Local Government Law (Public Corporation)

August 17, 2019

Why PubCorp when its Local Gov. Law?

- When there’s no doubt as to it being a public corporation, then it is essentially under
government law.

General Principles.

1. Corporation
Q: What makes it a Public Corporation?
A: Giving something life/personality. When it has life, it can act with legal effect. Basically, the idea of a
corporation is having its own personalities.
What are the acts?
- Enter into a contract.
- To sue or be sued.
- To own or acquire its own properties.
*A public corporation exists perpetually until it is abolished. As a corporation, it can carry a name.

*The principle of distinct personality as one of the important characteristics (*Tunio vs Fontanilla)
- an lgu is a corp and it has a personality distinct and separate from its officers, directors or
persons composing it.
- unless there is a showing of bad faith or gross or wanton negligence on their part. To make an
officer of a corporation liable for the negligence of the corporation there must have been upon his part
such a breach of duty as contributed to or helped to bring about, the injury; that is to say, he must be a
participant in the wrongful act.
- 3 Folds-Responsibility Rule (Criminal, Civil or Administrative)

*Read the case Tunio vs Fontanilla.

- Distinction between proprietary or governmental function of the state in order to establish the
liability of the Municipality in the case at bar.

*Read Municipality of Tangkal vs Hon. Balindong

- Mayor is a Muslim, hence, plaintiff filed the case before the Sharia court. The court says no,
regular courts have jurisdiction since Municipality of Tangkal has distinct and separate personality.

2. Distinction of Private and Private Corporation

Private – aims for profits by private individuals
Public – governance of a portion of a state.
Q1: What’s the purpose of having LGUs?
A1: Delegation of duties. And, LGUs can address the needs/grievances of their own territory as they
know their problems, they are closer to them. (Principle of Subsidiaries is the core principle of local
government units).

Q2: The manner of creating of public corporations from private corporations.

A2: Both, law is involved. A public corp is not created pursuant to a law, a PC is created by law, not
pursuant to law. A private corp is created pursuant to a law.
Q3: Whether or not the creation of a corporation based on a contract.
A3: PrivCorp – based on contract; PubCorp – not contract.

*BSP vs COA
- 2 Tests on determining whether Pub or Priv
1. Purpose Test
2.