Local Government Units Vis - A - Vis National Government: Power of General Supervision

DECENTRALIZATION, LOCAL AUTONOMY, POWERS OF MUNICIPAL CORPORATIONS
PART II
PART II: DECENTRALIZATION, LOCAL AUTONOMY, POWERS OF MUNICIPAL CORPORATIONS
1. Local Government Units vis-‐à-‐vis National Government
Power of General Supervision
2. Decentralization, Local Autonomy
3. Intergovernmental Relations
4. Powers of Municipal Corporations/Governments
4.1 Police Power
4.2 Power of Taxation; Local Taxes and Real Property Tax
Local Taxation
Franchises
4.3 Shares of LGUs in National Taxes
4.4 Abatement of Nuisance
4.5 Power of Eminent Domain
4.6 Reclassisifcation of Lands
4.7 Closure and Opening of Roads
4.8 Corporate Powers
4.9 Authority to Negotiate and Secure Grants, Receive Donations, Float Bonds, BOT
4.10 Mayor’s Power over the Police, Operational Control, Suspension
1. LOCAL GOVERNMENT UNITS VIS-‐A-‐VIS NATIONAL GOVERNMENT

Power of general supervision
Drilon v. Lim (1994)

FACTS:
Then Secretary of Justice Franklin M. Drilon, pursuant to the authority granted upon him by Section 187 of the LGC
and upon appeal of concerned parties, declared the Manila Revenue Code null and void for non-‐compliance with the
prescribed procedure in thge enactment of local tax ordinances and for containing provisions contrary to law and
public policy.
Upon appeal to the RTC, the trial judge reversed the order of petitioner and, in addition, declared Section 187 of
the LGC unconstitutional as it gave the Secretary of Justice the power of control over local governments in
violation of the principle of local autonomy mandated by the Constitution. The RTC ruled that the Executive only
had the power of supervision and not control.
HELD:
The SC overruled the trial court insofar as it declared Section 187 unconstitutional. The power of control
encompasses the power to lay down the rules in the accomplishment of an act. If they are not followed, the one in
control may order the act done, re-‐done, or do it himself. On the other hand, the power to supervise only entails a
determination of WON the rules were followed and to have the work done or re-‐done in accordance with
the prescribed rules.
Contrary to the holding of the lower court, the SC said that the provision only gave the Secretary of Justice the
power to supervise, not control, in that the Secretary of Justice could only determine the constitutionality or
legality of the local tax ordinance and revoke them on such grounds. The provision did not em power the Secretary
to substitute his own judgment for the judgment of the LGU; the Secretary was not authorized by Section 187 to
determine whether the law was wise or reasonable or otherwise a generally bad law. He was given no discretion in
the matter.
That notwithstanding, the SC agreed with the trial court in that the procedural requirements for the passage of the
ordinance were fulfilled. The initial decision of the Secretary, it said, was a result of the insufficient time it gave to
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DECENTRALIZATION, LOCAL AUTONOMY, POWERS OF MUNICIPAL CORPORATIONS PART II
the respondents to procure the necessary evidence of such procedural compliance. The Manila Revenue Code was
upheld.
(Note: No mention was made in the final decision regarding the provisions contrary to law and public policy earlier
cited by the Secretary as additional grounds.)
Solicitor General v. Metopolitan Manila Authority (1991)

FACTS:
On July 13, 1990, the Gonong decision was promulgated wherein the Court held that confiscation of license plates
is NOT allowed to be imposed by Metro Manila Authority (MMA) under PD 1605 EXCEPT as provided for under LOI
43 in case of stalled vehicles obstructing the public streets. Likewise, PD 1605 does not allow confiscation of driver's
license.
However, subsequently, a number of confiscations of driver's license and license plates were still committed by
traffic enforcers in Metro Manila. Hence, SC received several letter-‐complaints regarding this matter.
The accused traffic enforcers invoked Ordinance No. 7, Series of 1988 and Ordinance No. 11, Series of 1991 which
both authorize confiscation of driver's license and removal of license plate.
ISSUES:
1. WON there is a valid delegation of legislative power to promulgate the ordinances
2. WON the ordinances were valid
HELD:
1. YES. The requisites of a valid delegation were present namely:
a. Completeness of statute making the delegation
b. Presence of sufficient standard: Public convenience and welfare in this case
2. NO. To test the validity of such acts, apply the particular requisites of a valid ordinance namely:
a. It must not contravene the Constitution or any statute
b. It must not be unfair nor oppressive
c. It must not be partial nor discriminatory
d. It must not prohibit but regulate trade
e. It must not be unreasonable
f. It must be general and consistent with public policy
Applying the Gonong decision, measures under consideration does not pass the first requisite because they are not
conforming to the existing law which was PD 1605 in this case. PD 1605 expressly prohibits removal of license plate
and confiscation of driver's license contrary to the ordinances.
Ganzon vs. CA (1991)

FACTS:
Ganzon was the then mayor of Iloilo City. 10 administrative cases were filed against him on grounds of misfeasance
of office, abuse of authority, oppression, grave misconduct, etc. Finding probable cause for the charges, the Secretary of
Interior issued several 60-‐day preventive suspension orders against Ganzon, possibly reaching 600 days of
suspension. Ganzon appealed the issue to the CA which affirmed the suspension orders by the Secretary. Ganzon then
instituted an action for prohibition against the Secretary in the RTC of Iloilo City where he succeeded in obtaining a
writ of preliminary injunction. He also instituted actions for prohibition before the Court of Appeals but were both
dismissed. The Supreme Court nonetheless issued a temporary restraining order enjoining the
Secretary from implementing his suspension orders. Thus, this petition for review with the argument that that the
1987 Constitution does not authorize the President nor any of his alter ego, including the respondent Secretary, is
devoid, in any event, of any authority to suspend and remove local officials as the 1987 Constitution no longer
allows the President to exercise said power, and instead it supports local autonomy and strengthens the same.
What was given by the present Constitution was mere supervisory power.
ISSUE:
Whether or not the Secretary of Local Government, as the President's alter ego, can suspend and or remove local
officials.
HELD: YES.
• Notwithstanding the change in the Constitutional language, the Constitution did not intend to divest the
legislature of its right, or the President of her prerogative as conferred by existing legislation to provide administrative
sanction against local officials. Autonomy does not contemplate making mini-‐states out of LGUs, and is subject
to the guidance, though not control, of the legislature, albeit the legislative responsibility under the Constitution and
as the "supervision clause" itself suggest-‐is to wean local government units from over-‐ dependence on
the central government. Local autonomy is not instantly self-‐executing, subject to the passage of a LGC, and other
measures to realize autonomy at the local level. The deletion of "as may be provided by law" in Sec. 4, Art. 10 of the
Constitution was meant to stress, sub silencio, the objective of the framers to strengthen local autonomy by severing
congressional control of its affairs.
• Ganzon: that the Constitution has left the President mere supervisory powers, which supposedly excludes the
power of investigation, and denied her control, which allegedly embraces disciplinary authority.
• SC: Legally, "supervision" is not incompatible with disciplinary authority. Mondano v. Silvosa held that:
• → "control" – the power of an officer to alter or modify or nullify or set aside what a subordinate officer had
done in the performance of his duties and to substitute the judgment of the former for test of the latter
• → "supervision" – overseeing or the power or authority of an officer to see that subordinate officers perform
their duties.
• However, "investigating" is not inconsistent with "overseeing", although it is a lesser power than "altering".
Previous jurisprudence did not categorically ban the Chief Executive from exercising acts of disciplinary authority
because she did not exercise control powers, but because no law allowed her to exercise disciplinary authority.
Local governments, under the Constitution, are subject to regulation, however limited, and for no other purpose than
precisely, albeit paradoxically, to enhance self-‐ government.
• Decentralization means devolution of national administration but not power to the local levels.
• → Decentralization of administration – when the central government delegates administrative powers to
political subdivisions to broaden the base of government power and 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." 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, not control.
• → Decentralization of power – an abdication of political power in the favor of local governments units declared to
be autonomous, which are free to chart their own destiny and shape their future with minimum intervention from
central authorities. It amounts to "self-‐immolation," since the autonomous government becomes
accountable not to the central authorities but to its constituency.
• Since Ganzon is facing 10 administrative charges, he is facing the possibility of 600 days of suspension, in the
event that all 10 cases yield prima facie findings. To make Mayor Ganzon serve 600 days of suspension is to
effectively suspend him out of office.
• → A basic assumption of the electoral process implicit in the right of suffrage that the people are entitled to the
services of elective officials of their choice. For misfeasance or malfeasance, they could be proceeded against
administratively or criminally. A preventive suspension may be justified. Its continuance, however, for an
unreasonable length of time raises a due process question. For even if thereafter he were acquitted, in the
meanwhile his right to hold office had been nullified. Clearly, there would be in such a case an injustice suffered by
him. Nor is he the only victim. There is injustice inflicted likewise on the people for having been deprived of his
services.
• The sole objective of a suspension is simply "to prevent the accused from hampering the normal cause of the
investigation with his influence and authority over possible witnesses" or to keep him off "the records and other
evidence. It is a means, and no more, to assist prosecutors in firming up a case against an erring local official.
Under the LGC, it can not exceed 60 days. It is not a penalty, and it is only temporary.
• We are not precluding the President, through the Secretary of Interior from exercising a legal power, yet we are
of the opinion that the Secretary of Interior is exercising that power oppressively, and needless to say, with a grave
abuse of discretion.
Mactan Cebu International Airport Authority v. Marcos (1996).

FACTS::
In 1994, the Cebu City government asked the MCIAA to pay P2.229 million in real estate taxes. MCIAA said that its
charter exempted it from payment of real taxes, and further argued that as an instrumentality of the government
performing governmental functions, it was exempt from the taxes levied by local government units.
ISSUE:
Whether or not the taxing powers given to local government units by the 1987 Constitution exempted government
owned or controlled corporations such as the MCIAA.
HELD:
NO, government owned or controlled corporations are not exempt from real estate taxes levied by LGUs.
RATIO:
Because the general rule is to tax, the exemption must be clear and expressly provided for in the law. The RTC ruled
that the LGC was clear in revoking all tax exemptions or incentives granted, except those specifically provided for in
the LGC, and the MCIAA did not fall under those exemptions.
The SC, in upholding the RTC decision, said the exemptions granted under Sec 133 of the LGC were further
qualified by other sections (232, 234) in the same Code and that, taken together, it was clear the MCIAA was not
exempt from paying realty taxes.
1. While RA 6958, the charter of MCIAA, expressly exempted it from paying taxes, the Local Government Code (RA
7160) later enacted in pursuance of Art X of the 1987 Constitution revoked all exemptions (Sec 193: Unless
otherwise provided for in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons
whether natural or juridical, including government-‐owned or controlled corporations, except local water districts,
cooperatives duly registered under RA No. 6938, non-‐stock and non-‐profit hospitals and educational institutions,
are hereby withdrawn…)
2. MCIAA, however, claimed that it was exempt under Sec 133 (o), which said that the exercise of the taxing
powers of the LGUs shall not extend to…(o) Taxes, fees, charges of any kind on the National Government, its
agencies and instrumentalities, and local government units.
The SC however pointed out that Sec 234 specifically mentioned that exemptions previously granted to or presently
enjoyed by…government owned and controlled corporations were withdrawn upon the effectivity of the Code. It
did not differentiate between GOCCs performing governmental or proprietary functions.
The exemptions given under the LGC were based on ownership (owned by: the Republic, province, city,
municipality, barangay, or a registered cooperative); character (charitable institutions, houses and temples of prayer,
non-‐profit or religious cemeteries); and use of property (if actually, directly, or exclusively used for religious,
charitable, or educational purposes; by local water districts or government-‐owned or controlled
corporations engaged in the supply/distribution of water/electricity; and machinery and equipment used for
pollution control and environmental protection).
While 133 is the general rule (the taxing power of LGUs cannot extend to taxes, fees, charges levied on agencies
and instrumentalities of National Government) it is further qualified by 232 (which allowed LGUs in Metropolitan
Manila to levy real property taxes) and 234 (which, while exempting real property owned by the Republic of the
Philippines or any of its political subdivisions, added the phrase: EXCEPT when the beneficial use thereof had been
granted…to a taxable person.)
Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from
payment of real property taxes granted to natural or juridical persons, including government-‐owned or controlled
corporations, except as provided in the said section, and the petitioner is, undoubtedly, a government-‐owned
corporation, it necessarily follows that its exemption from such tax granted it in Section 14 of its Charter, R.A. No.
6958, has been withdrawn.
3. The question is, is the land exempt from real property taxes, by virtue of 234 (a): property owned by the
Republic of the Philippines…
The SC said NO: While 133 (o) mentioned instrumentalities of the National Government, it pointed out that 234
only mentioned “Republic of the Philippines or its political subdivisions…”
The two terms, Republic of the Philippines and National Government are not interchangeable, the SC said. The first
is the “corporate governmental entity through which the functions of government are exercised throughout the
Philippines, including the various arms through which political authority is made effective…” while National
Government is the “entire machinery of the central government, as distinguished from the different forms of local
governments.”
If Section 234(a) intended to extend the exception therein to the withdrawal of the exemption from payment of
real property taxes under the last sentence of the said section to the agencies and instrumentalities of the National
Government mentioned in Section 133(o), then it should have restated the wording of the latter.
The SC added that the source of this exemption could be traced to PD 464, the Real Property Tax Code, which
exempts real property owned by the Republic of the Philippines or any of its political subdivisions. While the same
provision also exempts GOCCs, it added that the exemption shall not apply to real property the beneficial use of
which has been granted to a taxable person.
So even if the land belonged to the Republic of the Philippines, but has been transferred to a taxable person, it was
still not exempt. Art. 15 of the MCIAA charter transferred the assets to the MCIAA.
The SC pointed out that under its own charter, MCIAA was only exempt from paying real property taxes; it did not
say that the authority was not a taxable person. And even if was not a taxable person for purposes of payment of
real property taxes, it became one through the last paragraph of Sec 234 of the LGC, which withdrew exemptions
from payment of real property tax from “all persons…including GOCCs…”
Province of Negros Occidental v. Commission on Audit(2010)

FACTS:
Petitioner, through an approved Sangguniang Panlalawigan resolution , granted and released the payment for
health care insurance benefits of the province’s officials and employees without any prior approval from the
President, as required by an administrative order. COA disallowed the premium payment for such benefits because
aside from contravening the administrative order, it is allegedly also a form of additional compensation, which is
against the Salary Standardization Law.
ISSUE:
WON the administrative order applies also to LGUs
HELD:
No, the President, pursuant to Art X Sec. 4 of the Constitution can only exercise general supervision, which is the
power of a superior officer to see to it that subordinates perform their functions according to law. This is different
from the power of control , which is to alter, modify, or set aside what a subordinate has done in performance of
his duties. Thus, an administrative order does not apply to LGUs but only to government offices /agencies, and
GOCCs which are under the control of the President. The grant of additional compensation like health insurance
benefits do not need the prior approval of the President.
2. DECENTRALIZATION, LOCAL AUTONOMY
Limbona vs. Mangelin (1989)

FACTS:
Petitioner Sultan Alimbusar Limbona was elected Speaker of the Legislative Assembly of Region XII or Batasang
Pampook of Central Mindanao (Assembly). Consequently, he was invited by the Chairman of the Committee on
Muslim Affairs of the House of Representatives for consultation and dialogue as prelude to the establishment of an
autonomous government. Consistent with the said invitation, Petitioner advised all Assemblymen through the
Acting Secretary of the Assembly that there shall be no session in November as “our presence in the house
committee hearing of Congress takes precedence over any pending business in batasang pampook...” However,
the Assembly (Respondents) still held session in defiance of Petitioner's advice. After declaring the presence of a
quorum, the Speaker Pro-‐Tempore Mangelin was authorized to preside in the session. On Motion to declare the
seat of the Speaker vacant, all Assemblymen in attendance voted in the affirmative. Accordingly, Petitioner filed
before the Supreme Court for the issuance of a restraining order enjoining respondents from proceeding with their
session, and prayed that his election as Speaker of said Legislative Assembly be held valid and subsisting. Pending
further proceedings, Court also received a resolution filed by the Sangguniang Pampook, “Expelling Alimbusar P.
Limbona from Membership of the Sangguniang Pampook Autonomous Region XII.” According to Respondents,
Petitioner filed a case before the Supreme Court against some members of the Assembly on question which should
have been resolved within the confines of the Assembly.
ISSUE:
Are the so-‐called autonomous governments of Mindanao subject to the jurisdiction of the national courts?
(In other words, what is the extent of self-‐government given to the two autonomous governments of Regions IX
and XII?)
HELD:
Yes. An examination of the presidential decree creating the autonomous governments of Mindanao and
promulgated on July 25, 1979 shows that they were never meant to exercise autonomy such that the central
government commits an act of self-‐immolation. First, P.D. No. 1618 mandates that “[t]he President shall have the
power of general supervision and control over Autonomous Regions.” Second, the Sangguniang Pampook, the
legislative arm, is made to discharge chiefly administrative services.
RATIO:
Autonomy is either decentralization of administration or decentralization of power. There is decentralization of
administration when the central government delegates administrative powers to political subdivisions in order to
broaden the base of government power. 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. On the other hand, decentralization of power involves an abdication
of political power in favor of local governments units declared to be autonomous. Because the autonomous
government becomes accountable not to the central authorities but to its constituency, decentralization of power
essentially amounts to “self-‐immolation.”
San Juan vs. Civil Service Commission (1991)

FACTS:
• The position of Provincial Budget Officer (PBO) became vacant for the Province of Rizal.
• The Provincial Governor, Reynaldo San Juan, informed the Department of Budget and Management
(DBM) Director for Region IV, Reynaldo Abella, that Dalisay Santos assumed office as acting PBO pursuant to a
Memo issued by the Governor which also requested the Director to endorse Dalisay Santos to the position of PBO.
• Director Abella instead recommended Cecilia Almajose as PBO of Rizal stating that the latter is the most
qualified amongst the individuals involved in a comparative study of all the Municipal Budget Officers of the
Province as she is a Certified Public Accountant. DBM Undersecretary, Nazario Cabuquit, signed Almajose’s
appointment papers on the basis of Director Abella’s recommendation.
• Governor San Juan reiterated his request for appointment not knowing that Cabuquit already signed the
appointment papers. Director Galvez, the successor of Director Abella, informed Gov. San Juan that his
recommendees did not meet the minimum requirements under Local Budget Circular # 31 for the PBO position
and required him to submit at least three nominees.
• Gov. San Juan protested the appointment to the DBM Secretary and in response, the Bureau of Legal and
Legislative Affairs (BLLA) of DBM issued a Memo ruling that his protest isn’t meritorious since DBM validly
exercised its prerogative in filling up the contested position since none met the prescribed requirements from
among his nominees.
• Gov. San Juan moved for reconsideration but it was denied so he protested against the appointment to
the Civil Service Commission (CSC) which again denied his protest. Hence, he appealed to the Supreme Court
arguing that the CSC committed grave abuse of discretion in refusing to allow Gov. San Juan to submit new
nominees who could meet the required qualifications.
ISSUE:
• Whether or not the DBM is free to appoint anyone in the event that the Provincial Governor recommends
an unqualified person.
RULING:
• No
RATIO:
• The recommending power of the Provincial Governor in E.O. 112 is not directory but mandatory pursuant
to the constitutional and state policy of local autonomy as enunciated in Article II, Sec. 25 and Article X Sections 2
and 3 of the 1987 Constitution. Thus, a mere administrative issuance (Local Budget Circular # 31) by the DBM
reserving the right to fill-‐up any existing position in case the nominees of the Provincial Governor do not meet the
required qualifications is therefore ultra-‐vires. If the DBM Secretary hounds all the budgetary powers and ignores
the right of local government units to develop self-‐reliance and resoluteness in handling their own funds, the goal
of local autonomy is frustrated and setback and all the effort for the exercise of local governments of meaningful
power since President McKinley’s Instructions in 7 April 1900, to the Second Philippine Commission, to the 1935
Constitution which distinguished between Presidential control and supervision, to R.A. 2264 increasing the
autonomy of local governments, to R.A. 8185, the Decentralization Law, to the 1973 Constitution, to B.P. 337, till
the 1987 Constitution will be put to naught.
• The PBO synchronizes his/her work with the DBM and ensures proper administrative fiscal affairs at the
local level. Provincial and municipal budgets are prepared at the local level and forwarded to the national level
officials for review. Since they are prepared by local officials who must work within the constraints of those
budgets, it is only fitting that there should be a genuine interplay and a harmonization of proposal for both the local
and national officials and thus, the nomination and appointment process should involve a sharing of power
between the two levels of government. Additionally, the appointment was aggravated by the fact that Director
Galvez required Gov. San Juan to submit at least 3 other names after the appointment of Almajose has already
been formalized. Hence, it was manifest that there was a complete disregard of the local government’s prerogative
and the smug belief that the DBM has absolute wisdom, authority and discretion.
Ganzon vs. CA (1991)

FACTS:
Ganzon was the then mayor of Iloilo City. 10 administrative cases were filed against him on grounds of misfeasance
of office, abuse of authority, oppression, grave misconduct, etc. Finding probable cause for the charges, the Secretary of
Interior issued several 60-‐day preventive suspension orders against Ganzon, possibly reaching 600 days of
suspension. Ganzon appealed the issue to the CA which affirmed the suspension orders by the Secretary. Ganzon then
instituted an action for prohibition against the Secretary in the RTC of Iloilo City where he succeeded in obtaining a
writ of preliminary injunction. He also instituted actions for prohibition before the Court of Appeals but were both
dismissed. The Supreme Court nonetheless issued a temporary restraining order enjoining the Secretary from
implementing his suspension orders. Thus, this petition for review with the argument that that the 1987 Constitution
does not authorize the President nor any of his alter ego, including the respondent Secretary, is devoid, in any event, of
any authority to suspend and remove local officials as the 1987 Constitution no longer allows the President to
exercise said power, and instead it supports local autonomy and strengthens the same. What was given by the
present Constitution was mere supervisory power.
ISSUE:
Whether or not the Secretary of Local Government, as the President's alter ego, can suspend and or remove local
officials.
HELD:
YES.
• Notwithstanding the change in the Constitutional language, the Constitution did not intend to
divest the legislature of its right, or the President of her prerogative as conferred by existing legislation to provide
administrative sanction against local officials. Autonomy does not contemplate making mini-‐states out of
LGUs, and is subject to the guidance, though not control, of the legislature, albeit the legislative responsibility under the
Constitution and as the "supervision clause" itself suggest-‐is to wean local government units from
over-‐ dependence on the central government. Local autonomy is not instantly self-‐executing, subject to the passage
of a LGC, and other measures to realize autonomy at the local level. The deletion of "as may be provided by law" in Sec.
4, Art. 10 of the Constitution was meant to stress, sub silencio, the objective of the framers to strengthen local
autonomy by severing congressional control of its affairs.
• Ganzon: that the Constitution has left the President mere supervisory powers, which supposedly
excludes the power of investigation, and denied her control, which allegedly embraces disciplinary authority.
• SC: Legally, "supervision" is not incompatible with disciplinary authority. Mondano v. Silvosa held
that:
• → "control" – the power of an officer to alter or modify or nullify or set aside what a subordinate
officer had done in the performance of his duties and to substitute the judgment of the former for test of the latter
• → "supervision" – overseeing or the power or authority of an officer to see that subordinate
officers perform their duties.
• However, "investigating" is not inconsistent with "overseeing", although it is a lesser power than
"altering". Previous jurisprudence did not categorically ban the Chief Executive from exercising acts of disciplinary
authority because she did not exercise control powers, but because no law allowed her to exercise disciplinary
authority. Local governments, under the Constitution, are subject to regulation, however limited, and for no other
purpose than precisely, albeit paradoxically, to enhance self-‐ government.
• Decentralization means devolution of national administration but not power to the local levels.
• → Decentralization of administration – when the central government delegates administrative
powers to political subdivisions to broaden the base of government power and 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." 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, not control.
• → Decentralization of power – an abdication of political power in the favor of local governments
units declared to be autonomous, which are free to chart their own destiny and shape their future with minimum
intervention from central authorities. It amounts to "self-‐immolation," since the autonomous
government becomes accountable not to the central authorities but to its constituency.
• Since Ganzon is facing 10 administrative charges, he is facing the possibility of 600 days of
suspension, in the event that all 10 cases yield prima facie findings. To make Mayor Ganzon serve 600 days of
suspension is to effectively suspend him out of office.
• → A basic assumption of the electoral process implicit in the right of suffrage that the people are
entitled to the services of elective officials of their choice. For misfeasance or malfeasance, they could be
proceeded against administratively or criminally. A preventive suspension may be justified. Its continuance,
however, for an unreasonable length of time raises a due process question. For even if thereafter he were
acquitted, in the meanwhile his right to hold office had been nullified. Clearly, there would be in such a case an
injustice suffered by him. Nor is he the only victim. There is injustice inflicted likewise on the people for having
been deprived of his services.
• The sole objective of a suspension is simply "to prevent the accused from hampering the normal
cause of the investigation with his influence and authority over possible witnesses" or to keep him off "the records
and other evidence. It is a means, and no more, to assist prosecutors in firming up a case against an erring local
official. Under the LGC, it can not exceed 60 days. It is not a penalty, and it is only temporary.
• We are not precluding the President, through the Secretary of Interior from exercising a legal
power, yet we are of the opinion that the Secretary of Interior is exercising that power oppressively, and needless
to say, with a grave abuse of discretion.
Cordillera Broad Coalition vs. COA (1990)

