6. WALTER LUTZ v. J.

ANTONIO ARANETA
PETITIONER: Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the Intestate
Estate of Antonio Jayme Ledesma, seeks to recover from the Collector of Internal Revenue the
sum of P14,666.40 paid by the estate as taxes, under section 3 of the Act [Commonwealth Act
567], for the crop years 1948-1949 and 1949-1950; alleging that such tax is unconstitutional
and void, being levied for the aid and support of the sugar industry exclusively, which in
plaintiff's opinion is not a public purpose for which a tax may be constitutionally levied.
RULING: . Analysis of the Act, and particularly of section 6 will show that the tax is levied with
a regulatory purpose, to provide means for the rehabilitation and stabilization of the
threatened sugar industry. In other words, the act is primarily an exercise of the police power.
This Court can take judicial notice of the fact that sugar production is one of the great industries
of our nation, sugar occupying a leading position among its export products; that it gives
employment to thousands of laborers in fields and factories; that it is a great source of the
state's wealth, is one of the important sources of foreign exchange needed by our government,
and is thus pivotal in the plans of a regime committed to a policy of currency stability. Its
promotion, protection and advancement, therefore redounds greatly to the general welfare.
Hence it was competent for the legislature to find that the general welfare demanded that the
sugar industry should be stabilized in turn; and in the wide field of its police power, the
lawmaking body could provide that the distribution of benefits therefrom be readjusted among
its components to enable it to resist the added strain of the increase in taxes that it had to
sustain
Once it is conceded, as it must, that the protection and promotion of the sugar industry is a
matter of public concern, it follows that the Legislature may determine within reasonable
bounds what is necessary for its protection and expedient for its promotion. Here, the
legislative discretion must be allowed fully play, subject only to the test of reasonableness; and
it is not contended that the means provided in section 6 of the law (above quoted) bear no
relation to the objective pursued or are oppressive in character. If objective and methods are
alike constitutionally valid, no reason is seen why the state may not levy taxes to raise funds
for their prosecution and attainment. Taxation may be made the implement of the state's
police power

7. JOSE J. FERRER, JR v. CITY MAYOR HERBERT BAUTISTA

PETITIONER: Petitioner asserts that there is no specific provision in the 1987 Constitution
stating that the ownership and enjoyment of property bear a social function. And even if there
is, it is seriously doubtful and far-fetched that the principle means that property owners should
provide funds for the housing of informal settlers and for home site development. Social justice
and police power, petitioner believes, does not mean imposing a tax on one, or that one has
to give up something, for the benefit of another. At best, the principle that property ownership
and enjoyment bear a social function is but a reiteration of the Civil Law principle that property
should not be enjoyed and abused to the injury of other properties and the community, and
that the use of the property may be restricted by police power, the exercise of which is not
involved in this case.

RULING: Contrary to petitioner’s submission, the 1987 Constitution explicitly espouses the
view that the use of property bears a social function and that all economic agents shall
contribute to the common good. Property has not only an individual function, insofar as it has
to provide for the needs of the owner, but also a social function insofar as it has to provide for
the needs of the other members of society. The principle is this:

Police power proceeds from the principle that every holder of property, however absolute and
unqualified may be his title, holds it under the implied liability that his use of it shall not be
injurious to the equal enjoyment of others having an equal right to the enjoyment of their
property, nor injurious to the right of the community. Rights of property, like all other social
and conventional rights, are subject to reasonable limitations in their enjoyment as shall
prevent them from being injurious, and to such reasonable restraints and regulations
established by law as the legislature, under the governing and controlling power vested in them
by the constitution, may think necessary and expedient
Police power, which flows from the recognition that salus populi est suprema lex (the welfare
of the people is the supreme law), 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.93 Property rights of individuals may be subjected to
restraints and burdens in order to fulfill the objectives of the government in the exercise of
police power. 94 In this jurisdiction, it is well-entrenched that taxation may be made the
implement of the state’s police power.
8. ARTURO M. TOLENTINO v COMMISSION ON ELECTIONS

