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SO ORDERED.

Puno (C.J.), Ynares-Santiago, Corona, Carpio-Morales,

Chico-Nazario, Velasco, Jr., Nachura, Brion, Peralta,
Bersamin, Del Castillo and Abad, JJ., concur.
Quisumbing and Carpio, JJ., On Official Leave.

Resolutions reversed and set aside.

Note.—Section 32 of R.A. 7166 is clear and unequivocal

that the prohibited act to which this provision refers is made
up of the following elements—1) the person is bearing,
carrying, or transporting firearms or other deadly weapons,
2) such possession occurs during the election period, and 3)
the weapon is carried in a public place. (Abenes vs. Court of
Appeals, 515 SCRA 690 [2007])
——o0o——

G.R. No. 177056. September 18, 2009.*

THE OFFICE OF THE SOLICITOR GENERAL, petitioner,

vs. AYALA LAND, INCORPORATED, ROBINSON’S
LAND CORPORATION, SHANGRI-LA PLAZA
CORPORATION and SM PRIME HOLDINGS, INC.,
respondents.

Statutory Construction; Statutory construction has it that if a

statute is clear and unequivocal, it must be given its literal
meaning and applied without any attempt at interpretation.—
Statutory construction has it that if a statute is clear and
unequivocal, it must be given its literal meaning and applied
without any attempt at interpretation. Since Section 803 of the
National Building Code and Rule XIX of its IRR do not mention
parking fees, then simply, said provisions do not regulate the
collection of the same. The RTC and the

_______________

* THIRD DIV ISION.

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Court of Appeals correctly applied Article 1158 of the New Civil

Code, which states: Art. 1158. Obligations derived from law are not
presumed. Only those expressly determined in this Code or in
special laws are demandable, and shall be regulated by the precepts
of the law which establishes them; and as to what has not been
foreseen, by the provisions of this Book.
National Building Code; The Office of the Solicitor General
(OSG) cannot rely on Section 102 of the National Building Code to
expand the coverage of Section 803 of the same Code and Rule XIX
of the Implementing Rules and Regulations (IRR), so as to include
the regulation of parking fees.—The OSG cannot rely on Section
102 of the National Building Code to expand the coverage of Section
803 of the same Code and Rule XIX of the IRR, so as to include the
regulation of parking fees. The OSG limits its citation to the first
part of Section 102 of the National Building Code declaring the
policy of the State “to safeguard life, health, property, and public
welfare, consistent with the principles of sound environmental
management and control”; but totally ignores the second part of said
provision, which reads, “and to this end, make it the purpose of this
Code to provide for all buildings and structures, a framework of
minimum standards and requirements to regulate and control
their location, site, design, quality of materials, construction, use,
occupancy, and maintenance.” While the first part of Section 102 of
the National Building Code lays down the State policy, it is the
second part thereof that explains how said policy shall be carried
out in the Code. Section 102 of the National Building Code is not an
all-encompassing grant of regulatory power to the DPWH Secretary
and local building officials in the name of life, health, property, and
public welfare. On the contrary, it limits the regulatory power of
said officials to ensuring that the minimum standards and
requirements for all buildings and structures, as set forth in the
National Building Code, are complied with.
Administrative Agencies; The rule-making power of
administrative agencies must be confined to details for regulating
the mode or proceedings to carry into effect the law as it has been
enacted and it cannot be extended to amend or expand the statutory
requirements or to embrace matters not covered by the statute.—The
OSG cannot claim that in addition to fixing the minimum
requirements for parking spaces for buildings, Rule XIX of the IRR

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also mandates that such parking spaces be provided by building

owners free of charge. If

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Rule XIX is not covered by the enabling law, then it cannot be

added to or included in the implementing rules. The rule-making
power of administrative agencies must be confined to details for
regulating the mode or proceedings to carry into effect the law as it
has been enacted, and it cannot be extended to amend or expand
the statutory requirements or to embrace matters not covered by the
statute. Administrative regulations must always be in harmony
with the provisions of the law because any resulting discrepancy
between the two will always be resolved in favor of the basic law.
National Building Code; Whether allowing or prohibiting the
collection of such parking fees, the action of the Department of
Public Works and Highways (DPWH) Secretary and local building
officials must pass the test of classic reasonableness and propriety of
the measures or means in the promotion of the ends sought to be
accomplished.—It is not sufficient for the OSG to claim that “the
power to regulate and control the use, occupancy, and maintenance
of buildings and structures carries with it the power to impose fees
and, conversely, to control, partially or, as in this case, absolutely,
the imposition of such fees.” Firstly, the fees within the power of
regulatory agencies to impose are regulatory fees. It has been
settled law in this jurisdiction that this broad and all-compassing
governmental competence to restrict rights of liberty and property
carries with it the undeniable power to collect a regulatory fee. It
looks to the enactment of specific measures that govern the relations
not only as between individuals but also as between private parties
and the political society. True, if the regulatory agencies have the
power to impose regulatory fees, then conversely, they also have the
power to remove the same. Even so, it is worthy to note that the
present case does not involve the imposition by the DPWH
Secretary and local building officials of regulatory fees upon
respondents; but the collection by respondents of parking fees from
persons who use the mall parking facilities. Secondly, assuming
arguendo that the DPWH Secretary and local building officials do
have regulatory powers over the collection of parking fees for the
use of privately owned parking facilities, they cannot allow or
prohibit such collection arbitrarily or whimsically. Whether allowing
or prohibiting the collection of such parking fees, the action of the
DPWH Secretary and local building officials must pass the test of

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classic reasonableness and propriety of the measures or means in

the promotion of the ends sought to be accomplished.

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Same; The National Building Code regulates buildings, by

setting the minimum specifications and requirements for the same.
—The Court is unconvinced. The National Building Code regulates
buildings, by setting the minimum specifications and requirements
for the same. It does not concern itself with traffic congestion in
areas surrounding the building. It is already a stretch to say that
the National Building Code and its IRR also intend to solve the
problem of traffic congestion around the buildings so as to ensure
that the said buildings shall have adequate lighting and
ventilation. Moreover, the Court cannot simply assume, as the OSG
has apparently done, that the traffic congestion in areas around the
malls is due to the fact that respondents charge for their parking
facilities, thus, forcing vehicle owners to just park in the streets. The
Court notes that despite the fees charged by respondents, vehicle
owners still use the mall parking facilities, which are even fully
occupied on some days. Vehicle owners may be parking in the
streets only because there are not enough parking spaces in the
malls, and not because they are deterred by the parking fees
charged by respondents. Free parking spaces at the malls may even
have the opposite effect from what the OSG envisioned: more people
may be encouraged by the free parking to bring their own vehicles,
instead of taking public transport, to the malls; as a result, the
parking facilities would become full sooner, leaving more vehicles
without parking spaces in the malls and parked in the streets
instead, causing even more traffic congestion.
Police Power; The Court finds, however, that in totally
prohibiting respondents from collecting parking fees from the public
for the use of the mall parking facilities, the State would be acting
beyond the bounds of police power.—Without using the term
outright, the OSG is actually invoking police power to justify the
regulation by the State, through the DPWH Secretary and local
building officials, of privately owned parking facilities, including the
collection by the owners/operators of such facilities of parking fees
from the public for the use thereof. The Court finds, however, that
in totally prohibiting respondents from collecting parking fees from
the public for the use of the mall parking facilities, the State would
be acting beyond the bounds of police power.
Same; Police power does not involve the taking or confiscation
of property, with the exception of a few cases where there is a

