Professional Documents
Culture Documents
Upon compliance with the guidelines The delay in the payment of just compensation is a forbearance
abovementioned, the court shall immediately issue of money. As such, this is necessarily entitled to earn
to the implementing agency an order to take interest. The difference in the amount between the final
possession of the property and start the amount as adjudged by the court and the initial payment made
implementation of the project. by the government - which is part and parcel of the just
compensation due to the property owner - should earn legal
Before the court can issue a writ of possession, the interest as a forbearance of money.
implementing agency shall present to the court a
certificate of availability of funds from the proper In the present case, Republic-DPWH filed the expropriation
official concerned.1wphi1 complaint on 22 March 2004. As this preceded the actual taking
of the property, the just compensation shall be appraised as of
In the event that the owner of the property this date. No interest shall accrue as the government did not
contests the implementing agency's proffered take possession of the Subject Premises. Republic-DPWH was
value, the court shall determine the just able to take possession of the property on 21 April 2006 upon
compensation to be paid the owner within sixty the agreement of the parties. Thus, a legal interest of 12% per
(60) days from the date of filing of the annum on the difference between the final amount adjudged
expropriation case. When the decision of the by the Court and the initial payment made shall accrue from
court becomes final and executory, the 21 April 2006 until 30 June 2013. From 1 July 2013 (BSP
implementing agency shall pay the owner the Circular No. 799) until the finality of the Decision of the Court,
difference between the amount already paid the difference between the initial payment and the final
amount adjudged by the Court shall earn interest at the rate
of 6% per annum. Thereafter, the total amount of just
compensation shall earn legal interest of 6% per annum from
the finality of this Decision until full payment thereof.
DANILO CALIVO CARIAGA vs. EMMANUEL D. SAPIGAO (b) the firing of guns was a common occurrence in Cariaga's
and GINALYN C. ACOSTA farm. 13
G.R. No. 223844. June 28, 2017
For her part, 14 Acosta averred that she was merely
FACTS: performing her duties as Barangay Secretary when she
Cariaga filed a complaint affidavit before the Office of the certified as true copies the photocopies of the aforesaid blotter
Provincial Prosecutor, accusing respondents Emmanuel D. entries requested by the police authorities.
Sapigao (Sapigao) and Ginalyn C. Acosta (Acosta; collectively,
respondents) of the crimes of Falsification of Public Documents, The Office of the Provincial Prosecutor (OPP) dismissed the
False Certification, and Slander by Deed. complaint for lack of probable cause. It found that the
questioned blotter entries were all made in good faith done in
In the said complaint, Cariaga alleged that respondents, in the performance of the respondents official duties, and based
their respective capacities as Barangay Chairman and on personal knowledge of what actually transpired. Filed an
Secretary of Brgy. Carosucan Sur, Asingan, Pangasinan, made MR, denied.
two (2) spurious entries in the barangay blotter stating that
(a) an unnamed resident reported that someone was firing a
gun inside Cariaga's compound, and that when Sapigao went The Office of the Regional State Prosecutor's Ruling
thereat, he was able to confirm that the gunfire came from
inside the compound and was directed towards the adjacent In a Resolution 22 dated January 5, 2015, the ORSP affirmed
rice fields; and (b) stating that a concerned but unnamed the OPP's ruling. Filed an MR, denied.
resident reported to Sapigao that Cariaga and his companions
attended the funeral march of former Kagawad Rodrigo Calivo, The CA Ruling
Sr. (Calivo, Sr.) with firearms visibly tucked in their waists The CA dismissed Cariagas petition for review before it.
(blotter entries). According to Cariaga, the police authorities The ORSP is not the final authority in the hierarchy of the
used the blotter entries to obtain a warrant for the search and National Prosecution Service, as one could still appeal an
seizure operation made inside his residence and cattle farm on unfavorable ORSP ruling to the Secretary of Justice (SOJ). As
December 18, 2012. While such operation resulted in the such, Cariaga's direct and immediate recourse to the CA to
confiscation of a firearm and several ammunitions, the criminal assail the ORSP ruling without first filing a petition for review
case for illegal possession of firearms consequently filed before the SOJ violated the principle of exhaustion of
against him was dismissed by the Regional Trial Court of administrative remedies. Thus, the dismissal of Cariaga's
Urdaneta City. 9 petition for review is warranted.
MR denied.
In his defense, 11 Sapigao denied the accusations against him,
maintaining that the blotter entries were true, as he personally The Issue Before the Court
witnessed their details. In this regard, he presented the Joint The issue for the Court's resolution is whether or not the CA
Affidavit 12 executed by Barangay Kagawads Elpidio Cariaga, correctly dismissed Cariaga's petition for review before it on
Metrinio Dela Cruz, Greg Turalba, and Ex-Barangay Kagawad the ground of non-exhaustion of administrative remedies.
