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18
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
the
respondents
to
procure
the
necessary
evidence
of
such
procedural
compliance.
The
Manila
Revenue
Code
was
upheld.
(Note:
No
mention
was
made
in
the
final
decision
regarding
the
provisions
contrary
to
law
and
public
policy
earlier
cited
by
the
Secretary
as
additional
grounds.)
Solicitor
General
v.
Metopolitan
Manila
Authority
(1991)
FACTS:
On
July
13,
1990,
the
Gonong
decision
was
promulgated
wherein
the
Court
held
that
confiscation
of
license
plates
is
NOT
allowed
to
be
imposed
by
Metro
Manila
Authority
(MMA)
under
PD
1605
EXCEPT
as
provided
for
under
LOI
43
in
case
of
stalled
vehicles
obstructing
the
public
streets.
Likewise,
PD
1605
does
not
allow
confiscation
of
driver's
license.
However,
subsequently,
a
number
of
confiscations
of
driver's
license
and
license
plates
were
still
committed
by
traffic
enforcers
in
Metro
Manila.
Hence,
SC
received
several
letter-‐complaints
regarding
this
matter.
The
accused
traffic
enforcers
invoked
Ordinance
No.
7,
Series
of
1988
and
Ordinance
No.
11,
Series
of
1991
which
both
authorize
confiscation
of
driver's
license
and
removal
of
license
plate.
ISSUES:
1.
WON
there
is
a
valid
delegation
of
legislative
power
to
promulgate
the
ordinances
2.
WON
the
ordinances
were
valid
HELD:
1.
YES.
The
requisites
of
a
valid
delegation
were
present
namely:
a.
Completeness
of
statute
making
the
delegation
b.
Presence
of
sufficient
standard:
Public
convenience
and
welfare
in
this
case
2.
NO.
To
test
the
validity
of
such
acts,
apply
the
particular
requisites
of
a
valid
ordinance
namely:
a.
It
must
not
contravene
the
Constitution
or
any
statute
b.
It
must
not
be
unfair
nor
oppressive
c.
It
must
not
be
partial
nor
discriminatory
d.
It
must
not
prohibit
but
regulate
trade
e.
It
must
not
be
unreasonable
f.
It
must
be
general
and
consistent
with
public
policy
Applying
the
Gonong
decision,
measures
under
consideration
does
not
pass
the
first
requisite
because
they
are
not
conforming
to
the
existing
law
which
was
PD
1605
in
this
case.
PD
1605
expressly
prohibits
removal
of
license
plate
and
confiscation
of
driver's
license
contrary
to
the
ordinances.
Ganzon
vs.
CA
(1991)
FACTS:
Ganzon
was
the
then
mayor
of
Iloilo
City.
10
administrative
cases
were
filed
against
him
on
grounds
of
misfeasance
of
office,
abuse
of
authority,
oppression,
grave
misconduct,
etc.
Finding
probable
cause
for
the
charges,
the
Secretary
of
Interior
issued
several
60-‐day
preventive
suspension
orders
against
Ganzon,
possibly
reaching
600
days
of
suspension.
Ganzon
appealed
the
issue
to
the
CA
which
affirmed
the
suspension
orders
by
the
Secretary.
Ganzon
then
instituted
an
action
for
prohibition
against
the
Secretary
in
the
RTC
of
Iloilo
City
where
he
succeeded
in
obtaining
a
writ
of
preliminary
injunction.
He
also
instituted
actions
for
prohibition
before
the
Court
of
Appeals
but
were
both
dismissed.
The
Supreme
Court
nonetheless
issued
a
temporary
restraining
order
enjoining
the
19
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Secretary
from
implementing
his
suspension
orders.
Thus,
this
petition
for
review
with
the
argument
that
that
the
1987
Constitution
does
not
authorize
the
President
nor
any
of
his
alter
ego,
including
the
respondent
Secretary,
is
devoid,
in
any
event,
of
any
authority
to
suspend
and
remove
local
officials
as
the
1987
Constitution
no
longer
allows
the
President
to
exercise
said
power,
and
instead
it
supports
local
autonomy
and
strengthens
the
same.
What
was
given
by
the
present
Constitution
was
mere
supervisory
power.
ISSUE:
Whether
or
not
the
Secretary
of
Local
Government,
as
the
President's
alter
ego,
can
suspend
and
or
remove
local
officials.
HELD:
YES.
•
Notwithstanding
the
change
in
the
Constitutional
language,
the
Constitution
did
not
intend
to
divest
the
legislature
of
its
right,
or
the
President
of
her
prerogative
as
conferred
by
existing
legislation
to
provide
administrative
sanction
against
local
officials.
Autonomy
does
not
contemplate
making
mini-‐states
out
of
LGUs,
and
is
subject
to
the
guidance,
though
not
control,
of
the
legislature,
albeit
the
legislative
responsibility
under
the
Constitution
and
as
the
"supervision
clause"
itself
suggest-‐is
to
wean
local
government
units
from
over-‐
dependence
on
the
central
government.
Local
autonomy
is
not
instantly
self-‐executing,
subject
to
the
passage
of
a
LGC,
and
other
measures
to
realize
autonomy
at
the
local
level.
The
deletion
of
"as
may
be
provided
by
law"
in
Sec.
4,
Art.
10
of
the
Constitution
was
meant
to
stress,
sub
silencio,
the
objective
of
the
framers
to
strengthen
local
autonomy
by
severing
congressional
control
of
its
affairs.
•
Ganzon:
that
the
Constitution
has
left
the
President
mere
supervisory
powers,
which
supposedly
excludes
the
power
of
investigation,
and
denied
her
control,
which
allegedly
embraces
disciplinary
authority.
•
SC:
Legally,
"supervision"
is
not
incompatible
with
disciplinary
authority.
Mondano
v.
Silvosa
held
that:
•
→
"control"
–
the
power
of
an
officer
to
alter
or
modify
or
nullify
or
set
aside
what
a
subordinate
officer
had
done
in
the
performance
of
his
duties
and
to
substitute
the
judgment
of
the
former
for
test
of
the
latter
•
→
"supervision"
–
overseeing
or
the
power
or
authority
of
an
officer
to
see
that
subordinate
officers
perform
their
duties.
•
However,
"investigating"
is
not
inconsistent
with
"overseeing",
although
it
is
a
lesser
power
than
"altering".
Previous
jurisprudence
did
not
categorically
ban
the
Chief
Executive
from
exercising
acts
of
disciplinary
authority
because
she
did
not
exercise
control
powers,
but
because
no
law
allowed
her
to
exercise
disciplinary
authority.
Local
governments,
under
the
Constitution,
are
subject
to
regulation,
however
limited,
and
for
no
other
purpose
than
precisely,
albeit
paradoxically,
to
enhance
self-‐
government.
•
Decentralization
means
devolution
of
national
administration
but
not
power
to
the
local
levels.
•
→
Decentralization
of
administration
–
when
the
central
government
delegates
administrative
powers
to
political
subdivisions
to
broaden
the
base
of
government
power
and
to
make
local
governments
"more
responsive
and
accountable,"
and
"ensure
their
fullest
development
as
self-‐reliant
communities
and
make
them
more
effective
partners
in
the
pursuit
of
national
development
and
social
progress."
It
relieves
the
central
government
of
the
burden
of
managing
local
affairs
and
enables
it
to
concentrate
on
national
concerns.
The
President
exercises
"general
supervision"
over
them,
not
control.
•
→
Decentralization
of
power
–
an
abdication
of
political
power
in
the
favor
of
local
governments
units
declared
to
be
autonomous,
which
are
free
to
chart
their
own
destiny
and
shape
their
future
with
minimum
intervention
from
central
authorities.
It
amounts
to
"self-‐immolation,"
since
the
autonomous
government
becomes
accountable
not
to
the
central
authorities
but
to
its
constituency.
•
Since
Ganzon
is
facing
10
administrative
charges,
he
is
facing
the
possibility
of
600
days
of
suspension,
in
the
event
that
all
10
cases
yield
prima
facie
findings.
To
make
Mayor
Ganzon
serve
600
days
of
suspension
is
to
effectively
suspend
him
out
of
office.
•
→
A
basic
assumption
of
the
electoral
process
implicit
in
the
right
of
suffrage
that
the
people
are
entitled
to
the
services
of
elective
officials
of
their
choice.
For
misfeasance
or
malfeasance,
they
could
be
proceeded
against
administratively
or
criminally.
A
preventive
suspension
may
be
justified.
Its
continuance,
however,
for
an
unreasonable
length
of
time
raises
a
due
process
question.
For
even
if
thereafter
he
were
acquitted,
in
the
meanwhile
his
right
to
hold
office
had
been
nullified.
Clearly,
there
would
be
in
such
a
case
an
injustice
suffered
by
20
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
him.
Nor
is
he
the
only
victim.
There
is
injustice
inflicted
likewise
on
the
people
for
having
been
deprived
of
his
services.
•
The
sole
objective
of
a
suspension
is
simply
"to
prevent
the
accused
from
hampering
the
normal
cause
of
the
investigation
with
his
influence
and
authority
over
possible
witnesses"
or
to
keep
him
off
"the
records
and
other
evidence.
It
is
a
means,
and
no
more,
to
assist
prosecutors
in
firming
up
a
case
against
an
erring
local
official.
Under
the
LGC,
it
can
not
exceed
60
days.
It
is
not
a
penalty,
and
it
is
only
temporary.
•
We
are
not
precluding
the
President,
through
the
Secretary
of
Interior
from
exercising
a
legal
power,
yet
we
are
of
the
opinion
that
the
Secretary
of
Interior
is
exercising
that
power
oppressively,
and
needless
to
say,
with
a
grave
abuse
of
discretion.
Mactan
Cebu
International
Airport
Authority
v.
Marcos
(1996).
FACTS::
In
1994,
the
Cebu
City
government
asked
the
MCIAA
to
pay
P2.229
million
in
real
estate
taxes.
MCIAA
said
that
its
charter
exempted
it
from
payment
of
real
taxes,
and
further
argued
that
as
an
instrumentality
of
the
government
performing
governmental
functions,
it
was
exempt
from
the
taxes
levied
by
local
government
units.
ISSUE:
Whether
or
not
the
taxing
powers
given
to
local
government
units
by
the
1987
Constitution
exempted
government
owned
or
controlled
corporations
such
as
the
MCIAA.
HELD:
NO,
government
owned
or
controlled
corporations
are
not
exempt
from
real
estate
taxes
levied
by
LGUs.
RATIO:
Because
the
general
rule
is
to
tax,
the
exemption
must
be
clear
and
expressly
provided
for
in
the
law.
The
RTC
ruled
that
the
LGC
was
clear
in
revoking
all
tax
exemptions
or
incentives
granted,
except
those
specifically
provided
for
in
the
LGC,
and
the
MCIAA
did
not
fall
under
those
exemptions.
The
SC,
in
upholding
the
RTC
decision,
said
the
exemptions
granted
under
Sec
133
of
the
LGC
were
further
qualified
by
other
sections
(232,
234)
in
the
same
Code
and
that,
taken
together,
it
was
clear
the
MCIAA
was
not
exempt
from
paying
realty
taxes.
1.
While
RA
6958,
the
charter
of
MCIAA,
expressly
exempted
it
from
paying
taxes,
the
Local
Government
Code
(RA
7160)
later
enacted
in
pursuance
of
Art
X
of
the
1987
Constitution
revoked
all
exemptions
(Sec
193:
Unless
otherwise
provided
for
in
this
Code,
tax
exemptions
or
incentives
granted
to,
or
presently
enjoyed
by
all
persons
whether
natural
or
juridical,
including
government-‐owned
or
controlled
corporations,
except
local
water
districts,
cooperatives
duly
registered
under
RA
No.
6938,
non-‐stock
and
non-‐profit
hospitals
and
educational
institutions,
are
hereby
withdrawn…)
2.
MCIAA,
however,
claimed
that
it
was
exempt
under
Sec
133
(o),
which
said
that
the
exercise
of
the
taxing
powers
of
the
LGUs
shall
not
extend
to…(o)
Taxes,
fees,
charges
of
any
kind
on
the
National
Government,
its
agencies
and
instrumentalities,
and
local
government
units.
The
SC
however
pointed
out
that
Sec
234
specifically
mentioned
that
exemptions
previously
granted
to
or
presently
enjoyed
by…government
owned
and
controlled
corporations
were
withdrawn
upon
the
effectivity
of
the
Code.
It
did
not
differentiate
between
GOCCs
performing
governmental
or
proprietary
functions.
The
exemptions
given
under
the
LGC
were
based
on
ownership
(owned
by:
the
Republic,
province,
city,
municipality,
barangay,
or
a
registered
cooperative);
character
(charitable
institutions,
houses
and
temples
of
prayer,
non-‐profit
or
religious
cemeteries);
and
use
of
property
(if
actually,
directly,
or
exclusively
used
for
religious,
charitable,
or
educational
purposes;
by
local
water
districts
or
government-‐owned
or
controlled
21
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
corporations
engaged
in
the
supply/distribution
of
water/electricity;
and
machinery
and
equipment
used
for
pollution
control
and
environmental
protection).
While
133
is
the
general
rule
(the
taxing
power
of
LGUs
cannot
extend
to
taxes,
fees,
charges
levied
on
agencies
and
instrumentalities
of
National
Government)
it
is
further
qualified
by
232
(which
allowed
LGUs
in
Metropolitan
Manila
to
levy
real
property
taxes)
and
234
(which,
while
exempting
real
property
owned
by
the
Republic
of
the
Philippines
or
any
of
its
political
subdivisions,
added
the
phrase:
EXCEPT
when
the
beneficial
use
thereof
had
been
granted…to
a
taxable
person.)
Since
the
last
paragraph
of
Section
234
unequivocally
withdrew,
upon
the
effectivity
of
the
LGC,
exemptions
from
payment
of
real
property
taxes
granted
to
natural
or
juridical
persons,
including
government-‐owned
or
controlled
corporations,
except
as
provided
in
the
said
section,
and
the
petitioner
is,
undoubtedly,
a
government-‐owned
corporation,
it
necessarily
follows
that
its
exemption
from
such
tax
granted
it
in
Section
14
of
its
Charter,
R.A.
No.
6958,
has
been
withdrawn.
3.
The
question
is,
is
the
land
exempt
from
real
property
taxes,
by
virtue
of
234
(a):
property
owned
by
the
Republic
of
the
Philippines…
The
SC
said
NO:
While
133
(o)
mentioned
instrumentalities
of
the
National
Government,
it
pointed
out
that
234
only
mentioned
“Republic
of
the
Philippines
or
its
political
subdivisions…”
The
two
terms,
Republic
of
the
Philippines
and
National
Government
are
not
interchangeable,
the
SC
said.
The
first
is
the
“corporate
governmental
entity
through
which
the
functions
of
government
are
exercised
throughout
the
Philippines,
including
the
various
arms
through
which
political
authority
is
made
effective…”
while
National
Government
is
the
“entire
machinery
of
the
central
government,
as
distinguished
from
the
different
forms
of
local
governments.”
If
Section
234(a)
intended
to
extend
the
exception
therein
to
the
withdrawal
of
the
exemption
from
payment
of
real
property
taxes
under
the
last
sentence
of
the
said
section
to
the
agencies
and
instrumentalities
of
the
National
Government
mentioned
in
Section
133(o),
then
it
should
have
restated
the
wording
of
the
latter.
The
SC
added
that
the
source
of
this
exemption
could
be
traced
to
PD
464,
the
Real
Property
Tax
Code,
which
exempts
real
property
owned
by
the
Republic
of
the
Philippines
or
any
of
its
political
subdivisions.
While
the
same
provision
also
exempts
GOCCs,
it
added
that
the
exemption
shall
not
apply
to
real
property
the
beneficial
use
of
which
has
been
granted
to
a
taxable
person.
So
even
if
the
land
belonged
to
the
Republic
of
the
Philippines,
but
has
been
transferred
to
a
taxable
person,
it
was
still
not
exempt.
Art.
15
of
the
MCIAA
charter
transferred
the
assets
to
the
MCIAA.
The
SC
pointed
out
that
under
its
own
charter,
MCIAA
was
only
exempt
from
paying
real
property
taxes;
it
did
not
say
that
the
authority
was
not
a
taxable
person.
And
even
if
was
not
a
taxable
person
for
purposes
of
payment
of
real
property
taxes,
it
became
one
through
the
last
paragraph
of
Sec
234
of
the
LGC,
which
withdrew
exemptions
from
payment
of
real
property
tax
from
“all
persons…including
GOCCs…”
Province
of
Negros
Occidental
v.
Commission
on
Audit(2010)
FACTS:
Petitioner,
through
an
approved
Sangguniang
Panlalawigan
resolution
,
granted
and
released
the
payment
for
health
care
insurance
benefits
of
the
province’s
officials
and
employees
without
any
prior
approval
from
the
President,
as
required
by
an
administrative
order.
COA
disallowed
the
premium
payment
for
such
benefits
because
aside
from
contravening
the
administrative
order,
it
is
allegedly
also
a
form
of
additional
compensation,
which
is
against
the
Salary
Standardization
Law.
22
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
ISSUE:
WON
the
administrative
order
applies
also
to
LGUs
HELD:
No,
the
President,
pursuant
to
Art
X
Sec.
4
of
the
Constitution
can
only
exercise
general
supervision,
which
is
the
power
of
a
superior
officer
to
see
to
it
that
subordinates
perform
their
functions
according
to
law.
This
is
different
from
the
power
of
control
,
which
is
to
alter,
modify,
or
set
aside
what
a
subordinate
has
done
in
performance
of
his
duties.
Thus,
an
administrative
order
does
not
apply
to
LGUs
but
only
to
government
offices
/agencies,
and
GOCCs
which
are
under
the
control
of
the
President.
The
grant
of
additional
compensation
like
health
insurance
benefits
do
not
need
the
prior
approval
of
the
President.
2.
DECENTRALIZATION,
LOCAL
AUTONOMY
Limbona
vs.
Mangelin
(1989)
FACTS:
Petitioner
Sultan
Alimbusar
Limbona
was
elected
Speaker
of
the
Legislative
Assembly
of
Region
XII
or
Batasang
Pampook
of
Central
Mindanao
(Assembly).
Consequently,
he
was
invited
by
the
Chairman
of
the
Committee
on
Muslim
Affairs
of
the
House
of
Representatives
for
consultation
and
dialogue
as
prelude
to
the
establishment
of
an
autonomous
government.
Consistent
with
the
said
invitation,
Petitioner
advised
all
Assemblymen
through
the
Acting
Secretary
of
the
Assembly
that
there
shall
be
no
session
in
November
as
“our
presence
in
the
house
committee
hearing
of
Congress
takes
precedence
over
any
pending
business
in
batasang
pampook...”
However,
the
Assembly
(Respondents)
still
held
session
in
defiance
of
Petitioner's
advice.
After
declaring
the
presence
of
a
quorum,
the
Speaker
Pro-‐Tempore
Mangelin
was
authorized
to
preside
in
the
session.
On
Motion
to
declare
the
seat
of
the
Speaker
vacant,
all
Assemblymen
in
attendance
voted
in
the
affirmative.
Accordingly,
Petitioner
filed
before
the
Supreme
Court
for
the
issuance
of
a
restraining
order
enjoining
respondents
from
proceeding
with
their
session,
and
prayed
that
his
election
as
Speaker
of
said
Legislative
Assembly
be
held
valid
and
subsisting.
Pending
further
proceedings,
Court
also
received
a
resolution
filed
by
the
Sangguniang
Pampook,
“Expelling
Alimbusar
P.
Limbona
from
Membership
of
the
Sangguniang
Pampook
Autonomous
Region
XII.”
According
to
Respondents,
Petitioner
filed
a
case
before
the
Supreme
Court
against
some
members
of
the
Assembly
on
question
which
should
have
been
resolved
within
the
confines
of
the
Assembly.
ISSUE:
Are
the
so-‐called
autonomous
governments
of
Mindanao
subject
to
the
jurisdiction
of
the
national
courts?
(In
other
words,
what
is
the
extent
of
self-‐government
given
to
the
two
autonomous
governments
of
Regions
IX
and
XII?)
HELD:
Yes.
An
examination
of
the
presidential
decree
creating
the
autonomous
governments
of
Mindanao
and
promulgated
on
July
25,
1979
shows
that
they
were
never
meant
to
exercise
autonomy
such
that
the
central
government
commits
an
act
of
self-‐immolation.
First,
P.D.
No.
1618
mandates
that
“[t]he
President
shall
have
the
power
of
general
supervision
and
control
over
Autonomous
Regions.”
Second,
the
Sangguniang
Pampook,
the
legislative
arm,
is
made
to
discharge
chiefly
administrative
services.
RATIO:
Autonomy
is
either
decentralization
of
administration
or
decentralization
of
power.
There
is
decentralization
of
administration
when
the
central
government
delegates
administrative
powers
to
political
subdivisions
in
order
to
broaden
the
base
of
government
power.
The
President
exercises
“general
supervision”
over
them,
but
only
to
“ensure
that
local
affairs
are
administered
according
to
law.”
He
has
no
control
over
their
acts
in
the
sense
that
he
can
substitute
their
judgments
with
his
own.
On
the
other
hand,
decentralization
of
power
involves
an
abdication
of
political
power
in
favor
of
local
governments
units
declared
to
be
autonomous.
Because
the
autonomous
23
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
government
becomes
accountable
not
to
the
central
authorities
but
to
its
constituency,
decentralization
of
power
essentially
amounts
to
“self-‐immolation.”
San
Juan
vs.
Civil
Service
Commission
(1991)
FACTS:
•
The
position
of
Provincial
Budget
Officer
(PBO)
became
vacant
for
the
Province
of
Rizal.
•
The
Provincial
Governor,
Reynaldo
San
Juan,
informed
the
Department
of
Budget
and
Management
(DBM)
Director
for
Region
IV,
Reynaldo
Abella,
that
Dalisay
Santos
assumed
office
as
acting
PBO
pursuant
to
a
Memo
issued
by
the
Governor
which
also
requested
the
Director
to
endorse
Dalisay
Santos
to
the
position
of
PBO.
•
Director
Abella
instead
recommended
Cecilia
Almajose
as
PBO
of
Rizal
stating
that
the
latter
is
the
most
qualified
amongst
the
individuals
involved
in
a
comparative
study
of
all
the
Municipal
Budget
Officers
of
the
Province
as
she
is
a
Certified
Public
Accountant.
DBM
Undersecretary,
Nazario
Cabuquit,
signed
Almajose’s
appointment
papers
on
the
basis
of
Director
Abella’s
recommendation.
•
Governor
San
Juan
reiterated
his
request
for
appointment
not
knowing
that
Cabuquit
already
signed
the
appointment
papers.
Director
Galvez,
the
successor
of
Director
Abella,
informed
Gov.
San
Juan
that
his
recommendees
did
not
meet
the
minimum
requirements
under
Local
Budget
Circular
#
31
for
the
PBO
position
and
required
him
to
submit
at
least
three
nominees.
•
Gov.
San
Juan
protested
the
appointment
to
the
DBM
Secretary
and
in
response,
the
Bureau
of
Legal
and
Legislative
Affairs
(BLLA)
of
DBM
issued
a
Memo
ruling
that
his
protest
isn’t
meritorious
since
DBM
validly
exercised
its
prerogative
in
filling
up
the
contested
position
since
none
met
the
prescribed
requirements
from
among
his
nominees.
•
Gov.
San
Juan
moved
for
reconsideration
but
it
was
denied
so
he
protested
against
the
appointment
to
the
Civil
Service
Commission
(CSC)
which
again
denied
his
protest.
Hence,
he
appealed
to
the
Supreme
Court
arguing
that
the
CSC
committed
grave
abuse
of
discretion
in
refusing
to
allow
Gov.
San
Juan
to
submit
new
nominees
who
could
meet
the
required
qualifications.
ISSUE:
•
Whether
or
not
the
DBM
is
free
to
appoint
anyone
in
the
event
that
the
Provincial
Governor
recommends
an
unqualified
person.
RULING:
•
No
RATIO:
•
The
recommending
power
of
the
Provincial
Governor
in
E.O.
112
is
not
directory
but
mandatory
pursuant
to
the
constitutional
and
state
policy
of
local
autonomy
as
enunciated
in
Article
II,
Sec.
25
and
Article
X
Sections
2
and
3
of
the
1987
Constitution.
Thus,
a
mere
administrative
issuance
(Local
Budget
Circular
#
31)
by
the
DBM
reserving
the
right
to
fill-‐up
any
existing
position
in
case
the
nominees
of
the
Provincial
Governor
do
not
meet
the
required
qualifications
is
therefore
ultra-‐vires.
If
the
DBM
Secretary
hounds
all
the
budgetary
powers
and
ignores
the
right
of
local
government
units
to
develop
self-‐reliance
and
resoluteness
in
handling
their
own
funds,
the
goal
of
local
autonomy
is
frustrated
and
setback
and
all
the
effort
for
the
exercise
of
local
governments
of
meaningful
power
since
President
McKinley’s
Instructions
in
7
April
1900,
to
the
Second
Philippine
Commission,
to
the
1935
Constitution
which
distinguished
between
Presidential
control
and
supervision,
to
R.A.
