G.R. No.

199439               April 22, 2014

CITY OF GENERAL SANTOS vs. COMMISSION ON AUDIT

STATEMENT FACTS
The mayor of General Santos City, Pedro B. Acharon, Jr., issued
Executive Order No. 40, series of 2008, creating management teams pursuant
to its organization development program. Mayor Pedro B. Acharon, Jr.
conducted a process and practice review for each department, section, and unit
of the local government. The product was an organization development
masterplan adopted as Executive Order No. 13. This is followed by Resolution
No. 004, requesting for the mayor’s support for GenSan SERVES, an early
retirement program to be proposed to the Sangguniang Panlungsod. Moreover,
Ordinance No. 08, was passed together with its implementing rules and
regulations, which provides for separation benefits for sickly employees who
have not yet reached retirement age The passing of Ordinance No. 08, was not
contested by respondent Commission on Audit. The city’s audit team leader,
sent a query on the legality of the ordinance to respondent Commission on
Audit’s director. Respondent Commission’s regional director agreed that the
grant lacked legal basis and was contrary to the GSIS Act. He forwarded the
matter to respondent Commission’s Office of General Counsel, for a more
authoritative opinion. Consequently, it releases an opinion explaining that
Ordinance No. 08 partakes of a supplementary retirement benefit plan. In its
view, Section 28, paragraph (b) of Commonwealth Act No. 186, as amended,
prohibits government agencies from establishing supplementary retirement or
pension plans from the time the Government Service Insurance System charter
took effect while those plans already existing when the charter was enacted
were declared abolished.

ISSUES
WHETHER RESPONDENT COMMISSION ON AUDIT COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT CONSIDERED ORDINANCE NO. 08,
SERIES OF 2009, IN THE NATURE OF AN EARLY RETIREMENT PROGRAM
REQUIRING A LAW AUTHORIZING IT FOR ITS VALIDITY

STATEMENT OF THE CASE

The passing of Ordinance No. 08, was not contested by respondent
Commission on Audit. The city’s audit team leader, sent a query on the legality
of the ordinance to respondent Commission on Audit’s director. Respondent
Commission’s regional director agreed that the grant lacked legal basis and
was contrary to the GSIS Act. He forwarded the matter to respondent
Commission’s Office of General Counsel, for a more authoritative opinion.
Consequently, it releases an opinion explaining that Ordinance No. 08 partakes
of a supplementary retirement benefit plan. In its view, Section 28, paragraph
(b) of Commonwealth Act No. 186, as amended, prohibits government agencies
from establishing supplementary retirement or pension plans from the time the
Government Service Insurance System charter took effect while those plans
already existing when the charter was enacted were declared abolished.
Petitioner city, through then mayor, Pedro B. Acharon, Jr., filed a letter-
reconsideration dated June 7, 2010. They followed through with two letters
addressed to respondent Commission’s chairman dated July 26, 2010 and
October 6, 2010, respectively, for the reconsideration of COA-LSS Opinion No.
2010-021. Respondent Commission on Audit treated these letters as an appeal.
On January 20, 2011, it rendered its decision denying the appeal and affirming
COA-LSS Opinion No. 2010-021. It also denied reconsideration by resolution
dated October 17, 2011.