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necessity to confiscate private property in order to destroy it for the

purpose of

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protecting peace and order and of promoting the general welfare; for
instance, the confiscation of an illegally possessed article, such as
opium and firearms.—Police power is the power of promoting the
public welfare by restraining and regulating the use of liberty and
property. It is usually exerted in order to merely regulate the use
and enjoyment of the property of the owner. The power to regulate,
however, does not include the power to prohibit. A fortiori, the
power to regulate does not include the power to confiscate. Police
power does not involve the taking or confiscation of property, with
the exception of a few cases where there is a necessity to confiscate
private property in order to destroy it for the purpose of protecting
peace and order and of promoting the general welfare; for instance,
the confiscation of an illegally possessed article, such as opium and
firearms.
Taking; A police regulation that unreasonably restricts the
right to use business property for business purposes amounts to
taking of private property, and the owner may recover therefor.—The
power of eminent domain results in the taking or appropriation of
title to, and possession of, the expropriated property; but no cogent
reason appears why the said power may not be availed of only to
impose a burden upon the owner of condemned property, without
loss of title and possession. It is a settled rule that neither
acquisition of title nor total destruction of value is essential to
taking. It is usually in cases where title remains with the private
owner that inquiry should be made to determine whether the
impairment of a property is merely regulated or amounts to a
compensable taking. A regulation that deprives any person of the
profitable use of his property constitutes a taking and entitles him to
compensation, unless the invasion of rights is so slight as to permit
the regulation to be justified under the police power. Similarly, a
police regulation that unreasonably restricts the right to use
business property for business purposes amounts to a taking of
private property, and the owner may recover therefor.
Same; Although in the present case, title to and/or possession of
the parking facilities remain/s with respondents, the prohibition
against their collection of parking fees from the public, for the use of
said facilities, is already tantamount to a taking or confiscation of
their properties.—Although in the present case, title to and/or

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possession of the parking facilities remain/s with respondents, the

pro-

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hibition against their collection of parking fees from the public, for
the use of said facilities, is already tantamount to a taking or
confiscation of their properties. The State is not only requiring that
respondents devote a portion of the latter’s properties for use as
parking spaces, but is also mandating that they give the public
access to said parking spaces for free. Such is already an excessive
intrusion into the property rights of respondents. Not only are they
being deprived of the right to use a portion of their properties as
they wish, they are further prohibited from profiting from its use or
even just recovering therefrom the expenses for the maintenance
and operation of the required parking facilities.
Same; Expropriation; The total prohibition against the
collection by respondents of parking fees from persons who use the
mall parking facilities has no basis in the National Building Code
or its Implementing Rules and Regulations (IRR).—The total
prohibition against the collection by respondents of parking fees
from persons who use the mall parking facilities has no basis in the
National Building Code or its IRR. The State also cannot impose the
same prohibition by generally invoking police power, since said
prohibition amounts to a taking of respondents’ property without
payment of just compensation.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
The Solicitor General for petitioner.
Migallos & Luna Law Offices for respondent Shangri-la
Plaza Corporation.
Siguion Reyna, Montecillo & Ongsiako for respondent
Ayala Land, Inc.
Romulo, Mabanta, Buenaventura, Sayoc & De Los
Angeles for respondent Robinsons Land Corporation.
Tan, Acut & Lopez for respondent SM Prime Holdings,
Inc.

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Office of the Solicitor General vs. Ayala Land, Incorporated

CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari,1
under Rule 45 of the Revised Rules of Court, filed by
petitioner Office of the Solicitor General (OSG), seeking the
reversal and setting aside of the Decision2 dated 25 January
2007 of the Court of Appeals in CA-G.R. CV No. 76298,
which affirmed in toto the Joint Decision3 dated 29 May
2002 of the Regional Trial Court (RTC) of Makati City,
Branch 138, in Civil Cases No. 00-1208 and No. 00-1210;
and (2) the Resolution4 dated 14 March 2007 of the
appellate court in the same case which denied the Motion for
Reconsideration of the OSG. The RTC adjudged that
respondents Ayala Land, Incorporated (Ayala Land),
Robinsons Land Corporation (Robinsons), Shangri-la Plaza
Corporation (Shangri-la), and SM Prime Holdings, Inc. (SM
Prime) could not be obliged to provide free parking spaces in
their malls to their patrons and the general public.
Respondents Ayala Land, Robinsons, and Shangri-la
maintain and operate shopping malls in various locations in
Metro Manila. Respondent SM Prime constructs, operates,
and leases out commercial buildings and other structures,
among which, are SM City, Manila; SM Centerpoint, Sta.
Mesa, Manila; SM City, North Avenue, Quezon City; and
SM Southmall, Las Piñas.
The shopping malls operated or leased out by
respondents have parking facilities for all kinds of motor
vehicles, either by way of parking spaces inside the mall
buildings or in separate buildings and/or adjacent lots that
are solely devoted for use as parking spaces. Respondents
Ayala Land, Robinsons,

_______________

1 Rollo, pp. 26-43.

2 Penned by Associate Justice Myrna Dimaranan Vidal with Associate
Justices Jose L. Sabio, Jr. and Jose C. Reyes, concurring; Rollo, pp. 45-
58.
3 Penned by Judge Sixto Marella, Jr.; Rollo, pp. 250-260.
4 Rollo, pp. 59-60.