2264
increasing
the
autonomy
of
local
governments,
to
R.A.
8185,
the
Decentralization
Law,
to
the
1973
Constitution,
to
B.P.
337,
till
the
1987
Constitution
will
be
put
to
naught.
•
The
PBO
synchronizes
his/her
work
with
the
DBM
and
ensures
proper
administrative
fiscal
affairs
at
the
local
level.
Provincial
and
municipal
budgets
are
prepared
at
the
local
level
and
forwarded
to
the
national
level
officials
for
review.
Since
they
are
prepared
by
local
officials
who
must
work
within
the
constraints
of
those
budgets,
it
is
only
fitting
that
there
should
be
a
genuine
interplay
and
a
harmonization
of
proposal
for
both
the
local
and
national
officials
and
thus,
the
nomination
and
appointment
process
should
involve
a
sharing
of
power
between
the
two
levels
of
government.
Additionally,
the
appointment
was
aggravated
by
the
fact
that
Director
24
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Galvez
required
Gov.
San
Juan
to
submit
at
least
3
other
names
after
the
appointment
of
Almajose
has
already
been
formalized.
Hence,
it
was
manifest
that
there
was
a
complete
disregard
of
the
local
government’s
prerogative
and
the
smug
belief
that
the
DBM
has
absolute
wisdom,
authority
and
discretion.
Ganzon
vs.
CA
(1991)
FACTS:
Ganzon
was
the
then
mayor
of
Iloilo
City.
10
administrative
cases
were
filed
against
him
on
grounds
of
misfeasance
of
office,
abuse
of
authority,
oppression,
grave
misconduct,
etc.
Finding
probable
cause
for
the
charges,
the
Secretary
of
Interior
issued
several
60-‐day
preventive
suspension
orders
against
Ganzon,
possibly
reaching
600
days
of
suspension.
Ganzon
appealed
the
issue
to
the
CA
which
affirmed
the
suspension
orders
by
the
Secretary.
Ganzon
then
instituted
an
action
for
prohibition
against
the
Secretary
in
the
RTC
of
Iloilo
City
where
he
succeeded
in
obtaining
a
writ
of
preliminary
injunction.
He
also
instituted
actions
for
prohibition
before
the
Court
of
Appeals
but
were
both
dismissed.
The
Supreme
Court
nonetheless
issued
a
temporary
restraining
order
enjoining
the
Secretary
from
implementing
his
suspension
orders.
Thus,
this
petition
for
review
with
the
argument
that
that
the
1987
Constitution
does
not
authorize
the
President
nor
any
of
his
alter
ego,
including
the
respondent
Secretary,
is
devoid,
in
any
event,
of
any
authority
to
suspend
and
remove
local
officials
as
the
1987
Constitution
no
longer
allows
the
President
to
exercise
said
power,
and
instead
it
supports
local
autonomy
and
strengthens
the
same.
What
was
given
by
the
present
Constitution
was
mere
supervisory
power.
ISSUE:
Whether
or
not
the
Secretary
of
Local
Government,
as
the
President's
alter
ego,
can
suspend
and
or
remove
local
officials.
HELD:
YES.
•
Notwithstanding
the
change
in
the
Constitutional
language,
the
Constitution
did
not
intend
to
divest
the
legislature
of
its
right,
or
the
President
of
her
prerogative
as
conferred
by
existing
legislation
to
provide
administrative
sanction
against
local
officials.
Autonomy
does
not
contemplate
making
mini-‐states
out
of
LGUs,
and
is
subject
to
the
guidance,
though
not
control,
of
the
legislature,
albeit
the
legislative
responsibility
under
the
Constitution
and
as
the
"supervision
clause"
itself
suggest-‐is
to
wean
local
government
units
from
over-‐
dependence
on
the
central
government.
Local
autonomy
is
not
instantly
self-‐executing,
subject
to
the
passage
of
a
LGC,
and
other
measures
to
realize
autonomy
at
the
local
level.
The
deletion
of
"as
may
be
provided
by
law"
in
Sec.
4,
Art.
10
of
the
Constitution
was
meant
to
stress,
sub
silencio,
the
objective
of
the
framers
to
strengthen
local
autonomy
by
severing
congressional
control
of
its
affairs.
•
Ganzon:
that
the
Constitution
has
left
the
President
mere
supervisory
powers,
which
supposedly
excludes
the
power
of
investigation,
and
denied
her
control,
which
allegedly
embraces
disciplinary
authority.
•
SC:
Legally,
"supervision"
is
not
incompatible
with
disciplinary
authority.
Mondano
v.
Silvosa
held
that:
•
→
"control"
–
the
power
of
an
officer
to
alter
or
modify
or
nullify
or
set
aside
what
a
subordinate
officer
had
done
in
the
performance
of
his
duties
and
to
substitute
the
judgment
of
the
former
for
test
of
the
latter
•
→
"supervision"
–
overseeing
or
the
power
or
authority
of
an
officer
to
see
that
subordinate
officers
perform
their
duties.
•
However,
"investigating"
is
not
inconsistent
with
"overseeing",
although
it
is
a
lesser
power
than
"altering".
Previous
jurisprudence
did
not
categorically
ban
the
Chief
Executive
from
exercising
acts
of
disciplinary
authority
because
she
did
not
exercise
control
powers,
but
because
no
law
allowed
her
to
exercise
disciplinary
authority.
Local
governments,
under
the
Constitution,
are
subject
to
regulation,
however
limited,
and
for
no
other
purpose
than
precisely,
albeit
paradoxically,
to
enhance
self-‐
government.
•
Decentralization
means
devolution
of
national
administration
but
not
power
to
the
local
levels.
•
→
Decentralization
of
administration
–
when
the
central
government
delegates
administrative
powers
to
political
subdivisions
to
broaden
the
base
of
government
power
and
to
make
local
governments
"more
responsive
and
accountable,"
and
"ensure
their
fullest
development
as
self-‐reliant
communities
and
make
them
25
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
more
effective
partners
in
the
pursuit
of
national
development
and
social
progress."
It
relieves
the
central
government
of
the
burden
of
managing
local
affairs
and
enables
it
to
concentrate
on
national
concerns.
The
President
exercises
"general
supervision"
over
them,
not
control.
•
→
Decentralization
of
power
–
an
abdication
of
political
power
in
the
favor
of
local
governments
units
declared
to
be
autonomous,
which
are
free
to
chart
their
own
destiny
and
shape
their
future
with
minimum
intervention
from
central
authorities.
It
amounts
to
"self-‐immolation,"
since
the
autonomous
government
becomes
accountable
not
to
the
central
authorities
but
to
its
constituency.
•
Since
Ganzon
is
facing
10
administrative
charges,
he
is
facing
the
possibility
of
600
days
of
suspension,
in
the
event
that
all
10
cases
yield
prima
facie
findings.
To
make
Mayor
Ganzon
serve
600
days
of
suspension
is
to
effectively
suspend
him
out
of
office.
•
→
A
basic
assumption
of
the
electoral
process
implicit
in
the
right
of
suffrage
that
the
people
are
entitled
to
the
services
of
elective
officials
of
their
choice.
For
misfeasance
or
malfeasance,
they
could
be
proceeded
against
administratively
or
criminally.
A
preventive
suspension
may
be
justified.
Its
continuance,
however,
for
an
unreasonable
length
of
time
raises
a
due
process
question.
For
even
if
thereafter
he
were
acquitted,
in
the
meanwhile
his
right
to
hold
office
had
been
nullified.
Clearly,
there
would
be
in
such
a
case
an
injustice
suffered
by
him.
Nor
is
he
the
only
victim.
There
is
injustice
inflicted
likewise
on
the
people
for
having
been
deprived
of
his
services.
•
The
sole
objective
of
a
suspension
is
simply
"to
prevent
the
accused
from
hampering
the
normal
cause
of
the
investigation
with
his
influence
and
authority
over
possible
witnesses"
or
to
keep
him
off
"the
records
and
other
evidence.
It
is
a
means,
and
no
more,
to
assist
prosecutors
in
firming
up
a
case
against
an
erring
local
official.
Under
the
LGC,
it
can
not
exceed
60
days.
It
is
not
a
penalty,
and
it
is
only
temporary.
•
We
are
not
precluding
the
President,
through
the
Secretary
of
Interior
from
exercising
a
legal
power,
yet
we
are
of
the
opinion
that
the
Secretary
of
Interior
is
exercising
that
power
oppressively,
and
needless
to
say,
with
a
grave
abuse
of
discretion.
Cordillera
Broad
Coalition
vs.
COA
(1990)
FACTS:
Historical
Antecedents
March
1,
1986:
New
People's
Army
Lumbaya
Company
under
Ka-‐Ambo
(Fr.
Conrado
Balweg,
SVD)
formed
the
Cordillera
People's
Liberation
Army
(CPLA)
Purpose:
1.
defend
the
Cordillera
homeland
and
its
people;
and
2.
to
push
for
Cordillera
Autonomy.
3.
Also
to
establish
the
Cordillera
Autonomous
Socialist
State
through
a
Federal
Republic
of
the
Philippines
Post
EDSA
1
Revolution:
President
Aquino
advocated
national
reconciliation.
She
called
on
all
revolutionary
forces
for
peace
dialogue.
CPLA
heeded
the
call
for
peace
and
reconciliation.
Exchange
of
letters
between
Vice
President
Laurel
and
Fr.
Conrado
Balweg
and
series
of
preliminary
talks
between
presidential
emissary
Butch
Aquino
and
members
and
leaders
of
the
Cordillera
Bodong
Association
(CBA),
CPLA
and
the
Montanosa
National
Solidarity
were
held
(CBA
is
a
confederation
of
tribes
that
had
its
roots
in
the
tribal
organizations
in
the
cordilleras).
The
negotiations
resulted
to
a
submission
of
a
position
paper
from
CBA
and
CPLA
outlining
their
26
specific
demands.
This
was
submitted
to
President
Aquino
on
September
13,
1986.
It
contained
the
following:
Demand
No.
1:
Recognition
by
the
national
government
of
the
autonomy
of
the
various
ethnolinguistic
groups
in
the
Cordilleras.
Demand
No.
4:
For
the
national
government
to
guarantee
the
independence
and
freedom
of
the
Cordillera
Nation,
in
preserving,
consolidating
and
developing
the
socialist
way
of
life
and
moral
order
indigenous
to
its
homelands.
26
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Demand
No.
6:
For
the
national
government
to
set-‐up
a
Federal
Republic
of
the
Philippines
that
allows
the
existence
within
the
framework
of
autonomous
and
co-‐equal
states,
including
a
Cordillera
Autonomous
Socialist
State.
7
months
of
peace
talks
ensued:
In
1986,
the
Cordillera
Broad
Coalition
or
CBC
was
founded.
All
of
those
not
linked
to
CBA/CPLA
composed
the
coalition.
During
this
time,
the
Cordillera
People's
Alliance
was
also
formed.
June
9,
1987:
The
result
of
the
peace
talks
and
negotiations
is
the
INTERIM
CORDILLERA
REGIONAL
ADMINITRATION
or
ICRA.
It
is
the
main
basis
for
the
issuance
of
EO
No.
220
by
President
Aquino.
CBC
protested.
It
proposed
instead
the
creation
of
Cordillera
Regional
Development
Council
as
the
interim
regional
set-‐up
pending
establishment
of
an
autonomous
region.
This
proposal
minoritized
the
CPLA
and
CBA
group.
Hence,
CBA
and
CPLA
rejected
the
proposal.
Ambassador
Pelaez
and
Fr.
Balweg,
as
Chairman
of
the
Cordillera
signed
the
Joint
Agreement.
Both
worked
together
in
drafting
an
Executive
Order
to
create
a
preparatory
body
that
could
perform
policy-‐making
and
administrative
functions
and
undertake
consultations
and
studies
leading
to
a
draft
organic
act
of
the
cordilleras.
Pursuance
hereto,
EO
No.
220
was
signed
by
President
Aquino
(July
15,
1987)
entitled,
“Creating
a
Cordillera
Administrative
Region,
Appropriating
Funds
Thereof
and
for
other
Purpose.”
This
is
in
pursuant
to
Sec.
6,
Art.
XVIII
of
the
Constitution,
in
which
the
President
has
the
power
to
continue
to
exercise
legislative
powers
until
the
first
Congress
is
convened.
The
Executive
Order
(No.
220)
contained
the
following:
Sec.
2.
Territorial
Coverage:
Abra,
Benguet,
Ifugao,
Kalinga-‐Apayao,
Mt.
Province
and
chartered
city
of
Baguio.
Sec.
8.
Cordillera
Regional
Assembly
(CRA):
policy-‐formulating
body
consisting
of
250
representatives
from
the
municipalities
and
the
city
of
Baguio,
NGOs,
and
tribes.
The
President
appoints
the
head
of
this
body.
Sec.
9.
Sessions:
once
every
year,
5
days
sessions.
Sec.
10.
Cordillera
Executive
Board
(CEB):
CEB
shall
implement
decisions
of
CRA.
The
President
appoints
29
members.
Sec.
11.
Executive
Director
Sec.
12.
Executive
Committee
Sec.
13.
Cordillera
Bodong
Adminstration
Sec.
17.
Period
of
Existence:
It
shall
exist
until
such
time
as
the
autonomous
regional
government
shall
have
been
established
and
organized
under
an
organic
act
passed
by
Congress
in
accordance
with
Sec.
18,
Art.
X
of
the
Constitution.
During
the
pendency
of
this
case,
Republic
Act
6766
entitled
“An
Act
Providing
for
and
Organic
Act
for
the
Cordillera
Autonomous
Region”
was
enacted
and
signed
into
law.
It
recognized
the
CAR
established
by
EO
No.
220,
its
offices,
and
agencies.
ISSUE
#
1:EO
No.
220
pre-‐empted
Congress
from
its
mandated
task
of
enacting
an
organic
act
and
created
an
autonomous
region
in
Cordillera.
NO.
RATIO:
a.
Reading
the
law:
only
envisions
consolidation
and
coordination
of
the
delivery
of
services
of
line
departments
and
agencies
of
the
national
government,
as
a
step
preparatory
to
the
grant
of
autonomy
to
Cordilleras.
b.
It
does
not
create
the
autonomous
region:
1.
only
provides
for
the
transitory
measures
27
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
2.
it
prepares
the
ground
for
autonomy
c.
The
process
of
creating
the
Autonomous
Region
will
take
time
and
the
first
congress
had
not
yet
been
convened.
The
President
saw
it
fit
to
address
the
urgent
needs
of
the
Cordilleras.
d.
SC
can't
inquire
into
the
wisdom
of
the
President.
Petitioner
alleges
that
EO
No.
220
is
a
capitulation
to
CPLA
of
Fr.
Balweg.
e.
It
is
not
an
interim
autonomous
region
in
the
Cordilleras:
1.
it
only
created
an
administrative
region
with
the
sole
objective
of
planning
and
implementing
programs
and
services
of
the
national
government;
2.
only
constitute
as
an
“umbrella”
that
brings
together
the
existing
local
governments,
agencies
of
the
National
Government,
ethnolinguistic
groups/tribes,
and
NGOs,
in
a
concerted
effort
to
spur
development;
and
3.
give
available
funds
for
priority
development
programs
and
projects
recommended
by
CAR.
f.
There
is
now
RA
No.
6658
which
created
the
Cordillera
Regional
Consultative
Commission.
In
short,
the
autonomous
region
in
the
Cordilleras
is
still
to
be
created.
Therefore,
EO
220
was
not
a
short-‐cut
to
autonomy.
ISSUE
#
2:
Collateral
issue
–
What
is
the
nature
of
CAR
whether
or
not
it
is
a
territorial
and
political
subdivision.
Did
EO
No.
220
create
a
new
territorial
and
political
subdivision.
NO.
RATIO:
a.
CAR
is
not
a
public
corporation
or
territorial
and
political
subdivision
it
has
no
separate
juridical
entity
it
has
no
power
to
sue
and
be
sued,
own
and
dispose
property,
create
its
own
revenue
(powers
that
are
normally
granted
to
public
corporation)
it
is
likened
to
Presidential
Decree
#1
of
1972
or
the
“Integrated
Reorganization
Plan
of
1972
which
established
12
regions,
with
definite
regional
centers
and
required
departments
and
agencies
of
the
Executive
Branch
of
the
national
government
to
set-‐up
field
offices
therein
b.
CAR
is
in
the
same
genre
as
the
administrative
regions
created
under
reorganization
plan
of
President
Marcos.
c.
It
is
nothing
but
a
regional
coordinating
agency
of
the
national
government
considering
the
control
and
supervision
exercised
by
the
President
over
the
CAR
and
offices
created
under
EO
No.
220.
d.
CAR
is
a
more
sophisticated
version
of
the
regional
development
council.
ISSUE
#
3:
Creation
of
CAR
contravened
the
constitutional
guarantee
of
local
autonomy
for
the
provinces
of
Abra,
Benguet,
Ifugao,
Kalinga-‐Apayao,
and
Mt.
Province
and
the
city
of
Baguio.
NO.
RATIO:
a.
There
is
a
misconception
about
the
concept
of
local
autonomy
b.
The
constitutional
guarantee
of
local
autonomy
(Art.
X,
Sec.
2)
refers
to
administrative
autonomy
of
LGUs.
c.
The
centralization
of
governmental
authority
vs.
creation
of
Autonomous
Regions:
autonomous
region
contemplates
the
grant
of
political
autonomy
and
not
just
administrative
autonomy.
d.
Political
Autonomy
of
autonomous
regions:
There
is
established
an
executive
department,
a
legislative
assembly
and
special
courts
with
personal,
family
and
property
law
jurisdiction
in
each
of
the
autonomous
regions.
e.
CAR
has
not
diminished
the
local
autonomy.
f.
Pure
speculation
and
a
resort
to
probabilities.
DISPOSITIVE:
PETITIONS
ARE
DISMISSED
FOR
LACK
OF
MERIT.
Concurring
Opinion:
J.
Gutierrez
Jr.
Issues
have
become
moot
and
academic
because
the
Cordillera
Regional
Consultative
Commission
and
the
Cordillera
Autonomous
Region
have
taken
over
the
functions
of
the
Cordillera
Administrative
Region.
28
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Magtajas
vs.
Pryce
Properties
Corp,
Inc.
(1991)
FACTS:
•
The
Philippine
Amusement
and
Gaming
Corporation
(PAGCOR)
is
a
corporation
created
directly
by
Presidential
Decree
1869
to
help
centralize
and
regulate
all
games
of
chance,
including
casinos
on
land
and
sea
within
the
territorial
jurisdiction
of
the
Philippines
(the
constitutionality
of
the
decree
was
sustained
in
Basco
v.
Philippine
Amusements
and
Gambling
Corporation).
•
Cagayan
de
Oro
City,
like
other
local
political
subdivisions,
is
empowered
to
enact
ordinances
for
the
purposes
indicated
in
the
Local
Government
Code.
It
is
expressly
vested
with
the
police
power
under
what
is
known
as
the
General
Welfare
Clause
embodied
in
Section
16.
Its
Sangguniang
Panglungsod
derives
its
powers,
duties
and
functions
under
Section
458
of
said
Code.
•
In
1992,
following
its
success
in
several
cities,
PAGCOR
decided
to
expand
its
operations
to
Cagayan
de
Oro
City.
To
this
end,
it
leased
a
portion
of
a
building
belonging
to
Pryce
Properties
Corporation
Inc.,
renovated
and
equipped
the
same,
and
prepared
to
inaugurate
its
casino
there
during
the
Christmas
season.
•
The
reaction
of
the
Sangguniang
Panlungsod
of
Cagayan
de
Oro
City
was
swift
and
hostile.
On
7
December
1992,
it
enacted
Ordinance
3353
(An
Ordinance
Prohibiting
the
issuance
of
business
permit
and
canceling
existing
business
permit
to
any
establishment
for
the
using
and
allowing
to
be
used
its
premises
or
portion
thereof
for
the
operation
of
Casino).
On
4
January
1993,
it
adopted
a
sterner
Ordinance
3375-‐93
(An
Ordinance
prohibiting
the
operation
of
Casino
and
providing
penalty
for
violation
therefore).
•
Pryce
assailed
the
ordinances
before
the
Court
of
Appeals,
where
it
was
joined
by
PAGCOR
as
intervenor
and
supplemental
petitioner.
The
Court
found
the
ordinances
invalid
and
issued
the
writ
prayed
for
to
prohibit
their
enforcement.
Reconsideration
of
the
decision
was
denied
on
13
July
1993.
Cagayan
de
Oro
City
and
its
mayor
filed
a
petition
for
review
under
Rules
of
Court
with
the
Supreme
Court.
ISSUE:
Whether
the
Sangguniang
Panlungsod
of
Cagayan
de
Oro
can
prohibit
the
establishment
of
a
casino,
or
gambling,
operated
by
PAGCOR
through
an
ordinance
or
resolution.
HELD:
No,
•
The
morality
of
gambling
is
not
justiciable
issue.
Gambling
is
not
illegal
per
se.
While
it
is
generally
considered
inimical
to
the
interests
of
the
people,
there
is
nothing
in
the
Constitution
categorically
proscribing
or
penalizing
gambling
or,
for
that
matter,
even
mentioning
it
at
all.
•
It
is
left
to
Congress
to
deal
with
the
activity
as
it
sees
fit.
In
the
exercise
of
its
own
discretion,
the
legislature
may
prohibit
gambling
altogether
or
allow
it
without
limitation
or
it
may
prohibit
some
forms
of
gambling
and
allow
others
for
whatever
reasons
it
may
consider
sufficient.
•
Further,
there
are
two
kinds
of
gambling,
to
wit,
the
illegal
and
those
authorized
by
law.
Legalized
gambling
is
not
a
modern
concept;
it
is
probably
as
old
as
illegal
gambling,
if
not
indeed
more
so.
The
suggestion
that
the
Local
Government
Code
(LGC)
authorize
Local
Government
Units
(LGUs)
to
prohibit
all
kinds
of
gambling
would
erase
the
distinction
between
these
two
forms
of
gambling
without
a
clear
indication
that
this
is
the
will
of
legislature.
•
Ordinances
should
not
contravene
a
statute
as
municipal
governments
are
only
agents
of
the
national
government.
Local
councils
exercise
only
delegated
legislative
powers
conferred
on
them
by
Congress
as
the
national
lawmaking
body.
The
delegate
cannot
be
superior
to
the
principal
or
exercise
powers
higher
than
those
of
the
latter.
Taule
vs.
Santos
(1991)
FACTS:
•
The
Federation
of
Associations
of
Barangay
Council
(FABC)
of
Catanduanes
convened
to
elect
its
officers.
•
The
election
was
to
be
supervised
by
the
Board
of
Election
Supervisors/Consultants
composed
of
the
29
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Provincial
Government
Operation
Officer
(PGOO),
the
Provincial
Treasurer,
and
the
Provincial
Election
Supervisor.
•
Out
of
its
11
members,
only
6
were
in
attendance.
When
the
group
decided
to
push
through
with
the
election,
the
Provincial
Treasurer
and
the
Provincial
Election
Supervisor
walked
out.
•
Nevertheless,
the
election
pushed
through
with
the
PGOO
as
presiding
officer.
•
Petitioner
Ruperto
Taule
was
elected
President.
•
Respondent
Leandro
Verceles,
governor
of
Catanduanes,
sent
a
letter-‐protest
to
respondent
Luis
Santos,
who
was
then
Secretary
of
Local
Government
(“Secretary”),
seeking
the
nullification
of
the
election
in
view
of
the
irregularities
in
the
manner
it
was
conducted.
•
Petitioner,
in
his
comment
to
the
letter-‐protest,
denied
the
allegations
of
respondent
Gov.
Verceles
and
requested
that
he,
as
the
duly
elected
President
of
the
FABC
in
Catanduanes,
be
appointed
as
member
of
the
Sangguniang
Panlalawigan
of
the
province.
•
Respondent
Secretary
nullified
the
election
and
ordered
a
new
one
to
be
conducted.
•
Petitioner
filed
a
motion
for
reconsideration
but
the
Secretary
denied
it.
ISSUE:
WON
the
respondent
Secretary
has
jurisdiction
to
entertain
an
election
protest
involving
the
election
of
the
officers
of
the
FABC.
Arguments:
Petitioner:
It
is
the
COMELEC,
not
the
Secretary,
which
has
jurisdiction
over
all
contests
involving
elective
barangay
officials
(Art.
IX-‐C,
Sec.
2,
1987
Constitution)
Respondent:
The
Secretary
has
jurisdiction
because
the
case
involves
a
violation
of
Department
of
Local
Government
Circular
89-‐09
,
any
violation
of
which
is
a
ground
for
filing
a
protest
with
the
Secretary.
HELD/RATIO:
NO.
Presidential
power
over
local
governments
is
limited
by
the
Constitution
to
the
exercise
of
general
supervision
to
ensure
that
local
affairs
are
administered
according
to
law.
The
general
supervision
is
exercised
by
the
President
through
the
Secretary
of
Local
Government
.