RULING
No. The court explained that the Commission on Audit has the duty to
make its own assessment of the merits of the disallowance and need not be
limited to a review of the grounds relied upon by the auditor of the agency.
It was held that findings of administrative agencies are generally respected,
unless found to have been tainted with unfairness that amounted to grave
abuse of discretion. It is the general policy of the Court to sustain the decisions
of administrative authorities, especially one which is constitutionally-created
not only on the basis of the doctrine of separation of powers but also for their
presumed expertise in the laws they are entrusted to enforce. Findings of
administrative agencies are accorded not only respect but also finality when
the decision and order are not tainted with unfairness or arbitrariness that
would amount to grave abuse of discretion. It is only when the COA has acted
without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, that this Court entertains a petition
questioning its rulings.
The Court agrees with respondent Commission on Audit but only insofar
as Section 5 of the ordinance is concerned. The Court declares Section 6 on
post-retirement incentives as valid. The constitutional mandate for local
autonomy supports petitioner city’s issuance of EO No. 40, series of 2008,
creating change management teams as an initial step for its organization
development masterplan. Thus, consistent with the state policy of local
autonomy as guaranteed by the 1987 Constitution, under Section 25, Article II
and Section 2, Article X, and the Local Government Code of 1991. The Court
declares that the grant and release of the hospitalization and health care
insurance benefits given to petitioner’s officials and employees were validly
enacted. Local autonomy allows an interpretation of Sections 76 and 16 as
granting petitioner city the authority to create its organization development
program. In any case, petitioner city is authorized by Sec. 458 of the Local
Government Code to approve ordinances to provide for the care of the sick.
Thus, the cash gift for the sickly employees, lifetime free medical consultation
in petitioner city's hospital, and other similar benefits under Section 6 of the
ordinance are valid.

DOCTRINES
the general welfare clause - the power to streamline and reorganize
Section 76. Organizational Structure and Staffing Pattern. - Every local
government unit shall design and implement its own organizational structure
and staffing pattern taking into consideration its service requirements and
financial capability, subject to the minimum standards and guidelines
prescribed by the Civil Service Commission.
Section 16. General Welfare. - Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as
powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government units
shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities, improve
public morals, enhance economic prosperity and social justice, promote full
employment among their residents, maintain peace and order, and preserve
the comfort and convenience of their inhabitants.

devolution of powers
Section 5, paragraph (a) of the Local Government Code states that "any
provision on a power of a local government unit shall be liberally interpreted in
its favor, and in case of doubt, any question thereon shall be resolved in favor
or devolution of powers x x x.”
Section 5, paragraph (c) also provides that "the general welfare provisions in
this Code shall be liberally interpreted to give more powers to local government
units in accelerating economic development and upgrading the quality of life
for the people in the community.”

Power to Approve Ordinances for the care of the sick

SECTION 458. – Powers, Duties, Functions and Compensation. – (a) The
Sangguniang Panlungsod, as the legislative body of the city, shall enact
ordinances, approve resolutions and appropriate funds for the general welfare
of the city and its inhabitants pursuant to section 16 of this Code and in the
proper exercise of the corporate powers of the city as provided for under section
22 of this Code, and shall:
xxxx
(5) Approve ordinances which shall ensure the efficient and effective delivery of
the basic services and facilities as provided for under Section 17 of this Code,
and in addition to said services and facilities, shall:
xxxx
(xiv) Provide for the care of disabled persons, paupers, the aged, the sick,
persons of unsound mind, abandoned minors, juvenile delinquents, drug
dependents, abused children and other needy and disadvantaged persons,
particularly children and youth below eighteen (18) years of age; and, subject
to availability of funds, establish and provide for the operation of centers and
facilities for said needy and disadvantaged persons[.]
G.R. No. 131512           January 20, 2000
LAND TRANSPORTATION OFFICE [LTO] vs. CITY OF BUTUAN

STATEMENT OF FACTS
The Sangguniang Panglungsod ("SP") of Butuan, passed SP Ordinance
No. 916-92 entitled "An Ordinance Regulating the Operation of Tricycles-for-
Hire, providing mechanism for the issuance of Franchise, Registration and
Permit, and imposing Penalties for Violations thereof and for other Purposes."
The ordinance provided for, among other things, the payment of franchise fees
for the grant of the franchise of tricycles-for-hire, fees for the registration of the
vehicle, and fees for the issuance of a permit for the driving thereof.
Petitioner LTO explains that one of the functions of the national
government that, indeed, has been transferred to local government units is the
franchising authority over tricycles-for-hire of the Land Transportation
Franchising and Regulatory Board ("LTFRB") but not, it asseverates, the
authority of LTO to register all motor vehicles and to issue to qualified persons
of licenses to drive such vehicles.