FACTS:
Historical Antecedents
March 1, 1986: New People's Army Lumbaya Company under Ka-‐Ambo (Fr. Conrado Balweg, SVD) formed the
Cordillera People's Liberation Army (CPLA)
Purpose:
1. defend the Cordillera homeland and its people; and
2. to push for Cordillera Autonomy.
3. Also to establish the Cordillera Autonomous Socialist State through a Federal Republic of the Philippines
Post EDSA 1 Revolution: President Aquino advocated national reconciliation. She called on all revolutionary forces
for peace dialogue. CPLA heeded the call for peace and reconciliation.
Exchange of letters between Vice President Laurel and Fr. Conrado Balweg and series of preliminary talks between
presidential emissary Butch Aquino and members and leaders of the Cordillera Bodong Association (CBA), CPLA
and the Montanosa National Solidarity were held (CBA is a confederation of tribes that had its roots in the tribal
organizations in the cordilleras).
The negotiations resulted to a submission of a position paper from CBA and CPLA outlining their 26 specific
demands. This was submitted to President Aquino on September 13, 1986. It contained the following:
Demand No. 1: Recognition by the national government of the autonomy of the various ethnolinguistic
groups in the Cordilleras.
Demand No. 4: For the national government to guarantee the independence and freedom of the
Cordillera Nation, in preserving, consolidating and developing the socialist way of life and moral order indigenous
to its homelands.
Demand No. 6: For the national government to set-‐up a Federal Republic of the Philippines that allows the
existence within the framework of autonomous and co-‐equal states, including a Cordillera Autonomous
Socialist State.
7 months of peace talks ensued: In 1986, the Cordillera Broad Coalition or CBC was founded. All of those not linked
to CBA/CPLA composed the coalition. During this time, the Cordillera People's Alliance was also formed.
June 9, 1987: The result of the peace talks and negotiations is the INTERIM CORDILLERA REGIONAL
ADMINITRATION or ICRA. It is the main basis for the issuance of EO No. 220 by President Aquino.
CBC protested. It proposed instead the creation of Cordillera Regional Development Council as the interim regional set-‐
up pending establishment of an autonomous region. This proposal minoritized the CPLA and CBA group. Hence, CBA
and CPLA rejected the proposal.
Ambassador Pelaez and Fr. Balweg, as Chairman of the Cordillera signed the Joint Agreement. Both worked
together in drafting an Executive Order to create a preparatory body that could perform policy-‐making and
administrative functions and undertake consultations and studies leading to a draft organic act of the cordilleras.
Pursuance hereto, EO No. 220 was signed by President Aquino (July 15, 1987) entitled, “Creating a Cordillera
Administrative Region, Appropriating Funds Thereof and for other Purpose.” This is in pursuant to Sec. 6, Art. XVIII
of the Constitution, in which the President has the power to continue to exercise legislative powers until the first
Congress is convened.
The Executive Order (No. 220) contained the following:
Sec. 2. Territorial Coverage: Abra, Benguet, Ifugao, Kalinga-‐Apayao, Mt. Province and chartered city of
Baguio.
Sec. 8. Cordillera Regional Assembly (CRA): policy-‐formulating body consisting of 250 representatives from
the municipalities and the city of Baguio, NGOs, and tribes. The President appoints the head of this body.
Sec. 9. Sessions: once every year, 5 days sessions.
Sec. 10. Cordillera Executive Board (CEB): CEB shall implement decisions of CRA. The President appoints
29 members.
Sec. 11. Executive Director
Sec. 12. Executive Committee
Sec. 13. Cordillera Bodong Adminstration
Sec. 17. Period of Existence: It shall exist until such time as the autonomous regional government shall
have been established and organized under an organic act passed by Congress in accordance with Sec. 18, Art. X of
the Constitution.
During the pendency of this case, Republic Act 6766 entitled “An Act Providing for and Organic Act for the
Cordillera Autonomous Region” was enacted and signed into law. It recognized the CAR established by EO No. 220,
its offices, and agencies.
ISSUE # 1:EO No. 220 pre-‐empted Congress from its mandated task of enacting an organic act and created
an autonomous region in Cordillera. NO.
RATIO:
a. Reading the law: only envisions consolidation and coordination of the delivery of services of line
departments and agencies of the national government, as a step preparatory to the grant of autonomy to
Cordilleras.
b. It does not create the autonomous region:
1. only provides for the transitory measures
2. it prepares the ground for autonomy

c. The process of creating the Autonomous Region will take time and the first congress had not yet been
convened. The President saw it fit to address the urgent needs of the Cordilleras.
d. SC can't inquire into the wisdom of the President. Petitioner alleges that EO No. 220 is a capitulation to
CPLA of Fr. Balweg.
e. It is not an interim autonomous region in the Cordilleras:
1. it only created an administrative region with the sole objective of planning and implementing
programs and services of the national government;
2. only constitute as an “umbrella” that brings together the existing local governments, agencies of
the National Government, ethnolinguistic groups/tribes, and NGOs, in a concerted effort to spur
development; and
3. give available funds for priority development programs and projects recommended by CAR.
f. There is now RA No. 6658 which created the Cordillera Regional Consultative Commission. In short, the
autonomous region in the Cordilleras is still to be created. Therefore, EO 220 was not a short-‐cut to autonomy.
ISSUE # 2: Collateral issue – What is the nature of CAR whether or not it is a territorial and political subdivision. Did
EO No. 220 create a new territorial and political subdivision. NO.
RATIO:
a. CAR is not a public corporation or territorial and political subdivision

it has no separate juridical entity
it has no power to sue and be sued, own and dispose property, create its own revenue (powers that are
normally granted to public corporation)
it is likened to Presidential Decree #1 of 1972 or the “Integrated Reorganization Plan of 1972 which
established 12 regions, with definite regional centers and required departments and agencies of the Executive Branch of
the national government to set-‐up field offices therein
b. CAR is in the same genre as the administrative regions created under reorganization plan of President Marcos.
c. It is nothing but a regional coordinating agency of the national government considering the control and
supervision exercised by the President over the CAR and offices created under EO No. 220.
d. CAR is a more sophisticated version of the regional development council.
ISSUE # 3: Creation of CAR contravened the constitutional guarantee of local autonomy for the provinces of Abra,
Benguet, Ifugao, Kalinga-‐Apayao, and Mt. Province and the city of Baguio. NO.
RATIO:
a. There is a misconception about the concept of local autonomy
b. The constitutional guarantee of local autonomy (Art. X, Sec. 2) refers to administrative autonomy of LGUs.
c. The centralization of governmental authority vs. creation of Autonomous Regions: autonomous region
contemplates the grant of political autonomy and not just administrative autonomy.
d. Political Autonomy of autonomous regions: There is established an executive department, a legislative assembly
and special courts with personal, family and property law jurisdiction in each of the autonomous regions.
e. CAR has not diminished the local autonomy.
f. Pure speculation and a resort to probabilities.
DISPOSITIVE:
PETITIONS ARE DISMISSED FOR LACK OF MERIT.
Concurring Opinion: J. Gutierrez Jr.

Issues have become moot and academic because the Cordillera Regional Consultative Commission and the
Cordillera Autonomous Region have taken over the functions of the Cordillera Administrative Region.
Magtajas vs. Pryce Properties Corp, Inc. (1991)

FACTS:
• The Philippine Amusement and Gaming Corporation (PAGCOR) is a corporation created directly by
Presidential Decree 1869 to help centralize and regulate all games of chance, including casinos on land and sea
within the territorial jurisdiction of the Philippines (the constitutionality of the decree was sustained in Basco v.
Philippine Amusements and Gambling Corporation).
• Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the
purposes indicated in the Local Government Code. It is expressly vested with the police power under what is
known as the General Welfare Clause embodied in Section 16. Its Sangguniang Panglungsod derives its powers,
duties and functions under Section 458 of said Code.
• In 1992, following its 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., 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 7 December
1992, it enacted Ordinance 3353 (An Ordinance Prohibiting the issuance of business permit and canceling existing
business permit to any establishment for the using and allowing to be used its premises or portion thereof for the
operation of Casino). On 4 January 1993, it adopted a sterner Ordinance 3375-‐93 (An Ordinance prohibiting
the operation of Casino and providing penalty for violation therefore).
• Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor
and supplemental petitioner. The Court found the ordinances invalid and issued the writ prayed for to prohibit their
enforcement. Reconsideration of the decision was denied on 13 July 1993. Cagayan de Oro City and its mayor filed
a petition for review under Rules of Court with the Supreme Court.
ISSUE:
Whether the Sangguniang Panlungsod of Cagayan de Oro can prohibit the establishment of a casino, or gambling,
operated by PAGCOR through an ordinance or resolution.
HELD:
No,
• The morality of gambling is not justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically proscribing or
penalizing gambling or, for that matter, even mentioning it at all.
• It is left to Congress to deal with the activity as it sees fit. In the exercise of its own discretion, the
legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms of
gambling and allow others for whatever reasons it may consider sufficient.
• Further, there are two kinds of gambling, to wit, the illegal and those authorized by law. Legalized
gambling is not a modern concept; it is probably as old as illegal gambling, if not indeed more so. The suggestion
that the Local Government Code (LGC) authorize Local Government Units (LGUs) to prohibit all kinds of gambling
would erase the distinction between these two forms of gambling without a clear indication that this is the will of
legislature.
• Ordinances should not contravene a statute as 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.
Taule vs. Santos (1991)

FACTS:
• The Federation of Associations of Barangay Council (FABC) of Catanduanes convened to elect its officers.
• The election was to be supervised by the Board of Election Supervisors/Consultants composed of the
Provincial Government Operation Officer (PGOO), the Provincial Treasurer, and the Provincial Election Supervisor.
• Out of its 11 members, only 6 were in attendance. When the group decided to push through with the
election, the Provincial Treasurer and the Provincial Election Supervisor walked out.
• Nevertheless, the election pushed through with the PGOO as presiding officer.
• Petitioner Ruperto Taule was elected President.
• Respondent Leandro Verceles, governor of Catanduanes, sent a letter-‐protest to respondent Luis Santos,
who was then Secretary of Local Government (“Secretary”), seeking the nullification of the election in view of the
irregularities in the manner it was conducted.
• Petitioner, in his comment to the letter-‐protest, denied the allegations of respondent Gov. Verceles and
requested that he, as the duly elected President of the FABC in Catanduanes, be appointed as member of the
Sangguniang Panlalawigan of the province.
• Respondent Secretary nullified the election and ordered a new one to be conducted.
• Petitioner filed a motion for reconsideration but the Secretary denied it.
ISSUE:
WON the respondent Secretary has jurisdiction to entertain an election protest involving the election of the
officers of the FABC.
Arguments:
Petitioner: It is the COMELEC, not the Secretary, which has jurisdiction over all contests involving elective barangay
officials (Art. IX-‐C, Sec. 2, 1987 Constitution)
Respondent: The Secretary has jurisdiction because the case involves a violation of Department of Local Government
Circular 89-‐09 , any violation of which is a ground for filing a protest with the Secretary.
HELD/RATIO:
NO. Presidential power over local governments is limited by the Constitution to the exercise of general supervision
to ensure that local affairs are administered according to law. The general supervision is exercised by the President
through the Secretary of Local Government . In administrative law, supervision means overseeing or the power or
authority of an officer to see that the subordinate officers perform their duties. If the latter fails or neglects to fulfill
them the former may take such action or step as prescribed by law to make them perform their duties. Control, on
the other hand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer
had done in the performance of his duties and to substitute the judgment of the former for that of the latter. From
the foregoing, the Secretary of Local Government has no jurisdiction to entertain any protest involving the election
of officers of the FABC. To allow respondent Secretary to do so will in effect give him control over local government
officials for it will permit him to interfere in a purely democratic and non-‐partisan activity aimed at strengthening
the barangay as the basic component of local governments so that the ultimate goal of fullest autonomy may be
achieved.
On the other hand, the contention of petitioners that it is the COMELEC which has jurisdiction over the dispute is
also untenable. The COMELEC exercises only appellate jurisdiction over election contests involving elective
barangay officials decided by the Metropolitan or Municipal Trial Courts. The recourse of the parties is to the
ordinary courts.
Binay vs. Domingo (1991)

FACTS:
Petitioner Municipality of Makati, through its Council, approved Resolution No. 60. This resolution aims to extend
P500 burial assistance to poor, bereaved families, the funds to be taken out of the unappropriated available funds
in the municipal treasury. The Metro Manila Commission approved Res. No. 60.
Thereafter, the Municipal secretary certified a disbursement of P400,000 for the implementation of the program.
However, Commission on Audit disapproved said resolution and disbursement of funds. The reasons it gave were:
1)the resolution has no connection to alleged public safety, general welfare, safety, etc. of the inhabitants of
Makati; 2)it will only benefit a few individuals. Public funds should only be used for public purposes. The issue is
WON Res. No. 60, reenacted as Res. No. 243, is a valid exercise of the police power under the general welfare
clause.
HELD/RATIO:
Yes. Police power is a governmental function, an inherent attribute of sovereignty – inherent in the state but not
in municipal corporations. Before a municipal corporation may exercise such power, there must be a valid
delegation of such power by the legislature. Municipal corporations exercise police power under the general
welfare clause. Under Sec. 7 of BP 337, “every local government unit shall exercise the powers expressly granted,
those necessarily implied therefrom, as well as necessary and proper for governance such as to promote health and
safety, enhance prosperity, improve morals, and maintain peace and order in the LGU, and preserve the comfort
and convenience of the inhabitants therein.” Police power is the power to prescribe regulations to promote the
health, morals, peace, education, good order or safety and general welfare of the people. It is the most essential,
insistent, and illimitable of powers. The police power of a municipal corporation is broad, and has been said to be
commensurate with, but not to exceed, the duty to provide for the real needs of the people in their health, safety,
comfort, and convenience as consistently as may be with private rights. It extends to all the great public needs, and,
in a broad sense includes all legislation and almost every function of the municipal government. Thus, it is
inadvisable to frame any definition which shall absolutely indicate the limits of police power. Public purpose is not
unconstitutional merely because it incidentally benefits a limited number of persons. The care for the poor is
generally recognized as a public duty. The support for the poor has long been an accepted exercise of police power
in the promotion of the common good. There is no violation of the equal protection clause in classifying paupers as
subject of legislation because the classification is reasonable. Precious to the hearts of our legislators, down to our
local councilors, is the welfare of the paupers. Thus, statutes have been passed giving rights and benefits to the
disabled, emancipating the tenant-‐farmer from the bondage of the soil, housing the urban poor, etc.
Res. No. 60 of Makati is a paragon of the continuing program of our government towards social justice.
City Government of Quezon City v. Ericta (1983)

FACTS:
Section 9 of City Ordinance No. 6118, S-‐64 entitled "ORDINANCE REGULATING THE ESTABLISHMENT,
MAINTENANCE AND OPERATION OF PRIVATE MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN THE
JURISDICTION OF QUEZON CITY AND PROVIDING PENALTIES FOR THE VIOLATION THEREOF" provides:
"At least six (6) percent of the total area of the memorial park cemetery shall be set aside for charity
burial of deceased persons who are paupers and have been residents of Quezon City for at least 5 years prior to
their death, to be determined by competent City Authorities. The area so designated shall immediately be
developed and should be open for operation not later than six months from the date of approval of the
application."
For seven years, this provision has not been enforced until the Quezon City Council passed the resolution
requesting the City Engineer of Quezon City to stop and further selling and/or transaction of memorial park lots in
QC where the owners thereof failed to donate the required 6% for pauper burial. Pursuant to such resolution, the
City Engineer notified Himlayang Pilipino Inc in writing that Sec 9 of Ordinance 6118 would be enforced.
Because of this, Himlayang Pilipino filed the CFI at QC a petition for declaratory relief, prohibition and mandamus
with preliminary injunction seeking to annul Section 9 of the ordinance for being contrary to the Constitution, the
QC Charter, Local Autonomy Act and Revised Administrative Code.
The lower court declared said provision null and void, thus the City Council of QC filed the petition for review
before the SC.
The QC Council argue that the taking of the respondent's property is a valid and reasonable exercise of police
power and that the land is taken for a public use as it is intended for the burial ground of paupers. They further
argue that the Quezon City Council is authorized under its charter, in the exercise of local police power, " to make
such further ordinances and resolutions not repugnant to law as may be necessary to carry into effect and
discharge the powers and duties conferred by this Act and such as it shall deem necessary and proper to provide
for the health and safety, promote the prosperity, improve the morals, peace, good order, comfort and
convenience of the city and the inhabitants thereof, and for the protection of property therein."
On the other hand, Himlayang Pilipino, Inc. contends that the taking or confiscation of property is obvious because
the questioned ordinance permanently restricts the use of the property such that it cannot be used for any
reasonable purpose and deprives the owner of all beneficial use of his property. The respondent also stresses that
the general welfare clause is not available as a source of power for the taking of the property in this case because it
refers to "the power of promoting the public welfare by restraining and regulating the use of liberty and property."
The respondent points out that if an owner is deprived of his property outright under the State's police power, the
property is generally not taken for public use but is urgently and summarily destroyed in order to promote the
general welfare.
ISSUES:
1. Does QC council have the authority to issue create the provision in question?
2. Is Section 9 of Ordinance No. 6118, S-‐64 is a valid exercise of police power?
HELD:
1. NO.
There is nothing in the Charter of Question City that would justify provision in question. It cannot be justified under
the power granted to Quezon City to tax, fix the license fee, and regulate such other business, trades, and
occupation as may be established or practiced in the City because the power to regulate does not include the
power to prohibit.
Neither is the provision justified under R.A. 537 authorizing the city council to 'prohibit the burial of the dead within
the center of population of the city and provide for their burial in such proper place and in such manner as the
council may determine, subject to the provisions of the general law regulating burial grounds and cemeteries and
governing funerals and disposal of the dead' because such provision does not authorize confiscation of property to
serve as burial grounds.
2. NO.
The police power of Quezon City provides:
"To make such further ordinance and regulations not repugnant to law as may be necessary to carry into
effect and discharge the powers and duties conferred by this act and such as it shall deem necessary and
proper to provide for the health and safety, promote, the prosperity, improve the morals, peace, good
order, comfort and convenience of the city and the inhabitants thereof, and for the protection of property
therein; and enforce obedience thereto with such lawful fines or penalties as the City Council may
prescribe under the provisions of subsection (jj) of this section."
In a long line of cases, police power is usually exercised in the form of mere regulation or restriction in the use of
liberty or property for the promotion of the general welfare. It does not involve the taking or confiscation of
property with the exception of a few cases where there is a necessity to confiscate private property in order to
destroy it for the purpose of protecting the peace and order and of promoting the general welfare as for instance,
the confiscation of an illegally possessed article, such as opium and firearms. The provision in question is not
merely regulation but an outright confiscation. It deprives a person of its property without compensation.
The provision can neither be sustained on the ground of presumption of validity of a duly enacted legislation.
There is no reasonable relation between the setting aside of at least six (6) percent of the total area of an private
cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals, good order,
safety, or the general welfare of the people. The ordinance is actually a taking without compensation of a certain
area from a private cemetery to benefit paupers who are charges of the municipal corporation. Instead of building
or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries. Similarly, when
the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang panlungsod
may "provide for the burial of the dead in such place and in such manner as prescribed by law or ordinance" it
simply authorizes the city to provide its own city owned land or to buy or expropriate private properties to
construct public cemeteries.
The questioned ordinance is different from laws and regulations requiring owners of subdivisions to set aside
certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to buyers of
subdivision lots. The necessities of public safety, health, and convenience are very clear from said requirements
which are intended to insure the development of communities with conducive and wholesome environments and
the beneficiaries of the regulation, in turn, are made to pay by the subdivision developer when individual lots are
sold
Villanueva vs. Castaneda (1987)

FACTS:
-‐ The municipal council of San Fernando adopted Resolution No. 218 authorizing 24 members of Fernandino United
Merchants and Traders Association to construct permanent stalls and sell in the subject property within the vicinity
of the public market.
-‐ Resolution 218 was protested. Civil Case No. 2040 was filed. CFI issued writ of preliminary injunction to prevent the
construction of stalls.
-‐ While the case was pending, the municipal council adopted Resolution No. 29 which declared the subject area as
a parking place and as the public plaza of the municipality.
-‐ CFI decided Civil Case No. 2040. It held that the subject land was public in nature and was beyond the commerce
of man. The preliminary injunction was made permanent.
-‐ Vendors (petitioners) were not evicted. They were assigned specific areas and were made to pay daily fees to the
municipal government for use of the area.
-‐ On January 12, 1982 (more than 13 years after CFI decision), the Association of Concerned Citizens and
Consumers of San Fernando filed a petition for the immediate implementation of Resolution No. 29.
-‐ After investigation was conducted by the municipal attorney, Macalino, officer-‐in-‐charge of the office of the
mayor, issued a resolution ordering the demolition of the stalls in the subject area.
-‐ Petitioners filed a petition for prohibition with the CFI (Civil Case No. 6470). The judge denied the petition and the
MR. A petition for certiorari was filed with the SC.
ISSUE:
Whether or not the vendors had the right to occupy and make use of the property.
Arguments of parties:
-‐ Petitioners argued that they had right to occupy the area by virtue of lease contracts entered into with the
municipal government, and later, by virtue of space allocations made in their favor for which they paid daily fees.
-‐ The municipality denied that they entered into said agreements. It argued that even if the leases were valid, the
same could be terminated at will because rent was collected daily.
HELD:
The petitioners had no right to occupy the property.
-‐ The property was declared a public plaza, a promenade for public use. It was outside the commerce of man and
cannot be the subject of a lease contract.
-‐ Structures on the property constitute a nuisance subject to abatement.
-‐ Macalino (OIC) did not act without authority when he issued the order for the demolition of stalls. He was
seeking to enforce the decision in Civil Case No. 2040.
-‐ General welfare clause -‐> authorizes the municipal council to enact such ordinances and make such regulations,
not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred
upon it by law and such as shall seem necessary and proper to provide for the health and safety , promote the
prosperity, improve the morals, peace, good order, comfort and convenience of the municipality and the
inhabitants thereof, and for the protection of property therein.
-‐ Authority was validly exercised. Since the occupation of the place by the vendors, it had deteriorated to the
prejudice of the community. Stalls, being made of flammable materials, became a potential fire trap; access to and
from the market was obstructed; there were aggravated health and sanitation problems; flow of traffic was
obstructed; stallholders in the public market were deprived of a sizable volume of business; the people were
deprived of the use of the place as a public plaza.
-‐ Even if the lease was valid, Resolution No. 29 could have terminated it. Police power can be activated at any time
to change or even annul contracts for the promotion and protection of general welfare.
-‐ The CFI judge did not commit grave abuse of discretion in denying the petition for prohibition.
Petition dismissed.
Republic vs. Gonzalez (1991)

FACTS:
-‐ In response to several resolutions passed by the Municipal Council of Malabon as regards the increasing
vehicular traffic and congestion along F. Sevilla Boulevard, Pres. Ramon Magsaysay issued Proc. No. 144, which
withdrew Lots 1 and 2 in Tañong, Malabon from sale and settlement as they will be used in the street widening and
the putting up of parking spaces near the proposed market and slaughterhouse of Malabon.
-‐ Respondents Policarpio Gonzales and Augusto Josue constructed their own mixed residential and
commercial buildings in the interior part of Lot 2. Because of this, ejectment proceedings were instituted against
them by Malabon. In their defense, respondents argued that: a.) the lots in question were covered by a lease
application and subsequently by a miscellaneous sales application, b.) they were given permits by Malabon to put
commercial improvements on said lots, and that c.) Lots 1 and 2 are not really needed in the road widening
project.
-‐ Despite said defenses, the lower court ruled in favor of respondents’ eviction. This decision was reversed
by the Court of Appeals ruling that the reservation of the said lots for parking spaces is not required by public
interest as mandated by Sec. 84 of the Public Land Act, nor is it for the benefit of the public because only those few
who own cars can use the parking lot. According to the CA, the limited use to specific persons disqualifies the
reservation as one which benefits the general public. Because of this adverse decision, the republic filed its appeal
in the Supreme Court.
ISSUES:
a. Whether or not Proc. No. 144 is valid.
b. Whether or not respondents must be evicted.
HELD/RATIO:
-‐ Yes, Proc. No. 144 is valid. Said proclamation was issued in response to the determination of the
Municipal Council of Malabon that the extreme traffic and congestion problem in F. Sevilla Boulevard has already
caused recurring problems of great discomfort and inconvenience to the public. They also foresaw that this traffic
problem will worsen upon completion of the proposed market and slaughterhouse in that area.
-‐ The traffic problem is not an isolated issue. It might have deleterious effects which might translate to
threats to the health, welfare, safety and convenience of the people. As such, Proc. No. 144 is not of limited
benefit only to those who drive cars. Its positive effects will spill over to the general public will be dispensed from
such great discomfort and inconvenience brought by the extreme traffic and congestion in the area.
Yes, the respondents must be evicted. As to the second issue, the Court ruled that the miscellaneous sales
applications of respondents were never approved thus they have nothing to hold on to as regards their ownership
of the said lots. Moreover, the municipal permits issued to them by Malabon cannot also save them as the same
were issued by Malabon in excess of its authority. It is the Director of Lands and not the local government unit
involved who has executive control as regards the lease, sale or any other form of concession or disposition of
lands under the public domain.
Patalinghug vs. CA (1994)

FACTS:
The Sangguniang Panlungsod of Davao City enacted Ordinance No. 363, series of 1982 (Expanded Zoning
Ordinance of Davao City), Section 8 of which required that funeral parlors “shall be established not less than 50
meters from any residential structures, churches and other institutional buildings.”
Upon prior approval and certification of zoning compliance, Patalinghug was issued a building permit for the
construction of a funeral parlor in the name and style of Metropolitan Funeral Parlor at Cabaguio Avenue, Agdao,
Davao City. Thereafter, Patalinghug commenced the construction of his funeral parlor.
Acting on the complaint of several residents of Barangay Agdao, Davao City that the construction of Patalinghug’s
funeral parlor violated Ordinance No. 363, since it was allegedly situated within a 50-‐meter radius from the Iglesia ni
Kristo Chapel and several residential structures, the Sangguniang Panlungsod conducted an investigation and found
that the nearest residential structure, owned by Wilfred Tepoot is only 8 inches to the south. But, Patalinghug
continued to construct his funeral parlor.
Consequently, private respondents filed a case for the declaration of nullity of a building permit with preliminary
prohibitory and mandatory injunction and/or restraining order with the trial court.
TC: dismissed. After conducting its own ocular inspection, it found that:
1. the residential building of Cribillo and Iglesia ni Kristo chapel are 63.25 meters and 55.95 meters away,
respectively, from the funeral parlor.
2.although the residential building owned by Mr. Tepoot is adjacent to the funeral parlor (separated only by a
concrete fence), said residential building is being rented by Mr. Asiaten, who actually devotes it to his laundry
business with machinery thereon.
CA: reversed and annulled Patalinghug’s building permit on the ground that the funeral parlor was within the 50-‐
meter radius from Mr. Tepoot's building. Although Mr. Teepot’s building was used by his lessee for laundry
business, it was a residential lot as reflected in the tax declaration, thus paving Ordinance No. 363 applies.
ISSUE:
Whether or not petitioner's operation of a funeral home constitutes permissible use within a particular district or
zone in Davao City.
HELD:
YES.
The testimony of City Councilor Vergara shows that Mr. Tepoot's building was used for a dual purpose both as a
dwelling and as a place where a laundry business was conducted. But while its commercial aspect has been
established by the presence of machineries and laundry paraphernalia, its use as a residence, other than being
declared for taxation purposes as such, was not fully substantiated.
A tax declaration is not conclusive of the nature of the property for zoning purposes. A property may have been
declared by its owner as residential for real estate taxation purposes but it may well be within a commercial zone. A
discrepancy may thus exist in the determination of the nature of property for real estate taxation purposes vis-‐a-‐ vis
the determination of a property for zoning purposes. A tax declaration only enables the assessor to identify the
same for assessment levels. In fact, a tax declaration does not bind a provincial/city assessor, for under Sec. 22 of
the Real Estate Tax Code, appraisal and assessment are based on the actual use irrespective of "any previous
assessment or taxpayer's valuation thereon," which is based on a taxpayer's declaration. In fact, a piece of land
declared by a taxpayer as residential may be assessed by the provincial or city assessor as commercial because its
actual use is commercial.
The finding that Mr. Tepoot's building is commercial is strengthened by the Sangguniang Panlungsod’s declaration
of the questioned area as commercial or C-‐2 under the same ordinance. Consequently, even if Tepoot's building
was declared for taxation purposes as residential, once a local government has reclassified an area as commercial,
that determination for zoning purposes must prevail. While the commercial character of the questioned vicinity has
been declared thru the ordinance, private respondents failed to substantiate their claim that Cabaguio Avenue,
where the funeral parlor was constructed, was still a residential zone. Unquestionably, the operation of a funeral
parlor constitutes a "commercial purpose".
The declaration of the said area as a commercial zone thru a municipal ordinance is an exercise of police power to
promote the good order and general welfare of the people in the locality. Corollary thereto, the state, in order to
promote the general welfare, may interfere with personal liberty, with property, and with business and
occupations. Thus, persons may be subjected to certain kinds of restraints and burdens in order to secure the
general welfare of the state and to this fundamental aim of government, the rights of the individual may be
subordinated. The ordinance which regulates the location of funeral homes has been adopted as part of
comprehensive zoning plans for the orderly development of the area covered thereunder.
CA decision is reversed. TC decision is reinstated.
Ampatuan vs. Puno (2011)
FACTS:
On 24 Nov. 2009, the day after the Maguindanao Massacre, then Pres. Arroyo issued Proclamation 1946, placing
“the Provinces of Maguindanao and Sultan Kudarat and the City of Cotabato under a state of emergency.” She
directed the AFP and the PNP “to undertake such measures as may be allowed by the Constitution and by law to
prevent and suppress all incidents of lawless violence” in the named places. Three days later, she also issued AO
273 “transferring” supervision of the ARMM from the Office of the President to the DILG. She subsequently issued AO
273-‐A, which amended the former AO (the term “transfer” used in AO 273 was amended to “delegate”,
referring to the supervision of the ARMM by the DILG).
PETITIONERS’ CONTENTION: The President’s proclamation and orders encroached on the ARMM’s autonomy as
these issuances empowered the DILG Secretary to take over ARMM’s operations and to seize the regional
government’s powers, in violation of the principle of local autonomy under RA 9054 (the Expanded ARMM Act)
and the Constitution.
ISSUE:
Whether Proclamation 1946 and AOs 273 and 273-‐A violate the principle of local autonomy under Sec. 16 Art. X of the
Constitution and Sec. 1 Art. V of RA 9054
HELD:
NO. The DILG Secretary did not take over control of the powers of the ARMM. After law enforcement agents took
the respondent Governor of ARMM into custody for alleged complicity in the Maguindanao Massacre, the ARMM
Vice-‐Governor, petitioner Adiong, assumed the vacated post on 10 Dec. 2009 pursuant to the rule on succession
found in Sec. 12 Art.VII of RA 9054. In turn, Acting Governor Adiong named the then Speaker of the ARMM Regional
Assembly, petitioner Sahali-‐Generale, Acting ARMM Vice-‐Governor. The DILG Secretary therefore did not take over
the administration or the operations of the ARMM.
3. INTERGOVERNMENTAL RELATIONS: Book I, Chapters 3,4, RA 7160
POWERS OF MUNICIPAL CORPORATIONS/LOCAL GOVERNMENTS

