PUBLIC CORPORATION responsibilities and resources, (c) provide for qualifications, elections appointment

and removal, term, salaries, powers and function and duties of local officials and
INTRODUCTION (d) other matters relating to the organization and operation of local units.

Political Law – branch of public law which deals with the organization and Autonomy – is either decentralization of administration (deconcentration) or
operations of the governmental organs of the State and defines the relations of the decentralization of power (devolution).
State with the inhabitants of its territory.
Decentralization of administration – delegation by the central government of
administrative powers to local subdivisions in order to broaden the base of
DIVISIONS OF POLITICAL LAW: governmental power making such local governments “more responsive and
accountable” and insuring their fullest development as self-reliant communities
(a) Constitutional Law – branch of public law which deals with the and effective partners in the pursuit of national development and progress”
maintenance of the proper balance between authority as (declared policy of LGC); relieves central government of the burden of managing
represented by three inherent powers of the State and liberty as local affairs, enabling it to concentrate on national concerns; the President
guaranteed by the Bill of Rights. exercises “general supervision” over them but only to ensure that local affairs are
(b) Administrative law – branch of public law which fixes the administered according to law (President’s mandate to ensure faithful execution of
organization of government, determines competence of the laws) but he has no control over their acts (he cannot substitute their judgment
administrative authorities who execute the law and indicates to with his own).
the individual remedies for violation of his rights.
(c) Law on Municipal Corporations Decentralization of power –abdication of political power in favor of local
(d) Law of Public Officers government units declared to be autonomous; the autonomous government is free
(e) Election Laws to chart its own destiny and shape its future with minimum intervention from
(f) Public International Law central authorities; amount to self-immolation since the autonomous government
becomes accountable not to the central authority but to its constituency.

GENERAL PRINCIPLES NOTE: Constitutional guarantee of Local Autonomy refers to ADMINISTRATIVE

AUTONOMY of local government units (or decentralization of government
CORPORATION Defined: An artificial being created by operation of law having authority).
the right of succession and powers, attributes and properties expressly authorized
by law or incident to its existence.
Case: PROVINCE OF BATANGAS vs. ALBERTO G. ROMULO, G.R. No.
CLASSIFICATION OF CORPORATIONS: 152774, 5/27/2004.

(i) Public – organized for the government of a portion of FACTS: Province of Batangas filed a petition for certiorari to declare
the State; unconstitutional and void certain provisos contained in the General Appropriations
(ii) Private – formed for some private purpose, benefit, Acts (GAA) of 1999, 2000 and 2001 earmarking for said years five billion pesos
aim or end; (P5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local
(iii) Quasi-public – private corporation that renders public Government Service Equalization Fund (LGSEF) and imposed conditions for the
service or supplies release thereof such as modifying the allocation scheme for such allotment as
public wants. prescribed under the Local Government Code and securing approval for local
projects from the Oversight Committee on Devolution.
NOTE: Criterion to determine whether a corporation is public – The relationship
of the corporation to the Sate, that is, if created by the State as its own agency to RULING: In Section 25, Article II of the Constitution, the State has expressly
help the State in carrying out its governmental functions then it is public, adopted as a policy tha, “The State shall ensure the autonomy of local
otherwise, it is private. governments”. The State policy on local autonomy is amplified in Section 2
thereof, “It is hereby declared the policy of the State that the territorial and
CLASSES OF PUBLIC CORPORATIONS: political subdivisions of the State shall enjoy genuine and meaningful local
autonomy to enable them to attain their fullest development as self-reliant
(i) Quasi-corporation – created by the State for a communities and make them more effective partners in the attainment of national
narrow/limited purpose (PCSO, etc.); goals x x x .
(ii) Municipal Corporations – body politic and corporate
constituted by the incorporation of the inhabitants for The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD
the purpose of local government. resolutions violate the constitutional precept on local autonomy. Section 6, Article
X of the Constitution reads: Sec. 6. Local government units shall have a
ELEMENTS OF MUNICIPAL CORPORATIONS: just share, as determined by law, in the national taxes which shall be automatically
released to them. "Automatic" means "involuntary either wholly or to a major
1. Legal creation or incorporation – there must be a law extent so that any activity of the will is largely negligible; of a reflex nature;
creating/authorizing the creation or incorporation of a municipal without volition; mechanical; like or suggestive of an automaton. Being
corporation]; "automatic," thus, connotes something mechanical, spontaneous and perfunctory.
2. Corporate name – name by which the corporation is known; As such, the LGUs are not required to perform any act to receive the "just share"
3. Inhabitants – people residing in the territory of the corporation; accruing to them from the national coffers. The "just share" of the LGUs is
4. Territory – land mass where the inhabitants reside together with incorporated as the IRA in the appropriations law or GAA enacted by Congress
internal and external waters and air space above the land and annually.
waters.
The entire process involving the LGSEF’s distribution and release is
DUAL NATURE & FUNCTIONS OF MUNICIPAL CORPORATIONS: constitutionally impermissible. The LGSEF is part of the IRA or “just share” of the
LGUs in the national taxes. Submitting its distribution and release to the vagaries
Every local government unit created/organized under the Local Government Code of the implementing rules including the guidelines and mechanisms unilaterally
is a BODY POLITIC and CORPORATE endowed with powers to be exercised by prescribed by the Oversight Committee from time to time as sanctioned by the
it in conformity with law. As such it shall exercise powers as a political challenged laws and OCD resolutions, makes the release not automatic – a flagrant
subdivision of the National Government and as a corporate entity representing the violation of the constitutional and statutory mandate that LGUs’ just share shall be
inhabitants of the territory (Section 15, RA7160). Accordingly, it has dual automatically released to them.
functions –

(i) public or governmental – acts as an agent of the State for the Meaning of Administrative Regions – are mere grouping of contiguous provinces
government of the territory and the inhabitants; and for administrative purposes, not for political representation. The division of the
country into regions is intended to facilitate not only the administration of local
(ii) private or proprietary – acts as an agent of the community in governments which the law requires to have regional offices. Creation of
the administration of local affairs, as such, acts as a separate administrative regions for purpose of expediting the delivery of services is nothing
entity for its own purposes and not as a subdivision of the new. The Integrated Reorganization plan of 1972, which was made part of the law
State. of the land by virtue of Presidential Decree No. 1, established 11 regions, later
became 12. With definite regional centers and required departments and agencies
of the Executive Branch of the National Government to set up field offices therein
BASIC PRINCIPLES (DTI VII, DOLE VII, DPWH Regional Office). The functions of the regional
offices is to be established pursuant the reorganization plan are: (a) implement
Sec. 1 – Act shall be known as the Local Government Code of 1991. laws, policies, plans, programs, rules and regulation of the department or agency in
the regional area; (2) provide economical, efficient and effective services to the
Under the 1987 Constitution, declared policy: The State shall ensure people in the area; (3) to coordinate with regional offices of other departments,
the autonomy of local governments (Art. II, Sec. 25) bureaus and agencies in the area; and (3) perform such other functions as may be
provided by law.
To highlight this policy, note, an entire Article (X) with fourteen
sections is devoted to “Local Governments”. Section (3) thereof mandates: Meaning of Autonomous Regions – creation of autonomous regions in Muslim
Congress SHALL enact a local government code (a) to provide a more responsive Mindanao and the Cordilleras, which is unique to the 1987 Constitution,
and accountable local government structure initiated through a system of contemplates grant of political autonomy and not just administrative autonomy to
DECENTRALIZATION with effective mechanisms of recall, initiative and those regions. Thus, Art. X, Section 18 of Constitution mandates for Congress to
referendum, (a) allocate among different local government units their powers, enact an organic act for the autonomous regions (with assistance and participation

1
of consultative commission composed of representatives appointed by the
President from list of nominees of multisectoral bodies) to provide for an The declaration of policy as stated in Section 2 of LGC reinforces declared State
autonomous regional government with a basic structure consisting of an executive policy (Art. II, Sec. 25 of Constitution) ensuring autonomy to local government
department and a legislative assembly and special courts with personal, family and units.
property law jurisdiction in each of the autonomous regions.
Case: LINA VS. PANO 364 SCRA 76
Case: DISOMANGCOP vs. DPWH SECRETARY, G.R. No. 149848, 11/25/2004.
FACTS: Respondent Tony Calvento was appointed PSCO agent to install and
FACTS: Pursuant to Sec. 15, Art. X of the Constitution (for the creation of operate a lotto terminal. Mayor of San Pedro Laguna denied his application for a
autonomous regions in Muslim Mindanao and the Cordilleras), RA 6734 (An Act business permit citing an ordinance (Kapasyahan Blg. 508, taong 1995) passed by
Providing for An Organic Act for the Autonomous Region in Muslim Mindanao) the Provincial Board of Laguna, objecting/opposing any form of gambling
was enacted. Subsequently, the four provinces of Lanao del Sur, Maguindanao, including lotto in Laguna. Calvento arguing that KB508 is curtailment of State
Sulu and Tawi-Tawi, voting in favor of autonomy, became the Autonomous Region power since in this case the national legislature itself already declared lotto as legal
in Muslim Mindanao (provinces of Basilan, Cotabato, Davao del Sur, Lanao del and permitted its operation around the country, filed for declaratory relief before
Norte, Palawan, South Cotabato, Sultan Kudarat, Zamboanga del Norte, and the RTC, to annul KB 508 and compel the the local mayor to issue a business
Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General Santos, permit for the operation of a lotto outlet. Suit decided in Calvento’s favor. MR by
Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga said no in the Respondent denied. Petition with SC.
plebiscite) (later virtue of RA9054, the provinces of Basilan and Marawi City
joined). In accordance with RA6734, EO426 was issued placing the control and RULING: Game of lotto is a game of chance duly authorized by the national
supervision of the offices of the DPWH within the autonomous region in Muslim government through an Act of Congress (RA1169), as amended by BP42, the law
Mindanao under the Autonomous Regional Government. Petitioners Arsadi M. granting a franchise to the PCSO and allows it to operate lotteries. This statute
Disomangcop and Ramir M. Dimalotang (Dimalotang), in their capacity as remains valid today. While lotto is a game of chance, the national government
Officer-in-Charge and District Engineer/Engineer II, respectively, of the 1 st deems it wise and proper to permit it. Hence, the Provincial Board of Laguna, as a
Engineering District of DPWH-ARMM in Lanao del Sur petitioned to nullify LGU, cannot issue a resolution or an ordinance that would seek to prohibit
Dept. Order 119 and RA8999 (creating the Marawi Sub-District Engineering permits. What the national legislature allows by law, such as lotto, a provincial
Office and vesting it with jurisdiction over all national infrastructure projects and board may not disallow by ordinance or resolution.
facilities under the DPWH within Marawi City and Lanao del Sur. Petitioners
contend that the challenged measures violate ARMM’s constitutional autonomy Ours is till a unitary government, not a federal state. Being so, any form of
considering that the functions of the Marawi Sub-District Engineering Office have autonomy granted to LGs will necessarily be limited and confined within the
already been devolved to the DPWH-ARMM 1st Engineering District in Lanao del extent allowed by the central government. Besides, the principle of local autonomy
Sur. under the 1987 Constitution simply means decentralization. It does not make local
governments sovereign within the state or an “imperium in imperio”.
RULING: Petition GRANTED. DO119 is violative of the provisions of EO426
(issued pursuant to RA6734). The 1987 Constitution mandates regional autonomy Municipal governments are only agents of the national government. Local councils
to give a bold and unequivocal answer to the cry for a meaningful, effective and exercise only delegated legislative powers conferred upon them by Congress as the
forceful autonomy. Autonomy, as a national policy, recognizes the wholeness of national lawmaking body. The delegate cannot be superior to the principal or
the Philippine society in its ethnolinguistic, cultural and even religious diversities. exercise powers higher than those of the latter. It is heresy to suggest that the
It strives to free Philippine society of the strain and wastage caused by the LGUs can undo the acts and negate by mere ordinance the mandate of the statute.
assimilationist approach. Policies emanating from the legislature are invariably
assimilationist in character despite channels being open for minority Section 2(c) requiring consultations should be read together with Section 26, 27,
representation. LGC (prior consultation by national agencies with lgus involving projects that may
cause pollution, climatic change, depletion of non-renewable resources, loss of
A necessary prerequisite of autonomy is decentralization. Decentralization is a crop land, range-land or forest cover and extinction of animal or plant species).
decision by the central government authorizing its subordinates, whether Thus, Section 2(c) does not apply to lotto, the latter being neither a program nor
geographically or functionally defined, to exercise authority in certain areas. It project of the national government, but of a charitable institution, the PCSO. Also,
involves decision-making by subnational units. It is typically a delegated power, the argument is an afterthought, Mayor denied application for business permit
wherein a larger government chooses to delegate certain authority to more local solely on ground of KB508.
governments. Federalism implies some measure of decentralization, but unitary
systems may also decentralize. Decentralization differs intrinsically from Section 3, LGC – Operative Principles of Decentralization – policies and measures
federalism in that the sub-units that have been authorized to act (by delegation) do on local autonomy to be guided by these:
not possess any claim of right against the central government.
(a) effective allocation among the different LGUs of their respective powers,
Decentralization comes in two forms — deconcentration and devolution. functions and responsibilities [is provided for by LGC],
Deconcentration (administrative decentralization) is administrative in nature; it
involves the transfer of functions or the delegation of authority and responsibility (b) establishment in every LGU of an accountable, efficient and dynamic
from the national office to the regional and local offices. Devolution, on the other organizational structure and operating mechanism that will meet priority needs and
hand, connotes political decentralization, or the transfer of powers, responsibilities, service requirements of its communities,
and resources for the performance of certain functions from the central
government to local government units. (c) local officials and employees, subject to civil service law, rules and regulation,
to be appointed or removed, according to merit and fitness, by the appropriate
By regional autonomy, the framers intended it to mean "meaningful and authentic appointing authority,
regional autonomy (that is, a kind of local self-government which allows the
people of the region or area the power to determine what is best for their growth (d) vesting of duty, responsibility and accountability in LGUS shall be
and development without undue interference or dictation from the central accompanied with provision for reasonably adequate resources to discharge their
government). To this end, Section 16, Article X limits the power of the President powers and effectively carry out their function – they shall have the power to
over autonomous regions. In essence, the provision also curtails the power of create and broaden their own sources of revenue and the right to a just share in the
Congress over autonomous regions. Consequently, Congress will have to re- national taxes and an equitable share in proceeds of the utilization and
examine national laws and make sure that they reflect the Constitution's adherence development of the national wealth within their respective areas
to local autonomy. And in case of conflicts, the underlying spirit which should
guide its resolution is the Constitution's desire for genuine local autonomy. (e) provinces – to component cities and municipalities; cites and municipalities –
to component barangays to ensure that acts of component units are within scope of
E.O. 426 officially devolved the powers and functions of the DPWH in ARMM to prescribe powers and functions (supervisorial powers)
the Autonomous Regional Government (ARG). More importantly, Congress itself
through R.A. 9054 transferred and devolved the administrative and fiscal (f) LGUs may group themselves, consolidate their efforts, services and resources
management of public works and funds for public works to the ARG. The aim of for purposes commonly beneficial to them – thus, MMDA;
the Constitution is to extend to the autonomous peoples, the people of Muslim
Mindanao in this case, the right to self-determination — a right to choose their NOTE: Autonomy denotes “state of independence” (referred previously to states)
own path of development; the right to determine the political, cultural and – community autonomy, that is, local autonomy. In the LGC, local autonomy does
economic content of their development path within the framework of the not mean total independence of LGUS from the central or national government. It
sovereignty and territorial integrity of the Philippine Republic. Self-determination only means decentralization of powers from national to local government. When
refers to the need for a political structure that will respect the autonomous peoples' exercising governmental powers and performing duties, a LGU is an agency of the
uniqueness and grant them sufficient room for self-expression and self- national government.
construction.
Section 4, LGC – Scope of Application – scope means areas of coverage, that is, to
With R.A. 8999, however, this freedom is taken away, and the National provinces, cities, municipalities and barangays and other political subdivisions as
Government takes control again. The hands, once more, of the autonomous may be created by law and to the extent herein provided to officials, offices or
peoples are reined in and tied up. The challenged law creates an office with agencies of the National Government.
functions and powers which, by virtue of E.O. 426, have been previously devolved
to the DPWH-ARMM, First Engineering District in Lanao del Sur. Section 5, LGC – Rules of Interpretation – (a) provision on power of LG shall be
liberally interpreted in its favor; in case of doubt, any question shall be resolved in
Section 2, LGC- Declaration of Policy - LGU to enjoy genuine and meaningful favor of devolution of powers and of the lower LGU. Any fair and reasonable
autonomy to enable them to attain their fullest development as self-reliant doubt as to existence of power, interpreted in favor of LGU concerned
communities and make them effective partners in attainment of national goals –
thru decentralization. National agencies and offices to conduct periodic (b) doubt as to any tax ordinance or revenue measure, strictly construed against
consultations with appropriate lgu, ngo and po, before any proect or program is LGU, liberally in favor of taxpayer (deprivation of property). Tax exemption,
implemented in their jurisdiction. incentive r relief granted any LGU, construed strictly against person claiming it

