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CASE DIGESTS IN PUBLIC CORPORATIONS LAW (Atty.

Lapid)

Submitted by: Dean Ace A. Pamaran

1. Espiritu vs. Melgar (1992) Facts: Three similar complaints were filed with the DILG, Office of the Provincial Governor, and Office of the President, accusing Mayor Melgar of physically assaulting and arresting complainant without any reason. Sangguniang Panlalawigan, after evaluation, passed a resolution recommending the Provincial Governor to preventively suspend him pending the administrative case so Mayor Melgar was suspended by Governor Espiritu. Melgar filed petition with RTC which enjoined the Governor from implementing the order of suspension. Held: RTC has no jurisdiction to enjoin the governor from preventively suspending the mayor. Clearly, under Sec63 of the (old) LGC, the provincial governor of Oriental Mindoro is authorized by law to preventively suspend the municipal mayor of Naujan at anytime after the issues had been joined and any of the following grounds were shown to exist: (1) When there is reasonable ground to believe that the respondent has committed the act or acts complained of; (2) When the evidence of culpability is strong; (3) When the gravity of the offense so warrants; or (4) 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. The rationale of preventive suspension is so that the respondent may not hamper the normal course of the investigation through the use of his influence and authority over possible witnesses (Lacson vs. Roque, 92 Phil. 456). Also, Melgar failed to exhaust administrative remedies. Since respondent mayor believed that his preventive suspension was unjustified and politically motivated, he should have sought relief first from the Secretary of Interior and Local Government, not from the courts. However, once the 60-day preventive suspension has been served, the official is deemed reinstated in office without prejudice to the continuation of the administrative investigation of the charges against him. 2. Bunye vs. Escareal (1993) Facts: Petitioners Municipal Mayor, Vice Mayor and Councilors questions the resolution suspending them from office for 90 days pending their trial for violation of Sec3(3) of the AntiGraft and Corrupt Practices Act. 1

Held: Suspension of petitioners was proper. Sec13 of RA3019 unequivocally provides that the accused public official “shall be suspended from office” while the criminal prosecution is pending in court. Under Gonzaga case, such suspension is mandatory. It is not violative of the Constitution as it is not a penalty. It is mandatory as soon as the validity of the information is determined. There is no merit in the contention that their admission of the acts constituting the offense charged against them eliminates apprehension that they might tamper with the records. It is not for the petitioners to say that their admissions are all the evidence that the prosecution will need to hold up its case against them. The prosecution must be given the opportunity to gather and prepare the facts for trial under conditions which would ensure non intervention and noninterference for 90 days from petitioner’s camp. The fear that the government will be paralyzed by their suspension is remote. There are 8 councilors left who can meet as the Sangguniang Bayan. The President or his alter ego, the Secretary of Interior and Local Government will know how to deal with the problem of filling up the temporarily vacant positions in accordance with the provisions of the LGC. 3. Garcia vs. COMELEC (1993) Facts: On July1993, some mayors, vice-mayors and members of the Sangguniang Bayan of 12 municipalities of Bataan province met and constituted themselves into a Preparatory Recall Assembly (PRA) in the Bagac town plaza to initiate the recall election of Governor Garcia (elected governor of Bataan in May, 1992 elections) for “loss of confidence”. COMELEC scheduled recall elections. Governor Garcia asserts the unconstitutionality of Sec70, LGC. Held: Sec70 of LGC is constitutional. The presumption of validity rests on the respect due to the wisdom, integrity, and the patriotism of the legislative, by which the law is passed, and the Chief Executive, by whom the law is approved. Garcia does not point to any constitutional provision that will sustain their contention – for surely, there is nothing in there that will remotely suggest that the people have the “sole and exclusive right to decide on whether to initiate a recall proceeding.” The Constitution did not provide for any mode of initiating recall elections. It did not prohibit the adoption of multiple modes of initiating recall elections. The mandate given by Sec3 of Art X of the Constitution is for Congress to “enact a LGC which shall provide for a more responsive and accountable local government structure through a system of decentralization with effective mechanisms of recall, initiative, and referendum xxx” Congress was clearly given the power to choose the effective mechanisms of recall as its discernment dictates. Power given was to select which among the means and methods of initiating recall elections are effective to carry out the judgment of the electorate, and it was not straight jacketed to one particular mechanism of initiating recall elections. The Constitution requires only that the mechanisms chosen (one or many) be effective. Congress deemed it wise to enact the alternative mode to supplement the former mode by direct action, and the Court cannot supplant this judgment by Congress in respect of the principle of separation of powers. Choice may be erroneous but the remedy against a bad law is to seek its amendment or repeal by the legislative. Initiation by the PRAC is also initiation by the people, albeit done indirectly through their representatives this act by the people through their elected representatives is not constitutionally impermissible as seen in the task of drafting the Constitution which is delegated to their representatives (either by constitutional convention or as a congressional constituent assembly). 2

