The foundation of all our rights is the Bill of Rights (Article III) of the 1987 Constitution. The over-arching right is found in the due process clause, specifically in Section 1 which states:
"No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws."
Substantive and procedural laws flow from the due process clause. Substantive laws create rights, while procedural laws and rules show us how these rights are to be protected and, if there is a violation, how we are to seek redress.
In connection with this, we have to understand the difference between substantive and procedural due process.
In the case of ALLIANCE FOR THE FAMILY FOUNDATION, PHILIPPINES, INC. (ALF), ET AL VERSUS HON. JANETTE L. GAGARIN, et al, GR No. 217872, April 26, 2017, the Supreme Court stated:
"Due process of law has two aspects: substantive and procedural. In order that a particular act may not be impugned as violative of the due process clause, there must be compliance with both the substantive and the procedural requirements thereof. Substantive due process refers to the intrinsic validity of a law that interferes with the rights of a person to his property. Procedural due process, on the other hand, means compliance with the procedures or steps, even periods, prescribed by the statute, in conformity with the standard of fair play and without arbitrariness on the part of those who are called upon to administer it."
The Supreme Court also said that:
"By 'due process of law' we mean 'a law which hears before it condemns; which proceeds upon inquiry, and renders judgment only after trial. ... .' (4 Wheaton, U.S. 518, 581.); or, as this Court has said, 'Due process of law' contemplates notice and opportunity to be heard before judgment is rendered, affecting one's person or property" (Lopez vs. Director of Lands, 47 Phil. 23, 32) cited in Mariano A. Albert versus University Publishing Co., Inc., GR No. L-19118, January 30, 1965.
Another reason why we should distinguish between substantive and remedial law relates to the issue of prospective or retroactive application.
Substantive laws are to be applied prospectively, while remedial laws may be applied retroactively unless vested rights are going to be impaired.
We can understand this better by studying the case of SPOUSES MARIAN B. LINTAG ET AL VS. NATIONAL POWER CORPORATION, GR NO. 158609 (July 27, 2007).
The issue is whether or not RA 8974 is a substantive or remedial law. If it is a substantive law, it cannot be applied retroactively. If it is a remedial law, it can be applied retroactively.
The petitioners-spouses owned a parcel of land with an area of 80,001 square meters. The National Power Corporation (NPC) filed a complaint for expropriation in order to acquire an easement of right-of-way over a portion of the property measuring 8,050 square meters. NPC deposited the initial assessed value of the property with the bank, in the sum of P2,469.09. Pursuant to the recommendation of commissioners, the Regional Trial Court directed the NPC to pay the petitioners-spouses P49,665.63 for damage to the improvements on the property.
About two months later, RA 8974 took effect. Under this law, the value of the property should be based on the zonal valuation made by the Bureau of Internal Revenue. Using P700 per square meter as the basis, the petitioners-spouses claimed that they are entitled to P5.6 million.
The RTC ruled in favor of the petitioners-spouses but the Court of Appeals reversed this ruling. This prompted the petitioners-spouses to bring the issue before the Supreme Court.
The petitioners-spouses took the position that RA 8974 is a remedial law, as it refers to expropriation, and therefore, it should be applied retroactively. It should be applied to this case which was filed before RA 8974 took effect, and which is still pending.
The Supreme Court held that RA 8974 is a substantive law.
Citing REPUBLIC VS. GINGOYON, G.R. No. 166429, December 19, 2005, 478 SCRA 474, 520), it stated:
It likewise bears noting that the appropriate standard of just compensation is a substantive matter. It is well within the province of the legislature to fix the standard, which it did through the enactment of Rep. Act No. 8974. Specifically, this prescribes the new standards in determining the amount of just compensation in expropriation cases relating to national government infrastructure projects, as well as the payment of the provisional value as a prerequisite to the issuance of a writ of possession.
This ruling was reiterated in this Court's Resolution of February 1, 2006, which further states that:
[I]f the rule takes away a vested right, it is not procedural, and so the converse certainly holds that if the rule or provision creates a right, it should be properly appreciated as substantive in nature. Indubitably, a matter is substantive when it involves the creation of rights to be enjoyed by the owner of property to be expropriated. The right of the owner to receive just compensation prior to acquisition of possession by the State of the property is a proprietary right, appropriately classified as a substantive matter and, thus, within the sole province of the legislature to legislate on.
It is possible for a substantive matter to be nonetheless embodied in a rule of procedure, and to a certain extent, Rule 67 does contain matters of substance. Yet the absorption of the substantive point into a procedural rule does not prevent the substantive right from being superseded or amended by statute, for the creation of property rights is a matter for the legislature to enact on, and not for the courts to decide upon. Indeed, if the position of the Government is sustained, it could very well lead to the absurd situation wherein the judicial branch of government may shield laws with the veneer of irrepealability simply by absorbing the provisions of law into the rules of procedure. When the 1987 Constitution restored to the judicial branch of government the sole prerogative to promulgate rules concerning pleading, practice and procedure, it should be understood that such rules necessarily pertain to points of procedure, and not points of substantive law.
It is a well-entrenched principle that statutes, including administrative rules and regulations, operate prospectively unless the legislative intent to the contrary is manifest by express terms or by necessary implication because the retroactive application of a law usually divests rights that have already become vested. This is based on the Latin maxim: Lex prospicit non respicit (the law looks forward, not backward).
In the application of RA No. 8974, the Court finds no justification to depart from this rule. First, RA No. 8974 is a substantive law. Second, there is nothing in RA No. 8974 which expressly provides that it should have retroactive effect. Third, neither is retroactivity necessarily implied from RA No. 8974 or in any of its provisions. Unfortunately for the petitioners, the silence of RA No. 8974 and its Implementing Rules on the matter cannot give rise to the inference that it can be applied retroactively. In the two (2) cases wherein this Court applied the provisions of RA No. 8974, the complaints were filed at the time the law was already in full force and effect. Thus, these cases cannot serve as binding precedent to the case at bench.
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