Facts: Plaintiff a municipal corporation filed a complaint against defendant a public corporation, created under Act.1383. It contends that the said act does not include within its purview the Baguio Water Works system, assuming that it does, is unconstitutional because it deprives the plaintiff ownership, control and operation of said water works without just compensation and due process of law. The defendant filed a motion to dismiss ion the ground that it is not a proper exercise of police power and eminent domain. The court denied the motion and ordered the defendants to file an answer. The court holds that the water works system of Baguio belongs to private property and cannot be expropriated without just compensation. Sec. 8 of R.A.1383 provides for the exchange of the NAWASA assets for the value of the water works system of Baguio is unconstitutional for this is not just compensation. Defendants motion for reconsideration was denied hence this appeal.
Issue: Whether or Not there is a valid exercise of police power of eminent domain.
Held: R.A. 1383 does not constitute a valid exercise of police power. The act does not confiscate, destroy or appropriate property belonging to a municipal corporation. It merely directs that all water works belonging to cities, municipalities and municipal districts in the Philippines to be transferred to the NAWASA. The purpose is placing them under the control and supervision of an agency with a view to promoting their efficient management, but in so doing does not confiscate them because it directs that they be paid with equal value of the assets of NAWASA.
The 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 it is a property of a municipal corporation, water works cannot be taken away except for public use and upon payment of just compensation. Judgment affirmed.
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