Initiation of recall process is a lesser act and there is no rhyme or reason why it cannot be entrusted to and exercised by the elected representatives of the people. PRA resolution of recall is not the recall itself. The PRA resolution merely starts the process – only a part of the process, and not the whole. This is self-evident because a PRA resolution of recall that is not submitted to the COMELEC for validation will not recall its subject officials. Likewise, a PRA resolution of recall that is rejected by the people in the election called for the purpose bears no effect whatsoever. The initiatory resolution merely sets the stage for the official concerned to appear before the tribunal of the people so he can justify why he should be allowed to continue in office. Before the people render their sovereign judgment, the official concerned remains in office but his right to continue in office is subject to question. This is clear in Sec72, LGC which explicitly states that “the recall of an elective local official shall be effective only upon the election and proclamation of a successor in the person of the candidate receiving the highest number of votes cast during the election on recall.” The fear expressed is that the members of PRAC may inject political color in their decision as they may initiate recall proceedings only against their political opponents especially those belonging to the minority. Careful reading of the law will show that it does not give an asymmetrical treatment to locally elected officials belonging to the political minority. The politically neutral composition of the PRA under Sec70(b) where all mayors, vice-mayors, sanggunian members of municipality and component cities are made members of the PRA at the provincial level-its membership is not apportioned to political parties – no significance is given to the political affiliation of its members. PRA at the provincial level includes all the elected officials in the province concerned- considering their number, the greater probability is that no one political party can control its majority. Sec. 69, LGC provides that the only ground to recall is loss of confidence of the people. The members of PRAC are there not in representation of their political parties but as representatives of the peoples. By necessary implication, loss of confidence cannot be premised on mere differences in political party affiliation. The Constitution even encourages multi-party system to nurture the democratic system. Fear that a PRA may be dominated by a political party and that it may use its power to initiate the recall of officials of opposite political persuasions is not a ground to strike down the law as unconstitutional. Moreover, law instituted safeguards to assure that the initiation of the recall process by a PRA will not be corrupted by extraneous influences. Its diverse and distinct composition guarantees that all the sectors of the electorate province shall be heard. Following are required for the validity of resolution: (1) Notice to all members is a condition sine qua non to the validity of its proceedings; (2) Law also requires a qualified majority of all the PRA members to convene in session and in a public place; (3) Also, the recall resolution by majority must be adopted during its session called for the purpose. Furthermore, it cannot be claimed that the PRA members voted along narrow political lines. Neither COMELEC nor SC made a judicial inquiry as to the reason that led the members of the said recall assembly to cast a vote against Garcia. Pimentel in his book stressed that the substantive content of a vote of lack of confidence is beyond any inquiry – a political question (as held in Evardone vs COMELEC)The proposal will still be passed upon by the sovereign electorate of Bataan – yet to be expressed. It is premature to conclude that the will has been subverted. If electorate re-elects him, the proposal to recall is rejected. If they do not, then he has lost the confidence of the people which he once enjoyed

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[Conclusion: The alternative mode of initiating recall proceedings thru a PRA is an innovative attempt by Congress to remove impediments to the effective exercise by the people of their sovereign power to check the performance of their elected officials. The power to determine this mode was specifically given to Congress and is not proscribed by the Constitution.] [SC Resolution: The requirement of notice is mandatory for it is indispensable in determining the collective wisdom of the members of PRA. Its non-observance is fatal to the validity of the resolution to recall Garcia as Governor of Bataan. The due process clause of the Constitution requiring notice as an element of fairness is inviolable and should always be considered as part and parcel of every law in case of its silence. Need for notice to all members of PRA is also imperative for these members represent the different sectors of the electorate. Resolution to recall should articulate the majority will of the members of the assembly but the majority will can be genuinely determined only after all the members have been given a fair opportunity to express the will of their constituents. In accord with the SC Resolution, Notice of Session was again sent to the members of PRAC.] 4. Paras vs. COMELEC (1996) Facts: Petition for recall of Paras as Punong Barangay (elected last 1994 regular barangay elections) was filed by the registered voters of the barangay. COMELEC approved the petition and scheduled the petition signing on October14, 1995 and set the recall election on Nov13, 1995.At least 29.30% of registered voters signed the petition (above the required 25%). Paras opposed so recall election was deferred by COMELEC to Dec16, 1995.COMELEC rescheduled recall election on Jan13, 1996. Held: There can still be a recall election even with the four (4) months that separate the recall election from the upcoming SK elections. Evident intent of Sec74 of LGC is to subject an elective local official to recall election once during his term of office. Paragraph (b) construed together with paragraph (a) merely designates the period when such elective official may be subject of a recall election, that is, during the 2nd year of his term of office. Thus, subscribing to Paras’ interpretation of the phrase regular local election to include the SK election will unduly circumscribe the novel provision of the LGC on recall, a mode of removal of public officers by initiation of the people before the end of his term. If the SK election were to be deemed within the purview of the phrase “regular local election” (to be held every 3years from May1996), then no recall election can be conducted rendering inutile the recall provision of the LGC. It is a basic precept of statutory construction that a statute should be interpreted in harmony with the Constitution. Interpretation of Sec74(b), LGC should not be in conflict with the constitutional mandate of Sec3, Art X to “enact a LGC 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 xxx” Recall election is potentially disruptive of the normal working of the LGU necessitating additional expenses, hence the prohibition against the conduct of recall election 1year immediately preceding the regular local election. The proscription is due to the proximity of the next regular election for the office of the local elective official concerned. Electorate could choose the official’s replacement in the said election who certainly has a longer tenure in office than a successor elected through a recall election. Therefore, it would be more in keeping with the intent of the recall provision of the Code to construe regular local election as one referring to 4