Police Power
Binay v. Domingo (1991) -‐ supra
Chua Huat vs. CA (1991)

FACTS:
ñ 14 September 1982 -‐ Manuel Uy and Sons, Inc., one of the respondents, requested Manila City Engineer
anding Official Manuel del Rosario (“City Engineer”) to condemn the dilapidated structures on 12 lots occupied by
petitioners.
ñ On 17 November 1982 – Basing on Inspection Reports showing that the buildings suffered from structural
deterioration of as much as 80%, the City Engineer issued to herein Petitioners the requested Condemnation
Orders. The Condemnation Order also stated that it was:
(1) subject to the confirmation of the Mayor as required by Section 276 of the Compilation of Ordinances of
the City of Manila; and
(2) NOT an order to demolish as the findings of the City Engineer are still subject to the approval of the
Mayor. The orders were based on inspection reports made by the Office of the City Engineer which showed that the
buildings suffered from structural deterioration of as much as 80%. The Mayor confirmed the condemnation
orders.
ñ 22 February 1983 – or more than 3 months after the issuance of the Condemnation Orders, the
Petitioners formally protested against the Condemnation Orders.
ñ 26 April 1983 – one of the petitioners was informed that the City Engineer issued a demolition order with
respect to the structure she was occupying. City Mayor Ramon Bagatsing would later confirm all the Demolition
Orders issued by the City Engineer.
ñ On 2 May 1983, petitioners filed the instant Petition for Prohibition, with Preliminary Injunction and/or
Restraining Order, against the City Mayor, City Engineer, who is also the Building Official, and Manuel Uy and Sons
Inc.
ñ The Court granted the TRO and required respondents to comment.
ñ Respondents prayed that the petition be dismissed, considering that:
(1) the power to condemn buildings and structures in the City of Manila falls within the exclusive domain of
the City Engineer pursuant to Sections 275 and 276 of its Compilation of Ordinances (also Revised Ordinances
1600); and
(2) the power to condemn and remove buildings and structures is an exercise of the police power granted the
City of Manila to promote public safety.
ISSUE:
(1) WON the power to condemn buildings and structures in the City of Manila falls within the exclusive
jurisdiction of the City Engineer, who is at the same time the Building Officials;
(2) WON the City Mayor and City Engineer committed grave abuse of discretion in the exercise of their such
powers.
HELD:
(1) YES. The Compilation of Ordinances of the City of Manila and the National Building Code (PD 1096),
provide the authority of the Building Officials, with respect to dangerous buildings. Respondent City Engineer and
Building Official can, therefore, validly issue the questioned condemnation and demolition orders. It is also clear
from the Compilation of Ordinances of the City of Manila that the Mayor has the power to confirm or deny the
action taken by the Building Officials, with respect to the dangerous or ruinous buildings.
(2) NO. Tthe orders were made only after thorough ocular inspections were conducted by the City's Building
Inspectors. The respondent Mayor's act of approving the condemnation orders was likewise done in accordance
with law. Petitioners were given the opportunity to protest the condemnation but only did so long after the lapse
of the period (7 days) allowed them under the Compilation of Ordinances.
Tatel v. Municipality of Virac (1992)

FACTS:
• Mar. 18, 1966 – Residents of Brgy. Sta. Elena filed a complaint with the municipal council against the
disturbance caused by the operation of an abaca baling machine inside the warehouse of Tatel, which is situated in
the said barangay.
• Disturbance: smoke, obnoxious odor and dust emitted by the machine → affected peace and tranquility of
the neighborhood.
• A committee appointed by the municipal council investigate the matter further.
• COMMITTEE FINDINGS: warehouse located in a crowded neighborhood. Crowded roads. So much so that
any fire that could start from the warehouse (where the abaca products are located) will easily spread to the
neighboring houses—danger to life and property.
• Apr. 22, 1966 – Muncipal Council issued Reso. 29, declaring Tatel’s warehouse a nuisance pursuant to Art.
694 of the Civil Code.
• Tatel filed a petition for preliminary injunction to prevent council from implement such a resolution.
CONTENTION c/o VIRAC | Reso. 29 is justified as there has been a violation by Tatel against Ordinance 13 (Series of
1952), prohibiting the construction of warehouses wherein inflammable materials are stored where such
warehouses are located at a distance of 200 meters from a block of houses. The purpose is to avoid the loss of life
and property in case of fire which is one of the primordial obligation of the government.
CONTENTION c/o TATEL | Ordinance unconstitutional. contrary to the due process and equal protection clause of
the Constitution and null and void for not having been passed in accordance with law.
ISSUE:
WON Ordinance 13 constitutional?
HELD/RATIO:
Ordinance is constitutional.
• Valid exercise of police power. DOCTRINE | It is a settled principle of law that municipal corporations are
agencies of the State for the promotion and maintenance of local self-‐government and as such are endowed with
the police powers in order to effectively accomplish and carry out the declared objects of their creation. ADMIN
CODE, General Welfare Clause: to carry into effect and discharge the powers and duties conferred upon it by law
and such as shall seem necessary and proper to provide for the health and safety, promote the prosperity, improve
the morals, peace, good order, comfort and convenience
• Ordinance was valid. Requisites: 1) not in contravention with law, 2) not unfair and oppressive, 3) not
partial or discriminatory, 4) not prohibit but regulate trade, 5) general and consistent with public policy, and 6) not
unreasonable.
Bayan v. Ermita (2006) : Power of Mayor to issue permits for rallies; BP 880
FACTS:
A series of rallies and demonstrations were conducted in Manila City from September to October 2005. Petitioners
Bayan et al., Jess Del Prado et al., and Kilusang Mayo Uno (KMU) et al. participated in these rallies which were
allegedly violently dispersed due to the failure to secure permits from the Office of the Mayor. Such permits are
required to be obtained under Batas Pambansa (B.P.) 880 which states,
Sec. 4. Permit when required and when not required. – A written permit shall be required for any person or
persons to organize and hold a public assembly in a public place. However, no permit shall be required if the
public assembly shall be done or made in a freedom park duly established by law or ordinance or in private
property, in which case only the consent of the owner or the one entitled to its legal possession is required,
or in the campus of a government-‐owned and operated educational institution which shall be subject to the
rules and regulations of said educational institution. Political meetings or rallies held during any election
campaign period as provided for by law are not covered by this Act.
xxx
Sec. 12. Dispersal of public assembly without permit. – When the public assembly is held without a permit
where a permit is required, the said public assembly may be peacefully dispersed.
Additionally, Executive Secretary Eduardo Ermita stated in an earlier Press Release that the rule of Calibrated
Preemptive Response (CPR) will be observed in lieu of maximum tolerance under B.P. 880.
Petitioners alleged that B.P. 880 or some portions thereof and the CPR violate the right of the people to peaceably
assemble and to petition the government for redress of grievances.
Respondents counter-‐alleged that B.P. 880 only regulates the time, manner and place of the public assembly
subject to the recognized “clear and present danger” standard. For his part, Manila City Mayor Lito Atienza alleged
that independent of B.P. 880, the Local Government Code gives him the power to deny permits based on the “clear
and present danger” standard. He asserted that his denial of the permit was pursuant to this standard since there
was a clamor to stop rallies that disrupt the economy and to protect the lives of other people.
ISSUES:
1. WoN under the Local Government Code mayors have the power to deny an application for permit to rally?
2. WoN the power to grant or deny permit given to mayors under B.P. 880 is unconstitutional?
HELD:
1. The Supreme Court did not consider this issue since the parties did not pursue this.
2. NO. Citing Primicias v. Fugoso, the Supreme Court reaffirmed the primacy of freedom of speech and to assembly
and petition over comfort and convenience in the use of streets and parks. However, the Supreme Court also
reiterated the qualification made in Reyes v. Bagatsing that while the freedoms of speech, expression, of the press,
to peaceably assemble and to petition the government for redress rank high among the constitutional values, still
they can be regulated by the police power of the state which is exercised for the promotion of health, morals,
peace, education, good order or safety, and general welfare of the people.
Recognizing this qualification in Bagatsing, the Supreme Court held that the standards provided in Bagatsing for
the valid exercise of this police power was faithfully adopted in B.P. 880. Thus, the “no permit, no rally” policy is
constitutional.
The exercise by the mayor of the power to grant or deny permit based on the standards under the law is therefore,
also, constitutional.
Integrated Bar of the Philippines v. Atienza (2010)

FACTS:
IBP filed with the Office of the City Mayor of Manila an application for a permit to rally at the foot of Mendiola
Bridge. The mayor issued a permit allowing the IBP to stage a rally on given date but indicated therein Plaza
Miranda as the venue, instead of Mendiola Bridge. The rally pushed through at Mendiola Bridge. A criminal action
was thereafter instituted against Cadiz for violating the Public Assembly Act in staging a rally at a venue not
indicated in the permit.
HELD:
The Supreme Court held that in modifying the permit outright, respondent Mayor gravely abused his discretion
when he did not immediately inform the IBP who should have been heard first on the matter of his perceived
imminent and grave danger of a substantive evil that may warrant the changing of the venue. The opportunity to
be heard precedes the action on the permit, since the applicant may directly go to court after an unfavorable action
on the permit. Respondent mayor failed to indicate how he had arrived at modifying the terms of the permit
against the standard of a clear and present danger test which is an indispensable condition to such modification.
Nothing in the issued permit adverts to an imminent and grave danger of a substantive evil, which “blank” denial or
modification would, when granted imprimatur as the appellate court would have it, render illusory any judicial
scrutiny thereof.
White Light v. City of Manila (2009)

FACTS:
City of Manila, in the exercise of police power, enacted an ordinance entitled “An ordinance Prohibiting Short-‐Time
Admission, Short-‐Time Admission Rates, and Wash-‐Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses,
Pension Houses, and Similar Establishments in the City of Manila”. Operators of drive-‐in hotels and motels
challenges the ordinance for being unconstitutional alleging that it violates the right to privacy and the freedom of
movement; it is an invalid exercise of police power; and it is an unreasonable and oppressive interference in their
business.
ISSUE:
WON the ordinance is unconstitutional
HELD:
Yes. For an ordinance to be a legitimate exercise of police power, (1) it must appear that the interests of the public
generally, as distinguished from those of a particular class, require an interference with private rights and the
means must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of private
rights. (2) It must also be evident that no other alternative for the accomplishment of the purpose less intrusive of
private rights can work. (3) a reasonable relation must exist between the purposes of the measure and the means
employed for its accomplishment
We cannot discount other legitimate activities which the Ordinance would proscribe or impair. There are very
legitimate uses for a wash rate or renting the room out for more than twice a day. The behavior which the
Ordinance seeks to curtail is in fact already prohibited and could in fact be diminished simply by applying existing
laws. Less intrusive measures such as curbing the proliferation of prostitutes and drug dealers through active police
work would be more effective in easing the situation. The ordinance is an arbitrary and whimsical intrusion into the
rights of the establishments as well as their patrons. The Ordinance needlessly restrains the operation of
the businesses of the petitioners as well as restricting the rights of their patrons without sufficient justification.
4.2 Power of taxation: local taxes and real property tax

Local Taxation
Basco v. Phil Amusement and Gaming Corp. (1991)

FACTS:
Petitioners assail the validity of PD 1869, the PAGCOR Charter on the following grounds:
1st: Gambling is generally prohibited, and the PAGCOR Charter legitimizes it;
2nd: Section 2, Paragraph 2 of hte Charter exempting PAGCOR from all other taxes and in lieu thereof imposes a 5%
franchise fee, constitutes a waiver of hte right of the city of Manila to tax (i.e. impose license fees and other levies)
PAGCOR and/ or gambling;
3rd: Likewise, this violates the local autonomy clause of the constitution, Article X, Section 5;
4th: It violates the equal protection clause of the constitution, while most forms of gambling are illegal, those done
by PAGCOR are legal;
5th: It is violative of the government stand against monopolies;
6th: It violates Sections 11 (Personality Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social
Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution
HELD:
PD 1869, PAGCOR Charter is valid.
RATIO:
What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State concern and
hence, it is the sole prerogative of the State to retain it or delegate it to local governments.
As gambling is usually an offense against the State, legislative grant or express charter power is generally necessary
to empower the local corporation to deal with the subject. . . .
1st: Regarding Gambling -‐
(a.) PD 1869 was enacted to regulate and centralize games of chance;

(b.) The duty to regulate and centralize games of chance is part of the police power of the State, which PAGCOR
accomplishes;
Gambling, in all its forms, is generally prohibited, unless allowed by law. But the prohibition of gambling does not
mean that the government can not regulate it in the exercise of its police power, wherein the state has the
authority to enact legislation that may interfere with personal liberty or property in order to promote the general
welfare. The Judiciary does not settle policy issues which are within the domain of the political branches of
government and the people themselves as the repository of all state power.
(c.) PAGCOR is the 3rd largest source of government revenue, earning P3.43B in 1989.
2nd: Regarding PAGCOR's exemption from taxes

(a.) According to the decision, Local Government Units have no inherent power to tax;
The "power to tax" granted to L.G.U.s by their charter must yield to a legislative act which is superior (national
legislation) having been passed upon by the state itself which has the "inherent power to tax."
(b.) The Charter of the City Government of Manila is subject to control by Congress. Congress can grant the City the
power to tax, can provide for exemptions and even take back the power.
(c.) The City of Manila's power to impose license fees on gambling, has long been revoked. As early as 1975, the
power of local governments to regulate gambling thru the grant of "franchise, licenses or permits" was withdrawn
by P.D. No. 771 and was vested exclusively on the Pagcor.

(d.) Local Governments have no power to tax instrumentalities of the government. PAGCOR is an instrumentality of
the national government with its own charter. The doctrine of supremacy of national government over local
government was applied.
3rd: Regarding Local Autonomy

The exercise by local governments of the power to tax is subject to limitations that may be established by
Congress. Congress may amend, repeal or revoke such powers.
PAGCOR Charter constitutes an exemption to the power of local government to tax. A Local Government Unit is a
political subdivision, intra-‐sovereign subdivision within one sovereign nation and must yield to the sovereign.
4th: Regarding the Equal Protection Clause:

The petition was not clear as to how the PAGCOR Charter violated the equal protection clause.
The mere fact that some gambling activities like cockfighting (PD 449) horse racing (RA 306 as amended by RA
983), sweepstakes, lotteries and races (RA 1169 as amended by BP 42) are legalized under certain conditions, while
others are prohibited, does not render the applicable laws, PD. 1869 for one, unconstitutional.
The clause does not preclude classification of individuals who may be accorded different treatment under the law
as long as the classification is not unreasonable or arbitrary.
5th: Regarding the Government Stand against Monopolies:

Every law has in its favor the presumption of constitutionality. For PD 1869 to be nullified, it must be shown that
there is a clear and unequivocal breach of the Constitution, not merely a doubtful and equivocal one. In other
words, the grounds for nullity must be clear and beyond reasonable doubt.
Monopolies are not necessarily prohibited by the Constitution. The state must still decide whether public interest
demands that monopolies be regulated or prohibited. Again, this is a matter of policy for the Legislature to decide.
6th: Regarding Sections 11 (Personality Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social
Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution:
It should be noted that these are merely statements of principles and, policies. They are not self-‐executing,
meaning a law should be passed by Congress to clearly define and effectuate such principles.
DISPOSITION:
Petition is dismissed.
Phil Petroleum Corp vs. Mun. of Pililia, Rizal (1991)

FACTS:
PPC is engaged in the manufacture of lubricated oil basestock which is a petroleum product, with its refinery plant
situated at Malaya, Pililla, Rizal. It owns and maintains an oil refinery including 49 storage tanks for its petroleum
products. Under Section 142 of the NIRC of 1939, manufactured oils and other fuels are subject to specific tax.
On June 28, 1973, PD 231 (Local Tax Code) was issued enacted. Sections 19 and 19 (a) thereof provide that the
municipality may impose taxes on business, except on those for which fixed taxes are provided on manufacturers,
importers or producers of any article of commerce of whatever kind or nature, including brewers, distillers,
rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in accordance with the schedule
listed therein.
The Secretary of Finance issued Provincial Circular No. 26-‐73 directing all provincial, city and municipal treasurers to
refrain from collecting any local tax imposed in old or new tax ordinances in the business of manufacturing, wholesaling,
retailing, or dealing in petroleum products subject to the specific tax under the NIRC.
Provincial Circular No. 26 A-‐73 was also issued instructing all city treasurers to refrain from collecting any local tax
imposed in tax ordinances enacted before or after the effectivity of the Local Tax Code, on the businesses of
manufacturing, wholesaling, retailing, or dealing in, petroleum products subject to the specific tax under the NIRC.
Municipality of Pililla, Rizal enacted Municipal Tax Ordinance No. 1, S-‐1974 otherwise known as "The Pililla
Tax Code of 1974". Sections 9 and 10 of the said ordinance imposed a tax on business, except for those for which fixed
taxes are provided in the Local Tax Code on manufacturers, importers, or producers of any article of commerce of
whatever kind or nature, including brewers, distillers, rectifiers, repackers, and compounders of liquors, distilled
spirits and/or wines in accordance with the schedule found in the Local Tax Code, as well as mayor's permit,
sanitary inspection fee and storage permit fee for flammable, combustible or explosive substances. Section 139 of
the disputed ordinance imposed surcharges and interests on unpaid taxes, fees or charges.
On March 30, 1974, PD 426 was issued amending provisions of PD 231 but retaining Sections 19 and 19(a) [that
municipalities may impose taxes on business]. Thereafter, P.D. 436 was promulgated increasing the specific tax on
lubricating oils, gasoline, bunker fuel oil, diesel fuel oil and other similar petroleum products levied under Sections
142, 144 and 145 of the NIRC, and granting provinces, cities and municipalities certain shares in the specific tax on
such products in lieu of local taxes imposed on petroleum products.
Municipal Tax Ordinance No. 1 was not implemented and/or enforced because of its having been suspended in
view of Provincial Circular Nos. 26-‐73 and 26 A-‐73. Provincial Circular No. 6-‐77 was also issued directing all city and
municipal treasurers to refrain from collecting storage fee on flammable or combustible materials imposed under
local tax ordinance. On June 3, 1977, PD 1158 or the NIRC of 1977 was enacted, Section 153 of which specifically
imposes specific tax on refined and manufactured mineral oils and motor fuels.
Enforcing the provisions of the ordinance, the respondent filed a complaint against PPC for the collection of the
business tax from 1979 to 1986; storage permit fees from 1975 to 1986; mayor's permit and sanitary inspection
fees from 1975 to 1984. PPC, however, have already paid the last-‐named fees starting 1985. The RTC rendered a
decision against petitioner.
ISSUE:
WON PPC is still liable to pay tax on business and storage fees, considering Provincial Circular No. 6-‐77; and
mayor's permit and sanitary inspection fee based on Municipal Ordinance No. 1
HELD:
PPC is liable to pay business taxes but it is not liable to pay storage fees
PPC presented the following contentions:
(a) Provincial Circular No. 26-‐73 declared as contrary to national economic policy the imposition of local taxes on
the manufacture of petroleum products as they are already subject to specific tax under the NIRC;
(b) It covers not only old tax ordinances but new ones, as well as those which may be enacted in the future;
(c) both Provincial Circulars 26-‐73 and 26 A-‐73 are still effective and until revoked, any effort on the part of the
respondent to collect the suspended tax on business from the petitioner would be illegal and unauthorized; and
(d) Section 2 of PD. 436 prohibits the imposition of local taxes on petroleum products.
PC No. 26-‐73 and PC No. 26 A-‐73 suspended the effectivity of local tax ordinances imposing a tax on
business under Section 19 (a) of the Local Tax Code, with regard to manufacturers, retailers, wholesalers or dealers
in petroleum products subject to the specific tax under the NIRC.
Pililla's Municipal Tax Ordinance No. 1 imposing the assailed taxes, fees and charges is valid especially Section 9 (A)
which "was lifted in toto and/or is a literal reproduction of Section 19 (a) of the Local Tax Code as amended by PD
No. 426." It conforms with the mandate of said law.
PD 426 amending the Local Tax Code is deemed to have repealed Provincial Circular Nos. 26-‐73 and 26 A-‐73 when
Sections 19 and 19 (a), were carried over into PD 426 and no exemptions were given to manufacturers,
wholesalers, retailers, or dealers in petroleum products.
While Section 2 of PD 436 prohibits the imposition of local taxes on petroleum products, said decree did not
amend Sections 19 and 19 (a) of PD 231 as amended by P.D. 426, wherein the municipality is granted the right to
levy taxes on business of manufacturers, importers, producers of any article of commerce of whatever kind or
nature. A tax on business is distinct from a tax on the article itself. Thus, if the imposition of tax on business of
manufacturers, etc. in petroleum products contravenes a declared national policy, it should have been expressly
stated in P.D. No. 436.
The exercise by local governments of the power to tax is ordained by the present Constitution. To allow the continuous
effectivity of the prohibition set forth in PC No. 26-‐73 (1) would be tantamount to restricting their power to
tax by mere administrative issuances. Under Section 5, Article X of the 1987 Constitution, only guidelines and
limitations that may be established by Congress can define and limit such power of local governments.
Provincial Circular No. 6-‐77 enjoining all city and municipal treasurers to refrain from collecting the so-‐called
storage fee on flammable or combustible materials imposed in the local tax ordinance of their respective locality
frees petitioner PPC from the payment of storage permit fee.
The storage permit fee is a fee for the installation and keeping in storage of any flammable, combustible or
explosive substances. Inasmuch as said storage makes use of tanks owned not by the municipality of Pililla, but by
petitioner PPC, same is obviously not a charge for any service rendered by the municipality as what is envisioned in
Section 37 of the same Code.
As to the authority of the mayor to waive payment of the mayor's permit and sanitary inspection fees, the trial
court did not err in holding that "since the power to tax includes the power to exempt thereof which is essentially
a legislative prerogative, it follows that a municipal mayor who is an executive officer may not unilaterally withdraw
such an expression of a policy thru the enactment of a tax."
The waiver partakes of the nature of an exemption. Exemptions from taxation are construed in strictissimi juris
against the taxpayer and liberally in favor of the taxing authority. Tax exemptions are looked upon with disfavor.
Thus, in the absence of a clear and express exemption from the payment of said fees, the waiver cannot be
recognized. It is the law-‐making body, and not an executive like the mayor, who can make an exemption. Under
Section 36 of the Code, a permit fee like the mayor's permit, shall be required before any individual or juridical
entity shall engage in any business or occupation under the provisions of the Code.
Floro Cement Corp vs. Gorospe

FACTS:
Floro Cement Corporation is a domestic corporation duly organized and existing under the laws of the Republic of
the Philippines with business establishment and office address at its compound in the municipality of Lugait.
As a mining operator of mineral lands situated at Lugait, Misamis Oriental, Floro Cement was granted by the
Secretary of Agriculture and Natural Resources a Certificate of Qualification for Tax Exemption as an exemption
from the payment of all taxes, except income tax for a period of 5 years (April 30, 1969 -‐ April 29, 1974).
The said Certificate was amended on Nov. 5, 1974, when the Secretary of Natural Resources, Mr. Jose Leido Jr.
granted to Floro Cement a Certificate, which extended the exemption from all taxes, duties, and fees, except
income tax for 5 years (May 17, 1974 -‐ Jan. 1, 1978). The amended Certificate was issued pursuant to Sec. 52, PD
463:
Sec. 52. Power to Levy Taxes on Mines, Mining Operations and Mineral Products.-‐Any law to the contrary
notwithstanding, no province, City, municipality, barrio or municipal district shall levy and collect taxes, fees,
rentals, royalties or charges of any kind whatsoever on mines, mining claims, mineral products, or on any
operation, process, or activity therewith.
On July 3, 1974, the Municipality through its Municipal Mayor, wired the Secretary of Finance, opposing the
application of Floro Cement for the extension of its exemption, which opposition was not favorably acted upon.
The Municipality, pursuant to PD 231 (June 28, 1973), passed Municipal Ordinance No. 5, otherwise known as
Municipal Revenue Code of 1974, effective Jan. 1, 1974.
The Municipality, pursuant to PD 426 (March 30, 1974), passed Municipal Revenue Ordinance No. 10.
Pursuant to Municipal Ordinances Nos. 5 and 10, the Municipality demanded of Floro Cement the payment of
manufacturer's and exporter's taxes including surcharge for the period covering Jan. 1, 1974 to Sept. 30, 1975, but
Floro Cement refused in view of the tax exemption granted to it.
The municipality of Lugait, through its Mun. Treasurer and Prov. Treasurer, filed with the CFI of Misamis Oriental a
verified complaint for collection of manufacturer’s and exporter’s taxes of P161,875.00 (Jan. 1, 1974 -‐ Sept. 30,
1975) plus 25% thereof as surcharge.
On the basis of the stipulations of facts, the parties submitted their respective memoranda.
CFI: in favor of the Municipality of Lugait and ordered Floro Cement Corporation to pay P161,875.00 as
manufacturer's and exporter's taxes and surcharges.
Hence, this appeal.
Floro Cement holds that:

1. Since Ordinances Nos. 5 and 10 were enacted pursuant to PD 231 and PD 426, respectively, said
ordinances do not apply to its business in view of the limitation on the taxing power of local government provided
in Sec. 5m of PD 231, to wit:
Sec. 5. Common Limitations on the Taxing Powers of Local Governments. The exercise of taxing
power of provinces, cities, municipalities and barrios shall not extend to the imposition of the
following:
...
(m) Taxes on mines, mining operations and mineral products and their by-‐products
when sold domestically by the operator.
2. that cement is a mineral product and the prohibition on imposition of taxes in Sec. 52 of PD 463 includes
any operation, process or activity connected with its production. The manufacture of cement is a process inherently
connected with the mining operation undertaken by Floro Cement.
The Municipality:
1. admits that Floro Cement undertakes exploration, development and exploitation of mineral products, but
the taxes sought to be collected were not imposed on these activities;
2. The taxes were levied on the corporation's business of manufacturing and exporting cement, which does
not fall under exploration, development nor exploitation of mineral resources as defined in Sec. 2 of PD 463. Hence,
it is outside the scope of application of Sec. 52 of said decree.
3. Its power to levy taxes on manufacturers and exporters is provided in Article 2, Sec. 19 of PD 231, as
amended by PD426: "The municipality may impose a tax on business except those for which fixed taxes are
provided for in this Code:
(a) On manufacturers, importers, or producers of any article of commerce of whatever kind or nature,
including brewers, distillers, rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in
accordance with the following schedule: . . .
(a-‐1) On retailers, independent wholesalers, and distributors . . .
ISSUE:
WON Ordinances Nos. 5 and 10 of Lugait, Misamis Oriental apply to Floro Cement notwithstanding the limitation
on the taxing power of local government as provided for in Sec. 52 of PD 231 and Sec. 52 of PD 463.
HELD/RATIO:
YES.
This Court has consistently held that cement is not a mineral product but rather a manufactured product. While
cement is composed of 80% minerals, it is not merely an admixture or blending of raw materials, as lime, silica,
shale and others. It is the result of a definite process – the crushing of minerals, grinding, mixing, calcining adding of
retarder or raw gypsum In short, before cement reaches its saleable form, the minerals had already undergone a
chemical change through manufacturing process.
As held by the lower court, the exemption in Sec. 52 of PD 463 refers only to machineries, equipment, tools for
production, etc., as provided in Sec. 53 of the same decree. The manufacture and the export of cement does not
fall under the said provision for it is not a mineral product. It is not cement that is mined only the mineral products
composing the finished product.
As the power of taxation is a high prerogative of sovereignty, the relinquishment is never presumed and any
reduction or diminution thereof with respect to its mode or its rate, must be strictly construed, and the same must
be coached in clear and unmistakable terms in order that it may be applied. The general rule is that any claim for
exemption from the tax statute should be strictly construed against the taxpayer. He who claims an exemption
must be able to point out some provision of law creating the right; it cannot be allowed to exist upon a mere vague
implication or inference. Floro Cement failed to prove this.
In fact, by the parties' own stipulation of facts, it is admitted that Floro Cement is engaged in the manufacturing
and selling, including exporting of cement. As such, and since the taxes sought to be collected were levied on these
activities, Ordinances Nos. 5 and 10 properly apply to Floro Cement. AFFIRMED.
Tuzon and Mapagu vs. CA (1992)

FACTS:
14 March 1977: Sangguniang Bayan of Camalaniugan, Cagayan, adopted Resolution No. 9 soliciting 1% donation of
the palay threshed from the thresher operators who will apply for a permit to thresh. The proceeds will fund the
construction of the Sports and Nutrition Center Bldg of the municipality.
Petitioner Lope Mapagu (treasurer) prepared a document for signature of all thresher/ owner/ operators who
applied for a mayor’s permit.
Private respondent Jurado tried to pay the P285.00 license fee for thresher operators but it was refused on the
ground that he must first get a mayor’ permit (by Mapagu) and second, the he did not sign the agreement to give
1% of the palay he produced (by Mayor Tuzon).
Jurado filed for an action for mandamus with the RTC in Aparri, Cagayan (CFI then) to compel the issuance of the
mayor’s permit and license. He filed another petition for declaratory judgment against the resolution for being
illegal either as a donation or as a tax measure.
RTC: Upheld the challenge measure. Dismissed the claims for damages.
Jurado appealed to CA.
CA: Affirmed the validity of Resolution No. 9 but declared that it is not mandatory. But held that Mayor Tuzon and
Treasurer Mapagu are liable to pay P20T as actual damages and P5T as moral damages.
As for the Resolution, it was passed by the Sanggunian in the lawful exercise of its legislative powers granted by
Article XI, Section 5 of the 1973 Constitution which provided that each LGU shall have the power to create its own
source revenue and to levy taxes, subject to such limitation as may be provided by law. And also under Article 4,
Sec. 29, PD 231: The barrio council may solicit money, materials, and other contributions from private agencies and
individuals.
ISSUE 1: WON a resolution imposing a 1% donation is a valid exercise of the taxing power of an LGU. NO RULING.
RATIO:
The Court just remarked that the reasoning of the CA is an over-‐simplification. It held that the respondent court
has not offered any explanation for its conclusion that the challenged measures are valid nor does it discuss its
own concept of the nature of the resolution.
The Court did not concern itself with the validity of the Resolution since the issue was not raised in the petition as
an assigned error of the CA. The measures have been sustained in the challenged decision, from which the
respondent has not appealed. The implementing agency made the “donation” obligatory.
Although again the validity of the resolution was not in issue, the SC observed that: it “seems to make the donation
obligatory and a condition precedent to the issuance of the mayor's permit. This goes against the nature of a
donation, which is an act of liberality and is never obligatory.
If it is to be considered as a tax ordinance, it must be shown:

1. to have been enacted in accordance with the requirements of the Local Tax Code ;
2. it would include the holding of a public hearing on the measure; and
3. its subsequent approval by the Secretary of Finance, in addition to the requisites for publication of
ordinances in general.
ISSUE2: WON the refusal on the part of the petitioners to issue a Mayor’s permit and license to operate a thresher
to the private respondent is “unjustified and constitutes bad faith” on their part. NO.
RATIO:
Petitioners acted within the scope of their authority and in consonance with their honest interpretation of the
resolution in question. It was not for them to rule on its validity. In the absence of a judicial decision declaring it
invalid, its legality would have to be presumed. As executive officials of the municipality, they had the duty to
enforce it as long as it had not been repealed by the Sangguniang Bayan or annulled by the courts.
xxx As a rule, a pubic officer, whether, judicial, quasi-‐judicial or executive, is not personally liable to one injured in
consequence of an act performed within the scope of his official authority, and in line of his official duty.
xxx It has been held that an erroneous interpretation of an ordinance does not constitute nor does it amount to
bad faith, that would entitle an aggrieved party to an award for damages. (Philippine Match Co. Ltd. v. City of
Cebu)
Franchises
PLDT vs. City of Davao (2001)

FACTS:
-‐ Petitioner PLDT applied for a mayor’s permit to operate its Davao Metro Exchange but Respondent Davao
City withheld its action to the application pending payment by petitioner of the local franchise tax in the amount of
Php3,681,985.72. Petitioner contested the assessment saying that it was exempt from such franchise tax as
evidenced by the opinion of the Bureau of Local Government Finance (BLGF) invoking Sec. 23 of RA 7925 which
mandates the equality of treatment in telecom companies. According to petitioner, since Globe and Smart are
both enjoying exemption from franchise tax and are paying a fixed percentage of their gross receipts in lieu of the
franchise tax, then the same exemption should also be granted to it.
-‐ On the other hand, Davao City is invoking Sec. 137of the LGC which provides that the notwithstanding any
exemption granted by law, the local government unit may impose a franchise tax at a rate not exceeding 50% of
1% of the gross annual receipts of the business. Respondent also raised the provision of Sec. 193 which removed
all existing tax exemptions and incentives granted to juridical and natural persons, unless otherwise provided by
the Local Government Code.
ISSUE:
WON Davao City may impose a franchise tax against PLDT.
HELD/RATIO:
-‐ YES. The claim of petitioner that the exemption extended to Globe and Smart by virtue of their legislative
franchises, should also be extended to it because of Sec. 23 of RA 7925, cannot stand. This will result to absurd
consequences since Globe and Smart have varying percentages as regards the tax they should pay based on their
gross receipts, in lieu of payment of franchise tax. Globe is required to pay 1.5% of all gross receipts from its
transactions while Smart must pay 3% on all its gross receipts. If petitioner’s theory of leveling the playing field will
be followed, then Smart can also claim that the percentage imposed to it be lowered to that of Globe. And if in the
future, Congress again grants a franchise to another telecom company imposing a lower percentage, say 1%
franchise tax, then all other telecom franchises can also claim that theirs be lowered to that percentage. This is not
the intent of Congress in Sec. 23 of RA 7925 as this would leave the Government with the burden of having to keep
track of all granted telecom franchises, lest some companies be treated equally.
The exemption mentioned in Sec. 23 of RA 7925 is too general. The intent of the framers of RA 7925 is to promote
gradually the deregulation of the entry, pricing and operations of all public telecom entities and thus promote a
level playing field in the telecom industry. There is nothing in Sec. 23 which shows that it contemplates the grant of
tax exemptions to all telecom entities, including those whose exemptions have been withdrawn by the LGC. The
exemption mentioned in Sec. 23 refers to certain regulatory or repertory requirements and not to the payment of
franchise taxes.
City Government of Q.C. v. Bayantel (2006)

FACTS: :
1. Bayantel is a legislative franchise holder under R. A. 3259 to establish and operate radio stations for
domestic telecommunications, radiophone, broadcasting and telecasting. The franchise included an exemption
from taxes:
“SECTION 14. (a) The grantee shall be liable to pay the same taxes on its real estate, buildings and
personal property, exclusive of the franchise, as other persons or corporations are now or hereafter may
be required by law to pay. (b) The grantee shall further pay to the Treasurer of the Philippines each year,
within ten days after the audit and approval of the accounts as prescribed in this Act, one and one-‐half
per centum of all gross receipts from the business transacted under this franchise by the said grantee.”
2. The Local Government Code (LGC), which took effect in January 1992, grants local government units within
the Metro Manila Area the power to levy tax on real properties, viz:
“SEC. 232. – Power to Levy Real Property Tax. – A province or city or a municipality within the
Metropolitan Manila Area may levy an annual ad valorem tax on real property such as land, building,
machinery and other improvements not hereinafter specifically exempted.”
and
“SEC. 234 -‐ Exemptions from Real Property Tax. The following are exempted from payment of the
real property tax:
xxx xxx xxx
Except as provided herein, any exemption from payment of real property tax previously granted to,
or enjoyed by, all persons, whether natural or juridical, including government-‐owned-‐or-‐
controlled corporations is hereby withdrawn upon effectivity of this Code.”
3. Shortly thereafter, or in July 1992, Bayantel's franchise was amended, but it retained Sec. 14 of R.A. 3259.
The new law, in Sec. 11 of R.A. 7633, restated Sec. 14. of R.A. 3259.
4. In 1993, the government of Quezon City enacted the Quezon City Revenue Code (QCRC), which imposes a
real property tax on all real properties in Quezon City, and reiterated the withdrawal of exemption from real
property tax under Section 234 of the LGC.
5. Conformably with the QCRC, the City Assessor issued new tax declarations for Bayantel's real properties in
Quezon City.
6. Bayantel requested the City Assessor to exclude its real properties in the city from the roll of taxable real
properties. Its request having been denied, it appealed to the Local Board of Assessment Appeals (LBAA).
7. Because Bayantel did not pay the real property taxes assessed against it, the City Treasurer sent out
notices of delinquency followed by warrants of levy against Bayantel's properties, preparatory to their sale at a
public auction.
8. Bayantel immediately withdrew its appeal at the LBAA and filed with the RTC a petition for prohibition
with an urgent applicaton for a temporary restraining order and/or writ of preliminary injunction.
ISSUE:
WON Bayantel's real properties in Quezon City are, under its amended franchise, exempt from real property tax.
HELD:
Yes.
RATIO:
1. Bayantel's amended franchise retained the phrase “exclusive of this franchise,” which phrase is also in its
original franchise.
2. The phrase “exclusive of this franchise” (found in Sec. 14 of R.A. 3259 and in Sec. 11 of RA 7633)
distinghuishes between two sets of properties: a) those actually, directly and exclusively used in its radio or
telecommunication business and b) those properties which are not so used.
3. While Sec. 14 granted local governments the power to tax those properties not actually, directly and
exclusively used in the pursuit of franchisee's business, the same provision also worked to limit the local
government's power to impose taxes only on the franchisee's properties that are not actually, directly and
exclusively used in the pursuit of its franchise. Necessrily, other properties of Bayantel actually, directly, and
exclusively used in the operation of its franchise are not within the delegated power to tax of local governments
and are exempt from real property taxes.
4. Although the enactment into law of the LGC effectively withdrew Bayantel's exemptions from real estate
taxes for properties within Metro Manila, the subsequent enactment of RA 7633, which amended Bayantel's
franchise, reenacted the tax provision, Sec. 14 of the original franchise, RA 3259. In short, Sec. 14, which exempts
Bayantel from real property taxes, and which was deemed repealed by the LGC, was revived by RA 7633.
5. Congress was well aware that the LGC withdrew Bayantel's former exemption from property taxes such
that it opted to enact into law RA 7633. Said law contains the same defining phrase “exclusive of its franchise”
which was the basis of Bayantel's exepmtion from realty taxes prior to the LGC. R.A. 7633, a subsequent legislation,
is an expression of Congress' intention to remove from the LGC's delegated taxing power all the franchisee's
properties that are actually, directly, and exclusively used in the pursuit of its franchise.
6. The power to tax is still primarily vested in the Congress. The LGC itself highlighted the Legislature's power
to exempt certain realties from the taxing power of local government units (Art. 232. “... not hereinafter
specifically exempted”).
FELS Energy v. Prov. Of Batangas (2007)

FACTS:
The law does not look with favor on tax exemptions and the entity that would seek to be thus privileged must
justify it by words too plain to be mistaken and too categorical to be misinterpreted. Thus, applying the rule of
strict construction of laws granting tax exemptions, and the rule that doubts should be resolved in favor of
provincial corporations, we hold that FELS is considered a taxable entity. The right of local government units to
collect taxes due must always be upheld to avoid severe tax erosion. This consideration is consistent with the State
policy to guarantee the autonomy of local governments and the objective of the LGC that they enjoy genuine and
meaningful local autonomy to empower them to achieve their fullest development as self-‐reliant communities and
make them effective partners in the attainment of national goals.
Digitel v. Prov. Of Pangasinan (2007)

FACTS:
• January 1, 1992 – effectivity of Local Government Code (RA 7160)
➢ Of significance to the present petition are Sections 137 and 232 of the Local Government Code.
➢ Section 137 of the Local Government Code, in principle, withdrew any exemption from the payment of a
tax on businesses enjoying a franchise.
➢ Expressly, it authorized local governments to impose a franchise tax on businesses enjoying a franchise
within its territorial jurisdiction.
➢ Section 232 likewise authorizes the imposition of an ad valorem tax on real property by the local
government.
• November 13, 1992 -‐ petitioner DIGITEL was granted, under Provincial Ordinance No. 18-‐92, a provincial
franchise to install, maintain and operate a telecommunications system
➢ Section 6 -‐ DIGITEL is required to pay franchise and real property taxes.
• December 29, 1992 -‐ the Sangguniang Panlalawigan of respondent Province of Pangasinan enacted on 29
December 1992, Provincial Tax Ordinance No. 1, pursuant to the mandate of Sections 137 and 232 of the Local
Government Code
• September 10, 1993 -‐ Provincial Tax Ordinance No. 4, otherwise known as "The Pangasinan Franchising
Ordinance of 1993," was similarly ratified.
➢ Sections 4, 5 and 6 thereof, positively imposed a franchise tax on businesses enjoying a franchise within
its territorial jurisdiction
• Feb 17, 1994 -‐ DIGITEL was granted by Republic Act No. 7678, a legislative franchise
➢ Sec. 5 -‐ DIGITEL is liable for the payment of a franchise tax "as may be prescribed by law of all gross
receipts of the telephone or other telecommunications businesses transacted under it by the grantee," as well as
real property tax "on its real estate, and buildings "exclusive of this franchise."
• Province of Pangasinan, in its examination of its record found that petitioner DIGITEL had a franchise tax
deficiency for the years 1992, 1993 and 1994.
• March 16, 1995 -‐ Congress passed Republic Act No. 7925, otherwise known as "The Public Telecommunications
Policy Act of the Philippines."
➢ Section 23 of this law entitled Equality of Treatment in the Telecommunications Industry, provided for the
ipso facto application to any previously granted telecommunications franchises of any advantage, favor, privilege,
exemption or immunity granted under existing franchises, or those still to be granted, to be accorded immediately
and unconditionally to earlier grantees.
• The provincial franchise and real property taxes remained unpaid by Digitel to the Province of Pangasinan.
On 1 March 2000, no settlement having been made, Province of Pangasinan filed a Complaint13 for Mandamus,
Collection of Sum of Money and Damages before Branch 68 of the RTC of Lingayen, Pangasinan.
• RTC ruled in favor of the Province of Pangasinan:

➢ DIGITEL’s legislative franchise does not work to exempt the latter from payment of provincial franchise
and real property taxes; the provincial and legislative franchises are separate and distinct from each other
➢ Section 137 of the Local Government Code had already withdrawn any exemption granted to anyone; as
such, the local government of a province may impose a tax on a business enjoying a franchise
• DIGITEL argues:
➢ By virtue of Section 23 of Republic Act No. 7925, the ipso facto, immediate and unconditional application
to it of the tax exemption found in the franchises of Globe, Smart and Bell
➢ Stated simply, Section 23 of Republic Act No. 7925, in relation to the pertinent provisions of the legislative
franchises of Globe, Smart and Bell, "the national franchise tax for which petitioner (DIGITEL) is liable to pay shall
be ‘in lieu of any and all taxes of any kind, nature or description levied, established or collected by any authority
whatsoever, municipal, provincial, or national, from which the grantee is hereby expressly granted.”
ISSUES:
1. Whether or not petitioner DIGITEL is entitled to the exemption from the payment of provincial franchise
tax in view of Section 23 of Republic Act No. 7925, in relation to the tax exemption provisions found in the legislative
franchises of Globe, Smart and Bell? (Stated otherwise, are the "in-‐lieu-‐of-‐all-‐taxes" clauses/provisos found in
the legislative franchises of Globe, Smart and Bell, vis-‐à-‐vis Section 23 of Republic Act No. 7925, applicable to
petitioner DIGITEL such that the latter is now exempt from the payment of any other taxes except the national franchise
and income taxes?)
2. If answered in the negative, whether or not petitioner DIGITEL’s real properties found within the
territorial jurisdiction of respondent Province of Pangasinan are exempt from the payment of real property taxes by
virtue of the phrase "exclusive of this franchise" found in Section 5 of its legislative franchise?
HELD:
1. NO. The case at bar is actually not one of first impression. Indeed, as far back as 2001, this Court has had
the occasion to rule against the claim for tax exemption under Republic Act No. 7925. In the case of Philippine Long
Distance Telephone Company, Inc. v. City of Davao, we already clarified the confusion brought about by the effect
of Section 23 of Republic Act No. 7925 – that the word "exemption" as used in the statute refers or pertains merely
to an exemption from regulatory or reporting requirements of the DOTC or the NTC and not to the grantee’s tax
liability.
➢ In approving Section 23 of Republic Act No. 7925, Congress did not intend it to operate as a blanket tax
exemption to all telecommunications entities
➢ The tax exemption must be expressed in the statute in clear language that leaves no doubt of the
intention of the legislature to grant such exemption. And, even if it is granted, the exemption must be interpreted
in strictissimi juris against the taxpayer and liberally in favor of the taxing authority
➢ There is nothing in the language of §23 nor in the proceedings of both the House of Representatives and
the Senate in enacting R.A. No. 7925 which shows that it contemplates the grant of tax exemptions to all
telecommunications entities, including those whose exemptions had been withdrawn by the LGC.
➢ The word ‘exemption’ in §23 of R.A. No. 7925 contemplates exemption from certain regulatory or
reporting requirements, bearing in mind the policy of the law. HENCE, DIGITEL IS LIABLE TO PAY THE PROVINCIAL
FRANCHISE TAX.
2. YES. However, it is with the caveat that such exemption solely applies to those real properties actually,
directly and exclusively used by the grantee in its franchise.
The present issue actually boils down to a dispute between the inherent taxing power of Congress and the
delegated authority to tax of the local government borne by the 1987 Constitution. In the afore-‐quoted case
of PLDT v. City of Davao, we already sustained the power of Congress to grant exemptions over and above the
power of the local government’s delegated taxing authority notwithstanding the source of such power.
The grant of taxing powers to local government units under the Constitution and the LGC does not affect the
power of Congress to grant exemptions to certain persons, pursuant to a declared national policy. The legal effect
of the constitutional grant to local governments simply means that in interpreting statutory provisions on municipal
taxing powers, doubts must be resolved in favor of municipal corporations.
Real Property Taxation (Sec 197-‐283, RA 7160) and Special Education Fund Tax
Sec of Finance vs. Ilarde & Cipriano Cabaluna (2005)

FACTS:
Cabaluna is the Regional Director of Regional Office No. VI of the Dept. of Finance in Iloilo City. He co-‐owns with his
wife several real properties, on which the City Treasurer’s Office assessed real property tax delinquencies from 1986-‐
1992. Cabaluna paid under protest, contending that the penalties imposed are in excess than that provided by Sec.
66 of PD 464 (Real Property Tax Code), which fixed the maximum penalty at 24% of the delinquent tax. After his
retirement, he filed a formal protest which was denied by the City Treasurer, citing Sec. 4(c) of Joint Assessment
Regulation No. 1-‐85 and Local Treasury Regulation No. 2-‐85 issued by respondent Secretary (formerly Minister) of
Finance, providing that the penalty of 2% per month of delinquency or 24% per annum as the case may be,
continued to be imposed from the time of delinquency incurred until the time it is fully paid. After exhausting all
administrative remedies, he filed a suit before the RTC which found that Section 4(c) of Joint Assessment Regulation
No. 1-‐85 and Local Treasury Regulation No. 2-‐85 (“Regulations”) are void, because the penalty imposed therein
has no limit as the 24% penalty per annum is continually imposed until delinquent tax is fully paid for, unlike under
Sec. 66 of PD 464 (“RPT Code”) where total penalty is limited only to 24% of the delinquent tax.
ISSUE:
Whether or not the then Ministry of Finance could legally promulgate Regulations prescribing a rate of penalty on
delinquent taxes other than that provided for under PD 464 (“RPT Code”).
HELD:
NO.
• Petitioner: that the Regulations are sanctioned by EO 73.
SC: NO.
-‐ EO 73 was enacted to antedate the effectivity of the 1984 Real Property Tax Values from 01 January 1988
to 01 January 1987, thus repealing the earlier EO 1019, which reorganized the tax collection and assessment in
provinces, municipalities and cities. EO 73 merely designated the Minister of Finance to promulgate rules to
implement such application of the 1984 Values (Sec. 2 of EO 73), not the amendment of rates of penalty on
delinquent taxes (Sec. 66 of PD 464).

