ACEBEDO OPTICAL CO. v. COURT OR APPEALS, et al.G.R. No. 100152, 31 March 2000, En Banc, (Purisima, J.)

Acebedo applied for a business permit with the Office of the City Mayor of Iligan. The City Mayor issued the permit subject to conditions that Acebedo will: 1) Since it is a corporation, Acebedo cannot put up an optical clinic but only an commercial store. 2) Acebedo cannot examine and/or prescribe reading and similar optical glasses for patients, because these are function of optical clinics. 3) Acebedo cannot sell reading and similar eye glasses without a prescription having been first made by an independent optometrist (not its employee) or independent optical clinic. Acebedo can only sell directly to the public without need of prescriptions, Ray ban and similar eye glasses. 4) Acebedo cannot advertise optical lenses and eyeglasses but can advertise Ray ban and similar glasses and frames. 5) Acebedo is allowed to grind glasses but only upon the prescriptions of an independent optometrist.

The Samahan ng Optometrist ng Pilipinas (SOPI) however, ledged a complaint against Acebedo, alleging that Acebedo violated all the conditions impose on its business permit. Acebedo in response, protested the conditions impose by the city mayor stating that

1) The conditions impose are beyond what the city mayor can impose within his authority as they have no basis in any law or ordinance and

2) Acebedo’s acceptance of the business permit does not stop it from challenging the said conditions as ultra vires since a permit is not a binding contract.

After investigation, the City Mayor found Acebedo guilty for violating the conditions of the business permit and cancelled the permit and banned the issuance of business permit to Acebedo.

The RTC and CA dismissed the petitions. Hence, this petition.

ISSUES:1. Is the issuance of the business permit in the performance of its

proprietary functions?2. Is the business permit a contract between the City Mayor and

Acebedo, thus, binding on the latter?

RULING:

No, the issuance by the City Mayor of the business permit is a regulatory function, an exercise of police power delegated to the local government.

The scope of police power has been held to be so comprehensive as to encompass almost all matters affecting the health, safety, peace, order, morals, comfort and convenience of the community. Police power 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.

As aptly discussed by the Solicitor General in his Comment, the power to issue licenses and permits necessarily includes the corollary power to revoke, withdraw or cancel the same. And the power to revoke or cancel likewise includes the power to restrict through the imposition of certain conditions.

Distinction must be made between the grant of a license or permit to do business and the issuance of a license to engage in the practice of a particular profession. The first is usually granted by the local authorities and the second is issued by the Board or Commission tasked to regulate the particular profession. A business permit authorizes the person, natural or otherwise, to engage in business or some form of commercial activity. A professional license, on the other hand, is the grant of authority to a natural person to engage in the practice or exercise of his or her profession.

In the case at bar, 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 as a corporate body or entity, although it does have in its employ, persons who are duly licensed to practice optometry by the Board of Examiners in Optometry.

In the present case, 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, like that of optometry. 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.

No, a business permit is not in the nature of a contract but a special privilege.

A license or a permit is not a contract between the sovereignty and the licensee or permitee, and is not a property in the constitutional sense, as to which the constitutional proscription against impairment of the obligation of contracts may extend. A license is rather in the nature of a special privilege, of a permission or authority to do what is within its terms. It is not in any way vested, permanent or absolute."

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.

Estate of Gregoria Francisco vs. CA, July 25, 2001

BACKGROUND: In 1944, A Quonset building was constructed by the American

Liberation Forces In 1946 The building was purchased by Gregoria Francisco who died

in 1976o The building stands on a lot owned by the Philippine Ports

Authority which, by virtue of Proclamation No. 83 by President Elpidio Quirino,was declared for the exclusive use of port facilities.

January 10, 1989 The Philippine Ports Authority issued to Tan Gin San (surviving spouse of Gregoria Francisco) a permit to occupy the lot where the building stands for a period of One (1) year, to expire on 31 December 1989. The permittee was using the Quonset for the storage of copra.

May 8, 1989 Municipal Mayor, BenjaminValencia, notified Tan Gin San by mail to remove or relocate because the city was conducting a "clean-- up campaign on illegal squatters and unsanitary surroundings‐ along Strong Boulevard" under Zoning Ordinance No. 147.

May 19, 1989 another letter of the same tenor. Both letters were unheeded. May 24,1989 Mayor Valencia ordered demolition. August7, 1989 The Trial Court denied petitioners Writ of Prohibition

with Injunction and Damages and upheld the power of respondent Mayor to order the demolition under the ordinance, even without judicial authority.

September 6, 1989 Petitioner’s quonset building was completely demolished. In its place sprang shanties and huts.

—January 25, 1990 Court of Appeals reversed the ruling saying that the Mayor was not vested with power to order summarily, and without any judicial proceeding, the demolition of the quonset building, which was not a nuisance per se, and that petitioner is in legal possession of the land on which the building stands by virtue of the permit issued by the Philippine Ports Authority (Zamboanga Province).

—June 13, 1990 The CA reversed itself saying that the Mayor initial order of demolition– which was defective as being without judicial process – was cured when herein petitioner filed a petition for prohibition and injunction and was heard on oral argument.

—Respondents justify the demolition in the exercise of police power and for reasons of health, safety and general welfare.

ISSUE: Whether or not Respondent Mayor could summarily and extra-judicially order the demolition of petitioner's quonset building.

HELD: NO

Ordinance No. 147 relied upon by Respondents should not be interpreted as authorizing the summary removal of a non-conforming building by the municipal government. For if it does, it must be struck down for being in contravention of the requirements of due process, as originally held by the Court of Appeals.

Moreover, the enforcement and administration of the provisions of the Ordinance resides with the Zoning Administrator. It is said official who may call upon the City Fiscal to institute the necessary legal proceedings to enforce the provisions of the Ordinance. And any person aggrieved by the decision of the Zoning Administrator regarding the enforcement of the Ordinance may appeal to the Board of Zoning Appeals.

Violation of a municipal ordinance neither empowers the Municipal Mayor to avail of extra-judicial remedies. On the contrary, the Local Government Code imposes upon him the duty "to cause to be instituted judicial proceedings in

connection with the violation of ordinances" (Local Government Code, Sec. 141 [2] [t]).

Respondents cannot seek cover under the general welfare clause authorizing the abatement of nuisances without judicial proceedings, which applies only to a nuisance per se or one which affects the immediate safety of persons and property and may be summarily abated under the undefined law of necessity (Monteverde v. Generoso, 52 Phil. 123 [1982]). The storage of copra in the quonset building is a legitimate business. By its nature, it cannot be said to be injurious to rights of property, of health or of comfort of the community. If it be a nuisance per accidens it may be so proven in a hearing conducted for that purpose. It is not per se a nuisance warranting its summary abatement without judicial intervention.

The provincial governor, district engineer or district health officer is not authorized to destroy private property consisting of dams and fishponds summarily and without any judicial proceedings whatever under the pretense that such private property constitutes a nuisance. A dam or a fishery constructed in navigable rivers is not a nuisance per se. A dam or fishpond may be a nuisance per accidens where it endangers or impairs the health or depreciates property by causing water to become stagnant. (Monteverde v. Generoso, supra).

While the Sangguniang Bayan may provide for the abatement of a nuisance (Local Government Code, Sec. 149 [ee]), it can not declare a particular thing as a nuisance per se and order its condemnation. The nuisance can only be so adjudged by judicial determination.

[Municipal councils] do not have the power to find as a fact that a particular thing is a nuisance when such thing is not a nuisance per se nor can they authorize the extra judicial condemnation and destruction of that as a nuisance which, in its nature, situation or use is not such. These things must be determined in the ordinary courts of law. In the present case, . . . the ice factory of the plaintiff is not a nuisance per se. It is a legitimate industry . . . . If it be in fact a nuisance due to the manner of its operation, that question cannot be determined by a mere resolution of the board. The petitioner is entitled to a fair and impartial heating before a judicial

tribunal. (Iloilo Cold Storage v. Municipal Council, 24 Phil. 47 [1913]).

Petitioner was in lawful possession of the lot and quonset building by virtue of a permit from the Philippine Ports Authority (Port of Zamboanga) when demolition was effected. It was not squatting on public land. Its property was not of trifling value. It was entitled to an impartial hearing before a tribunal authorized to decide whether the quonset building did constitute a nuisance in law. There was no compelling necessity for precipitate action. It follows then that respondent public officials of the Municipality of Isabela, Basilan, transcended their authority in abating summarily petitioner's quonset building. They had deprived petitioner of its property without due process of law. The fact that petitioner filed a suit for prohibition and was subsequently heard thereon will not cure the defect, as opined by the Court of Appeals, the demolition having been a fait accompli prior to hearing and the authority to demolish without a judicial order being a prejudicial issue.

NOTES:

“Nuisances are of two classes: Nuisances per se and per accidens. As to the first, since they affect the immediate safety of persons and property, they may be summarily abated under the undefined law of necessity. But if the nuisance be of the second class, even the municipal authorities, under their power to declare and abate nuisances, would not have the right to compel the abatement of a particular thing or act as a nuisance without reasonable notice to the person alleged to be maintaining or doing the same of the time and place of hearing before a tribunal authorized to decide whether such a thing or act does in law constitute a nuisance.” (Monteverde v. Generoso, 52 Phil. 123 (1982), citing Iloilo Ice and Cold Storage Co. vs. Municipal Council of Iloilo [{1913}, 24 Phil., 471])

“Petitioner's business could not be considered a nuisance which respondent municipality could summarily abate in the guise of exercising its police powers. The abatement of a nuisance without judicial proceedings is possible only if it is a nuisance per se. A gas station is not a nuisance per se or one affecting the immediate safety of persons and property,17 hence, it cannot be closed down or transferred summarily to another location.” (PARAYNO v. JOVELLANOS, G.R. No. 148408, 14 July 2006 citing Monteverde v. Generoso, 52 Phil. 123 (1982)

Lim vs. Court of Appeals [GR 111397, 12 August 2002]Third Division, Carpio (J): 2 concur, 1 on leave

Facts: On 7 December 1992, Bistro Pigalle Inc. filed before the trial court a petition for mandamus and prohibition, with prayer for temporary restraining order or writ of preliminary injunction, against Alfredo Lim in his capacity as Mayor of the City of Manila. The Bistro filed the case because policemen under Lim’s instructions inspected and investigated the Bistro’s license as well as the work permits and health certificates of its staff. This caused the stoppage of work in the Bistro’s night club and restaurant operations (i.e. the New Bangkok Club and the Exotic Garden Restaurant). Lim also refused to accept the Bistro’s application for a business license, as well as the work permit applications of the Bistro’s staff, for the year 1993.

Acting on the Bistro’s application for injunctive relief, the trial court issued the temporary restraining order on 29 December 1992, ordering Lim and/or his agents to refrain from inspecting or otherwise interfering in the operation of the establishments of the Bistro. At the hearing, the parties submitted their evidence in support of their respective positions. On 20 January 1993, the trial court granted the Bistro’s application for a writ of prohibitory preliminary injunction. However, despite the trial court’s order, Lim still issued a closure order on the Bistro’s operations effective 23 January 1993, even sending policemen to carry out his closure order. Lim insisted that the power of a mayor to inspect and investigate commercial establishments and their staff is implicit in the statutory power of the city mayor to issue, suspend or revoke business permits and licenses. This statutory power is expressly provided for in Section 11 (l), Article II of the Revised Charter of the City of Manila and in Section 455, paragraph 3 (iv) of the Local Government Code of 1991. On 25 January 1993, the Bistro filed an "Urgent Motion for Contempt" against Lim and the policemen who stopped the Bistro’s operations on January 23, 1993. At the hearing of the motion for contempt on 29 January 1993, the Bistro withdrew its motion on condition that Lim would respect the court’s injunction. However, on February 12, 13, 15, 26 and 27, and on March 1 and 2, 1993, Lim, acting through his agents and policemen, again disrupted the Bistro’s business operations. Meanwhile, on 17 February 1993, Lim filed a motion to dissolve the injunctive order and to dismiss the case. The trial court denied Lim’s motion to dissolve the injunction and to dismiss the case in an order dated 2 March 1993. On 10 March 1993, Lim filed with the Court of Appeals a petition for certiorari, prohibition and mandamus against the Bistro and Judge Wilfredo Reyes. The Court of Appeals sustained

the RTC orders in a decision on 25 March 1993, and denied Lim's motion for reconsideration in a resolution dated 13 July 1993. On 1 July 1993, Manila City Ordinance 778314 took effect. On the same day, Lim ordered the Western Police District Command to permanently close down the operations of the Bistro, which order the police implemented at once. Lim filed the petition for review on certiorari before the Supreme Court.

Issue: Whether the Bistro should be given an opportunity to rebut the allegations that it violated the conditions of its licenses and permits.

Held: From the language of Section 11 (l), Article II of the Revised Charter of the City of Manila and Section 455 (3) (iv) of the Local Government Code, it is clear that the power of the mayor to issue business licenses and permits necessarily includes the corollary power to suspend, revoke or even refuse to issue the same. However, the power to suspend or revoke these licenses and permits is expressly premised on the violation of the conditions of these permits and licenses. The laws specifically refer to the "violation of the condition(s)" on which the licenses and permits were issued. Similarly, the power to refuse to issue such licenses and permits is premised on non-compliance with the prerequisites for the issuance of such licenses and permits. The mayor must observe due process in exercising these powers, which means that the mayor must give the applicant or licensee notice and opportunity to be heard. True, the mayor has the power to inspect and investigate private commercial establishments for any violation of the conditions of their licenses and permits. However, the mayor has no power to order a police raid on these establishments in the guise of inspecting or investigating these commercial establishments. Lim has no authority to close down Bistro’s business or any business establishment in Manila without due process of law. Lim cannot take refuge under the Revised Charter of the City of Manila and the Local Government Code. There is no provision in these laws expressly or impliedly granting the mayor authority to close down private commercial establishments without notice and hearing, and even if there is, such provision would be void. The due process clause of the Constitution requires that Lim should have given the Bistro an opportunity to rebut the allegations that it violated the conditions of its licenses and permits.