Jaime Aguida attesting that:
(a) during the funeral march of Calivo, Sr., they observed that The Court's Ruling
Cariaga and his employees had handguns tucked into their The petition must be denied.
waists; and
The Department of Justice's (DOJ) Department Circular No. 70
33 dated July 3, 2000, entitled the "2000 NPS Rule on Appeal," (b) If the complaint is filed outside the NCR and is not
which governs the appeals process in the National Prosecution cognizable by the MTCs/MeTCs/MCTCs, the ruling of the OPP
Service (NPS), provides that resolutions of, inter alia, the RSP, may be appealable by way of petition for review before SOJ,
in cases subject of preliminary investigation/reinvestigation which ruling shall be with finality;
shall be appealed by filing a verified petition for review before
the SOJ. 34 However, this procedure was immediately (c) If the complaint is filed within the NCR and is cognizable by
amended by the DOJ's Department Circular No. 70-A 35 dated the MTCs/MeTCs/MCTCs, the ruling of the OCP may be
July 10, 2000, entitled "Delegation of Authority to Regional appealable by way of petition for review before the Prosecutor
State Prosecutors to Resolve Appeals in Certain Cases. General, whose ruling shall be with finality;
Department Circular No. 70-A delegated to the ORSPs the (d) If the complaint is filed within the NCR and is not cognizable
authority to rule with finality cases subject of preliminary by the MTCs/MeTCs/MCTCs, the ruling of the OCP may be
investigation/reinvestigation appealed before it, provided that: appealable by way of petition for review before the SOJ, whose
(a) the case is not filed in the National Capital Region (NCR); ruling shall be with finality;
and
(b) the case, should it proceed to the courts, is cognizable by (e) Provided, that in instances covered by (a) and (c), the SOJ
the Metropolitan Trial Courts, Municipal Trial Courts and may, pursuant to his power of control and supervision over the
Municipal Circuit Trial Courts (MeTCs, MTCs, and MCTCs) entire National Prosecution Service, review, modify, or reverse
which includes not only violations of city or municipal the ruling of the ORSP or the Prosecutor General, as the case
ordinances, but also all offenses punishable with imprisonment may be.
not exceeding six (6) years, irrespective of the amount of fine,
and regardless of other imposable accessory or other penalties In the instant case, Cariaga filed a complaint before the OPP in
attached thereto. 36 This is, however, without prejudice on the Pangasinan (i.e.,
part of the SOJ to review the ORSP ruling should the former outside the NCR) Of the crimes charged, only False
deem it appropriate to do so in the interest of justice. Certification and Slander by Deed are cognizable by the
MTCs/MeTCs/MCTCs, 38 while Falsification of Public
The foregoing amendment is further strengthened by a later Documents is cognizable by the Regional Trial Courts. 39
issuance, i.e., Department Circular No. 018-14.
Applying the prevailing rule on the appeals process of the NPS,
A reading of the foregoing provisions shows that the prevailing the ruling of the ORSP as regards Falsification of Public
appeals process in the NPS with regard to complaints subject Documents may still be appealed to the SOJ before resort to
of preliminary investigation would depend on two factors, the courts may be availed of. On the other hand, the ruling of
namely: where the complaint was filed, i.e., whether in the the ORSP pertaining to False Certification and Slander by Deed
NCR or in the provinces; and which court has original should already be deemed final at least insofar as the NPS
jurisdiction over the case, i.e., whether or not it is cognizable is concerned and thus, may already be elevated to the
by the MTCs/MeTCs/MCTCs. Thus, the rule shall be as follows: courts.
(a) If the complaint is filed outside the NCR and is cognizable
by the MTCs/MeTCs/MCTCs, the ruling of the OPP may be Verily, the CA erred in completely dismissing Cariaga's petition
appealable by way of petition for review before the ORSP, before it on the ground of non-exhaustion of administrative
which ruling shall be with finality; remedies, as only the ORSP ruling regarding the crime of
Falsification of Public Documents may be referred to the SOJ, the courts' power to review a public prosecutor's determination
while the ORSP ruling regarding the crimes of False of probable cause is to ensure that the latter acts within the
Certification and Slander by Deed may already be elevated permissible bounds of his authority or does not gravely abuse
before the courts. Thus, the CA should have resolved Cariaga's the same. This manner of judicial review is a constitutionally
petition on the merits insofar as the crimes of False enshrined form of check and balance which underpins the very
Certification and Slander by Deed are concerned. In such an core of our system of government.
instance, court procedure dictates that the instant case be
remanded to the CA for resolution on the merits. In the foregoing context, the Court observes that grave abuse
of discretion taints a public prosecutor's resolution if he
"However, when there is already enough basis on which a arbitrarily disregards the jurisprudential parameters of
proper evaluation of the merits may be had as in this case probable cause. In particular, case law states that probable
the Court may dispense with the time-consuming procedure cause, for the purpose of filing a criminal information, exists
of remand in order to prevent further delays in the disposition when the facts are sufficient to engender a well founded belief
of the case and to better serve the ends of justice." 40 In view that a crime has been committed and that the respondent is
of the foregoing as well as the fact that Cariaga prayed for probably guilty thereof. It does not mean "actual and positive
a resolution on the merits the Court finds it appropriate to cause" nor does it import absolute certainty. Rather, it is
resolve the substantive issues of this case. merely based on opinion and reasonable belief and, as such,
does not require an inquiry into whether there is sufficient
II. evidence to procure a conviction; it is enough that it is believed
In the recent case of Hilbero v. Morales, Jr., 41 the Court that the act or omission complained of constitutes the offense
reiterated the guiding principles in determining whether or not charged.