2
(loss of income on part of LGU). endeavor to establish a government center where offices, agencies or branches of
the National Government, lgu or government-owned or controlled corporations
(c) liberal interpretation of general welfare provisions in order to give more power may, as far as practicable, be located. In designating such a center, the lgu
to LGU in accelerating economic development and upgrading quality of life for concerned shall take into account the existing facilities of the national and local
the people. agencies and offices which may serve as the government center as contemplated
under this Section. The National Government, the lgu or gocc shall bear the
Note: Basic precept in statutory construction that legislative intent is the expenses for the construction of its buildings and facilities in the government
controlling factor in the interpretation of statute. Power to declare what the law center.
shall be is a legislative power, power to declare what the law is or has been is
judicial. When law is unambiguous and unequivocal, application and not Section 13 – Name of LGU and Public Places, Streets and Structures – always in
interpretation thereof is IMPERATIVE. consultation with Philippine Historical Commission; prohibition against naming
after living persons, change of name not oftener than once every 10 years unless
When is statute AMBIGIOUS? If capable of being understood by reasonably well- for justifiable reason; change requires prior plebiscite; change of name involving a
informed persons in either of two or more senses. lgu, public place, street or structure with historical, cultural or ethnic significance
can be done only by a UNANIMOUS VOTE of the sanggunian concerned and in
Power of judicial review can be exercised by courts to invalidate constitutionally consultation with the PHC.
infirm acts. Ergo, courts are not bound by legislative interpretation of their own
acts.
Section 14 – Beginning of Corporate Existence – When a new LGU is created, its
When is statute AMBIGIOUS? If capable of being understood by reasonably well- corporate existence shall commence upon election and qualification of its chief
informed persons in either of two or more senses. executive and majority of members of sanggunian.

Power of judicial review can be exercised by courts to invalidate constitutionally MEJIA vs. BALOLING 81 PHIL 486 – Since a city is a public corporation or
infirm acts. Ergo, courts are not bound by legislative interpretation of their own juridical entity, and as such cannot operate or transact business by itself but
acts. through agents and officials, it is necessary that officials thereof be appointed or
elected in order that it may transact business as such public corporation or city.
De Facto Municipal Corporations requisites:
Valid law authorizing incorporation; attempt in good faith to organize under it;
colorable compliance with law, assumption of corporate powers. NOTE: De Facto Municipal Corporations requisites: Valid law authorizing
incorporation; attempt in good faith to organize under it; colorable compliance
with law, assumption of corporate powers.
MUNICIPAL CORPORATIONS
Case: EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L-
Elements: (a) legal creation/incorporation – there must be a law 23825, 1/24/1965
creating/authorizing creation or incorporation of a municipal corporation; (b)
corporate name- name by which the corporation shall be known; (c) inhabitants – FACTS: President of the Philippines, purporting to act pursuant to Sec. 68 of
people residing in the territory of the corporation; and (d) territory – land mass Revised Administrative Code (presidential authority to define the boundary, or
where inhabitants reside together with internal and external waters and airspace boundaries, of any province, sub-province, municipality, [township] municipal
above land and waters. district or other political subdivision, and increase or diminish the territory
comprised therein, may divide any province into one or more subprovinces,
Section 6 – Authority to Create LGU – (created, divided, merged, abolished or separate any political division other than a province, into such portions as may be
borders substantially altered) either by LAW enacted by Congress in the case of required, merge any of such subdivisions or portions with another, name any new
province, city, municipality or any other political subdivision, or ORDINANCE by subdivision so created, and may change the seat of government within any
sangguniang panlalawigan/panglungosd in the case of a barangay located within subdivision to such place therein as the public welfare may require), issued several
its territorial jurisdiction, subject to limitations prescribed in this Code. executive orders creating 33 municipalities. Petitioner (as Vice-President and as
taxpayer), instituted a special civil action seeking to enjoin Auditor General from
Section 7 – Creation/Conversion of LGU – generally, creation of LGU or its passing in audit any expenditure of public funds in implementation of said certain
conversion from one level to another, subject to verifiable indicators of viability executive orders and/or disbursement by said municipalities.
and projected capacity to provide services: INCOME, POPULATION and LAND
AREA, compliance with which to be attested to by the Dept. of Finance, NSO and DECISION: PETITION GRANTED. Since January 1, 1960, when Republic Act
Land Management Bureau of DENR. No. 2370 became effective, barrios may "not be created or their boundaries altered
nor their names changed" except by Act of Congress or of the corresponding
Income – must be sufficient, based on acceptable standards to provide all essential provincial board "upon petition of a majority of the voters in the areas affected"
government facilities and services and special functions commensurate with the and the "recommendation of the council of the municipality or municipalities in
size of its populations, as expected of the LGU concerned. which the proposed barrio is situated." This statutory denial of the presidential
authority to create a new barrio implies a negation of the bigger power to create
Population – total number of inhabitants within the territorial jurisdiction of the municipalities, each of which consists of several barrios.
LGU concerned.
Whereas the power to fix a common boundary, in order to avoid or settle conflicts
Land Area – must be contiguous, unless it comprises two (2) or more islands or is of jurisdiction between adjoining municipalities, may partake of an administrative
separated by a LGU independent of the others properly identified by metes and nature — involving, as it does, the adoption of means and ways to carry into effect
bounds with technical descriptions and sufficient to provide for such basic services the law creating said municipalities - the authority to create municipal corporations
and facilities to meet the requirements of its populace. is essentially legislative in nature.

(READ GRINO VS. COMELEC 213 SCRA 672) Case: MALABANG vs. BENITO, 27 SCRA 533

Section 8 – Division/Merger of existing LGUs – to comply with same requisites for FACTS: Petitioner Balindong (municipal mayor of Malabang, Lanao del Sur),
creation under Section 7. No reduction in income, population or land area; no Respondents (Mayor Benito and councilors of Municipality of Balabagan of the
reduction in current income classification. same province). Balabagan, (formerly part of Malabang) was created on March 15,
1960, by Executive Order 386 of the then President Carlos P. Garcia, out of barrios
Section 9 – Abolition – LGU may be abolished when its income, population or and sitios of the Malabang.
land aea has been irreversibly reduced to less than the minimum standards
prescribed for its creation (as certified by DOF, NSO and LMB); law/ordinance Citing Pelaez ruling (that Republic Act 2370 [Barrio Charter Act, approved
abolishing an LGU to specify province, city, municipality or barangay to which the January 1, 1960], vested power to create barrios in the provincial board, and
LGU to be abolished will be incorporated or merged. Section 68 of the Administrative Code, insofar as it gives the President the power
to create municipalities, is unconstitutional (a) because it constitutes an undue
Section 10 – Plebiscite requirement – pre-condition to creation, abolition, merger, delegation of legislative power and (b) because it offends against Section 10 (1) of
division or substantial alteration of boundaries of LGUs; requires majority of the Article VII of the Constitution, which limits the President's power over local
votes cast in plebiscite called for the purpose in the political unit/s directly governments to mere supervision”), Petitioner sought to nullify E.O. 386 and
affected; plebiscite to be conducted by COMELEC within 120 days from date of restrain respondents from performing their official functions.
effectivity of law/ordinance effecting such action, unless said law/ordinance fixes
another date. Respondents argued that Pelaez ruling did not apply because, unlike the
municipalities involved therein, the municipality of Balabagan is at least a de facto
Section 11- Seat of Government - considerations of GEOGRAPHICAL corporation, having been organized under color of a statute before this was
CENTRALITY, ACCESSIBILITY, AVAILABILITY OF TRANSPORATION declared unconstitutional (by Pelaez ruling), its officers having been either elected
AND COMMUNICATION FACILITIES, DRAINAGE AND SANITATION or appointed, and the municipality itself having discharged its corporate functions
DEVELOPMENT, ECONOMIC PROGRESS and OTHER RELEVANT for the past five years preceding the institution of this action. That as a de facto
CONSIDERATIONS; transfer of seat when conditions and development in LGU corporation, its existence cannot be collaterally attacked, although it may be
concerned has subsequently changed significantly, requires 2/3 vote of members of inquired into directly in an action for quo warranto at the instance of the State and
sanggunian, after public hearing; transfer site shall not be outside the territorial not of an individual like the petitioner Balindong.
boundaries of the LGU; old site together with improvements thereon may be
disposed of by sale or lease or converted to such other use as the sanggunian DECISION: Petition granted, Executive Order 386 declared void. Generally, the
concerned may deem beneficial to the LGU and its inhabitants. inquiry into the legal existence of a municipality is reserved to the State in a
proceeding for quo warranto or other direct proceeding, and that only in a few
exceptions may a private person exercise this function of government. But the rule
Section 12 – Government Centers – Provinces, cities and municipalities shall disallowing collateral attacks applies only where the municipal corporation is at

3
least a de facto corporation. For where it is neither a corporation de jure nor de
facto, but a nullity, the rule is that its existence may be questioned collaterally or
directly in any action or proceeding by any one whose rights or interests are
affected thereby, including the citizens of the territory incorporated unless they are
estopped by their conduct from doing so.
(3) Municipality (Sec. 440, LGC) – groups of barangays, serves primarily
as a general purpose government for coordination and delivery of basic,
regular and direct services and effective governance of inhabitants
within its jurisdiction;