Bayan Muna vs. Executive Secretary Ermita, April 25, 2006

Facts: The petitioners, Bayan, et al., alleged that they are citizens and taxpayers of the Philippines and that their right as organizations and

individuals were violated when the rally they participated in on October 6, 2005 was violently dispersed by policemen implementing Batas Pambansa No. 880.

Petitioners contended that Batas Pambansa No. 880 is clearly a violation of the Constitution and the International Covenant on Civil and Political Rights and other human rights treaties of which the Philippines is a signatory. They argue that B.P. No. 880 requires a permit before one can stage a public assembly regardless of the presence or absence of a clear and present danger. It also curtails the choice of venue and is thus repugnant to the freedom of expression clause as the time and place of a public assembly form part of the message which the expression is sought. Furthermore, it is not content-neutral as it does not apply to mass actions in support of the government. The words “lawful cause,” “opinion,” “protesting or influencing” suggest the exposition of some cause not espoused by the government. Also, the phrase “maximum tolerance” shows that the law applies to assemblies against the government because they are being tolerated. As a content-based legislation, it cannot pass the strict scrutiny test. This petition and two other petitions were ordered to be consolidated on February 14, 2006. During the course of oral arguments, the petitioners, in the interest of a speedy resolution of the petitions, withdrew the portions of their petitions raising factual issues, particularly those raising the issue of whether B.P. No. 880 and/or CPR is void as applied to the rallies of September 20, October 4, 5 and 6, 2005.

Issue: Whether the Calibrated Pre-emptive response and the Batas Pambansa No. 880, specifically Sections 4, 5, 6, 12, 13(a) and 14(a) violates Art. III Sec. 4 of the Philippine Constitution as it causes a disturbing effect on the exercise by the people of the right to peaceably assemble.

Held: Section 4 of Article III of the Philippine Constitution provides that no law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances. The right to peaceably assemble and petition for redress of grievances, together with freedom of speech, of expression, and of the press, is a right that enjoys dominance in the sphere of constitutional protection. For this rights represent the very basis of a functional democratic polity, without which all the other rights would be meaningless and unprotected.

However, it must be remembered that the right, while sacrosanct, is not

absolute. It may be regulated that it shall not be injurious to the equal enjoyment of others having equal rights, nor injurious to the rights of the community or society. The power to regulate the exercise of such and other constitutional rights is termed the sovereign “police power,” which is the power to prescribe regulations, to promote the health, morals, peace, education, good order or safety, and general welfare of the people.

B.P. No 880 is not an absolute ban of public assemblies but a restriction that simply regulates the time, place and manner of the assemblies. B.P. No. 880 thus readily shows that it refers to all kinds of public assemblies that would use public places. The reference to “lawful cause” does not make it content-based because assemblies really have to be for lawful causes, otherwise they would not be “peaceable” and entitled to protection. Neither the words “opinion,” “protesting,” and “influencing” in of grievances come from the wording of the Constitution, so its use cannot be avoided. Finally, maximum tolerance is for the protection and benefit of all rallyist and is independent of the content of the expression in the rally.

Furthermore, the permit can only be denied on the ground of clear and present danger to public order, public safety, public convenience, public morals or public health. This is a recognized exception to the exercise of the rights even under the Universal Declaration of Human Rights and The International Covenant on Civil and Political Rights.

Wherefore, the petitions are GRANTED in part, and respondents, more particularly the Secretary of the Interior and Local Governments, are DIRECTED to take all necessary steps for the immediate compliance with Section 15 of Batas Pambansa No. 880 through the establishment or designation of at least one suitable freedom park or plaza in every city and municipality of the country. After thirty (30) days from the finality of this Decision, subject to the giving of advance notices, no prior permit shall be required to exercise the right to peaceably assemble and petition in the public parks or plaza in every city or municipality that has not yet complied with section 15 of the law. Furthermore, Calibrated pre-emptive response (CPR), insofar as it would purport to differ from or be in lieu of maximum tolerance, is NULL and VOID and respondents are ENJOINED to REFRAIN from using it and to STRICTLY OBSERVE the requirements of maximum tolerance, The petitions are DISMISSED in all other respects, and the constitutionality of Batas Pambansa No. 880 is SUSTAINED

Roble Arrastre, Inc. vs. Hon. Villaflor, August 22, 2006

Facts: Roble Arrastre, Inc. is a cargo handling service operator, authorized by the Philippine Ports Authority. For the years 1992 and 1993, petitioner was granted Business Permits No. 349 and No. 276, respectively, by respondent Altagracia Villaflor as Municipal Mayor of Hilongos, Leyte. PPA issued a 90-day hold-over authority to petitioner. Stated therein was the proviso that notwithstanding the 90-day period aforementioned, the authority shall be deemed ipso facto revoked if an earlier permit/contract for cargo handling services is granted or sooner withdrawn or cancelled for cause pursuant to PPA Administrative Order No. 10-81. On 27 January 1994, while the 90-day hold-over authority was in effect, petitioner filed with respondent mayor an application for the renewal of its Business Permit No. 276. However, the same was denied. Aggrieved by the denial, petitioner filed with the RTC, a Petition for Mandamus with Preliminary Mandatory Injunction. petitioner said the source of the power of the municipal mayor to issue licenses is Section 444 Local Government Code of 1991, which is merely for the purpose of revenue generation and not regulation, hence, the municipal mayor has no discretion to refuse the issuance of a business license following the applicant’s payment or satisfaction of the proper license fees. Respondent mayor averred, inter alia, that the remedy of mandamus does not lie as the issuance of the permit sought is not a ministerial function, but one that requires the exercise of sound judgment and discretion.The RTC opined that the PPA has the sole authority to grant permits in the operation of cargo handling services in all Philippine ports, whether public or private. Respondent mayor filed a Motion for Reconsideration thereon, which was denied for lack of merit by the RTC, the appellate court rendered a Decision dated 7 October 1996, reversing and setting aside the RTC it said that Court of Appeals ruled that the pursuit of the duty of respondent mayor under Section 444 of the Local Government Code necessarily entails the exercise of official discretion. Hence, it held that mandamus will not lie to control or review the exercise of her discretion. Moreover, the Court of Appeals declared that petitioner’s main prayer that is to compel respondent mayor to issue a business license for the year 1994, by the passage of time had already become moot and academic. Hence, the instant Petition.

Issue: Whether or not the Court of Appeals validly interpreted Section 444 of Local Government Code of 1991, as a grant of police power and full discretion to the respondent mayor to refuse the issuance of the permit despite due

compliance of all documentary requirements and full payment of the required permit fees by the petitioner.

Held: Section 444 of the Local Government Code of 1991, whereby the power of the respondent mayor to issue license and permits is circumscribed, is a manifestation of the delegated police power of a municipal corporation.Necessarily, the exercise thereof cannot be deemed ministerial. As to the question of whether the power is validly exercised, the matter is within the province of a writ of certiorari, but certainly, not of mandamus.The limits in the exercise of the power of a municipal mayor to issue licenses, and permits and suspend or revoke the same can be contained in a law or an ordinance.

The court further held that the general welfare clause is the delegation in statutory form of the police power of the State to LGUs. Through this, LGUs may prescribe regulations to protect the lives, health, and property of their constituents and maintain peace and order within their respective territorial jurisdictions. Accordingly, we have upheld enactments providing, for instance, the regulation of gambling, the occupation of rig drivers, the installation and operation of pinball machines, the maintenance and operation of cockpits, the exhumation and transfer of corpses from public burial grounds, and the operation of hotels, motels, and lodging houses as valid exercises by local legislatures of the police power under the general welfare clause.

Social Justice Society (SJS) vs. Hon. Atienza, Jr., February 13, 2008

Facts: The Social Justice Society sought to compel respondent Hon. Jose L. Atienza, Jr., then mayor of the City of Manila, to enforce Ordinance No. 8027 that was enacted by the Sangguniang Panlungsod of Manila in 2001. Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed the owners and operators of businesses disallowed under the reclassification to cease and desist from operating their businesses within six months from the date of effectivity of the ordinance. Among the businesses situated in the area are the so-called “Pandacan Terminals� of the oil companies (the brief history of the Pandacan Oil Terminals is here).

In 2002, the City of Manila and the Department of Energy (DOE) entered into a memorandum of understanding (MOU) with the oil companies. They agreed that “the scaling down of the Pandacan Terminals [was] the most viable and practicable option.†� The Sangguniang Panlungsod ratified the MOU in

Resolution No. 97. In the same resolution, the Sanggunian declared that the MOU was effective only for a period of six months starting 25 July 2002, which period was extended up to 30 April 2003.

This is the factual backdrop of the Supreme Court’s 7 March 2007 Decision. The SC ruled that respondent had the ministerial duty under the Local Government Code (LGC) to “enforce all laws and ordinances relative to the governance of the city,†� including Ordinance No. 8027. After the SC promulgated its Decision, Chevron Philippines Inc. (Chevron), Petron Corporation (Petron) and Pilipinas Shell Petroleum Corporation (Shell) (the “oil companies†�) and the Republic of the Philippines, represented by the DOE, sought to intervene and ask for a reconsideration of the decision.

Intervention of the oil companies and the DOE allowed in the interest of justice

Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected by such proceedings. The allowance or disallowance of a motion to intervene is addressed to the sound discretion of the court. While the motions to intervene respectively filed by the oil companies and the DOE were filed out of time, these motions were granted because they presented novel issues and arguments. DOE’s intervention was also allowed considering the transcendental importance of this case.

Ordinance No. 8119 did not impliedly repeal Ordinance No. 8027

Repeal by implication proceeds on the premise that where a statute of later date clearly reveals the intention of the legislature to abrogate a prior act on the subject, that intention must be given effect. Implied repeals are not favored and will not be so declared unless the intent of the legislators is manifest.

There are two kinds of implied repeal. The first is: where the provisions in the two acts on the same subject matter are irreconcilably contradictory, the latter act, to the extent of the conflict, constitutes an implied repeal of the earlier one. The second is: if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate to repeal the

earlier law. The oil companies argue that the situation here falls under the first category.

For the first kind of implied repeal, there must be an irreconcilable conflict between the two ordinances. However, there was no legislative purpose to repeal Ordinance No. 8027. There is no conflict since both ordinances actually have a common objective, i.e., to shift the zoning classification from industrial to commercial (Ordinance No. 8027) or mixed residential/commercial (Ordinance No. 8119). While it is true that both ordinances relate to the same subject matter, i.e., classification of the land use of the area where Pandacan oil depot is located, if there is no intent to repeal the earlier enactment, every effort at reasonable construction must be made to reconcile the ordinances so that both can be given effect.

Moreover, it is a well-settled rule in statutory construction that a subsequent general law does not repeal a prior special law on the same subject unless it clearly appears that the legislature has intended by the latter general act to modify or repeal the earlier special law. The special law must be taken as intended to constitute an exception to, or a qualification of, the general act or provision. Ordinance No. 8027 is a special law since it deals specifically with a certain area described therein (the Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a general law as it covers the entire city of Manila.

Mandamus lies to compel respondent Mayor to enforce Ordinance No. 8027

The oil companies insist that mandamus does not lie against respondent in consideration of the separation of powers of the executive and judiciary. However, while it is true that Courts will not interfere by mandamus proceedings with the legislative or executive departments of the government in the legitimate exercise of its powers, there is an exception – to enforce mere ministerial acts required by law to be performed by some officer thereof. A writ of mandamus is the power to compel “the performance of an act which the law specifically enjoins as a duty resulting from office, trust or station.�

The oil companies also argue that petitioners had a plain, speedy and adequate remedy to compel respondent to enforce Ordinance No. 8027, which was to seek relief from the President of the Philippines through the Secretary of the Department of Interior and Local Government (DILG) by virtue of the

President’s power of supervision over local government units. This suggested process, however, would be unreasonably long, tedious and consequently injurious to the interests of the local government unit (LGU) and its constituents whose welfare is sought to be protected. A party need not go first to the DILG in order to compel the enforcement of an ordinance. Besides, the resort to an original action for mandamus before the SC is undeniably allowed by the Constitution.

Ordinance No. 8027 is constitutional and valid

The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be within the corporate powers of the LGU to enact and be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy and (6) must not be unreasonable. There is no showing that the Ordinance is unconstitutional.

The City of Manila has the power to enact Ordinance No. 8027

Ordinance No. 8027 was passed by the Sangguniang Panlungsod of Manila in the exercise of its police power. Police power is the plenary power vested in the legislature to make statutes and ordinances to promote the health, morals, peace, education, good order or safety and general welfare of the people. This power flows from the recognition that salus populi est suprema lex (the welfare of the people is the supreme law).

While police power rests primarily with the national legislature, such power may be delegated. Section 16 of the LGC, known as the general welfare clause, encapsulates the delegated police power to local governments. LGUs like the City of Manila exercise police power through their respective legislative bodies, in this case, the Sangguniang Panlungsod or the city council. Specifically, the Sanggunian can enact ordinances for the general welfare of the city.

This police power was also provided for in RA 409 or the Revised Charter of the City of Manila. Specifically, the Sanggunian has the power to “reclassify land within the jurisdiction of the city.†�

The enactment of Ordinance No. 8027 is a legitimate exercise of police power

As with the State, local governments may be considered as having properly exercised their police power only if the following requisites are met: (1) the interests of the public generally, as distinguished from those of a particular class, require its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. In short, there must be a concurrence of a lawful subject and a lawful method.

