PUBLIC CORPORATION INTRODUCTION
1991.
Under the 1987 Constitution, declared policy: The State shall ensure the autonomy of local governments (Art. II, Sec. 25)
Politi olitica call Law Law – bran branch ch of publ public ic law law whic which h deal dealss with with the the organization and operations of the governmental organs of the To highlight this policy, note, an entire Article (X) with State and defines the relations of the State with the inhabitants of fourteen sections is devoted to “Local Governments”. Section (3) its territory. thereof thereof mandates: mandates: Congress SHALL enact a local government government code code (a) to provid provide e a more more respon responsiv sive e and accounta accountable ble local local gover overnm nmen entt stru struct ctu ure init initia iate ted d thr throug ough a syst system em of DIVISIONS OF POLITICAL LAW: LAW: DECENTRALIZATION with effective mechanisms of recall, initiative and referendum, (a) allocate among different local government (a) (a) Const Constit itut utio iona nall Law Law – bran branch ch of publ public ic law law whic which h units their powers, responsibilities and resources, (c) provide for deals with the maintenance of the proper balance qualifications, elections appointment and removal, term, salaries, between authority as represented by three inherent powers and function and duties of local officials and (d) other powers of the State and liberty as guaranteed by matters relating to the organization and operation of local units. the Bill of Rights. (b) Administra Administrative tive law – branch branch of public public law which which fixes fixes Auto Autono nomy my – is eithe eitherr dece decent ntral raliz izat atio ion n of admi admini nist strat ratio ion n the the orga organi niza zatio tion n of gove govern rnme ment nt,, dete determ rmin ines es (deconcentration) or decentralization of power (devolution). comp compet eten ence ce of admi admini nist stra rativ tive e auth authori oritie tiess who who execu execute te the law and indicates indicates to the indivi individua duall Decentraliza Decentralization tion of administrati administration on – delegation delegation by the central remedies for violation of his rights. govern governmen mentt of admini administr strati ative ve powers powers to local local subdiv subdivisi isions ons in (c) Law on on Munici Municipal pal Corpo Corporati rations ons order to broaden the base of governmental power making such (d) Law of Publi Publicc Offi Officers cers local local govern governmen ments ts “mo “more re respon responsive sive and accoun accountab table” le” and (e) (e) Elec Electi tion on Law Lawss insuring their fullest development as self-reliant communities and (f) (f) Publ Public ic Inte Intern rnati ation onal al Law Law effective effective partners in the pursuit of national national development development and progress” (declared policy of LGC); relieves central government of the burden of managing local affairs, enabling it to concentrate GENERAL PRINCIPLES on nati nation onal al conc concer erns ns;; the the Pres Presid iden entt exer exerci cise sess “gen “gener eral al supervision” over them but only to ensure that local affairs are CORPORATION Defined: An artificial being created by operation of administered according to law (President’s mandate to ensure law having the right of succession and powers, attributes and faithful execution of the laws) but he has no control over their prop proper erti ties es expr expres essl sly y auth authori orize zed d by law law or inci incide dent nt to its its acts (he cannot substitute their judgment with his own). existence. Decentralization of power –abdication of political power in favor of CLASSIFICATION OF CORPORATIONS: loca locall gove govern rnme ment nt units units decl declar ared ed to be auto autono nomo mous us;; the the autono autonomou mouss govern governmen mentt is free free to chart chart its own destin destiny y and (i) Public – or organize ized fo for th the go government of of a shap shape e its futu future re with with mini minimu mum m inte interv rven entio tion n from from cent centra rall portion of the State; authorities; authorities; amount to self-immol self-immolation ation since since the autonomou autonomouss (ii) (ii) Priva rivate te – for forme med d for for some some priv privat ate e pur purpo pose se,, government becomes accountable not to the central authority but benefit, aim or end; to its constituency. (iii iii) Quasi-pu -public – priv rivate corporation ion that renders public service or supplies NOTE: NOT E: Constit Constituti utiona onall guaran guarantee tee of Local Local Autono Autonomy my refers refers to public wants. ADMIN ADMINIST ISTRA RATIV TIVE E AUTONO AUTONOMY MY of local local govern governmen mentt units units (or decentralization of government authority). NOTE: Criterion to determine whether a corporation is public – The relationship of the corporation to the Sate, that is, if created by the State as its own agency to help the State in carrying out its Case: PROVINCE OF BATANGA BATANGAS S vs. ALBERTO ALBERTO G. ROMULO, G.R. No. governmental functions then it is public, otherwise, it is private. 152774, 5/27/2004. CLASSES OF PUBLIC CORPORATIONS: CORPORATIONS: (i) (i) (ii) ii)
Quasi uasi-c -cor orp porat oratio ion n – create eated d by by th the Sta State te for for a narrow/limited purpose (PCSO, etc.); Municipal Cor Corporations ons – body pol politi itic and and corporate corporate constituted constituted by the incorporatio incorporation n of the inhabitants for the purpose of local government.
ELEMENTS OF MUNICIPAL CORPORATIONS: CORPORATIONS: 1. 2. 3. 4.
Legal Legal creati creation on or incor incorpor porati ation on – there there must must be a law law creating/authorizing the creation or incorporation of a municipal corporation]; Corpora Corporate te name name – name name by whic which h the corp corpora oration tion is known; Inhabi Inhabitan tants ts – people people resid residing ing in the the territ territory ory of the the corporation; Territor erritory y – land mass mass where where the inhabi inhabitan tants ts reside reside together with internal and external waters and air space above the land and waters.
DUAL NATURE & FUN CTIONS OF MUNICIPAL MU NICIPAL CORPORATIONS: CORPORATIONS: Every local government unit created/organized under the Local Government Code is a BODY POLITIC and CORPORATE endowed with powers to be exercised by it in conformity with law. As such it shall exercise powers as a political subdivision of the National Gove Govern rnme ment nt and and as a corp corpor orat ate e enti entity ty repr repres esen enti ting ng the the inhabitants of the territory (Section 15, RA7160). Accordingly, it has dual functions – (i) (i)
(ii) (ii)
pub public lic or gover overnm nmen enta tall – acts acts as an an ag agent ent of the State for the government of the territory and the inhabitants; and
FACTS: ACTS: Provi Province nce of Batang Batangas as filed filed a petitio petition n for certio certiorari rari to declare unconstitutional and void certain provisos contained in the General Appropriations Acts (GAA) of 1999, 2000 and 2001 earmarking for said years five billion pesos (P5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) and imposed conditions for the release thereof such as modifying the allocation scheme for such allotment as prescribed under the Local Government Code and securing approval for local projects from the Oversight Committee on Devolution. RULING: In Section 25, Article II of the Constitution, the State has expressly adopted as a policy tha, “The State shall ensure the autono autonomy my of local local govern governmen ments” ts”.. The State State policy policy on local local autonomy is amplified in Section 2 thereof, “It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant commu communit nities ies and make make them them more more effect effective ive partne partners rs in the attainment of national goals x x x . The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions violate the constitutional precept on local autonomy. Section 6, Article X of the Constitution reads: Sec. 6. Local Local govern governmen mentt units units shall shall have have a just just share, share, as dete determ rmin ined ed by law, law, in the the nati nation onal al tax taxes whic which h shal shalll be automatically released to them. "Automatic" means "involuntary either wholly or to a major extent so that any activity of the will is largely negligible; of a reflex nature; without volition; mechanical; like like or sugges suggestiv tive e of an automa automaton ton.. Being Being "autom "automatic atic," ," thus, thus, connotes something mechanical, spontaneous and perfunctory. As such, the LGUs are not required to perform any act to receive the "just share" accruing to them from the national coffers. The "jus "justt shar share" e" of the the LGUs LGUs is inco incorp rpor orat ated ed as the the IRA IRA in the the appropriations law or GAA enacted by Congress annually. annually.
priv privat ate e or or pr propri opriet etar ary y – acts acts as an agen agentt of of the the community in the administration of local affairs, as such, acts as a separate entity for its own purposes and not as a subdivision of the State.
The entire process involving the LGSEF’s distribution and release is constitutionally impermissible. The LGSEF is part of the IRA or “just share” of the LGUs in the national taxes. Submitting its distribution and release to the vagaries of the implementing rules including the guidelines and mechanisms unilaterally prescribed by the Oversight Oversight Committee from time to time as sanctioned sanctioned by BASIC PRINCIPLES the challenged laws and OCD resolutions, makes the release not automatic – a flagrant violation of the constitutional and statutory Sec. 1 – Act shall be known as the Local Government Code of mandate that LGUs’ just share shall be automatically released to 1
them. Meanin Meaning g of Admin Administ istrati rative ve Regio Regions ns – are mere mere group grouping ing of contiguous provinces for administrative purposes, not for political repr repres esen entat tation ion.. The The divi divisi sion on of the the coun countr try y into into regi region onss is inte intend nded ed to faci facilit litate ate not not only only the the admi admini nist strat ratio ion n of loca locall government governmentss which the law requires to have regional offices. Creation Creation of administrativ administrative e regions regions for purpose of expediting expediting the delivery of services is nothing new. The Integrated Reorganization plan of 1972, which was made part of the law of the land by virtue of President Presidential ial Decree Decree No. 1, established established 11 regions, regions, later beca became me 12. 12. With With defi defini nite te regi region onal al cent center erss and and requ requir ired ed depa depart rtme ment ntss and and agen agenci cies es of the the Exec Execut utiv ive e Bran Branch ch of the the National Government to set up field offices therein (DTI VII, DOLE VII, DPWH Regional Office). The functions of the regional offices is to be establ establish ished ed pursu pursuant ant the reorga reorganiz nizati ation on plan plan are: are: (a) implement laws, policies, plans, programs, rules and regulation of the departmen departmentt or agency agency in the region regional al area; area; (2) provi provide de economical, efficient and effective services to the people in the area; (3) to coordinate with regional offices of other departments, bureaus and agencies in the area; and (3) perform such other functions as may be provided by law. Meanin Meaning g of Autono Autonomou mouss Regio Regions ns – creati creation on of autono autonomou mouss regions in Muslim Mindanao and the Cordilleras, which is unique to the the 1987 1987 Const Constitu ituti tion on,, cont contem empl plat ates es gran grantt of poli politi tica call autonomy and not just administrative autonomy to those regions. Thus, Art. X, Section 18 of Constitution mandates for Congress to enact an organic act for the autonomous regions (with assistance and partic participa ipatio tion n of consul consultat tative ive commis commissio sion n compos composed ed of representatives appointed by the President from list of nominees of multisectoral bodies) to provide for an autonomous regional government government with a basic structure structure consisting consisting of an executive executive department and a legislative assembly and special courts with person personal, al, family family and property property law jurisdi jurisdicti ction on in each each of the autonomous regions.
Decent Decentral ralizat ization ion comes comes in two forms forms — deconc deconcent entrati ration on and devolution. devolution. Deconcentra Deconcentration tion (administrat (administrative ive decentraliz decentralization) ation) is administrative in nature; it involves the transfer of functions or the delegation of authority and responsibility from the national office to the regional and local offices. Devolution, on the other hand, hand, connot connotes es politic political al decent decentrali ralizat zation ion,, or the transf transfer er of powers, responsibilities, and resources for the performance of cert certai ain n func functi tion onss from from the the cent centra rall gove govern rnme ment nt to loca locall government units. By regi region onal al auto autono nomy my,, the the fram framer erss inte intend nded ed it to mean mean "meaningfu "meaningfull and authentic authentic regional regional autonomy (that is, a kind of local self-government which allows the people of the region or area the power to determine what is best for their growth and development without undue interference or dictation from the central government). To this end, Section 16, Article X limits the power of the President over autonomous regions. In essence, the provision also curtails the power of Congress over autonomous regions. Consequently, Congress will have to re-examine national laws and make sure that they reflect the Constitution's adherence to local autonomy. And in case of conflicts, the underlying spirit which should guide its resolution is the Constitution's desire for genuine local autonomy. E.O. E.O. 426 official officially ly devolve devolved d the powers and function functionss of the DPWH in ARMM to the Autonomous Regional Government (ARG). More importantly, Congress itself through R.A. 9054 transferred and devolved the administrative and fiscal management of public works and funds for public works to the ARG. The aim of the Constitution is to extend to the autonomous peoples, the people of Muslim Mindanao in this case, the right to self-determination — a right to choose their own path of development; the right to determine the political, cultural and economic content of their development path within the framework of the sovereignty and territorial integrity of the Philippine Republic. Self-determination refers to the need for a political structure that will respect the autonomous peoples' uniqueness and grant them sufficient room for self-expression and self-construction.