an election where the office held by the local elective official sought to be recalled will be contested and be filled by the electorate. However, recall is no longer possible in the case at bar because of the limitation under Sec74(b) – the next regular election involving the barangay office concerned is barely 7months away (scheduled on May1997). [Davide Concurring Opinion: SK election is not a regular local election for purposes of recall under Sec74, LGC. The term “regular local election” must be confined to the regular election of local elective officials, as distinguished from the regular election of national officials (President, VP, Senators and Congressmen).The officials enumerated under footnote are the only local elective officials deemed recognized by Sec2 par (2) of Art IX-C of Constitution (COMELEC’s power and exclusive original jurisdiction over all contests relating to elections, returns, and qualifications of all elective regional, provincial, and city officials, and appellate jurisdiction over all contests involving elective municipal officials decided by RTCs of general jurisdiction, or involving elective barangay officials decided by trial courts of limited jurisdiction). A regular election (local or national) can only refer to an election participated in by those who possess the right of suffrage, are not otherwise disqualified by law, and who are registered voters. One of the requirements for exercise of suffrage under Sec1, Art V of the Constitution is that the person must be at least 18years of age, and one requisite before he can vote is that he be a registered voter pursuant to the rules on registration prescribed in the Omnibus Election Code (Sec113-118). Under the law, SK includes the youth with ages ranging from 15-21 (Sec424, LGC). Accordingly, they include many who are not qualified to vote in a regular election – those from ages 15 to less than 18. In no manner then may SK elections be considered a regular election. SK is nothing more than a youth organization. Although fully recognized in LGC and vested with certain powers and functions, its elective officials have not attained the status of local elective officials. 5. Flores vs. Drilon (1993) Facts: Mayor Gordon of Olongapo City was appointed Chairman/CEO of the SBMA pursuant to RA7277 “Bases Conversion & Development Act of 1992” which provides that- The President shall appoint a professional manager as administrator of the Subic Authority with a compensation to be determined by the Board subject to the approval of the Secretary of Budget, who shall be the ex officio chairman of the Board and who shall serve as the chief executive officer of the Subic Authority: Provided, however, That for the first year of its operations from the effectivity of this Act, the mayor of the City of Olongapo shall be appointed as the chairman and chief executive officer of the Subic Authority. Petitioners filed an original petition before the SC, challenging the constitutionality of the proviso above. Held: The proviso violates the constitutional proscription against appointment or designation of elective officials to other government posts. The proscription is an affirmation that a public office is a full-time job. A public officer should be precluded from dissipating his efforts… among too many positions of responsibility, which may result in inefficiency. Section 94 of LGC which permits the appointment of a local elective official to another post if so allowed by law or by the primary functions of his office is untenable. No legislative act can prevail over the Constitution. This view ignores the clear-cut difference in the wording between the two paragraphs of Section 7 Art. IX-B, w/c distinction was purposely sought by the drafters of the Constitution. 5

Holding of multiple offices by an appointive official is permitted when allowed by law or by the primary functions of his position is more stringent. It does not provide any exception to the rule against appointment or designation of an elective official to other government posts except as particularly recognized in the Constitution itself, such as: President, as head of the Economic and Planning Agency; Vice-President, who may be appointed as Cabinet member; Congressman, who may be designated ex officio member of the Judicial & Bar Council. The exemption allowed to appointive officials can’t be extended to elective officials. The contention that SBMA posts are merely ex officio to the position of Mayor of Olongapo City, hence, an excepted circumstance citing Civil Liberties v Exec Secretary where the Court held that the prohibition in Section 13 Art. VII of the Constitution doesn’t apply to additional duties & functions required by the primary functions of the official concerned, who are to perform them in an ex officio capacity… is also untenable. Congress did not contemplate making the SBMA posts as ex officio or automatically attached to the Office of the Mayor of Olongapo City w/o need of appointment. The phrase “shall be appointed” shows the intent to make the posts appointive. In the Senate deliberations, Sen. Saguisag suggested that they make the post ex officio so as not to contravene Section 7 paragrap 1 of Art. IX-B of the Constitution, but Congress decided to have the controversy resolved by the courts instead. That the proviso is NOT a legislative encroachment on the appointing authority of the President…The power of appointment necessarily carries the discretion of whom to appoint. When Congress clothes the President with the power to appoint an officer, it cannot at the same time limit the choice of the President to only one candidate, even on the pretext of prescribing qualifications of the officer (as in this case, where the qualifications prescribed can only be met by one individual). Such enactment eliminates the discretion of the appointing power [and encroaches upon his power of appointment]. [Solution: Since the ineligibility of an elective official for appointment remains all throughout his tenure or during his incumbency, Gordon may resign first from his elective post to cast off the constitutionally-attached disqualification.] [Conclusion: Gordon’s appointment pursuant to an unconstitutional legislative act is null & void. He however remains Mayor of Olongapo City. His acts as SBMA Chair/CEO are not necessarily null and void. He may be considered a de facto officer, whose acts will hold valid in so far as they involve the interests of the public and third persons. Also, all emoluments received by Gordon pursuant to his appointment may be retained by him.] 6. Salalima vs. Guingona (1996) Facts: Petitioners, members of the Sangguniang Panlalawigan of Albay, seek to annul and set aside Administrative Order 153, signed by the President and by public respondent Executive Secretary Teofisto Guingona, approving the finding of fact and recommendations of the Ad Hoc Committee and holding petitioners administratively liable. The order meted out on each petitioner penalties of suspension of different durations, to be served successively but not to go beyond their respective unexpired terms in accordance with Section 66 (b) of LGC. Petitioners argued that the order is an oppressive and capricious exercise of executive power. Held: Section 66 (b) of LGC provides that the penalty of suspension shall not exceed the unexpired term of the respondent or a period of six (6) months for every Administrative Offense, nor shall said penalty be a bar to the candidacy of the respondent so suspended as long as he meet the qualifications for the office. An administrative offense means every act or conduct or 6