Ordinance No. 8027 is a valid police power measure because there is a concurrence of lawful subject and lawful method. It was enacted “for the purpose of promoting sound urban planning, ensuring health, public safety and general welfare� of the residents of Manila. The Sanggunian was impelled to take measures to protect the residents of Manila from catastrophic devastation in case of a terrorist attack on the Pandacan Terminals. Towards this objective, the Sanggunian reclassified the area defined in the ordinance from industrial to commercial.

The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants of Manila and not just of a particular class. The depot is perceived, rightly or wrongly, as a representation of western interests which means that it is a terrorist target. As long as it there is such a target in their midst, the residents of Manila are not safe. It therefore became necessary to remove these terminals to dissipate the threat. Wide discretion is vested on the legislative authority to determine not only what the interests of the public require but also what measures are necessary for the protection of such interests. Clearly, the Sanggunian was in the best position to determine the needs of its constituents.

In the exercise of police power, property rights of individuals may be subjected to restraints and burdens in order to fulfill the objectives of the government. Otherwise stated, the government may enact legislation that may interfere with personal liberty, property, lawful businesses and occupations to promote the general welfare. However, the interference must be reasonable and not arbitrary. And to forestall arbitrariness, the methods or means used to protect public health, morals, safety or welfare must have a reasonable relation to the end in view.

The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified the area where the depot is situated from industrial to commercial. A zoning ordinance is defined as a local city or municipal legislation which logically arranges, prescribes, defines and apportions a given political subdivision into specific land uses as present and future projection of needs. As a result of the zoning, the continued operation of the businesses of the oil companies in their present location will no longer be permitted. The power to establish zones for industrial, commercial and residential uses is derived from the police power itself and is exercised for the protection and benefit of the residents of a locality. Consequently, the enactment of Ordinance No. 8027 is within the power of the Sangguniang Panlungsod of the City of Manila and any resulting burden on those affected cannot be said to be unjust.

Ordinance No. 8027 is not unfair, oppressive or confiscatory which amounts to taking without compensation

According to the oil companies, Ordinance No. 8027 is unfair and oppressive as it does not only regulate but also absolutely prohibits them from conducting operations in the City of Manila. However, the oil companies are not prohibited from doing business in other appropriate zones in Manila. The City of Manila merely exercised its power to regulate the businesses and industries in the zones it established.

The oil companies also argue that the ordinance is unfair and oppressive because they have invested billions of pesos in the depot, and the forced closure will result in huge losses in income and tremendous costs in constructing new facilities. This argument has no merit. In the exercise of police power, there is a limitation on or restriction of property interests to promote public welfare which involves no compensable taking. Compensation is necessary only when the state’s power of eminent domain is exercised. In eminent domain, property is appropriated and applied to some public purpose. Property condemned under the exercise of police power, on the other hand, is noxious or intended for a noxious or forbidden purpose and, consequently, is not compensable. The restriction imposed to protect lives, public health and safety from danger is not a taking. It is merely the prohibition or abatement of a noxious use which interferes with paramount rights of the public. In the regulation of the use of the property, nobody else acquires the use or interest therein, hence there is no compensable taking.

In this case, the properties of the oil companies and other businesses situated in the affected area remain theirs. Only their use is restricted although they can be applied to other profitable uses permitted in the commercial zone.

Ordinance No. 8027 is not partial and discriminatory

The oil companies take the position that the ordinance has discriminated against and singled out the Pandacan Terminals despite the fact that the Pandacan area is congested with buildings and residences that do not comply with the National Building Code, Fire Code and Health and Sanitation Code.

An ordinance based on reasonable classification does not violate the constitutional guaranty of the equal protection of the law. The requirements for a valid and reasonable classification are: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class. The law may treat and regulate one class differently from another class provided there are real and substantial differences to distinguish one class from another.

Here, there is a reasonable classification. What the ordinance seeks to prevent is a catastrophic devastation that will result from a terrorist attack. Unlike the depot, the surrounding community is not a high-value terrorist target. Any damage caused by fire or explosion occurring in those areas would be nothing compared to the damage caused by a fire or explosion in the depot itself. Accordingly, there is a substantial distinction. The enactment of the ordinance which provides for the cessation of the operations of these terminals removes the threat they pose. Therefore it is germane to the purpose of the ordinance. The classification is not limited to the conditions existing when the ordinance was enacted but to future conditions as well. Finally, the ordinance is applicable to all businesses and industries in the area it delineated.

Ordinance No. 8027 is not inconsistent with RA 7638 and RA 8479

The oil companies and the DOE assert that Ordinance No. 8027 is unconstitutional because it contravenes RA 7638 (DOE Act of 1992) and RA 8479 (Downstream Oil Industry Deregulation Law of 1998).

It is true that ordinances should not contravene existing statutes enacted by Congress. However, a brief survey of decisions where the police power

measure of the LGU clashed with national laws shows that the common dominator is that the national laws were clearly and expressly in conflict with the ordinances/resolutions of the LGUs. The inconsistencies were so patent that there was no room for doubt. This is not the case here. The laws cited merely gave DOE general powers to “establish and administer programs for the exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage of energy resources� and “to encourage certain practices in the [oil] industry which serve the public interest and are intended to achieve efficiency and cost reduction, ensure continuous supply of petroleum products.†� These powers can be exercised without emasculating the LGUs of the powers granted them. When these ambiguous powers are pitted against the unequivocal power of the LGU to enact police power and zoning ordinances for the general welfare of its constituents, it is not difficult to rule in favor of the latter. Considering that the powers of the DOE regarding the Pandacan Terminals are not categorical, the doubt must be resolved in favor of the City of Manila.

The principle of local autonomy is enshrined in and zealously protected under the Constitution. An entire article (Article X) of the Constitution has been devoted to guaranteeing and promoting the autonomy of LGUs. The LGC was specially promulgated by Congress to ensure the autonomy of local governments as mandated by the Constitution. There is no showing how the laws relied upon by the oil companies and DOE stripped the City of Manila of its power to enact ordinances in the exercise of its police power and to reclassify the land uses within its jurisdiction.

The DOE cannot exercise the power of control over LGUs

Another reason that militates against the DOE’s assertions is that Section 4 of Article X of the Constitution confines the President’s power over LGUs to one of general supervision. Consequently, the Chief Executive or his or her alter egos, cannot exercise the power of control over them. The President and his or her alter egos, the department heads, cannot interfere with the activities of local governments, so long as they act within the scope of their authority. Accordingly, the DOE cannot substitute its own discretion for the discretion exercised by the sanggunian of the City of Manila. In local affairs, the wisdom of local officials must prevail as long as they are acting within the parameters of the Constitution and the law.

Ordinance No. 8027 is not invalid for failure to comply with RA 7924 and EO 72

The oil companies argue that zoning ordinances of LGUs are required to be submitted to the Metropolitan Manila Development Authority (MMDA) for review and if found to be in compliance with its metropolitan physical framework plan and regulations, it shall endorse the same to the Housing and Land Use Regulatory Board (HLURB). Their basis is Section 3 (e) of RA 7924 and Section 1 of E.O. 72. They argue that because Ordinance No. 8027 did not go through this review process, it is invalid.

The argument is flawed. RA 7942 does not give MMDA the authority to review land use plans and zoning ordinances of cities and municipalities. This was only found in its implementing rules which made a reference to EO 72. EO 72 expressly refers to comprehensive land use plans (CLUPs) only. Ordinance No. 8027 is admittedly not a CLUP nor intended to be one. Instead, it is a very specific ordinance which reclassified the land use of a defined area in order to prevent the massive effects of a possible terrorist attack. It is Ordinance No. 8119 which was explicitly formulated as the “Manila [CLUP] and Zoning Ordinance of 2006.†� CLUPs are the ordinances which should be submitted to the MMDA for integration in its metropolitan physical framework plan and approved by the HLURB to ensure that they conform with national guidelines and policies. Moreover, even assuming that the MMDA review and HLURB ratification are necessary, the oil companies did not present any evidence to show that these were not complied with. In accordance with the presumption of validity in favor of an ordinance, its constitutionality or legality should be upheld in the absence of proof showing that the procedure prescribed by law was not observed.

Conclusion

Essentially, the oil companies are fighting for their right to property. They allege that they stand to lose billions of pesos if forced to relocate. However, based on the hierarchy of constitutionally protected rights, the right to life enjoys precedence over the right to property. The reason is obvious: life is irreplaceable, property is not. When the state or LGU’s exercise of police power clashes with a few individuals’ right to property, the former should prevail.

Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without a doubt, there are no impediments to its enforcement and implementation. Any delay is unfair to the inhabitants of the City of Manila and its leaders who have categorically expressed their desire for the relocation of the terminals. Their power to chart and control their own destiny and preserve their lives and safety should not be curtailed by the intervenors’ warnings of doomsday scenarios and threats of economic disorder if the ordinance is enforced.

Just the same, the Court noted that it is not about to provoke a crisis by ordering the immediate relocation of the Pandacan Terminals out of its present site. The enforcement of a decision, specially one with far-reaching consequences, should always be within the bounds of reason, in accordance with a comprehensive and well-coordinated plan, and within a time-frame that complies with the letter and spirit of our resolution. To this end, the oil companies have no choice but to obey the law.

White Light Corporation vs. City of Manila, January 20, 2009

Facts: On December 3, 1992, City Mayor Alfredo S. Lim signed into 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” (the Ordinance).” The ordinance sanctions any person or corporation who will allow the admission and charging of room rates for less than 12 hours or the renting of rooms more than twice a day.

The petitioners White Light Corporation (WLC), Titanium Corporation (TC), and Sta. Mesa Tourist and Development Corporation (STDC), who own and operate several hotels and motels in Metro Manila, filed a motion to intervene and to admit attached complaint-in-intervention on the ground that the ordinance will affect their business interests as operators. The respondents, in turn, alleged that the ordinance is a legitimate exercise of police power.

RTC declared Ordinance No. 7774 null and void as it “strikes at the personal liberty of the individual guaranteed and jealously guarded by the Constitution.” Reference was made to the provisions of the Constitution encouraging private enterprises and the incentive to needed investment, as

well as the right to operate economic enterprises. Finally, from the observation that the illicit relationships the Ordinance sought to dissuade could nonetheless be consummated by simply paying for a 12-hour stay,When elevated to CA, the respondents asserted that the ordinance is a valid exercise of police power pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities the power 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. Also, they contended that under Art III Sec 18 of Revised Manila Charter, they have the power to enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity and the promotion of the morality, peace, good order, comfort, convenience and general welfare of the city and its inhabitants and to fix penalties for the violation of ordinances.

Petitioners argued that the ordinance is unconstitutional and void since it violates the right to privacy and freedom of movement; it is an invalid exercise of police power; and it is unreasonable and oppressive interference in their business.CA, in turn, reversed the decision of RTC and affirmed the constitutionality of the ordinance. First, it held that the ordinance did not violate the right to privacy or the freedom of movement, as it only penalizes the owners or operators of establishments that admit individuals for short time stays. Second, the virtually limitless reach of police power is only constrained by having a lawful object obtained through a lawful method. The lawful objective of the ordinance is satisfied since it aims to curb immoral activities. There is a lawful method since the establishments are still allowed to operate. Third, the adverse effect on the establishments is justified by the well-being of its constituents in general.

Hence, the petitioners appeared before the SC.

Issue: Whether Ordinance No. 7774 is a valid exercise of police power of the State.

Held: No. Ordinance No. 7774 cannot be considered as a valid exercise of police power, and as such, it is unconstitutional.

The facts of this case will recall to mind not only the recent City of Manila v Laguio Jr ruling, but the 1967 decision in Ermita-Malate Hotel and Motel

Operations Association, Inc., v. Hon. City Mayor of Manila. The common thread that runs through those decisions and the case at bar goes beyond the singularity of the localities covered under the respective ordinances. All three ordinances were enacted with a view of regulating public morals including particular illicit activity in transient lodging establishments. This could be described as the middle case, wherein there is no wholesale ban on motels and hotels but the services offered by these establishments have been severely restricted. At its core, this is another case about the extent to which the State can intrude into and regulate the lives of its citizens

The test of a valid ordinance is well established. A long line of decisions including City of Manila has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and pass according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.

The ordinance in this case prohibits two specific and distinct business practices, namely wash rate admissions and renting out a room more than twice a day. The ban is evidently sought to be rooted in the police power as conferred on local government units by the Local Government Code through such implements as the general welfare clause.

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.

SC contended that if they were to take the myopic view that an ordinance should be analyzed strictly as to its effect only on the petitioners at bar, then it would seem that the only restraint imposed by the law that they were

capacitated to act upon is the injury to property sustained by the petitioners. Yet, they also recognized the capacity of the petitioners to invoke as well the constitutional rights of their patrons – those persons who would be deprived of availing short time access or wash-up rates to the lodging establishments in question. The rights at stake herein fell within the same fundamental rights to liberty. Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include “the right to exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the facilities with which he has been endowed by his Creator, subject only to such restraint as are necessary for the common welfare,

Indeed, the right to privacy as a constitutional right must be recognized and the invasion of it should be justified by a compelling state interest. Jurisprudence accorded recognition to the right to privacy independently of its identification with liberty; in itself it is fully deserving of constitutional protection. Governmental powers should stop short of certain intrusions into the personal life of the citizen.