Case: DISOMANGCOP vs. DPWH SECRETARY, G.R. No. 149848, 11/25/2004. With R.A. 8999, however, this freedom is taken away, and the National Government takes control again. The hands, once more, FACTS: Pursuant to Sec. 15, Art. X of the Constitution (for the of the the auto autono nomo mous us peop people less are are rein reined ed in and and tied tied up. up. The The creati creation on of autono autonomou mouss region regionss in Muslim Muslim Mindan Mindanao ao and the challenged law creates an office with functions and powers which, Cordilleras), RA 6734 (An Act Providing for An Organic Act for the by virtue virtue of E.O. E.O. 426, 426, have have been been previ previous ously ly devolve devolved d to the Auto Autono nomo mous us Regio egion n in Musl Muslim im Mind Mindan anao ao)) was was enac enacte ted. d. DPWH-ARMM, First First Engineering District in Lanao del Sur. Sur. Subsequently, the four provinces of Lanao del Sur, Maguindanao, Sulu and Tawi-T awi-Tawi, voting in favor of autonomy, autonomy, became became the Section 2, LGC- Declaration of Policy - LGU to enjoy genuine and Autonomous Region in Muslim Mindanao (provinces of Basilan, meanin meaningfu gfull autono autonomy my to enable enable them them to attain attain their their fullest fullest Cotaba Cotabato, to, Davao Davao del Sur, Sur, Lanao Lanao del Nor Norte, te, Palawan, alawan, South South development as self-reliant communities and make them effective Cotabato, Sultan Kudarat, Zamboanga del Norte, and Zamboanga partners in attainment of national goals – thru decentralization. del Sur, and the cities of Cotabato, Dapitan, Dipolog, General National agencies and offices to conduct periodic consultations Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga with appropriate lgu, ngo and po, before any proect or program is said no in the plebiscite) (later virtue of RA9054, the provinces of implemented in their jurisdiction. Basilan Basilan and Marawi Marawi City joined). joined). In accord accordanc ance e with with RA673 RA6734, 4, EO426 EO426 was issued issued placing placing the contro controll and supervis supervision ion of the The declaration of policy as stated in Section 2 of LGC reinforces office officess of the DPWH within within the autonomou autonomouss region region in Muslim Muslim declared State policy (Art. II, Sec. 25 of Constitution) ensuring Mind Mindan anao ao unde underr the the Auto Autono nomo mous us Region egional al Gove Govern rnme ment nt.. autonomy to local government units. Petitioners Petitioners Arsadi M. Disomangc Disomangcop op and Ramir M. Dimalotang Dimalotang (Dimalotang), in their capacity as Officer-in-Charge and District Case: LINA VS. PANO 364 SCRA 76 Engineer/Eng Engineer/Engineer ineer II, respectively respectively,, of the 1st Engineering District of DPWH-ARMM in Lanao del Sur petitioned to nullify Dept. Order FACTS: Respondent Tony Calvento was appointed PSCO agent to 119 and RA8999 (creating the Marawi Sub-District Engineering install and operate a lotto terminal. Mayor of San Pedro Laguna Offi Office ce and and vest vestin ing g it with with juri jurisd sdic icti tion on over over all all nati nation onal al denied his application for a business permit citing an ordinance infras infrastru tructu cture re projec projects ts and facilit facilities ies under under the DPWH DPWH within within (Kapa (Kapasya syahan han Blg. Blg. 508, 508, taong taong 1995) 1995) passed passed by the Provi Provinci ncial al Marawi Marawi City and Lanao Lanao del Sur. Sur. Petit Petition ioners ers conten contend d that that the Board Board of Laguna Laguna,, object objecting ing/op /oppos posing ing any form form of gambli gambling ng challenged challenged measures measures violate violate ARMM’s ARMM’s constitutio constitutional nal autonomy autonomy incl includ udin ing g lotto lotto in Lagun Laguna. a. Calven Calvento to argu arguin ing g that that KB50 KB508 8 is cons consid ideri ering ng that that the the func functi tion onss of the the Mara Marawi wi SubSub-Di Dist stric rictt curt curtail ailme ment nt of Stat State e powe powerr sinc since e in this this case case the the natio nationa nall Engineering Engineering Office have already already been devolved to the DPWH- legislature itself already declared lotto as legal and permitted its ARMM 1st Engineering District in Lanao del Sur. Sur. operation around the country, filed for declaratory relief before the RTC, to annul KB 508 and compel the the local mayor to issue RULING: Petition GRANTED. DO119 is violative of the provisions of a business permit for the operation of a lotto outlet. Suit decided EO426 EO426 (issue (issued d pursua pursuant nt to RA673 RA6734). 4). The 1987 1987 Consti Constitut tution ion in Calvento’s favor. MR by Respondent denied. Petition with SC. mandat mandates es region regional al autono autonomy my to give give a bold bold and unequi unequivoc vocal al answ answer er to the the cry cry for for a mean meanin ingf gful ul,, effec effectiv tive e and and forc forcef eful ul RULING: Game of lotto is a game of chance duly authorized by autono autonomy my.. Auton Autonomy omy,, as a nation national al policy policy,, recogn recognizes izes the the national government through an Act of Congress (RA1169), as wholeness of the Philippine society in its ethnolinguistic, cultural amended by BP42, the law granting a franchise to the PCSO and and even religious diversities. It strives to free Philippine society allows it to operate lotteries. This statute remains valid today. of the strain and wastage caused by the assimilationist approach. While lotto is a game of chance, the national government deems Polic olicie iess eman emanat atin ing g from from the the legi legisl slat atur ure e are are inva invari riab ably ly it wise and proper to permit it. Hence, the Provincial Board of assimi assimilati lationi onist st in charac character ter despit despite e chann channels els being being open open for Laguna, as a LGU, cannot issue a resolution or an ordinance that minority representation. would would seek seek to prohib prohibit it permit permits. s. What What the nation national al legisl legislatu ature re allows by law, such as lotto, a provincial board may not disallow A nece necess ssary ary prer prereq equi uisi site te of auto autono nomy my is dece decent ntra raliz lizat ation ion.. by ordinance or resolution. Dece Decent ntral raliz izati ation on is a deci decisi sion on by the the cent centra rall gover governm nmen entt auth author oriz izin ing g its its subo subord rdin inat ates es,, whet whethe herr geog geogra raph phic icall ally y or Ours is till a unitary government, not a federal state. Being so, functi functiona onally lly define defined, d, to exerc exercise ise author authority ity in certai certain n areas. areas. It any form of autonomy autonomy granted to LGs will necessarily necessarily be limited involves decision-making by subnational units. It is typically a and and conf confin ined ed with within in the the exte extent nt allo allowe wed d by the the cent centra rall delega delegated ted power, power, wherei wherein n a larger larger govern governmen mentt choose choosess to government. Besides, the principle of local autonomy under the delegate certain authority to more local governments. Federalism 1987 Constitution Constitution simply means decentralizatio decentralization. n. It does not implies some measure of decentralization, but unitary systems make make loca locall gove govern rnme ment ntss sove sovere reig ign n withi within n the the stat state e or an may also decentralize. Decentralization differs intrinsically from “imperium in imperio”. federalism in that the sub-units that have been authorized to act (by delegation) do not possess any claim of right against the Muni Munici cipa pall gove govern rnme ment ntss are are only only agen agents ts of the the nati nation onal al central government. government government.. Local Local councils councils exercise exercise only delegated delegated legislative legislative power powerss conf confer erre red d upon upon them them by Congr Congres esss as the the natio nationa nall 2
lawmaking body. The delegate cannot be superior to the principal When is statute AMBIGIOUS? If capable of being understood by or exercise powers higher than those of the latter. It is heresy to reasonably well-informed persons in either of two or more senses. suggest that the LGUs can undo the acts and negate by mere ordinance the mandate of the statute. Power of judicial review can be exercised by courts to invalidate consti constitut tution ionally ally infirm infirm acts. acts. Ergo, Ergo, court courtss are not bound bound by Section 2(c) requiring consultations should be read together with legislative interpretation of their own acts. Section 26, 27, LGC (prior consultation by national agencies with lgus involving projects that may cause pollution, climatic change, De Facto Municipal Corporations requisites: depletion of non-renewable resources, loss of crop land, range- Valid law author authorizin izing g incorp incorporat oration ion;; attemp attemptt in good good faith faith to land or forest cover and extinction of animal or plant species). organize organize under it; colorable colorable compliance compliance with law, assumption assumption of Thus, Section 2(c) does not apply to lotto, the latter being neither corporate powers. a progra program m nor project project of the national national governme government, nt, but of a char charit itab able le inst institu ituti tion on,, the the PCSO PCSO.. Also Also,, the the argu argume ment nt is an afterthought, Mayor denied application for business permit solely MUNICIPAL CORPORATIONS on ground of KB508. Elements: Elements: (a) legal creation/inco creation/incorporat rporation ion – there there must be a law creating ing/au /autho thoriz rizing ing creat creation ion or incorp incorpora oration tion of a munic municipa ipall Section 3, LGC – Operative Principles of Decentralization – policies creat and measures on local autonomy to be guided by these: corporation; (b) corporate name- name by which the corporation shall be known; (c) inhabitants – people residing in the territory of (a) (a) effec effecti tive ve alloc allocat ation ion amon among g the the diff differ eren entt LGUs LGUs of thei theirr the corporation; corporation; and (d) territory – land mass where where inhabitants inhabitants respective powers, functions and responsibilities [is provided for reside together with internal and external waters and airspace by LGC], above land and waters. (b) establishment in every LGU of an accountable, efficient and dynamic organizational structure and operating mechanism that will will meet meet prio priorit rity y need needss and and serv service ice requ requir irem emen ents ts of its its communities,
Section 6 – Authority to Create LGU – (created, divided, merged,
abolished or borders substantially altered) either by LAW enacted by Congress in the case of province, city, municipality or any other other politic political al subdiv subdivisio ision, n, or ORDINA ORDINANCE NCE by sanggu sanggunia niang ng panlalawigan panlalawigan/pang /panglungo lungosd sd in the case of a barangay barangay located located (c) local officials and employees, subject to civil service law, rules within its territorial territorial jurisdiction jurisdiction,, subject subject to limitations limitations prescribed prescribed and regulation, to be appointed or removed, according to merit in this Code. and fitness, by the appropriate appointing authority, Section 7 – Creation/Conversion of LGU – generally, creation of (d) vesting of duty, responsibility and accountability in LGUS shall LGU or its convers conversion ion from one level level to anothe another, r, subjec subjectt to be acco accomp mpan anie ied d with with prov provis isio ion n for for reas reason onab ably ly adeq adequa uate te verifiable indicators of viability and projected capacity to provide resources to discharge their powers and effectively carry out their services: INCOME, POPULATION and LAND AREA, compliance with function – they shall have the power to create and broaden their which to be attested to by the Dept. of Finance, NSO and Land own sources of revenue and the right to a just share in the Management Bureau of DENR. nati nation onal al taxe taxess and and an equi equita tabl ble e shar share e in proc proceed eedss of the the utilization and development of the national wealth within their Income – must be sufficient, based on acceptable standards to respective areas provi provide de all essent essential ial govern governmen mentt facilit facilities ies and servic services es and special functions commensurate with the size of its populations, (e) provinces – to component cities and municipalities; cites and as expected of the LGU concerned. municipalities – to component barangays to ensure that acts of compon component ent units units are within within scope scope of prescr prescribe ibe powers powers and Populatio Population n – total number of inhabitants inhabitants within the territorial territorial functions (supervisorial powers) jurisdiction of the LGU concerned. (f) LGUs may group themselves, consolidate their efforts, services Land Area – must be contiguous, unless it comprises two (2) or and resources for purposes commonly beneficial to them – thus, more islands or is separated by a LGU independent of the others MMDA; prop properl erly y iden identi tifie fied d by mete metess and and boun bounds ds with with tech techni nica call descriptions and sufficient to provide for such basic services and NOTE: NOT E: Autono Autonomy my denote denotess “state “state of indepe independe ndence nce”” (refer (referred red facilities to meet the requirements of its populace. previo previousl usly y to states states)) – commu community nity autono autonomy, my, that that is, local local autono autonomy my.. In the LGC, LGC, local local autono autonomy my does does not mean mean total total (READ GRINO VS. COMELEC 213 SCRA 672) independence of LGUS from the central or national government. It only only means means decent decentral ralizat ization ion of powers powers from from nation national al to local local Section Section 8 – Division Division/Mer /Merger ger of existin existing g LGUs – to comply with gove govern rnme ment nt.. When When exer exerci cisi sing ng gove govern rnme ment ntal al powe powers rs and and same requisites for creation under Section 7. No reduction in perf perfor ormi ming ng duti duties es,, a LGU LGU is an agen agency cy of the the nati nation onal al income, population or land area; no reduction in current income government. classification. Section 4, LGC – Scope of Application – scope means areas of cove covera rage, ge, that that is, is, to prov provin ince ces, s, citie cities, s, muni munici cipa palit litie iess and and barangays and other political subdivisions as may be created by law and to the extent extent herein herein provided provided to offici officials als,, office officess or agencies of the National Government.
provision on power Section 5, LGC – Rules of Interpretation – (a) provision
of LG shall be liberally interpreted in its favor; in case of doubt, any question shall be resolved in favor of devolution of powers and and of the the lower lower LGU. LGU. Any Any fair fair and and reas reason onab able le doub doubtt as to existence of power, interpreted in favor of LGU concerned
abolished when its income, income, Section 9 – Abolition – LGU may be abolished
population or land aea has been irreversibly reduced to less than the minimum standards prescribed for its creation (as certified by DOF, NSO and LMB); law/ordinanc law/ordinance e abolishing abolishing an LGU to specify specify province, city, municipality or barangay to which the LGU to be abolished will be incorporated or merged.
Section 10 – Plebiscite requirement – pre-condition to creation,
abolition, merger, division or substantial alteration of boundaries of LGUs; requires majority of the votes cast in plebiscite called for the purpose in the political unit/s directly affected; plebiscite to be cond conduc ucte ted d by COME COMELE LEC C with within in 120 120 days days from from date date of (b) doubt as to any tax ordinance or revenue measure, strictly effectivity effectivity of law/ordinan law/ordinance ce effecting effecting such action, action, unless unless said construed against LGU, liberally in favor of taxpayer (deprivation law/ordinance fixes another date. of property). property). Tax Tax exemption, exemption, incentive incentive r relief granted any LGU, construed strictly against person claiming it (loss of income on Sect cons consid idera erati tion onss of Sectio ion n 1111- Seat Seat of Gove Govern rnme ment nt part of LGU). GEOGRAPHIC GEOGRAPHICAL AL CENTRALITY, CENTRALITY, ACCESSIBIL ACCESSIBILITY, ITY, AVAILABIL AVAILABILITY ITY OF TR TRANSP ANSPORA ORATION TION AND COMMUNICA COMMUNICATION TION FACILITIES, ACILITIES, DRAINAGE DRAINAGE (c) liberal interpretation of general welfare provisions in order to AND SANIT SANITA ATION TION DEVEL DEVELOPM OPMENT ENT,, ECONOM ECONOMIC IC PROGRE PROGRESS SS and give more power to LGU in accelerating economic development OTH OTHER ER RELEV RELEVANT ANT CONSID CONSIDER ERA ATIONS; TIONS; transf transfer er of seat when when and upgrading quality of life for the people. conditions and development in LGU concerned has subsequently chang hanged ed sign signif ific ican antl tly, y, requ requir ires es 2/3 2/3 vote vote of memb member erss of Note: Note: Basic Basic precep preceptt in statut statutory ory constr construct uction ion that that legisla legislativ tive e sanggunian, after public hearing; transfer site shall not be outside intent is the controlling factor in the interpretation of statute. the territoria territoriall bounda boundaries ries of the LGU; old site togeth together er with Power to declare what the law shall be is a legislative power, improvements thereon may be disposed of by sale or lease or power to declare what the law is or has been is judicial. When law converted to such other use as the sanggunian concerned may is unam unambi bigu guou ouss and and uneq unequi uivo voca cal, l, appl applic icat atio ion n and and not not deem beneficial to the LGU and its inhabitants. interpretation thereof is IMPERATIVE. When is statute AMBIGIOUS? If capable of being understood by Secti Province nces, s, cities cities and Section on 12 – Gover Governme nment nt Cente Centers rs – Provi reasonably well-informed persons in either of two or more senses. municipalities shall endeavor to establish a government center where offices, agencies or branches of the National Government, Power of judicial review can be exercised by courts to invalidate lgu or governmen government-owned t-owned or controlled controlled corporations corporations may, as far consti constitut tution ionally ally infirm infirm acts. acts. Ergo, Ergo, courts courts are not bound bound by as practicable, be located. In designating such a center, the lgu legislative interpretation of their own acts. concerned shall take into account the existing facilities of the national and local agencies and offices which may serve as the 3
govern governmen mentt center center as contem contempla plated ted under under this this Sectio Section. n. The National Government, the lgu or gocc shall bear the expenses for the construction construction of its buildings buildings and facilities in the government government center. Sect Sectio ion n 13 – Name Name of LGU LGU and and Publ Public ic Plac Places es,, Stre Street ets s and and always in consul consultati tation on with with Philip Philippin pine e Histor Historical ical Structures – always
Commission Commission;; prohibitio prohibition n against against naming naming after living persons, persons, change of name not oftener than once every 10 years unless for justifiable justifiable reason; change requires requires prior plebiscite; plebiscite; change of name name involv involving ing a lgu, lgu, public public place, place, street street or structu structure re with with historical, cultural or ethnic significance can be done only by a UNAN UNANIM IMOU OUS S VOTE OTE of the the sang sangg gunia unian n conc concer erne ned d and and in consultation with the PHC. Section 14 – Beginning of Corporate Existence – When a new LGU
is created, its corporate existence shall commence upon election and qualification of its chief executive and majority of members of sanggunian.
organi organized zed under under color color of a statut statute e before before this this was declar declared ed unconstitutional (by Pelaez ruling), its officers having been either elec electe ted d or appo appoin inte ted, d, and and the the muni munici cipa palit lity y itse itself lf havi having ng disc discha harg rged ed its its corp corpor orat ate e func functi tion onss for for the the past past five five year yearss prec preced edin ing g the the inst institu ituti tion on of this this acti action on.. That That as a de fact facto o corpor corporati ation, on, its existe existence nce cannot cannot be collat collateral erally ly attack attacked, ed, although it may be inquired into directly in an action for quo warranto at the instance of the State and not of an individual like the petitioner Balindong. DECISION: Petition granted, Executive Order 386 declared void. Generally, the inquiry into the legal existence of a municipality is reserved to the State in a proceeding for quo warranto or other direct direct proceedi proceeding, ng, and that that only only in a few excep exceptio tions ns may a private person exercise this function of government. But the rule disallowing collateral attacks applies only where the municipal corporation is at least a de facto corporation. For where it is neither a corporation de jure nor de facto, but a nullity, the rule is that its existence may be questioned collaterally or directly in any action or proceeding by any one whose rights or interests are affe affect cted ed ther thereb eby, y, incl includ udin ing g the the citi citizen zenss of the the terr territ itor ory y incorporate incorporated d unless unless they are estopped estopped by their conduct conduct from doing so.