omission which amounts to, or constitutes, any of the grounds for disciplinary action. In the case at bar, there is no grave abuse of discretion in imposing the penalty of suspension, although the aggregate thereof exceeded the six months and the unexpired portion of the petitioners' term of office. The fact remains that the suspension imposed for each administrative offense did not exceed six months and there was an express provision that the successive service of suspension should not exceed the unexpired portion of the petitioners' term. The suspension does not amount to petitioners' removal from office. However, the petitioners cannot be administratively liable. This is so because public officials cannot be subject to disciplinary action for administrative misconduct committed during a prior term. The Court should never remove a public officer for acts done prior to his present term of office. To do otherwise would be to deprive the people of their right to elect their officers. When the people have elected a man to office, it must be assumed that they did this with knowledge of his life and character, and that they disregard or forgave his faults or misconduct, if he had been guilty of any. The Court cannot practically overrule the will of the people. The liabilities of the petitioners who signed Resolution 129 authorizing petitioner Salalima to enter into the retainer contract in question who were reelected in the 1992 elections are condoned. This is, however, without prejudice to the institution of appropriate civil and criminal cases. 7. Malinao vs. Reyes (1996) Facts: Malinao filed an administrative case against Mayor Red for abuse of authority and denial of due process with the Sangguniang Panlalawigan of Marinduque. On August 12, 1994, members of the Sanggunian, by a vote of 5 to 3, found Red guilty, vote signed only by presiding chairman. On September 5, the Sanggunian, voting 7 to 2, acquitted Red of the charges against him. This vote was embodied in a Decision which was signed by all the members. Malinao argued that the First Sanggunian Decision had already become final and executory for failure of Red to appeal. The issue is whether or not the second Decision is valid. Held: Yes, the second decision of acquittal is valid. In any case, this issue is already moot and academic as a result of the expiration of Red’s term during which the act complained of was allegedly committed, and further proceedings are barred by his reelection. [Sec 66(b) LGC]. Reelection abates any administrative disciplinary proceedings against the local elective official. [Under Sec. 66 (b) of the LGC, the penalty of suspension cannot exceed the unexpired term of the official and any administrative disciplinary proceeding against said official is abated if in the meantime he is re-elected because such re-election is a condonation of whatever misconduct he might have committed during his previous term. In order to render a decision in an administrative case involving elected local officials, the decision of the Sanggunian must be in writing, stating clearly the facts and the reasons for such a decision.] 8. Garcia vs. Mojica (1999) Facts: Garcia, as Cebu City mayor, signed a contract with F.E. Zuellig for supply of asphalt to the city. Contract covers the period 1998-2001 which was to commence on September1998 when the first delivery should have been made by Zuellig.March1999, news reports came out regarding alleged anomalous purchase of asphalt by Cebu City, through the contract signed by 7

Garcia – which prompted Office of Ombudsman (Visayas) to conduct an inquiry. Preventive suspension order was issued by the Office of the Ombudsman. Garcia assails validity of the order. Held: There can be no question as to the power and authority of respondent Deputy Ombudsman Mojica to issue an order of preventive suspension against an official like Garcia – to prevent that official from using his office to intimidate or influence witnesses or to tamper with records that might be vital to the prosecution of the case against him. However, the said office cannot hold him administratively liable for acts committed prior to his present term of office. It has repeatedly held in a number of cases that a reelected local official may not be held administratively accountable for misconduct committed during his prior term of office. The rationale is that when the electorate put him back into office, it is presumed that it did so with full knowledge of his life and character, including his past misconduct. If, armed with such knowledge, it still reelects him, then such reelection is considered a condonation of his past misdeeds. That the people voted for an official with knowledge of his character is presumed, precisely to eliminate the need to determine, in factual terms, the extent of this knowledge. Such an undertaking is impossible. Rulings on the matter do not distinguish the precise timing or period when the misconduct was committed, reckoned from the date of the official’s reelection, except that it must be prior to said date. [Salalima case applies – that sound policy dictates it. To rule otherwise would open the floodgates to exacerbating endless partisan contests between the reelected official and his political enemies, who may not stop to hound the former during his new term with administrative cases for acts alleged to have been committed during his previous term. In the case at bar, Garcia cannot anymore be held administrative liable for an act done during his previous term (his signing of contract with Zuellig).] 9. Javellana vs. DILG Facts: This petition for review on certiorari involves the right of a public official to engage in the practice of his profession while employed in the Government. Attorney Erwin B. Javellana was an elected City Councilor of Bago City, Negros Occidental. City Engineer Ernesto C. Divinagracia filed Administrative Case No. C-10-90 against Javellana for: (1) violation of Department of Local Government (DLG) Memorandum Circular No. 80-38 dated June 10, 1980 in relation to DLG Memorandum Circular No. 74-58 and of Section 7, paragraph b, No. 2 of Republic Act No. 6713, otherwise known as the "Code of Conduct and Ethical Standards for Public Officials and Employees," and (2) for oppression, misconduct and abuse of authority. Divinagracia's complaint alleged that Javellana, an incumbent member of the City Council or Sanggunian Panglungsod of Bago City, and a lawyer by profession, has continuously engaged in the practice of law without securing authority for that purpose from the Regional Director, Department of Local Government, as required by DLG Memorandum Circular No. 80-38 in relation to DLG Memorandum Circular No. 74-58 of the same department. On the other hand, Javellana filed a Motion to Dismiss the administrative case against him on the ground mainly that DLG Memorandum Circulars Nos. 80-38 and 90-81 are unconstitutional because the Supreme Court has the sole and exclusive authority to regulate the practice of law. 8