An ordinance which 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.The behavior which the ordinance seeks to curtail is in fact already prohibited and could in fact be diminished simply by applying existing laws. Less intrusive measures such as curbing the proliferation of prostitutes and drug dealers through active police work would be more effective in easing the

situation. So would the strict enforcement of existing laws and regulations penalizing prostitution and drug use. These measures would have minimal intrusion on the businesses of the petitioners and other legitimate merchants. Further, it is apparent that the ordinance can easily be circumvented by merely paying the whole day rate without any hindrance to those engaged in illicit activities. Moreover, drug dealers and prostitutes can in fact collect “wash rates” from their clientele by charging their customers a portion of the rent for motel rooms and even apartments.

SC reiterated 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. The State is a leviathan that must be restrained from needlessly intruding into the lives of its citizens. However well¬-intentioned the ordinance may be, it is in effect an arbitrary and whimsical intrusion into the rights of the establishments as well as their patrons. The ordinance needlessly restrains the operation of the businesses of the petitioners as well as restricting the rights of their patrons without sufficient justification. The ordinance rashly equates wash rates and renting out a room more than twice a day with immorality without accommodating innocuous intentions.

WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED, and the Decision of the Regional Trial Court of Manila, Branch 9, is REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No pronouncement as to costs.

Cabrera vs. CA, March 18, 1991

Facts: The Provincial Board of Catanduanes adopted Resolution No. 158 closing the old road leading to the new Capitol Building of this province to traffic and giving the owners of the properties traversed by the new road equal area as per survey by the Highway District Engineer's office from the old road adjacent to the respective remaining portion of their properties. Pursuant thereto, Deeds of Exchange were executed under which the Province of Catanduanes conveyed to Remedios R. Bagadiong, Fredeswindo F. Alcala, Elena S. Latorre, Baldomero Tolentino, Eulogia T. Alejandro, Angeles S. Vargas, and Juan S. Reyes portions of the closed road in exchange for their own respective properties, on which was subsequently laid a new concrete road leading to the Capitol Building. In 1978, part of the northern end of the old road fronting the petitioner's house was planted to vegetables in 1977 by

Eulogia Alejandro. Anselmo Peña, who had bought Angeles Vargas's share, also in the same part of the road, converted it into a piggery farm. Learning about Resolution 158, the petitioner filed on December 29, 1978, a complaint with the Court of First Instance of Catanduanes for "Restoration of Public Road and/or Abatement of Nuisance, Annulment of Resolutions and Documents with Damages." He alleged that the land fronting his house was a public road owned by the Province of Catanduanes in its governmental capacity and therefore beyond the commerce of man. He contended that Resolution No. 158 and the deeds of exchange were invalid, as so too was the closure of the northern portion of the said road.In a decision dated November 21, 1980, Judge Graciano P. Gayapa, Jr., while holding that the land in question was not a declared public road but a mere "passageway" or "short-cut," nevertheless sustained the authority of the provincial board to enact Resolution No. 158 under existing law. 1 Appeal was taken to the respondent court, 2 which found that the road was a public road and not a trail but just the same also upheld Resolution 158. It declared:Pursuant to Republic Act No. 5185, municipal authorities can close, subject to the approval or direction of the Provincial Board, thoroughfares under Section 2246 of the Revised Administrative Code. Although in this case the road was not closed by the municipality of Catanduanes but by the provincial board of Catanduanes, the closure, nevertheless, is valid since it was ordered by the approving authority itself. However, while it could do so, the provincial government of Catanduanes could close the road only if the persons prejudiced thereby were indemnified, Section 2246 of the Revised Administrative Code being very explicit on this.Before us now, the petitioner insists that Sec. 2246 is not applicable because Resolution No. 158 is not an order for the closure of the road in question but an authority to barter or exchange it with private properties. He maintains that the public road was owned by the province in its governmental capacity and, without a prior order of closure, could not be the subject of a barter. Control over public roads, he insists, is with Congress and not with the provincial board.The petitioner alleges that the closure of the road has especially injured him and his family as they can no longer use it in going to the national road leading to the old capitol building but must instead pass through a small passageway. For such inconvenience, he is entitled to damages in accordance with law.

Issue: WON the provincial board can order the closure of a road and use/ convey it for other purposes. YES.

The authority of the provincial board to close that road and use or convey it for other purposes is derived from the following provisions of Republic Act No. 5185 in relation to Section 2246 of the Revised Administrative Code: R.A. No. 5185, Section 11 (II) (a): II. The following actions by municipal officials or municipal councils, as provided for in the pertinent sections of the Revised Administrative Code shall take effect without the need of approval or direction from any official of the national government: Provided, That such actions shall be subject to approval or direction by the Provincial Board: (a) Authority to close thoroughfare under Section 2246; Sec. 2246. Authority to close thoroughfare. — With the prior authorization of the Department Head, a municipal council may close any municipal road, street, alley, park, or square; but no such way or place aforesaid or any part thereof, shall be closed without indemnifying any person prejudiced thereby.

Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the municipality might be lawfully used or conveyed.

Cebu Oxygen and Acetylene Co., Inc. v. Bercilles: closure of a city street is within the powers of the city council under the Revised Charter of Cebu City. It sustained the subsequent sale of the land as being in accordance not only with the charter but also with Article 422 of the Civil Code, which provides: "Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State."

Favis vs. City of Baguio: appellant may not challenge the city council's act of withdrawing a strip of Lapu-Lapu Street at its dead end from public use and converting the remainder thereof into an alley. These are acts well within the ambit of the power to close a city street. The city council, it would seem to us, is the authority competent to determine whether or not a certain property is still necessary for public use. Such power to vacate a street or alley is discretionary. And the discretion will not ordinarily be controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust will be presumed. So the fact that some private interests may be served incidentally will not invalidate the vacation ordinance.

While it is true that the above cases dealt with city councils and not the provincial board, there is no reason for not applying the doctrine announced therein to the provincial board in connection with the

closure of provincial roads. The provincial board has, after all, the duty of maintaining such roads for the comfort and convenience of the inhabitants of the province. Moreover, this authority is inferable from the grant by the national legislature of the funds to the Province of Catanduanes for the construction of provincial roads.

The lower court found the petitioner's allegation of injury and prejudice to be without basis because he had "easy access anyway to the national road, for in fact the vehicles used by the Court and the parties during the ocular inspection easily passed and used it, reaching beyond plaintiff's house." However, the CA ruled that the he "was prejudiced by the closure of the road which formerly fronted his house. He and his family were undoubtedly inconvenienced by the loss of access to their place of residence for which we believe they should be compensated."

Favis: The general rule is that one whose property does not abut on the closed section of a street has no right to compensation for the closing or vacation of the street, if he still has reasonable access to the general system of streets. The circumstances in some cases may be such as to give a right to damages to a property owner, even though his property does not abut on the closed section. But to warrant recovery in any such case the property owner must show that the situation is such that he has sustained special damages differing in kind, and not merely in degree, from those sustained by the public generally.

Richmond v. City of Hinton : The Constitution does not undertake to guarantee to a property owner the public maintenance of the most convenient route to his door. The law will not permit him to be cut off from the public thoroughfares, but he must content himself with such route for outlet as the regularly constituted public authority may deem most compatible with the public welfare. When he acquires city property, he does so in tacit recognition of these principles. If, subsequent to his acquisition, the city authorities abandon a portion of the street to which his property is not immediately adjacent, he may suffer loss because of the inconvenience imposed, but the public treasury cannot be required to recompense him. Such case is damnum absque injuria.

petitioner is not entitled to damages because the injury he has incurred, such as it is, is the price he and others like him must pay for the welfare of the entire community. This is not a case where his property has been expropriated and he is entitled to just

compensation. The construction of the new road was undertaken under the general welfare clause. As the trial judge acutely observed, whatever inconvenience the petitioner has suffered "pales in significance compared to the greater convenience the new road, which is wide and concrete, straight to the veterans fountain and down to the pier, has been giving to the public, plus the fact that the new road adds beauty and color not only to the town of Virac but also to the whole province of Catanduanes." For the enjoyment of those benefits, every individual in the province, including the petitioner, must be prepared to give his share.

Macasiano vs. Hon. Diokno, August 10, 1992

Facts: Paranaque passed Ordinance No. 86, Series of 1990 which authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at Baclaran, Parañaque, Metro Manila and the establishment of a flea market thereon. The said ordinance was approved by the municipal council pursuant to MMC Ordinance No. 2, Series of 1979, authorizing and regulating the use of certain city and/or municipal streets, roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and conditions.On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s. 1990 of the municipal council of respondent municipality subject to the following conditions: 1. That the aforenamed streets are not used for vehicular traffic, and that the majority of the residents do not oppose the establishment of the flea market/vending areas thereon; 2. That the 2-meter middle road to be used as flea market/vending area shall be marked distinctly, and that the 2 meters on both sides of the road shall be used by pedestrians; 3. That the time during which the vending area is to be used shall be clearly designated; 4. That the use of the vending areas shall be temporary and shall be closed once the reclaimed areas are developed and donated by the Public Estate Authority.On June 20, 1990, the municipal council of Parañaque issued a resolution authorizing Parañaque Mayor Walfrido N. Ferrer to enter into contract with any service cooperative for the establishment, operation, maintenance and management of flea markets and/or vending areas.On August 8, 1990, respondent municipality and respondent Palanyag, a service cooperative, entered into an agreement whereby the latter shall operate, maintain and manage the flea market in the aforementioned streets

with the obligation to remit dues to the treasury of the municipal government of Parañaque. Consequently, market stalls were put up by respondent Palanyag on the said streets.On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. Gabriel St. in Baclaran. These stalls were later returned to respondent Palanyag.On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent Palanyag giving the latter ten (10) days to discontinue the flea market; otherwise, the market stalls shall be dismantled.Hence, on October 23, 1990, respondents municipality and Palanyag filed with the trial court a joint petition for prohibition and mandamus with damages and prayer for preliminary injunction, to which the petitioner filed his memorandum/opposition to the issuance of the writ of preliminary injunction.On October 24, 1990, the trial court issued a temporary restraining order to enjoin petitioner from enforcing his letter-order of October 16, 1990 pending the hearing on the motion for writ of preliminary injunction.On December 17, 1990, the trial court issued an order upholding the validity of Ordinance No. 86 s. 1990 of the Municipality' of Parañaque and enjoining petitioner Brig. Gen. Macasiano from enforcing his letter-order against respondent Palanyag.Issue: WON the ordinance authorizing the flea markets on public streets is valid NO.

The property of provinces, cities and municipalities is divided into property for public use and patrimonial property (Art. 423, Civil Code). As to what consists of property for public use, Article 424 of Civil Code states: Art. 424. Property for public use, in the provinces, cities and municipalities, consists of the provincial roads, city streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities or municipalities. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws.

J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets are local roads used for public service and are therefore considered public properties of respondent municipality. Properties of the local government which are devoted to public service are deemed public and are under the absolute control of Congress. Hence, local governments have no authority whatsoever to control or regulate the

use of public properties unless specific authority is vested upon them by Congress. One such example of this authority given by Congress to the local governments is the power to close roads as provided in Section 10, Chapter II of the LGC, which states: Sec. 10. Closure of roads. - A LGU may likewise, through its head acting pursuant to a resolution of its sangguniang and in accordance with existing law and the provisions of this Code, close any barangay, municipal, city or provincial road, street, alley, park or square. No such way or place or any part of thereof shall be close without indemnifying any person prejudiced thereby. A property thus withdrawn from public use may be used or conveyed for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed.

However, the aforestated legal provision which gives authority to LGUs to close roads and other similar public places should be read and interpreted in accordance with basic principles already established by law. These basic principles have the effect of limiting such authority of the province, city or municipality to close a public street or thoroughfare. Article 424 of the Civil Code lays down the basic principle that properties of public dominion devoted to public use and made available to the public in general are outside the commerce of man and cannot be disposed of or leased by the LGU to private persons. Aside from the requirement of due process, which should be complied with before closing a road, street or park, the closure should be for the sole purpose of withdrawing the road or other public property from public use when circumstances show that such property is no longer intended or necessary for public use or public service. When it is already withdrawn from public use, the property then becomes patrimonial property of the LGU concerned (Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et al., G.R. No. L--40474, August 29, 1975, 66 SCRA 481). It is only then that the respondent municipality can "use or convey them for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed" in accordance with the last sentence of Section 10, Chapter II of Blg. 337, known as LGC. In one case, the City Council of Cebu, through a resolution, declared the terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned road, the same not being included in the City Development Plan. Thereafter, the City Council passes another resolution authorizing the sale of the said abandoned road through public bidding. We held therein that the City of Cebu is

empowered to close a city street and to vacate or withdraw the same from public use. Such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract (Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al., G.R. No.L-40474, August 29, 1975, 66 SCRA 481). However, those roads and streets which are available to the public in general and ordinarily used for vehicular traffic are still considered public property devoted to public use. In such case, the local government has no power to use it for another purpose or to dispose of or lease it to private persons.

Even assuming, in gratia argumenti, that respondent municipality has the authority to pass the disputed ordinance, the same cannot be validly implemented because it cannot be considered approved by the Metropolitan Manila Authority due to non-compliance by respondent municipality of the conditions imposed by the former for the approval of the ordinance.

Respondent municipality has not shown any iota of proof that it has complied with the foregoing conditions precedent to the approval of the ordinance. The allegations of respondent municipality that the closed streets were not used for vehicular traffic and that the majority of the residents do not oppose the establishment of a flea market on said streets are unsupported by any evidence that will show that this first condition has been met. Likewise, the designation by respondents of a time schedule during which the flea market shall operate is absent.