MEJIA MEJIA vs. BALO BALOLI LING NG 81 PHIL 486 – Sinc Since e a city city is a publ public ic corporation or juridical entity, and as such cannot operate or transact transact business by itself but through agents and officials, it is necessary necessary that officials officials thereof be appointed appointed or elected in order A de facto municipal corporation is recognized as such despite that it may transact business as such public corporation or city. the fact that the statute creating it was later invalidated, rests upon the consideration that there was some other valid law giving corporate corporate validity to the organization. organization. Hence, Hence, in the case at bar, NOTE: NOT E: De Facto acto Munici Municipal pal Cor Corpora poratio tions ns requis requisite ites: s: Valid law the mere fact that Balabagan was organized at a time when the authorizing incorporation; attempt in good faith to organize under statute had not been invalidated cannot conceivably make it a de it; colora colorable ble compli complianc ance e with law, assump assumptio tion n of corpor corporate ate fact facto o corp corpor orat ation ion,, as, as, inde indepe pend nden ently tly of Sect Sectio ion n 68 of the the powers. Administrative Code, there is no other valid statute to give color of authority to its creation. Thus, Executive Order 386 creating Case: EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L- the municipality in question is a nullity pursuant to the ruling in 23825, 1/24/1965 Pelaez ruling. This is not to say, however, that the acts done by the municipality of Balabagan in the exercise of its corporate FACTS: President of the Philippines, purporting to act pursuant to powers are a nullity because the executive order "is, in legal Sec. 68 of Revised Administrative Code (presidential authority to contem contempla plation tion,, as inoper inoperativ ative e as thoug though h it had never never been been defi define ne the the boun bounda dary, ry, or boun bounda darie ries, s, of any any prov provin ince ce,, subsub- passed passed." ." Note, Note, the existe existence nce of Execu Executiv tive e Order Order 386 is "an province, province, municipality, municipality, [township] [township] municipal municipal district district or other operati operative ve fact fact which which cannot cannot justly justly be ignore ignored." d." The actual actual politic political al subdiv subdivisi ision, on, and increa increase se or diminis diminish h the territo territory ry existe existence nce of a statut statute, e, prior prior to such such a determ determina ination tion,, in an comprised therein, may divide any province into one or more operative fact and may have consequences which cannot justly subp subpro rovi vinc nces, es, sepa separat rate e any any polit politic ical al divi divisi sion on othe otherr than than a be ignored. The past cannot always be erased by a new judicial province, into such portions as may be required, merge any of declaration. The effect of the subsequent ruling as to invalidity such such subdiv subdivisi isions ons or portio portions ns with with anothe another, r, name name any new may have to be considered in various aspects — with respect to subdivision so created, and may change the seat of government partic particula ularr relatio relations ns,, individ individual ual and corpor corporate, ate, and partic particula ularr within any subdivision to such place therein as the public welfare conduct, private and official. may requir require), e), issued issued several several execu executiv tive e orders orders creat creating ing 33 municipali municipalities. ties. Petitioner Petitioner (as Vice-Pre Vice-Presiden sidentt and as taxpayer), taxpayer), Case: MUN. OF JIMENEZ, vs. HON. VICENTE T. BAZ. JR., G.R. No. instituted a special civil action seeking to enjoin Auditor General 105746. 12/2/1996 from from pass passin ing g in audi auditt any any expe expend ndit itur ure e of publ public ic fund fundss in impl implem emen entat tatio ion n of said said certa certain in exec execut utiv ive e orde orders rs and/ and/or or FACTS: ACTS: In 1949, 1949, Pres. Pres. Elpidio Elpidio Quirin Quirino o (pursu (pursuant ant to Sec. Sec. 68 of disbursement by said municipalities. Revised Admin Code) issued EO258 creating the Municipality of Sinacaban consisting Petitioner’s southern portion. In 1988, the DECISIO DECISION: N: PETITIO PETITION N GRANT GRANTED. ED. Since Since Januar January y 1, 1960, 1960, when when Munic Municipa ipality lity of Sinaca Sinacaban ban filed filed with the Provi Provinci ncial al Board Board of Republic Act No. 2370 became effective, barrios may "not be Misami Misamiss Occien Occiental tal a claim claim agains againstt Petiti Petitione onerr over over portio portions ns created created or their boundaries boundaries altered nor their names changed" affecting certain barrios based on the technical description in E.O. except except by Act of Congress Congress or of the correspondin corresponding g provincial provincial No. 258. Petitioner conceded that, under EO258 the disputed area board "upon petition of a majority of the voters in the areas is part of Sinacaban, but nonetheless asserted jurisdiction on the affe affect cted ed"" and and the the "rec "recom omme mend ndat atio ion n of the the coun counci cill of the the basis of an agreement it had with the Municipality of Sinacaban municipali municipality ty or municipali municipalities ties in which the proposed proposed barrio is and approved by provincial board resolution in 1950. The board situated." situated." This statutory statutory denial of the presidenti presidential al authority authority to declared the disputed area to be part of Sinacaban ruling that the create a new barrio implies a negation of the bigger power to previ previous ous resolu resolutio tion n approv approving ing the agreem agreement ent between between the create municipalities, each of which consists of several barrios. municipalities was void because the Board had no power to alter the boundaries of Sinacaban as fixed in E.O. No. 258, that power Whereas Whereas the power to fix a common boundary, boundary, in order to avoid being vested in Congress pursuant to the Constitution and the or settle conflicts of jurisdiction between adjoining municipalities, LGC of 1983 (B.P. Blg. 337). Before the SC, Petitioner challenges may partake of an administrative nature — involving, as it does, the the tria triall cour court’ t’ss deci decisi sion on affi affirm rmin ing g the the lega legall exis existe tenc nce e of the adoption of means and ways to carry into effect the law Sinacaban and ordering the relocation of its boundary for the creating said municipalities - the authority to create municipal purpo purpose se of determ determini ining ng whethe whetherr certai certain n areas areas claime claimed d by it corporations is essentially legislative in nature. belonged to it. Case: MALABANG vs. BENITO, 27 SCRA 533 FACTS: Petitioner Balindong (municipal mayor of Malabang, Lanao del del Sur) Sur),, Respo espon ndent dentss (May (Mayor or Beni Benito to and and coun counci cilo lors rs of Municipality Municipality of Balabagan Balabagan of the same province). province). Balabagan, Balabagan, (formerly part of Malabang) was created on March 15, 1960, by Executive Order 386 of the then President Carlos P. Garcia, out of barrios and sitios of the Malabang. Citing Pelaez ruling (that Republic Act 2370 [Barrio Charter Act, approved January 1, 1960], vested power to create barrios in the provi provinci ncial al board, board, and Sectio Section n 68 of the Admin Administ istrati rative ve Code, Code, inso insofa farr as it giv gives the Presid esiden entt the the powe powerr to crea create te municipalities, is unconstitutional (a) because it constitutes an undue delegation of legislative power and (b) because it offends against Section 10 (1) of Article VII of the Constitution, which limits limits the Presi Presiden dent's t's power power over over local local govern governmen ments ts to mere mere supervision”), Petitioner sought to nullify E.O. 386 and restrain respondents from performing their official functions.
DECISION: The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the Pelaez ruling that the creation of municipal corporations is essentially a legislative matter and therefore the President was without power to create by executive order Sinacaban. The ruling in this case has been reiterated in a number of cases later decided. However, we have since held that where a municipality created as such by executive order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned. Sinacaban is at least a de facto municipal corporation in the sense that its legal existe existence nce has been been recogn recognize ized d and acquie acquiesce sced d public publicly ly and officially. Sinacaban had been in existence for sixteen years when the Pelaez ruling yet the validity of E.O. No. 258 creating it had never been questioned.
The The State State and even the Municipa Municipality lity of Jimene Jimenezz itself itself have have recognized Sinacaban's corporate existence entering in 1950 into an agreement with it regarding their common boundary. Also, it has attained de jure status, 442(d) of the LGC, must be deemed to have have cure cured d any any defe defect ct in the the crea creati tion on of Sina Sinaca caba ban. n. Respondents argued that Pelaez ruling did not apply because, (“Municipalities existing as of the date of the effectivity of this unlike unlike the municipalit municipalities ies involved involved therein, therein, the municipalit municipality y of Code Code shall shall cont contin inue ue to exis existt and and opera operate te as such such.. Exis Existi ting ng Balab Balabag agan an is at leas leastt a de fact facto o corp corpora orati tion on,, havi having ng been been municipal districts organized pursuant to presidential issuances or 4
executive executive orders and which have their respective respective set of elective municipal officials holding office at the time of the effectivity of the Cod Code shal shalll henc hencef efor orth th be consi onsid dered ered as regul egular ar municipalities”).
GENERAL POWERS & ATTRIBUTES OF LGUs Sources of Powers – Article II, Section 25 and Article X of the Constitution; statutes (eg. RA7160), charter.
no power to enact ordinances for the welfare of the community. It is the local government units, acting through their respective legislative legislative councils, that possess possess legislative legislative power and police power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of Neptune Street, hence, its proposed proposed opening by petitioner petitioner MMDA is illegal and the respondent Court of Appeals did not err in so ruling. We desist from ruling on the other issues as they are unnecessary.
Pointss of Discus Discussio sion n – Police Police power is inhere inherent nt in the State, Section 15 – Political and Corporate Nature of LGUs – every LGU is Point a body body polit politic ic and and corp corpora orate te endo endowe wed d with with powe powers rs to be exercised by the Legislature, but may be validly delegated. Upon exercised by it in conformity with law. valid valid delega delegatio tion, n, the exerc exercise ise thereo thereoff by the delega delegate te being being limited limited only to such such powers powers as confer conferred red by the legislatu legislature. re. Dual Functions of LGU – (1) public/governmental – acts as an Legislature has delegated police power to LGUs (Sec. 15, LGC) agen agentt of Stat State e for for the the gove govern rnme ment nt of the the terr territ itory ory and and its its through through their respective respective legislative legislative bodies, bodies, under under the General General inhabi inhabitan tants; ts; (2) propr propriet ietary/ ary/priv private ate – acts acts as an agent agent of the Welfare Clause (Sec. 16, LGC). community in the administration of local affairs, and as such, it acts as a separate entity for its own purposes and not as a subdivision of the State. NOTE: NOT E: RA 7924 7924 declar declared ed Metrop Metropolit olitan an or Metro Metro Manila Manila (body (body composed of several LGUs, i.e., twelve (12) cities of Caloocan, Municipal Corporation in the Philippines: Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Piñas, Marikina, Parañaque and Valenzuela, and the five (5) (1) Provi Province nce (Sec. (Sec. 459, LGC) – cluste clusterr of municip municipalit alities ies or municipalities of Malabon, Navotas, Pateros, San Juan and Taguig) Taguig) municipalities and component cities, as a political and as a "special development and administrative region" with the corporate unit of government which serves as a dynamic administration of "metro-wide" basic services affecting the region mechanism for developmental processes and effective placed under "a development authority" referred to as the MMDA governance of LGUs within its territorial jurisdiction. (governed (governed by the Metro Manila Council Council composed composed of the mayors of the component 12 cities and 5 municipalities, the president of (2) City (Sec. (Sec. 448) 448) – composed composed of more more more more urbanized urbanized and and the Metro Manila Vice-Mayors' League and the president of the develop developed ed barang barangays ays,, serves serves as a general general purpos purpose e Metro Manila Councilors' League) headed by the Chairman. govern governmen mentt for coo coordi rdinat nation ion and delive delivery ry of basic, basic, regular and direct services and effective governance of the inhabitants within its jurisdiction; NOTE: NOT E: When When R.A. R.A. No. 7924 7924 took took effect effect,, Metrop Metropolit olitan an Manila Manila became a "special development and administrative region" and the MMDA a "special "special development development authority" authority" whose functions functions were "without prejudice to the autonomy of the affected local (3) (3) Muni Munici cipa pali lity ty (Sec (Sec.. 440, 440, LGC) LGC) – grou groups ps of bara barang ngay ays, s, govern gov ernmen ment t units. uni ts." " The charac cha racter ter of the MMDA MMD A was clearly cle arly serves primarily as a general purpose government for defined in the legislative debates enacting its charter. MMDA not coordinati coordination on and delivery of basic, basic, regular regular and direct a special metropolitan political subdivision, because the latter’s services services and effective governance governance of inhabitants inhabitants within creation requires the approval by a majority of the votes cast in a its jurisdiction; plebiscite in the political units directly affected. 56 R.A. No. 7924 was was not not subm submit itte ted d to the the inha inhabi bita tant ntss of Metr Metro o Mani Manila la in a plebiscite. The Chairman of the MMDA is not an official elected by (4) Barangay Barangay (Sec. 384, 384, LGC) – basic basic political political unit, unit, serves as as the people, but appointed by the President with the rank and the the prim primar ary y plan planni ning ng and and impl implem emen enti ting ng unit unit of privileges privileges of a cabinet member. member. In fact, part of his function function is to govern governmen mentt polici policies, es, plans, plans, progr programs ams,, proje projects cts and perform such other duties as may be assigned to him by the activit activities ies in the communit community y and as a forum forum wherei wherein n President, 57 whereas in local government units, the President collective views of people may be expressed, crystallized merely merely exercises exercises supervisory supervisory authority authority.. This emphasizes emphasizes the and and cons consid ider ered ed wher where e disp dispute utess are are also also amic amicab ably ly administrative character of the MMDA. settled; Section 16 – General Welfare Clause – LGUs shall exercise powers
(5) (5) Auton utono omous ous Regio egions ns – refer efer to Artic rticle le 10 of the the expressly granted, those necessarily implied therefrom, as well a s those those necessa necessary, ry, approp appropriat riate e or incide incidenta ntall for effici efficient ent and Constitution. effect effective ive govern governanc ance e (i.e. (i.e. promo promote te health health,, safety safety,, enhanc enhance e prosperity, improve morals of inhabitants) – is the statutory grant of police police power power to LGUs LGUs throug through h their their respec respectiv tive e legisl legislativ ative e Note: Metropolitan Manila Development Authority is not a local bodies bodies empowe empowerin ring g them them to enact enact ordina ordinance ncess and approv approve e government unit. The power delegated to MMDA is that given to resolutions and appropriate functions for the general welfare of the Metro Manila Council to promulgate administrative rules and the LGU. regulations in the Note: Police power is an inherent attribute of sovereignty vested Case: MMDA vs. BAVA, BAVA, G.R. No. 135962, 3/27/2000 3/27/200 0 in Cong Congre ress ss to make make,, orda ordain in and and esta establ blis ish h all all mann manner erss of wholeso wholesome me and reasonab reasonable le laws laws for the common common good; good; it is FACTS: Petitioner is a government agency tasked with delivery of plenary and its scope is vast and pervasive. However, by virtue of basic basic servic services es in Metro Metro Manila. Manila. Respo Responde ndent nt Bel-Ai Bel-Airr Villag Village e valid delegation, it may be exercised by LGUs. The latter being Association, Inc. is a non-stock, non-profit corporation composed only agents can only exercise such powers as are conferred upon of homeowners in Bel-Air Village, a private subdivision in Makati them by Congress. City City. Respo Responde ndent nt had sought sought to enjoin enjoin Petiti Petitione oner’s r’s plan plan to demo demoli litio tion n the the peri perime mete terr fenc fence e and and open open to publ public ic acce access ss Limits on LGUs police Power Neptune Street, a road (beside) privately/legally owned by the (1) Exercisable only within territorial limits of LGU subdivision. The Court of Appeals, in reversing the dismissal of (2) Equal Protection Clause ( interest of public vs. those of a Respondent’s complaint, ruled that Petitioner did not have the particular class requires exercise of such power) authority to order the opening of the street in issue. Before the (3) Due Process Clause (reasonable means employed and not SC, Petitioner asserted that, there was no need for an ordinance undul unduly y oppres oppressive sive – case case of Villav Villavice icenci ncio o vs. Lukban Lukban,, GR No. from the City of Manila to open Neptune Street to public because, 14639, March 25, 1919) as an agent of the State, it was endowed with police power in the (4) Not contrar contrary y to the Constitu Constitution tion and the laws (It cannot cannot deliv delivery ery of basi basicc servi service cess in Metr Metro o Mani Manila la incl includ udin ing g traf traffi ficc legalize prohibited act under the guise of regulation. Likewise, it management (involving regulation of the use of thoroughfares to cannot prohibit legal activities but only regulate) insure the safety, convenience and welfare of the general public). Note: Under Section 16, LGU to ensure and support preservation DECISION: Petition DENIED. It is beyond doubt that MMDA is not a and enrichment of culture, promote health and safety, enhance local local govern governmen mentt unit unit or a publi publicc corpor corporati ation on endowe endowed d with with people’s right to balance and healthful ecology, improve public legislative power. It is not even a “special metropolitan political moral morals, s, enha enhanc nce e econ econom omic ic pros prospe perit rity y and and soci social al just justice ice,, subd subdiv ivis isio ion n” as cont contem empl plat ated ed in Sec. Sec. 11, 11, Art. rt. X of the the maintenance of peace a nd order. Cons Constit titut utio ion. n. MMDA MMDA’s ’s powe powers rs are are limit limited ed to form formul ulat atio ion, n, coor coordi dina nati tion on,, regu regula lati tion on,, impl implem emen enta tati tion on,, prep prepar arat ation ion,, Case: REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622, management, monitoring, policy-setting, installation of a system 9/12/2002 and administration. There is no syllabus in RA7924 that grants MMDA police power, let al one legislative power. PD 1596 (The Environmental Impact Statement System) ensures enviro environme nmenta ntall protec protection tion and regula regulates tes certain certain govern governmen mentt Clearly then, the MMC under P.D. No. 824 is not the same entity acti activit vitie iess affe affect ctin ing g the the envi enviro ronm nmen ent. t. Relat elated ed to PD 1151 1151 as the MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has 5
(Philippine Environment Policy), requires an environmental impact statement from all agencies and instrumentalities of the national gove govern rnme ment nt,, incl includ udin ing g gove govern rnme ment nt-ow -owne ned d or cont contro rolle lled d corporations corporations,, as well as private private corporations corporations,, firms and entities, entities, for every proposed project and undertaking which significantly affect the quality of the environment.
law governing local government units. The general welfare clause has two branches. The first, known as the general legislative power, authorizes the municipal council to enact ordinances and make regulations not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties confer conferred red upon upon the munic municipa ipall counci councill by law. law. The second second,, known known as the police police power power prope proper, r, author authorize izess the municipality to enact ordinances as may be necessary and proper for the health and safety, prosperity, morals, peace, good order, comfort, and convenience of the municipality and its inhabitants, and for the protection of their property. property.