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and SM Prime spent for the construction of their own

parking facilities. Respondent Shangri-la is renting its
parking facilities, consisting of land and building
specifically used as parking spaces, which were constructed
for the lessor’s account.
Respondents expend for the maintenance and
administration of their respective parking facilities. They
provide security personnel to protect the vehicles parked in
their parking facilities and maintain order within the area.
In turn, they collect the following parking fees from the
persons making use of their parking facilities, regardless of
whether said persons are mall patrons or not:

Respondent Parking Fees

Ayala Land On weekdays, P25.00 for the first four hours and
P10.00 for every succeeding hour; on weekends,
flat rate of P25.00 per day
Robinsons P20.00 for the first three hours and P10.00 for
every succeeding hour
Shangri-la Flat rate of P30.00 per day
SM Prime P10.00 to P20.00 (depending on whether the
parking space is outdoors or indoors) for the first
three hours and 59 minutes, and P10.00 for every
succeeding hour or fraction thereof

The parking tickets or cards issued by respondents to

vehicle owners contain the stipulation that respondents
shall not be responsible for any loss or damage to the
vehicles parked in respondents’ parking facilities.
In 1999, the Senate Committees on Trade and Commerce
and on Justice and Human Rights conducted a joint
investigation for the following purposes: (1) to inquire into
the legality of the prevalent practice of shopping malls of
charging
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parking fees; (2) assuming arguendo that the collection of

parking fees was legally authorized, to find out the basis
and reasonableness of the parking rates charged by
shopping malls; and (3) to determine the legality of the
policy of shopping malls of denying liability in cases of theft,
robbery, or carnapping, by invoking the waiver clause at the
back of the parking tickets. Said Senate Committees invited
the top executives of respondents, who operate the major
malls in the country; the officials from the Department of
Trade and Industry (DTI), Department of Public Works and
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Highways (DPWH), Metro Manila Development Authority

(MMDA), and other local government officials; and the
Philippine Motorists Association (PMA) as representative of
the consumers’ group.
After three public hearings held on 30 September, 3
November, and 1 December 1999, the afore-mentioned
Senate Committees jointly issued Senate Committee Report
No. 2255 on 2 May 2000, in which they concluded:

“In view of the foregoing, the Committees find that the collection
of parking fees by shopping malls is contrary to the National
Building Code and is therefor [sic] illegal. While it is true that the
Code merely requires malls to provide parking spaces, without
specifying whether it is free or not, both Committees believe that the
reasonable and logical interpretation of the Code is that the parking
spaces are for free. This interpretation is not only reasonable and
logical but finds support in the actual practice in other countries like
the United States of America where parking spaces owned and
operated by mall owners are free of charge.
Figuratively speaking, the Code has “expropriated” the land for
parking—something similar to the subdivision law which require
developers to devote so much of the land area for parks.
Moreover, Article II of R.A. No. 9734 (Consumer Act of the
Philippines) provides that “it is the policy of the State to protect the
interest of the consumers, promote the general welfare and establish
standards of conduct for business and industry.” Obviously, a con-

_______________

5 Id., at pp. 410-431.

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trary interpretation (i.e., justifying the collection of parking fees)

would be going against the declared policy of R.A. 7394.
Section 201 of the National Building Code gives the
responsibility for the administration and enforcement of the
provisions of the Code, including the imposition of penalties for
administrative violations thereof to the Secretary of Public Works.
This set up, however, is not being carried out in reality.
In the position paper submitted by the Metropolitan Manila
Development Authority (MMDA), its chairman, Jejomar C. Binay,
accurately pointed out that the Secretary of the DPWH is
responsible for the implementation/enforcement of the National
Building Code. After the enactment of the Local Government Code
of 1991, the local government units (LGU’s) were tasked to
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discharge the regulatory powers of the DPWH. Hence, in the local

level, the Building Officials enforce all rules/ regulations formulated
by the DPWH relative to all building plans, specifications and
designs including parking space requirements. There is, however,
no single national department or agency directly tasked to supervise
the enforcement of the provisions of the Code on parking,
notwithstanding the national character of the law.”6

Senate Committee Report No. 225, thus, contained the

following recommendations:

“In light of the foregoing, the Committees on Trade and

Commerce and Justice and Human Rights hereby recommend the
following:
1. The Office of the Solicitor General should institute the
necessary action to enjoin the collection of parking fees as well
as to enforce the penal sanction provisions of the National
Building Code. The Office of the Solicitor General should
likewise study how refund can be exacted from mall owners
who continue to collect parking fees.
2. The Department of Trade and Industry pursuant to the
provisions of R.A. No. 7394, otherwise known as the
Consumer Act of the Philippines should enforce the provisions
of the Code relative to parking. Towards this end, the DTI
should

_______________

6 Id., at pp. 420-421.

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formulate the necessary implementing rules and regulations

on parking in shopping malls, with prior consultations with
the local government units where these are located.
Furthermore, the DTI, in coordination with the DPWH,
should be empowered to regulate and supervise the
construction and maintenance of parking establishments.
3. Finally, Congress should amend and update the
National Building Code to expressly prohibit shopping malls
from collecting parking fees by at the same time, prohibit
them from invoking the waiver of liability.”7

Respondent SM Prime thereafter received information

that, pursuant to Senate Committee Report No. 225, the
DPWH Secretary and the local building officials of Manila,

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Quezon City, and Las Piñas intended to institute, through

the OSG, an action to enjoin respondent SM Prime and
similar establishments from collecting parking fees, and to
impose upon said establishments penal sanctions under
Presidential Decree No. 1096, otherwise known as the
National Building Code of the Philippines (National
Building Code), and its Implementing Rules and
Regulations (IRR). With the threatened action against it,
respondent SM Prime filed, on 3 October 2000, a Petition for
Declaratory Relief8 under Rule 63 of the Revised Rules of
Court, against the DPWH Secretary and local building
officials of Manila, Quezon City, and Las Piñas. Said
Petition was docketed as Civil Case No. 00-1208 and
assigned to the RTC of Makati City, Branch 138, presided
over by Judge Sixto Marella, Jr. (Judge Marella). In its
Petition, respondent SM Prime prayed for judgment:

“a) Declaring Rule XIX of the Implementing Rules and

Regulations of the National Building Code as ultra vires, hence,
unconstitutional and void;

_______________

7 Id., at pp. 421-422.

8 Id., at pp. 64-89.

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b) Declaring [herein respondent SM Prime]’s clear legal right to

lease parking spaces appurtenant to its department stores, malls,
shopping centers and other commercial establishments; and
c) Declaring the National Building Code of the Philippines
Implementing Rules and Regulations as ineffective, not having
been published once a week for three (3) consecutive weeks in a
newspaper of general circulation, as prescribed by Section 211 of
Presidential Decree No. 1096.
[Respondent SM Prime] further prays for such other reliefs as
may be deemed just and equitable under the premises.”9

The very next day, 4 October 2000, the OSG filed a

Petition for Declaratory Relief and Injunction (with Prayer
for Temporary Restraining Order and Writ of Preliminary
Injunction)10 against respondents. This Petition was
docketed as Civil Case No. 00-1210 and raffled to the RTC of
Makati, Branch 135, presided over by Judge Francisco B.
Ibay (Judge Ibay). Petitioner prayed that the RTC:
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“1. After summary hearing, a temporary restraining order and

a writ of preliminary injunction be issued restraining respondents
from collecting parking fees from their customers; and
2. After hearing, judgment be rendered declaring that the
practice of respondents in charging parking fees is violative of the
National Building Code and its Implementing Rules and
Regulations and is therefore invalid, and making permanent any
injunctive writ issued in this case.
Other reliefs just and equitable under the premises are likewise
prayed for.”11

On 23 October 2000, Judge Ibay of the RTC of Makati

City, Branch 135, issued an Order consolidating Civil Case
No. 00-1210 with Civil Case No. 00-1208 pending before
Judge Marella of RTC of Makati, Branch 138.

