PUBLIC CORPORATION INTRODUCTION Political Law branch of public law which deals with the organization and operations

ns of the governmental organs of the State and defines the relations of the State with the inhabitants of its territory. Divisions of Political Law (a) Constitutional Law branch of public law which deals with the maintenance of the proper balance between authority as represented by three inherent powers of the State and liberty as guaranteed by the Bill of Rights. (b) Administrative law branch of public law which fixes the organization of government, determines competence of administrative authorities who execute the law and indicates to the individual remedies for violation of his rights. (c) Law on Municipal Corporations (d) Law of Public Officers (e) Election Laws (f) Public International Law GENERAL PRINCIPLES A. CORPORATION An artificial being created by operation of law having the right of succession and powers, attributes and properties expressly authorized by law or incident to its existence. 1. Classification of Corporations: (i) (ii) (iii) Public organized for the government of a portion of the State; Private formed for some private purpose, benefit, aim or end; Quasi-public private corporation that renders public service or supplies public wants.

Criterion to determine whether a corporation is public The relationship of the corporation to the Sate, that is, if created by the State as its own agency to help the State in carrying out its governmental functions then it is public, otherwise, it is private. 2. Classes of Public Corporations: (i) (ii) Quasi-corporation created by the State for a narrow/limited purpose (PCSO, etc.); Municipal Corporations body politic and corporate constituted by the incorporation of the inhabitants for the purpose of local government.

B. MUNICIPAL CORPORATIONS 1. Elements (a) legal creation or incorporation [there must be a law creating/authorizing the creation or incorporation of a municipal corporation]; (b) corporation name [name by which the corporation shall be known]; (c) inhabitants [people residing in the territory of the corporation]; (d) territory [land mass where the inhabitants reside

together with internal and external waters and air space above the land and waters. 2. Dual Nature & Functions Every local government unit created/organized under the Local Government Code is a body politic and corporate endowed with powers to be exercised by it in conformity with law. As such it shall exercise powers as a political subdivision of the National Government and as a corporate entity representing the inhabitants of the territory (Section 15, RA7160). Accordingly, it has dual functions (i) public or governmental acts as an agent of the State for the government of the territory and the inhabitants; (ii) private or proprietary acts as an agent of the community in the administration of local affairs, as such, acts as a separate entity for its own purposes and not as a subdivision of the State.

BASIC PRINCIPLES Sec. 1 Act shall be known as the Local Government Code of 1991. Under the 1987 Constitution, declared policy: The State shall ensure the autonomy of local governments (Art. II, Sec. 25) To highlight this policy, note, an entire Article (X) with fourteen sections is devoted to Local Governments. Section (3) thereof mandates: Congress SHALL enact a local government code (a) to provide a more responsive and accountable local government structure initiated through a system of DECENTRALIZATION with effective mechanisms of recall, initiative and referendum, (a) allocate among different local government units their powers, responsibilities and resources, (c) provide for qualifications, elections appointment and removal, term, salaries, powers and function and duties of local officials and (d) other matters relating to the organization and operation of local units. Autonomy is either decentralization of administration (deconcentration) or decentralization of power (devolution). Decentralization of administration delegation by the central government of administrative powers to local subdivisions in order to broaden the base of governmental power making such local governments more responsive and accountable and insuring their fullest development as self-reliant communities and effective partners in the pursuit of national development and progress (declared policy of LGC); relieves central government of the burden of managing local affairs, enabling 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 (Presidents mandate to ensure faithful execution of the laws) but he has no control over their acts (he cannot substitute their judgment with his own). Decentralization of power abdication of political power in favor of local government units declared to be autonomous; the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central authorities; amount to self-immolation since the autonomous government becomes accountable not to the central authority but to its constituency.

NOTE: Constitutional guarantee of Local Autonomy refers to ADMINISTRATIVE AUTONOMY of local government units (or decentralization of government authority).

CASE: PROVINCE OF BATANGAS vs. ALBERTO G. ROMULO, G.R. No. 152774, 5/27/2004. FACTS: Province of Batangas filed a petition for certiorari to declare unconstitutional and void certain provisos contained in the General Appropriations Acts (GAA) of 1999, 2000 and 2001 earmarking for said years five billion pesos (P5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) and imposed conditions for the release thereof such as modifying the allocation scheme for such allotment as prescribed under the Local Government Code and securing approval for local projects from the Oversight Committee on Devolution. RULING: In Section 25, Article II of the Constitution, the State has expressly adopted as a policy tha, The State shall ensure the autonomy of local governments. The State policy on local autonomy is amplified in Section 2 thereof, It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals x x x . The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions violate the constitutional precept on local autonomy. Section 6, Article X of the Constitution reads: Sec. 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. "Automatic" means "involuntary either wholly or to a major extent so that any activity of the will is largely negligible; of a reflex nature; without volition; mechanical; like or suggestive of an automaton. Being "automatic," thus, connotes something mechanical, spontaneous and perfunctory. As such, the LGUs are not required to perform any act to receive the "just share" accruing to them from the national coffers. The "just share" of the LGUs is incorporated as the IRA in the appropriations law or GAA enacted by Congress annually. The entire process involving the LGSEFs distribution and release is constitutionally impermissible. The LGSEF is part of the IRA or just share of the LGUs in the national taxes. Submitting its distribution and release to the vagaries of the implementing rules including the guidelines and mechanisms unilaterally prescribed by the Oversight Committee from time to time as sanctioned by the challenged laws and OCD resolutions, makes the release not automatic a flagrant violation of the constitutional and statutory mandate that LGUs just share shall be automatically released to them.

Meaning of Administrative Regions are mere grouping of contiguous provinces for administrative purposes, not for political representation. The division of the country into regions is intended to facilitate not only the administration of local governments which the law requires to have regional offices. Creation of administrative regions for purpose of expediting the delivery of services is nothing new. The Integrated Reorganization plan of 1972, which was made part of the law of the land by virtue of Presidential Decree No. 1, established 11 regions, later became 12. With definite regional centers and required departments and agencies of the Executive Branch of the National Government

to set up field offices therein (DTI VII, DOLE VII, DPWH Regional Office). The functions of the regional offices is to be established pursuant the reorganization plan are: (a) implement laws, policies, plans, programs, rules and regulation of the department or agency in the regional area; (2) provide economical, efficient and effective services to the people in the area; (3) to coordinate with regional offices of other departments, bureaus and agencies in the area; and (3) perform such other functions as may be provided by law. Meaning of Autonomous Regions creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is unique to the 1987 Constitution, contemplates grant of political autonomy and not just administrative autonomy to those regions. Thus, Art. X, Section 18 of Constitution mandates for Congress to enact an organic act for the autonomous regions (with assistance and participation of consultative commission composed of representatives appointed by the President from list of nominees of multisectoral bodies) to provide 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. CASE: DISOMANGCOP vs. DPWH SECRETARY, G.R. No. 149848, 11/25/2004. FACTS: Pursuant to Sec. 15, Art. X of the Constitution (for the creation of autonomous regions in Muslim Mindanao and the Cordilleras), RA 6734 (An Act Providing for An Organic Act for the Autonomous Region in Muslim Mindanao) was enacted. Subsequently, the four provinces of Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi, voting in favor of autonomy, became the Autonomous Region in Muslim Mindanao (provinces of Basilan, Cotabato, Davao del Sur, Lanao del Norte, Palawan, South Cotabato, Sultan Kudarat, Zamboanga del Norte, and Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga said no in the plebiscite) (later virtue of RA9054, the provinces of Basilan and Marawi City joined). In accordance with RA6734, EO426 was issued placing the control and supervision of the offices of the DPWH within the autonomous region in Muslim Mindanao under the Autonomous Regional Government. Petitioners Arsadi M. Disomangcop and Ramir M. Dimalotang (Dimalotang), in their capacity as Officer-in-Charge and District Engineer/Engineer II, respectively, of the 1st Engineering District of DPWH-ARMM in Lanao del Sur petitioned to nullify Dept. Order 119 and RA8999 (creating the Marawi Sub-District Engineering Office and vesting it with jurisdiction over all national infrastructure projects and facilities under the DPWH within Marawi City and Lanao del Sur. Petitioners contend that the challenged measures violate ARMMs constitutional autonomy considering that the functions of the Marawi Sub-District Engineering Office have already been devolved to the DPWH-ARMM 1st Engineering District in Lanao del Sur. RULING: Petition GRANTED. DO119 is violative of the provisions of EO426 (issued pursuant to RA6734). The 1987 Constitution mandates regional autonomy to give a bold and unequivocal answer to the cry for a meaningful, effective and forceful autonomy. Autonomy, as a national policy, recognizes the wholeness of the Philippine society in its ethnolinguistic, cultural and even religious diversities. It strives to free Philippine society of the strain and wastage caused by the assimilationist approach. Policies emanating from the legislature are invariably assimilationist in character despite channels being open for minority representation. A necessary prerequisite of autonomy is decentralization. Decentralization is a decision by the central government authorizing its subordinates, whether geographically or functionally defined, to exercise authority in certain areas. It

involves decision-making by subnational units. It is typically a delegated power, wherein a larger government chooses to delegate certain authority to more local governments. Federalism implies some measure of decentralization, but unitary systems may also decentralize. Decentralization differs intrinsically from federalism in that the sub-units that have been authorized to act (by delegation) do not possess any claim of right against the central government. Decentralization comes in two forms deconcentration and devolution. Deconcentration (administrative decentralization) is administrative in nature; it involves the transfer of functions or the delegation of authority and responsibility from the national office to the regional and local offices. Devolution, on the other hand, connotes political decentralization, or the transfer of powers, responsibilities, and resources for the performance of certain functions from the central government to local government units. By regional autonomy, the framers intended it to mean "meaningful and authentic regional autonomy (that is, a kind of local self-government which allows the people of the region or area the power to determine what is best for their growth and development without undue interference or dictation from the central government). To this end, Section 16, Article X limits the power of the President over autonomous regions. In essence, the provision also curtails the power of Congress over autonomous regions. Consequently, Congress will have to re-examine national laws and make sure that they reflect the Constitution's adherence to local autonomy. And in case of conflicts, the underlying spirit which should guide its resolution is the Constitution's desire for genuine local autonomy. E.O. 426 officially devolved the powers and functions of the DPWH in ARMM to the Autonomous Regional Government (ARG). More importantly, Congress itself through R.A. 9054 transferred and devolved the administrative and fiscal management of public works and funds for public works to the ARG. The aim of the Constitution is to extend to the autonomous peoples, the people of Muslim Mindanao in this case, the right to self-determination a right to choose their own path of development; the right to determine the political, cultural and economic content of their development path within the framework of the sovereignty and territorial integrity of the Philippine Republic. Self-determination refers to the need for a political structure that will respect the autonomous peoples' uniqueness and grant them sufficient room for self-expression and selfconstruction. With R.A. 8999, however, this freedom is taken away, and the National Government takes control again. The hands, once more, of the autonomous peoples are reined in and tied up. The challenged law creates an office with functions and powers which, by virtue of E.O. 426, have been previously devolved to the DPWH-ARMM, First Engineering District in Lanao del Sur. Section 2, LGC- Declaration of Policy - LGU to enjoy genuine and meaningful autonomy to enable them to attain their fullest development as self-reliant communities and make them effective partners in attainment of national goals thru decentralization. National agencies and offices to conduct periodic consultations with appropriate lgu, ngo and po, before any proect or program is implemented in their jurisdiction. The declaration of policy as stated in Section 2 of LGC reinforces declared State policy (Art. II, Sec. 25 of Constitution) ensuring autonomy to local government units. CASE: LINA VS. PANO 364 SCRA 76