-‐ The Ministry (now Secretary) of Finance cannot promulgate regulations prescribing a rate of penalty on
delinquent taxes. Despite the promulgation of EO 73, PD 464 in general and Sec. 66 in particular, remained to be
good law. To accept the Secretary’s premise that EO 73 had accorded him the authority to alter, increase, or modify
the tax structure would be tantamount to saying that EO 73 has repealed or amended PD 464. Repeal of laws
should be made clear and expressed. Repeals by implication are not favored as laws are presumed to be passed
with deliberation and full knowledge of all laws existing on the subject. There is no inconsistency between EO 73
and PD 464. It is only RA 7160 (LGC) which repealed PD 464.
-‐ Assuming argumenti that EO 73 has authorized the Secretary to issue the Regulations, such conferment of
powers is void for being repugnant to the well-‐encrusted doctrine in political law that the power of taxation
is generally vested with the legislature.
• Petitioner: that since Cabaluna was responsible for the issuance and implementation of Regional Office
Memorandum Circular No. 04-‐89 which implemented the Regulations, he is now estopped from seeking the
nullification of the Regulations.
SC: NO.
-‐ Fact that Cabaluna previously endorsed implementation of the Regulations is of no moment, because he
did it in his capacity as the Regional Director of Regional Office No. VI of the Department of Finance in Iloilo City. As
such, he was a subordinate of the Secretary of Finance so that he was duty bound to implement subject
regulations. In this present case, however, he is suing as a plain taxpayer, he having already retired. His official acts
as Regional Director could not have stripped him of his rights as a taxpayer.
• Thus, for purposes of computation of the real property taxes due from Cabaluna for years 1986-‐
1991, including the penalties and interests, the law applicable is still Sec. 66 of PD 464. The penalty that ought to be
imposed for delinquency in the payment of real property taxes should, therefore, be 2% of the delinquent tax for
each month of delinquency or fraction thereof but in no case shall the total penalty exceed 24% of the delinquent
tax. However, from 01 January 1992 onwards, the proper basis of the real property tax, including penalties and
interests, must now be RA 7160 (LGC), inasmuch as Sec. 534 expressly repealed PD 464 (RPT Code).
Benguet Corp vs. Central Board of Assessment Appeals (1992)

FACTS:
Benguet corporation has bunkhouses used by its rank and file employees for residential purposes. The provincial
assessor of Benguet assessed real property tax on these bunkhouses. According to him the tax exemption of the
bunkhouses under PD 745 was already removed by PD 1955. The MAIN CONTENTION OF BENGUET CORP IS THAT
THE REALTY TAXES ARE LOCAL TAXE BECAUSE THEY ARE LEVIED BY THE LGU'S PURSUANT TO SECTION 39 OF PD
464.
Section 39 -‐ The provincial, city, or municipality board or council shall fix a uniform rate of real property tax
applicable to their respective localitites.
Benguet contends that LGU's are without authority to levy realty taxes on mines per PD 463 and the local tax code.
ISSUES:
1) WON the assessor can assess the tax despite the proscription in the local tax code against the imposition of
taxes by local government units on mines.
2) WON real property tax exemption granted under PD 745 was removed by PD 1955.
HELD:
yes to both issues, petition denied.
RATIO:
While the local government units are charged with fixing the rate of real property taxes, it does not necessarily
follow from that authority the determination of whether or not to impose the tax. In fact, local governments have
no alternative but to collect taxes as mandated in sec 38 of the Real property tax code as stated in sec 38 of the
code.
It is thus clear that it is the national government expressing itself through the legislative branch that levies the tax.
Consequently when local governments are required to fix the rates, they are merely constituted as agents of the
national government in the enforcement of the real property tax code. The delegation of the taxing power is not
even involved here because the national government has already imposed realty tax in sec 38 leaving only the
enforcement to be done by the local governments.
Realty tax is enforced throughout the Philippines and not merely in a particular municipality or city but the
proceeds of the tax accrue to the province, city, municipality and barrio where the realty taxed is situated. In
contrast a local tax is imposed by the municipal or city council by virtue of the local tax code.
The provisions are a mere limitation on the taxing powers of the LGU and are not pertinent to the issue in the case
at bar. It cannot affect the imposition of real property tax by the national government.
National Development Co. vs. Cebu City

FACTS:
National Development Company (NDC) is a GOCC authorized to engage in commercial, industrial, mining,
agricultural and other enterprises necessary or contributory to economic development or important to public
interest. It also operates subsidiary corporations one of which is National Warehousing Corporation (NWC).
In 1939, the President issued Proclamation No. 430 reserving Block no. 4, Reclamation Area No. 4, of Cebu City for
warehousing purposes under the administration of NWC. In 1940, a warehouse with a floor area of 1,940 square
meters more or less, was constructed thereon. In 1947, EO 93 dissolved NWC with NDC taking over its assets and
functions. In 1948, Cebu City assessed and collected from NDC real estate taxes on the land and the warehouse
thereon. By the first quarter of 1970, a substantial amount of the taxes were paid under protest. NDC asked for a
full refund contending that the land and the warehouse belonged to the Republic and therefore exempt from
taxation.
ISSUE:
WON the NDC is exempt from real estate taxes
HELD:
Yes, as to the land reserved, for the previous six years . No, as to the warehouse
To come within the ambit of the exemption provided in Art. 3, par. (a), of the Assessment Law, it is important to
establish that the property is owned by the government or its unincorporated agency, and once government
ownership is determined, the nature of the use of the property, whether for proprietary or sovereign purposes,
becomes immaterial. What appears to have been ceded to NWC is merely the administration of the property while
the government retains ownership of what has been declared reserved for warehousing purposes under
Proclamation No. 430.
A reserved land is defined as “a public land has been withheld or kept back from sale or disposition”. The
government does not part with its title by reserving them, but gives notice to the world that it desires them for a
certain purpose Absolute disposition of land is not implied from reservation; it merely means “a withdrawal of a
specified portion of the pubic domain from disposal under the land laws and the appropriation for the time being
to some particular use or purpose of the general government.”As its title remains with the Republic, the reserved
land is clearly covered by the tax exemption provision.
Land still not subject to real estate taxation under Sec 11 of Public Land Act:
-‐Taxable land is limited only to public lands that have undergone these modes of disposition: Homestead,
concession and contract
-‐Not concession because it entails alienation of land, in this case, land is still absolutely owned by the
government.
As to warehouse constructed on a public reservation, a different rule should apply because "[t]he exemption of
public property from taxation does not extend to improvements on the public lands made by pre-‐
emptioners, homesteaders and other claimants, or occupants, at their own expense, and these are taxable by the
state . . ." Only six years of refund because tax refund is in the nature of solution indebiti which has a prescriptive
period of only six years.
Prov. of Tarlac vs. Judge Alcantara (1992)

FACTS:
• Tarlac Enterprise, Inc. is the owner of the following properties: a. A piece of land located at Mabini, Tarlac,
Tarlac, b. Ice Drop factory located at Mabini, Taarlac, Tarlac, c. A machinery shed located at Mabini, Tarlac, Tarlac,
d. A machinery of Deisel Electric Sets—Make MAN Cylinders Type C.U. 4160 Sno. 40556; 226P H.P. Generator;
Fated KRUPP 4265; AC Generator 5528042; ER MORCEL 816826, and Worthington 2901.
• The Provincial Treasurer found that real estate taxes for the years 1974 until 1992 in the amount of
P532,435.55 including penalties have not been paid for the aforementioned properties. The company refused to
pay after repeated demands so after the last demand in writing made on December 3, 1982, by the Provincial
Treasurer, Jose M. Meru, he filed a complaint for the payment of the realty taxes amounting to the
aforementioned sum plus damages.
• The company filed a motion to dismiss. But the lower court denied the motion. Thereafter, the Province of
Tarlac set the auction sale of Tarlac Enterprises' properties to satisfy the real estate taxes due. This prompted Tarlac
Enterprises to file a motion praying that the Province be directed to desist from proceeding with the public auction
sale. The lower court issued an order granting said motion to prevent mootness of the case considering that the
properties to be sold are the subjects of the complaint.
• The company then filed an answer saying that under Section 40(g) of PD46 in relation to PD 551, it was
exempt from paying said tax. The court rendered the decision dismissing the complaint. It ruled that P.D. No. 551
expressly exempts Tarlac Enterprises from paying the real property taxes demanded, it being a grantee of a
franchise to generate, distribute and sell electric current for light. The court held that in lieu of said taxes, Tarlac
Enterprises had been required to pay 2% franchise tax in line with the intent of the law to give assistance to
operators such as the Tarlac Enterprises to enable the consumers to enjoy cheaper rates. Citing the case of Butuan
Sawmill, Inc. v. City of Butuan, the court ruled that local governments are without power to tax the electric
companies already subject to franchise tax unless their franchise allows the imposition of additional tax.
• Hence, the present recourse. Petitioner contends that respondent judge erred in: (a) holding that private
respondent is exempt from the payment of realty tax under P.D. No. 551, as amended; (b) ruling under the
authority of Butuan Sawmill, Inc v. Butuan City, that it is without power to impose said realty tax on private
respondent, and (c) dismissing the complaint and denying its motion for reconsideration of its decision.
ISSUE:
WON Tarlac Enterprises, Inc. is exempt from the payment of real property tax under Sec. 40 (g) of P.D. No. 464 in
relation to P.D. No. 551, as amended.
RULING:
No
RATIO:
• Sec. 40(g) of P.D. No. 464, the Real Property Tax Code, provides that real property a: SEC. 40. Exemptions
from Real Property Tax. -‐ The exemption shall be as follows: (g) Real property exempt under other laws.
• Tarlac Enterprises contends that the "other laws" referred to in this Section is P.D. No. 551 (Lowering the
Cost to Consumers of Electricity by Reducing the Franchise Tax Payable by Electric Franchise Holders and the Tariff
on Fuel Oils for the Generation of Electric Power by Public Utilities). Its pertinent provisions state: SECTION 1. Any
provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all grantees of
franchises to generate, distribute and sell electric current for light, heat and power shall be two (2%) of their gross
receipts received from the sale of electric current and from transactions incident to the generation, distribution
• SC held that the phrase "in lieu of all taxes and assessments of whatever nature" in the second paragraph
of Sec. 1 of P.D. No. 551 does not expressly exempts Tarlac Enterprises from paying real property taxes. As correctly
observed by the Province, said proviso is modified and delimited by the phrase "on earnings, receipts. income and
privilege of generation, distribution and sale" which specifies the kinds of taxes and assessments which shall not be
collected in view of the imposition of the franchise tax. Said enumerated items upon which taxes shall not be
imposed, have no relation at all to, and are entirely different from real properties subject to tax.
• SC also held that if the intention of the law is to exempt electric franchise grantees from paying real
property tax and to make the 2% franchise tax the only imposable tax, then said enumerated items would not have
been added when PD 852 was enacted to amend P.D. No. 551. The legislative authority would have simply stopped
after the phrase "national or local authority" by putting therein a period. On the contrary, it went on to enumerate
what should not be subject to tax thereby delimiting the extent of the exemption.
• SC also do not find merit in Tarlac Enterprises’ contention that the real properties being taxed, viz., the
machinery for the generation and distribution of electric power, the building housing said machinery, and the land
on which said building is constructed, are necessary for the operation of its business of generation, distribution and
sale of electric current and, therefore, they should be exempted from taxation. Tarlac Enteprises apparently does
not quite comprehend the distinction among the subject matters or objects of the taxes involved. It bears emphasis
that P.D. No. 551 as amended by P.D. No. 852 deals with franchise tax and tariff on fuel oils and the "earnings,
receipts, income and privilege of generation, distribution and sale of electric current" are the items exempted from
taxation by the imposition of said tax or tariff duty. On the other hand, the collection complaint filed by petitioner
specified only taxes due on real properties. While P.D. No. 551 was intended to give "assistance to the franchise
holders by reducing some of their tax and tariff obligations," to construe said decree as having granted such
franchise holders exemption from payment of real property tax would unduly extend the ambit of exemptions
beyond the purview of the law.
• The annexes attached to Tarlac Enterprises's comment on the petition to prove by contemporaneous
interpretation its claimed tax exemption are not of much help to it. Department Order No. 35-‐74 dated September
16, 1974 11 regulating the implementation of P.D. No. 551 merely reiterates the "in lieu of all taxes" proviso. Local
Tax Regulations No. 3-‐75 12 issued by then Secretary of Finance Cesar Virata and addressed to all Provincial and
City Treasurers enjoins strict compliance with the directive that "the franchise tax imposed under Local Tax
Ordinances pursuant to Section 19 of the Local Tax Code, as amended, shall be collected from business holding
franchises but not from establishments whose franchise contains the in lieu of all taxes' proviso," thereby clearly
indicating that said proviso exempts taxpayers like private respondent from paying the franchise tax collected by
the provinces under the Local Tax Code. Lastly, the letter 13 of the then Bureau of Internal Revenue Acting
Commissioner addressed to the Matic Law Office granting exemption to the latter's client from paying the "privilege
(fixed) tax which is an excise tax on the privilege of engaging in business" clearly excludes realty tax from such
exemption.
• SC also found the lower court’s reliance on Butuan Sawmill. Inc. v. City of Butuan as misplaced. In that
case, the questioned tax is a tax on the gross sales or receipts of said sawmill while the tax involved herein is a real
property tax. The City of Butuan is categorically prohibited therein by Sec. 2(j) of the Local Autonomy Act from
imposing "taxes of any kind . . . on person paying franchise tax." On the other hand, P.D. No. 551 is not as
all-‐ encompassing as said provision of the Local Autonomy Act for it enumerates the items which are not taxable by
virtue of the payment of franchise tax.
• It has always been the rule that "exemptions from taxation are construed in strictissimi juris against the
taxpayer and liberally in favor of the taxing authority" primarily because "taxes are the lifeblood of government and
their prompt and certain availability is an imperious need." Thus, to be exempted from payment of taxes, it is the
taxpayer's duty to justify the exemption "by words too plain to be mistaken and too categorical to be
misinterpreted.; Private respondent has utterly failed to discharge this duty.
• Decision reversed and remanded to the lower court for computation of the real property taxes.
4.3 Shares of LGUS in national taxes
Pimentel vs. Aguirre (2000)

FACTS:
 On 27 December 1997, President Ramos issued AO 372 with the following contentious
provisions:
Section 1 – All government departments and agencies, including SUCs, GOCCs and LGUs will
identify and implement measures in FY 1998 that will reduce total expenditures for the year by
at least 25% of authorized regular appropriations for non-‐personal services items;
Section 2 – Pending the assessment and evaluation of the Development Budget Coordinating
Committee of the emerging fiscal situation, the amount equivalent to 10% of the IRA to LGUs
shall be withheld.
 On 10 December 1998, President Estrada issued AO 43, amending Section 4 of AO 372 by
reducing to 5% the amount of IRA to be withheld
Petitioner’s arguments:
 In issuing AO 372, the President exercised the power of control over LGUs when in fact he only
has the power of general supervision, pursuant to the principle of local autonomy.
 The directive to withhold 10% of the IRA is in contravention of Section 286 of LGC and Section 6,
Article X of the Constitution, providing for the automatic release to each LGU.
Respondent’s arguments:
 AO 372 was issued to alleviate the economic difficulties brought about by the peso devaluation
and it was merely an exercise of the President’s power of supervision over LGUs
 It does not violate fiscal autonomy because it merely directs the LGUs to identify measures that
will reduce their total expenditures.
 The withholding of 10% of the LGUs’ IRA does not violate the statutory prohibition since its
merely temporary in nature pending the assessment and evaluation by the DBCC of the emerging
fiscal situation.
ISSUES:
1. WON Section 1 of AO 372 which “directs” all LGUs to reduce their expenditures by 25% is a valid
exercise of the President’s power of general supervision over LGUs. YES
2. WON Section 4 of AO 372 which withholds 10% of the LGUs’ IRA is a valid exercise of the
President’s power of general supervision over LGUs. NO
RATIO:
 LGUs have administrative autonomy in the exercise of their functions, as well as fiscal autonomy.
 Fiscal autonomy – LGUs have the power to create their own sources of revenue in addition to
their equitable share in the national taxes released by the national government as well as the
power to allocate their resources in accordance with their priorities.
Requisites before the President may interfere in local fiscal matters (LGC, Section 284):
1. Unmanaged public sector deficit of the national government
2. Consultations with the presiding officers of the Senate and the House of Representatives and the
presidents of the various local leagues
3. Corresponding recommendation of the secretaries of DOF, DILG and DBM
4. Any adjustment in the allotment shall in no case be less than 30% of the collection of national
internal revenue taxes of the third fiscal year preceding the current one
Court:
 Respondents failed to comply with these requisites before the issuance and implantation of AO
372.
 On the first issue, Section 1 is merely advisory in character and does not constitute a mandatory
order that interferes with the local autonomy. It is merely an advisory to prevail upon LCEs to
recognize the need for fiscal restraint in a period of economic difficulty.
 On the second issue, basic feature of local fiscal autonomy is the automatic release of the shares
of LGUs in the national internal revenue(Consti, Article X, Sec. 6). LGC, Section 286 specifies that
the release shall be made directly to the LGU concerned within 5 days after every quarter of the
year and shall not be subject to any lien or holdback that may be imposed by the national
government for whatever purpose. This withholding, although temporary, contravenes the
Constitution and the law since it is tantamount to a holdback and any retention is prohibited.
Discussion: Scope of the President’s power of general supervision over LGUs
Constitution, Article X, Section 4: “The President of the Philippines shall exercise general
supervision over local governments.”
Supervision Control
Overseeing or the power or the power or Power of an officer to

authority of any officer to see that
subordinate officers perform their duties. - Alter
- Modify
If they fail, the former may take such
- Nullify
action or step prescribed by law to make - Set aside
them perform their duties What a subordinate has done in the
performance of his duties and to substitute
the judgment of the former for the latter
Supervising officials merely see to it that Officers in control lay down the rules in the
the rules are followed, but they performance or accomplishment of an act.
themselves do not lay down such rules, nor If these rules are not followed, they may
do they have the discretion to modify or order the act undone or redone by their
replace them. subordinates.
Heads of political subdivisions are elected Members of the Cabinet and other
by the people and their sovereign powers executive officials are alter egos of the
emanate from the electorate. They are President and they are subject to his
subject to the President’s supervision only, power of control
not control, as long as their acts are
exercised within the sphere of their
legitimate powers.
Extent of local autonomy
 Local autonomy signified a more responsive and accountable local government structure
instituted through a system of decentralization.
 Decentralization – devolution of national administration, not power, to local governments. Local
officials remain accountable to the central government as the law may provide.
Note: In the Philippines, only administrative powers over local affairs are delegated to political
subdivisions to make governance more directly responsive and effective at the local levels.
Decentralization of Administration Decentralization of Power
Central government delegates This involves an abdication of political

administrative powers to political power in the favor of LGUs declared to be
subdivisions in order to broaden the base autonomous.
of government power and make local
governments more responsive and
accountable.
President exercises general supervision to This amounts to self-‐immolation since

ensure that local affairs are administered the autonomous government becomes
according to law. accountable not to the central authorities
but to its constituency.
8. 4 Abatement of Nuisance
Estate of Gregoria Francisco vs. CA

FACTS:
A quonset was constructed by American Liberation Forces on a lot owned by Philippine Ports Authority (PPA).
Gregoria Francisco bought a quonset building in 1946 and used it for storage of copra. She died 1976. In 1989, PPA
issued a permit to occupy the lot for a year, until December 1989. However, in May 1989, Mayor Valencia sent two
letters ordering Gregoria's surviving spouse, Tan Gin San, to remove or relocate the quonset by virtue of Ordinance
147, establishing Comprehensive Zoning Regulations for Municipality of Isabela, which provides for “clean-‐up
campaign on illegal squatters and unsanitary surroundings along Strong Boulevard”. Due to Tan's inaction, the
mayor ordered the demolition of the quonset. Tan sought for Writ of Preliminary Injunction.
RTC upheld the power of of the mayor to order the demolition without judicial authority in accordance with the
ordinance. CA initially ruled that the Mayor was not vested with the power to order summary demolition but upon
reconsideration filed by the mayor, later affirmed the RTC decision and dismissed the case.
ISSUE:
Whether or not the mayor could order the demolition of the quonset without judicial process? NO
RATIO:
1. The mayor cannot claim authority to summarily abate nuisance under the general welfare clause of the Local
Government Code. This only applies to nuisance per se or one which affects the immediate safety of persons and
property and may be summarily abated under the undefined law of necessity.
.
Whether or not a structure is nuisance per se can only be adjudged by judicial determination. In this case the court
held that,
• The storage of copra in the quonset building is a legitimate business. By its nature, it can not be
said to be injurious to rights of property, of health or of comfort of the community.
• Tan was in lawful possession by virtue of the permit from PPA and was not squatting on public
land
• It was not of trifling value
• Tan was entitled to an impartial hearing to decide if it be a nuisance per se or per accidens
• There was no compelling necessity for the summary abatement
2. To construe Sec 16 of Ordinance 47 as authorizing the summary removal of non conforming structures, such as
the quonset which was built outside the zone for warehouses, would be null and void for violating the
requirements of due process.
3. The Ordinance provides for a judicial remedy in the enforcement of the said provision. The Zoning Administrator
may call upon the fiscal to institute the proper legal proceedings. From this, it is clear that the mayor cannot order
the removal of the structure without judicial process.
4. The violation of the ordinance does not empower the mayor to avail of extra-‐judicial remedies. On the contrary,
the Local Government Code also imposes the duty upon him to cause to be institutes judicial proceedings in
connection of ordinances. The Mayor and his officials transcended their authority.
SC reinstated the case to determine just compensation.
Technology Developers, Inc v. CA (1991)

FACTS:
Technology Developers (a corporation engaged in the manufacture and export of charcoal briquette), received a
letter from acting mayor Pablo Cruz: 1) ordering the full cessation of its plant in Guyong, Sta. Maria, Bulacan until
further order, and 2) requesting its Plant Manager to bring before the office of the mayor its building permit,
mayor's permit, and Region III-‐Pollution of Environment and Natural Resources Anti-‐Pollution Permit. Technology
Developers undertook to comply with the request to produce the required documents. It sought to secure the
Region III-‐Pollution of Environment and Natural Resources Anti-‐Pollution Permit (note: prior to the operation
of the plant, a Temporary Permit to Operate Air Pollution Installation was issued to Technology Developers) and the
mayor's permit, but as to the latter, the office of the mayor did not entertain it. Eventually, the acting mayor
ordered that the plant premises be padlocked, effectively causing the stoppage of operation. This was done without
previous and reasonable notice. Technology Developers then instituted an action for certiorari, prohibition and
mandamus with preliminary injunction against the acting mayor with Bulacan RTC, alleging that the closure order
was issued in grave abuse of discretion. The RTC found that the issuance of the writ of preliminary mandatory
injunction was proper, ordering the acting mayor to immediately revoke his closure order and allow Technology
Developers to resume its normal business operations until the case has been adjudicated on the merits. Upon MR,
the Provincial Prosecutor presented evidence as to the allegation that "Due to the manufacturing process and
nature of raw materials used, the fumes coming from the factory may contain particulate matters which are
hazardous to the health of the people. As such, the company should cease operating until such a time that the
proper air pollution device is installed and operational." Reassessing the evidence, the RTC set aside its order
granted the writ of preliminary mandatory injunction. The CA denied Technology Developer's petition for certiorari
for lack of merit.
ISSUE:
W/N the acting mayor had a legal ground for ordering the stoppage of Technology Developer
HELD:
YES 1) No mayor's permit had been secured. While it is true that the matter of determining whether there is a
pollution of the environment that requires control if not prohibition of the operation of a business is essentially
addressed to the t the Environmental Management Bureau of the Department of Environment and Natural
Resources, it must be recognized that the mayor of a town has as much responsibility to protect its inhabitants
from pollution, and by virture of his police power, he may deny the application for a permit to operate a business or
otherwise close the same unless appropriate measures are taken to control and/or avoid injury to the health of the
residents of the community from the emissions in the operation of the business. 2) Note: There was actually factual
bases for the action of the acting mayor. a) He called the attention of Technology Developers to the fact that its
plant was emitting fumes whose offensive odor "not only pollute the air in the locality but also affect the health of
the residents in the area," so that petitioner was ordered to stop its operation until further orders and compliance
with the documentary requirements. b) There had been complaints from the residents of the area directing to the
Provincial Governor. The four-‐page petition, on the whole, was signed by different persons. c) The Closure Order
was issued only after an investigation was made by Marivic Guina, which found that the fumes emitted by the plant
goes directly to the surrounding houses and that no proper air pollution device has been installed. d) Technology
Developers did not even have a building permit from the municipality of Sta. Maria. e) The Temporary permit given
to Technology Developers was good only up to May 1988. Thereafter, Technology Developers did not even exert
the effort to extend or validate its permit, much less install any device to control and prevent any hazard to the
health of the residents of the community. Last note: concomitant with the need to promote investment and
contribute to the growth of the economy is the equally essential imperative of protecting the health, nay the very
lives of the people, from the deleterious effect of the pollution of the environment. Petition Denied
Laguna Lake Development Authority vs. CA, 251 SCRA 421 (1995)
FACTS:
• RA 4850 was enacted creating the "Laguna Lake Development Authority." This agency was supposed to
accelerate the development and balanced growth of the Laguna Lake area and the surrounding provinces, cities
and towns, in the act, within the context of the national and regional plans and policies for social and economic
development.
• PD 813 amended certain sections RA 4850 because of the concern for the rapid expansion of
Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de Bay, combined with current and
prospective uses of the lake for municipal-‐industrial water supply, irrigation, fisheries, and the like.
• To effectively perform the role of the Authority under RA 4850, the Chief Executive issued EO 927 further
defined and enlarged the functions and powers of the Authority and named and enumerated the towns, cities and
provinces encompassed by the term "Laguna de Bay Region". Also, pertinent to the issues in this case are the
following provisions of EO 927 which include in particular the sharing of fees:
• Sec 2: xxx the Authority shall have exclusive jurisdiction to issue permit for the use of all surface water for
any projects or activities in or affecting the said region including navigation, construction, and operation of
fishpens, fish enclosures, fish corrals and the like.
• Then came Republic Act No. 7160. The municipalities in the Laguna Lake Region interpreted the provisions
of this law to mean that the newly passed law gave municipal governments the exclusive jurisdiction to issue fishing
privileges within their municipal waters because R.A. 7160 provides: "Sec. 149. Fishery Rentals; Fees and Charges
(a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and impose
rental fees or charges therefor in accordance with the provisions of this Section.
• Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen permits.
Big fishpen operators took advantage of the occasion to establish fishpens and fishcages to the consternation of the
Authority. Unregulated fishpens and fishcages occupied almost one-‐third the entire lake water surface area,
increasing the occupation drastically from 7,000 ha in 1990 to almost 21,000 ha in 1995. The Mayor's permit to
construct fishpens and fishcages were all undertaken in violation of the policies adopted by the Authority on
fishpen zoning and the Laguna Lake carrying capacity.
• In view of the foregoing circumstances, the Authority served notice to the general public that:
“ 1. All fishpens, fishcages and other aqua-‐culture structures in the Laguna de Bay Region, which
were not registered or to which no application for registration and/or permit has been filed with
Laguna Lake Development Authority as of March 31, 1993 are hereby declared outrightly as
illegal.
2. All fishpens; fishcages and other aqua-‐culture structures so declared as illegal shall be subject
to demolition which shall be undertaken by the Presidential Task Force for illegal Fishpen and
Illegal Fishing.
3. Owners of fishpens, fishcages and other aqua-‐culture structures declared as illegal shall,
without prejudice to demolition of their structures be criminally charged in accordance with Section
39-‐A of Republic Act 4850 as amended by P.D. 813 for violation of the same laws.
Violations of these laws carries a penalty of imprisonment of not exceeding 3 years or a fine not
exceeding Five Thousand Pesos or both at the discretion of the court.
• All operators of fishpens, fishcages and other aqua-‐culture structures declared as illegal in
accordance with the foregoing Notice shall have one (1) month on or before 27 October 1993 to show cause before
the LLDA why their said fishpens, fishcages and other aqua-‐culture structures should not be
demolished/dismantled."
• One month, thereafter, the Authority sent notices to the concerned owners of the illegally constructed
fishpens, fishcages and other aqua-‐culture structures advising them to dismantle their respective structures within
10 days from receipt thereof, otherwise, demolition shall be effected.
• The fishpen owners filed injunction cases against the LLDA.
• The LLDA filed motions to dismiss the cases against it on jurisdictional grounds.
• The motions to dismiss were denied. Meanwhile, TRO/writs of preliminary mandatory injunction were
issued enjoining the LLDA from demolishing the fishpens and similar structures in question. Hence, the present
petition for certiorari, prohibition and injunction. The CA dismissed the LLDA’s consolidated petitions. It ruled that
(A) LLDA is not among those quasi-‐judicial agencies of government appealable only to the Court of Appeals; (B) the
LLDA charter does vest LLDA with quasi-‐judicial functions insofar as fishpens are concerned; (C) the provisions of the
LLDA charter insofar as fishing privileges in Laguna de Bay are concerned had been repealed by the Local
Government Code of 1991; (D) in view of the aforesaid repeal, the power to grant permits devolved to respective
local government units concerned.
• LLDA filed a petition for certiorari and prohibition in the SC
ISSUE:
Which agency of the Government -‐ the LLDA or the towns and municipalities comprising the region -‐ should exercise
jurisdiction over the Laguna Lake and its environs insofar as the issuance of permits for fishery privileges is concerned?
HELD:
LLDA
RATIO:
It has to be conceded that the charter of the LLDA constitutes a special law. RA 7160 is a general law. It is basic is
basic in statutory construction that the enactment of a later legislation which is a general law cannot be construed
to have repealed a special law. It is a well-‐settled rule in this jurisdiction that "a special statute, provided
for a particular case or class of cases, is not repealed by a subsequent statute, general in its terms, provisions and
application, unless the intent to repeal or alter is manifest, although the terms of the general law are broad
enough to include the cases embraced in the special law." Where there is a conflict between a general law and a
special statute, the special statute should prevail since it evinces the legislative intent more clearly that the general
statute. The special law is to be taken as an exception to the general law in the absence of special circumstances
forcing a contrary conclusion. This is because implied repeals are not favored and as much as possible, given to all
enactments of the legislature. A special law cannot be repealed, amended or altered by a subsequent general law
by mere implication.
Considering the reasons behind the establishment of the Authority, which are enviromental protection,
navigational safety, and sustainable development, there is every indication that the legislative intent is for the
Authority to proceed with its mission.
Thus, the SC holds that Section 149 of RA 7160, otherwise known as the Local Government Code of 1991, has not
repealed the provisions of the charter of the LLDA, Republic Act No. 4850, as amended. Thus, the Authority has the
exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of
municipalities situated therein and the authority to exercise such powers as are by its charter vested on it.
4.5 Power of Eminent Domain:
Moday et al v. CA (1997)
FACTS:
• In 1989, Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed Resolution No. 43-‐
89, "Authorizing the Municipal Mayor to Initiate the Petition for Expropriation of a One (1) Hectare Portion of Lot
No. 6138-‐Pls-‐4 Along the National Highway Owned by Percival Moday for the Site of Bunawan Farmers Center and
Other Government Sports Facilities."
• This resolution was approved by then Municipal Mayor Bustillo and was transmitted to the Sangguniang
Panlalawigan for its approval.
• However, Sangguniang Panlalawigan disapproved said Resolution reasoning that expropriation is
unnecessary considering that there are still available lots in Bunawan for the establishment of the government
center.
• Nevertheless, Municipality filed a petition for Eminent Domain against the Modays.
• Municipality also filed a Motion to Take or Enter Upon the Possession of Subject Matter of This Case
stating that it had already deposited with the municipal treasurer the necessary amount in accordance with
Section 2, Rule 67 of the Revised Rules of Court and that it would be in the government's best interest for public
respondent to be allowed to take possession of the property.
• RTC granted respondent municipality's motion to take possession of the land holding that the
Sangguniang Panlalawigan's failure to declare the resolution invalid leaves it effective. The duty of the Sangguniang
Panlalawigan is merely to review the ordinances and resolutions passed by the Sangguniang Bayan under Section
208 (1) of B.P. Blg. 337, old Local Government Code and that the exercise of eminent domain is not one of the two
acts enumerated in Section 19 thereof requiring the approval of the Sangguniang Panlalawigan.
• Moday’s MFR was denied; hence, he elevated the case in a petition for certiorari alleging grave abuse of
discretion on the part of the trial court.
• CA dismissed the same holding that that the public purpose for the expropriation is clear from Resolution No.
43-‐89 and that since the Sangguniang Panlalawigan of Agusan del Sur did not declare Resolution No. 43-‐89
invalid, expropriation of Modays' property could proceed. MFR likewise denied.
• Municipality of Bunawan had erected three buildings on the subject property: the Association of Barangay
Councils (ABC) Hall, the Municipal Motorpool, both wooden structures, and the Bunawan Municipal Gymnasium,
which is made of concrete.
• Moday filed the instant petition for review seeking the reversal of the decision and resolution of the CA and a
declaration that Resolution No. 43-‐89 of the Municipality is null and void.
• Court issued a TRO enjoining and restraining the judge from enforcing her order granting possession of the
land to municipality and municipality from using and occupying all the buildings constructed and from further
constructing any building on the land subject of this petition.
• Court also issued a Resolution citing incumbent municipal Mayor Bustillo for contempt, ordering him to
pay the fine and to demolish the "blocktiendas" which were built in violation of the restraining order.
ISSUES:
1. WON a municipality may expropriate private property by virtue of a municipal resolution which was
disapproved by the Sangguniang Panlalawigan