Further, it is of public notice that the streets along Baclaran area are congested with people, houses and traffic brought about by the proliferation of vendors occupying the streets. To license and allow the establishment of a flea market along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets in Baclaran would not help in solving the problem of congestion.

The powers of a LGU are not absolute. They are subject to limitations laid down by toe Constitution and the laws such as our Civil Code. Moreover, the exercise of such powers should be subservient to paramount considerations of health and well-being of the members of the community. Every LGU has the sworn obligation to enact measures that will enhance the public health, safety and convenience, maintain peace and order, and promote the general prosperity of the inhabitants of the local units. Based on this objective, the local government should refrain from acting towards that which might prejudice or adversely affect the general welfare.

Dacanay case: the general public have a legal right to demand the demolition of the illegally constructed stalls in public roads and streets and the officials of respondent municipality have the corresponding duty arising from public office to clear the city streets and restore them to their specific public purpose. The instant case as well as the Dacanay case, involves an ordinance which is void and illegal for lack of basis and authority in laws applicable during its time. However, at this point, We find it worthy to note that Batas Pambansa Blg. 337, known as Local Government Lode, has already been repealed by Republic Act No. 7160 known as LGC of 1991 which took effect on January 1, 1992. Section 5(d) of the new Code provides that rights and obligations existing on the date of effectivity of the new Code and arising out of contracts or any other source of prestation involving a LGU shall be governed by the original terms and conditions of the said contracts or the law in force at the time such rights were vested.

DAR vs. Sarangani Agricultural Co., Inc., January 24, 2007

Petitioner: DARRespondents: Sarangani Agricultural Co Inc, ACIL Corporation, Nicasio Alcantara and Tomas AlcantaraPonente: Azcuna

Facts: The Sangguniang Bayan of Alabel, Sarangani passed Resolution No. 97-08 adopting a 10 year comprehensive development plan of the municipality and its land use. On January 30, 1998, pursuant to Municipal Zoning Ordinance No. 08, Series of 1997, and to accelerate the development and urbanization of Alabel, the Sangguniang Bayan of Alabel passed Resolution No. 98-03 reclassifying lots that were located within the built-up areas, based on the 1995-2005 Land Use Plan of the municipality, from agricultural to non-agricultural uses.Later, the Sangguniang Panlalawigan of Sarangani approved Resolution No. 98-018 or the “Resolution Adopting the Ten-Year Municipal Comprehensive Development Plan (MCDP 1995-2205) and the Land Use Development Plan and Zoning Ordinance of the Municipality of Alabel, Sarangani Per Resolution No. 97-08 and Municipal Ordinance No. 97-08, S. of 1997 of the Sangguniang Bayan of Alabel.” A portion of the area involving 376.5424 hectares, however, was covered by the CARP commercial farms deferment scheme.

The Zoning Certification issued by the office of the Municipal Planning and Development Council (MPDC) showed that respondents’ properties located at Barangay Maribulan, Alabel were among those reclassified from agricultural and pasture land to residential, commercial institutional, light industrial and open space in the 1995-2005 land use plan of Alabel.

The respondent then field an application for land use conversion of certain parcels of land. Meanwhile, members of the Sarangani Agrarian Reform Beneficiaries Association, Inc. (SARBAI) sent a letter-petition to the DAR Secretary oppposing the application for land use conversion filed by SACI. SARBAI alleged that its members were merely forced to sign the waiver of rights, considering that the commercial farm deferment period ended on June 15, 1998. Later, the PLUTC agreed to recommend the disapproval of a portion of a property which was still viable for agriculture. The conversion was deferred subject to the submission of certain requirements.

Later, the DAR Secretary denied SACI’s application for land use conversion. On November 9, 2000, DAR Secretary Horacio R. Morales, Jr. denied SACI’s application for land use conversion. SACI appealed to the Office of the President. The Office of the President dismissed the appeal and affirmed in toto the challenged DAR Orders. Respondents’ motion for reconsideration was denied, so they filed with the Court of Appeals a petition for review raising substantially the same issues. The CA granted the petition and ordred DAR to issue a conversion order. As to the deferred portion, DAR was directed to expedite the processing and evaluation of petitioner’s application.

Issue: WON a notice of coverage is an indispensable requirement for the acquisition of land

Held: No, Under the circumstances, a notice of coverage is not an indispensable requirement before DAR can acquire the subject lots or commercial farms, which are covered by a deferment period under the Comprehensive Agrarian Reform Law (CARL) or R.A. No 6657 upon its effectivity on June 15, 1998

Issue: WON the DAR should use the comprehensive land use plans and ordinance of the local sanggunian as primary reference

Held: Yes, Section 20 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, empowers the local government units to reclassify

agricultural lands. Memorandum Circular No. 54 “Prescribing the Guidelines Governing Section 20 of R.A. No. 7160 Otherwise Known as the Local Government Code of 1991 Authorizing Cities and Municipalities to Reclassify Agricultural Lands Into Non-Agricultural Uses” issued by President Ramos on June 8, 1993 specified the scope and limitations on the power of the cities and municipalities to reclassify agricultural lands into other uses. It provided that all ordinances authorizing reclassification of agricultural lands shall be subject to the review and approval of the province in the case of component cities or municipalities, or by the HLURB for highly urbanized or independent component cities in accordance with Executive Order No. 72, Series of 1993.Hence, with regard to agricultural lands that have been reclassified for non-agricultural uses by the local government unit concerned, the CA is correct in declaring that DAR should refer to the comprehensive land use plans and the ordinances of the Sanggunian in assessing land use conversion applications, thus: Construing Sec. 20 of the Local Government Code and the subsequent administrative issuances implementing the same, we are of the opinion that while the DAR retains the responsibility for approving or disapproving applications for land use conversion filed by individual landowners on their landholdings, the exercise of such authority should be confined to compliance with the requirements and limitations under existing laws and regulations, such as the allowable percentage of agricultural [area] to be reclassified, ensuring sufficient food production, areas non-negotiable for conversion and those falling under environmentally critical areas or highly restricted for conversion under the NIPAS law. Definitely, the DAR’s power in such cases may not be exercised in such a manner as to defeat the very purpose of the LGU concerned in reclassifying certain areas to achieve social and economic benefits in pursuit of its mandate towards the general welfare. Precisely, therefore, the DAR is required to use the comprehensive land use plans and accompanying ordinances of the local Sanggunian as primary references in evaluating applications for land use conversion filed by individual landowners. In this case, petitioners have already complied with the standard requirements laid down under the applicable rules and regulations of the DAR.... The conversion of agricultural lands into non-agricultural uses shall be strictly regulated and may be allowed only when the conditions prescribed under R.A. No. 6657 are present. In this regard, the Court agrees with the ratiocination of the CA that DAR’s scope of authority in assessing land use conversion applications is limited to examining whether the requirements prescribed by law and existing rules and regulations have been complied with.

This holds true in the present case where, because of the creation of the Province of Sarangani and in view of its thrust to urbanize, particularly its provincial capital which is the Municipality of Alabel, the local government has reclassified certain portions of its land area from agricultural to non-agricultural. Thus, to reiterate, in accordance with E.O. No. 72, Series of 1993, and subject to the limitations prescribed by law, DAR should utilize the comprehensive land use plans in evaluating the land use conversion application of respondents whose lands have already been reclassified by the local government for non--agricultural uses. This is not to say, however, that every property of respondents which is included in the comprehensive land use plan of the Municipality of Alabel shall be automatically granted non-coverage. As mentioned earlier, said application is subject to the limitations and conditions prescribed by law. One such limitation that is present here is that a portion of respondents’ property of 376.5424 hectares, a portion totaling 154.622 [or 154.1622] hectares which are planted to bananas and coconuts, are covered by CARL’s ten-year deferment scheme, which has expired on June 15, 1998. By law, these lands are subject to redistribution to CARP beneficiaries upon the lapse of the ten-year period, counted from the date of the effectivity of the CARL or R.A. No. 6657 on June 15, 1988, which was way before the creation of the Province of Sarangani and the eventual reclassification of the agricultural lands into non-agricultural in the Municipality of Alabel where respondents’ properties are located. In short, the creation of the new Province of Sarangani, and the reclassification that was effected by the Municipality of Alabel did not operate to supersede the applicable provisions of R.A. No. 6657. Moreover, Section 20 of the LGC of 1991 on the reclassification of lands explicitly states that “[n]othing in this section shall be construed as repealing, amending or modifying in any manner the provisions of R.A. No. 6657.” Thus, where the law speaks in clear and categorical language, there is no room for interpretation. There is only room for application.

Moday vs. CA, February 20, 1997

Facts: The Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed R 43-89, "Authorizing the Municipal Mayor to Initiate the Petition for Expropriation of a One (1) Hectare Portion of Lot No. 6138-Pls-4 Along the National Highway Owned by Percival Moday for the Site of Bunawan Farmers Center and Other Government Sports Facilities." R 43-89 was approved by

then Municipal Mayor Anuncio C. Bustillo and transmitted to the Sangguniang Panlalawigan for its approval. The Sangguniang Panlalawigan disapproved said Resolution and returned it with the comment that "expropriation is unnecessary considering that there are still available lots in Bunawan for the establishment of the government center." Bunawan filed a petition for Eminent Domain against petitioner Percival Moday, as well as his parents before the RTC at Prosperidad, Agusan del Sur. The municipality filed a Motion to Take or Enter Upon the Possession of Subject Matter of This Case stating that it had already deposited with the municipal treasurer the necessary amount in accordance with Section 2, Rule 67 of the Revised Rules of Court and that it would be in the government's best interest for public respondent to be allowed to take possession of the property.RTC: granted respondent municipality's motion to take possession of the land, held that the Sangguniang Panlalawigan's failure to declare the resolution invalid leaves it effective. It added that the duty of the Sangguniang Panlalawigan is merely to review the ordinances and resolutions passed by the Sangguniang Bayan under Section 208 (1) of B.P. Blg. 337, old LGC and that the exercise of eminent domain is not one of the two acts enumerated in Section 19 thereof requiring the approval of the Sangguniang Panlalawigan. MR: denied. CA: the public purpose for the expropriation is clear from R 43-89 and that since the Sangguniang Panlalawigan of Agusan del Sur did not declare R 43-89 invalid, expropriation of petitioners' property could proceed. MR: denied.        Meanwhile, the Municipality of Bunawan had erected three buildings on the subject property: the Association of Barangay Councils (ABC) Hall, the Municipal Motorpool, both wooden structures, and the Bunawan Municipal Gymnasium, which is made of concrete.Pet: seeks the reversal of the decision and resolution of the CA and a declaration that R 43-89 of the Municipality of Bunawan is null and void. Court issued TRO enjoining and restraining public respondent Judge from enforcing her order and respondent municipality from using and occupying all the buildings constructed and from further constructing any building on the land subject of this petition. Acting on petitioners' Omnibus Motion for Enforcement of Restraining Order and for Contempt, the Court issued a Resolution citing incumbent municipal mayor Anuncio C. Bustillo for contempt, ordering him to pay the fine and to demolish the "blocktiendas" which were built in violation of the restraining order. Bustillo paid the fine and manifested that he lost in the election. The incumbent Mayor Leonardo Barrios, filed a Manifestation, Motion to Resolve "Urgent Motion for Immediate Dissolution of the Temporary Restraining Order" and

Memorandum on June 11, 1996 for the Municipality of Bunawan.  Pet: contend that the CA erred in upholding the legality of the condemnation proceedings initiated by the municipality. According to petitioners, the expropriation was politically motivated and R 43-89 was correctly disapproved by the Sangguniang Panlalawigan, there being other municipal properties available for the purpose. Petitioners also pray that the former Mayor Bustillo be ordered to pay damages for insisting on the enforcement of a void municipal resolution.CA: declared that the Sangguniang Panlalawigan's reason for disapproving the resolution "could be baseless, because it failed to point out which and where are those available lots.'" Respondent court also concluded that since the Sangguniang Panlalawigan did not declare the municipal board's resolution as invalid, expropriation of petitioners' property could proceed.

Issue: WON a municipality may expropriate private property by virtue of a municipal resolution which was disapproved by the Sangguniang Panlalawigan. NO.

Eminent domain, the power which the Municipality of Bunawan exercised in the instant case, is a fundamental State power that is inseparable from sovereignty. It is government's right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose. Inherently possessed by the national legislature, the power of eminent domain may be validly delegated to local governments, other public entities and public utilities. For the taking of private property by the government to be valid, the taking must be for public use and there must be just compensation.

The Municipality of Bunawan's power to exercise the right of eminent domain is not disputed as it is expressly provided for in Batas Pambansa Blg. 337, the LGC 18 in forceat the time expropriation proceedings were initiated. Section 9 of said law states: A LGU may, through its head and acting pursuant to a resolution of its sanggunian, exercise the right of eminent domain and institute condemnation proceedings for public use or purpose.

What petitioners question is the lack of authority of themunicipality to exercise this right since the Sangguniang Panlalawigandisapproved R 43-89.

Section 153 of B.P. Blg. 337: Sangguniang Panlalawigan Review.  (1) Within thirty days after receiving copies of approved ordinances,resolutions and executive orders promulgated by the municipal mayor, the sangguniang panlalawigan shall examine the documents or

transmit them to the provincial attorney, or if there be none, to the provincial fiscal, who shall examine them promptly and inform the sangguniang panlalawigan in writing of any defect or impropriety which he may discover therein and make such comments or recommendations as shall appear to him proper. (2)  If thesangguniang panlalawigan shall find that any municipal ordinance, resolution or executive order is beyond the power conferred upon the sangguniang bayan or the mayor, it shall declare such ordinance, resolution or executive order invalid in whole or in part, entering its actions upon the minutes and advising the proper municipal authorities thereof. The effect of such an action shall be to annul the ordinance, resolution or executive order in question in whole or in part. The action of the sangguniang panlalawigan shall be final.