PETITIONER: Organic Resolution No. 1 and the other implementing resolutions thereof
subsequently approved by the Convention have no force and effect as laws in so far as they
provide for the holding of a plebiscite co-incident with the elections of eight senators and all
city, provincial and municipal officials to be held on November 8, 1971, hence all of Comelec's
acts in obedience thereof and tending to carry out the holding of the plebiscite directed by said
resolutions are null and void, on the ground that the calling and holding of such a plebiscite is,
by the Constitution, a power lodged exclusively in Congress, as a legislative body, and may not
be exercised by the Convention, and that, under Section 1, Article XV of the Constitution, the
proposed amendment in question cannot be presented to the people for ratification separately
from each and all of the other amendments to be drafted and proposed by the Convention

RULING: True it is that once convened, this Convention became endowed with extra ordinary
powers generally beyond the control of any department of the existing government, but the
compass of such powers can be co-extensive only with the purpose for which the convention
was called and as it may propose cannot have any effect as part of the Constitution until the
same are duly ratified by the people, it necessarily follows that the acts of convention, its
officers and members are not immune from attack on constitutional grounds. The present
Constitution is in full force and effect in its entirety and in everyone of its parts the existence
of the Convention notwithstanding, and operates even within the walls of that assembly. While
it is indubitable that in its internal operation and the performance of its task to propose
amendments to the Constitution it is not subject to any degree of restraint or control by any
other authority than itself, it is equally beyond cavil that neither the Convention nor any of its
officers or members can rightfully deprive any person of life, liberty or property without due
process of law, deny to anyone in this country the equal protection of the laws or the freedom
of speech and of the press in disregard of the Bill of Rights of the existing Constitution. Nor, for
that matter, can such Convention validly pass any resolution providing for the taking of private
property without just compensation or for the imposition or exacting of any tax, impost or
assessment, or declare war or call the Congress to a special session, suspend the privilege of
the writ of habeas corpus, pardon a convict or render judgment in a controversy between
private individuals or between such individuals and the state, in violation of the distribution of
powers in the Constitution.

It being manifest that there are powers which the Convention may not and cannot validly
assert, much less exercise, in the light of the existing Constitution, the simple question arises,
should an act of the Convention be assailed by a citizen as being among those not granted to
or inherent in it, according to the existing Constitution, who can decide whether such a
contention is correct or not? It is of the very essence of the rule of law that somehow
somewhere the Power and duty to resolve such a grave constitutional question must be lodged
on some authority, or we would have to confess that the integrated system of government
established by our founding fathers contains a wide vacuum no intelligent man could ignore,
which is naturally unworthy of their learning, experience and craftsmanship in constitution-
making.

9. PABLO C. SANIDAD v HONORABLE COMMISSION ON ELECTIONS

PETITIONER: On September 27, 1976, PABLO C. SANIDAD and PABLITO V. SANIDAD, father and
son, commenced L-44640 for Prohibition with Preliminary Injunction seeking to enjoin the
Commission on Elections from holding and conducting the Referendum Plebiscite on October
16; to declare without force and effect Presidential Decree Nos. 991 and 1033, insofar as they
propose amendments to the Constitution, as well as Presidential Decree No. 1031, insofar as it
directs the Commission on Elections to supervise, control, hold, and conduct the Referendum-
Plebiscite scheduled on October 16, 1976.

Petitioners contend that under the 1935 and 1973 Constitutions there is no grant to the
incumbent President to exercise the constituent power to propose amendments to the new
Constitution. As a consequence, the Referendum-Plebiscite on October 16 has no
constitutional or legal basis. The Solicitor General principally maintains that petitioners have
no standing to sue; the issue raised is political in nature, beyond judicial cognizance of this
Court; at this state of the transition period, only the incumbent President has the authority to
exercise constituent power; the referendum-plebiscite is a step towards normalization.