the courts may overturn the findings of the public prosecutor
in a preliminary investigation proceedings on the ground of In the instant case, a judicious perusal of the records reveals
grave abuse of discretion in the exercise of his/her functions, that the ORSP correctly ruled that there is no probable cause
viz.: to indict respondents of the crimes of Slander by Deed and
A public prosecutor's determination of probable cause that False Certification. As aptly found by the ORSP, there was no
is, one made for the purpose of filing an information in court improper motive on the part of respondents in making the
is essentially an executive function and, therefore, generally blotter entries as they were made in good faith; in the
lies beyond the pale of judicial scrutiny. The exception to this performance of their official duties as barangay officials; and
rule is when such determination is tainted with grave abuse of without any intention to malign, dishonor, or defame Cariaga.
discretion and perforce becomes correctible through the Moreover, the statements contained in the blotter entries were
extraordinary writ of certiorari. It is fundamental that the confirmed by disinterested parties who likewise witnessed the
concept of grave abuse of discretion transcends mere incidents recorded therein. On the other hand, Cariaga's
judgmental error as it properly pertains to a jurisdictional insistence that the blotter entries were completely false
aberration. While defying precise definition, grave abuse of essentially rests on mere self-serving assertions that deserve
discretion generally refers to a "capricious or whimsical no weight in law. 43 Thus, respondents cannot be said to have
exercise of judgment as is equivalent to lack of jurisdiction." committed the crime of Slander by Deed. Furthermore, suffice
Corollary, the abuse of discretion must be patent and gross so it to say that the mere act of authenticating photocopies of the
as to amount to an evasion of a positive duty or a virtual refusal blotter entries cannot be equated to committing the crime of
to perform a duty enjoined by law, or to act at all in False Certification under the law. In sum, the ORSP correctly
contemplation of law. To note, the underlying principle behind
found no probable cause to indict respondents of the said
crimes.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
Arlyn Almario-Templonuevo v. Office of the Whether or not the condonation doctrine should apply in the
Ombudsman case.
G.R. No. 198583 June 28, 2017
RULING:
FACTS: Yes, the condonation doctrine applies in this case. When the
Petitioner was elected as Sangguniang Bayan Member case was appealed to the CA, it should have considered
of Caramoan, Catanduanes during the May 2007 elections Templonuevo's election as Vice Mayor as rendering the
where she served from July 1, 2007 to June 30, 2010. In the imposition of administrative sanctions moot and academic on
May 2010 elections, she was elected as Municipal Vice Mayor the basis of the condonation doctrine. Said doctrine, despite its
of the same municipality. abandonment in Conchita Carpio-Morales v. CA, still applies in
A complaint was filed administratively charging this case as the effect of the abandonment was made
petitioner before the ombudsman for violation of Sec. 2, par. prospective in application.
1 of R.A. 9287 (illegal gambling). The ombudsman found her In Giron v. Ochoa, the Court recognized that the doctrine can
guilty of simple misconduct and imposed the penalty of 1 be applied to a public officer who was elected to a different
month suspension without pay. At the time she received her position provided that it is shown that the body politic electing
copy of the January 6, 2010 Decision on September 27, 2010, the person to another office is the same.
her term as Sangguniang Bayan Member had expired. She, In this case, those who elected Templonuevo into office as
however, was elected as Vice Mayor of the same municipality. Sangguniang Bayan member and Vice Mayor were essentially
Without filing a motion for reconsideration, she directly the same. Stated otherwise, the electorate for the Vice Mayor
filed before the CA an original petition for certiorari and of a municipality embraces wholly those voting for a member
prohibition under Rule 65 of the Rules of Court. She claimed of the Sangguniang Bayan. Logically, the condonation doctrine
that the Ombudsman acted with grave abuse of discretion in is applicable in her case. The Court is, thus, precluded from
ordering her suspension at a time when her term of office as imposing the administrative penalties of one-month
Sangguniang Bayan Member had already expired and she had suspension on account of the same people's decision to elect
been elected as Vice Mayor. This was however dismissed on her again to office.
the ground of failure to file a motion for reconsideration.
Hence, she filed a petition for review on certiorari of the
decision of the CA. She claims that there was no need to file
for reconsideration considering that the Ombudsman's decision
has become final, executory and unappealable, citing the Rules
of Procedure of the Ombudsman.
She also states fact that the misconduct for which she
was penalized was committed when she was still a
Sangguniang Bayan Member. As she was elected Vice Mayor,
she claims that such election resulted in the condonation of her
administrative liability on acts committed during her previous
post. Consequently, the decision of the Ombudsman is in her
view a patent nullity.
