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G.R. No.

L-28089

October 25, 1967

BARA LIDASAN, petitioner, vs. COMMISSION ON ELECTIONS, respondent. Suntay for petitioner. Barrios and Fule for respondent. SANCHEZ, J.: The question initially presented to the Commission on Elections,1 is this: Is Republic Act 4790, which is entitled "An Act Creating the Municipality of Dianaton in the Province of Lanao del Sur", but which includes barrios located in another province Cotabato to be spared from attack planted upon the constitutional mandate that "No bill which may be enacted into law shall embrace more than one subject which shall be expressed in the title of the bill"? Comelec's answer is in the affirmative. Offshoot is the present original petition for certiorari and prohibition. On June 18, 1966, the Chief Executive signed into law House Bill 1247, known as Republic Act 4790, now in dispute. The body of the statute, reproduced in haec verba, reads: Sec. 1. Barrios Togaig, Madalum, Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan, Kabamakawan, Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung, Losain, Matimos and Magolatung, in the Municipalities of Butig and Balabagan, Province of Lanao del Sur, are separated from said municipalities and constituted into a distinct and independent municipality of the same province to be known as the Municipality of Dianaton, Province of Lanao del Sur. The seat of government of the municipality shall be in Togaig. Sec. 2. The first mayor, vice-mayor and councilors of the new municipality shall be elected in the nineteen hundred sixty-seven general elections for local officials. Sec. 3. This Act shall take effect upon its approval. It came to light later that barrios Togaig and Madalum just mentioned are within the municipality of Buldon,Province of Cotabato, and that Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan and Kabamakawan are parts and parcel of another municipality, the municipality of Parang, also in theProvince of Cotabato and not of Lanao del Sur. Prompted by the coming elections, Comelec adopted its resolution of August 15, 1967, the pertinent portions of which are:

For purposes of establishment of precincts, registration of voters and for other election purposes, the Commission RESOLVED that pursuant to RA 4790, the new municipality of Dianaton, Lanao del Sur shall comprise the barrios of Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung, Losain, Matimos, and Magolatung situated in the municipality of Balabagan, Lanao del Sur, the barrios of Togaig and Madalum situated in the municipality of Buldon, Cotabato, the barrios of Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan and Kabamakawan situated in the municipality of Parang, also of Cotabato. Doubtless, as the statute stands, twelve barrios in two municipalities in the province of Cotabato are transferred to the province of Lanao del Sur. This brought about a change in the boundaries of the two provinces. Apprised of this development, on September 7, 1967, the Office of the President, through the Assistant Executive Secretary, recommended to Comelec that the operation of the statute be suspended until "clarified by correcting legislation." Comelec, by resolution of September 20, 1967, stood by its own interpretation, declared that the statute "should be implemented unless declared unconstitutional by the Supreme Court." This triggered the present original action for certiorari and prohibition by Bara Lidasan, a resident and taxpayer of the detached portion of Parang, Cotabato, and a qualified voter for the 1967 elections. He prays that Republic Act 4790 be declared unconstitutional; and that Comelec's resolutions of August 15, 1967 and September 20, 1967 implementing the same for electoral purposes, be nullified. 1. Petitioner relies upon the constitutional requirement aforestated, that "[n]o bill which may be enacted into law shall embrace more than one subject which shall be expressed in the title of the bill."2 It may be well to state, right at the outset, that the constitutional provision contains dual limitations upon legislative power. First. Congress is to refrain from conglomeration, under one statute, of heterogeneous subjects. Second. The title of the bill is to be couched in a language sufficient to notify the legislators and the public and those concerned of the import of the single subject thereof. Of relevance here is the second directive. The subject of the statute must be "expressed in the title" of the bill. This constitutional requirement "breathes the spirit of command."3 Compliance is imperative, given the fact that the Constitution does not exact of Congress the obligation to read during its deliberations the entire text of the bill. In fact, in the case of House Bill 1247, which became Republic Act 4790, only its title was read from its introduction to its final approval in the House of Representatives4 where the bill, being of local application, originated.5

Of course, the Constitution does not require Congress to employ in the title of an enactment, language of such precision as to mirror, fully index or catalogue all the contents and the minute details therein. It suffices if the title should serve the purpose of the constitutional demand that it inform the legislators, the persons interested in the subject of the bill, and the public, of the nature, scope and consequences of the proposed law and its operation. And this, to lead them to inquire into the body of the bill, study and discuss the same, take appropriate action thereon, and, thus, prevent surprise or fraud upon the legislators.6 In our task of ascertaining whether or not the title of a statute conforms with the constitutional requirement, the following, we believe, may be taken as guidelines: The test of the sufficiency of a title is whether or not it is misleading; and, which technical accuracy is not essential, and the subject need not be stated in express terms where it is clearly inferable from the details set forth, a title which is so uncertain that the average person reading it would not be informed of the purpose of the enactment or put on inquiry as to its contents, or which is misleading, either in referring to or indicating one subject where another or different one is really embraced in the act, or in omitting any expression or indication of the real subject or scope of the act, is bad. xxx xxx xxx

In determining sufficiency of particular title its substance rather than its form should be considered, and the purpose of the constitutional requirement, of giving notice to all persons interested, should be kept in mind by the court.7 With the foregoing principles at hand, we take a hard look at the disputed statute. The title "An Act Creating the Municipality of Dianaton, in the Province of Lanao del Sur"8 projects the impression that solely the province of Lanao del Sur is affected by the creation of Dianaton. Not the slightest intimation is there that communities in the adjacent province of Cotabato are incorporated in this new Lanao del Sur town. The phrase "in the Province of Lanao del Sur," read without subtlety or contortion, makes the title misleading, deceptive. For, the known fact is that the legislation has a twopronged purpose combined in one statute: (1) it creates the municipality of Dianaton purportedly from twenty-one barrios in the towns of Butig and Balabagan, both in the province of Lanao del Sur; and (2) it also dismembers two municipalities in Cotabato, a province different from Lanao del Sur. The baneful effect of the defective title here presented is not so difficult to perceive. Such title did not inform the members of Congress as to the full impact of the law; it did not apprise the people in the towns of Buldon and Parang in Cotabato and in the province of Cotabato itself that part of their territory is being taken away from their towns and province and added to the adjacent Province of Lanao del Sur; it kept the public in the dark as to what towns and provinces were actually affected by the bill.

These are the pressures which heavily weigh against the constitutionality of Republic Act 4790. Respondent's stance is that the change in boundaries of the two provinces resulting in "the substantial diminution of territorial limits" of Cotabato province is "merely the incidental legal results of the definition of the boundary" of the municipality of Dianaton and that, therefore, reference to the fact that portions in Cotabato are taken away "need not be expressed in the title of the law." This posture we must say but emphasizes the error of constitutional dimensions in writing down the title of the bill. Transfer of a sizeable portion of territory from one province to another of necessity involves reduction of area, population and income of the first and the corresponding increase of those of the other. This is as important as the creation of a municipality. And yet, the title did not reflect this fact. Respondent asks us to read Felwa vs. Salas, L-16511, October 29, 1966, as controlling here. The Felwa case is not in focus. For there, the title of the Act (Republic Act 4695) reads: "An Act Creating the Provinces of Benguet, Mountain Province, Ifugao, and Kalinga-Apayao." That title was assailed as unconstitutional upon the averment that the provisions of the law (Section, 8 thereof) in reference to the elective officials of the provinces thus created, were not set forth in the title of the bill. We there ruled that this pretense is devoid of merit "for, surely, an Act creating said provinces must be expected to provide for the officers who shall run the affairs thereof" which is "manifestly germane to the subject" of the legislation, as set forth in its title. The statute now before us stands altogether on a different footing. The lumping together of barrios in adjacent but separate provinces under one statute is neither a natural nor logical consequence of the creation of the new municipality of Dianaton. A change of boundaries of the two provinces may be made without necessarily creating a new municipality and vice versa. As we canvass the authorities on this point, our attention is drawn to Hume vs. Village of Fruitport, 219 NW 648, 649. There, the statute in controversy bears the title "An Act to Incorporate the Village of Fruitport, in the County of Muskegon." The statute, however, in its section 1 reads: "The people of the state of Michigan enact, that the following described territory in the counties of Muskegon and Ottawa Michigan, to wit: . . . be, and the same is hereby constituted a village corporate, by the name of the Village of Fruitport." This statute was challenged as void by plaintiff, a resident of Ottawa county, in an action to restraint the Village from exercising jurisdiction and control, including taxing his lands. Plaintiff based his claim on Section 20, Article IV of the Michigan State Constitution, which reads: "No law shall embrace more than one object, which shall be expressed in its title." The Circuit Court decree voided the statute and defendant appealed. The Supreme Court of Michigan voted to uphold the decree of nullity. The following, said in Hume, may well apply to this case: It may be that words, "An act to incorporate the village of Fruitport," would have been a sufficient title, and that the words, "in the county of Muskegon" were

unnecessary; but we do not agree with appellant that the words last quoted may, for that reason, be disregarded as surplusage. . . . Under the guise of discarding surplusage, a court cannot reject a part of the title of an act for the purpose of saving the act. Schmalz vs. Woody, 56 N.J. Eq. 649, 39 A. 539. A purpose of the provision of the Constitution is to "challenge the attention of those affected by the act to its provisions." Savings Bank vs. State of Michigan, 228 Mich. 316, 200 NW 262. The title here is restrictive. It restricts the operation of the act of Muskegon county. The act goes beyond the restriction. As was said in Schmalz vs. Wooly, supra: "The title is erroneous in the worst degree, for it is misleading."9 Similar statutes aimed at changing boundaries of political subdivisions, which legislative purpose is not expressed in the title, were likewise declared unconstitutional."10 We rule that Republic Act 4790 is null and void. 2. Suggestion was made that Republic Act 4790 may still be salvaged with reference to the nine barrios in the municipalities of Butig and Balabagan in Lanao del Sur, with the mere nullification of the portion thereof which took away the twelve barrios in the municipalities of Buldon and Parang in the other province of Cotabato. The reasoning advocated is that the limited title of the Act still covers those barrios actually in the province of Lanao del Sur. We are not unmindful of the rule, buttressed on reason and of long standing, that where a portion of a statute is rendered unconstitutional and the remainder valid, the parts will be separated, and the constitutional portion upheld. Black, however, gives the exception to this rule, thus: . . . But when the parts of the statute are so mutually dependent and connected, as conditions, considerations, inducements, or compensations for each other, as to warrant a belief that the legislature intended them as a whole, and that if all could not be carried into effect, the legislature would not pass the residue independently, then, if some parts are unconstitutional, all the provisions which are thus dependent, conditional, or connected, must fall with them,11 In substantially similar language, the same exception is recognized in the jurisprudence of this Court, thus: The general rule is that where part of a statute is void, as repugnant to the Organic Law, while another part is valid, the valid portion if separable from the invalid, may stand and be enforced. But in order to do this, the valid portion must

be so far independent of the invalid portion that it is fair to presume that the Legislature would have enacted it by itself if they had supposed that they could not constitutionally enact the other. . . Enough must remain to make a complete, intelligible, and valid statute, which carries out the legislative intent. . . . The language used in the invalid part of the statute can have no legal force or efficacy for any purpose whatever, and what remains must express the legislative will independently of the void part, since the court has no power to legislate, . . . .12 Could we indulge in the assumption that Congress still intended, by the Act, to create the restricted area of nine barrios in the towns of Butig and Balabagan in Lanao del Sur into the town of Dianaton, if the twelve barrios in the towns of Buldon and Parang, Cotabato were to be excluded therefrom? The answer must be in the negative. Municipal corporations perform twin functions. Firstly. They serve as an instrumentality of the State in carrying out the functions of government. Secondly. They act as an agency of the community in the administration of local affairs. It is in the latter character that they are a separate entity acting for their own purposes and not a subdivision of the State.13 Consequently, several factors come to the fore in the consideration of whether a group of barrios is capable of maintaining itself as an independent municipality. Amongst these are population, territory, and income. It was apparently these same factors which induced the writing out of House Bill 1247 creating the town of Dianaton. Speaking of the original twenty-one barrios which comprise the new municipality, the explanatory note to House Bill 1247, now Republic Act 4790, reads: The territory is now a progressive community; the aggregate population is large; and the collective income is sufficient to maintain an independent municipality. This bill, if enacted into law, will enable the inhabitants concerned to govern themselves and enjoy the blessings of municipal autonomy. When the foregoing bill was presented in Congress, unquestionably, the totality of the twenty-one barrios not nine barrios was in the mind of the proponent thereof. That this is so, is plainly evident by the fact that the bill itself, thereafter enacted into law, states that the seat of the government is in Togaig, which is a barrio in the municipality of Buldon in Cotabato. And then the reduced area poses a number of questions, thus: Could the observations as to progressive community, large aggregate population, collective income sufficient to maintain an independent municipality, still apply to a motley group of only nine barrios out of the twenty-one? Is it fair to assume that the inhabitants of the said remaining barrios would have agreed that they be formed into a municipality, what with the consequent duties and liabilities of an independent municipal corporation? Could they stand on their own feet with the income to be derived in their community? How about the peace and order, sanitation, and other corporate obligations? This Court may not supply the answer to any of these

disturbing questions. And yet, to remain deaf to these problems, or to answer them in the negative and still cling to the rule on separability, we are afraid, is to impute to Congress an undeclared will. With the known premise that Dianaton was created upon the basic considerations of progressive community, large aggregate population and sufficient income, we may not now say that Congress intended to create Dianaton with only nine of the original twenty-one barrios, with a seat of government still left to be conjectured. For, this unduly stretches judicial interpretation of congressional intent beyond credibility point. To do so, indeed, is to pass the line which circumscribes the judiciary and tread on legislative premises. Paying due respect to the traditional separation of powers, we may not now melt and recast Republic Act 4790 to read a Dianaton town of nine instead of the originally intended twenty-one barrios. Really, if these nine barrios are to constitute a town at all, it is the function of Congress, not of this Court, to spell out that congressional will. Republic Act 4790 is thus indivisible, and it is accordingly null and void in its totality. 14 3. There remains for consideration the issue raised by respondent, namely, that petitioner has no substantial legal interest adversely affected by the implementation of Republic Act 4790. Stated differently, respondent's pose is that petitioner is not the real party in interest. Here the validity of a statute is challenged on the ground that it violates the constitutional requirement that the subject of the bill be expressed in its title. Capacity to sue, therefore, hinges on whether petitioner's substantial rights or interests are impaired by lack of notification in the title that the barrio in Parang, Cotabato, where he is residing has been transferred to a different provincial hegemony. The right of every citizen, taxpayer and voter of a community affected by legislation creating a town to ascertain that the law so created is not dismembering his place of residence "in accordance with the Constitution" is recognized in this jurisdiction. 15 Petitioner is a qualified voter. He expects to vote in the 1967 elections. His right to vote in his own barrio before it was annexed to a new town is affected. He may not want, as is the case here, to vote in a town different from his actual residence. He may not desire to be considered a part of hitherto different communities which are fanned into the new town; he may prefer to remain in the place where he is and as it was constituted, and continue to enjoy the rights and benefits he acquired therein. He may not even know the candidates of the new town; he may express a lack of desire to vote for anyone of them; he may feel that his vote should be cast for the officials in the town before dismemberment. Since by constitutional direction the purpose of a bill must be shown in its title for the benefit, amongst others, of the community affected thereby,16 it stands to reason to say that when the constitutional right to vote on the part of any citizen of that community is affected, he may become a suitor to challenge the constitutionality of the Act as passed by Congress.

For the reasons given, we vote to declare Republic Act 4790 null and void, and to prohibit respondent Commission from implementing the same for electoral purposes. No costs allowed. So ordered. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Castro and Angeles, JJ., concur.

Separate Opinions FERNANDO, J., dissenting: With regret and with due recognition of the merit of the opinion of the Court, I find myself unable to give my assent. Hence these few words to express my stand. Republic Act No. 4790 deals with one subject matter, the creation of the municipality of Dianaton in the province of Lanao del Sur. The title makes evident what is the subject matter of such an enactment. The mere fact that in the body of such statute barrios found in two other municipalities of another province were included does not of itself suffice for a finding of nullity by virtue of the constitutional provision invoked. At the most, the statute to be free from the insubstantial doubts about its validity must be construed as not including the barrios, located not in the municipalities of Butig and Balabagan, Lanao del Sur, but in Parang and Baldon, Cotabato. The constitutional requirement is that no bill which may be enacted into law shall embrace more than one subject which shall be expressed in the title of the bill.1 This provision is similar to those found in the Constitution of many American States. It is aimed against the evils, of the so-called omnibus bills, and log-rolling legislation, and against surreptitious or unconsidered enactments.2 Where the subject of a bill is limited to a particular matter, the members of the legislature as well as the people should be informed of the subject of proposed legislative measures. This constitutional provision thus precludes the insertion of riders in legislation, a rider being a provision not germane to the subject matter of the bill. It is not to be narrowly construed though as to cripple or impede proper legislation. The construction must be reasonable and not technical. It is sufficient if the title be comprehensive enough reasonably to include the general object which the statute seeks to effect without expressing each and every end and means necessary for the accomplishment of that object. Mere details need not be set forth. The legislature is not required to make the title of the act a complete index of its contents. The constitutional provision is satisfied if all parts of an act which relates to its subject find expression in its title.3

The first decision of this Court, after the establishment of the Commonwealth of the Philippines, in 1938, construing a provision of this nature, Government v. Hongkong & Shanghai Bank,4 held that the inclusion of Section 11 of Act No. 4007, the Reorganization Law, providing for the mode in which the total annual expenses of the Bureau of Banking may be reimbursed through assessment levied upon all banking institutions subject to inspection by the Bank Commissioner was not violative of such a requirement in the Jones Law, the previous organic act. Justice Laurel, however, vigorously dissented, his view being that while the main subject of the act was reorganization, the provision assailed did not deal with reorganization but with taxation. While the case ofGovernment vs. Hongkong & Shanghai Bank was decided by a bare majority of four justices against three, the present trend seems to be that the constitutional requirement is to be given the liberal test as indicated in the majority opinion penned by Justice Abad Santos, and not the strict test as desired by the majority headed by Justice Laurel. Such a trend has been reflected in subsequent decisions beginning with Sumulong v. Commission on Elections,5up to and including Felwa vs. Salas, a 1966 decision,6 the opinion coming from Justice Concepcion. It is true of course that in Philconsa v. Gimenez,7 one of the grounds on which the invalidity of Republic Act No. 3836 was predicated was the violation of the above constitutional provision. This Retirement Act for senators and representatives was entitled "AN ACT AMENDING SUB-SECTION (c), SECTION TWELVE OF COMMONWEALTH ACT NUMBERED ONE HUNDRED EIGHTY-SIX, AS AMENDED BY REPUBLIC ACT NUMBERED THIRTY HUNDRED NINETY-SIX." As we noted, the paragraph in Republic Act No. 3836 deemed objectionable "refers to members of Congress and to elective officers thereof who are not members of the Government Service Insurance System. To provide retirement benefits, therefore, for these officials, would relate to a subject matter which is not germane to Commonwealth Act No. 186. In other words, this portion of the amendment ( re retirement benefits for Members of Congress and appointive officers, such as the Secretary and Sergeants-at-arms for each house) is not related in any manner to the subject of Commonwealth Act No. 186 establishing the Government Service Insurance System and which provides for both retirement and insurance benefits to its members." Nonetheless our opinion was careful to note that there was no abandonment of the principle of liberality. Thus: "we are not unmindful of the fact that there has been a general disposition in all courts to construe the constitutional provision with reference to the subject and title of the Act, liberally." It would follow therefore that the challenged legislation Republic Act No. 4790 is not susceptible to the indictment that the constitutional requirement as to legislation having only one subject which should be expressed in his title was not met. The subject was the creation of the municipality of Dianaton. That was embodied in the title.

It is in the light of the aforementioned judicial decisions of this Court, some of the opinions coming from jurists illustrious for their mastery of constitutional law and their acknowledged erudition, that, with all due respect, I find the citation from Corpus Juris Secundum, unnecessary and far from persuasive. The State decisions cited, I do not deem controlling, as the freedom of this Court to accept or reject doctrines therein announced cannot be doubted. Wherein does the weakness of the statute lie then? To repeat, several barrios of two municipalities outside Lanao del Sur were included in the municipality of Dianaton of that province. That itself would not have given rise to a constitutional question considering the broad, well-high plenary powers possessed by Congress to alter provincial and municipal boundaries. What justified resort to this Court was the congressional failure to make explicit that such barrios in two municipalities located in Cotabato would thereafter form part of the newly created municipality of Dianaton, Lanao del Sur. To avoid any doubt as to the validity of such statute, it must be construed as to exclude from Dianaton all of such barrios mentioned in Republic Act No. 4790 found in municipalities outside Lanao del Sur. As thus interpreted, the statute can meet the test of the most rigid scrutiny. Nor is this to do violence to the legislative intent. What was created was a new municipality from barrios named as found in Lanao del Sur. This construction assures precisely that. This mode of interpreting Republic Act No. 4790 finds support in basic principles underlying precedents, which if not precisely controlling, have a persuasive ring. In Radiowealth v. Agregado,8 certain provisions of the Administrative Code were interpreted and given a "construction which would be more in harmony with the tenets of the fundamental law." In Sanchez v. Lyon Construction,9 this Court had a similar ruling: "Article 302 of the Code of Commerce must be applied in consonance with [the relevant] provisions of our Constitution." The above principle gained acceptance at a much earlier period in our constitutional history. Thus in a 1913 decision, In re Guaria:10"In construing a statute enacted by the Philippine Commission we deem it our duty not to give it a construction which would be repugnant to an Act of Congress, if the language of the statute is fairly susceptible of another construction not in conflict with the higher law. In doing so, we think we should not hesitate to disregard contentions touching the apparent intention of the legislator which would lead to the conclusion that the Commission intended to enact a law in violation of the Act of Congress. However specious the argument may be in favor of one of two possible constructions, it must be disregarded if on examination it is found to rest on the contention that the legislator designed an attempt to transcend the rightful limits of his authority, and that his apparent intention was to enact an invalid law." American Supreme Court decisions are equally explicit. The then Justice, later Chief Justice, Stone, construed statutes "with an eye to possible constitutional limitations so as to avoid doubts as to [their] validity."11 From the pen of the articulate jurist,

Frankfurter:12 "Accordingly, the phrase "lobbying activities" in the resolution must be given the meaning that may fairly be attributed to it, having special regard for the principle of constitutional adjudication which makes it decisive in the choice of fair alternatives that one construction may raise serious constitutional questions avoided by another." His opinion in the Rumely case continues with the above pronouncement of Stone and two other former Chief Justices: "In the words of Mr. Chief Justice Taft, '(i)t is our duty in the interpretation of federal statutes to reach conclusion which will avoid serious doubt of their constitutionality', Richmond Screw Anchor Co. v. United States, 275 US 331, 346, 48 S. Ct. 194, 198, 72 L. ed. 303. . . . As phrased by Mr. Chief Justice Hughes, "if a serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided.' Crowell v. Benson, 285, 296, 76 L. ed. 598, and cases cited." The prevailing doctrine then as set forth by Justice Clark in a 1963 decision,13 is that courts "have consistently sought an interpretation which supports the constitutionality of legislation." Phrased differently by Justice Douglas, the judiciary favors "that interpretation of legislation which gives it the greater change of surviving the test of constitutionality."14 It would follow then that both Philippine and American decisions unite in the view that a legislative measure, in the language of Van Devanter "should not be given a construction which will imperil its validity where it is reasonably open to construction free from such peril."15 Republic Act No. 4790 as above construed incurs no such risk and is free from the peril of nullity. So I would view the matter, with all due acknowledgment of the practical considerations clearly brought to light in the opinion of the Court.

G.R. No. L-22766

August 30, 1968

SURIGAO ELECTRIC, CO., INC. and ARTURO LUMANLAN, SR., petitioners, vs. MUNICIPALITY OF SURIGAO and HON. PUBLIC SERVICE COMMISSION, respondents. David G. Nitafan for petitioners. Provincial Fiscal Bernardo Ll. Salas for respondent Municipality of Surigao. Office of the Solicitor General for respondent Public Service Commission. FERNANDO, J.: On June 18, 1960, Congress further amended the Public Service Act, one of the changes introduced doing away with the requirement of a certificate of public convenience and necessity from the Public Service Commission for "public services

owned or operated by government entities or government-owned or controlled corporations," but at the same time affirming its power of regulation, 1 more specifically as set forth in the next section of the law, which while exempting public services owned or operated by any instrumentality of the government or any government-owned or controlled corporations from its supervision, jurisdiction and control stops short of including "the fixing of rates."2 In this petition for review, a case of first impression, petitioner Surigao Electric Co., Inc., a legislative franchise holder, and petitioner Arturo Lumanlan to whom, on February 16, 1962, the rights and privileges of the former as well as its plant and facilities were transferred, challenge the validity of the order of respondent Public Service Commission, dated July 11, 1963, wherein it held that it had "no other alternative but to approve as [it did approve] the tentative schedule of rates submitted by the applicant," the other respondent herein, the Municipality of Surigao.3 In the above order, the issue, according to respondent Commission, "boils down to whether or not a municipal government can directly maintain and operate an electric plant without obtaining a specific franchise for the purpose and without a certificate of public convenience and necessity duly issued by the Public Service Commission."4 Citing the above amendments introduced by Republic Act No. 2677, respondent Commission answered the question thus: "A municipal government or a municipal corporation such as the Municipality of Surigao is a government entity recognized, supported and utilized by the National Government as a part of its government machinery and functions; a municipal government actually functions as an extension of the national government and, therefore, it is an instrumentality of the latter; and by express provisions of Section 14(e) of Act 2677, an instrumentality of the national government is exempted from the jurisdiction of the PSC except with respect to the fixing of rates. This exemption is even clearer in Section 13(a)." 5 The above formulation of respondent Commission could be worded differently. There is need for greater precision as well as further elaboration. Its conclusion, however, can stand the test of scrutiny. We sustain the Public Service Commission. The question involved is one of statutory interpretation. We have to ascertain the intent of Congress in introducing the above amendments, more specifically, in eliminating the requirement of the certificate of public convenience and necessity being obtained by government entities, or by government-owned or controlled corporations operating public services. Here, the Municipality of Surigao is not a government-owned or controlled corporation. It cannot be said, however, that it is not a government entity. As early as 1916, in Mendoza v. de Leon,6 there has been a recognition by this Court of the dual character of a municipal corporation, one as governmental, being a branch of the general administration of the state, and the other as quasi-private and corporate. A well-known authority, Dillon, was referred to by us to stress the undeniable fact that "legislative and governmental powers" are "conferred upon a municipality, the better to

enable it to aid a state in properly governing that portion of its people residing within its municipality, such powers [being] in their nature public, ..."7 As was emphasized by us in the Mendoza decision: "Governmental affairs do not lose their governmental character by being delegated to the municipal governments. Nor does the fact that such duties are performed by officers of the municipality which, for convenience, the state allows the municipality to select, change their character. To preserve the peace, protect the morals and health of the community and so on is to administer government, whether it be done by the central government itself or is shifted to a local organization."8 It would, therefore, be to erode the term "government entities" of its meaning if we are to reverse the Public Service Commission and to hold that a municipality is to be considered outside its scope. It may be admitted that there would be no ambiguity at all had the term "municipal corporations" been employed. Our function, however, is to put meaning to legislative words, not to denude them of their contents. They may be at times, as Cohen pointed out, frail vessels in which to embark legislative hopes, but we do not, just because of that, allow them to disappear perpetually from sight to find eternal slumber in the deep. It would be far from manifesting fidelity to the judicial task of construing statutes if we were to consider the order under review as a failure to abide by what the law commands. The above construction gives significance to every word of the statute. It makes the entire scheme harmonious. Moreover, the conclusion to which we are thus led is reinforced by a manifestation of public policy as expressed in a legislative act of wellnigh contemporaneous vintage. We refer to the Local Autonomy Act,9 approved a year earlier. It would be to impute to Congress a desire not to extend further but to cut short what the year before it considered a laudatory scheme to enlarge the scope of municipal power, if the amendatory act now under scrutiny were to be so restrictively construed. Municipal corporations should not be excluded from the operation thereof. There would be no warrant for such a view. Logic and common sense would be affronted by such a conclusion, let alone the sense of esteem which under the theory of separation of powers is owed a coordinate branch. Again, this is one instance where assuming the ambiguity of the words employed in a statute, its overriding principle, to paraphrase Holmes, fixes the reach of statutory language. With the view we thus take of the amendatory statute, the errors assigned by petitioner, which would seek to fasten, mistakenly to our mind, an unwarranted restriction to the amendatory language of Republic Act No. 2677, need not be passed upon. An alleged error imputed to respondent Commission, however, needs further discussion. Petitioners seek refuge in the legislative franchise granted them. 10 Whatever privilege may be claimed by petitioners cannot override the specific constitutional restriction that no franchise or right shall be granted to any individual or

corporation except under a condition that it shall be subject to amendment, alteration or repeal by Congress. 11 Such amendment or alteration need not be express; it may be implied from a latter act of general applicability, such as the one now under consideration. Moreover, under a well-settled principle of American origin, one which upon the establishment of the Philippine Government under American tutelage was adopted here and continued under our Constitution, no such franchise or right can be availed of to defeat the proper exercise of the police power. An early expression of this view is found in the leading American case of Charles River Bridge v. Warren Bridge, 12 an 1837 decision, the opinion being penned by Chief Justice Taney: "The continued existence of a government would be of no great value, if by implications and presumptions it was disarmed of the powers necessary to accomplish the ends of its creation; and the functions it was designed to perform, transferred to the hands of privileged Corporations. .. While the rights of private property are sacredly guarded, we must not forget that the community also have rights, and that the happiness and wellbeing of every citizen depend on their faithful preservation." 13 Reference by petitioners to the statute providing the procedure for the taking over and operation by the government of public utilities, 14 in their view "to further strengthen [their] contention", as to the commission of this alleged error is unavailing, even if such statute were applicable, which it is not. In the language of their own brief: "This Act provides for the procedure to be followed whenever the Government or any political subdivision thereof decides to acquire and operate a public utility owned and operated by any individual or private corporation." 15What is to be regulated, therefore, by this enactment is the exercise of eminent domain, which is a taking of private property for public use upon the payment of just compensation. There is here no taking. There is here no appropriation. What was owned before by petitioners continue to remain theirs. There is to be no transfer of ownership. Rather, a municipal corporation, by virtue of Commonwealth Act No. 2677, may further promote community welfare by itself engaging in supplying public services, without the need of a certificate of public convenience. If at all then, the exercise of this governmental prerogative comes within the broad, well-nigh, undefined scope of the police power. It is not here, of course, the ordinary case of restraint on property or liberty, by the imposition of a regulation. What the amendatory act in effect accomplishes is to lend encouragement and support for the municipal corporation itself undertaking an activity as a result of which, profits of a competing private firm would be adversely affected. Clearly, then, the relevancy of the statute providing for the taking or operation of the government of public utilities, appears, to put it at its mildest, far from clear. Petitioners' contention as to this alleged error being committed, therefore, far from being strengthened by such a reference, suffers from a fate less auspicious.

No other alleged error committed need be considered. WHEREFORE, the order of respondent Public Service Commission of July 11, 1963, as well as the order of February 7, 1964, denying the motion for reconsideration, are affirmed. Costs against petitioners. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ., concur.

G.R. No. 105746 December 2, 1996 MUNICIPALITY OF JIMENEZ, through its MAYOR ELEUTERIO A. QUIMBO, VICEMAYOR ROBINSON B. LOMO, COUNCILORS TEOFILO GALORIO, CASIANO ADORABLE, MARIO APAO, ANTONIO BIENES, VEDE SULLANO, MARIETO TAN, SR., HERMINIO SERINO, BENJAMIN DANO, and CRISPULO MUNAR, and ELEUTERIO A. QUIMBO, ROBINSON B. LOMO, TEOFILO GALORIO, CASIANO ADORABLE, MARIO APAO, ANTONIO BIENES, VEDE SULLANO, MARIETO TAN, SR., HERMINIO SERINO, BENJAMIN DANO, and CRISPULO MUNAR, in their private capacities as taxpayer in the Province of Misamis Occidental and in the Municipality of Jimenez, Misamis Occidental, and BENJAMIN C. GALINDO and BENHUR B. BAUTISTA, in their private capacities as taxpayers in the Province of Misamis Occidental and the Municipality of Jimenez, Misamis Occidental, petitioners, vs. HON. VICENTE T. BAZ, JR., Presiding Judge, REGIONAL TRIAL COURT, BRANCH 14, 10th JUDICIAL REGION, OROQUIETA CITY, and MUNICIPALITY OF SINACABAN through its MAYOR EUFRACIO D. LOOD, VICE-MAYOR BASILIO M. BANAAG, COUNCILORS CONCEPCION E. LAGA-AC, MIGUEL F. ABCEDE, JUANITO B. TIU, CLAUDIO T. REGIL, ANICETO S. MEJAREZ NAZIANCINO PAYE, JOSE P. BANQUE, NUMERIANO B. MARIQUIT, and FEDERICO QUINIMON, and THE PROVINCE OF MISAMIS OCCIDENTAL through the PROVINCIAL BOARD OF MISAMIS OCCIDENTAL and its members, VICE-GOVERNOR FLORENCIO L. GARCIA, BOARD MEMBERS MARIVIC S. CHIONG, PACITA M. YAP, ALEGRIA V. CARINO, JULIO L. TIU, LEONARDO R. REGALADO II, CONSTANCIO C. BALAIS, and ERNESTO P. IRA, and THE COMMISSION ON AUDIT, through its Chairman, HON. EUFEMIO DOMINGO, and THE DEPARTMENT OF LOCAL GOVERNMENT through its Secretary, HON. LUIS SANTOS (now HON. CESAR SARINO), and THE DEPARTMENT OF BUDGET AND MANAGEMENT, through its Secretary, HON. GUILLERMO CARAGUE (now HON. SALVADOR ENRIQUEZ), and The Hon. CATALINO MACARAIG (now HON. FRANKLIN DRILON), EXECUTIVE SECRETARY OFFICE OF THE PRESIDENT, respondents.

MENDOZA, J.:p This is a petition for review of the decision dated March 4, 1992 of the Regional Trial Court, Branch 14 of Oroquieta City, 1 affirming the legal existence of the Municipality of Sinacaban in Misamis Occidental and ordering the relocation of its boundary for the purpose of determining whether certain areas claimed by it belong to it. The antecedent facts are as follows: The Municipality of Sinacaban was created by Executive Order No. 258 of then President Elpidio Quirino, pursuant to 68 of the Revised Administrative Code of 1917. The full text of the Order reads: EXECUTIVE ORDER NO. 258 CREATING THE MUNICIPALITY IN THE PROVINCE OF MISAMIS OCCIDENTAL OF SINACABAN,

Upon the recommendation of the Secretary of the Interior, and pursuant to the provisions of Section 68 of the Revised Administrative Code, there is hereby created, in the Province of Misamis Occidental, a municipality to be known as the municipality of Sinacaban, which shall consist of the southern portion of the municipality of Jimenez, Misamis Occidental, more particularly described and bounded as follows: On the north by a line starting from point 1, the center of the lighthouse on the Tabo-o point S. 84 30'W., 7,250 meters to point 2 which is on the bank of Palilan River branch; thence following Palilan River branch 2,400 meters southwesterly to point 3, thence a straight line S 87 00' W, 22,550 meters to point 4, where this intersects the Misamis Occidental-Zamboanga boundary; on the west, by the present Misamis Occidental-Zamboanga boundary; and on the south by the present Jimenez-Tudela boundary; and on the east, by the limits of the municipal waters which the municipality of Sinacaban shall have pursuant to section 2321 of the Revised Administrative Code, (Description based on data shown in Enlarged Map of Poblacion of Jimenez, Scale 1:8:000). The municipality of Sinacaban contains the barrios of Sinacaban, which shall be the seat of the municipal government, Sinonoc, Libertad, the southern portion of the barrio of Macabayao, and the sitios of Tipan, Katipunan, Estrella, Flores, Senior, Adorable, San Isidro, Cagayanon, Kamanse, Kulupan and Libertad Alto. The municipality of Jimenez shall have its present territory, minus the portion thereof included in the municipality of Sinacaban.

