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City of Baguio v. NAWASA
On April 25, 1956 Plaintiff City of Baguio, a municipal corporation filed a complaint for declaratory relief against defendant NAWASA, a public corporation created by Republic Act No. 1383. It contend that said Act does not include within its purview the Baguio Waterworks System; that assuming that it does, said Act is unconstitutional because it has the effect of depriving plaintiff of the ownership, control and operation of said waterworks system without compensation and without due process of law, and that it is oppressive, unreasonable and unjust to plaintiff and other cities, municipalities and municipal districts similarly situated.
On May 22, 1956, defendant filed a motion to dismiss on the ground that Republic Act No. 1383 is a proper exercise of the police power of the State; that assuming that said Act contemplates an act of expropriation, it is still a constitutional exercise of the power of eminent domain; that at any rate the Baguio Waterworks System is not a private property but "public works for public service" over which the Legislature has control; and that the provisions of said Act being clear and unambiguous, there is no necessity for construction.
On November 5, 1956 the court held that the waterworks system of the City of Baguio falls within the category of ‘private property’, as contemplated by our Constitution and may not be expropriated without just compensation; and that section 8 of Republic Act No. 1383 provides for the exchange of the NAWASA assets for the value of the waterworks system of Baguio is unconstitutional as this is not ‘just compensation.
Whether or not Republic Act No. 1383 is a valid exercise of police power or power of eminent domain.
Republic Act No. 1383 is not a valid exercise of police power, since the Act does not confiscate, nor destroy, nor appropriate property belonging to appellee. It merely directs that all waterworks belonging to cities, municipalities and municipal districts in the Philippines be transferred to the NAWASA for the purpose of placing them under the control and supervision of one agency with a view to promoting their efficient management, but in so doing it does not confiscate them because it directs that they be paid with an equal value of the assets of the NAWASA.
Furthermore Baguio water works system is not like a public road, the park, street other public property held in trust by a municipal corporation for the benefit of the public but is rather a property owned by the appellee. Waterworks system is patrimonial property of the city, and being owned by a municipal corporation; it cannot be taken away.