ISSUES:
City of Batangas v. Pilipinas Shell Corporation On May 28, 2001, the Sangguniang
GR No. 195003 June 7, 2017 Panlungsod enacted the Assailed Ordinance which
requires heavy industries operating along the portions
DOCTRINE: The policy of ensuring the autonomy of local of Batangas Bay within the territorial jurisdiction of
governments was not intended to create an imperium in Batangas City to construct desalination plants to
imperio and install intra-sovereign political subdivisions facilitate the use of seawater as coolant for their
independent of the sovereign state. As agents of the state, industrial facilities.
local governments should bear in mind that the police power
The Assailed Ordinance was approved by the city mayor
devolved to them by law must be, at all times, exercised in a
on June 7, 2001.
manner consistent with the will of their principal.
Heavy industries subject of the Assailed Ordinance had
FACTS: until May 28, 2006 to comply with its
provisions. Among the facilities affected by the
Batangas City is a local government unit.
Assailed Ordinance is PSPC's Tabangao Refinery.
The Sangguniang Panlungsod is the legislative body of
Batangas City. PSPC filed against Batangas City and the Sangguniang
Panlungsod a Petition for Declaration of Nullity (PSPC
Philippine Shell Petroleum Corporation (PSPC) is a duly
Petition) before the RTC praying that the Assailed
organized Philippine corporation engaged in the
Ordinance be declared null and void. The PSPC Petition
business of manufacturing, refining and distribution of
was raffled to Branch 84, and docketed as SP Civil Case
petroleum products; they also own and operate a
No. 7924. Thereafter, SPEX filed a petition-in-
refinery situated in Tabangao, Batangas City (Tabangao
intervention (Intervention) praying for the same relief.
Refinery).
PSPC averred that the Assailed Ordinance constitutes
Shell Philippines Exploration, B.V. (SPEX) is a foreign
an invalid exercise of police power as it failed to meet
corporation licensed to do business in the Philippines.
the substantive requirements for validity. Particularly,
In furtherance of the mandate of Presidential Decree
PSPC argued that the Assailed Ordinance contravenes
No. 87 (PD 87) to promote the discovery and production
the Water Code of the Philippines (Water Code), and
of indigenous petroleum, the Department of Energy
encroaches upon the power of the National Water
(DOE) executed Service Contract No. 38 (SC 38) with
Resources Board (NWRB) to regulate and control the
SPEX under which SPEX was tasked to explore and
Philippines' water resources. PSPC alleged that the
develop possible petroleum sources in North Western Assailed Ordinance unduly singles out heavy industries,
Palawan.
and holds them solely accountable for the loss of water
SPEX's exploration led to the discovery of an abundant and destruction of aquifers without basis, resulting in
source of natural gas in the Malampaya field off the the deprivation of their property rights without due
shores of Palawan, which thereafter gave rise to the process of law.
Malampaya Project. The Malampaya Project required RTC and CA declared that said ordinance is INVALID.
the construction of a 504-kilometer offshore pipeline for
the transport of natural gas from Malampaya field to
Batangas, for treatment in PSPC's Tabangao Refinery. ISSUE: whether or not the CA erred in affirming the RTC
Decision which declared the Assailed Ordinance invalid?
the use of ground water which, by virtue of the provisions of
the Water Code, pertains solely to the NWRB. By enacting the
RULING:
Assailed Ordinance, Batangas City acted in excess of the
The CA is correct. powers granted to it as an LGU, rendering the Assailed
The Assailed Ordinance is void for being ultra vires, for Ordinance ultra vzres.
being contrary to existing law, and for lack of evidence Being ultra vires, the Assailed Ordinance, in its entirety, is null
showing the existence of factual basis for its enactment. and void. Thus, it becomes unnecessary to still determine if it
The requisites for a valid ordinance are well established. Time complies with the other substantive requirements for a valid
and again, the Court has ruled that in order for an ordinance ordinance - i.e., that the ordinance is fair and reasonable.
to be valid, it must not only be within the corporate powers of
the concerned LGU to enact, but must also be passed in
accordance with the procedure prescribed by law. Moreover,
substantively, the ordinance (i) must not contravene the
Constitution or any statute; (ii) must not be unfair or
oppressive; (iii) must not be partial or discriminatory; (iv)
must not prohibit, but may regulate trade; (v) must be general
and consistent with public policy; and (vi) must not be
unreasonable.70
Batangas City claims that the enactment of the Assailed
Ordinance constitutes a valid exercise of its police power. This
claim is erroneous.
Police power is the power to prescribe regulations to promote
the health, morals, peace, education, good order, safety, and
general welfare of the people. As an inherent attribute of
sovereignty, police power primarily rests with the State. In
furtherance of the State's policy to foster genuine and
meaningful local autonomy, the national legislature delegated
the exercise of police power to local government units (LGUs)
as agents of the State. Such delegation can be found in Section
16 of the LGC, which embodies the general welfare clause.