The municipality of Sinacaban shall begin to exist upon the appointment and qualification of the mayor, vice-mayor, and a majority of the councilors thereof. The new municipality shall, however, assume payment of a proportionate share of the loan of the municipality of Jimenez with the Rehabilitation Finance Corporation as may be outstanding on the date of its organization, the proportion of such payment to be determined by the Department of Finance. Done in the City of Manila, this 30th day of August, in the year of Our Lord, nineteen hundred and forty-nine, and of the Independence of the Philippines, the fourth. (SGD.) ELPIDIO QUIRINO President of the Philippines By the President: (SGD.) TEODORO EVANGELISTA Executive Secretary By virtue of Municipal Council Resolution No 171, 2 dated November 22, 1988, Sinacaban laid claim to a portion of Barrio Tabo-o and to Barrios Macabayao, Adorable, Sinara Baja, and Sinara Alto, 3 based on the technical description in E.O. No. 258. The claim was filed with the Provincial Board of Misamis Occidental against the Municipality of Jimenez. In its answer, the Municipality of Jimenez, while conceding that under E.O. No. 258 the disputed area is part of Sinacaban, nonetheless asserted jurisdiction on the basis of an agreement it had with the Municipality of Sinacaban. This agreement was approved by the Provincial Board of Misamis Occidental, in its Resolution No. 77, dated February 18, 1950, which fixed the common boundary of Sinacaban and Jimenez as follows: 4 From a point at Cagayanon Beach follow Macabayao Road until it intersects Tabangag Creek at the back of the Macabayao Elementary School. Follow the Tabangag Creek until it intersect the Macabayao River at upper Adorable. Follow the Macabayao River such that the barrio of Macabayao, Sitio Adorable and site will be a part of Jimenez down and the sitios of San Vicente, Donan, Estrella, Mapula will be a part of Sinacaban. (Emphasis added) In its decision dated October 11, 1989, 5 the Provincial Board declared the disputed area to be part of Sinacaban. It held that the previous resolution approving the agreement between the municipalities was void because the Board had no power to

alter the boundaries of Sinacaban as fixed in E.O. No. 258, that power being vested in Congress pursuant to the Constitution and the Local Government Code of 1983 (B.P. Blg. 337), 134. 6 The Provincial Board denied in its Resolution No. 13-90 dated January 30, 1990 the motion of Jimenez seeking reconsideration. 7 On March 20, 1990, Jimenez filed a petition for certiorari, prohibition, and mandamus in the Regional Trial Court of Oroquieta City, Branch 14. The suit was filed against Sinacaban, the Province of Misamis Occidental and its Provincial Board, the Commission on Audit, the Departments of Local Government, Budget and Management, and the Executive Secretary. Jimenez alleged that, in accordance with the decision in Pelaez v. Auditor General, 8 the power to create municipalities is essentially legislative and consequently Sinacaban, which was created by an executive order, had no legal personality and no right to assert a territorial claim vis-avis Jimenez, of which it remains part. Jimenez prayed that Sinacaban be enjoined from assuming control and supervision over the disputed barrios; that the Provincial Board be enjoined from assuming jurisdiction over the claim of Sinacaban; that E.O. No. 258 be declared null and void; that the decision dated October 11, 1989 and Resolution No. 13-90 of the Provincial Board be set aside for having been rendered without jurisdiction; that the Commission on Audit be enjoined from passing in audit any expenditure of public funds by Sinacaban; that the Department of Budget and Management be enjoined from allotting public funds to Sinacaban; and that the Executive Secretary be enjoined from exercising control and supervision over said municipality. During pre-trial, the parties agreed to limit the issues to the following: A. Whether the Municipality of Sinacaban is a legal juridical entity, duly created in accordance with law; B. If not, whether it is a de facto juridical entity; C. Whether the validity of the existence of the Municipality can be properly questioned in this action on certiorari; D. Whether the Municipality of Jimenez which had recognized the existence of the municipality for more than 40 years is estopped to question its existence; E. Whether the existence of the municipality has been recognized by the laws of the land; and F. Whether the decision of the Provincial Board had acquired finality. On February 10, 1992, the RTC rendered its decision, the dispositive portion of which reads:

WHEREFORE, premises considered, it is the finding of this Court that the petition must be denied and judgment is hereby rendered declaring a STATUS QUO, that is, the municipality of Sinacaban shall continue to exist and operate as a regular municipality; declaring the decision dated October 11, 1989 rendered by the Sangguniang Panlalawigan fixing the boundaries between Sinacaban and Jimenez, Misamis Occi. as null and void, the same not being in accordance with the boundaries provided for in Executive Order No. 258 creating the municipality of Sinacaban; dismissing the petition for lack of merit, without pronouncement as to costs and damages. With respect to the counterclaim, the same is hereby ordered dismissed. The Commissioners are hereby ordered to conduct the relocation survey of the boundary of Sinacaban within 60 days from the time the decision shall have become final and executory and another 60 days within which to submit their report from the completion of the said relocation survey. SO ORDERED. The RTC, inter alia, held that Sinacaban is a de facto corporation since it had completely organized itself even prior to the Pelaez case and exercised corporate powers for forty years before its existence was questioned; that Jimenez did not have the legal standing to question the existence of Sinacaban, the same being reserved to the State as represented by the Office of the Solicitor General in a quo warrantoproceeding; that Jimenez was estopped from questioning the legal existence of Sinacaban by entering into an agreement with it concerning their common boundary; and that any question as to the legal existence of Sinacaban had been rendered moot by 442(d) of the Local Government Code of 1991 (R.A. No. 7160), which provides: Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective set of elective municipal officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities. On March 17, 1990, petitioner moved for a reconsideration of the decision but its motion was denied by the RTC. Hence this petition raising the following issues: (1) whether Sinacaban has legal personality to file a claim, and (2) if it has, whether it is the boundary provided for in E.O. No. 258 or in Resolution No. 77 of the Provincial Board of Misamis Occidental which should be used as the basis for adjudicating Sinacaban's territorial claim.

First. The preliminary issue concerns the legal existence of Sinacaban. If Sinacaban legally exists, then it has standing to bring a claim in the Provincial Board. Otherwise, it cannot. The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the ruling inPelaez v. Auditor General that the creation of municipal corporations is essentially a legislative matter and therefore the President was without power to create by executive order the Municipality of Sinacaban. The ruling in this case has been reiterated in a number of cases 9 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. In Municipality of San Narciso, Quezon v. Mendez, Sr., 10 this Court considered the following factors as having validated the creation of a municipal corporation, which, like the Municipality of Sinacaban, was created by executive order of the President before the ruling in Pelaez v. Auditor General: (1) the fact that for nearly 30 years the validity of the creation of the municipality had never been challenged; (2) the fact that following the ruling in Pelaez no quo warranto suit was filed to question the validity of the executive order creating such municipality; and (3) the fact that the municipality was later classified as a fifth class municipality, organized as part of a municipal circuit court and considered part of a legislative district in the Constitution apportioning the seats in the House of Representatives. Above all, it was held that whatever doubt there might be as to the de jure character of the municipality must be deemed to have been put to rest by the Local Government Code of 1991 (R.A. No. 7160), 442(d) of which provides that "municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets of elective officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities." Here, the same factors are present so as to confer on Sinacaban the status of at least a de facto municipal corporation in the sense that its legal existence has been recognized and acquiesced publicly and officially. Sinacaban had been in existence for sixteen years when Pelaez v. Auditor General was decided on December 24, 1965. Yet the validity of E.O. No. 258 creating it had never been questioned. Created in 1949, it was only 40 years later that its existence was questioned and only because it had laid claim to an area that apparently is desired for its revenue. This fact must be underscored because under Rule 66, 16 of the Rules of Court, a quo warranto suit against a corporation for forfeiture of its charter must be commenced within five (5) years from the time the act complained of was done or committed. On the contrary, the State and even the Municipality of Jimenez itself have recognized Sinacaban's corporate existence. Under Administrative Order No. 33 dated June 13, 1978 of this Court, as reiterated by 31 of the Judiciary Reorganization Act of 1980 (B. P. Blg. 129), Sinacaban is constituted part of a municipal circuit for purposes of the establishment of Municipal Circuit Trial Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in 1950 by entering into an agreement with it regarding their

common boundary. The agreement was embodied in Resolution No. 77 of the Provincial Board of Misamis Occidental. Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987 Constitution, apportioning legislative districts throughout the country, which considered Sinacaban part of the Second District of Misamis Occidental. Moreover, following the ruling in Municipality of San Narciso, Quezon v. Mendez, Sr., 442(d) of the Local Government Code of 1991 must be deemed to have cured any defect in the creation of Sinacaban. This provision states: Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective set of elective municipal officials holding office at the time of the effectivity of the Code shall henceforth be considered as regular municipalities. Second. Jimenez claims, however, that R.A. No. 7160, 442(d) is invalid, since it does not conform to the constitutional and statutory requirements for the holding of plebiscites in the creation of new 11 municipalities. This contention will not bear analysis. Since, as previously explained, Sinacaban had attained de facto status at the time the 1987 Constitution took effect on February 2, 1987, it is not subject to the plebiscite requirement. This requirement applies only to new municipalities created for the first time under the Constitution. Actually, the requirement of plebiscite was originally contained in Art. XI, 3 of the previous Constitution which took effect on January 17, 1973. It cannot, therefore, be applied to municipal corporations created before, such as the Municipality of Sinacaban in the case at bar. Third. Finally, Jimenez argues that the RTC erred in ordering a relocation survey of the boundary of Sinacaban because the barangays which Sinacaban are claiming are not enumerated in E.O. No. 258 and that in any event in 1950 the parties entered into an agreement whereby the barangays in question were considered part of the territory of Jimenez. E.O. No. 258 does not say that Sinacaban comprises only the barrios (now called barangays) therein mentioned. What it says is that "Sinacaban contains" those barrios, without saying they are the only ones comprising it. The reason for this is that the technical description, containing the metes and bounds of its territory, is controlling. The trial court correctly ordered a relocation survey as the only means of determining the boundaries of the municipality and consequently the question to which the municipality the barangays in question belong.

Now, as already stated, in 1950 the two municipalities agreed that certain barrios belonged to Jimenez, while certain other ones belonged to Sinacaban. This agreement was subsequently approved by the Provincial Board of Misamis Occidental. Whether this agreement conforms to E.O. No. 258 will be determined by the result of the survey. Jimenez contends, however, that regardless of its conformity to E.O. No. 258, the agreement as embodied in Resolution No. 77 of the Provincial Board, is binding on Sinacaban. This raises the question whether the Provincial Board had authority to approve the agreement or, to put it in another way, whether it had the power to declare certain barrios part of one or the other municipality. We hold it did not if the effect would be to amend the area as described in E.O. No. 258 creating the Municipality of Sinacaban. At the time the Provincial Board passed Resolution No. 77 on February 18, 1950, the applicable law was 2167 of the Revised Administrative Code of 1917 which provided: Sec. 2167. Municipal boundary disputes. How settled. Disputes as to jurisdiction of municipal governments over places or barrios shall be decided by the provincial boards of the provinces in which such municipalities are situated, after an investigation at which the municipalities concerned shall be duly heard. From the decision of the provincial board appeal may be taken by the municipality aggrieved to the Secretary of the Interior [now the Office of the Executive Secretary], whose decision shall be final. Where the places or barrios in dispute are claimed by municipalities situated in different provinces, the provincial boards of the provinces concerned shall come to an agreement if possible, but, in the event of their failing to agree, an appeal shall be had to the Secretary of Interior [Executive Secretary], whose decision shall be final. As held in Pelaez v. Auditor General, 12 the power of provincial boards to settle boundary disputes is "of an administrative nature involving, as it does, the adoption of means and ways to carry into effect the law creating said municipalities." It is a power "to fix common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities." It is thus limited to implementing the law creating a municipality. It is obvious that any alteration of boundaries that is not in accordance with the law creating a municipality is not the carrying into effect of that law but its amendment. 13 If, therefore, Resolution No. 77 of the Provincial Board of Misamis Occidental is contrary to the technical description of the territory of Sinacaban, it cannot be used by Jimenez as basis for opposing the claim of Sinacaban. Jimenez properly brought to the RTC for review the decision of October 11, 1989 and Resolution No. 13-90 of the Provincial Board. Its action is in accordance with the Local Government Code of 1983, 79 of which provides that in case no settlement of boundary disputes is made the dispute should be elevated to the RTC of the province. In 1989, when the action was brought by Jimenez, this Code was the governing law.

The governing law is now the Local Government Code of 1991 (R.A. No. 7160), 118-119. Jimenez's contention that the RTC failed to decide the case "within one year from the start of proceedings" as required by 79 of the Local Government Code of 1983 and the 90-day period provided for in Article VIII, 15 of the Constitution does not affect the validity of the decision rendered. For even granting that the court failed to decide within the period prescribed by law, its failure did not divest it of its jurisdiction to decide the case but only makes the judge thereof liable for possible administrative sanction. WHEREFORE, the petition is DENIED and the decisionof the Regional Trial Court of Oroquieta City, Branch 14 is AFFIRMED. SO ORDERED. Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Francisco, Hermosisima, Jr., Panganiban and Torres, Jr., JJ., concur.

G.R. No. 103702 December 6, 1994 MUNICIPALITY OF SAN NARCISO, QUEZON; MAYOR JUAN K. UY; COUNCILORS: DEOGRACIAS R. ARGOSINO III, BENITO T. CAPIO, EMMANUEL R. CORTEZ, NORMANDO MONTILLA, LEONARDO C. UY, FIDEL C. AURELLANA, PEDRO C. CARABIT, LEONARDO D. AURELLANA, FABIAN M. MEDENILLA, TRINIDAD F. CORTEZ, SALVADOR M. MEDENILLA, CERELITO B. AUREADA and FRANCISCA A. BAMBA, petitioners, vs. HON. ANTONIO V. MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th Judicial Region, Gumaca, Quezon; MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR FRANCISCO DE LEON; COUNCILORS: FE LUPINAC, TOMAS AVERIA, MANUEL O. OSAS, WILFREDO O. FONTANIL, ENRICO U. NADRES, RODELITO LUZOIR, LENAC, JOSE L. CARABOT, DOMING AUSA, VIDAL BANQUELES and CORAZON M. MAXIMO, respondents. Manuel Laserna, Jr. for petitioners. Florante Pamfilo for private respondents.

VITUG, J.: On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630 of the Revised Administrative Code, as amended, Executive Order No.

353 creating the municipal district of San Andres, Quezon, by segregating from the municipality of San Narciso of the same province, the barrios of San Andres, Mangero, Alibijaban, Pansoy, Camflora and Tala along with their respective sitios. Executive Order No. 353 was issued upon the request, addressed to the President and coursed through the Provincial Board of Quezon, of the municipal council of San Narciso, Quezon, in its Resolution No. 8 of 24 May 1959. 1 By virtue of Executive Order No. 174, dated 05 October 1965, issued by President Diosdado Macapagal, the municipal district of San Andres was later officially recognized to have gained the status of a fifth class municipality beginning 01 July 1963 by operation of Section 2 of Republic Act No. 1515. 2 The executive order added that "(t)he conversion of this municipal district into (a) municipality as proposed in House Bill No. 4864 was approved by the House of Representatives." On 05 June 1989, the Municipality of San Narciso filed a petition for quo warranto with the Regional Trial Court, Branch 62, in Gumaca, Quezon, against the officials of the Municipality of San Andres. Docketed Special Civil Action No. 2014-G, the petition sought the declaration of nullity of Executive Order No. 353 and prayed that the respondent local officials of the Municipality of San Andres be permanently ordered to refrain from performing the duties and functions of their respective offices. 3 Invoking the ruling of this Court in Pelaez v. Auditor General, 4the petitioning municipality contended that Executive Order No. 353, a presidential act, was a clear usurpation of the inherent powers of the legislature and in violation of the constitutional principle of separation of powers. Hence, petitioner municipality argued, the officials of the Municipality or Municipal District of San Andres had no right to exercise the duties and functions of their respective offices that righfully belonged to the corresponding officials of the Municipality of San Narciso. In their answer, respondents asked for the dismissal of the petition, averring, by way of affirmative and special defenses, that since it was at the instance of petitioner municipality that the Municipality of San Andres was given life with the issuance of Executive Order No. 353, it (petitioner municipality) should be deemed estopped from questioning the creation of the new municipality; 5 that because the Municipality of San Andred had been in existence since 1959, its corporate personality could no longer be assailed; and that, considering the petition to be one for quo warranto, petitioner municipality was not the proper party to bring the action, that prerogative being reserved to the State acting through the Solicitor General. 6 On 18 July 1991, after the parties had submitted their respective pre-trial briefs, the trial court resolved to defer action on the motion to dismiss and to deny a judgment on the pleadings. On 27 November 1991, the Municipality of San Andres filed anew a motion to dismiss alleging that the case had become moot and academic with the enactment of Republic

Act No. 7160, otherwise known as the Local Government Code of 1991, which took effect on 01 January 1991. The movant municipality cited Section 442(d) of the law, reading thusly: Sec. 442. Requisites for Creation. . . . (d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective set of elective municipal officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities. The motion was opposed by petitioner municipality, contending that the above provision of law was inapplicable to the Municipality of San Andres since the enactment referred to legally existing municipalities and not to those whose mode of creation had been void ab initio. 7 In its Order of 02 December 1991, the lower court 8 finally dismissed the petition 9 for lack of cause of action on what it felt was a matter that belonged to the State, adding that "whatever defects (were) present in the creation of municipal districts by the President pursuant to presidential issuances and executive orders, (were) cured by the enactment of R.A. 7160, otherwise known as Local Government Code of 1991." In an order, dated 17 January 1992, the same court denied petitioner municipality's motion for reconsideration. Hence, this petition "for review on certiorari." Petitioners 10 argue that in issuing the orders of 02 December 1991 and 17 January 1992, the lower court has "acted with grave abuse of discretion amounting to lack of or in excess of jurisdiction." Petitioners assert that the existence of a municipality created by a null and void presidential order may be attacked either directly or even collaterally by anyone whose interests or rights are affected, and that an unconstitutional act is not a law, creates no office and is inoperative such as though its has never been passed. 11 Petitioners consider the instant petition to be one for "review on certiorari" under Rules 42 and 45 of the Rules of Court; at the same time, however, they question the orders of the lower court for having been issued with "grave abuse of discretion amounting to lack of or in excess of jurisdiction, and that there is no other plain, speedy and adequate remedy in the ordinary course of law available to petitioners to correct said Orders, to protect their rights and to secure a final and definitive interpretation of the legal issues involved." 12 Evidently, then, the petitioners intend to submit their case in this instance under Rule 65. We shall disregard the procedural incongruence. The special civil action of quo warranto is a "prerogative writ by which the Government can call upon any person to show by what warrant he holds a public office or exercises

a public franchise." 13 When the inquiry is focused on the legal existence of a body politic, the action is reserved to the State in a proceeding for quo warranto or any other credit proceeding. 14 It must be brought "in the name of the Republic of the Philippines" 15 and commenced by the Solicitor General or the fiscal "when directed by the President of the Philippines . . . ." 16 Such officers may, under certain circumstances, bring such an action "at the request and upon the relation of another person" with the permission of the court. 17 The Rules of Court also allows an individual to commence an action for quo warranto in his own name but this initiative can be done when he claims to be "entitled to a public office or position usurped or unlawfully held or exercised by another." 18 While the quo warranto proceedings filed below by petitioner municipality has so named only the officials of the Municipality of San Andres as respondents, it is virtually, however, a denunciation of the authority of the Municipality or Municipal District of San Andres to exist and to act in that capacity. At any rate, in the interest of resolving any further doubt on the legal status of the Municipality of San Andres, the Court shall delve into the merits of the petition. While petitioners would grant that the enactment of Republic Act No. 7160 may have converted the Municipality of San Andres into a de facto municipality, they, however, contend that since the petition for quo warranto had been filed prior to the passage of said law, petitioner municipality had acquired a vested right to seek the nullification of Executive Order No. 353, and any attempt to apply Section 442 of Republic Act 7160 to the petition would perforce be violative of due process and the equal protection clause of the Constitution. Petitioners' theory might perhaps be a point to consider had the case been seasonably brought. Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally decided to challenge the legality of the executive order. In the meantime, the Municipal District, and later the Municipality, of San Andres, began and continued to exercise the powers and authority of a duly created local government unit. In the same manner that the failure of a public officer to question his ouster or the right of another to hold a position within a one-year period can abrogate an action belatedly filed, 19 so also, if not indeed with greatest imperativeness, must a quo warranto proceeding assailing the lawful authority of a political subdivision be timely raised. 20 Public interest demands it. Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutional delegation of legislative power, the peculiar circumstances obtaining in this case hardly could offer a choice other than to consider the Municipality of San Andres to have at least attained a status uniquely of its own closely approximating, if not in fact attaining, that of a de facto municipal corporation. Conventional wisdom cannot allow it to be otherwise. Created in 1959 by virtue of Executive Order No. 353, the Municipality of San Andres had been in existence for more than six years when, on

24 December 1965, Pelaez v. Auditor General was promulgated. The ruling could have sounded the call for a similar declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case. On the contrary, certain governmental acts all pointed to the State's recognition of the continued existence of the Municipality of San Andres. Thus, after more than five years as a municipal district, Executive Order No. 174 classified the Municipality of San Andres as a fifth class municipality after having surpassed the income requirement laid out in Republic Act No. 1515. Section 31 of Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980, constituted as municipal circuits, in the establishment of Municipal Circuit Trial Courts in the country, certain municipalities that comprised the municipal circuits organized under Administrative Order No. 33, dated 13 June 1978, issued by this Court pursuant to Presidential Decree No. 537. Under this administrative order, the Municipality of San Andres had been covered by the 10th Municipal Circuit Court of San Francisco-San Andres for the province of Quezon. At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the Ordinance (adopted on 15 October 1986) apportioning the seats of the House of Representatives, appended to the 1987 Constitution, the Municipality of San Andres has been considered to be one of the twelve (12) municipalities composing the Third District of the province of Quezon. Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities." No pretension of unconstitutionality per seof Section 442(d) of the Local Government Code is proferred. It is doubtful whether such a pretext, even if made, would succeed. The power to create political subdivisions is a function of the legislature. Congress did just that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence are retrospective, 21 and aimed at giving "validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualification against impairment of vested rights. 22 All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now be conceded. WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Costs against petitioners. SO ORDERED. Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno, Kapunan and Mendoza, JJ. concur. Feliciano, J., is on leave.

G.R. No. 116702 December 28, 1995 THE MUNICIPALITY OF CANDIJAY, BOHOL, acting through its Sanguniang Bayan and Mayor, petitioner, vs. COURT OF APPEALS and THE MUNICIPALITY OF ALICIA, BOHOL, respondents. RESOLUTION

PANGANIBAN, J.: This is a petition for review on certiorari of the Decision of the Court of Appeals 1 promulgated on June 28, 1994,reversing the judgment 2 of the Regional Trial Court (Branch I) of the City of Tagbilaran, Bohol. The lower court's decision, among other things, declared "barrio/barangay Pagahat as within the territorial jurisdiction of the plaintiff municipality of Candijay, Bohol, therefore, said barrio forms part and parcel of its territory, therefore, belonging to said plaintiff municipality", and further permanently enjoined defendant municipality of Alicia "to respect plaintiff's control, possession and political supervision of barangay Pagahat and never to molest, disturb, harass its possession and ownership over the same barrio" (RTC decision, p. 4; Rollo, p. 86). On appeal, the respondent Court stated that "(S)crutiny of the conflicting claims and the respective evidence of the parties lead to the conclusion that the trial court committed an error in declaring that Barrio Pagahat is within the territorial jurisdiction of plaintiff-appellee (municipality of Candijay)." Said Court rejected the boundary line being claimed by petitioner based on certain exhibits, since it would in effect place "practically all of Barrio Pagahat . . . , part of Barrio Cagongcagong and portions of Barrio Putlongcam and La Hacienda and all of Barrio Mahayag and Barrio del Monte within the territorial jurisdiction of plaintiff-appellee Candijay." Added the respondent Court, "As aptly pointed out by defendant-appellant in its appeal brief, 'the plaintiff municipality will not only engulf the entire barrio of Pagahat, but also of the barrios of Putlongcam, Mahayag, Del Monte, Cagongcagong, and a part of the Municipality of Mabini. Candijay will eat up a big chunk of territories far exceeding her territorial jurisdiction under the law creating her. Her claim opens the floodgate of controversies over boundaries, including with Mabini.'" (Decision p. 4; rollo, p. 35.) The respondent Court concluded that "the trial court erred in relying on Exh. X-Commissioner [exhibit for petitioner], because, in effect, it included portions of Barrios Putlongcam and La Hacienda within the jurisdiction of appellee Candijay when said barrios are

undisputedly part of appellant's (Alicia) territory under Executive Order No. 265 creating the latter" (Decision, p. 6, rollo, p. 37). The respondent Court also found, after an examination of the respective survey plans of petitioner and respondent submitted as exhibits, that "both plans are inadequate insofar as identifying the monuments of the boundary line between [petitioner] and the Municipality of Mabini (which is not a party to this case) as declared by the Provincial Board of Bohol. Neither plan shows where Looc-Tabasan, Lomislis Island, Tagtang Canlirong, mentioned in the aforequoted boundary line declared by the Provincial Board of Bohol, are actually located." (Decision, p. 4; rollo, p. 35.) The respondent Court, after weighing and considering the import of certain official acts, including Executive Order No. 265 dated September 16, 1949 (which created the municipality of Alicia from out of certain barrios of the municipality of Mabini), and Act No. 968 of the Philippine Commission dated October 31, 1903 (which set forth the respective component territories of the municipalities of Mabini and Candijay), concluded that "Barrio Bulawan from where barrio Pagahat originated is not mentioned as one of the barrios constituted as part of defendant-appellant Municipality of Alicia. Neither do they show that Barrio Pagahat forms part of plaintiff-appellant Municipality of Candijay." On that basis, the respondent Court held that: Clearly, from the foregoing, there is equiponderance of evidence. The Supreme Court has ruled: Equiponderance of evidence rule states: When the scale shall stand upon an equipoise and there is nothing in the evidence which shall incline it to one side or the other, the court will find for the defendant. Under said principle, the plaintiff must rely on the strength of his evidence and not on the weakness of defendant's claim. Even if the evidence of the plaintiff may be stronger than that of the defendant, there is no preponderance of evidence on his side if such evidence is insufficient in itself to establish his cause of action. (Sapu-an, et al. v. Court of Appeals, Oct. 19, 1992, 214 SCRA 701, 705-706.) WHEREFORE, the appealed judgment is reversed and set aside. Another judgment is hereby entered dismissing the complaint in Civil Case No. 2402. No costs. (Decision, p. 6, rollo, p. 37.)

Petitioner's motion for reconsideration having been rejected by the respondent Court, petitioner came to this Court, alleging (i) improper application by the respondent Court of Appeals of the so-called principle of "equiponderance of evidence", for having based its ruling against petitioner on documentary evidence which, petitioner claims, are void, (ii) the respondent municipality's purported lack of juridical personality, as a result of having been created under a void executive order, and (iii) that the challenged Decision "does not solve the problem of both towns but throws them back again to their controversy." (Petition, p. 6, rollo, p. 21.) After deliberating on the petition, comment and reply, this Court is not persuaded to grant due course to the petition. With respect to the first and third grounds, we find that the issues of fact in this case had been adequately passed upon by respondent Court in its Decision, which is wellsupported by the evidence on record. The determination of equiponderance of evidence by the respondent Court involves the appreciation of evidence by the latter tribunal, which will not be reviewed by this Court unless shown to be whimsical or capricious; here, there has been no such showing. In connection with the foregoing, that the assailed Decision, in dismissing the complaint in Civil Case No. 2402, may leave the parties where they are or may not resolve their problem one way or the other, is of no moment. The fact remains that, as correctly evaluated by the respondent Court, neither party was able to make out a case; neither side could establish its cause of action and prevail with the evidence it had. They are thus no better off than before they proceeded to litigate, and, as a consequence thereof, the courts can only leave them as they are. In such cases, courts have no choice but to dismiss the complaints/petitions. On the second issue, we noted that petitioner commenced its collateral attack on the juridical personality of respondent municipality on 19 January 1984 (or some thirty five years after respondent municipality first came into existence in 1949) during the proceedings in the court a quo. It appears that, after presentation of its evidence, herein petitioner asked the trial court to bar respondent municipality from presenting its evidence on the ground that it had no juridical personality. Petitioner contended that Exec. Order No. 265 issued by President Quirino on September 16, 1949 creating respondent municipality is null and void ab initio, inasmuch as Section 68 of the Revised Administrative Code, on which said Executive Order was based, constituted an undue delegation of legislative powers to the President of the Philippines, and was therefore declared unconstitutional, per this Court's ruling in Pelaez vs. Auditor General. 3 In this regard, we call to mind the ruling of this Court in Municipality of San Narciso, Quezon vs. Mendez, Sr. 4 , which will be found very instructive in the case at bench. Therein we stated:

While petitioners would grant that the enactment of Republic Act No. 7160 [Local Government Code of 1991] may have converted the Municipality of San Andres into a de facto municipality, they, however, contend that since the petition for quo warranto had been filed prior to the passage of said law, petitioner municipality had acquired a vested right to seek the nullification of Executive Order No. 353, and any attempt to apply Section 442 of Republic Act 7160 to the petition would perforce be violative of due process and the equal protection clause of the Constitution. Petitioner's theory might perhaps be a point to consider had the case been seasonably brought. Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally decided to challenge the legality of the executive order. In the meantime, the Municipal district, and later the Municipality of San Andres, began and continued to exercise the powers and authority of a duly created local government unit. In the same manner that the failure of a public officer to question his ouster or the right of another to hold a position within a oneyear period can abrogate an action belatedly file, so also, if not indeed with greatest imperativeness, must a quo warrantoproceeding assailing the lawful authority of a political subdivision be timely raised. Public interest demands it. Granting that Executive Order No. 353 was a complete nullity for being the result of an unconstitutional delegation of legislative power, the peculiar circumstances obtaining in this case hardly could offer a choice other than to consider the Municipality of San Andres to have at least attained a status uniquely of its own closely approximating, if not in fact attaining, that of a de factomunicipal corporation. Conventional wisdom cannot allow it to be otherwise. Created in 1959 by virtue of Executive Order No. 353, the Municipality of San Andres had been in existence for more than six years when, on 24 December 1965, Pelaez vs. Auditor General was promulgated. The ruling could have sounded the call for a similar declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case. On the contrary, certain governmental acts all pointed to the State's recognition of the continued existence of the Municipality of San Andres. Thus, after more than five years as a municipal district, Executive Order No. 174 classified the Municipality of San Andres as a fifth class municipality after having surpassed the income requirement laid out in Republic Act No. 1515. Section 31 of Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980, constituted as municipal circuits, in the establishment of Municipal Circuit Trial Courts in the country, certain municipalities that comprised the municipal circuits organized under Administrative Order No. 33, dated 13 June 1978, issued

by this court pursuant to Presidential Decree No. 537. Under this administrative order, the Municipality of San Andres had been covered by the 10th Municipal Circuit Court of San Francisco-San Andres for the province of Quezon. At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the Ordinance (adopted on 15 October 1986) apportioning the seats of the House of Representatives, appended to the 1987 Constitution, the Municipality of San Andres has been considered to be one of the twelve (12) municipalities composing the Third District of the province of Quezon. Equally significant is Section 442 (d) of the Local Government Code to the effect that municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities." No pretension of unconstitutionality per se of Section 442 (d) of the Local Government Code is proffered. It is doubtful whether such a pretext, even if made, would succeed. The power to create political subdivisions is a function of the legislature. Congress did just that when it has incorporated Section 442 (d) in the Code. Curativelaws, which in essence are retrospective, and aimed at giving "validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualification against impairment of vested rights. All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now be conceded. Respondent municipality's situation in the instant case is strikingly similar to that of the municipality of San Andres. Respondent municipality of Alicia was created by virtue of Executive Order No. 265 in 1949, or ten years ahead of the municipality of San Andres, and therefore had been in existence for all of sixteen years when Pelaez vs.Auditor General was promulgated. And various governmental acts throughout the years all indicate the State's recognition and acknowledgment of the existence thereof. For instance, under Administrative Order No. 33 above-mentioned, the Municipality of Alicia was covered by the 7th Municipal Circuit Court of Alicia-Mabini for the province of Bohol. Likewise, under the Ordinance appended to the 1987 Constitution, the Municipality of Alicia is one of twenty municipalities comprising the Third District of Bohol. Inasmuch as respondent municipality of Alicia is similarly situated as the municipality of San Andres, it should likewise benefit from the effects of Section 442 (d) of the Local Government Code, and should henceforth be considered as a regular, de jure municipality.

WHEREFORE, the instant petition for review on certiorari is hereby DENIED, with costs against petitioner. SO ORDERED. Romero, Melo and Vitug, JJ., concur.