2. WON the expropriation was politically motivated and Resolution No. 43-‐89 was correctly disapproved by
the Sangguniang Panlalawigan, there being other municipal properties available for the purpose
3. WON former Mayor Bustillo is liable to pay damages for insisting on the enforcement of a void municipal
resolution
HELD:
1. YES. Eminent domain, the power which the Municipality of Bunawan exercised, is a fundamental State
power that is inseparable from sovereignty. It is government's right to appropriate, in the nature of a compulsory
sale to the State, private property for public use or purpose. Inherently possessed by the national legislature, the
power of eminent domain may be validly delegated to local governments, other public entities and public utilities.
For the taking of private property by the government to be valid, the taking must be for public use and there must
be just compensation.
The Municipality of Bunawan's power to exercise the right of eminent domain is not disputed as it is expressly
provided for in Sec. 9 of BP 337, the local Government Code in force at the time expropriation proceedings were
initiated.
The Sangguniang Panlalawigan's disapproval of Municipal Resolution No. 43-‐89 is an infirm action which does not
render said resolution null and void. The law, as expressed in Section 153 of B.P. Blg. 337, grants the Sangguniang
Panlalawigan the power to declare a municipal resolution invalid on the sole ground that it is beyond the power of
the Sangguniang Bayan or the Mayor to issue.
As held in Velazco vs Blas, “The only ground upon which a provincial board may declare any municipal resolution,
ordinance, or order invalid is when such resolution, ordinance, or order is ‘beyond the powers conferred upon the
council or president making the same’. The provincial board's disapproval of any resolution, ordinance, or order
must be premised specifically upon the fact that such resolution, ordinance, or order is outside the scope of the
legal powers conferred by law. If a provincial board passes these limits, it usurps the legislative function of the
municipal council or president.”
Thus, the Sangguniang Panlalawigan was without the authority to disapprove Municipal Resolution No. 43-‐89 for
the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and its Sangguniang
Bayan the capacity to promulgate said resolution, pursuant to the Sec 9 of B.P. Blg. 337. Thus, it follows that Resolution
No. 43-‐89 is valid and binding and could be used as lawful authority to petition for the condemnation of Modays'
property.
2. NO. The limitations on the power of eminent domain are that the use must be public, compensation must
be made and due process of law must be observed. The necessity of exercising eminent domain must be genuine
and of a public character. Government may not capriciously choose what private property should be taken.
After a careful study of the records of the case, SC found no evidentiary support for Modays' allegations. The
uncertified photocopy of the sketch plan does not conclusively prove that the municipality does own vacant land
adjacent to Modays' property suited to the purpose of the expropriation. In the questioned decision, respondent
appellate court similarly held that the pleadings and documents on record have not pointed out any of respondent
municipality's "other available properties available for the same purpose."
3. NO. Since the accusations of political reprisal are likewise unsupported by competent evidence, SC held
that Modays' demand that the former municipal mayor be personally liable for damages is without basis.
Prov. Of Camarines Sur v. Court of Appeals (1993)

FACTS:
• Resolution 129 s. 1988 was passed by the Sangguniang Panlalawigan of Cam Sur authorizing the Provincial
Governor to expropriate private property contiguous to the provincial capitol site in order to establish a pilot farm
for non-‐food ad non-‐traditional agricultural crops and a housing project for provincial employees.
• An expropriation petition was filed by the Prov. Of Cam Sur (PCS) against private owners Ernesto and
Efren San Joaquin. The RTC ruled in favor of the PCS:
o It denied the motion to dismiss filed by the San Joaquins
o Granted the motion to issue writ of possession and authorized the CS to take possession with the
condition to post a bond
• When it was elevated to the CA, it:
o set aside the order of the trial court allowing PCS to take possession of the private properties
o it ordered the trial court to suspend the expropriation proceeding until PCS shall have submitted
the requisite approval of the Department of Agrarian Reform to convert the reclassification.
o The ruling of the CA assumed that the resolution was valid and that the expropriation was for
public purpose.
• PCS assails the decision of the CA
ISSUES:
1. WON, the expropriation was for a public purpose. YES
2. WON, PCS needs the approval of the DAR. NO
HELD:
Petition is GRANTED. The purpose for which the expropriation is made pursuant to satisfies the constitutional
requirement of law and that the PCS is within its limited delegated power to expropriate such property not subject
to the approval of the Department of Agriculture.
RATIO:
1. The establishment of a lot development center would inure to the direct benefit and advantage of the
people of PCS. Likewise the housing project satisfies the public purpose requirement of the Constitution citing:
Sumulong v Guerrero: Housing is a basic human need. Shortage in housing is a matter of state concern since it
directly and significantly affects public health , safety and environment and in sum the general welfare of the
people.
There has been a shift from the literal interpretation of public purpose/use for which the power of eminent
domain may be exercised. Under the new concept it means public advantage, convenience or benefit which tends
to contribute to the general welfare of the community.
2. The power of expropriation is superior to the power to distribute lands under the land reform program,
citing Juancho Ardana v Reyes.
The CA sided with the Sol Gen who in effect denigrated the power to expropriate by PCS by stressing that the
power is only delegated. Not taking into consideration that such limitation was not clearly expressed in law. It must
be remembered that “statutes conferring power of eminent domain to political subdivisions cannot be broadened
or constricted by implication.”
Although local governments do not have inherent power of eminent domain and can exercise it only when
expressly authorized by legislature, and the latter may retain certain control or impose certain restraints on the
exercise thereof, such delegated power although limited it is complete within its limits. Nothing in the LGC limits
this power by requiring the approval of DAR. Likewise, there is nothing in CAR law which expressly subjects such
expropriations under the control of DAR.
Barangay San Roque vs. Heirs of Pastor (2000)

FACTS:
Petitioners filed before the MTC of Talisay Cebu a Complaint to expropriate the property of respondents. This
complaint was dismissed by the MTC for lack of jurisdiction over the subject matter of the complaint. The MTC
reasoned that in an action for eminent domain the principal cause of action is the exercise of such right and that
jurisdiction lies with the RTC.
The RTC subsequently also dismissed the complaint saying that an action for eminent domain involved title to real
property. Hence, it is the value of the property to be expropriated that would determine the proper court where
the case should be filed. (the value of the property was 1,740php.)
The petitioners then appealed to the SC.
ISSUE:
Which court has jurisdiction over cases for eminent domain or expropriation where the assessed value of the
subject property is below 20k?
HELD:
The RTC
1. An expropriation suit is one that is incapable of pecuniary estimation (IPE).
2. In determining whether a suit is one that is IPE, one must first ascertain the nature of the principal action
or the remedy sought. If it is primarily for the recovery of a sum of money, the claim is capable of pecuniary
estimation.
3. But if it is not for recovery of the sum of money or if the money claim is purely incidental, the suit falls
within exclusively within the jurisdiction of the courts of first instance.
4. An expropriation suit does not involve the recovery of a sum of money. It deals with the exercise by the
government of its authority and right to take private property for public use.
5. NPC vs. Jocson: Expropriation proceedings have two phases:
a) Concerned with the determination of the plaintiff to exercise the power of eminent domain and the
propriety of its exercise
b) Concerned with the issue of just compensation
6. The primary consideration in an expropriation suit is whether the government has complied with the
requirements for taking of private property.
The value of the property is merely incidental to the expropriation suit.
Mun. of Paranaque vs. V.M. Realty Corp

FACTS:
The Sangguniang Bayan of the municipality of Parañaque passed Resolution no. 93-‐95, series of 1993 authorizing
the local chief executive to initiate expropriation proceedings against VM Realty. VM realty is the owner of two
parcels of land sought to be expropriated by the municipality. The said lots were to be used for the municipality’s
socialized housing project for the homeless. The RTC gave due course to the complaint and upon motion, allowed
the municipality to enter the premises after payment of 15% of the fair market value of the property.
VM realty filed its answer, raising the following affirmative defenses: 1. The complaint is barred by res
judicata (in connection with an earlier resolution which led to the offer by the municipality to enter into a
negotiated sale with VM realty) 2. The complaint failed to state a cause of action because the authority of the local
chief executive was based upon a resolution and not an ordinance.
The position of the municipality is that a resolution and an ordinance are synonymous for the purposes of
initiating an expropriation proceeding. Moreover, under Article 36 of Rule VI of the IRR of LGC, what is required is a
resolution and not an ordinance.
The RTC dismissed the complaint which was affirmed by the CA. Hence, the recourse to the SC.
ISSUE:
WON a local government unit may exercise the power of eminent domain through a resolution.
HELD:
No. Section 19 of the LGC expressly requires that an ordinance must be passed authorizing the local chief
executive to initiate expropriation proceedings.
RATIO:
The power of eminent domain is legislative in nature. Congress granted LGUs the power to exercise it,
subject to restraints and limitations. Sec.19 of the LGC lays down the parameters for the exercise thereof. Under
the said provision, the following must be complied with before expropriation may be had:
1. an ordinance is enacted by the local legislative council
2. the exercise of eminent domain is for the public use, public purpose or welfare or for the benefit of the
poor and the landless
3. just compensation must be paid
4. there must have been a previous valid and definite offer made to the owner of the property which the
latter denied
In this case, the first requirement was not complied with. A resolution is different from an ordinance. An ordinance
is a law while a resolution is merely a declaration of the LGU’s sentiment or opinion on a specific matter.
The municipality cannot rely on the words of Article 36, Rule VI of the IRR because it cannot contradict the law that
it seeks to implement. Moreover, the use of the word “resolution” in the said IRR appears to be mere oversight.
Nonetheless, the LGU may opt to comply with the requirements and then initiate another expropriation
proceeding.
RULING:
Petition is denied.
City of Cebu vs. CA (1996)

FACTS:
Merlita Cardeno is the owner of a parcel of land in Sitio Sto. Nino, Alaska-‐Mambaling, Cebu City. On February 25,
1992, the City Government of Cebu filed a complaint for eminent domain against Cardeno with the RTC seeking to
expropriate the said parcel of land. The complaint was initiated pursuant to Resolution No. 404 and Ordinance No.
1418 of the Sangguniang Panlungsod of Cebu City authorizing the City Mayor to expropriate the said parcel of land for
the purpose of providing a socialized housing project for the landless and low-‐income city residents.
Cardeno filed a motion to dismiss on the ground of lack of cause of action for failure to comply with condition
precedent of “a valid and definite offer” set forth in Section 19 of RA 7160. There had been negotiations for the
purchase of the property without resorting to expropriation, but said negotiations failed. Cardeno contended by
definition, "negotiations run the whole range of acts preparatory to concluding an agreement, from the
preliminary correspondence; the fixing of the terms of the agreement; the price; the mode of payment; obligations
of (sic) the parties may conceive as necessary to their agreement." Thus, "negotiations" by itself may pertain to any
of the foregoing and does not automatically mean the making of "a valid and definite offer."
The RTC dismissed the complaint. The CA affirmed the ruling of the RTC. According to the CA an allegation of
repeated negotiations made with the private respondent for the purchase of her property by the petitioner,
"cannot by any stretch of imagination, be equated or likened to the clear and specific requirement that the
petitioner should have previously made a valid and definite offer to purchase." It further added that the term
"negotiation" which necessarily implies uncertainty, it consisting of acts the purpose of which is to arrive at a
conclusion, may not be perceived to mean the valid and definite offer contemplated by law.
ISSUE:
WON expropriation may be granted
RATIO:
The Supreme Court ruled that the complaint state a cause of action. The Court said that a complaint should not be
dismissed upon a mere ambiguity, indefiniteness or uncertainty of the cause of action stated therein for these are
not grounds for a motion to dismiss but rather for a bill of particulars. In other words, a complaint should not be
dismissed for insufficiency unless it appears clearly from the face of the complaint that the plaintiff is not entitled to
any relief under any state of facts which could be proved within the facts alleged therein.
The error of both the RTC and respondent Court of Appeals in holding that the complaint failed to state a cause of
action stems from their inflexible application of the rule that: when the motion to dismiss is based on the ground
that the complaint states no cause of action, no evidence may be allowed and the issue should only be determined
in the light of the allegations of the complaint. However, this rule is not without exceptions. The trial court may
consider, in addition to the complaint, other pleadings submitted by the parties in deciding whether or not the
complaint should be dismissed for lack of cause of action.
In the case at bar, the petitioner also incorporated in their complaint for eminent domain a copy of Ordinance No.
1418. A perusal of the copy of said ordinance which has been annexed to the complaint shows that the fact of
petitioner's having made a previous valid and definite offer to private respondent is categorically stated therein.
Thus, the second whereas clause of the said ordinance provides as follows:
The city government has made a valid and definite offer to purchase subject lot(s) for the public use
aforementioned but the registered owner Mrs. Merlita Cardeno has rejected such offer.
The foregoing showed that the petitioner had in fact complied with the condition precedent of "a valid and definite
offer" set forth in Sec. 19 of R.A. 7160.
Francia vs. Mun. of Meycauyan (2008)

FACTS:
• Respondent municipality filed a complaint for Expropriation against petitioners in the RTC of Bulacan
• It planned to establish a common public terminal for all types of PUVs with a weighing scale for heavy
trucks
• The property is a 16,256 sq. m. idle land at the junction of North Expressway, Malhacan-‐Iba-‐Camalig main
road artery, and the MacArthur Highway.
• Petitioners:
o Property is not raw land; in fact it is developed
o The offered price of the municipality is too low (P111.99/sq. m. or a total of P2,333,500)
• RTC: Expropriation was for a public purpose
o The common terminal for all PUVs would improve the flow of traffic during rush hours
o The property is best suited because of its accessibility
o Grants immediate possession to municipality since deposited 15% of FMV based on current tax
declarations
• CA: Partial grant for petitioners
o Petitioners were deprived of opportunity to controvert respondent’s allegations
o Order of expropriation nullified, but not the Writ of Possession
o WoP → must be given upon the deposit of the required amount. No hearing is necessary.
• Petitioners’ contentions in the SC: there is a need for prior determination of public purpose in the
issuance of a WoP
ISSUES/HELD:
1. WON prior determination of public purpose is needed for the issuance of a WoP? No.
• Sec. 19 of RA 7160 states:
Section 19. Eminent Domain. A local government unit 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; Provided, however, That the
power of eminent domain may not be exercised unless a valid and definite offer has been
previously made to the owner, and that such offer was not accepted; Provided, further, That the
local government unit may immediately take possession of the property upon the filing of the
expropriation proceedings and upon making a deposit with the proper court of at least fifteen
percent (15%) of the fair market value of the property based on the current tax declaration of the
property to be expropriated; Provided, finally, That, the amount to be paid for the expropriated
property shall be determined by the proper court, based on the fair market value at the time of the
taking of the property. (emphasis supplied)
• Requirements for an LGU for it to enter into possession of a property:
o File a complaint for expropriation sufficient in form and in substance
o Deposit with the court at least 15% of the property’s FMV 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
WoP
Heirs of Ardona v. Reyes (1983)

FACTS:
The Philippine Tourism Authority filed complaints with the CFI of Cebu City to expropriate 282 hectares of rolling land in
several barangays in Cebu for the development into “integrated resort complexes of selected and well-‐
defined geographic areas with potential tourism value.” The PTA wants to construct a sports complex, club house,
golf course, playground and picnic areas on said land. Furthermore, an electric power grid as well as a deep well
and drainage system will also be constructed. Complimentary sport facilities such as malls, coffee shops, etc. will
be created in the said area.
The defendants argue that the taking is (1) not impressed with “public use” contemplated under the Constitution;
(2) that the land was covered by the land reform program and that jurisdiction of the case should be with the Court
of Agrarian Relations and not with the CFI; and (3) that the expropriation would impair the obligation of contracts.
The PTA deposited with the PNB an amount equivalent to 10% of the value of the properties pursuant to PD 1533.
Thereafter, the CFI issued separate orders authorizing PTA to take immediate possession of the premises and
directing the issuance of writs of possession. Hence, this appeal.
ISSUE:
WON there is compliance with the “public use” requirement under the Constitution
HELD/RATIO:
YES. The concept of public use is not limited to traditional purposes such as the construction of roads, waterworks,
schools, markets, etc. The idea that public use is strictly limited to clear cases of “use by the public” has long been
discarded. According to CJ Fernando in his book entitled The Constitution of the Philippines stated that the
statutory and judicial trend is that as long as the purpose of the taking is public, then the power of eminent
domain comes into play.
The petitioners argue that tourism is not a species of public use because it is not found in the Constitution. The
Court held that the policy objectives of the framers can be expressed only in general terms such as social justice,
local autonomy, conservation and development of the national patrimony, public interest, and general welfare,
among others. The programs to achieve these objectives vary from time to time and according to place. To freeze
specific programs like Tourism into express constitutional provisions would make the Constitution more prolix than
a bulky code and require of the framers prescience beyond Delphic proportions. The particular mention in the
Constitution of agrarian reform and the transfer of utilities and other private enterprises to public ownership
merely underscores the magnitude of the problems sought to be remedied by these programs. They do not
preclude nor limit the exercise of the power of eminent domain for such purposes like tourism and other
development programs.
The petitioners' contention that the promotion of tourism is not "public use" because private concessioners would
be allowed to maintain various facilities such as restaurants, hotels, stores, etc. inside the tourist complex is
impressed with even less merit. Private bus firms, taxicab fleets, roadside restaurants, and other private businesses
using public streets end highways do not diminish in the least bit the public character of expropriations for roads
and streets.
Moreover, the Court also said that the petitioners have failed to overcome the deference that is appropriately
accorded to formulations of national policy expressed in legislation. The US case of Berman v. Parker of deference
to legislative policy even if such policy might mean taking from one private person and conferring on another
private person is also applicable in the Philippines. The case mentioned that “the public end may be as well or
better served through an agency of private enterprise than through a department of government-‐or so the
Congress might conclude. We cannot say that public ownership is the sole method of promoting the public
purposes of community redevelopment projects.” Moreover, Philippine cases such as Visayan Refining Co. vs.
Camus shows that from the very start of constitutional government in our country judicial deference to legislative
policy has been clear and manifest in eminent domain proceedings.
The expression of national policy are found in PD 564 or the revised PTA Charter wherein it was said that it is the
avowed aim of the Philippine government to promote tourism and work for its accelerated and balanced growth.
Section 1 of the revised PTA Charter further states that it is the policy of the State to “promote, encourage, and
develop Philippine tourism as an instrument in accelerating the development of the country, of strengthening the
country's foreign exchange reserve position, and of protecting Philippine culture, history, traditions and natural
beauty, internationally as well as domestically.” Lastly, the power of eminent domain is expressly provided under
Section 5 B(2) of the Charter to achieve the aforementioned State policy.
Filstream International Inc. vs. CA(1998)

FACTS:
Filstream International is the registered owner of adjacent lots in Tondo,Manila with a total area of 3,571 square
meters.
An ejectment suit was filed by Filstream in 7 January 1993 against private respondents/residents on the grounds of
termination of the lease contract and non-‐payment of rentals. MTC, RTC and CA ruled in favor of Filstream,
ordering private respondents to vacate the lots. The decision became final and executory as no further action was
taken beyond the CA. The MTC subsequently issued a writ of execution as well as a Notice to Vacate, both of which
were assailed by the private respondents alleging that supervening events had taken place.
Alleged supervening events:

• City of Manila approved Ordinance no. 7813 authorizing Mayor Lim to initiate the acquisition by legal
means of certain parcels of land including a large part of the land owned by Filstream.
• City of Manila approved Ordinance no. 7855 declaring the expropriation of certain lots owned by Enrique
Gutierrez, Filstream’s predecessor-‐in-‐interest. The lots were to be sold and distributed to qualified tenants.
• City of Manila filed a complaint for eminent domain on 23 May 1994 (roughly 3 months prior to CA
decision) seeking to expropriate Filstream’s lots. A writ of possession was subsequently issued by the RTC in favor
of the City of Manila.
Filstream’s motion to dismiss and its motion to quash the writ of possession were denied by the RTC in 30
September 1994. With its motion for reconsideration denied in the RTC, Filstream filed a petition for certiorari with
the CA which was also dismissed for being insufficient in form and substance. Filstream thus filed a (1st petition)
petition for certiorari under Rule 45 with the SC.
MTC denied the motion to quash writ of execution filed by the private respondents in the first case, and, in 22 April
1996, issued an order commanding the demolition of the structure erected on the disputed lots. The demolition,
however, was averted when the RTC issued a TRO enjoining the execution of the writ issued by the MTC in
response to a petition for certiorari and prohibition filed by the private respondents. A latter petition for certiorari
and prohibition filed in the RTC by the City of Manila was subsequently consolidated with the private respondent’s
petition.
The consolidated petitions pending in the RTC were later dismissed for violation of SC Circular No. 04-‐94
(forum shopping) because the same parties, causes of action and subject matter involved therein had already been
disposed of in the earlier ejectment case. Upon petition of the defeated parties, the CA issued a TRO ordering the MTC
to desist from implementing the order of demolition.
Thus, a (2nd petition) petition for certiorari and prohibition under Rule 65 was filed with the SC by Filstream
assailing the CA’s resolution granting the TRO against the demolition.
ISSUES/HELD:
1. WON City of Manila may exercise right of eminent domain despite the existence of a final and executory
judgment ordering private respondents to vacate the lots.
YES. The City of Manila has an undeniable right to exercise its power of eminent domain within its jurisdiction. The
right to expropriate private property for public use is expressly granted under Sec 19 of the Local Govt Code. Sec
100 of the Revised Charter of the City of Manila further empowers the city government to expropriate private
property in the pursuit of its urban land reform and housing program. The city’s right to exercise these
prerogatives notwithstanding the existence of a final and executory judgment over the property to be expropriated
had already been previously upheld by the court in the case of Philippine Columbian Association vs Panis in 21
December 1993.
2. WON expropriation of Filstream’s lots were legally and validly undertaken.
NO. Local government units are not given an unbridled authority when exercising their power of eminent domain.
Constitutional provisions on due process and just compensation for the expropriation of private property must be
complied with. Other laws have also set down specific rules in the exercise of the power of eminent domain, to
wit,
• Sec 19 of LGC provides that such exercise must be pursuant to the provisions of the Constitution and
pertinent laws.
• Sec 9 of the Urban Development and Housing Act of 1992 (UDHA) provides an order ofpriority in the
acquisition of land for socialized housing, with private lands listed as the last option.
• Sec 10 of UDHA provides that expropriation shall be resorted to only when other modes of acquisition
such as community mortgage, land swapping, donation to the government, etc. have been exhausted, and, where
expropriation is resorted to, parcels of land owned by small property owners shall be exempted.
Compliance with the above legislated conditions are deemed mandatory because these are the only safeguards in
securing the right of owners of private property to DUE PROCESS when their property is expropriated for public
use.
The court found nothing in the records which would indicate that the City of Manila complied with the above
conditions. There was thus a violation of petitioner Filstream’s right to due process in the manner by which the
expropriation of its private property was undertaken by the City of Manila.
CA resolutions upholding the expropriation and restraining the demolition were reversed and set aside.
Lesson in a Nutshell
The power of eminent domain may be exercised despite the existence of a final and executory decision recognizing
a private party’s ownership rights over a parcel of land, BUT due process requirements must be complied with in
the exercise of the said power.
Hagonoy Market Vendors Assn. Vs. Mun. of Hagonoy, Bulacan (2002)