Since LGUs exercise delegated police power as agents of the
State, it is incumbent upon them to act in conformity to the
will of their principal, the State. Necessarily, therefore,
ordinances enacted pursuant to the general welfare clause may
not subvert the State's will by contradicting national statutes.
There is no doubt, therefore, that the Assailed Ordinance
effectively contravenes the provisions of the Water Code as it
arrogates unto Batangas City the power to control and regulate
REPUBLIC VS SALVADOR ISSUE: Whether the capital gains tax on the transfer of the
G.R. No. 205428 June 7, 2017 expropriated property can be considered as consequential
damages that may be awarded to respondents.
FACTS:
Spouses Salvador are the registered owners of a parcel of land RULING: NO.
with a total land area of 229 square meters, located in Kaingin
Street, Barangay Parada, Valenzuela City. This is clearly an error. It is settled that the transfer of property
through expropriation proceedings is a sale or exchange within
The Republic, represented by the DPWH, filed a verified the meaning of Sections 24(D) and 56(A) (3) of the National
Complaint before the RTC Internal Revenue Code, and profit from the transaction
for the expropriation of 83 square meters of said parcel of land constitutes capital gain. 32 Since capital gains tax is a tax on
(subject property), as well as the improvements thereon, for passive income, it is the seller, or respondents in this
the construction of the C-5 Northern Link Road Project Phase case, who are liable to shoulder the tax.
2 (Segment 9) from the North Luzon Expressway (NLEX) to
McArthur Highway. 5 In fact, the Bureau of Internal Revenue (BIR), in BIR Ruling
No. 476-2013 dated December 18, 2013, has constituted the
Sps. Salvador received two checks from the DPWH DPWH as a withholding agent tasked to withhold the 6% final
representing 100% of the zonal value of the subject property withholding tax in the expropriation of real property for
and the cost of the one-storey semi-concrete residential house infrastructure projects. 11ms, as far as the government is
erected on the property amounting to 161,850.00 and concerned, the capital gains tax in expropriation proceedings
523,449.22, respectively. The RTC then issued the Writ of remains a liability of the seller, as it is a tax on the seller's gain
Possession in favor of the Republic. from the sale of real property.
On the same day, Salvador signified in open court that they Besides, as previously explained, consequential damages are
recognized the purpose for which their property is being only awarded if as a result of the expropriation, the remaining
expropriated and interposed no objection thereto. They also property of the owner suffers from an impairment or decrease
manifested that they have already received the total sum of in value. 35 In this case, no evidence was submitted to prove
685,349.22 from the DPWH and are therefore no longer any impairment or decrease in value of the subject property as
intending to claim any just compensation. a result of the expropriation. More significantly, given that the
payment of capital gains tax on the transfer of the subject
RTC rendered judgment in favor of the Republic condemning property has no effect on the increase or decrease in value of
the subject property for the purpose of implementing the the remaining property, it can hardly be considered as
construction of the C-5 Northern Link Road Project Phase 2 consequential damages that may be awarded to respondents.
(Segment 9) from NLEX to McArthur Highway, Valenzuela City.
G.R. No. 226792 1. Was Tallado's Suspension from office a ground for petition
for disqualification?
FACTS:
2. Was there a violation of the three-term limit provided in the
1. In the 2007 Elections, Respondent (Tallado) and Jesus O. Constitution and Local Government Code?
Typoco were both candidates for Governor in Camarines Norte,
Typoco was proclaimed as the winner.
Subsequently, on August 8, 2011, per nomination of the Section 4, Rule 67 of the Rules of Court provides:
parties, the trial court appointed three (3) Commissioners, Section 4. Order of expropriation. If the objections to and
namely, Engr. Marilyn P. Legaspi(P78.65 per square meter), the defenses against the right of the plaintiff to expropriate the
Engr. Norberto Badelles(P1.20 per square meter) and Atty. property are overruled, or when no party appears to defend as
Avelino Pakino(P2,000.00 per square meter), to determine the required by this Rule, the court may issue an order of
just compensation of the properties affected. expropriation declaring that the plaintiff has a lawful right to
take the property sought to be expropriated, for the public use
RTC Decision or purpose described in the complaint, upon the payment of
RTC set aside the Commissioners report and fixed the just just compensation to be determined as of the date of the
compensation at the rate of P1,520.00 per square meter with taking of the property or the ling of the complaint,
legal interest of 12% per annum reckoned from April 20, 2007, whichever came first. x x x
the date of ling of the complaint. The RTC opined that the just
compensation should not be reckoned from 1983, the time of As further pointed out in Republic v. Lara, et al., thus:
taking, because it was established by the landowners that x x x "The value of the property should be fixed as of the date
entry into their property was without their knowledge. when it was taken and not the date of the ling of the
proceedings." For where property is taken ahead of the filing
CA Decision of the condemnation proceedings, the value thereof may be
Ruled that TransCos entry into Oroville's lots in 1983 was enhanced by the public purpose for which it is taken; the entry
made without warrant or color of authority because at the time by the plaintiff upon the property may have depreciated its
TransCo constructed the Tagoloan-Pulangi 138 kV transmission value thereby; or, there may have been a natural increase in
line over the disputed properties in 1983, it was made without the value of the property from the time it is taken to the time
intent to expropriate. It added that TransCo constructed the the complaint is led, due to general economic conditions. The
owner of private property should be compensated only for what
he actually loses; it is not intended that his compensation shall
extend beyond his loss or injury. And what he loses is only the
actual value of his property at the time it is taken x x x
Thus, the Court rules that the Sandiganbayan did not commit
a grave abuse of discretion in dismissing the criminal case
against Maliksi. WHEREFORE, the petition is DENIED.
