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Non-impairment of Contracts
Article 3, SECTION 10 Philippines Constitution
NON-IMPAIRMENT OF CONTRACTS
Abella v. NLRC
– illegal dismissal – To come under the constitutional prohibition, the law must effect change in the rights of the parties with reference to each other and not with reference to non-parties. The contract in this case cannot have the effect of annulling subsequent legislation for the protection of the workers.
Ortigas and Co. v. CA
– MMDA ordinance; reclassification of a portion of Ortigas Ave. – A later law which enlarges, abridges or in any manner changes the intent of the parties to the contract necessarily impairs the contract itself and cannot be given retroactive effect without violating the constitutional prohibition against the non-impairment of contracts; Police power legislation is applicable not only to future contracts but equally to those already in existence. Non-impairment of contracts must yield to the superior and
legitimate exercise by the State of police power to promote health, morals, etc.
National Development Company v. Philippine Veteran’s Bank
– mortgage liability; AGRIX – While it is true that police power is superior to the impairment clause, the principle will only apply only where the contract is so related to the public welfare that it will be considered congenitally susceptible to change by the legislature in the interest of the greater number.
Republic v. Caguioa
– tax exemptions; granted but was later withdrawn by a latter law – There is no vested right in tax exemption, more so when the latest expression of legislative intent render its continuance doubtful; Congress in the legitimate exercise of its lawmaking powers, can enact a law withdrawing a tax
exemption just as efficaciously as it may grant the same.