In
administrative
law,
supervision
means
overseeing
or
the
power
or
authority
of
an
officer
to
see
that
the
subordinate
officers
perform
their
duties.
If
the
latter
fails
or
neglects
to
fulfill
them
the
former
may
take
such
action
or
step
as
prescribed
by
law
to
make
them
perform
their
duties.
Control,
on
the
other
hand,
means
the
power
of
an
officer
to
alter
or
modify
or
nullify
or
set
aside
what
a
subordinate
officer
had
done
in
the
performance
of
his
duties
and
to
substitute
the
judgment
of
the
former
for
that
of
the
latter.
From
the
foregoing,
the
Secretary
of
Local
Government
has
no
jurisdiction
to
entertain
any
protest
involving
the
election
of
officers
of
the
FABC.
To
allow
respondent
Secretary
to
do
so
will
in
effect
give
him
control
over
local
government
officials
for
it
will
permit
him
to
interfere
in
a
purely
democratic
and
non-‐partisan
activity
aimed
at
strengthening
the
barangay
as
the
basic
component
of
local
governments
so
that
the
ultimate
goal
of
fullest
autonomy
may
be
achieved.
On
the
other
hand,
the
contention
of
petitioners
that
it
is
the
COMELEC
which
has
jurisdiction
over
the
dispute
is
also
untenable.
The
COMELEC
exercises
only
appellate
jurisdiction
over
election
contests
involving
elective
barangay
officials
decided
by
the
Metropolitan
or
Municipal
Trial
Courts.
The
recourse
of
the
parties
is
to
the
ordinary
courts.
Binay
vs.
Domingo
(1991)
FACTS:
Petitioner
Municipality
of
Makati,
through
its
Council,
approved
Resolution
No.
60.
This
resolution
aims
to
extend
P500
burial
assistance
to
poor,
bereaved
families,
the
funds
to
be
taken
out
of
the
unappropriated
available
funds
in
the
municipal
treasury.
The
Metro
Manila
Commission
approved
Res.
No.
60.
Thereafter,
the
Municipal
secretary
certified
a
disbursement
of
P400,000
for
the
implementation
of
the
program.
However,
Commission
on
Audit
disapproved
said
resolution
and
disbursement
of
funds.
The
reasons
it
gave
were:
30
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
1)the
resolution
has
no
connection
to
alleged
public
safety,
general
welfare,
safety,
etc.
of
the
inhabitants
of
Makati;
2)it
will
only
benefit
a
few
individuals.
Public
funds
should
only
be
used
for
public
purposes.
The
issue
is
WON
Res.
No.
60,
reenacted
as
Res.
No.
243,
is
a
valid
exercise
of
the
police
power
under
the
general
welfare
clause.
HELD/RATIO:
Yes.
Police
power
is
a
governmental
function,
an
inherent
attribute
of
sovereignty
–
inherent
in
the
state
but
not
in
municipal
corporations.
Before
a
municipal
corporation
may
exercise
such
power,
there
must
be
a
valid
delegation
of
such
power
by
the
legislature.
Municipal
corporations
exercise
police
power
under
the
general
welfare
clause.
Under
Sec.
7
of
BP
337,
“every
local
government
unit
shall
exercise
the
powers
expressly
granted,
those
necessarily
implied
therefrom,
as
well
as
necessary
and
proper
for
governance
such
as
to
promote
health
and
safety,
enhance
prosperity,
improve
morals,
and
maintain
peace
and
order
in
the
LGU,
and
preserve
the
comfort
and
convenience
of
the
inhabitants
therein.”
Police
power
is
the
power
to
prescribe
regulations
to
promote
the
health,
morals,
peace,
education,
good
order
or
safety
and
general
welfare
of
the
people.
It
is
the
most
essential,
insistent,
and
illimitable
of
powers.
The
police
power
of
a
municipal
corporation
is
broad,
and
has
been
said
to
be
commensurate
with,
but
not
to
exceed,
the
duty
to
provide
for
the
real
needs
of
the
people
in
their
health,
safety,
comfort,
and
convenience
as
consistently
as
may
be
with
private
rights.
It
extends
to
all
the
great
public
needs,
and,
in
a
broad
sense
includes
all
legislation
and
almost
every
function
of
the
municipal
government.
Thus,
it
is
inadvisable
to
frame
any
definition
which
shall
absolutely
indicate
the
limits
of
police
power.
Public
purpose
is
not
unconstitutional
merely
because
it
incidentally
benefits
a
limited
number
of
persons.
The
care
for
the
poor
is
generally
recognized
as
a
public
duty.
The
support
for
the
poor
has
long
been
an
accepted
exercise
of
police
power
in
the
promotion
of
the
common
good.
There
is
no
violation
of
the
equal
protection
clause
in
classifying
paupers
as
subject
of
legislation
because
the
classification
is
reasonable.
Precious
to
the
hearts
of
our
legislators,
down
to
our
local
councilors,
is
the
welfare
of
the
paupers.
Thus,
statutes
have
been
passed
giving
rights
and
benefits
to
the
disabled,
emancipating
the
tenant-‐farmer
from
the
bondage
of
the
soil,
housing
the
urban
poor,
etc.
Res.
No.
60
of
Makati
is
a
paragon
of
the
continuing
program
of
our
government
towards
social
justice.
City
Government
of
Quezon
City
v.
Ericta
(1983)
FACTS:
Section
9
of
City
Ordinance
No.
6118,
S-‐64
entitled
"ORDINANCE
REGULATING
THE
ESTABLISHMENT,
MAINTENANCE
AND
OPERATION
OF
PRIVATE
MEMORIAL
TYPE
CEMETERY
OR
BURIAL
GROUND
WITHIN
THE
JURISDICTION
OF
QUEZON
CITY
AND
PROVIDING
PENALTIES
FOR
THE
VIOLATION
THEREOF"
provides:
"At
least
six
(6)
percent
of
the
total
area
of
the
memorial
park
cemetery
shall
be
set
aside
for
charity
burial
of
deceased
persons
who
are
paupers
and
have
been
residents
of
Quezon
City
for
at
least
5
years
prior
to
their
death,
to
be
determined
by
competent
City
Authorities.
The
area
so
designated
shall
immediately
be
developed
and
should
be
open
for
operation
not
later
than
six
months
from
the
date
of
approval
of
the
application."
For
seven
years,
this
provision
has
not
been
enforced
until
the
Quezon
City
Council
passed
the
resolution
requesting
the
City
Engineer
of
Quezon
City
to
stop
and
further
selling
and/or
transaction
of
memorial
park
lots
in
QC
where
the
owners
thereof
failed
to
donate
the
required
6%
for
pauper
burial.
Pursuant
to
such
resolution,
the
City
Engineer
notified
Himlayang
Pilipino
Inc
in
writing
that
Sec
9
of
Ordinance
6118
would
be
enforced.
Because
of
this,
Himlayang
Pilipino
filed
the
CFI
at
QC
a
petition
for
declaratory
relief,
prohibition
and
mandamus
with
preliminary
injunction
seeking
to
annul
Section
9
of
the
ordinance
for
being
contrary
to
the
Constitution,
the
QC
Charter,
Local
Autonomy
Act
and
Revised
Administrative
Code.
The
lower
court
declared
said
provision
null
and
void,
thus
the
City
Council
of
QC
filed
the
petition
for
review
before
the
SC.
31
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
The
QC
Council
argue
that
the
taking
of
the
respondent's
property
is
a
valid
and
reasonable
exercise
of
police
power
and
that
the
land
is
taken
for
a
public
use
as
it
is
intended
for
the
burial
ground
of
paupers.
They
further
argue
that
the
Quezon
City
Council
is
authorized
under
its
charter,
in
the
exercise
of
local
police
power,
"
to
make
such
further
ordinances
and
resolutions
not
repugnant
to
law
as
may
be
necessary
to
carry
into
effect
and
discharge
the
powers
and
duties
conferred
by
this
Act
and
such
as
it
shall
deem
necessary
and
proper
to
provide
for
the
health
and
safety,
promote
the
prosperity,
improve
the
morals,
peace,
good
order,
comfort
and
convenience
of
the
city
and
the
inhabitants
thereof,
and
for
the
protection
of
property
therein."
On
the
other
hand,
Himlayang
Pilipino,
Inc.
contends
that
the
taking
or
confiscation
of
property
is
obvious
because
the
questioned
ordinance
permanently
restricts
the
use
of
the
property
such
that
it
cannot
be
used
for
any
reasonable
purpose
and
deprives
the
owner
of
all
beneficial
use
of
his
property.
The
respondent
also
stresses
that
the
general
welfare
clause
is
not
available
as
a
source
of
power
for
the
taking
of
the
property
in
this
case
because
it
refers
to
"the
power
of
promoting
the
public
welfare
by
restraining
and
regulating
the
use
of
liberty
and
property."
The
respondent
points
out
that
if
an
owner
is
deprived
of
his
property
outright
under
the
State's
police
power,
the
property
is
generally
not
taken
for
public
use
but
is
urgently
and
summarily
destroyed
in
order
to
promote
the
general
welfare.
ISSUES:
1.
Does
QC
council
have
the
authority
to
issue
create
the
provision
in
question?
2.
Is
Section
9
of
Ordinance
No.
6118,
S-‐64
is
a
valid
exercise
of
police
power?
HELD:
1.
NO.
There
is
nothing
in
the
Charter
of
Question
City
that
would
justify
provision
in
question.
It
cannot
be
justified
under
the
power
granted
to
Quezon
City
to
tax,
fix
the
license
fee,
and
regulate
such
other
business,
trades,
and
occupation
as
may
be
established
or
practiced
in
the
City
because
the
power
to
regulate
does
not
include
the
power
to
prohibit.
Neither
is
the
provision
justified
under
R.A.
537
authorizing
the
city
council
to
'prohibit
the
burial
of
the
dead
within
the
center
of
population
of
the
city
and
provide
for
their
burial
in
such
proper
place
and
in
such
manner
as
the
council
may
determine,
subject
to
the
provisions
of
the
general
law
regulating
burial
grounds
and
cemeteries
and
governing
funerals
and
disposal
of
the
dead'
because
such
provision
does
not
authorize
confiscation
of
property
to
serve
as
burial
grounds.
2.
NO.
The
police
power
of
Quezon
City
provides:
"To
make
such
further
ordinance
and
regulations
not
repugnant
to
law
as
may
be
necessary
to
carry
into
effect
and
discharge
the
powers
and
duties
conferred
by
this
act
and
such
as
it
shall
deem
necessary
and
proper
to
provide
for
the
health
and
safety,
promote,
the
prosperity,
improve
the
morals,
peace,
good
order,
comfort
and
convenience
of
the
city
and
the
inhabitants
thereof,
and
for
the
protection
of
property
therein;
and
enforce
obedience
thereto
with
such
lawful
fines
or
penalties
as
the
City
Council
may
prescribe
under
the
provisions
of
subsection
(jj)
of
this
section."
In
a
long
line
of
cases,
police
power
is
usually
exercised
in
the
form
of
mere
regulation
or
restriction
in
the
use
of
liberty
or
property
for
the
promotion
of
the
general
welfare.
It
does
not
involve
the
taking
or
confiscation
of
property
with
the
exception
of
a
few
cases
where
there
is
a
necessity
to
confiscate
private
property
in
order
to
destroy
it
for
the
purpose
of
protecting
the
peace
and
order
and
of
promoting
the
general
welfare
as
for
instance,
the
confiscation
of
an
illegally
possessed
article,
such
as
opium
and
firearms.
The
provision
in
question
is
not
merely
regulation
but
an
outright
confiscation.
It
deprives
a
person
of
its
property
without
compensation.
The
provision
can
neither
be
sustained
on
the
ground
of
presumption
of
validity
of
a
duly
enacted
legislation.
32
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
There
is
no
reasonable
relation
between
the
setting
aside
of
at
least
six
(6)
percent
of
the
total
area
of
an
private
cemeteries
for
charity
burial
grounds
of
deceased
paupers
and
the
promotion
of
health,
morals,
good
order,
safety,
or
the
general
welfare
of
the
people.
The
ordinance
is
actually
a
taking
without
compensation
of
a
certain
area
from
a
private
cemetery
to
benefit
paupers
who
are
charges
of
the
municipal
corporation.
Instead
of
building
or
maintaining
a
public
cemetery
for
this
purpose,
the
city
passes
the
burden
to
private
cemeteries.
Similarly,
when
the
Local
Government
Code,
Batas
Pambansa
Blg.
337
provides
in
Section
177
(q)
that
a
Sangguniang
panlungsod
may
"provide
for
the
burial
of
the
dead
in
such
place
and
in
such
manner
as
prescribed
by
law
or
ordinance"
it
simply
authorizes
the
city
to
provide
its
own
city
owned
land
or
to
buy
or
expropriate
private
properties
to
construct
public
cemeteries.
The
questioned
ordinance
is
different
from
laws
and
regulations
requiring
owners
of
subdivisions
to
set
aside
certain
areas
for
streets,
parks,
playgrounds,
and
other
public
facilities
from
the
land
they
sell
to
buyers
of
subdivision
lots.
The
necessities
of
public
safety,
health,
and
convenience
are
very
clear
from
said
requirements
which
are
intended
to
insure
the
development
of
communities
with
conducive
and
wholesome
environments
and
the
beneficiaries
of
the
regulation,
in
turn,
are
made
to
pay
by
the
subdivision
developer
when
individual
lots
are
sold
Villanueva
vs.
Castaneda
(1987)
FACTS:
-‐
The
municipal
council
of
San
Fernando
adopted
Resolution
No.
218
authorizing
24
members
of
Fernandino
United
Merchants
and
Traders
Association
to
construct
permanent
stalls
and
sell
in
the
subject
property
within
the
vicinity
of
the
public
market.
-‐
Resolution
218
was
protested.
Civil
Case
No.
2040
was
filed.
CFI
issued
writ
of
preliminary
injunction
to
prevent
the
construction
of
stalls.
-‐
While
the
case
was
pending,
the
municipal
council
adopted
Resolution
No.
29
which
declared
the
subject
area
as
a
parking
place
and
as
the
public
plaza
of
the
municipality.
-‐
CFI
decided
Civil
Case
No.
2040.
It
held
that
the
subject
land
was
public
in
nature
and
was
beyond
the
commerce
of
man.
The
preliminary
injunction
was
made
permanent.
-‐
Vendors
(petitioners)
were
not
evicted.
They
were
assigned
specific
areas
and
were
made
to
pay
daily
fees
to
the
municipal
government
for
use
of
the
area.
-‐
On
January
12,
1982
(more
than
13
years
after
CFI
decision),
the
Association
of
Concerned
Citizens
and
Consumers
of
San
Fernando
filed
a
petition
for
the
immediate
implementation
of
Resolution
No.
29.
-‐
After
investigation
was
conducted
by
the
municipal
attorney,
Macalino,
officer-‐in-‐charge
of
the
office
of
the
mayor,
issued
a
resolution
ordering
the
demolition
of
the
stalls
in
the
subject
area.
-‐
Petitioners
filed
a
petition
for
prohibition
with
the
CFI
(Civil
Case
No.
6470).
The
judge
denied
the
petition
and
the
MR.
A
petition
for
certiorari
was
filed
with
the
SC.
ISSUE:
Whether
or
not
the
vendors
had
the
right
to
occupy
and
make
use
of
the
property.
Arguments
of
parties:
-‐
Petitioners
argued
that
they
had
right
to
occupy
the
area
by
virtue
of
lease
contracts
entered
into
with
the
municipal
government,
and
later,
by
virtue
of
space
allocations
made
in
their
favor
for
which
they
paid
daily
fees.
-‐
The
municipality
denied
that
they
entered
into
said
agreements.
It
argued
that
even
if
the
leases
were
valid,
the
same
could
be
terminated
at
will
because
rent
was
collected
daily.
HELD:
The
petitioners
had
no
right
to
occupy
the
property.
-‐
The
property
was
declared
a
public
plaza,
a
promenade
for
public
use.
It
was
outside
the
commerce
of
man
and
cannot
be
the
subject
of
a
lease
contract.
-‐
Structures
on
the
property
constitute
a
nuisance
subject
to
abatement.
33
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
-‐
Macalino
(OIC)
did
not
act
without
authority
when
he
issued
the
order
for
the
demolition
of
stalls.
He
was
seeking
to
enforce
the
decision
in
Civil
Case
No.
2040.
-‐
General
welfare
clause
-‐>
authorizes
the
municipal
council
to
enact
such
ordinances
and
make
such
regulations,
not
repugnant
to
law,
as
may
be
necessary
to
carry
into
effect
and
discharge
the
powers
and
duties
conferred
upon
it
by
law
and
such
as
shall
seem
necessary
and
proper
to
provide
for
the
health
and
safety
,
promote
the
prosperity,
improve
the
morals,
peace,
good
order,
comfort
and
convenience
of
the
municipality
and
the
inhabitants
thereof,
and
for
the
protection
of
property
therein.
-‐
Authority
was
validly
exercised.
Since
the
occupation
of
the
place
by
the
vendors,
it
had
deteriorated
to
the
prejudice
of
the
community.
Stalls,
being
made
of
flammable
materials,
became
a
potential
fire
trap;
access
to
and
from
the
market
was
obstructed;
there
were
aggravated
health
and
sanitation
problems;
flow
of
traffic
was
obstructed;
stallholders
in
the
public
market
were
deprived
of
a
sizable
volume
of
business;
the
people
were
deprived
of
the
use
of
the
place
as
a
public
plaza.
-‐
Even
if
the
lease
was
valid,
Resolution
No.
29
could
have
terminated
it.
Police
power
can
be
activated
at
any
time
to
change
or
even
annul
contracts
for
the
promotion
and
protection
of
general
welfare.
-‐
The
CFI
judge
did
not
commit
grave
abuse
of
discretion
in
denying
the
petition
for
prohibition.
Petition
dismissed.
Republic
vs.
Gonzalez
(1991)
FACTS:
-‐
In
response
to
several
resolutions
passed
by
the
Municipal
Council
of
Malabon
as
regards
the
increasing
vehicular
traffic
and
congestion
along
F.
Sevilla
Boulevard,
Pres.
Ramon
Magsaysay
issued
Proc.
No.
144,
which
withdrew
Lots
1
and
2
in
Tañong,
Malabon
from
sale
and
settlement
as
they
will
be
used
in
the
street
widening
and
the
putting
up
of
parking
spaces
near
the
proposed
market
and
slaughterhouse
of
Malabon.
-‐
Respondents
Policarpio
Gonzales
and
Augusto
Josue
constructed
their
own
mixed
residential
and
commercial
buildings
in
the
interior
part
of
Lot
2.
Because
of
this,
ejectment
proceedings
were
instituted
against
them
by
Malabon.
In
their
defense,
respondents
argued
that:
a.)
the
lots
in
question
were
covered
by
a
lease
application
and
subsequently
by
a
miscellaneous
sales
application,
b.)
they
were
given
permits
by
Malabon
to
put
commercial
improvements
on
said
lots,
and
that
c.)
Lots
1
and
2
are
not
really
needed
in
the
road
widening
project.
-‐
Despite
said
defenses,
the
lower
court
ruled
in
favor
of
respondents’
eviction.
This
decision
was
reversed
by
the
Court
of
Appeals
ruling
that
the
reservation
of
the
said
lots
for
parking
spaces
is
not
required
by
public
interest
as
mandated
by
Sec.
84
of
the
Public
Land
Act,
nor
is
it
for
the
benefit
of
the
public
because
only
those
few
who
own
cars
can
use
the
parking
lot.
According
to
the
CA,
the
limited
use
to
specific
persons
disqualifies
the
reservation
as
one
which
benefits
the
general
public.
Because
of
this
adverse
decision,
the
republic
filed
its
appeal
in
the
Supreme
Court.
ISSUES:
a.
Whether
or
not
Proc.
No.
144
is
valid.
b.
Whether
or
not
respondents
must
be
evicted.
HELD/RATIO:
-‐
Yes,
Proc.
No.
144
is
valid.
Said
proclamation
was
issued
in
response
to
the
determination
of
the
Municipal
Council
of
Malabon
that
the
extreme
traffic
and
congestion
problem
in
F.
Sevilla
Boulevard
has
already
caused
recurring
problems
of
great
discomfort
and
inconvenience
to
the
public.
They
also
foresaw
that
this
traffic
problem
will
worsen
upon
completion
of
the
proposed
market
and
slaughterhouse
in
that
area.
-‐
The
traffic
problem
is
not
an
isolated
issue.
It
might
have
deleterious
effects
which
might
translate
to
threats
to
the
health,
welfare,
safety
and
convenience
of
the
people.
As
such,
Proc.
No.
144
is
not
of
limited
34
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
benefit
only
to
those
who
drive
cars.
Its
positive
effects
will
spill
over
to
the
general
public
will
be
dispensed
from
such
great
discomfort
and
inconvenience
brought
by
the
extreme
traffic
and
congestion
in
the
area.
Yes,
the
respondents
must
be
evicted.
As
to
the
second
issue,
the
Court
ruled
that
the
miscellaneous
sales
applications
of
respondents
were
never
approved
thus
they
have
nothing
to
hold
on
to
as
regards
their
ownership
of
the
said
lots.
Moreover,
the
municipal
permits
issued
to
them
by
Malabon
cannot
also
save
them
as
the
same
were
issued
by
Malabon
in
excess
of
its
authority.
It
is
the
Director
of
Lands
and
not
the
local
government
unit
involved
who
has
executive
control
as
regards
the
lease,
sale
or
any
other
form
of
concession
or
disposition
of
lands
under
the
public
domain.
Patalinghug
vs.
CA
(1994)
FACTS:
The
Sangguniang
Panlungsod
of
Davao
City
enacted
Ordinance
No.
363,
series
of
1982
(Expanded
Zoning
Ordinance
of
Davao
City),
Section
8
of
which
required
that
funeral
parlors
“shall
be
established
not
less
than
50
meters
from
any
residential
structures,
churches
and
other
institutional
buildings.”
Upon
prior
approval
and
certification
of
zoning
compliance,
Patalinghug
was
issued
a
building
permit
for
the
construction
of
a
funeral
parlor
in
the
name
and
style
of
Metropolitan
Funeral
Parlor
at
Cabaguio
Avenue,
Agdao,
Davao
City.
Thereafter,
Patalinghug
commenced
the
construction
of
his
funeral
parlor.
Acting
on
the
complaint
of
several
residents
of
Barangay
Agdao,
Davao
City
that
the
construction
of
Patalinghug’s
funeral
parlor
violated
Ordinance
No.
363,
since
it
was
allegedly
situated
within
a
50-‐meter
radius
from
the
Iglesia
ni
Kristo
Chapel
and
several
residential
structures,
the
Sangguniang
Panlungsod
conducted
an
investigation
and
found
that
the
nearest
residential
structure,
owned
by
Wilfred
Tepoot
is
only
8
inches
to
the
south.
But,
Patalinghug
continued
to
construct
his
funeral
parlor.
Consequently,
private
respondents
filed
a
case
for
the
declaration
of
nullity
of
a
building
permit
with
preliminary
prohibitory
and
mandatory
injunction
and/or
restraining
order
with
the
trial
court.
TC:
dismissed.
After
conducting
its
own
ocular
inspection,
it
found
that:
1.
the
residential
building
of
Cribillo
and
Iglesia
ni
Kristo
chapel
are
63.25
meters
and
55.95
meters
away,
respectively,
from
the
funeral
parlor.
2.
although
the
residential
building
owned
by
Mr.
Tepoot
is
adjacent
to
the
funeral
parlor
(separated
only
by
a
concrete
fence),
said
residential
building
is
being
rented
by
Mr.
Asiaten,
who
actually
devotes
it
to
his
laundry
business
with
machinery
thereon.
CA:
reversed
and
annulled
Patalinghug’s
building
permit
on
the
ground
that
the
funeral
parlor
was
within
the
50-‐
meter
radius
from
Mr.
Tepoot's
building.
Although
Mr.
Teepot’s
building
was
used
by
his
lessee
for
laundry
business,
it
was
a
residential
lot
as
reflected
in
the
tax
declaration,
thus
paving
Ordinance
No.
363
applies.
ISSUE:
Whether
or
not
petitioner's
operation
of
a
funeral
home
constitutes
permissible
use
within
a
particular
district
or
zone
in
Davao
City.
HELD:
YES.
The
testimony
of
City
Councilor
Vergara
shows
that
Mr.
Tepoot's
building
was
used
for
a
dual
purpose
both
as
a
dwelling
and
as
a
place
where
a
laundry
business
was
conducted.
But
while
its
commercial
aspect
has
been
established
by
the
presence
of
machineries
and
laundry
paraphernalia,
its
use
as
a
residence,
other
than
being
declared
for
taxation
purposes
as
such,
was
not
fully
substantiated.
35
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
A
tax
declaration
is
not
conclusive
of
the
nature
of
the
property
for
zoning
purposes.
A
property
may
have
been
declared
by
its
owner
as
residential
for
real
estate
taxation
purposes
but
it
may
well
be
within
a
commercial
zone.
A
discrepancy
may
thus
exist
in
the
determination
of
the
nature
of
property
for
real
estate
taxation
purposes
vis-‐a-‐
vis
the
determination
of
a
property
for
zoning
purposes.