G.R. No. 161414

January 17, 2005

SULTAN OSOP B. CAMID, petitioner, vs. THE OFFICE OF THE PRESIDENT, DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AUTONOMOUS REGION IN MUSLIM MINDANAO, DEPARTMENT of FINANCE, DEPARTMENT of BUDGET AND MANAGEMENT, COMMISSION ON AUDIT, and the CONGRESS OF THE PHILIPPINES (HOUSE of REPRESENTATIVES AND SENATE), respondents. DECISION TINGA, J.: This Petition for Certiorari presents this Court with the prospect of our own Brigadoon1 the municipality of Andong, Lanao del Surwhich like its counterpart in filmdom, is a town that is not supposed to exist yet is anyway insisted by some as actually alive and thriving. Yet unlike in the movies, there is nothing mystical, ghostly or anything even remotely charming about the purported existence of Andong. The creation of the putative municipality was declared void ab initio by this Court four decades ago, but the present petition insists that in spite of this insurmountable obstacle Andong thrives on, and hence, its legal personality should be given judicial affirmation. We disagree. The factual antecedents derive from the promulgation of our ruling in Pelaez v. Auditor General2 in 1965. As discussed therein, then President Diosdado Macapagal issued several Executive Orders3 creating thirty-three (33) municipalities in Mindanao. Among them was Andong in Lanao del Sur which was created by virtue of Executive Order No. 107.4 These executive orders were issued after legislative bills for the creation of municipalities involved in that case had failed to pass Congress.5 President Diosdado Macapagal justified the creation of these municipalities citing his powers under Section 68 of the Revised Administrative Code. Then Vice-President Emmanuel Pelaez filed a special civil action for a writ of prohibition, alleging in main that the Executive Orders were null and void, Section 68 having been repealed by Republic Act No. 2370,6 and said orders constituting an undue delegation of legislative power.7

After due deliberation, the Court unanimously held that the challenged Executive Orders were null and void. A majority of five justices, led by the ponente, Justice (later Chief Justice) Roberto Concepcion, ruled that Section 68 of the Revised Administrative Code did not meet the well-settled requirements for a valid delegation of legislative power to the executive branch,8 while three justices opined that the nullity of the issuances was the consequence of the enactment of the 1935 Constitution, which reduced the power of the Chief Executive over local governments.9 Pelaez was disposed in this wise: WHEREFORE, the Executive Orders in question are declared null and void ab initio and the respondent permanently restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any disbursement by the municipalities above referred to. It is so ordered.10 Among the Executive Orders annulled was Executive Order No. 107 which created the Municipality of Andong. Nevertheless, the core issue presented in the present petition is the continued efficacy of the judicial annulment of the Municipality of Andong. Petitioner Sultan Osop B. Camid (Camid) represents himself as a current resident of Andong,11 suing as a private citizen and taxpayer whose locus standi "is of public and paramount interest especially to the people of the Municipality of Andong, Province of Lanao del Sur."12 He alleges that Andong "has metamorphosed into a full-blown municipality with a complete set of officials appointed to handle essential services for the municipality and its constituents,"13 even though he concedes that since 1968, no person has been appointed, elected or qualified to serve any of the elective local government positions of Andong.14 Nonetheless, the municipality of Andong has its own high school, Bureau of Posts, a Department of Education, Culture and Sports office, and at least seventeen (17) "barangay units" with their own respective chairmen.15 From 1964 until 1972, according to Camid, the public officials of Andong "have been serving their constituents through the minimal means and resources with least (sic) honorarium and recognition from the Office of the then former President Diosdado Macapagal." Since the time of Martial Law in 1972, Andong has allegedly been getting by despite the absence of public funds, with the "Interim Officials" serving their constituents "in their own little ways and means."16 In support of his claim that Andong remains in existence, Camid presents to this Court a Certification issued by the Office of the Community Environment and Natural Resources (CENRO) of the Department of Environment and Natural Resources (DENR) certifying the total land area of the Municipality of Andong, "created under Executive Order No. 107 issued [last] October 1, 1964."17 He also submits a Certification issued by the Provincial Statistics Office of Marawi City concerning the population of Andong, which is pegged at fourteen thousand fifty nine (14,059) strong. Camid also enumerates a list of governmental agencies and private groups that allegedly recognize Andong, and notes that other municipalities have recommended to

the Speaker of the Regional Legislative Assembly for the immediate implementation of the revival or re-establishment of Andong.18 The petition assails a Certification dated 21 November 2003, issued by the Bureau of Local Government Supervision of the Department of Interior and Local Government (DILG).19 The Certification enumerates eighteen (18) municipalities certified as "existing," per DILG records. Notably, these eighteen (18) municipalities are among the thirty-three (33), along with Andong, whose creations were voided by this Court in Pelaez. These municipalities are Midaslip, Pitogo, Naga, and Bayog in Zamboanga del Sur; Siayan and Pres. Manuel A. Roxas in Zamboanga del Norte; Magsaysay, Sta. Maria and New Corella in Davao; Badiangan and Mina in Iloilo; Maguing in Lanao del Sur; Gloria in Oriental Mindoro; Maasim in Sarangani; Kalilangan and Lantapan in Bukidnon; and Maco in Compostela Valley.20 Camid imputes grave abuse of discretion on the part of the DILG "in not classifying [Andong] as a regular existing municipality and in not including said municipality in its records and official database as [an] existing regular municipality."21 He characterizes such non-classification as unequal treatment to the detriment of Andong, especially in light of the current recognition given to the eighteen (18) municipalities similarly annulled by reason ofPelaez. As appropriate relief, Camid prays that the Court annul the DILG Certification dated 21 November 2003; direct the DILG to classify Andong as a "regular existing municipality;" all public respondents, to extend full recognition and support to Andong; the Department of Finance and the Department of Budget and Management, to immediately release the internal revenue allotments of Andong; and the public respondents, particularly the DILG, to recognize the "Interim Local Officials" of Andong.22 Moreover, Camid insists on the continuing validity of Executive Order No. 107. He argues that Pelaez has already been modified by supervening events consisting of subsequent laws and jurisprudence. Particularly cited is ourDecision in Municipality of San Narciso v. Hon. Mendez,23 wherein the Court affirmed the unique status of the municipality of San Andres in Quezon as a "de facto municipal corporation."24 Similar to Andong, the municipality of San Andres was created by way of executive order, precisely the manner which the Court in Pelaez had declared as unconstitutional. Moreover, San Narciso cited, as Camid does, Section 442(d) of the Local Government Code of 1991 as basis for the current recognition of the impugned municipality. The provision reads: Section 442. Requisites for Creation. - xxx (d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities.25

There are several reasons why the petition must be dismissed. These can be better discerned upon examination of the proper scope and application of Section 442(d), which does not sanction the recognition of just any municipality. This point shall be further explained further on. Notably, as pointed out by the public respondents, through the Office of the Solicitor General (OSG), the case is not a fit subject for the special civil actions of certiorari and mandamus, as it pertains to the de novo appreciation of factual questions. There is indeed no way to confirm several of Camids astonishing factual allegatio ns pertaining to the purported continuing operation of Andong in the decades since it was annulled by this Court. No trial court has had the opportunity to ascertain the validity of these factual claims, the appreciation of which is beyond the function of this Court since it is not a trier of facts. The importance of proper factual ascertainment cannot be gainsaid, especially in light of the legal principles governing the recognition of de facto municipal corporations. It has been opined that municipal corporations may exist by prescription where it is shown that the community has claimed and exercised corporate functions, with the knowledge and acquiescence of the legislature, and without interruption or objection for period long enough to afford title by prescription.26 These municipal corporations have exercised their powers for a long period without objection on the part of the government that although no charter is in existence, it is presumed that they were duly incorporated in the first place and that their charters had been lost.27 They are especially common in England, which, as well-worth noting, has existed as a state for over a thousand years. The reason for the development of that rule in England is understandable, since that country was settled long before the Roman conquest by nomadic Celtic tribes, which could have hardly been expected to obtain a municipal charter in the absence of a national legal authority. In the United States, municipal corporations by prescription are less common, but it has been held that when no charter or act of incorporation of a town can be found, it may be shown to have claimed and exercised the powers of a town with the knowledge and assent of the legislature, and without objection or interruption for so long a period as to furnish evidence of a prescriptive right.28 What is clearly essential is a factual demonstration of the continuous exercise by the municipal corporation of its corporate powers, as well as the acquiescence thereto by the other instrumentalities of the state. Camid does not have the opportunity to make an initial factual demonstration of those circumstances before this Court. Indeed, the factual deficiencies aside, Camids plaint should have undergone the usual administrative gauntlet and, once that was done, should have been filed first with the Court of Appeals, which at least would have had the power to make the necessary factual determinations. Camids seeming ignorance of the principles of exhaustion of administrative remedies and hierarchy of courts, as well as the concomitant prematurity of the present petition, cannot be countenanced.

It is also difficult to capture the sense and viability of Camids present action. The assailed issuance is theCertification issued by the DILG. But such Certification does not pretend to bear the authority to create or revalidate a municipality. Certainly, the annulment of the Certification will really do nothing to serve Camids ultimate causethe recognition of Andong. Neither does the Certification even expressly refute the claim that Andong still exists, as there is nothing in the document that comments on the present status of Andong. Perhaps the Certification is assailed before this Court if only to present an actual issuance, rather than a long-standing habit or pattern of action that can be annulled through the special civil action of certiorari. Still, the relation of theCertification to Camids central argument is forlornly strained. These disquisitions aside, the central issue remains whether a municipality whose creation by executive fiat was previously voided by this Court may attain recognition in the absence of any curative or reimplementing statute. Apparently, the question has never been decided before, San Narciso and its kindred cases pertaining as they did to municipalities whose bases of creation were dubious yet were never judicially nullified. The effect of Section 442(d) of the Local Government Code on municipalities such as Andong warrants explanation. Besides, the residents of Andong who belabor under the impression that their town still exists, much less those who may comport themselves as the municipalitys "Interim Government," would be well served by a rude awakening. The Court can employ a simplistic approach in resolving the substantive aspect of the petition, merely by pointing out that the Municipality of Andong never existed.29 Executive Order No. 107, which established Andong, was declared "null and void ab initio" in 1965 by this Court in Pelaez, along with thirty-three (33) other executive orders. The phrase "ab initio" means "from the beginning,"30 "at first,"31 "from the inception."32 Pelaez was never reversed by this Court but rather it was expressly affirmed in the cases of Municipality of San Joaquin v. Siva,33Municipality of Malabang v. Benito,34 and Municipality of Kapalong v. Moya.35 No subsequent ruling by this Court declared Pelaez as overturned or inoperative. No subsequent legislation has been passed since 1965 creating a Municipality of Andong. Given these facts, there is hardly any reason to elaborate why Andong does not exist as a duly constituted municipality. This ratiocination does not admit to patent legal errors and has the additional virtue of blessed austerity. Still, its sweeping adoption may not be advisedly appropriate in light of Section 442(d) of the Local Government Code and our ruling in Municipality of San Narciso, both of which admit to the possibility of de facto municipal corporations. To understand the applicability of Municipality of San Narciso and Section 442(b) of the Local Government Code to the situation of Andong, it is necessary again to consider the ramifications of our decision in Pelaez. The eminent legal doctrine enunciated in Pelaez was that the President was then, and still is, not empowered to create municipalities through executive issuances. The Court therein recognized "that the President has, for many years, issued executive orders

creating municipal corporations, and that the same have been organized and in actual operation . . . ."36 However, the Court ultimately nullified only those thirty-three (33) municipalities, including Andong, created during the period from 4 September to 29 October 1964 whose existence petitioner Vice-President Pelaez had specifically assailed before this Court. No pronouncement was made as to the other municipalities which had been previously created by the President in the exercise of power the Court deemed unlawful. Two years after Pelaez was decided, the issue again came to fore in Municipality of San Joaquin v. Siva.37 The Municipality of Lawigan was created by virtue of Executive Order No. 436 in 1961. Lawigan was not one of the municipalities ordered annulled in Pelaez. A petition for prohibition was filed contesting the legality of the executive order, again on the ground that Section 68 of the Revised Administrative Code was unconstitutional. The trial court dismissed the petition, but the Supreme Court reversed the ruling and entered a new decision declaring Executive Order No. 436 void ab initio. The Court reasoned without elaboration that the issue had already been squarely taken up and settled in Pelaez which agreed with the argument posed by the challengers to Lawigans validity.38 In the 1969 case of Municipality of Malabang v. Benito,39 what was challenged is the validity of the constitution of the Municipality of Balabagan in Lanao del Sur, also created by an executive order,40 and which, similar to Lawigan, was not one of the municipalities annulled in Pelaez. This time, the officials of Balabagan invoked de facto status as a municipal corporation in order to dissuade the Court from nullifying action. They alleged that its status as a de facto corporation cannot be collaterally attacked but should be inquired into directly in an action forquo warranto at the instance of the State, and not by a private individual as it was in that case. In response, the Court conceded that an inquiry into the legal existence of a municipality is reserved to the State in a proceeding for quo warranto, but only if the municipal corporation is a de facto corporation.41 Ultimately, the Court refused to acknowledge Balabagan as a de facto corporation, even though it had been organized prior to the Courts decision in Pelaez. The Court declared void the executive order creating Balabagan and restrained its municipal officials from performing their official duties and functions.42 It cited conflicting American authorities on whether a de facto corporation can exist where the statute or charter creating it is unconstitutional.43 But the Courts final conclusion was unequivocal that Balabagan was not a de factocorporation.1awphi1.nt In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a time when the statute had not been invalidated cannot conceivably

make it a de facto corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to give color of authority to its creation. 44 The Court did clarify in Malabang that the previous acts done by the municipality in the exercise of its corporate powers were not necessarily a nullity. 45 Camid devotes several pages of his petition in citing this point,46 yet the relevance of the citation is unclear considering that Camid does not assert the validity of any corporate act of Andong prior to its judicial dissolution. Notwithstanding, the Court in Malabang retained an emphatic attitude as to the unconstitutionality of the power of the President to create municipal corporations by way of presidential promulgations, as authorized under Section 68 of the Revised Administrative Code. This principle was most recently affirmed in 1988, in Municipality of Kapalong v. Moya.47 The municipality of Santo Tomas, created by President Carlos P. Garcia, filed a complaint against another municipality, who challenged Santo Tomass legal personality to institute suit. Again, Santo Tomas had not been expressly nullified by prior judicial action, yet the Court refused to recognize its legal existence. The blunt but simple ruling: "Now then, as ruled in the Pelaez case supra, the President has no power to create a municipality. Since [Santo Tomas] has no legal personality, it can not be a party to any civil action."48 Nevertheless, when the Court decided Municipality of San Narciso49 in 1995, it indicated a shift in the jurisprudential treatment of municipalities created through presidential issuances. The questioned municipality of San Andres, Quezon was created on 20 August 1959 by Executive Order No. 353 issued by President Carlos P. Garcia. Executive Order No. 353 was not one of the thirty-three issuances annulled by Pelaez in 1965. The legal status of the Municipality of San Andres was first challenged only in 1989, through a petition for quo warranto filed with the Regional Trial Court of Gumaca, Quezon, which did cite Pelaez as authority.50 The RTC dismissed the petition for lack of cause of action, and the petitioners therein elevated the matter to this Court. In dismissing the petition, the Court delved in the merits of the petition, if only to resolve further doubt on the legal status of San Andres. It noted a circumstance which is not present in the case at barthat San Andres was in existence for nearly thirty (30) years before its legality was challenged. The Court did not declare the executive order creating San Andres null and void. Still, acting on the premise that the said executive order was a complete nullity, the Court noted "peculiar circumstances" that led to the conclusion that San Andres had attained the unique status of a "de facto municipal corporation."51 It noted that Pelaez limited its nullificatory effect only to those executive orders specifically challenged therein, despite the fact that the Court then could have very well extended the decision to invalidate San Andres as well.52 This statement squarely contradicts Camids reading ofSan Narciso that the creation of San Andres, just like Andong, had been declared a complete nullity on the same ground of unconstitutional delegation of legislative power found in Pelaez.53

The Court also considered the applicability of Section 442(d)54 of the Local Government Code of 1991. It clarified the implication of the provision as follows: Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities." No pretension of unconstitutionality per se of Section 442(d) of the Local Government Code is preferred. It is doubtful whether such a pretext, even if made, would succeed. The power to create political subdivisions is a function of the legislature. Congress did just that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence are retrospective, and aimed at giving "validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualification against impairment of vested rights. (Emphasis supplied)55 The holding in San Narciso was subsequently affirmed in Municipality of Candijay v. Court of Appeals56 and Municipality of Jimenez v. Baz57 In Candijay, the juridical personality of the Municipality of Alicia, created in a 1949 executive order, was attacked only beginning in 1984. Pelaez was again invoked in support of the challenge, but the Court refused to invalidate the municipality, citing San Narciso at length. The Court noted that the situation of the Municipality of Alicia was strikingly similar to that in San Narciso; hence, the town should likewise "benefit from the effects of Section 442(d) of the Local Government Code, and should [be] considered as a regular, de juremunicipality." 58 The valid existence of Municipality of Sinacaban, created in a 1949 executive order, was among the issues raised in Jimenez. The Court, through Justice Mendoza, provided an expert summation of the evolution of the rule. The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the ruling inPelaez v. Auditor General that the creation of municipal corporations is essentially a legislative matter and therefore the President was without power to create by executive order the Municipality of 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. In Municipality of San Narciso, Quezon v. Mendez, Sr., this Court considered the following factors as having validated the creation of a municipal corporation, which, like the Municipality of Sinacaban, was created by executive order of the President before the ruling in Pelaez v. Auditor General: (1) the fact that for nearly 30 years the validity of the creation of the municipality had never been challenged; (2) the fact that following the ruling in Pelaez no quo warranto suit was filed to question the validity of the executive order creating such municipality; and (3) the fact that the municipality was later classified as a fifth class municipality, organized

as part of a municipal circuit court and considered part of a legislative district in the Constitution apportioning the seats in the House of Representatives. Above all, it was held that whatever doubt there might be as to the de jure character of the municipality must be deemed to have been put to rest by the Local Government Code of 1991 (R. A. No. 7160), 442(d) of which provides that "municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets of elective officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities." Here, the same factors are present so as to confer on Sinacaban the status of at least a de facto municipal corporation in the sense that its legal existence has been recognized and acquiesced publicly and officially. Sinacaban had been in existence for sixteen years when Pelaez v. Auditor General was decided on December 24, 1965. Yet the validity of E.O. No. 258 creating it had never been questioned. Created in 1949, it was only 40 years later that its existence was questioned and only because it had laid claim to an area that apparently is desired for its revenue. This fact must be underscored because under Rule 66, 16 of the Rules of Court, a quo warranto suit against a corporation for forfeiture of its charter must be commenced within five (5) years from the time the act complained of was done or committed. On the contrary, the State and even the Municipality of Jimenez itself have recognized Sinacaban's corporate existence. Under Administrative Order No. 33 dated June 13, 1978 of this Court, as reiterated by 31 of the Judiciary Reorganization Act of 1980 (B. P. Blg. 129), Sinacaban is constituted part of a municipal circuit for purposes of the establishment of Municipal Circuit Trial Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in 1950 by entering into an agreement with it regarding their common boundary. The agreement was embodied in Resolution No. 77 of the Provincial Board of Misamis Occidental. Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987 Constitution, apportioning legislative districts throughout the country, which considered Sinacaban part of the Second District of Misamis Occidental. Moreover, following the ruling in Municipality of San Narciso, Quezon v. Mendez, Sr., 442(d) of the Local Government Code of 1991 must be deemed to have cured any defect in the creation of Sinacaban.591awphi1.nt From this survey of relevant jurisprudence, we can gather the applicable rules. Pelaez and its offspring cases ruled that the President has no power to create municipalities, yet limited its nullificatory effects to the particular municipalities challenged in actual cases before this Court. However, with the promulgation of the Local Government Code in 1991, the legal cloud was lifted over the municipalities similarly created by executive order but not judicially annulled. The de facto status of such municipalities as San Andres, Alicia and Sinacaban was recognized by this Court, and Section 442(b) of the Local Government Code deemed curative whatever legal defects to title these municipalities had labored under.

Is Andong similarly entitled to recognition as a de facto municipal corporation? It is not. There are eminent differences between Andong and municipalities such as San Andres, Alicia and Sinacaban. Most prominent is the fact that the executive order creating Andong was expressly annulled by order of this Court in 1965. If we were to affirm Andongs de facto status by reason of its alleged continued existence despite its nullification, we would in effect be condoning defiance of a valid order of this Court.l^vvphi1.net Court decisions cannot obviously lose their efficacy due to the sheer defiance by the parties aggrieved. It bears noting that based on Camids own admissions, Andong does not meet the requisites set forth by Section 442(d) of the Local Government Code. Section 442(d) requires that in order that the municipality created by executive order may receive recognition, they must "have their respective set of elective municipal officials holding office at the time of the effectivity of [the Local Government] Code." Camid admits that Andong has never elected its municipal officers at all.60 This incapacity ties in with the fact that Andong was judicially annulled in 1965. Out of obeisance to our ruling in Pelaez, the national government ceased to recognize the existence of Andong, depriving it of its share of the public funds, and refusing to conduct municipal elections for the void municipality. The failure to appropriate funds for Andong and the absence of elections in the municipality in the last four decades are eloquent indicia of the non-recognition by the State of the existence of the town. The certifications relied upon by Camid, issued by the DENR-CENRO and the National Statistics Office, can hardly serve the purpose of attesting to Andongs legal efficacy. In fact, both these certifications qualify that they were issued upon the request of Camid, "to support the restoration or re-operation of the Municipality of Andong, Lanao del Sur,"61thus obviously conceding that the municipality is at present inoperative.1awphi1.nt We may likewise pay attention to the Ordinance appended to the 1987 Constitution, which had also been relied upon in Jimenez and San Narciso. This Ordinance, which apportioned the seats of the House of Representatives to the different legislative districts in the Philippines, enumerates the various municipalities that are encompassed by the various legislative districts. Andong is not listed therein as among the municipalities of Lanao del Sur, or of any other province for that matter.62 On the other hand, the municipalities of San Andres, Alicia and Sinacaban are mentioned in the Ordinance as part of Quezon,63 Bohol,64 and Misamis Occidental65 respectively. How about the eighteen (18) municipalities similarly nullified in Pelaez but certified as existing in the DILGCertification presented by Camid? The petition fails to mention that subsequent to the ruling in Pelaez, legislation was enacted to reconstitute these municipalities.66 It is thus not surprising that the DILG certified the existence of these eighteen (18) municipalities, or that these towns are among the municipalities enumerated in the Ordinance appended to the Constitution. Andong has not been similarly reestablished through statute. Clearly then, the fact that there are valid

organic statutes passed by legislation recreating these eighteen (18) municipalities is sufficient legal basis to accord a different legal treatment to Andong as against these eighteen (18) other municipalities. We thus assert the proper purview to Section 442(d) of the Local Government Code that it does not serve to affirm or reconstitute the judicially dissolved municipalities such as Andong, which had been previously created by presidential issuances or executive orders. The provision affirms the legal personalities only of those municipalities such as San Narciso, Alicia, and Sinacaban, which may have been created using the same infirm legal basis, yet were fortunate enough not to have been judicially annulled. On the other hand, the municipalities judicially dissolved in cases such as Pelaez, San Joaquin, and Malabang, remain inexistent, unless recreated through specific legislative enactments, as done with the eighteen (18) municipalities certified by the DILG. Those municipalities derive their legal personality not from the presidential issuances or executive orders which originally created them or from Section 442(d), but from the respective legislative statutes which were enacted to revive them.1a\^/phi1.net And what now of Andong and its residents? Certainly, neither Pelaez or this decision has obliterated Andong into a hole on the ground. The legal effect of the nullification of Andong in Pelaez was to revert the constituent barrios of the voided town back into their original municipalities, namely the municipalities of Lumbatan, Butig and Tubaran.67 These three municipalities subsist to this day as part of Lanao del Sur,68 and presumably continue to exercise corporate powers over the barrios which once belonged to Andong. If there is truly a strong impulse calling for the reconstitution of Andong, the solution is through the legislature and not judicial confirmation of void title. If indeed the residents of Andong have, all these years, been governed not by their proper municipal governments but by a ragtag "Interim Government," then an expedient political and legislative solution is perhaps necessary. Yet we can hardly sanction the retention of Andongs legal personality solely on the basis of collective amnesia that may have allowed Andong to somehow pretend itself into existence despite its judicial dissolution. Maybe those who insist Andong still exists prefer to remain unperturbed in their blissful ignorance, like the inhabitants of the cave in Platos famed allegory. But the time has come for the light to seep in, and for the petitioner and like-minded persons to awaken to legal reality. WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against petitioner. SO ORDERED. Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, SandovalGutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur.

G.R. No. L-28113

March 28, 1969

THE MUNICIPALITY OF MALABANG, LANAO DEL SUR, and AMER MACAORAO BALINDONG, petitioners, vs. PANGANDAPUN BENITO, HADJI NOPODIN MACAPUNUNG, HADJI HASAN MACARAMPAD, FREDERICK V. DUJERTE MONDACO ONTAL, MARONSONG ANDOY, MACALABA INDAR LAO. respondents. L. Amores and R. Gonzales for petitioners. Jose W. Diokno for respondents. CASTRO, J.: The petitioner Amer Macaorao Balindong is the mayor of Malabang, Lanao del Sur, while the respondent Pangandapun Bonito is the mayor, and the rest of the respondents are the councilors, of the municipality of Balabagan of the same province. Balabagan was formerly a part of the municipality of Malabang, having been created on March 15, 1960, by Executive Order 386 of the then President Carlos P. Garcia, out of barrios and sitios 1 of the latter municipality. The petitioners brought this action for prohibition to nullify Executive Order 386 and to restrain the respondent municipal officials from performing the functions of their respective office relying on the ruling of this Court in Pelaez v. Auditor General 2 and Municipality of San Joaquin v. Siva. 3 In Pelaez this Court, through Mr. Justice (now Chief Justice) Concepcion, ruled: (1) that section 23 of Republic Act 2370 [Barrio Charter Act, approved January 1, 1960], by vesting the power to create barrios in the provincial board, is a "statutory denial of the presidential authority to create a new barrio [and] implies a negation of the bigger power to create municipalities," and (2) that section 68 of the Administrative Code, insofar as it gives the President the power to create 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 the President's power over local governments to mere supervision. As this Court summed up its discussion: "In short, even if it did not entail an undue delegation of legislative powers, as it certainly does, said section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly incompatible and inconsistent with said statutory enactment." On the other hand, the respondents, while admitting the facts alleged in the petition, nevertheless argue that the rule announced in Pelaez can have no application

in this case because unlike the municipalities involved in Pelaez, the municipality of Balabagan is at least a de facto corporation, having been organized under color of a statute before this was declared unconstitutional, its officers having been either elected or appointed, and the municipality itself having discharged its corporate functions for the past five years preceding the institution of this action. It is contended that as a de facto corporation, its existence cannot be collaterally attacked, 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. It is indeed true that, generally, an inquiry into the legal existence of a municipality is reserved to the State in a proceeding for quo warranto or other direct proceeding, and that only in a few exceptions may a private person exercise this function of government. 4 But the rule disallowing collateral attacks applies only where the municipal corporation is at least a de facto corporations. 5 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 ate affected thereby, including the citizens of the territory incorporated unless they are estopped by their conduct from doing so. 6 And so the threshold question is whether the municipality of Balabagan is a de facto corporation. As earlier stated, the claim that it is rests on the fact that it was organized before the promulgation of this Court's decision inPelaez. 7 Accordingly, we address ourselves to the question whether a statute can lend color of validity to an attempted organization of a municipality despite the fact that such statute is subsequently declared unconstitutional.lawphi1.et This has been a litigiously prolific question, sharply dividing courts in the United States. Thus, some hold that a de facto corporation cannot exist where the statute or charter creating it is unconstitutional because there can be no de facto corporation where there can be no de jure one, 8 while others hold otherwise on the theory that a statute is binding until it is condemned as unconstitutional. 9 An early article in the Yale Law Journal offers the following analysis: It appears that the true basis for denying to the corporation a de facto status lay in the absence of any legislative act to give vitality to its creation. An examination of the cases holding, some of them unreservedly, that a de facto office or municipal corporation can exist under color of an unconstitutional statute will reveal that in no instance did the invalid act give life to the corporation, but that either in other valid acts or in the constitution itself the office or the corporation was potentially created.... The principle that color of title under an unconstitutional statute can exist only where there is some other valid law under which the organization may be

effected, or at least an authority in potentia by the state constitution, has its counterpart in the negative propositions that there can be no color of authority in an unconstitutional statute that plainly so appears on its face or that attempts to authorize the ousting of a de jure or de facto municipal corporation upon the same territory; in the one case the fact would imply the imputation of bad faith, in the other the new organization must be regarded as a mere usurper.... As a result of this analysis of the cases the following principles may be deduced which seem to reconcile the apparently conflicting decisions: I. The color of authority requisite to the organization of a de facto municipal corporation may be: 1. A valid law enacted by the legislature. 2. An unconstitutional law, valid on its face, which has either (a) been upheld for a time by the courts or (b) not yet been declared void; provided that a warrant for its creation can be found in some other valid law or in the recognition of its potential existence by the general laws or constitution of the state. II. There can be no de facto municipal corporation unless either directly or potentially, such a de jurecorporation is authorized by some legislative fiat. III. There can be no color of authority in an unconstitutional statute alone, the invalidity of which is apparent on its face. IV. There can be no de facto corporation created to take the place of an existing de jure corporation, as such organization would clearly be a usurper.10 In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a time when the statute had not been invalidated cannot conceivably make it a de facto corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to give color of authority to its creation. Indeed, in Municipality of San Joaquin v. Siva, 11 this Court granted a similar petition for prohibition and nullified an executive order creating the municipality of Lawigan in Iloilo on the basis of the Pelaez ruling, despite the fact that the municipality was created in 1961, before section 68 of the Administrative Code, under which the President had acted, was invalidated. 'Of course the issue of de factomunicipal corporation did not arise in that case.

In Norton v. Shelby Count, 12 Mr. Justice Field said: "An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed." Accordingly, he held that bonds issued by a board of commissioners created under an invalid statute were unenforceable. Executive Order 386 "created no office." This is not to say, however, that the acts done by the municipality of Balabagan in the exercise of its corporate powers are a nullity because the executive order "is, in legal contemplation, as inoperative as though it had never been passed." For the existence of Executive, Order 386 is "an operative fact which cannot justly be ignored." As Chief Justice Hughes explained in Chicot County Drainage District v. Baxter State Bank: 13 The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, I. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects with respect to particular relations, individual and corporate, and particular conduct, private and official. Questions of rights claimed to have become vested, of status of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified. There is then no basis for the respondents' apprehension that the invalidation of the executive order creating Balabagan would have the effect of unsettling many an act done in reliance upon the validity of the creation of that municipality. 14 ACCORDINGLY, the petition is granted, Executive Order 386 is declared void, and the respondents are hereby permanently restrained from performing the duties and functions of their respective offices. No pronouncement as to costs. Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez and Capistrano, JJ., concur. Teehankee and Barredo, JJ., took no part.

Separate Opinions FERNANDO, J., concurring: I concur fully with the well-written opinion of Justice Castro. It breaks new ground; it strikes out new paths. It is precisely because of its impact on the power of judicial review of executive acts that I deem a few additional words would not be amiss. 1. Insofar as the effect of a declaration of unconstitionality is concerned, the latter and more realistic trend reflected in Chicot County Drainage District v. Baxter State Bank 1 had previously elicited our approval. Thus: "'Rutter vs. Esteban (93 Phil. 68) may be construed to mean that at the time of the decision the Moratorium law could no longer be validly applied because of the prevailing circumstances. At any rate, although the general rule is that an unconstitutional statute 'confers no right, creates no office, affords no protection and justifies no acts performed under it.' ... there are several instances wherein courts, out of equity, have relaxed its operation ... or qualified its effects 'since the actual existence of a statute prior to such declaration is an operative fact, and may have consequences which cannot justly be ignored' ... and a realistic approach is eroding the general doctrine ....'" 2 Also: "We have taken note, of the fact that, on June 30, 1961, Section 25 of Reorganization Plan No. 20-A had been declared unconstitutional by this Court in the case of Corominas, et al. v. The Labor Standards Commission, et al., .... It appears, however, that the Plaintiff had filed his claim before Regional Office No. 4 of the Department of Labor on July 26, 1960, or about one year before said Section 25 had been declared unconstitutional. The circumstance that Section 25 of Reorganization Plan No. 20-A had been declared unconstitutional should not be counted against the defendant in the present case. In the case of Manila Motor Co., Inc. v. Flores, ..., this Court upheld the right of a party under the Moratorium Law which had accrued in his favor before said law was declared unconstitutional by this Court in the case of Rutter v. Esteban, 93 Phil. 68." 3 2. Nothing can be clearer therefore in the light of the two above cases than that a previous declaration of invalidity of legislative acts would not be bereft of legal results. Would that view hold true of nullification of executive acts? There might have been doubts as to the correct answer before. There is none now. A judicial decision annulling a presidential exercise of authority 4 is not without its effect either. That much is evident from the holding now reached. The act stricken down, whether proceeding from the legislature or the Executive, could in the language of the Chicot County case, be considered, prior to the declaration of invalidity, as "an operative fact and may have consequences which cannot justly be ignored."

Thus the frontiers of the law have been extended, a doctrine which to some may come into play when a statute is voided is now considered equally applicable to a Presidential act that has met a similar fate. Such a result should not occasion surprise. That is to be expected. There would be an unjustified deviation from the doctrine of separation of powers if a consequence attached to the annulment of a statue is considered as not operative where an executive order is involved. The doctrine of co-equal or coordinate departments would be meaningless if a discrimination of the above sort were considered permissible. The cognizance taken of the prior existence of an enactment subsequently declared unconstitutional applies as well as to a Presidential act thereafter successfully assailed. There was a time when it too did exist and, as such, a fact to be reckoned with, though an infirm source of a legal right, if, as subsequently held, considered violative of a constitutional command. 3. Precisionists may cavil at the above view; they may assert, and with some degree of plausibility, that the holding in the Pelaez case goes no further than to locate a statutory infirmity in the Presidential act there challenged, creating municipal corporations under what the then Executive considered a grant of authority found in the Revised Administrative Code. 5 Such a power having been found not to exist, the decision, so it may be asserted, did not reach the constitutional issue of non-delegation of legislative power. Tersely put, there was no finding of nullity based on a violation of the Constitution. To such a claim, it suffices to answer that while the challenged Administrative Code provision was in fact held as not containing within itself the authority conferred on the President to create municipal corporations, the opinion by the then Justice, now Chief Justice, Concepcion went further. As was pointed out by him: "Although Congress may delegate to another branch of the Government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself it must set forth therein the policy to be executed, carried out or implemented by the delegate and (b) fix a standard the limits of which are sufficiently determinate or determinable to which the delegate must conform in the performance of his functions. Indeed, without a statutory declaration of policy, the delegate would, in effect, make or formulate such policy, which is the essence of every law; and without the aforementioned standard, there would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority. Hence, he could thereby arrogate upon himself the power, not only to make the law, but also and this is worse to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and, consequently, undermining the very foundation of our Republican system." 6

From which, it would follow, in the language of the opinion: "Section 68 of the Revised Administrative Code does not meet these well-settled requirements for a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President. Neither does it give a standard sufficiently precise to avoid the evil effects above referred to." 7 It is thus clear that while it might not be strictly accurate to advance the view that there was a finding of unconstitutionality of a challenged statutory norm, there could be no objection to the view that the holding was one of unconstitutional application. Nor is this all. If there be admission of the force of the assertion that the Pelaez opinion went no further than to locate in the challenged Executive orders creating municipal corporations an act in excess of statutory authority, then our decision in this case is all the more noteworthy for the more hospitable scope accorded the Chicot doctrine. For as originally formulated, it would merely recognize that during its existence, prior to its being declared violative of the constitute, the statute must be deemed an operative fact. Today we decide that such a doctrine extends to a Presidential act held void not only on the ground of unconstitutional infirmity but also because in excess of the statutory power conferred. That to me is the more significant aspect of this decision. To repeat, to that point of view I yield full concurrence. I do so because it appears to me a logical corollary to the principle of separation of powers. Once we accept the basic doctrine that each department as a coordinate agency of government is entitled to the respect of the other two, it would seem to follow that at the very least, there is a presumption of the validity of the act performed by it, unless subsequently declared void in accordance with legally accepted principles. The rule of law cannot be satisfied with anything less. Since under our Constitution, judicial review exists precisely to test the validity of executive or legislative acts in an appropriate legal proceeding, there is always the possibility of their being declared inoperative and void. Realism compels the acceptance of the thought that there could be a time-lag between the initiation of such Presidential or congressional exercise of power and the final declaration of nullity. In the meanwhile, it would be productive of confusion, perhaps at times even of chaos, if the parties affected were left free to speculate as to its fate being one of doom, thus leaving them free to disobey it in the meanwhile. Since, however, the orderly processes of government not to mention common sense, requires that the presumption of validity be accorded an act of Congress or an order of the President, it would be less than fair, and it may be productive of injustice, if no notice of its existence as a fact be paid to it, even if thereafter, it is stricken down as contrary, in the case of Presidential act, either to the Constitution or a controlling statute. The far-reaching import in the above sense of the decision we now render calls, to my mind, for an articulation of further reflection on its varied implications. We have

here an illustration to paraphrase Dean Pound, of the law being stable and yet far from standing still. That is as it ought to be; that is how law grows. It is in that sense that the judicial process is impressed with creativity, admittedly within limits rather narrowly confined. That in itself is to hold fast to the appropriate role of the judiciary, far from insignificant as our decision discloses. Hence, this separate concurring opinion, which, I trust, will make manifest why my agreement with what Justice Castro had so ably expressed in the opinion of the Court is wholehearted and entire. Concepcion, C.J., concurs.

G.R. No. 135535

February 14, 2005

ZOOMZAT, INC., petitioner, vs. THE PEOPLE OF THE PHILIPPINES, ROMULO S. RODRIGUEZ, JR., AVELINO C. CANOSA, ROLANDO G. CHAVEZ, CEFERINO C. GARCIA, DEMOCRITO C. LAGO, ANTONIO F. LUGOD, WAYNE T. MILITANTE, JOHNNY L. MOTOOMULL, JR., FLORENTINO S. OCAMPO, EDUARDO L. REMEGOSO, CLEOFAS B. SALUGSUGAN, RAFAEL T. BERDELAO, and WINFREDO T. MILITANTE, JR., respondents. DECISION YNARES-SANTIAGO, J.: Assailed in this petition for review on certiorari is the Resolution1 dated June 17, 1998 of the Sandiganbayan in Crim. Case No. 22026 approving the withdrawal of the Information charging herein respondents, all members of the Sangguniang Panlungsod of Gingoog City, of violation of Section 3(e), R.A. No. 3019, otherwise known as theAnti-Graft and Corrupt Practices Act, and its Resolution2 dated September 9, 1998, denying petitioner Zoomzat, Inc.s motion for reconsideration. The factual antecedents are as follows: Petitioner Zoomzat, Inc. alleged that on December 20, 1991, the Sangguniang Panlungsod of Gingoog City passed Resolution No. 2613 which resolved "to express the willingness of the City of Gingoog to allow Zoomzat to install and operate a cable TV system." Thereupon, petitioner applied for a mayors permit but the same was not acted upon by the mayors office. Subsequently, or on April 6, 1993, respondents enacted Ordinance No. 194 which granted a franchise to Gingoog Spacelink Cable TV, Inc. to operate a cable television for a period of ten (10) years, subject to automatic renewal.

