Social function of property ownership

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.[1] The High Court already recognized this in Social Justice Society (SJS), et al. v. Hon. Atienza, Jr.:[2]
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.[3]

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.[4] 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.[5] In this jurisdiction, it is well-entrenched that taxation may be made the implement of the state’s police power.[6]

[1] 1987 CONSTITUTION, Art. XII, Sec. 6.

[2] 568 Phil. 658 (2008).

[3] Social Justice Society (SJS), et al. v. Hon. Atienza, Jr., supra note 53, at 707.

[4] Id. at 700-701.

[5] Id. at 703.

[6] See Rep. of the Phils. v. Judge Caguioa, 562 Phil. 187 (2007) (withdrawal of the tax exemption on cigars and cigarettes, distilled spirits, fermented liquors and wines brought directly into the freeports under R.A. No. 9334); Southern Cross Cement Corporation v. Philippine Cement Manufacturers Corporation, 503 Phil. 485 (2005) (imposition of general safeguard measures); Republic of the Philippines v. COCOFED et al., 423 Phil. 735 (2001) (on the Coconut Consumer Stabilization Fund or coconut levy funds under P.D. No. 276); Caltex Philippines, Inc. v. Commission on Audit, G.R. No. 92585, May 8, 1992, 208 SCRA 726 (on the Oil Price Stabilization Fund under P.D. No. 1956, as amended); Gaston v. Republic Planters Bank, 242 Phil. 377 (1988) (stabilization fees to accrue to a Development and Stabilization Fund under P.D. No. 388); Philippine Airlines, Inc. v. Commissioner Edu, 247 Phil. 283 (1988) (motor vehicle registration fees under R.A. No. 4136); Tio v. Videogram Regulatory Board, 235 Phil. 198 (1987) (tax on sale, lease or disposition of videograms under P.D. No. 1987); Republic of the Philippines v. Bacolod-Murcia Milling Co., 124 Phil. 27 (1966) (special assessment for the Sugar Research and Stabilization Fund under R.A. No. 632); and Lutz v. Araneta, 98 Phil. 148 (1955) (levy on owners or persons in control of lands devoted to the cultivation of sugar cane and ceded to others for a consideration in favor of the Sugar Adjustment and Stabilization Fund under Commonwealth Act 567).

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