A
tax
declaration
only
enables
the
assessor
to
identify
the
same
for
assessment
levels.
In
fact,
a
tax
declaration
does
not
bind
a
provincial/city
assessor,
for
under
Sec.
22
of
the
Real
Estate
Tax
Code,
appraisal
and
assessment
are
based
on
the
actual
use
irrespective
of
"any
previous
assessment
or
taxpayer's
valuation
thereon,"
which
is
based
on
a
taxpayer's
declaration.
In
fact,
a
piece
of
land
declared
by
a
taxpayer
as
residential
may
be
assessed
by
the
provincial
or
city
assessor
as
commercial
because
its
actual
use
is
commercial.
The
finding
that
Mr.
Tepoot's
building
is
commercial
is
strengthened
by
the
Sangguniang
Panlungsod’s
declaration
of
the
questioned
area
as
commercial
or
C-‐2
under
the
same
ordinance.
Consequently,
even
if
Tepoot's
building
was
declared
for
taxation
purposes
as
residential,
once
a
local
government
has
reclassified
an
area
as
commercial,
that
determination
for
zoning
purposes
must
prevail.
While
the
commercial
character
of
the
questioned
vicinity
has
been
declared
thru
the
ordinance,
private
respondents
failed
to
substantiate
their
claim
that
Cabaguio
Avenue,
where
the
funeral
parlor
was
constructed,
was
still
a
residential
zone.
Unquestionably,
the
operation
of
a
funeral
parlor
constitutes
a
"commercial
purpose".
The
declaration
of
the
said
area
as
a
commercial
zone
thru
a
municipal
ordinance
is
an
exercise
of
police
power
to
promote
the
good
order
and
general
welfare
of
the
people
in
the
locality.
Corollary
thereto,
the
state,
in
order
to
promote
the
general
welfare,
may
interfere
with
personal
liberty,
with
property,
and
with
business
and
occupations.
Thus,
persons
may
be
subjected
to
certain
kinds
of
restraints
and
burdens
in
order
to
secure
the
general
welfare
of
the
state
and
to
this
fundamental
aim
of
government,
the
rights
of
the
individual
may
be
subordinated.
The
ordinance
which
regulates
the
location
of
funeral
homes
has
been
adopted
as
part
of
comprehensive
zoning
plans
for
the
orderly
development
of
the
area
covered
thereunder.
CA
decision
is
reversed.
TC
decision
is
reinstated.
Ampatuan
vs.
Puno
(2011)
FACTS:
On
24
Nov.
2009,
the
day
after
the
Maguindanao
Massacre,
then
Pres.
Arroyo
issued
Proclamation
1946,
placing
“the
Provinces
of
Maguindanao
and
Sultan
Kudarat
and
the
City
of
Cotabato
under
a
state
of
emergency.”
She
directed
the
AFP
and
the
PNP
“to
undertake
such
measures
as
may
be
allowed
by
the
Constitution
and
by
law
to
prevent
and
suppress
all
incidents
of
lawless
violence”
in
the
named
places.
Three
days
later,
she
also
issued
AO
273
“transferring”
supervision
of
the
ARMM
from
the
Office
of
the
President
to
the
DILG.
She
subsequently
issued
AO
273-‐A,
which
amended
the
former
AO
(the
term
“transfer”
used
in
AO
273
was
amended
to
“delegate”,
referring
to
the
supervision
of
the
ARMM
by
the
DILG).
PETITIONERS’
CONTENTION:
The
President’s
proclamation
and
orders
encroached
on
the
ARMM’s
autonomy
as
these
issuances
empowered
the
DILG
Secretary
to
take
over
ARMM’s
operations
and
to
seize
the
regional
government’s
powers,
in
violation
of
the
principle
of
local
autonomy
under
RA
9054
(the
Expanded
ARMM
Act)
and
the
Constitution.
ISSUE:
Whether
Proclamation
1946
and
AOs
273
and
273-‐A
violate
the
principle
of
local
autonomy
under
Sec.
16
Art.
X
of
the
Constitution
and
Sec.
1
Art.
V
of
RA
9054
HELD:
NO.
The
DILG
Secretary
did
not
take
over
control
of
the
powers
of
the
ARMM.
After
law
enforcement
agents
took
the
respondent
Governor
of
ARMM
into
custody
for
alleged
complicity
in
the
Maguindanao
Massacre,
the
ARMM
36
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Vice-‐Governor,
petitioner
Adiong,
assumed
the
vacated
post
on
10
Dec.
2009
pursuant
to
the
rule
on
succession
found
in
Sec.
12
Art.VII
of
RA
9054.
In
turn,
Acting
Governor
Adiong
named
the
then
Speaker
of
the
ARMM
Regional
Assembly,
petitioner
Sahali-‐Generale,
Acting
ARMM
Vice-‐Governor.
The
DILG
Secretary
therefore
did
not
take
over
the
administration
or
the
operations
of
the
ARMM.
3.
INTERGOVERNMENTAL
RELATIONS:
Book
I,
Chapters
3,4,
RA
7160
4.
POWERS
OF
MUNICIPAL
CORPORATIONS/LOCAL
GOVERNMENTS
4.1
Police
Power
Binay
v.
Domingo
(1991)
-‐
supra
Chua
Huat
vs.
CA
(1991)
FACTS:
ñ
14
September
1982
-‐
Manuel
Uy
and
Sons,
Inc.,
one
of
the
respondents,
requested
Manila
City
Engineer
and
Building
Official
Manuel
del
Rosario
(“City
Engineer”)
to
condemn
the
dilapidated
structures
on
12
lots
occupied
by
petitioners.
ñ
On
17
November
1982
–
Basing
on
Inspection
Reports
showing
that
the
buildings
suffered
from
structural
deterioration
of
as
much
as
80%,
the
City
Engineer
issued
to
herein
Petitioners
the
requested
Condemnation
Orders.
The
Condemnation
Order
also
stated
that
it
was:
(1)
subject
to
the
confirmation
of
the
Mayor
as
required
by
Section
276
of
the
Compilation
of
Ordinances
of
the
City
of
Manila;
and
(2)
NOT
an
order
to
demolish
as
the
findings
of
the
City
Engineer
are
still
subject
to
the
approval
of
the
Mayor.
The
orders
were
based
on
inspection
reports
made
by
the
Office
of
the
City
Engineer
which
showed
that
the
buildings
suffered
from
structural
deterioration
of
as
much
as
80%.
The
Mayor
confirmed
the
condemnation
orders.
ñ
22
February
1983
–
or
more
than
3
months
after
the
issuance
of
the
Condemnation
Orders,
the
Petitioners
formally
protested
against
the
Condemnation
Orders.
ñ
26
April
1983
–
one
of
the
petitioners
was
informed
that
the
City
Engineer
issued
a
demolition
order
with
respect
to
the
structure
she
was
occupying.
City
Mayor
Ramon
Bagatsing
would
later
confirm
all
the
Demolition
Orders
issued
by
the
City
Engineer.
ñ
On
2
May
1983,
petitioners
filed
the
instant
Petition
for
Prohibition,
with
Preliminary
Injunction
and/or
Restraining
Order,
against
the
City
Mayor,
City
Engineer,
who
is
also
the
Building
Official,
and
Manuel
Uy
and
Sons
Inc.
ñ
The
Court
granted
the
TRO
and
required
respondents
to
comment.
ñ
Respondents
prayed
that
the
petition
be
dismissed,
considering
that:
(1)
the
power
to
condemn
buildings
and
structures
in
the
City
of
Manila
falls
within
the
exclusive
domain
of
the
City
Engineer
pursuant
to
Sections
275
and
276
of
its
Compilation
of
Ordinances
(also
Revised
Ordinances
1600);
and
(2)
the
power
to
condemn
and
remove
buildings
and
structures
is
an
exercise
of
the
police
power
granted
the
City
of
Manila
to
promote
public
safety.
ISSUE:
(1)
WON
the
power
to
condemn
buildings
and
structures
in
the
City
of
Manila
falls
within
the
exclusive
jurisdiction
of
the
City
Engineer,
who
is
at
the
same
time
the
Building
Officials;
(2)
WON
the
City
Mayor
and
City
Engineer
committed
grave
abuse
of
discretion
in
the
exercise
of
their
such
powers.
37
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
HELD:
(1)
YES.
The
Compilation
of
Ordinances
of
the
City
of
Manila
and
the
National
Building
Code
(PD
1096),
provide
the
authority
of
the
Building
Officials,
with
respect
to
dangerous
buildings.
Respondent
City
Engineer
and
Building
Official
can,
therefore,
validly
issue
the
questioned
condemnation
and
demolition
orders.
It
is
also
clear
from
the
Compilation
of
Ordinances
of
the
City
of
Manila
that
the
Mayor
has
the
power
to
confirm
or
deny
the
action
taken
by
the
Building
Officials,
with
respect
to
the
dangerous
or
ruinous
buildings.
(2)
NO.
Tthe
orders
were
made
only
after
thorough
ocular
inspections
were
conducted
by
the
City's
Building
Inspectors.
The
respondent
Mayor's
act
of
approving
the
condemnation
orders
was
likewise
done
in
accordance
with
law.
Petitioners
were
given
the
opportunity
to
protest
the
condemnation
but
only
did
so
long
after
the
lapse
of
the
period
(7
days)
allowed
them
under
the
Compilation
of
Ordinances.
Tatel
v.
Municipality
of
Virac
(1992)
FACTS:
•
Mar.
18,
1966
–
Residents
of
Brgy.
Sta.
Elena
filed
a
complaint
with
the
municipal
council
against
the
disturbance
caused
by
the
operation
of
an
abaca
baling
machine
inside
the
warehouse
of
Tatel,
which
is
situated
in
the
said
barangay.
•
Disturbance:
smoke,
obnoxious
odor
and
dust
emitted
by
the
machine
→
affected
peace
and
tranquility
of
the
neighborhood.
•
A
committee
appointed
by
the
municipal
council
investigate
the
matter
further.
•
COMMITTEE
FINDINGS:
warehouse
located
in
a
crowded
neighborhood.
Crowded
roads.
So
much
so
that
any
fire
that
could
start
from
the
warehouse
(where
the
abaca
products
are
located)
will
easily
spread
to
the
neighboring
houses—danger
to
life
and
property.
•
Apr.
22,
1966
–
Muncipal
Council
issued
Reso.
29,
declaring
Tatel’s
warehouse
a
nuisance
pursuant
to
Art.
694
of
the
Civil
Code.
•
Tatel
filed
a
petition
for
preliminary
injunction
to
prevent
council
from
implement
such
a
resolution.
CONTENTION
c/o
VIRAC
|
Reso.
29
is
justified
as
there
has
been
a
violation
by
Tatel
against
Ordinance
13
(Series
of
1952),
prohibiting
the
construction
of
warehouses
wherein
inflammable
materials
are
stored
where
such
warehouses
are
located
at
a
distance
of
200
meters
from
a
block
of
houses.
The
purpose
is
to
avoid
the
loss
of
life
and
property
in
case
of
fire
which
is
one
of
the
primordial
obligation
of
the
government.
CONTENTION
c/o
TATEL
|
Ordinance
unconstitutional.
contrary
to
the
due
process
and
equal
protection
clause
of
the
Constitution
and
null
and
void
for
not
having
been
passed
in
accordance
with
law.
ISSUE:
WON
Ordinance
13
constitutional?
HELD/RATIO:
Ordinance
is
constitutional.
•
Valid
exercise
of
police
power.
DOCTRINE
|
It
is
a
settled
principle
of
law
that
municipal
corporations
are
agencies
of
the
State
for
the
promotion
and
maintenance
of
local
self-‐government
and
as
such
are
endowed
with
the
police
powers
in
order
to
effectively
accomplish
and
carry
out
the
declared
objects
of
their
creation.
ADMIN
CODE,
General
Welfare
Clause:
to
carry
into
effect
and
discharge
the
powers
and
duties
conferred
upon
it
by
law
and
such
as
shall
seem
necessary
and
proper
to
provide
for
the
health
and
safety,
promote
the
prosperity,
improve
the
morals,
peace,
good
order,
comfort
and
convenience
•
Ordinance
was
valid.
Requisites:
1)
not
in
contravention
with
law,
2)
not
unfair
and
oppressive,
3)
not
partial
or
discriminatory,
4)
not
prohibit
but
regulate
trade,
5)
general
and
consistent
with
public
policy,
and
6)
not
unreasonable.
38
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Bayan
v.
Ermita
(2006)
:
Power
of
Mayor
to
issue
permits
for
rallies;
BP
880
FACTS:
A
series
of
rallies
and
demonstrations
were
conducted
in
Manila
City
from
September
to
October
2005.
Petitioners
Bayan
et
al.,
Jess
Del
Prado
et
al.,
and
Kilusang
Mayo
Uno
(KMU)
et
al.
participated
in
these
rallies
which
were
allegedly
violently
dispersed
due
to
the
failure
to
secure
permits
from
the
Office
of
the
Mayor.
Such
permits
are
required
to
be
obtained
under
Batas
Pambansa
(B.P.)
880
which
states,
Sec.
4.
Permit
when
required
and
when
not
required.
–
A
written
permit
shall
be
required
for
any
person
or
persons
to
organize
and
hold
a
public
assembly
in
a
public
place.
However,
no
permit
shall
be
required
if
the
public
assembly
shall
be
done
or
made
in
a
freedom
park
duly
established
by
law
or
ordinance
or
in
private
property,
in
which
case
only
the
consent
of
the
owner
or
the
one
entitled
to
its
legal
possession
is
required,
or
in
the
campus
of
a
government-‐owned
and
operated
educational
institution
which
shall
be
subject
to
the
rules
and
regulations
of
said
educational
institution.
Political
meetings
or
rallies
held
during
any
election
campaign
period
as
provided
for
by
law
are
not
covered
by
this
Act.
x
x
x
Sec.
12.
Dispersal
of
public
assembly
without
permit.
–
When
the
public
assembly
is
held
without
a
permit
where
a
permit
is
required,
the
said
public
assembly
may
be
peacefully
dispersed.
Additionally,
Executive
Secretary
Eduardo
Ermita
stated
in
an
earlier
Press
Release
that
the
rule
of
Calibrated
Preemptive
Response
(CPR)
will
be
observed
in
lieu
of
maximum
tolerance
under
B.P.
880.
Petitioners
alleged
that
B.P.
880
or
some
portions
thereof
and
the
CPR
violate
the
right
of
the
people
to
peaceably
assemble
and
to
petition
the
government
for
redress
of
grievances.
Respondents
counter-‐alleged
that
B.P.
880
only
regulates
the
time,
manner
and
place
of
the
public
assembly
subject
to
the
recognized
“clear
and
present
danger”
standard.
For
his
part,
Manila
City
Mayor
Lito
Atienza
alleged
that
independent
of
B.P.
880,
the
Local
Government
Code
gives
him
the
power
to
deny
permits
based
on
the
“clear
and
present
danger”
standard.
He
asserted
that
his
denial
of
the
permit
was
pursuant
to
this
standard
since
there
was
a
clamor
to
stop
rallies
that
disrupt
the
economy
and
to
protect
the
lives
of
other
people.
ISSUES:
1.
WoN
under
the
Local
Government
Code
mayors
have
the
power
to
deny
an
application
for
permit
to
rally?
2.
WoN
the
power
to
grant
or
deny
permit
given
to
mayors
under
B.P.
880
is
unconstitutional?
HELD:
1.
The
Supreme
Court
did
not
consider
this
issue
since
the
parties
did
not
pursue
this.
2.
NO.
Citing
Primicias
v.
Fugoso,
the
Supreme
Court
reaffirmed
the
primacy
of
freedom
of
speech
and
to
assembly
and
petition
over
comfort
and
convenience
in
the
use
of
streets
and
parks.
However,
the
Supreme
Court
also
reiterated
the
qualification
made
in
Reyes
v.
Bagatsing
that
while
the
freedoms
of
speech,
expression,
of
the
press,
to
peaceably
assemble
and
to
petition
the
government
for
redress
rank
high
among
the
constitutional
values,
still
they
can
be
regulated
by
the
police
power
of
the
state
which
is
exercised
for
the
promotion
of
health,
morals,
peace,
education,
good
order
or
safety,
and
general
welfare
of
the
people.
Recognizing
this
qualification
in
Bagatsing,
the
Supreme
Court
held
that
the
standards
provided
in
Bagatsing
for
the
valid
exercise
of
this
police
power
was
faithfully
adopted
in
B.P.
880.
Thus,
the
“no
permit,
no
rally”
policy
is
constitutional.
39
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
The
exercise
by
the
mayor
of
the
power
to
grant
or
deny
permit
based
on
the
standards
under
the
law
is
therefore,
also,
constitutional.
Integrated
Bar
of
the
Philippines
v.
Atienza
(2010)
FACTS:
IBP
filed
with
the
Office
of
the
City
Mayor
of
Manila
an
application
for
a
permit
to
rally
at
the
foot
of
Mendiola
Bridge.
The
mayor
issued
a
permit
allowing
the
IBP
to
stage
a
rally
on
given
date
but
indicated
therein
Plaza
Miranda
as
the
venue,
instead
of
Mendiola
Bridge.
The
rally
pushed
through
at
Mendiola
Bridge.
A
criminal
action
was
thereafter
instituted
against
Cadiz
for
violating
the
Public
Assembly
Act
in
staging
a
rally
at
a
venue
not
indicated
in
the
permit.
HELD:
The
Supreme
Court
held
that
in
modifying
the
permit
outright,
respondent
Mayor
gravely
abused
his
discretion
when
he
did
not
immediately
inform
the
IBP
who
should
have
been
heard
first
on
the
matter
of
his
perceived
imminent
and
grave
danger
of
a
substantive
evil
that
may
warrant
the
changing
of
the
venue.
The
opportunity
to
be
heard
precedes
the
action
on
the
permit,
since
the
applicant
may
directly
go
to
court
after
an
unfavorable
action
on
the
permit.
Respondent
mayor
failed
to
indicate
how
he
had
arrived
at
modifying
the
terms
of
the
permit
against
the
standard
of
a
clear
and
present
danger
test
which
is
an
indispensable
condition
to
such
modification.
Nothing
in
the
issued
permit
adverts
to
an
imminent
and
grave
danger
of
a
substantive
evil,
which
“blank”
denial
or
modification
would,
when
granted
imprimatur
as
the
appellate
court
would
have
it,
render
illusory
any
judicial
scrutiny
thereof.
White
Light
v.
City
of
Manila
(2009)
FACTS:
City
of
Manila,
in
the
exercise
of
police
power,
enacted
an
ordinance
entitled
“An
ordinance
Prohibiting
Short-‐Time
Admission,
Short-‐Time
Admission
Rates,
and
Wash-‐Up
Rate
Schemes
in
Hotels,
Motels,
Inns,
Lodging
Houses,
Pension
Houses,
and
Similar
Establishments
in
the
City
of
Manila”.
Operators
of
drive-‐in
hotels
and
motels
challenges
the
ordinance
for
being
unconstitutional
alleging
that
it
violates
the
right
to
privacy
and
the
freedom
of
movement;
it
is
an
invalid
exercise
of
police
power;
and
it
is
an
unreasonable
and
oppressive
interference
in
their
business.
ISSUE:
WON
the
ordinance
is
unconstitutional
HELD:
Yes.
For
an
ordinance
to
be
a
legitimate
exercise
of
police
power,
(1)
it
must
appear
that
the
interests
of
the
public
generally,
as
distinguished
from
those
of
a
particular
class,
require
an
interference
with
private
rights
and
the
means
must
be
reasonably
necessary
for
the
accomplishment
of
the
purpose
and
not
unduly
oppressive
of
private
rights.
(2)
It
must
also
be
evident
that
no
other
alternative
for
the
accomplishment
of
the
purpose
less
intrusive
of
private
rights
can
work.
(3)
a
reasonable
relation
must
exist
between
the
purposes
of
the
measure
and
the
means
employed
for
its
accomplishment
We
cannot
discount
other
legitimate
activities
which
the
Ordinance
would
proscribe
or
impair.
There
are
very
legitimate
uses
for
a
wash
rate
or
renting
the
room
out
for
more
than
twice
a
day.
The
behavior
which
the
Ordinance
seeks
to
curtail
is
in
fact
already
prohibited
and
could
in
fact
be
diminished
simply
by
applying
existing
laws.
Less
intrusive
measures
such
as
curbing
the
proliferation
of
prostitutes
and
drug
dealers
through
active
police
work
would
be
more
effective
in
easing
the
situation.
The
ordinance
is
an
arbitrary
and
whimsical
intrusion
into
the
rights
of
the
establishments
as
well
as
their
patrons.
The
Ordinance
needlessly
restrains
the
operation
of
40
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
the
businesses
of
the
petitioners
as
well
as
restricting
the
rights
of
their
patrons
without
sufficient
justification.
4.2
Power
of
taxation:
local
taxes
and
real
property
tax
Local
Taxation
Basco
v.
Phil
Amusement
and
Gaming
Corp.
(1991)
FACTS:
Petitioners
assail
the
validity
of
PD
1869,
the
PAGCOR
Charter
on
the
following
grounds:
1st:
Gambling
is
generally
prohibited,
and
the
PAGCOR
Charter
legitimizes
it;
2nd:
Section
2,
Paragraph
2
of
hte
Charter
exempting
PAGCOR
from
all
other
taxes
and
in
lieu
thereof
imposes
a
5%
franchise
fee,
constitutes
a
waiver
of
hte
right
of
the
city
of
Manila
to
tax
(i.e.
impose
license
fees
and
other
levies)
PAGCOR
and/
or
gambling;
3rd:
Likewise,
this
violates
the
local
autonomy
clause
of
the
constitution,
Article
X,
Section
5;
4th:
It
violates
the
equal
protection
clause
of
the
constitution,
while
most
forms
of
gambling
are
illegal,
those
done
by
PAGCOR
are
legal;
5th:
It
is
violative
of
the
government
stand
against
monopolies;
6th:
It
violates
Sections
11
(Personality
Dignity)
12
(Family)
and
13
(Role
of
Youth)
of
Article
II;
Section
13
(Social
Justice)
of
Article
XIII
and
Section
2
(Educational
Values)
of
Article
XIV
of
the
1987
Constitution
HELD:
PD
1869,
PAGCOR
Charter
is
valid.
RATIO:
What
is
settled
is
that
the
matter
of
regulating,
taxing
or
otherwise
dealing
with
gambling
is
a
State
concern
and
hence,
it
is
the
sole
prerogative
of
the
State
to
retain
it
or
delegate
it
to
local
governments.
As
gambling
is
usually
an
offense
against
the
State,
legislative
grant
or
express
charter
power
is
generally
necessary
to
empower
the
local
corporation
to
deal
with
the
subject.
.
.
.
1st:
Regarding
Gambling
-‐
(a.)
PD
1869
was
enacted
to
regulate
and
centralize
games
of
chance;
(b.)
The
duty
to
regulate
and
centralize
games
of
chance
is
part
of
the
police
power
of
the
State,
which
PAGCOR
accomplishes;
Gambling,
in
all
its
forms,
is
generally
prohibited,
unless
allowed
by
law.
But
the
prohibition
of
gambling
does
not
mean
that
the
government
can
not
regulate
it
in
the
exercise
of
its
police
power,
wherein
the
state
has
the
authority
to
enact
legislation
that
may
interfere
with
personal
liberty
or
property
in
order
to
promote
the
general
welfare.
The
Judiciary
does
not
settle
policy
issues
which
are
within
the
domain
of
the
political
branches
of
government
and
the
people
themselves
as
the
repository
of
all
state
power.
(c.)
PAGCOR
is
the
3rd
largest
source
of
government
revenue,
earning
P3.43B
in
1989.
2nd:
Regarding
PAGCOR's
exemption
from
taxes
(a.)
According
to
the
decision,
Local
Government
Units
have
no
inherent
power
to
tax;
The
"power
to
tax"
granted
to
L.G.U.s
by
their
charter
must
yield
to
a
legislative
act
which
is
superior
(national
legislation)
having
been
passed
upon
by
the
state
itself
which
has
the
"inherent
power
to
tax."
(b.)
The
Charter
of
the
City
Government
of
Manila
is
subject
to
control
by
Congress.
Congress
can
grant
the
City
the
power
to
tax,
can
provide
for
exemptions
and
even
take
back
the
power.
(c.)
The
City
of
Manila's
power
to
impose
license
fees
on
gambling,
has
long
been
revoked.
As
early
as
1975,
the
power
of
local
governments
to
regulate
gambling
thru
the
grant
of
"franchise,
licenses
or
permits"
was
withdrawn
41
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
by
P.D.
No.
771
and
was
vested
exclusively
on
the
Pagcor.
(d.)
Local
Governments
have
no
power
to
tax
instrumentalities
of
the
government.
PAGCOR
is
an
instrumentality
of
the
national
government
with
its
own
charter.
The
doctrine
of
supremacy
of
national
government
over
local
government
was
applied.
3rd:
Regarding
Local
Autonomy
The
exercise
by
local
governments
of
the
power
to
tax
is
subject
to
limitations
that
may
be
established
by
Congress.
