Partition of the estate of Ramirez among his widow, grandnephews and his companion Wanda. Under his will he granted usufruct of real property to Wanda
%
who is an alien. Usufruct over land is not contrary to the constitution as it does not vest ownership onto a person. Also in this case testamentary succession is included in the prohibition.
Halili v. CA:
De Guzman, an American citizen, died and his forced heirs were his wife Helen and his son David who were both American. Helen made a deed of quitclaim assigning all properties to David. David then sold one of the properties to Cataniag.
Petitioners now question the transfer to David of the properties of Helen. The SC ruled that although under the Constitution, you cannot transfer properties to aliens except in case of hereditary succession such was deemed cured when David transferred it to Cataniag since the purpose of leaving the properties with Filipinos is preserved.
Osmena v. Osmena:
Case between the petitioner who is the daughter of Osmena and Sy and the respondent is the grandchildren. Sy executed a will with the ancestral house but the lot was not included and was in the name of respondent’s father so the respondents transferred to their name after his death. Petitioner claims that she also owns the land from her mother (Sy) and it was only placed on the name of their brother because mother was a Chinese national and could not acquire land. Court wont allow the contravention of the constitution (must come to the court with clean hands).
Exemption for former Filipino Citizens Republic v. CA:
Spouses bought land when they were natural-born citizens. When they applied for its registration however they were naturalized Canadian citizens already. The SC said that they can still register it even if they were no longer Filipino citizens at that time. Under Art. 12 a natural born citizen who lost his citizenship may be a transferee of private land. As former Filipino citizens they can have the land registered.
Sec. 9: The Congress may establish an independent economic and planning agency headed by the President, which shall, after consultations with the appropriate public agencies, various private sectors, and local government units, recommend to Congress, and implement continuing integrated and coordinated programs and policies for national development.
Until the Congress provides otherwise, the National Economic and Development Authority shall function as the independent planning agency of the government.
1. Economic and planning agency
! The creation of such agency is optional since formal economic planning is not an indispensible part of managing the national economy
! Until Congress provides otherwise, the present NEDA will continue as the central planning agency which is recommendatory to Congress
! While it is independent of Congress, it is under the President and dependent on the President who chairs the body
Sec. 10: The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities.
I. Filipinization
! Particular areas of business may be Filipinized without doing violence to the equal protection clause
! 2nd paragraph commands the state to give preference to qualified Filipinos in the
grant of rights and privileges – and this, provided that the Filipino is “qualified” even if a foreigner is “more qualified”
! Provision is mandatory and enforceable only in regard to the grant of rights, privileges and concessions covering national economy and patrimony and not to every aspect of trade and commerce
! 3rd paragraph has reference to both the regulation of the entry of foreign
investments and to regulation of foreign investments already I place Manila Prince Hotel v. GSIS:
Pursuant to a privatization program, GSIS wanted to sell Manila Hotel Corp. There were two bidders Manila Prince and Renong Berhard an Indonesian company. Renong won the bidding. The SC ruled that the sale of the Manila Hotel to Renong is violative of the constitution. Although the first paragrpah of Article 12 section 10 is non-self executing as it needs legislation, the second part is a mandate that rights, privileges and concessions covering national economy and patrimony of the state shall be given preference to qualified Filipinos. Estoppel wont work here when it violates the constitution. Manila hotel is part of Filipino culture and the Filipino first policy does not only cover natural resources but culture as well thus the sale to Renong is void.
Army and Navy Club v. CA:
Petitioner entered into a lease contract with the respondent and under it they are to pay 250k rent with increase, pay the taxes and construct a hotel within 5y. Petitioner failed. Petitioner then invokes that the Army and Navy Club was declared a national historical landmark by the National Historical Commission thus its existence cannot in any way be undermined by the simple ejectment suit. The SC said however that there is no showing that it became a national landmark since the signatories thereto of the certification are members of the club so it was self-serving. Such certification is not valid because it did not even follow the procedure provided by law:
! The director of the national museum will convene panels of experts (natural sciences, history, fine arts, etc) who carefully study and deliberate which among the cultural properties will be considered “National Cultural Treasures.”
! It will then be marked, described , photograph by the national museum etc. Also even if the certification was valid it would not prevent the suit because being declared a national treasure doesn’t give any kind of possessory right or claim of ownership over it. Nowhere in the law does it provide that such recognition grants possessory right. Also the case is only an ejectment case so the national treasure, if it were, is still preserved.