Davao Davao City City in 2000, 2000, applied applied for a certif certificat icate e of non-co non-covera verage ge (CNC) for its proposed Davao City Artica Sports Dome project from the required Environmental Compliance Certificate (having been certified that its project is not located in an environmentally critical area (ECA). Application denied for the reason that Davao City must undergo the environmental impact assessment (EIA) process to secure an Environmental Compliance Certificate (ECC), In the presen presentt case, case, the ordina ordinance ncess imposin imposing g licens licenses es and before it can proceed with the construction of its project. requiring permits for any business establishment, for purposes of regulation enacted by the municipal council of Makati, fall within Denial Denial of applic applicatio ation n lead lead to compla complaint int for injunc injunctio tion n agains againstt the purview of the first branch of the general welfare clause. DENR filed by Davao City. RTC ruled in latter’s favor reasoning Moreover, the ordinance of the municipality imposing the annual that the laws do not require local government units (LGUs) to business tax is part of the power of taxation vested upon local comply with the EIS law. Only agencies and instrumentalities of governments. the the nati nation onal al gove govern rnme ment nt,, incl includ udin ing g gove govern rnme ment nt owne owned d or controlled corporations, as well as private corporations, firms and RE (closure order) - The bank was not engaged in any illegal or entities are mandated to go through the EIA process for their immoral activities to warrant its outright closure. The appropriate proposed projects which have significant effect on the quality of remedi remedies es to enforc enforce e paymen paymentt of delinq delinquen uentt taxes taxes or fees fees are the environment. A local government unit, not being an agency or provided for in Section 62 of the Local Tax Code, (by distraint of instrumentality of the National Government, is deemed excluded personal property, and by legal action). The law did not provide under the principle of expressio unius est exclusio alterius. for closure which furthermore violated petitioner's right to due process. Petition for certiorari filed by Republic from RTC decision. Case moot and academic when subsequent change in administration of Case: TANO vs. HON. GOV. GOV. SALVA SALVADOR DOR P. SOCRA SOCRATES, G.R. G.R. No. Davao City which filed manifestation expressing that it needs to 110249, 8/21/ 1997 secu secure re an ECC ECC for for its its prop propos osed ed proje project ct.. But But Cour Court, t, for for the the guidance of the implementors of the EIS law and pursuant to our FACTS: City Council of Puerto Princesa, Palawan, to effectively symbolic function to educate the bench and bar, addressed the free city seawaters from cyanide and other obnoxious substances, issue. passed Ordinance No. 15-92 (effective January 1, 1993) banning the shipment of all live fish and lobster outside Puerto Princesa Decision: Sec. 15, LGC (a local government unit is body politic from January 1, 1993 to January 1, 1998. To implement said city and corporat corporate e endowe endowed d with with powers powers to be exerc exercise ised d by it in ordina ordinance nce,, the acting city mayor mayor issued issued Office Order No. 23, conf confor ormi mity ty with with law) law).. As such such,, it perf perfor orms ms dual dual func functi tion ons, s, authorizing local law enforcers to to check or conduct necessary govern governmen mental tal and propr propriet ietary ary.. In exerc exercise ise of govern governme mental ntal inspec inspectio tions ns on cargo cargoes es contai containin ning g live live fish fish and lobste lobsterr being being powers and performing governmental duties, an LGU i s an agency shipped out from the Puerto Princesa to ascertain whether the of the national government. shipper shipper possessed possessed the required required Mayor's Permit Permit issued by this Office and the shipment is covered by invoice or clearance issued Sec. 16, LGC - duty of the LGUs to promote the people's right to a by the the local local offi office ce of the the Bure Bureau au of Fishe isherie riess and and Aqua Aquati ticc balanced ecology. ecology. Pursuant to this, an LGU, like the City of Davao, Resources and as to compliance with all other existing rules and can not claim exemption from the coverage of PD 1586. As a regulations on the matter. Subsequently, the Provincial Board of body politic endowed with governmental functions, an LGU has Palawan issued a similar ordinance. the duty to ensure the quality of the environment, which is the very same objective of PD 1586. Petitioners, who were charged with violation of certain provisions of the forego foregoing ing issuan issuances ces upon upon the latter’ latter’ss implem implement entatio ation, n, Section 4 of PD 1586 clearly states that "no person, partnership sough soughtt relief relief with with the SC conten contendin ding g that that (a) the challe challenge nged d or corpor corporatio ation n shall shall underta undertake ke or operat operate e any such such declar declared ed ordinances deprived them of due process of law, their livelihood, environmen environmentally tally critical project or area without first securing securing an and unduly restricted them from the practice of their trade, in Environmental Compliance Certificate issued by the President or violation violation of constituti constitutional onal guarantees, guarantees, and (b) the challenged challenged his duly authorized representative." 13 The Civil Code defines a office order contained no regulation nor condition under which person as either natural or juridical. The state and its political the Mayor's permit could be granted or denied, vesting the mayor subdi subdivis vision ions, s, i.e., i.e., the local local govern governmen mentt units units 14 are juridi juridical cal absolu absolute te author authority ity to determ determine ine whether whether or not to issue issue the persons. 15 Undoubtedly therefore, local government units are permit. not excluded from the coverage of PD 1586. DECISION: PETITION dismissed. It is of course settled that laws Note: Note: Based Based on DENR-C DENR-Comm ommuni unity ty Enviro Environme nment nt and Natura Naturall (including ordinances enacted by local government units) enjoy Resourc Resources es Office Office (CENRO-We (CENRO-West) st) certification certification,, project project area not the the pres presum umpt ption ion of cons constit titut ution ional ality ity.. To overt overthr hrow ow this this environmentally critical area. SC is not trier of facts. Proclamation presumption, there must be a clear and unequivocal breach of the No. 2146 issued on December 14, 1981, lists areas and types of Cons Consti titu tuti tion on,, not not mere merely ly a doubt oubtfu full or argu argume ment ntat ativ ive e projects as ECA and within EIS system under PD1586, eg., heavy contradiction. In short, the conflict with the Constitution must be industries, iron and steel mills, smelting plants, major mining and shown beyond reasonable reasonable doubt. Where doubt doubt exists, exists, even if quarrying projects, etc.) well-founded, there can be no finding of unconstitutionality. To doubt is to sustain. Case: RURAL BANK OF MAKATI, MAKATI, INC. vs. MUNICIPALITY OF MAKATI, The right to a balanced and healthful ecology carries with it a G.R. No. 150763, 7/2/2004 correlative duty to refrain from impairing the environment . . . The LGC provisions invoked by private respondents merely seek to FACTS: ACTS: For For non-pa non-payme yment nt of mayor’ mayor’ss permit permit fee and annual annual give flesh and blood to the right of the people to a balanced and busin business ess taxes, taxes, crimin criminal al charge chargess agains againstt certai certain n office officers rs of healthful ecology. In fact, the General Welfare Clause, expressly Petit Petition ioner er.. Pend Pending ing these these charge charges, s, Respo Responde ndent nt ordere ordered d the mentions this right. closure of the bank, prompting the latter to pay, under protest P82,408.66 as mayor’s permit fee and annual business taxes. In light then of the principles principles of decentralization decentralization and devolution devolution Petitioner filed a civil complaint for sum of money and damages enshrined in the LGC and the powers granted therein to local agains againstt Respo Responde ndent nt with RTC allegin alleging g that that the collec collection tion of government units under Section 16 (the General Welfare Clause), subject subject fees and closure order were oppressive oppressive and arbitrary and under Sections 149, 447(a) (1) (vi), 458(a)(1)(vi) and 468(a) which which result resulted ed loss loss of expect expected ed earnin earnings. gs. RTC dismis dismissed sed the (1)(vi), which unquestionably involve the exercise of police power, complaint, complaint, which decision was sustained sustained by the CA holding holding that the validity of the questioned Ordinances cannot be doubted. the closure order was a legitimate exercise of police power by Respondent. Hence, petition with SC. Case: TAN vs. PEREÑA, G.R. No. 149743, 2/18/2005 DECISION: Assailed decision AFFIRMED with modification deleting closure order. RE (imposition of fees) - Municipal corporations are agencies of the State for the promotion and maintenance of local self-government and as such are endowed with police powers in order to effectively accomplish and carry out the declared objects of their creation. 20 The authority of a local government unit to exercise police power under a general welfare clause is not a recent development. Thus, the closure of the bank was a valid exercise of police power pursuant to the general welfare clause contained in and restated by B.P. Blg. 337, which was then the
FACTS: How many cockpits may be allowed to operate in a city or munic municipa ipality lity?? Comes Comes into into play, play, the traditio traditional nal power power of the national government to enact police power measures, on one hand, and the vague principle of local autonomy now enshrined in the Constitution on the other. PD449 (Cockfighting Law of 1974) prov provid ided ed that that only only one one cock cockpi pitt shal shalll be allo allowe wed d in each each city/munic city/municipality ipality except except that in cities or municipalit municipalities ies with a popula population tion of over over 100T, 100T, two cockpit cockpitss may be establ establish ished, ed, main mainta tain ined ed or oper operat ated. ed. In 1993 1993,, the the Muni Munici cipa pall Coun Counci cill of Daan Daanba bant ntaya aya,, Cebu Cebu enac enacte ted d muni munici cipa pall ordi ordian ance cess whic which h 6
eventually allowed the operation of not more than three cockpits in the municipality. In 1995, Petitioner (Leonardo Tan) applied for a license to operate a cockpit. Respondent (Socorro Perena), who was an existing licensee, filed a complaint with the RTC to enjoin Petitioner from operating his cockpit citing that the challenged ordinance allowing the operation of not more than three cockpits violat violated ed PD449. PD449. The trial trial court court dismis dismissed sed the compla complaint int and upheld Petitioner’s franchise reasoning that, while the ordiance may be in conflict with PD449, any doubt in interpretation should be resolved in favor of the grant of more power to LGUs under the LGC’s principle of devolution. Court of Appeals reversed the trial court’s decision. Hence, Petitioner’s appeal to the SC.
(under EO205) has the authority to issue a certificate of authority to operate a CATV system, this does not preclude the city council from regulating the operation of such a system in their locality under the powers conferred by the LGC (of 1983).
In the the late late 1940 1940s, s, John John Walso alson, n, an appl applia ianc nce e deal dealer er in Pennsylvania, suffered a decline in the sale of television (tv) sets because of poor reception of signals in his community. Troubled, he built an antenna on top of a nearby mountain. Using coaxial cable lines, he distributed the tv signals from the antenna to the homes of his customers. Walson's innovative idea improved his sales and at the same time gave birth to a new telecommunication system — the Community Antenna Television (CATV) or Cable Television. The query in this case is – may a LGU regulate the subscriber rates charged by CATV operators within its territorial jurisdiction?
But, But, while while we recogn recognize ize the LGUs' power under under the general general welfare clause, we cannot sustain Resolution No. 210. We are convinced convinced that respondent respondentss strayed strayed from the well recognized recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violate violatess the mandate mandate of existi existing ng laws laws and (2) it violate violatess the State's deregulation policy over the CATV industry. industry.
RULING: Petition GRANTED. Significantly, President Marcos and President Aquino, in the exercise of their legislative power, issued P.D. No. 1512, E.O. No. 546 and E.O. No. 205. Hence, they have the force and effect of statutes or laws passed by Congress. That the the regu regula lato tory ry powe powerr stay stayss with with the the NTC NTC is also also clea clearr from from President Ramos' E.O. No. 436 mandating that the regulation and supervision of the CATV industry shall remain vested "solely" in the NTC. In light of the above laws and E.O. No. 436, the NTC RULING: Petition DENIED. For Petitioner, Section 447(a)(3)(v) of exercises regulatory power over CATV operators to the exclusion the LGC sufficiently repeals Section 5(b) of the Cockfighting Law, of other bodies. vesting as it does on LGUs the power and authority to issue franch franchises ises and regula regulate te the operati operation on and establ establish ishmen mentt of But, But, lest lest we be misu misund nders ersto tood od,, noth nothin ing g here herein in shou should ld be cockpits in their respective municipalities, any law to the contrary interpreted as to strip LGUs of their general power to prescribe notwithstan notwithstanding. ding. However, while the Local Local Government Government Code regu regula lati tion onss unde underr the the gene genera rall welfa welfare re clau clause se of the the Loca Locall expressly repealed several laws, PD449 was not among them. Government Code. It must be emphasized that when E.O. No. 436 Section 534(f) of the LGC declares that all general and special decrees that the "regulatory power" shall be vested "solely" in the laws or decrees inconsistent with the Code are hereby repealed or NTC, it pertains to the "regulatory power" over those matters modified accordingly, but such clause is not an express repealing which are peculiarly within the NTC's competence, such as, the: clause because it fails to identify or designate the acts that are (1) (1) dete determ rmin inat atio ion n of rates rates,, (2) (2) issua issuanc nce e of "cert "certif ific icat ates es of intended to be repealed. auth author orit ity, y, (3) (3) esta establ blis ishm hmen entt of area areass of oper operat atio ion, n, (4) (4) examination and assessment of the legal, technical and financial While the sanggunian retains the power to authorize and license qualifications of applicant operators, (5) granting of permits for the establishment, operation, and maintenance of cockpits, its the use of frequencies, (6) regulation of ownership and operation, discretion is limited in that it cannot authorize more than one (7) adjudication of issues arising from its functions, and (8) other cock cockpi pitt per per city city or muni munici cipa pali lity ty,, unle unless ss suc such citi cities es or similar matters. Within these areas, the NTC reigns supreme as it municipalities have a population of over one hundred thousand, possesses the exclusive power to regulate — a power comprising in which case two cockpits may be established. varied acts, such as "to fix, establish, or control; to adjust by rule, method or established mode; to direct by rule or restriction; or to Cockfighting Law arises from a valid exercise of police power by subject to governing principles or laws." the nation national al govern governmen ment. t. Of course course,, local local govern governmen ments ts are similarly similarly empowered empowered under Section 16 of the Local Government Government There is no dispute that respondent Sangguniang Panlungsod, like Code. Code. We do not doubt, doubt, however however,, the ability ability of the national national other other local local legisl legislativ ative e bodies, bodies, has been been empower empowered ed to enact enact government to implement police power measures that affect the ordinances ordinances and approve approve resolutions resolutions under the general general welfare welfare subjects subjects of municipal municipal government, government, especially if the subject of clause of B.P. Blg. 337, the Local Government Code of 1983. That regulation regulation is a condition condition of universal universal character irrespective irrespective of it continues to posses such power is clear under the new law , R.A. territorial jurisdictions. Cockfighting is one such condition. It is a No. 7160. traditionally traditionally regulated regulated activity, activity, due to the attendant gambling involved or maybe even the fact that it essentially consists of two The general welfare welfare clause clause is the delegation delegation in statutory statutory form of birds killing each other for public amusement. Laws have been the police power of the State to LGUs. Through this, LGUs may enacted restricting the days when cockfights could be held, and prescribe regulations to protect the lives, health, and property of legislation has even been emphatic that cockfights could not be their their consti constitue tuents nts and mainta maintain in peace peace and order order within within their their held on holidays celebrating national honor such as Independence respective territorial jurisdictions. Accordingly, we have upheld Day and Rizal Day. enactments providing, for instance, the regulation of gambling, the occupation of rig drivers, the installation and operation of The obvious thrust of our laws designating when cockfights could pinball machines, the maintenance and operation of cockpits, the be held is to limit cockfighting and imposing the one-cockpit-per- exhumation and transfer of corpses from public burial grounds, municipality rule is in line with that aim. Cockfighting is a valid and the operation of hotels, hotels, motels, and lodging lodging houses as valid matter of police power regulation, as it is a form of gambling exerc exercise isess by local local legisl legislatu atures res of the police police power power under under the essent essentiall ially y antago antagonis nistic tic to the aims aims of enhanc enhancing ing nation national al general welfare clause. produ producti ctivit vity y and self-re self-relia liance nce.. Limita Limitation tion on the numbe numberr of cockpits in a given municipality is a reasonably necessary means Like any other enterprise, CATV operation maybe regulated by for the accomplishment of the purpose of controlling cockfighting, LGUs under the general welfare clause. This is primarily because for clearly more cockpits equals more cockfights. the CATV system commits the indiscretion indiscretion of crossing crossing public prop proper erti ties es.. (It (It uses uses publ public ic prop proper erti ties es in orde orderr to reac reach h A municipal ordinance must not contravene the Constitution or subscribers.) The physical realities of constructing CATV system any statute, otherwise it is void. Ordinance No. 7 unmistakably — the use of public public streets streets,, rights rights of ways, ways, the foundi founding ng of contravenes the Cockfighting Law in allowing three cockpits in structures, and the parceling of large regions — allow an LGU a Daanbantayan. certai certain n degree degree of regula regulatio tion n over over CATV CATV operato operators. rs. This This is the same same regula regulatio tion n that that it exerc exercise isess over over all privat private e enterp enterprise risess Case: BATANGAS CATV, INC. vs. CA, G.R. No. 138810, 9/29/2004 within its territory. territory.
Resolution No. 210 is an enactment of an LGU acting only as agent of the national legislature. Necessarily, its act must reflect and conform to the will of its principal. To To test its validity, we must apply the particular requisites of a valid ordinance as laid down by the accepted principles governing municipal corporations.
On July 28, 1986, Respondent city council enacted a resolution granting Petitioner a permit to construct, install, and operate a The apparent defect in Resolution No. 210 is that it contravenes CATV CATV syst system em in Bata Batang ngas as City City with with auth author orit ity y to char charge ge E.O. No. 205 and E.O. No. 436 insofar as it permits respondent subscribers the maximum rates specified therein with condition Sangguniang Panlungsod to usurp a power exclusively vested in that rate increases would be subject to council approval. When the NTC, i.e., the power to fix the subscriber rates charged by Petitioner increased its subscriber rates from P88.00 to P180.00 CATV CATV operators. operators. As earlier discussed, discussed, the fixing of subscriber subscriber per per mont month h in 1993 1993,, Respo espond nden entt Mayo Mayorr wrot wrote/ e/th thre reat aten ened ed rates is definitely one of the matters within the NTC's exclusive Petitioner with the cancellation of its permit unless it secures the domain. approval approval of responden respondentt City Council. Council. Petitioner Petitioner claiming that, under EO205, the National Telecommunications Commission has "The rationale of the requirement that the ordinances should not sole authority to regulate regulate the CATV CATV operation in the Philippines, Philippines, contravene a statute is obvious. Municipal governments are only Petitioner filed a petition before the RTC to enjoin from enforcing agents of the national government. Local councils exercise only the questioned ordinance. The trial court granted the injunction delegated legislative powers conferred on them by Congress as reasoning that the sole agency of the government which can the national lawmaking body. The delegate cannot be superior to regulate CATV operation is the NTC, and that the LGUs cannot the principal or exercise powers higher than those of the latter. It exercise regulatory power over it without appropriate legislation. is a heresy to suggest that the local government units can undo Trial Trial court’s ruling was reversed reversed by the CA holding holding that, NTC the acts of Congress, from which they have derived their power in 7
the first place, and negate by mere ordinance the mandate of the statute.
