G.R. No.

111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners, vs. PRYCE
PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING CORPO-RATION,
respondents.

FACTS:

The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR
decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a
building belonging to Pryce Properties Corporation, Inc., one of the herein private respondents,
renovated and equipped the same, and prepared to inaugurate its casino there during the
Christmas season.

The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On
December 7, 1992, it enacted Ordinance No. 3353 (AN ORDINANCE PROHIBITING THE
ISSUANCE OF BUSINESS PERMIT AND CANCELLING EXISTING BUSINESS PERMIT TO ANY
ESTABLISHMENT FOR THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION
THEREOF FOR THE OPERATION OF CASINO).

Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 (AN
ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY FOR
VIOLATION THEREFOR).

ISSUE:

WON Ordinance No. 3355 and Ordinance No. 3375-93 as enacted by the Sangguniang
Panlungsod of Cagayan de Oro City are valid. NO.

RULING:

The tests of a valid ordinance are well established. A long line of decisions has held that to be
valid, an ordinance must conform to the following substantive requirements:

1) It must not contravene the constitution or any statute.

2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.

6) It must not be unreasonable.

PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games
of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the
public policy embodied therein insofar as they prevent PAGCOR from exercising the power
conferred on it to operate a casino in Cagayan de Oro City.

The 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.

This basic relationship between the national legislature and the local government units has not
been enfeebled by the new provisions in the Constitution strengthening the policy of local
autonomy. Without meaning to detract from that policy, we here confirm that Congress retains
control of the local government units although in significantly reduced degree now than under
our previous Constitutions. The power to create still includes the power to destroy. The power
to grant still includes the power to withhold or recall. True, there are certain notable
innovations in the Constitution, like the direct conferment on the local government units of the
power to tax, which cannot now be withdrawn by mere statute. By and large, however, the
national legislature is still the principal of the local government units, which cannot defy its will
or modify or violate it.

The Court understands and admires the concern of the petitioners for the welfare of their
constituents and their apprehensions that the welfare of Cagayan de Oro City will be
endangered by the opening of the casino. Nevertheless, we must recognize the power of the
legislature to decide, in its own wisdom, to legalize certain forms of gambling, as was done in
P.D. 1869 and impliedly affirmed in the Local Government Code.

G.R. No. 89651 November 10, 1989

DATU FIRDAUSI I.Y. ABBAS, DATU BLO UMPAR ADIONG, DATU MACALIMPOWAC
DELANGALEN, CELSO PALMA, ALI MONTAHA BABAO, JULMUNIR JANNARAL, RASHID SABER,
and DATU JAMAL ASHLEY ABBAS, representing the other taxpayers of Mindanao, petitioners,
vs. COMMISSION ON ELECTIONS, and HONORABLE GUILLERMO C. CARAGUE, DEPARTMENT
SECRETARY OF BUDGET AND MANAGEMENT, respondents.

G.R. No. 89965 November 10, 1989

ATTY. ABDULLAH D. MAMA-O, petitioner, vs. HON. GUILLERMO CARAGUE, in his capacity as
the Secretary of the Budget, and the COMMISSION ON ELECTIONS, respondents.

FACTS:
The present controversy relates to the plebiscite in thirteen (13) provinces and nine (9) cities in
Mindanao and Palawan, scheduled for November 19, 1989, in implementation of Republic Act
No. 6734, entitled “An Act Providing for an Organic Act for the Autonomous Region in Muslim
Mindanao.”

These consolidated petitions pray that the Court: (1) enjoin the Commission on Elections
(COMELEC) from conducting the plebiscite and the Secretary of Budget and Management from
releasing funds to the COMELEC for that purpose; and (2) declare R.A. No. 6734, or parts
thereof, unconstitutional.

One of the provisions impugned by the petitioners is Article XIX, section 13 of R.A. No. 6734
which, among others, states:

... Provided, That only the provinces and cities voting favorably in such plebiscite shall be
included in the Autonomous Region in Muslim Mindanao. The provinces and cities which in the
plebiscite do not vote for inclusion in the Autonomous Region shall remain in the existing
administrative regions: Provided, however, that the President may, by administrative
determination, merge the existing regions.

According to petitioners, said provision grants the President the power to merge regions, a
power which is not conferred by the Constitution upon the President. That the President may
choose to merge existing regions pursuant to the Organic Act is challenged as being in conflict
with Article X, Section 10 of the Constitution which provides:

No province, city, municipality, or barangay may be created, divided, merged, abolished, or its
boundary substantially altered, except in accordance with the criteria established in the local
government code and subject to approval by a majority of the votes cast in a plebiscite in the
political units directly affected.

ISSUE:

WON Article XIX, section 13 of R.A. No. 6734 is constitutional. YES.