Sec. 11: No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per
%
certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.
I. Public Utilities
! Public utility: a utility corporation which renders service to the general public for compensation
o Essential feature is that its service is not confined to privileged individuals but is open to an indefinite public
o The public or private character of a utility does not depend on the number of persons who avail of its services but on whether or not it is open to serve all members of the public who may require it
o It is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph services ! This provision does not determine WHO may grant public utility franchises but
only about the capacity to acquire a public utility franchise
o Congress has the authority to grant franchises but may delegate it to gov’t agencies
! Filipinization of public utilities: requiring that any form of authorization for its operation should be granted only to Philippine citizens or corporations or associations organized under the laws of the Philippines at least 60% of the capital is owned by Filipinos.
o Note that the mere formation of a public utility corporation without the required Filipino capital is not forbidden, but the granting of a franchise or other form or authorization is
! Franchises granted by the gov’t cannot be exclusive in character nor can a franchise be granted except that it must be subject to amendment, alteration or even repeal by the legislature when the common good so requires
! The first part of the last sentence which authorizes foreign investors to participate in the governing body of public utilities to the extent of their proportionate share in the capital, is a reversal of the Filipinization trend
o But all executive and managing officers of such corporation/association must be Filipino citizens
Francisco v. TRB:
Marcos authorized the establishment of toll facilities for the use of public improvements. Later a franchise was granted to Philippine National Construction Corporation for 30 years to operate toll facilities in NLEX, SLEX, Skyway. The Toll Regulatory Board was also created on the same day to enter into contracts for the construction and maintenance of the tollways, grant permits to operate toll facilities, and fix toll rates after due notice and hearing (on behalf of the government).
Cory then became president and the 1987 constitution had the franchise provision which made the PNCC seek the opinion of the Government Corporate Counsel. It was held that PNCC may enter into a JVA with private entities without public bidding subject to certain requirements.
! After a JVA is concluded, a new JV company formed to undertake a specific toll project.
! The Republic through the TRB (grantor), PNCC (operator) and new JV corporation (investor/concessionaire) will make a Supplemental Toll Operation Agreement (STOA) to implement the Toll Operation Agreement previously issued (TRB and PNCC signed a TOA on Nlex, Slex, with terms of toll operations).
! Once the project is completed the TRB fixed or approves the initial toll rate after which it prescribes periodic toll rate adjustment.
Claim: TRB does not have the power to grant administrative franchise for toll facilities because it is an exclusive power of Congress based on Art. 12, sec. 11. ! The SC held that such interpretation is wrong. A Franchise is a legislative grant
of a special privilege to someone either from statue or can also be by an administrative agencies with delegated power to give franchise. Nothing in the Constitution indicates the necessity of a congressional franchise before a public utility may operate if the law delegates the authority to an administrative body to grant a franchise. (Needed to adapt to increase complexity of modern life). ! PNCC’s franchise granted by Marcos, expired in 2007 but even if it had already
expired, the fact of expiration did not carry with it the cancellation of PNCC’s authority and that of its JV partners to construct, operate and maintain any part of NLEX, SLEX< MMEX.
Claim: The rate fixing power and power to enter into contracts of the TRB is invalid. ! The SC held that there is difference between the initial fixing of toll rates and
the periodic or subsequent toll rates. The requirement of notice in hearing for the approval of denial of petitions for toll rates only refers to adjustments or subsequent toll rates NOT initial toll rates. The TRB is authorized to approve initial toll rates without necessity of hearing. Only when there is a challenge on the toll rates that public hearings are required. In this case the initial toll rates came to pass without any hearing but there was no challenge on the validity of such.
! Furthermore, the use of a toll way/highway is a privilege with a cost and thus can’t necessarily say that exorbitant fees are being charged. There are alternative routes or roads that motorists may rely on if they are unwilling to pay the toll.
Claim: The STOA entered into by TRB grants it authority to enter into contracts for the construction, operation and maintenance thereof. One of the STOAs (MNTC) granted to ADB and WB (The lenders of MNTC) unrestricted right to appoint a substitute entity to replace MNTC in case of an MNTC default before prepayment of the loans and an option to extend the franchise for another 50 years.