ISSUE
Whether or not the power of the Land Registration Office (LTO) to register
tricycles and to issue licenses for the driving thereof, has been devolved to local
government units.

STATEMENT OF THE CASE

The Court is asked in this instance to resolve the issue of whether under
the present set up the power of the Land Registration Office ("LTO") to register,
tricycles in particular, as well as to issue licenses for the driving thereof, has
likewise devolved to local government units. The Regional Trial Court of Butuan
City held that the authority to register tricycles, the grant of the corresponding
franchise, the issuance of tricycle drivers' license, and the collection of fees
therefor had all been vested in the Local Government Units. Accordingly, it
decreed the issuance of a permanent writ of injunction against LTO,
prohibiting and enjoining LTO, as well as its employees and other persons
acting in its behalf, from (a) registering tricycles and (b) issuing licenses to
drivers of tricycles. The Court of Appeals, on appeal to it, sustained the trial
court.1âwphi1.nêtThe adverse rulings of both the court a quo and the appellate
court prompted the LTO to file the instant petition for review on certiorari to
annul and set aside the decision, dated 17 November 1997, of the Court of
Appeals affirming the permanent injunctive writ order of the Regional Trial
Court of Butuan City.
HELD
No, It is within the authority of the LTO to register and license all
vehicles while the power to franchise and regulate had been vested in the
LTFRB, as provided under R.A. No. 4136, otherwise known as Land
Transportation and Traffic Code. Moreover, the Supreme Court held that only
the franchising authority of the LTFRB has been devolved to LGUs under the
Local Government Code; functions of the LTO were not devolved to the LGUs.
Thus, the decision of the lower courts’ prohibition against LTO in registering
and licensing tricycles is reversed and the Supreme Court enjoins LTO to
resume their functions.

DOCTRINE
Imperium in imperio principle
Imperium in imperio principle entails a state within
a state, inclusive of deep states or other forces which operate with sovereign-
like impunity within a polity. The 1987 Constitution of the Republic of the
Philippines seeks to strengthen local units and ensure their viability, clearly,
however, it has never been the intention of that organic law to create
an imperuim in imperio and install an infra sovereign political subdivision
independent of a single sovereign state.
JOHANNALYN M. SANCHEZ
JD-1

G.R. No. 210551               June 30, 2015

JOSE J. FERRER, JR., Petitioner,
vs.
CITY MAYOR HERBERT BAUTISTA, CITY COUNCIL OF QUEZON CITY,
CITY TREASURER OF QUEZON CITY, and CITY ASSESSOR OF QUEZON
CITY, Respondents.

Statement of Facts
On October 17, 2011, respondent Quezon City Council enacted
Ordinance No. SP-2095, S-2011, or the Socialized Housing Tax of Quezon City.
the Socialized Housing Tax ( SHT ) shall be utilized by the Quezon City
Government for the following projects: (a) land purchase/land banking; (b)
improvement of current/existing socialized housing facilities; (c) land
development; (d) construction of core houses, sanitary cores, medium-rise
buildings and other similar structures; and (e) financing of public-private
partners hip agreement of the Quezon City Government and National Housing
Authority ( NHA ) with the private sector. On the other hand, Ordinance No.
SP-2235, S-2013 was enacted and took effect ten days. The proceeds collected
from the garbage fees on residential properties shall be deposited solely and
exclusively in an earmarked special account under the general fund to be
utilized for garbage collections. Petitioner alleges that he is a registered co-
owner of a 371-square-meter residential property in Quezon City which is
covered by Transfer Certificate of Title (TCT ) No. 216288, and that, on January
7, 2014, he paid his realty tax which already included the garbage fee in the
sum of Php100.00. The instant petition was filed on January 17, 2014. The
court then issued a TRO which enjoined the enforcement of Ordinance Nos. SP-
2095 and SP-2235 and required respondents to comment on the petition
without necessarily giving due course thereto. Respondents filed their
Comment with urgent motion to dissolve the TRO.