Congress
may
amend,
repeal
or
revoke
such
powers.
PAGCOR
Charter
constitutes
an
exemption
to
the
power
of
local
government
to
tax.
A
Local
Government
Unit
is
a
political
subdivision,
intra-‐sovereign
subdivision
within
one
sovereign
nation
and
must
yield
to
the
sovereign.
4th:
Regarding
the
Equal
Protection
Clause:
The
petition
was
not
clear
as
to
how
the
PAGCOR
Charter
violated
the
equal
protection
clause.
The
mere
fact
that
some
gambling
activities
like
cockfighting
(PD
449)
horse
racing
(RA
306
as
amended
by
RA
983),
sweepstakes,
lotteries
and
races
(RA
1169
as
amended
by
BP
42)
are
legalized
under
certain
conditions,
while
others
are
prohibited,
does
not
render
the
applicable
laws,
PD.
1869
for
one,
unconstitutional.
The
clause
does
not
preclude
classification
of
individuals
who
may
be
accorded
different
treatment
under
the
law
as
long
as
the
classification
is
not
unreasonable
or
arbitrary.
5th:
Regarding
the
Government
Stand
against
Monopolies:
Every
law
has
in
its
favor
the
presumption
of
constitutionality.
For
PD
1869
to
be
nullified,
it
must
be
shown
that
there
is
a
clear
and
unequivocal
breach
of
the
Constitution,
not
merely
a
doubtful
and
equivocal
one.
In
other
words,
the
grounds
for
nullity
must
be
clear
and
beyond
reasonable
doubt.
Monopolies
are
not
necessarily
prohibited
by
the
Constitution.
The
state
must
still
decide
whether
public
interest
demands
that
monopolies
be
regulated
or
prohibited.
Again,
this
is
a
matter
of
policy
for
the
Legislature
to
decide.
6th:
Regarding
Sections
11
(Personality
Dignity)
12
(Family)
and
13
(Role
of
Youth)
of
Article
II;
Section
13
(Social
Justice)
of
Article
XIII
and
Section
2
(Educational
Values)
of
Article
XIV
of
the
1987
Constitution:
It
should
be
noted
that
these
are
merely
statements
of
principles
and,
policies.
They
are
not
self-‐executing,
meaning
a
law
should
be
passed
by
Congress
to
clearly
define
and
effectuate
such
principles.
DISPOSITION:
Petition
is
dismissed.
Phil
Petroleum
Corp
vs.
Mun.
of
Pililia,
Rizal
(1991)
FACTS:
PPC
is
engaged
in
the
manufacture
of
lubricated
oil
basestock
which
is
a
petroleum
product,
with
its
refinery
plant
situated
at
Malaya,
Pililla,
Rizal.
It
owns
and
maintains
an
oil
refinery
including
49
storage
tanks
for
its
petroleum
products.
Under
Section
142
of
the
NIRC
of
1939,
manufactured
oils
and
other
fuels
are
subject
to
specific
tax.
On
June
28,
1973,
PD
231
(Local
Tax
Code)
was
issued
enacted.
Sections
19
and
19
(a)
thereof
provide
that
the
municipality
may
impose
taxes
on
business,
except
on
those
for
which
fixed
taxes
are
provided
on
manufacturers,
importers
or
producers
of
any
article
of
commerce
of
whatever
kind
or
nature,
including
brewers,
distillers,
rectifiers,
repackers,
and
compounders
of
liquors,
distilled
spirits
and/or
wines
in
accordance
with
the
schedule
listed
therein.
The
Secretary
of
Finance
issued
Provincial
Circular
No.
26-‐73
directing
all
provincial,
city
and
municipal
treasurers
to
refrain
from
collecting
any
local
tax
imposed
in
old
or
new
tax
ordinances
in
the
business
of
manufacturing,
wholesaling,
retailing,
or
dealing
in
petroleum
products
subject
to
the
specific
tax
under
the
NIRC.
Provincial
Circular
No.
26
A-‐73
was
also
issued
instructing
all
city
treasurers
to
refrain
from
collecting
any
local
tax
42
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
imposed
in
tax
ordinances
enacted
before
or
after
the
effectivity
of
the
Local
Tax
Code,
on
the
businesses
of
manufacturing,
wholesaling,
retailing,
or
dealing
in,
petroleum
products
subject
to
the
specific
tax
under
the
NIRC.
Municipality
of
Pililla,
Rizal
enacted
Municipal
Tax
Ordinance
No.
1,
S-‐1974
otherwise
known
as
"The
Pililla
Tax
Code
of
1974".
Sections
9
and
10
of
the
said
ordinance
imposed
a
tax
on
business,
except
for
those
for
which
fixed
taxes
are
provided
in
the
Local
Tax
Code
on
manufacturers,
importers,
or
producers
of
any
article
of
commerce
of
whatever
kind
or
nature,
including
brewers,
distillers,
rectifiers,
repackers,
and
compounders
of
liquors,
distilled
spirits
and/or
wines
in
accordance
with
the
schedule
found
in
the
Local
Tax
Code,
as
well
as
mayor's
permit,
sanitary
inspection
fee
and
storage
permit
fee
for
flammable,
combustible
or
explosive
substances.
Section
139
of
the
disputed
ordinance
imposed
surcharges
and
interests
on
unpaid
taxes,
fees
or
charges.
On
March
30,
1974,
PD
426
was
issued
amending
provisions
of
PD
231
but
retaining
Sections
19
and
19(a)
[that
municipalities
may
impose
taxes
on
business].
Thereafter,
P.D.
436
was
promulgated
increasing
the
specific
tax
on
lubricating
oils,
gasoline,
bunker
fuel
oil,
diesel
fuel
oil
and
other
similar
petroleum
products
levied
under
Sections
142,
144
and
145
of
the
NIRC,
and
granting
provinces,
cities
and
municipalities
certain
shares
in
the
specific
tax
on
such
products
in
lieu
of
local
taxes
imposed
on
petroleum
products.
Municipal
Tax
Ordinance
No.
1
was
not
implemented
and/or
enforced
because
of
its
having
been
suspended
in
view
of
Provincial
Circular
Nos.
26-‐73
and
26
A-‐73.
Provincial
Circular
No.
6-‐77
was
also
issued
directing
all
city
and
municipal
treasurers
to
refrain
from
collecting
storage
fee
on
flammable
or
combustible
materials
imposed
under
local
tax
ordinance.
On
June
3,
1977,
PD
1158
or
the
NIRC
of
1977
was
enacted,
Section
153
of
which
specifically
imposes
specific
tax
on
refined
and
manufactured
mineral
oils
and
motor
fuels.
Enforcing
the
provisions
of
the
ordinance,
the
respondent
filed
a
complaint
against
PPC
for
the
collection
of
the
business
tax
from
1979
to
1986;
storage
permit
fees
from
1975
to
1986;
mayor's
permit
and
sanitary
inspection
fees
from
1975
to
1984.
PPC,
however,
have
already
paid
the
last-‐named
fees
starting
1985.
The
RTC
rendered
a
decision
against
petitioner.
ISSUE:
WON
PPC
is
still
liable
to
pay
tax
on
business
and
storage
fees,
considering
Provincial
Circular
No.
6-‐77;
and
mayor's
permit
and
sanitary
inspection
fee
based
on
Municipal
Ordinance
No.
1
HELD:
PPC
is
liable
to
pay
business
taxes
but
it
is
not
liable
to
pay
storage
fees
PPC
presented
the
following
contentions:
(a)
Provincial
Circular
No.
26-‐73
declared
as
contrary
to
national
economic
policy
the
imposition
of
local
taxes
on
the
manufacture
of
petroleum
products
as
they
are
already
subject
to
specific
tax
under
the
NIRC;
(b)
It
covers
not
only
old
tax
ordinances
but
new
ones,
as
well
as
those
which
may
be
enacted
in
the
future;
(c)
both
Provincial
Circulars
26-‐73
and
26
A-‐73
are
still
effective
and
until
revoked,
any
effort
on
the
part
of
the
respondent
to
collect
the
suspended
tax
on
business
from
the
petitioner
would
be
illegal
and
unauthorized;
and
(d)
Section
2
of
PD.
436
prohibits
the
imposition
of
local
taxes
on
petroleum
products.
PC
No.
26-‐73
and
PC
No.
26
A-‐73
suspended
the
effectivity
of
local
tax
ordinances
imposing
a
tax
on
business
under
Section
19
(a)
of
the
Local
Tax
Code,
with
regard
to
manufacturers,
retailers,
wholesalers
or
dealers
in
petroleum
products
subject
to
the
specific
tax
under
the
NIRC.
Pililla's
Municipal
Tax
Ordinance
No.
1
imposing
the
assailed
taxes,
fees
and
charges
is
valid
especially
Section
9
(A)
which
"was
lifted
in
toto
and/or
is
a
literal
reproduction
of
Section
19
(a)
of
the
Local
Tax
Code
as
amended
by
PD
No.
426."
It
conforms
with
the
mandate
of
said
law.
43
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
PD
426
amending
the
Local
Tax
Code
is
deemed
to
have
repealed
Provincial
Circular
Nos.
26-‐73
and
26
A-‐73
when
Sections
19
and
19
(a),
were
carried
over
into
PD
426
and
no
exemptions
were
given
to
manufacturers,
wholesalers,
retailers,
or
dealers
in
petroleum
products.
While
Section
2
of
PD
436
prohibits
the
imposition
of
local
taxes
on
petroleum
products,
said
decree
did
not
amend
Sections
19
and
19
(a)
of
PD
231
as
amended
by
P.D.
426,
wherein
the
municipality
is
granted
the
right
to
levy
taxes
on
business
of
manufacturers,
importers,
producers
of
any
article
of
commerce
of
whatever
kind
or
nature.
A
tax
on
business
is
distinct
from
a
tax
on
the
article
itself.
Thus,
if
the
imposition
of
tax
on
business
of
manufacturers,
etc.
in
petroleum
products
contravenes
a
declared
national
policy,
it
should
have
been
expressly
stated
in
P.D.
No.
436.
The
exercise
by
local
governments
of
the
power
to
tax
is
ordained
by
the
present
Constitution.
To
allow
the
continuous
effectivity
of
the
prohibition
set
forth
in
PC
No.
26-‐73
(1)
would
be
tantamount
to
restricting
their
power
to
tax
by
mere
administrative
issuances.
Under
Section
5,
Article
X
of
the
1987
Constitution,
only
guidelines
and
limitations
that
may
be
established
by
Congress
can
define
and
limit
such
power
of
local
governments.
Provincial
Circular
No.
6-‐77
enjoining
all
city
and
municipal
treasurers
to
refrain
from
collecting
the
so-‐called
storage
fee
on
flammable
or
combustible
materials
imposed
in
the
local
tax
ordinance
of
their
respective
locality
frees
petitioner
PPC
from
the
payment
of
storage
permit
fee.
The
storage
permit
fee
is
a
fee
for
the
installation
and
keeping
in
storage
of
any
flammable,
combustible
or
explosive
substances.
Inasmuch
as
said
storage
makes
use
of
tanks
owned
not
by
the
municipality
of
Pililla,
but
by
petitioner
PPC,
same
is
obviously
not
a
charge
for
any
service
rendered
by
the
municipality
as
what
is
envisioned
in
Section
37
of
the
same
Code.
As
to
the
authority
of
the
mayor
to
waive
payment
of
the
mayor's
permit
and
sanitary
inspection
fees,
the
trial
court
did
not
err
in
holding
that
"since
the
power
to
tax
includes
the
power
to
exempt
thereof
which
is
essentially
a
legislative
prerogative,
it
follows
that
a
municipal
mayor
who
is
an
executive
officer
may
not
unilaterally
withdraw
such
an
expression
of
a
policy
thru
the
enactment
of
a
tax."
The
waiver
partakes
of
the
nature
of
an
exemption.
Exemptions
from
taxation
are
construed
in
strictissimi
juris
against
the
taxpayer
and
liberally
in
favor
of
the
taxing
authority.
Tax
exemptions
are
looked
upon
with
disfavor.
Thus,
in
the
absence
of
a
clear
and
express
exemption
from
the
payment
of
said
fees,
the
waiver
cannot
be
recognized.
It
is
the
law-‐making
body,
and
not
an
executive
like
the
mayor,
who
can
make
an
exemption.
Under
Section
36
of
the
Code,
a
permit
fee
like
the
mayor's
permit,
shall
be
required
before
any
individual
or
juridical
entity
shall
engage
in
any
business
or
occupation
under
the
provisions
of
the
Code.
Floro
Cement
Corp
vs.
Gorospe
FACTS:
Floro
Cement
Corporation
is
a
domestic
corporation
duly
organized
and
existing
under
the
laws
of
the
Republic
of
the
Philippines
with
business
establishment
and
office
address
at
its
compound
in
the
municipality
of
Lugait.
As
a
mining
operator
of
mineral
lands
situated
at
Lugait,
Misamis
Oriental,
Floro
Cement
was
granted
by
the
Secretary
of
Agriculture
and
Natural
Resources
a
Certificate
of
Qualification
for
Tax
Exemption
as
an
exemption
from
the
payment
of
all
taxes,
except
income
tax
for
a
period
of
5
years
(April
30,
1969
-‐
April
29,
1974).
The
said
Certificate
was
amended
on
Nov.
5,
1974,
when
the
Secretary
of
Natural
Resources,
Mr.
Jose
Leido
Jr.
granted
to
Floro
Cement
a
Certificate,
which
extended
the
exemption
from
all
taxes,
duties,
and
fees,
except
income
tax
for
5
years
(May
17,
1974
-‐
Jan.
1,
1978).
The
amended
Certificate
was
issued
pursuant
to
Sec.
52,
PD
463:
44
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Sec.
52.
Power
to
Levy
Taxes
on
Mines,
Mining
Operations
and
Mineral
Products.-‐Any
law
to
the
contrary
notwithstanding,
no
province,
City,
municipality,
barrio
or
municipal
district
shall
levy
and
collect
taxes,
fees,
rentals,
royalties
or
charges
of
any
kind
whatsoever
on
mines,
mining
claims,
mineral
products,
or
on
any
operation,
process,
or
activity
therewith.
On
July
3,
1974,
the
Municipality
through
its
Municipal
Mayor,
wired
the
Secretary
of
Finance,
opposing
the
application
of
Floro
Cement
for
the
extension
of
its
exemption,
which
opposition
was
not
favorably
acted
upon.
The
Municipality,
pursuant
to
PD
231
(June
28,
1973),
passed
Municipal
Ordinance
No.
5,
otherwise
known
as
Municipal
Revenue
Code
of
1974,
effective
Jan.
1,
1974.
The
Municipality,
pursuant
to
PD
426
(March
30,
1974),
passed
Municipal
Revenue
Ordinance
No.
10.
Pursuant
to
Municipal
Ordinances
Nos.
5
and
10,
the
Municipality
demanded
of
Floro
Cement
the
payment
of
manufacturer's
and
exporter's
taxes
including
surcharge
for
the
period
covering
Jan.
1,
1974
to
Sept.
30,
1975,
but
Floro
Cement
refused
in
view
of
the
tax
exemption
granted
to
it.
The
municipality
of
Lugait,
through
its
Mun.
Treasurer
and
Prov.
Treasurer,
filed
with
the
CFI
of
Misamis
Oriental
a
verified
complaint
for
collection
of
manufacturer’s
and
exporter’s
taxes
of
P161,875.00
(Jan.
1,
1974
-‐
Sept.
30,
1975)
plus
25%
thereof
as
surcharge.
On
the
basis
of
the
stipulations
of
facts,
the
parties
submitted
their
respective
memoranda.
CFI:
in
favor
of
the
Municipality
of
Lugait
and
ordered
Floro
Cement
Corporation
to
pay
P161,875.00
as
manufacturer's
and
exporter's
taxes
and
surcharges.
Hence,
this
appeal.
Floro
Cement
holds
that:
1.
Since
Ordinances
Nos.
5
and
10
were
enacted
pursuant
to
PD
231
and
PD
426,
respectively,
said
ordinances
do
not
apply
to
its
business
in
view
of
the
limitation
on
the
taxing
power
of
local
government
provided
in
Sec.
5m
of
PD
231,
to
wit:
Sec.
5.
Common
Limitations
on
the
Taxing
Powers
of
Local
Governments.
The
exercise
of
taxing
power
of
provinces,
cities,
municipalities
and
barrios
shall
not
extend
to
the
imposition
of
the
following:
.
.
.
(m)
Taxes
on
mines,
mining
operations
and
mineral
products
and
their
by-‐products
when
sold
domestically
by
the
operator.
2.
that
cement
is
a
mineral
product
and
the
prohibition
on
imposition
of
taxes
in
Sec.
52
of
PD
463
includes
any
operation,
process
or
activity
connected
with
its
production.
The
manufacture
of
cement
is
a
process
inherently
connected
with
the
mining
operation
undertaken
by
Floro
Cement.
The
Municipality:
1.
admits
that
Floro
Cement
undertakes
exploration,
development
and
exploitation
of
mineral
products,
but
the
taxes
sought
to
be
collected
were
not
imposed
on
these
activities;
2.
The
taxes
were
levied
on
the
corporation's
business
of
manufacturing
and
exporting
cement,
which
does
not
fall
under
exploration,
development
nor
exploitation
of
mineral
resources
as
defined
in
Sec.
2
of
PD
463.
Hence,
it
is
outside
the
scope
of
application
of
Sec.
52
of
said
decree.
3.
Its
power
to
levy
taxes
on
manufacturers
and
exporters
is
provided
in
Article
2,
Sec.
19
of
PD
231,
as
amended
by
PD426:
"The
municipality
may
impose
a
tax
on
business
except
those
for
which
fixed
taxes
are
provided
for
in
this
Code:
(a)
On
manufacturers,
importers,
or
producers
of
any
article
of
commerce
of
whatever
kind
or
nature,
45
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
including
brewers,
distillers,
rectifiers,
repackers,
and
compounders
of
liquors,
distilled
spirits
and/or
wines
in
accordance
with
the
following
schedule:
.
.
.
(a-‐1)
On
retailers,
independent
wholesalers,
and
distributors
.
.
.
ISSUE:
WON
Ordinances
Nos.
5
and
10
of
Lugait,
Misamis
Oriental
apply
to
Floro
Cement
notwithstanding
the
limitation
on
the
taxing
power
of
local
government
as
provided
for
in
Sec.
52
of
PD
231
and
Sec.
52
of
PD
463.
HELD/RATIO:
YES.
This
Court
has
consistently
held
that
cement
is
not
a
mineral
product
but
rather
a
manufactured
product.
While
cement
is
composed
of
80%
minerals,
it
is
not
merely
an
admixture
or
blending
of
raw
materials,
as
lime,
silica,
shale
and
others.
It
is
the
result
of
a
definite
process
–
the
crushing
of
minerals,
grinding,
mixing,
calcining
adding
of
retarder
or
raw
gypsum
In
short,
before
cement
reaches
its
saleable
form,
the
minerals
had
already
undergone
a
chemical
change
through
manufacturing
process.
As
held
by
the
lower
court,
the
exemption
in
Sec.
52
of
PD
463
refers
only
to
machineries,
equipment,
tools
for
production,
etc.,
as
provided
in
Sec.
53
of
the
same
decree.
The
manufacture
and
the
export
of
cement
does
not
fall
under
the
said
provision
for
it
is
not
a
mineral
product.
It
is
not
cement
that
is
mined
only
the
mineral
products
composing
the
finished
product.
As
the
power
of
taxation
is
a
high
prerogative
of
sovereignty,
the
relinquishment
is
never
presumed
and
any
reduction
or
diminution
thereof
with
respect
to
its
mode
or
its
rate,
must
be
strictly
construed,
and
the
same
must
be
coached
in
clear
and
unmistakable
terms
in
order
that
it
may
be
applied.
The
general
rule
is
that
any
claim
for
exemption
from
the
tax
statute
should
be
strictly
construed
against
the
taxpayer.
He
who
claims
an
exemption
must
be
able
to
point
out
some
provision
of
law
creating
the
right;
it
cannot
be
allowed
to
exist
upon
a
mere
vague
implication
or
inference.
Floro
Cement
failed
to
prove
this.
In
fact,
by
the
parties'
own
stipulation
of
facts,
it
is
admitted
that
Floro
Cement
is
engaged
in
the
manufacturing
and
selling,
including
exporting
of
cement.
As
such,
and
since
the
taxes
sought
to
be
collected
were
levied
on
these
activities,
Ordinances
Nos.
5
and
10
properly
apply
to
Floro
Cement.
AFFIRMED.
Tuzon
and
Mapagu
vs.
CA
(1992)
FACTS:
14
March
1977:
Sangguniang
Bayan
of
Camalaniugan,
Cagayan,
adopted
Resolution
No.
9
soliciting
1%
donation
of
the
palay
threshed
from
the
thresher
operators
who
will
apply
for
a
permit
to
thresh.
The
proceeds
will
fund
the
construction
of
the
Sports
and
Nutrition
Center
Bldg
of
the
municipality.
Petitioner
Lope
Mapagu
(treasurer)
prepared
a
document
for
signature
of
all
thresher/
owner/
operators
who
applied
for
a
mayor’s
permit.
Private
respondent
Jurado
tried
to
pay
the
P285.00
license
fee
for
thresher
operators
but
it
was
refused
on
the
ground
that
he
must
first
get
a
mayor’
permit
(by
Mapagu)
and
second,
the
he
did
not
sign
the
agreement
to
give
1%
of
the
palay
he
produced
(by
Mayor
Tuzon).
Jurado
filed
for
an
action
for
mandamus
with
the
RTC
in
Aparri,
Cagayan
(CFI
then)
to
compel
the
issuance
of
the
mayor’s
permit
and
license.
He
filed
another
petition
for
declaratory
judgment
against
the
resolution
for
being
illegal
either
as
a
donation
or
as
a
tax
measure.
RTC:
Upheld
the
challenge
measure.
Dismissed
the
claims
for
damages.
46
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Jurado
appealed
to
CA.
CA:
Affirmed
the
validity
of
Resolution
No.
9
but
declared
that
it
is
not
mandatory.
But
held
that
Mayor
Tuzon
and
Treasurer
Mapagu
are
liable
to
pay
P20T
as
actual
damages
and
P5T
as
moral
damages.
As
for
the
Resolution,
it
was
passed
by
the
Sanggunian
in
the
lawful
exercise
of
its
legislative
powers
granted
by
Article
XI,
Section
5
of
the
1973
Constitution
which
provided
that
each
LGU
shall
have
the
power
to
create
its
own
source
revenue
and
to
levy
taxes,
subject
to
such
limitation
as
may
be
provided
by
law.
And
also
under
Article
4,
Sec.
29,
PD
231:
The
barrio
council
may
solicit
money,
materials,
and
other
contributions
from
private
agencies
and
individuals.
ISSUE
1:
WON
a
resolution
imposing
a
1%
donation
is
a
valid
exercise
of
the
taxing
power
of
an
LGU.
NO
RULING.
RATIO:
The
Court
just
remarked
that
the
reasoning
of
the
CA
is
an
over-‐simplification.
It
held
that
the
respondent
court
has
not
offered
any
explanation
for
its
conclusion
that
the
challenged
measures
are
valid
nor
does
it
discuss
its
own
concept
of
the
nature
of
the
resolution.
The
Court
did
not
concern
itself
with
the
validity
of
the
Resolution
since
the
issue
was
not
raised
in
the
petition
as
an
assigned
error
of
the
CA.
The
measures
have
been
sustained
in
the
challenged
decision,
from
which
the
respondent
has
not
appealed.
The
implementing
agency
made
the
“donation”
obligatory.
Although
again
the
validity
of
the
resolution
was
not
in
issue,
the
SC
observed
that:
it
“seems
to
make
the
donation
obligatory
and
a
condition
precedent
to
the
issuance
of
the
mayor's
permit.
This
goes
against
the
nature
of
a
donation,
which
is
an
act
of
liberality
and
is
never
obligatory.
If
it
is
to
be
considered
as
a
tax
ordinance,
it
must
be
shown:
1.
to
have
been
enacted
in
accordance
with
the
requirements
of
the
Local
Tax
Code
;
2.
it
would
include
the
holding
of
a
public
hearing
on
the
measure;
and
3.
its
subsequent
approval
by
the
Secretary
of
Finance,
in
addition
to
the
requisites
for
publication
of
ordinances
in
general.
ISSUE2:
WON
the
refusal
on
the
part
of
the
petitioners
to
issue
a
Mayor’s
permit
and
license
to
operate
a
thresher
to
the
private
respondent
is
“unjustified
and
constitutes
bad
faith”
on
their
part.
NO.
RATIO:
Petitioners
acted
within
the
scope
of
their
authority
and
in
consonance
with
their
honest
interpretation
of
the
resolution
in
question.
It
was
not
for
them
to
rule
on
its
validity.
In
the
absence
of
a
judicial
decision
declaring
it
invalid,
its
legality
would
have
to
be
presumed.