A de facto municipal corporation is recognized as such despite the fact that the
(4) Barangay (Sec. 384, LGC) – basic political unit, serves as the primary
statute creating it was later invalidated, rests upon the consideration that there was
planning and implementing unit of government policies, plans,
some other valid law giving corporate validity to the organization. Hence, in the
programs, projects and activities in the community and as a forum
case at bar, the mere fact that Balabagan was organized at a time when the statute
wherein collective views of people may be expressed, crystallized and
had not been invalidated cannot conceivably make it a de facto corporation, as,
considered where disputes are also amicably settled;
independently of Section 68 of the Administrative Code, there is no other valid
statute to give color of authority to its creation. Thus, Executive Order 386
creating the municipality in question is a nullity pursuant to the ruling in Pelaez
ruling. This is not to say, however, that the acts done by the municipality of (5) Autonomous Regions – refer to Article 10 of the Constitution.
Balabagan in the exercise of its corporate powers are a nullity because the
executive order "is, in legal contemplation, as inoperative as though it had never
been passed." Note, the existence of Executive Order 386 is "an operative fact Note: Metropolitan Manila Development Authority is not a local government unit.
which cannot justly be ignored." The actual existence of a statute, prior to such a The power delegated to MMDA is that given to the Metro Manila Council to
determination, in an operative fact and may have consequences which cannot promulgate administrative rules and regulations in the
justly be ignored. The past cannot always be erased by a new judicial declaration.
The effect of the subsequent ruling as to invalidity may have to be considered in Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000
various aspects — with respect to particular relations, individual and corporate,
and particular conduct, private and official. FACTS: Petitioner is a government agency tasked with delivery of basic services
in Metro Manila. Respondent Bel-Air Village Association, Inc. is a non-stock, non-
Case: MUN. OF JIMENEZ, vs. HON. VICENTE T. BAZ. JR., G.R. No. 105746. profit corporation composed of homeowners in Bel-Air Village, a private
12/2/1996 subdivision in Makati City. Respondent had sought to enjoin Petitioner’s plan to
demolition the perimeter fence and open to public access Neptune Street, a road
FACTS: In 1949, Pres. Elpidio Quirino (pursuant to Sec. 68 of Revised Admin (beside) privately/legally owned by the subdivision. The Court of Appeals, in
Code) issued EO258 creating the Municipality of Sinacaban consisting Petitioner’s reversing the dismissal of Respondent’s complaint, ruled that Petitioner did not
southern portion. In 1988, the Municipality of Sinacaban filed with the Provincial have the authority to order the opening of the street in issue. Before the SC,
Board of Misamis Occiental a claim against Petitioner over portions affecting Petitioner asserted that, there was no need for an ordinance from the City of
certain barrios based on the technical description in E.O. No. 258. Petitioner Manila to open Neptune Street to public because, as an agent of the State, it was
conceded that, under EO258 the disputed area is part of Sinacaban, but nonetheless endowed with police power in the delivery of basic services in Metro Manila
asserted jurisdiction on the basis of an agreement it had with the Municipality of including traffic management (involving regulation of the use of thoroughfares to
Sinacaban and approved by provincial board resolution in 1950. The board insure the safety, convenience and welfare of the general public).
declared the disputed area to be part of Sinacaban ruling that the previous
resolution approving the agreement between the municipalities was void because DECISION: Petition DENIED. It is beyond doubt that MMDA is not a local
the Board had no power to alter the boundaries of Sinacaban as fixed in E.O. No. government unit or a public corporation endowed with legislative power. It is not
258, that power being vested in Congress pursuant to the Constitution and the even a “special metropolitan political subdivision” as contemplated in Sec. 11, Art.
LGC of 1983 (B.P. Blg. 337). Before the SC, Petitioner challenges the trial court’s X of the Constitution. MMDA’s powers are limited to formulation, coordination,
decision affirming the legal existence of Sinacaban and ordering the relocation of regulation, implementation, preparation, management, monitoring, policy-setting,
its boundary for the purpose of determining whether certain areas claimed by it installation of a system and administration. There is no syllabus in RA7924 that
belonged to it. grants MMDA police power, let alone legislative power.
DECISION: The principal basis for the view that Sinacaban was not validly Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA
created as a municipal corporation is the Pelaez ruling that the creation of under R.A. No. 7924. Unlike the MMC, the MMDA has no power to enact
municipal corporations is essentially a legislative matter and therefore the ordinances for the welfare of the community. It is the local government units,
President was without power to create by executive order Sinacaban. The ruling in acting through their respective legislative councils, that possess legislative power
this case has been reiterated in a number of cases later decided. However, we have and police power. In the case at bar, the Sangguniang Panlungsod of Makati City
since held that where a municipality created as such by executive order is later did not pass any ordinance or resolution ordering the opening of Neptune Street,
impliedly recognized and its acts are accorded legal validity, its creation can no hence, its proposed opening by petitioner MMDA is illegal and the respondent
longer be questioned. Sinacaban is at least a de facto municipal corporation in the Court of Appeals did not err in so ruling. We desist from ruling on the other issues
sense that its legal existence has been recognized and acquiesced publicly and as they are unnecessary.
officially. Sinacaban had been in existence for sixteen years when the Pelaez ruling
yet the validity of E.O. No. 258 creating it had never been questioned.

The State and even the Municipality of Jimenez itself have recognized Sinacaban's Points of Discussion – Police power is inherent in the State, exercised by the
corporate existence entering in 1950 into an agreement with it regarding their Legislature, but may be validly delegated. Upon valid delegation, the exercise
common boundary. Also, it has attained de jure status, 442(d) of the LGC, must be thereof by the delegate being limited only to such powers as conferred by the
deemed to have cured any defect in the creation of Sinacaban. (“Municipalities legislature. Legislature has delegated police power to LGUs (Sec. 15, LGC)
existing as of the date of the effectivity of this Code shall continue to exist and through their respective legislative bodies, under the General Welfare Clause (Sec.
operate as such. Existing municipal districts organized pursuant to presidential 16, LGC).
issuances or executive orders and which have their respective set of elective
municipal officials holding office at the time of the effectivity of the Code shall
henceforth be considered as regular municipalities”). NOTE: RA 7924 declared Metropolitan or Metro Manila (body composed of
several LGUs, i.e., twelve (12) cities of Caloocan, Manila, Mandaluyong, Makati,
Pasay, Pasig, Quezon, Muntinlupa, Las Piñas, Marikina, Parañaque and
Valenzuela, and the five (5) municipalities of Malabon, Navotas, Pateros, San Juan
GENERAL POWERS & ATTRIBUTES OF LGUs and Taguig) as a "special development and administrative region" with the
administration of "metro-wide" basic services affecting the region placed under "a
Sources of Powers – Article II, Section 25 and Article X of the Constitution; development authority" referred to as the MMDA (governed by the Metro Manila
statutes (eg. RA7160), charter. Council composed of the mayors of the component 12 cities and 5 municipalities,
the president of the Metro Manila Vice-Mayors' League and the president of the
Section 15 – Political and Corporate Nature of LGUs – every LGU is a body Metro Manila Councilors' League) headed by the Chairman.
politic and corporate endowed with powers to be exercised by it in conformity
with law.
NOTE: When R.A. No. 7924 took effect, Metropolitan Manila became a "special
Dual Functions of LGU – (1) public/governmental – acts as an agent of State for development and administrative region" and the MMDA a "special development
the government of the territory and its inhabitants; (2) proprietary/private – acts as authority" whose functions were "without prejudice to the autonomy of the
an agent of the community in the administration of local affairs, and as such, it acts affected local government units." The character of the MMDA was clearly defined
as a separate entity for its own purposes and not as a subdivision of the State. in the legislative debates enacting its charter. MMDA not a special metropolitan
political subdivision, because the latter’s creation requires the approval by a
Municipal Corporation in the Philippines: majority of the votes cast in a plebiscite in the political units directly affected. 56
R.A. No. 7924 was not submitted to the inhabitants of Metro Manila in a
(1) Province (Sec. 459, LGC) – cluster of municipalities or municipalities plebiscite. The Chairman of the MMDA is not an official elected by the people, but
and component cities, as a political and corporate unit of government appointed by the President with the rank and privileges of a cabinet member. In
which serves as a dynamic mechanism for developmental processes and fact, part of his function is to perform such other duties as may be assigned to him
effective governance of LGUs within its territorial jurisdiction. by the President, 57 whereas in local government units, the President merely
exercises supervisory authority. This emphasizes the administrative character of
(2) City (Sec. 448) – composed of more more urbanized and developed the MMDA.
barangays, serves as a general purpose government for coordination
and delivery of basic, regular and direct services and effective
governance of the inhabitants within its jurisdiction; Section 16 – General Welfare Clause – LGUs shall exercise powers expressly
granted, those necessarily implied therefrom, as well as those necessary,
appropriate or incidental for efficient and effective governance (i.e. promote
4
health, safety, enhance prosperity, improve morals of inhabitants) – is the statutory RTC alleging that the collection of subject fees and closure order were oppressive
grant of police power to LGUs through their respective legislative bodies and arbitrary which resulted loss of expected earnings. RTC dismissed the
empowering them to enact ordinances and approve resolutions and appropriate complaint, which decision was sustained by the CA holding that the closure order
functions for the general welfare of the LGU. was a legitimate exercise of police power by Respondent. Hence, petition with SC.

Note: Police power is an inherent attribute of sovereignty vested in Congress to DECISION: Assailed decision AFFIRMED with modification deleting closure
make, ordain and establish all manners of wholesome and reasonable laws for the order. RE (imposition of fees) - Municipal corporations are agencies of the State
common good; it is plenary and its scope is vast and pervasive. However, by virtue for the promotion and maintenance of local self-government and as such are
of valid delegation, it may be exercised by LGUs. The latter being only agents can endowed with police powers in order to effectively accomplish and carry out the
only exercise such powers as are conferred upon them by Congress. declared objects of their creation. 20 The authority of a local government unit to
exercise police power under a general welfare clause is not a recent development.
Limits on LGUs police Power - Thus, the closure of the bank was a valid exercise of police power pursuant to the
(1) Exercisable only within territorial limits of LGU general welfare clause contained in and restated by B.P. Blg. 337, which was then
(2) Equal Protection Clause ( interest of public vs. those of a particular class the law governing local government units.
requires exercise of such power)
(3) Due Process Clause (reasonable means employed and not unduly oppressive – The general welfare clause has two branches. The first, known as the general
case of Villavicencio vs. Lukban, GR No. 14639, March 25, 1919) legislative power, authorizes the municipal council to enact ordinances and make
(4) Not contrary to the Constitution and the laws (It cannot legalize prohibited act regulations not repugnant to law, as may be necessary to carry into effect and
under the guise of regulation. Likewise, it cannot prohibit legal activities but only discharge the powers and duties conferred upon the municipal council by law. The
regulate) second, known as the police power proper, authorizes the municipality to enact
ordinances as may be necessary and proper for the health and safety, prosperity,
Note: Under Section 16, LGU to ensure and support preservation and enrichment morals, peace, good order, comfort, and convenience of the municipality and its
of culture, promote health and safety, enhance people’s right to balance and inhabitants, and for the protection of their property.
healthful ecology, improve public morals, enhance economic prosperity and social
justice, maintenance of peace and order. In the present case, the ordinances imposing licenses and requiring permits for any
business establishment, for purposes of regulation enacted by the municipal
Case: REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622, 9/12/2002 council of Makati, fall within the purview of the first branch of the general welfare
clause. Moreover, the ordinance of the municipality imposing the annual business
PD 1596 (The Environmental Impact Statement System) ensures environmental tax is part of the power of taxation vested upon local governments.
protection and regulates certain government activities affecting the environment.
Related to PD 1151 (Philippine Environment Policy), requires an environmental RE (closure order) - The bank was not engaged in any illegal or immoral activities
impact statement from all agencies and instrumentalities of the national to warrant its outright closure. The appropriate remedies to enforce payment of
government, including government-owned or controlled corporations, as well as delinquent taxes or fees are provided for in Section 62 of the Local Tax Code, (by
private corporations, firms and entities, for every proposed project and undertaking distraint of personal property, and by legal action). The law did not provide for
which significantly affect the quality of the environment. closure which furthermore violated petitioner's right to due process.