Statement of the Case

On October 17, 2011, respondent Quezon City Council enacted Ordinance No.
SP-2095, S-2011, or the Socialized Housing Tax of Quezon City. On the other
hand, Ordinance No. SP-2235, S-20135 was enacted on December 16, 2013
and took effect ten days after when it was approved by respondent City Mayor.
Petitioner alleges that he is a registered co-owner of a 371-square-meter
residential property in Quezon City which is covered by Transfer Certificate of
Title (TCT ) No. 216288, and that, on January 7, 2014, he paid his realty tax
which already included the garbage fee. The instant petition was filed on
January 17, 2014. We issued a TRO on February 5, 2014, which enjoined the
enforcement of Ordinance Nos. SP-2095 and SP-2235 and required
respondents to comment on the petition without necessarily giving due course
thereto. Respondents filed their Comment with urgent motion to dissolve the
TRO on February 17, 2014. Thereafter, petitioner filed a Reply and a
Memorandum on March 3, 2014 and September 8, 2014, respectively.

ISSUE:
Whether the Local Government Code allow the imposition of Socialized Housing
Tax considering there is already a property tax?

Held:
Yes. The Local Government allow the imposition of Socialized Housing Tax
(SHT). Under the general welfare clause of the Local Government Code, local
governments possess the power to enact measure that will benefit the people.
The foundation of this is the police power. The general welfare clause is the
delegation in statutory form of the police power of the State to LGUs.The tax is
not a pure exercise of taxing power or merely to raise revenue; it is levied with
a regulatory purpose. The levy is primarily in the exercise of the police power
for the general welfare of the entire city. It is greatly imbued with public
interest. Removing slum areas in Quezon City is not only beneficial to the
underprivileged and homeless constituents but advantageous to the real
property owners as well.

Doctrines:
Corporate Powers
In this jurisdiction, pursuant to Section 16 of the LGC and in the proper
exercise of its corporate powers under Section 22 of the same, the Sangguniang
Panlungsod of Quezon City, like other local legislative bodies, is empowered to
enact ordinances, approve resolutions, and appropriate funds for the genera l
welfare of the city and its inhabitants.

General Welfare Clause

Section 16 of the LGC provides:
SECTION 16. General Welfare . – Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as
powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government units
shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities, improve
public morals, enhance economic prosperity and social justice, promote full
employment among their residents, maintain peace and order, and preserve
the comfort and convenience of their inhabitants. The general welfare clause is
the delegation in statutory form of the police power of the State to LGUs. The
provisions related thereto are liberally interpreted to give more powers to LGUs
in accelerating economic development and upgrading the quality of life for the
people in the community. Wide discretion is vested on the legislative authority
to determine not only what the interests of the public require but also what
measures are necessary for the protection of such interests since the
Sanggunian is in the best position to determine the needs of its constituents.

Imperium in Imperio Principle

LGUs must be reminded that they merely form part of the whole; that the
policy of ensuring the autonomy of local governments was never intended by
the drafters of the 1987 Constitution to create an imperium in imperio and
install an intra-sovereign political subdivision independent of a single sovereign
state. Furthermore, LGUs are able to legislate only by virtue of a valid
delegation of legislative power from the national legislature; they are mere
agents vested with what is called the power of subordinate legislation.
G.R. No. 195770               July 17, 2012
AQUILINO Q. PIMENTEL, JR., SERGIO TADEO and NELSON
ALCANTARA, Petitioners,
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA and SECRETARY CORAZON
JULIANO-SOLIMAN OF THE DEPARTMENT OF SOCIAL WELFARE and
DEVELOPMENT (DSWD), Respondents.