Held: Petitioner's contention that Section 90 of the Local Government Code of 1991 and DLG Memorandum Circular No. 90-81 violate Article VIII, Section 5 of the Constitution is completely off tangent. Neither the statute nor the circular trenches upon the Supreme Court's power and authority to prescribe rules on the practice of law. The Local Government Code and DLG Memorandum Circular No. 90-81 simply prescribe rules of conduct for public officials to avoid conflicts of interest between the discharge of their public duties and the private practice of their profession, in those instances where the law allows it. Section 90 of the Local Government Code does not discriminate against lawyers and doctors. It applies to all provincial and municipal officials in the professions or engaged in any occupation. Section 90 explicitly provides that sanggunian members "may practice their professions, engage in any occupation, or teach in schools expect during session hours." If there are some prohibitions that apply particularly to lawyers, it is because of all the professions, the practice of law is more likely than others to relate to, or affect, the area of public service. 10. Rabuco vs. Villegas Facts: The "dominant and inextricable issue" at bar, as correctly perceived by the appellate court is the constitutionality of Republic Act 3120 whereby Congress converted the lot in question together with another lot in San Andres, Malate "which are reserved as communal property" into "disposable or alienable lands of the State to be placed under the administration and disposal of the Land Tenure Administration" for subdivision into small lots not exceeding 120 square meters per lot for sale on installment basis to the tenants or bona fide occupants thereof and expressly prohibited ejectment and demolition of petitioners' homes under section 2 of the Act as quoted in the appellate court's certification resolution. Held: If the Act is invalid and unconstitutional for constituting deprivation of property without due process of law and without just compensation as contended by respondents city officials, then the trial court's refusal to enjoin ejectment and demolition of petitioners' houses may be upheld. Otherwise, petitioners' right under the Act to continue possession and occupation of the premises and to the lifting and dismissal of the order of demolition issued against them must be enforced and the trial court's judgment must be set aside. Respondents city officials' contention that the Act must be stricken down as unconstitutional for depriving the city of Manila of the lots in question and providing for their sale in subdivided small lots to bona fide occupants or tenants without payment of just compensation is untenable and without basis, since the lots in question are manifestly owned by the city in its public and governmental capacity and are therefore public property over which Congress had absolute control as distinguished from patrimonial property owned by it in its private or proprietary capacity of which it could not be deprived without due process and without just compensation. Here, Republic Act 3120 expressly declared that the properties were "reserved as communal property" and ordered their conversion into "disposable and alienable lands of the State" for sale in small lots to the bona fide occupants thereof. It is established doctrine that the act of classifying State property calls for the exercise of wide discretionary legislative power which will not be interfered with by the courts. Since the challenge of respondents city officials against the constitutionality of Republic Act 3120 must fail as the City was not deprived thereby of anything it owns by acquisition with 9

its private or corporate funds either under the due process clause or under the eminent domain provisions of the Constitution, the provisions of said Act must be enforced and petitioners are entitled to the injunction as prayed for implementing the Act's prohibition against their ejectment and demolition of their houses. The Court holds that the Acts in question were intended to implement the social justice policy of the Constitution and the government program of land for the landless and that they were not "intended to expropriate the property involved but merely to confirm its character as communal land of the State and to make it available for disposition by the National Government: ...The subdivision of the land and conveyane of the resulting subdivision lots to the occupants by Congressional authorization does not operate as an exercise of the power of eminent domain without just compensation in violation of Section 1, subsection (2), Article III of the Constitution, but simply as a manifestation of its right and power to deal with state property." 11. Torio vs. Fontanilla (1978) Facts: The Municipal Council of Malasiqui managed the celebration of the town fiesta of the municipality. They ordered a stage to be constructed foa a zarzuela. As the stage was not strong enough, it collapsed during the zarzuela and the deceased was pinned to death. The Municipality argued that that since it was performing a governmental function in managing the celebration of the fiesta, it is not liable for damages. Held: The celebration a town fiesta is an undertaking in the exercise of a municipality's government proprietary character thus the municipality is liable. The powers of a municipality are twofold in character — public, governmental, or political on the one hand, and corporate, private, or proprietary on the other. Governmental powers are those exercised by the corporation in administering the powers of the state and promoting the public welfare and they include the legislative, judicial, public, and political. Municipal powers on the other hand are exercised for the special benefit and advantage of the community and include those which are ministerial, private and corporate. In the CAB, Section 2282 of the Chapter on Municipal Law of the Revised Administrative Code simply gives authority to the municipality to celebrate a yearly fiesta but it does not impose upon it a duty to observe one. Holding a fiesta even if the purpose is to commemorate a religious or historical event of the town is in essence an act for the special benefit of the community and not for the general welfare of the public performed in pursuance of a policy of the state. The mere fact that the celebration, as claimed, was not to secure profit or gain but merely to provide entertainment to the town inhabitants is not a conclusive test. For instance, the maintenance of parks is not a source of income for the town, nonetheless it is private undertaking as distinguished from the maintenance of public schools, jails, and the like which are for public service. Easily, no governmental or public policy of the state is involved in the celebration of a town fiesta. Since the injury was caused respect to the municipality’s proprietary functions, the settled rule is that a municipal corporation can be held liable to third persons ex contractu or ex delicto if found negligent, which the CA found and held that there was negligence. The municipality acting through its municipal council appointed Macaraeg as chairman of the subcommittee on entertainment and in charge of the construction of the "zarzuela" stage. Macaraeg acted merely as an agent of the Municipality. Under the doctrine of respondent 10