Davao City in 2000, applied for a certificate of non-coverage (CNC) for its Case: TANO vs. HON. GOV. SALVADOR P. SOCRATES, G.R. No. 110249, 8/21/
proposed Davao City Artica Sports Dome project from the required Environmental 1997
Compliance Certificate (having been certified that its project is not located in an
environmentally critical area (ECA). Application denied for the reason that Davao FACTS: City Council of Puerto Princesa, Palawan, to effectively free city
City must undergo the environmental impact assessment (EIA) process to secure seawaters from cyanide and other obnoxious substances, passed Ordinance No. 15-
an Environmental Compliance Certificate (ECC), before it can proceed with the 92 (effective January 1, 1993) banning the shipment of all live fish and lobster
construction of its project. outside Puerto Princesa from January 1, 1993 to January 1, 1998. To implement
said city ordinance, the acting city mayor issued Office Order No. 23, authorizing
Denial of application lead to complaint for injunction against DENR filed by local law enforcers to to check or conduct necessary inspections on cargoes
Davao City. RTC ruled in latter’s favor reasoning that the laws do not require local containing live fish and lobster being shipped out from the Puerto Princesa to
government units (LGUs) to comply with the EIS law. Only agencies and ascertain whether the shipper possessed the required Mayor's Permit issued by this
instrumentalities of the national government, including government owned or Office and the shipment is covered by invoice or clearance issued by the local
controlled corporations, as well as private corporations, firms and entities are office of the Bureau of Fisheries and Aquatic Resources and as to compliance with
mandated to go through the EIA process for their proposed projects which have all other existing rules and regulations on the matter. Subsequently, the Provincial
significant effect on the quality of the environment. A local government unit, not Board of Palawan issued a similar ordinance.
being an agency or instrumentality of the National Government, is deemed
excluded under the principle of expressio unius est exclusio alterius. Petitioners, who were charged with violation of certain provisions of the foregoing
issuances upon the latter’s implementation, sought relief with the SC contending
Petition for certiorari filed by Republic from RTC decision. Case moot and that (a) the challenged ordinances deprived them of due process of law, their
academic when subsequent change in administration of Davao City which filed livelihood, and unduly restricted them from the practice of their trade, in violation
manifestation expressing that it needs to secure an ECC for its proposed project. of constitutional guarantees, and (b) the challenged office order contained no
But Court, for the guidance of the implementors of the EIS law and pursuant to our regulation nor condition under which the Mayor's permit could be granted or
symbolic function to educate the bench and bar, addressed the issue. denied, vesting the mayor absolute authority to determine whether or not to issue
the permit.
Decision: Sec. 15, LGC (a local government unit is body politic and corporate
endowed with powers to be exercised by it in conformity with law). As such, it DECISION: PETITION dismissed. It is of course settled that laws (including
performs dual functions, governmental and proprietary. In exercise of ordinances enacted by local government units) enjoy the presumption of
governmental powers and performing governmental duties, an LGU is an agency constitutionality. To overthrow this presumption, there must be a clear and
of the national government. unequivocal breach of the Constitution, not merely a doubtful or argumentative
contradiction. In short, the conflict with the Constitution must be shown beyond
Sec. 16, LGC - duty of the LGUs to promote the people's right to a balanced reasonable doubt. Where doubt exists, even if well-founded, there can be no
ecology. Pursuant to this, an LGU, like the City of Davao, can not claim finding of unconstitutionality. To doubt is to sustain.
exemption from the coverage of PD 1586. As a body politic endowed with
governmental functions, an LGU has the duty to ensure the quality of the The right to a balanced and healthful ecology carries with it a correlative duty to
environment, which is the very same objective of PD 1586. refrain from impairing the environment . . . The LGC provisions invoked by
private respondents merely seek to give flesh and blood to the right of the people
Section 4 of PD 1586 clearly states that "no person, partnership or corporation to a balanced and healthful ecology. In fact, the General Welfare Clause, expressly
shall undertake or operate any such declared environmentally critical project or mentions this right.
area without first securing an Environmental Compliance Certificate issued by the
President or his duly authorized representative." 13 The Civil Code defines a In light then of the principles of decentralization and devolution enshrined in the
person as either natural or juridical. The state and its political subdivisions, i.e., the LGC and the powers granted therein to local government units under Section 16
local government units 14 are juridical persons. 15 Undoubtedly therefore, local (the General Welfare Clause), and under Sections 149, 447(a) (1) (vi), 458(a)(1)
government units are not excluded from the coverage of PD 1586. (vi) and 468(a)(1)(vi), which unquestionably involve the exercise of police power,
the validity of the questioned Ordinances cannot be doubted.
Note: Based on DENR-Community Environment and Natural Resources Office
(CENRO-West) certification, project area not environmentally critical area. SC is Case: TAN vs. PEREÑA, G.R. No. 149743, 2/18/2005
not trier of facts. Proclamation No. 2146 issued on December 14, 1981, lists areas
and types of projects as ECA and within EIS system under PD1586, eg., heavy FACTS: How many cockpits may be allowed to operate in a city or municipality?
industries, iron and steel mills, smelting plants, major mining and quarrying Comes into play, the traditional power of the national government to enact police
projects, etc.) power measures, on one hand, and the vague principle of local autonomy now
enshrined in the Constitution on the other. PD449 (Cockfighting Law of 1974)
provided that only one cockpit shall be allowed in each city/municipality except
Case: RURAL BANK OF MAKATI, INC. vs. MUNICIPALITY OF MAKATI, that in cities or municipalities with a population of over 100T, two cockpits may be
G.R. No. 150763, 7/2/2004 established, maintained or operated. In 1993, the Municipal Council of
Daanbantaya, Cebu enacted municipal ordiances which eventually allowed the
FACTS: For non-payment of mayor’s permit fee and annual business taxes, operation of not more than three cockpits in the municipality. In 1995, Petitioner
criminal charges against certain officers of Petitioner. Pending these charges, (Leonardo Tan) applied for a license to operate a cockpit. Respondent (Socorro
Respondent ordered the closure of the bank, prompting the latter to pay, under Perena), who was an existing licensee, filed a complaint with the RTC to enjoin
protest P82,408.66 as mayor’s permit fee and annual business taxes. Petitioner Petitioner from operating his cockpit citing that the challenged ordinance allowing
filed a civil complaint for sum of money and damages against Respondent with the operation of not more than three cockpits violated PD449. The trial court

5
dismissed the complaint and upheld Petitioner’s franchise reasoning that, while the
ordiance may be in conflict with PD449, any doubt in interpretation should be
resolved in favor of the grant of more power to LGUs under the LGC’s principle of
devolution. Court of Appeals reversed the trial court’s decision. Hence, Petitioner’s
appeal to the SC.
RULING: Petition DENIED. For Petitioner, Section 447(a)(3)(v) of the LGC
sufficiently repeals Section 5(b) of the Cockfighting Law, vesting as it does on
LGUs the power and authority to issue franchises and regulate the operation and
establishment of cockpits in their respective municipalities, any law to the contrary
notwithstanding. However, while the Local Government Code expressly repealed
several laws, PD449 was not among them. Section 534(f) of the LGC declares that
all general and special laws or decrees inconsistent with the Code are hereby
repealed or modified accordingly, but such clause is not an express repealing
clause because it fails to identify or designate the acts that are intended to be
repealed.
While the sanggunian retains the power to authorize and license the establishment,
operation, and maintenance of cockpits, its discretion is limited in that it cannot
authorize more than one cockpit per city or municipality, unless such cities or
municipalities have a population of over one hundred thousand, in which case two
cockpits may be established.
operators, (5) granting of permits for the use of frequencies, (6) regulation of
ownership and operation, (7) adjudication of issues arising from its functions, and
(8) other similar matters. Within these areas, the NTC reigns supreme as it
possesses the exclusive power to regulate — a power comprising varied acts, such
as "to fix, establish, or control; to adjust by rule, method or established mode; to
direct by rule or restriction; or to subject to governing principles or laws."
There is no dispute that respondent Sangguniang Panlungsod, like other local
legislative bodies, has been empowered to enact ordinances and approve
resolutions under the general welfare clause of B.P. Blg. 337, the Local
Government Code of 1983. That it continues to posses such power is clear under
the new law, R.A. No. 7160.
The general welfare clause is the delegation in statutory form of the police power
of the State to LGUs. Through this, LGUs may prescribe regulations to protect the
lives, health, and property of their constituents and maintain peace and order
within their respective territorial jurisdictions. Accordingly, we have upheld
enactments providing, for instance, the regulation of gambling, the occupation of
rig drivers, the installation and operation of pinball machines, the maintenance and
operation of cockpits, the exhumation and transfer of corpses from public burial
grounds, and the operation of hotels, motels, and lodging houses as valid exercises
by local legislatures of the police power under the general welfare clause.

Cockfighting Law arises from a valid exercise of police power by the national Like any other enterprise, CATV operation maybe regulated by LGUs under the
government. Of course, local governments are similarly empowered under Section general welfare clause. This is primarily because the CATV system commits the
16 of the Local Government Code. We do not doubt, however, the ability of the indiscretion of crossing public properties. (It uses public properties in order to
national government to implement police power measures that affect the subjects reach subscribers.) The physical realities of constructing CATV system — the use
of municipal government, especially if the subject of regulation is a condition of of public streets, rights of ways, the founding of structures, and the parceling of
universal character irrespective of territorial jurisdictions. Cockfighting is one such large regions — allow an LGU a certain degree of regulation over CATV
condition. It is a traditionally regulated activity, due to the attendant gambling operators. This is the same regulation that it exercises over all private enterprises
involved or maybe even the fact that it essentially consists of two birds killing within its territory.
each other for public amusement. Laws have been enacted restricting the days
when cockfights could be held, and legislation has even been emphatic that But, while we recognize the LGUs' power under the general welfare clause, we
cockfights could not be held on holidays celebrating national honor such as cannot sustain Resolution No. 210. We are convinced that respondents strayed
Independence Day and Rizal Day. from the well recognized limits of its power. The flaws in Resolution No. 210 are:
(1) it violates the mandate of existing laws and (2) it violates the State's
The obvious thrust of our laws designating when cockfights could be held is to deregulation policy over the CATV industry.
limit cockfighting and imposing the one-cockpit-per-municipality rule is in line
with that aim. Cockfighting is a valid matter of police power regulation, as it is a Resolution No. 210 is an enactment of an LGU acting only as agent of the national
form of gambling essentially antagonistic to the aims of enhancing national legislature. Necessarily, its act must reflect and conform to the will of its principal.
productivity and self-reliance. Limitation on the number of cockpits in a given To test its validity, we must apply the particular requisites of a valid ordinance as
municipality is a reasonably necessary means for the accomplishment of the laid down by the accepted principles governing municipal corporations.
purpose of controlling cockfighting, for clearly more cockpits equals more
cockfights. The apparent defect in Resolution No. 210 is that it contravenes E.O. No. 205 and
E.O. No. 436 insofar as it permits respondent Sangguniang Panlungsod to usurp a
A municipal ordinance must not contravene the Constitution or any statute, power exclusively vested in the NTC, i.e., the power to fix the subscriber rates
otherwise it is void. Ordinance No. 7 unmistakably contravenes the Cockfighting charged by CATV operators. As earlier discussed, the fixing of subscriber rates is
Law in allowing three cockpits in Daanbantayan. definitely one of the matters within the NTC's exclusive domain.

Case: BATANGAS CATV, INC. vs. CA, G.R. No. 138810, 9/29/2004 "The rationale of the requirement that the ordinances should not contravene a
statute is obvious. Municipal governments are only agents of the national
In the late 1940s, John Walson, an appliance dealer in Pennsylvania, suffered a government. Local councils exercise only delegated legislative powers conferred
decline in the sale of television (tv) sets because of poor reception of signals in his on them by Congress as the national lawmaking body. The delegate cannot be
community. Troubled, he built an antenna on top of a nearby mountain. Using superior to the principal or exercise powers higher than those of the latter. It is a
coaxial cable lines, he distributed the tv signals from the antenna to the homes of heresy to suggest that the local government units can undo the acts of Congress,
his customers. Walson's innovative idea improved his sales and at the same time from which they have derived their power in the first place, and negate by mere
gave birth to a new telecommunication system — the Community Antenna ordinance the mandate of the statute.
Television (CATV) or Cable Television. The query in this case is – may a LGU
regulate the subscriber rates charged by CATV operators within its territorial OTHER CASES: VELASCO vs. VILLEGAS 120 SCRA 568 – Manilia ordinance
jurisdiction? prohibiting barbershops from conducting massage business in another room was
held valid, as it was passed for protection of public morals.
On July 28, 1986, Respondent city council enacted a resolution granting Petitioner
a permit to construct, install, and operate a CATV system in Batangas City with BALACUIT vs. CFI OF AGUSAN DEL NORTE 163 SCRA 182 - Ordinance
authority to charge subscribers the maximum rates specified therein with condition penalizing persons charging full payment for admission of children ages (ages 7 to
that rate increases would be subject to council approval. When Petitioner increased 12) in moviehouse was an invalid exercise of the police power for being
its subscriber rates from P88.00 to P180.00 per month in 1993, Respondent Mayor unreasonable and oppressive on business of petitioners.
wrote/threatened Petitioner with the cancellation of its permit unless it secures the
approval of respondent City Council. Petitioner claiming that, under EO205, the DE LA CRUZ vs. PARAS 123 SCRA 759 – Ordinance of Bocaue, Bulacan
National Telecommunications Commission has sole authority to regulate the prohibiting operation of nightclubs was declared invalid because it was prohibitory
CATV operation in the Philippines, Petitioner filed a petition before the RTC to and not merely regulatory in character.
enjoin from enforcing the questioned ordinance. The trial court granted the
injunction reasoning that the sole agency of the government which can regulate Section 17, LGC – Basic Services and Facilities – LGU endeavor to be self-reliant
CATV operation is the NTC, and that the LGUs cannot exercise regulatory power and continue exercise powers and discharge their duties and functions currently
over it without appropriate legislation. Trial court’s ruling was reversed by the CA vested upon them; also discharge functions and responsibilities of national
holding that, NTC (under EO205) has the authority to issue a certificate of agencies devlolved to them pursuant to the LGC; exercise such other powers and
authority to operate a CATV system, this does not preclude the city council from discharge other functions as are necessary, appropriate or incidental to efficient
regulating the operation of such a system in their locality under the powers and effective provision of basic services and facilities enumerate in Sec. 17. (see
conferred by the LGC (of 1983). list of basic services and facilities)