As
executive
officials
of
the
municipality,
they
had
the
duty
to
enforce
it
as
long
as
it
had
not
been
repealed
by
the
Sangguniang
Bayan
or
annulled
by
the
courts.
xxx
As
a
rule,
a
pubic
officer,
whether,
judicial,
quasi-‐judicial
or
executive,
is
not
personally
liable
to
one
injured
in
consequence
of
an
act
performed
within
the
scope
of
his
official
authority,
and
in
line
of
his
official
duty.
xxx
It
has
been
held
that
an
erroneous
interpretation
of
an
ordinance
does
not
constitute
nor
does
it
amount
to
bad
faith,
that
would
entitle
an
aggrieved
party
to
an
award
for
damages.
(Philippine
Match
Co.
Ltd.
v.
City
of
Cebu)
Franchises
PLDT
vs.
City
of
Davao
(2001)
47
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
FACTS:
-‐
Petitioner
PLDT
applied
for
a
mayor’s
permit
to
operate
its
Davao
Metro
Exchange
but
Respondent
Davao
City
withheld
its
action
to
the
application
pending
payment
by
petitioner
of
the
local
franchise
tax
in
the
amount
of
Php3,681,985.72.
Petitioner
contested
the
assessment
saying
that
it
was
exempt
from
such
franchise
tax
as
evidenced
by
the
opinion
of
the
Bureau
of
Local
Government
Finance
(BLGF)
invoking
Sec.
23
of
RA
7925
which
mandates
the
equality
of
treatment
in
telecom
companies.
According
to
petitioner,
since
Globe
and
Smart
are
both
enjoying
exemption
from
franchise
tax
and
are
paying
a
fixed
percentage
of
their
gross
receipts
in
lieu
of
the
franchise
tax,
then
the
same
exemption
should
also
be
granted
to
it.
-‐
On
the
other
hand,
Davao
City
is
invoking
Sec.
137of
the
LGC
which
provides
that
the
notwithstanding
any
exemption
granted
by
law,
the
local
government
unit
may
impose
a
franchise
tax
at
a
rate
not
exceeding
50%
of
1%
of
the
gross
annual
receipts
of
the
business.
Respondent
also
raised
the
provision
of
Sec.
193
which
removed
all
existing
tax
exemptions
and
incentives
granted
to
juridical
and
natural
persons,
unless
otherwise
provided
by
the
Local
Government
Code.
ISSUE:
WON
Davao
City
may
impose
a
franchise
tax
against
PLDT.
HELD/RATIO:
-‐
YES.
The
claim
of
petitioner
that
the
exemption
extended
to
Globe
and
Smart
by
virtue
of
their
legislative
franchises,
should
also
be
extended
to
it
because
of
Sec.
23
of
RA
7925,
cannot
stand.
This
will
result
to
absurd
consequences
since
Globe
and
Smart
have
varying
percentages
as
regards
the
tax
they
should
pay
based
on
their
gross
receipts,
in
lieu
of
payment
of
franchise
tax.
Globe
is
required
to
pay
1.5%
of
all
gross
receipts
from
its
transactions
while
Smart
must
pay
3%
on
all
its
gross
receipts.
If
petitioner’s
theory
of
leveling
the
playing
field
will
be
followed,
then
Smart
can
also
claim
that
the
percentage
imposed
to
it
be
lowered
to
that
of
Globe.
And
if
in
the
future,
Congress
again
grants
a
franchise
to
another
telecom
company
imposing
a
lower
percentage,
say
1%
franchise
tax,
then
all
other
telecom
franchises
can
also
claim
that
theirs
be
lowered
to
that
percentage.
This
is
not
the
intent
of
Congress
in
Sec.
23
of
RA
7925
as
this
would
leave
the
Government
with
the
burden
of
having
to
keep
track
of
all
granted
telecom
franchises,
lest
some
companies
be
treated
equally.
The
exemption
mentioned
in
Sec.
23
of
RA
7925
is
too
general.
The
intent
of
the
framers
of
RA
7925
is
to
promote
gradually
the
deregulation
of
the
entry,
pricing
and
operations
of
all
public
telecom
entities
and
thus
promote
a
level
playing
field
in
the
telecom
industry.
There
is
nothing
in
Sec.
23
which
shows
that
it
contemplates
the
grant
of
tax
exemptions
to
all
telecom
entities,
including
those
whose
exemptions
have
been
withdrawn
by
the
LGC.
The
exemption
mentioned
in
Sec.
23
refers
to
certain
regulatory
or
repertory
requirements
and
not
to
the
payment
of
franchise
taxes.
City
Government
of
Q.C.
v.
Bayantel
(2006)
FACTS:
:
1.
Bayantel
is
a
legislative
franchise
holder
under
R.
A.
3259
to
establish
and
operate
radio
stations
for
domestic
telecommunications,
radiophone,
broadcasting
and
telecasting.
The
franchise
included
an
exemption
from
taxes:
“SECTION
14.
(a)
The
grantee
shall
be
liable
to
pay
the
same
taxes
on
its
real
estate,
buildings
and
personal
property,
exclusive
of
the
franchise,
as
other
persons
or
corporations
are
now
or
hereafter
may
be
required
by
law
to
pay.
(b)
The
grantee
shall
further
pay
to
the
Treasurer
of
the
Philippines
each
year,
within
ten
days
after
the
audit
and
approval
of
the
accounts
as
prescribed
in
this
Act,
one
and
one-‐half
per
centum
of
all
gross
receipts
from
the
business
transacted
under
this
franchise
by
the
said
grantee.”
2.
The
Local
Government
Code
(LGC),
which
took
effect
in
January
1992,
grants
local
government
units
within
the
Metro
Manila
Area
the
power
to
levy
tax
on
real
properties,
viz:
“SEC.
232.
–
Power
to
Levy
Real
Property
Tax.
–
A
province
or
city
or
a
municipality
within
the
48
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Metropolitan
Manila
Area
may
levy
an
annual
ad
valorem
tax
on
real
property
such
as
land,
building,
machinery
and
other
improvements
not
hereinafter
specifically
exempted.”
and
“SEC.
234
-‐
Exemptions
from
Real
Property
Tax.
The
following
are
exempted
from
payment
of
the
real
property
tax:
xxx
xxx
xxx
Except
as
provided
herein,
any
exemption
from
payment
of
real
property
tax
previously
granted
to,
or
enjoyed
by,
all
persons,
whether
natural
or
juridical,
including
government-‐owned-‐or-‐controlled
corporations
is
hereby
withdrawn
upon
effectivity
of
this
Code.”
3.
Shortly
thereafter,
or
in
July
1992,
Bayantel's
franchise
was
amended,
but
it
retained
Sec.
14
of
R.A.
3259.
The
new
law,
in
Sec.
11
of
R.A.
7633,
restated
Sec.
14.
of
R.A.
3259.
4.
In
1993,
the
government
of
Quezon
City
enacted
the
Quezon
City
Revenue
Code
(QCRC),
which
imposes
a
real
property
tax
on
all
real
properties
in
Quezon
City,
and
reiterated
the
withdrawal
of
exemption
from
real
property
tax
under
Section
234
of
the
LGC.
5.
Conformably
with
the
QCRC,
the
City
Assessor
issued
new
tax
declarations
for
Bayantel's
real
properties
in
Quezon
City.
6.
Bayantel
requested
the
City
Assessor
to
exclude
its
real
properties
in
the
city
from
the
roll
of
taxable
real
properties.
Its
request
having
been
denied,
it
appealed
to
the
Local
Board
of
Assessment
Appeals
(LBAA).
7.
Because
Bayantel
did
not
pay
the
real
property
taxes
assessed
against
it,
the
City
Treasurer
sent
out
notices
of
delinquency
followed
by
warrants
of
levy
against
Bayantel's
properties,
preparatory
to
their
sale
at
a
public
auction.
8.
Bayantel
immediately
withdrew
its
appeal
at
the
LBAA
and
filed
with
the
RTC
a
petition
for
prohibition
with
an
urgent
applicaton
for
a
temporary
restraining
order
and/or
writ
of
preliminary
injunction.
ISSUE:
WON
Bayantel's
real
properties
in
Quezon
City
are,
under
its
amended
franchise,
exempt
from
real
property
tax.
HELD:
Yes.
RATIO:
1.
Bayantel's
amended
franchise
retained
the
phrase
“exclusive
of
this
franchise,”
which
phrase
is
also
in
its
original
franchise.
2.
The
phrase
“exclusive
of
this
franchise”
(found
in
Sec.
14
of
R.A.
3259
and
in
Sec.
11
of
RA
7633)
distinghuishes
between
two
sets
of
properties:
a)
those
actually,
directly
and
exclusively
used
in
its
radio
or
telecommunication
business
and
b)
those
properties
which
are
not
so
used.
3.
While
Sec.
14
granted
local
governments
the
power
to
tax
those
properties
not
actually,
directly
and
exclusively
used
in
the
pursuit
of
franchisee's
business,
the
same
provision
also
worked
to
limit
the
local
government's
power
to
impose
taxes
only
on
the
franchisee's
properties
that
are
not
actually,
directly
and
exclusively
used
in
the
pursuit
of
its
franchise.
Necessrily,
other
properties
of
Bayantel
actually,
directly,
and
exclusively
used
in
the
operation
of
its
franchise
are
not
within
the
delegated
power
to
tax
of
local
governments
and
are
exempt
from
real
property
taxes.
4.
Although
the
enactment
into
law
of
the
LGC
effectively
withdrew
Bayantel's
exemptions
from
real
estate
taxes
for
properties
within
Metro
Manila,
the
subsequent
enactment
of
RA
7633,
which
amended
Bayantel's
franchise,
reenacted
the
tax
provision,
Sec.
14
of
the
original
franchise,
RA
3259.
In
short,
Sec.
14,
which
exempts
Bayantel
from
real
property
taxes,
and
which
was
deemed
repealed
by
the
LGC,
was
revived
by
RA
7633.
49
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
5.
Congress
was
well
aware
that
the
LGC
withdrew
Bayantel's
former
exemption
from
property
taxes
such
that
it
opted
to
enact
into
law
RA
7633.
Said
law
contains
the
same
defining
phrase
“exclusive
of
its
franchise”
which
was
the
basis
of
Bayantel's
exepmtion
from
realty
taxes
prior
to
the
LGC.
R.A.
7633,
a
subsequent
legislation,
is
an
expression
of
Congress'
intention
to
remove
from
the
LGC's
delegated
taxing
power
all
the
franchisee's
properties
that
are
actually,
directly,
and
exclusively
used
in
the
pursuit
of
its
franchise.
6.
The
power
to
tax
is
still
primarily
vested
in
the
Congress.
The
LGC
itself
highlighted
the
Legislature's
power
to
exempt
certain
realties
from
the
taxing
power
of
local
government
units
(Art.
232.
“...
not
hereinafter
specifically
exempted”).
FELS
Energy
v.
Prov.
Of
Batangas
(2007)
FACTS:
The
law
does
not
look
with
favor
on
tax
exemptions
and
the
entity
that
would
seek
to
be
thus
privileged
must
justify
it
by
words
too
plain
to
be
mistaken
and
too
categorical
to
be
misinterpreted.
Thus,
applying
the
rule
of
strict
construction
of
laws
granting
tax
exemptions,
and
the
rule
that
doubts
should
be
resolved
in
favor
of
provincial
corporations,
we
hold
that
FELS
is
considered
a
taxable
entity.
The
right
of
local
government
units
to
collect
taxes
due
must
always
be
upheld
to
avoid
severe
tax
erosion.
This
consideration
is
consistent
with
the
State
policy
to
guarantee
the
autonomy
of
local
governments
and
the
objective
of
the
LGC
that
they
enjoy
genuine
and
meaningful
local
autonomy
to
empower
them
to
achieve
their
fullest
development
as
self-‐reliant
communities
and
make
them
effective
partners
in
the
attainment
of
national
goals.
Digitel
v.
Prov.
Of
Pangasinan
(2007)
FACTS:
•
January
1,
1992
–
effectivity
of
Local
Government
Code
(RA
7160)
➢
Of
significance
to
the
present
petition
are
Sections
137
and
232
of
the
Local
Government
Code.
➢
Section
137
of
the
Local
Government
Code,
in
principle,
withdrew
any
exemption
from
the
payment
of
a
tax
on
businesses
enjoying
a
franchise.
➢
Expressly,
it
authorized
local
governments
to
impose
a
franchise
tax
on
businesses
enjoying
a
franchise
within
its
territorial
jurisdiction.
➢
Section
232
likewise
authorizes
the
imposition
of
an
ad
valorem
tax
on
real
property
by
the
local
government.
•
November
13,
1992
-‐
petitioner
DIGITEL
was
granted,
under
Provincial
Ordinance
No.
18-‐92,
a
provincial
franchise
to
install,
maintain
and
operate
a
telecommunications
system
➢
Section
6
-‐
DIGITEL
is
required
to
pay
franchise
and
real
property
taxes.
•
December
29,
1992
-‐
the
Sangguniang
Panlalawigan
of
respondent
Province
of
Pangasinan
enacted
on
29
December
1992,
Provincial
Tax
Ordinance
No.
1,
pursuant
to
the
mandate
of
Sections
137
and
232
of
the
Local
Government
Code
•
September
10,
1993
-‐
Provincial
Tax
Ordinance
No.
4,
otherwise
known
as
"The
Pangasinan
Franchising
Ordinance
of
1993,"
was
similarly
ratified.
➢
Sections
4,
5
and
6
thereof,
positively
imposed
a
franchise
tax
on
businesses
enjoying
a
franchise
within
its
territorial
jurisdiction
•
Feb
17,
1994
-‐
DIGITEL
was
granted
by
Republic
Act
No.
7678,
a
legislative
franchise
➢
Sec.
5
-‐
DIGITEL
is
liable
for
the
payment
of
a
franchise
tax
"as
may
be
prescribed
by
law
of
all
gross
receipts
of
the
telephone
or
other
telecommunications
businesses
transacted
under
it
by
the
grantee,"
as
well
as
real
property
tax
"on
its
real
estate,
and
buildings
"exclusive
of
this
franchise."
50
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
•
Province
of
Pangasinan,
in
its
examination
of
its
record
found
that
petitioner
DIGITEL
had
a
franchise
tax
deficiency
for
the
years
1992,
1993
and
1994.
•
March
16,
1995
-‐
Congress
passed
Republic
Act
No.
7925,
otherwise
known
as
"The
Public
Telecommunications
Policy
Act
of
the
Philippines."
➢
Section
23
of
this
law
entitled
Equality
of
Treatment
in
the
Telecommunications
Industry,
provided
for
the
ipso
facto
application
to
any
previously
granted
telecommunications
franchises
of
any
advantage,
favor,
privilege,
exemption
or
immunity
granted
under
existing
franchises,
or
those
still
to
be
granted,
to
be
accorded
immediately
and
unconditionally
to
earlier
grantees.
•
The
provincial
franchise
and
real
property
taxes
remained
unpaid
by
Digitel
to
the
Province
of
Pangasinan.
On
1
March
2000,
no
settlement
having
been
made,
Province
of
Pangasinan
filed
a
Complaint13
for
Mandamus,
Collection
of
Sum
of
Money
and
Damages
before
Branch
68
of
the
RTC
of
Lingayen,
Pangasinan.
•
RTC
ruled
in
favor
of
the
Province
of
Pangasinan:
➢
DIGITEL’s
legislative
franchise
does
not
work
to
exempt
the
latter
from
payment
of
provincial
franchise
and
real
property
taxes;
the
provincial
and
legislative
franchises
are
separate
and
distinct
from
each
other
➢
Section
137
of
the
Local
Government
Code
had
already
withdrawn
any
exemption
granted
to
anyone;
as
such,
the
local
government
of
a
province
may
impose
a
tax
on
a
business
enjoying
a
franchise
•
DIGITEL
argues:
➢
By
virtue
of
Section
23
of
Republic
Act
No.
7925,
the
ipso
facto,
immediate
and
unconditional
application
to
it
of
the
tax
exemption
found
in
the
franchises
of
Globe,
Smart
and
Bell
➢
Stated
simply,
Section
23
of
Republic
Act
No.
7925,
in
relation
to
the
pertinent
provisions
of
the
legislative
franchises
of
Globe,
Smart
and
Bell,
"the
national
franchise
tax
for
which
petitioner
(DIGITEL)
is
liable
to
pay
shall
be
‘in
lieu
of
any
and
all
taxes
of
any
kind,
nature
or
description
levied,
established
or
collected
by
any
authority
whatsoever,
municipal,
provincial,
or
national,
from
which
the
grantee
is
hereby
expressly
granted.”
ISSUES:
1.
Whether
or
not
petitioner
DIGITEL
is
entitled
to
the
exemption
from
the
payment
of
provincial
franchise
tax
in
view
of
Section
23
of
Republic
Act
No.
7925,
in
relation
to
the
tax
exemption
provisions
found
in
the
legislative
franchises
of
Globe,
Smart
and
Bell?
(Stated
otherwise,
are
the
"in-‐lieu-‐of-‐all-‐taxes"
clauses/provisos
found
in
the
legislative
franchises
of
Globe,
Smart
and
Bell,
vis-‐à-‐vis
Section
23
of
Republic
Act
No.
7925,
applicable
to
petitioner
DIGITEL
such
that
the
latter
is
now
exempt
from
the
payment
of
any
other
taxes
except
the
national
franchise
and
income
taxes?)
2.
If
answered
in
the
negative,
whether
or
not
petitioner
DIGITEL’s
real
properties
found
within
the
territorial
jurisdiction
of
respondent
Province
of
Pangasinan
are
exempt
from
the
payment
of
real
property
taxes
by
virtue
of
the
phrase
"exclusive
of
this
franchise"
found
in
Section
5
of
its
legislative
franchise?
HELD:
1.
NO.
The
case
at
bar
is
actually
not
one
of
first
impression.
Indeed,
as
far
back
as
2001,
this
Court
has
had
the
occasion
to
rule
against
the
claim
for
tax
exemption
under
Republic
Act
No.
7925.
In
the
case
of
Philippine
Long
Distance
Telephone
Company,
Inc.
v.
City
of
Davao,
we
already
clarified
the
confusion
brought
about
by
the
effect
of
Section
23
of
Republic
Act
No.
7925
–
that
the
word
"exemption"
as
used
in
the
statute
refers
or
pertains
merely
to
an
exemption
from
regulatory
or
reporting
requirements
of
the
DOTC
or
the
NTC
and
not
to
the
grantee’s
tax
liability.
➢
In
approving
Section
23
of
Republic
Act
No.
7925,
Congress
did
not
intend
it
to
operate
as
a
blanket
tax
exemption
to
all
telecommunications
entities
➢
The
tax
exemption
must
be
expressed
in
the
statute
in
clear
language
that
leaves
no
doubt
of
the
intention
of
the
legislature
to
grant
such
exemption.
And,
even
if
it
is
granted,
the
exemption
must
be
interpreted
in
strictissimi
juris
against
the
taxpayer
and
liberally
in
favor
of
the
taxing
authority
➢
There
is
nothing
in
the
language
of
§23
nor
in
the
proceedings
of
both
the
House
of
Representatives
and
51
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
the
Senate
in
enacting
R.A.
No.
7925
which
shows
that
it
contemplates
the
grant
of
tax
exemptions
to
all
telecommunications
entities,
including
those
whose
exemptions
had
been
withdrawn
by
the
LGC.
➢
The
word
‘exemption’
in
§23
of
R.A.
No.
7925
contemplates
exemption
from
certain
regulatory
or
reporting
requirements,
bearing
in
mind
the
policy
of
the
law.
HENCE,
DIGITEL
IS
LIABLE
TO
PAY
THE
PROVINCIAL
FRANCHISE
TAX.
2.
YES.
However,
it
is
with
the
caveat
that
such
exemption
solely
applies
to
those
real
properties
actually,
directly
and
exclusively
used
by
the
grantee
in
its
franchise.
The
present
issue
actually
boils
down
to
a
dispute
between
the
inherent
taxing
power
of
Congress
and
the
delegated
authority
to
tax
of
the
local
government
borne
by
the
1987
Constitution.
In
the
afore-‐quoted
case
of
PLDT
v.
City
of
Davao,
we
already
sustained
the
power
of
Congress
to
grant
exemptions
over
and
above
the
power
of
the
local
government’s
delegated
taxing
authority
notwithstanding
the
source
of
such
power.
The
grant
of
taxing
powers
to
local
government
units
under
the
Constitution
and
the
LGC
does
not
affect
the
power
of
Congress
to
grant
exemptions
to
certain
persons,
pursuant
to
a
declared
national
policy.
The
legal
effect
of
the
constitutional
grant
to
local
governments
simply
means
that
in
interpreting
statutory
provisions
on
municipal
taxing
powers,
doubts
must
be
resolved
in
favor
of
municipal
corporations.
Real
Property
Taxation
(Sec
197-‐283,
RA
7160)
and
Special
Education
Fund
Tax
Sec
of
Finance
vs.
Ilarde
&
Cipriano
Cabaluna
(2005)
FACTS:
Cabaluna
is
the
Regional
Director
of
Regional
Office
No.
VI
of
the
Dept.
of
Finance
in
Iloilo
City.
He
co-‐owns
with
his
wife
several
real
properties,
on
which
the
City
Treasurer’s
Office
assessed
real
property
tax
delinquencies
from
1986-‐1992.
Cabaluna
paid
under
protest,
contending
that
the
penalties
imposed
are
in
excess
than
that
provided
by
Sec.
66
of
PD
464
(Real
Property
Tax
Code),
which
fixed
the
maximum
penalty
at
24%
of
the
delinquent
tax.
After
his
retirement,
he
filed
a
formal
protest
which
was
denied
by
the
City
Treasurer,
citing
Sec.
4(c)
of
Joint
Assessment
Regulation
No.
1-‐85
and
Local
Treasury
Regulation
No.
2-‐85
issued
by
respondent
Secretary
(formerly
Minister)
of
Finance,
providing
that
the
penalty
of
2%
per
month
of
delinquency
or
24%
per
annum
as
the
case
may
be,
continued
to
be
imposed
from
the
time
of
delinquency
incurred
until
the
time
it
is
fully
paid.
After
exhausting
all
administrative
remedies,
he
filed
a
suit
before
the
RTC
which
found
that
Section
4(c)
of
Joint
Assessment
Regulation
No.
1-‐85
and
Local
Treasury
Regulation
No.
2-‐85
(“Regulations”)
are
void,
because
the
penalty
imposed
therein
has
no
limit
as
the
24%
penalty
per
annum
is
continually
imposed
until
delinquent
tax
is
fully
paid
for,
unlike
under
Sec.
66
of
PD
464
(“RPT
Code”)
where
total
penalty
is
limited
only
to
24%
of
the
delinquent
tax.
ISSUE:
Whether
or
not
the
then
Ministry
of
Finance
could
legally
promulgate
Regulations
prescribing
a
rate
of
penalty
on
delinquent
taxes
other
than
that
provided
for
under
PD
464
(“RPT
Code”).
HELD:
NO.
•
Petitioner:
that
the
Regulations
are
sanctioned
by
EO
73.
SC:
NO.
-‐
EO
73
was
enacted
to
antedate
the
effectivity
of
the
1984
Real
Property
Tax
Values
from
01
January
1988
to
01
January
1987,
thus
repealing
the
earlier
EO
1019,
which
reorganized
the
tax
collection
and
assessment
in
provinces,
municipalities
and
cities.
EO
73
merely
designated
the
Minister
of
Finance
to
promulgate
rules
to
implement
such
application
of
the
1984
Values
(Sec.
2
of
EO
73),
not
the
amendment
of
rates
of
penalty
on
52
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
delinquent
taxes
(Sec.
66
of
PD
464).
-‐
The
Ministry
(now
Secretary)
of
Finance
cannot
promulgate
regulations
prescribing
a
rate
of
penalty
on
delinquent
taxes.
Despite
the
promulgation
of
EO
73,
PD
464
in
general
and
Sec.
66
in
particular,
remained
to
be
good
law.
To
accept
the
Secretary’s
premise
that
EO
73
had
accorded
him
the
authority
to
alter,
increase,
or
modify
the
tax
structure
would
be
tantamount
to
saying
that
EO
73
has
repealed
or
amended
PD
464.
Repeal
of
laws
should
be
made
clear
and
expressed.
Repeals
by
implication
are
not
favored
as
laws
are
presumed
to
be
passed
with
deliberation
and
full
knowledge
of
all
laws
existing
on
the
subject.
There
is
no
inconsistency
between
EO
73
and
PD
464.
It
is
only
RA
7160
(LGC)
which
repealed
PD
464.
-‐
Assuming
argumenti
that
EO
73
has
authorized
the
Secretary
to
issue
the
Regulations,
such
conferment
of
powers
is
void
for
being
repugnant
to
the
well-‐encrusted
doctrine
in
political
law
that
the
power
of
taxation
is
generally
vested
with
the
legislature.
•
Petitioner:
that
since
Cabaluna
was
responsible
for
the
issuance
and
implementation
of
Regional
Office
Memorandum
Circular
No.
04-‐89
which
implemented
the
Regulations,
he
is
now
estopped
from
seeking
the
nullification
of
the
Regulations.
SC:
NO.