Hence, on July 30, 1993, petitioner filed a complaint with the Office of the Ombudsman against herein respondents for violation of Section 3(e), R.A. No. 3019. The complaint alleged that in enacting Ordinance No. 19, the respondents gave unwarranted benefits, advantage or preference to Spacelink, to the prejudice of petitioner who was a prior grantee-applicant by virtue of Resolution No. 261. On December 20, 1994, Graft Investigation Officer I Virginia Tehano-Ang, recommended the indictment of the respondents under Section 3(e), R.A. No. 3019,5 which recommendation was affirmed on review by Special Prosecution Officer II Rolando Ines.6 Accordingly, a criminal information for violation of Section 3(e), R.A. No. 3019, was filed against the respondents before the Sandiganbayan. The case was docketed as Crim. Case No. 22026. However, upon directive by the Sandiganbayan to restudy the instant case, Special Prosecution Officer II Antonio Manzano recommended the dismissal of the case and the Information withdrawn for lack of probable cause.7 On further investigation, Special Prosecution Officer III Victor Pascual also recommended that the case be dismissed for insufficiency of evidence.8 Consequently, on June 17, 1998, the Sandiganbayan issued the now assailed resolution approving the dismissal of the case and ordering the withdrawal of the Information against the respondents. On September 9, 1998, the Sandiganbayan denied petitioners motion for reconsideration. Hence, the instant petition. Petitioner assails the findings of Special Prosecutor Pascual that under Executive Order No. 205,9 it is the National Telecommunications Commission (NTC), and not the local government unit, that has the power and authority to allow or disallow the operation of cable television. It argues that while the NTC has the authority to grant the franchise to operate a cable television, this power is not exclusive because under the Local Government Code, the city council also has the power to grant permits, licenses and franchises in aid of the local government units regulatory or revenue raising powers. Petitioner also contends that the grant of exclusive franchise to Spacelink for a period of ten (10) years subject to automatic renewal, contravenes Section 2 of Executive Order No. 205, which provides that "a certificate of authority to operate a CATV by the Commission shall be on a non-exclusive basis and for a period not to exceed 15 years." Thus, in awarding an exclusive franchise, the petitioner asserts that respondents gave Spacelink undue or unwarranted advantage and preference because it stifled business competition. It claims that, even assuming the lack of actual

damage or injury, the fact remains that respondents extended undue favor and advantage to Spacelink, which makes them liable under Section 3(e) of R.A. No. 3019. The petition is bereft of merit. Respondents were charged with violation of Section 3(e), R.A. No. 3019, which states: Section 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: (e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions. (Emphasis ours) Thus, for one to be held liable under Section 3(e), R.A. No. 3019, he must be an officer or employee of offices or government corporations charged with the grant of licenses or permits or other concessions. Executive Order No. 205 clearly provides that only the NTC could grant certificates of authority to cable television operators and issue the necessary implementing rules and regulations. Likewise, Executive Order No. 436,10vests with the NTC the regulation and supervision of cable television industry in the Philippines. Our pronouncement in Batangas CATV, Inc. v. Court of Appeals,11 is pertinent: There is no law specifically authorizing the LGUs to grant franchises to operate CATV system. Whatever authority the LGUs had before, the same had been withdrawn when President Marcos issued P.D. No. 1512 "terminating all franchises, permits or certificates for the operation of CATV system previously granted by local governments." Today, pursuant to Section 3 of E.O. No. 436, "only persons, associations, partnerships, corporations or cooperatives granted a Provisional Authority or Certificate of Authority by the NTC may install, operate and maintain a cable television system or render cable television service within a service area." It is clear that in the absence of constitutional or legislative authorization, municipalities have no power to grant franchises. Consequently, the protection of the constitutional provision as to impairment of the obligation of a contract does not extend to privileges, franchises and grants given by a municipality in excess of its powers, orultra vires.

It is undisputed that respondents were not employees of NTC. Instead, they were charged in their official capacity as members of the Sangguniang Panlungsod of Gingoog City. As such, they cannot be charged with violation of Section 3(e), R.A. No. 3019 for enacting Ordinance No. 19 which granted Spacelink a franchise to operate a cable television. Petitioner, however, insists that while the NTC is the licensing and regulatory body, nonetheless, the actual operations of cable television entails other activities, which may be regulated by the local government unit pursuant to the general welfare clause or subject to its revenue generating powers. Again, this issue has been discussed in Batangas CATV, Inc. v. Court of Appeals,12 thus: But, lest we be misunderstood, nothing herein should be interpreted as to strip LGUs of their general power to prescribe regulations under the general welfare clause of the Local Government Code. It must be emphasized that when E.O. No. 436 decrees that the "regulatory power" shall be vested "solely" in the NTC, it pertains to the "regulatory power" over those matters, which are peculiarly within the NTCs competence There is no dispute that respondent Sangguniang Panlungsod, like other local legislative bodies, has been empowered to enact ordinances and approve resolutions under the general welfare clause of B.P. Blg. 337, the Local Government Code of 1983. That it continues to possess such power is clear under the new law, R.A. No. 7160 (the Local Government Code of 1991). Indeed, under the general welfare clause of the Local Government Code, the local government unit can regulate the operation of cable television but only when it encroaches on public properties, such as the use of public streets, rights of ways, the founding of structures, and the parceling of large regions.13 Beyond these parameters, its acts, such as the grant of the franchise to Spacelink, would be ultra vires. Plainly, the Sangguniang Panlungsod of Gingoog City overstepped the bounds of its authority when it usurped the powers of the NTC with the enactment of Ordinance No. 19. Being a void legislative act, Ordinance No. 19 did not confer any right nor vest any privilege to Spacelink. As such, petitioner could not claim to have been prejudiced or suffered injury thereby. Incidentally, petitioners claim of undue injury becomes even more baseless with the finding that Spacelink did not commence to operate despite the grant to it of a franchise under Ordinance No. 19. In addition, petitioner could not impute manifest partiality, evident bad faith or gross inexcusable negligence on the part of the respondents when they enacted Ordinance No. 19. A perfunctory reading of Resolution No. 261 shows that the Sangguniang Panlungsod did not grant a franchise to it but merely expressed its willingness to allow the petitioner to install and operate a cable television. Had respondents intended

otherwise, they would have couched the resolution in more concrete, specific and categorical terms. In contrast, Ordinance No. 19 clearly and unequivocally granted a franchise to Spacelink, specifically stating therein its terms and conditions. Not being a bona fide franchise holder, petitioner could not claim prior right on the strength of Resolution No. 261. WHEREFORE, in view of the foregoing, the petition is DENIED. The assailed Resolution of the Sandiganbayan dated June 17, 1998, approving the withdrawal of the Information against the respondents and the dismissal of Crim. Case No. 22026, for violation of Section 3(e), R.A. No. 3019, and the Resolution dated September 9, 1998, denying reconsideration thereof, are AFFIRMED. SO ORDERED. Davide, Jr., C.J., (Chairman), Quisumbing, Carpio and Azcuna, JJ., concur.

G.R. No. 93252 August 5, 1991 RODOLFO T. GANZON, petitioner, vs. THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, respondents. G.R. No. 93746 August 5,1991 MARY ANN RIVERA ARTIEDA, petitioner, vs. HON. LUIS SANTOS, in his capacity as Secretary of the Department of Local Government, NICANOR M. PATRICIO, in his capacity as Chief, Legal Service of the Department of Local Government and SALVADOR CABALUNA JR., respondents. G.R. No. 95245 August 5,1991 RODOLFO T. GANZON, petitioner, vs. THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, in his capacity as the Secretary of the Department of Local Government, respondents. Nicolas P. Sonalan for petitioner in 93252. Romeo A. Gerochi for petitioner in 93746. Eugenio Original for petitioner in 95245.

SARMIENTO, J.:p The petitioners take common issue on the power of the President (acting through the Secretary of Local Government), to suspend and/or remove local officials. The petitioners are the Mayor of Iloilo City (G.R. Nos. 93252 and 95245) and a member of the Sangguniang Panglunsod thereof (G.R. No. 93746), respectively. The petitions of Mayor Ganzon originated from a series of administrative complaints, ten in number, filed against him by various city officials sometime in 1988, on various charges, among them, abuse of authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable violation of the Constitution, and arbitrary detention. 1 The personalities involved are Joceleehn Cabaluna, a clerk at the city health office; Salvador Cabaluna, her husband; Dr. Felicidad Ortigoza, Assistant City Health Officer; Mansueto Malabor, Vice-Mayor; Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong, and Eduardo Pefia Redondo members of the Sangguniang Panglunsod; and Pancho Erbite, a barangay tanod. The complaints against the Mayor are set forth in the opinion of the respondent Court of Appeals. 2 We quote: xxx xxx xxx In her verified complaint (Annex A), Mrs. Cabaluna, a clerk assigned to the City Health, Office of Iloilo City charged that due to political reasons, having supported the rival candidate, Mrs. Rosa 0. Caram, the petitioner City Mayor, using as an excuse the exigency of the service and the interest of the public, pulled her out from rightful office where her qualifications are best suited and assigned her to a work that should be the function of a noncareer service employee. To make matters worse, a utility worker in the office of the Public Services, whose duties are alien to the complainant's duties and functions, has been detailed to take her place. The petitioner's act are pure harassments aimed at luring her away from her permanent position or force her to resign. In the case of Dra. Felicidad Ortigoza, she claims that the petitioner handpicked her to perform task not befitting her position as Assistant City Health Officer of Iloilo City; that her office was padlocked without any explanation or justification; that her salary was withheld without cause since April 1, 1988; that when she filed her vacation leave, she was given the run-around treatment in the approval of her leave in connivance with Dr. Rodolfo Villegas and that she was the object of a well-engineered trumpedup charge in an administrative complaint filed by Dr. Rodolfo Villegas (Annex B).

On the other hand, Mansuelo Malabor is the duly elected Vice-Mayor of Iloilo City and complainants Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong and Eduardo Pefia Pedondo are members of the Sangguniang Panglunsod of the City of Iloilo. Their complaint arose out from the case where Councilor Larry Ong, whose key to his office was unceremoniously and without previous notice, taken by petitioner. Without an office, Councilor Ong had to hold office at Plaza Libertad, The ViceMayor and the other complainants sympathized with him and decided to do the same. However, the petitioner, together with its fully-armed security men, forcefully drove them away from Plaza Libertad. Councilor Ong denounced the petitioner's actuations the following day in the radio station and decided to hold office at the Freedom Grandstand at Iloilo City and there were so many people who gathered to witness the incident. However, before the group could reach the area, the petitioner, together with his security men, led the firemen using a firetruck in dozing water to the people and the bystanders. Another administrative case was filed by Pancho Erbite, a barangay tanod, appointed by former mayor Rosa O. Caram. On March 13, 1988, without the benefit of charges filed against him and no warrant of arrest was issued, Erbite was arrested and detained at the City Jail of Iloilo City upon orders of petitioner. In jail, he was allegedly mauled by other detainees thereby causing injuries He was released only the following day. 3 The Mayor thereafter answered 4 and the cases were shortly set for hearing. The opinion of the Court of Appeals also set forth the succeeding events: xxx xxx xxx The initial hearing in the Cabaluna and Ortigoza cases were set for hearing on June 20-21, 1988 at the Regional Office of the Department of Local Government in Iloilo City. Notices, through telegrams, were sent to the parties (Annex L) and the parties received them, including the petitioner. The petitioner asked for a postponement before the scheduled date of hearing and was represented by counsel, Atty. Samuel Castro. The hearing officers, Atty. Salvador Quebral and Atty. Marino Bermudez had to come all the way from Manila for the two-day hearings but was actually held only on June 20,1988 in view of the inability and unpreparedness of petitioner's counsel. The next hearings were re-set to July 25, 26, 27,1988 in the same venueIloilo City. Again, the petitioner attempted to delay the proceedings and moved for a postponement under the excuse that he had just hired his counsel. Nonetheless, the hearing officers denied the motion to postpone,

in view of the fact that the parties were notified by telegrams of the scheduled hearings (Annex M). In the said hearings, petitioner's counsel cross-examined the complainants and their witnesses. Finding probable grounds and reasons, the respondent issued a preventive suspension order on August 11, 1988 to last until October 11,1988 for a period of sixty (60) days. Then the next investigation was set on September 21, 1988 and the petitioner again asked for a postponement to September 26,1988. On September 26, 1988, the complainants and petitioner were present, together with their respective counsel. The petitioner sought for a postponement which was denied. In these hearings which were held in Mala the petitioner testified in Adm. Case No. C-10298 and 10299. The investigation was continued regarding the Malabor case and the complainants testified including their witnesses. On October 10, 1988, petitioner's counsel, Atty. Original moved for a postponement of the October 24, 1988 hearing to November 7 to 11, 1988 which was granted. However, the motion for change of venue as denied due to lack of funds. At the hearing on November 7, 1988, the parties and counsel were present. Petitioner reiterated his motion to change venue and moved for postponement anew. The counsel discussed a proposal to take the deposition of witnesses in Iloilo City so the hearing was indefinitely postponed. However, the parties failed to come to terms and after the parties were notified of the hearing, the investigation was set to December 13 to 15, 1988. The petitioner sought for another postponement on the ground that his witnesses were sick or cannot attend the investigation due to lack of transportation. The motion was denied and the petitioner was given up to December 14, 1988 to present his evidence. On December 14,1988, petitioner's counsel insisted on his motion for postponement and the hearing officers gave petitioner up to December 15, 1988 to present his evidence. On December 15, 1988, the petitioner failed to present evidence and the cases were considered submitted for resolution. In the meantime, a prima facie evidence was found to exist in the arbitrary detention case filed by Pancho Erbite so the respondent ordered the petitioner's second preventive suspension dated October 11, 1988 for

another sixty (60) days. The petitioner was able to obtain a restraining order and a writ of preliminary injunction in the Regional Trial Court, Branch 33 of Iloilo City. The second preventive suspension was not enforced. 5 Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition against the respondent Secretary of Local Government (now, Interior) in the Regional Trial Court, Iloilo City, where he succeeded in obtaining a writ of preliminary injunction. Presently, he instituted CA-G.R. SP No. 16417, an action for prohibition, in the respondent Court of Appeals. Meanwhile, on May 3, 1990, the respondent Secretary issued another order, preventively suspending Mayor Ganzon for another sixty days, the third time in twenty months, and designating meantime Vice-Mayor Mansueto Malabor as acting mayor. Undaunted, Mayor Ganzon commenced CA-G.R. SP No. 20736 of the Court of Appeals, a petition for prohibition, 6 (Malabor it is to be noted, is one of the complainants, and hence, he is interested in seeing Mayor Ganzon ousted.) On September 7, 1989, the Court of Appeals rendered judgment, dismissing CA-G.R. SP No. 16417. On July 5, 1990, it likewise promulgated a decision, dismissing CA-G.R. SP No. 20736. In a Resolution dated January 24, 1990, it issued a Resolution certifying the petition of Mary Ann Artieda, who had been similary charged by the respondent Secretary, to this Court. On June 26,1990, we issued a Temporary Restraining Order, barring the respondent Secretary from implementing the suspension orders, and restraining the enforcement of the Court of Appeals' two decisions. In our Resolution of November 29, 1990, we consolidated all three cases. In our Resolutions of January 15, 1991, we gave due course thereto. Mayor Ganzon claims as a preliminary (GR No. 93252), that the Department of Local Government in hearing the ten cases against him, had denied him due process of law and that the respondent Secretary had been "biased, prejudicial and hostile" towards him 7 arising from his (Mayor Ganzon's) alleged refusal to join the Laban ng Demokratikong Pilipino party 8 and the running political rivalry they maintained in the last congressional and local elections; 9 and his alleged refusal to operate a lottery in Iloilo City. 10 He also alleges that he requested the Secretary to lift his suspension since it had come ninety days prior to an election (the barangay elections of November 14, 1988), 11 notwithstanding which, the latter proceeded with the hearing and meted out two more suspension orders of the aforementioned cases. 12 He likewise contends that he sought to bring the cases to Iloilo City (they were held in Manila) in order to reduce the costs of proceeding, but the Secretary rejected his request. 13 He states that he asked for postponement on "valid and justifiable" 14 grounds, among them, that he was suffering from a heart ailment which required confinement; that his "vital" 15 witness was also hospitalized 16 but that the latter unduly denied his request. 17

Mayor Ganzon's primary argument (G.R. Nos. 93252 and 95245) is that the Secretary of Local Government is devoid, in any event, of any authority to suspend and remove local officials, an argument reiterated by the petitioner Mary Ann Rivera Artieda (G.R. No. 93746). As to Mayor Ganzon's charges of denial of due process, the records do not show very clearly in what manner the Mayor might have been deprived of his rights by the respondent Secretary. His claims that he and Secretary Luis-Santos were (are) political rivals and that his "persecution" was politically motivated are pure speculation and although the latter does not appear to have denied these contentions (as he, Mayor Ganzon, claims), we can not take his word for it the way we would have under less political circumstances, considering furthermore that "political feud" has often been a good excuse in contesting complaints. The Mayor has failed furthermore to substantiate his say-so's that Secretary Santos had attempted to seduce him to join the administration party and to operate a lottery in Iloilo City. Again, although the Secretary failed to rebut his allegations, we can not accept them, at face value, much more, as judicial admissions as he would have us accept them 18 for the same reasons above-stated and furthermore, because his say so's were never corroborated by independent testimonies. As a responsible public official, Secretary Santos, in pursuing an official function, is presumed to be performing his duties regularly and in the absence of contrary evidence, no ill motive can be ascribed to him. As to Mayor Ganzon's contention that he had requested the respondent Secretary to defer the hearing on account of the ninety-day ban prescribed by Section 62 of Batas Blg. 337, the Court finds the question to be moot and academic since we have in fact restrained the Secretary from further hearing the complaints against the petitioners. 19 As to his request, finally, for postponements, the Court is afraid that he has not given any compelling reason why we should overturn the Court of Appeals, which found no convincing reason to overrule Secretary Santos in denying his requests. Besides, postponements are a matter of discretion on the part of the hearing officer, and based on Mayor Ganzon's above story, we are not convinced that the Secretary has been guilty of a grave abuse of discretion. The Court can not say, under these circumstances, that Secretary Santos' actuations deprived Mayor Ganzon of due process of law. We come to the core question: Whether or not the Secretary of Local Government, as the President's alter ego, can suspend and/or remove local officials. It is the petitioners' argument that the 1987 Constitution 20 no longer allows the President, as the 1935 and 1973 Constitutions did, to exercise the power of suspension and/or removal over local officials. According to both petitioners, the

Constitution is meant, first, to strengthen self-rule by local government units and second, by deleting the phrase 21 as may be provided by law to strip the President of the power of control over local governments. It is a view, so they contend, that finds support in the debates of the Constitutional Commission. The provision in question reads as follows: Sec. 4. The President of the Philippines shall exercise general supervision over local governments. Provinces with respect to component cities and municipalities, and cities and municipalities with respect to component barangays shall ensure that the acts of their component units are within the scope of their prescribed powers and functions. 22 It modifies a counterpart provision appearing in the 1935 Constitution, which we quote: Sec. 10. The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all Local governments as may be provided by law, and take care that the laws be faithfully executed. 23 The petitioners submit that the deletion (of "as may be provided by law") is significant, as their argument goes, since: (1) the power of the President is "provided by law" and (2) hence, no law may provide for it any longer. It is to be noted that in meting out the suspensions under question, the Secretary of Local Government acted in consonance with the specific legal provisions of Batas Blg. 337, the Local Government Code, we quote: Sec. 62. Notice of Hearing. Within seven days after the complaint is filed, the Minister of local Government, or the sanggunian concerned, as the case may be, shall require the respondent to submit his verified answer within seven days from receipt of said complaint, and commence the hearing and investigation of the case within ten days after receipt of such answer of the respondent. No investigation shall be held within ninety days immediately prior to an election, and no preventive suspension shall be imposed with the said period. If preventive suspension has been imposed prior to the aforesaid period, the preventive suspension shall be lifted.24 Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by the Minister of Local Government if the respondent is a provincial or city official, by the provincial governor if the respondent is an elective municipal official, or by the city or municipal mayor if the respondent is an elective barangay official. (2) Preventive suspension may be imposed at any time after the issues are joined, when there is reasonable ground to believe that the respondent has

committed the act or acts complained of, when the evidence of culpability is strong, when the gravity of the offense so warrants, or when the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. In all cases, preventive suspension shall not extend beyond sixty days after the start of said suspension. (3) At the expiration of sixty days, the suspended official shall be deemed reinstated in office without prejudice to the continuation of the proceedings against him until its termination. However ' if the delay in the proceedings of the case is due to his fault, neglect or request, the time of the delay shall not be counted in computing the time of suspension. 25 The issue, as the Court understands it, consists of three questions: (1) Did the 1987 Constitution, in deleting the phrase "as may be provided by law" intend to divest the President of the power to investigate, suspend, discipline, and/or remove local officials? (2) Has the Constitution repealed Sections 62 and 63 of the Local Government Code? (3) What is the significance of the change in the constitutional language? It is the considered opinion of the Court that notwithstanding the change in the constitutional language, the charter did not intend to divest the legislature of its right or the President of her prerogative as conferred by existing legislation to provide administrative sanctions against local officials. It is our opinion that the omission (of "as may be provided by law") signifies nothing more than to underscore local governments' autonomy from congress and to break Congress' "control" over local government affairs. The Constitution did not, however, intend, for the sake of local autonomy, to deprive the legislature of all authority over municipal corporations, in particular, concerning discipline. Autonomy does not, after all, contemplate making mini-states out of local government units, as in the federal governments of the United States of America (or Brazil or Germany), although Jefferson is said to have compared municipal corporations euphemistically to "small republics." 26 Autonomy, in the constitutional sense, is subject to the guiding star, though not control, of the legislature, albeit the legislative responsibility under the Constitution and as the "supervision clause" itself suggest-is to wean local government units from over-dependence on the central government. It is noteworthy that under the Charter, "local autonomy" is not instantly self-executing, but subject to, among other things, the passage of a local government code, 27 a local tax law, 28 income distribution legislation, 29 and a national representation law, 30 and measures 31 designed to realize autonomy at the local level. It is also noteworthy that in spite of autonomy, the Constitution places the local government under the general supervision of the Executive. It is noteworthy finally, that the Charter allows Congress to include in the local government code provisions for removal of local officials, which

suggest that Congress may exercise removal powers, and as the existing Local Government Code has done, delegate its exercise to the President. Thus: Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units. 32 As hereinabove indicated, the deletion of "as may be provided by law" was meant to stress, sub silencio, the objective of the framers to strengthen local autonomy by severing congressional control of its affairs, as observed by the Court of Appeals, like the power of local legislation. 33 The Constitution did nothing more, however, and insofar as existing legislation authorizes the President (through the Secretary of Local Government) to proceed against local officials administratively, the Constitution contains no prohibition. The petitioners are under the impression that the Constitution has left the President mere supervisory powers, which supposedly excludes the power of investigation, and denied her control, which allegedly embraces disciplinary authority. It is a mistaken impression because legally, "supervision" is not incompatible with disciplinary authority as this Court has held, 34 thus: xxx xxx xxx It is true that in the case of Mondano vs. Silvosa, 51 Off. Gaz., No. 6 p. 2884, this Court had occasion to discuss the scope and extent of the power of supervision by the President over local government officials in contrast to the power of control given to him over executive officials of our government wherein it was emphasized that the two terms, control and supervision, are two different things which differ one from the other in meaning and extent. Thus in that case the Court has made the following digression: "In administration law supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them the former may take such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify of set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for that of the latter." But from this pronouncement it cannot be reasonably inferred that the power of supervision of the President over local government officials does not include the power of investigation when in his opinion the good of the public

service so requires, as postulated in Section 64(c) of the Revised Administrative Code. ... 35 xxx xxx xxx "Control" has been defined as "the power of an officer to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for test of the latter." 36 "Supervision" on the other hand means "overseeing or the power or authority of an officer to see that subordinate officers perform their duties. 37 As we held, 38 however, "investigating" is not inconsistent with "overseeing", although it is a lesser power than "altering". The impression is apparently exacerbated by the Court's pronouncements in at least three cases, Lacson v. Roque, 39 Hebron v. Reyes, 40 and Mondano v. Silvosa, 41 and possibly, a fourth one, Pelaez v. Auditor General. 42 In Lacson, this Court said that the President enjoyed no control powers but only supervision "as may be provided by law," 43 a rule we reiterated in Hebron, and Mondano. In Pelaez, we stated that the President "may not . . . suspend an elective official of a regular municipality or take any disciplinary action against him, except on appeal from a decision of the corresponding provincial board." 44 However, neither Lacson nor Hebron nor Mondano categorically banned the Chief Executive from exercising acts of disciplinary authority because she did not exercise control powers, but because no law allowed her to exercise disciplinary authority. Thus, according to Lacson: The contention that the President has inherent power to remove or suspend municipal officers is without doubt not well taken. Removal and suspension of public officers are always controlled by the particular law applicable and its proper construction subject to constitutional limitations. 45 In Hebron we stated: Accordingly, when the procedure for the suspension of an officer is specified by law, the same must be deemed mandatory and adhered to strictly, in the absence of express or clear provision to the contrary-which does not et with respect to municipal officers ... 46 In Mondano, the Court held: ... The Congress has expressly and specifically lodged the provincial supervision over municipal officials in the provincial governor who is authorized to "receive and investigate complaints made under oath against municipal officers for neglect of duty, oppression, corruption or other form of maladministration of office, and conviction by final judgment of any crime involving moral turpitude." And if the charges are serious, "he shall submit written charges touching the matter to the provincial board, furnishing a copy of such charges to the accused either personally or by registered

mail, and he may in such case suspend the officer (not being the municipal treasurer) pending action by the board, if in his opinion the charge by one affecting the official integrity of the officer in question." Section 86 of the Revised Administration Code adds nothing to the power of supervision to be exercised by the Department Head over the administration of ... municipalities ... . If it be construed that it does and such additional power is the same authority as that vested in the Department Head by section 79(c) of the Revised Administrative Code, then such additional power must be deemed to have been abrogated by Section 110(l), Article VII of the Constitution. 47 xxx xxx xxx In Pelaez, we stated that the President can not impose disciplinary measures on local officials except on appeal from the provincial board pursuant to the Administrative Code. 48 Thus, in those case that this Court denied the President the power (to suspend/remove) it was not because we did not think that the President can not exercise it on account of his limited power, but because the law lodged the power elsewhere. But in those cases ii which the law gave him the power, the Court, as in Ganzon v. Kayanan, found little difficulty in sustaining him. 49 The Court does not believe that the petitioners can rightfully point to the debates of the Constitutional Commission to defeat the President's powers. The Court believes that the deliberations are by themselves inconclusive, because although Commissioner Jose Nolledo would exclude the power of removal from the President, 50Commissioner Blas Ople would not. 51 The Court is consequently reluctant to say that the new Constitution has repealed the Local Government Code, Batas Blg. 37. As we said, "supervision" and "removal" are not incompatible terms and one may stand with the other notwithstanding the stronger expression of local autonomy under the new Charter. We have indeed held that in spite of the approval of the Charter, Batas Blg. 337 is still in force and effect. 52 As the Constitution itself declares, local autonomy means "a more responsive and accountable local government structure instituted through a system of decentralization." 53 The Constitution as we observed, does nothing more than to break up the monopoly of the national government over the affairs of local governments and as put by political adherents, to "liberate the local governments from the imperialism of Manila." Autonomy, however, is not meant to end the relation of partnership and interdependence between the central administration and local government units, or otherwise, to user in a regime of federalism. The Charter has not taken such a radical step. Local governments, under the Constitution, are subject to regulation, however

limited, and for no other purpose than precisely, albeit paradoxically, to enhance selfgovernment. As we observed in one case, 54 decentralization means devolution of national administration but not power to the local levels. Thus: Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of administration when the central government delegates administrative powers to political subdivisions in order to broaden the base of government power and in the process to make local governments "more responsive and accountable," and "ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress." At the same time, it relieves the central government of the burden of managing local affairs and enables it to concentrate on national concerns. The President exercises "general supervision" over them, but only to "ensure that local affairs are administered according to law." He has no control over their acts in the sense that he can substitute their judgments with his own. Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments units declared to be autonomous, In that case, the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central authorities. According to a constitutional author, decentralization of power amounts to "self-immolation," since in that event, the autonomous government becomes accountable not to the central authorities but to its constituency. 55 The successive sixty-day suspensions imposed on Mayor Rodolfo Ganzon is albeit another matter. What bothers the Court, and what indeed looms very large, is the fact that since the Mayor is facing ten administrative charges, the Mayor is in fact facing the possibility of 600 days of suspension, in the event that all ten cases yield prima faciefindings. The Court is not of course tolerating misfeasance in public office (assuming that Mayor Ganzon is guilty of misfeasance) but it is certainly another question to make him serve 600 days of suspension, which is effectively, to suspend him out of office. As we held: 56 2. Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His term of office does not expire until 1986. Were it not for this information and the suspension decreed by the Sandiganbayan according to the AntiGraft and Corrupt Practices Act, he would have been all this while in the full discharge of his functions as such municipal mayor. He was elected precisely to do so. As of October 26, 1983, he has been unable to. it is a basic assumption of the electoral process implicit in the right of suffrage

that the people are entitled to the services of elective officials of their choice. For misfeasance or malfeasance, any of them could, of course, be proceeded against administratively or, as in this instance, criminally. In either case, Ms culpability must be established. Moreover, if there be a criminal action, he is entitled to the constitutional presumption of innocence. A preventive suspension may be justified. Its continuance, however, for an unreasonable length of time raises a due process question. For even if thereafter he were acquitted, in the meanwhile his right to hold office had been nullified. Clearly, there would be in such a case an injustice suffered by him. Nor is he the only victim. There is injustice inflicted likewise on the people of Lianga They were deprived of the services of the man they had elected to serve as mayor. In that sense, to paraphrase Justice Cardozo, the protracted continuance of this preventive suspension had outrun the bounds of reason and resulted in sheer oppression. A denial of due process is thus quite manifest. It is to avoid such an unconstitutional application that the order of suspension should be lifted. 57 The plain truth is that this Court has been ill at ease with suspensions, for the above reasons, 58 and so also, because it is out of the ordinary to have a vacancy in local government. The sole objective of a suspension, as we have held, 59 is simply "to prevent the accused from hampering the normal cause of the investigation with his influence and authority over possible witnesses" 60 or to keep him off "the records and other evidence. 61 It is a means, and no more, to assist prosecutors in firming up a case, if any, against an erring local official. Under the Local Government Code, it can not exceed sixty days, 62 which is to say that it need not be exactly sixty days long if a shorter period is otherwise sufficient, and which is also to say that it ought to be lifted if prosecutors have achieved their purpose in a shorter span. Suspension is not a penalty and is not unlike preventive imprisonment in which the accused is held to insure his presence at the trial. In both cases, the accused (the respondent) enjoys a presumption of innocence unless and until found guilty. Suspension finally is temporary and as the Local Government Code provides, it may be imposed for no more than sixty days. As we held, 63 a longer suspension is unjust and unreasonable, and we might add, nothing less than tyranny. As we observed earlier, imposing 600 days of suspension which is not a remote possibility Mayor Ganzon is to all intents and purposes, to make him spend the rest of his term in inactivity. It is also to make, to all intents and purposes, his suspension permanent. It is also, in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not been proven. Worse, any absolution will be for naught because needless to say,

the length of his suspension would have, by the time he is reinstated, wiped out his tenure considerably. The Court is not to be mistaken for obstructing the efforts of the respondent Secretary to see that justice is done in Iloilo City, yet it is hardly any argument to inflict on Mayor Ganzon successive suspensions when apparently, the respondent Secretary has had sufficient time to gather the necessary evidence to build a case against the Mayor without suspending him a day longer. What is intriguing is that the respondent Secretary has been cracking down, so to speak, on the Mayor piecemeal apparently, to pin him down ten times the pain, when he, the respondent Secretary, could have pursued a consolidated effort. We reiterate that we are not precluding the President, through the Secretary of Interior from exercising a legal power, yet we are of the opinion that the Secretary of Interior is exercising that power oppressively, and needless to say, with a grave abuse of discretion. The Court is aware that only the third suspension is under questions, and that any talk of future suspensions is in fact premature. The fact remains, however, that Mayor Ganzon has been made to serve a total of 120 days of suspension and the possibility of sixty days more is arguably around the corner (which amounts to a violation of the Local Government Code which brings to light a pattern of suspensions intended to suspend the Mayor the rest of his natural tenure. The Court is simply foreclosing what appears to us as a concerted effort of the State to perpetuate an arbitrary act. As we said, we can not tolerate such a state of affairs. We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third suspension and lifting, for the purpose, the Temporary Restraining Order earlier issued. Insofar as the seven remaining charges are concerned, we are urging the Department of Local Government, upon the finality of this Decision, to undertake steps to expedite the same, subject to Mayor Ganzon's usual remedies of appeal, judicial or administrative, or certiorari, if warranted, and meanwhile, we are precluding the Secretary from meting out further suspensions based on those remaining complaints, notwithstanding findings of prima facie evidence. In resume the Court is laying down the following rules: 1. Local autonomy, under the Constitution, involves a mere decentralization of administration, not of power, in which local officials remain accountable to the central government in the manner the law may provide; 2. The new Constitution does not prescribe federalism;

3. The change in constitutional language (with respect to the supervision clause) was meant but to deny legislative control over local governments; it did not exempt the latter from legislative regulations provided regulation is consistent with the fundamental premise of autonomy; 4. Since local governments remain accountable to the national authority, the latter may, by law, and in the manner set forth therein, impose disciplinary action against local officials; 5. "Supervision" and "investigation" are not inconsistent terms; "investigation" does not signify "control" (which the President does not have); 6. The petitioner, Mayor Rodolfo Ganzon. may serve the suspension so far ordered, but may no longer be suspended for the offenses he was charged originally; provided: a) that delays in the investigation of those charges "due to his fault, neglect or request, (the time of the delay) shall not be counted in computing the time of suspension. [Supra, sec. 63(3)] b) that if during, or after the expiration of, his preventive suspension, the petitioner commits another or other crimes and abuses for which proper charges are filed against him by the aggrieved party or parties, his previous suspension shall not be a bar to his being preventively suspended again, if warranted under subpar. (2), Section 63 of the Local Government Code. WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary Restraining Order issued is LIFTED. The suspensions of the petitioners are AFFIRMED, provided that the petitioner, Mayor Rodolfo Ganzon, may not be made to serve future suspensions on account of any of the remaining administrative charges pending against him for acts committed prior to August 11, 1988. The Secretary of Interior is ORDERED to consolidate all such administrative cases pending against Mayor Ganzon. The sixty-day suspension against the petitioner, Mary Ann Rivera Artieda, is AFFIRMED. No costs. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ concur.

G.R. No. 79956 January 29, 1990 CORDILLERA BROAD COALITION, petitioner, vs. COMMISSION ON AUDIT, respondent. G.R. No. 82217 January 29, 1990 LILIA YARANON and BONA BAUTISTA, assisted by their spouses, BRAULIO D. YARANON and DEMETRIO D. BAUTISTA, JR., respectively; JAMES BRETT and SINAI C. HAMADA, petitioners, vs. THE COMMISSION ON AUDIT, HON. CATALINO MACARAIG, Executive Secretary, HON. VICENTE JAYME, Secretary of Finance, HON. GUILLERMO N. CARAGUE, Secretary of Budget and Management, and HON. ROSALINA S. CAJUCOM, OIC National Treasurer, respondents.

CORTES, J.: In these consolidated petitions, the constitutionality of Executive Order No. 220, dated July 15, 1987, which created the (Cordillera Administrative Region, is assailed on the primary ground that it pre-empts the enactment of an organic act by the Congress and the creation of' the autonomous region in the Cordilleras conditional on the approval of the act through a plebiscite. Relative to the creation of autonomous regions, the constitution, in Article X, provides: AUTONOMOUS REGIONS Sec. 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines. SEC. 16. The President shall exercise general supervision over autonomous regions to ensure that laws are faithfully executed. Sec. 17. All powers, functions, and responsibilities not granted Constitution or by law to the autonomous regions shall be vested in the National Government.