RULING: Petition GRANTED. Significantly, President Marcos and President
Aquino, in the exercise of their legislative power, issued P.D. No. 1512, E.O. No.
546 and E.O. No. 205. Hence, they have the force and effect of statutes or laws
passed by Congress. That the regulatory power stays with the NTC is also clear
from President Ramos' E.O. No. 436 mandating that the regulation and supervision
of the CATV industry shall remain vested "solely" in the NTC. In light of the
above laws and E.O. No. 436, the NTC exercises regulatory power over CATV
operators to the exclusion of other bodies.
But, lest we be misunderstood, nothing herein should be interpreted as to strip
LGUs of their general power to prescribe regulations under the general welfare
clause of the Local Government Code. It must be emphasized that when E.O. No.
436 decrees that the "regulatory power" shall be vested "solely" in the NTC, it
pertains to the "regulatory power" over those matters which are peculiarly within
the NTC's competence, such as, the: (1) determination of rates, (2) issuance of
"certificates of authority, (3) establishment of areas of operation, (4) examination
and assessment of the legal, technical and financial qualifications of applicant
Note: Public works and infrastructure projects and other facilities, programs and
services funded by national government under GAA and other laws, not covered
by Section 17 except where LGU is duly designated as the implementing agency
for such project/facilities/programs and services.
Section 18 – Power to Generate & Apply Resources – restates and implements
Section 5, 6 and 7 of Article 10 of the Constitution, but the power is subject to
limitations imposed by Congress.
-includes:
1. Establishing an organization responsible for efficient and
effective implementation of their development plans,
programs and objective and priorities;
2. 2. Creating their own sources of revenue and to levy taxes,
fees and charges which shall accrue exclusively to their own
use and disposition and which shall be retained by them;

6
 3. Having a just share in national taxes which shall be
automatically and directly released to them without need of
further action;
4. Having an equitable share in proceeds and from utilization
and development of national wealth and resources within
their respective jurisdictions including sharing the same
with inhabitants by way of direct benefits;
5. To acquire, develop, lease, encumber and alienate or
otherwise dispose of real or personal property held by them
in their private capacity and apply their resources and assets
for productive, developmental or welfare purposes, in
exercise or furtherance of their governmental or proprietary
powers and functions and ensure thereby their development
as self-feliant communities and active participants in
attainment of national goals.
FACST: Respondent, a duly organized condomium corporation holding title to the
common and limited common areas of the BA-Lepanto Condominium, collected
regular assessments from its members for operating expenses, capital expenditures
on the common areas, and other special assessments, pursuant to its Amended By-
Laws.
Without citing as basis any specific provision of the Revenue Code of Makati or
the Local Government Code, Petitioner (City Treasurer of Makati City) issued a
notice of assessment holding Petitioner liable to pay business taxes, fees and
charges totaling P1,601,013.77 for the years 1995 to 1997. Petitioner reasoned that
Respondent is engaged in a profit venture as the collection of dues from unit
owners was primarily "to sustain and maintain the expenses of the common areas,
giving full appreciative living values for the individual condominium occupants,
generating better marketable prices for future sale of their units.

Upon denial of its protest, Respondent filed an appeal with the Regional Trial
NOTE: Sections 128-383, Book II of LGC provides for detailed provisions on Court which appeal was dismissed. On review by the Court of Appeals, the latter
Local Taxation and Fiscal Matters. reversed the trial court’s decision and declared that the corporation was not liable
to pay business taxes to the City of Makati. Her motion for reconsideration denied,
NOTE: Section 130, LGC (Fundamental Principles Governing Exercise of Power Petitioner filed a petition for review with the Supreme Court.
to Tax and Generate Revenues by LGUs):
- Taxation shall be uniform in each LGU; RULING: Petition DENIED. The power of local government units to impose taxes
- Taxes, fees, charges and imposition shall be equitable and based within its territorial jurisdiction derives from the Constitution itself, which
as far as practicable on taxpayer’s ability to pay; levied only for a recognizes the power of these units "to create its own sources of revenue and to
public purpose; not unjust, excessive, oppressive or confiscatory; levy taxes, fees, and charges subject to such guidelines and limitations as the
not contrary to law, public policy, national economic policy or in Congress may provide, consistent with the basic policy of local autonomy." These
restraint of trade; guidelines and limitations as provided by Congress are in main contained in the
- Collection of taxes, fees, charges and other impositions shall in no Local Government Code of 1991, which provides for comprehensive instances
case be let to any private person; when and how local government units may impose taxes. The significant
- Revenue collection shall inure solely to the benefit of, and be limitations are enumerated primarily in Section 133 of the Code (prohibition on
subject to the disposition by LGU unless specifically provided income taxes except when levied on banks and other financial institutions). Found
herein; and in Title I of Book II of the Code are other taxes imposable by local government
- Each LGU shall, as far as practicable, evolve a progressive units, including business taxes. Under Section 151 of the Code, cities such as
system of taxation Makati are authorized to levy the same taxes fees and charges as provinces and
municipalities.
NOTE: Section 305, LGC (Fundamental Principles Governing Financial Affairs,
Transactions and Operations of LGU): Section 143 of the Code specifically enumerates several types of business on
- No money to be paid out of local treasury except in pursuance of which municipalities and cities may impose taxes. Moreover, the local sanggunian
an appropriation ordinance or law; is also authorized to impose taxes on any other businesses not otherwise specified
- Local government funds and monies shall be spent solely for under Section 143 which the sanggunian concerned may deem proper to tax.
public purposes;
- Local revenue is generated only from sources expressly The coverage of business taxation particular to the City of Makati is provided by
authorized by law or ordinance, collection thereof shall at all the Makati Revenue Code enacted through Municipal Ordinance No. 92-072.
times be acknowledged properly; Article A, Chapter III of said code governs business taxes in Makati, and it is quite
- All monies officially received by a local government officer in specific as to the particular businesses which are covered by business taxes. The
any capacity or on any occasion shall be accounted for as local initial inquiry is what provision of the Makati Revenue Code does the City
funds, unless otherwise, provided by law; Treasurer rely on to make the Corporation liable for business taxes.
- Trust funds in local treasury shall not be paid out except in
fulfillment of purpose for which trust was created or funds As stated earlier, local tax on businesses (that is, "trade or commercial activity
received; regularly engaged in as a means of livelihood or with a view to profit") is
- Local budget shall operationalize approved development plans. authorized under Section 143 of the Local Government Code. It is thus imperative
that in order that Respondent may be subjected to business taxes, its activities must
fall within the definition of business as provided in the Local Government Code.
Case: HUMBERTO BASCO vs. PAGCOR, G.R. No. 91649, 5/14/1991 And to hold that they do is to ignore the very statutory nature of a condominium
corporation.
Under PD 1869, the Philippine Amusement and Gaming Corporation (PAGCOR)
was empowered to regulate and centralized all games of chance authorized by The creation of the condominium corporation is sanctioned by RA No. 4726,
existing franchise or permitted by law. Petitioners (as lawyers and taxpayers) (Condominium Act - a condominium is an interest in real property consisting of a
challenging the constitutionality of PD1869, alleged that said law waived Manila separate interest in a unit in a residential, industrial or commercial building and an
City’s right to impose taxes and license fees, which by law is recognized and thus, undivided interest in common, directly or indirectly, in the land on which it is
was an intrusion into LGU’s right to impose local taxes and license fees in located and in other common areas of the building). In line with the authority of
contravention of the constitutionally enshrined principle of local autonomy. the condominium corporation to manage the condominium project, it may be
Specifically, the challenged is directed against Section 13 par. (2) of P.D. 1869 authorized, in the deed of restrictions, "to make reasonable assessments to meet
which exempts PAGCOR, as the franchise holder from paying any "tax of any authorized expenditures, each condominium unit to be assessed separately for its
kind or form, income or otherwise, as well as fees, charges or levies of whatever share of such expenses in proportion (unless otherwise provided) to its owner's
nature, whether National or Local", except for the 5% franchise tax due to the fractional interest in any common areas." The collection of these assessments from
National Government. unit owners is the basis for the City Treasurer's claim that the Corporation is doing
business as these collections are "with the end view of getting full appreciative
RULING: Petition DISMISSED. Section 5, Article X of the 1987 Constitution (on living values" for the condominium units, and as a result, profit is obtained once
Local Autonomy) provides that “each local government unit shall have the power these units are sold at higher prices. The Court cites with approval the two
to create its own source of revenue and to levy taxes, fees, and other charges counterpoints raised by the Court of Appeals in rejecting this contention. First, if
subject to such guidelines and limitation as the congress may provide, consistent any profit is obtained by the sale of the units, it accrues not to the corporation but
with the basic policy on local autonomy. Such taxes, fees and charges shall accrue to the unit owner. Second, if the unit owner does obtain profit from the sale of his
exclusively to the local government." The power of local government to "impose unit, he is already required to pay capital gains tax on the appreciated value of the
taxes and fees" is always subject to "limitations" which Congress may provide by condominium unit.
law. Since PD 1869 remains an "operative" law until "amended, repealed or
revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains Case: MIAA vs. CA, G.R. No. 155650. 7/20/2006
as an exception to the exercise of the power of local governments to impose taxes
and fees. It cannot therefore be violative but rather is consistent with the principle FACTS: Petitioner Manila International Airport Authority operates the Ninoy
of local autonomy. Local governments have no power to tax instrumentalities of Aquino International Airport (NAIA) Complex in Parañaque City under Executive
the National Government. PAGCOR is a government owned or controlled Order No. 903, otherwise known as the Revised Charter of the Manila
corporation with an original charter, PD 1869. All of its shares of stocks are owned International Airport Authority. Subsequently, Executive Order Nos. 909 and 298
by the National Government. In addition to its corporate powers (Sec. 3, Title II, amended the MIAA Charter, where as operator of the international airport, MIAA
PD 1869) it also exercises regulatory powers, thus PAGCOR has a dual role, to administers the land, improvements and equipment within the NAIA Complex.
operate and to regulate gambling casinos. The latter role is governmental, which The MIAA Charter transferred to MIAA approximately 600 hectares of land, 3
places it in the category of an agency or instrumentality of the Government. Being including the runways and buildings then under the Bureau of Air Transportation.
an instrumentality of the Government, PAGCOR should be and actually is exempt
from local taxes. Otherwise, its operation might be burdened, impeded or After, the Office of the Government Corporate Counsel (OGCC) issued Opinion
subjected to control by a mere Local government. Otherwise, mere creatures of the No. 061 stating that the Local Government Code of 1991 withdrew the exemption
State can defeat National policies thru extermination of what local authorities may from real estate tax granted to MIAA under Section 21 of the MIAA Charter,
perceive to be undesirable activates or enterprise using the power to tax as "a tool MIAA negotiated with Respondent City of Parañaque to pay the real estate tax
for regulation" imposed by the City and paid some of said taxes already due. Later, MIAA
received Final Notices of Real Estate Tax Delinquency (totaling P624,506,725.42)
Case: LUZ YAMANE vs. BA LEPANTO CONDOMINIUM CORP., G.R. No. from the City of Parañaque for the taxable years 1992 to 2001.
154993, 10/25/2005

7
When Parañaque City issued notices of levy and warrants of levy on the Airport
Lands and Buildings and threatened to sell at public auction these properties if
MIAA failed to pay the real estate tax delinquency, MIAA sought clarification of
OGCC Opinion No. 061. The OGCC then issued Opinion No. 147 clarifying
OGCC Opinion No. 061 stating that Section 206 of the Local Government Code
requires persons exempt from real estate tax to show proof of exemption and that
in the case of MIAA, Section 21 of the MIAA Charter is the proof that MIAA is
exempt from real estate tax.
155491, 9/16/2008
FACTS: The Tax Code of Davao City ISec. 1, Art. 10 thereof) provided that:
“Notwithstanding any exemption granted by any law or other special law, there is
hereby imposed a tax on businesses enjoying a franchise, at a rate of seventy-five
percent (75%) of one percent (1%) of the gross annual receipts for the preceding
calendar year based on the income or receipts realized within the territorial
jurisdiction of Davao City.