FACTS: Respondent Tony Calvento was appointed PSCO agent to install and operate a lotto terminal. Mayor of San Pedro Laguna denied his application for a business permit citing an ordinance (Kapasyahan Blg. 508, taong 1995) passed by the Provincial Board of Laguna, objecting/opposing any form of gambling including lotto in Laguna. Calvento arguing that KB508 is curtailment of State power since in this case the national legislature itself already declared lotto as legal and permitted its operation around the country, filed for declaratory relief before the RTC, to annul KB 508 and compel the the local mayor to issue a business permit for the operation of a lotto outlet. Suit decided in Calventos favor. MR by Respondent denied. Petition with SC. RULING: Game of lotto is a game of chance duly authorized by the national government through an Act of Congress (RA1169), as amended by BP42, the law granting a franchise to the PCSO and allows it to operate lotteries. This statute remains valid today. While lotto is a game of chance, the national government deems it wise and proper to permit it. Hence, the Provincial Board of Laguna, as a LGU, cannot issue a resolution or an ordinance that would seek to prohibit permits. What the national legislature allows by law, such as lotto, a provincial board may not disallow by ordinance or resolution. Ours is till a unitary government, not a federal state. Being so, any form of autonomy granted to LGs will necessarily be limited and confined within the extent allowed by the central government. 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. 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 heresy to suggest that the LGUs can undo the acts and negate by mere ordinance the mandate of the statute. Section 2(c) requiring consultations should be read together with Section 26, 27, LGC (prior consultation by national agencies with lgus involving projects 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). Thus, Section 2(c) does not apply to lotto, the latter being neither a program nor project of the national government, but of a charitable institution, the PCSO. Also, the argument is an afterthought, Mayor denied application for business permit solely on ground of KB508. Section 3, LGC Operative Principles of Decentralization policies and measures on local autonomy to be guided by these: (a) effective allocation among the different LGUs of their respective powers, functions and responsibilities [is provided for by LGC], (b) establishment in every LGU of an accountable, efficient and dynamic organizational structure and operating mechanism that will meet priority needs and service requirements of its communities, (c) local officials and employees, subject to civil service law, rules and regulation, to be appointed or removed, according to merit and fitness, by the appropriate appointing authority,

(d) vesting of duty, responsibility and accountability in LGUS shall be accompanied with provision for reasonably adequate resources to discharge their powers and effectively carry out their function they shall have the power to create and broaden their own sources of revenue and the right to a just share in the national taxes and an equitable share in proceeds of the utilization and development of the national wealth within their respective areas (e) provinces to component cities and municipalities; cites and municipalities to component barangays to ensure that acts of component units are within scope of prescribe powers and functions (supervisorial powers) (f) LGUs may group themselves, consolidate their efforts, services and resources for purposes commonly beneficial to them thus, MMDA; NOTE: Autonomy denotes state of independence (referred previously to states) community autonomy, that is, local autonomy. In the LGC, local autonomy does not mean total independence of LGUS from the central or national government. It only means decentralization of powers from national to local government. When exercising governmental powers and performing duties, a LGU is an agency of the national government. Section 4, LGC Scope of Application scope means areas of coverage, that is, to provinces, cities, municipalities and barangays and other political subdivisions as may be created by law and to the extent herein provided to officials, offices or agencies of the National Government. Section 5, LGC Rules of Interpretation (a) provision on power of LG shall be liberally interpreted in its favor; in case of doubt, any question shall be resolved in favor of devolution of powers and of the lower LGU. Any fair and reasonable doubt as to existence of power, interpreted in favor of LGU concerned (b) doubt as to any tax ordinance or revenue measure, strictly construed against LGU, liberally in favor of taxpayer (deprivation of property). Tax exemption, incentive r relief granted any LGU, construed strictly against person claiming it (loss of income on part of LGU). (c) liberal interpretation of general welfare provisions in order to give more power to LGU in accelerating economic development and upgrading quality of life for the people. Note: Basic precept in statutory construction that legislative intent is the controlling factor in the interpretation of statute. Power to declare what the law shall be is a legislative power, power to declare what the law is or has been is judicial. When law is unambiguous and unequivocal, application and not interpretation thereof is IMPERATIVE. When is statute AMBIGIOUS? If capable of being understood by reasonably wellinformed persons in either of two or more senses. Power of judicial review can be exercised by courts to invalidate constitutionally infirm acts. Ergo, courts are not bound by legislative interpretation of their own acts. When is statute AMBIGIOUS? If capable of being understood by reasonably wellinformed persons in either of two or more senses.

Power of judicial review can be exercised by courts to invalidate constitutionally infirm acts. Ergo, courts are not bound by legislative interpretation of their own acts. De Facto Municipal Corporations requisites: Valid law authorizing incorporation; attempt in good faith to organize under it; colorable compliance with law, assumption of corporate powers. MUNICIPAL CORPORATIONS Elements (a) legal creation/incorporation there must be a law creating/authorizing creation or incorporation of a municipal corporation; (b) corporate name- name by which the corporation shall be known; (c) inhabitants people residing in the territory of the corporation; and (d) territory land mass where inhabitants reside together with internal and external waters and airspace above land and waters. Section 6 Authority to Create LGU (created, divided, merged, abolished or borders substantially altered) either by LAW enacted by Congress in the case of province, city, municipality or any other political subdivision, or ORDINANCE by sangguniang panlalawigan/panglungosd in the case of a barangay located within its territorial jurisdiction, subject to limitations prescribed in this Code. Section 7 Creation/Conversion of LGU generally, creation of LGU or its conversion from one level to another, subject to verifiable indicators of viability and projected capacity to provide services: INCOME, POPULATION and LAND AREA, compliance with which to be attested to by the Dept. of Finance, NSO and Land Management Bureau of DENR. Income must be sufficient, based on acceptable standards to provide all essential government facilities and services and special functions commensurate with the size of its populations, as expected of the LGU concerned. Population total number of inhabitants within the territorial jurisdiction of the LGU concerned. Land Area must be contiguous, unless it comprises two (2) or more islands or is separated by a LGU independent of the others properly identified by metes and bounds with technical descriptions and sufficient to provide for such basic services and facilities to meet the requirements of its populace. (READ GRINO VS. COMELEC 213 SCRA 672) Section 8 Division/Merger of existing LGUs to comply with same requisites for creation under Section 7. No reduction in income, population or land area; no reduction in current income classification. Section 9 Abolition LGU may be abolished when its income, population or land aea has been irreversibly reduced to less than the minimum standards prescribed for its creation (as certified by DOF, NSO and LMB); law/ordinance abolishing an LGU to specify province, city, municipality or barangay to which the LGU to be abolished will be incorporated or merged. Section 10 Plebiscite requirement pre-condition to creation, abolition, merger, division or substantial alteration of boundaries of LGUs; requires majority of the votes cast in plebiscite called for the purpose in the political unit/s directly affected; plebiscite to be conducted by COMELEC within 120 days from date of

effectivity of law/ordinance effecting such action, unless said law/ordinance fixes another date. Section 11- Seat of Government - considerations of GEOGRAPHICAL CENTRALITY, ACCESSIBILITY, AVAILABILITY OF TRANSPORATION AND COMMUNICATION FACILITIES, DRAINAGE AND SANITATION DEVELOPMENT, ECONOMIC PROGRESS and OTHER RELEVANT CONSIDERATIONS; transfer of seat when conditions and development in LGU concerned has subsequently changed significantly, requires 2/3 vote of members of sanggunian, after public hearing; transfer site shall not be outside the territorial boundaries of the LGU; old site together with improvements thereon may be disposed of by sale or lease or converted to such other use as the sanggunian concerned may deem beneficial to the LGU and its inhabitants.

Section 12 Government Centers Provinces, cities and municipalities shall endeavor to establish a government center where offices, agencies or branches of the National Government, lgu or government-owned or controlled corporations may, as far as practicable, be located. In designating such a center, the lgu concerned shall take into account the existing facilities of the national and local agencies and offices which may serve as the government center as contemplated under this Section. The National Government, the lgu or gocc shall bear the expenses for the construction of its buildings and facilities in the government center. Section 13 Name of LGU and Public Places, Streets and Structures always in consultation with Philippine Historical Commission; prohibition against naming after living persons, change of name not oftener than once every 10 years unless for justifiable reason; change requires prior plebiscite; change of name involving a lgu, public place, street or structure with historical, cultural or ethnic significance can be done only by a UNANIMOUS VOTE of the sanggunian concerned and in consultation with the PHC.

Section 14 Beginning of Corporate Existence When a new LGU is created, its corporate existence shall commence upon election and qualification of its chief executive and majority of members of sanggunian. MEJIA vs. BALOLING 81 PHIL 486 Since a city is a public corporation or juridical entity, and as such cannot operate or transact business by itself but through agents and officials, it is necessary that officials thereof be appointed or elected in order that it may transact business as such public corporation or city.

NOTE: De Facto Municipal Corporations requisites: Valid law authorizing incorporation; attempt in good faith to organize under it; colorable compliance with law, assumption of corporate powers. EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L-23825, December 24, 1965 FACTS: President of the Philippines, purporting to act pursuant to Sec. 68 of Revised Administrative Code (presidential authority to define the boundary, or boundaries, of any province, sub-province, municipality, [township] municipal district or other political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovinces, separate any political division other than a province, into such portions as may be required, merge any of such subdivisions or portions with another, name any

new subdivision so created, and may change the seat of government within any subdivision to such place therein as the public welfare may require), issued several executive orders creating 33 municipalities. Petitioner (as Vice-President and as taxpayer), instituted a special civil action seeking to enjoin Auditor General from passing in audit any expenditure of public funds in implementation of said certain executive orders and/or disbursement by said municipalities. DECISION: PETITION GRANTED. Since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be created or their boundaries altered nor their names changed" except by Act of Congress or of the corresponding provincial board "upon petition of a majority of the voters in the areas affected" and the "recommendation of the council of the municipality or municipalities in which the proposed barrio is situated." This statutory denial of the presidential authority to create a new barrio implies a negation of the bigger power to create municipalities, each of which consists of several barrios. Whereas the power to fix a common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of an administrative nature involving, as it does, the adoption of means and ways to carry into effect the law creating said municipalities - the authority to create municipal corporations is essentially legislative in nature. MALABANG vs. BENITO, 27 SCRA 533 FACTS: Petitioner Balindong (municipal mayor of Malabang, Lanao del Sur), Respondents (Mayor Benito and councilors of Municipality of Balabagan of the same province). Balabagan, (formerly part of Malabang) was created on March 15, 1960, by Executive Order 386 of the then President Carlos P. Garcia, out of barrios and sitios of the Malabang. Citing Pelaez ruling (that Republic Act 2370 [Barrio Charter Act, approved January 1, 1960], vested power to create barrios in the provincial board, and 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), Petitioner sought to nullify E.O. 386 and restrain respondents from performing their official functions. Respondents argued that Pelaez ruling did not apply because, unlike the municipalities involved therein, the municipality of Balabagan is at least a de facto corporation, having been organized under color of a statute before this was declared unconstitutional (by Pelaez ruling), 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. 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. DECISION: Petition granted, Executive Order 386 declared void. Generally, the inquiry into the legal existence of a municipality is reserved to the State in a proceeding for quo warranto or other direct proceeding, and that only in a few exceptions may a private person exercise this function of government. But the rule disallowing collateral attacks applies only where the municipal corporation is at least a de facto corporation. For where it is neither a corporation de jure nor de facto, but a nullity, the rule is that its existence may be questioned collaterally or directly in any action or proceeding by any one whose rights or interests are

affected thereby, including the citizens of the territory incorporated unless they are estopped by their conduct from doing so. A de facto municipal corporation is recognized as such despite the fact that the statute creating it was later invalidated, rests upon the consideration that there was some other valid law giving corporate validity 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 Section 68 of the Administrative Code, there is no other valid statute to give color of authority to its creation. Thus, Executive Order 386 creating the municipality in question is a nullity pursuant to the ruling in Pelaez ruling. 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." Note, the existence of Executive Order 386 is "an operative fact which cannot justly be ignored." The actual existence of a statute, prior to such a determination, in 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. MUNICIPALITY OF JIMENEZ, vs. HON. VICENTE T. BAZ. JR., G.R. No. 105746. December 2, 1996. FACTS: In 1949, Pres. Elpidio Quirino (pursuant to Sec. 68 of Revised Admin Code) issued EO258 creating the Municipality of Sinacaban consisting Petitioners southern portion. In 1988, the Municipality of Sinacaban filed with the Provincial Board of Misamis Occiental a claim against Petitioner over portions affecting certain barrios based on the technical description in E.O. No. 258. Petitioner conceded that, under EO258 the disputed area is part of Sinacaban, but nonetheless asserted jurisdiction on the basis of an agreement it had with the Municipality of Sinacaban and approved by provincial board resolution in 1950. The board declared the disputed area to be part of Sinacaban ruling 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 LGC of 1983 (B.P. Blg. 337). Before the SC, Petitioner challenges the trial courts decision affirming the legal existence of Sinacaban and ordering the relocation of its boundary for the purpose of determining whether certain areas claimed by it belonged to it. DECISION: The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the Pelaez ruling that the creation of municipal corporations is essentially a legislative matter and therefore the President was without power to create by executive order Sinacaban. The ruling in this case has been reiterated in a number of cases later decided. However, we have since held that where a municipality created as such by executive order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned. Sinacaban is at least a de facto municipal corporation in the sense that its legal existence has been recognized and acquiesced publicly and officially. Sinacaban had been in existence for sixteen years when the Pelaez ruling yet the validity of E.O. No. 258 creating it had never been questioned. The State and even the Municipality of Jimenez itself have recognized Sinacaban's corporate existence entering in 1950 into an agreement with it regarding their common boundary. Also, it has attained de jure status, 442(d) of

the LGC, must be deemed to have cured any defect in the creation of Sinacaban. (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).