Sec. 18. The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative commission composed of representatives appointed by the President from a list of nominees from multi-sectoral bodies. The organic act shall define the basic structure of government for the region consisting of the executive department and legislative assembly, both of which shall be elective and representative of the constituent political units. The organic acts shall likewise provide for special courts with personal, family and property law jurisdiction consistent with the provisions of this Constitution and national laws. The creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the autonomous region. Sec. 19. The first Congress elected under this Constitution shall, within eighteen months from the time of organization of both Houses, pass the organic acts for the autonomous regions in Muslim Mindanao and the Cordilleras. Sec. 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous regions shall provide for legislative powers over: (1) Administrative organization; (2) Creation of sources of revenues; (3) Ancestral domain and natural resources; (4) Personal, family and property relations; (5) Regional urban and rural planning development; (6) Economic, social and tourism development ; (7) Educational policies; (8) Preservation and development of the cultural heritage; and (9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region.

Sec. 21. The preservation of peace and order within the regions shall be the responsibility of the local police agencies which shall be organized, maintained, supervised, and utilized in accordance with applicable laws. The defense and security of the regions shall be the responsibility of the National Government. A study of E.O. No. 220 would be incomplete Without reference to its historical background. In April 1986, just after the EDSA Revolution, Fr. Conrado M. Balweg, S.V.D., broke off on ideological grounds from the Communist Party of the Philippines (CPP) and its military arm the New People's Army. (NPA). After President Aquino was installed into office by People Power, she advocated a policy of national reconciliation. She called on all revolutionary forces to a peace dialogue. The CPLA heeded this call of the President. After the preliminary negotiations, President Aquino and some members of her Cabinet flew to Mt. Data in the Mountain Province on September 13, 1986 and signed with Fr. Conrado M. Balweg (As Commander of the CPLA and Ama Mario Yag-ao (as President of Cordillera Bodong Administration, the civil government of the CPLA a ceasefire agreement that signified the cessation of hostilities (WHEREAS No. 7, E.O. 220). The parties arrived at an agreement in principle: the Cordillera people shall not undertake their demands through armed and violent struggle but by peaceful means, such as political negotiations. The negotiations shall be a continuing process until the demands of the Cordillera people shall have been substantially granted. On March 27, 1987, Ambassador Pelaez [Acting as Chief Negotiator of the government], in pursuance of the September 13, 1986 agreement, flew to the Mansion House, Baguio City, and signed with Fr. Balweg (as Chairman of the Cordillera panel) a joint agreement, paragraphs 2 and 3 of which state: Par. 2- Work together in drafting an Executive Order to create a preparatory body that could perform policy-making and administrative functions and undertake consultations and studies leading to a draft organic act for the Cordilleras. Par. 3- Have representatives from the Cordillera panel join the study group of the R.P. Panel in drafting the Executive Order.

Pursuant to the above joint agreement, E.O. 220 was drafted by a panel of the Philippine government and of the representatives of the Cordillera people. On July 15, 1987, President Corazon C. Aquino signed the joint draft into law, known now as E.O. 220. [Rejoinder G.R. No. 82217, pp. 2-3]. Executive Order No. 220, issued by the President in the exercise of her legislative powers under Art. XVIII, sec. 6 of the 1987 Constitution, created the Cordillera Administrative Region (CAR) , which covers the provinces of Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain Province and the City of Baguio [secs. 1 and 2]. It was created to accelerate economic and social growth in the region and to prepare for the establishment of the autonomous region in the Cordilleras [sec. 3]. Its main function is to coordinate the planning and implementation of programs and services in the region, particularly, to coordinate with the local government units as well as with the executive departments of the National Government in the supervision of field offices and in identifying, planning, monitoring, and accepting projects and activities in the region [sec. 5]. It shall also monitor the implementation of all ongoing national and local government projects in the region [sec. 20]. The CAR shall have a Cordillera Regional Assembly as a policy-formulating body and a Cordillera Executive Board as an implementing arm [secs. 7, 8 and 10]. The CAR and the Assembly and Executive Board shall exist until such time as the autonomous regional government is established and organized [sec. 17]. Explaining the rationale for the issuance of E.O. No. 220, its last "Whereas" clause provides: WHEREAS, pending the convening of the first Congress and the enactment of the organic act for a Cordillera autonomous region, there is an urgent need, in the interest of national security and public order, for the President to reorganize immediately the existing administrative structure in the Cordilleras to suit it to the existing political realities therein and the Government's legitimate concerns in the areas, without attempting to pre-empt the constitutional duty of the first Congress to undertake the creation of an autonomous region on a permanent basis. During the pendency of this case, Republic Act No. 6766 entitled "An Act Providing for an Organic Act for the Cordillera Autonomous Region," was enacted and signed into law. The Act recognizes the CAR and the offices and agencies created under E.O. No. 220 and its transitory nature is reinforced in Art. XXI of R.A. No. 6766, to wit:

SEC. 3. The Cordillera Executive Board, the Cordillera Region Assembly as well as all offices and agencies created under Execute Order No. 220 shall cease to exist immediately upon the ratification of this Organic Act. All funds, properties and assets of the Cordillera Executive Board and the Cordillera Regional Assembly shall automatically be transferred to the Cordillera Autonomous Government. I It is well-settled in our jurisprudence that respect for the inherent and stated powers and prerogatives of the law-making body, as well as faithful adherence to the principle of separation of powers, require that its enactment be accorded the presumption of constitutionality. Thus, in any challenge to the constitutionality of a statute, the burden of clearly and unequivocally proving its unconstitutionality always rests upon the challenger. Conversely, failure to so prove will necessarily defeat the challenge. We shall be guided by these principles in considering these consolidated petitions. In these cases, petitioners principally argue that by issuing E.O. No. 220 the President, in the exercise of her legislative powers prior to the convening of the first Congress under the 1987 Constitution, has virtually pre-empted Congress from its mandated task of enacting an organic act and created an autonomous region in the Cordilleras. We have carefully studied the Constitution and E.O. No. 220 and we have come to the conclusion that petitioners' assertions are unfounded. Events subsequent to the issuance of E.O. No. 220 also bear out this conclusion. 1. A reading of E.O. No. 220 will easily reveal that what it actually envisions is the consolidation and coordination of the delivery of services of line departments and agencies of the National Government in the areas covered by the administrative region as a step preparatory to the grant of autonomy to the Cordilleras. It does not create the autonomous region contemplated in the Constitution. It merely provides for transitory measures in anticipation of the enactment of an organic act and the creation of an autonomous region. In short, it prepares the ground for autonomy. This does not necessarily conflict with the provisions of the Constitution on autonomous regions, as we shall show later. The Constitution outlines a complex procedure for the creation of an autonomous region in the Cordilleras. A regional consultative commission shall first be created. The President shall then appoint the members of a regional consultative commission from a list of nominees from multi-sectoral bodies. The

commission shall assist the Congress in preparing the organic act for the autonomous region. The organic act shall be passed by the first Congress under the 1987 Constitution within eighteen months from the time of its organization and enacted into law. Thereafter there shall be held a plebiscite for the approval of the organic act [Art. X, sec. 18]. Only then, after its approval in the plebiscite, shall the autonomous region be created. Undoubtedly, all of these will take time. The President, in 1987 still exercising legislative powers, as the first Congress had not yet convened, saw it fit to provide for some measures to address the urgent needs of the Cordilleras in the meantime that the organic act had not yet been passed and the autonomous region created. These measures we find in E.O. No. 220. The steps taken by the President are obviously perceived by petitioners, particularly petitioner Yaranon who views E.O. No. 220 as capitulation to the Cordillera People's Liberation Army (CPLA) of Balweg, as unsound, but the Court cannot inquire into the wisdom of the measures taken by the President, We can only inquire into whether or not the measures violate the Constitution. But as we have seen earlier, they do not. 2. Moreover, the transitory nature of the CAR does not necessarily mean that it is, as petitioner Cordillera Broad Coalition asserts, "the interim autonomous region in the Cordilleras" [Petition, G.R. No. 79956, p. 25]. The Constitution provides for a basic structure of government in the autonomous region composed of an elective executive and legislature and special courts with personal, family and property law jurisdiction [Art. X, sec. 18]. Using this as a guide, we find that E.O. No. 220 did not establish an autonomous regional government. It created a region, covering a specified area, for administrative purposes with the main objective of coordinating the planning and implementation of programs and services [secs. 2 and 5]. To determine policy, it created a representative assembly, to convene yearly only for a five-day regular session, tasked with, among others, identifying priority projects and development programs [sec. 9]. To serve as an implementing body, it created the Cordillera Executive Board composed of the Mayor of Baguio City, provincial governors and representatives of the Cordillera Bodong Administration, ethnolinguistic groups and non-governmental organizations as regular members and all regional directors of the line departments of the National Government as exofficio members and headed by an Executive Director [secs. 10 and 11]. The bodies created by E.O. No. 220 do not supplant the existing local governmental structure, nor are they autonomous government agencies. They merely constitute the mechanism for an "umbrella" that brings together the existing local governments, the agencies of the National Government, the ethnolinguistic groups or tribes, and non-governmental organizations in a concerted effort to spur development in the Cordilleras.

The creation of the CAR for purposes of administrative coordination is underscored by the mandate of E.O. No. 220 for the President and appropriate national departments and agencies to make available sources of funds for priority development programs and projects recommended by the CAR [sec. 21] and the power given to the President to call upon the appropriate executive departments and agencies of the National Government to assist the CAR [sec. 24]. 3. Subsequent to the issuance of E.O. No. 220, the Congress, after it was convened, enacted Republic Act No. 6658 which created the Cordillera Regional Consultative Commission. The President then appointed its members. The commission prepared a draft organic act which became the basis for the deliberations of the Senate and the House of Representatives. The result was Republic Act No. 6766, the organic act for the Cordillera autonomous region, which was signed into law on October 23, 1989. A plebiscite for the approval of the organic act, to be conducted shortly, shall complete the process outlined in the Constitution. In the meantime, E.O. No. 220 had been in force and effect for more than two years and we find that, despite E.O. No. 220, the autonomous region in the Cordilleras is still to be created, showing the lack of basis of petitioners' assertion. Events have shown that petitioners' fear that E.O. No. 220 was a "shortcut" for the creation of the autonomous region in the Cordilleras was totally unfounded. Clearly, petitioners' principal challenge has failed. II A collateral issue raised by petitioners is the nature of the CAR: whether or not it is a territorial and political subdivision. The Constitution provides in Article X: Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided. xxx xxx xxx Sec. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected.

We have seen earlier that the CAR is not the autonomous region in the Cordilleras contemplated by the Constitution, Thus, we now address petitioners' assertion that E. 0. No. 220 contravenes the Constitution by creating a new territorial and political subdivision. After carefully considering the provisions of E.O. No. 220, we find that it did not create a new territorial and political subdivision or merge existing ones into a larger subdivision. 1. Firstly, the CAR is not a public corporation or a territorial and political subdivision. It does not have a separate juridical personality, unlike provinces, cities and municipalities. Neither is it vested with the powers that are normally granted to public corporations, e.g. the power to sue and be sued, the power to own and dispose of property, the power to create its own sources of revenue, etc. As stated earlier, the CAR was created primarily to coordinate the planning and implementation of programs and services in the covered areas. The creation of administrative regions for the purpose of expediting the delivery of services is nothing new. The Integrated Reorganization Plan of 1972, which was made as part of the law of the land by virtue of Presidential Decree No. 1, established eleven (11) regions, later increased to twelve (12), with definite regional centers and required departments and agencies of the Executive Branch of the National Government to set up field offices therein. The functions of the regional offices to be established pursuant to the Reorganization Plan are: (1) to implement laws, policies, plans, programs, rules and regulations of the department or agency in the regional areas; (2) to provide economical, efficient and effective service to the people in the area; (3) to coordinate with regional offices of other departments, bureaus and agencies in the area; (4) to coordinate with local government units in the area; and (5) to perform such other functions as may be provided by law. [See Part II, chap. III, art. 1, of the Reorganization Plan]. We can readily see that the CAR is in the same genre as the administrative regions created under the Reorganization Plan, albeit under E.O. No. 220 the operation of the CAR requires the participation not only of the line departments and agencies of the National Government but also the local governments, ethnolinguistic groups and non-governmental organizations in bringing about the desired objectives and the appropriation of funds solely for that purpose. 2. Then, considering the control and supervision exercised by the President over the CAR and the offices created under E.O. No. 220, and considering further the indispensable participation of the line departments of the National Government, the CAR may be considered more than anything else as a regional coordinating agency of the National Government, similar to the regional development councils which the President may create under the Constitution [Art. X, sec. 14]. These

councils are "composed of local government officials, regional heads of departments and other government offices, and representatives from nongovernmental organizations within the region for purposes of administrative decentralization to strengthen the autonomy of the units therein and to accelerate the economic and social growth and development of the units in the region." [Ibid.] In this wise, the CAR may be considered as a more sophisticated version of the regional development council. III Finally, petitioners incidentally argue that the creation of the CAR contravened the constitutional guarantee of the local autonomy for the provinces (Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain Province) and city (Baguio City) which compose the CAR. We find first a need to clear up petitioners' apparent misconception of the concept of local autonomy. It must be clarified that the constitutional guarantee of local autonomy in the Constitution [Art. X, sec. 2] refers to the administrative autonomy of local government units or, cast in more technical language, the decentralization of government authority [Villegas v. Subido, G.R. No. L-31004, January 8, 1971, 37 SCRA 1]. Local autonomy is not unique to the 1987 Constitution, it being guaranteed also under the 1973 Constitution [Art. II, sec. 10]. And while there was no express guarantee under the 1935 Constitution, the Congress enacted the Local Autonomy Act (R.A. No. 2264) and the Decentralization Act (R.A. No. 5185), which ushered the irreversible march towards further enlargement of local autonomy in the country [Villegas v. Subido, supra.] On the other hand, the creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is peculiar to the 1987 Constitution contemplates the grant of political autonomy and not just administrative autonomy these regions. Thus, the provision in the Constitution for an autonomous regional government with a basic structure consisting of an executive department and a legislative assembly and special courts with personal, family and property law jurisdiction in each of the autonomous regions [Art. X, sec. 18]. As we have said earlier, the CAR is a mere transitory coordinating agency that would prepare the stage for political autonomy for the Cordilleras. It fills in the resulting gap in the process of transforming a group of adjacent territorial and political subdivisions already enjoying local or administrative autonomy into an autonomous region vested with political autonomy. Anent petitioners' objection, we note the obvious failure to show how the creation of the CAR has actually diminished the local autonomy of the covered

provinces and city. It cannot be over-emphasized that pure speculation and a resort to probabilities are insufficient to cause the invalidation of E.O. No. 220. WHEREFORE, the petitions are DISMISSED for lack of merit. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Grio-Aquino, Medialdea and Regalado, JJ., concur.

Separate Opinions

GUTIERREZ, JR., J., concurring: I concur in the result because with the enactments of Republic Acts No. 6658 and No. 6766, the questioned Executive Order No. 220 has been superseded. The basic issues have become moot and academic. The Cordillera Regional Consultative Commission and the Cordillera Autonomous Region have taken over the functions of the Cordillera Administrative Region. The latter office has becomefunctus oficio. Moreover, there can be no question about the validity of its acts because if it is not de jure, at the very least it is a de facto office. I make these observations because I have grave doubts about the authority of the President to create such an office as the Cordillera Administrative Region (CAR) by mere executive fiat. The office has to be created by statute. To me, the functions of CAR go beyond ordinary planning and preparation for the real office. In fact, Congress had to pass Republic Act 6658 for this purpose. CAR was an agency which accelerated economic and social growth in the Cordilleras, coordinated the implementation of programs, accepted projects and activities in the Cordilleras, and discharged basic administrative functions. It was a de facto agency whose acts are valid but not a de jure or fully valid creation.

Separate Opinions GUTIERREZ, JR., J., concurring:

I concur in the result because with the enactments of Republic Acts No. 6658 and No. 6766, the questioned Executive Order No. 220 has been superseded. The basic issues have become moot and academic. The Cordillera Regional Consultative Commission and the Cordillera Autonomous Region have taken over the functions of the Cordillera Administrative Region. The latter office has becomefunctus oficio. Moreover, there can be no question about the validity of its acts because if it is not de jure, at the very least it is a de facto office. I make these observations because I have grave doubts about the authority of the President to create such an office as the Cordillera Administrative Region (CAR) by mere executive fiat. The office has to be created by statute. To me, the functions of CAR go beyond ordinary planning and preparation for the real office. In fact, Congress had to pass Republic Act 6658 for this purpose. CAR was an agency which accelerated economic and social growth in the Cordilleras, coordinated the implementation of programs, accepted projects and activities in the Cordilleras, and discharged basic administrative functions. It was a de facto agency whose acts are valid but not a de jure or fully valid creation.

[G.R. No. 132988. July 19, 2000] AQUILINO Q. PIMENTEL JR., petitioner, vs. Hon. ALEXANDER AGUIRRE in his capacity as Executive Secretary, Hon. EMILIA BONCODIN in her capacity as Secretary of the Department of Budget and Management, respondents. ROBERTO PAGDANGANAN, intervenor. DECISION PANGANIBAN, J.: The Constitution vests the President with the power of supervision, not control, over local government units (LGUs). Such power enables him to see to it that LGUs and their officials execute their tasks in accordance with law. While he may issue advisories and seek their cooperation in solving economic difficulties, he cannot prevent them from performing their tasks and using available resources to achieve their goals. He may not withhold or alter any authority or power given them by the law. Thus, the withholding of a portion of internal revenue allotments legally due them cannot be directed by administrative fiat.
The Case

Before us is an original Petition for Certiorari and Prohibition seeking (1) to annul Section 1 of Administrative Order (AO) No. 372, insofar as it requires local government units to reduce their expenditures by 25 percent of their authorized regular appropriations for non-personal services; and (2) to enjoin respondents from

implementing Section 4 of the Order, which withholds a portion of their internal revenue allotments. On November 17, 1998, Roberto Pagdanganan, through Counsel Alberto C. Agra, filed a Motion for Intervention/Motion to Admit Petition for Intervention, [1] attaching thereto his Petition in Intervention[2] joining petitioner in the reliefs sought. At the time, intervenor was the provincial governor of Bulacan, national president of the League of Provinces of the Philippines and chairman of the League of Leagues of Local Governments. In a Resolution dated December 15, 1998, the Court noted said Motion and Petition.
The Facts and the Arguments

On December 27, 1997, the President of the Philippines issued AO 372. Its full text, with emphasis on the assailed provisions, is as follows: "ADMINISTRATIVE ORDER NO. 372 ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998 WHEREAS, the current economic difficulties brought about by the peso depreciation requires continued prudence in government fiscal management to maintain economic stability and sustain the country's growth momentum; WHEREAS, it is imperative that all government agencies adopt cash management measures to match expenditures with available resources; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and direct: SECTION 1. All government departments and agencies, including state universities and colleges, government-owned and controlled corporations and local governments units will identify and implement measures in FY 1998 that will reduce total expenditures for the year by at least 25% of authorized regular appropriations for non-personal services items, along the following suggested areas: 1. Continued implementation of the streamlining policy on organization and staffing by deferring action on the following: a. b. c. Operationalization of new agencies; Expansion of organizational units and/or creation of positions; Filling of positions; and

d. Hiring of additional/new consultants, contractual and casual personnel, regardless of funding source. 2. Suspension of the following activities: a. b. c. d. Implementation of new capital/infrastructure projects, except those which have already been contracted out; Acquisition of new equipment and motor vehicles; All foreign travels of government personnel, except those associated with scholarships and trainings funded by grants; Attendance in conferences abroad where the cost is charged to the government except those clearly essential to Philippine commitments in the international field as may be determined by the Cabinet; Conduct of trainings/workshops/seminars, except those conducted by government training institutions and agencies in the performance of their regular functions and those that are funded by grants; Conduct of cultural and social celebrations and sports activities, except those associated with the Philippine Centennial celebration and those involving regular competitions/events; Grant of honoraria, except in cases where it constitutes the only source of compensation from government received by the person concerned; Publications, media advertisements and related items, except those required by law or those already being undertaken on a regular basis; Grant of new/additional benefits to employees, except those expressly and specifically authorized by law; and Donations, contributions, grants and gifts, except those given by institutions to victims of calamities.

e.

f.

g. h. i. j.

3. Suspension of all tax expenditure subsidies to all GOCCs and LGUs 4. Reduction in the volume of consumption of fuel, water, office supplies, electricity and other utilities 5. Deferment of projects that are encountering significant implementation problems 6. Suspension of all realignment of funds and the use of savings and reserves

SECTION 2. Agencies are given the flexibility to identify the specific sources of costsavings, provided the 25% minimum savings under Section 1 is complied with. SECTION 3. A report on the estimated savings generated from these measures shall be submitted to the Office of the President, through the Department of Budget and Management, on a quarterly basis using the attached format. SECTION 4. Pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation, the amount equivalent to 10% of the internal revenue allotment to local government units shall be withheld. SECTION 5. The Development Budget Coordination Committee shall conduct a monthly review of the fiscal position of the National Government and if necessary, shall recommend to the President the imposition of additional reserves or the lifting of previously imposed reserves. SECTION 6. This Administrative Order shall take effect January 1, 1998 and shall remain valid for the entire year unless otherwise lifted. DONE in the City of Manila, this 27th day of December, in the year of our Lord, nineteen hundred and ninety-seven." Subsequently, on December 10, 1998, President Joseph E. Estrada issued AO 43, amending Section 4 of AO 372, by reducing to five percent (5%) the amount of internal revenue allotment (IRA) to be withheld from the LGUs. Petitioner contends that the President, in issuing AO 372, was in effect exercising the power of control over LGUs. The Constitution vests in the President, however, only the power of general supervision over LGUs, consistent with the principle of local autonomy. Petitioner further argues that the directive to withhold ten percent (10%) of their IRA is in contravention of Section 286 of the Local Government Code and of Section 6, Article X of the Constitution, providing for the automatic release to each of these units its share in the national internal revenue. The solicitor general, on behalf of the respondents, claims on the other hand that AO 372 was issued to alleviate the "economic difficulties brought about by the peso devaluation" and constituted merely an exercise of the President's power of supervision over LGUs. It allegedly does not violate local fiscal autonomy, because it merely directs local governments to identify measures that will reduce their total expenditures for non-personal services by at least 25 percent. Likewise, the withholding of 10 percent of the LGUs IRA does not violate the statutory prohibition on the imposition of any lien or holdback on their revenue shares, because such withholding is "temporary in nature pending the assessment and evaluation by the Development Coordination Committee of the emerging fiscal situation."
The Issues

The Petition[3] submits the following issues for the Court's resolution: "A. Whether or not the president committed grave abuse of discretion [in] ordering all LGUS to adopt a 25% cost reduction program in violation of the LGU[']S fiscal autonomy "B. Whether or not the president committed grave abuse of discretion in ordering the withholding of 10% of the LGU[']S IRA" In sum, the main issue is whether (a) Section 1 of AO 372, insofar as it "directs" LGUs to reduce their expenditures by 25 percent; and (b) Section 4 of the same issuance, which withholds 10 percent of their internal revenue allotments, are valid exercises of the President's power of general supervision over local governments. Additionally, the Court deliberated on the question whether petitioner had the locus standi to bring this suit, despite respondents' failure to raise the issue. [4] However, the intervention of Roberto Pagdanganan has rendered academic any further discussion on this matter.
The Court's Ruling

The Petition is partly meritorious.


Main Issue: Validity of AO 372 Insofar as LGUs Are Concerned

Before resolving the main issue, we deem it important and appropriate to define certain crucial concepts: (1) the scope of the President's power of general supervision over local governments and (2) the extent of the local governments' autonomy.
Scope of President's Power of Supervision Over LGUs

Section 4 of Article X of the Constitution confines the President's power over local governments to one of general supervision. It reads as follows: "Sec. 4. The President of the Philippines shall exercise general supervision over local governments. x x x" This provision has been interpreted to exclude the power of control. In Mondano v. Silvosa,[5] the Court contrasted the President's power of supervision over local government officials with that of his power of control over executive officials of the national government. It was emphasized that the two terms -- supervision and control - differed in meaning and extent. The Court distinguished them as follows: "x x x In administrative law, supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or

neglect to fulfill them, the former may take such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer ha[s] done in the performance of his duties and to substitute the judgment of the former for that of the latter."[6] In Taule v. Santos,[7] we further stated that the Chief Executive wielded no more authority than that of checking whether local governments or their officials were performing their duties as provided by the fundamental law and by statutes. He cannot interfere with local governments, so long as they act within the scope of their authority. "Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining authority over such body,"[8] we said. In a more recent case, Drilon v. Lim,[9] the difference between control and supervision was further delineated. Officers in control lay down the rules in the performance or accomplishment of an act. If these rules are not followed, they may, in their discretion, order the act undone or redone by their subordinates or even decide to do it themselves. On the other hand, supervision does not cover such authority. Supervising officials merely see to it that the rules are followed, but they themselves do not lay down such rules, nor do they have the discretion to modify or replace them. If the rules are not observed, they may order the work done or redone, but only to conform to such rules. They may not prescribe their own manner of execution of the act. They have no discretion on this matter except to see to it that the rules are followed. Under our present system of government, executive power is vested in the President.[10] The members of the Cabinet and other executive officials are merely alter egos. As such, they are subject to the power of control of the President, at whose will and behest they can be removed from office; or their actions and decisions changed, suspended or reversed.[11] In contrast, the heads of political subdivisions are elected by the people. Their sovereign powers emanate from the electorate, to whom they are directly accountable. By constitutional fiat, they are subject to the Presidents supervision only, not control, so long as their acts are exercised within the sphere of their legitimate powers. By the same token, the President may not withhold or alter any authority or power given them by the Constitution and the law.
Extent of Local Autonomy

Hand in hand with the constitutional restraint on the President's power over local governments is the state policy of ensuring local autonomy.[12] In Ganzon v. Court of Appeals,[13] we said that local autonomy signified "a more responsive and accountable local government structure instituted through a system of decentralization." The grant of autonomy is intended to "break up the monopoly of the national government over the affairs of local governments, x x x not x x x to end the

relation of partnership and interdependence between the central administration and local government units x x x." Paradoxically, local governments are still subject to regulation, however limited, for the purpose of enhancing self-government.[14] Decentralization simply means the devolution of national administration, not power, to local governments. Local officials remain accountable to the central government as the law may provide.[15] The difference between decentralization of administration and that of power was explained in detail in Limbona v. Mangelin[16] as follows: "Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of administration when the central government delegates administrative powers to political subdivisions in order to broaden the base of government power and in the process to make local governments 'more responsive and accountable,'[17] and 'ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress.'[18] At the same time, it relieves the central government of the burden of managing local affairs and enables it to concentrate on national concerns. The President exercises 'general supervision'[19] over them, but only to 'ensure that local affairs are administered according to law.'[20] He has no control over their acts in the sense that he can substitute their judgments with his own.[21] Decentralization of power, on the other hand, involves an abdication of political power in the favor of local government units declared to be autonomous. In that case, the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central authorities. According to a constitutional author, decentralization of power amounts to 'self-immolation,' since in that event, the autonomous government becomes accountable not to the central authorities but to its constituency."[22] Under the Philippine concept of local autonomy, the national government has not completely relinquished all its powers over local governments, including autonomous regions. Only administrative powers over local affairs are delegated to political subdivisions. The purpose of the delegation is to make governance more directly responsive and effective at the local levels. In turn, economic, political and social development at the smaller political units are expected to propel social and economic growth and development. But to enable the country to develop as a whole, the programs and policies effected locally must be integrated and coordinated towards a common national goal. Thus, policy-setting for the entire country still lies in the President and Congress. As we stated in Magtajas v. Pryce Properties Corp., Inc., municipal governments are still agents of the national government.[23]
The Nature of AO 372

Consistent with the foregoing jurisprudential precepts, let us now look into the nature of AO 372. As its preambular clauses declare, the Order was a "cash

management measure" adopted by the government "to match expenditures with available resources," which were presumably depleted at the time due to "economic difficulties brought about by the peso depreciation." Because of a looming financial crisis, the President deemed it necessary to "direct all government agencies, state universities and colleges, government-owned and controlled corporations as well as local governments to reduce their total expenditures by at least 25 percent along suggested areas mentioned in AO 372. Under existing law, local government units, in addition to having administrative autonomy in the exercise of their functions, enjoy fiscal autonomy as well. Fiscal autonomy means that local governments have the power to create their own sources of revenue in addition to their equitable share in the national taxes released by the national government, as well as the power to allocate their resources in accordance with their own priorities. It extends to the preparation of their budgets, and local officials in turn have to work within the constraints thereof. They are not formulated at the national level and imposed on local governments, whether they are relevant to local needs and resources or not. Hence, the necessity of a balancing of viewpoints and the harmonization of proposals from both local and national officials, [24] who in any case are partners in the attainment of national goals. Local fiscal autonomy does not however rule out any manner of national government intervention by way of supervision, in order to ensure that local programs, fiscal and otherwise, are consistent with national goals. Significantly, the President, by constitutional fiat, is the head of the economic and planning agency of the government,[25] primarily responsible for formulating and implementing continuing, coordinated and integrated social and economic policies, plans and programs[26] for the entire country. However, under the Constitution, the formulation and the implementation of such policies and programs are subject to "consultations with the appropriate public agencies, various private sectors, and local government units." The President cannot do so unilaterally. Consequently, the Local Government Code provides:[27] "x x x [I]n the event the national government incurs an unmanaged public sector deficit, the President of the Philippines is hereby authorized, upon the recommendation of [the] Secretary of Finance, Secretary of the Interior and Local Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the presidents of the liga, to make the necessary adjustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year x x x." There are therefore several requisites before the President may interfere in local fiscal matters: (1) an unmanaged public sector deficit of the national government; (2) consultations with the presiding officers of the Senate and the House of Representatives and the presidents of the various local leagues; and (3) the

corresponding recommendation of the secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore, any adjustment in the allotment shall in no case be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current one. Petitioner points out that respondents failed to comply with these requisites before the issuance and the implementation of AO 372. At the very least, they did not even try to show that the national government was suffering from an unmanageable public sector deficit. Neither did they claim having conducted consultations with the different leagues of local governments. Without these requisites, the President has no authority to adjust, much less to reduce, unilaterally the LGU's internal revenue allotment. The solicitor general insists, however, that AO 372 is merely directory and has been issued by the President consistent with his power of supervision over local governments. It is intended only to advise all government agencies and instrumentalities to undertake cost-reduction measures that will help maintain economic stability in the country, which is facing economic difficulties. Besides, it does not contain any sanction in case of noncompliance. Being merely an advisory, therefore, Section 1 of AO 372 is well within the powers of the President. Since it is not a mandatory imposition, the directive cannot be characterized as an exercise of the power of control. While the wordings of Section 1 of AO 372 have a rather commanding tone, and while we agree with petitioner that the requirements of Section 284 of the Local Government Code have not been satisfied, we are prepared to accept the solicitor general's assurance that the directive to "identify and implement measures x x x that will reduce total expenditures x x x by at least 25% of authorized regular appropriation" is merely advisory in character, and does not constitute a mandatory or binding order that interferes with local autonomy. The language used, while authoritative, does not amount to a command that emanates from a boss to a subaltern. Rather, the provision is merely an advisory to prevail upon local executives to recognize the need for fiscal restraint in a period of economic difficulty. Indeed, all concerned would do well to heed the President's call to unity, solidarity and teamwork to help alleviate the crisis. It is understood, however, that no legal sanction may be imposed upon LGUs and their officials who do not follow such advice. It is in this light that we sustain the solicitor general's contention in regard to Section 1.
Withholding a Part of LGUs' IRA

Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal autonomy is the automatic release of the shares of LGUs in the national internal revenue. This is mandated by no less than the Constitution.[28] The Local Government Code[29] specifies further that the release shall be made directly to the LGU concerned

within five (5) days after every quarter of the year and " shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose."[30] As a rule, the term "shall" is a word of command that must be given a compulsory meaning.[31] The provision is, therefore, imperative. Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation" in the country. Such withholding clearly contravenes the Constitution and the law. Although temporary, it is equivalent to a holdback, which means "something held back or withheld, often temporarily."[32] Hence, the "temporary" nature of the retention by the national government does not matter. Any retention is prohibited. In sum, while Section 1 of AO 372 may be upheld as an advisory effected in times of national crisis, Section 4 thereof has no color of validity at all. The latter provision effectively encroaches on the fiscal autonomy of local governments. Concededly, the President was well-intentioned in issuing his Order to withhold the LGUs IRA, but the rule of law requires that even the best intentions must be carried out within the parameters of the Constitution and the law. Verily, laudable purposes must be carried out by legal methods.
Refutation of Justice Kapunan's Dissent

Mr. Justice Santiago M. Kapunan dissents from our Decision on the grounds that, allegedly, (1) the Petition is premature; (2) AO 372 falls within the powers of the President as chief fiscal officer; and (3) the withholding of the LGUs IRA is implied in the President's authority to adjust it in case of an unmanageable public sector deficit. First, on prematurity. According to the Dissent, when "the conduct has not yet occurred and the challenged construction has not yet been adopted by the agency charged with administering the administrative order, the determination of the scope and constitutionality of the executive action in advance of its immediate adverse effect involves too remote and abstract an inquiry for the proper exercise of judicial function." This is a rather novel theory -- that people should await the implementing evil to befall on them before they can question acts that are illegal or unconstitutional. Be it remembered that the real issue here is whether the Constitution and the law are contravened by Section 4 of AO 372, not whether they are violated by the acts implementing it. In the unanimous en banc case Taada v. Angara,[33] this Court held that when an act of the legislative department is seriously alleged to have infringed the Constitution, settling the controversy becomes the duty of this Court. By the mere enactment of the questioned law or the approval of the challenged action, the dispute is said to have ripened into a judicial controversy even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken judicial duty. Said the Court:

"In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no doubt raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. 'The question thus posed is judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of the Constitution is upheld.'[34] Once a 'controversy as to the application or interpretation of a constitutional provision is raised before this Court x x x , it becomes a legal issue which the Court is bound by constitutional mandate to decide.'[35] xxx xxx xxx

"As this Court has repeatedly and firmly emphasized in many cases,[36] it will not shirk, digress from or abandon its sacred duty and authority to uphold the Constitution in matters that involve grave abuse of discretion brought before it in appropriate cases, committed by any officer, agency, instrumentality or department of the government." In the same vein, the Court also held in Tatad v. Secretary of the Department of Energy:[37] "x x x Judicial power includes not only the duty of the courts to settle actual controversies involving rights which are legally demandable and enforceable, but also the duty to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of government. The courts, as guardians of the Constitution, have the inherent authority to determine whether a statute enacted by the legislature transcends the limit imposed by the fundamental law. Where the statute violates the Constitution, it is not only the right but the duty of the judiciary to declare such act unconstitutional and void." By the same token, when an act of the President, who in our constitutional scheme is a coequal of Congress, is seriously alleged to have infringed the Constitution and the laws, as in the present case, settling the dispute becomes the duty and the responsibility of the courts. Besides, the issue that the Petition is premature has not been raised by the parties; hence it is deemed waived. Considerations of due process really prevents its use against a party that has not been given sufficient notice of its presentation, and thus has not been given the opportunity to refute it.[38] Second, on the President's power as chief fiscal officer of the country. Justice Kapunan posits that Section 4 of AO 372 conforms with the President's role as chief fiscal officer, who allegedly "is clothed by law with certain powers to ensure the observance of safeguards and auditing requirements, as well as the legal prerequisites in the release and use of IRAs, taking into account the constitutional and statutory mandates."[39] He cites instances when the President may lawfully intervene in the fiscal affairs of LGUs.