MIAA petitioned the CA for prohibition and injunction, with prayer for RULING: Smart is of the view that the only taxes it may be made to bear under its
preliminary injunction or temporary restraining order seeking to restrain the City franchise are the national franchise tax (now VAT), income tax, and real property
of Parañaque from imposing real estate tax on, levying against, and auctioning for tax. It claims exemption from the local franchise tax because the “in lieu of taxes”
public sale the Airport Lands and Buildings, which petition however was clause in its franchise does not distinguish between national and local taxes. We
dismissed for having been filed beyond the 60-day reglementary period. Hence, pay heed that R.A. No. 7294 is not definite in granting exemption to Smart from
this petition for review. local taxation. Section 9 of R.A. No. 7294 imposes on Smart a franchise tax
equivalent to three percent (3%) of all gross receipts of the business transacted
RULING: Petition GRANTED. The Airport Lands and Buildings of MIAA are under the franchise and the said percentage shall be in lieu of all taxes on the
EXEMPT from the real estate tax imposed by the City of Parañaque. All the real franchise or earnings thereof. R.A. No 7294 does not expressly provide what kind
estate tax assessments, including the final notices of real estate tax delinquencies, of taxes Smart is exempted from. It is not clear whether the “in lieu of all taxes”
issued by the City of Parañaque on the Airport Lands and Buildings of the Manila provision in the franchise of Smart would include exemption from local or national
International Airport Authority, except for the portions that the Manila taxation. What is clear is that Smart shall pay franchise tax equivalent to three
International Airport Authority has leased to private parties, are declared VOID. percent (3%) of all gross receipts of the business transacted under its franchise.
But whether the franchise tax exemption would include exemption from exactions
As a rule, a government-owned or controlled corporation is not exempt from real by both the local and the national government is not unequivocal.
estate tax. However, MIAA is not a government-owned or controlled corporation.
A government-owned or controlled corporation must be "organized as a stock or The uncertainty in the “in lieu of all taxes” clause in R.A. No. 7294 on whether
non-stock corporation." MIAA is not organized as a stock or non-stock Smart is exempted from both local and national franchise tax must be construed
corporation. MIAA is not a stock corporation because it has no capital stock strictly against Smart which claims the exemption. Smart has the burden of
divided into shares, has no stockholders or voting shares and its capital is not proving that, aside from the imposed 3% franchise tax, Congress intended it to be
divided into shares of stock. Neither is it a non-stock corporation because it has no exempt from all kinds of franchise taxes – whether local or national. However,
members. A non-stock corporation must have members. Even if the Government is Smart failed in this regard.
considered as the sole member of MIAA, this will not make MIAA a non-stock
corporation because non-stock corporations cannot distribute any part of their Tax exemptions are never presumed and are strictly construed against the taxpayer
income to their members and in MIAA’s case, Section 11 of its Charter requires it and liberally in favor of the taxing authority.[22] They can only be given force
to remit 20% of its annual gross operating income to the National Treasury, thus, when the grant is clear and categorical. The surrender of the power to tax, when
preventing MIAA from qualifying as a non-stock corporation. Further, non-stock claimed, must be clearly shown by a language that will admit of no reasonable
corporations are organized for charitable, religious, educational, professional, construction consistent with the reservation of the power. If the intention of the
cultural, recreational, fraternal, literary, scientific, social, civil service, or similar legislature is open to doubt, then the intention of the legislature must be resolved
purposes, like trade, industry, agriculture and like chambers. MIAA is not in favor of the State.
organized for any of these purposes. MIAA, a public utility, is organized to operate
an international and domestic airport for public use. In this case, the doubt must be resolved in favor of the City of Davao. The “in lieu
of all taxes” clause applies only to national internal revenue taxes and not to local
MIAA is a government instrumentality vested with corporate powers to perform taxes.
efficiently its governmental functions. MIAA is like any other government
instrumentality, the only difference is that MIAA is vested with corporate powers. [T]he "in lieu of all taxes" clause in Smart's franchise refers only to taxes, other
When the law vests in a government instrumentality corporate powers, the than income tax, imposed under the National Internal Revenue Code. The "in lieu
instrumentality does not become a corporation, unless the government of all taxes" clause does not apply to local taxes. The clear intent is for the "in lieu
instrumentality is organized as a stock or non-stock corporation. Thus, MIAA of all taxes" clause to apply only to taxes under the National Internal Revenue
exercises the governmental powers of eminent domain, police authority and the Code and not to local taxes. Even with respect to national internal revenue taxes,
levying of fees and charges. At the same time, MIAA exercises "all the powers of a the "in lieu of all taxes" clause does not apply to income tax.
corporation under the Corporation Law, insofar as these powers are not
inconsistent with the provisions of this Executive Order." Case: JUDGE TOMAS C. LEYNES vs. COA, G.R. No. 143596, 12/11/2003

A government instrumentality like MIAA falls under Section 133(o) of the Local FACT: Petitioner was formerly receiving a P1600-monthly allowance from the
Government Code, which states that, unless otherwise provided by the Code, the Municipality of Naujan while he was stationed there as judge of the municipal trial
exercise of the taxing powers of provinces, cities, municipalities, and barangays court. Respondent Commission on Audit (upholding the Regional Director and
shall not extend to the levy of taxes, fees or charges of any kind on the National Provincial Auditor) disallowed said allowance citing that the latter along with
Government, its agencies and instrumentalities and local government units. Petitioner’s RATA from the Supreme Court violated certain budget circulars
(NCC#67) that no one shall be allowed to collect RATA from more than one
Section 133(o) recognizes the basic principle that local governments cannot tax the source.
national government, which historically merely delegated to local governments the
power to tax. While the 1987 Constitution now includes taxation as one of the RULING: On October 10, 1991, Congress enacted RA 7160, (Local Government
powers of local governments, local governments may only exercise such power Code of 1991). The power of the LGUs to grant allowances and other benefits to
"subject to such guidelines and limitations as the Congress may provide." judges and other national officials stationed in their respective territories was
expressly provided in Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi) of the
When local governments invoke the power to tax on national government Code. Section 447(a)(1)(xi) of RA 7160, the Local Government Code of 1991,
instrumentalities, such power is construed strictly against local governments. The provides: “When the finances of the municipal government allow, provide for
rule is that a tax is never presumed and there must be clear language in the law additional allowances and other benefits to judges, prosecutors, public elementary
imposing the tax. Any doubt whether a person, article or activity is taxable is and high school teachers, and other national government officials stationed in or
resolved against taxation. This rule applies with greater force when local assigned to the municipality;
governments seek to tax national government instrumentalities.
The controversy actually centers on the seemingly sweeping provision in NCC No.
The Airport Lands and Buildings of MIAA are property of public dominion and 67 which states that "no one shall be allowed to collect RATA from more than one
therefore owned by the State or the Republic of the Philippines. Properties of source." Does this mean that judges cannot receive allowances from LGUs in
public dominion mentioned in Article 420 of the Civil Code, like "roads, canals, addition to the RATA from the Supreme Court? By no stretch of the imagination
rivers, torrents, ports and bridges constructed by the State," are owned by the can NCC No. 67 be construed as nullifying the power of LGUs to grant allowances
State. The term "ports" includes seaports and airports. The MIAA Airport Lands to judges under the Local Government Code of 1991. It was issued primarily to
and Buildings constitute a "port" constructed by the State. The Airport Lands and make the grant of RATA to national officials under the national budget uniform. In
Buildings are devoted to public use because they are used by the public for other words, it applies only to the national funds administered by the DBM, not the
international and domestic travel and transportation. The fact that the MIAA local funds of LGUs.
collects terminal fees and other charges from the public does not remove the
character of the Airport Lands and Buildings as properties for public use. The To rule against the power of LGUs to grant allowances to judges as what
charging of fees to the public does not determine the character of the property respondent COA would like us to do will subvert the principle of local autonomy
whether it is of public dominion or not. Article 420 of the Civil Code defines zealously guaranteed by the Constitution. The Local Government Code of 1991
property of public dominion as one "intended for public use." was specially promulgated by Congress to ensure the autonomy of local
governments as mandated by the Constitution. By upholding, in the present case,
As properties of public dominion, the airport properties are outside the commerce the power of LGUs to grant allowances to judges and leaving to their discretion
of man. Properties of public dominion, being for public use, are not subject to levy, the amount of allowances they may want to grant, depending on the availability of
encumbrance or disposition through public or private sale. Any encumbrance, levy local funds, we ensure the genuine and meaningful local autonomy of LGUs.
on execution or auction sale of any property of public dominion is void for being
contrary to public policy. Essential public services will stop if properties of public
dominion are subject to encumbrances, foreclosures and auction sale. This will Section 19,LGC – LGU’s Power of Eminent Domain – LGU through its Chief
happen if the City of Parañaque can foreclose and compel the auction sale of the Executive acting pursuant to an ordinance; for public use or purpose or welfare for
600-hectare runway of the MIAA for non-payment of real estate tax. the benefit of poor and landless; upon payment of just compensation, pursuant to
provisions of the Constitution and pertinent laws.
Case: SMART COMMUNICATIONS, INC. vs. CITY OF DAVAO, G.R. No.

8
Conditions for Exercise of Power of Eminent Domain: (i) Prior valid and definite within the power of the local government unit (through council by way of
offer to owner which latter did not accept; (II) LGU may take immediate ordinance).
possession of property upon filing of expropriation proceedings (Rule 67 of Rules
of Court) and payment of deposit of at least 15% of fair market value of property - LGU (by ordinance) – may permanently/temporarily close or open any local
based on current tax declaration; amount to be paid for expropriation shall be road, alley, park or square falling within its jurisdiction.
determined by proper court (reference to Commissioner) based on fair market
value at the time of taking. Note: In case of permanent closure, ordinance must be approved by, at least 2/3 of
all members of the sanggunian and when necessary, an adequate substitute for the
- Eminent Domain – inherent attribute of sovereignty to take private property upon public facility subject of closure, is provided.
payment of just compensation.
- Property publicly withdrawn from public use may be used/conveyed for any
Case: MUN. OF PARANAQUE vs. V.M. REALTY CORP. 292 SCRA 678 purpose for which other real property belonging to the LGU concerned may be
lawfully used or conveyed.
FACTS: A resolution passed by Municipal Council authorized Chief Executive to
exercise police power. Note: No freedom park shall be closed permanently without provision for its
transfer/relocation to a new site. (see related B.P.880 Public Assembly Act).
RULING: LGC in effect when complaint for expropriation was filed, explicitly
requires an ordinance for this purpose. If Congress intended to allow LGU to - LGU has the power to close local and even national roads (Note: LGU has no
exercise eminent domain through MERE resolution, it would have simply adopted authority to order permanent closure/opening of a national road, alley, park or
the language of the previous local government code (BP 337 of 1983). Where the square, such authority applies to local roads only, see sec. 2[a]).
law is clear and ambiguous, the law is applied according to the express terms.
Eminent Domain necessarily involves a derogation of a fundamental or private Conditions for temporary closure of national/local roads under Sec. 2[c]: (i)
right of the people, hence, manifest change in legislative language from occasion of actual emergency, fiesta celebrations, public rallies, agricultural or
“resolution” under BP337 to “ordinance” under RA7160 demands strict industrial fairs, or undertaking of public works and highways (eg. Banilad
interpretation. Petitioner relies on Art. 36 of Rule VI of the Implementing Rules flyover); (ii) written order for temporary closure by local chief executive; (iii) no
which requires only a “resolution” to authorize the LGU to exercise eminent national or local road, alley, park or square shall be temporarily closed for athletic,
domain. This is clearly misplaced. Section 19 of the LGC, the law itself, surely cultural or civic activity not officially sponsored, recognized or approved by local
prevails over said rule which merely seeks to implement it. The clear letter of the LGU concerned.
law is controlling and cannot be amended by mere administrative rule issued for its
implementation. Case: ANTONIO FAVIS vs. THE CITY OF BAGUIO, G.R. No. L-29910,
4/25/1969
Note: Resolution is a mere declaration of sentiment/opinion of lawmaking body on
a specific matter; it is temporary in nature; third reading not necessary unless FACTS: A resolution passed by the city council closed the dead-end portion of
decided otherwise by majority of all sangguniang members. Ordinance on the Lapu-lapu Street to public use. By subsequent resolution, the Mayor as authorized
otherhand, is law and is of general and permanent character and requires 3 therein, leased the closed portion to Shell Corporation. Petitioner Favis protested
readings. the lease to Shell claiming that said lease diminished the width of Lapu-Lapu
Street and that the City was bereft of authority to lease any portion of its public
Case: AMOS FRANCIA, vs. MUN. OF MEYCAUAYAN, G.R. No. 170432, streets in favor of anyone. Subsequently, Petitioner filed a complaint for annulment
3/24/2008 of the lease with damages in the Court of First Instance of Baguio. The latter court
dismissed his complaint. Hence, appeal to the Supreme Court.
FACTS: Respondent filed a complaint to expropriate Petitioners’ 16,256 sq. m.
idle property which it planned to use as a common public terminal for all types of RULING: APPEAL Denied. Appellant may not challenge the city council's act of
public utility vehicles with a weighing scale for heavy trucks. In their answer, withdrawing a strip of Lapu-Lapu Street at its dead end from public use and
Petitioners averred that the subject land was developed contrary to Respondent’s converting the remainder thereof into an alley. These are acts well within the ambit
claim of being raw land, for which reason, Respondent’s offer price of 333,500 (or of the power to close a city street. The city council is the authority competent to
P111.99 per square meter) was too low. Petitioners essentially aver that the CA determine if a certain property is still necessary for public use. This power is
erred in upholding the RTC's order that, in expropriation cases, prior determination discretionary and will not ordinarily be controlled or interfered with by the courts,
of the existence of a public purpose was not necessary for the issuance of a writ of absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust
possession. will be presumed. The fact that some private interests may be served incidentally
will not invalidate the vacation ordinance.
RULING: Petitioner DENIED. Sec. 19, LGC provides that, a LGU may, through
its chief executive and acting pursuant to an ordinance, exercise the power of Given the precept that the discretion of a municipal corporation is broad in scope
eminent domain for public use, or purpose, or welfare for the benefit of the poor and should thus be accorded great deference in the spirit of the Local Autonomy
and the landless, upon payment of just compensation, pursuant to the provisions of Law (R.A. 2264), and absent a clear abuse of discretion, we hold that the
the Constitution and pertinent laws. Before a LGU may enter into possession of withdrawal for lease of the disputed portion of Lapu-Lapu Street and the
the property sought to be expropriated, it must (1) file a complaint for conversion of the remainder of the dead-end part thereof into an alley, does not call
expropriation sufficient in form and substance in the proper court and (2) deposit for, and is beyond the reach of, judicial interference.
with the said court at least 15% of the property's fair market value based on its
current tax declaration. The law does not make the determination of a public From the fact that the leased strip of 100 square meters was withdrawn from public
purpose a condition precedent to the issuance of a writ of possession. use, it necessarily follows that such leased portion becomes patrimonial property.
Article 422 of the Civil Code indeed provides that property of public domain,
"when no longer intended for public use or public service, shall form part of the
Section 20, LGC – LGU Power to Reclassify Land – City or Municipality through patrimonial property of the State." Authority is not wanting for the proposition that
ordinance passed after conducting public hearings for that purpose, may authorize "[property for public use of provinces and towns are governed by the same
the reclassification of agricultural lands and provide for the manner of their principles as property of public dominion of the same character." There is no doubt
utilization or disposition. that the strip withdrawn from public use and held in private ownership may be
given in lease.
Agricultural Land, defined: Those public lands acquired from Spain which are not
timber or mineral land; land devoted to agriculture or to any growth. The general rule is, one whose property does not abut on the closed section of a
street has no right to compensation for the closing or vacation of the street, if he
Grounds for Reclassification: (i) When land ceases to be economically feasible and still has reasonable access to the general system of streets. The circumstances in
sound for agricultural purposes as determined by the Dept. of Agriculture; and (ii) some cases may be such as to give a right to damages to a property owner, even
when land shall have substantially greater economic value for residential, though his property does not abut on the closed section. But to warrant recovery in
commercial or industrial purposes as determined by the Sanggunian; any such case the property owner must show that the situation is such that he has
sustained special damages differing in kind, and not merely in degree, from those
Conditions for Reclassification: Percentage limits, that is, of the total agricultural sustained by the public generally."
area at the time of passage of reclassification – (a) for highly urbanized cities and
independent component cities – 15%; (b) for component cities and 1 st to 3rd class In the case at bar, no private right of appellant has been invaded. No special
municipalities – 10%; and (c) for 4th to 6th class municipalities – 5% damage or damages he will incur by reason of the closing of a portion of Lapu-
Lapu Street at its dead end. His property does not abut that street. In fact, the court
Note: President (upon Nat’l Economic Dev’t Authority’s recommendation), when has found that the remaining portion of Lapu-Lapu Street, which actually is 4
public interest so requires, authorize a city or municipality to reclassify lands in meters in width, is sufficient for the needs of appellant and that the leased portion
excess of limits set in Section 20(a). — subject of this suit — "was not necessary for public use."