The Sangguniang Panlalawigan's disapproval of MunicipalR 43-89 is an infirm action which does not render said resolutionnull and void. The law, as expressed in Section 153 of B.P. Blg. 337, grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue. Although pertaining to a similar provision of law but different factual milieu then obtaining, the Court's pronouncements in Velazco v. Blas, where we cited significant early jurisprudence, are applicable to the case at bar. The only ground upon which a provincial board may declare any municipal resolution, ordinance, or order invalid is when such resolution, ordinance, or order is "beyond the powers conferred upon the council or president making the same." Absolutely no other ground is recognized by the law. A strictly legal question is before the provincial board in its consideration of a municipal resolution, ordinance, or order. The provincial (board's) disapproval of any resolution, ordinance, or order must be premised specifically upon the fact that such resolution, ordinance, or order is outside the scope of the legal powers conferred by law. If a provincial board passes these limits, it usurps the legislative function of the municipal council or president. Such has been the consistent course of executive authority.

Sangguniang Panlalawigan was without the authority to disapprove Municipal R 43-89 for the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and its Sangguniang Bayan the capacity to promulgate said resolution, pursuant to the earlier-quoted Section 9 of B.P. Blg. 337. Perforce, it follows that

Resolution No. 43-89 is valid and binding and could be used as lawful authority to petition for the condemnation of petitioners' property.

Accusation of political oppression: it is alleged that Percival Moday incurred the ire of then Mayor Bustillo when he refused to support the latter's candidacy for mayor in previous elections. Petitioners claim that then incumbent Mayor C. Bustillo used the expropriation to retaliate by expropriating their land even if there were other properties belonging to the municipality and available for the purpose. Specifically, they allege that the municipality owns a vacant seven-hectare property adjacent to petitioners' land, evidenced by a sketch plan.

The limitations on the power of eminent domain are that theuse must be public, compensation must be made and due process of law must be observed. The Supreme Court, taking cognizance of such issues as the adequacy of compensation, necessity of the taking and the public use character or the purpose of the taking, 23 has ruled that the necessity of exercising eminent domain must be genuine and of a public character. Government may not capriciously choose what private property should be taken. After a careful study of the records of the case, however, we find no evidentiary support for petitioners' allegations. The uncertified photocopy of the sketch plan does not conclusively prove that the municipality does own vacant land adjacent to petitioners' property suited to the purpose of the expropriation. In the questioned decision, respondent appellate court similarly held that the pleadings and documents on record have not pointed out any of respondent municipality's "other available properties available forthe same purpose." The accusations of political reprisal are likewiseunsupported by competent evidence. Consequently, the Court holds that petitioners' demand that the former municipal mayor be personally liable for damages is without basis.

Heirs of Alberto Suguitan vs. City of Mandaluyong, March 14, 2000

FACTS:

On October 13, 1994, the Sangguniang Panlungsod of Mandaluyong City issued Resolution No. 396, S-1994 authorizing then Mayor Benjamin B. Abalos to institute expropriation proceedings over the property of Alberto Suguitan.

The intended purpose of the expropriation was the expansion of the Mandaluyong Medical Center.

Mayor Benjamin Abalos wrote Alberto Suguitan a letter dated January 20, 1995 offering to buy his property, but Suguitan refused to sell. Consequently, on March 13, 1995, the city of Mandaluyong filed a complaint for expropriation with the Regional Trial Court of Pasig.

Petitioners assert that the city of Mandaluyong may only exercise its delegated power of eminent domain by means of an ordinance as required by section 19 of Republic Act (RA) No. 7160, and not by means of a mere resolution. Respondent contends, however, that it validly and legally exercised its power of eminent domain; that pursuant to article 36, Rule VI of the Implementing Rules and Regulations (IRR) of RA 7160, a resolution is a sufficient antecedent for the filing of expropriation proceedings with the Regional Trial Court.

ISSUE: Whether or not a resolution by the Sanggunian is sufficient to initiate an expropriation proceeding.

HELD: Despite the existence of this legislative grant in favor of local governments, it is still the duty of the courts to determine whether the power of eminent domain is being exercised in accordance with the delegating law.

The courts have the obligation to determine whether the following requisites have been complied with by the local government unit concerned:1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the local government unit, 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 present case, the City of Mandaluyong seeks to exercise the power of eminent domain over petitioners' property by means of a resolution, in contravention of the first requisite. The law in this case is clear and free from

ambiguity. Section 19 of the Code requires an ordinance, not a resolution, for the exercise of the power of eminent domain. We reiterate our ruling in Municipality of Parañaque v. V.M. Realty Corporation regarding the distinction between an ordinance and a resolution. In that 1998 case we held that: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. Additionally, the two are enacted differently — a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of all the Sanggunian members.

We cannot uphold respondent's contention that an ordinance is needed only to appropriate funds after the court has determined the amount of just compensation. An examination of the applicable law will show that an ordinance is necessary to authorize the filing of a complaint with the proper court since, beginning at this point, the power of eminent domain is already being exercised.

Barangay San Roque vs. Heirs of Pastor, June 20, 2000

Facts: Barangay San Roque in Talisay, Cebu filed before the Municipal Trial Court (MTC) of Talisay, Cebu (Branch 1) a Complaint to expropriate a property of Heirs of Francisco Pastor (Eugenio Sylianco, Teodoro Sylianco, Isabel Sylianco, Eugenia S. Ong, Lawrence Sylianco, Lawson Sylianco, Lawina S. Notario, Leonardo Sylianco, Jr. and Lawford Sylianco). In an Order dated 8 April 1997, the MTC dismissed the Complaint on the ground of lack of jurisdiction. It reasoned that "[e]minent domain is an exercise of the power to take private property for public use after payment of just compensation. In an action for eminent domain, therefore, the principal cause of action is the exercise of such power or right. The fact that the action also involves real property is merely incidental. An action for eminent domain is therefore within the exclusive original jurisdiction of the Regional Trial Court and not with this Court." When the complaint was filed with the Regional Trial Court (RTC), the RTC also dismissed the Complaint on 29 March 1999, holding that an action for eminent domain affected title to real property; hence, the value of the property to be expropriated would determine whether the case should be filed before the MTC or the RTC; therefore concluding that the action

should have been filed before the MTC since the value of the subject property was less than P20,000. The Barangay's motion for reconsideration was likewise denied on 14 May 1999. The Barangay filed the petition for review on certiorari with the Supreme Court.

Issue: Whether the Regional Trial Court (RTC) or the Metropolitan Trial Court (MTC) has jurisdiction over expropriation cases.

Held: The primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an expropriation suit is the government's exercise of eminent domain, a matter that is incapable of pecuniary estimation. True, the value of the property to be expropriated is estimated in monetary terms, for the court is duty-bound to determine the just compensation for it. This, however, is merely incidental to the expropriation suit. Indeed, that amount is determined only after the court is satisfied with the propriety of the expropriation. Verily, the Court held in Republic of the Philippines v. Zurbano that "condemnation proceedings are within the jurisdiction of Courts of First Instance," the forerunners of the regional trial courts (RTC). The said case was decided during the effectivity of the Judiciary Act of 1948 which, like Batas Pambansa 129 in respect to RTCs, provided that courts of first instance had original jurisdiction over "all civil actions in which the subject of the litigation is not capable of pecuniary estimation." The 1997 amendments to the Rules of Court were not intended to change these jurisprudential precedents.

Mactan-Cebu International Airport Authority vs. Lozada, Sr., February 25, 2010 176625Doctrine: Expropriation; private use. It is well settled that the taking of private property by the Government’s power of eminent domain is subject to two mandatory requirements: (1) that it is for a particular public purpose; and (2) that just compensation be paid to the property owner. These requirements partake of the nature of implied conditions that should be complied with to enable the condemnor to keep the property expropriated.

More particularly, with respect to the element of public use, the expropriator should commit to use the property pursuant to the purpose stated in the petition for expropriation filed, failing which, it should file another petition for

the new purpose. If not, it is then incumbent upon the expropriator to return the said property to its private owner, if the latter desires to reacquire the same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it would lack one indispensable element for the proper exercise of the power of eminent domain, namely, the particular public purpose for which the property will be devoted. Accordingly, the private property owner would be denied due process of law, and the judgment would violate the property owner’s right to justice, fairness, and equity.

In light of these premises, we now expressly hold that the taking of private property, consequent to the Government’s exercise of its power of eminent domain, is always subject to the condition that the property be devoted to the specific public purpose for which it was taken. Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and is peremptorily abandoned, then the former owners, if they so desire, may seek the reversion of the property, subject to the return of the amount of just compensation received. In such a case, the exercise of the power of eminent domain has become improper for lack of the required factual justification. Mactan-Cebu International Airport Authority (MCIAA) and Air Transportation Office (ATO) vs. Bernardo Lozada, et al., G.R. No. 176625, February 25, 2010.

G.R. No. 176625              

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY and AIR TRANSPORTATION OFFICE, Petitioners, vs.BERNARDO L. LOZADA, SR., and the HEIRS OF ROSARIO MERCADO, namely, VICENTE LOZADA, MARIO M. LOZADA, MARCIA L. GODINEZ, VIRGINIA L. FLORES, BERNARDO LOZADA, JR., DOLORES GACASAN, SOCORRO CAFARO and ROSARIO LOZADA, represented by MARCIA LOZADA GODINEZ, Respondents.

D E C I S I O N

NACHURA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse, annul, and set aside the Decision1 dated February 28, 2006

and the Resolution2 dated February 7, 2007 of the Court of Appeals (CA) (Cebu City), Twentieth Division, in CA-G.R. CV No. 65796.

The antecedent facts and proceedings are as follows:

Subject of this case is Lot No. 88-SWO-25042 (Lot No. 88), with an area of 1,017 square meters, more or less, located in Lahug, Cebu City. Its original owner was Anastacio Deiparine when the same was subject to expropriation proceedings, initiated by the Republic of the Philippines (Republic), represented by the then Civil Aeronautics Administration (CAA), for the expansion and improvement of the Lahug Airport. The case was filed with the then Court of First Instance of Cebu, Third Branch, and docketed as Civil Case No. R-1881.

As early as 1947, the lots were already occupied by the U.S. Army. They were turned over to the Surplus Property Commission, the Bureau of Aeronautics, the National Airport Corporation and then to the CAA.

During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr. acquired Lot No. 88 from Deiparine. Consequently, Transfer Certificate of Title (TCT) No. 9045 was issued in Lozada’s name.

On December 29, 1961, the trial court rendered judgment in favor of the Republic and ordered the latter to pay Lozada the fair market value of Lot No. 88, adjudged at P3.00 per square meter, with consequential damages by way of legal interest computed from November 16, 1947—the time when the lot was first occupied by the airport. Lozada received the amount of P3,018.00 by way of payment.

The affected landowners appealed. Pending appeal, the Air Transportation Office (ATO), formerly CAA, proposed a compromise settlement whereby the owners of the lots affected by the expropriation proceedings would either not appeal or withdraw their respective appeals in consideration of a commitment that the expropriated lots would be resold at the price they were expropriated in the event that the ATO would abandon the Lahug Airport, pursuant to an established policy involving similar cases. Because of this promise, Lozada did not pursue his appeal. Thereafter, Lot No. 88 was transferred and registered in the name of the Republic under TCT No. 25057.

The projected improvement and expansion plan of the old Lahug Airport, however, was not pursued.

Lozada, with the other landowners, contacted then CAA Director Vicente Rivera, Jr., requesting to repurchase the lots, as per previous agreement. The CAA replied that there might still be a need for the Lahug Airport to be used as an emergency DC-3 airport. It reiterated, however, the assurance that "should this Office dispose and resell the properties which may be found to be no longer necessary as an airport, then the policy of this Office is to give priority to the former owners subject to the approval of the President."

On November 29, 1989, then President Corazon C. Aquino issued a Memorandum to the Department of Transportation, directing the transfer of general aviation operations of the Lahug Airport to the Mactan International Airport before the end of 1990 and, upon such transfer, the closure of the Lahug Airport.

Sometime in 1990, the Congress of the Philippines passed Republic Act (R.A.) No. 6958, entitled "An Act Creating the Mactan-Cebu International Airport Authority, Transferring Existing Assets of the Mactan International Airport and the Lahug Airport to the Authority, Vesting the Authority with Power to Administer and Operate the Mactan International Airport and the Lahug Airport, and For Other Purposes."