Precisely, such powers referred to in the Dissent have specifically been authorized by law and have not been challenged as violative of the Constitution. On the other hand, Section 4 of AO 372, as explained earlier, contravenes explicit provisions of the Local Government Code (LGC) and the Constitution. In other words, the acts alluded to in the Dissent are indeed authorized by law; but, quite the opposite, Section 4 of AO 372 is bereft of any legal or constitutional basis. Third, on the President's authority to adjust the IRA of LGUs in case of an unmanageable public sector deficit. It must be emphasized that in striking down Section 4 of AO 372, this Court is not ruling out any form of reduction in the IRAs of LGUs. Indeed, as the President may make necessary adjustments in case of an unmanageable public sector deficit, as stated in the main part of this Decision, and in line with Section 284 of the LGC, which Justice Kapunan cites. He, however, merely glances over a specific requirement in the same provision -- that such reduction is subject to consultation with the presiding officers of both Houses of Congress and, more importantly, with the presidents of the leagues of local governments. Notably, Justice Kapunan recognizes the need for "interaction between the national government and the LGUs at the planning level," in order to ensure that "local development plans x x x hew to national policies and standards." The problem is that no such interaction or consultation was ever held prior to the issuance of AO 372. This is why the petitioner and the intervenor (who was a provincial governor and at the same time president of the League of Provinces of the Philippines and chairman of the League of Leagues of Local Governments) have protested and instituted this action. Significantly, respondents do not deny the lack of consultation. In addition, Justice Kapunan cites Section 287[40] of the LGC as impliedly authorizing the President to withhold the IRA of an LGU, pending its compliance with certain requirements. Even a cursory reading of the provision reveals that it is totally inapplicable to the issue at bar. It directs LGUs to appropriate in their annual budgets 20 percent of their respective IRAs for development projects. It speaks of no positive power granted the President to priorly withhold any amount. Not at all. WHEREFORE, the Petition is GRANTED. Respondents and their successors are hereby permanently PROHIBITED from implementing Administrative Order Nos. 372 and 43, respectively dated December 27, 1997 and December 10, 1998, insofar as local government units are concerned. SO ORDERED. Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Mendoza, Quisumbing, Pardo, Buena, Gonzaga-Reyes, and De Leon, Jr., JJ., concur. Kapunan, J., see dissenting opinion. Purisima, and Ynares-Santiago, JJ., join J. Kapunan in his dissenting opinion.
DISSENTING OPINION

KAPUNAN, J.:

In striking down as unconstitutional and illegal Section 4 of Administrative Order No. 372 ("AO No. 372"), the majority opinion posits that the President exercised power of control over the local government units ("LGU), which he does not have, and violated the provisions of Section 6, Article X of the Constitution, which states: SEC. 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. and Section 286(a) of the Local Government Code, which provides: SEC. 286. Automatic Release of Shares. - (a) The share of each local government unit shall be released, without need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a quarterly basis within five (5) days after the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose. The share of the LGUs in the national internal revenue taxes is defined in Section 284 of the same Local Government Code, to wit: SEC. 284. Allotment of Internal Revenue Taxes. - Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows: (a) On the first year of the effectivity of this Code, thirty percent (30%); (b) On the second year, thirty-five (35%) percent; and (c) On the third year and thereafter, forty percent (40%). Provided, That in the event that the national government incurs an unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and Local Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the presidents of the liga, to make the necessary adjustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year: Provided, further, That in the first year of the effectivity of this Code, the local government units shall, in addition to the thirty percent (30%) internal revenue allotment which shall include the cost of devolved functions for essential public services, be entitled to receive the amount equivalent to the cost of devolved personal services. xxx The majority opinion takes the view that the withholding of ten percent (10%) of the internal revenue allotment ("IRA") to the LGUs pending the assessment and evaluation

by the Development Budget Coordinating Committee of the emerging fiscal situation as called for in Section 4 of AO No. 372 transgresses against the above-quoted provisions which mandate the "automatic" release of the shares of the LGUs in the national internal revenue in consonance with local fiscal autonomy. The pertinent portions of AO No. 372 are reproduced hereunder:
ADMINISTRATIVE ORDER NO. 372

ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998 WHEREAS, the current economic difficulties brought about by the peso depreciation requires continued prudence in government fiscal management to maintain economic stability and sustain the countrys growth momentum; WHEREAS, it is imperative that all government agencies adopt cash management measures to match expenditures with available resources; NOW THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and direct: SECTION 1. All government departments and agencies, including x x x local government units will identify and implement measures in FY 1998 that will reduce total appropriations for non-personal services items, along the following suggested areas: xxx SECTION 4. Pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation the amount equivalent to 10% of the internal revenue allotment to local government units shall be withheld. xxx Subsequently, on December 10, 1998, President Joseph E. Estrada issued Administrative Order No. 43 (AO No. 43), amending Section 4 of AO No. 372, by reducing to five percent (5%) the IRA to be withheld from the LGUs, thus:
ADMINISTRATIVE ORDER NO. 43

AMENDING ADMINISTRATIVE ORDER NO. 372 DATED 27 DECEMBER 1997 ENTITLED "ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998" WHEREAS, Administrative Order No. 372 dated 27 December 1997 entitled "Adoption of Economy Measures in Government for FY 1998" was issued to address the economic difficulties brought about by the peso devaluation in 1997;

WHEREAS, Section 4 of Administrative Order No. 372 provided that the amount equivalent to 10% of the internal revenue allotment to local government units shall be withheld; and, WHEREAS, there is a need to release additional funds to local government units for vital projects and expenditures. NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order the reduction of the withheld Internal Revenue Allotment (IRA) of local government units from ten percent to five percent. The five percent reduction in the IRA withheld for 1998 shall be released before 25 December 1998. DONE in the City of Manila, this 10th day of December, in the year of our Lord, nineteen hundred and ninety eight. With all due respect, I beg to disagree with the majority opinion. Section 4 of AO No. 372 does not present a case ripe for adjudication. The language of Section 4 does not conclusively show that, on its face, the constitutional provision on the automatic release of the IRA shares of the LGUs has been violated. Section 4, as worded, expresses the idea that the withholding is merely temporary which fact alone would not merit an outright conclusion of its unconstitutionality, especially in light of the reasonable presumption that administrative agencies act in conformity with the law and the Constitution. Where the conduct has not yet occurred and the challenged construction has not yet been adopted by the agency charged with administering the administrative order, the determination of the scope and constitutionality of the executive action in advance of its immediate adverse effect involves too remote and abstract an inquiry for the proper exercise of judicial function. Petitioners have not shown that the alleged 5% IRA share of LGUs that was temporarily withheld has not yet been released, or that the Department of Budget and Management (DBM) has refused and continues to refuse its release. In view thereof, the Court should not decide as this case suggests an abstract proposition on constitutional issues. The President is the chief fiscal officer of the country. He is ultimately responsible for the collection and distribution of public money: SECTION 3. Powers and Functions. - The Department of Budget and Management shall assist the President in the preparation of a national resources and expenditures budget, preparation, execution and control of the National Budget, preparation and maintenance of accounting systems essential to the budgetary process, achievement of more economy and efficiency in the management of government operations, administration of compensation and position classification systems, assessment of

organizational effectiveness and review and evaluation of legislative proposals having budgetary or organizational implications.1 In a larger context, his role as chief fiscal officer is directed towards "the nation's efforts at economic and social upliftment"2 for which more specific economic powers are delegated. Within statutory limits, the President can, thus, fix "tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within the framework of the national development program of the government,3 as he is also responsible for enlisting the country in international economic agreements.4 More than this, to achieve "economy and efficiency in the management of government operations," the President is empowered to create appropriation reserves,5 suspend expenditure appropriations,6 and institute cost reduction schemes.7 As chief fiscal officer of the country, the President supervises fiscal development in the local government units and ensures that laws are faithfully executed. 8 For this reason, he can set aside tax ordinances if he finds them contrary to the Local Government Code.9 Ordinances cannot contravene statutes and public policy as declared by the national govemment.10 The goal of local economy is not to "end the relation of partnership and inter-dependence between the central administration and local government units,"11 but to make local governments "more responsive and accountable" [to] "ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress."12 The interaction between the national government and the local government units is mandatory at the planning level. Local development plans must thus hew to "national policies and standards13 as these are integrated into the regional development plans for submission to the National Economic Development Authority. "14 Local budget plans and goals must also be harmonized, as far as practicable, with "national development goals and strategies in order to optimize the utilization of resources and to avoid duplication in the use of fiscal and physical resources."15 Section 4 of AO No. 372 was issued in the exercise by the President not only of his power of general supervision, but also in conformity with his role as chief fiscal officer of the country in the discharge of which he is clothed by law with certain powers to ensure the observance of safeguards and auditing requirements, as well as the legal prerequisites in the release and use of IRAs, taking into account the constitutional16 and statutory17 mandates. However, the phrase "automatic release" of the LGUs' shares does not mean that the release of the funds is mechanical, spontaneous, self-operating or reflex. IRAs must first be determined, and the money for their payment collected. 18 In this regard, administrative documentations are also undertaken to ascertain their availability, limits and extent. The phrase, thus, should be used in the context of the whole budgetary process and in relation to pertinent laws relating to audit and accounting requirements. In the workings of the budget for the fiscal year, appropriations for expenditures are supported by existing funds in the national coffers and by proposals for revenue

raising. The money, therefore, available for IRA release may not be existing but merely inchoate, or a mere expectation. It is not infrequent that the Executive Department's proposals for raising revenue in the form of proposed legislation may not be passed by the legislature. As such, the release of IRA should not mean release of absolute amounts based merely on mathematical computations. There must be a prior determination of what exact amount the local government units are actually entitled in light of the economic factors which affect the fiscal situation in the country. Foremost of these is where, due to an unmanageable public sector deficit, the President may make the necessary adjustments in the IRA of LGUs. Thus, as expressly provided in Article 284 of the Local Government Code: x x x (I)n the event that the national government incurs an unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and Local Government and Secretary of Budget and Management and subject to consultation with the presiding officers of both Houses of Congress and the presidents of the "liga," to make the necessary adjustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year. x x x. Under the aforecited provision, if facts reveal that the economy has sustained or will likely sustain such "unmanageable public sector deficit," then the LGUs cannot assert absolute right of entitlement to the full amount of forty percent (40%) share in the IRA, because the President is authorized to make an adjustment and to reduce the amount to not less than thirty percent (30%). It is, therefore, impractical to immediately release the full amount of the IRAs and subsequently require the local government units to return at most ten percent (10%) once the President has ascertained that there exists an unmanageable public sector deficit. By necessary implication, the power to make necessary adjustments (including reduction) in the IRA in case of an unmanageable public sector deficit, includes the discretion to withhold the IRAs temporarily until such time that the determination of the actual fiscal situation is made. The test in determining whether one power is necessarily included in a stated authority is: "The exercise of a more absolute power necessarily includes the lesser power especially where it is needed to make the first power effective."19 If the discretion to suspend temporarily the release of the IRA pending such examination is withheld from the President, his authority to make the necessary IRA adjustments brought about by the unmanageable public sector deficit would be emasculated in the midst of serious economic crisis. In the situation conjured by the majority opinion, the money would already have been gone even before it is determined that fiscal crisis is indeed happening. The majority opinion overstates the requirement in Section 286 of the Local Government Code that the IRAs "shall not be subject to any lien or holdback that may

be imposed by the national government for whatever purpose" as proof that no withholding of the release of the IRAs is allowed albeit temporary in nature. It is worthy to note that this provision does not appear in the Constitution. Section 6, Art X of the Constitution merely directs that LGUs "shall have a just share" in the national taxes "as determined by law" and which share shall be automatically released to them. This means that before the LGUs share is released, there should be first a determination, which requires a process, of what is the correct amount as dictated by existing laws. For one, the Implementing Rules of the Local Government Code allows deductions from the IRAs, to wit: Article 384. Automatic Release of IRA Shares of LGUs: xxx (c) The IRA share of LGUs shall not be subject to any lien or hold back that may be imposed by the National Government for whatever purpose unless otherwise provided in the Code or other applicable laws and loan contract on project agreements arising from foreign loans and international commitments, such as premium contributions of LGUs to the Government Service Insurance System and loans contracted by LGUs under foreign-assisted projects. Apart from the above, other mandatory deductions are made from the IRAs prior to their release, such as: (1) total actual cost of devolution and the cost of city-funded hospitals;20and (2) compulsory contributions21 and other remittances.22 It follows, therefore, that the President can withhold portions of IRAs in order to set-off or compensate legitimately incurred obligations and remittances of LGUs. Significantly, Section 286 of the Local Government Code does not make mention of the exact amount that should be automatically released to the LGUs. The provision does not mandate that the entire 40% share mentioned in Section 284 shall be released. It merely provides that the "share" of each LGU shall be released and which "shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose." The provision on automatic release of IRA share should, thus, be read together with Section 284, including the proviso on adjustment or reduction of IRAs, as well as other relevant laws. It may happen that the share of the LGUs may amount to the full forty percent (40%) or the reduced amount of thirty percent (30%) as adjusted without any law being violated. In other words, all that Section 286 requires is the automatic release of the amount that the LGUs are rightfully and legally entitled to, which, as the same section provides, should not be less than thirty percent (30%) of the collection of the national revenue taxes. So that even if five percent (5%) or ten percent (10%) is either temporarily or permanently withheld, but the minimum of thirty percent (30%) allotment for the LGUs is released pursuant to the President's authority to make the necessary adjustment in the LGUS' share, there is still full compliance with the requirements of the automatic release of the LGUs' share.

Finally, the majority insists that the withholding of ten percent (10%) or five percent (5%) of the IRAs could not have been done pursuant to the power of the President to adjust or reduce such shares under Section 284 of the Local Government Code because there was no showing of an unmanageable public sector deficit by the national government, nor was there evidence that consultations with the presiding officers of both Houses of Congress and the presidents of the various leagues had taken place and the corresponding recommendations of the Secretary of Finance, Secretary of Interior and Local Government and the Budget Secretary were made. I beg to differ. The power to determine whether there is an unmanageable public sector deficit is lodged in the President. The President's determination, as fiscal manager of the country, of the existence of economic difficulties which could amount to "unmanageable public sector deficit" should be accorded respect. In fact, the withholding of the ten percent (10%) of the LGUs' share was further justified by the current economic difficulties brought about by the peso depreciation as shown by one of the "WHEREASES" of AO No. 372.23In the absence of any showing to the contrary, it is presumed that the President had made prior consultations with the officials thus mentioned and had acted upon the recommendations of the Secretaries of Finance, Interior and Local Government and Budget.24 Therefore, even assuming hypothetically that there was effectively a deduction of five percent (5%) of the LGUs' share, which was in accordance with the President's prerogative in view of the pronouncement of the existence of an unmanageable public sector deficit, the deduction would still be valid in the absence of any proof that the LGUs' allotment was less than the thirty percent (30%) limit provided for in Section 284 of the Local Government Code. In resume, the withholding of the amount equivalent to five percent (5%) of the IRA to the LGUs was temporary pending determination by the Executive of the actual share which the LGUs are rightfully entitled to on the basis of the applicable laws, particularly Section 284 of the Local Government Code, authorizing the President to make the necessary adjustments in the IRA of LGUs in the event of an unmanageable public sector deficit. And assuming that the said five percent (5%) of the IRA pertaining to the 1998 Fiscal Year has been permanently withheld, there is no showing that the amount actually released to the LGUs that same year was less than thirty percent (30%) of the national internal revenue taxes collected, without even considering the proper deductions allowed by law. WHEREFORE, I vote to DISMISS the petition.

G.R. No. 80391 February 28, 1989 SULTAN ALIMBUSAR P. LIMBONA, petitioner, vs.

CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS CONDING, ACMAD TOMAWIS, GERRY TOMAWIS, JESUS ORTIZ, ANTONIO DELA FUENTE, DIEGO PALOMARES, JR., RAUL DAGALANGIT, and BIMBO SINSUAT, respondents. Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner. Makabangkit B. Lanto for respondents.

SARMIENTO, J.: The acts of the Sangguniang Pampook of Region XII are assailed in this petition. The antecedent facts are as follows: 1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was appointed as a member of the Sangguniang Pampook, Regional Autonomous Government, Region XII, representing Lanao del Sur. 2. On March 12, 1987 petitioner was elected Speaker of the Regional Legislative Assembly or Batasang Pampook of Central Mindanao (Assembly for brevity). 3. Said Assembly is composed of eighteen (18) members. Two of said members, respondents Acmad Tomawis and Pakil Dagalangit, filed on March 23, 1987 with the Commission on Elections their respective certificates of candidacy in the May 11, 1987 congressional elections for the district of Lanao del Sur but they later withdrew from the aforesaid election and thereafter resumed again their positions as members of the Assembly. 4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the Committee on Muslim Affairs of the House of Representatives, invited Mr. Xavier Razul, Pampook Speaker of Region XI, Zamboanga City and the petitioner in his capacity as Speaker of the Assembly, Region XII, in a letter which reads: The Committee on Muslim Affairs well undertake consultations and dialogues with local government officials, civic, religious organizations and traditional leaders on the recent and present political developments and other issues affecting Regions IX and XII. The result of the conference, consultations and dialogues would hopefully chart the autonomous governments of the two regions as envisioned and may prod the President to constitute

immediately the Regional Consultative mandated by the Commission.

Commission

as

You are requested to invite some members of the Pampook Assembly of your respective assembly on November 1 to 15, 1987, with venue at the Congress of the Philippines. Your presence, unstinted support and cooperation is (sic) indispensable. 5. Consistent with the said invitation, petitioner sent a telegram to Acting Secretary Johnny Alimbuyao of the Assembly to wire all Assemblymen that there shall be no session in November as "our presence in the house committee hearing of Congress take (sic) precedence over any pending business in batasang pampook ... ." 6. In compliance with the aforesaid instruction of the petitioner, Acting Secretary Alimbuyao sent to the members of the Assembly the following telegram: TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM RECEIVED FROM SPEAKER LIMBONA QUOTE CONGRESSMAN JIMMY MATALAM CHAIRMAN OF THE HOUSE COMMITTEE ON MUSLIM AFFAIRS REQUESTED ME TO ASSIST SAID COMMITTEE IN THE DISCUSSION OF THE PROPOSED AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WERE ALL ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN NOVEMBER AS OUR PRESENCE IN THE HOUSE COMMITTEE HEARING OF CONGRESS TAKE PRECEDENCE OVER ANY PENDING BUSINESS IN BATASANG PAMPOOK OF MATALAM FOLLOWS UNQUOTE REGARDS. 7. On November 2, 1987, the Assembly held session in defiance of petitioner's advice, with the following assemblymen present: 1. Sali, Salic 2. Conding, Pilipinas (sic) 3. Dagalangit, Rakil 4. Dela Fuente, Antonio 5. Mangelen, Conte 6. Ortiz, Jesus

7. Palomares, Diego 8. Sinsuat, Bimbo 9. Tomawis, Acmad 10. Tomawis, Jerry After declaring the presence of a quorum, the Speaker Pro-Tempore was authorized to preside in the session. On Motion to declare the seat of the Speaker vacant, all Assemblymen in attendance voted in the affirmative, hence, the chair declared said seat of the Speaker vacant. 8. On November 5, 1987, the session of the Assembly resumed with the following Assemblymen present: 1. Mangelen Conte-Presiding Officer 2. Ali Salic 3. Ali Salindatu 4. Aratuc, Malik 5. Cajelo, Rene 6. Conding, Pilipinas (sic) 7. Dagalangit, Rakil 8. Dela Fuente, Antonio 9. Ortiz, Jesus 10 Palomares, Diego 11. Quijano, Jesus 12. Sinsuat, Bimbo 13. Tomawis, Acmad 14. Tomawis, Jerry An excerpt from the debates and proceeding of said session reads: HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the presence of our colleagues who have come to attend the session

today, I move to call the names of the new comers in order for them to cast their votes on the previous motion to declare the position of the Speaker vacant. But before doing so, I move also that the designation of the Speaker Pro Tempore as the Presiding Officer and Mr. Johnny Evangelists as Acting Secretary in the session last November 2, 1987 be reconfirmed in today's session. HON. SALIC ALI: I second the motions. PRESIDING OFFICER: Any comment or objections on the two motions presented? Me chair hears none and the said motions are approved. ... Twelve (12) members voted in favor of the motion to declare the seat of the Speaker vacant; one abstained and none voted against. 1 Accordingly, the petitioner prays for judgment as follows: WHEREFORE, petitioner respectfully prays that(a) This Petition be given due course; (b) Pending hearing, a restraining order or writ of preliminary injunction be issued enjoining respondents from proceeding with their session to be held on November 5, 1987, and on any day thereafter; (c) After hearing, judgment be rendered declaring the proceedings held by respondents of their session on November 2, 1987 as null and void; (d) Holding the election of petitioner as Speaker of said Legislative Assembly or Batasan Pampook, Region XII held on March 12, 1987 valid and subsisting, and (e) Making the injunction permanent. Petitioner likewise prays for such other relief as may be just and equitable. 2 Pending further proceedings, this Court, on January 19, 1988, received a resolution filed by the Sangguniang Pampook, "EXPECTING ALIMBUSAR P. LIMBONA FROM MEMBERSHIP OF THE SANGGUNIANG PAMPOOK AUTONOMOUS REGION XII," 3 on the grounds, among other things, that the petitioner "had caused to be prepared and signed by him paying [sic] the salaries and emoluments of Odin Abdula, who was considered resigned after filing his Certificate of Candidacy for Congressmen for the First District of Maguindanao in the last May 11, elections. . . and nothing in the record of the Assembly will show that any request for reinstatement by Abdula was ever made . . ." 4 and that "such action of Mr. Lim bona in paying Abdula his salaries

and emoluments without authority from the Assembly . . . constituted a usurpation of the power of the Assembly," 5 that the petitioner "had recently caused withdrawal of so much amount of cash from the Assembly resulting to the non-payment of the salaries and emoluments of some Assembly [sic]," 6 and that he had "filed a case before the Supreme Court against some members of the Assembly on question which should have been resolved within the confines of the Assembly," 7 for which the respondents now submit that the petition had become "moot and academic". 8 The first question, evidently, is whether or not the expulsion of the petitioner (pending litigation) has made the case moot and academic. We do not agree that the case has been rendered moot and academic by reason simply of the expulsion resolution so issued. For, if the petitioner's expulsion was done purposely to make this petition moot and academic, and to preempt the Court, it will not make it academic. On the ground of the immutable principle of due process alone, we hold that the expulsion in question is of no force and effect. In the first place, there is no showing that the Sanggunian had conducted an investigation, and whether or not the petitioner had been heard in his defense, assuming that there was an investigation, or otherwise given the opportunity to do so. On the other hand, what appears in the records is an admission by the Assembly (at least, the respondents) that "since November, 1987 up to this writing, the petitioner has not set foot at the Sangguniang Pampook." 9 "To be sure, the private respondents aver that "[t]he Assemblymen, in a conciliatory gesture, wanted him to come to Cotabato City," 10 but that was "so that their differences could be threshed out and settled." 11 Certainly, that avowed wanting or desire to thresh out and settle, no matter how conciliatory it may be cannot be a substitute for the notice and hearing contemplated by law. While we have held that due process, as the term is known in administrative law, does not absolutely require notice and that a party need only be given the opportunity to be heard, 12 it does not appear herein that the petitioner had, to begin with, been made aware that he had in fact stood charged of graft and corruption before his collegues. It cannot be said therefore that he was accorded any opportunity to rebut their accusations. As it stands, then, the charges now levelled amount to mere accusations that cannot warrant expulsion. In the second place, (the resolution) appears strongly to be a bare act of vendetta by the other Assemblymen against the petitioner arising from what the former perceive to be abduracy on the part of the latter. Indeed, it (the resolution) speaks of "a case [having been filed] [by the petitioner] before the Supreme Court . . . on question which should have been resolved within the confines of the Assemblyman act which some members claimed unnecessarily and unduly assails their integrity and character as representative of the people" 13 an act that cannot possibly justify expulsion. Access to judicial remedies is guaranteed by the Constitution, 14 and, unless the recourse

amounts to malicious prosecution, no one may be punished for seeking redress in the courts. We therefore order reinstatement, with the caution that should the past acts of the petitioner indeed warrant his removal, the Assembly is enjoined, should it still be so minded, to commence proper proceedings therefor in line with the most elementary requirements of due process. And while it is within the discretion of the members of the Sanggunian to punish their erring colleagues, their acts are nonetheless subject to the moderating band of this Court in the event that such discretion is exercised with grave abuse. It is, to be sure, said that precisely because the Sangguniang Pampook(s) are "autonomous," the courts may not rightfully intervene in their affairs, much less strike down their acts. We come, therefore, to the second issue: Are the so-called autonomous governments of Mindanao, as they are now constituted, subject to the jurisdiction of the national courts? In other words, what is the extent of self-government given to the two autonomous governments of Region IX and XII? The autonomous governments of Mindanao were organized in Regions IX and XII by Presidential Decree No. 161815 promulgated on July 25, 1979. Among other things, the Decree established "internal autonomy" 16 in the two regions "[w]ithin the framework of the national sovereignty and territorial integrity of the Republic of the Philippines and its Constitution," 17 with legislative and executive machinery to exercise the powers and responsibilities 18specified therein. It requires the autonomous regional governments to "undertake all internal administrative matters for the respective regions," 19 except to "act on matters which are within the jurisdiction and competence of the National Government," 20 "which include, but are not limited to, the following: (1) National defense and security; (2) Foreign relations; (3) Foreign trade; (4) Currency, monetary affairs, foreign exchange, banking and quasibanking, and external borrowing, (5) Disposition, exploration, development, exploitation or utilization of all natural resources; (6) Air and sea transport (7) Postal matters and telecommunications;

(8) Customs and quarantine; (9) Immigration and deportation; (10) Citizenship and naturalization; (11) National economic, social and educational planning; and (12) General auditing. 21 In relation to the central government, it provides that "[t]he President shall have the power of general supervision and control over the Autonomous Regions ..." 22 Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of administration when the central government delegates administrative powers to political subdivisions in order to broaden the base of government power and in the process to make local governments "more responsive and accountable," 23 "and ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress." 24 At the same time, it relieves the central government of the burden of managing local affairs and enables it to concentrate on national concerns. The President exercises "general supervision" 25 over them, but only to "ensure that local affairs are administered according to law." 26 He has no control over their acts in the sense that he can substitute their judgments with his own. 27 Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments units declare to be autonomous . In that case, the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central authorities. According to a constitutional author, decentralization of power amounts to "self-immolation," since in that event, the autonomous government becomes accountable not to the central authorities but to its constituency. 28 But the question of whether or not the grant of autonomy Muslim Mindanao under the 1987 Constitution involves, truly, an effort to decentralize power rather than mere administration is a question foreign to this petition, since what is involved herein is a local government unit constituted prior to the ratification of the present Constitution. Hence, the Court will not resolve that controversy now, in this case, since no controversy in fact exists. We will resolve it at the proper time and in the proper case. Under the 1987 Constitution, local government units enjoy autonomy in these two senses, thus: Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. Here

shall be autonomous regions in Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29 Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30 xxx xxx xxx See. 15. Mere shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines. 31 An autonomous government that enjoys autonomy of the latter category [CONST. (1987), art. X, sec. 15.] is subject alone to the decree of the organic act creating it and accepted principles on the effects and limits of "autonomy." On the other hand, an autonomous government of the former class is, as we noted, under the supervision of the national government acting through the President (and the Department of Local Government).32 If the Sangguniang Pampook (of Region XII), then, is autonomous in the latter sense, its acts are, debatably beyond the domain of this Court in perhaps the same way that the internal acts, say, of the Congress of the Philippines are beyond our jurisdiction. But if it is autonomous in the former category only, it comes unarguably under our jurisdiction. An examination of the very Presidential Decree creating the autonomous governments of Mindanao persuades us that they were never meant to exercise autonomy in the second sense, that is, in which the central government commits an act of self-immolation. Presidential Decree No. 1618, in the first place, mandates that "[t]he President shall have the power of general supervision and control over Autonomous Regions." 33 In the second place, the Sangguniang Pampook, their legislative arm, is made to discharge chiefly administrative services, thus: SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook shall exercise local legislative powers over regional affairs within the framework of national development plans, policies and goals, in the following areas: (1) Organization of regional administrative system; (2) Economic, social and cultural development of the Autonomous Region; (3) Agricultural, commercial and industrial programs for the Autonomous Region; (4) Infrastructure development for the Autonomous Region;

(5) Urban and rural planning for the Autonomous Region; (6) Taxation and other revenue-raising measures as provided for in this Decree; (7) Maintenance, operation and administration of schools established by the Autonomous Region; (8) Establishment, operation and maintenance of health, welfare and other social services, programs and facilities; (9) Preservation and development of customs, traditions, languages and culture indigenous to the Autonomous Region; and (10) Such other matters as may be authorized by law,including the enactment of such measures as may be necessary for the promotion of the general welfare of the people in the Autonomous Region. The President shall exercise such powers as may be necessary to assure that enactment and acts of the Sangguniang Pampook and the Lupong Tagapagpaganap ng Pook are in compliance with this Decree, national legislation, policies, plans and programs. The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa. 34 Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the expulsion in question, with more reason can we review the petitioner's removal as Speaker. Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds that: (1) the Sanggunian, in convening on November 2 and 5, 1987 (for the sole purpose of declaring the office of the Speaker vacant), did so in violation of the Rules of the Sangguniang Pampook since the Assembly was then on recess; and (2) assuming that it was valid, his ouster was ineffective nevertheless for lack of quorum. Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were invalid. It is true that under Section 31 of the Region XII Sanggunian Rules, "[s]essions shall not be suspended or adjourned except by direction of the Sangguniang Pampook," 35 but it provides likewise that "the Speaker may, on [sic] his discretion, declare a recess of "short intervals." 36 Of course, there is disagreement between the protagonists as to whether or not the recess called by the petitioner effective November 1 through 15, 1987 is the "recess of short intervals" referred to; the petitioner says that it is while the respondents insist that, to all intents and purposes, it was an adjournment and that "recess" as used by their Rules only refers to "a recess when arguments get heated up so that protagonists in a debate can talk things out

informally and obviate dissenssion [sic] and disunity. 37 The Court agrees with the respondents on this regard, since clearly, the Rules speak of "short intervals." Secondly, the Court likewise agrees that the Speaker could not have validly called a recess since the Assembly had yet to convene on November 1, the date session opens under the same Rules. 38 Hence, there can be no recess to speak of that could possibly interrupt any session. But while this opinion is in accord with the respondents' own, we still invalidate the twin sessions in question, since at the time the petitioner called the "recess," it was not a settled matter whether or not he could. do so. In the second place, the invitation tendered by the Committee on Muslim Affairs of the House of Representatives provided a plausible reason for the intermission sought. Thirdly, assuming that a valid recess could not be called, it does not appear that the respondents called his attention to this mistake. What appears is that instead, they opened the sessions themselves behind his back in an apparent act of mutiny. Under the circumstances, we find equity on his side. For this reason, we uphold the "recess" called on the ground of good faith. It does not appear to us, moreover, that the petitioner had resorted to the aforesaid "recess" in order to forestall the Assembly from bringing about his ouster. This is not apparent from the pleadings before us. We are convinced that the invitation was what precipitated it. In holding that the "recess" in question is valid, we are not to be taken as establishing a precedent, since, as we said, a recess can not be validly declared without a session having been first opened. In upholding the petitioner herein, we are not giving him a carte blanche to order recesses in the future in violation of the Rules, or otherwise to prevent the lawful meetings thereof. Neither are we, by this disposition, discouraging the Sanggunian from reorganizing itself pursuant to its lawful prerogatives. Certainly, it can do so at the proper time. In the event that be petitioner should initiate obstructive moves, the Court is certain that it is armed with enough coercive remedies to thwart them. 39 In view hereof, we find no need in dwelling on the issue of quorum. WHEREFORE, premises considered, the petition is GRANTED. The Sangguniang Pampook, Region XII, is ENJOINED to (1) REINSTATE the petitioner as Member, Sangguniang Pampook, Region XII; and (2) REINSTATE him as Speaker thereof. No costs. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Bidin, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur. Padilla, J., took no part.

G.R. No. 111097 July 20, 1994 MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners, vs. PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING CORPORATION,respondents. Aquilino G. Pimentel, Jr. and Associates for petitioners. R.R. Torralba & Associates for private respondent.

CRUZ, J.: There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic organizations angrily denounced the project. The religious elements echoed the objection and so did the women's groups and the youth. Demonstrations were led by the mayor and the city legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the city. The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation, Inc., one of the herein private respondents, renovated and equipped the same, and prepared to inaugurate its casino there during the Christmas season. The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992, it enacted Ordinance No. 3353 reading as follows: ORDINANCE NO. 3353 AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND CANCELLING EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION THEREOF FOR THE OPERATION OF CASINO. BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in session assembled that: Sec. 1. That pursuant to the policy of the city banning the operation of casino within its territorial jurisdiction, no business permit shall be issued to

any person, partnership or corporation for the operation of casino within the city limits. Sec. 2. That it shall be a violation of existing business permit by any persons, partnership or corporation to use its business establishment or portion thereof, or allow the use thereof by others for casino operation and other gambling activities. Sec. 3. PENALTIES. Any violation of such existing business permit as defined in the preceding section shall suffer the following penalties, to wit: a) Suspension of the business permit for sixty (60) days for the first offense and a fine of P1,000.00/day b) Suspension of the business permit for Six (6) months for the second offense, and a fine of P3,000.00/day c) Permanent revocation of the business permit and imprisonment of One (1) year, for the third and subsequent offenses. Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof. Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows: ORDINANCE NO. 3375-93 AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY FOR VIOLATION THEREFOR. WHEREAS, the City Council established a policy as early as 1990 against CASINO under its Resolution No. 2295; WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673, reiterating its policy against the establishment of CASINO; WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353, prohibiting the issuance of Business Permit and to cancel existing Business Permit to any establishment for the using and allowing to be used its premises or portion thereof for the operation of CASINO;

WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local Government Code of 1991 (Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI of the implementing rules of the Local Government Code, the City Council as the Legislative Body shall enact measure to suppress any activity inimical to public morals and general welfare of the people and/or regulate or prohibit such activity pertaining to amusement or entertainment in order to protect social and moral welfare of the community; NOW THEREFORE, BE IT ORDAINED by the City Council in session duly assembled that: Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is hereby prohibited. Sec. 2. Any violation of this Ordinance shall be subject to the following penalties: a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership or corporation undertaking the operation, conduct, maintenance of gambling CASINO in the City and closure thereof; b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in the amount of P5,000.00 or both at the discretion of the court against the manager, supervisor, and/or any person responsible in the establishment, conduct and maintenance of gambling CASINO. Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local newspaper of general circulation. Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2 Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the Rules of Court. 3 They aver that the respondent Court of Appeals erred in holding that: 1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does not have the power and authority to prohibit the establishment and operation of a PAGCOR gambling casino within the City's territorial limits.

2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par. (a), sub-par. (1) (v) of R.A. 7160 could only mean "illegal gambling." 3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point. 4. The questioned Ordinances are discriminatory to casino and partial to cockfighting and are therefore invalid on that point. 5. The questioned Ordinances are not reasonable, not consonant with the general powers and purposes of the instrumentality concerned and inconsistent with the laws or policy of the State. 6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 53 in disposing of the issues presented in this present case. PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines. In Basco v. Philippine Amusements and Gaming Corporation, 4 this Court sustained the constitutionality of the decree and even cited the benefits of the entity to the national economy as the third highest revenue-earner in the government, next only to the BIR and the Bureau of Customs. Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare Clause now embodied in Section 16 as follows: Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. In addition, Section 458 of the said Code specifically declares that:

Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang Panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: (1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall: xxx xxx xxx (v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute,gambling and other prohibited games of chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of obscene or pornographic materials or publications, and such other activities inimical to the welfare and morals of the inhabitants of the city; This section also authorizes the local government units to regulate properties and businesses within their territorial limits in the interest of the general welfare. 5 The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the operation of casinos because they involve games of chance, which are detrimental to the people. Gambling is not allowed by general law and even by the Constitution itself. The legislative power conferred upon local government units may be exercised over all kinds of gambling and not only over "illegal gambling" as the respondents erroneously argue. Even if the operation of casinos may have been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit them within its territory pursuant to the authority entrusted to it by the Local Government Code. It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in Article II, Section 25, and Article X of the Constitution, as well as various other provisions therein seeking to strengthen the character of the nation. In giving the local government units the power to prevent or suppress gambling and other social problems, the Local Government Code has recognized the competence of such communities to determine and adopt the measures best expected to promote the general welfare of their inhabitants in line with the policies of the State.