RULING: As a preliminary resolution, We rule that the petitioners in L-44640 (Pablo C. Sanidad
and Pablito V. Sanidad) possess locus standi to challenge the constitutional premise of
Presidential Decree Nos. 991, 1031, and 1033. It is now an ancient rule that the valid source of
a stature Presidential Decrees are of such nature-may be contested by one who will sustain a
direct injuries as a in result of its enforcement. At the instance of taxpayers, laws providing for
the disbursement of public funds may be enjoined, upon the theory that the expenditure of
public funds by an officer of the State for the purpose of executing an unconstitutional act
constitutes a misapplication of such funds. The breadth of Presidential Decree No. 991 carries
all appropriation of Five Million Pesos for the effective implementation of its purposes. 5
Presidential Decree No. 1031 appropriates the sum of Eight Million Pesos to carry out its
provisions. The interest of the aforenamed petitioners as taxpayers in the lawful expenditure
of these amounts of public money sufficiently clothes them with that personality to litigate the
validity of the Decrees appropriating said funds. Moreover, as regards taxpayer's suits, this
Court enjoys that open discretion to entertain the same or not. 7 For the present case, We
deem it sound to exercise that discretion affirmatively so that the authority upon which the
disputed Decrees are predicated may be inquired into.

10. VIVENCIO V. JUMAMIL v. JOSE J. CAFÉ

PETITIONER: Petitioner alleges that Resolution Nos. 7 and 49 were unconstitutional because
they were passed for the business, occupation, enjoyment and benefit of private respondents
who deposited the amount of ₱40,000.00 for each stall, and with whom also the mayor had a
prior contract to award the would be constructed stalls to all private respondents.… As
admitted by public respondents some of the private respondents are close friends and/or
relatives of some of the public respondents which makes the questioned acts discriminatory.
The questioned resolutions and ordinances did not provide for any notice of publication that
the special privilege and unwarranted benefits conferred on the private respondents maybe
(sic) availed of by anybody who can deposit the amount of ₱40,000.00. Both the RTC and the
CA dismissed the case on the ground of petitioner’s lack of legal standing.

RULING: Legal standing or locus standi is a party’s personal and substantial interest in a case
such that he has sustained or will sustain direct injury as a result of the governmental act being
challenged. It calls for more than just a generalized grievance. The term "interest" means a
material interest, an interest in issue affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental interest. 22 Unless a person’s
constitutional rights are adversely affected by the statute or ordinance, he has no legal
standing.

The CA held that petitioner had no standing to challenge the two resolutions/ordinances
because he suffered no wrong under their terms. It also concluded that "the issue (was) not
the ordinances themselves but the award of the market stalls to the private respondents on
the strength of the contracts individually executed by them with Mayor Cafe." Consequently,
it ruled that petitioner, who was not a party to the lease contracts, had no standing to file the
petition for declaratory relief and seek judicial interpretation of the agreements.

We do not agree. Petitioner brought the petition in his capacity as taxpayer of the Municipality
of Panabo, Davao del Norte23 and not in his personal capacity. He was questioning the official
acts of the public respondents in passing the ordinances and entering into the lease contracts
with private respondents. A taxpayer need not be a party to the contract to challenge its
validity.24

Parties suing as taxpayers must specifically prove sufficient interest in preventing the illegal
expenditure of money raised by taxation.26 The expenditure of public funds by an officer of the
State for the purpose of executing an unconstitutional act constitutes a misapplication of such
funds/

Petitioner did not seasonably allege his interest in preventing the illegal expenditure of public
funds or the specific injury to him as a result of the enforcement of the questioned resolutions
and contracts. It was only in the "Remark to Comment" he filed in this Court did he first assert
that "he (was) willing to engage in business and (was) interested to occupy a market
stall."32 Such claim was obviously an afterthought.

Therefore, since petitioner had no locus standi to question the ordinances, there is no need for
us to discuss the constitutionality of said enactments.