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OTHER CASES: VELASCO vs. VILLEGAS 120 SCRA 568 – Manilia ordinance ordinance prohibitin prohibiting g barbershop barbershopss from conductin conducting g massage massage business in another room was held valid, as it was passed for protection of public morals.
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BALAC BALACUIT UIT vs. CFI OF AGUSA AGUSAN N DEL NORTE NORTE 163 SCRA 182 Ordinance penalizing persons charging full payment for admission of children ages (ages 7 to 12) in moviehouse was an invalid exer exerci cise se of the the poli police ce powe powerr for for bein being g unre unreas ason onab able le and and oppressive on business of petitioners.
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Loca ocal revenue is generated ated onl only from sources expressly authorized by law or ordinance, collection thereof shall at all times be acknowledged properly; All All monies monies off offic icia ially lly rec receiv eived ed by a loca locall gover governm nmen entt officer in any capacity or on any occasion shall be accoun accounted ted for as local local funds, funds, unles unlesss otherwi otherwise, se, provided by law; Trust rust fund fundss in local local trea treasu sury ry shal shalll not be paid paid out out except in fulfillment of purpose for which trust was created or funds received; Local budget shall operationalize approved development plans.
DE LA CRUZ vs. PARAS 123 SCRA 759 – Ordinance of Bocaue, Case: HUMBERTO BASCO vs. PAGCOR, G.R. No. 91649, 5/14/1991 Bulacan prohibiting operation of nightclubs was declared invalid because it was prohibitory and not merely regulatory in character. Unde Underr PD 1869 1869,, the the Phil Philip ippi pine ne Amus Amusem emen entt and and Gami Gaming ng Corp Corpor orat atio ion n (PAG (PAGCO COR) R) was was empo empowe were red d to regu regula late te and and Section 17, LGC – Basic Services and Facilities – LGU endeavor to centralized all games of chance authorized by existing franchise be self-reliant and continue exercise powers and discharge their or permit permitted ted by law. law. Petiti Petitione oners rs (as lawyers lawyers and taxpay taxpayers) ers) duties and functions currently vested upon them; also discharge challenging the constitutionality of PD1869, alleged that said law functions and responsibilities of national agencies devlolved to waived Manila City’s right to impose taxes and license fees, which them them pursua pursuant nt to the LGC; LGC; exerc exercise ise such such other other powers powers and by law is recognized and and thus, was an intrusion intrusion into LGU’s right discha discharge rge other other functi functions ons as are necess necessary ary,, approp appropriat riate e or to impose local taxes and license fees in contravention of the incidental to efficient and effective provision of basic services and cons consti titu tuti tion onall ally y ensh enshri rine ned d prin princi cipl ple e of local local auto autono nomy my.. facilities enumerate in Sec. 17. (see list of basic services and Specifically, the challenged is directed against Section 13 par. (2) facilities) of P.D. P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any "tax of any kind or form, income or otherwise, as well Note: Public works and infrastructure projects and other facilities, as fees, charges or levies of whatever nature, whether National or programs and services funded by national government under GAA Local", Local", except except for the 5% franch franchise ise tax due to the National National and other laws, not covered by Section 17 except where LGU is Government. duly duly desi design gnat ated ed as the the impl implem emen enti ting ng agen agency cy for for such such project/facilities/programs and services. RULING: RULING: Petition Petition DISMIS DISMISSED SED.. Sectio Section n 5, Articl Article e X of the 1987 1987 Consti Constitut tution ion (on Local Local Autono Autonomy) my) provid provides es that that “each “each local local government unit shall have the power to create its own source of Section 18 – Power to Generate & Apply Resources – restates and revenue and to levy taxes, fees, and other charges subject to implements Section 5, 6 and 7 of Article 10 of the Constitution, such such guidel guideline iness and limitat limitation ion as the congr congress ess may provid provide, e, but the power is subject to limitations imposed by Congress. consistent with the basic policy on local autonomy. Such taxes, -includes: fees fees and and char charge gess shal shalll accr accrue ue excl exclus usiv ivel ely y to the the loca locall government government." ." The power of local government government to "impose taxes taxes 1. Estab Establis lishi hing ng an orga organi niza zati tion on resp respon onsib sible le for for and fees" is always subject to "limitations" which Congress may efficient and effective implementation of their provide by law. Since PD 1869 remains an "operative" law until development plans, programs and objective and "ame "amend nded ed,, repe repeale aled d or revo revok ked" ed" (Sec (Sec.. 3, Art. Art. XVII XVIII, I, 1987 1987 priorities; Constitution), its "exemption clause" remains as an exception to 2. 2. Creati Creating ng thei theirr own sour sources ces of of reven revenue ue and and to the exercise of the power of local governments to impose taxes levy taxes, fees and charges which shall accrue and fees. It cannot therefore be violative but rather is consistent exclusively to their own use and disposition and with the principle of local autonomy. Local governments have no which shall be retained by them; power power to tax instru instrumen mental talitie itiess of the Nation National al Govern Governmen ment. t. 3. Having Having a just just share share in nati nationa onall taxes taxes which which shal shalll PAGCOR is a government owned or controlled corporation with an be automatically and directly released to them original charter, PD 1869. All of its shares of stocks are owned by without need of further action; the National Government. Government. In addition addition to its corporate powers 4. Having Having an an equita equitable ble shar share e in proce proceeds eds and and from from (Sec. 3, Title II, PD 1869) it also exercises regulatory powers, thus utilization and development of national wealth PAGCOR has a dual role, to operate and to regulate gambling and and resou esourrces ces with within in thei theirr respe espect ctiv ive e casinos. The latter role is governmental, which places it in the jurisdictio jurisdictions ns including including sharing the same with category category of an agency or instrumenta instrumentality lity of the Government. Government. inhabitants by way of direct benefits; Being an instrumentality of the Government, PAGCOR should be 5. To acqu acquir ire, e, deve develo lop, p, leas lease, e, encu encumb mber er and and and actually is exempt from local taxes. Otherwise, its operation alienate or otherwise dispose of real or personal might be burdened, impeded or subjected to control by a mere property held by them in their private capacity Local government. Otherwise, mere creatures of the State can and and appl apply y thei theirr reso resour urce cess and and asset assetss for for defe defeat at Nation National al poli policie ciess thru thru exter extermi mina natio tion n of what what loca locall productive, developmental or welfare purposes, authorities may perceive to be undesirable activates or enterprise in exercise or furtherance of their governmental using the power to tax as "a tool for regulation" or proprietary powers and functions and ensure ther thereb eby y thei theirr devel develop opme ment nt as self self-f -feli elian antt Case: LUZ YAMANE vs. BA LEPANTO CONDOMINIUM CORP., G.R. comm commu uniti nities es and and acti active ve part partic icip ipan ants ts in No. 154993, 10/25/2005 attainment of national goals. FACST: ACST: Responde Respondent, nt, a duly organized organized condomium condomium corporation corporation holding title to the common and limited common areas of the BANOTE: NOT E: Sectio Sections ns 128-38 128-383, 3, Boo Book k II of LGC provid provides es for detaile detailed d Lepanto Lepanto Condominiu Condominium, m, collected collected regular regular assessmen assessments ts from its provisions on Local Taxation and Fiscal Matters. members members for operating operating expenses, expenses, capital expenditur expenditures es on the common areas, and other special assessments, pursuant to its NOTE: NOT E: Sectio Section n 130, 130, LGC (Fund (Fundame amenta ntall Princi Principle pless Govern Governing ing Amended By-Laws. Exercise of Power to Tax and Generate Revenues by LGUs): Taxat axatio ion n sha shall ll b be e uni unifo form rm in each each LGU; LGU; Without citing as basis any specific provision of the Revenue Code Taxes, fees, charges and impositi ition shall all be of Maka Makati ti or the the Loca Locall Gove Govern rnme ment nt Code, Code, Petitio etitione nerr (Cit (City y equi equita tabl ble e and and base based d as far far as prac practi tica cable ble on Treasurer of Makati City) issued a notice of assessment holding taxpayer’s ability to pay; levied only for a public Petitioner liable to pay business taxes, fees and charges totaling purp purpos ose; e; not not unju unjust st,, exce excess ssiv ive, e, oppr oppres essi sive ve or P1,601,013.77 for the years 1995 to 1997. Petitioner reasoned confis confiscat catory ory;; not contra contrary ry to law, publi publicc policy policy,, that Respondent is engaged in a profit venture as the collection of national economic policy or in restraint of trade; dues from unit owners was primarily "to sustain and maintain the Collection of taxes, fees, charges and other expenses expenses of the common areas, giving giving full appreciative appreciative living impositions shall in no case be let to any private values for the individual individual condomini condominium um occupants, occupants, generating person; better marketable prices for future sale of their units. Reve Revenu nue e collec collecti tion on sha shall ll inur inure e solel solely y to the the benef benefit it of, and be subject to the disposition by LGU unless Upon denial of its protest, Respondent filed an appeal with the specifically provided herein; and Regional Trial Court which appeal was dismissed. On review by Each Each LGU LGU shall, all, as far far as prac practi ticcable able,, evol evolve ve a the Court of Appeals, the latter reversed the trial court’s decision progressive system of taxation and declared that the corporation was not liable to pay business taxes to the City of Makati. Her motion for reconsideration denied, NOTE: NOT E: Sectio Section n 305, 305, LGC (Fund (Fundame amenta ntall Princi Principle pless Govern Governing ing Petitioner filed a petition for review with the Supreme Court. Financial Financial Affairs, Transactions and Operations of LGU): No mon money ey to to be pai paid d out out of loc local al tre treas asur ury y exce except pt in in RULING: Petition DENIED. The power of local government units to pursuance of an appropriation ordinance or law; impose taxes within its territorial jurisdiction derives from the Loca Locall gover governm nmen entt fund fundss and mon monies ies sha shall ll be spe spent nt Constitution itself, which recognizes the power of these units "to solely for public purposes; create its own sources of revenue and to levy taxes, fees, and 8
char charge gess subj subjec ectt to such such guid guideli eline ness and and limi limitat tatio ions ns as the the Congress may provide, consistent with the basic policy of local autono autonomy my." ." These These guidel guideline iness and limitat limitation ionss as provi provided ded by Congress are in main contained in the Local Government Code of 1991, which provides for comprehensive instances when and how local local govern governmen mentt units units may impose impose taxes. taxes. The signif significa icant nt limitations are enumerated primarily in Section 133 of the Code (prohibition on income taxes except when levied on banks and other financial institutions). Found in Title I of Book II of the Code are other taxes imposable by local government units, including business taxes. Under Section 151 of the Code, cities such as Makati are authorized to levy the same taxes fees and charges as provinces and municipalities. Section 143 of the Code specifically enumerates several types of business on which municipalities and cities may impose taxes. Moreover, the local sanggunian is also authorized to impose taxes on any other businesses not otherwise specified under Section 143 which the sanggunian concerned may deem proper to tax. The coverage of business taxation particular to the City of Makati is prov provid ided ed by the the Maka Makati ti Revenu evenue e Code Code enac enacte ted d thro throug ugh h Municipal Ordinance No. 92-072. Article A, Chapter III of said code governs business taxes in Makati, and it is quite specific as to the particular businesses which are covered by business taxes. The initial inquiry is what provision of the Makati Revenue Code does the City Treasur reasurer er rely rely on to make make the Corporatio Corporation n liable liable for business taxes. As stated earlier, earlier, local local tax on busine businesse ssess (that (that is, "trade or commercial activity regularly engaged in as a means of livelihood or with a view to profit") is authorized under Section 143 of the Local Government Code. It is thus imperative that in order that Respondent may be subjected to business taxes, its activities must fall within the definition of business as provided in the Local Government Code. And to hold that they do is to ignore the very statutory nature of a condominium corporation. The creation of the condominium corporation is sanctioned by RA No. 4726, (Condominium Act - a condominium is an interest in real real prope property rty consisti consisting ng of a separa separate te intere interest st in a unit unit in a residential, industrial or commercial building and an undivided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building). In line with the authority of the condominium condominium corporation corporation to manage manage the condom condomini inium um proje project, ct, it may be author authorize ized, d, in the deed deed of restrictions, "to make reasonable assessments to meet authorized expenditures, each condominium unit to be assessed separately for its share of such expenses in proportion (unless otherwise provided) to its owner's fractional interest in any common areas." The collection of these assessments from unit owners is the basis for the City Treasur reasurer' er'ss claim claim that that the Cor Corpor porati ation on is doing doing business as these collections are "with the end view of getting full appreciative living values" for the condominium units, and as a result, result, profit profit is obtain obtained ed once once these these units units are sold sold at higher higher prices. The Court cites with approval the two counterpoints raised by the Court of Appeals in rejecting this contention. First, if any profit is obtained by the sale of the units, it accrues not to the corporation but to the unit owner. Second, if the unit owner does obtain profit from the sale of his unit, he is already required to pay pay capi capita tall gain gainss tax tax on the the appr apprec ecia iate ted d valu value e of the the condominium unit. Case: MIAA vs. CA, G.R. No. 155650. 7/20/2006 FACTS: Petitioner Manila International Airport Authority operates the the Nino Ninoy y Aqui Aquino no Inte Intern rnat atio iona nall Airp Airport ort (NAI (NAIA) A) Compl Complex ex in Parañaque City under Executive Order No. 903, otherwise known as the the Revis evised ed Char Charte terr of the the Mani Manila la Inte Intern rnat atio iona nall Airp Airport ort Author Authority ity.. Subseq Subsequen uently tly,, Execu Executive tive Order Order Nos. Nos. 909 909 and 298 amen amende ded d the the MIAA MIAA Char Charte ter, r, wher where e as opera perato torr of the the international airport, MIAA administers the land, improvements and equipmen equipmentt within within the NAIA NAIA Comple Complex. x. The MIAA Charte Charterr transf transferr erred ed to MIAA appro approxim ximatel ately y 600 hectar hectares es of land, land, 3 including the runways and buildings then under the Bureau of Air Transportation.
Charter is the proof that MIAA is exempt from real estate tax. MIAA petitioned the CA for prohibition and injunction, with prayer for preliminary injunction or temporary restraining order seeking to restrain the City of Parañaque from imposing real estate tax on, levying against, and auctioning for public sale the Airport Lands and Buildings, which petition however was dismissed for having been filed beyond the 60-day reglementary period. Hence, this petition for review. RULING: Petition GRANTED. The Airport Lands and Buildings of MIAA are EXEMPT from the real estate tax imposed by the City of Parañaque. All the real estate tax assessments, including the final notices of real estate tax delinquencies, issued by the City of Parañaqu arañaque e on the Airpor Airportt Lands Lands and Buildi Buildings ngs of the Manila Manila International Airport Authority, except for the portions that the Manila Manila Intern Internati ationa onall Airpor Airportt Author Authority ity has leased leased to privat private e parties, are declared VOID. As a rule, a government-owned or controlled corporation is not exempt from real estate tax. However, MIAA is not a governmentowne owned d or cont contro rolle lled d corp corpora orati tion on.. A gove govern rnme ment nt-ow -owne ned d or controlled corporation must be "organized as a stock or non-stock corpor corporati ation. on."" MIAA is not organize organized d as a stock stock or non-sto non-stock ck corporation. MIAA is not a stock corporation because it has no capital stock divided into shares, has no stockholders or voting shares and its capital is not divided into shares of stock. Neither is it a non-stock corporation because it has no members. A nonstock corporation must have members. Even if the Government is considered as the sole member of MIAA, this wil l not make MIAA a non-stock non-stock corporation corporation because because non-stock non-stock corporations corporations cannot cannot distri distribut bute e any part of their their income income to their their member memberss and in MIAA’s case, Section 11 of its Charter requires it to remit 20% of its annual gross operating income to the National Treasury, thus, preve preventi nting ng MIAA from from qualif qualifyin ying g as a non-sto non-stock ck corpor corporati ation. on. Further urther,, non-st non-stock ock corpor corporati ations ons are organi organized zed for charit charitabl able, e, religi religious ous,, educat education ional, al, profes professio sional nal,, cultu cultural, ral, recrea recreatio tional nal,, frater fraternal nal,, literar literary, y, scient scientifi ific, c, social social,, civil civil service service,, or similar similar purposes, purposes, like trade, industry, industry, agricultur agriculture e and like chambers. chambers. MIAA is not organized for any of these purposes. MIAA, a public utility utility,, is organi organized zed to operate operate an intern internati ationa onall and domest domestic ic airport for public use. MIAA is a govern governmen mentt instru instrumen mentali tality ty vested vested with with corpor corporate ate powers to perform efficiently its governmental functions. MIAA is like any other government instrumentality, the only difference is that MIAA is vested with corporate powers. When the law vests in a gove goverrnmen nmentt inst instru rum menta entali lity ty corp orporat orate e powe powers rs,, the the instru instrumen mental tality ity does does not become become a corpor corporati ation, on, unless unless the government instrumentality is organized as a stock or non-stock corporation. Thus, MIAA exercises the governmental powers of eminent domain, police authority and the levying of fees and charges. At the same time, MIAA exercises "all the powers of a corporation under the Corporation Law, insofar as these powers are not inconsistent with the provisions of this Executive Order." A government instrumentality like MIAA falls under Section 133(o) of the the Loca Locall Gove Govern rnme ment nt Code, Code, whic which h stat states es that that,, unles unlesss otherwi otherwise se provid provided ed by the Code, Code, the exerc exercise ise of the taxing taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and local government units. Sect Sectio ion n 133( 133(o) o) reco recogn gniz izes es the the basi basicc prin princi cipl ple e that that loca locall gove govern rnme ment ntss cann cannot ot tax the the nati nation onal al gove govern rnme ment nt,, whic which h historically historically merely delegated delegated to local governmen governments ts the power to tax. While the 1987 Constitution now includes taxation as one of the powers of local governments, local governments may only exercise such power "subject to such guidelines and limitations as the Congress may provide."