_______________

9 Id., at pp. 86-87.

10 Id., at pp. 90-95.
11 Id., at pp. 93-94.

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As a result of the pre-trial conference held on the

morning of 8 August 2001, the RTC issued a Pre-Trial
Order12 of even date which limited the issues to be resolved
in Civil Cases No. 00-1208 and No. 00-1210 to the following:

“1. Capacity of the plaintiff [OSG] in Civil Case No. 00-1210 to

institute the present proceedings and relative thereto whether the
controversy in the collection of parking fees by mall owners is a
matter of public welfare.
2. Whether declaratory relief is proper.
3. Whether respondent Ayala Land, Robinsons, Shangri-La
and SM Prime are obligated to provide parking spaces in their malls
for the use of their patrons or the public in general, free of charge.
4. Entitlement of the parties of [sic] award of damages.”13

On 29 May 2002, the RTC rendered its Joint Decision in

Civil Cases No. 00-1208 and No. 00-1210.
The RTC resolved the first two issues affirmatively. It
ruled that the OSG can initiate Civil Case No. 00-1210
under Presidential Decree No. 478 and the Administrative
Code of 1987.14 It also found that all the requisites for an
action for declaratory relief were present, to wit:
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“The requisites for an action for declaratory relief are: (a) there is
a justiciable controversy; (b) the controversy is between persons
whose interests are adverse; (c) the party seeking the relief has a
legal interest in the controversy; and (d) the issue involved is ripe
for judicial determination.
SM, the petitioner in Civil Case No. 001-1208 [sic] is a mall
operator who stands to be affected directly by the position taken by
the government officials sued namely the Secretary of Public
Highways and the Building Officials of the local government units
where it

_______________

12 Penned by Judge Sixto Marella, Jr., Id., at pp. 61-63.

13 Id., at pp. 62-63.
14 Section 1 of Presidential Decree No. 478 and Section 35, Chapter12, Title
III of the Administrative Code of 1987, enumerate the powers and functions of
the OSG.

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Office of the Solicitor General vs. Ayala Land, Incorporated

operates shopping malls. The OSG on the other hand acts on a

matter of public interest and has taken a position adverse to that of
the mall owners whom it sued. The construction of new and bigger
malls has been announced, a matter which the Court can take
judicial notice and the unsettled issue of whether mall operators
should provide parking facilities, free of charge needs to be
resolved.”15

As to the third and most contentious issue, the RTC

pronounced that:

“The Building Code, which is the enabling law and the

Implementing Rules and Regulations do not impose that parking
spaces shall be provided by the mall owners free of charge. Absent
such directive[,] Ayala Land, Robinsons, Shangri-la and SM [Prime]
are under no obligation to provide them for free. Article 1158 of the
Civil Code is clear:
“Obligations derived from law are not presumed. Only
those expressly determined in this Code or in special laws are
demandable and shall be regulated by the precepts of the law
which establishes them; and as to what has not been
foreseen, by the provisions of this Book (1090).[“]
xxxx
The provision on ratios of parking slots to several variables, like
shopping floor area or customer area found in Rule XIX of the

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Implementing Rules and Regulations cannot be construed as a

directive to provide free parking spaces, because the enabling law,
the Building Code does not so provide. x x x.
To compel Ayala Land, Robinsons, Shangri-La and SM [Prime]
to provide parking spaces for free can be considered as an unlawful
taking of property right without just compensation.
Parking spaces in shopping malls are privately owned and for
their use, the mall operators collect fees. The legal relationship could
be either lease or deposit. In either case[,] the mall owners have the
right to collect money which translates into income. Should parking
spaces be made free, this right of mall owners shall be gone. This,
without just compensation. Further, loss of effective control over
their property will ensue which is frowned upon by law.

_______________

15 Rollo, p. 252.

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The presence of parking spaces can be viewed in another

light. They can be looked at as necessary facilities to entice the
public to increase patronage of their malls because without parking
spaces, going to their malls will be inconvenient. These are[,]
however[,] business considerations which mall operators will have to
decide for themselves. They are not sufficient to justify a legal
conclusion, as the OSG would like the Court to adopt that it is the
obligation of the mall owners to provide parking spaces for free.”16

The RTC then held that there was no sufficient evidence

to justify any award for damages.
The RTC finally decreed in its 29 May 2002 Joint
Decision in Civil Cases No. 00-1208 and No. 00-1210 that:

“FOR THE REASONS GIVEN, the Court declares that Ayala

Land[,] Inc., Robinsons Land Corporation, Shangri-la Plaza
Corporation and SM Prime Holdings[,] Inc. are not obligated to
provide parking spaces in their malls for the use of their patrons or
public in general, free of charge.
All counterclaims in Civil Case No. 00-1210 are dismissed.
No pronouncement as to costs.”17

CA-G.R. CV No. 76298 involved the separate appeals of

the OSG18 and respondent SM Prime19 filed with the Court
of Appeals. The sole assignment of error of the OSG in its
Appellant’s Brief was:

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THE TRIAL COURT ERRED IN HOLDING THAT THE

NATIONAL BUILDING CODE DID NOT INTEND MALL
PARKING SPACES TO BE FREE OF CHARGE[;]20

while the four errors assigned by respondent SM Prime in

its Appellant’s Brief were:

_______________

16 Id., at pp. 258-260.

17 Id., at p. 260.
18 Id., at pp. 263-272.
19 Id., at pp. 461-516.
20 Id., at p. 263.

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I
THE TRIAL COURT ERRED IN FAILING TO DECLARE RULE
XIX OF THE IMPLEMENTING RULES AS HAVING BEEN
ENACTED ULTRA VIRES, HENCE, UNCONSTITUTIONAL AND
VOID.
II
THE TRIAL COURT ERRED IN FAILING TO DECLARE THE
IMPLEMENTING RULES INEFFECTIVE FOR NOT HAVING
BEEN PUBLISHED AS REQUIRED BY LAW.
III
THE TRIAL COURT ERRED IN FAILING TO DISMISS THE
OSG’S PETITION FOR DECLARATORY RELIEF AND
INJUNCTION FOR FAILURE TO EXHAUST ADMINISTRATIVE
REMEDIES.
IV
THE TRIAL COURT ERRED IN FAILING TO DECLARE THAT
THE OSG HAS NO LEGAL CAPACITY TO SUE AND/OR THAT IT
IS NOT A REAL PARTY-IN-INTEREST IN THE INSTANT
CASE.21

Respondent Robinsons filed a Motion to Dismiss Appeal

of the OSG on the ground that the lone issue raised therein
involved a pure question of law, not reviewable by the Court
of Appeals.
The Court of Appeals promulgated its Decision in CA-
G.R. CV No. 76298 on 25 January 2007. The appellate court
agreed with respondent Robinsons that the appeal of the
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OSG should suffer the fate of dismissal, since “the issue on

whether or not the National Building Code and its
implementing rules require shopping mall operators to
provide parking facilities to the public for free” was
evidently a question of law. Even so, since CA-G.R. CV No.
76298 also included the appeal of respondent SM Prime,
which raised issues worthy of consideration, and in order to
satisfy the demands of substantial jus-

_______________

21 Id., at p. 462.

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tice, the Court of Appeals proceeded to rule on the merits of

the case.
In its Decision, the Court of Appeals affirmed the
capacity of the OSG to initiate Civil Case No. 00-1210 before
the RTC as the legal representative of the government,22
and as the one deputized by the Senate of the Republic of
the Philippines through Senate Committee Report No. 225.
The Court of Appeals rejected the contention of
respondent SM Prime that the OSG failed to exhaust
administrative remedies. The appellate court explained that
an administrative review is not a condition precedent to
judicial relief where the question in dispute is purely a legal
one, and nothing of an administrative nature is to be or can
be done.

_______________

22 Citing Section 35, Chapter XII, Title III, Book IV of Executive Order
No. 292, otherwise known as the Administrative Code of 1987, which
provide:
SECTION 35. Powers and Functions.—The Office of the
Solicitor General shall represent the Government of the
Philippines, its agencies and instrumentalities and its officials and
agents in any litigation, proceeding, investigation or matter
requiring the services of a lawyer. When authorized by the
President or head of the office concerned, it shall also represent
government-owned or controlled corporations. The Office of the
Solicitor General shall constitute the law office of the Government
and, as such, shall discharge duties requiring the services of a
lawyer. It shall have the following specific powers and functions:

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xxxx
(3) Appear in any court in any action involving the validity of
any treaty, law, executive order or proclamation, rule or regulation
when in his judgment his intervention is necessary or when
requested by the Court.
xxxx
(11) Act and represent the Republic and/or the people before
any court, tribunal, body or commission in any matter, action or
proceeding which, in his opinion, affects the welfare of the people as
the ends of justice may require; x x x.

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The Court of Appeals likewise refused to rule on the

validity of the IRR of the National Building Code, as such
issue was not among those the parties had agreed to be
resolved by the RTC during the pre-trial conference for
Civil Cases No. 00-1208 and No. 00-1210. Issues cannot be
raised for the first time on appeal. Furthermore, the
appellate court found that the controversy could be settled
on other grounds, without touching on the issue of the
validity of the IRR. It referred to the settled rule that courts
should refrain from passing upon the constitutionality of a
law or implementing rules, because of the principle that
bars judicial inquiry into a constitutional question, unless
the resolution thereof is indispensable to the determination
of the case.
Lastly, the Court of Appeals declared that Section 803 of
the National Building Code and Rule XIX of the IRR were
clear and needed no further construction. Said provisions
were only intended to control the occupancy or congestion of
areas and structures. In the absence of any express and
clear provision of law, respondents could not be obliged and
expected to provide parking slots free of charge.
The fallo of the 25 January 2007 Decision of the Court of
Appeals reads:

“WHEREFORE, premises considered, the instant appeals are

DENIED. Accordingly, appealed Decision is hereby AFFIRMED
in toto.”23

In its Resolution issued on 14 March 2007, the Court of

Appeals denied the Motion for Reconsideration of the OSG,
finding that the grounds relied upon by the latter had
already been carefully considered, evaluated, and passed

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upon by the appellate court, and there was no strong and

cogent reason to modify much less reverse the assailed
judgment.

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23 Rollo, p. 57.

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The OSG now comes before this Court, via the instant
Petition for Review, with a single assignment of error:

THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING

THE RULING OF THE LOWER COURT THAT RESPONDENTS
ARE NOT OBLIGED TO PROVIDE FREE PARKING SPACES TO
THEIR CUSTOMERS OR THE PUBLIC.24

The OSG argues that respondents are mandated to

provide free parking by Section 803 of the National
Building Code and Rule XIX of the IRR.
According to Section 803 of the National Building Code:

“SECTION 803. Percentage of Site Occupancy

(a) Maximum site occupancy shall be governed by the use, type
of construction, and height of the building and the use, area,
nature, and location of the site; and subject to the provisions of the
local zoning requirements and in accordance with the rules and
regulations promulgated by the Secretary.”

In connection therewith, Rule XIX of the old IRR,25

provides:

RULE XIX—PARKING AND LOADING SPACE REQUIREMENTS

“Pursuant to Section 803 of the National Building Code (PD 1096)
providing for maximum site occupancy, the following provisions on
parking and loading space requirements shall be observed:
1. The parking space ratings listed below are minimum off-street
requirements for specific uses/occupancies for buildings/structures:

_______________

24 Id., at p. 33.
25 A Revised IRR took effect on 30 April 2005. Rule XIX of the old IRR
was reproduced in Table VII.4 (Minimum Required Off-Street (Off-

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RROW)-cum-On-Site Parking Slot, Parking Area and Loading/Unloading

Space Requirements by Allowed Use or Occupancy) of the Revised IRR.

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1.1 The size of an average automobile parking slot shall be

computed as 2.4 meters by 5.00 meters for perpendicular or
diagonal parking, 2.00 meters by 6.00 meters for parallel
parking. A truck or bus parking/loading slot shall be
computed at a minimum of 3.60 meters by 12.00 meters.
The parking slot shall be drawn to scale and the total
number of which shall be indicated on the plans and
specified whether or not parking accommodations, are
attendant-managed. (See Section 2 for computation of
parking requirements).
xxxx
1.7 Neighborhood shopping center—1 slot/100 sq. m. of
shopping floor area

The OSG avers that the aforequoted provisions should be

read together with Section 102 of the National Building
Code, which declares:

“SECTION 102. Declaration of Policy

It is hereby declared to be the policy of the State to safeguard
life, health, property, and public welfare, consistent with the
principles of sound environmental management and control; and to
this end, make it the purpose of this Code to provide for all buildings
and structures, a framework of minimum standards and
requirements to regulate and control their location, site, design,
quality of materials, construction, use, occupancy, and
maintenance.”