Southern Luzon Drug Corporation v DSWD services rendered as compensation to private establishments
for the 20% discount that they are required to grant to senior
citizens and PWDs. Further, the petitioner prayed that the
"An Act to Maximize the Contribution of Senior Citizens to respondents be permanently enjoined from implementing the
Nation-Building, Grant Benefits and Special Privileges and For assailed provisions.
Other Purposes," was enacted. Under the said law, a senior CA: dismissed the petition, the assailed provisions are valid
citizen, who must be at least 60 years old and has an annual exercise of police power
income of not more than P60,000.00,4 may avail of the
privileges provided in Section 4 thereof, one of which is 20%
discount on the purchase of medicines.
ISSUE:
To recoup the amount given as discount to qualified senior
citizens, covered establishments can claim an equal amount as 1. whether or not the assailed provisions of the law are
tax credit which can be applied against the income tax due constitutional
from them. 2. whether or not the laws violate the equal protection clause
The law was subsequently amended the tax treatment of the
discount was modified: from tax credit to tax deduction from
gross income, computed based on the net COGS. RULING:
The change in the tax treatment of the discount given to senior
1. YES.
citizens did not sit well with some drug store owners and
corporations, claiming it affected the profitability of their The change in the tax treatment of the discount was a valid
business. Thus, drug store owners filed a Petition for exercise of police power.
Prohibition with Prayer for Temporary Restraining Order (TRO)
I and/or Preliminary Injunction before this Court, assailing the The duty to care for the elderly and the disabled lies not only
constitutionality of Section 4(a) of R.A. No. 9257 primarily on upon the State, but also on the community and even private
the ground that it amounts to taking of private property entities. As to the State, the duty emanates from its role
without payment of just compensation. SC: constitutional as parens patriae which holds it under obligation to provide
protection and look after the welfare of its people especially
Magna Carta for Disabled Persons was enacted. Same discount those who cannot tend to themselves. Parens patriae means
(20%) and tax treatment (covered establishments shall claim parent of his or her country, and refers to the State in its role
the discounts given to PWDs as tax deductions from the gross as "sovereign", or the State in its capacity as a provider of
income, based on the net cost of goods sold or services protection to those unable to care for themselves. 33 In
rendered.) fulfilling this duty, the State may resort to the exercise of its
inherent powers: police power, eminent domain and power of
Petitioner filed a Petition for Prohibition with Application for
taxation.
TRO and/or Writ of Preliminary Injunction9 with the CA,
seeking to declare as unconstitutional (a) Section 4(a) of R.A. It is in the exercise of its police power that the Congress
No. 9257, and (b) Section 32 of R.A. No. 9442 and Section 5.1 enacted R.A. Nos. 9257 and 9442, the laws mandating a 20%
of its IRR, insofar as these provisions only allow tax deduction discount on purchases of medicines made by senior citizens
on the gross income based on the net cost of goods sold or and PWDs. It is also in further exercise of this power that the
legislature opted that the said discount be claimed as tax which may or may not come into existence. It is contingent as
deduction, rather than tax credit, by covered establishments. it only comes "into existence on an event or condition which
The petitioner, however, claims that the change in the tax may not happen or be performed until some other event may
prevent their vesting."51Certainly, the petitioner cannot claim
treatment of the discount is illegal as it constitutes taking
confiscation or taking of something that has yet to exist. It
without just compensation. It even submitted financial
cannot claim deprivation of profit before the consummation of
statements for the years 2006 and 2007 to support its claim of
a sale and the purchase by a senior citizen or PWD.
declining profits when the change in the policy was
implemented. (The Court is not swayed. The power being Corollary, whether to treat the discount as a tax deduction or
exercised here is police power and not eminent domain.) tax credit is a matter addressed to the wisdom of the
In the exercise of police power, "property rights of private legislature. After all, it is within its prerogative to enact laws
individuals are subjected to restraints and burdens in order to which it deems sufficient to address a specific public concern.