When local governments invoke the power to tax on national government government instrumentalities instrumentalities,, such power is construed construed strictly strictly agai agains nstt loca locall gove govern rnme ment nts. s. The The rule rule is that that a tax tax is neve neverr presumed and there must be clear language in the law imposing the tax. Any doubt whether a person, article or activity is taxable After, the Office of the Government Corporate Counsel (OGCC) is resolved against taxation. This rule applies with greater force issued Opinion No. 061 stating that the Local Government Code of when when local local gove govern rnme ment ntss seek seek to tax tax nati nation onal al gove govern rnme ment nt 1991 withdrew the exemption from real estate tax granted to instrumentalities. MIAA under Section 21 of the MIAA Charter, MIAA negotiated with Respondent City of Parañaque to pay the real estate tax imposed The Airport Lands and Buildings of MIAA are property of public by the City and paid some of said taxes already due. Later, MIAA dominion and therefore owned by the State or the Republic of the received Final Notices of Real Estate Tax Delinquency (totaling Philippines Philippines.. Properties Properties of public public dominion dominion mentioned mentioned in Article P624,506 P624,506,725. ,725.42) 42) from the City of Parañaqu Parañaque e for the taxable taxable 420 of the Civil Code, like "roads, canals, rivers, torrents, ports years 1992 to 2001. and bridges constructed by the State," are owned by the State. The term "ports" includes seaports and airports. The MIAA Airport When Parañaque City issued notices of levy and warrants of levy Lands and Buildings constitute a "port" constructed by the State. on the Airport Airport Lands Lands and Building Buildingss and threate threatened ned to sell sell at The The Airport Airport Lands and Building Buildingss are devote devoted d to publi publicc use public auction these properties if MIAA failed to pay the real beca becaus use e they they are are used used by the the publ public ic for for inte intern rnat atio iona nall and and estate tax delinquency, MIAA sought clarification of OGCC Opinion domest domestic ic travel travel and transp transport ortatio ation. n. The fact fact that that the MIAA No. 061. The OGCC then issued Opinion No. 147 clarifying OGCC collects terminal fees and other charges from the public does not Opinion No. 061 stating that Section 206 of the Local Government remove remove the charac character ter of the Airpor Airportt Lands Lands and Building Buildingss as Code requires persons exempt from real estate tax to show proof properties for public use. The charging of fees to the public does of exemption and that in the case of MI AA, Section 21 of the MIA A not determine the character of the property whether it is of public 9
dominion or not. Article 420 of the Civil Code defines property of municipal municipal government government allow, provide for additional additional allowances allowances public dominion as one "intended for public use." and other benefits to judges, prosecutors, public elementary and high school teachers, and other national government government officials officials As proper propertie tiess of publi publicc domini dominion, on, the airpor airportt proper properties ties are stationed in or assigned to the municipality; outside outside the commerce of man. Properties Properties of public public dominion, dominion, being for public use, are not subject to levy, encumbrance or The The contro controvers versy y actual actually ly center centerss on the seemin seemingly gly sweepi sweeping ng disposition through public or private sale. Any encumbrance, levy provi provision sion in NCC No. 67 which states states that that "no one shall shall be on execution or auction sale of any property of public dominion is allowed to collect RATA from more than one source." Does this void for being contrary to public policy. Essential public services mean mean that that judg judges es cann cannot ot rece receive ive allow allowan ance cess from from LGUs LGUs in will will stop stop if prop proper erti ties es of publ public ic domi domini nion on are are subj subjec ectt to addition to the RATA from the Supreme Court? By no stretch of encumbrances, foreclosures and auction sale. This will happen if the imagination can NCC No. 67 be construed as nullifying the the City of Parañaque can foreclose and compel the auction sale power of LGUs to grant allowances to judges under the Local of the 600-hectare runway of the MIAA for non-payment of real Government Code of 1991. It was issued primarily to make the estate tax. grant grant of RAT RATA to nation national al offici officials als under under the nation national al budget budget uniform. In other words, it applies only to the national funds Case: SMART COMMUNICATIONS, INC. vs. CITY OF DAVAO, G.R. No. administered by the DBM, not the local funds of LGUs. 155491, 9/16/2008 To rule against the power of LGUs to grant allowances to judges FACTS: The Tax Code of Davao City ISec. 1, Art. 10 thereof) as what respondent COA would like us to do will subvert the provided that: “Notwithstanding any exemption granted by any prin princi cipl ple e of loca locall auto autono nomy my zeal zealou ousl sly y guara guarant nteed eed by the the law law or othe otherr spec specia iall law, law, ther there e is here hereby by impo impose sed d a tax tax on Constitution. The Local Government Code of 1991 was specially businesses enjoying a franchise, at a rate of seventy-five percent promu promulga lgated ted by Congr Congress ess to ensure ensure the autono autonomy my of local local (75%) of one percent (1%) of the gross annual receipts for the governments as mandated by the Constitution. By upholding, in preceding calendar year based on the income or receipts realized the present present case, case, the power of LGUs LGUs to grant grant allowa allowance ncess to within the territorial jurisdiction of Davao City. judges and leaving to their discretion the amount of allowances they may want to grant, depending on the availability of local RULING: Smart is of the view that the only taxes it may be made funds, we ensure the genuine and meaningful local autonomy of to bear under its franchise are the national franchise tax (now LGUs. VAT), income tax, and real property tax. It claims exemption from the local franchise tax because the “in lieu of taxes” clause in its franchise does not distinguish between national and local taxes. Section 19,LGC – LGU’s Power of Eminent Domain – LGU through We pay heed that R.A. R.A. No. 7294 7294 is not definite definite in granti granting ng its Chief Executive acting pursuant to an ordinance; for public use exemption to Smart from local taxation. Section 9 of R.A. No. or purpose or welfare for the benefit of poor and landless; upon 7294 7294 impose imposess on Smart Smart a franch franchise ise tax equiva equivalen lentt to three three paymen paymentt of just just compen compensat sation ion,, pursua pursuant nt to provi provision sionss of the percen percentt (3%) (3%) of all gross gross receip receipts ts of the busin business ess transa transacte cted d Constitution and pertinent laws. under the franchise and the said percentage shall be in lieu of all taxes on the franchise or earnings thereof. R.A. No 7294 does not Conditions for Exercise of Power of Eminent Domain: (i) Prior valid expressly provide what kind of taxes Smart is exempted from. It is and definite offer to owner which latter did not accept; (II) LGU not not clea clearr wheth whether er the the “in “in lieu lieu of all taxe taxes” s” prov provis isio ion n in the the may may take take imme immedi diat ate e poss posses essi sion on of prop proper erty ty upon upon fili filing ng of franchise of Smart would include exemption from local or national exprop expropriat riation ion procee proceedin dings gs (Rule (Rule 67 of Rules Rules of Court) Court) and taxatio taxation. n. What What is clear clear is that that Smart Smart shall shall pay franchis franchise e tax paym paymen entt of depo deposit sit of at leas leastt 15% 15% of fair fair mark market et valu value e of equiva equivalent lent to three three percen percentt (3%) (3%) of all gross gross receipts receipts of the property based on current tax declaration; amount to be paid for busi busine ness ss tran transa sact cted ed unde underr its its fran franch chis ise. e. But But whet whethe herr the the expropriation shall be determined by proper court (reference to franchise tax exemption would include exemption from exactions Commissioner) based on fair market value at the time of taking. by both the local and the national government is not unequivocal. - Eminen Eminentt Domain Domain – inhere inherent nt attrib attribute ute of sovere sovereign ignty ty to take take The uncertainty in the “in lieu of al l taxes” clause in R.A. No. 7294 private property upon payment of just compensation. on whethe whetherr Smart Smart is exemp exempted ted from from both both local local and national national franchise franchise tax must be construed construed strictly against Smart which Case: MUN. OF PARANAQUE vs. V.M. REALTY CORP. 292 SCRA 678 claims claims the exemp exemption tion.. Smart Smart has the burden burden of provi proving ng that, that, aside from the imposed 3% franchise tax, Congress intended it to FACTS: A resolution passed by Municipal Council authorized Chief be exempt from all kinds of franchise taxes – whether local or Executive to exercise police power. national. However, Smart failed in this regard. RULING: LGC in effect when complaint for expropriation was filed, Tax exemptions are never presumed and are strictly construed explic explicitly itly requir requires es an ordina ordinance nce for this this purpo purpose. se. If Congre Congress ss against the taxpayer and liberally in favor of the taxing authority. intended to allow LGU to exercise eminent domain through MERE [22] They can only be given force when the grant is clear and resolution, it would have simply adopted the language of the categorical. The surrender of the power to tax, when claimed, previous local government code (BP 337 of 1983). Where the law must must be clear clearly ly show shown n by a lang langua uage ge that that will will admi admitt of no is clear clear and ambiguou ambiguous, s, the law is applied applied accordi according ng to the reasonable reasonable construction construction consistent with the reservation reservation of the express terms. Eminent Domain necessarily involves a derogation power. If the intention of the legislature is open to doubt, then the of a fundamental or private right of the people, hence, manifest intention of the legislature must be resolved in favor of the State. change in legislative language from “resolution” under BP337 to “ordina ordinance nce”” under under RA716 RA7160 0 demand demandss strict strict interp interpret retatio ation. n. In this case, the doubt must be resolved in favor of the City of Petitioner relies on Art. 36 of Rule VI of the Implementing Rules Davao. The “in lieu of all taxes” clause applies only to national which which requir requires es only only a “resolu resolutio tion” n” to author authorize ize the LGU to internal revenue taxes and not to lo cal taxes. exercise eminent domain. This is clearly misplaced. Section 19 of the LGC, the law itself, surely prevails over said rule which merely [T]he "in lieu of all taxes" clause in Smart's franchise franchise refers only seeks to implement it. The clear letter of the law is controlling to taxes, other than income tax, imposed under the National and cannot be amended by mere administrative rule issued for its Internal Revenue Code. The "in lieu of all taxes" clause does not implementation. apply to local taxes. The clear intent is for the "in lieu of all taxes" clause to apply only to taxes under the National Internal Revenue Note: Resolution is a mere declaration of sentiment/opinion of Code and not to local taxes. Even with respect to national internal lawmaking body on a specific matter; it is temporary in nature; revenue taxes, the "in lieu of all taxes" clause does not apply to third reading not necessary unless decided otherwise by majority income tax. of all sangguniang members. Ordinance on the otherhand, is law and and is of gene general ral and and perm perman anen entt chara charact cter er and and requ requir ires es 3 Case Case:: JUDGE JUDGE TOMA TOMAS S C. LEYN LEYNES ES vs. vs. COA, COA, G.R. G.R. No. No. 1435 143596 96,, readings. 12/11/2003 Case: Case: AMOS AMOS FRANC FRANCIA, IA, vs. MUN. MUN. OF MEYCAU MEYCAUA AYAN, G.R. G.R. No. FACT ACT: Petiti etition oner er was was form former erly ly rece receivi iving ng a P160 P16000-mo mont nthl hly y 170432, 3/24/2008 allowance from the Municipality of Naujan while he was stationed ther there e as judg judge e of the the muni munici cipa pall tria triall cour court. t. Respo espond nden entt FACTS: Respondent filed a complaint to expropriate Petitioners’ Commis Commission sion on Audit Audit (uphol (upholdin ding g the Regio Regional nal Direct Director or and 16,256 sq. m. idle property which it planned to use as a common Provincial Auditor) disallowed said allowance citing that the latter publi publicc termin terminal al for all types types of publi publicc utility utility vehicles vehicles with a along with Petitioner’ Petitioner’ss RATA RATA from the Supreme Supreme Court violated weighi weighing ng scale scale for heavy heavy trucks trucks.. In their their answer answer,, Petiti Petitione oners rs certain budget circulars (NCC#67) that no one shall be allowed to aver averre red d that that the the subj subjec ectt land land was deve develo lope ped d cont contra rary ry to collect RATA from more than one source. Respo espond nden ent’ t’ss clai claim m of bein being g raw land, land, for for whic which h reas reason on,, Respo Responde ndent’ nt’ss offer offer price price of 333,50 333,500 0 (or P111.9 P111.99 9 per square square RULING: On October 10, 1991, Congress enacted RA 7160, (Local meter) was too low. Petitioners essentially aver that the CA erred Government Code of 1991). The power of the LGUs to grant in upholding the RTC's order that, in expropriation cases, prior allowan allowances ces and other other benefit benefitss to judges judges and other nation national al determ determina inatio tion n of the existen existence ce of a public public purpose purpose was not officials officials stationed stationed in their respective respective territories territories was expressly necessary for the issuance of a writ of possession. provided in Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi) of the the Code Code.. Sect Sectio ion n 447( 447(a)( a)(1) 1)(xi (xi)) of RA 7160 7160,, the the Loca Locall RULING: Petitioner DENIED. Sec. 19, LGC provides that, a LGU Government Government Code of 1991, 1991, provides: provides: “When the finances finances of the may, may, throug through h its chief chief execu executive tive and acting acting pursua pursuant nt to an 10
ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws. Before a LGU may enter into possession of the property sought to be expropriated, it must (1) file a complaint for expropriation sufficient in form and substance in the proper court and (2) deposit with the said court at least 15% of the property's fair market value based on its current tax declaration. The law does not make the determination of a public purp purpos ose e a cond conditi ition on prec preced eden entt to the the issua issuanc nce e of a writ writ of possession.
portion to Shell Corporation. Petitioner Favis protested the lease to Shell claiming that said lease diminished the width of LapuLapu Street and that the City was bereft of authority to lease any portion of its public streets in favor of anyone. Subsequently, Petiti Petitione onerr filed filed a compla complaint int for annulm annulment ent of the lease lease with with damages in the Court of First Instance of Baguio. The latter court dismissed his complaint. Hence, appeal to the Supreme Court.