From the date of the institution of the expropriation proceedings up to the present, the public purpose of the said expropriation (expansion of the airport) was never actually initiated, realized, or implemented. Instead, the old airport was converted into a commercial complex. Lot No. 88 became the site of a jail known as Bagong Buhay Rehabilitation Complex, while a portion thereof was occupied by squatters.3 The old airport was converted into what is now known as the Ayala I.T. Park, a commercial area.1avvphi1

Thus, on June 4, 1996, petitioners initiated a complaint for the recovery of possession and reconveyance of ownership of Lot No. 88. The case was docketed as Civil Case No. CEB-18823 and was raffled to the Regional Trial Court (RTC), Branch 57, Cebu City. The complaint substantially alleged as follows:

(a) Spouses Bernardo and Rosario Lozada were the registered owners of Lot No. 88 covered by TCT No. 9045;

(b) In the early 1960’s, the Republic sought to acquire by expropriation Lot No. 88, among others, in connection with its program for the improvement and expansion of the Lahug Airport;

(c) A decision was rendered by the Court of First Instance in favor of the Government and against the land owners, among whom was Bernardo Lozada, Sr. appealed therefrom;

(d) During the pendency of the appeal, the parties entered into a compromise settlement to the effect that the subject property would be resold to the original owner at the same price when it was expropriated in the event that the Government abandons the Lahug Airport;

(e) Title to Lot No. 88 was subsequently transferred to the Republic of the Philippines (TCT No. 25057);

(f) The projected expansion and improvement of the Lahug Airport did not materialize;

(g) Plaintiffs sought to repurchase their property from then CAA Director Vicente Rivera. The latter replied by giving as assurance that priority would be given to the previous owners, subject to the approval of the President, should CAA decide to dispose of the properties;

(h) On November 29, 1989, then President Corazon C. Aquino, through a Memorandum to the Department of Transportation and Communications (DOTC), directed the transfer of general aviation operations at the Lahug Airport to the Mactan-Cebu International Airport Authority;

(i) Since the public purpose for the expropriation no longer exists, the property must be returned to the plaintiffs.4

In their Answer, petitioners asked for the immediate dismissal of the complaint. They specifically denied that the Government had made assurances to reconvey Lot No. 88 to respondents in the event that the property would no longer be needed for airport operations. Petitioners instead asserted that the

judgment of condemnation was unconditional, and respondents were, therefore, not entitled to recover the expropriated property notwithstanding non-use or abandonment thereof.

After pretrial, but before trial on the merits, the parties stipulated on the following set of facts:

(1) The lot involved is Lot No. 88-SWO-25042 of the Banilad Estate, situated in the City of Cebu, containing an area of One Thousand Seventeen (1,017) square meters, more or less;

(2) The property was expropriated among several other properties in Lahug in favor of the Republic of the Philippines by virtue of a Decision dated December 29, 1961 of the CFI of Cebu in Civil Case No. R-1881;

(3) The public purpose for which the property was expropriated was for the purpose of the Lahug Airport;

(4) After the expansion, the property was transferred in the name of MCIAA; [and]

(5) On November 29, 1989, then President Corazon C. Aquino directed the Department of Transportation and Communication to transfer general aviation operations of the Lahug Airport to the Mactan-Cebu International Airport Authority and to close the Lahug Airport after such transfer[.]5

During trial, respondents presented Bernardo Lozada, Sr. as their lone witness, while petitioners presented their own witness, Mactan-Cebu International Airport Authority legal assistant Michael Bacarisas.

On October 22, 1999, the RTC rendered its Decision, disposing as follows:

WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in favor of the plaintiffs, Bernardo L. Lozada, Sr., and the heirs of Rosario Mercado, namely, Vicente M. Lozada, Marcia L. Godinez, Virginia L. Flores, Bernardo M. Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro and Rosario M. Lozada, represented by their attorney-in-fact Marcia Lozada Godinez, and

against defendants Cebu-Mactan International Airport Authority (MCIAA) and Air Transportation Office (ATO):

1. ordering MCIAA and ATO to restore to plaintiffs the possession and ownership of their land, Lot No. 88 Psd-821 (SWO-23803), upon payment of the expropriation price to plaintiffs; and

2. ordering the Register of Deeds to effect the transfer of the Certificate of Title from defendant[s] to plaintiffs on Lot No. [88], cancelling TCT No. 20357 in the name of defendant MCIAA and to issue a new title on the same lot in the name of Bernardo L. Lozada, Sr. and the heirs of Rosario Mercado, namely: Vicente M. Lozada, Mario M. Lozada, Marcia L. Godinez, Virginia L. Flores, Bernardo M. Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro and Rosario M. Lozada.

No pronouncement as to costs.

SO ORDERED.6

Aggrieved, petitioners interposed an appeal to the CA. After the filing of the necessary appellate briefs, the CA rendered its assailed Decision dated February 28, 2006, denying petitioners’ appeal and affirming in toto the Decision of the RTC, Branch 57, Cebu City. Petitioners’ motion for reconsideration was, likewise, denied in the questioned CA Resolution dated February 7, 2007.

Hence, this petition arguing that: (1) the respondents utterly failed to prove that there was a repurchase agreement or compromise settlement between them and the Government; (2) the judgment in Civil Case No. R-1881 was absolute and unconditional, giving title in fee simple to the Republic; and (3) the respondents’ claim of verbal assurances from government officials violates the Statute of Frauds.

The petition should be denied.

Petitioners anchor their claim to the controverted property on the supposition that the Decision in the pertinent expropriation proceedings did not provide for the condition that should the intended use of Lot No. 88 for the expansion of the Lahug Airport be aborted or abandoned, the property

would revert to respondents, being its former owners. Petitioners cite, in support of this position, Fery v. Municipality of Cabanatuan,7 which declared that the Government acquires only such rights in expropriated parcels of land as may be allowed by the character of its title over the properties—

If x x x land is expropriated for a particular purpose, with the condition that when that purpose is ended or abandoned the property shall return to its former owner, then, of course, when the purpose is terminated or abandoned the former owner reacquires the property so expropriated. If x x x land is expropriated for a public street and the expropriation is granted upon condition that the city can only use it for a public street, then, of course, when the city abandons its use as a public street, it returns to the former owner, unless there is some statutory provision to the contrary. x x x. If, upon the contrary, however, the decree of expropriation gives to the entity a fee simple title, then, of course, the land becomes the absolute property of the expropriator, whether it be the State, a province, or municipality, and in that case the non-user does not have the effect of defeating the title acquired by the expropriation proceedings. x x x.

When land has been acquired for public use in fee simple, unconditionally, either by the exercise of eminent domain or by purchase, the former owner retains no right in the land, and the public use may be abandoned, or the land may be devoted to a different use, without any impairment of the estate or title acquired, or any reversion to the former owner. x x x.8

Contrary to the stance of petitioners, this Court had ruled otherwise in Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority,9 thus—

Moreover, respondent MCIAA has brought to our attention a significant and telling portion in the Decision in Civil Case No. R-1881 validating our discernment that the expropriation by the predecessors of respondent was ordered under the running impression that Lahug Airport would continue in operation—

As for the public purpose of the expropriation proceeding, it cannot now be doubted. Although Mactan Airport is being constructed, it does not take away the actual usefulness and importance of the Lahug Airport: it is handling the air traffic both civilian and military. From it aircrafts fly to Mindanao and Visayas and pass thru it on their flights to the North and Manila. Then, no

evidence was adduced to show how soon is the Mactan Airport to be placed in operation and whether the Lahug Airport will be closed immediately thereafter. It is up to the other departments of the Government to determine said matters. The Court cannot substitute its judgment for those of the said departments or agencies. In the absence of such showing, the Court will presume that the Lahug Airport will continue to be in operation (emphasis supplied).

While in the trial in Civil Case No. R-1881 [we] could have simply acknowledged the presence of public purpose for the exercise of eminent domain regardless of the survival of Lahug Airport, the trial court in its Decision chose not to do so but instead prefixed its finding of public purpose upon its understanding that "Lahug Airport will continue to be in operation." Verily, these meaningful statements in the body of the Decision warrant the conclusion that the expropriated properties would remain to be so until it was confirmed that Lahug Airport was no longer "in operation." This inference further implies two (2) things: (a) after the Lahug Airport ceased its undertaking as such and the expropriated lots were not being used for any airport expansion project, the rights vis-à-vis the expropriated Lots Nos. 916 and 920 as between the State and their former owners, petitioners herein, must be equitably adjusted; and (b) the foregoing unmistakable declarations in the body of the Decision should merge with and become an intrinsic part of the fallo thereof which under the premises is clearly inadequate since the dispositive portion is not in accord with the findings as contained in the body thereof.10

Indeed, the Decision in Civil Case No. R-1881 should be read in its entirety, wherein it is apparent that the acquisition by the Republic of the expropriated lots was subject to the condition that the Lahug Airport would continue its operation. The condition not having materialized because the airport had been abandoned, the former owner should then be allowed to reacquire the expropriated property.11

On this note, we take this opportunity to revisit our ruling in Fery, which involved an expropriation suit commenced upon parcels of land to be used as a site for a public market. Instead of putting up a public market, respondent Cabanatuan constructed residential houses for lease on the area. Claiming that the municipality lost its right to the property taken since it did not pursue its public purpose, petitioner Juan Fery, the former owner of the lots expropriated, sought to recover his properties. However, as he had admitted

that, in 1915, respondent Cabanatuan acquired a fee simple title to the lands in question, judgment was rendered in favor of the municipality, following American jurisprudence, particularly City of Fort Wayne v. Lake Shore & M.S. RY. Co.,12McConihay v. Theodore Wright,13 and Reichling v. Covington Lumber Co.,14 all uniformly holding that the transfer to a third party of the expropriated real property, which necessarily resulted in the abandonment of the particular public purpose for which the property was taken, is not a ground for the recovery of the same by its previous owner, the title of the expropriating agency being one of fee simple.

Obviously, Fery was not decided pursuant to our now sacredly held constitutional right that private property shall not be taken for public use without just compensation.15 It is well settled that the taking of private property by the Government’s power of eminent domain is subject to two mandatory requirements: (1) that it is for a particular public purpose; and (2) that just compensation be paid to the property owner. These requirements partake of the nature of implied conditions that should be complied with to enable the condemnor to keep the property expropriated.16

More particularly, with respect to the element of public use, the expropriator should commit to use the property pursuant to the purpose stated in the petition for expropriation filed, failing which, it should file another petition for the new purpose. If not, it is then incumbent upon the expropriator to return the said property to its private owner, if the latter desires to reacquire the same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it would lack one indispensable element for the proper exercise of the power of eminent domain, namely, the particular public purpose for which the property will be devoted. Accordingly, the private property owner would be denied due process of law, and the judgment would violate the property owner’s right to justice, fairness, and equity.

In light of these premises, we now expressly hold that the taking of private property, consequent to the Government’s exercise of its power of eminent domain, is always subject to the condition that the property be devoted to the specific public purpose for which it was taken. Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and is peremptorily abandoned, then the former owners, if they so desire, may seek the reversion of the property, subject to the return of the amount of just compensation received. In such a case, the exercise of the power of eminent domain has become improper for lack of the required factual justification.17

Even without the foregoing declaration, in the instant case, on the question of whether respondents were able to establish the existence of an oral compromise agreement that entitled them to repurchase Lot No. 88 should the operations of the Lahug Airport be abandoned, we rule in the affirmative.

It bears stressing that both the RTC, Branch 57, Cebu and the CA have passed upon this factual issue and have declared, in no uncertain terms, that a compromise agreement was, in fact, entered into between the Government and respondents, with the former undertaking to resell Lot No. 88 to the latter if the improvement and expansion of the Lahug Airport would not be pursued. In affirming the factual finding of the RTC to this effect, the CA declared—

Lozada’s testimony is cogent. An octogenarian widower-retiree and a resident of Moon Park, California since 1974, he testified that government representatives verbally promised him and his late wife while the expropriation proceedings were on-going that the government shall return the property if the purpose for the expropriation no longer exists. This promise was made at the premises of the airport. As far as he could remember, there were no expropriation proceedings against his property in 1952 because the first notice of expropriation he received was in 1962. Based on the promise, he did not hire a lawyer. Lozada was firm that he was promised that the lot would be reverted to him once the public use of the lot ceases. He made it clear that the verbal promise was made in Lahug with other lot owners before the 1961 decision was handed down, though he could not name the government representatives who made the promise. It was just a verbal promise; nevertheless, it is binding. The fact that he could not supply the necessary details for the establishment of his assertions during cross-examination, but that "When it will not be used as intended, it will be returned back, we just believed in the government," does not dismantle the credibility and truthfulness of his allegation. This Court notes that he was 89 years old when he testified in November 1997 for an incident which happened decades ago. Still, he is a competent witness capable of perceiving and making his perception known. The minor lapses are immaterial. The decision of the competency of a witness rests primarily with the trial judge and must not be disturbed on appeal unless it is clear that it was erroneous. The objection to his competency must be made before he has given any testimony or as soon as the incompetency becomes apparent. Though Lozada is not part of the compromise agreement,18 he nevertheless adduced sufficient evidence to support his claim.19

As correctly found by the CA, unlike in Mactan Cebu International Airport Authority v. Court of Appeals,20 cited by petitioners, where respondent therein offered testimonies which were hearsay in nature, the testimony of Lozada was based on personal knowledge as the assurance from the government was personally made to him. His testimony on cross-examination destroyed neither his credibility as a witness nor the truthfulness of his words.

Verily, factual findings of the trial court, especially when affirmed by the CA, are binding and conclusive on this Court and may not be reviewed. A petition for certiorari under Rule 45 of the Rules of Court contemplates only questions of law and not of fact.21 Not one of the exceptions to this rule is present in this case to warrant a reversal of such findings.

As regards the position of petitioners that respondents’ testimonial evidence violates the Statute of Frauds, suffice it to state that the Statute of Frauds operates only with respect to executory contracts, and does not apply to contracts which have been completely or partially performed, the rationale thereof being as follows:

In executory contracts there is a wide field for fraud because unless they be in writing there is no palpable evidence of the intention of the contracting parties. The statute has precisely been enacted to prevent fraud. However, if a contract has been totally or partially performed, the exclusion of parol evidence would promote fraud or bad faith, for it would enable the defendant to keep the benefits already delivered by him from the transaction in litigation, and, at the same time, evade the obligations, responsibilities or liabilities assumed or contracted by him thereby.22

In this case, the Statute of Frauds, invoked by petitioners to bar the claim of respondents for the reacquisition of Lot No. 88, cannot apply, the oral compromise settlement having been partially performed. By reason of such assurance made in their favor, respondents relied on the same by not pursuing their appeal before the CA. Moreover, contrary to the claim of petitioners, the fact of Lozada’s eventual conformity to the appraisal of Lot No. 88 and his seeking the correction of a clerical error in the judgment as to the true area of Lot No. 88 do not conclusively establish that respondents absolutely parted with their property. To our mind, these acts were simply meant to cooperate with the government, particularly because of the oral promise made to them.