FACTS:
For the Court’s consideration in this Petition for Certiorari and
Prohibition is the constitutionality of certain provisions of Republic Act No.
10147 or the General Appropriations Act (GAA) of 2011 which provides a P21
Billion budget allocation for the Conditional Cash Transfer Program (CCTP)
headed by the Department of Social Welfare & Development (DSWD).
Petitioners seek to enjoin respondents Executive Secretary Paquito N. Ochoa
and DSWD Secretary Corazon Juliano-Soliman from implementing the said
program on the ground that it amounts to a "recentralization" of government
functions that have already been devolved from the national government to the
local government units.

Statement of the Case:

In 2007, the DSWD embarked on a poverty reduction strategy with the
poorest of the poor as target beneficiaries. Dubbed "Ahon Pamilyang Pilipino,"
it was pre-pilot tested in the municipalities of Sibagat and Esperanza in
Agusan del Sur; the municipalities of Lopez Jaena and Bonifacio in Misamis
Occidental, the Caraga Region; and the cities of Pasay and Caloocan upon the
release of the amount of P50 Million Pesos under a Special Allotment Release
Order (SARO) issued by the Department of Budget and Management. On July
16, 2008, the DSWD issued Administrative Order No. 16 setting the
implementing guidelines for the project renamed "Pantawid Pamilyang Pilipino
Program" (4Ps). Petitioner challenges before the Court the disbursement of
public funds and the implementation of the CCTP which are alleged to have
encroached into the local autonomy of the LGUs.

ISSUE:
Whether or not the program is contrary to the precepts of local autonomy
and the avowed policy of decentralization.

HELD:
 No. Petitioners have failed to discharge the burden of proving the
invalidity of the provisions under the GAA of 2011. The Constitution declares it
a policy of the State to ensure the autonomy of local governments. The essence
of this express reservation of power by the national government is that, unless
an LGU is particularly designated as the implementing agency, it has no power
over a program for which funding has been provided by the national
government under the annual general appropriations act, even if the program
involves the delivery of basic services within the jurisdiction of the LGU. Under
the Philippine concept of local autonomy, the national government has not
completely relinquished all its powers over local governments, including
autonomous regions. Only administrative powers over local affairs are
delegated to political subdivisions. The purpose of the delegation is to make
governance more directly responsive and effective at the local levels. 

Doctrines:
Decentralization
It is the process of redistributing or dispersing functions powers, people
or things away from a central location or authority. It transfer of powers from
central government to lower levels in a political-administrative and territorial
hierarchy.

Decentralization of Administration
There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden
the base of government power and in the process to make local governments
‘more responsive and accountable’ and ‘ensure their fullest development as
self-reliant communities and make them more effective partners in the pursuit
of national development and social progress.’ At the same time, it relieves the
central government of the burden of managing local affairs and enables it to
concentrate on national concerns. The President exercises ‘general supervision’
over them, but only to ‘ensure that local affairs are administered according to
law.’ He has no control over their acts in the sense that he can substitute their
judgments with his own.

Decentralization of Power
Decentralization of power, on the other hand, involves an abdication of
political power in the [sic] favor of local governments [sic] units declared to be
autonomous. In that case, the autonomous government is free to chart its own
destiny and shape its future with minimum intervention from central
authorities. According to a constitutional author, decentralization of power
amounts to ‘self-immolation,’ since in that event, the autonomous government
becomes accountable not to the central authorities but to its constituency.
G.R. No. 199802

CONGRESSMAN HERMILANDO I. MANDANAS vs.

EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.