-‐
Fact
that
Cabaluna
previously
endorsed
implementation
of
the
Regulations
is
of
no
moment,
because
he
did
it
in
his
capacity
as
the
Regional
Director
of
Regional
Office
No.
VI
of
the
Department
of
Finance
in
Iloilo
City.
As
such,
he
was
a
subordinate
of
the
Secretary
of
Finance
so
that
he
was
duty
bound
to
implement
subject
regulations.
In
this
present
case,
however,
he
is
suing
as
a
plain
taxpayer,
he
having
already
retired.
His
official
acts
as
Regional
Director
could
not
have
stripped
him
of
his
rights
as
a
taxpayer.
•
Thus,
for
purposes
of
computation
of
the
real
property
taxes
due
from
Cabaluna
for
years
1986-‐1991,
including
the
penalties
and
interests,
the
law
applicable
is
still
Sec.
66
of
PD
464.
The
penalty
that
ought
to
be
imposed
for
delinquency
in
the
payment
of
real
property
taxes
should,
therefore,
be
2%
of
the
delinquent
tax
for
each
month
of
delinquency
or
fraction
thereof
but
in
no
case
shall
the
total
penalty
exceed
24%
of
the
delinquent
tax.
However,
from
01
January
1992
onwards,
the
proper
basis
of
the
real
property
tax,
including
penalties
and
interests,
must
now
be
RA
7160
(LGC),
inasmuch
as
Sec.
534
expressly
repealed
PD
464
(RPT
Code).
Benguet
Corp
vs.
Central
Board
of
Assessment
Appeals
(1992)
FACTS:
Benguet
corporation
has
bunkhouses
used
by
its
rank
and
file
employees
for
residential
purposes.
The
provincial
assessor
of
Benguet
assessed
real
property
tax
on
these
bunkhouses.
According
to
him
the
tax
exemption
of
the
bunkhouses
under
PD
745
was
already
removed
by
PD
1955.
The
MAIN
CONTENTION
OF
BENGUET
CORP
IS
THAT
THE
REALTY
TAXES
ARE
LOCAL
TAXE
BECAUSE
THEY
ARE
LEVIED
BY
THE
LGU'S
PURSUANT
TO
SECTION
39
OF
PD
464.
Section
39
-‐
The
provincial,
city,
or
municipality
board
or
council
shall
fix
a
uniform
rate
of
real
property
tax
applicable
to
their
respective
localitites.
Benguet
contends
that
LGU's
are
without
authority
to
levy
realty
taxes
on
mines
per
PD
463
and
the
local
tax
code.
ISSUES:
1)
WON
the
assessor
can
assess
the
tax
despite
the
proscription
in
the
local
tax
code
against
the
imposition
of
taxes
by
local
government
units
on
mines.
2)
WON
real
property
tax
exemption
granted
under
PD
745
was
removed
by
PD
1955.
HELD:
yes
to
both
issues,
petition
denied.
RATIO:
While
the
local
government
units
are
charged
with
fixing
the
rate
of
real
property
taxes,
it
does
not
necessarily
53
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
follow
from
that
authority
the
determination
of
whether
or
not
to
impose
the
tax.
In
fact,
local
governments
have
no
alternative
but
to
collect
taxes
as
mandated
in
sec
38
of
the
Real
property
tax
code
as
stated
in
sec
38
of
the
code.
It
is
thus
clear
that
it
is
the
national
government
expressing
itself
through
the
legislative
branch
that
levies
the
tax.
Consequently
when
local
governments
are
required
to
fix
the
rates,
they
are
merely
constituted
as
agents
of
the
national
government
in
the
enforcement
of
the
real
property
tax
code.
The
delegation
of
the
taxing
power
is
not
even
involved
here
because
the
national
government
has
already
imposed
realty
tax
in
sec
38
leaving
only
the
enforcement
to
be
done
by
the
local
governments.
Realty
tax
is
enforced
throughout
the
Philippines
and
not
merely
in
a
particular
municipality
or
city
but
the
proceeds
of
the
tax
accrue
to
the
province,
city,
municipality
and
barrio
where
the
realty
taxed
is
situated.
In
contrast
a
local
tax
is
imposed
by
the
municipal
or
city
council
by
virtue
of
the
local
tax
code.
The
provisions
are
a
mere
limitation
on
the
taxing
powers
of
the
LGU
and
are
not
pertinent
to
the
issue
in
the
case
at
bar.
It
cannot
affect
the
imposition
of
real
property
tax
by
the
national
government.
National
Development
Co.
vs.
Cebu
City
FACTS:
National
Development
Company
(NDC)
is
a
GOCC
authorized
to
engage
in
commercial,
industrial,
mining,
agricultural
and
other
enterprises
necessary
or
contributory
to
economic
development
or
important
to
public
interest.
It
also
operates
subsidiary
corporations
one
of
which
is
National
Warehousing
Corporation
(NWC).
In
1939,
the
President
issued
Proclamation
No.
430
reserving
Block
no.
4,
Reclamation
Area
No.
4,
of
Cebu
City
for
warehousing
purposes
under
the
administration
of
NWC.
In
1940,
a
warehouse
with
a
floor
area
of
1,940
square
meters
more
or
less,
was
constructed
thereon.
In
1947,
EO
93
dissolved
NWC
with
NDC
taking
over
its
assets
and
functions.
In
1948,
Cebu
City
assessed
and
collected
from
NDC
real
estate
taxes
on
the
land
and
the
warehouse
thereon.
By
the
first
quarter
of
1970,
a
substantial
amount
of
the
taxes
were
paid
under
protest.
NDC
asked
for
a
full
refund
contending
that
the
land
and
the
warehouse
belonged
to
the
Republic
and
therefore
exempt
from
taxation.
ISSUE:
WON
the
NDC
is
exempt
from
real
estate
taxes
HELD:
Yes,
as
to
the
land
reserved,
for
the
previous
six
years
.
No,
as
to
the
warehouse
To
come
within
the
ambit
of
the
exemption
provided
in
Art.
3,
par.
(a),
of
the
Assessment
Law,
it
is
important
to
establish
that
the
property
is
owned
by
the
government
or
its
unincorporated
agency,
and
once
government
ownership
is
determined,
the
nature
of
the
use
of
the
property,
whether
for
proprietary
or
sovereign
purposes,
becomes
immaterial.
What
appears
to
have
been
ceded
to
NWC
is
merely
the
administration
of
the
property
while
the
government
retains
ownership
of
what
has
been
declared
reserved
for
warehousing
purposes
under
Proclamation
No.
430.
A
reserved
land
is
defined
as
“a
public
land
has
been
withheld
or
kept
back
from
sale
or
disposition”.
The
government
does
not
part
with
its
title
by
reserving
them,
but
gives
notice
to
the
world
that
it
desires
them
for
a
certain
purpose
Absolute
disposition
of
land
is
not
implied
from
reservation;
it
merely
means
“a
withdrawal
of
a
specified
portion
of
the
pubic
domain
from
disposal
under
the
land
laws
and
the
appropriation
for
the
time
being
to
some
particular
use
or
purpose
of
the
general
government.”As
its
title
remains
with
the
Republic,
the
reserved
land
is
clearly
covered
by
the
tax
exemption
provision.
54
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Land
still
not
subject
to
real
estate
taxation
under
Sec
11
of
Public
Land
Act:
-‐Taxable
land
is
limited
only
to
public
lands
that
have
undergone
these
modes
of
disposition:
Homestead,
concession
and
contract
-‐Not
concession
because
it
entails
alienation
of
land,
in
this
case,
land
is
still
absolutely
owned
by
the
government.
As
to
warehouse
constructed
on
a
public
reservation,
a
different
rule
should
apply
because
"[t]he
exemption
of
public
property
from
taxation
does
not
extend
to
improvements
on
the
public
lands
made
by
pre-‐emptioners,
homesteaders
and
other
claimants,
or
occupants,
at
their
own
expense,
and
these
are
taxable
by
the
state
.
.
."
Only
six
years
of
refund
because
tax
refund
is
in
the
nature
of
solution
indebiti
which
has
a
prescriptive
period
of
only
six
years.
Prov.
of
Tarlac
vs.
Judge
Alcantara
(1992)
FACTS:
•
Tarlac
Enterprise,
Inc.
is
the
owner
of
the
following
properties:
a.
A
piece
of
land
located
at
Mabini,
Tarlac,
Tarlac,
b.
Ice
Drop
factory
located
at
Mabini,
Taarlac,
Tarlac,
c.
A
machinery
shed
located
at
Mabini,
Tarlac,
Tarlac,
d.
A
machinery
of
Deisel
Electric
Sets—Make
MAN
Cylinders
Type
C.U.
4160
Sno.
40556;
226P
H.P.
Generator;
Fated
KRUPP
4265;
AC
Generator
5528042;
ER
MORCEL
816826,
and
Worthington
2901.
•
The
Provincial
Treasurer
found
that
real
estate
taxes
for
the
years
1974
until
1992
in
the
amount
of
P532,435.55
including
penalties
have
not
been
paid
for
the
aforementioned
properties.
The
company
refused
to
pay
after
repeated
demands
so
after
the
last
demand
in
writing
made
on
December
3,
1982,
by
the
Provincial
Treasurer,
Jose
M.
Meru,
he
filed
a
complaint
for
the
payment
of
the
realty
taxes
amounting
to
the
aforementioned
sum
plus
damages.
•
The
company
filed
a
motion
to
dismiss.
But
the
lower
court
denied
the
motion.
Thereafter,
the
Province
of
Tarlac
set
the
auction
sale
of
Tarlac
Enterprises'
properties
to
satisfy
the
real
estate
taxes
due.
This
prompted
Tarlac
Enterprises
to
file
a
motion
praying
that
the
Province
be
directed
to
desist
from
proceeding
with
the
public
auction
sale.
The
lower
court
issued
an
order
granting
said
motion
to
prevent
mootness
of
the
case
considering
that
the
properties
to
be
sold
are
the
subjects
of
the
complaint.
•
The
company
then
filed
an
answer
saying
that
under
Section
40(g)
of
PD46
in
relation
to
PD
551,
it
was
exempt
from
paying
said
tax.
The
court
rendered
the
decision
dismissing
the
complaint.
It
ruled
that
P.D.
No.
551
expressly
exempts
Tarlac
Enterprises
from
paying
the
real
property
taxes
demanded,
it
being
a
grantee
of
a
franchise
to
generate,
distribute
and
sell
electric
current
for
light.
The
court
held
that
in
lieu
of
said
taxes,
Tarlac
Enterprises
had
been
required
to
pay
2%
franchise
tax
in
line
with
the
intent
of
the
law
to
give
assistance
to
operators
such
as
the
Tarlac
Enterprises
to
enable
the
consumers
to
enjoy
cheaper
rates.
Citing
the
case
of
Butuan
Sawmill,
Inc.
v.
City
of
Butuan,
the
court
ruled
that
local
governments
are
without
power
to
tax
the
electric
companies
already
subject
to
franchise
tax
unless
their
franchise
allows
the
imposition
of
additional
tax.
•
Hence,
the
present
recourse.
Petitioner
contends
that
respondent
judge
erred
in:
(a)
holding
that
private
respondent
is
exempt
from
the
payment
of
realty
tax
under
P.D.
No.
551,
as
amended;
(b)
ruling
under
the
authority
of
Butuan
Sawmill,
Inc
v.
Butuan
City,
that
it
is
without
power
to
impose
said
realty
tax
on
private
respondent,
and
(c)
dismissing
the
complaint
and
denying
its
motion
for
reconsideration
of
its
decision.
ISSUE:
WON
Tarlac
Enterprises,
Inc.
is
exempt
from
the
payment
of
real
property
tax
under
Sec.
40
(g)
of
P.D.
No.
464
in
relation
to
P.D.
No.
551,
as
amended.
RULING:
No
RATIO:
•
Sec.
40(g)
of
P.D.
No.
464,
the
Real
Property
Tax
Code,
provides
that
real
property
a:
SEC.
40.
Exemptions
from
Real
Property
Tax.
-‐
The
exemption
shall
be
as
follows:
(g)
Real
property
exempt
under
other
laws.
•
Tarlac
Enterprises
contends
that
the
"other
laws"
referred
to
in
this
Section
is
P.D.
No.
551
(Lowering
the
55
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Cost
to
Consumers
of
Electricity
by
Reducing
the
Franchise
Tax
Payable
by
Electric
Franchise
Holders
and
the
Tariff
on
Fuel
Oils
for
the
Generation
of
Electric
Power
by
Public
Utilities).
Its
pertinent
provisions
state:
SECTION
1.
Any
provision
of
law
or
local
ordinance
to
the
contrary
notwithstanding,
the
franchise
tax
payable
by
all
grantees
of
franchises
to
generate,
distribute
and
sell
electric
current
for
light,
heat
and
power
shall
be
two
(2%)
of
their
gross
receipts
received
from
the
sale
of
electric
current
and
from
transactions
incident
to
the
generation,
distribution
•
SC
held
that
the
phrase
"in
lieu
of
all
taxes
and
assessments
of
whatever
nature"
in
the
second
paragraph
of
Sec.
1
of
P.D.
No.
551
does
not
expressly
exempts
Tarlac
Enterprises
from
paying
real
property
taxes.
As
correctly
observed
by
the
Province,
said
proviso
is
modified
and
delimited
by
the
phrase
"on
earnings,
receipts.
income
and
privilege
of
generation,
distribution
and
sale"
which
specifies
the
kinds
of
taxes
and
assessments
which
shall
not
be
collected
in
view
of
the
imposition
of
the
franchise
tax.
Said
enumerated
items
upon
which
taxes
shall
not
be
imposed,
have
no
relation
at
all
to,
and
are
entirely
different
from
real
properties
subject
to
tax.
•
SC
also
held
that
if
the
intention
of
the
law
is
to
exempt
electric
franchise
grantees
from
paying
real
property
tax
and
to
make
the
2%
franchise
tax
the
only
imposable
tax,
then
said
enumerated
items
would
not
have
been
added
when
PD
852
was
enacted
to
amend
P.D.
No.
551.
The
legislative
authority
would
have
simply
stopped
after
the
phrase
"national
or
local
authority"
by
putting
therein
a
period.
On
the
contrary,
it
went
on
to
enumerate
what
should
not
be
subject
to
tax
thereby
delimiting
the
extent
of
the
exemption.
•
SC
also
do
not
find
merit
in
Tarlac
Enterprises’
contention
that
the
real
properties
being
taxed,
viz.,
the
machinery
for
the
generation
and
distribution
of
electric
power,
the
building
housing
said
machinery,
and
the
land
on
which
said
building
is
constructed,
are
necessary
for
the
operation
of
its
business
of
generation,
distribution
and
sale
of
electric
current
and,
therefore,
they
should
be
exempted
from
taxation.
Tarlac
Enteprises
apparently
does
not
quite
comprehend
the
distinction
among
the
subject
matters
or
objects
of
the
taxes
involved.
It
bears
emphasis
that
P.D.
No.
551
as
amended
by
P.D.
No.
852
deals
with
franchise
tax
and
tariff
on
fuel
oils
and
the
"earnings,
receipts,
income
and
privilege
of
generation,
distribution
and
sale
of
electric
current"
are
the
items
exempted
from
taxation
by
the
imposition
of
said
tax
or
tariff
duty.
On
the
other
hand,
the
collection
complaint
filed
by
petitioner
specified
only
taxes
due
on
real
properties.
While
P.D.
No.
551
was
intended
to
give
"assistance
to
the
franchise
holders
by
reducing
some
of
their
tax
and
tariff
obligations,"
to
construe
said
decree
as
having
granted
such
franchise
holders
exemption
from
payment
of
real
property
tax
would
unduly
extend
the
ambit
of
exemptions
beyond
the
purview
of
the
law.
•
The
annexes
attached
to
Tarlac
Enterprises's
comment
on
the
petition
to
prove
by
contemporaneous
interpretation
its
claimed
tax
exemption
are
not
of
much
help
to
it.
Department
Order
No.
35-‐74
dated
September
16,
1974
11
regulating
the
implementation
of
P.D.
No.
551
merely
reiterates
the
"in
lieu
of
all
taxes"
proviso.
Local
Tax
Regulations
No.
3-‐75
12
issued
by
then
Secretary
of
Finance
Cesar
Virata
and
addressed
to
all
Provincial
and
City
Treasurers
enjoins
strict
compliance
with
the
directive
that
"the
franchise
tax
imposed
under
Local
Tax
Ordinances
pursuant
to
Section
19
of
the
Local
Tax
Code,
as
amended,
shall
be
collected
from
business
holding
franchises
but
not
from
establishments
whose
franchise
contains
the
in
lieu
of
all
taxes'
proviso,"
thereby
clearly
indicating
that
said
proviso
exempts
taxpayers
like
private
respondent
from
paying
the
franchise
tax
collected
by
the
provinces
under
the
Local
Tax
Code.
Lastly,
the
letter
13
of
the
then
Bureau
of
Internal
Revenue
Acting
Commissioner
addressed
to
the
Matic
Law
Office
granting
exemption
to
the
latter's
client
from
paying
the
"privilege
(fixed)
tax
which
is
an
excise
tax
on
the
privilege
of
engaging
in
business"
clearly
excludes
realty
tax
from
such
exemption.
•
SC
also
found
the
lower
court’s
reliance
on
Butuan
Sawmill.
Inc.
v.
City
of
Butuan
as
misplaced.
In
that
case,
the
questioned
tax
is
a
tax
on
the
gross
sales
or
receipts
of
said
sawmill
while
the
tax
involved
herein
is
a
real
property
tax.
The
City
of
Butuan
is
categorically
prohibited
therein
by
Sec.
2(j)
of
the
Local
Autonomy
Act
from
imposing
"taxes
of
any
kind
.
.
.
on
person
paying
franchise
tax."
On
the
other
hand,
P.D.
No.
551
is
not
as
all-‐
encompassing
as
said
provision
of
the
Local
Autonomy
Act
for
it
enumerates
the
items
which
are
not
taxable
by
virtue
of
the
payment
of
franchise
tax.
•
It
has
always
been
the
rule
that
"exemptions
from
taxation
are
construed
in
strictissimi
juris
against
the
taxpayer
and
liberally
in
favor
of
the
taxing
authority"
primarily
because
"taxes
are
the
lifeblood
of
government
and
their
prompt
and
certain
availability
is
an
imperious
need."
Thus,
to
be
exempted
from
payment
of
taxes,
it
is
the
taxpayer's
duty
to
justify
the
exemption
"by
words
too
plain
to
be
mistaken
and
too
categorical
to
be
misinterpreted.;
Private
respondent
has
utterly
failed
to
discharge
this
duty.
•
Decision
reversed
and
remanded
to
the
lower
court
for
computation
of
the
real
property
taxes.
56
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
57
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
2. Consultations
with
the
presiding
officers
of
the
Senate
and
the
House
of
Representatives
and
the
presidents
of
the
various
local
leagues
3. Corresponding
recommendation
of
the
secretaries
of
DOF,
DILG
and
DBM
4. Any
adjustment
in
the
allotment
shall
in
no
case
be
less
than
30%
of
the
collection
of
national
internal
revenue
taxes
of
the
third
fiscal
year
preceding
the
current
one
Court:
• Respondents
failed
to
comply
with
these
requisites
before
the
issuance
and
implantation
of
AO
372.
• On
the
first
issue,
Section
1
is
merely
advisory
in
character
and
does
not
constitute
a
mandatory
order
that
interferes
with
the
local
autonomy.
It
is
merely
an
advisory
to
prevail
upon
LCEs
to
recognize
the
need
for
fiscal
restraint
in
a
period
of
economic
difficulty.
• On
the
second
issue,
basic
feature
of
local
fiscal
autonomy
is
the
automatic
release
of
the
shares
of
LGUs
in
the
national
internal
revenue(Consti,
Article
X,
Sec.
6).
LGC,
Section
286
specifies
that
the
release
shall
be
made
directly
to
the
LGU
concerned
within
5
days
after
every
quarter
of
the
year
and
shall
not
be
subject
to
any
lien
or
holdback
that
may
be
imposed
by
the
national
government
for
whatever
purpose.
This
withholding,
although
temporary,
contravenes
the
Constitution
and
the
law
since
it
is
tantamount
to
a
holdback
and
any
retention
is
prohibited.
Discussion:
Scope
of
the
President’s
power
of
general
supervision
over
LGUs
Constitution,
Article
X,
Section
4:
“The
President
of
the
Philippines
shall
exercise
general
supervision
over
local
governments.”
Supervision Control
Overseeing
or
the
power
or
the
power
or
Power
of
an
officer
to
authority
of
any
officer
to
see
that
subordinate
officers
perform
their
duties.
- Alter
- Modify
If
they
fail,
the
former
may
take
such
- Nullify
action
or
step
prescribed
by
law
to
make
- Set
aside
them
perform
their
duties
What
a
subordinate
has
done
in
the
performance
of
his
duties
and
to
substitute
the
judgment
of
the
former
for
the
latter
Supervising
officials
merely
see
to
it
that
Officers
in
control
lay
down
the
rules
in
the
the
rules
are
followed,
but
they
performance
or
accomplishment
of
an
act.
themselves
do
not
lay
down
such
rules,
nor
If
these
rules
are
not
followed,
they
may
do
they
have
the
discretion
to
modify
or
order
the
act
undone
or
redone
by
their
replace
them.
subordinates.
Heads
of
political
subdivisions
are
elected
Members
of
the
Cabinet
and
other
by
the
people
and
their
sovereign
powers
executive
officials
are
alter
egos
of
the
emanate
from
the
electorate.
They
are
President
and
they
are
subject
to
his
subject
to
the
President’s
supervision
only,
power
of
control
not
control,
as
long
as
their
acts
are
exercised
within
the
sphere
of
their
58
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
legitimate
powers.
• Local
autonomy
signified
a
more
responsive
and
accountable
local
government
structure
instituted
through
a
system
of
decentralization.
• Decentralization
–
devolution
of
national
administration,
not
power,
to
local
governments.
Local
officials
remain
accountable
to
the
central
government
as
the
law
may
provide.
Note:
In
the
Philippines,
only
administrative
powers
over
local
affairs
are
delegated
to
political
subdivisions
to
make
governance
more
directly
responsive
and
effective
at
the
local
levels.
59
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
property
and
may
be
summarily
abated
under
the
undefined
law
of
necessity.
.
Whether
or
not
a
structure
is
nuisance
per
se
can
only
be
adjudged
by
judicial
determination.
In
this
case
the
court
held
that,
•
The
storage
of
copra
in
the
quonset
building
is
a
legitimate
business.
By
its
nature,
it
can
not
be
said
to
be
injurious
to
rights
of
property,
of
health
or
of
comfort
of
the
community.
•
Tan
was
in
lawful
possession
by
virtue
of
the
permit
from
PPA
and
was
not
squatting
on
public
land
•
It
was
not
of
trifling
value
•
Tan
was
entitled
to
an
impartial
hearing
to
decide
if
it
be
a
nuisance
per
se
or
per
accidens
•
There
was
no
compelling
necessity
for
the
summary
abatement
2.
To
construe
Sec
16
of
Ordinance
47
as
authorizing
the
summary
removal
of
non
conforming
structures,
such
as
the
quonset
which
was
built
outside
the
zone
for
warehouses,
would
be
null
and
void
for
violating
the
requirements
of
due
process.
3.
The
Ordinance
provides
for
a
judicial
remedy
in
the
enforcement
of
the
said
provision.
The
Zoning
Administrator
may
call
upon
the
fiscal
to
institute
the
proper
legal
proceedings.
From
this,
it
is
clear
that
the
mayor
cannot
order
the
removal
of
the
structure
without
judicial
process.
4.
The
violation
of
the
ordinance
does
not
empower
the
mayor
to
avail
of
extra-‐judicial
remedies.
On
the
contrary,
the
Local
Government
Code
also
imposes
the
duty
upon
him
to
cause
to
be
institutes
judicial
proceedings
in
connection
of
ordinances.
The
Mayor
and
his
officials
transcended
their
authority.
SC
reinstated
the
case
to
determine
just
compensation.
Technology
Developers,
Inc
v.
CA
(1991)
FACTS:
Technology
Developers
(a
corporation
engaged
in
the
manufacture
and
export
of
charcoal
briquette),
received
a
letter
from
acting
mayor
Pablo
Cruz:
1)
ordering
the
full
cessation
of
its
plant
in
Guyong,
Sta.
Maria,
Bulacan
until
further
order,
and
2)
requesting
its
Plant
Manager
to
bring
before
the
office
of
the
mayor
its
building
permit,
mayor's
permit,
and
Region
III-‐Pollution
of
Environment
and
Natural
Resources
Anti-‐Pollution
Permit.
Technology
Developers
undertook
to
comply
with
the
request
to
produce
the
required
documents.
It
sought
to
secure
the
Region
III-‐Pollution
of
Environment
and
Natural
Resources
Anti-‐Pollution
Permit
(note:
prior
to
the
operation
of
the
plant,
a
Temporary
Permit
to
Operate
Air
Pollution
Installation
was
issued
to
Technology
Developers)
and
the
mayor's
permit,
but
as
to
the
latter,
the
office
of
the
mayor
did
not
entertain
it.