The requirement of free-of-charge parking, the OSG

argues, greatly contributes to the aim of safeguarding “life,
health, property, and public welfare, consistent with the
principles of sound environmental management and
control.” Adequate parking spaces would contribute greatly
to alleviating traffic congestion when complemented by
quick and easy access thereto because of free-charge
parking. Moreover, the power to regulate and control the
use, occupancy, and maintenance of buildings and
structures carries with it the power to impose fees and,
conversely, to control—partially or, as in this case,
absolutely—the imposition of such fees.

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The Court finds no merit in the present Petition.

The explicit directive of the afore-quoted statutory and
regulatory provisions, garnered from a plain reading
thereof, is that respondents, as operators/lessors of
neighborhood shopping centers, should provide parking and
loading spaces, in accordance with the minimum ratio of one
slot per 100 square meters of shopping floor area. There is
nothing therein pertaining to the collection (or non-
collection) of parking fees by respondents. In fact, the term
“parking fees” cannot even be found at all in the entire
National Building Code and its IRR.
Statutory construction has it that if a statute is clear and
unequivocal, it must be given its literal meaning and
applied without any attempt at interpretation.26 Since
Section 803 of the National Building Code and Rule XIX of
its IRR do not mention parking fees, then simply, said
provisions do not regulate the collection of the same. The
RTC and the Court of Appeals correctly applied Article 1158
of the New Civil Code, which states:

“Art. 1158. Obligations derived from law are not presumed.

Only those expressly determined in this Code or in special laws
are demandable, and shall be regulated by the precepts of the law
which establishes them; and as to what has not been foreseen, by
the provisions of this Book.” (Emphasis ours.)

Hence, in order to bring the matter of parking fees within

the ambit of the National Building Code and its IRR, the
OSG had to resort to specious and feeble argumentation, in
which the Court cannot concur.
The OSG cannot rely on Section 102 of the National
Building Code to expand the coverage of Section 803 of the
same Code and Rule XIX of the IRR, so as to include the
regulation of parking fees. The OSG limits its citation to the
first part of

_______________

26 Soria v. Desierto, 490 Phil. 749, 754; 450 SCRA 339, 344 (2005).

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Office of the Solicitor General vs. Ayala Land, Incorporated

Section 102 of the National Building Code declaring the

policy of the State “to safeguard life, health, property, and
public welfare, consistent with the principles of sound
environmental management and control”; but totally
ignores the second part of said provision, which reads, “and
to this end, make it the purpose of this Code to provide for
all buildings and structures, a framework of minimum
standards and requirements to regulate and control
their location, site, design, quality of materials,
construction, use, occupancy, and maintenance.” While the
first part of Section 102 of the National Building Code lays
down the State policy, it is the second part thereof that
explains how said policy shall be carried out in the Code.
Section 102 of the National Building Code is not an all-
encompassing grant of regulatory power to the DPWH
Secretary and local building officials in the name of life,
health, property, and public welfare. On the contrary, it
limits the regulatory power of said officials to ensuring that
the minimum standards and requirements for all buildings
and structures, as set forth in the National Building Code,
are complied with.
Consequently, the OSG cannot claim that in addition to
fixing the minimum requirements for parking spaces for
buildings, Rule XIX of the IRR also mandates that such
parking spaces be provided by building owners free of
charge. If Rule XIX is not covered by the enabling law, then
it cannot be added to or included in the implementing rules.
The rule-making power of administrative agencies must be
confined to details for regulating the mode or proceedings to
carry into effect the law as it has been enacted, and it cannot
be extended to amend or expand the statutory requirements
or to embrace matters not covered by the statute.
Administrative regulations must always be in harmony with
the provisions of the law because any resulting discrepancy
between the two will always be resolved in favor of the basic
law.27

_______________

27 Land Bank of the Philippines v. Court of Appeals, 327 Phil. 1048,

1052; 258 SCRA 404, 407 (1996).

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Office of the Solicitor General vs. Ayala Land, Incorporated

From the RTC all the way to this Court, the OSG
repeatedly referred to Republic v. Gonzales28 and City of
Ozamis v. Lumapas29 to support its position that the State
has the power to regulate parking spaces to promote the
health, safety, and welfare of the public; and it is by virtue of
said power that respondents may be required to provide free
parking facilities. The OSG, though, failed to consider the
substantial differences in the factual and legal backgrounds
of these two cases from those of the Petition at bar.
In Republic, the Municipality of Malabon sought to eject
the occupants of two parcels of land of the public domain to
give way to a road-widening project. It was in this context
that the Court pronounced:

“Indiscriminate parking along F. Sevilla Boulevard and other main

thoroughfares was prevalent; this, of course, caused the build up of
traffic in the surrounding area to the great discomfort and
inconvenience of the public who use the streets. Traffic congestion
constitutes a threat to the health, welfare, safety and convenience
of the people and it can only be substantially relieved by widening
streets and providing adequate parking areas.”

The Court, in City of Ozamis, declared that the City had

been clothed with full power to control and regulate its
streets for the purpose of promoting public health, safety
and welfare. The City can regulate the time, place, and
manner of parking in the streets and public places; and
charge minimal fees for the street parking to cover the
expenses for supervision, inspection and control, to ensure
the smooth flow of traffic in the environs of the public
market, and for the safety and convenience of the public.
Republic and City of Ozamis involved parking in the local
streets; in contrast, the present case deals with privately
owned parking facilities available for use by the general
pub-

_______________

28 G.R. No. 45338-39, 31 July 1991, 199 SCRA 788, 793.

29 160 Phil. 33; 65 SCRA 33 (1975).