RULING: APPEAL Denied. Appellant may not challenge the city council's act of withdrawing a strip of Lapu-Lapu Street at its dead end from public use and converting the remainder thereof into an alley. These are acts well within the ambit of the power to close a city city stre street. et. The The city city coun counci cill is the the auth authori ority ty comp compet eten entt to Secti Section on 20, LGC – LGU Power Power to Recla Reclassi ssify fy Land Land – City or determine if a certain property is still necessary for public use. Municipality Municipality through ordinance ordinance passed after conductin conducting g public public This power is discretionary and will not ordinarily be controlled or hearings for that purpose, may authorize the reclassification of interfered with by the courts, absent a plain case of abuse or agricultura agriculturall lands and provide for the manner of their utilization utilization frau fraud d or coll collus usio ion. n. Faithf aithful ulne ness ss to the the publ public ic trus trustt will will be or disposition. presumed. The fact that some private interests may be served incidentally will not invalidate the vacation ordinance. Agricu Agricultu ltural ral Land, Land, define defined: d: Those Those public public lands lands acquir acquired ed from from Spain Spain which which are not timber timber or mineral mineral land; land devote devoted d to Given the precept that the discretion of a municipal corporation is agriculture or to any growth. broad in scope and should thus be accorded great deference in the spirit of the Local Autonomy Law (R.A. 2264), and absent a Grou Ground ndss for for Recla eclass ssif ific icati ation on:: (i) (i) When When land land ceas ceases es to be clear abuse of discretion, we hold that the withdrawal for lease of economical economically ly feasible feasible and sound for agricultural agricultural purposes as the disputed portion of Lapu-Lapu Street and the conversion of determined by the Dept. of Agriculture; and (ii) when land shall the remainder of the dead-end part thereof into an alley, does not have have substa substanti ntially ally greate greaterr econom economic ic value value for reside residenti ntial, al, call for, and is beyond the reach of, judicial interference. comm commer erci cial al or indu indust stria riall purp purpos oses es as dete determ rmin ined ed by the the Sanggunian; From the fact that the leased strip of 100 square meters was withdrawn from public use, it necessarily follows that such leased Conditions for Reclassification: Percentage limits, that is, of the portion portion becomes becomes patrimonial patrimonial property. property. Article Article 422 of the Civil total agricultural area at the time of passage of reclassification – Code indeed provides that property of public domain, "when no (a) for highly urbanized cities and independent component cities – longer intended for public use or public service, shall form part of 15%; (b) for component cities and 1st to 3 rd class municipalities – the patrimonial property of the State." Authority is not wanting for 10%; and (c) for 4 th to 6th class municipalities – 5% the proposition that "[property for public use of provinces and towns are governed by the same principles as property of public Note Note:: Pres Presid iden entt (upo (upon n Nat’ Nat’ll Econ Econom omic ic Dev’ Dev’tt Auth Authori ority ty’s ’s dominion of the same character." There is no doubt that the strip recommendation), when public interest so requires, authorize a withdrawn from public use and held in private ownership may be city or municipality to reclassify lands in excess of limits set in given in lease. Section 20(a). The general rule is, one whose property does not abut on the - Under Sec. 20(e) – Agricultural lands distributed to agrarian closed section of a street has no right to compensation for the reform reform benefi beneficia ciaries ries pursua pursuant nt to RA665 RA6657(C 7(CARL ARL), ), shall shall not be closing or vacation of the street, if he still has reasonable access affected by the reclassification and the conversion of such lands to the genera generall system system of street streets. s. The circum circumsta stance ncess in some some into other purposes shall be governed by Sec. 65 of CARL. cases may be such as to give a right to damages to a property owner, even though his property does not abut on the closed Note Note:: Sec. Sec. 65 of RA665 A6657 7 – Cond Condit itio ions ns for for conv conver ersi sion on of section. But to warrant recovery in any such case the property agricultural lands held by agrarian reform program beneficiaries owner must show that the situation is such that he has sustained to non-agricultura non-agriculturall use with DAR: (a) 5 year lapse from award of special damages differing in kind, and not merely in degree, from land; (ii) land ceased to be economically feasible and sound for those sustained by the public generally." generally." agric agricul ultu tura rall purp purpos ose; e; (iii) (iii) noti notice ce to affe affect cted ed part partie ies; s; (iv) (iv) beneficiary has fully paid his obligation. In the case at bar, no private right of appellant has been invaded. No special damage or damages he will incur by reason of the Section 21, LGC – Closure & Opening of Roads – The closure of closing of a portion of Lapu-Lapu Street at its dead end. His streets/roads is within the power of the local government unit property does not abut that street. In fact, the court has found (through council by way of ordinance). that the remaining portion of Lapu-Lapu Street, which actually is 4 meters in width, is sufficient for the needs of appellant and that - LGU (by ordinance) ordinance) – may permanently/te permanently/tempora mporarily rily close or the leased portion — subject of this suit — "was not necessary for open open any local road, road, alley, alley, park park or square square falling falling within within its public use." jurisdiction. "The Constitution does not undertake to guarantee to a property Note: In case of permanent closure, ordinance must be approved owner the public maintenance of the most convenient route to his by, at least 2/3 of all members of the sanggunian and when door. The law will not permit him to be cut off from the public necessary, an adequate substitute for the public facility subject of thoroughfares, but he must content himself with such route for closure, is provided. outlet as the regularly constituted public authority may deem most compatible with the public welfare. When he acquires city - Prop Proper erty ty publ public icly ly with withd drawn rawn from from publ public ic use use may may be property, he does so in tacit recognition of these principles. If, used/conveyed for any purpose for which other real property subsequent to his appreciation, the city authorities abandon a belon belongi ging ng to the the LGU LGU conc concer erne ned d may may be lawfu lawfull lly y used used or portion of the street to which his property is not immediately conveyed. adjace adjacent, nt, he may suffer suffer loss becaus because e of the inconv inconveni enienc ence e impo impose sed, d, but but the the publ public ic trea treasu sury ry cann cannot ot be requ requir ired ed to Note: Note: No freedo freedom m park park shall shall be closed closed perman permanent ently ly withou withoutt recompense him. Such case is damnum absque injuria." provision for its transfer/relocation to a new site. (see related B.P.880 Public Assembly Act). Case: COACO, INC. vs. HON. PASCUAL A. BERCILLES, G.R. No. L- LGU has the power to close local and even national roads (Note: 40474, 8/29/1975 LGU has no authority to order permanent closure/opening of a national road, alley, park or square, such authority applies to local FACTS: Petitioner Cebu Oxygen & Acytelene Co., Inc. applied for roads only, see sec. 2[a]). registratio registration n of title over a portion portion of M. Gorces Street in Mabolo, Mabolo, Cebu City. Said portion was declared an abandoned road by the Conditions Conditions for temporary temporary closure closure of national/loca national/locall roads roads under under City Council of Cebu the same not being included in the Cebu Sec. 2[c]: (i) occasion of actual emergency, fiesta celebrations, Development Plan, and later, by authority of the City Council, was public rallies, agricultural or industrial fairs, or undertaking of sold by the Acting Mayor to petitioner who was the highest bidder public works and highways (eg. Banilad flyover); (ii) written order at a public bidding. On motion by the Assistant Provincial Fiscal for temporary closure by local chief executive; (iii) no national or (alleging that the subject property being a public road intended local road, alley, park or square shall be temporarily closed for for a public use, it is part of the public domain, outside the athl athleti etic, c, cult cultur ural al or civic civic activ activit ity y not not offi offici ciall ally y spon sponso sore red, d, commerce of men, and cannot be subject to registration by any recognized or approved by local LGU concerned. priva private te indi indivi vidu dual) al),, the the tria triall cour courtt dism dismis isse sed d Peti Petitio tione ner’ r’ss application. Case: ANTONIO FAVIS vs. THE CITY OF BAGUIO, G.R. No. L-29910, 4/25/1969 RULING: PETITION is granted. Order of dismissal set aside and trial court ordered to proceed with the hearing of the petitioner's FACTS: A resolution passed by the city council closed the dead- application for registration of title. end portion of Lapu-lapu Street to public use. By subsequent Under the Cebu City Charter, the City Council is empowered to resolution, the Mayor as authorized therein, leased the closed close a city road or a street and further, use or convey property 11
thus withdrawn from public servitude for any purpose for which other real property belonging to the City may be lawfully used or Case Case:: MUNI MUNICI CIP PALIT ALITY Y OF PILI PILILI LIA A vs. vs. CA 233 233 SCR SCRA 484 484 – conveyed. Municipalit Municipality y cannot cannot be represent represented ed by a private private lawyer. lawyer. Only provincial fiscal or municipal attorney can represent a province or In the case of Favis vs. City of Baguio, the Court upholding the municipalit municipality y in lawsuits. lawsuits. This is mandatory mandatory.. The municipality municipality’s ’s power of the city council to close city streets and to vacate or authority to employ a private lawyer is limited to situations where withdr withdraw aw the same same from from public public use was similar similarly ly assail assailed, ed, the the prov provin inci cial al fisc fiscal al is disq disqua uali lifi fied ed to pres presen entt it whic which h declar declared ed that that the city city counci councill is the author authority ity compet competent ent to disqua disqualif lificat ication ion must must appear appear on record record.. Fiscal’ iscal’ss refusa refusall to determine whether or not a certain property is still necessary for represent the municipality is not legal justification for employing public use. This power to vacate a street or alley is discretionary, the services of private counsel, Municipality should request the and will not ordinarily be controlled or interfered with by the Secretary of Justice to appoint an acting provincial fiscal in place cour courts ts,, abse absent nt a plai plain n case case of abus abuse e or frau fraud d or coll collus usio ion. n. of the one who declined to handle it. Faithfulness to the public trust will be presumed. Case: RAMOS vs. CA 269 SCRA 34 –Petitioners Ramos and Baliuag Sinc Since e that that port portion ion of the the city city stre street et subj subjec ectt of peti petiti tion oner er's 's Market Vendors’ Association filed a petition to declare certain application for registration of title was withdrawn from public use, ordi ordina nanc nces es ille illega gal. l. In said said suit suit,, Petiti etition oner erss chal challen lenge ged d the the it follow followss that that such such withdra withdrawn wn portion portion become becomess patrim patrimoni onial al appearance of a private lawyer for the municipality. SC held, Only prop proper erty ty whic which h can can be the the obje object ct of an ordi ordina nary ry cont contrac ractt provi provinci ncial al fiscal fiscal,, under under (Sec. (Sec. 1683 1683 of Revise Revised d Admin Admin Code) Code) consisting with Article 422 of the Civil Code (that property of provincial attorney or municipal attorney may validly represent public dominion, when no longer intended for public use or for the the muni munici cipa pali lity ty.. The The legali legality ty of the the repr repres esen enta tati tion on of an public service, shall form part of the patrimonial property of the unau unauth thori orize zed d coun counse sell may may be rais raised ed at any any stag stage e of the the State). proceedings. Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000
RE: POWER TO ACQUIRE/CONVEY REAL OR PERSONAL PROPERTY – LGU may acquire real/personal, tangible or intangible in any FACTS: Petitioner issued an order to open to public traffic Neptune manner allowed by law, eg., sale or donation, etc. Street (and to demolition its perimeter fence) – a private road owned by Respondent. Case: VILLANUEVA vs. CASTANEDA 454 SCRA 142 – Public plaza is beyond the commerce of man and cannot be the subject of a RULING: Petition DENIED. While we hold that the general welfare lease or other contractual undertaking, and even assuming the should be promoted, we stress that it should not be achieved at existence existence of a valid lease of the public public plaza or part thereof, thereof, the the expense of the rule of law. It is thus beyond doubt that the municipal resolution effectively terminated the agreement, for it MMDA is not a local government unit or a public corporation is sett settled led that that the the polic police e powe powerr cann cannot ot be surr surren ende dere red d or endo endowe wed d with with legisl legislat ativ ive e powe powerr. It is not not even even a "spe "speci cial al bargained away through the medium of a contract. metropolitan political subdivision" as contemplated in Section 11, Article X of the Constitution. The powers of the MMDA are limited RE: POWER TO ENTER INTO CONTRACTS – requires: (i) LGU has to form formul ulat atio ion, n, coor coordi dina natio tion, n, regu regulat latio ion, n, impl implem emen enta tati tion on,, express/im express/implied plied or inherent inherent power to enter into the particular prepa preparat ration ion,, manage managemen ment, t, monitor monitoring ing,, settin setting g of polici policies, es, contract (refer to LGC, special laws or charter); (ii) contract is inst install allat ation ion of a syst system em and and admi admini nist stra rati tion on.. It is the the local local entered into by the proper department, board, committee, officer government government units, acting acting through through their respective respective legislative or agent (under LGC, generally such authority is with the Local councils that possess legislative power and police power. In the Chief Executive Executive upon prior authorization authorization by sanggunian sanggunian); ); (iii) case at bar, the Sanggunia Sangguniang ng Panlungsod Panlungsod of Makati Makati City did not contract must comply with certain substantive requirements, eg., pass any ordinance or resolution ordering the opening of Neptune when expenditure of public funds is to be made, there must be Street, hence, its proposed opening by Petitioner is illegal. actual appropriation and certificate of availability of funds; (iv) contrac contractt must must comply comply with with formal formal requir requireme ements nts of written written NOTE: Closure of Roads is not expropriation where the property contracts, eg. Statutes of fraud. owner is entitled to just compensation. Construction of new road was undertaken under the General Welfare Clause (police power), NOTE: A contract entered into without complying with (i) and (iii) that is, for enjoyment of convenience, every individual must be above above is ULTR ULTRA A VIRES, VIRES, ergo, ergo, NULL NULL AND VOID. Such Such contra contract ct prepared to give his share. cannot be ratified or validated. Ratification of defective contracts is possible only when there is non-compliance with (ii) and (iv) Section 22, LGC – Corporate Powers – As a body corporate, has requirements. the following powers; (a) To continuous continuous success succession ion in its corporate corporate name; name; Case: CITY OF QUEZON vs. LEXBER, INC., G.R. 141616, 3/15/01 – (b) To sue sue and and be sued; sued; (c) To have have and and use use a corporate corporate seal; FACTS; Before the effectivity of the LGC in 1991, a tri-partite (d) To acquire acquire and convey convey real or personal personal property property;; agr agreeme eement nt was was sign signed ed by Lexb Lexber er,, Quezo uezon n City City and and the the (e) To enter into contra contracts cts;; such other other powers as are Municipality of Antipolo whereby, with the conformity of Antipolo, granted granted corporation corporation subject to limits provided provided in Quezon City would lease and use the private land owned by LGC and other laws. Lexbe Lexberr as a dumpsi dumpsite te situat situated ed in Antip Antipolo olo in excha exchange nge for exclu exclusiv sive e servic services es and equipm equipment ent for landfi landfill ll to be provid provided ed Corporate Corporate Powers, Powers, defined: defined: Corporation’ Corporation’ss capacity/rig capacity/right ht to do Lexber. From 1991-1992, Quezon City used the site for dumping certain acts or engage in certain activities such as sue/be sued but suddenly suddenly stopped stopped without any explanation explanation.. Lexber Lexber sent a enter enter into into contrac contracts, ts, borrow borrow money and do suc other thing thingss demand demand letter claiming claiming that it was still entitled to compensati compensation on necessary to obtain its purposes. pursuant to the agreement but Mayor Mel Mathay of Quezon City refused citing that the contract was void having been signed by NOTE: Local Chief Executive enters into contracts in behalf of then Mayor Simon without the approval or ratification by City LGU, LGU, requir requires es prior prior author authorizat ization ion by sanggu sanggunia niang ng concer concerned ned Council and that there was no budget appropriation. Collection UNLESS otherwise provided in the LGC. suit was filed by Lexber. RTC ruled in the latter’s favor and which decision was affirmed by the CA. NOTE: Legible copy of contract to be posted in conspicuous place in provi provinc ncial ial capi capitol tol/c /cit ity/ y/mu muni nici cipa palit lity/ y/ba bara rang ngay ay hall hall (for (for RULING: Petition DENIED. In the case at bar, the contract requires Transparency). P94M for a 5-year period. Quezon City invoked PD1445 (Auditing Code of the Philippines) that contracts involving expenditure of NOTE: Full autonomy in exercise of corporate powers (not acting publ public ic fund fundss can can only only be ente enterred into into when when ther there e is an as agen agentt of the the Stat State), e), and limi limite ted d only only by LGC LGC and and othe otherr approp appropriat riation ion thereo thereoff to be certif certified ied by proper proper accoun accountin ting g applicable laws. official/agent that funds have been appropriated for that purpose. Also, Quezon City cited the LGC empowering the sanggunian with RE: RIGHT TO SUE/BE SUED – Case: CITY COUNCIL OF CEBU vs. auth author orit ity y to appr approp opri riat ate e fund fundss for for expe expens nses es of the the city city CUIZON 47 SCRA 325 govern governmen ment. t. PD1445 PD1445 does does not provid provide e that that the absenc absence e of appropriation law ipso facto makes a contract entered into by the FACTS: For lack of prior authority from the Council, the latter filed LGU null and void. Under the LGC (1973), the power of a mayor to with CFI-Cebu, a complaint to nullify the contract between Mayor enter contract is not subject to prior authorization by the council. Cuizon and Tropical Commercial Co., Inc. involving the purchase of road road constr construct uction ion equipm equipment entss for $520,9 $520,912. 12.00 00 cash cash from from Case: MANANTAN vs. MUNICIPLAITY OF LUNA (LA UNION) 82 Phil Tropical. Complaint was dismissed for lack of legal capacity as 844 – Contract Contract of lease granting granting fishing privileges privileges is a valid and trial court reasoned that there is no provision of law authorizing bindin binding g contra contract ct and canno cannott be impair impaired ed by a subseq subsequen uentt city council to sue in behalf of the city and that the authorized resolution setting it aside and granting the privilege to another representative under the LGC is the city mayor for that purpose. (unle (unless ss the subseq subsequen uentt resolu resolution tion is a police police power power measur measure e beca becaus use e the the exer exerci cise se of the the latt latter er prev prevai ails ls over over the the nonnonRULING: RULING: Generally, Generally, suit is commenced by the local executive executive impairment clause. upon upon auth author ority ity of the the sang sanggu guni nian an,, exce except pt wher where e the the city city councilors councilors themselves themselves and as representa representatives tives of/in behalf behalf of the Section 23, LGC – Grants and Donations – sets forth the rules on city, bring the action to prevent unlawful disbursement of city grants and donations to LGUs from local and foreign assistance funds. agencies) which local chief executive may “upon authority of the 12
sanggunian” negotiate and secure in order to “support the basic fails or neglects to perform their duties, the former may take such services or facilities enumerated in Sec. 17. steps/action as prescribed by law to make them perform their duties. Supervision does not mean control. Control includes the - No need of securing clearance/approval for grant/donation from power to alter/modify/set aside acts of a subordinate officer. any department, agency or office of the national government or from any higher LGU. Note: Note: Nation National al agenci agencies/ es/off office icess with with projec projectt implem implement entatio ation n function shall coordinate with each other and with LGU concerned - Proje Projects cts financ financed ed by such such grants grants/as /assis sistan tance ce with with nation national al in the discharge of these functions to ensure participation of LGU security implications shall be approved by the national agency both in the planning and implementation of said national projects. concerned. Failure of such agency to act on request within 30 days from receipt thereof, it is deemed approved. Note: National agencies may be directed by the President, upon LGU’s request, to provide financial, technical or other forms of - Local Chief shall, within 30 days, upon signing of such grant, assistance to LGU without extra cost to LGU. agreement or deed of donation, report the nature, amount, terms of such assistance to both Houses of Congress and the President. Note Note:: Nati Nation onal al agen agenccies ies (in (inclu cluding ding GOCC GOCCs) s) with with fiel field d offices/branches in province/city/municipality to furnish local chief Section 24, LGC – Municipal Liability – Rule: LGU and their officials executive concerned, for his information and guidance, monthly are not exemp empt from lia liabili ility for death or injury to repo report rtss incl includ udin ing g duly duly cert certif ified ied budg budget etary ary alloc allocati ation onss and and persons/damage to property. property. expenditures. Damages – in legal contemplation refers to the sum of money whic which h law law awar awards ds or impo impose sess as pecu pecuni niary ary comp compen ensat sation ion,, reco recomp mpen ense se or satis satisfa fact ctio ion n for for an inju injury ry done done or a wron wrong g sustained as a consequence either of a breach of contractual obligation or a tortuous act. It includes all kinds of damages cont contem empl plat ated ed in the the Civi Civill Code; Code; it is awar awarde ded d to one one as a vindication of the wrongful invasion of his rights.
