CONSTITUTION OF LIBERTY

Fundamental Powers of the States

States has 3 fundamental powers which is the:

 POLICE POWER
 POWER OF EMINENT DOMAIN Power exercised by whom
 POWER OF TAXATION
Police and taxation: Exercised only by the
Similarities among the fundamental Powers of government
the State
Eminent Domain: Maybe exercised by private
1. They are inherent in the State and may be entities
exercised by it without need of express
constitutional grant. Nature of the property taken

2. They are not only necessary but also Police: Property is noxious or intended for a
indispensable. The State cannot continue or be noxious purpose
effective unless it can exercise them. Taxation and Eminent Domain: Property is
3. They are methods by which the State wholesome
interferes with private rights. Purpose as to property taken
4. They all presuppose an equivalent Police: Property taken is destroyed
compensation for the private rights interfered
with; and Taxation and Eminent Domain: Property is
taken for public use
5. They are exercised primarily by the
legislature. Compensation

Common limitations on these powers Police: Intangible altruistic feeling that one has
contributed to the public good/general welfare
1. May not be exercised arbitrarily to the
prejudice of the Bill of Rights; and Taxation: Protection and public improvements

2. Subject always to the limitations and Eminent Domain: Fair market value of the
requirements of the Constitution and may in property expropriated
proper cases be annulled by the courts,
Exercise of the fundamental powers of the
i.e., when there is grave abuse of discretion. state

Police Power vs. Taxation vs. Eminent General Rule: The inherent powers are to be
Domain exercised by the legislature. Exception: These
powers may be delegated to:
Extent of power
a. President.
Police power: Regulates liberty and property
b. Administrative Agencies.
Taxation and Eminent Domain: Affects only
property rights c. Local Government Units; and
d. Quasi-Public Corporation (private
corporations which perform a public function or
render public service. e.g., Meralco).  Police power of the State is a power
coextensive with self-protection and is
NOTE: ONLY Eminent Domain may be delegated aptly termed the law of overruling
to quasi-public corporations. necessity (Rubi v. Provincial Board, G.R.
No. L-14078, March 7, 1919).
Police Power
Generally, police power extends to all the
General Welfare Clause
great public needs. Its aspects, however,
The delegation of police power to the LGU (R.A. 7160 or the Local are the following:
Government Code of 1991, Sec. 16)
 Public health.
 Police power is the power of the state
 Public morals.
to promote public welfare by
restraining and regulating the use of  Public safety; and
liberty and property. It is the most  Public welfare.
pervasive, the least limitable, and the Requisites for a valid exercise of police
most demanding of the three power
fundamental powers of the State.
 The justification is found in the Latin 1. Lawful subject – The interests of the
maxims salus populi est suprema lex public generally, as distinguished from
(The welfare of the people is the those of a particular class, require the
supreme law) and sic utere tuout exercise of the police power; and
alienum non laedas (so use your 2. Lawful means – The means employed are
property as not to injure the property of reasonably necessary for the
others). As an inherent attribute of accomplishment of the purpose and not
sovereignty which virtually extends to unduly oppressive upon individuals. (NTC v.
all public needs, police power grants a Philippine Veterans Bank, 192 SCRA 257,
wide panoply of instruments through December 10, 1990).
which the State, as parens patriae, gives
effect to a host of its regulatory powers. Requisites for the valid exercise of police
We have held that the power to power by the delegate
“regulate” means the power to protect,
1. Express grant by law;
foster, promote, preserve, and control,
with due regard for the interests, first 2. Must not be contrary to law; and
and foremost, of the public, then of the
3. General Rule: Within territorial limits of
utility of its patrons (Gerochi v.
LGUs. Exception: When exercised to protect
Department of Energy, G. R. 159796,
water supply (Wilson v. City of Mountain
July 17, 2007).
Lake Terraces, 417 P.2d 632, August 18,
 Police power rests upon public
1966).
necessity and upon the right of the
State and of the public to self- The courts cannot interfere with the
protection. For this reason, its scope exercise of police power
expands and contracts with the
changing needs.
If the legislature decides to act, the choice Power of expropriation as exercised by
of measures or remedies lies within its Congress vs. Power of expropriation as
exclusive discretion, as long as the exercised by delegates
requisites for a valid exercise of police
power have been complied with. Power of Expropriation as exercised by
Congress:
Q: Can MMDA exercise police power?
Scope: The power is pervasive and all
A: NO. The MMDA cannot exercise police encompassing; It can reach every form of
powers since its powers are limited to property which may be needed by the State
the formulation, coordination, regulation, for public use. In fact, it can reach even
implementation, preparation, management, private property already dedicated to public
monitoring, setting of policies, installing a use, or even property already devoted to
system, and administration. Nothing in RA religious worship (Barlin v. Ramirez, 7 Phil.
No. 7924 granted the MMDA police power, 41, November 24, 1906)
let alone legislative power (MMDA v. Question of necessity: Political Question
Trackworks, G.R. No. 179554, December 16,
2009). Power of expropriation as exercised by
delegates
Power of Eminent Domain
Scope: It can only be broad as the enabling
The power of eminent domain is the law and the conferring authorities want it to
inherent right of the State to condemn be.
private property to public use upon
payment of just compensation. Question of necessity: Judicial question
(The courts can determine whether there is
The power o f the nation or the sovereign genuine necessity for its exercise, as well as
state to take, or to authorize the taking of the value of the property)
private property for public use without the
owner’s consent, conditioned upon
payment of just compensation (Brgy. Requisites for valid taking
Sindalan, San Fernando, Pampanga v. CA,
G.R. No. 150640, March 22, 2007). 1. The expropriator must enter a private
property;
Conditions for the exercise of the Power of
Eminent Domain 2. Entry must be for more than a
momentary period;
1. Taking of private property;
3. Entry must be under warrant or color of
2. For public Use. legal authority;
3. Just Compensation; and 4. Property must be devoted to public use
4. Observance of due process. NOTE: There or otherwise informally appropriated or
must be a valid offer to buy the property injuriously affected; and
and refusal of said offer. 5. Utilization of property must be in such a
way as to oust the owner and deprive him
of beneficial enjoyment of the property
(Republic v. De Castellvi, G.R. No. L-20620, just compensation which, of course, should
August 15, 1974). be based on preponderance of evidence.