GENERAL POWERS & ATTRIBUTES OF LGUs Sources of Powers Article II, Section 25 and Article X of the Constitution; statutes (eg. RA7160), charter. Section 15 Political and Corporate Nature of LGUs every LGU is a body politic and corporate endowed with powers to be exercised by it in conformity with law. Dual Functions of LGU (1) public/governmental acts as an agent of State for the government of the territory and its inhabitants; (2) proprietary/private acts as an agent of the community in the administration of local affairs, and as such, it acts as a separate entity for its own purposes and not as a subdivision of the State. Municipal Corporation in the Philippines: (1) Province (Sec. 459, LGC) cluster of municipalities or municipalities and component cities, as a political and corporate unit of government which serves as a dynamic mechanism for developmental processes and effective governance of LGUs within its territorial jurisdiction. (2) City (Sec. 448) composed of more more urbanized and developed barangays, serves as a general purpose government for coordination and delivery of basic, regular and direct services and effective governance of the inhabitants within its jurisdiction; (3) Municipality (Sec. 440, LGC) groups of barangays, serves primarily as a general purpose government for coordination and delivery of basic, regular and direct services and effective governance of inhabitants within its jurisdiction; (4) Barangay (Sec. 384, LGC) basic political unit, serves as the primary planning and implementing unit of government policies, plans, programs, projects and activities in the community and as a forum wherein collective views of people may be expressed, crystallized and considered where disputes are also amicably settled; (5) Autonomous Regions refer to Article 10 of the Constitution. Note: Metropolitan Manila Development Authority is not a local government unit. The power delegated to MMDA is that given to the Metro Manila Council to promulgate administrative rules and regulations in the MMDA vs. BEL-AIR VILLAGE ASSOCIATION, INC. (BAVA), G.R. No. 135962, March 27, 2000.

FACTS: Petitioner is a government agency tasked with delivery of basic services in Metro Manila. Respondent, a non-stock, non-profit corporation composed of homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent had sought to enjoin Petitioners plan to demolition the perimeter fence and open to public access Neptune Street, a road (beside) privately/legally owned by the subdivision. The Court of Appeals, in reversing the dismissal of Respondents complaint, ruled that Petitioner did not have the authority to order the opening of the street in issue. Before the SC, Petitioner asserted that, there was no need for an ordinance from the City of Manila to open Neptune Street to public because, as an agent of the State, it was endowed with police power in the delivery of basic services in Metro Manila including traffic management (involving regulation of the use of thoroughfares to insure the safety, convenience and welfare of the general public). DECISION: Petition DENIED. It is beyond doubt that MMDA is not a local government unit or a public corporation endowed with legislative power. It is not even a special metropolitan political subdivision as contemplated in Sec. 11, Art. X of the Constitution. MMDAs powers are limited to formulation, coordination, regulation, implementation, preparation, management, monitoring, policy-setting, installation of a system and administration. There is no syllabus in RA7924 that grants MMDA police power, let alone legislative power. Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has no power to enact ordinances for the welfare of the community. It is the local government units, acting through their respective legislative councils, that possess legislative power and police power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the respondent Court of Appeals did not err in so ruling. We desist from ruling on the other issues as they are unnecessary.

Points of Discussion Police power is inherent in the State, exercised by the Legislature, but may be validly delegated. Upon valid delegation, the exercise thereof by the delegate being limited only to such powers as conferred by the legislature. Legislature has delegated police power to LGUs (Sec. 15, LGC) through their respective legislative bodies, under the General Welfare Clause (Sec. 16, LGC).

NOTE: RA 7924 declared Metropolitan or Metro Manila (body composed of several LGUs, i.e., twelve (12) cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pias, Marikina, Paraaque and Valenzuela, and the five (5) municipalities of Malabon, Navotas, Pateros, San Juan and Taguig) as a "special development and administrative region" with the administration of "metro-wide" basic services affecting the region placed under "a development authority" referred to as the MMDA (governed by the Metro Manila Council composed of the mayors of the component 12 cities and 5 municipalities, the president of the Metro Manila Vice-Mayors' League and the president of the Metro Manila Councilors' League) headed by the Chairman.

NOTE: When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative region" and the MMDA a "special development authority" whose functions were "without prejudice to the autonomy of the affected local government units." The character of the MMDA was clearly

defined in the legislative debates enacting its charter. MMDA not a special metropolitan political subdivision, because the latters creation requires the approval by a majority of the votes cast in a plebiscite in the political units directly affected. 56 R.A. No. 7924 was not submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people, but appointed by the President with the rank and privileges of a cabinet member. In fact, part of his function is to perform such other duties as may be assigned to him by the President, 57 whereas in local government units, the President merely exercises supervisory authority. This emphasizes the administrative character of the MMDA.

RE: GENERAL POWERS AND ATTRIBUTES OF LGU Sources: Constitution (Art. II, Sec. 5 and Art. 10), RA 7160 (statutes), charter, doctrine of right of self-government. Section 16 General Welfare Clause LGUs shall exercise powers expressly granted, those necessarily implied therefrom, as well as those necessary, appropriate or incidental for efficient and effective governance (i.e. promote health, safety, enhance prosperity, improve morals of inhabitants) is the statutory grant of police power to LGUs through their respective legislative bodies empowering them to enact ordinances and approve resolutions and appropriate functions for the general welfare of the LGU. Note: Police power is an inherent attribute of sovereignty vested in Congress to make, ordain and establish all manners of wholesome and reasonable laws for the common good; it is plenary and its scope is vast and pervasive. However, by virtue of valid delegation, it may be exercised by LGUs. The latter being only agents can only exercise such powers as are conferred upon them by Congress. Limits on LGUs police Power (1) Exercisable only within territorial limits of LGU (2) Equal Protection Clause ( interest of public vs. those of a particular class requires exercise of such power) (3) Due Process Clause (reasonable means employed and not unduly oppressive case of Villavicencio vs. Lukban, GR No. 14639, March 25, 1919) (4) Not contrary to the Constitution and the laws (It cannot legalize prohibited act under the guise of regulation. Likewise, it cannot prohibit legal activities but only regulate) Note: Under Section 16, LGU to ensure and support preservation and enrichment of culture, promote health and safety, enhance peoples right to balance and healthful ecology, improve public morals, enhance economic prosperity and social justice, maintenance of peace and order. REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622, 9/12/2002 PD 1596 (The Environmental Impact Statement System) ensures environmental protection and regulates certain government activities affecting the environment. Related to PD 1151 (Philippine Environment Policy), requires an environmental impact statement from all agencies and instrumentalities of the national government, including government-owned or controlled corporations, as well as private corporations, firms and entities, for every proposed project and undertaking which significantly affect the quality of the environment. Davao City in 2000, applied for a certificate of non-coverage (CNC) for its proposed Davao City Artica Sports Dome project from the required

Environmental Compliance Certificate (having been certified that its project is not located in an environmentally critical area (ECA). Application denied for the reason that Davao City must undergo the environmental impact assessment (EIA) process to secure an Environmental Compliance Certificate (ECC), before it can proceed with the construction of its project. Denial of application lead to complaint for injunction against DENR filed by Davao City. RTC ruled in latters favor reasoning that the laws do not require local government units (LGUs) to comply with the EIS law. Only agencies and instrumentalities of the national government, including government owned or controlled corporations, as well as private corporations, firms and entities are mandated to go through the EIA process for their proposed projects which have significant effect on the quality of the environment. A local government unit, not being an agency or instrumentality of the National Government, is deemed excluded under the principle of expressio unius est exclusio alterius. Petition for certiorari filed by Republic from RTC decision. Case moot and academic when subsequent change in administration of Davao City which filed manifestation expressing that it needs to secure an ECC for its proposed project. But Court, for the guidance of the implementors of the EIS law and pursuant to our symbolic function to educate the bench and bar, addressed the issue. Decision: Sec. 15, LGC (a local government unit is body politic and corporate endowed with powers to be exercised by it in conformity with law). As such, it performs dual functions, governmental and proprietary. In exercise of governmental powers and performing governmental duties, an LGU is an agency of the national government. Sec. 16, LGC - duty of the LGUs to promote the people's right to a balanced ecology. Pursuant to this, an LGU, like the City of Davao, can not claim exemption from the coverage of PD 1586. As a body politic endowed with governmental functions, an LGU has the duty to ensure the quality of the environment, which is the very same objective of PD 1586. Section 4 of PD 1586 clearly states that "no person, partnership or corporation shall undertake or operate any such declared environmentally critical project or area without first securing an Environmental Compliance Certificate issued by the President or his duly authorized representative." 13 The Civil Code defines a person as either natural or juridical. The state and its political subdivisions, i.e., the local government units 14 are juridical persons. 15 Undoubtedly therefore, local government units are not excluded from the coverage of PD 1586. Note: Based on DENR-Community Environment and Natural Resources Office (CENRO-West) certification, project area not environmentally critical area. SC is not trier of facts. Proclamation No. 2146 issued on December 14, 1981, lists areas and types of projects as ECA and within EIS system under PD1586, eg., heavy industries, iron and steel mills, smelting plants, major mining and quarrying projects, etc.)

RURAL BANK OF MAKATI, INC. vs. MUNICIPALITY OF MAKATI, G.R. No. 150763, 7/2/2004 FACTS: For non-payment of mayors permit fee and annual business taxes, criminal charges against certain officers of Petitioner. Pending these charges, Respondent ordered the closure of the bank, prompting the latter to pay, under protest P82,408.66 as mayors permit fee and annual business taxes. Petitioner filed a civil complaint for sum of money and damages against Respondent with

RTC alleging that the collection of subject fees and closure order were oppressive and arbitrary which resulted loss of expected earnings. RTC dismissed the complaint, which decision was sustained by the CA holding that the closure order was a legitimate exercise of police power by Respondent. Hence, petition with SC. DECISION: Assailed decision AFFIRMED with modification deleting closure order. RE (imposition of fees) - Municipal corporations are agencies of the State for the promotion and maintenance of local self-government and as such are endowed with police powers in order to effectively accomplish and carry out the declared objects of their creation. 20 The authority of a local government unit to exercise police power under a general welfare clause is not a recent development. Thus, the closure of the bank was a valid exercise of police power pursuant to the general welfare clause contained in and restated by B.P. Blg. 337, which was then the law governing local government units. The general welfare clause has two branches. The first, known as the general legislative power, authorizes the municipal council to enact ordinances and make regulations not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred upon the municipal council by law. The second, known as the police power proper, authorizes the municipality to enact ordinances as may be necessary and proper for the health and safety, prosperity, morals, peace, good order, comfort, and convenience of the municipality and its inhabitants, and for the protection of their property. In the present case, the ordinances imposing licenses and requiring permits for any business establishment, for purposes of regulation enacted by the municipal council of Makati, fall within the purview of the first branch of the general welfare clause. Moreover, the ordinance of the municipality imposing the annual business tax is part of the power of taxation vested upon local governments. RE (closure order) - The bank was not engaged in any illegal or immoral activities to warrant its outright closure. The appropriate remedies to enforce payment of delinquent taxes or fees are provided for in Section 62 of the Local Tax Code, (by distraint of personal property, and by legal action). The law did not provide for closure which furthermore violated petitioner's right to due process. TANO vs. HON. GOV. SALVADOR P. SOCRATES, G.R. No. 110249, August 21, 1997. FACTS: City Council of Puerto Princesa, Palawan, to effectively free city seawaters from cyanide and other obnoxious substances, passed Ordinance No. 15-92 (effective January 1, 1993) banning the shipment of all live fish and lobster outside Puerto Princesa from January 1, 1993 to January 1, 1998. To implement said city ordinance, the acting city mayor issued Office Order No. 23, authorizing local law enforcers to to check or conduct necessary inspections on cargoes containing live fish and lobster being shipped out from the Puerto Princesa to ascertain whether the shipper possessed the required Mayor's Permit issued by this Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries and Aquatic Resources and as to compliance with all other existing rules and regulations on the matter. Subsequently, the Provincial Board of Palawan issued a similar ordinance. Petitioners, who were charged with violation of certain provisions of the foregoing issuances upon the latters implementation, sought relief with the SC contending that (a) the challenged ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice of their trade, in violation of constitutional guarantees, and (b) the challenged office order contained no regulation nor condition under which the Mayor's permit could be granted or