superior mentioned petitioner is responsible or liable for the negligence of its agent acting within his assigned tasks. ". . . when it is sought to render a municipal corporation liable for the act of servants or agents, a cardinal inquiry is, whether they are the servants or agents of the corporation. If the corporation appoints or elects them, can control them in the discharge of their duties, can continue or remove them, can hold them responsible for the manner in which they discharge their trust, and if those duties relate to the exercise of corporate powers, and are for the peculiar benefit of the corporation in its local or special interest, they may justly be regarded as its agents or servants, and the maxim of respondent superior applies." (Dillon on Municipal Corporations, 5th Ed., Vol. IV, p. 2879) 12. Garcia vs. COMELEC (1993) Facts: On July,1993 some mayors, vice-mayors and members of the Sangguniang Bayan of 12 municipalities of Bataan province met and constituted themselves into a Preparatory Recall Assembly (PRA) in the Bagac town plaza to initiate the recall election of Governor Garcia,elected governor of Bataan in May, 1992 elections, for “loss of confidence”. COMELEC scheduled recall elections. Governor Garcia asserts the unconstitutionality of Section 70 of the Local Government Code. The issue is whether or not Section 70 of the Local Government Code is unconstitutional? Held: Section 70 of LGC is constitutional. The presumption of validity rests on the respect due to the wisdom, integrity, and the patriotism of the legislative, by which the law is passed, and the Chief Executive, by whom the law is approved. Garcia et al, do not point to any constitutional provision that will sustain their contention – for surely, there is nothing in there that will remotely suggest that the people have the “sole and exclusive right to decide on whether to initiate a recall proceeding.” The Constitution did not provide for any mode of initiating recall elections. It did not prohibit the adoption of multiple modes of initiating recall elections. Mandate given by Sec3 of ArtX of the Constitution is for Congress to “enact a LGC which shall provide for a more responsive and accountable local government structure through a system of decentralization with effective mechanisms of recall, initiative, and referendum.” The Congress was clearly given the power to choose the effective mechanisms of recall as its discernment dictates. The power given was to select which among the means and methods of initiating recall elections are effective to carry out the judgment of the electorate, and it was not straightjacketed to one particular mechanism of initiating recall elections. The Constitution requires only that the mechanisms chosen be effective. The choice may be erroneous but the remedy against a bad law is to seek its amendment or repeal by the legislative. The requirement of notice is mandatory for it is indispensable in determining the collective wisdom of the members of PRA. Its non-observance is fatal to the validity of the resolution to recall Garcia as Governor of Bataan. The due process clause of the Constitution requiring notice as an element of fairness is inviolable and should always be considered as part and parcel of every law in case of its silence. Resolution to recall should articulate the majority will of the members of the assembly but the majority will can be genuinely determined only after all the members have been given a fair opportunity to express the will of their constituents Initiation by the PRAC is also initiation by the people, albeit done indirectly through their representatives, this act by the people through their elected representatives is not constitutionally impermissible as seen in the task of drafting the Constitution which is delegated to their 11

representatives (either by constitutional convention or as a congressional constituent assembly). Initiation of recall process is a lesser act and there is no rhyme or reason why it cannot be entrusted to and exercised by the elected representatives of the people. PRA resolution of recall is not the recall itself. The PRA resolution merely starts the process – only a part of the process, and not the whole. This is self-evident because a PRA resolution of recall that is not submitted to the COMELEC for validation will not recall its subject officials. 13. Paras vs. COMELEC (1996) Facts: Petition for recall of Paras as Punong Barangay (elected last 1994 regular barangay elections) was filed by the registered voters of the barangay. COMELEC approved the petition and scheduled the petition signing on October14, 1995 and set the recall election on Nov13, 1995. At least 29.30% of registered voters signed the petition (above the required 25%). Paras opposed so recall election was deferred by COMELEC to Dec16, 1995. COMELEC rescheduled recall election on Jan13, 1996. Held: There can still be a recall election even with the 4months that separate the recall election from the upcoming SK elections. Evident intent of Sec74 of LGC9 is to subject an elective local official to recall election once during his term of office. Paragraph (b) construed together with paragraph (a) merely designates the period when such elective official may be subject of a recall election, that is, during the 2nd year of his term of office. Thus, subscribing to Paras’ interpretation of the phrase regular local election to include the SK election will unduly circumscribe the novel provision of the LGC on recall, a mode of removal of public officers by initiation of the people before the end of his term. If the SK election were to be deemed within the purview of the phrase “regular local election” (to be held every 3years from May1996), then no recall election can be conducted rendering inutile the recall provision of the LGC. It is a basic precept of stat con that a statute should be interpreted in harmony with the Constitution. Interpretation of Sec74(b), LGC should not be in conflict with Consti mandate of Sec3, ArtX to “enact a LGC which shall provide for a more responsive and accountable local gov structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum” Recall election is potentially disruptive of the normal working of the LGU necessitating additional expenses, hence the prohibition against the conduct of recall election 1year immediately preceding the regular local election. The proscription is due to the proximity of the next regular election for the office of the local elective official concerned. Electorate could choose the official’s replacement in the said election who certainly has a longer tenure in office than a successor elected through a recall election. Therefore, it would be more in keeping with the intent of the recall provision of the Code to construe regular local election as one referring to an election where the office held by the local elective official sought to be recalled will be contested and be filled by the electorate. However, recall is no longer possible in CAB because of the limitation under Sec74(b) – the next regular election involving the barangay office concerned is barely 7months away (scheduled on May1997).