The petitioners also stress that when the Code expressly authorized the local government units to prevent and suppress gambling and other prohibited games of chance, like craps, baccarat, blackjack and roulette, it meant allforms of gambling without distinction. Ubi lex non distinguit, nec nos distinguere debemos. 6 Otherwise, it would have expressly excluded from the scope of their power casinos and other forms of gambling authorized by special law, as it could have easily done. The fact that it did not do so simply means that the local government units are permitted to prohibit all kinds of gambling within their territories, including the operation of casinos. The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter of the PAGCOR. The Code is not only a later enactment than P.D. 1869 and so is deemed to prevail in case of inconsistencies between them. More than this, the powers of the PAGCOR under the decree are expressly discontinued by the Code insofar as they do not conform to its philosophy and provisions, pursuant to Par. (f) of its repealing clause reading as follows: (f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly. It is also maintained that assuming there is doubt regarding the effect of the Local Government Code on P.D. 1869, the doubt must be resolved in favor of the petitioners, in accordance with the direction in the Code calling for its liberal interpretation in favor of the local government units. Section 5 of the Code specifically provides: Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code, the following rules shall apply: (a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned; xxx xxx xxx (c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in accelerating economic development and upgrading the quality of life for the people in the community; . . . (Emphasis supplied.) Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the Constitution and several decisions of this Court expressive of the general and official disapprobation of the vice. They invoke the State policies on the

family and the proper upbringing of the youth and, as might be expected, call attention to the old case of U.S. v. Salaveria, 7 which sustained a municipal ordinance prohibiting the playing of panguingue. The petitioners decry the immorality of gambling. They also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in creating PAGCOR and authorizing it to operate casinos "on land and sea within the territorial jurisdiction of the Philippines." This is the opportune time to stress an important point. The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered inimical to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court has no authority to review, much less reverse. Well has it been said that courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the political departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes are not addressed to the judiciary but may be resolved only by the legislative and executive departments, to which the function belongs in our scheme of government. That function is exclusive. Whichever way these branches decide, they are answerable only to their own conscience and the constituents who will ultimately judge their acts, and not to the courts of justice. The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and Ordinance No. 3375-93 as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And we shall do so only by the criteria laid down by law and not by our own convictions on the propriety of gambling. The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid, an ordinance must conform to the following substantive requirements: 1) It must not contravene the constitution or any statute. 2) It must not be unfair or oppressive. 3) It must not be partial or discriminatory. 4) It must not prohibit but may regulate trade. 5) It must be general and consistent with public policy. 6) It must not be unreasonable.

We begin by observing that under Sec. 458 of the Local Government Code, local government units are authorized to prevent or suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision excludes games of chance which are not prohibited but are in fact permitted by law. The petitioners are less than accurate in claiming that the Code could have excluded such games of chance but did not. In fact it does. The language of the section is clear and unmistakable. Under the rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or given the same meaning of, words with which it is associated. Accordingly, we conclude that since the word "gambling" is associated with "and other prohibited games of chance," the word should be read as referring to only illegal gambling which, like the other prohibited games of chance, must be prevented or suppressed. We could stop here as this interpretation should settle the problem quite conclusively. But we will not. The vigorous efforts of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and the earnestness of their advocacy, deserve more than short shrift from this Court. The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy embodied therein insofar as they prevent PAGCOR from exercising the power conferred on it to operate a casino in Cagayan de Oro City. The petitioners have an ingenious answer to this misgiving. They deny that it is the ordinances that have changed P.D. 1869 for an ordinance admittedly cannot prevail against a statute. Their theory is that the change has been made by the Local Government Code itself, which was also enacted by the national lawmaking authority. In their view, the decree has been, not really repealed by the Code, but merely "modified pro tanto" in the sense that PAGCOR cannot now operate a casino over the objection of the local government unit concerned. This modification of P.D. 1869 by the Local Government Code is permissible because one law can change or repeal another law. It seems to us that the petitioners are playing with words. While insisting that the decree has only been "modifiedpro tanto," they are actually arguing that it is already dead, repealed and useless for all intents and purposes because the Code has shorn PAGCOR of all power to centralize and regulate casinos. Strictly speaking, its operations may now be not only prohibited by the local government unit; in fact, the prohibition is not only discretionary but mandated by Section 458 of the Code if the word "shall" as used therein is to be given its accepted meaning. Local government units have now no choice but to prevent and suppress gambling, which in the petitioners' view includes both legal and illegal gambling. Under this construction, PAGCOR will have no more games of chance to regulate or centralize as they must all be prohibited by the local government units pursuant to the mandatory duty imposed upon them by the Code. In this situation, PAGCOR cannot continue to exist except only as a toothless tiger or a white elephant and will no longer be able to exercise its powers as a prime source of government revenue through the operation of casinos.

It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently discarding the rest of the provision which painstakingly mentions the specific laws or the parts thereof which are repealed (or modified) by the Code. Significantly, P.D. 1869 is not one of them. A reading of the entire repealing clause, which is reproduced below, will disclose the omission: Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as the "Local Government Code," Executive Order No. 112 (1987), and Executive Order No. 319 (1988) are hereby repealed. (b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions, memoranda and issuances related to or concerning the barangay are hereby repealed. (c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special Education Fund; Presidential Decree No. 144 as amended by Presidential Decree Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree No. 436 as amended by Presidential Decree No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed and rendered of no force and effect. (d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects. (e) The following provisions are hereby repealed or amended insofar as they are inconsistent with the provisions of this Code: Sections 2, 16, and 29 of Presidential Decree No. 704; Sections 12 of Presidential Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as amended; and Section 16 of Presidential Decree No. 972, as amended, and (f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly. Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear and unmistakable showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court explained: The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later date clearly reveals an intention on the part of the lawmaking power to abrogate the prior law, this intention must

be given effect; but there must always be a sufficient revelation of this intention, and it has become an unbending rule of statutory construction that the intention to repeal a former law will not be imputed to the Legislature when it appears that the two statutes, or provisions, with reference to which the question arises bear to each other the relation of general to special. There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private respondent points out, PAGCOR is mentioned as the source of funding in two later enactments of Congress, to wit, R.A. 7309, creating a Board of Claims under the Department of Justice for the benefit of victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing for measures for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes. This would show that the PAGCOR charter has not been repealed by the Local Government Code but has in fact been improved as it were to make the entity more responsive to the fiscal problems of the government. It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably destructive confrontation, courts must exert every effort to reconcile them, remembering that both laws deserve a becoming respect as the handiwork of a coordinate branch of the government. On the assumption of a conflict between P.D. 1869 and the Code, the proper action is not to uphold one and annul the other but to give effect to both by harmonizing them if possible. This is possible in the case before us. The proper resolution of the problem at hand is to hold that under the Local Government Code, local government units may (and indeed must) prevent and suppress all kinds of gambling within their territories except only those allowed by statutes like P.D. 1869. The exception reserved in such laws must be read into the Code, to make both the Code and such laws equally effective and mutually complementary. This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and those authorized by law. Legalized gambling is not a modern concept; it is probably as old as illegal gambling, if not indeed more so. The petitioners' suggestion that the Code authorizes them to prohibit all kinds of gambling would erase the distinction between these two forms of gambling without a clear indication that this is the will of the legislature. Plausibly, following this theory, the City of Manila could, by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from conducting a lottery as authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized by R.A. 309 and R.A. 983. In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the petitioners that the ordinances in question are valid. On the contrary, we find that the ordinances violate P.D. 1869, which has the character and force of a statute, as well as the public policy expressed in the decree allowing the playing of certain games of chance despite the prohibition of gambling in general.

The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute. Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the State, and the corporation could not prevent it. We know of no limitation on the right so far as to the corporation themselves are concerned. They are, so to phrase it, the mere tenants at will of the legislature. 11 This basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we here confirm that Congress retains control of the local government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of the power to tax, 12which cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it. The Court understands and admires the concern of the petitioners for the welfare of their constituents and their apprehensions that the welfare of Cagayan de Oro City will be endangered by the opening of the casino. We share the view that "the hope of large or easy gain, obtained without special effort, turns the head of the workman" 13 and that "habitual gambling is a cause of laziness and ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge of gambling must be stamped out. The laws against gambling must be enforced to the limit." George Washington called gambling "the child of avarice, the brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of the legislature to decide, in its own wisdom, to legalize certain forms of gambling, as was done in P.D. 1869 and impliedly affirmed in the Local Government Code. That decision can be revoked by this Court only if it contravenes the Constitution as the touchstone of all official acts. We do not find such contravention here.

We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has not been modified by the Local Government Code, which empowers the local government units to prevent or suppress only those forms of gambling prohibited by law. Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 337593 prohibiting the operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced therein and are therefore ultra vires and void. WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of Appeals is AFFIRMED, with costs against the petitioners. It is so ordered. Narvasa, C.J., Feliciano, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason, Puno, Vitug, Kapunan and Mendoza, JJ., concur.

Separate Opinions

PADILLA, J., concurring: I concur with the majority holding that the city ordinances in question cannot modify much less repeal PAGCOR's general authority to establish and maintain gambling casinos anywhere in the Philippines under Presidential Decree No. 1869. In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a separate opinion that: . . . I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling properly pertain to "state policy". It is, therefore, the political departments of government, namely, the legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such policy." (Emphasis supplied)

However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by respondent PAGCOR, I wish to reiterate my view that gambling in any form runs counter to the government's own efforts to re-establish and resurrect the Filipino moral character which is generally perceived to be in a state of continuing erosion. It is in the light of this alarming perspective that I call upon government to carefully weigh the advantages and disadvantages of setting up more gambling facilities in the country. That the PAGCOR contributes greatly to the coffers of the government is not enough reason for setting up more gambling casinos because, undoubtedly, this will not help improve, but will cause a further deterioration in the Filipino moral character. It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do not always justify the means. As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the former will not render it any less reprehensible even if substantial revenue for the government can be realized from it. The same is true of gambling. In the present case, it is my considered view that the national government (through PAGCOR) should re-examine and re-evaluate its decision of imposing the gambling casino on the residents of Cagayan de Oro City; for it is abundantly clear that public opinion in the city is very much against it, and again the question must be seriously deliberated: will the prospects of revenue to be realized from the casino outweigh the further destruction of the Filipino sense of values?

DAVIDE, JR., J., concurring: While I concur in part with the majority, I wish, however, to express my views on certain aspects of this case. I. It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed with the Court of Appeals its so-called petition for prohibition, thereby invoking the said court's original jurisdiction to issue writs of prohibition under Section 9(1) of B.P. Blg. 129. As I see it, however, the principal cause of action therein is one for declaratory relief: to declare null and unconstitutional for, inter alia, having been enacted without or in excess of jurisdiction, for impairing the obligation of contracts, and for being inconsistent with public policy the challenged ordinances enacted by the Sangguniang Panglungsod of the City of Cagayan de Oro. The intervention therein of public respondent Philippine Amusement and Gaming Corporation (PAGCOR) further underscores the "declaratory relief" nature of the

action. PAGCOR assails the ordinances for being contrary to the non-impairment and equal protection clauses of the Constitution, violative of the Local Government Code, and against the State's national policy declared in P.D. No. 1869. Accordingly, the Court of Appeals does not have jurisdiction over the nature of the action. Even assuming arguendo that the case is one for prohibition, then, under this Court's established policy relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of Cagayan de Oro City. I find no special or compelling reason why it was not filed with the said court. I do not wish to entertain the thought that PRYCE doubted a favorable verdict therefrom, in which case the filing of the petition with the Court of Appeals may have been impelled by tactical considerations. A dismissal of the petition by the Court of Appeals would have been in order pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989]) and Defensor-Santiago vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated: A last word. This court's original jurisdiction to issue writs of certiorari (as well as prohibition,mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts (formerly Courts of First Instance), which may issue the writ, enforceable in any part of their respective regions. It is also shared by this court, and by the Regional Trial Court, with the Court of Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue the extraordinary writs was restricted by those "in aid of its appellate jurisdiction." This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the revenue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the restriction of the jurisdiction of the Court of Appeals in this regard, supra resulting from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" was evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for extraordinary writs which, but for the expansion of the Appellate Court's

corresponding jurisdiction, would have had to be filed with it. (citations omitted) And in Vasquez, this Court said: One final observation. We discern in the proceedings in this case a propensity on the part of petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from this Court despite the fact that the same is available in the lower courts in the exercise of their original or concurrent jurisdiction, or is even mandated by law to be sought therein. This practice must be stopped, not only because of the imposition upon the previous time of this Court but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our primary jurisdiction. II. The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the Issuance of Business Permit and Canceling Existing Business Permit To Any Establishment for the Using and Allowing to be Used Its Premises or Portion Thereof for the Operation of Casino," and (b) Ordinance No. 3375-93 entitled, "An Ordinance Prohibiting the Operation of Casino and Providing Penalty for Violation Therefor." They were enacted to implement Resolution No. 2295 entitled, "Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow the Establishment of the Gambling Casino in the City of Cagayan de Oro," which was promulgated on 19 November 1990 nearly two years before PRYCE and PAGCOR entered into a contract of lease under which the latter leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino which resolution was vigorously reiterated in Resolution No. 2673 of 19 October 1992. The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express powers conferred by Section 458, paragraph (a), subparagraphs (1)-(v), (3)(ii), and (4)-(i), (iv), and (vii), Local Government Code, and pursuant to its implied power under Section 16 thereof (the general welfare clause) which reads: Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective

governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. The issue that necessarily arises is whether in granting local governments (such as the City of Cagayan de Oro) the above powers and functions, the Local Government Code has, pro tanto, repealed P.D. No. 1869 insofar as PAGCOR's general authority to establish and maintain gambling casinos anywhere in the Philippines is concerned. I join the majority in holding that the ordinances cannot repeal P.D. No. 1869. III. The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily because it is in contravention to P.D. No. 1869 is unwarranted. A contravention of a law is not necessarily a contravention of the constitution. In any case, the ordinances can still stand even if they be conceded as offending P.D. No. 1869. They can be reconciled, which is not impossible to do. So reconciled, the ordinances should be construed as not applying to PAGCOR. IV. From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are, for obvious reasons, strongly against the opening of the gambling casino in their city. Gambling, even if legalized, would be inimical to the general welfare of the inhabitants of the City, or of any place for that matter. The PAGCOR, as a governmentowned corporation, must consider the valid concerns of the people of the City of Cagayan de Oro and should not impose its will upon them in an arbitrary, if not despotic, manner.

# Separate Opinions

PADILLA, J., concurring:

I concur with the majority holding that the city ordinances in question cannot modify much less repeal PAGCOR's general authority to establish and maintain gambling casinos anywhere in the Philippines under Presidential Decree No. 1869. In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a separate opinion that: . . . I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling properly pertain to "state policy". It is, therefore, the political departments of government, namely, the legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such policy. (emphasis supplied) However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by respondent PAGCOR, I wish to reiterate my view that gambling in any form runs counter to the government's own efforts to re-establish and resurrect the Filipino moral character which is generally perceived to be in a state of continuing erosion. It is in the light of this alarming perspective that I call upon government to carefully weigh the advantages and disadvantages of setting up more gambling facilities in the country. That the PAGCOR contributes greatly to the coffers of the government is not enough reason for setting up more gambling casinos because, undoubtedly, this will not help improve, but will cause a further deterioration in the Filipino moral character. It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do not always justify the means. As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the former will not render it any less reprehensible even if substantial revenue for the government can be realized from it. The same is true of gambling. In the present case, it is my considered view that the national government (through PAGCOR) should re-examine and re-evaluate its decision of imposing the gambling casino on the residents of Cagayan de Oro City; for it is abundantly clear that public opinion in the city is very much against it, and again the question must be seriously deliberated: will the prospects of revenue to be realized from the casino outweigh the further destruction of the Filipino sense of values? DAVIDE, JR., J., concurring: While I concur in part with the majority, I wish, however, to express my views on certain aspects of this case.

I. It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed with the Court of Appeals its so-called petition for prohibition, thereby invoking the said court's original jurisdiction to issue writs of prohibition under Section 9(1) of B.P. Blg. 129. As I see it, however, the principal cause of action therein is one for declaratory relief: to declare null and unconstitutional for, inter alia, having been enacted without or in excess of jurisdiction, for impairing the obligation of contracts, and for being inconsistent with public policy the challenged ordinances enacted by the Sangguniang Panglungsod of the City of Cagayan de Oro. The intervention therein of public respondent Philippine Amusement and Gaming Corporation (PAGCOR) further underscores the "declaratory relief" nature of the action. PAGCOR assails the ordinances for being contrary to the non-impairment and equal protection clauses of the Constitution, violative of the Local Government Code, and against the State's national policy declared in P.D. No. 1869. Accordingly, the Court of Appeals does not have jurisdiction over the nature of the action. Even assuming arguendo that the case is one for prohibition, then, under this Court's established policy relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of Cagayan de Oro City. I find no special or compelling reason why it was not filed with the said court. I do not wish to entertain the thought that PRYCE doubted a favorable verdict therefrom, in which case the filing of the petition with the Court of Appeals may have been impelled by tactical considerations. A dismissal of the petition by the Court of Appeals would have been in order pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989]) and Defensor-Santiago vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated: A last word. This court's original jurisdiction to issue writs of certiorari (as well as prohibition,mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts (formerly Courts of First Instance), which may issue the writ, enforceable in any part of their respective regions. It is also shared by this court, and by the Regional Trial Court, with the Court of Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue the extraordinary writs was restricted by those "in aid of its appellate jurisdiction." This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the revenue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter,

with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the restriction of the jurisdiction of the Court of Appeals in this regard, supra resulting from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" was evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for extraordinary writs which, but for the expansion of the Appellate Court's corresponding jurisdiction, would have had to be filed with it. (citations omitted) And in Vasquez, this Court said: One final observation. We discern in the proceedings in this case a propensity on the part of petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from this Court despite the fact that the same is available in the lower courts in the exercise of their original or concurrent jurisdiction, or is even mandated by law to be sought therein. This practice must be stopped, not only because of the imposition upon the previous time of this Court but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our primary jurisdiction. II. The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the Issuance of Business Permit and Canceling Existing Business Permit To Any Establishment for the Using and Allowing to be Used Its Premises or Portion Thereof for the Operation of Casino," and (b) Ordinance No. 3375-93 entitled, "An Ordinance Prohibiting the Operation of Casino and Providing Penalty for Violation Therefor." They were enacted to implement Resolution No. 2295 entitled, "Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow the Establishment of the Gambling Casino in the City of Cagayan de Oro," which was promulgated on 19 November 1990 nearly two years before PRYCE and PAGCOR entered into a

contract of lease under which the latter leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino which resolution was vigorously reiterated in Resolution No. 2673 of 19 October 1992. The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express powers conferred by Section 458, paragraph (a), subparagraphs (1)-(v), (3)(ii), and (4)-(i), (iv), and (vii), Local Government Code, and pursuant to its implied power under Section 16 thereof (the general welfare clause) which reads: Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. The issue that necessarily arises is whether in granting local governments (such as the City of Cagayan de Oro) the above powers and functions, the Local Government Code has, pro tanto, repealed P.D. No. 1869 insofar as PAGCOR's general authority to establish and maintain gambling casinos anywhere in the Philippines is concerned. I join the majority in holding that the ordinances cannot repeal P.D. No. 1869. III. The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily because it is in contravention to P.D. No. 1869 is unwarranted. A contravention of a law is not necessarily a contravention of the constitution. In any case, the ordinances can still stand even if they be conceded as offending P.D. No. 1869. They can be reconciled, which is not impossible to do. So reconciled, the ordinances should be construed as not applying to PAGCOR. IV. From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are, for obvious reasons, strongly against the opening of the gambling casino in their city. Gambling, even if legalized, would be inimical to the general welfare of the inhabitants of the City, or of any place for that matter. The PAGCOR, as a governmentowned corporation, must consider the valid concerns of the people of the City of

Cagayan de Oro and should not impose its will upon them in an arbitrary, if not despotic, manner.

G.R. No. 129093

August 30, 2001

HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and HON. CALIXTO CATAQUIZ,petitioners, vs. HON. FRANCISCO DIZON PAO and TONY CALVENTO, respondents. QUISUMBING, J.: For our resolution is a petition for review on certiorari seeking the reversal of the decision 1 dated February 10, 1997 of the Regional Trial Court of San Pedro, Laguna, Branch 93, enjoining petitioners from implementing or enforcing Kapasiyahan Bilang 508, Taon 1995, of the Sangguniang Panlalawigan of Laguna and its subsequent Order 2 dated April 21, 1997 denying petitioners' motion for reconsideration. On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for a mayor's permit to open the lotto outlet. This was denied by Mayor Cataquiz in a letter dated February 19, 1996. The ground for said denial was an ordinance passed by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, T. 1995 which was issued on September 18, 1995. The ordinance reads: ISANG KAPASIYAHAN TINUTUTULAN ANG MGA "ILLEGAL GAMBLING" LALO NA ANG LOTTO SA LALAWIGAN NG LAGUNA SAPAGKA'T, ang sugal dito sa lalawigan ng Laguna ay talamak na; SAPAGKA'T, ang sugal ay nagdudulot ng masasamang impluwensiya lalo't higit sa mga kabataan; KUNG KAYA'T DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at Kgg. Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd. Meliton C. Larano at buong pagkakaisang sinangayunan ng lahat ng dumalo sa pulong; IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano mang uri ng sugal dito sa lalawigan ng Laguna lalo't higit ang Lotto; IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang pinuno ng Philippine National Police (PNP) Col. [illegible] na mahigpit na pag-ibayuhin

ang pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan ng Laguna lalo na ang "Jueteng".3 As a result of this resolution of denial, respondent Calvento filed a complaint for declaratory relief with prayer for preliminary injunction and temporary restraining order. In the said complaint, respondent Calvento asked the Regional Trial Court of San Pedro Laguna, Branch 93, for the following reliefs: (1) a preliminary injunction or temporary restraining order, ordering the defendants to refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon. Municipal Mayor Calixto R Cataquiz to issue a business permit for the operation of a lotto outlet; and (3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995. On February 10, 1997, the respondent judge, Francisco Dizon Pao, promulgated his decision enjoining the petitioners from implementing or enforcing resolution or Kapasiyahan Blg. 508, T. 1995. The dispositive portion of said decision reads: WHEREFORE, premises considered, defendants, their agents and representatives are hereby enjoined from implementing or enforcing resolution or kapasiyahan blg. 508, T. 1995 of the Sangguniang Panlalawigan ng Laguna prohibiting the operation of the lotto in the province of Laguna. SO ORDERED.4 Petitioners filed a motion for reconsideration which was subsequently denied in an Order dated April 21, 1997, which reads: Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr. and the Sangguniang Panlalawigan of Laguna, thru counsel, with the opposition filed by plaintiff's counsel and the comment thereto filed by counsel for the defendants which were duly noted, the Court hereby denies the motion for lack of merit. SO ORDERED.5 On May 23, 1997, petitioners filed this petition alleging that the following errors were committed by the respondent trial court: I THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE SANGGUNIANG PANLALAWIGAN OF LAGUNA PROHIBITING THE OPERATION OF THE LOTTO IN THE PROVINCE OF LAGUNA. II

THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED BY THE PETITIONERS THAT BEFORE ANY GOVERNMENT PROJECT OR PROGRAM MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR OFFICES, PRIOR CONSULTATION AND APPROVAL BY THE LOCAL GOVERNMENT UNITS CONCERNED AND OTHER CONCERNED SECTORS IS REQUIRED. Petitioners contend that the assailed resolution is a valid policy declaration of the Provincial Government of Laguna of its vehement objection to the operation of lotto and all forms of gambling. It is likewise a valid exercise of the provincial government's police power under the General Welfare Clause of Republic Act 7160, otherwise known as the Local Government Code of 1991.6 They also maintain that respondent's lotto operation is illegal because no prior consultations and approval by the local government were sought before it was implemented contrary to the express provisions of Sections 2 (c) and 27 of R.A. 7160.7 For his part, respondent Calvento argues that the questioned resolution is, in effect, a curtailment of the power of the state since in this case the national legislature itself had already declared lotto as legal and permitted its operations around the country. 8 As for the allegation that no prior consultations and approval were sought from the sangguniang panlalawigan of Laguna, respondent Calvento contends this is not mandatory since such a requirement is merely stated as a declaration of policy and not a self-executing provision of the Local Government Code of 1991.9 He also states that his operation of the lotto system is legal because of the authority given to him by the PCSO, which in turn had been granted a franchise to operate the lotto by Congress.10 The Office of the Solicitor General (OSG), for the State, contends that the Provincial Government of Laguna has no power to prohibit a form of gambling which has been authorized by the national government.11 He argues that this is based on the principle that ordinances should not contravene statutes as municipal governments are merely agents of the national government. The local councils exercise only delegated legislative powers which have been conferred on them by Congress. This being the case, these councils, as delegates, cannot be superior to the principal or exercise powers higher than those of the latter. The OSG also adds that the question of whether gambling should be permitted is for Congress to determine, taking into account national and local interests. Since Congress has allowed the PCSO to operate lotteries which PCSO seeks to conduct in Laguna, pursuant to its legislative grant of authority, the province's Sangguniang Panlalawigan cannot nullify the exercise of said authority by preventing something already allowed by Congress. The issues to be resolved now are the following: (1) whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a mayor's permit based thereon are valid; and (2) whether prior consultations and approval by the concerned Sanggunian are needed before a lotto system can be operated in a given local government unit.

The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a mayor's permit for the operation of a lotto outlet in favor of private respondent. According to the mayor, he based his decision on an existing ordinance prohibiting the operation of lotto in the province of Laguna. The ordinance, however, merely states the "objection" of the council to the said game. It is but a mere policy statement on the part of the local council, which is not self-executing. Nor could it serve as a valid ground to prohibit the operation of the lotto system in the province of Laguna. Even petitioners admit as much when they stated in their petition that: 5.7. The terms of the Resolution and the validity thereof are express and clear. The Resolution is a policy declaration of the Provincial Government of Laguna of its vehement opposition and/or objection to the operation of and/or all forms of gambling including the Lotto operation in the Province of Laguna.12 As a policy statement expressing the local government's objection to the lotto, such resolution is valid. This is part of the local government's autonomy to air its views which may be contrary to that of the national government's. However, this freedom to exercise contrary views does not mean that local governments may actually enact ordinances that go against laws duly enacted by Congress. Given this premise, the assailed resolution in this case could not and should not be interpreted as a measure or ordinance prohibiting the operation of lotto. The game of lotto is a game of chance duly authorized by the national government through an Act of Congress. Republic Act 1169, as amended by Batas Pambansa Blg. 42, is the law which grants a franchise to the PCSO and allows it to operate the lotteries. The pertinent provision reads: SECTION 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers conferred in section thirteen of Act Numbered One thousand four hundred fifty-nine, as amended, and shall have the authority: A. To hold and conduct charity sweepstakes races, lotteries, and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors. This statute remains valid today. While lotto is clearly a game of chance, the national government deems it wise and proper to permit it. Hence, the Sangguniang Panlalawigan of Laguna, a local government unit, cannot issue a resolution or an ordinance that would seek to prohibit permits. Stated otherwise, what the national legislature expressly allows by law, such as lotto, a provincial board may not disallow by ordinance or resolution.

In our system of government, the power of local government units to legislate and enact ordinances and resolutions is merely a delegated power coming from Congress. As held in Tatel vs. Virac,13 ordinances should not contravene an existing statute enacted by Congress. The reasons for this is obvious, as elucidated inMagtajas v. Pryce Properties Corp.14 Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred upon them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute. Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the state, and the corporation could not prevent it. We know of no limitation on the right so far as the corporation themselves are concerned. They are, so to phrase it, the mere tenants at will of the legislature (citing Clinton vs. Ceder Rapids, etc. Railroad Co., 24 Iowa 455). Nothing in the present constitutional provision enhancing local autonomy dictates a different conclusion. The basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we here confirm that Congress retains control of the local government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of the power to tax (citing Art. X, Sec. 5, Constitution), which cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.15 Ours is still a unitary form of government, not a federal state. Being so, any form of autonomy granted to local governments will necessarily be limited and confined within the extent allowed by the central authority. Besides, the principle of local autonomy

under the 1987 Constitution simply means "decentralization". It does not make local governments sovereign within the state or an "imperium in imperio".16 To conclude our resolution of the first issue, respondent mayor of San Pedro, cannot avail of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board of Laguna as justification to prohibit lotto in his municipality. For said resolution is nothing but an expression of the local legislative unit concerned. The Board's enactment, like spring water, could not rise above its source of power, the national legislature. As for the second issue, we hold that petitioners erred in declaring that Sections 2 (c) and 27 of Republic Act 7160, otherwise known as the Local Government Code of 1991, apply mandatorily in the setting up of lotto outlets around the country. These provisions state: SECTION 2. Declaration of Policy. . . . (c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with appropriate local government units, nongovernmental and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions. SECTION 27. Prior Consultations Required. No project or program shall be implemented by government authorities unless the consultations mentioned in Section 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian concerned is obtained; Provided, that occupants in areas where such projects are to be implemented shall not be evicted unless, appropriate relocation sites have been provided, in accordance with the provisions of the Constitution. From a careful reading of said provisions, we find that these apply only to national programs and/or projects which are to be implemented in a particular local community. Lotto is neither a program nor a project of the national government, but of a charitable institution, the PCSO. Though sanctioned by the national government, it is far fetched to say that lotto falls within the contemplation of Sections 2 (c) and 27 of the Local Government Code. Section 27 of the Code should be read in conjunction with Section 26 thereof. 17 Section 26 reads: SECTION 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. - It shall be the duty of every national agency or governmentowned or controlled corporation authorizing or involved in the planning and implementation of any project or program that may cause pollution, climatic change, depletion of non-renewable resources, loss of crop land, range-land, or

forest cover, and extinction of animal or plant species, to consult with the local government units, nongovernmental organizations, and other sectors concerned and explain the goals and objectives of the project or program, its impact upon the people and the community in terms of environmental or ecological balance, and the measures that will be undertaken to prevent or minimize the adverse effects thereof. Thus, the projects and programs mentioned in Section 27 should be interpreted to mean projects and programs whose effects are among those enumerated in Section 26 and 27, to wit, those that: (1) may cause pollution; (2) may bring about climatic change; (3) may cause the depletion of non-renewable resources; (4) may result in loss of crop land, range-land, or forest cover; (5) may eradicate certain animal or plant species from the face of the planet; and (6) other projects or programs that may call for the eviction of a particular group of people residing in the locality where these will be implemented. Obviously, none of these effects will be produced by the introduction of lotto in the province of Laguna. Moreover, the argument regarding lack of consultation raised by petitioners is clearly an afterthought on their part. There is no indication in the letter of Mayor Cataquiz that this was one of the reasons for his refusal to issue a permit. That refusal was predicated solely but erroneously on the provisions of Kapasiyahan Blg. 508, Taon 1995, of the Sangguniang Panlalawigan of Laguna. In sum, we find no reversible error in the RTC decision enjoining Mayor Cataquiz from enforcing or implementing the Kapasiyahan Blg. 508, T. 1995, of the Sangguniang Panlalawigan of Laguna. That resolution expresses merely a policy statement of the Laguna provincial board. It possesses no binding legal force nor requires any act of implementation. It provides no sufficient legal basis for respondent mayor's refusal to issue the permit sought by private respondent in connection with a legitimate business activity authorized by a law passed by Congress. WHEREFORE, the petition is DENIED for lack of merit. The Order of the Regional Trial Court of San Pedro, Laguna enjoining the petitioners from implementing or enforcing Resolution or Kapasiyahan Blg. 508, T. 1995, of the Provincial Board of Laguna is hereby AFFIRMED. No costs. SO ORDERED. Bellosillo, Mendoza, Buena and De Leon, Jr., JJ ., concur.

G.R. No. 92299 April 19, 1991

REYNALDO R. SAN JUAN, petitioner, vs. CIVIL SERVICE COMMISSION, DEPARTMENT OF BUDGET AND MANAGEMENT and CECILIA ALMAJOSE,respondents. Legal Services Division for petitioner. Sumulong, Sumulong, Paras & Abano Law Offices for private respondent.

GUTIERREZ, JR., J.:p In this petition for certiorari pursuant to Section 7, Article IX (A) of the present Constitution, the petitioner Governor of the Province of Rizal, prays for the nullification of Resolution No. 89-868 of the Civil Service Commission (CSC) dated November 21, 1989 and its Resolution No. 90-150 dated February 9, 1990. The dispositive portion of the questioned Resolution reads: WHEREFORE, foregoing premises considered, the Commission resolved to dismiss, as it hereby dismisses the appeal of Governor Reynaldo San Juan of Rizal. Accordingly, the approved appointment of Ms. Cecilia Almajose as Provincial Budget Officer of Rizal, is upheld. (Rollo, p. 32) The subsequent Resolution No. 90-150 reiterates CSC's position upholding the private respondent's appointment by denying the petitioner's motion for reconsideration for lack of merit. The antecedent facts of the case are as follows: On March 22, 1988, the position of Provincial Budget Officer (PBO) for the province of Rizal was left vacant by its former holder, a certain Henedima del Rosario. In a letter dated April 18, 1988, the petitioner informed Director Reynaldo Abella of the Department of Budget and Management (DBM) Region IV that Ms. Dalisay Santos assumed office as Acting PBO since March 22, 1988 pursuant to a Memorandum issued by the petitioner who further requested Director Abella to endorse the appointment of the said Ms. Dalisay Santos to the contested position of PBO of Rizal. Ms. Dalisay Santos was then Municipal Budget Officer of Taytay, Rizal before she discharged the functions of acting PBO. In a Memorandum dated July 26, 1988 addressed to the DBM Secretary, then Director Abella of Region IV recommended the appointment of the private respondent as PBO of Rizal on the basis of a comparative study of all Municipal Budget Officers of the said province which included three nominees of the petitioner. According to Abella, the

private respondent was the most qualified since she was the only Certified Public Accountant among the contenders. On August 1, 1988, DBM Undersecretary Nazario S. Cabuquit, Jr. signed the appointment papers of the private respondent as PBO of Rizal upon the aforestated recommendation of Abella. In a letter dated August 3, 1988 addressed to Secretary Carague, the petitioner reiterated his request for the appointment of Dalisay Santos to the contested position unaware of the earlier appointment made by Undersecretary Cabuquit. On August 31, 1988, DBM Regional Director Agripino G. Galvez wrote the petitioner that Dalisay Santos and his other recommendees did not meet the minimum requirements under Local Budget Circular No. 31 for the position of a local budget officer. Director Galvez whether or not through oversight further required the petitioner to submit at least three other qualified nominees who are qualified for the position of PBO of Rizal for evaluation and processing. On November 2, 1988, the petitioner after having been informed of the private respondent's appointment wrote Secretary Carague protesting against the said appointment on the grounds that Cabuquit as DBM Undersecretary is not legally authorized to appoint the PBO; that the private respondent lacks the required three years work experience as provided in Local Budget Circular No. 31; and that under Executive Order No. 112, it is the Provincial Governor, not the Regional Director or a Congressman, who has the power to recommend nominees for the position of PBO. On January 9, 1989 respondent DBM, through its Director of the Bureau of Legal & Legislative Affairs (BLLA) Virgilio A. Afurung, issued a Memorandum ruling that the petitioner's letter-protest is not meritorious considering that public respondent DBM validly exercised its prerogative in filling-up the contested position since none of the petitioner's nominees met the prescribed requirements. On January 27, 1989, the petitioner moved for a reconsideration of the BLLA ruling. On February 28, 1989, the DBM Secretary denied the petitioner's motion for reconsideration. On March 27, 1989, the petitioner wrote public respondent CSC protesting against the appointment of the private respondent and reiterating his position regarding the matter. Subsequently, public respondent CSC issued the questioned resolutions which prompted the petitioner to submit before us the following assignment of errors: A. THE CSC ERRED IN UPHOLDING THE APPOINTMENT BY DBM ASSISTANT SECRETARY CABUQUIT OF CECILIA ALMAJOSE AS PBO OF RIZAL.