Nature of property taken Purpose: For public interest

General Rule: All private property capable Destruction from necessity

of ownership, including services, can be
Who can exercise: May be validly
taken.
undertaken by private individuals
Exceptions:
Kind of right: Right of self defense, self-
a. Money; and preservation, whether applied to persons or
to property
b. Choses in action - personal right not
reduced in possession but recoverable by Requirement: No need conversion; no just
compensation but payment in the form of
a suit at law such as right to receive,
damages when applicable
demand or recover debt, demand or
Beneficiary: Private
damages on a cause of action ex contractu
or for a tort or omission of duty. Source: Based on tort and emanates from
the transgression of a right
NOTE: A chose in action is a property right
in something intangible, or which is not in Purpose: To vindicate a legal wrong through
one’s possession but enforceable through damages, which may be actual, moral,
legal or court action e.g. cash, a right of nominal, temperate, liquidated, or
action in tort or breach of contract, an exemplary.
entitlement to cash refund, checks, money,
salaries, insurance claims. Power of Taxation
Taxes are:
Eminent Domain vs. Destruction from
necessity 1. Enforced proportional contributions
from persons and property;
Eminent Domain:
2. Levied by the State by virtue of its
Who can exercise: Only authorized public
sovereignty;
entities or public officials
3. For the support of the government; and
Kind of right: Public right
4. For public needs.
Requirement: Conversion of property
taken for public use; payment of just Taxation
compensation
 It is the process by which the
Beneficiary: State/ Public government, through its legislative
branch, imposes and collects
Source: Arises from the State’s exercise of
revenues to defray the necessary
its power to expropriate private property
expenses of the government, and to
for public use. The Constitution mandates
be able to carry out, in particular, all
that the property owner shall only receive
projects that are supposed to be for
 the common good. Simply put, General Limitations on the power of
taxation is the method by which taxation
these contributions are exacted.
A. Inherent limitations
 The power to tax includes the
power to destroy only if it is used as 1. Public purpose;
a valid implement of the police
2. Non-delegability of power;
power in discouraging and in effect,
ultimately prohibiting certain things 3. Territoriality or situs of taxation;
or enterprises inimical to public
welfare. But where the power to tax 4. Exemption of government from
is used solely for the purpose of taxation; and
raising revenues, the modern view 5. International comity.
is that it cannot be allowed to
confiscate or destroy. If this is B. Constitutional limitations
sought to be done, the tax may be 1. Due process of law (Art. III, Sec.1);
successfully attacked as an
inordinate and unconstitutional 2. Equal protection clause (Art. III,
exercise of the discretion that is Sec.1);
usually vested exclusively in the
3. Uniformity, equitability and
legislature in ascertaining the
progressive system of taxation (Art. VI,
amount of tax (Roxas v. CTA, G.R.
Sec 28);
No. L-25043, April 26, 1968)
4. non-impairment of contracts (Art. III,
NOTE: Payment of taxes is an obligation
Sec. 10);
based on law, and not on contract. It is
a duty imposed upon the individual by 5. non-imprisonment for non-payment
the mere fact of his membership in the of poll tax (Art. III, Sec. 20);
body politic and his enjoyment of the
6. Revenue and tariff bills must
benefits available from such
originate in the House of
membership. Except only in the case of
Representatives (Art IV, Sec. 24);
poll (community) taxes, non-payment of
a tax may be the subject of criminal 7. non-infringement of religious
prosecution and punishment. The freedom (Art. III, Sec.4);
accused cannot invoke the prohibition