denied, vesting the mayor absolute authority to determine whether or not to issue the permit. DECISION: PETITION dismissed. It is of course settled that laws (including ordinances enacted by local government units) enjoy the presumption of constitutionality. To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution, not merely a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown beyond reasonable doubt. Where doubt exists, even if well-founded, there can be no finding of unconstitutionality. To doubt is to sustain. The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing the environment . . . The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people to a balanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right. In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted therein to local government units under Section 16 (the General Welfare Clause), and under Sections 149, 447(a) (1) (vi), 458(a)(1)(vi) and 468(a)(1)(vi), which unquestionably involve the exercise of police power, the validity of the questioned Ordinances cannot be doubted. TAN vs. PEREA, G.R. No. 149743, 2/18/2005 FACTS: How many cockpits may be allowed to operate in a city or municipality? Comes into play, the traditional power of the national government to enact police power measures, on one hand, and the vague principle of local autonomy now enshrined in the Constitution on the other. PD449 (Cockfighting Law of 1974) provided that only one cockpit shall be allowed in each city/municipality except that in cities or municipalities with a population of over 100T, two cockpits may be established, maintained or operated. In 1993, the Municipal Council of Daanbantaya, Cebu enacted municipal ordiances which eventually allowed the operation of not more than three cockpits in the municipality. In 1995, Petitioner (Leonardo Tan) applied for a license to operate a cockpit. Respondent (Socorro Perena), who was an existing licensee, filed a complaint with the RTC to enjoin Petitioner from operating his cockpit citing that the challenged ordinance allowing the operation of not more than three cockpits violated PD449. The trial court dismissed the complaint and upheld Petitioners franchise reasoning that, while the ordiance may be in conflict with PD449, any doubt in interpretation should be resolved in favor of the grant of more power to LGUs under the LGCs principle of devolution. Court of Appeals reversed the trial courts decision. Hence, Petitioners appeal to the SC. RULING: Petition DENIED. For Petitioner, Section 447(a)(3)(v) of the LGC sufficiently repeals Section 5(b) of the Cockfighting Law, vesting as it does on LGUs the power and authority to issue franchises and regulate the operation and establishment of cockpits in their respective municipalities, any law to the contrary notwithstanding. However, while the Local Government Code expressly repealed several laws, PD449 was not among them. Section 534(f) of the LGC declares that all general and special laws or decrees inconsistent with the Code are hereby repealed or modified accordingly, but such clause is not an express repealing clause because it fails to identify or designate the acts that are intended to be repealed. While the sanggunian retains the power to authorize and license the establishment, operation, and maintenance of cockpits, its discretion is limited in that it cannot authorize more than one cockpit per city or municipality, unless

such cities or municipalities have a population of over one hundred thousand, in which case two cockpits may be established. Cockfighting Law arises from a valid exercise of police power by the national government. Of course, local governments are similarly empowered under Section 16 of the Local Government Code. We do not doubt, however, the ability of the national government to implement police power measures that affect the subjects of municipal government, especially if the subject of regulation is a condition of universal character irrespective of territorial jurisdictions. Cockfighting is one such condition. It is a traditionally regulated activity, due to the attendant gambling involved or maybe even the fact that it essentially consists of two birds killing each other for public amusement. Laws have been enacted restricting the days when cockfights could be held, and legislation has even been emphatic that cockfights could not be held on holidays celebrating national honor such as Independence Day and Rizal Day. The obvious thrust of our laws designating when cockfights could be held is to limit cockfighting and imposing the one-cockpit-per-municipality rule is in line with that aim. Cockfighting is a valid matter of police power regulation, as it is a form of gambling essentially antagonistic to the aims of enhancing national productivity and self-reliance. Limitation on the number of cockpits in a given municipality is a reasonably necessary means for the accomplishment of the purpose of controlling cockfighting, for clearly more cockpits equals more cockfights. A municipal ordinance must not contravene the Constitution or any statute, otherwise it is void. Ordinance No. 7 unmistakably contravenes the Cockfighting Law in allowing three cockpits in Daanbantayan. BATANGAS CATV, INC. vs. CA, G.R. No. 138810, 9/29/2004 In the late 1940s, John Walson, an appliance dealer in Pennsylvania, suffered a decline in the sale of television (tv) sets because of poor reception of signals in his community. Troubled, he built an antenna on top of a nearby mountain. Using coaxial cable lines, he distributed the tv signals from the antenna to the homes of his customers. Walson's innovative idea improved his sales and at the same time gave birth to a new telecommunication system the Community Antenna Television (CATV) or Cable Television. The query in this case is may a LGU regulate the subscriber rates charged by CATV operators within its territorial jurisdiction? On July 28, 1986, Respondent city council enacted a resolution granting Petitioner a permit to construct, install, and operate a CATV system in Batangas City with authority to charge subscribers the maximum rates specified therein with condition that rate increases would be subject to council approval. When Petitioner increased its subscriber rates from P88.00 to P180.00 per month in 1993, Respondent Mayor wrote/threatened Petitioner with the cancellation of its permit unless it secures the approval of respondent City Council. Petitioner claiming that, under EO205, the National Telecommunications Commission has sole authority to regulate the CATV operation in the Philippines, Petitioner filed a petition before the RTC to enjoin from enforcing the questioned ordinance. The trial court granted the injunction reasoning that the sole agency of the government which can regulate CATV operation is the NTC, and that the LGUs cannot exercise regulatory power over it without appropriate legislation. Trial courts ruling was reversed by the CA holding that, NTC (under EO205) has the authority to issue a certificate of authority to operate a CATV system, this does not preclude the city council from regulating the operation of such a system in their locality under the powers conferred by the LGC (of 1983).

RULING: Petition GRANTED. Significantly, President Marcos and President Aquino, in the exercise of their legislative power, issued P.D. No. 1512, E.O. No. 546 and E.O. No. 205. Hence, they have the force and effect of statutes or laws passed by Congress. That the regulatory power stays with the NTC is also clear from President Ramos' E.O. No. 436 mandating that the regulation and supervision of the CATV industry shall remain vested "solely" in the NTC. In light of the above laws and E.O. No. 436, the NTC exercises regulatory power over CATV operators to the exclusion of other bodies. 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 NTC's competence, such as, the: (1) determination of rates, (2) issuance of "certificates of authority, (3) establishment of areas of operation, (4) examination and assessment of the legal, technical and financial qualifications of applicant operators, (5) granting of permits for the use of frequencies, (6) regulation of ownership and operation, (7) adjudication of issues arising from its functions, and (8) other similar matters. Within these areas, the NTC reigns supreme as it possesses the exclusive power to regulate a power comprising varied acts, such as "to fix, establish, or control; to adjust by rule, method or established mode; to direct by rule or restriction; or to subject to governing principles or laws." 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 posses such power is clear under the new law, R.A. No. 7160. The general welfare clause is the delegation in statutory form of the police power of the State to LGUs. Through this, LGUs may prescribe regulations to protect the lives, health, and property of their constituents and maintain peace and order within their respective territorial jurisdictions. Accordingly, we have upheld enactments providing, for instance, the regulation of gambling, the occupation of rig drivers, the installation and operation of pinball machines, the maintenance and operation of cockpits, the exhumation and transfer of corpses from public burial grounds, and the operation of hotels, motels, and lodging houses as valid exercises by local legislatures of the police power under the general welfare clause. Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order to reach subscribers.) The physical realities of constructing CATV system the use of public streets, rights of ways, the founding of structures, and the parceling of large regions allow an LGU a certain degree of regulation over CATV operators. This is the same regulation that it exercises over all private enterprises within its territory. But, while we recognize the LGUs' power under the general welfare clause, we cannot sustain Resolution No. 210. We are convinced that respondents strayed from the well recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the State's deregulation policy over the CATV industry.

Resolution No. 210 is an enactment of an LGU acting only as agent of the national legislature. Necessarily, its act must reflect and conform to the will of its principal. To test its validity, we must apply the particular requisites of a valid ordinance as laid down by the accepted principles governing municipal corporations. The apparent defect in Resolution No. 210 is that it contravenes E.O. No. 205 and E.O. No. 436 insofar as it permits respondent Sangguniang Panlungsod to usurp a power exclusively vested in the NTC, i.e., the power to fix the subscriber rates charged by CATV operators. As earlier discussed, the fixing of subscriber rates is definitely one of the matters within the NTC's exclusive domain. "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. OTHER CASES: VELASCO vs. VILLEGAS 120 SCRA 568 Manilia ordinance prohibiting barbershops from conducting massage business in another room was held valid, as it was passed for protection of public morals. BALACUIT vs. CFI OF AGUSAN DEL NORTE 163 SCRA 182 - Ordinance penalizing persons charging full payment for admission of children ages (ages 7 to 12) in moviehouse was an invalid exercise of the police power for being unreasonable and oppressive on business of petitioners. DE LA CRUZ vs. PARAS 123 SCRA 759 Ordinance of Bocaue, Bulacan prohibiting operation of nightclubs was declared invalid because it was prohibitory and not merely regulatory in character. Section 17, LGC Basic Services and Facilities LGU endeavor to be self-reliant and continue exercise powers and discharge their duties and functions currently vested upon them; also discharge functions and responsibilities of national agencies devlolved to them pursuant to the LGC; exercise such other powers and discharge other functions as are necessary, appropriate or incidental to efficient and effective provision of basic services and facilities enumerate in Sec. 17. (see list of basic services and facilities) Note: Public works and infrastructure projects and other facilities, programs and services funded by national government under GAA and other laws, not covered by Section 17 except where LGU is duly designated as the implementing agency for such project/facilities/programs and services.

Section 18 Power to Generate & Apply Resources restates and implements Section 5, 6 and 7 of Article 10 of the Constitution, but the power is subject to limitations imposed by Congress. -includes: 1. Establishing an organization responsible for efficient and effective implementation of their development plans, programs and objective and priorities;

2. 2. Creating their own sources of revenue and to levy taxes, fees and charges which shall accrue exclusively to their own use and disposition and which shall be retained by them; 3. Having a just share in national taxes which shall be automatically and directly released to them without need of further action; 4. Having an equitable share in proceeds and from utilization and development of national wealth and resources within their respective jurisdictions including sharing the same with inhabitants by way of direct benefits; 5. To acquire, develop, lease, encumber and alienate or otherwise dispose of real or personal property held by them in their private capacity and apply their resources and assets for productive, developmental or welfare purposes, in exercise or furtherance of their governmental or proprietary powers and functions and ensure thereby their development as self-feliant communities and active participants in attainment of national goals.