The right of respondents to repurchase Lot No. 88 may be enforced based on a constructive trust constituted on the property held by the government in favor of the former. On this note, our ruling in Heirs of Timoteo Moreno is instructive, viz.:

Mactan-Cebu International Airport Authority is correct in stating that one would not find an express statement in the Decision in Civil Case No. R-1881 to the effect that "the [condemned] lot would return to [the landowner] or that [the landowner] had a right to repurchase the same if the purpose for which it was expropriated is ended or abandoned or if the property was to be used other than as the Lahug Airport." This omission notwithstanding, and while the inclusion of this pronouncement in the judgment of condemnation would have been ideal, such precision is not absolutely necessary nor is it fatal to the cause of petitioners herein. No doubt, the return or repurchase of the condemned properties of petitioners could be readily justified as the manifest legal effect or consequence of the trial court’s underlying presumption that "Lahug Airport will continue to be in operation" when it granted the complaint for eminent domain and the airport discontinued its activities.

The predicament of petitioners involves a constructive trust, one that is akin to the implied trust referred to in Art. 1454 of the Civil Code, "If an absolute conveyance of property is made in order to secure the performance of an obligation of the grantor toward the grantee, a trust by virtue of law is established. If the fulfillment of the obligation is offered by the grantor when it becomes due, he may demand the reconveyance of the property to him." In the case at bar, petitioners conveyed Lots No. 916 and 920 to the government with the latter obliging itself to use the realties for the expansion of Lahug Airport; failing to keep its bargain, the government can be compelled by petitioners to reconvey the parcels of land to them, otherwise, petitioners would be denied the use of their properties upon a state of affairs that was not conceived nor contemplated when the expropriation was authorized.

Although the symmetry between the instant case and the situation contemplated by Art. 1454 is not perfect, the provision is undoubtedly applicable. For, as explained by an expert on the law of trusts: "The only problem of great importance in the field of constructive trust is to decide whether in the numerous and varying fact situations presented to the courts there is a wrongful holding of property and hence a threatened unjust enrichment of the defendant." Constructive trusts are fictions of equity which

are bound by no unyielding formula when they are used by courts as devices to remedy any situation in which the holder of legal title may not in good conscience retain the beneficial interest.

In constructive trusts, the arrangement is temporary and passive in which the trustee’s sole duty is to transfer the title and possession over the property to the plaintiff-beneficiary. Of course, the "wronged party seeking the aid of a court of equity in establishing a constructive trust must himself do equity." Accordingly, the court will exercise its discretion in deciding what acts are required of the plaintiff-beneficiary as conditions precedent to obtaining such decree and has the obligation to reimburse the trustee the consideration received from the latter just as the plaintiff-beneficiary would if he proceeded on the theory of rescission. In the good judgment of the court, the trustee may also be paid the necessary expenses he may have incurred in sustaining the property, his fixed costs for improvements thereon, and the monetary value of his services in managing the property to the extent that plaintiff-beneficiary will secure a benefit from his acts.

The rights and obligations between the constructive trustee and the beneficiary, in this case, respondent MCIAA and petitioners over Lots Nos. 916 and 920, are echoed in Art. 1190 of the Civil Code, "When the conditions have for their purpose the extinguishment of an obligation to give, the parties, upon the fulfillment of said conditions, shall return to each other what they have received x x x In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid down in the preceding article shall be applied to the party who is bound to return x x x."23

On the matter of the repurchase price, while petitioners are obliged to reconvey Lot No. 88 to respondents, the latter must return to the former what they received as just compensation for the expropriation of the property, plus legal interest to be computed from default, which in this case runs from the time petitioners comply with their obligation to respondents.

Respondents must likewise pay petitioners the necessary expenses they may have incurred in maintaining Lot No. 88, as well as the monetary value of their services in managing it to the extent that respondents were benefited thereby.

Following Article 118724 of the Civil Code, petitioners may keep whatever income or fruits they may have obtained from Lot No. 88, and respondents

need not account for the interests that the amounts they received as just compensation may have earned in the meantime.

In accordance with Article 119025 of the Civil Code vis-à-vis Article 1189, which provides that "(i)f a thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor x x x," respondents, as creditors, do not have to pay, as part of the process of restitution, the appreciation in value of Lot No. 88, which is a natural consequence of nature and time.26

WHEREFORE, the petition is DENIED. The February 28, 2006 Decision of the Court of Appeals, affirming the October 22, 1999 Decision of the Regional Trial Court, Branch 87, Cebu City, and its February 7, 2007 Resolution are AFFIRMED with MODIFICATION as follows:

1. Respondents are ORDERED to return to petitioners the just compensation they received for the expropriation of Lot No. 88, plus legal interest, in the case of default, to be computed from the time petitioners comply with their obligation to reconvey Lot No. 88 to them;

2. Respondents are ORDERED to pay petitioners the necessary expenses the latter incurred in maintaining Lot No. 88, plus the monetary value of their services to the extent that respondents were benefited thereby;

3. Petitioners are ENTITLED to keep whatever fruits and income they may have obtained from Lot No. 88; and

4. Respondents are also ENTITLED to keep whatever interests the amounts they received as just compensation may have earned in the meantime, as well as the appreciation in value of Lot No. 88, which is a natural consequence of nature and time;

In light of the foregoing modifications, the case is REMANDED to the Regional Trial Court, Branch 57, Cebu City, only for the purpose of receiving evidence on the amounts that respondents will have to pay petitioners in accordance with this Court’s decision. No costs.

SO ORDERED.

Case: MIGUEL BELUSO VS. THE MUNICIPALITY OF PANAY (CAPIZ), G.R. no. 153974 August 7, 2006

Facts: The Sangguniang Bayan of the Municipality of Panay issued Resolution No. 95-29 authorizing the municipal government through the mayor to initiate expropriation proceedings. A petition for expropriation was thereafter filed on April 14, 1997 by the respondent Municipality of Panay before the Regional Trial Court (RTC), Branch 18 of Roxas City. Petitioners filed a Motion to Dismiss alleging that the taking is not for public use but only for the benefit of certain individuals; that it is politically motivated because petitioners voted against the incumbent mayor and vice-mayor; and that some of the supposed beneficiaries of the land sought to be expropriated have not actually signed a petition asking for the property but their signatures were forged or they were misled into signing the same. The trial court denied petitioners’ Motion to Dismiss and declared that the expropriation in this case is for "public use" and the respondent has the lawful right to take the property upon payment of just compensation.

Petitioners then filed a Petition for Certiorari before the CA claiming that they were denied due process when the trial court declared that the taking was for public purpose without receiving evidence on petitioners’ claim that the Mayor of Panay was motivated by politics in expropriating their property and in denying their Motion to Hold in Abeyance the Hearing of the Court Appointed Commissioners; and that the trial court also committed grave abuse of discretion when it disregarded the affidavits of persons denying that they signed a petition addressed to the municipal government of Panay. Then CA rendered its Decision dismissing the Petition for Certiorari. It held that the petitioners were not denied due process as they were able to file an answer to the complaint and were able to adduce their defenses therein; and that the purpose of the taking in this case constitutes "public use".

Issue: Whether the Municipal Government of Panay exercise the power of Eminent Domain is being exercised in accordance with the delegating law under the existence of legislative grant in favor of local governments.

Decision: The petition is granted.

Rationale: The Court in no uncertain terms have pronounced that a local government unit cannot authorize an expropriation of private property through a mere resolution of its lawmaking body. R.A. No. 7160 otherwise known as the Local Government Code expressly requires an ordinance for the purpose and a resolution that merely expresses the sentiment of the municipal council will not suffice.

A resolution will not suffice for an LGU to be able to expropriate private property; and the reason for this is settled: 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. Additionally, the two are enacted differently -- a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of all the Sanggunian members.

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, Sec. 19 of R.A. [No.] 7160 categorically requires that the local chief executive act pursuant to an ordinance.

As respondent’s expropriation in this case was based merely on a resolution, such expropriation is clearly defective. While the Court is aware of the constitutional policy promoting local autonomy, the court cannot grant judicial sanction to an LGU’s exercise of its delegated power of eminent domain in contravention of the very law giving it such power.

Barangay Sindalan v. CA, G.R. No. G.R. No. 150640, 22 March 2007

Facts Barangay Sindalan, pursuant to its resolution, filed a complaint for eminent domain against the Sindayan spouses who were the registered owners of the parcel of land subject of the expropriation. The barangay sought to convert a portion of spouses Sindayan’s land into Barangay Sindalan’s feeder road. The spouses argued that the expropriation of their property was improper because it was sought for a private use. They alleged that the expropriation of their property, which was adjacent to Davsan II Subdivision,

would benefit only the homeowners of said subdivision. The RTC ruled that the barangay had the lawful right to take the property of the Sindayan spouses. The Court of Appeals reversed.

Issue: Whether the proposed exercise of the power of eminent domain would be for a public purpose – No, the contemplated road to be constructed by the barangay would benefit only the residents of a subdivision.

Held: In the exercise of the power of eminent domain, it is basic that the taking of private property must be for a public purpose. In this jurisdiction, "public use" is defined as "whatever is beneficially employed for the community." The intended feeder road sought to serve the residents of the subdivision only. It has not been shown that the other residents of Barangay Sindalan, San Fernando, Pampanga, will be benefited by the contemplated road to be constructed. While the number of people who use or can use the property is not determinative of whether or not it constitutes public use or purpose, the factual milieu of the case reveals that the intended use of respondents’ lot is confined solely to the Davsan II Subdivision residents and is not exercisable in common. Considering that the residents who need a feeder road are all subdivision lot owners, it is the obligation of the Davsan II Subdivision owner to acquire a right-of-way for them. To deprive respondents of their property instead of compelling the subdivision owner to comply with his obligation under the law is an abuse of the power of eminent domain and is patently illegal. Without doubt, expropriation cannot be justified on the basis of an unlawful purpose.

AMOS P. FRANCIA, JR., ET AL. VS. MUNICIPALITY OF MEYCAUAYAN[G.R. No. 170432, March 24, 2008]

FACTS: Respondent Municipality of Meycauayan, Bulacan filed a complaint for expropriation against petitioners. Respondent needed petitioners' 16,256 sq. m. idle property at the junction of the North Expressway, Malhacan-Iba-Camalig main road artery and the MacArthur Highway. It planned to use it to

establish a common public terminal for all types of public utility vehicles with a weighing scale for heavy trucks.

In their answer, petitioners denied that the property sought to be expropriated was raw land. It was in fact developed and there were plans for further development. For this reason, respondent's offer price of P2,333,500 (or P111.99 per square meter) was too low.

RTC ruled that the expropriation was for a public purpose. The construction of a common terminal for all public utility conveyances (serving as a two-way loading and unloading point for commuters and goods) would improve the flow of vehicular traffic during rush hours. Moreover, the property was the best site for the proposed terminal because of its accessibility. Hence, an order of expropriation and writ of possession were issued.

Aggrieved, petitioners filed a petition for certiorari in the Court of Appeals. They claimed that the trial court issued the orders without conducting a hearing to determine the existence of a public purpose.

CA rendered a decision partially granting the petition. Finding that petitioners were deprived of an opportunity to controvert respondent's allegations, the appellate court nullified the order of expropriation except with regard to the writ of possession. According to the CA, a hearing was not necessary because once the expropriator deposited the required amount (with the Court), the issuance of a writ of possession became ministerial.

ISSUE: Whether or not a prior determination of the existence of a public purpose is necessary for the issuance of a writ of possession.

SC RULING: No.

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. (emphasis supplied)

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.

SPS YUSAY v. CA[G.R. No. 156684, April 6, 2011]

FACTS:

The petitioners owned a parcel of land situated in Barangay Mauway, Mandaluyong City. Half of their land they used as their residence, and the rest they rented out to nine other families. Allegedly, the land was their only property and only source of income.

On October 2, 1997, the Sangguniang Panglungsod of Mandaluyong City adopted Resolution No. 552, Series of 1997, to authorize then City Mayor Benjamin S. Abalos, Sr. to take the necessary legal steps for the expropriation of the land of the petitioners for the purpose of developing it for low cost housing for the less privileged but deserving city inhabitants.

The petitioners became alarmed, and filed a petition for certiorari and prohibition, praying for the annulment of Resolution No. 552 due to its being unconstitutional, confiscatory, improper, and without force and effect.

The City countered that Resolution No. 552 was a mere authorization given to the City Mayor to initiate the legal steps towards expropriation, which included making a definite offer to purchase the property of the petitioners; hence, the suit of the petitioners was premature.

ISSUE: Whether or not the action of the petitioner will propsper.

HELD: The fact that there is no cause of action is evident from the face of the Complaint for expropriation which was based on a mere resolution. The absence of an ordinance authorizing the same is equivalent to lack of cause of action.

In view of the absence of the proper expropriation ordinance authorizing and providing for the expropriation, the petition for certiorari filed in the RTC was dismissible for lack of cause of action.

The remedy of prohibition was not called for, considering that only a resolution expressing the desire of the Sangguniang Panglungsod to expropriate the petitioners' property was issued. As of then, it was premature for the petitioners to mount any judicial challenge, for the power of eminent domain could be exercised by the City only through the filing of a verified complaint in the proper court. Before the City as the expropriating authority filed such verified complaint, no expropriation proceeding could be said to exist. Until then, the petitioners as the owners could not also be deprived of their property under the power of eminent domain.