Case: RODOLFO GANZON vs. CA, G.R. No. 93252, 8/5/1991 FACTS: ACTS: Petition Petitioner, er, Mayor of Iloilo Iloilo City City and a member member of the Sangguni Sangguniang ang Panglun Panglungsod gsod thereof, thereof, respective respectively, ly, were charged charged admini administr strativ atively ely on variou variouss charge charges, s, among among them, them, abuse abuse of authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable violation of the Constitution, and arbitra arbitrary ry detent detention ion.. Hearin Hearing g on the charge chargess ensued ensued and the Respondent DILG, upon finding of probable cause and reasons, issued successive preventive suspension orders against Petitioner Mayor. Before the SC, Petitioners’ primary argument is that the DILG Secretary (as President’s alter ego) is devoid, in any event, of any authority to suspend and remove local officials.
Case: Case: CORREA CORREA vs. CFI of BULACAN BULACAN 92 SCRA SCRA 312 312 – Munic Municipa ipall corporation is responsible only for acts of its officers only when they they have have acted acted by authority authority of law and in confo conformi rmity ty with with requirements. A public officer who commits a tort or wrongful act, done in excess or beyond the scope of his duty, is not protected by his office and is personally liable therefor like any private individual. RULING: RULING: Since Since local local govern governmen ments ts remain remain accoun accountab table le to the national national authority, the latter may, by law, and in the manner set Case” PILAR vs. SANGGUNIANG BAYAN OF DANSOL, PANGASINAN forth therein, impose disciplinary action against local officials. In 128 SCRA 173 – Municipal mayor is personally liable for damages the case at bar, the DILG Secretary, the President’s alter ego, in (moral and exemplary) and attorney’s fees for having vetoed in consonance with the specific provisions of BP337 (the existing bad faith, resolution appropriating funds for salary of the vice- Local Gov’t Code) can suspend Petitioners. mayor. Supervision is not incompatible with disciplinary authority. As this Case: MENDOZA vs DE LEON 33 PHIL 508 – Operation of ferry Cour Courtt held held in Ganz Ganzon on vs. Caya Cayana nan n, 104 104 Phil 484, 84, “in service is a proprietary function. Municipality is negligent and administrative law, supervision means overseeing or the power or therefore therefore liable for having awarded awarded franchise franchise to operate ferry authority of an officer to see that subordinate officers perform service to another notwithstanding previous grant of franchise to their duties. If the latter fail or neglect to fulfill them the former the plaintiff. may take such action or step as prescribed by law to make them perform their duties”. Case Case:: MUNIC MUNICIP IPAL ALITY ITY OF JAAS JAASAN AN,, MISA MISAMI MIS S ORIEN ORIENT TAL vs. vs. GENTALLAN, G.R. 154961, 5/9/2005 – There being no malice or While the respondent Secretary, as President’s alter ego, under bad bad faith faith in the the illeg illegal al dism dismis issa sall and and refu refusa sall to rein reinst state ate the existing Local Gov’t Code, has the power to suspend the respondent Gentallan by her superior officers, the latter cannot petitioner, petitioner, such power cannot cannot be exercise exercised d oppressivel oppressively y. Ten be held held perso persona nally lly liab liable le for for her her back back salar salaries ies.. Muni Munici cipa pall administrative cases have been successively filed against the city govern governmen ment, t, ergo, ergo, should should disbu disburse rse funds funds to answer answer for her mayor. The latter has been made to serve a total of 120 days of claims. suspension for the first two cases and the respondent Secretary has issued another order preventively suspending the former for NOTE: Liability for contracts – Rule: LGU, like ordinary person is anto antoeh ehrr 60 days days,, the the thir third d time time in twen twenty ty mont months hs.. We are are liable on a contract it enters, provided that contract is ultra vires. allowing the mayor to suffer the duration of his third suspension. Otherwi Otherwise, se, become become person personal al liabilit liability y of the officer officer who acted acted Insofar as the remaining charges are concerned, we are urging beyond his power. the DILG, upon finalit finality y of this this decisi decision on to underta undertake ke steps steps to expedite the same, subject to the mayor’s usual remedies of See Articles 2189, 2180 and 34 of the Civil Code on provisions on appeal, judicial or administrative or certiorari, if warranted and liability. meanwhile, meanwhile, we are precluding precluding the Secretary Secretary from meting meting out furthe furtherr suspen suspension sionss based based on those those remain remaining ing compla complaint ints, s, NOTE NOTE:: As to tort tort liab liabili ility ty:: LGU LGU is not not liab liable le if enga engage ged d in notwithstanding findings of prima facie evidence. govern governmen mental tal functi function on but liable liable if engage engaged d in propri proprieta etary ry function. – National agency/GOCC (i n Section 26, LGC planning/im planning/implemen plementation tation)) of a project/pr project/program ogram have DUTY TO INTERGOVERNMENTAL INTERGOVERNMENTAL RELATIONS CONSULT LGU on objectives/goals, impact to the people in terms of envi envirronme onment ntal al/e /eco colo logi gica call bala balanc nce e and and meas measur ures es to – as a body political and corporate (to serve i ts constituents) prevent/minimize adverse effects. NATIONAL NATIONAL GOVERNMENT – LGU RELATIONS:
NOTE: Project/Program intended may cause pollution, climactic change, depletion of non-renewable resources, loss of cropland, Section 25, LGC – National supervision over LGU – despite the rangeland, forest cover or extinction of animal or plant species. unitar unitary y and centra centraliz lized ed Phil. Phil. Govern Governmen mental tal struct structure ure,, 1987 1987 Constitution limits the authority of the President over LGU only to Section 27, LGC – (read alongside Sec. 2 © and Sec. 26) - Prior GENERAL SUPERVISION. consul consultat tation ion with with LGU (plus (plus prior prior approv approval al by sanggu sanggunia nian) n) is indispensable for implementation of program/project. President’s General Supervision – (i ) directs over provinces, highly urbanized NOTE: If project results in eviction, appropriate relocation sites to cities cities and independen independentt component component cities, cities, be provided. (through provinces over) component cities and municipalities; and (through cities and See: REPUBLIC vs. CITY OF DAVAO, G.R. No. 148622, 9/12/2002; municipalities over) barangays; LINA VS. PANO 364 SCRA 76 (ii) to en ensure th that ac acts of LG LGU ar are within the scop scope e of thei theirr pres prescr crib ibed ed powe powers rs and and functions; LGU – PNP RELATIONS: (iii) Article X, Section 16 of 1987 Constitution – President shall exercise general supervision Section 28, LGC – LGU Power of Operational Supervision and over over authon authonmou mouss region regionss to ensure ensure that that Control over PNP – laws are faithfully executed. as as provided under RA 6975 (DILG Act of 1990) amended by RA 8551 (PNP Reorganization Act of 1991). These laws govern the Supervision defined – means overseeing or power/authority of an extent extent of operati operationa onall superv supervisi ision on and contro controll of local local chief chief office to see that subordinate performs their duties. If the latter exec execut utiv ive e over over polic police e forc force, e, fire fire prot protec ecti tion on unit unit and and jail jail 13
management assigned in their respective jurisdiction. NOTE: Governors Governors and mayors, mayors, upon having been elected and qualified as such, are automatically deputized as representatives of NAPOLCOM in their respective jurisdiction and as such, they can inspect police forces and units, conduct audit and exercise such other functions as may be duly authorized. NOTE: Operat NOTE: Operation ional al Contro Controll and Superv Supervisio ision n (OCS), (OCS), define defined d – power to direct, oversee, superintend, the day to day functions of police investigation of crimes and crime prevention activities and traffic control in accordance with rules and regulations issued by the NAPOLCOM NAPOLCOM.. It includ includes es the power to employ employ and deploy deploy police personnel and units.
Sect Sectio ion n 60 – Bure Bureau au of Jail Jail Mana Manage geme ment nt and and Penol enolog ogy y – supervision and control over all city and municipal jails. Provincial jails shall be supervised and controlled by Provincial government within within its jurisd jurisdict iction ion whose whose expens expenses es shall shall be subsid subsidized ized by Nati Nation onal al Gove Govern rnme ment nt for for not not more more than than thre three e years years afte afterr effectivity of RA6975. 3. INTER-LOCAL GOVERNMENT RELATIONS - Secti Section on 29, LGC – Provin Province ce has has SUPERV SUPERVISO ISORY RY POWER POWER – (or
oversight power but does not include any restraining authority over supervised party) of province over components but not over highly highly urbanized urbanized and independen independentt component component cities; cities; Province Province (thr (throu ough gh Gove Govern rnor) or) – shall shall ensu ensure re that that every every comp compon onen entt city/municipality within its territorial jurisdiction acts within scope NOTE: NOT E: OCS for GOVER GOVERNOR NOR:: (a) choose choose the provin provincia ciall police police of its prescribed powers and functions. director from a list of three eligibles recommended by the PNP Director; and (b) as chair of peace and order council, oversee Section 30, LGC – POWER TO REVIEW – Governor has power of implementation of provincial public safety plan. (Sec. 64, RA8551) revi review ew of all all exec execut utive ive orde orders rs prom promul ulga gate ted d by comp compon onen entt cities/mun cities/municipal icipalities ities within his jurisdiction jurisdiction.. Exception: Exception: otherwise otherwise NOTE: OCS for CITY/MUNICIPAL MAYOR: includes – power to: (i) prov provid ided ed unde underr the the Cons Consti titu tuti tion on and and spec specia iall stat statue ues. s. choose chief of police from list of 5 eligibles recommeneded by City City/m /mun unic icip ipal al mayo mayorr shal shalll revi review ew all all exec execut utiv ive e orde orders rs provincial police director, preferably from same province, city or promulgated by the punong barangay within his jurisdiction. municipality, no OIC to be for more than 30 days; local peace and order council through Mayor may recommend recall/reassignment NOTE: It is mandatory upon these named higher local chiefs to of chief of police when in its perception, the latter has been review executive orders of the lower local chiefs. ineffective in combating crime or maintaining peace and order in the LGU, relief relief shall shall be based based on guidel guideline iness establ establish ished ed by NOTE: Review – to ensure that executive orders are within the NAPOLCOM; (ii) recommend to provincial police director, transfer, powers ers grant anted by law and in conformity ity with the reassignme reassignment nt or detail of PNP members outside their respective respective provincial/city/municipal ordinances, as the case may be, that is, city/town residences; (iii) authority to recommend from list of to ensure that such orders do not violate existing law/ordinance. eligibles previously screened by local peace and order council appo appoin intm tmen entt of new new PNP PNP memb member erss to be assig assigne ned d to the the NOTE: Executive order submitted to reviewing authority within 3 respe espect ctiv ive e citi cities es/m /mun unic icip ipal alit itie iess with withou outt whic which h no such such days from issuance; inaction within 30 days from submission, the appoin appointme tments nts shall shall be atteste attested. d. Whene Whenever ver practi practicab cable le and same is deemed consistent with law and therefore valid. consistent with requirements of service, PNP members shall be assigned to the city/municipaliy of their residence; (iv) control Section 31, LGC – MUNICIPAL QUESTIONS – questions affecting and supervision of anti-gambling operation within its jurisdiction. the munic municipa ipality lity are to be submit submitted ted to the munic municipa ipall legal legal officer, if none, to the provincial legal officer, if none, to the NOTE: Exercise operational supervision and control over PNP units provincial prosecutor. prosecutor. in their respective jurisdiction, except, 30-day period immediately preceding and 30 days after any national or local and barangay Sect Sectio ion n 32, 32, LGC LGC – POWE POWER R OF GENE GENERA RAL L SUPE SUPERV RVIS ISIO ION N – elections in which instances, police under authority of COMELEC. City City/M /Mun unic icip ipali ality ty has has powe powerr of gene genera rall supe superv rvis ision ion over over component barangays to ensure said barangays act within the Note: City/Municipal mayors, in coordination with local peace and scope of their prescribed powers and functions. order order counci councill which which he CHAIRS, CHAIRS, shall shall develo develop p an integr integrate ated d area/community public safety plan embrancing a priority of action Section appropriate ordinance, ordinance, may Section 33, LGC – LGUs through appropriate and program thrusts for implementation by local PNP stations. group themselves, consolidate or coordinate their efforts/services and resources for the purpose commonly beneficial to them. For Case: ANDAYA ANDAYA vs. RTC 319 SCRA 696 – PNP RD Andaya submitted such such unde undert rtaki aking ng,, LGUs LGUs,, upon upon appr approv oval al of sang sanggu guni nian ang g a list of 5 eligibles not including the name of P/Chief Insp. Andres conc concer erne ned, d, afte afterr publ public ic heari hearing ng cond conduc ucte ted d ther theref efor, or, shal shalll Sarmiento, to Mayor of Cebu City. Mayor Garcia wants the name contribute contribute funds, real estate, estate, equipment equipment and other property, property, of Sarmiento on the list. Andaya claims Sarmiento not qualified. appo appoin int/ t/as assi sign gn pers person onne nell unde underr term termss agre agreed ed upon upon by SC held that, Mayor has no power to appoint, has only limited participating LGU through a memorandum of agreement. power of selecting, one from among list of eligibles to be named chief of police. Mayor cannot require Regional Director to include LGU – PEOPLES’S AND NON- GOV’TAL GOV’TAL ORGANIZATIONS RELATIONS the name of any officer, no matter how qualified, in the list. – People’s People’s organizations organizations are bonafide bonafide association associationss of citizens with demonstrated capacity to promote public interest and with identifiable leadership, membership and structure (Art. NOTE NOTE:: Unles Unlesss reve revers rsed ed by Pres Presid iden ent, t, depu deputi tizat zatio ion n may may be XIII, Section 15 of 1987 Constitution). withdr withdrawn awn/r /revo evoked ked by Commis Commissio sion n after after consu consulta ltatio tion n with with Provinci Provincial al Governor Governor and congressm congressman an concerned concerned.. Deputization Deputization,, Section 16, Art. XIII of the Constitution – “The right of the people upon good cause shown, may be restored by President directly or and their their organi organizati zations ons to effect effective ive and reason reasonabl able e levels levels of throug through h the Commis Commission sion.. Withdr Withdrawa awal/R l/Revo evocat cation ion may be on social, social, politi political cal and econom economic ic decisi decisionon-mak making ing shall shall not be grounds of frequent unauthorized absence; abuse of authority; abridged. The State, by law, shall facilitate the establishment of providing material support to criminal elements; engaging in acts adequate consultation mechanisms”. inimical inimical to national national security or which negate effectiveness effectiveness of peace and order campaign. NOTE: Sections 34, 35 and 36 of LGC implement Section 16, Art. XIII of the 1987 Constitution. NOTE NOTE:: LGU LGU DISC DISCIP IPLI LINA NAR RY POWE POWERS RS OVER OVER PNP PNP MEMB MEMBER ERS S – City/Municipal mayors, after due notice and summary hearing, Section 34, LGC – LGU to promote establishments and operation shal shalll impo impose se DISC DISCIP IPLI LINA NAR RY PENA PENALLTIES TIES for for mino minorr offe offens nses es of PO and NGO to become active partners in pursuit of local comm commit itted ted by PNP PNP memb membes es assi assign gned ed to their their resp respec ecti tive ve autonomy. jurisdiction as provided in Section 41 of RA6975 (not involving moral turpitude, includes, but not limited to, simple misconduct, Section 35, LGC – LGU may enter joint ventures and such other insu insubo bord rdin inat ation ion,, freq freque uent nt abse absenc nces es,, tard tardin ines ess, s, habit habitua uall cooperative arrangements with PO and NGO to engage in delivery drunkenness, gambling as prohibited by law). of certain basic services, capability and livelihood projects. RELATED ITEMS INVOLVING INVOLVING LGU CONTAINED CONTAINED IN RA 6975 (DILG Act Section 36, LGC – LGU may through local chief executive with the of 1990): concur concurren rence ce of sangg sangguni unian, an, provi provide de assist assistanc ance, e, financ financial ial or otherwise to such PO and NGO is for economic, socially-oriented, Section 55 – Bureau of Fire Protection – tasked with prevention environmental or cultural projects to be implemented within its and suppression of destructive fires, investigate all causes of fire, territorial jurisdiction. file complaint with fiscal; composed of provincial/district offices and city/municipal stations; LGU at city and municipal levels shall be responsible for fire protection and various emergency services such as rescue and evaluation of injured people at fire-related incide incidents nts and in general general,, all fire fire preve preventi ntion on and suppr suppressi ession on measures to secure the safety of life and property of citize nry. nry. Section 56 – At least 1 fire station with adequate firefighting faci facili liti ties es and and equi equipm pmen entt for for prov provin inci cial al capi capito tol, l, city city and and munici municipal pality ity;; LGU to provi provide de the necessary necessary site for the fire station. 14