secure the general comfort, health, and prosperity of the And, in the process of legislation, a bill goes through rigorous
State."38 Even then, the State's claim of police power cannot tests of validity, necessity and sufficiency in both houses of
be arbitrary or unreasonable. After all, the overriding purpose Congress before enrolment. It undergoes close scrutiny of the
of the exercise of the power is to promote general welfare, members of Congress and necessarily had to surpass the
public health and safety, among others. It is a measure, which arguments hurled against its passage. Thus, the presumption
by sheer necessity, the State exercises, even to the point of of validity that goes with every law as a form of deference to
interfering with personal liberties or property rights in order to the process it had gone through and also to the legislature's
advance common good. To warrant such interference, two exercise of discretion.
requisites must concur: (a) the interests of the public
The legislature may also grant rights and impose additional
generally, as distinguished from those of a particular class,
burdens: It may also regulate industries, in the exercise of
require the interference of the! State; and (b) the means
police power, for the protection of the public. R.A. Nos. 9257
employed are reasonably necessary to the: attainment of the
and 9442 are akin to regulatory laws, the issuance of which is
object sought to be accomplished and not unduly oppressive
within the ambit of police power. The minimum wage law,
upon individuals. In other words, the proper exercise of the
zoning ordinances, price control laws, laws regulating the
police power requires the concurrence of a lawful subject and
operation of motels and hotels, laws limiting the working hours
a lawful method.39
to eight, and the like fall under this category. 58
Not confiscatory no taking of property without just Indeed, regulatory laws are within the category of police power
compensation. To reiterate, the subject provisions only affect measures from which affected persons or entities cannot claim
the petitioner's right to profit, and not earned profits. exclusion or compensation.
Unfortunately for the petitioner, the right to profit is not a
vested right or an entitlement that has accrued on the person I.t was ruled that it is within the bounds of the police power of
or entity such that its invasion or deprivation warrants the state to impose burden on private entities, even if it may
compensation. affect their profits, such as in the imposition of price control
measures. There is no compensable taking but only a
Right to profits does not give the petitioner the cause of action recognition of the fact that they are subject to the regulation
to ask for just compensation, it being only an inchoate right or of the State and that all personal or private interests must bow
one that has not fully developed50 and therefore cannot be down to the more paramount interest of the State.
claimed as one's own. An inchoate right is a mere expectation,
This notwithstanding, the regulatory power of the State does To recognize all senior citizens as a group, without distinction
not authorize the destruction of the business. While a business as to income, is a valid classification. The Constitution itself
may be regulated, such regulation must be within the bounds considered the elderly as a class of their own and deemed it a
of reason, i.e., the regulatory ordinance must be reasonable, priority to address their needs. When the Constitution declared
and its provision cannot be oppressive amounting to an its intention to prioritize the predicament of the
arbitrary interference with the business or calling subject of underprivileged sick, elderly, disabled, women, and
regulation. A lawful business or calling may not, under the children,71 it did not make any reservation as to income, race,
guise of regulation, be unreasonably interfered with even by religion or any other personal circumstances. It was a blanket
the exercise of police power. 64 After all, regulation only privilege afforded the group of citizens in the enumeration in
signifies control or restraint, it does not mean suppression or view of the vulnerability of their class.
absolute prohibition. The same ratiocination may be said of the recognition of PWDs
The power to regulate is not the power to destroy useful and as a class in R.A. No. 9442 and in granting them
harmless enterprises, but is the power to protect, foster, discounts.1wphi1 It needs no further explanation that PWDs
promote, preserve, and control with due regard for the have special needs which, for most,' last their entire lifetime.
interest, first and foremost, of the public, then of the utility and They constitute a class of their own, equally deserving of
of its patrons. Any regulation, therefore, which operates as an government support as our elderlies. While some of them
effective confiscation of private property or constitutes an maybe willing to work and earn income for themselves, their
arbitrary or unreasonable infringement of property rights is disability deters them from living their full potential. Thus, the
void, because it is repugnant to the constitutional guaranties need for assistance from the government to augment the
of due process and equal protection of the laws. 66 reduced income or productivity brought about by their physical
or intellectual limitations.
2. NO.
There is also no question that the grant of mandatory discount
Equal protection requires that all persons or things similarly is germane to the purpose of R.A. Nos. 9257 and 9442, that is,
situated should be treated alike, both as to rights conferred to adopt an integrated and comprehensive approach to health
and responsibilities imposed. Similar subjects, in other words, development and make essential goods and other social
should not be treated differently, so as to give undue favor to services available to all the people at affordable cost, with
some and unjustly discriminate against others. The guarantee special priority given to the elderlies and the disabled, among
means that no person or class of persons shall be denied the others. The privileges granted by the laws ease their concerns
same protection of laws which is enjoyed by other persons or and allow them to live more comfortably.
other classes in like circumstances.68 (Citations omitted)
The subject laws also address a continuing concern of the
"The equal protection clause is not infringed by legislation government for the welfare of the senior citizens and PWDs. It
which applies only to those persons falling within a specified is not some random predicament but an actual, continuing and
class. If the groupings are characterized by substantial pressing concern that requires preferential attention. Also, the
distinctions that make real differences, one class may be laws apply to all senior citizens and PWDs, respectively,
treated and regulated differently from another."69 For a without further distinction or reservation. Without a doubt, all
classification to be valid, (1) it must be based upon substantial the elements for a valid classification were met.
distinctions, (2) it must be germane to the purposes 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. 70
Drugstores Association of the Philippines, Inc. v. concurrence of a lawful subject and a lawful method. In more
National Council on Disability Affairs (NCDA) familiar words, (a) the interests of the public generally, as
G.R. No. 194561 September 14, 2016 distinguished from those of a particular class, should justify the
Peralta, J. interference of the state; and (b) the means employed are
reasonably necessary for the accomplishment of the purpose
FACTS: and not unduly oppressive upon individuals.