NOTE: Sections 128-383, Book II of LGC provides for detailed provisions on Local Taxation and Fiscal Matters. NOTE: Section 130, LGC (Fundamental Principles Governing Exercise of Power to Tax and Generate Revenues by LGUs): - Taxation shall be uniform in each LGU; - Taxes, fees, charges and imposition shall be equitable and based as far as practicable on taxpayers ability to pay; levied only for a public purpose; not unjust, excessive, oppressive or confiscatory; not contrary to law, public policy, national economic policy or in restraint of trade; - Collection of taxes, fees, charges and other impositions shall in no case be let to any private person; - Revenue collection shall inure solely to the benefit of, and be subject to the disposition by LGU unless specifically provided herein; and - Each LGU shall, as far as practicable, evolve a progressive system of taxation NOTE: Section 305, LGC (Fundamental Principles Governing Financial Affairs, Transactions and Operations of LGU): - No money to be paid out of local treasury except in pursuance of an appropriation ordinance or law; - Local government funds and monies shall be spent solely for public purposes; - Local revenue is generated only from sources expressly authorized by law or ordinance, collection thereof shall at all times be acknowledged properly; - All monies officially received by a local government officer in any capacity or on any occasion shall be accounted for as local funds, unless otherwise, provided by law; - Trust funds in local treasury shall not be paid out except in fulfillment of purpose for which trust was created or funds received; - Local budget shall operationalize approved development plans. HUMBERTO BASCO vs. PAGCOR, G.R. No. 91649, May 14, 1991. Under PD 1869, the Philippine Amusement and Gaming Corporation (PAGCOR) was empowered to regulate and centralized all games of chance authorized by existing franchise or permitted by law. Petitioners (as lawyers and taxpayers) challenging the constitutionality of PD1869, alleged that said law waived Manila

Citys right to impose taxes and license fees, which by law is recognized and thus, was an intrusion into LGUs right to impose local taxes and license fees in contravention of the constitutionally enshrined principle of local autonomy. Specifically, the challenged is directed against Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any "tax of any kind or form, income or otherwise, as well as fees, charges or levies of whatever nature, whether National or Local", except for the 5% franchise tax due to the National Government. RULING: Petition DISMISSED. Section 5, Article X of the 1987 Constitution (on Local Autonomy) provides that each local government unit shall have the power to create its own source of revenue and to levy taxes, fees, and other charges subject to such guidelines and limitation as the congress may provide, consistent with the basic policy on local autonomy. Such taxes, fees and charges shall accrue exclusively to the local government." The power of local government to "impose taxes and fees" is always subject to "limitations" which Congress may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception to the exercise of the power of local governments to impose taxes and fees. It cannot therefore be violative but rather is consistent with the principle of local autonomy. Local governments have no power to tax instrumentalities of the National Government. PAGCOR is a government owned or controlled corporation with an original charter, PD 1869. All of its shares of stocks are owned by the National Government. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it also exercises regulatory powers, thus PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is governmental, which places it in the category of an agency or instrumentality of the Government. Being an instrumentality of the Government, PAGCOR should be and actually is exempt from local taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a mere Local government. Otherwise, mere creatures of the State can defeat National policies thru extermination of what local authorities may perceive to be undesirable activates or enterprise using the power to tax as "a tool for regulation" LUZ YAMANE vs. BA LEPANTO CONDOMINIUM CORP., G.R. No. 154993, 10/25/2005 Respondent, a duly organized condomium corporation holding title to the common and limited common areas of the BA-Lepanto Condominium, collected regular assessments from its members for operating expenses, capital expenditures on the common areas, and other special assessments, pursuant to its Amended By-Laws. Without citing as basis any specific provision of the Revenue Code of Makati or the Local Government Code, Petitioner (City Treasurer of Makati City) issued a notice of assessment holding Petitioner liable to pay business taxes, fees and charges totaling P1,601,013.77 for the years 1995 to 1997. Petitioner reasoned that Respondent is engaged in a profit venture as the collection of dues from unit owners was primarily "to sustain and maintain the expenses of the common areas, giving full appreciative living values for the individual condominium occupants, generating better marketable prices for future sale of their units. Upon denial of its protest, Respondent filed an appeal with the Regional Trial Court which appeal was dismissed. On review by the Court of Appeals, the latter reversed the trial courts decision and declared that the corporation was not liable to pay business taxes to the City of Makati. Her motion for reconsideration denied, Petitioner filed a petition for review with the Supreme Court.

DECISION: Petition DENIED. The power of local government units to impose taxes within its territorial jurisdiction derives from the Constitution itself, which recognizes the power of these units "to create its own sources of revenue and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy." These guidelines and limitations as provided by Congress are in main contained in the Local Government Code of 1991, which provides for comprehensive instances when and how local government units may impose taxes. The significant limitations are enumerated primarily in Section 133 of the Code (prohibition on income taxes except when levied on banks and other financial institutions). Found in Title I of Book II of the Code are other taxes imposable by local government units, including business taxes. Under Section 151 of the Code, cities such as Makati are authorized to levy the same taxes fees and charges as provinces and municipalities. Section 143 of the Code specifically enumerates several types of business on which municipalities and cities may impose taxes. Moreover, the local sanggunian is also authorized to impose taxes on any other businesses not otherwise specified under Section 143 which the sanggunian concerned may deem proper to tax. The coverage of business taxation particular to the City of Makati is provided by the Makati Revenue Code enacted through Municipal Ordinance No. 92-072. Article A, Chapter III of said code governs business taxes in Makati, and it is quite specific as to the particular businesses which are covered by business taxes. The initial inquiry is what provision of the Makati Revenue Code does the City Treasurer rely on to make the Corporation liable for business taxes. As stated earlier, local tax on businesses (that is, "trade or commercial activity regularly engaged in as a means of livelihood or with a view to profit") is authorized under Section 143 of the Local Government Code. It is thus imperative that in order that Respondent may be subjected to business taxes, its activities must fall within the definition of business as provided in the Local Government Code. And to hold that they do is to ignore the very statutory nature of a condominium corporation. The creation of the condominium corporation is sanctioned by RA No. 4726, (Condominium Act - a condominium is an interest in real property consisting of a separate interest in a unit in a residential, industrial or commercial building and an undivided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building). In line with the authority of the condominium corporation to manage the condominium project, it may be authorized, in the deed of restrictions, "to make reasonable assessments to meet authorized expenditures, each condominium unit to be assessed separately for its share of such expenses in proportion (unless otherwise provided) to its owner's fractional interest in any common areas." The collection of these assessments from unit owners is the basis for the City Treasurer's claim that the Corporation is doing business as these collections are "with the end view of getting full appreciative living values" for the condominium units, and as a result, profit is obtained once these units are sold at higher prices. The Court cites with approval the two counterpoints raised by the Court of Appeals in rejecting this contention. First, if any profit is obtained by the sale of the units, it accrues not to the corporation but to the unit owner. Second, if the unit owner does obtain profit from the sale of his unit, he is already required to pay capital gains tax on the appreciated value of the condominium unit. MANILA INTERNATIONAL AIRPORT AUTHORITY vs. CA, G.R. No. 155650. 7/20/2006

Petitioner MIAA operates the Ninoy Aquino International Airport (NAIA) Complex in Paraaque City under Executive Order No. 903, otherwise known as the Revised Charter of the Manila International Airport Authority. Subsequently, Executive Order Nos. 909 and 298 amended the MIAA Charter, where as operator of the international airport, MIAA administers the land, improvements and equipment within the NAIA Complex. The MIAA Charter transferred to MIAA approximately 600 hectares of land, 3 including the runways and buildings then under the Bureau of Air Transportation. After, the Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061 stating that the Local Government Code of 1991 withdrew the exemption from real estate tax granted to MIAA under Section 21 of the MIAA Charter, MIAA negotiated with Respondent City of Paraaque to pay the real estate tax imposed by the City and paid some of said taxes already due. Later, MIAA received Final Notices of Real Estate Tax Delinquency (totaling P624,506,725.42) from the City of Paraaque for the taxable years 1992 to 2001. When Paraaque City issued notices of levy and warrants of levy on the Airport Lands and Buildings and threatened to sell at public auction these properties if MIAA failed to pay the real estate tax delinquency, MIAA sought clarification of OGCC Opinion No. 061. The OGCC then issued Opinion No. 147 clarifying OGCC Opinion No. 061 stating that Section 206 of the Local Government Code requires persons exempt from real estate tax to show proof of exemption and that in the case of MIAA, Section 21 of the MIAA Charter is the proof that MIAA is exempt from real estate tax. MIAA petitioned the CA for prohibition and injunction, with prayer for preliminary injunction or temporary restraining order seeking to restrain the City of Paraaque from imposing real estate tax on, levying against, and auctioning for public sale the Airport Lands and Buildings, which petition however was dismissed for having been filed beyond the 60-day reglementary period. Hence, this petition for review. DECISION: Petition GRANTED. The Airport Lands and Buildings of MIAA are EXEMPT from the real estate tax imposed by the City of Paraaque. All the real estate tax assessments, including the final notices of real estate tax delinquencies, issued by the City of Paraaque on the Airport Lands and Buildings of the Manila International Airport Authority, except for the portions that the Manila International Airport Authority has leased to private parties, are declared VOID. As a rule, a government-owned or controlled corporation is not exempt from real estate tax. However, MIAA is not a government-owned or controlled corporation. A government-owned or controlled corporation must be "organized as a stock or non-stock corporation." MIAA is not organized as a stock or non-stock corporation. MIAA is not a stock corporation because it has no capital stock divided into shares, has no stockholders or voting shares and its capital is not divided into shares of stock. Neither is it a non-stock corporation because it has no members. A non-stock corporation must have members. Even if the Government is considered as the sole member of MIAA, this will not make MIAA a non-stock corporation because non-stock corporations cannot distribute any part of their income to their members and in MIAAs case, Section 11 of its Charter requires it to remit 20% of its annual gross operating income to the National Treasury, thus, preventing MIAA from qualifying as a non-stock corporation. Further, non-stock corporations are organized for charitable, religious, educational, professional, cultural, recreational, fraternal, literary, scientific, social, civil service, or similar purposes, like trade, industry, agriculture and like chambers. MIAA is not organized for any of these purposes. MIAA, a

public utility, is organized to operate an international and domestic airport for public use. MIAA is a government instrumentality vested with corporate powers to perform efficiently its governmental functions. MIAA is like any other government instrumentality, the only difference is that MIAA is vested with corporate powers. When the law vests in a government instrumentality corporate powers, the instrumentality does not become a corporation, unless the government instrumentality is organized as a stock or non-stock corporation. Thus, MIAA exercises the governmental powers of eminent domain, police authority and the levying of fees and charges. At the same time, MIAA exercises "all the powers of a corporation under the Corporation Law, insofar as these powers are not inconsistent with the provisions of this Executive Order." A government instrumentality like MIAA falls under Section 133(o) of the Local Government Code, which states that, unless otherwise provided by the Code, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and local government units. Section 133(o) recognizes the basic principle that local governments cannot tax the national government, which historically merely delegated to local governments the power to tax. While the 1987 Constitution now includes taxation as one of the powers of local governments, local governments may only exercise such power "subject to such guidelines and limitations as the Congress may provide." When local governments invoke the power to tax on national government instrumentalities, such power is construed strictly against local governments. The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. Any doubt whether a person, article or activity is taxable is resolved against taxation. This rule applies with greater force when local governments seek to tax national government instrumentalities. The Airport Lands and Buildings of MIAA are property of public dominion and therefore owned by the State or the Republic of the Philippines. Properties of public dominion mentioned in Article 420 of the Civil Code, like "roads, canals, rivers, torrents, ports and bridges constructed by the State," are owned by the State. The term "ports" includes seaports and airports. The MIAA Airport Lands and Buildings constitute a "port" constructed by the State. The Airport Lands and Buildings are devoted to public use because they are used by the public for international and domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the public does not remove the character of the Airport Lands and Buildings as properties for public use. The charging of fees to the public does not determine the character of the property whether it is of public dominion or not. Article 420 of the Civil Code defines property of public dominion as one "intended for public use." As properties of public dominion, the airport properties are outside the commerce of man. Properties of public dominion, being for public use, are not subject to levy, encumbrance or disposition through public or private sale. Any encumbrance, levy on execution or auction sale of any property of public dominion is void for being contrary to public policy. Essential public services will stop if properties of public dominion are subject to encumbrances, foreclosures and auction sale. This will happen if the City of Paraaque can foreclose and compel the auction sale of the 600-hectare runway of the MIAA for non-payment of real estate tax.