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14. Viola vs. Alunan III (1997) Facts: Cesar G. Viola, filed petition for prohibition challenging the validity of Art. III, §§1-2 of the Revised Implementing Rules and Guidelines for the General Elections of the Liga ng mga Barangay Officers in so far as they provide for the election of first, second and third vice presidents and for auditors for the National Liga ng mga Barangay and its chapters. The issue is whether or not Section 1-2 of the Implementing Rules are valid? Held: The creation of the additional positions is authorized by §493 of LGC which in fact requires — and not merely authorizes — the board of directors to "create such other positions as it may deem necessary for the management of the chapter" and belies petitioner's claim that §493 limits the officers of a chapter to the president, VP, 5 members of the board of directors, secretary, and treasurer. Also, the creation of these positions was actually made in the constitution and by-laws of the Liga ng mga Barangay adopted by the 1st Barangay National Assembly. Congress can delegate the power to create positions such as these. Section493 embodies a fairly intelligible standard “deemed necessary for the management of the chapters,". There is no undue delegation of power by Congress. SC decisions have upheld the validity of reorganization statutes authorizing the President of the Philippines to create, abolish or merge offices in the executive department. 15. Victoria vs. Comelec (1994) Facts: The basic question is how the ranking of SP members should be computed for the purpose of succession. Petitioner argue that the ranking of the SP members should not only be based on the number of votes obtained in relation to the total number of registered voters, but also on the number of voters in the district who actually voted therein (which will result in petitioner Victoria ranking first) Held: Sec 44 of Local Gpvernment Code last paragraph provides: "For purposes of succession as provided in this Chapter, ranking in the sanggunian shall be determined on the basis of the proportion of votes obtained by each winning candidates to the total number of registered voters in each district in the immediately preceding local election." The law is clear that the ranking in the SP shall be determined on the basis of the proportion of the votes obtained by each winning candidate to the total number of registered voters of each district. It does not mention anything about factoring the numbers of voters who actually voted. 16. Cruz vs. Paras Facts: The municipal corporation of Bocaue, Bulacan prohibits the exercise of a lawful trade, the operation of night clubs, and the pursuit of a lawful occupation, such as clubs employing hostesses. It is contended that the ordinance assailed as invalid is tainted with a nullity, the municipality being devoid of power to prohibit a lawful business, occupation or calling, petitioners at the same time alleging that their rights to due process and equal protection of the laws were violated as the license previously given to them was in effect withdrawn without judicial hearing. The issue is whether or not a municipal corporation can prohibit the exercise of 13

a lawful trade, the operation of night clubs, and the pursuit of a lawful occupation, such as clubs employing hostesses? Held: It is clear that municipal corporations cannot prohibit the operation of night clubs. They may be regulated but not prevented from carrying on their business. All that petitioners would have to do is to apply once more for licenses to operate night clubs. A refusal to grant licenses, because no businesses could legally open, would be subject to judicial correction. That is to comply with the legislative will to allow the operation and continued existence of night clubs subject to appropriate regulations. In the meanwhile, to compel petitioners to close their establishments, the necessary result of an affirmance, would amount to no more than a temporary termination of their business. 17. Masikip vs. City of Pasig Facts: The City of Pasig notified petitioner of its intention to expropriate a 1,500 square meter portion of her property to be used for the sports development and recreational activities of the residents of barangay Caniogan. This was pursuant to Ordinance No. 42 enacted by the then Sangguniang Bayan of Pasig. Respondent wrote another letter to petitioner, but this time the purpose was allegedly in line with the program of the municipal government to provide land opportunities to deserving poor sectors of our community is constitutional, invalid, and oppressive, as the are of her lot is neither sufficient nor suitable to provide land opportunities to deserving poor sectors of our community. Respondent reiterated that the purpose of the expropriated of petitioner’s property is to provide sports and recreational facilities to its poor residents. Held: The power of eminent domain is subject only to Constitutional limitations. Local government have no inherent power of eminent domain and may exercise it only when expressly authorized by statute.The right to take private property for public purposes necesaarily originates from the necessity and the taking must be limited to such necessity. Applying this standard, the Supreme Court hold that respondent City of Pasig has failed to establish that there is a genuine necessity to expropriate petitioner’s property. The necessity has not been shown, especially considering that there exists an alternative facility for sports development and community recreation in the area, which is the Rainforest park, available to all residents of Pasig City, including those of Caniogan. 18. Ong vs. Alegre Facts: Private respondent and Petitioner were candidates who filed certificates of candidacy for mayor of San Vicente, Camarines Norte. Ong was then the incumbent mayor. Alegre filed with the COMELEC Provincial Office a Petition to Disqualify Ong. The petition was predicated on the three-consecutive term-rule, Ong having, according to Alegre, ran in the May 1995, May 1998, and May 2001 mayoralty elections and have assumed office as mayor and discharged the duties thereof for 3 consecutive full terms corresponding to those elections. Ong alleged that he could not be considered as having served as mayor from 1998 to 2001 because he was not duly elected to the post; he merely assumed office as a presumptive winner. 14