RA 9442 was issued amending RA 7277 to read as Magna R.A. No. 7277 was enacted primarily to provide full
Carta for Persons with Disability and granted the PWDs a 20% support to the improvement of the total well-being of PWDs
discount on the purchase of medicine, and a tax deduction and their integration into the mainstream of society. Hence,
scheme was adopted wherein covered establishments may the PWD mandatory discount on the purchase of medicine is
deduct the discount granted from gross income based on the supported by a valid objective or purpose. It has a valid subject
net cost of goods sold or services rendered. considering that the concept of public use is no longer confined
The NCDA issued an order prescribing guidelines for the to the traditional notion of use by the public, but held
issuance of a PWD ID, which was the basis for providing synonymous with public interest, public benefit, public welfare,
privileges and discounts to bona fide PWDs. The DOF issued a and public convenience. As in the case of senior citizens, the
Revenue Regulation stating that drugstores can only deduct discount privilege to which the PWDs are entitled is actually a
the 20% discount from their gross income subject to some benefit enjoyed by the general public to which these citizens
conditions. The DOH also issued an order stating that the grant belong. The means employed in invoking the active
of the discount applied to the purchase of branded and participation of the private sector, in order to achieve the
unbranded medicine from all establishments dispensing purpose or objective of the law, is reasonably and directly
medicine for the exclusive use of the PWDs. related. Also, the means employed to provide a fair, just and
Petitioner filed a Petition for Prohibition before the CA quality health care to PWDs are reasonably related to its
to annul and enjoin the implementation of the laws and orders accomplishment, and are not oppressive, considering that as a
for being unconstitutional. The CA upheld their form of reimbursement, the discount extended to PWDs in the
constitutionality, hence the petition. purchase of medicine can be claimed by the establishments as
allowable tax deductions pursuant to Section 32 of R.A. No.
ISSUES: 9442 as implemented in Section 4 of DOF Revenue Regulations
1) Whether or not the mandated PWD Discount is a valid No. 1-2009. Otherwise stated, the discount reduces taxable
exercise of police power. income upon which the tax liability of the establishments is
2) Whether or not RA 7277 as amended by RA 9442 computed.
violates the due process clause, for only requiring
identification cards that do not prove any medical 2) No, it did not violate the Due Process clause. RA 7277
finding of disability, and for not providing any process as amended, must be read with its IRR which stated that upon
for identification of a PWD. its effectivity, NCWP would adopt the ID issued by the LGUs for
3) Whether the PWD Discount violates the equal protection purposes of uniformity in the implementation. Thus the NCDA
clause because it singles out drugstores to bear the order provides the reasonable guidelines in the issuance of IDs
burden of the discount. to PWDs as proof of their entitlement to the privileges and
incentives under the law and fills the details in the
RULING: implementation of the law.
1) Yes, the PWD Discount is a valid exercise of police Petitioners' insistence that the order is void because it
power. A legislative act based on the police power requires the allows allegedly non-competent persons like teachers, head of
establishments and heads of NGOs to confirm the medical particular, a large discretion is necessarily vested in the
condition of the applicant is misplaced. It must be stressed that legislature to determine, not only what interests of the public
only for apparent disabilities can the teacher or head of a require, but what measures are necessary for the protection of
business establishment validly issue the mentioned required such interests. Thus, the Courts are mindful of the fundamental
document because, obviously, the disability is easily seen or criteria in cases of this nature that all reasonable doubts should
clearly visible. It is, therefore, not an unqualified grant of be resolved in favor of the constitutionality of a statute. The
authority for the said non- medical persons as it is simply burden of proof is on him who claims that a statute is
limited to apparent disabilities. For a non-apparent disability or unconstitutional. Petitioners failed to discharge such burden of
a disability condition that is not easily seen or clearly visible, proof.
the disability can only be validated by a licensed private or
government physician, and a medical certificate has to be
presented in the procurement of an ID. Also, to avail of the
discount, the PWD must not only present his I.D. but also the
doctor's prescription stating, among others, the generic name
of the medicine, the physician's address, contact number and
professional license number, professional tax receipt number
and narcotic license number, if applicable. A purchase booklet
issued by the local social/health office is also required in the
purchase of over-the-counter medicines. Likewise, any single
dispensing of medicine must be in accordance with the
prescription issued by the physician and should not exceed a
one (1) month supply. Therefore, R.A. No. 7277 as amended
complies with the standards of substantive due process.