536 OSG v. Ayala Coloquio

OSG v.
Ayala
600 SCRA 617
September 18, 2009
FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court,
seeking the reversal of the decision of the Court of Appeals which affirmed the decision of the
Regional Trial Court, judging that respondents Ayala Land Incorporated, Robinsons Land Corp.,
Shangri-la Plaza Corporation, and SM Prime Holdings, Inc. could not be obliged to provide free
parking spaces in their malls. Respondents operate shopping malls in Metro Manila which have
parking facilities for motor vehicles. They spend for the maintenance and administration of these
parking lots, so they collect parking fees from persons who make use of them. The parking
tickets contain the stipulation that they shall not be responsible for any loss or damage to the
vehicles of those parked in their facilities.
In 1999, Senate Committees conducted a joint investigation to look into the legality of
the practice of charging parking fees, and the waiver clause invoked. They eventually found the
charging of fees contrary to the National Building Code and therefore illegal. They also invoke
Article II of R.A. No. 9734 which 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. The necessary departments were then instructed to institute the
necessary action to enjoin the collection of parking fees, and to enforce penal sanctions,
recommending to the Congress the amendment of the National Building Code to expressly
prohibit the malls form charging parking fees and invoking the waiver clause.
Action was filed with the RTC to question the prohibition, but the Office of the Solicitor
General followed with its petition for declaratory relief in support the illegality of the fees. RTC
pronounced its judgment stating that the Building Code does not impose that parking spaces shall
be provided for free by the owners, so they are not under any obligation to make their facilities
available for parking free of charge. The court added that to compel the mall owners would
constitute an unlawful taking of property right without just compensation, for the parking spaces
are privately owned. The petitioners appealed to the CA which ruled that the National Building
Code and the IRR were clear, intending only 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. Their motion for reconsideration
was likewise denied, hence this petition.
ISSUE(S):
1. Whether or not the CA erred in ruling that the respondents are not obligated to provide
free parking spaces to their customers or the public.
HELD:
1. No.
The OSG argues that the requirement of free of charge parking would contribute to the
safeguarding of life, health, property, and public welfare, consistent with the principles of sound
environmental management and control. It would also contribute to alleviating traffic
congestion when complemented by quick and easy access. Moreover, the power to regulate and
control the use and maintenance of buildings and structures carries with it the power to control
Prepared by: Jo-Anne D. Coloquio
the imposition of such fees. The Court finds the argument of the OSG untenable for there is
nothing in the National Building Code which supports the idea that the mall owners must provide
parking spaces for free, for it only talks about the minimum standards and requirements to
regulate the location or the site, including the construction and maintenance of the building. The
Code actually limits the regulatory power of officials, not granting them an all-encompassing
power to regulate. Even if the DPWH Secretary and local building officials 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 for reasonableness must still be the standard
to be followed. For the argument that it would alleviate traffic congestion, the Court states that it
will even worsen the traffic for more people will be encouraged to bring their own cars to park in
free parking lots.
If police power is invoked, the Court stated that totally prohibiting the mall owners from
imposing parking fees would be acting beyond the bounds of police power. Police power is the
power to regulate, but the latter does not include the power to prohibit nor the power to
confiscate unless there is a necessity for peace and order or for the general welfare. Eminent
domain is exercised when there is taking or confiscation of private property for public use, but of
course upon payment of just compensation. 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 under the police power. Also, 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. In the case at bar,
the prohibition against the collection of parking fees already amounts to a confiscation of the
respondents properties, which is already an excessive intrusion into their property rights. 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
incurred in the maintenance and operation of the facilities. Wherefore, the petition is denied.
Prepared by: Jo-Anne D. Coloquio

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