- Under Sec. 20(e) – Agricultural lands distributed to agrarian reform beneficiaries
pursuant to RA6657(CARL), shall not be affected by the reclassification and the
conversion of such lands into other purposes shall be governed by Sec. 65 of
CARL.
Note: Sec. 65 of RA6657 – Conditions for conversion of agricultural lands held by
agrarian reform program beneficiaries to non-agricultural use with DAR: (a) 5 year
lapse from award of land; (ii) land ceased to be economically feasible and sound
for agricultural purpose; (iii) notice to affected parties; (iv) beneficiary has fully
paid his obligation.
"The Constitution does not undertake to guarantee to a property owner the public
maintenance of the most convenient route to his door. The law will not permit him
to be cut off from the public thoroughfares, but he must content himself with such
route for outlet as the regularly constituted public authority may deem most
compatible with the public welfare. When he acquires city property, he does so in
tacit recognition of these principles. If, subsequent to his appreciation, the city
authorities abandon a portion of the street to which his property is not immediately
adjacent, he may suffer loss because of the inconvenience imposed, but the public
treasury cannot be required to recompense him. Such case is damnum absque
injuria."

Section 21, LGC – Closure & Opening of Roads – The closure of streets/roads is

9
Case: COACO, INC. vs. HON. PASCUAL A. BERCILLES, G.R. No. L-40474, funds.
8/29/1975
Case: MUNICIPALITY OF PILILIA vs. CA 233 SCRA 484 – Municipality cannot
FACTS: Petitioner Cebu Oxygen & Acytelene Co., Inc. applied for registration of be represented by a private lawyer. Only provincial fiscal or municipal attorney
title over a portion of M. Gorces Street in Mabolo, Cebu City. Said portion was can represent a province or municipality in lawsuits. This is mandatory. The
declared an abandoned road by the City Council of Cebu the same not being municipality’s authority to employ a private lawyer is limited to situations where
included in the Cebu Development Plan, and later, by authority of the City the provincial fiscal is disqualified to present it which disqualification must appear
Council, was sold by the Acting Mayor to petitioner who was the highest bidder at on record. Fiscal’s refusal to represent the municipality is not legal justification for
a public bidding. On motion by the Assistant Provincial Fiscal (alleging that the employing the services of private counsel, Municipality should request the
subject property being a public road intended for a public use, it is part of the Secretary of Justice to appoint an acting provincial fiscal in place of the one who
public domain, outside the commerce of men, and cannot be subject to registration declined to handle it.
by any private individual), the trial court dismissed Petitioner’s application.
Case: RAMOS vs. CA 269 SCRA 34 –Petitioners Ramos and Baliuag Market
RULING: PETITION is granted. Order of dismissal set aside and trial court Vendors’ Association filed a petition to declare certain ordinances illegal. In said
ordered to proceed with the hearing of the petitioner's application for registration suit, Petitioners challenged the appearance of a private lawyer for the municipality.
of title. SC held, Only provincial fiscal, under (Sec. 1683 of Revised Admin Code)
Under the Cebu City Charter, the City Council is empowered to close a city road provincial attorney or municipal attorney may validly represent the municipality.
or a street and further, use or convey property thus withdrawn from public The legality of the representation of an unauthorized counsel may be raised at any
servitude for any purpose for which other real property belonging to the City may stage of the proceedings.
be lawfully used or conveyed.
RE: POWER TO ACQUIRE/CONVEY REAL OR PERSONAL PROPERTY –
In the case of Favis vs. City of Baguio, the Court upholding the power of the city LGU may acquire real/personal, tangible or intangible in any manner allowed by
council to close city streets and to vacate or withdraw the same from public use law, eg., sale or donation, etc.
was similarly assailed, declared that the city council is the authority competent to
determine whether or not a certain property is still necessary for public use. This Case: VILLANUEVA vs. CASTANEDA 454 SCRA 142 – Public plaza is beyond
power to vacate a street or alley is discretionary, and will not ordinarily be the commerce of man and cannot be the subject of a lease or other contractual
controlled or interfered with by the courts, absent a plain case of abuse or fraud or undertaking, and even assuming the existence of a valid lease of the public plaza
collusion. Faithfulness to the public trust will be presumed. or part thereof, the municipal resolution effectively terminated the agreement, for
it is settled that the police power cannot be surrendered or bargained away through
Since that portion of the city street subject of petitioner's application for the medium of a contract.
registration of title was withdrawn from public use, it follows that such withdrawn
portion becomes patrimonial property which can be the object of an ordinary RE: POWER TO ENTER INTO CONTRACTS – requires: (i) LGU has
contract consisting with Article 422 of the Civil Code (that property of public express/implied or inherent power to enter into the particular contract (refer to
dominion, when no longer intended for public use or for public service, shall form LGC, special laws or charter); (ii) contract is entered into by the proper
part of the patrimonial property of the State). department, board, committee, officer or agent (under LGC, generally such
authority is with the Local Chief Executive upon prior authorization by
Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000 sanggunian); (iii) contract must comply with certain substantive requirements, eg.,
when expenditure of public funds is to be made, there must be actual appropriation
FACTS: Petitioner issued an order to open to public traffic Neptune Street (and to and certificate of availability of funds; (iv) contract must comply with formal
demolition its perimeter fence) – a private road owned by Respondent. requirements of written contracts, eg. Statutes of fraud.

RULING: Petition DENIED. While we hold that the general welfare should be NOTE: A contract entered into without complying with (i) and (iii) above is
promoted, we stress that it should not be achieved at the expense of the rule of law. ULTRA VIRES, ergo, NULL AND VOID. Such contract cannot be ratified or
It is thus beyond doubt that the MMDA is not a local government unit or a public validated. Ratification of defective contracts is possible only when there is non-
corporation endowed with legislative power. It is not even a "special metropolitan compliance with (ii) and (iv) requirements.
political subdivision" as contemplated in Section 11, Article X of the Constitution.
The powers of the MMDA are limited to formulation, coordination, regulation, Case: CITY OF QUEZON vs. LEXBER, INC., G.R. 141616, 3/15/01 –
implementation, preparation, management, monitoring, setting of policies,
installation of a system and administration. It is the local government units, acting FACTS; Before the effectivity of the LGC in 1991, a tri-partite agreement was
through their respective legislative councils that possess legislative power and signed by Lexber, Quezon City and the Municipality of Antipolo whereby, with the
police power. In the case at bar, the Sangguniang Panlungsod of Makati City did conformity of Antipolo, Quezon City would lease and use the private land owned
not pass any ordinance or resolution ordering the opening of Neptune Street, by Lexber as a dumpsite situated in Antipolo in exchange for exclusive services
hence, its proposed opening by Petitioner is illegal. and equipment for landfill to be provided Lexber. From 1991-1992, Quezon City
used the site for dumping but suddenly stopped without any explanation. Lexber
NOTE: Closure of Roads is not expropriation where the property owner is entitled sent a demand letter claiming that it was still entitled to compensation pursuant to
to just compensation. Construction of new road was undertaken under the General the agreement but Mayor Mel Mathay of Quezon City refused citing that the
Welfare Clause (police power), that is, for enjoyment of convenience, every contract was void having been signed by then Mayor Simon without the approval
individual must be prepared to give his share. or ratification by City Council and that there was no budget appropriation.
Collection suit was filed by Lexber. RTC ruled in the latter’s favor and which
Section 22, LGC – Corporate Powers – As a body corporate, has the following decision was affirmed by the CA.
powers;
(a) To continuous succession in its corporate name; RULING: Petition DENIED. In the case at bar, the contract requires P94M for a 5-
(b) To sue and be sued; year period. Quezon City invoked PD1445 (Auditing Code of the Philippines) that
(c) To have and use a corporate seal; contracts involving expenditure of public funds can only be entered into when
(d) To acquire and convey real or personal property; there is an appropriation thereof to be certified by proper accounting official/agent
(e) To enter into contracts; such other powers as are granted that funds have been appropriated for that purpose. Also, Quezon City cited the
corporation subject to limits provided in LGC and other laws. LGC empowering the sanggunian with authority to appropriate funds for expenses
of the city government. PD1445 does not provide that the absence of appropriation
Corporate Powers, defined: Corporation’s capacity/right to do certain acts or law ipso facto makes a contract entered into by the LGU null and void. Under the
engage in certain activities such as sue/be sued enter into contracts, borrow money LGC (1973), the power of a mayor to enter contract is not subject to prior
and do suc other things necessary to obtain its purposes. authorization by the council.

NOTE: Local Chief Executive enters into contracts in behalf of LGU, requires Case: MANANTAN vs. MUNICIPLAITY OF LUNA (LA UNION) 82 Phil 844 –
prior authorization by sangguniang concerned UNLESS otherwise provided in the Contract of lease granting fishing privileges is a valid and binding contract and
LGC. cannot be impaired by a subsequent resolution setting it aside and granting the
privilege to another (unless the subsequent resolution is a police power measure
NOTE: Legible copy of contract to be posted in conspicuous place in provincial because the exercise of the latter prevails over the non-impairment clause.
capitol/city/municipality/barangay hall (for Transparency).
Section 23, LGC – Grants and Donations – sets forth the rules on grants and
NOTE: Full autonomy in exercise of corporate powers (not acting as agent of the donations to LGUs from local and foreign assistance agencies) which local chief
State), and limited only by LGC and other applicable laws. executive may “upon authority of the sanggunian” negotiate and secure in order to
“support the basic services or facilities enumerated in Sec. 17.
RE: RIGHT TO SUE/BE SUED – Case: CITY COUNCIL OF CEBU vs. CUIZON
47 SCRA 325 - No need of securing clearance/approval for grant/donation from any department,
agency or office of the national government or from any higher LGU.
FACTS: For lack of prior authority from the Council, the latter filed with CFI-
Cebu, a complaint to nullify the contract between Mayor Cuizon and Tropical - Projects financed by such grants/assistance with national security implications
Commercial Co., Inc. involving the purchase of road construction equipments for shall be approved by the national agency concerned. Failure of such agency to act
$520,912.00 cash from Tropical. Complaint was dismissed for lack of legal on request within 30 days from receipt thereof, it is deemed approved.
capacity as trial court reasoned that there is no provision of law authorizing city
council to sue in behalf of the city and that the authorized representative under the - Local Chief shall, within 30 days, upon signing of such grant, agreement or deed
LGC is the city mayor for that purpose. of donation, report the nature, amount, terms of such assistance to both Houses of
Congress and the President.
RULING: Generally, suit is commenced by the local executive upon authority of
the sanggunian, except where the city councilors themselves and as representatives Section 24, LGC – Municipal Liability – Rule: LGU and their officials are not
of/in behalf of the city, bring the action to prevent unlawful disbursement of city exempt from liability for death or injury to persons/damage to property.

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Damages – in legal contemplation refers to the sum of money which law awards or
imposes as pecuniary compensation, recompense or satisfaction for an injury done
or a wrong sustained as a consequence either of a breach of contractual obligation
or a tortuous act. It includes all kinds of damages contemplated in the Civil Code;
it is awarded to one as a vindication of the wrongful invasion of his rights.
Supervision is not incompatible with disciplinary authority. As this Court held in
Ganzon vs. Cayanan, 104 Phil 484, “in administrative law, supervision means
overseeing or the power or authority of an officer to see that subordinate officers
perform their duties. If the latter fail or neglect to fulfill them the former may take
such action or step as prescribed by law to make them perform their duties”.