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lic. In Republic and City of Ozamis, the concerned local

governments regulated parking pursuant to their power to
control and regulate their streets; in the instant case, the
DPWH Secretary and local building officials regulate
parking pursuant to their authority to ensure compliance
with the minimum standards and requirements under the
National Building Code and its IRR. With the difference in
subject matters and the bases for the regulatory powers
being invoked, Republic and City of Ozamis do not
constitute precedents for this case.
Indeed, Republic and City of Ozamis both contain
pronouncements that weaken the position of the OSG in the
case at bar. In Republic, the Court, instead of placing the
burden on private persons to provide parking facilities to
the general public, mentioned the trend in other
jurisdictions wherein the municipal governments
themselves took the initiative to make more parking spaces
available so as to alleviate the traffic problems, thus:

“Under the Land Transportation and Traffic Code, parking in

designated areas along public streets or highways is allowed which
clearly indicates that provision for parking spaces serves a useful
purpose. In other jurisdictions where traffic is at least as
voluminous as here, the provision by municipal governments of
parking space is not limited to parking along public streets or
highways. There has been a marked trend to build off-street
parking facilities with the view to removing parked cars from the
streets. While the provision of off-street parking facilities or
carparks has been commonly undertaken by private enterprise,
municipal governments have been constrained to put up carparks in
response to public necessity where private enterprise had failed to
keep up with the growing public demand. American courts have
upheld the right of municipal governments to construct off-street
parking facilities as clearly redounding to the public benefit.”30

_______________

30 Republic v. Gonzales, supra note 28 at 793.

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In City of Ozamis, the Court authorized the collection by

the City of minimal fees for the parking of vehicles along the
streets: so why then should the Court now preclude
respondents from collecting from the public a fee for the use
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of the mall parking facilities? Undoubtedly, respondents

also incur expenses in the maintenance and operation of the
mall parking facilities, such as electric consumption,
compensation for parking attendants and security, and
upkeep of the physical structures.
It is not sufficient for the OSG to claim that “the power to
regulate and control the use, occupancy, and maintenance
of buildings and structures carries with it the power to
impose fees and, conversely, to control, partially or, as in
this case, absolutely, the imposition of such fees.” Firstly, the
fees within the power of regulatory agencies to impose are
regulatory fees. It has been settled law in this jurisdiction
that this broad and all-compassing governmental
competence to restrict rights of liberty and property carries
with it the undeniable power to collect a regulatory fee. It
looks to the enactment of specific measures that govern the
relations not only as between individuals but also as
between private parties and the political society.31 True, if
the regulatory agencies have the power to impose
regulatory fees, then conversely, they also have the power to
remove the same. Even so, it is worthy to note that the
present case does not involve the imposition by the DPWH
Secretary and local building officials of regulatory fees upon
respondents; but the collection by respondents of parking
fees from persons who use the mall parking facilities.
Secondly, assuming arguendo that the DPWH Secretary
and local building officials do have regulatory powers over
the collection of parking fees for the use of privately owned
parking facilities, they cannot allow or prohibit such
collection arbitrarily or whimsically. Whether allowing or
prohibiting the collection of such parking fees, the

_______________

31 Republic v. Philippine Rabbit Bus Lines, 143 Phil. 158, 163; 32

SCRA 211, 215 (1970).

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action of the DPWH Secretary and local building officials

must pass the test of classic reasonableness and propriety of
the measures or means in the promotion of the ends sought
to be accomplished.32
Keeping in mind the aforementioned test of
reasonableness and propriety of measures or means, the
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Court notes that Section 803 of the National Building Code

falls under Chapter 8 on Light and Ventilation.
Evidently, the Code deems it necessary to regulate site
occupancy to ensure that there is proper lighting and
ventilation in every building. Pursuant thereto, Rule XIX of
the IRR requires that a building, depending on its specific
use and/or floor area, should provide a minimum number of
parking spaces. The Court, however, fails to see the
connection between regulating site occupancy to ensure
proper light and ventilation in every building vis-à-vis
regulating the collection by building owners of fees for the
use of their parking spaces. Contrary to the averment of the
OSG, the former does not necessarily include or imply the
latter. It totally escapes this Court how lighting and
ventilation conditions at the malls could be affected by the
fact that parking facilities thereat are free or paid for.
The OSG attempts to provide the missing link by arguing
that:

“Under Section 803 of the National Building Code,

complimentary parking spaces are required to enhance light and
ventilation, that is, to avoid traffic congestion in areas surrounding
the building, which certainly affects the ventilation within the
building itself, which otherwise, the annexed parking spaces would
have served. Free-of-charge parking avoids traffic congestion by
ensuring quick and easy access of legitimate shoppers to off-street
parking spaces annexed to the malls, and thereby removing the
vehicles of these

_______________

32 Acebedo Optical Company, Inc. v. Court of Appeals, 385 Phil. 956, 969; 329
SCRA 314, 327 (2000).

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legitimate shoppers off the busy streets near the commercial

establishments.”33

The Court is unconvinced. The National Building Code

regulates buildings, by setting the minimum specifications
and requirements for the same. It does not concern itself
with traffic congestion in areas surrounding the building.
It is already a stretch to say that the National Building
Code and its IRR also intend to solve the problem of traffic
congestion around the buildings so as to ensure that the
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said buildings shall have adequate lighting and ventilation.

Moreover, the Court cannot simply assume, as the OSG has
apparently done, that the traffic congestion in areas around
the malls is due to the fact that respondents charge for their
parking facilities, thus, forcing vehicle owners to just park in
the streets. The Court notes that despite the fees charged by
respondents, vehicle owners still use the mall parking
facilities, which are even fully occupied on some days.
Vehicle owners may be parking in the streets only because
there are not enough parking spaces in the malls, and not
because they are deterred by the parking fees charged by
respondents. Free parking spaces at the malls may even
have the opposite effect from what the OSG envisioned:
more people may be encouraged by the free parking to bring
their own vehicles, instead of taking public transport, to the
malls; as a result, the parking facilities would become full
sooner, leaving more vehicles without parking spaces in the
malls and parked in the streets instead, causing even more
traffic congestion.
Without using the term outright, the OSG is actually
invoking police power to justify the regulation by the State,
through the DPWH Secretary and local building officials, of
privately owned parking facilities, including the collection
by the owners/operators of such facilities of parking fees
from the public for the use thereof. The Court finds,
however, that in totally prohibiting respondents from
collecting parking fees

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33 Rollo, pp. 36-37.