FACTS:
-‐ On Oct. 1, 1996, the Sanguniang Bayan of Hagonoy, Bulacan enacted an ordinance, Kautusan Blg. 28
which increased the stall rentals of market vendors in Hagonoy. Art.3 provided that it shall take effect upon
approval.
-‐ The subject ordinance was posted from Nov. 4-‐25, 1996. In the last week of Nov. 1997, the petitioner’s
members were personally given copies of the approved Ordinance and were informed that it shall be enforced in
Jan. 1998.
-‐ On Dec. 8, 1997, the petitioner’s President filed an appeal with the Secretary of Justice assailing the
constitutionality of the tax ordinance.
-‐ Petitioner claimed it was unaware of the posting of the ordinance.
-‐ Respondent opposed the appeal. It contended that the ordinance took effect on October 6, 1996 and that
the ordinance, as approved, was posted as required by law. Hence, it was pointed out that petitioner’s appeal, made
over a year later, was already time-‐barred.
-‐ The Secretary of Justice dismissed the appeal on the ground that it was filed out of time – beyond the 30
days from the effectivity of the Ordinance on Oct. 1, 1996 as prescribed under Sec.187 of the 1991 LGC.
-‐ After its motion for reconsideration was denied, petitioner appealed to the CA, claiming the Sec. erred
and should have overlooked the technicality and ruled on its petition on the merits.
-‐ CA dismissed its petition for being formally deficient as it was not accompanied by certified true copies of
the assailed Resolutions of the Sec. of Justice.
ISSUES:
1. WoN the petition to the Court of Appeals was formally deficient as it was not accompanied by certified
true copies of the assailed Resolutions of the Sec. of Justice. NO.
-‐ The petitioner insists that it had good reasons for its failure to comply with the rule and the CA erred in
refusing to accept its explanation.
-‐ This Court agrees with the petitioner. It is clear from the records that the petitioner exerted due diligence
to get the copies of its appealed Resolution certified by the Dept. of Justice but failed to do so on account of
typhoon Loleng.
2. WoN the petition to the DOJ Secretary should be dismissed for being time-‐barred. YES.
-‐ Nonetheless, the Court held that the petition should be dismissed as the appeal of the petitioner with the Sec.
of Justice was already time-‐barred.
-‐ Sec. 187 of the 1991 LGC states that an appeal of a tax ordinance or revenue measure should be made to
the Sec. of Justice within 30 days from the effectivity of the assailed ordinance shall not be suspended.
-‐ In the case at bar, Mun. Ord, No. 28 took effect in Oct. 1996. Petitioner filed its appeal only in Dec. 1997.
The periods stated in Sec. 187 LGC are mandatory. Being a revenue measure, the collection of which is of
paramount importance thus it is essential that the validity of revenue measures is not left uncertain for a
considerable length of time.
3. WoN the ordinance is unconstitutional for lacking the requirement of mandatory public hearing. NO.
-‐ Petitioners cannot gripe that there was practically no public hearing conducted as its objections to the
proposed measure were not considered by the Sanguniang Bayan. Indeed, they participated in the said public
hearing.
-‐ Public hearings are conducted by legislative bodies to allow interested parties to ventilate their views on a
proposed law or ordinance. However, the views are not binding on the legislative body and it is not compelled by
law to adopt the same.
4. WoN the ordinance is unconstitutional for lacking the requirement of mandatory publication or posting,
hence they were unaware of the approval and effectivity of the ordinance. NO.
-‐ The records is bereft of any evidence to prove petitioner’s negative allegation that the subject ordinance
was not posted as required by law.
-‐ Municipal Ordinace No. 28 was enacted by the Sangguniang Bayan of Hagonoy on Octover 1, 1996.
-‐ Then Acting Municipal Mayor Maria Garcia Santos approved the Ordinance on October 7, 1996.
-‐ After its approval, copies of the Ordinance were given to the Municipal Treasurer on the same day.
-‐ On November 9, 1996, the Ordinance was approved by the Sangguniang Panlalawigan.
-‐ The Ordinance was posted during the period from Nov. 4-‐25, 1996 in three (3) public places, viz.: in front
of the municipal building, at the bulletin board of the Sta. Ana Parish Church and on the front door of the Office of
the Market Master in the public market.
-‐ Posting was validly made in lieu of publication as there was no newspaper of local circulation in the
municipality of Hagonoy (Sec. 188 of the Local Gov’t Code provides for local newspaper or in at least two
conspicuous and publicly accessible places).
-‐ Also, even on the substantive points raised, the petition must fail. Sec. 6c.04 of the 1993 Mun. Rev. Code &
Sec 191 of the LGC limiting the percentage of increase that can be imposed apply to tax rates, not rentals. Neither
can it be said that the rates were not uniformly imposed. The ordinance covered 3 public markets. However, it
excluded Bagong Munisipyo from the increase since it is only a makeshift, dilapidated place intended for transient
peddlers.
DISPOSITIVE:
The petition is Dismissed for lack of merit.
Republic of the Philippines v. CA (2002)

FACTS:
• Petitioner instituted expropriation proceedings covering a total of 544,980 square meters of contiguous
land situated along MacArthur Highway, Malolos, Bulacan, to be utilized for the continued broadcast operation
and use of radio transmitter facilities for the “Voice of the Philippines” project.
• Petitioner took over the premises after the previous lessee, the “Voice of America,” had ceased its
operations thereat. Petitioner made a deposit of P517,558.80, the sum provisionally fixed
as being the reasonable value of the property. On 26 February 1979, or more than nine years after the institution of
the expropriation proceedings, the trial court issued this order condemning the property and ordering the plaintiff
to pay the defendants the just compensation for the property.
• The subject of the case is the 76,589-‐square meter property previously owned by Luis Santos,
predecessor-‐in-‐interest of respondents, which forms part of the expropriated area.
• It is alleged that national government failed to pay to respondents the compensation pursuant to the
foregoing decision, such that a little over five years later, or on 09 May 1984, respondents filed a manifestation
with a motion seeking payment for the expropriated property.
• President Estrada issued Proclamation No. 22, transferring 20 hectares of the expropriated property to
the Bulacan State University for the expansion of its facilities and another 5 hectares to be used exclusively for the
propagation of the Philippine carabao.
• The remaining portion was retained by the PIA. This fact notwithstanding, and despite the 1984 court
order, the Santos heirs remained unpaid, and no action was taken on their case until September 1999 when
petitioner filed its manifestation and motion to permit the deposit in court of the amount of P4,664,000.00 by way
of just compensation for the expropriated property of the late Luis Santos subject to such final computation as
might be approved by the court.
• Santos’ heirs, opposing the manifestation and motion, submitted a counter-‐motion to adjust
the compensation from P6.00 per square meter previously fixed in the 1979 decision to its current zonal valuation
pegged at P5,000.00 per square meter or, in the alternative, to cause the return to them of the expropriated
property.
• On 01 March 2000, the Bulacan RTC ruled in favor of respondents and issued the assailed order, vacating
its decision of 26 February 1979 and declaring it to be unenforceable on the ground of prescription.
• The CA denied the appeal (failure to file during the reglementary period).
ISSUES:
WON the LGU of Bulacan has inherent powers of eminent domain?
WON the respondents are entitled to the return of the property in question?
HELD/RATIO:
On the right of eminent domain
The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate
any property within its territorial sovereignty for a public purpose.
In the hands of the legislature, the power is inherent, its scope matching that of taxation, even that of police
power itself, in many respects. It reaches to every form of property the State needs for public use and, as an old
case so puts it, all separate interests of individuals in property are held under a tacit agreement or implied
reservation vesting upon the sovereign the right to resume the possession of the property whenever the public
interest so requires it
The ubiquitous character of eminent domain is manifest in the nature of the expropriation proceedings.
Expropriation proceedings are not adversarial in the conventional sense, for the condemning authority is not
required to assert any conflicting interest in the property. Thus, by filing the action, the condemnor in effect
merely serves notice that it is taking title and possession of the property, and the defendant asserts title or interest
in the property, not to prove a right to possession, but to prove a right to compensation for the taking.
Obviously, however, the power is not without its limits: first, the taking must be for public use, and second, that
just compensation must be given to the private owner of the property.
These twin proscriptions have their origin in the recognition of the necessity for achieving balance between the
State interests, on the one hand, and private rights, upon the other hand, by effectively restraining the former and
affording protection to the latter. In determining “public use,” two approaches are utilized -‐ the first is public
employment or the actual use by the public, and the second is public advantage or benefit
The expropriated property has been shown to be for the continued utilization by the PIA, a significant portion
thereof being ceded for the expansion of the facilities of the Bulacan State University and for the propagation of
the Philippine carabao, themselves in line with the requirements of public purpose. Respondents question the
public nature of the utilization by petitioner of the condemned property, pointing out that its present use differs
from the purpose originally contemplated in the 1969 expropriation proceedings. The argument is of no moment.
The property has assumed a public character upon its expropriation. Surely, petitioner, as the condemnor and as
the owner of the property, is well within its rights to alter and decide the use of that property, the only limitation
being that it be for public use, which, decidedly, it is.
On Return of property
In insisting on the return of the expropriated property, respondents would exhort on the pronouncement in
Provincial Government of Sorsogon vs. Vda. de Villaroya where the unpaid landowners were allowed the
alternative remedy of recovery of the property there in question. It might be borne in mind that the case involved
the municipal government of Sorsogon, to which the power of eminent domain is not inherent, but merely
delegated and of limited application. The grant of the power of eminent domain to local governments under RA
7160 cannot be understood as being the pervasive and all-‐encompassing power vested in the legislative branch of
government. For local governments to be able to wield the power, it must, by enabling law, be delegated to it by
the national legislature, but even then, this delegated power of eminent domain is not, strictly speaking, a power of
eminent, but only of inferior, domain or only as broad or confined as the real authority would want it to be.
Thus, in Valdehueza vs. Republic where the private landowners had remained unpaid ten years after the
termination of the expropriation proceedings, this Court ruled -‐ “The points in dispute are whether such payment
can still be made and, if so, in what amount. Said lots have been the subject of expropriation proceedings. By final
and executory judgment in said proceedings, they were condemned for public use, as part of an airport, and
ordered sold to the government. x x x It follows that both by virtue of the judgment, long final, in the expropriation
suit, as well as the annotations upon their title certificates, plaintiffs are not entitled to recover possession of their
expropriated lots -‐ which are still devoted to the public use for which they were expropriated -‐ but only to demand
the fair market value of the same.”
The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides not only for the
payment of just compensation to herein respondents but likewise adjudges the property condemned in favor of
petitioner over which parties, as well as their privies, are bound. Petitioner has occupied, utilized and, for all
intents and purposes, exercised dominion over the property pursuant to the judgment. The exercise of such rights
vested to it as the condemnee indeed has amounted to at least a partial compliance or satisfaction of the 1979
judgment, thereby preempting any claim of bar by prescription on grounds of non-‐execution. In arguing for
the return of their property on the basis of non-‐payment, respondents ignore the fact that the right
of the expropriatory authority is far from that of an unpaid seller in ordinary sales, to which the remedy of
rescission might perhaps apply. An in rem proceeding, condemnation acts upon the property. After condemnation,
the paramount title is in the public under a new and independent title; thus, by giving notice to all claimants to a
disputed title, condemnation proceedings provide a judicial process for securing better title against all the world
than may be obtained by voluntary conveyance.
Respondents, in arguing laches against petitioner did not take into account that the same argument could likewise
apply against them. Respondents first instituted proceedings for payment against petitioner on 09 May 1984, or
five years after the 1979 judgment had become final. The unusually long delay in bringing the action to compel
payment against herein petitioner would militate against them. Consistently with the rule that one should take
good care of his own concern, respondents should have commenced the proper action upon the finality of the
judgment which, indeed, resulted in a permanent deprivation of their ownership and possession of the property.
The constitutional limitation of “just compensation” is considered to be the sum equivalent to the market value of
the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course
of legal action and competition or the fair value of the property as between one who receives, and one who
desires to sell, it fixed at the time of the actual taking by the government. Thus, if property is taken for public use
before compensation is deposited with the court having jurisdiction over the case, the final compensation must
include interests on its just value to be computed from the time the property is taken to the time when
compensation is actually paid or deposited with the court.
In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the
owner in a position as good as (but not better than) the position he was in before the taking occurred.
The Bulacan trial court, in its 1979 decision, was correct in imposing interests on the zonal value of the property to
be computed from the time petitioner instituted condemnation proceedings and “took” the property in September
1969. This allowance of interest on the amount found to be the value of the property as of the time of the taking
computed, being an effective forbearance, at 12% per annum should help eliminate the issue of the constant
fluctuation and inflation of the value of the currency over time. Article 1250 of the Civil Code, providing that, in case
of extraordinary inflation or deflation, the value of the currency at the time of the establishment of the obligation
shall be the basis for the payment when no agreement to the contrary is stipulated, has strict application only to
contractual obligations. In other words, a contractual agreement is needed for the effects of extraordinary inflation
to be taken into account to alter the value of the currency.
DISPOSITIVE:
All given, the trial court of Bulacan in issuing its order, dated 01 March 2000, vacating its decision of 26 February
1979 has acted beyond its lawful cognizance, the only authority left to it being to order its execution. Verily,
private respondents, although not entitled to the return of the expropriated property, deserve to be paid promptly
on the yet unpaid award of just compensation already fixed by final judgment of the Bulacan RTC on 26 February
1979 at P6.00 per square meter, with legal interest thereon at 12% per annum computed from the date of "taking"
of the property, i.e., 19 September 1969, until the due amount shall have been fully paid.
4.6 Reclassification of lands
Fortich vs. Corona (1999)

FACTS:
This case involves a 144-‐hectare land located at San Vicente, Sumilao, Bukidnon owned by NQSRMDC. The
property was leased as a pineapple plantation to Del Monte Philippines for a period of 10 years. In October 1991,
DAR placed the said property under compulsory acquisition. NQSRMDC resisted the DAR’s action and sought relief
from the DAR Adjudication Board (DARAB). The DARAB ruled in favor of NQSRMDC and ordered DAR to desist from
pursuing any activity concerning the subject property.
Thereafter, the Provincial Development Council of Bukidnon passed Resolution No. 6 designating areas along
Bukidnon-‐Sayre Highway as part of the Bukidnon Agro-‐Industrial Zones where the subject property is situated.
Pursuant to Section 20 of the LGC, the Sangguniang Bayan of Sumilao enacted Ordinance No. 24 converting or re-‐
classifying the subject property from agricultural to industrial/institutional with a view of providing an opportunity
to attract investors and provide more jobs and raise income of its people.
An application for land use conversion was filed by the BAIDA and NQSRMDC before the DAR concerning the 144-‐
hectare land. Invoking Section 65 of RA 6657 (Comprehensive Agrarian Reform Law), then DAR Secretary Garilao
denied the application for conversion and instead placed the subject property under the compulsory coverage of
CARP. He ordered the distribution of the land to qualified landless farmers. BAIDA and NQSRMDC filed a motion for
reconsideration which was however denied in an Order by the DAR.
Bukidnon governor Carlos Fortich appealed the order of denial to the OP and prayed for the conversion of the
subject property. Executive Secretary Torres issued a Decision which reversed the DAR Order and upheld the
power of the local government units to convert portions of their agricultural lands into industrial areas. The DAR
belatedly filed a motion for reconsideration which was denied by Secretary Torres on the ground that the OP
Decision had already become final and executory.
Meanwhile, during the pendency of the appeal by Gov. Fortich to the OP, DAR, without giving just compensation,
caused the cancellation of the NQSRMDC’s title on the land and had it transferred in the name of RP. Thereafter, it
caused the issuance of Certificates of Land Ownership Awards (CLOA) and had them registered in the name of 137
farmer-‐beneficiaries.
Despite the denial of the OP, DAR filed a second motion for reconsideration of the order of the President. Some alleged
farmer-‐beneficiaries staged a hunger-‐strike in front of the DAR compound to protest the OP decision.
President Ramos constituted the Presidential Fact-‐Finding Task Force to look into the controversy. Deputy
Executive Secretary Corona then issued the so-‐called “Win-‐Win” Resolution which substantially modified the
OP Decision by awarding 100 hectares of the subject property to the qualified farmer-‐beneficiaries and allocating
only 44-‐hectares for the establishment of an industrial and commercial zone.
First SC Decision dated 14 April 1998
Petitioners Gov. Fortich and NQSRDMC filed a petition for certiorari, prohibition and injunction before the SC. They
sought to nullify the “Win-‐Win” Resolution and argued that Deputy Executive Secretary Corona committed grave
abuse of discretion when he issued the same.
ISSUE:
WON the final and executory OP Decision can still be substantially modified by the “Win-‐Win” Resolution
HELD:
No
The SC annulled the “Win-‐Win” Resolution and applied the rule on finality of administrative determination in
declaring the OP Decision as final and executory. According to the court, when the OP issued the said decision, it had
lost its jurisdiction to re-‐open the case, more so modify its decision. It had no authority to entertain the
second motion for reconsideration filed by the DAR.
Second SC Decision dated 17 November 1998
Respondents and applicants for intervention files separate motions for reconsiderations seeking the reversal of the
first SC decision nullifying the “Win-‐Win” Resolution.
ISSUE:
WON the power of the local government units to reclassify lands is subject to the approval of the DAR
HELD:
No
The said issue has been decided by the SC in the case of the Province of Camarines Sur et al. vs. CA wherein it was
held that local government units need not obtain the approval of the DAR to convert reclassify lands from
agricultural to non-‐agricultural use.
The SC declared that when the OP Decision was declared final and executor, vested rights were acquired by the
petitioners and all others who should be benefited by the said decision. The court also pointed out that the
applicants for intervention categorically admitted that they were not tenants of the NQSRMDC but were merely
seasonal farm workers in the pineapple plantation. It held that, being merely seasonal farm workers without a
right to own, the applicants for intervention have no legal or actual and interest over the subject property.
The SC also reiterated the pertinent portion of the OP Decision which recognized the authority of the Sangguniang
Bayan of Sumilao to reclassify the land into industrial/institutional use:
“The language of Sec. 20 of RA 7160 is clear and affords no room for any other interpretation. By
unequivocal legal mandate, it grants local government units autonomy in their local affairs including the
power to convert portions of their agricultural lands and provide for the manner of their utilization and
disposition to enable them to attain their fullest development as self-‐reliant communities.”
Third SC Decision dated 19 August 1999
Separate motions for reconsideration were again filed by respondents and intervenors this time to assail the 17
November 1998 Resolution. Both respondents and intervenors prayed that the case be referred to the Court en
banc inasmuch as their earlier MRs were resolved by a vote of two-‐two, the required number to carry a decision
under the Constitution (3 votes) was not met.
ISSUE:
WON failure to meet the three votes justifies the referral of the case to the court en banc
HELD:
No
A careful reading of the constitutional provision reveals the intention of the framers to draw a distinction between
cases, on the one hand, and matters, on the other hand, such that cases are “decided” while matters, which include
motions, are “resolved”. Otherwise put, the word “decided” must refer to “cases”; while the word “resolved” must
refer to “matters”, applying the rule of reddendo singula singulis.
It is clear that only cases are referred to the Court en banc for decision whenever the required number of votes is
not obtained. Conversely, the rule does not apply where, as in this case, the required three votes is not obtained
in the resolution of a MR. Article VIII, Section 4(3) pertains to the disposition of cases by a division. If there is a tie in
the voting, there is no decision. The only way to dispose of the case then is to refer it to the Court en banc. On the
other hand, if a case has already been decided by the division and the losing party files a MR, the failure of the
division to resolve the motion because of a tie in the voting does not leave the case undecided. There is still the
decision which must stand in view of the failure of the members of the division to muster the necessary vote for its
reconsideration. Quite plainly, if the voting results in a tie, the motion for reconsideration is lost. The assailed
decision is not reconsidered and must therefore be deemed affirmed. Such was the ruling of this Court in the
Resolution of November 17, 1998.
ISSUE:
WON the referral to the court en banc is justified on the ground that the issues are of first impression
HELD:
No
The issues presented by the movants are matters of no extraordinary import to merit the attention of the Court en
banc. The issue of whether or not the power of the local government units to reclassify lands is subject to the
approval of the DAR is no longer novel, this having been decided by this Court in the case of Province of Camarines
Sur, et al. vs. Court of Appeals wherein we held that local government units need not obtain the approval of the
DAR to convert or reclassify lands from agricultural to non-‐agricultural use.
Moreover, the Decision sought to be reconsidered was arrived at by a unanimous vote of all five (5) members of
the Second Division of this Court. Stated otherwise, the Second Division is of the opinion that the matters raised
by movants are nothing new and do not deserve the consideration of the Court en banc. Thus, the participation of
the full Court in the resolution of movants’ motions for reconsideration would be inappropriate.
ISSUE:
WON the referral to the court en banc partakes of the nature of a second MR
HELD:
Yes
The contention that the Resolution of November 17, 1998 did not dispose of the earlier MR of the Decision dated
April 24, 1998 is flawed. The present MR necessarily partakes of the nature of a second motion for reconsideration
which, according to the clear and unambiguous language of Rule 56, Section 4, in relation to Rule 52, Section 2, of
the 1997 Rules of Civil Procedure, is prohibited.
In this case, not only did movants fail to ask for prior leave of court, but more importantly, they have been unable
to show that there are exceptional reasons for due course to their second motions for reconsideration. Stripped of
the arguments for referral of this incident to the Court en banc, the motions subject of this resolution are nothing
more but rehashes of the motions for reconsideration which have been denied in the Resolution of November 17,
1998. To be sure, the allegations contained therein have already been raised before and passed upon by the Court
in the said Resolution.
ISSUE:
WON the Win-‐Win Resolution was valid
HELD:
No
The resolution is void and of no legal effect considering that the March 29, 1996 OP Decision had already become
final and executory even prior to the filing of the MR which became the basis of the said “Win-‐Win” Resolution. While
it may be true that on its face the nullification of the “Win-‐Win” Resolution was grounded on a procedural rule
pertaining to the reglementary period to appeal or move for reconsideration, the underlying consideration therefor
was the protection of the substantive rights of petitioners. “Just as a losing party has the right to file an appeal
within the prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution
of his/her case.”
In other words, the finality of the March 29, 1996 OP Decision accordingly vested appurtenant rights to the land in
dispute on petitioners as well as on the people of Bukidnon and other parts of the country who stand to be
benefited by the development of the property.
Roxas & Co., Inc. v. CA (1999)

FACTS:
President Cory Aquino on July 1987 promulgated Proclamation Number 131 instituting CARP and EO No. 229
providing for mechanisms necessary to implement CARP.
Later, when congress finally covened, it passed RA 6657 or the Comprehensive Agrarian Reform Law.
This case involves 3 haciendas in Nasugbu, Batangas owned by Roxas & Co., Inc. namely:
1.) Hacienda Palico,
2.) Hacienda Banilad and
3.) Hacienda Caylaway.
Before CARL took effect, Roxas & Co., Inc. (petitioner) voluntarily offered to sell Hacienda Caylaway pursuant to
EO 229.
The other 2 were placed under compulsory acquisition by respondent DAR in accordance with CARL.
Petitioner instituted a case with DAR Adjudication Board (DARAB) to re-‐classify the lands into non-‐agricultural
pursuant to Proclamation No. 1520 issued by former President Marcos declaring Nasugbu, Batangas as a tourist
zone, which were denied.
DARAB held that the case involved theprejudicial question of whether the property was subject to agrarian reform
and should be submitted to the Office of the Secretary of Agrarian Reform.
Petitioner filed a case with the CA questioning the expropriation of the properties under CARL and the denial of
due process in the acquisition of the land.
CA dismissed the petition on the ground of failure to exhaust administrative remedies.
Hacienda Palico
DAR, through Municipal Agrarian Reform Officer (MARO) of Nasugbu, Batangas, sent a notice entitled “Invitation
to Parties” to petitioner to discuss the results of the DAR investigation of Hacienda Palico, which was “scheduled
for compulsory acquisition this year under the CARP.
”Summary Investigation Reports were submitted by the MARO, representatives of the Barangay
Agrarian Reform Committee (BARC), Land Bank (LBP) and the Provincial Agrarian Reform Officer
(PARO) recommending that 270 ha and 75.3 ha of the property be placed under compulsory
acquisition at a compensation of P8,109,739.00 and P2,188,195.47, respectively.
DAR through Secretary Miriam Santiago sent a “Notice of Acquisition” to petitioner.
Petitioner was informed that 1,023.999 ha of its land in Hacienda Palico were subject to immediate acquisition and
distribution by the government under the CARL; and the government was offering compensation of P3.4 million for
333.0800 hectares.
Almost two years later, the DAR Regional Director sent to the LBP Land Valuation Manager three (3) separate
Memoranda entitled “Request to Open Trust Account.”
Each Memoranda requested that a trust account representing the valuation of three portions of Hacienda Palico
be opened in favor of the petitioner in view of the latter’s rejection of its offered value.
Meanwhile, petitioner applied with the DAR for conversion of Haciendas Palico and Banilad from agricultural to
non-‐agricultural lands under the provisions of the CARL.
Despite petitioner’s application for conversion, DAR proceeded with the acquisition of the two Haciendas.
The LBP trust accounts as compensation for Hacienda Palico were replaced by respondent DAR with cash and LBP
bonds.
On October 22, 1993, from the mother title of TCT No. 985 of the Hacienda, DAR registered Certificate of Land
Ownership Award (CLOA) No. 6654.
On October 30, 1993, CLOA’s were distributed to farmer beneficiaries.
Hacienda Banilad.
DAR through the MARO of Nasugbu Batangas sent a notice of acquisition to petitioner.
Later, the MARO sent an “Invitation to Parties” again to Pimentel inviting the latter to attend a conference to
discuss the results of the MARO’s investigation over Hacienda Banilad.
The Reports were discussed the conference.
Present in the conference were representatives of the prospective farmer beneficiaries, the BARC, the LBP, and
Jaime Pimentel on behalf of the landowner.
After the meeting, it was recommended that 737.2590 ha under Tax Declaration Nos. 0236 and 0237 be likewise
placed under compulsory acquisition for distribution.
DAR, through the Department Secretary, sent to petitioner two (2) separate “Notices of Acquisition” over Hacienda
Banilad.
These Notices were sent on the same day as the Notice of Acquisition over Hacienda Palico.
Unlike the Notice over Hacienda Palico, however, the Notices over Hacienda Banilad were addressed to Roxas y
Cia.Limited in Makati.
The DAR Regional Director sent to the LBP Land Valuation Manager a “Request to Open Trust Account” in
petitioner’s name as compensation for 234.6493 hectares of Hacienda Banilad.
A second “Request to Open Trust Account” was sent on November 18, 1991 over 723.4130 hectares of said
Hacienda.
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway.
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the effectivity of the
CARL.
DAR, through the Regional Director for Region IV, sent to petitioner two (2) separate Resolutions accepting petitioner’s
voluntary offer to sell Hacienda Caylaway, particularly TCT Nos. T-‐44664 and T-‐44663.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the Secretary
of DAR withdrawing its VOS of Hacienda Caylaway.
The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from
agricultural to non-‐agricultural.
As a result, petitioner informed DAR that it was applying for conversion of Hacienda Caylaway from agricultural to
other uses.
DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian reform.
The Secretary also denied petitioner’s withdrawal of the VOS on the ground that withdrawal could only be based on
specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and
that the land is undeveloped.
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its application for
conversion of both Haciendas Palico and Banilad.
On August 24, 1993, petitioner instituted Case No. N-‐0017-‐96-‐46 (BA) with the DARAB praying for the cancellation
of the CLOA’s issued by DAR in the name of several persons.
Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had been declared a tourist
zone, that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had
reclassified the land to non-‐agricultural.
DARAB submitted the case to the Office of the Secretary of Agrarian Reform for determination.
The CA filed a petition for before the CA questioning the expropriation of its properties under the CARL.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO.
The CA then dismissed the petition.
ISSUE 1: WON the Court can take cognizance of this petition despite petitioner’s failure to exhaust administrative
remedies
HELD 1: Yes
RATIO 1: Petitioner rightly sought immediate redress in the courts.
There was a violation of its rights and to require it to exhaust administrative remedies before the DAR itself was
not a plain, speedy and adequate remedy.
DAR issued CLOAs to farmer beneficiaries over portions of petitioner’s land without just compensation to
petitioner.
A CLOA is evidence of ownership of land by a beneficiary under R.A. 6657.
Before this may be awarded to a farmer beneficiary, the land must first be acquired by the State from the
landowner and ownership transferred to the former.
The transfer of possession and ownership of the land to the government are conditioned upon the receipt by the
landowner of the payment or deposit by the DAR of the compensation with an accessible bank.
Until then, title remains with the landowner.
There was no receipt by petitioner of any compensation for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific.
The law provides that the deposit must be made only in “cash” or “LBP bonds.”
DAR’s opening of trust account deposits in petitioner’s name with the Land Bank does not constitute payment
under the law.
Trust account deposits are not cash or LBP bonds.
The replacement of the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for
essentially, the determination of this compensation was marred by lack of due process.
In fact, in the entire acquisition proceedings, respondent DAR disregarded the basic requirements of administrative
due process.
Under these circumstances, the issuance of the CLOA’s to farmer beneficiaries necessitated immediate judicial
action on the part of the petitioner.
ISSUE 2: WON the acquisition proceedings over the three haciendas were valid and in accordance with law
HELD 2: No
RATIO 2: Mode of Acquisition of Land Under RA 6657.
Two (2) modes of acquisition of private land: compulsory and voluntary.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer beneficiaries must
first be identified.
After identification, the DAR shall send a Notice of Acquisition to the landowner, by personal delivery or registered
mail, and post it in a conspicuous place in the municipal building and barangay hall of the place where the property
is located.
Within thirty days from receipt of the Notice of Acquisition, the landowner, his administrator or representative
shall inform the DAR of his acceptance or rejection of the offer.
If the landowner accepts, he executes and delivers a deed of transfer in favor of the government and surrenders
the certificate of title.
Within 30 days from the execution of the deed of transfer, the LBP pays the owner the purchase price.
If the landowner rejects the DAR’s offer or fails to make a reply, the DAR conducts summary administrative
proceedings to determine just compensation for the land.
The landowner, the LBP representative and other interested parties may submit evidence on just compensation
within fifteen days from notice.
Within 30 days from submission, the DAR shall decide the case and inform the owner of its decision and the
amount of just compensation.
Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response from the
latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank.
The DAR shall immediately take possession of the land and cause the issuance of a transfer certificate of title in the
name of the Republic of the Philippines.
The land shall then be redistributed to the farmer beneficiaries.
Any party may question the decision of the DAR in the regular courts for final determination of just compensation.
For a valid implementation of the CAR Program, two notices are required:
(1) the Notice of Coverage and letter of invitation to a preliminary conference sent to the landowner, the
representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A. O. No. 12,
Series of 1989; and
(2) the Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the conference, and its
actual conduct cannot be understated.
They are steps designed to comply with the requirements of administrative due process.
The implementation of the CARL is an exercise of the State’s police power and the power of eminent domain.
To the extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for
the regulation of private property in accordance with the Constitution.
But where, to carry out such regulation, the owners are deprived of lands they own in excess of the maximum area
allowed, there is also a taking under the power of eminent domain.
The taking contemplated is not a mere limitation of the use of the land.
What is required is the surrender of the title to and physical possession of the said excess and all beneficial rights
accruing to the owner in favor of the farmer beneficiary.
The Bill of Rights provides that “[n]o person shall be deprived of life, liberty or property without due process of
law.”
The CARL was not intended to take away property without due process of law.
The exercise of the power of eminent domain requires that due process be observed in the taking of private
property.
The notice requirements under the CARL are not confined to the Notice of Acquisition set forth in Section 16 of the
law.
They also include the Notice of Coverage first laid down in DAR A. O. No. 12, Series of 1989 and subsequently
amended in DAR A. O. No. 9, Series of 1990 and DAR A. O. No. 1, Series of 1993.
This Notice of Coverage does not merely notify the landowner that his property shall be placed under CARP and
that he is entitled to exercise his retention right; it also notifies him, pursuant to DAR A. O. No. 9, Series of 1990,
that a public hearing shall be conducted where he and representatives of the concerned sectors of society may
attend to discuss the results of the field investigation, the land valuation and other pertinent matters.
Under DAR A. O. No. 1, Series of 1993, the Notice of Coverage also informs the landowner that a field investigation
of his landholding shall be conducted where he and the other representatives may be present
Compulsory Acquisition of Hacienda Palico and Banilad.