Case: CORREA vs. CFI of BULACAN 92 SCRA 312 – Municipal corporation is While the respondent Secretary, as President’s alter ego, under the existing Local
responsible only for acts of its officers only when they have acted by authority of Gov’t Code, has the power to suspend the petitioner, such power cannot be
law and in conformity with requirements. A public officer who commits a tort or exercised oppressively. Ten administrative cases have been successively filed
wrongful act, done in excess or beyond the scope of his duty, is not protected by against the city mayor. The latter has been made to serve a total of 120 days of
his office and is personally liable therefor like any private individual. suspension for the first two cases and the respondent Secretary has issued another
order preventively suspending the former for antoehr 60 days, the third time in
Case” PILAR vs. SANGGUNIANG BAYAN OF DANSOL, PANGASINAN 128 twenty months. We are allowing the mayor to suffer the duration of his third
SCRA 173 – Municipal mayor is personally liable for damages (moral and suspension. Insofar as the remaining charges are concerned, we are urging the
exemplary) and attorney’s fees for having vetoed in bad faith, resolution DILG, upon finality of this decision to undertake steps to expedite the same,
appropriating funds for salary of the vice-mayor. subject to the mayor’s usual remedies of appeal, judicial or administrative or
certiorari, if warranted and meanwhile, we are precluding the Secretary from
Case: MENDOZA vs DE LEON 33 PHIL 508 – Operation of ferry service is a meting out further suspensions based on those remaining complaints,
proprietary function. Municipality is negligent and therefore liable for having notwithstanding findings of prima facie evidence.
awarded franchise to operate ferry service to another notwithstanding previous
grant of franchise to the plaintiff. Section 26, LGC – National agency/GOCC (in planning/implementation) of a
project/program have DUTY TO CONSULT LGU on objectives/goals, impact to
Case: MUNICIPALITY OF JAASAN, MISAMIS ORIENTAL vs. GENTALLAN, the people in terms of environmental/ecological balance and measures to
G.R. 154961, 5/9/2005 – There being no malice or bad faith in the illegal dismissal prevent/minimize adverse effects.
and refusal to reinstate respondent Gentallan by her superior officers, the latter
cannot be held personally liable for her back salaries. Municipal government, ergo, NOTE: Project/Program intended may cause pollution, climactic change, depletion
should disburse funds to answer for her claims. of non-renewable resources, loss of cropland, rangeland, forest cover or extinction
of animal or plant species.
NOTE: Liability for contracts – Rule: LGU, like ordinary person is liable on a
contract it enters, provided that contract is ultra vires. Otherwise, become personal Section 27, LGC – (read alongside Sec. 2 © and Sec. 26) - Prior consultation with
liability of the officer who acted beyond his power. LGU (plus prior approval by sanggunian) is indispensable for implementation of
program/project.
See Articles 2189, 2180 and 34 of the Civil Code on provisions on liability.
NOTE: If project results in eviction, appropriate relocation sites to be provided.
NOTE: As to tort liability: LGU is not liable if engaged in governmental function
but liable if engaged in proprietary function. See: REPUBLIC vs. CITY OF DAVAO, G.R. No. 148622, 9/12/2002; LINA VS.
PANO 364 SCRA 76
INTERGOVERNMENTAL RELATIONS

– as a body political and corporate (to serve its constituents) LGU – PNP RELATIONS:

NATIONAL GOVERNMENT – LGU RELATIONS: Section 28, LGC – LGU Power of Operational Supervision and Control over PNP
–
Section 25, LGC – National supervision over LGU – despite the unitary and as as provided under RA 6975 (DILG Act of 1990) amended by RA 8551 (PNP
centralized Phil. Governmental structure, 1987 Constitution limits the authority of Reorganization Act of 1991). These laws govern the extent of operational
the President over LGU only to GENERAL SUPERVISION. supervision and control of local chief executive over police force, fire protection
unit and jail management assigned in their respective jurisdiction.
President’s General Supervision –
(i) directs over provinces, highly urbanized cities and NOTE: Governors and mayors, upon having been elected and qualified as such,
independent component cities, (through provinces are automatically deputized as representatives of NAPOLCOM in their respective
over) component cities and municipalities; and jurisdiction and as such, they can inspect police forces and units, conduct audit and
(through cities and municipalities over) barangays; exercise such other functions as may be duly authorized.
(ii) to ensure that acts of LGU are within the scope of their
prescribed powers and functions; NOTE: Operational Control and Supervision (OCS), defined – power to direct,
(iii) Article X, Section 16 of 1987 Constitution – President oversee, superintend, the day to day functions of police investigation of crimes and
shall exercise general supervision over authonmous crime prevention activities and traffic control in accordance with rules and
regions to ensure that laws are faithfully executed. regulations issued by the NAPOLCOM. It includes the power to employ and
deploy police personnel and units.
Supervision defined – means overseeing or power/authority of an office to see that
subordinate performs their duties. If the latter fails or neglects to perform their NOTE: OCS for GOVERNOR: (a) choose the provincial police director from a list
duties, the former may take such steps/action as prescribed by law to make them of three eligibles recommended by the PNP Director; and (b) as chair of peace and
perform their duties. Supervision does not mean control. Control includes the order council, oversee implementation of provincial public safety plan. (Sec. 64,
power to alter/modify/set aside acts of a subordinate officer. RA8551)

Note: National agencies/offices with project implementation function shall
coordinate with each other and with LGU concerned in the discharge of these
functions to ensure participation of LGU both in the planning and implementation
of said national projects.
Note: National agencies may be directed by the President, upon LGU’s request, to
provide financial, technical or other forms of assistance to LGU without extra cost
to LGU.
Note: National agencies (including GOCCs) with field offices/branches in
province/city/municipality to furnish local chief executive concerned, for his
information and guidance, monthly reports including duly certified budgetary
allocations and expenditures.
Case: RODOLFO GANZON vs. CA, G.R. No. 93252, 8/5/1991
NOTE: OCS for CITY/MUNICIPAL MAYOR: includes – power to: (i) choose
chief of police from list of 5 eligibles recommeneded by provincial police director,
preferably from same province, city or municipality, no OIC to be for more than
30 days; local peace and order council through Mayor may recommend
recall/reassignment of chief of police when in its perception, the latter has been
ineffective in combating crime or maintaining peace and order in the LGU, relief
shall be based on guidelines established by NAPOLCOM; (ii) recommend to
provincial police director, transfer, reassignment or detail of PNP members outside
their respective city/town residences; (iii) authority to recommend from list of
eligibles previously screened by local peace and order council appointment of new
PNP members to be assigned to the respective cities/municipalities without which
no such appointments shall be attested. Whenever practicable and consistent with
requirements of service, PNP members shall be assigned to the city/municipaliy of
their residence; (iv) control and supervision of anti-gambling operation within its
jurisdiction.

FACTS: Petitioner, Mayor of Iloilo City and a member of the Sangguniang
Panglungsod thereof, respectively, were charged administratively on various
charges, among them, abuse of authority, oppression, grave misconduct,
disgraceful and immoral conduct, intimidation, culpable violation of the
Constitution, and arbitrary detention. Hearing on the charges ensued and the
Respondent DILG, upon finding of probable cause and reasons, issued successive
preventive suspension orders against Petitioner Mayor. Before the SC, Petitioners’
primary argument is that the DILG Secretary (as President’s alter ego) is devoid, in
any event, of any authority to suspend and remove local officials.
NOTE: Exercise operational supervision and control over PNP units in their
respective jurisdiction, except, 30-day period immediately preceding and 30 days
after any national or local and barangay elections in which instances, police under
authority of COMELEC.
Note: City/Municipal mayors, in coordination with local peace and order council
which he CHAIRS, shall develop an integrated area/community public safety plan
embrancing a priority of action and program thrusts for implementation by local
PNP stations.

RULING: Since local governments remain accountable to the national authority,
the latter may, by law, and in the manner set forth therein, impose disciplinary
action against local officials. In the case at bar, the DILG Secretary, the President’s
alter ego, in consonance with the specific provisions of BP337 (the existing Local
Gov’t Code) can suspend Petitioners.
Case: ANDAYA vs. RTC 319 SCRA 696 – PNP RD Andaya submitted a list of 5
eligibles not including the name of P/Chief Insp. Andres Sarmiento, to Mayor of
Cebu City. Mayor Garcia wants the name of Sarmiento on the list. Andaya claims
Sarmiento not qualified. SC held that, Mayor has no power to appoint, has only
limited power of selecting, one from among list of eligibles to be named chief of

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police. Mayor cannot require Regional Director to include the name of any officer, to become active partners in pursuit of local autonomy.
no matter how qualified, in the list.
Section 35, LGC – LGU may enter joint ventures and such other cooperative
arrangements with PO and NGO to engage in delivery of certain basic services,
NOTE: Unless reversed by President, deputization may be withdrawn/revoked by capability and livelihood projects.
Commission after consultation with Provincial Governor and congressman
concerned. Deputization, upon good cause shown, may be restored by President Section 36, LGC – LGU may through local chief executive with the concurrence of
directly or through the Commission. Withdrawal/Revocation may be on grounds of sanggunian, provide assistance, financial or otherwise to such PO and NGO is for
frequent unauthorized absence; abuse of authority; providing material support to economic, socially-oriented, environmental or cultural projects to be implemented
criminal elements; engaging in acts inimical to national security or which negate within its territorial jurisdiction.
effectiveness of peace and order campaign.

NOTE: LGU DISCIPLINARY POWERS OVER PNP MEMBERS –

City/Municipal mayors, after due notice and summary hearing, shall impose
DISCIPLINARY PENALTIES for minor offenses committed by PNP membes
assigned to their respective jurisdiction as provided in Section 41 of RA6975 (not
involving moral turpitude, includes, but not limited to, simple misconduct,
insubordination, frequent absences, tardiness, habitual drunkenness, gambling as
prohibited by law).

RELATED ITEMS INVOLVING LGU CONTAINED IN RA 6975 (DILG Act of

1990):

Section 55 – Bureau of Fire Protection – tasked with prevention and suppression of

destructive fires, investigate all causes of fire, file complaint with fiscal; composed
of provincial/district offices and city/municipal stations; LGU at city and
municipal levels shall be responsible for fire protection and various emergency
services such as rescue and evaluation of injured people at fire-related incidents
and in general, all fire prevention and suppression measures to secure the safety of
life and property of citizenry.

Section 56 – At least 1 fire station with adequate firefighting facilities and

equipment for provincial capitol, city and municipality; LGU to provide the
necessary site for the fire station.

Section 60 – Bureau of Jail Management and Penology – supervision and control

over all city and municipal jails. Provincial jails shall be supervised and controlled
by Provincial government within its jurisdiction whose expenses shall be
subsidized by National Government for not more than three years after effectivity
of RA6975.

3. INTER-LOCAL GOVERNMENT RELATIONS - -

Section 29, LGC – Province has SUPERVISORY POWER – (or oversight power
but does not include any restraining authority over supervised party) of province
over components but not over highly urbanized and independent component cities;
Province (through Governor) – shall ensure that every component
city/municipality within its territorial jurisdiction acts within scope of its
prescribed powers and functions.

Section 30, LGC – POWER TO REVIEW – Governor has power of review of all
executive orders promulgated by component cities/municipalities within his
jurisdiction. Exception: otherwise provided under the Constitution and special
statues. City/municipal mayor shall review all executive orders promulgated by the
punong barangay within his jurisdiction.

NOTE: It is mandatory upon these named higher local chiefs to review executive
orders of the lower local chiefs.

NOTE: Review – to ensure that executive orders are within the powers granted by
law and in conformity with the provincial/city/municipal ordinances, as the case
may be, that is, to ensure that such orders do not violate existing law/ordinance.

NOTE: Executive order submitted to reviewing authority within 3 days from

issuance; inaction within 30 days from submission, the same is deemed consistent
with law and therefore valid.

Section 31, LGC – MUNICIPAL QUESTIONS – questions affecting the

municipality are to be submitted to the municipal legal officer, if none, to the
provincial legal officer, if none, to the provincial prosecutor.

Section 32, LGC – POWER OF GENERAL SUPERVISION – City/Municipality

has power of general supervision over component barangays to ensure said
barangays act within the scope of their prescribed powers and functions.

Section 33, LGC – LGUs through appropriate ordinance, may group themselves,
consolidate or coordinate their efforts/services and resources for the purpose
commonly beneficial to them. For such undertaking, LGUs, upon approval of
sangguniang concerned, after public hearing conducted therefor, shall contribute
funds, real estate, equipment and other property, appoint/assign personnel under
terms agreed upon by participating LGU through a memorandum of agreement.

LGU – PEOPLES’S AND NON-GOV’TAL ORGANIZATIONS RELATIONS

– People’s organizations are bonafide associations of citizens with
demonstrated capacity to promote public interest and with identifiable leadership,
membership and structure (Art. XIII, Section 15 of 1987 Constitution).

Section 16, Art. XIII of the Constitution – “The right of the people and their
organizations to effective and reasonable levels of social, political and economic
decision-making shall not be abridged. The State, by law, shall facilitate the
establishment of adequate consultation mechanisms”.

NOTE: Sections 34, 35 and 36 of LGC implement Section 16, Art. XIII of the
1987 Constitution.

Section 34, LGC – LGU to promote establishments and operation of PO and NGO

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