RULING:

It must be pointed out that what is referred to in R.A. No. 6734 is the merger of administrative
regions, i.e. Regions I to XII and the National Capital Region, which are mere groupings of
contiguous provinces for administrative purposes. Administrative regions are not territorial and
political subdivisions like provinces, cities, municipalities and barangays [see Art. X, sec. 1 of the
Constitution]. While the power to merge administrative regions is not expressly provided for in
the Constitution, it is a power which has traditionally been lodged with the President to
facilitate the exercise of the power of general supervision over local governments [see Art. X,
sec. 4 of the Constitution]. There is no conflict between the power of the President to merge
administrative regions with the constitutional provision requiring a plebiscite in the merger of
local government units because the requirement of a plebiscite in a merger expressly applies
only to provinces, cities, municipalities or barangays, not to administrative regions.
NOTE:

Under the Constitution and R.A. No. 6734, the creation of the autonomous region shall take
effect only when approved by a majority of the votes cast by the constituent units in a plebiscite,
and only those provinces and cities where a majority vote in favor of the Organic Act shall be
included in the autonomous region. The provinces and cities wherein such a majority is not
attained shall not be included in the autonomous region. It may be that even if an autonomous
region is created, not all of the thirteen (13) provinces and nine (9) cities mentioned in Article II,
section 1(2) of R.A. No. 6734 shall be included therein. The single plebiscite contemplated by the
Constitution and R.A. No. 6734 will therefore be determinative of (1) whether there shall be an
autonomous region in Muslim Mindanao and (2) which provinces and cities, among those
enumerated in R.A. No. 6734, shall comprise it.

G.R. No. 102782 December 11, 1991

THE SOLICITOR GENERAL, RODOLFO A. MALAPIRA, STEPHEN A. MONSANTO, DAN R.

CALDERON, and GRANDY N. TRIESTE, petitioners, vs. THE METROPOLITAN MANILA
AUTHORITY and the MUNICIPALITY OF MANDALUYONG, respondents.

FACTS:

Ordinance No. 7, Series of 1988, of Mandaluyong, authorized the confiscation of driver’s

licenses and the removal of license plates of motor vehicles for traffic violations.

On May 24,1990, the Metropolitan Manila Authority issued Ordinance No. 11, Series of 1991,
authorizing itself “to detach the license plate/tow and impound
attended/unattended/abandoned motor vehicles illegally parked or obstructing the flow of
traffic in Metro Manila.”

In Metropolitan Traffic Command, West Traffic District vs. Hon. Arsenio M. Gonong, G.R. No.
91023, promulgated on July 13, 1990, the Court held that the confiscation of the license plates
of motor vehicles for traffic violations was not among the sanctions that could be imposed by
the Metro Manila Commission under PD 1605 and was permitted only under the conditions laid
down by LOI 43 in the case of stalled vehicles obstructing the public streets. It was there also
observed that even the confiscation of driver’s licenses for traffic violations was not directly
prescribed by the decree nor was it allowed by the decree to be imposed by the Commission.
No motion for reconsideration of that decision was submitted. The judgment became final and
executory on August 6,1990, and it was duly entered in the Book of Entries of Judgments on
July 13, 1990.

Several complaints were received regarding the confiscation of driver’s license and removal of
front license plate for alleged traffic violation.

ISSUE:
WON Ordinance No. 11-Series of 1991, of the Metropolitan Manila Authority, and Ordinance
No. 7, Series of 1988, of the Municipality of Mandaluyong are valid. NO.

RULING:

The measures in question are enactments of local governments acting only as agents of the
national legislature. Necessarily, the acts of these agents must reflect and conform to the will of
their principal. To test the validity of such acts in the specific case now before us, we apply the
particular requisites of a valid ordinance as laid down by the accepted principles governing
municipal corporations.

According to Elliot, a municipal ordinance, to be valid: 1) must not contravene the Constitution
or any statute; 2) must not be unfair or oppressive; 3) must not be partial or discriminatory; 4)
must not prohibit but may regulate trade; 5) must not be unreasonable; and 6) must be general
and consistent with public policy.

A careful study of the Gonong decision will show that the measures under consideration do not
pass the first criterion because they do not conform to existing law. The pertinent law is PD
1605. PD 1605 does not allow either the removal of license plates or the confiscation of driver’s
licenses for traffic violations committed in Metropolitan Manila. The Commission was allowed
to “impose fines and otherwise discipline” traffic violators only “in such amounts and under
such penalties as are herein prescribed,” that is, by the decree itself. Nowhere is the removal of
license plates directly imposed by the decree or at least allowed by it to be imposed by the
Commission. Notably, Section 5 thereof expressly provides that “in case of traffic violations, the
driver’s license shall not be confiscated.” These restrictions are applicable to the Metropolitan
Manila Authority and all other local political subdivisions comprising Metropolitan Manila,
including the Municipality of Mandaluyong.

The requirement that the municipal enactment must not violate existing law explains itself.
Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative
power from the national legislature (except only that the power to create their own sources of
revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested
with what is called the power of subordinate legislation. As delegates of the Congress, the local
government unit cannot contravene but must obey at all times the will of their principal. In the
case before us, the enactments in question, which are merely local in origin, cannot prevail
against the decree, which has the force and effect of a statute.