SMART COMMUNICATIONS, INC. vs. CITY OF DAVAO, G.R. No. 155491, 9/16/2008 - The Tax Code of Davao City ISec. 1, Art. 10 thereof) provided that: Notwithstanding any exemption granted by any law or other special law, there is hereby imposed a tax on businesses enjoying a franchise, at a rate of seventyfive percent (75%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the income or receipts realized within the territorial jurisdiction of Davao City. RULING: Smart is of the view that the only taxes it may be made to bear under its franchise are the national franchise tax (now VAT), income tax, and real property tax. It claims exemption from the local franchise tax because the in lieu of taxes clause in its franchise does not distinguish between national and local taxes. We pay heed that R.A. No. 7294 is not definite in granting exemption to Smart from local taxation. Section 9 of R.A. No. 7294 imposes on Smart a franchise tax equivalent to three percent (3%) of all gross receipts of the business transacted under the franchise and the said percentage shall be in lieu of all taxes on the franchise or earnings thereof. R.A. No 7294 does not expressly provide what kind of taxes Smart is exempted from. It is not clear whether the in lieu of all taxes provision in the franchise of Smart would include exemption from local or national taxation. What is clear is that Smart shall pay franchise tax equivalent to three percent (3%) of all gross receipts of the business transacted under its franchise. But whether the franchise tax exemption would include exemption from exactions by both the local and the national government is not unequivocal. The uncertainty in the in lieu of all taxes clause in R.A. No. 7294 on whether Smart is exempted from both local and national franchise tax must be construed strictly against Smart which claims the exemption. Smart has the burden of proving that, aside from the imposed 3% franchise tax, Congress intended it to be exempt from all kinds of franchise taxes whether local or national. However, Smart failed in this regard. Tax exemptions are never presumed and are strictly construed against the taxpayer and liberally in favor of the taxing authority.[22] They can only be given force when the grant is clear and categorical. The surrender of the power to tax, when claimed, must be clearly shown by a language that will admit of no reasonable construction consistent with the reservation of the power. If the intention of the legislature is open to doubt, then the intention of the legislature must be resolved in favor of the State. In this case, the doubt must be resolved in favor of the City of Davao. The in lieu of all taxes clause applies only to national internal revenue taxes and not to local taxes. [T]he "in lieu of all taxes" clause in Smart's franchise refers only to taxes, other than income tax, imposed under the National Internal Revenue Code. The "in lieu of all taxes" clause does not apply to local taxes. The proviso in the first paragraph of Section 9 of Smart's franchise states that the grantee shall "continue to be liable for income taxes payable under Title II of the National Internal Revenue Code." Also, the second paragraph of Section 9 speaks of tax returns filed and taxes paid to the "Commissioner of Internal Revenue or his duly authorized representative in accordance with the National Internal Revenue Code." Moreover, the same paragraph declares that the tax returns "shall be subject to audit by the Bureau of Internal Revenue." Nothing is mentioned in Section 9 about local taxes. The clear intent is for the "in lieu of all taxes" clause to apply only to taxes under the National Internal Revenue Code and not to local taxes. Even with respect to national internal revenue taxes, the "in lieu of all taxes" clause does not apply to income tax.

NOTE: JUDGE TOMAS C. LEYNES vs. COMMISSION ON AUDIT, G.R. No. 143596, 12/11/2003 FACT: Petitioner was formerly receiving a P1600-monthly allowance from the Municipality of Naujan while he was stationed there as judge of the municipal trial court. Respondent Commission on Audit (upholding the Regional Director and Provincial Auditor) disallowed said allowance citing that the latter along with Petitioners RATA from the Supreme Court violated certain budget circulars (NCC#67) that no one shall be allowed to collect RATA from more than one source. RULING: On October 10, 1991, Congress enacted RA 7160, (Local Government Code of 1991). The power of the LGUs to grant allowances and other benefits to judges and other national officials stationed in their respective territories was expressly provided in Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi) of the Code. Section 447(a)(1)(xi) of RA 7160, the Local Government Code of 1991, provides: When the finances of the municipal government allow, provide for additional allowances and other benefits to judges, prosecutors, public elementary and high school teachers, and other national government officials stationed in or assigned to the municipality; The controversy actually centers on the seemingly sweeping provision in NCC No. 67 which states that "no one shall be allowed to collect RATA from more than one source." Does this mean that judges cannot receive allowances from LGUs in addition to the RATA from the Supreme Court? By no stretch of the imagination can NCC No. 67 be construed as nullifying the power of LGUs to grant allowances to judges under the Local Government Code of 1991. It was issued primarily to make the grant of RATA to national officials under the national budget uniform. In other words, it applies only to the national funds administered by the DBM, not the local funds of LGUs. To rule against the power of LGUs to grant allowances to judges as what respondent COA would like us to do will subvert the principle of local autonomy zealously guaranteed by the Constitution. The Local Government Code of 1991 was specially promulgated by Congress to ensure the autonomy of local governments as mandated by the Constitution. By upholding, in the present case, the power of LGUs to grant allowances to judges and leaving to their discretion the amount of allowances they may want to grant, depending on the availability of local funds, we ensure the genuine and meaningful local autonomy of LGUs.

Section 19,LGC LGUs Power of Eminent Domain LGU through its Chief Executive acting pursuant to an ordinance; for public use or purpose or welfare for the benefit of poor and landless; upon payment of just compensation, pursuant to provisions of the Constitution and pertinent laws. Conditions for Exercise of Power of Eminent Domain: (i) Prior valid and definite offer to owner which latter did not accept; (II) LGU may take immediate possession of property upon filing of expropriation proceedings (Rule 67 of Rules of Court) and payment of deposit of at least 15% of fair market value of property based on current tax declaration; amount to be paid for expropriation shall be determined by proper court (reference to Commissioner) based on fair market value at the time of taking. - Eminent Domain inherent attribute of sovereignty to take private property upon payment of just compensation.

MUN. OF PARANAQUE vs. V.M. REALTY CORP. 292 SCRA 678 A resolution passed by Municipal Council authorized Chief Executive to exercise police power. Held: LGC in effect when complaint for expropriation was filed, explicitly requires an ordinance for this purpose. If Congress intended to allow LGU to exercise eminent domain through MERE resolution, it would have simply adopted the language of the previous local government code (BP 337 of 1983). Where the law is clear and ambiguous, the law is applied according to the express terms. Eminent Domain necessarily involves a derogation of a fundamental or private right of the people, hence, manifest change in legislative language from resolution under BP337 to ordinance under RA7160 demands strict interpretation. Petitioner relies on Art. 36 of Rule VI of the Implementing Rules which requires only a resolution to authorize the LGU to exercise eminent domain. This is clearly misplaced. Section 19 of the LGC, the law itself, surely prevails over said rule which merely seeks to implement it. The clear letter of the law is controlling and cannot be amended by mere administrative rule issued for its implementation. Note: Resolution is a mere declaration of sentiment/opinion of lawmaking body on a specific matter; it is temporary in nature; third reading not necessary unless decided otherwise by majority of all sangguniang members. Ordinance on the otherhand, is law and is of general and permanent character and requires 3 readings. See: AMOS P. FRANCIA, vs. MUN. OF MEYCAUAYAN, G.R. No. 170432, 3/24/2008 FACTS: Respondent filed a complaint to expropriate Petitioners 16,256 sq. m. idle property which it planned to use as a common public terminal for all types of public utility vehicles with a weighing scale for heavy trucks. In their answer, Petitioners averred that the subject land was developed contrary to Respondents claim of being raw land, for which reason, Respondents offer price of 333,500 (or P111.99 per square meter) was too low. Petitioners essentially aver that the CA erred in upholding the RTC's order that, in expropriation cases, prior determination of the existence of a public purpose was not necessary for the issuance of a writ of possession. RULING: Petitioner DENIED. Sec. 19, LGC provides that, a LGU may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws. Before a LGU may enter into possession of the property sought to be expropriated, it must (1) file a complaint for expropriation sufficient in form and substance in the proper court and (2) deposit with the said court at least 15% of the property's fair market value based on its current tax declaration. The law does not make the determination of a public purpose a condition precedent to the issuance of a writ of possession.

Section 20, LGC LGU Power to Reclassify Land City or Municipality through ordinance passed after conducting public hearings for that purpose, may authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition. Agricultural Land, defined: Those public lands acquired from Spain which are not timber or mineral land; land devoted to agriculture or to any growth.

Grounds for Reclassification: (i) When land ceases to be economically feasible and sound for agricultural purposes as determined by the Dept. of Agriculture; and (ii) when land shall have substantially greater economic value for residential, commercial or industrial purposes as determined by the Sanggunian; Conditions for Reclassification: Percentage limits, that is, of the total agricultural area at the time of passage of reclassification (a) for highly urbanized cities and independent component cities 15%; (b) for component cities and 1st to 3rd class municipalities 10%; and (c) for 4th to 6th class municipalities 5% Note: President (upon Natl Economic Devt Authoritys recommendation), when public interest so requires, authorize a city or municipality to reclassify lands in excess of limits set in Section 20(a). - Under Sec. 20(e) Agricultural lands distributed to agrarian reform beneficiaries pursuant to RA6657(CARL), shall not be affected by the reclassification and the conversion of such lands into other purposes shall be governed by Sec. 65 of CARL. Note: Sec. 65 of RA6657 Conditions for conversion of agricultural lands held by agrarian reform program beneficiaries to non-agricultural use with DAR: (a) 5 year lapse from award of land; (ii) land ceased to be economically feasible and sound for agricultural purpose; (iii) notice to affected parties; (iv) beneficiary has fully paid his obligation. Section 21 Closure & Opening of Roads The closure of streets/roads is within the power of the local government unit (through council by way of ordinance). - LGU (by ordinance) may permanently/temporarily close or open any local road, alley, park or square falling within its jurisdiction. Note: In case of permanent closure, ordinance must be approved by, at least 2/3 of all members of the sanggunian and when necessary, an adequate substitute for the public facility subject of closure, is provided. - Property publicly withdrawn from public use may be used/conveyed for any purpose for which other real property belonging to the LGU concerned may be lawfully used or conveyed. Note: No freedom park shall be closed permanently without provision for its transfer/relocation to a new site. (see related B.P.880 Public Assembly Act). - LGU has the power to close local and even national roads (Note: LGU has no authority to order permanent closure/opening of a national road, alley, park or square, such authority applies to local roads only, see sec. 2[a]). Conditions for temporary closure of national/local roads under Sec. 2[c]: (i) occasion of actual emergency, fiesta celebrations, public rallies, agricultural or industrial fairs, or undertaking of public works and highways (eg. Banilad flyover); (ii) written order for temporary closure by local chief executive; (iii) no national or local road, alley, park or square shall be temporarily closed for athletic, cultural or civic activity not officially sponsored, recognized or approved by local LGU concerned. ANTONIO FAVIS vs. THE CITY OF BAGUIO, G.R. No. L-29910, April 25, 1969 A resolution passed by the city council closed the dead-end portion of Lapulapu Street to public use. By subsequent resolution, the Mayor as authorized

therein, leased the closed portion to Shell Corporation. Petitioner Favis protested the lease to Shell claiming that said lease diminished the width of Lapu-Lapu Street and that the City was bereft of authority to lease any portion of its public streets in favor of anyone. Subsequently, Petitioner filed a complaint for annulment of the lease with damages in the Court of First Instance of Baguio. The latter court dismissed his complaint. Hence, appeal to the Supreme Court. DECISION: APPEAL is Denied. Judgment dismissing complaint is affirmed. Appellant may not challenge the city council's act of withdrawing a strip of Lapu-Lapu Street at its dead end from public use and converting the remainder thereof into an alley. These are acts well within the ambit of the power to close a city street. The city council is the authority competent to determine if a certain property is still necessary for public use. This power is discretionary and will not ordinarily be controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust will be presumed. The fact that some private interests may be served incidentally will not invalidate the vacation ordinance. Given the precept that the discretion of a municipal corporation is broad in scope and should thus be accorded great deference in the spirit of the Local Autonomy Law (R.A. 2264), and absent a clear abuse of discretion, we hold that the withdrawal for lease of the disputed portion of Lapu-Lapu Street and the conversion of the remainder of the dead-end part thereof into an alley, does not call for, and is beyond the reach of, judicial interference. From the fact that the leased strip of 100 square meters was withdrawn from public use, it necessarily follows that such leased portion becomes patrimonial property. Article 422 of the Civil Code indeed provides that property of public domain, "when no longer intended for public use or public service, shall form part of the patrimonial property of the State." Authority is not wanting for the proposition that "[property for public use of provinces and towns are governed by the same principles as property of public dominion of the same character." There is no doubt that the strip withdrawn from public use and held in private ownership may be given in lease. The general rule is, one whose property does not abut on the closed section of a street has no right to compensation for the closing or vacation of the street, if he still has reasonable access to the general system of streets. The circumstances in some cases may be such as to give a right to damages to a property owner, even though his property does not abut on the closed section. But to warrant recovery in any such case the property owner must show that the situation is such that he has sustained special damages differing in kind, and not merely in degree, from those sustained by the public generally." In the case at bar, no private right of appellant has been invaded. No special damage or damages he will incur by reason of the closing of a portion of LapuLapu Street at its dead end. His property does not abut that street. In fact, the court has found that the remaining portion of Lapu-Lapu Street, which actually is 4 meters in width, is sufficient for the needs of appellant and that the leased portion subject of this suit "was not necessary for public use." "The Constitution does not undertake to guarantee to a property owner the public maintenance of the most convenient route to his door. The law will not permit him to be cut off from the public thoroughfares, but he must content himself with such route for outlet as the regularly constituted public authority may deem most compatible with the public welfare. When he acquires city property, he does so in tacit recognition of these principles. If, subsequent to his appreciation, the city authorities abandon a portion of the street to which his

property is not immediately adjacent, he may suffer loss because of the inconvenience imposed, but the public treasury cannot be required to recompense him. Such case is damnum absque injuria."

