G.R. No. L-57424 December 18, 1987
Robidante L. Kabiling, Prudencio C. Carbon, Policarpio S. Segui, Rafael C. Carbon, Antonio C. Bolasoc, Lolita C. Castro, Sotero S. Ferrer, Perfecto C. Mamaat, Vicente M. Mortera, et. al., petitioners, vs. The National Housing Authority and the Republic of the Philippines, respondents.

FACTS

Petitioners, lot owners within the Agno-Leveriza Tenant Association (ALTA) Subdivision in Malate, Manila, assailed the constitutionality of Presidential Decree No. 1808. The decree directed the cancellation of awards, contracts of sale, and titles of lots within the subdivision, their reconveyance to the government upon payment, and the expropriation of adjacent vacant lots for implementation under the Zonal Improvement Program (ZIP). Petitioners argued the decree deprived them of property without due process and just compensation, denied equal protection, impaired contractual obligations, and involved improper expropriation.
In an amended petition, petitioners added the ground of alleged non-publication of the decree. The National Housing Authority (NHA) reported that the property had been substantially developed, with P3 million invested, and compensation deposited. While many landowners had withdrawn payment, petitioners and others had not. The Supreme Court initially dismissed the amended petition for lack of merit, prompting this motion for reconsideration.

ISSUE

Whether Presidential Decree No. 1808 is constitutional.

RULING

The Supreme Court denied the motion for reconsideration, upholding the constitutionality of P.D. No. 1808 as a valid exercise of police power. The decree’s stated objective was to resolve land tenure problems in a identified depressed area to allow comprehensive development under the Zonal Improvement Program, addressing slum improvement and resettlement. The police power is an essential, plenary state power aimed at ensuring communal peace, safety, order, and welfare.
The constitutional guaranty against impairment of contracts is limited by and subject to the state’s police power exercised for public health, safety, morals, and general welfare. Consequently, petitioners’ claim of impairment of contractual obligations fails. For the same reason, the decree does not constitute a deprivation of property without due process, as the exercise of police power for a legitimate public purpose satisfies due process requirements.
Regarding just compensation, Section 3 of P.D. No. 1808 provided for payment to lot owners who had fully paid their obligations before its issuance. However, citing the precedent in Export Processing Zone Authority vs. Dulay, the Court ruled that those lot owners, like petitioners, who had not yet received compensation were entitled to a judicial determination of just compensation, as the decree’s method for fixing compensation was unconstitutional. The other procedural challenges, including the claim of non-publication, were sufficiently addressed by the respondents.