STATEMENT OF THE FACTS

The Congress has enacted Republic Act (RA 7160) otherwise known as
the Local Government Code. It is enacted in order to guarantee and ensure the
fiscal autonomy of the LGUs and provides that the LGU should have a part or
share in the National Internal Revenue. The Internal Revenue Allotment which
is the share of the LGUs has been regularly released to the LGUs. The IRA is
then determined on the basis of the actual collections of the National Internal
Revenue Taxes (NIRTs).
In the case at bar, the petitioners assert that certain collections of of
NIRTs by the Bureau of Customs have not been included in the base amounts
for the computation of IRA. Such taxes, should from part of the base for they
form part of the NIRTs. The petitioner also assails that there be a release of the
additional amount to the LGUs as their IRA for FY 2012. Congressman Garcia,
asserted that there be an insertion of words “Internal Revenue” in the phrase
national taxes that is found in Section 284 of the Local Government Code
caused the diminution of the base for determining the just share of the LGUs.
He also want to declare it unconstitutional and the exclusion of taxes be
similarly constitutionally untenable.

STATEMENT OF THE CASE

This is a special civil action for certiorari, prohibition and mandamus
assailing the manner the General Appropriations Act (GAA) for FY
2012 computed the IRA for the LGUs. Certain collections of NIRTs by the
Bureau of Customs (BOC) specifically excise taxes, value added taxes (VATs)
and documentary stamp taxes (DSTs) have not been included in the base
amounts for the computation of the IRA.

ISSUE
Whether or not the exclusion of certain national taxes from the base
amount for the computation of the just share of the LGUs in the national taxes
is constitutional.
 
RULING
The Section 286 of the LGC deviates from the Section 6 of Article X of the
1987 Constitution. Art. X Sec. 6 of the 1987 Constitution mentions national
taxes as the source of the just share of the LGUs while Section 284 of the LGC
states that the share of LGUs shall be taken from national internal revenue
taxes (NIRTs) instead. Congress has exceeded its constitutional boundary by
limiting to the NIRTs the base from which to compute the just share of the
LGUs. Section 284 has effectively deprived the LGUs from deriving their just
share from other national taxes, like the customs duties. Although it has the
primary discretion to determine and fix the just share of the LGUs in the
national taxes, Congress cannot disobey the express mandate of Section 6,
Article X of the 1987 Constitution for the just share of the LGUs to be derived
from the national taxes. The phrase as determined by law in Section 6 follows
and qualifies the phrase just share, and cannot be construed as qualifying the
succeeding phrase in the national taxes. The intent of the people in respect of
Section 6 is that the base for reckoning the just share of the LGUs should
include all national taxes. To read Section 6 differently as requiring that the
just share of LGUs in the national taxes shall be determined by law is
tantamount to the unauthorized revision of the 1987 Constitution. However,
the petitioners' prayer for the payment of the arrears of the LGUs' just share on
the theory that the computation of the base amount had been unconstitutional
all along cannot be granted. It is true that with declaration that the IRA is not
in accordance with the constitutional determination of the just share of the
LGUs in the national taxes, logic demands that the LGUs should receive the
difference between the just shares they should have received had the LGC
properly reckoned. This puts the National Government in arrears as to the just
share of the LGUs. However, doctrine of operative fact recognizes the existence
of the law or executive act prior to the determination of its unconstitutionality
as an operative fact that produced consequences that cannot always be erased,
ignored or disregarded. In short, it nullifies the void law or executive act but
sustains its effects. It provides an exception to the general rule that a void or
unconstitutional law produces no effect. Hence, the effect of the declaration
through the decision of the unconstitutionality of Section 284 of the LGC and
its related laws as far as they limited the source of the just share of the LGUs
to the NIRTs is prospective.
 
DOCTRINE

Subordinate Legislation
Subordinate Legislation is power to promulgate rules and regulations
within what is provided in the legislative enactment.

Doctrine of operative fact

Doctrine of operative fact recognises the existence of the law or executive
act prior to the determination of its unconstitutionality as an operative fact
that produced consequences that cannot always be erased, ignored or
disregarded. In short, it nullifies the void law or executive act but sustains its
effects. It provides an exception to the general rule that a void or
unconstitutional law produces no effect.