Held: For the three-term limit for elective local government officials to apply, two conditions or requisites must concur, to wit: 1) that the official concerned has been elected for three 3 consecutive terms in the same local government post, and; 2) that he has fully served 3 consecutive terms. Such assumption of office constitutes, for Ong, service for the full term, and should be counted as a full term served in contemplation of the 3-term limit prescribed by the constitutional and statutory provisions, barring local elective officials from being elected and serving for more than 3 consecutive term for the same position. Being a presumptive winner did not make him less than a duly duly elected mayor. His proclamation as the duly elected mayor in the 1998 mayoralty election coupled by his assumption of office and his continuous exercise of the functions thereof from start to finish of the term, should legally be taken as service for a full term in contemplation of the 3-term rule. 19. Ortigas & Co. vs. Feati Bank & Tust Co. (1979) Facts: When Ortigas and Co. sold two lots in highways Hills, Mandaluyong, Rizal, the original buyers agreed to the stipulations that the lots shall be used exlclusively for residential purposes. Subsequently, however, on February 4, 1960, the municipal council of Mandaluyong passed Resolution No.27 declaring the area whwre the lots were located as a commercial and industrial zone. Two years later, the defendant bank acquired the lots and in 1963 commenced the construction of a commercial building. Ortigas and Co. filed action to enjoin construction. The issue is which shall prevail – the restrictive covenant in the purchase agreement or the municipal ordinance? Held: Resolution no.27 was a legitimate exercise of police power “the most essential, insistent, and illimitable of powers” and in a sense, the greatest and most powerful attribute of government. The Court reiterated the PLDT ruling that police power “is elastic and must be responsive to various social conditions; it is not confined with narrow circumscriptions of precedents resting on past conditions; it must follow the legal progress of a democratic way of life.” It took notice of the commercial and industrial development along E. delos Santos Avenue and found the resolution a valid exercise of police power. On the non-impairment of contracts issue, the Court found the resolution a “legitimate response to a felt public need. The non-impairment clause may not bar the municipality’s exercise of police power. The Court also reiterated the Phil-Am Life vs. Auditor General ruling that not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. 20. Lumbuan vs. Ronquillo Facts: Petitioner is the registered owner of a lot located in Tondo, Manila. She leased it to respondent Ronquillo for a period of 3 years. Respondent violated the agreement and despite repeated verbal and written demands, the respondent refused to pay the arrears and vacate the leased premises. Petitioner referred the matter to the Barangay Chairman’s office but the parties failed to arrive at a settlement. The petitioner filed a case for Unlawful Detainer in the MeTC of Manila, said court rendered its decision against respondent. Upon appeal RTC rendered its 15

decision setting aside MeTC’s decision. RTC directed the parties to go baack to the Lupon Chairman or Punong Barangay for further proceedings and to comply strictly with the condition that should the parties fail to reach an amicable settlement, the entire records of the case will be remanded to MeTC of Manila. Respondent sought relief from the Court of Appeals through a petition for review. The appellate court ruled that when a complaint is prematurely instituted, as when the mandatory mediation and conciliation in the barangar level had not been complied with, the court should dismiss the case and not just remand the records to the court of origin so that the parties may go through the prerequisite proceedings. The issue is whether or not the Court of appeals gravely erred in dismissing the complaint for the alleged failure of the parties to comply with the mandatory mediation and conciliation proceedings in the barangay level? Held: The primordial objective of the Katarungang Pambarangay Rules is to reduce the number of court litigations and prevents the deterioration of the quality of justice which has been brought about by the indiscriminate filing of cases in the courts. To attain this objective, Section 412(a) of Republic Act 7160 requires the parties to undergo a conciliation process before the Lupon Chairman as the precondition to filing a complaint in court. Here the Lupon Chairman and Secretary signed the certificate to file action stating that no settlement was reached by the parties. While admittedly no Pangkat was constitutes, it was not denied that the parties met at the office of the Barangay Chairman for possible settlement. The efforts of the Barangay Chairman, however, proved futile as no agreement was reached. Although no Pangkat was formed, in our mind, the was substantial compliance with the law. It is noteworthy that under the aforequoted provision, the confrontation before the Lupon Chairman or the Pangkat is sufficient compliance with the precondition for filing the case in court. This is true notwithstanding the mandate of Section 410b should be construed together with Section 412, as well as the circumstances obtaining in and peculiar to the case. On this score, it is significant that the Barangay Chariman or Punong Barangay is herself the Chaiman of the Lupon under the Local Government Code. 21. Parayno vs. Jovellanos Facts: Petitioner was the owner of a gasoline station in Calisiao, Pangasinan. In 1989,some residents of Calisiao petitioned the Sangguniang Bayan of said municipality for the closure or transfer of the station to another location. Upon the advice of the Municipal Engineer, the sangguniang Bayan recommended to the Mayor the closure or transfer of location of the said gasoline filling station. The issue is whether or not the closure or transfer of her gasoline station by the municipality was a valid exercise of its police powers? Held: The Municipality invalidly used its police powers in ordering the closure or transfer of petitioner’s gasoline station. A local government is considered to have properly exercised its police powers only when the following requisites are met; 10 the interest of the public generally, as distinguished from those of a particular class, require the interference of the State and 20 the means employed are reasonably necessary for the attainment of the object sought to be accomplished and not unduly oppressive.

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22. Atienza vs. CA Facts: M/V ACE was a mortgaged to Far East Bank and Trust Company but was released therefrom on September 27, 1994 when petitioner sold it to privae resppndent Eulugio. It was the latter who settled the loan with FEBTC. Sometime later, petitioner, notwithstanding the fact that he had sold the vessel to private respondent, sought to transfer its homeport from from Manila to Batangas province. The records do not show how he was able to do it but petitioner succeeded in registering the vessel in his name with the Fifth Coast Guard District in Batangas City. Petitioner went to Batangas Maritime Regional Office and asked for the issuance by MARINA of the vessel’s Philippine Coast Guard certificate. He claimed that the certificates issued in Manila had been lost. When petitioner’s misrepresentation regarding the loss of the certificate was discovered a case was filed against him. MARINA issued an order directing him to show cause why he should be subjected to punitive action. Petitioner was found guilty of misrepresentation and was imposed an administrative fine. Held: The findings of MARINA are to be accorded great weight since MARINA is the government agency entrusted with the regulation of activities coming under its special and technical expertise. The exercise of administrative discretion is a policy decision and a matter that can be discharged by it, being the government agency concerned. MARINA held petitioner liable under Memorandum Circular No.50-A. Memorandun Circular 109, which deals specifically with misrepresentations relating to vessel registration, licensing and documentation, did not alter or modify that finding of culpability but only provided for a lower fine, that is, from P25,000 to p10,000. Since, Memorandum Circular No.109 was more favourable to petitioner, MARINA applied it retroactively to him.

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