against imprisonment for debt, as taxes 8. Delegation of legislative authority to
are not considered debts. the President to fix tariff rates, import
and export quotas, tonnage and
Scope of legislative discretion in the wharfage dues;
exercise of taxation
9. Tax exemption of properties actually,
1. Whether to tax in the first place; directly and exclusively used for
religious, charitable and educational
2. Whom or what to tax;
purposes (NIRC, Sec 30);
3. For what public purpose; and
10. Majority vote of all the members of
4. Amount or rate of the tax. Congress required in case of legislative
grant of tax exemptions; be imposed on the same subject
matter, for the same purpose, by the
11. Non-impairment of SC’s jurisdiction
same taxing authority, within the same
in tax cases;
jurisdiction, during the same taxing
12. Tax exemption of revenues and period; and the taxes must be of the
assets of, including grants, same kind or character (City of Manila
endowments, donations or v. Coca-Cola Bottlers Philippines, G.R.
contributions to educational institutions No. 181845, August 4, 2009).
(Art. VI of the 1987 Constitution, Sec. 28
Two tax laws or ordinances constitute
[3]).
Double
Notice and hearing in the enactment of
Taxation when they tax:
tax laws
1. For the same Purpose;
From the procedural viewpoint, due
process does not require previous 2. By the same taxing Authority;
notice and hearing before a law
3. For the same taxing Periods;
prescribing fixed or specific taxes on
certain articles may be enacted. But 4. On the same Subject matter;
where the tax to be collected is to be
based on the value of taxable property, 5. Within the same taxing Jurisdiction;
the taxpayer is entitled to be notified of and
the assessment proceedings and to be 6. Of the same Kind or character
heard therein on the correct valuation (Swedish Match Philippines v. Treasurer
to be given the property. of the City of Manila, G.R. No. 181277,
Uniformity in taxation July 3, 2013).

It refers to geographical uniformity, NOTE: There is no provision in the

meaning it operates with the same Constitution specifically prohibiting
force and effect in every place where double taxation, however, where there
the subject of it is found. is direct duplicate taxation, there may
be violation of the constitutional
Progressive system of taxation precepts of equal protection and
uniformity in taxation.
It posits that the tax rate increases as
the tax base increases. Tax exemptions may either be
Double taxation 1. Constitutional; or
It means taxing the same property twice NOTE: Requisite for Constitutional
when it should be taxed only once; that exemption: actual, direct and exclusive
is, “taxing the same person twice by the use by educational and charitable
same jurisdiction for the same thing.”It institutions, and religious organizations
is obnoxious when the taxpayer is taxed [Sec. 28(3), Art. VI, 1987 Constitution].
twice, when it should be but once.
Otherwise described as “direct 2. Statutory.
duplicate taxation,” the two taxes must
 NOTE: It must be passed by majority of
all the members of the Congress [Art.
VI, 1987 Constitution, Sec. 28(4)].

Revocability of tax exemptions

1. Exemption is granted gratuitously –

revocable; and

2. Exemption is granted for valuable

consideration (non-impairment of contracts) –
irrevocable.

Construction of tax laws

In case of doubt, tax statutes are to be

construed strictly against the government and
liberally in favor of the taxpayer, for taxes,
being burdens, are not to be presumed beyond
what the applicable statute expressly and
clearly declares (CIR v. La Tondena, Inc. and
CTA, 5 SCRA 665, July 31, 1962).

Construction of laws granting tax exemptions

It must be strictly construed against the

taxpayer, because the law frowns on exemption
from taxation; hence, an exempting provision
should be construed strictissimi juris (Acting
Commissioner of Customs v. Manila Electric
Company, G.R. No. L- 23623, June 30, 1977).