! The SC said that the power to determine WON to extend a concessionaire to operate a tollway is vested in the TRB and law and as such the lenders cannot unilaterally extend the concession period or impose and demand that TRB extend it. Furthermore, even if TRB is granted such power it cannot grant it for a period exceeding 50 years otherwise it would violate the constitution. In this case the original period was 30 years, and the clause that would allow extension if necessary to repay the loans to the lenders is a violation of the 50 year franchise threshold in the Constitution.
Gamboa vs. Teves
PTIC owns a substantial amount of shares in PLDT. The government wants to sell these shares to a HK-based corporation. Petitioner, a stockholder of PLDT, wants to nullify the sale of PTIC shares because if the sale would be permitted, the 60-40
%
definition of the term “capital” used in our constitution means the shares of stock which can vote, i.e. the common shares, not the outstanding capital stock.
The Court in the case held that: “In construing the term “capital” in Section 11, Article XII of the Constitution to include both voting and non-voting shares will result in the abject surrender of our telecommunications industry to foreigners, amounting to a clear abdication of the State’s constitutional duty to limit control of public utilities to Filipino citizens. Such an interpretation certainly runs counter to the constitutional provision reserving certain areas of investment to Filipino citizens, such as the exploitation of natural resources as well as the ownership of land, educational institutions and advertising businesses. The Court should never open to foreign control what the Constitution has expressly reserved to Filipinos for that would be a betrayal of the Constitution and of the national interest. The Court must perform its solemn duty to defend and uphold the intent and letter of the Constitution to ensure, in the words of the Constitution, “a self-reliant and independent national economy effectively controlled by Filipinos.”
Sec. 12: The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.
I. Filipino First Policy
! Gives native products and domestic entities preference in gov’t purchases ! The policy can extend beyond Filipino-first in gov’t transactions and into private
transactions
Sec. 13: The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.
I. Economic exchange
! The forms and arrangements of economic exchange referred to can be any number of those which are in practice, e.g. counter-trade, common market arrangements, multi-country arrangements, etc.
o The idea is not to tie down the country in any 1 form
o Must serve the general welfare – which includes not just health, safety, security but also the idea of protection of local enterprises o Must be characterized not only by reciprocity but also by equality
which imports mutual benefit
Sec. 14: The sustained development of a reservoir of national talents consisting of Filipino scientists, entrepreneurs, professionals, managers, high-level technical manpower and skilled workers and craftsmen in all fields shall be promoted by the State. The State shall encourage appropriate technology and regulate its transfer for the national benefit. The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law.
I. Filipino professionals and skilled workers
! Reflects the desire not only to develop a ready reservoir of Filipino professionals, scientists and skilled workers but also to protect their welfare
! The limitation on the practice of professions, however, is subject to exceptions found in reciprocity laws
! Encourages technological independence and regulation of technology transfers for the wealth of the nation
Sec. 15: The Congress shall create an agency to promote the viability and growth of cooperatives as instruments for social justice and economic development.
Sec. 16: The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability.
I. Private corporations
! Purpose is to insulate Congress against pressures from special interests
o To permit the law making body by special law to provide for the organization or formation or regulation of private corporations, would in effect to offer to it the temptation in many cases to favor certain groups to the prejudice of other or to the prejudice of the interests of the country
! 2nd sentence: includes the ideas that they must show capacity to function
efficiently in business and that they should not go into activities which the private sector can do better
o Economic viability is more than financial viability but also includes capability to make profit and generate benefits not quantifiable in financial terms
Sec. 17: In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest.
I. Temporary take-over
! Deals merely with the temporary state take-over of the operation of any privately owned public utility or business affected with public interest
! Justified in times of national emergency, when the public interest requires it o National emergency- encompassing threat from external aggression,
calamities or natural disasters, but not strikes
o Duration of the emergency is the measure of the duration of the takeover
! Business affected with public interest: business that has a lot of repercussion in public, whether it be public utility or other businesses which may partake of the characteristics of public utility but which is not yet considered public utility or any business which concerns a mass-based consumer group and especially among the low income groups
David v. Arroyo:
PP 1017 does not authorize President Arroyo during the emergency to temporarily take over or direct the operation of any privately owned public or business affected with public interest without authority from Congress.
Certain conditions must be met before the congress can grant emergency powers to the