In the case at bar, DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of invitation entitled
“Invitation to Parties” dated September 29, 1989 to petitioner, through Jaime Pimentel, the administrator of
Hacienda Palico.
The invitation was received on the same day it was sent as indicated by a signature and the date received at the
bottom left corner of said invitation.
With regard to Hacienda Banilad, DAR claims that Pimentel, administrator also of Hacienda Banilad, was notified
and sent an invitation to the conference.
Pimentel actually attended the conference on September 21, 1989 and signed the Minutes of the meeting on
behalf of petitioner.
The Minutes was also signed by the representatives of the BARC, the LBP and farmer beneficiaries.
No letter of invitation was sent or conference meeting held with respect to Hacienda Caylaway because it was
subject to a Voluntary Offer to Sell to DAR.
When DAR, through the MARO, sent to the various parties the Notice of Coverage and invitation to the conference,
DAR A. O. No. 12, Series of 1989 was already in effect more than a month earlier.
The Operating Procedure in DAR Administrative Order No. 12 does not specify how notices or letters of invitation
shall be sent to the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and other
interested parties.
The procedure in the sending of these notices is important to comply with the requisites of due process especially
when the owner, as in this case, is a juridical entity.
Petitioner is a domestic corporation, and therefore, has a personality separate and distinct from its shareholders,
officers and employees.
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation.
Is he, as administrator of the two Haciendas, considered an agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain that the
corporation will receive prompt and proper notice in an action against it.
Service must be made on a representative so integrated with the corporation as to make it a priori supposable that
he will realize his responsibilities and know what he should do with any legal papers served on him, and bring
home to the corporation notice of the filing of the action.
Petitioner’s evidence does not show the official duties of Pimentel as administrator of petitioner’s haciendas.
The evidence does not indicate whether Pimentel’s duties is so integrated with the corporation that he would
immediately realize his responsibilities and know what he should do with any legal papers served on him.
At the time the notices were sent and the preliminary conference conducted, petitioner’s principal place of
business was listed in DAR’s records as “Soriano Bldg., Plaza Cervantes, Manila,” and “7th Flr. Cacho-‐Gonzales
Bldg., 101 Aguirre St., Makati, Metro Manila.”
Pimentel did not hold office at the principal place of business of petitioner.
Neither did he exercise his functions in Plaza Cervantes, Manila nor in Cacho-‐Gonzales Bldg., Makati, Metro
Manila.
He performed his official functions and actually resided in the haciendas in Nasugbu, Batangas, a place over two
hundred kilometers away from Metro Manila.
Curiously, DAR had information of the address of petitioner’s principal place of business.
The Notices of Acquisition over Haciendas Palico and Banilad were addressed to petitioner at its offices in Manila
and Makati.
These Notices were sent barely three to four months after Pimentel was notified of the preliminary conference.
Why DAR chose to notify Pimentel instead of the officers of the corporation was not explained by the said
respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and letters of
invitation were validly served on petitioner through him, there is no showing that Pimentel himself was duly
authorized to attend the conference meeting with the MARO, BARC and LBP representatives and farmer
beneficiaries for purposes of compulsory acquisition of petitioner’s landholdings.
Even DAR’s evidence does not indicate this authority.
On the contrary, petitioner claims that it had no knowledge of the letter-‐invitation, hence, could not have given
Pimentel the authority to bind it to whatever matters were discussed or agreed upon by the parties at the
preliminary conference or public hearing.
Notably, one year after Pimentel was informed of the preliminary conference, DAR A.O. No. 9, Series of 1990 was
issued and this required that the Notice of Coverage must be sent “to the landowner concerned or his duly
authorized representative.”
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas found actually
subject to CARP were not properly identified before they were taken over by DAR.
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only portions
thereof.
Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares were targetted for acquisition.
Hacienda Banilad has an area of 1,050 hectares but only 964.0688 hectares were subject to CARP.
The haciendas are not entirely agricultural lands.
In fact, the various tax declarations over the haciendas describe the landholdings as “sugarland,” and “forest,
sugarland, pasture land, horticulture and woodland.”
Upon receipt of this notice, therefore, petitioner corporation had no idea which portions of its estate were subject
to compulsory acquisition, which portions it could rightfully retain, whether these retained portions were compact
or contiguous, and which portions were excluded from CARP coverage.
Even respondent DAR’s evidence does not show that petitioner, through its duly authorized representative, was
notified of any ocular inspection and investigation that was to be conducted by respondent DAR.
Neither is there proof that petitioner was given the opportunity to at least choose and identify its retention area in
those portions to be acquired compulsorily.
The right of retention and how this right is exercised, is guaranteed in Section 6 of the CARL.
Voluntary Acquisition of Hacienda Caylaway.

First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and beneficiaries of
the land subject to agrarian reform be identified before the notice of acquisition should be issued.
Hacienda Caylaway was voluntarily offered for sale in 1989.
The Hacienda has a total area of 867.4571 hectares and is covered by four (4) titles.
In two separate Resolutions both dated January 12, 1989, DAR, through the Regional Director, formally accepted
the VOS over two of these four titles.
The land covered by the two titles has an area of 855.5257 hectares, but only 648.8544 hectares thereof fell within
the coverage of R.A. 6657.
Petitioner claims it does not know where these portions are located.
DAR, on the other hand, avers that surveys on the land covered by the four titles were conducted in 1989, and that
petitioner, as landowner, was not denied participation therein.
The results of the survey and the land valuation summary report, however, do not indicate whether notices to
attend the same were actually sent to and received by petitioner or its duly authorized representative.
To reiterate, EO 229 does not lay down the operating procedure, much less the notice requirements, before the
VOS is accepted by DAR.
Notice to the landowner, however, cannot be dispensed with.
It is part of administrative due process and is an essential requisite to enable the landowner himself to exercise, at
the very least, his right of retention guaranteed under the CARL.
ISSUE 3: Assuming the haciendas may be reclassified from agricultural to non-‐agricultural, WON this court has the
power to rule on this issue
HELD 3: No
RATIO 3:It is petitioner’s claim that the three haciendas are not subject to agrarian reform because they have been
declared for tourism, not agricultural purposes.
In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a
tourist zone.
Lands in Nasugbu, including the subject haciendas, were allegedly reclassified as non-‐agricultural 13 years before
the effectivity of RA 6657.
In 1993, the Regional Director for Region IV of the DA certified that the haciendas are not feasible and sound for
agricultural development.
On March 20, 1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas adopted
Resolution No. 19 reclassifying certain areas of Nasugbu as non-‐agricultural.
This Resolution approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning Ordinance of Nasugbu
which zoning ordinance was based on a Land Use Plan for Planning Areas for New Development allegedly prepared
by the University of the Philippines.
Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang Panlalawigan of Batangas on March
8, 1993.
Petitioner claims that Proclamation No. 1520 was also upheld by DAR in 1991 when it approved conversion of 1,827
hectares in Nasugbu into a tourist area known as the Batulao Resort Complex, and 13.52 hectares in Barangay
Caylaway as within the potential tourist belt.
Petitioner presents evidence before us that these areas are adjacent to the haciendas subject of this petition,
hence, the haciendas should likewise be converted.
Petitioner urges this Court to take cognizance of the conversion proceedings and rule accordingly.
We do not agree.
DAR’s failure to observe due process in the acquisition of petitioner’s landholdings does not ipso facto give this
Court the power to adjudicate over petitioner’s application for conversion of its haciendas from agricultural to non-‐
agricultural.
The agency charged with the mandate of approving or disapproving applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the processing and
approval of applications for land use conversion was the DAR A. O. No. 2, Series of 1990.
Under this A. O., the application for conversion is filed with the MARO where the property is located.
The MARO reviews the application and its supporting documents and conducts field investigation and ocular
inspection of the property.
The findings of the MARO are subject to review and evaluation by the Provincial Agrarian Reform Officer (PARO).
The PARO may conduct further field investigation and submit a supplemental report together with his
recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the same.
For lands less than five hectares, the RARO shall approve or disapprove applications for conversion.
For lands exceeding five hectares, the RARO shall evaluate the PARO Report and forward the records and his report
to the Undersecretary for Legal Affairs.
Applications over areas exceeding fifty hectares are approved or disapproved by the Secretary of Agrarian Reform.
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a
controversy the jurisdiction over which is initially lodged with an administrative body of special competence.
DAR is in a better position to resolve petitioner’s application for conversion, being primarily the agency possessing
the necessary expertise on the matter.
The power to determine whether Haciendas Palico, Banilad and Caylaway are non-‐agricultural, hence, exempt
from the coverage of the CARL lies with the DAR, not with this Court.
Finally, we stress that the failure of DAR to comply with the requisites of due process in the acquisition
proceedings does not give this Court the power to nullify the CLOA’s already issued to the farmer beneficiaries.
To assume the power is to short-‐circuit the administrative process, which has yet to run its regular course.
DAR must be given the chance to correct its procedural lapses in the acquisition proceedings.
In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993.
Since then until the present, these farmers have been cultivating their lands.
It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their
own, of the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the
land.
4.7 Closure and Opening of Roads:
Cabrera vs. CA (1991)

FACTS :
The Province of Catanduanes sought to make the access to its capitol building easier by replacing the old road with
a new road that was directly connected to the pier. The provincial council enacted Resolution No. 158, that (1)
closed the old road to the capitol building; and (2) allowed the property owners that will be affected by the
building of the new road to claim portion of the old road in proportion to the property they will give up for the new
road. Two of those affected property owners, Mr Alejandro and Mr Peña decided to plant vegetables and operate a
piggery farm. Their neighbour, Mr Cabrera, who was an original occupant of the northern part of the old road filed
with the CFI an action for Restoration of Public Road and/or Abatement of Nuisance, Annulment of Resolutions and
Documents with Damages. Mr Cabrera argued that the road cannot be appropriated because it was beyond the
commerce of man. He argued that the provincial government cannot barter private property with public road
without prior closure of the road, and that such closure has injured his family because they can no longer use the
national road to the capitol and now must use a smaller road.
The CFI and the Court of Appeals ruled in favour of the provincial government. Based on Republic Act No. 5185 in
relation to Section 2246 of the Revised Administrative Code, municipal authorities have powers to close
thoroughfares.
ISSUES:
1. Was there a valid closure of the public road?
2. Is Mr Cabrera entitled to damages?
HELD:
1. Yes, there was a valid closure of the road. The questioned resolution clearly stated the closure of the road before
barter was done. It is within the scope of authority of the provincial government, and as cited in the cases of Cebu
Oxygen and Acetylene Co., Inc. v Bercilles and Favis v City of Baguio. The intention of the provincial government
was well within the general welfare clause as the new road is more accessible and convenient for the rest of the
community.
2. No, Mr Cabrera is not entitled to damages. He was not left without a recourse due to the closure of the old road.
He still had a way in and out of his property. In fact, during the pendency of the trial, the court officials did not
have difficulty getting to Mr Cabrera’s property during ocular inspection. It is not fair for the entire community to
pay for the price of his inconvenience when everyone else will have a more convenient time.
MMDA vs. Bel Air Village Assn. Inc., (2000)

FACTS :
1. Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila, including
“transport and traffic management.” Respondent Bel-‐Air Village Association, Inc. is the registered owner of
Neptune Street, a private road inside Bel-‐Air Village.
2. Neptune runs parallel to Kalayaan Avenue, a national road open to the general public.
3. Bel-‐Air received from MMDA, through its Chairman, a notice requesting it to open Neptune Street to
public vehicular traffic “for the safe and convenient movement of persons”. Bel-‐Air was also apprised that
the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would be demolished.
4. Bel-‐Air instituted against MMDA a case for injunction and prayed for the issuance of a temporary
restraining order and preliminary injunction enjoining the opening of Neptune Street and prohibiting the
demolition of the perimeter wall.
5. MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agent of the
state endowed with police power in the delivery of basic services in Metro Manila so that there is no need for the
City of Makati to enact an ordinance opening Neptune Street to the public.
ISSUE :
Whether or not the Metropolitan Manila Development Authority (MMDA) has the mandate to open Neptune
Street to public traffic pursuant to its regulatory and police powers?
HELD :
No.
RATIO :
1. Police power is lodged primarily in the National Legislature. It cannot be exercised by any group or body
of individuals not possessing legislative power. Our Congress delegated police power to the local government units
in the Local Government Code of 1991. But the MMDA is not a local government unit or a public corporation
endowed with legislative power. Even its governing board, the Metro Manila Council has not been delegated any
legislative power, unlike the legislative bodies of local government units.
2. The functions of MMDA are administrative in nature. According to its Charter, R.A. 7924:
"Sec. 2. Creation of the Metropolitan Manila Development Authority. -‐-‐ –x x x.
The MMDA shall perform planning, monitoring and coordinative functions, and in the process
exercise regulatory and supervisory authority over the delivery of metro-‐wide services within
Metro Manila, without diminution of the autonomy of the local government units concerning
purely local matters."
3. Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court where the Court
upheld certain ordinances as a legitimate exercise of police power because both Makati and the then Metro
Manila Commission which issued the said ordinances had the power to enact them. 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.
Sangalang vs. IAC (1988)

FACTS:
• 1. Bel-‐Air Village is located north of Buendia Avenue extension (now Sen. Gil J. Puyat Ave.)
across a stretch of commercial block from Reposo Street in the west up to Zodiac Street in the east.
• Plaintiffs are all either residents of Bel Air village or the Bel Air Village Association (BAVA).
• In the 1950's Bel Air Village property was sold by Makati Development Corporation which was
later merged with Ayala Corporation.
• The lots were subject to certain restrictions namely: 1)All lot owners would automatically be a
member of BAVA and 2) The lots may only be used for domestic purposes, which would last for a period of 50
years.
• At the time the area was open to all kinds of people and even animals. The residents decided to
build a wall along the commercial side of jupiter street.
• Eventually Ayala Corporation decided to sell the lots on the commercial side of jupiter street to
the public. In 1972, Bava and Ayala agreed that the lot owners would be members of BAVA and would be subject
to the same deed of restriction of other residents in the subdivision.
• On April 4, 1975, the municipal council of Makati enacted its ordinance no 81, providing for the
zonification of makati. Uner this ordinance, Bel air village was classified as a class A residential zone with its
boundary in the south EXTENDING TO THE CENTER LINE OF JUPITER STREET. The other side of the street in between
buendia and until the center line of Jupiter street was made an Administrative Office Zone.
• Jan 1977, The office of the Mayor wrote to BAVA that in order to ease traffic congestion Jupiter
street would be opened up to the public. BAVA requested for the indefinite postponement of the plan because of
the concern of the residents. Finally on August 1977 the officials of Makati removed the gates in order to open the
entire length of Jupiter street to the public. Because of this there was a huge increase of traffic along Jupiter street.
• The commercial establishments on the southern side of jupiter street broke down the wall as it
was no longer necessary and set up shop.
• Even the residential lots on the northern side of Jupiter street some chose to use as commercial
due to the increase in traffic in the area.
• On March 1981, the 'comprehensive zoning ordinance' was passed by the MMC as ordinance 81-‐
1. This ordinance made Bel Air village BOUND BY JUPITER STREET and no longer the center line. Significantly the
other side of Jupiter street was classified as High Intensity Commercial zone.
• Several residents as well as BAVA filed suit claiming 1) Ayala corp for breach of contract in
allowing the wall to be broken down ushering in a full commercialization of Jupiter street and 2)against some
residents that had used their lots as commercial in violation of the restrictions..
LOWER COURTS: plaintiffs won, then lost on appeal, the CA upholding the ordinances as valid under police power
and that they reclassified the area to allow commercial lots.
ISSUES:
1) WON Ayala corp was liable for breach of contract for the wall and the limited use of Jupiter street?
2) WON the lot owners are liable?
HELD/RATIO :
NO. Although Jupiter street was donated to BAVA in 1978 there was no intention to limit its use to bel air village
residents, in fact the deed included the general public. Also as regards the wall there was no proof that there was
any such agreement between the residents and Ayala corp that a wall be maintained.
NO. “we likewise exculpate the private respondents not only because of the fact that jupiter street is not covered
by the deed of restrictions but chiefly because the National Government itself through the MMC had reclassified Jupiter
street into a high density commercial zone pursuant to its ordinance 81-‐01.”
“It is not that we are saying that restrictive easements, especially the easements herein question, are
invalid or ineffective. As far as the bel air subdivision itself is concerned, certainly, they are valid and
enforceable. But they are like all contracts subject to the overriding demands needs and interests of the
greater number as the state may determine in the legitimate exercise of police power. Our jurisdiction
guarantees sanctity of the contract and is aid to be the law between the contracting parties, but while it is
so, it cannot contravene law, morals, good customs, public order, or public policy. Above all it cannot be
raised as a deterrent to police power designed precisely to promote health safety, peace, and enhance
the common good, at the expense of contractual rights, whenever necessary... The non impairment clause
is secondary to the more compelling interests of the general welfare.”
Macasiano vs. Diokno (1992)

FACTS :
-‐ June 13, 1990. The municipality of Parañaque passed Ordinance No. 86, which authorized the closure of J. Gabriel,
G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets at Baclaran, and the establishment of a flea market
thereon.
-‐ Metropolitan Manila Authority approved Ordinance No. 86 subject to the following conditions: (1) streets are not
used for vehicular traffic and majority of residents do not oppose the establishment of flea market/vending areas;
(2) 2-‐meter wide middle road to be used as flea market to be marked distinctly, and that the 2 meters on
both sides to be used by pedestrians; (3) time during which the vending area is to be used is clearly designated; (4) use
of vending areas shall be temporary and shall be closed once the reclaimed areas are developed and donated by
the Public Estate Authority.
-‐ Municipality and Palanyag, a service cooperative, entered into an agreement whereby Palanyag shall operate a
flea market and remit dues to the treasury of the municipal government.
-‐ Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan Traffic Command, ordered the destruction and
confiscation of stalls. Macasiano gave Palanyag 10 days to discontinue the flea market. Otherwise, the stalls shall be
dismantled.
-‐ Municipality and Palanyag filed joint petition for prohibition and mandamus. RTC issued TRO. Later, it upheld the
validity of Ordinance No. 86.
-‐ Macasiano, thru OSG, filed petition with SC.
ISSUE :
Whether or not an ordinance authorizing the lease and use of public streets or thoroughfares as sites for flea
markets is valid.
Arguments of parties:
-‐ Sol Gen, in behalf of Macasiano: Municipal roads are public properties and cannot be subject to private
appropriation or private contract. The municipality cannot, in the absence of specific authority granted by the
legislature, convert property already in public use to another public use. Also, assuming that the municipality was
authorized to close the streets, it failed to comply with conditions set forth by the MMA.
-‐ RTC decision upholding the legality of Ordinance No. 86: Chap. II Sec. 10 of the LGC (BP 337) empowers LGUs to
close its roads, streets or alleys subject to limitations stated therein. The authority of Macasiano as Police
Superintendent ceases to be operative on the ground that the streets covered by the ordinance cease to be public
thoroughfares.
HELD :
The ordinance is invalid
-‐ Properties of the local government devoted to public service are under the absolute control of Congress. Local
governments have no authority to control or regulate the use of public properties unless specific authority is vested
upon them by Congress.
-‐ Sec. 10, Chap. II, LGC (BP 337): Closure of roads. – A local government unit may likewise, through its head acting
pursuant to a resolution of its sangguniang and in accordance with existing law and the provisions of this Code,
close any barangay municipal, city or provincial road, street, alley, park or square. No such way or place or any
part thereof shall be closed without indemnifying any person prejudiced thereby. A property thus withdrawn from
public use may be used or conveyed for any purpose for which other real property belonging to the local unit
concerned might be lawfully used or conveyed.
-‐ The above provision authorizes the LGU to close a public street or thoroughfare for the sole purpose of
withdrawing it from public use when circumstances show that it is no longer intended or necessary for public use or
public service. It then becomes patrimonial property of the LGU which can be the object of an ordinary contract.
-‐ The subject roads and streets are ordinarily used for vehicular traffic and are still considered public property
devoted to public use. The local government had no power to use it for another purpose or lease it to private
persons.
-‐ Even assuming that the municipality has the authority to pass the ordinance, it cannot be validly implemented
because the municipality failed to show that it had complied with the conditions set forth by the MMA.
Petition granted; decision reversed and set aside.

Local Government Units Vis - A - Vis National Government: Power of General Supervision

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Local Government Units Vis - A - Vis National Government: Power of General Supervision

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DECENTRALIZATION, LOCAL AUTONOMY, POWERS OF MUNICIPAL CORPORATIONS

1. LOCAL GOVERNMENT UNITS VIS-‐A-‐VIS NATIONAL GOVERNMENT

Drilon v. Lim (1994)

Solicitor General v. Metopolitan Manila Authority (1991)

Ganzon vs. CA (1991)

Mactan Cebu International Airport Authority v. Marcos (1996).

Province of Negros Occidental v. Commission on Audit(2010)

2. DECENTRALIZATION, LOCAL AUTONOMY

Limbona vs. Mangelin (1989)

San Juan vs. Civil Service Commission (1991)

Ganzon vs. CA (1991)

Cordillera Broad Coalition vs. COA (1990)

The Executive Order (No. 220) contained the following:

2. it prepares the ground for autonomy

a. CAR is not a public corporation or territorial and political subdivision

Concurring Opinion: J. Gutierrez Jr.

Magtajas vs. Pryce Properties Corp, Inc. (1991)

Taule vs. Santos (1991)

Binay vs. Domingo (1991)

City Government of Quezon City v. Ericta (1983)

Villanueva vs. Castaneda (1987)

Republic vs. Gonzalez (1991)

Patalinghug vs. CA (1994)

CA decision is reversed. TC decision is reinstated.

Ampatuan vs. Puno (2011)

3. INTERGOVERNMENTAL RELATIONS: Book I, Chapters 3,4, RA 7160

POWERS OF MUNICIPAL CORPORATIONS/LOCAL GOVERNMENTS

Binay v. Domingo (1991) -‐ supra

Chua Huat vs. CA (1991)

Tatel v. Municipality of Virac (1992)

Integrated Bar of the Philippines v. Atienza (2010)

White Light v. City of Manila (2009)

4.2 Power of taxation: local taxes and real property tax

Basco v. Phil Amusement and Gaming Corp. (1991)

1st: Regarding Gambling -‐

(a.) PD 1869 was enacted to regulate and centralize games of chance;

2nd: Regarding PAGCOR's exemption from taxes

by P.D. No. 771 and was vested exclusively on the Pagcor.

3rd: Regarding Local Autonomy

4th: Regarding the Equal Protection Clause:

5th: Regarding the Government Stand against Monopolies:

Phil Petroleum Corp vs. Mun. of Pililia, Rizal (1991)

PPC presented the following contentions:

Floro Cement Corp vs. Gorospe

Floro Cement holds that:

Tuzon and Mapagu vs. CA (1992)

Jurado appealed to CA.

If it is to be considered as a tax ordinance, it must be shown:

PLDT vs. City of Davao (2001)

City Government of Q.C. v. Bayantel (2006)

FELS Energy v. Prov. Of Batangas (2007)

Digitel v. Prov. Of Pangasinan (2007)

• RTC ruled in favor of the Province of Pangasinan:

Sec of Finance vs. Ilarde & Cipriano Cabaluna (2005)

delinquent taxes (Sec. 66 of PD 464).

Benguet Corp vs. Central Board of Assessment Appeals (1992)

National Development Co. vs. Cebu City

Prov. of Tarlac vs. Judge Alcantara (1992)

4.3 Shares of LGUS in national taxes

Pimentel vs. Aguirre (2000)

Discussion: Scope of the President’s power of general supervision over LGUs

Overseeing or the power or the power or Power of an officer to

Extent of local autonomy