CEBU OXYGEN & ACETYLENE CO., INC. vs. HON. PASCUAL A. BERCILLES, G.R. No. L-40474, August 29, 1975. Petitioner applied for registration of title over a portion of M. Gorces Street in Mabolo, Cebu City. Said portion was declared an abandoned road by the City Council of Cebu the same not being included in the Cebu Development Plan, and later, by authority of the City Council, was sold by the Acting Mayor to petitioner who was the highest bidder at a public bidding. On motion by the Assistant Provincial Fiscal (alleging that the subject property being a public road intended for a public use, it is part of the public domain, outside the commerce of men, and cannot be subject to registration by any private individual), the trial court dismissed Petitioners application. DECISION: PETITION is granted. Order of dismissal set aside and trial court ordered to proceed with the hearing of the petitioner's application for registration of title. Under the Cebu City Charter, the City Council is empowered to close a city road or a street and further, use or convey property thus withdrawn from public servitude for any purpose for which other real property belonging to the City may be lawfully used or conveyed. In the case of Favis vs. City of Baguio, the Court upholding the power of the city council to close city streets and to vacate or withdraw the same from public use was similarly assailed, declared that the city council is the authority competent to determine whether or not a certain property is still necessary for public use. This power to vacate a street or alley is discretionary, and will not ordinarily be controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust will be presumed. Since that portion of the city street subject of petitioner's application for registration of title was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract consisting with Article 422 of the Civil Code (that property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State). METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) vs. BEL-AIR VILLAGE ASSOCIATION, INC. (BAVA), G.R. No. 135962, March 27, 2000. Not infrequently, the government is tempted to take legal shortcuts to solve urgent problems of the people. But even when government is armed with the best of intention, we cannot allow it to run roughshod over the rule of law. Again, we let the hammer fall and fall hard on the illegal attempt of the MMDA to open for public use a private road in a private subdivision. While we hold that the general welfare should be promoted, we stress that it should not be achieved at the expense of the rule of law. Petitioner is a government agency tasked with the delivery of basic services in Metro Manila. Respondent, a non-stock, non-profit corporation composed of homeowners in Bel-Air Village, a private subdivision in Makati City, is the registered owner of Neptune Street, a road beside the village. The perimeter fence located near the subject street was likewise order demolished. Respondent filed an injunction case before the RTC to enjoin the opening of Neptune Street and prohibit the demolition of the perimeter wall. The trial court issued a temporary restraining order the following day. Complaint was dismissed

but, on appeal, the Court of Appeals reversed the trial courts decision, ruling that the MMDA has no authority to order the opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter walls, authority for such being lodged in the City Council of Makati by ordinance. Petitioner MMDA claims that, there is no need for the City of Makati to enact an ordinance opening Neptune street to the public, because as an agent of the State endowed with police power in the delivery of basic services in Metro Manila including traffic management (involving regulation of the use of thoroughfares to insure the safety, convenience and welfare of the general public). DECISION: Petition is DENIED. It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed with legislative power. It is not even a "special metropolitan political subdivision" as contemplated in Section 11, Article X of the Constitution. The powers of the MMDA are limited to formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. There is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislative power. Even the Metro Manila Council has not been delegated any legislative power. Unlike the legislative bodies of the local government units, there is no provision in R.A. No. 7924 that empowers the MMDA or its Council to "enact ordinances, approve resolutions and appropriate funds for the general welfare" of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself, a "development authority." It is agency tasked with policy-making and coordination with the various national government agencies, people's organizations, non-governmental organizations and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in nature. While rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of transport and traffic management, such however cannot be interpreted as an express or implied grant of ordinance-making power, much less police power. Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has no power to enact ordinances for the welfare of the community. It is the local government units, acting through their respective legislative councils, that possess legislative power and police power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the respondent Court of Appeals did not err in so ruling. We desist from ruling on the other issues as they are unnecessary. RA 7924 declared Metropolitan or Metro Manila (body composed of several LGUs, i.e., twelve (12) cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pias, Marikina, Paraaque and Valenzuela, and the five (5) municipalities of Malabon, Navotas, Pateros, San Juan and Taguig) as a "special development and administrative region" with the administration of "metro-wide" basic services affecting the region placed under "a development authority" referred to as the MMDA (governed by the Metro Manila Council composed of the mayors of the component 12 cities and 5 municipalities, the president of the Metro Manila Vice-Mayors' League and the president of the Metro Manila Councilors' League) headed by the Chairman. When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative region" and the MMDA a "special development authority" whose functions were "without prejudice to the autonomy of the affected local government units." The character of the MMDA was clearly defined in the legislative debates enacting its charter.

MMDA not a special metropolitan political subdivision, because the latters creation requires the approval by a majority of the votes cast in a plebiscite in the political units directly affected. 56 R.A. No. 7924 was not submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people, but appointed by the President with the rank and privileges of a cabinet member. In fact, part of his function is to perform such other duties as may be assigned to him by the President, 57 whereas in local government units, the President merely exercises supervisory authority. This emphasizes the administrative character of the MMDA. Note: Closure of Roads is not expropriation where the property owner is entitled to just compensation. Construction of new road was undertaken under the General Welfare Clause (police power), that is, for enjoyment of convenience, every individual must be prepared to give his share. Section 22, LGC Corporate Powers As a body corporate, has the following powers; (a) To continuous succession in its corporate name; (b) To sue and be sued; (c) To have and use a corporate seal; (d) To acquire and convey real or personal property; (e) To enter into contracts; such other powers as are granted corporation subject to limits provided in LGC and other laws. Corporate Powers, defined: Corporations capacity/right to do certain acts or engage in certain activities such as sue/be sued enter into contracts, borrow money and do suc other things necessary to obtain its purposes. General Rule: Local Chief Executive enters into contracts in behalf of LGU, requires prior authorization by sangguniang concerned. Exception: unless otherwise provided in LGC. Note: Legible copy of contract to be posted in conspicuous place in provincial capitol/city/municipality/barangay hall (for Transparency). Note: Full autonomy in exercise of corporate powers (not acting as agent of the State), and limited only by LGC and other applicable laws. Read City Council of Cebu vs. Cuizon 47 SCRA 325 exception to general rule that, local chief executive represents the LGU in a suit. Read Municipality of Pililla vs. CA 233 SCRA 484 Municipality cannot be represented by private lawyer, reiterated in Ramos vs. CA 269 SCRA 34. Villanueva vs. Castaeda 154 SCra 142 Public plaza is beyond the commerce of man and cannot be the subject of lease or other contractual undertaking and even assuming the existence of a valid lease of the said plaza or part thereof, the municipal resolution effectively terminated the agreement for it is settled that the police power cannot be surrendered or bargained away through the medium of a contract. RE: RIGHT TO SUE/BE SUED CITY COUNCIL OF CEBU vs. CUIZON 47 SCRA 325 For lack of prior authority from the Council, the latter filed with CFI-Cebu, a complaint to nullify the contract between Mayor Cuizon and Tropical Commercial Co., Inc. involving the purchase of road construction equipments for $520,912.00 cash from Tropical. Complaint was dismissed for lack of legal

capacity as trial court reasoned that there is no provision of law authorizing city council to sue in behalf of the city and that the authorized representative under the LGC is the city mayor for that purpose. HELD: Generally, suit is commenced by the local executive upon authority of the sanggunian, except where the city councilors themselves and as representatives of/in behalf of the city, bring the action to prevent unlawful disbursement of city funds. MUNICIPALITY OF PILILIA vs. CA 233 SCRA 484 Municipality cannot be represented by a private lawyer. Only provincial fiscal or municipal attorney can represent a province or municipality in lawsuits. This is mandatory. The municipalitys authority to employ a private lawyer is limited to situations where the provincial fiscal is disqualified to present it which disqualification must appear on record. Fiscals refusal to represent the municipality is not legal justification for employing the services of private counsel, Municipality should request the Secretary of Justice to appoint an acting provincial fiscal in place of the one who declined to handle it. RAMOS vs. CA 269 SCRA 34 Petitioners Ramos and Baliuag Market Vendors Association filed a petition to declare certain ordinances illegal. In said suit, Petitioners challenged the appearance of a private lawyer for the municipality. SC held, Only provincial fiscal, under (Sec. 1683 of Revised Admin Code) provincial attorney or municipal attorney may validly represent the municipality. The legality of the representation of an unauthorized counsel may be raised at any stage of the proceedings. RE: POWER TO ACQUIRE/CONVEY REAL OR PERSONAL PROPERTY LGU may acquire real/personal, tangible or intangible in any manner allowed by law, eg., sale or donation, etc. VILLANUEVA vs. CASTANEDA 454 SCRA 142 Public plaza is beyond the commerce of man and cannot be the subject of a lease or other contractual undertaking, and even assuming the existence of a valid lease of the public plaza or part thereof, the municipal resolution effectively terminated the agreement, for it is settled that the police power cannot be surrendered or bargained away through the medium of a contract. RE: POWER TO ENTER INTO CONTRACTS requires: (i) LGU has express/implied or inherent power to enter into the particular contract (refer to LGC, special laws or charter); (ii) contract is entered into by the proper department, board, committee, officer or agent (under LGC, generally such authority is with the Local Chief Executive upon prior authorization by sanggunian); (iii) contract must comply with certain substantive requirements, eg., when expenditure of public funds is to be made, there must be actual appropriation and certificate of availability of funds; (iv) contract must comply with formal requirements of written contracts, eg. Statutes of fraud. NOTE: A contract entered into without complying with (i) and (iii) above is ULTRA VIRES, ergo, NULL AND VOID. Such contract cannot be ratified or validated. Ratification of defective contracts is possible only when there is non-compliance with (ii) and (iv) requirements. NOTE: CITY OF QUEZON vs. LEXBER, INC., G.R. 141616, 3/15/01 Before the effectivity of the LGC in 1991, a tri-partite agreement was signed by Lexber, Quezon City and the Municipality of Antipolo whereby, with the conformity of Antipolo, Quezon City would lease and use the private land owned by Lexber as a dumpsite situated in Antipolo in exchange for exclusive services and

equipment for landfill to be provided Lexber. From 1991-1992, Quezon City used the site for dumping but suddenly stopped without any explanation. Lexber sent a demand letter claiming that it was still entitled to compensation pursuant to the agreement but Mayor Mel Mathay of Quezon City refused citing that the contract was void having been signed by then Mayor Simon without the approval or ratification by City Council and that there was no budget appropriation. Collection suit was filed by Lexber. RTC ruled in the latters favor and which decision was affirmed by the CA. Issue: Is the contract valid against the city considering that the city council is vested by the LGC with power to appropriate city funds to cover the expenses of the city. Held: Note, contract requires P94M for a 5-year period. Quezon City invoked PD1445 (Auditing Code of the Philippines) that contracts involving expenditure of public funds can only be entered into when there is an appropriation thereof to be certified by proper accounting official/agent that funds have been appropriated for that purpose. Also, Quezon City cited the LGC empowering the sanggunian with authority to appropriate funds for expenses of the city government. According to the SC, PD1445 does not provide that the absence of appropriation law ipso facto makes a contract entered into by the LGU null and void. Under the LGC (1973), the power of a mayor to enter contract is not subject to prior authorization by the council. Note: MANANTAN vs. MUNICIPLAITY OF LUNA (LA UNION) 82 Phil 844 Contract of lease granting fishing privileges is a valid and binding contract and cannot be impaired by a subsequent resolution setting it aside and granting the privilege to another (unless the subsequent resolution is a police power measure because the exercise of the latter prevails over the non-impairment clause. Section 23, LGC Grants and Donations sets forth the rules on grants and donations to LGUs from local and foreign assistance agencies) which local chief executive may upon authority of the sanggunian negotiate and secure in order to support the basic services or facilities enumerated in Sec. 17. - No need of securing clearance/approval for grant/donation from any department, agency or office of the national government or from any higher LGU. - Projects financed by such grants/assistance with national security implications shall be approved by the national agency concerned. Failure of such agency to act on request within 30 days from receipt thereof, it is deemed approved. - Local Chief shall, within 30 days, upon signing of such grant, agreement or deed of donation, report the nature, amount, terms of such assistance to both Houses of Congress and the President. Section 24, LGC Municipal Liability Rule: LGU and their officials are not exempt from liability for death or injury to persons/damage to property. Damages in legal contemplation refers to the sum of money which law awards or imposes as pecuniary compensation, recompense or satisfaction for an injury done or a wrong sustained as a consequence either of a breach of contractual obligation or a tortuous act. It includes all kinds of damages contemplated in the Civil Code; it is awarded to one as a vindication of the wrongful invasion of his rights.