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644 SUPREME COURT REPORTS ANNOTATED

Office of the Solicitor General vs. Ayala Land, Incorporated

from the public for the use of the mall parking facilities, the
State would be acting beyond the bounds of police power.
Police power is the power of promoting the public welfare
by restraining and regulating the use of liberty and
property. It is usually exerted in order to merely regulate
the use and enjoyment of the property of the owner. The
power to regulate, however, does not include the power to
prohibit. A fortiori, the power to regulate does not include
the power to confiscate. Police power does not involve the
taking or confiscation of property, with the exception of a few
cases where there is a necessity to confiscate private
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property in order to destroy it for the purpose of protecting

peace and order and of promoting the general welfare; for
instance, the confiscation of an illegally possessed article,
such as opium and firearms.34
When there is a taking or confiscation of private property
for public use, the State is no longer exercising police power,
but another of its inherent powers, namely, eminent
domain. Eminent domain enables the State to forcibly
acquire private lands intended for public use upon payment
of just compensation to the owner.35
Normally, of course, the power of eminent domain results
in the taking or appropriation of title to, and possession of,
the expropriated property; but no cogent reason appears
why the said power may not be availed of only to impose a
burden upon the owner of condemned property, without loss
of title and possession.36 It is a settled rule that neither
acquisition of title nor total destruction of value is essential
to taking. It is usually in cases where title remains with the
private owner that inquiry should be made to determine
whether the im-

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34 See City Government of Quezon City v. Judge Ericta, 207 Phil.

648, 654; 122 SCRA 759, 764 (1983).
35 Acuña v. Arroyo, G.R. No. 79310, 14 July 1989, 175 SCRA 343,
370.
36 Republic of the Philippines v. Philippine Long Distance Telephone
Company, 136 Phil. 20, 29; 26 SCRA 620, 628 (1969).

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VOL. 600, SEPTEMBER 18, 2009 645

Office of the Solicitor General vs. Ayala Land, Incorporated

pairment of a property is merely regulated or amounts to a

compensable taking. A regulation that deprives any person
of the profitable use of his property constitutes a taking and
entitles him to compensation, unless the invasion of rights is
so slight as to permit the regulation to be justified under the
police power. Similarly, a police regulation that
unreasonably restricts the right to use business property for
business purposes amounts to a taking of private property,
and the owner may recover therefor.37
Although in the present case, title to and/or possession of
the parking facilities remain/s with respondents, the
prohibition against their collection of parking fees from the
public, for the use of said facilities, is already tantamount to
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a taking or confiscation of their properties. The State is not

only requiring that respondents devote a portion of the
latter’s properties for use as parking spaces, but is also
mandating that they give the public access to said parking
spaces for free. Such is already an excessive intrusion into
the property rights of respondents. Not only are they being
deprived of the right to use a portion of their properties as
they wish, they are further prohibited from profiting from its
use or even just recovering therefrom the expenses for the
maintenance and operation of the required parking
facilities.
The ruling of this Court in City Government of Quezon
City v. Judge Ericta38 is edifying. Therein, the City
Government of Quezon City passed an ordinance obliging
private cemeteries within its jurisdiction to set aside at least
six percent of their total area for charity, that is, for burial
grounds of deceased paupers. According to the Court, the
ordinance in question was null and void, for it authorized
the taking of private property without just compensation:

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37 See J. Romero’s Dissenting Opinion in Telecommunications and

Broadcast Attorneys of the Philippines v. Commission on Elections, 352
Phil. 153, 191; 289 SCRA 337, 367 (1998). See also People v. Fajardo, 104
Phil. 443, 447-448 (1958).
38 Supra note 34 at 656-657.

646

646 SUPREME COURT REPORTS ANNOTATED

Office of the Solicitor General vs. Ayala Land, Incorporated

“There is no reasonable relation between the setting aside of at

least six (6) percent of the total area of all private cemeteries for
charity burial grounds of deceased paupers and the promotion of’
health, morals, good order, safety, or the general welfare of the
people. The ordinance is actually a taking without compensation of
a certain area from a private cemetery to benefit paupers who are
charges of the municipal corporation. Instead of’ building or
maintaining a public cemetery for this purpose, the city passes the
burden to private cemeteries.
‘The expropriation without compensation of a portion of private
cemeteries is not covered by Section 12(t) of Republic Act 537, the
Revised Charter of Quezon City which empowers the city council to
prohibit the burial of the dead within the center of population of the
city and to provide for their burial in a proper place subject to the
provisions of general law regulating burial grounds and cemeteries.
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When the Local Government Code, Batas Pambansa Blg. 337

provides in Section 177(q) that a sangguniang panlungsod may
“provide for the burial of the dead in such place and in such manner
as prescribed by law or ordinance” it simply authorizes the city to
provide its own city owned land or to buy or expropriate private
properties to construct public cemeteries. This has been the law, and
practise in the past. It continues to the present. Expropriation,
however, requires payment of just compensation. The questioned
ordinance is different from laws and regulations requiring owners of
subdivisions to set aside certain areas for streets, parks,
playgrounds, and other public facilities from the land they sell to
buyers of subdivision lots. The necessities of public safety, health,
and convenience are very clear from said requirements which are
intended to insure the development of communities with salubrious
and wholesome environments. The beneficiaries of the regulation,
in turn, are made to pay by the subdivision developer when
individual lots are sold to homeowners.”

In conclusion, the total prohibition against the collection

by respondents of parking fees from persons who use the
mall parking facilities has no basis in the National Building
Code or its IRR. The State also cannot impose the same
prohibition by generally invoking police power, since said
prohibition amounts to a taking of respondents’ property
without payment of just compensation.
647

VOL. 600, SEPTEMBER 18, 2009 647

Office of the Solicitor General vs. Ayala Land, Incorporated

Given the foregoing, the Court finds no more need to

address the issue persistently raised by respondent SM
Prime concerning the unconstitutionality of Rule XIX of the
IRR. In addition, the said issue was not among those that
the parties, during the pre-trial conference for Civil Cases
No. 12-08 and No. 00-1210, agreed to submit for resolution
of the RTC. It is likewise axiomatic that the
constitutionality of a law, a regulation, an ordinance or an
act will not be resolved by courts if the controversy can be,
as in this case it has been, settled on other grounds.39
WHEREFORE, the instant Petition for Review on
Certiorari is hereby DENIED. The Decision dated 25
January 2007 and Resolution dated 14 March 2007 of the
Court of Appeals in CA-G.R. CV No. 76298, affirming in toto
the Joint Decision dated 29 May 2002 of the Regional Trial
Court of Makati City, Branch 138, in Civil Cases No. 00-
1208 and No. 00-1210 are hereby AFFIRMED. No costs.
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SO ORDERED.

Ynares-Santiago (Chairperson), Velasco, Jr., Nachura

and Peralta, JJ., concur.

Petition denied, judgment and resolution affirmed.

Note.—While the Constitution protects property rights,

petitioners must accept the realities of business and the
State, in the exercise of police power can intervene in the
operations of a business which may result in an impairment
of property rights in the process. (Carlos Superdrug Corp.,
vs. Department of Social Welfare and Development (DSWD),
526 SCRA 130 [2007])
——o0o——

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39 Ty v. Trampe, G.R. No. 117577, 1 December 1995, 250 SCRA 500,

520.

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