B. THE CSC ERRED IN HOLDING THAT CECILIA ALMA JOSE POSSESSES ALL THE REQUIRED QUALIFICATIONS. C. THE CSC ERRED IN DECLARING THAT PETITIONER'S NOMINEES ARE NOT QUALIFIED TO THE SUBJECT POSITION. D. THE CSC AND THE DBM GRAVELY ABUSED THEIR DISCRETION IN NOT ALLOWING PETITIONER TO SUBMIT NEW NOMINEES WHO COULD MEET THE REQUIRED QUALIFICATION (Petition, pp. 7-8, Rollo, pp. 15-16) All the assigned errors relate to the issue of whether or not the private respondent is lawfully entitled to discharge the functions of PBO of Rizal pursuant to the appointment made by public respondent DBM's Undersecretary upon the recommendation of then Director Abella of DBM Region IV. The petitioner's arguments rest on his contention that he has the sole right and privilege to recommend the nominees to the position of PBO and that the appointee should come only from his nominees. In support thereof, he invokes Section 1 of Executive Order No. 112 which provides that: Sec. 1. All budget officers of provinces, cities and municipalities shall be appointed henceforth by the Minister of Budget and Management upon recommendation of the local chief executive concerned, subject to civil service law, rules and regulations, and they shall be placed under the administrative control and technical supervision of the Ministry of Budget and Management. The petitioner maintains that the appointment of the private respondent to the contested position was made in derogation of the provision so that both the public respondents committed grave abuse of discretion in upholding Almajose's appointment. There is no question that under Section 1 of Executive Order No. 112 the petitioner's power to recommend is subject to the qualifications prescribed by existing laws for the position of PBO. Consequently, in the event that the recommendations made by the petitioner fall short of the required standards, the appointing authority, the Minister (now Secretary) of public respondent DBM is expected to reject the same. In the event that the Governor recommends an unqualified person, is the Department Head free to appoint anyone he fancies ? This is the issue before us. Before the promulgation of Executive Order No. 112 on December 24, 1986, Batas Pambansa Blg. 337, otherwise known as the Local Government Code vested upon the Governor, subject to civil service rules and regulations, the power to appoint the PBO

(Sec. 216, subparagraph (1), BP 337). The Code further enumerated the qualifications for the position of PBO. Thus, Section 216, subparagraph (2) of the same code states that: (2) No person shall be appointed provincial budget officer unless he is a citizen of the Philippines, of good moral character, a holder of a degree preferably in law, commerce, public administration or any related course from a recognized college or university, a first grade civil service eligibility or its equivalent, and has acquired at least five years experience in budgeting or in any related field. The petitioner contends that since the appointing authority with respect to the Provincial Budget Officer of Rizal was vested in him before, then, the real intent behind Executive Order No. 112 in empowering him to recommend nominees to the position of Provincial Budget Officer is to make his recommendation part and parcel of the appointment process. He states that the phrase "upon recommendation of the local chief executive concerned" must be given mandatory application in consonance with the state policy of local autonomy as guaranteed by the 1987 Constitution under Art. II, Sec. 25 and Art. X, Sec. 2 thereof. He further argues that his power to recommend cannot validly be defeated by a mere administrative issuance of public respondent DBM reserving to itself the right to fill-up any existing vacancy in case the petitioner's nominees do not meet the qualification requirements as embodied in public respondent DBM's Local Budget Circular No. 31 dated February 9, 1988. The questioned ruling is justified by the public respondent CSC as follows: As required by said E.O. No. 112, the DBM Secretary may choose from among the recommendees of the Provincial Governor who are thus qualified and eligible for appointment to the position of the PBO of Rizal. Notwithstanding, the recommendation of the local chief executive is merely directory and not a condition sine qua non to the exercise by the Secretary of DBM of his appointing prerogative. To rule otherwise would in effect give the law or E.O. No. 112 a different interpretation or construction not intended therein, taking into consideration that said officer has been nationalized and is directly under the control and supervision of the DBM Secretary or through his duly authorized representative. It cannot be gainsaid that said national officer has a similar role in the local government unit, only on another area or concern, to that of a Commission on Audit resident auditor. Hence, to preserve and maintain the independence of said officer from the local government unit, he must be primarily the choice of the national appointing official, and the exercise thereof must not be unduly hampered or interfered with, provided the appointee finally selected meets the requirements for the position in accordance with prescribed Civil Service Law, Rules and Regulations. In other words, the appointing official is not restricted or circumscribed to the list submitted or recommended by

the local chief executive in the final selection of an appointee for the position. He may consider other nominees for the position vis a vis the nominees of the local chief executive. (CSC Resolution No. 89-868, p. 2;Rollo, p. 31) The issue before the Court is not limited to the validity of the appointment of one Provincial Budget Officer. The tug of war between the Secretary of Budget and Management and the Governor of the premier province of Rizal over a seemingly innocuous position involves the application of a most important constitutional policy and principle, that of local autonomy. We have to obey the clear mandate on local autonomy. Where a law is capable of two interpretations, one in favor of centralized power in Malacaang and the other beneficial to local autonomy, the scales must be weighed in favor of autonomy. The exercise by local governments of meaningful power has been a national goal since the turn of the century. And yet, inspite of constitutional provisions and, as in this case, legislation mandating greater autonomy for local officials, national officers cannot seem to let go of centralized powers. They deny or water down what little grants of autonomy have so far been given to municipal corporations. President McKinley's Instructions dated April 7, 1900 to the Second Philippine Commission ordered the new Government "to devote their attention in the first instance to the establishment of municipal governments in which natives of the Islands, both in the cities and rural communities, shall be afforded the opportunity to manage their own local officers to the fullest extent of which they are capable and subject to the least degree of supervision and control which a careful study of their capacities and observation of the workings of native control show to be consistent with the maintenance of law, order and loyalty. In this initial organic act for the Philippines, the Commission which combined both executive and legislative powers was directed to give top priority to making local autonomy effective. The 1935 Constitution had no specific article on local autonomy. However, in distinguishing between presidential control and supervision as follows: The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed. (Sec. 11, Article VII, 1935 Constitution) the Constitution clearly limited the executive power over local governments to "general supervision . . . as may be provided by law." The President controls the executive departments. He has no such power over local governments. He has

only supervision and that supervision is both general and circumscribed by statute. In Tecson v. Salas, 34 SCRA 275, 282 (1970), this Court stated: . . . Hebron v. Reyes, (104 Phil. 175 [1958]) with the then Justice, now Chief Justice, Concepcion as the ponente, clarified matters. As was pointed out, the presidential competence is not even supervision in general, but general supervision as may be provided by law. He could not thus go beyond the applicable statutory provisions, which bind and fetter his discretion on the matter. Moreover, as had been earlier ruled in an opinion penned by Justice Padilla in Mondano V. Silvosa, (97 Phil. 143 [1955]) referred to by the present Chief Justice in his opinion in the Hebron case, supervision goes no further than "overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them the former may take such action or step as prescribed by law to make them perform their duties." (Ibid, pp. 147-148) Control, on the other hand, "means the power of an officer to alter or modify or nullify or set aside what a subordinate had done in the performance of their duties and to substitute the judgment of the former for that of the latter." It would follow then, according to the present Chief Justice, to go back to the Hebron opinion, that the President had to abide by the then provisions of the Revised Administrative Code on suspension and removal of municipal officials, there being no power of control that he could rightfully exercise, the law clearly specifying the procedure by which such disciplinary action would be taken. Pursuant to this principle under the 1935 Constitution, legislation implementing local autonomy was enacted. In 1959, Republic Act No. 2264, "An Act Amending the Law Governing Local Governments by Increasing Their Autonomy and Reorganizing Local Governments" was passed. It was followed in 1967 when Republic Act No. 5185, the Decentralization Law was enacted, giving "further autonomous powers to local governments governments." The provisions of the 1973 Constitution moved the country further, at least insofar as legal provisions are concerned, towards greater autonomy. It provided under Article II as a basic principle of government: Sec. 10. The State shall guarantee and promote the autonomy of local government units, especially the barangay to ensure their fullest development as self-reliant communities. An entire article on Local Government was incorporated into the Constitution. It called for a local government code defining more responsive and accountable local government structures. Any creation, merger, abolition, or substantial boundary

alteration cannot be done except in accordance with the local government code and upon approval by a plebiscite. The power to create sources of revenue and to levy taxes was specifically settled upon local governments. The exercise of greater local autonomy is even more marked in the present Constitution. Article II, Section 25 on State Policies provides: Sec. 25. The State shall ensure the autonomy of local governments The 14 sections in Article X on Local Government not only reiterate earlier doctrines but give in greater detail the provisions making local autonomy more meaningful. Thus, Sections 2 and 3 of Article X provide: Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units. When the Civil Service Commission interpreted the recommending power of the Provincial Governor as purely directory, it went against the letter and spirit of the constitutional provisions on local autonomy. If the DBM Secretary jealously hoards the entirety of budgetary powers and ignores the right of local governments to develop self-reliance and resoluteness in the handling of their own funds, the goal of meaningful local autonomy is frustrated and set back. The right given by Local Budget Circular No. 31 which states: Sec. 6.0 The DBM reserves the right to fill up any existing vacancy where none of the nominees of the local chief executive meet the prescribed requirements. is ultra vires and is, accordingly, set aside. The DBM may appoint only from the list of qualified recommendees nominated by the Governor. If none is qualified, he must return the list of nominees to the Governor explaining why no one meets the legal requirements and ask for new recommendees who have the necessary eligibilities and qualifications.

The PBO is expected to synchronize his work with DBM. More important, however, is the proper administration of fiscal affairs at the local level. Provincial and municipal budgets are prepared at the local level and after completion are forwarded to the national officials for review. They are prepared by the local officials who must work within the constraints of those budgets. They are not formulated in the inner sanctums of an all-knowing DBM and unilaterally imposed on local governments whether or not they are relevant to local needs and resources. It is for this reason that there should be a genuine interplay, a balancing of viewpoints, and a harmonization of proposals from both the local and national officials. It is for this reason that the nomination and appointment process involves a sharing of power between the two levels of government. It may not be amiss to give by way of analogy the procedure followed in the appointments of Justices and Judges. Under Article VIII of the Constitution, nominations for judicial positions are made by the Judicial and Bar Council. The President makes the appointments from the list of nominees submitted to her by the Council. She cannot apply the DBM procedure, reject all the Council nominees, and appoint another person whom she feels is better qualified. There can be no reservation of the right to fill up a position with a person of the appointing power's personal choice. The public respondent's grave abuse of discretion is aggravated by the fact that Director Galvez required the Provincial Governor to submit at least three other names of nominees better qualified than his earlier recommendation. It was a meaningless exercise. The appointment of the private respondent was formalized before the Governor was extended the courtesy of being informed that his nominee had been rejected. The complete disregard of the local government's prerogative and the smug belief that the DBM has absolute wisdom, authority, and discretion are manifest. In his classic work "Philippine Political Law" Dean Vicente G. Sinco stated that the value of local governments as institutions of democracy is measured by the degree of autonomy that they enjoy. Citing Tocqueville, he stated that "local assemblies of citizens constitute the strength of free nations. . . . A people may establish a system of free government but without the spirit of municipal institutions, it cannot have the spirit of liberty." (Sinco, Philippine Political Law, Eleventh Edition, pp. 705-706). Our national officials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit of liberty upon which these provisions are based. WHEREFORE, the petition is hereby GRANTED. The questioned resolutions of the Civil Service Commission are SET ASIDE. The appointment of respondent Cecilia Almajose is nullified. The Department of Budget and Management is ordered to appoint the Provincial Budget Officer of Rizal from among qualified nominees submitted by the Provincial Governor.

SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

G.R. Nos. 120865-71 December 7, 1995 LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH 70, REGIONAL TRIAL COURT OF BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and CARLITO ARROYO; THE MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents. LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH 163, REGIONAL TRIAL COURT OF PASIG; MANILA MARINE LIFE BUSINESS RESOURCES, INC. represented by, MR. TOBIAS REYNALD M. TIANGCO; MUNICIPALITY OF TAGUIG, METRO MANILA and/or MAYOR RICARDO D. PAPA, JR., respondents. LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE, BRANCH 79, REGIONAL TRIAL COURT OF MORONG, RIZAL; GREENFIELD VENTURES INDUSTRIAL DEVELOPMENT CORPORATION and R. J. ORION DEVELOPMENT CORPORATION; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents. LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE, BRANCH 162, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; IRMA FISHING & TRADING CORP.; ARTM FISHING CORP.; BDR CORPORATION, MIRT CORPORATION and TRIM CORPORATION; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents. LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF MORONG, RIZAL; BLUE LAGOON

FISHING CORP. and ALCRIS CHICKEN GROWERS, INC.; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents. LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF MORONG, RIZAL; AGP FISH VENTURES, INC., represented by its PRESIDENT ALFONSO PUYAT; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents. LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING JUDGE, BRANCH 161, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; SEA MAR TRADING CO. INC.; EASTERN LAGOON FISHING CORP.; MINAMAR FISHING CORP.; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS,respondents.

HERMOSISIMA, JR., J.: It is difficult for a man, scavenging on the garbage dump created by affluence and profligate consumption and extravagance of the rich or fishing in the murky waters of the Pasig River and the Laguna Lake or making a clearing in the forest so that he can produce food for his family, to understand why protecting birds, fish, and trees is more important than protecting him and keeping his family alive. How do we strike a balance between environmental protection, on the one hand, and the individual personal interests of people, on the other? Towards environmental protection and ecology, navigational safety, and sustainable development, Republic Act No. 4850 created the "Laguna Lake Development Authority." This Government Agency is supposed to carry out and effectuate the aforesaid declared policy, so as to accelerate the development and balanced growth of the Laguna Lake area and the surrounding provinces, cities and towns, in the act clearly named, within the context of the national and regional plans and policies for social and economic development. Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain sections of Republic Act No. 4850 because of the concern for the rapid expansion of Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de Bay, combined with current and prospective uses of the lake for municipal-industrial water supply, irrigation, fisheries, and the like. Concern on the part of the Government

and the general public over: the environment impact of development on the water quality and ecology of the lake and its related river systems; the inflow of polluted water from the Pasig River, industrial, domestic and agricultural wastes from developed areas around the lake; the increasing urbanization which induced the deterioration of the lake, since water quality studies have shown that the lake will deteriorate further if steps are not taken to check the same; and the floods in Metropolitan Manila area and the lakeshore towns which will influence the hydraulic system of Laguna de Bay, since any scheme of controlling the floods will necessarily involve the lake and its river systems, likewise gave impetus to the creation of the Authority. Section 1 of Republic Act No. 4850 was amended to read as follows: Sec. 1. Declaration of Policy. It is hereby declared to be the national policy to promote, and accelerate the development and balanced growth of the Laguna Lake area and the surrounding provinces, cities and towns hereinafter referred to as the region, within the context of the national and regional plans and policies for social and economic development and to carry out the development of the Laguna Lake region with due regard and adequate provisions for environmental management and control, preservation of the quality of human life and ecological systems, and the prevention of undue ecological disturbances, deterioration and pollution. 1 Special powers of the Authority, pertinent to the issues in this case, include: Sec. 3. Section 4 of the same Act is hereby further amended by adding thereto seven new paragraphs to be known as paragraphs (j), (k), (l), (m), (n), (o), and (p) which shall read as follows: xxx xxx xxx (j) The provisions of existing laws to the contrary notwithstanding, to engage in fish production and other aquaculture projects in Laguna de Bay and other bodies of water within its jurisdiction and in pursuance thereof to conduct studies and make experiments, whenever necessary, with the collaboration and assistance of the Bureau of Fisheries and Aquatic Resources, with the end in view of improving present techniques and practices. Provided, that until modified, altered or amended by the procedure provided in the following subparagraph, the present laws, rules and permits or authorizations remain in force; (k) For the purpose of effectively regulating and monitoring activities in Laguna de Bay,the Authority shall have exclusive

jurisdiction to issue new permit for the use of the lake waters for any projects or activities in or affecting the said lake including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the like, and to impose necessary safeguards for lake quality control and management and to collect necessary fees for said activities and projects: Provided, That the fees collected for fisheries may be shared between the Authority and other government agencies and political subdivisions in such proportion as may be determined by the President of the Philippines upon recommendation of the Authority's Board: Provided, further, That the Authority's Board may determine new areas of fishery development or activities which it may place under the supervision of the Bureau of Fisheries and Aquatic Resources taking into account the overall development plans and programs for Laguna de Bay and related bodies of water: Provided, finally, That the Authority shall subject to the approval of the President of the Philippines promulgate such rules and regulations which shall govern fisheries development activities in Laguna de Bay which shall take into consideration among others the following: socioeconomic amelioration of bonafide resident fishermen whether individually or collectively in the form of cooperatives, lakeshore town development, a master plan for fishpen construction and operation, communal fishing ground for lake shore town residents, and preference to lake shore town residents in hiring laborer for fishery projects; (l) To require the cities and municipalities embraced within the region to pass appropriate zoning ordinances and other regulatory measures necessary to carry out the objectives of the Authority and enforce the same with the assistance of the Authority; (m) The provisions of existing laws to the contrary notwithstanding, to exercise water rights over public waters within the Laguna de Bay region whenever necessary to carry out the Authority's projects; (n) To act in coordination with existing governmental agencies in establishing water quality standards for industrial, agricultural and municipal waste discharges into the lake and to cooperate with said existing agencies of the government of the Philippines in enforcing such standards, or to separately pursue enforcement and penalty actions as provided for in Section 4 (d) and Section 39-A of this Act: Provided, That in case of

conflict on the appropriate water quality standard to be enforced such conflict shall be resolved thru the NEDA Board. 2 To more effectively perform the role of the Authority under Republic Act No. 4850, as though Presidential Decree No. 813 were not thought to be completely effective, the Chief Executive, feeling that the land and waters of the Laguna Lake Region are limited natural resources requiring judicious management to their optimal utilization to insure renewability and to preserve the ecological balance, the competing options for the use of such resources and conflicting jurisdictions over such uses having created undue constraints on the institutional capabilities of the Authority in the light of the limited powers vested in it by its charter, Executive Order No. 927 further defined and enlarged the functions and powers of the Authority and named and enumerated the towns, cities and provinces encompassed by the term "Laguna de Bay Region". Also, pertinent to the issues in this case are the following provisions of Executive Order No. 927 which include in particular the sharing of fees: Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within the Lake Region: To effectively regulate and monitor activities in the Laguna de Bay region, the Authority shall have exclusive jurisdiction to issue permit for the use of all surface water for any projects or activities in or affecting the said region including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the like. For the purpose of this Executive Order, the term "Laguna de Bay Region" shall refer to the Provinces of Rizal and Laguna; the Cities of San Pablo, Pasay, Caloocan, Quezon, Manila and Tagaytay; the towns of Tanauan, Sto. Tomas and Malvar in Batangas Province; the towns of Silang and Carmona in Cavite Province; the town of Lucban in Quezon Province; and the towns of Marikina, Pasig, Taguig, Muntinlupa, and Pateros in Metro Manila. Sec 3. Collection of Fees. The Authority is hereby empowered to collect fees for the use of the lake water and its tributaries for all beneficial purposes including but not limited to fisheries, recreation, municipal, industrial, agricultural, navigation, irrigation, and waste disposal purpose; Provided, that the rates of the fees to be collected, and the sharing with other government agencies and political subdivisions, if necessary, shall be subject to the approval of the President of the Philippines upon recommendation of the Authority's Board, except fishpen fee, which will be shared in the following manner; 20 percent of the fee shall go to the lakeshore local governments, 5 percent shall go to the Project Development Fund which shall be administered by a Council and the remaining 75 percent shall constitute the share of LLDA. However, after the implementation within the three-year period of the Laguna Lake Fishery

Zoning and Management Plan, the sharing will be modified as follows: 35 percent of the fishpen fee goes to the lakeshore local governments, 5 percent goes to the Project Development Fund and the remaining 60 percent shall be retained by LLDA; Provided, however, that the share of LLDA shall form part of its corporate funds and shall not be remitted to the National Treasury as an exception to the provisions of Presidential Decree No. 1234. (Emphasis supplied) It is important to note that Section 29 of Presidential Decree No. 813 defined the term "Laguna Lake" in this manner: Sec 41. Definition of Terms. (11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this Act, the same shall refer to Laguna de Bay which is that area covered by the lake water when it is at the average annual maximum lake level of elevation 12.50 meters, as referred to a datum 10.00 meters below mean lower low water (M.L.L.W). Lands located at and below such elevation are public lands which form part of the bed of said lake. Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in the Laguna Lake Region interpreted the provisions of this law to mean that the newly passed law gave municipal governments the exclusive jurisdiction to issue fishing privileges within their municipal waters because R.A. 7160 provides: Sec. 149. Fishery Rentals, Fees and Charges. (a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and impose rental fees or charges therefor in accordance with the provisions of this Section. (b) The Sangguniang Bayan may: (1) Grant fishing privileges to erect fish corrals, oyster, mussel or other aquatic beds or bangus fry areas, within a definite zone of the municipal waters, as determined by it; . . . . (2) Grant privilege to gather, take or catch bangus fry, prawn fry or kawag-kawag or fry of other species and fish from the municipal waters by nets, traps or other fishing gears to marginal fishermen free from any rental fee, charges or any other imposition whatsoever. xxx xxx xxx Sec. 447. Power, Duties, Functions and Compensation. . . . .

xxx xxx xxx (XI) Subject to the provisions of Book II of this Code, grant exclusive privileges of constructing fish corrals or fishpens, or the taking or catching of bangus fry, prawn fry orkawagkawag or fry of any species or fish within the municipal waters. xxx xxx xxx Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen permits. Big fishpen operators took advantage of the occasion to establish fishpens and fishcages to the consternation of the Authority. Unregulated fishpens and fishcages, as of July, 1995, occupied almost one-third of the entire lake water surface area, increasing the occupation drastically from 7,000 hectares in 1990 to almost 21,000 hectares in 1995. The Mayor's permit to construct fishpens and fishcages were all undertaken in violation of the policies adopted by the Authority on fishpen zoning and the Laguna Lake carrying capacity. To be sure, the implementation by the lakeshore municipalities of separate independent policies in the operation of fishpens and fishcages within their claimed territorial municipal waters in the lake and their indiscriminate grant of fishpen permits have already saturated the lake area with fishpens, thereby aggravating the current environmental problems and ecological stress of Laguna Lake. In view of the foregoing circumstances, the Authority served notice to the general public that: In compliance with the instructions of His Excellency PRESIDENT FIDEL V. RAMOS given on June 23, 1993 at Pila, Laguna pursuant to Republic Act 4850 as amended by Presidential Decree 813 and Executive Order 927 series of 1983 and in line with the policies and programs of the Presidential Task Force on Illegal Fishpens and Illegal Fishing, the general public is hereby notified that: 1. All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay Region, which were not registered or to which no application for registration and/or permit has been filed with Laguna Lake Development Authority as of March 31, 1993 are hereby declared outrightly as illegal. 2. All fishpens, fishcages and other aqua-culture structures so declared as illegal shall be subject to demolition which shall be undertaken by the Presidential Task Force for Illegal Fishpen and Illegal Fishing. 3. Owners of fishpens, fishcages and other aqua-culture structures declared as illegal shall, without prejudice to demolition of their structures

be criminally charged in accordance with Section 39-A of Republic Act 4850 as amended by P.D. 813 for violation of the same laws. Violations of these laws carries a penalty of imprisonment of not exceeding 3 years or a fine not exceeding Five Thousand Pesos or both at the discretion of the court. All operators of fishpens, fishcages and other aqua-culture structures declared as illegal in accordance with the foregoing Notice shall have one (1) month on or before 27 October 1993 to show cause before the LLDA why their said fishpens, fishcages and other aqua-culture structures should not be demolished/dismantled. One month, thereafter, the Authority sent notices to the concerned owners of the illegally constructed fishpens, fishcages and other aqua-culture structures advising them to dismantle their respective structures within 10 days from receipt thereof, otherwise, demolition shall be effected. Reacting thereto, the affected fishpen owners filed injunction cases against the Authority before various regional trial courts, to wit: (a) Civil Case No. 759-B, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 70, Binangonan, Rizal, filed by Fleet Development, Inc. and Carlito Arroyo; (b) Civil Case No. 64049, for Injunction, Regional Trial Court, Branch 162, Pasig, filed by IRMA Fishing and Trading Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp. and TRIM Corp.; (c) Civil Case No. 566, for Declaratory Relief and Injunction, Regional Trial Court, Branch 163, Pasig, filed by Manila Marine Life Business Resources, Inc. and Tobias Reynaldo M. Tianco; (d) Civil Case No. 556-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal, filed by AGP Fishing Ventures, Inc.; (e) Civil Case No. 522-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal, filed by Blue Lagoon and Alcris Chicken Growers, Inc.; (f) Civil Case No. 554-, for Certiorari and Prohibition, Regional Trial Court, Branch 79, Morong, Rizal, filed by Greenfields Ventures Industrial Corp. and R.J. Orion Development Corp.; and (g) Civil Case No. 64124, for Injunction, Regional Trial Court, Branch 15, Pasig, filed by SEA-MAR Trading Co., Inc. and Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation. The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The motions to dismiss were invariably denied. Meanwhile, temporary restraining order/writs of preliminary mandatory injunction were issued in Civil Cases Nos. 64124, 759 and 566 enjoining the Authority from demolishing the fishpens and similar structures in question. Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 12086571, were filed by the Authority with this court. Impleaded as parties-respondents are concerned regional trial courts and respective private parties, and the municipalities and/or respective Mayors of Binangonan, Taguig and Jala-jala, who issued permits for

the construction and operation of fishpens in Laguna de Bay. The Authority sought the following reliefs,viz.: (A) Nullification of the temporary restraining order/writs of preliminary injunction issued in Civil Cases Nos. 64125, 759 and 566; (B) Permanent prohibition against the regional trial courts from exercising jurisdiction over cases involving the Authority which is a co-equal body; (C) Judicial pronouncement that R.A. 7610 (Local Government Code of 1991) did not repeal, alter or modify the provisions of R.A. 4850, as amended, empowering the Authority to issue permits for fishpens, fishcages and other aqua-culture structures in Laguna de Bay and that, the Authority the government agency vested with exclusive authority to issue said permits. By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were referred to the Court of Appeals. In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's consolidated petitions, the Court of Appeals holding that: (A) LLDA is not among those quasi-judicial agencies of government whose decision or order are appealable only to the Court of Appeals; (B) the LLDA charter does vest LLDA with quasi-judicial functions insofar as fishpens are concerned; (C) the provisions of the LLDA charter insofar as fishing privileges in Laguna de Bay are concerned had been repealed by the Local Government Code of 1991; (D) in view of the aforesaid repeal, the power to grant permits devolved to and is now vested with their respective local government units concerned. Not satisfied with the Court of Appeals decision, the Authority has returned to this Court charging the following errors: 1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN ERROR WHEN IT RULED THAT THE LAGUNA LAKE DEVELOPMENT AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY. 2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT R.A. 4850 AS AMENDED BY P.D. 813 AND E.O. 927 SERIES OF 1983 HAS BEEN REPEALED BY REPUBLIC ACT 7160. THE SAID RULING IS CONTRARY TO ESTABLISHED PRINCIPLES AND JURISPRUDENCE OF STATUTORY CONSTRUCTION. 3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT THE POWER TO ISSUE FISHPEN

PERMITS IN LAGUNA DE BAY HAS BEEN DEVOLVED CONCERNED (LAKESHORE) LOCAL GOVERNMENT UNITS.

TO

We take a simplistic view of the controversy. Actually, the main and only issue posed is: Which agency of the Government the Laguna Lake Development Authority or the towns and municipalities comprising the region should exercise jurisdiction over the Laguna Lake and its environs insofar as the issuance of permits for fishery privileges is concerned? Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, the provisions of Presidential Decree No. 813, and Section 2 of Executive Order No. 927, cited above, specifically provide that the Laguna Lake Development Authority shall have exclusive jurisdiction to issue permits for the use of all surface water for any projects or activities in or affecting the said region, including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the like. On the other hand, Republic Act No. 7160, the Local Government Code of 1991, has granted to the municipalities the exclusive authority to grant fishery privileges in municipal waters. The Sangguniang Bayan may grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area within a definite zone of the municipal waters. We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the aforementioned laws creating the Laguna Lake Development Authority and granting the latter water rights authority over Laguna de Bay and the lake region. The Local Government Code of 1991 does not contain any express provision which categorically expressly repeal the charter of the Authority. It has to be conceded that there was no intent on the part of the legislature to repeal Republic Act No. 4850 and its amendments. The repeal of laws should be made clear and expressed. It has to be conceded that the charter of the Laguna Lake Development Authority constitutes a special law. Republic Act No. 7160, the Local Government Code of 1991, is a general law. It is basic in statutory construction that the enactment of a later legislation which is a general law cannot be construed to have repealed a special law. It is a well-settled rule in this jurisdiction that "a special statute, provided for a particular case or class of cases, is not repealed by a subsequent statute, general in its terms, provisions and application, unless the intent to repeal or alter is manifest, although the terms of the general law are broad enough to include the cases embraced in the special law." 3 Where there is a conflict between a general law and a special statute, the special statute should prevail since it evinces the legislative intent more clearly than the general statute. The special law is to be taken as an exception to the general law in the absence of special circumstances forcing a contrary conclusion. This is because implied repeals are not favored and as much as possible, effect must be given to all

enactments of the legislature. A special law cannot be repealed, amended or altered by a subsequent general law by mere implication. 4 Thus, it has to be concluded that the charter of the Authority should prevail over the Local Government Code of 1991. Considering the reasons behind the establishment of the Authority, which are environmental protection, navigational safety, and sustainable development, there is every indication that the legislative intent is for the Authority to proceed with its mission. We are on all fours with the manifestation of petitioner Laguna Lake Development Authority that "Laguna de Bay, like any other single body of water has its own unique natural ecosystem. The 900 km lake surface water, the eight (8) major river tributaries and several other smaller rivers that drain into the lake, the 2,920 km basin or watershed transcending the boundaries of Laguna and Rizal provinces, greater portion of Metro Manila, parts of Cavite, Batangas, and Quezon provinces, constitute one integrated delicate natural ecosystem that needs to be protected with uniform set of policies; if we are to be serious in our aims of attaining sustainable development. This is an exhaustible natural resource a very limited one which requires judicious management and optimal utilization to ensure renewability and preserve its ecological integrity and balance." "Managing the lake resources would mean the implementation of a national policy geared towards the protection, conservation, balanced growth and sustainable development of the region with due regard to the inter-generational use of its resources by the inhabitants in this part of the earth. The authors of Republic Act 4850 have foreseen this need when they passed this LLDA law the special law designed to govern the management of our Laguna de Bay lake resources." "Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies where lakeshore local government units exercise exclusive dominion over specific portions of the lake water. The garbage thrown or sewage discharged into the lake, abstraction of water therefrom or construction of fishpens by enclosing its certain area, affect not only that specific portion but the entire 900 km of lake water. The implementation of a cohesive and integrated lake water resource management policy, therefore, is necessary to conserve, protect and sustainably develop Laguna de Bay." 5 The power of the local government units to issue fishing privileges was clearly granted for revenue purposes. This is evident from the fact that Section 149 of the New Local Government Code empowering local governments to issue fishing permits is embodied in Chapter 2, Book II, of Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing And Other Revenue Raising Power Of Local Government Units."

On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other aqua-culture structures is for the purpose of effectively regulating and monitoring activities in the Laguna de Bay region (Section 2, Executive Order No. 927) and for lake quality control and management. 6 It does partake of the nature of police power which is the most pervasive, the least limitable and the most demanding of all State powers including the power of taxation. Accordingly, the charter of the Authority which embodies a valid exercise of police power should prevail over the Local Government Code of 1991 on matters affecting Laguna de Bay. There should be no quarrel over permit fees for fishpens, fishcages and other aquaculture structures in the Laguna de Bay area. Section 3 of Executive Order No. 927 provides for the proper sharing of fees collected. In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our holding that, considering the provisions of Section 4 of Republic Act No. 4850 and Section 4 of Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake Development Authority vs. Court of Appeals, 231 SCRA 304, 306, which we quote: xxx xxx xxx As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB), except in cases where the special law provides for another forum. It must be recognized in this regard that the LLDA, as a specialized administrative agency, is specifically mandated under Republic Act No. 4850 and its amendatory laws to carry out and make effective the declared national policy of promoting and accelerating the development and balanced growth of the Laguna Lake area and the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan with due regard and adequate provisions for environmental management and control, preservation of the quality of human life and ecological systems, and the prevention of undue ecological disturbances, deterioration and pollution. Under such a broad grant of power and authority, the LLDA, by virtue of its special charter, obviously has the responsibility to protect the inhabitants of the Laguna Lake region from the deleterious effects of pollutants emanating from the discharge of wastes from the surrounding areas. In carrying out the aforementioned declared policy, the LLDA is mandated, among others, to pass upon and approve or disapprove all plans, programs, and projects proposed by local government offices/agencies within the region, public corporations, and private persons or enterprises where such plans, programs and/or projects are related to those of the LLDA for the development of the region. xxx xxx xxx

. . . . While it is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law, it is likewise a settled rule that an administrative agency has also such powers as are necessarily implied in the exercise of its express powers. In the exercise, therefore, of its express powers under its charter, as a regulatory and quasi-judicial body with respect to pollution cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is, perforce, implied. Otherwise, it may well be reduced to a "toothless" paper agency. there is no question that the Authority has express powers as a regulatory and quasi-judicial body in respect to pollution cases with authority to issue a "cease and desist order" and on matters affecting the construction of illegal fishpens, fishcages and other aqua-culture structures in Laguna de Bay. The Authority's pretense, however, that it is co-equal to the Regional Trial Courts such that all actions against it may only be instituted before the Court of Appeals cannot be sustained. On actions necessitating the resolution of legal questions affecting the powers of the Authority as provided for in its charter, the Regional Trial Courts have jurisdiction. In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, has not repealed the provisions of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, as amended. Thus, the Authority has the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities situated therein and the authority to exercise such powers as are by its charter vested on it. Removal from the Authority of the aforesaid licensing authority will render nugatory its avowed purpose of protecting and developing the Laguna Lake Region. Otherwise stated, the abrogation of this power would render useless its reason for being and will in effect denigrate, if not abolish, the Laguna Lake Development Authority. This, the Local Government Code of 1991 had never intended to do. WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted, insofar as they relate to the authority of the Laguna Lake Development Authority to grant fishing privileges within the Laguna Lake Region. The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC, Branch 78, Morong, Rizal; Judge Herculano Tech, RTC, Branch 70, Binangonan, Rizal; and Judge Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila, are hereby declared null and void and ordered set aside for having been issued with grave abuse of discretion. The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to construct and operate fishpens, fishcages and other aqua-culture structures

within the Laguna Lake Region, their previous issuances being declared null and void. Thus, the fishing permits issued by Mayors Isidro B. Pacis, Municipality of Binangonan; Ricardo D. Papa, Municipality of Taguig; and Walfredo M. de la Vega, Municipality of Jala-jala, specifically, are likewise declared null and void and ordered cancelled. The fishpens, fishcages and other aqua-culture structures put up by operators by virtue of permits issued by Municipal Mayors within the Laguna Lake Region, specifically, permits issued to Fleet Development, Inc. and Carlito Arroyo; Manila Marine Life Business Resources, Inc., represented by, Mr. Tobias Reynald M. Tiangco; Greenfield Ventures Industrial Development Corporation and R.J. Orion Development Corporation; IRMA Fishing And Trading Corporation, ARTM Fishing Corporation, BDR Corporation, Mirt Corporation and Trim Corporation; Blue Lagoon Fishing Corporation and ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc., represented by its President Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern Lagoon Fishing Corporation, and MINAMAR Fishing Corporation, are hereby declared illegal structures subject to demolition by the Laguna Lake Development Authority. SO ORDERED. Davide, Jr., Bellosillo and Kapunan, JJ., concur.

Separate Opinions

PADILLA, J., concurring: I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to stress what the decision already states, i.e., that the local government units in the Laguna Lake area are not precluded from imposing permits on fishery operations for revenue raising purposes of such local government units. In other words, while the exclusive jurisdiction to determine whether or not projects or activities in the lake area should be allowed, as well as their regulation, is with the Laguna Lake Development Authority, once the Authority grants a permit, the permittee may still be subjected to an additional local permit or license for revenue purposes of the local government units concerned. This approach would clearly harmonize the special law, Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will also enable small towns and municipalities in the lake area, like Jala-Jala, to rise to some level of economic viability.

Separate Opinions PADILLA, J., concurring: I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to stress what the decision already states, i.e., that the local government units in the Laguna Lake area are not precluded from imposing permits on fishery operations for revenue raising purposes of such local government units. In other words, while the exclusive jurisdiction to determine whether or not projects or activities in the lake area should be allowed, as well as their regulation, is with the Laguna Lake Development Authority, once the Authority grants a permit, the permittee may still be subjected to an additional local permit or license for revenue purposes of the local government units concerned. This approach would clearly harmonize the special law, Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will also enable small towns and municipalities in the lake area, like Jala-Jala, to rise to some level of economic viability.

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