CORREA vs. CFI of BULACAN 92 SCRA 312 Municipal corporation is responsible only for acts of its officers only when they have acted by authority of law and in conformity with requirements. A public officer who commits a tort or wrongful act, done in excess or beyond the scope of his duty, is not protected by his office and is personally liable therefor like any private individual. PILAR vs. SANGGUNIANG BAYAN OF DANSOL, PANGASINAN 128 SCRA 173 Municipal mayor is personally liable for damages (moral and exemplary) and attorneys fees for having vetoed in bad faith, resolution appropriating funds for salary of the vice-mayor. MENDOZA vs DE LEON 33 PHIL 508 Operation of ferry service is a proprietary function. Municipality is negligent and therefore liable for having awarded franchise to operate ferry service to another notwithstanding previous grant of franchise to the plaintiff. MUNICIPALITY OF JAASAN, MISAMIS ORIENTAL vs. GENTALLAN, G.R. 154961, 5/9/2005 There being no malice or bad faith in the illegal dismissal and refusal to reinstate respondent Gentallan by her superior officers, the latter cannot be held personally liable for her back salaries. Municipal government, ergo, should disburse funds to answer for her claims. Note: Liability for contracts Rule: LGU, like ordinary person is liable on a contract it enters, provided that contract is ultra vires. Otherwise, become personal liability of the officer who acted beyond his power. See Articles 2189, 2180 and 34 of the Civil Code on provisions on liability. Note: As to tort liability: LGU is not liable if engaged in governmental function but liable if engaged in proprietary function. INTERGOVERNMENTAL RELATIONS as a body political and corporate (to serve its constituents) 1. NATIONAL GOVERNMENT LGU Section 25, LGC National supervision over LGU despite the unitary and centralized Phil. Governmental structure, 1987 Constitution limits the authority of the President over LGU only to GENERAL SUPERVISION. Presidents General Supervision (i) directs over provinces, highly urbanized cities and independent component cities, (through provinces over) component cities and municipalities; and (through cities and municipalities over) barangays; (ii) to ensure that acts of LGU are within the scope of their prescribed powers and functions; (iii) Article X, Section 16 of 1987 Constitution President shall exercise general supervision over authonmous regions to ensure that laws are faithfully executed. Supervision defined means overseeing or power/authority of an office to see that subordinate performs their duties. If the latter fails or neglects to perform their duties, the former may take such steps/action as prescribed by law to make them perform their duties. Supervision does not mean control. Control includes the power to alter/modify/set aside acts of a subordinate officer.

Note: National agencies/offices with project implementation function shall coordinate with each other and with LGU concerned in the discharge of these functions to ensure participation of LGU both in the planning and implementation of said national projects. Note: National agencies may be directed by the President, upon LGUs request, to provide financial, technical or other forms of assistance to LGU without extra cost to LGU. Note: National agencies (including GOCCs) with field offices/branches in province/city/municipality to furnish local chief executive concerned, for his information and guidance, monthly reports including duly certified budgetary allocations and expenditures. RODOLFO GANZON vs. CA, G.R. No. 93252, 8/5/1991 FACTS: Petitioner, Mayor of Iloilo City and a member of the Sangguniang Panglungsod thereof, respectively, were charged administratively on various charges, among them, abuse of authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable violation of the Constitution, and arbitrary detention. Hearing on the charges ensued and the Respondent DILG, upon finding of probable cause and reasons, issued successive preventive suspension orders against Petitioner Mayor. Before the SC, Petitioners primary argument is that the DILG Secretary (as Presidents alter ego) is devoid, in any event, of any authority to suspend and remove local officials. DECISION: 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. In the case at bar, the DILG Secretary, the Presidents alter ego, in consonance with the specific provisions of BP337 (the existing Local Govt Code) can suspend Petitioners. Supervision is not incompatible with disciplinary authority. As this Court held in Ganzon vs. Cayanan, 104 Phil 484, 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. While the respondent Secretary, as Presidents alter ego, under the existing Local Govt Code, has the power to suspend the petitioner, such power cannot be exercised oppressively. Ten administrative cases have been successively filed against the city mayor. The latter has been made to serve a total of 120 days of suspension for the first two cases and the respondent Secretary has issued another order preventively suspending the former for antoehr 60 days, the third time in twenty months. We are allowing the mayor to suffer the duration of his third suspension. Insofar as the remaining charges are concerned, we are urging the DILG, upon finality of this decision to undertake steps to expedite the same, subject to the mayors 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. Section 26, LGC National agency/GOCC (in planning/implementation) of a project/program have DUTY TO CONSULT LGU on objectives/goals, impact to the people in terms of environmental/ecological balance and measures to prevent/minimize adverse effects.

Note: project/Program intended may cause pollution, climactic change, depletion of non-renewable resources, loss of cropland, rangeland, forest cover or extinction of animal or plant species. Section 27, LGC (read alongside Sec. 2 and Sec. 26) - Prior consultation with LGU (plus prior approval by sanggunian) is indispensable for implementation of program/project. Note: If project results in eviction, appropriate relocation sites to be provided. See: REPUBLIC vs. CITY OF DAVAO, G.R. No. 148622, 9/12/2002; LINA VS. PANO 364 SCRA 76 2. LGU PNP relations -Section 28, LGC LGU Power of Operational Supervision and Control over PNP as provided under RA 6975 (DILG Act of 1990) amended by RA 8551 (PNP Reorganization Act of 1991). These laws govern the extent of operational supervision and control of local chief executive over police force, fire protection unit and jail management assigned in their respective jurisdiction. Note: Governors and mayors, upon having been elected and qualified as such, are automatically deputized as representatives of NAPOLCOM in their respective jurisdiction and as such, they can inspect police forces and units, conduct audit and exercise such other functions as may be duly authorized. Operational Control and Supervision (OCS), defined power to direct, oversee, superintend, the day to day functions of police investigation of crimes and crime prevention activities and traffic control in accordance with rules and regulations issued by the NAPOLCOM. It includes the power to employ and deploy police personnel and units. Note: OCS for GOVERNOR: (a) choose the provincial police director from a list of three eligibles recommended by the PNP Director; and (b) as chair of peace and order council, oversee implementation of provincial public safety plan. (Sec. 64, RA8551) Note: OCS for CITY/MUNICIPAL MAYOR: includes power to: (i) choose chief of police from list of 5 eligibles recommeneded by provincial police director, preferably from same province, city or municipality, no OIC to be for more than 30 days; local peace and order council through Mayor may recommend recall/reassignment of chief of police when in its perception, the latter has been ineffective in combating crime or maintaining peace and order in the LGU, relief shall be based on guidelines established by NAPOLCOM; (ii) recommend to provincial police director, transfer, reassignment or detail of PNP members outside their respective city/town residences; (iii) authority to recommend from list of eligibles previously screened by local peace and order council appointment of new PNP members to be assigned to the respective cities/municipalities without which no such appointments shall be attested. Whenever practicable and consistent with requirements of service, PNP members shall be assigned to the city/municipaliy of their residence; (iv) control and supervision of anti-gambling operation within its jurisdiction. NOTE: Exercise operational supervision and control over PNP units in their respective jurisdiction, except, 30-day period immediately preceding and 30 days after any national or local and barangay elections in which instances, police under authority of COMELEC.

Note: City/Municipal mayors, in coordination with local peace and order council which he CHAIRS, shall develop an integrated area/community public safety plan embrancing a priority of action and program thrusts for implementation by local PNP stations. ANDAYA vs. RTC 319 SCRA 696 PNP RD Andaya submitted a list of 5 eligibles not including the name of P/Chief Insp. Andres Sarmiento, to Mayor of Cebu City. Mayor Garcia wants the name of Sarmiento on the list. Andaya claims Sarmiento not qualified. SC held that, Mayor has no power to appoint, has only limited power of selecting, one from among list of eligibles to be named chief of police. Mayor cannot require Regional Director to include the name of any officer, no matter how qualified, in the list.

NOTE: Unless reversed by President, deputization may be withdrawn/revoked by Commission after consultation with Provincial Governor and congressman concerned. Deputization, upon good cause shown, may be restored by President directly or through the Commission. Withdrawal/Revocation may be on grounds of frequent unauthorized absence; abuse of authority; providing material support to criminal elements; engaging in acts inimical to national security or which negate effectiveness of peace and order campaign. NOTE: LGU DISCIPLINARY POWERS OVER PNP MEMBERS City/Municipal mayors, after due notice and summary hearing, shall impose DISCIPLINARY PENALTIES for minor offenses committed by PNP membes assigned to their respective jurisdiction as provided in Section 41 of RA6975 (not involving moral turpitude, includes, but not limited to, simple misconduct, insubordination, frequent absences, tardiness, habitual drunkenness, gambling as prohibited by law). RELATED ITEMS INVOLVING LGU CONTAINED IN RA 6975 (DILG Act of 1990): Section 55 Bureau of Fire Protection tasked with prevention and suppression of destructive fires, investigate all causes of fire,file complaint with fiscal; composed of provincial/district offices and city/municipal stations; LGU at city and municipal levels shall be responsible for fire protection and various emergency services such as rescue and evaluation of injured people at fire-related incidents and in general, all fire prevention and suppression measures to secure the safety of life and property of citizenry. Section 56 At least 1 fire station with adequate firefighting facilities and equipment for provincial capitol, city and municipality; LGU to provide the necessary site for the fire station. Section 60 Bureau of Jail Management and Penology supervision and control over all city and municipal jails. Provincial jails shall be supervised and controlled by Provincial government within its jurisdiction whose expenses shall be subsidized by National Government for not more than three years after effectivity of RA6975. 3. INTER-LOCAL GOVERNMENT RELATIONS - Section 29, LGC Province has SUPERVISORY POWER (or oversight power but does not include any restraining authority over supervised party) of province over components but not over highly urbanized and independent component cities; Province (through Governor) shall ensure that every component city/municipality within its territorial jurisdiction acts within scope of its prescribed powers and functions.

Section 30, LGC Rule: Governor has power of review of all executive orders promulgated by component cities/municipalities within his jurisdiction. Exception: otherwise provided under the Constitution and special statues. - city/municipal mayor shall review all executive orders promulgated by the punong barangay within his jurisdiction. NOTE: It is mandatory upon these named higher local chiefs to review executive orders of the lower local chiefs. NOTE: Review to ensure that executive orders are within the powers granted by law and in conformity with the provincial/city/municipal ordinances, as the case may be, that is, to ensure that such orders do not violate existing law/ordinance. NOTE: Executive order submitted ot review authority within 3 days from issuance; inaction within 30 days from submission, the same is deemed consistent with law and therefore valid. Section 31, LGC Municipal questions (questions affecting the municipality) are to be submitted ot the municipal legal officer, if none, to the provincial legal officer, if none, to provincial prosecutor. Section 32, LGC City/Municipality has power of general supervision over component barangays to ensure said barangays act within the scope of their prescribed powers and functions. Section 33, LGC LGUs through appropriate ordinance, may group themselves, consolidate or coordinate their efforts/services and resources for the purpose commonly beneficial to them. For such undertaking, LGUs, upon approval of sangguniang concerned, after public hearing conducted therefor, shall contribute funds, real estate, equipment and other property, appoint/assign personnel under terms agreed upon by participating LGU through a memorandum of agreement. 4. LGU PEOPLESS AND NON-GOVTAL ORGANIZATIONS Peoples organizations are bonafide associations of citizens with demonstrated capacity to promote public interest and with identifiable leadership, membership and structure (Art. XIII, Section 15 of 1987 Constitution). Section 16, Art. XIII of the Constitution The right of the people and their organizations to effective and reasonable levels of social, political and economic decision-making shall not be abridged. The State, by law, shall facilitate the establishment of adequate consultation mechanisms. NOTE: Sections 34, 35 and 36 of LGC implement Section 16, Art. XIII of the 1987 Constitution. Section 34, LGC LGU to promote establishments and operation of PO and NGO to become active partners in pursuit of local autonomy. Section 35, LGC LGU may enter joint ventures and such other cooperative arrangements with PO and NGO to engage in delivery of certain basic services, capability and livelihood projects. Sectin 36, LGC LGU may through local chief executive with the concurrence of sanggunian, provide assistance, financial or otherwise to such PO and NGO is for economic, socially-oriented, environmental or cultural projects to be implemented within its territorial jurisdiction.