Eventually,
the
acting
mayor
ordered
that
the
plant
premises
be
padlocked,
effectively
causing
the
stoppage
of
operation.
This
was
done
without
previous
and
reasonable
notice.
Technology
Developers
then
instituted
an
action
for
certiorari,
prohibition
and
mandamus
with
preliminary
injunction
against
the
acting
mayor
with
Bulacan
RTC,
alleging
that
the
closure
order
was
issued
in
grave
abuse
of
discretion.
The
RTC
found
that
the
issuance
of
the
writ
of
preliminary
mandatory
injunction
was
proper,
ordering
the
acting
mayor
to
immediately
revoke
his
closure
order
and
allow
Technology
Developers
to
resume
its
normal
business
operations
until
the
case
has
been
adjudicated
on
the
merits.
Upon
MR,
the
Provincial
Prosecutor
presented
evidence
as
to
the
allegation
that
"Due
to
the
manufacturing
process
and
nature
of
raw
materials
used,
the
fumes
coming
from
the
factory
may
contain
particulate
matters
which
are
hazardous
to
the
health
of
the
people.
As
such,
the
company
should
cease
operating
until
such
a
time
that
the
proper
air
pollution
device
is
installed
and
operational."
Reassessing
the
evidence,
the
RTC
set
aside
its
order
granted
the
writ
of
preliminary
mandatory
injunction.
The
CA
denied
Technology
Developer's
petition
for
certiorari
for
lack
of
merit.
ISSUE:
W/N
the
acting
mayor
had
a
legal
ground
for
ordering
the
stoppage
of
Technology
Developer
60
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
HELD:
YES
1)
No
mayor's
permit
had
been
secured.
While
it
is
true
that
the
matter
of
determining
whether
there
is
a
pollution
of
the
environment
that
requires
control
if
not
prohibition
of
the
operation
of
a
business
is
essentially
addressed
to
the
t
the
Environmental
Management
Bureau
of
the
Department
of
Environment
and
Natural
Resources,
it
must
be
recognized
that
the
mayor
of
a
town
has
as
much
responsibility
to
protect
its
inhabitants
from
pollution,
and
by
virture
of
his
police
power,
he
may
deny
the
application
for
a
permit
to
operate
a
business
or
otherwise
close
the
same
unless
appropriate
measures
are
taken
to
control
and/or
avoid
injury
to
the
health
of
the
residents
of
the
community
from
the
emissions
in
the
operation
of
the
business.
2)
Note:
There
was
actually
factual
bases
for
the
action
of
the
acting
mayor.
a)
He
called
the
attention
of
Technology
Developers
to
the
fact
that
its
plant
was
emitting
fumes
whose
offensive
odor
"not
only
pollute
the
air
in
the
locality
but
also
affect
the
health
of
the
residents
in
the
area,"
so
that
petitioner
was
ordered
to
stop
its
operation
until
further
orders
and
compliance
with
the
documentary
requirements.
b)
There
had
been
complaints
from
the
residents
of
the
area
directing
to
the
Provincial
Governor.
The
four-‐page
petition,
on
the
whole,
was
signed
by
different
persons.
c)
The
Closure
Order
was
issued
only
after
an
investigation
was
made
by
Marivic
Guina,
which
found
that
the
fumes
emitted
by
the
plant
goes
directly
to
the
surrounding
houses
and
that
no
proper
air
pollution
device
has
been
installed.
d)
Technology
Developers
did
not
even
have
a
building
permit
from
the
municipality
of
Sta.
Maria.
e)
The
Temporary
permit
given
to
Technology
Developers
was
good
only
up
to
May
1988.
Thereafter,
Technology
Developers
did
not
even
exert
the
effort
to
extend
or
validate
its
permit,
much
less
install
any
device
to
control
and
prevent
any
hazard
to
the
health
of
the
residents
of
the
community.
Last
note:
concomitant
with
the
need
to
promote
investment
and
contribute
to
the
growth
of
the
economy
is
the
equally
essential
imperative
of
protecting
the
health,
nay
the
very
lives
of
the
people,
from
the
deleterious
effect
of
the
pollution
of
the
environment.
Petition
Denied
Laguna
Lake
Development
Authority
vs.
CA,
251
SCRA
421
(1995)
FACTS:
•
RA
4850
was
enacted
creating
the
"Laguna
Lake
Development
Authority."
This
agency
was
supposed
to
accelerate
the
development
and
balanced
growth
of
the
Laguna
Lake
area
and
the
surrounding
provinces,
cities
and
towns,
in
the
act,
within
the
context
of
the
national
and
regional
plans
and
policies
for
social
and
economic
development.
•
PD
813
amended
certain
sections
RA
4850
because
of
the
concern
for
the
rapid
expansion
of
Metropolitan
Manila,
the
suburbs
and
the
lakeshore
towns
of
Laguna
de
Bay,
combined
with
current
and
prospective
uses
of
the
lake
for
municipal-‐industrial
water
supply,
irrigation,
fisheries,
and
the
like.
•
To
effectively
perform
the
role
of
the
Authority
under
RA
4850,
the
Chief
Executive
issued
EO
927
further
defined
and
enlarged
the
functions
and
powers
of
the
Authority
and
named
and
enumerated
the
towns,
cities
and
provinces
encompassed
by
the
term
"Laguna
de
Bay
Region".
Also,
pertinent
to
the
issues
in
this
case
are
the
following
provisions
of
EO
927
which
include
in
particular
the
sharing
of
fees:
•
Sec
2:
xxx
the
Authority
shall
have
exclusive
jurisdiction
to
issue
permit
for
the
use
of
all
surface
water
for
any
projects
or
activities
in
or
affecting
the
said
region
including
navigation,
construction,
and
operation
of
fishpens,
fish
enclosures,
fish
corrals
and
the
like.
•
Then
came
Republic
Act
No.
7160.
The
municipalities
in
the
Laguna
Lake
Region
interpreted
the
provisions
of
this
law
to
mean
that
the
newly
passed
law
gave
municipal
governments
the
exclusive
jurisdiction
to
issue
fishing
privileges
within
their
municipal
waters
because
R.A.
7160
provides:
"Sec.
149.
Fishery
Rentals;
Fees
and
Charges
(a)
Municipalities
shall
have
the
exclusive
authority
to
grant
fishery
privileges
in
the
municipal
waters
and
impose
rental
fees
or
charges
therefor
in
accordance
with
the
provisions
of
this
Section.
•
Municipal
governments
thereupon
assumed
the
authority
to
issue
fishing
privileges
and
fishpen
permits.
Big
fishpen
operators
took
advantage
of
the
occasion
to
establish
fishpens
and
fishcages
to
the
consternation
of
the
Authority.
Unregulated
fishpens
and
fishcages
occupied
almost
one-‐third
the
entire
lake
water
surface
area,
increasing
the
occupation
drastically
from
7,000
ha
in
1990
to
almost
21,000
ha
in
1995.
The
Mayor's
permit
to
construct
fishpens
and
fishcages
were
all
undertaken
in
violation
of
the
policies
adopted
by
the
Authority
on
fishpen
zoning
and
the
Laguna
Lake
carrying
capacity.
61
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
•
In
view
of
the
foregoing
circumstances,
the
Authority
served
notice
to
the
general
public
that:
“
1.
All
fishpens,
fishcages
and
other
aqua-‐culture
structures
in
the
Laguna
de
Bay
Region,
which
were
not
registered
or
to
which
no
application
for
registration
and/or
permit
has
been
filed
with
Laguna
Lake
Development
Authority
as
of
March
31,
1993
are
hereby
declared
outrightly
as
illegal.
2.
All
fishpens;
fishcages
and
other
aqua-‐culture
structures
so
declared
as
illegal
shall
be
subject
to
demolition
which
shall
be
undertaken
by
the
Presidential
Task
Force
for
illegal
Fishpen
and
Illegal
Fishing.
3.
Owners
of
fishpens,
fishcages
and
other
aqua-‐culture
structures
declared
as
illegal
shall,
without
prejudice
to
demolition
of
their
structures
be
criminally
charged
in
accordance
with
Section
39-‐A
of
Republic
Act
4850
as
amended
by
P.D.
813
for
violation
of
the
same
laws.
Violations
of
these
laws
carries
a
penalty
of
imprisonment
of
not
exceeding
3
years
or
a
fine
not
exceeding
Five
Thousand
Pesos
or
both
at
the
discretion
of
the
court.
•
All
operators
of
fishpens,
fishcages
and
other
aqua-‐culture
structures
declared
as
illegal
in
accordance
with
the
foregoing
Notice
shall
have
one
(1)
month
on
or
before
27
October
1993
to
show
cause
before
the
LLDA
why
their
said
fishpens,
fishcages
and
other
aqua-‐culture
structures
should
not
be
demolished/dismantled."
•
One
month,
thereafter,
the
Authority
sent
notices
to
the
concerned
owners
of
the
illegally
constructed
fishpens,
fishcages
and
other
aqua-‐culture
structures
advising
them
to
dismantle
their
respective
structures
within
10
days
from
receipt
thereof,
otherwise,
demolition
shall
be
effected.
•
The
fishpen
owners
filed
injunction
cases
against
the
LLDA.
•
The
LLDA
filed
motions
to
dismiss
the
cases
against
it
on
jurisdictional
grounds.
•
The
motions
to
dismiss
were
denied.
Meanwhile,
TRO/writs
of
preliminary
mandatory
injunction
were
issued
enjoining
the
LLDA
from
demolishing
the
fishpens
and
similar
structures
in
question.
Hence,
the
present
petition
for
certiorari,
prohibition
and
injunction.
The
CA
dismissed
the
LLDA’s
consolidated
petitions.
It
ruled
that
(A)
LLDA
is
not
among
those
quasi-‐judicial
agencies
of
government
appealable
only
to
the
Court
of
Appeals;
(B)
the
LLDA
charter
does
vest
LLDA
with
quasi-‐judicial
functions
insofar
as
fishpens
are
concerned;
(C)
the
provisions
of
the
LLDA
charter
insofar
as
fishing
privileges
in
Laguna
de
Bay
are
concerned
had
been
repealed
by
the
Local
Government
Code
of
1991;
(D)
in
view
of
the
aforesaid
repeal,
the
power
to
grant
permits
devolved
to
respective
local
government
units
concerned.
•
LLDA
filed
a
petition
for
certiorari
and
prohibition
in
the
SC
ISSUE:
Which
agency
of
the
Government
-‐
the
LLDA
or
the
towns
and
municipalities
comprising
the
region
-‐
should
exercise
jurisdiction
over
the
Laguna
Lake
and
its
environs
insofar
as
the
issuance
of
permits
for
fishery
privileges
is
concerned?
HELD:
LLDA
RATIO:
It
has
to
be
conceded
that
the
charter
of
the
LLDA
constitutes
a
special
law.
RA
7160
is
a
general
law.
It
is
basic
is
basic
in
statutory
construction
that
the
enactment
of
a
later
legislation
which
is
a
general
law
cannot
be
construed
to
have
repealed
a
special
law.
It
is
a
well-‐settled
rule
in
this
jurisdiction
that
"a
special
statute,
provided
for
a
particular
case
or
class
of
cases,
is
not
repealed
by
a
subsequent
statute,
general
in
its
terms,
provisions
and
application,
unless
the
intent
to
repeal
or
alter
is
manifest,
although
the
terms
of
the
general
law
are
broad
enough
to
include
the
cases
embraced
in
the
special
law."
Where
there
is
a
conflict
between
a
general
law
and
a
special
statute,
the
special
statute
should
prevail
since
it
evinces
the
legislative
intent
more
clearly
that
the
general
statute.
The
special
law
is
to
be
taken
as
an
exception
to
the
general
law
in
the
absence
of
special
circumstances
forcing
a
contrary
conclusion.
This
is
because
implied
repeals
are
not
favored
and
as
much
as
possible,
given
to
all
enactments
of
the
legislature.
A
special
law
cannot
be
repealed,
amended
or
altered
by
a
subsequent
general
law
by
mere
implication.
62
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Considering
the
reasons
behind
the
establishment
of
the
Authority,
which
are
enviromental
protection,
navigational
safety,
and
sustainable
development,
there
is
every
indication
that
the
legislative
intent
is
for
the
Authority
to
proceed
with
its
mission.
Thus,
the
SC
holds
that
Section
149
of
RA
7160,
otherwise
known
as
the
Local
Government
Code
of
1991,
has
not
repealed
the
provisions
of
the
charter
of
the
LLDA,
Republic
Act
No.
4850,
as
amended.
Thus,
the
Authority
has
the
exclusive
jurisdiction
to
issue
permits
for
the
enjoyment
of
fishery
privileges
in
Laguna
de
Bay
to
the
exclusion
of
municipalities
situated
therein
and
the
authority
to
exercise
such
powers
as
are
by
its
charter
vested
on
it.
64
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
FACTS:
•
Resolution
129
s.
1988
was
passed
by
the
Sangguniang
Panlalawigan
of
Cam
Sur
authorizing
the
Provincial
Governor
to
expropriate
private
property
contiguous
to
the
provincial
capitol
site
in
order
to
establish
a
pilot
farm
for
non-‐food
ad
non-‐traditional
agricultural
crops
and
a
housing
project
for
provincial
employees.
•
An
expropriation
petition
was
filed
by
the
Prov.
Of
Cam
Sur
(PCS)
against
private
owners
Ernesto
and
Efren
San
Joaquin.
The
RTC
ruled
in
favor
of
the
PCS:
o
It
denied
the
motion
to
dismiss
filed
by
the
San
Joaquins
o
Granted
the
motion
to
issue
writ
of
possession
and
authorized
the
CS
to
take
possession
with
the
condition
to
post
a
bond
•
When
it
was
elevated
to
the
CA,
it:
o
set
aside
the
order
of
the
trial
court
allowing
PCS
to
take
possession
of
the
private
properties
o
it
ordered
the
trial
court
to
suspend
the
expropriation
proceeding
until
PCS
shall
have
submitted
the
requisite
approval
of
the
Department
of
Agrarian
Reform
to
convert
the
reclassification.
o
The
ruling
of
the
CA
assumed
that
the
resolution
was
valid
and
that
the
expropriation
was
for
public
purpose.
•
PCS
assails
the
decision
of
the
CA
ISSUES:
1.
WON,
the
expropriation
was
for
a
public
purpose.
YES
2.
WON,
PCS
needs
the
approval
of
the
DAR.
NO
HELD:
Petition
is
GRANTED.
The
purpose
for
which
the
expropriation
is
made
pursuant
to
satisfies
the
constitutional
requirement
of
law
and
that
the
PCS
is
within
its
limited
delegated
power
to
expropriate
such
property
not
subject
to
the
approval
of
the
Department
of
Agriculture.
RATIO:
1.
The
establishment
of
a
lot
development
center
would
inure
to
the
direct
benefit
and
advantage
of
the
people
of
PCS.
Likewise
the
housing
project
satisfies
the
public
purpose
requirement
of
the
Constitution
citing:
Sumulong
v
Guerrero:
Housing
is
a
basic
human
need.
Shortage
in
housing
is
a
matter
of
state
concern
since
it
directly
and
significantly
affects
public
health
,
safety
and
environment
and
in
sum
the
general
welfare
of
the
people.
There
has
been
a
shift
from
the
literal
interpretation
of
public
purpose/use
for
which
the
power
of
eminent
domain
may
be
exercised.
Under
the
new
concept
it
means
public
advantage,
convenience
or
benefit
which
tends
to
contribute
to
the
general
welfare
of
the
community.
2.
The
power
of
expropriation
is
superior
to
the
power
to
distribute
lands
under
the
land
reform
program,
citing
Juancho
Ardana
v
Reyes.
The
CA
sided
with
the
Sol
Gen
who
in
effect
denigrated
the
power
to
expropriate
by
PCS
by
stressing
that
the
power
is
only
delegated.
Not
taking
into
consideration
that
such
limitation
was
not
clearly
expressed
in
law.
It
must
be
remembered
that
“statutes
conferring
power
of
eminent
domain
to
political
subdivisions
cannot
be
broadened
or
constricted
by
implication.”
Although
local
governments
do
not
have
inherent
power
of
eminent
domain
and
can
exercise
it
only
when
expressly
authorized
by
legislature,
and
the
latter
may
retain
certain
control
or
impose
certain
restraints
on
the
exercise
thereof,
such
delegated
power
although
limited
it
is
complete
within
its
limits.
Nothing
in
the
LGC
limits
this
power
by
requiring
the
approval
of
DAR.
Likewise,
there
is
nothing
in
CAR
law
which
expressly
subjects
such
expropriations
under
the
control
of
DAR.
65
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Barangay
San
Roque
vs.
Heirs
of
Pastor
(2000)
FACTS:
Petitioners
filed
before
the
MTC
of
Talisay
Cebu
a
Complaint
to
expropriate
the
property
of
respondents.
This
complaint
was
dismissed
by
the
MTC
for
lack
of
jurisdiction
over
the
subject
matter
of
the
complaint.
The
MTC
reasoned
that
in
an
action
for
eminent
domain
the
principal
cause
of
action
is
the
exercise
of
such
right
and
that
jurisdiction
lies
with
the
RTC.
The
RTC
subsequently
also
dismissed
the
complaint
saying
that
an
action
for
eminent
domain
involved
title
to
real
property.
Hence,
it
is
the
value
of
the
property
to
be
expropriated
that
would
determine
the
proper
court
where
the
case
should
be
filed.
(the
value
of
the
property
was
1,740php.)
The
petitioners
then
appealed
to
the
SC.
ISSUE:
Which
court
has
jurisdiction
over
cases
for
eminent
domain
or
expropriation
where
the
assessed
value
of
the
subject
property
is
below
20k?
HELD:
The
RTC
1.
An
expropriation
suit
is
one
that
is
incapable
of
pecuniary
estimation
(IPE).
2.
In
determining
whether
a
suit
is
one
that
is
IPE,
one
must
first
ascertain
the
nature
of
the
principal
action
or
the
remedy
sought.
If
it
is
primarily
for
the
recovery
of
a
sum
of
money,
the
claim
is
capable
of
pecuniary
estimation.
3.
But
if
it
is
not
for
recovery
of
the
sum
of
money
or
if
the
money
claim
is
purely
incidental,
the
suit
falls
within
exclusively
within
the
jurisdiction
of
the
courts
of
first
instance.
4.
An
expropriation
suit
does
not
involve
the
recovery
of
a
sum
of
money.
It
deals
with
the
exercise
by
the
government
of
its
authority
and
right
to
take
private
property
for
public
use.
5.
NPC
vs.
Jocson:
Expropriation
proceedings
have
two
phases:
a)
Concerned
with
the
determination
of
the
plaintiff
to
exercise
the
power
of
eminent
domain
and
the
propriety
of
its
exercise
b)
Concerned
with
the
issue
of
just
compensation
6.
The
primary
consideration
in
an
expropriation
suit
is
whether
the
government
has
complied
with
the
requirements
for
taking
of
private
property.
The
value
of
the
property
is
merely
incidental
to
the
expropriation
suit.
Mun.
of
Paranaque
vs.
V.M.
Realty
Corp
FACTS:
The
Sangguniang
Bayan
of
the
municipality
of
Parañaque
passed
Resolution
no.
93-‐95,
series
of
1993
authorizing
the
local
chief
executive
to
initiate
expropriation
proceedings
against
VM
Realty.
VM
realty
is
the
owner
of
two
parcels
of
land
sought
to
be
expropriated
by
the
municipality.
The
said
lots
were
to
be
used
for
the
municipality’s
socialized
housing
project
for
the
homeless.
The
RTC
gave
due
course
to
the
complaint
and
upon
motion,
allowed
the
municipality
to
enter
the
premises
after
payment
of
15%
of
the
fair
market
value
of
the
property.
VM
realty
filed
its
answer,
raising
the
following
affirmative
defenses:
1.
The
complaint
is
barred
by
res
judicata
(in
connection
with
an
earlier
resolution
which
led
to
the
offer
by
the
municipality
to
enter
into
a
negotiated
sale
with
VM
realty)
2.
The
complaint
failed
to
state
a
cause
of
action
because
the
authority
of
the
local
chief
executive
was
based
upon
a
resolution
and
not
an
ordinance.
The
position
of
the
municipality
is
that
a
resolution
and
an
ordinance
are
synonymous
for
the
purposes
of
66
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
initiating
an
expropriation
proceeding.
Moreover,
under
Article
36
of
Rule
VI
of
the
IRR
of
LGC,
what
is
required
is
a
resolution
and
not
an
ordinance.
The
RTC
dismissed
the
complaint
which
was
affirmed
by
the
CA.
Hence,
the
recourse
to
the
SC.
ISSUE:
WON
a
local
government
unit
may
exercise
the
power
of
eminent
domain
through
a
resolution.
HELD:
No.
Section
19
of
the
LGC
expressly
requires
that
an
ordinance
must
be
passed
authorizing
the
local
chief
executive
to
initiate
expropriation
proceedings.
RATIO:
The
power
of
eminent
domain
is
legislative
in
nature.
Congress
granted
LGUs
the
power
to
exercise
it,
subject
to
restraints
and
limitations.
Sec.19
of
the
LGC
lays
down
the
parameters
for
the
exercise
thereof.
Under
the
said
provision,
the
following
must
be
complied
with
before
expropriation
may
be
had:
1.
an
ordinance
is
enacted
by
the
local
legislative
council
2.
the
exercise
of
eminent
domain
is
for
the
public
use,
public
purpose
or
welfare
or
for
the
benefit
of
the
poor
and
the
landless
3.
just
compensation
must
be
paid
4.
there
must
have
been
a
previous
valid
and
definite
offer
made
to
the
owner
of
the
property
which
the
latter
denied
In
this
case,
the
first
requirement
was
not
complied
with.
A
resolution
is
different
from
an
ordinance.
An
ordinance
is
a
law
while
a
resolution
is
merely
a
declaration
of
the
LGU’s
sentiment
or
opinion
on
a
specific
matter.
The
municipality
cannot
rely
on
the
words
of
Article
36,
Rule
VI
of
the
IRR
because
it
cannot
contradict
the
law
that
it
seeks
to
implement.
Moreover,
the
use
of
the
word
“resolution”
in
the
said
IRR
appears
to
be
mere
oversight.
Nonetheless,
the
LGU
may
opt
to
comply
with
the
requirements
and
then
initiate
another
expropriation
proceeding.
RULING:
Petition
is
denied.
City
of
Cebu
vs.
CA
(1996)
FACTS:
Merlita
Cardeno
is
the
owner
of
a
parcel
of
land
in
Sitio
Sto.
Nino,
Alaska-‐Mambaling,
Cebu
City.
On
February
25,
1992,
the
City
Government
of
Cebu
filed
a
complaint
for
eminent
domain
against
Cardeno
with
the
RTC
seeking
to
expropriate
the
said
parcel
of
land.
The
complaint
was
initiated
pursuant
to
Resolution
No.
404
and
Ordinance
No.
1418
of
the
Sangguniang
Panlungsod
of
Cebu
City
authorizing
the
City
Mayor
to
expropriate
the
said
parcel
of
land
for
the
purpose
of
providing
a
socialized
housing
project
for
the
landless
and
low-‐income
city
residents.
Cardeno
filed
a
motion
to
dismiss
on
the
ground
of
lack
of
cause
of
action
for
failure
to
comply
with
condition
precedent
of
“a
valid
and
definite
offer”
set
forth
in
Section
19
of
RA
7160.
There
had
been
negotiations
for
the
purchase
of
the
property
without
resorting
to
expropriation,
but
said
negotiations
failed.
Cardeno
contended
by
definition,
"negotiations
run
the
whole
range
of
acts
preparatory
to
concluding
an
agreement,
from
the
preliminary
correspondence;
the
fixing
of
the
terms
of
the
agreement;
the
price;
the
mode
of
payment;
obligations
of
(sic)
the
parties
may
conceive
as
necessary
to
their
agreement."
Thus,
"negotiations"
by
itself
may
pertain
to
any
of
the
foregoing
and
does
not
automatically
mean
the
making
of
"a
valid
and
definite
offer."
The
RTC
dismissed
the
complaint.
The
CA
affirmed
the
ruling
of
the
RTC.
According
to
the
CA
an
allegation
of
repeated
negotiations
made
with
the
private
respondent
for
the
purchase
of
her
property
by
the
petitioner,
67
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
"cannot
by
any
stretch
of
imagination,
be
equated
or
likened
to
the
clear
and
specific
requirement
that
the
petitioner
should
have
previously
made
a
valid
and
definite
offer
to
purchase."
It
further
added
that
the
term
"negotiation"
which
necessarily
implies
uncertainty,
it
consisting
of
acts
the
purpose
of
which
is
to
arrive
at
a
conclusion,
may
not
be
perceived
to
mean
the
valid
and
definite
offer
contemplated
by
law.
ISSUE:
WON
expropriation
may
be
granted
RATIO:
The
Supreme
Court
ruled
that
the
complaint
state
a
cause
of
action.
The
Court
said
that
a
complaint
should
not
be
dismissed
upon
a
mere
ambiguity,
indefiniteness
or
uncertainty
of
the
cause
of
action
stated
therein
for
these
are
not
grounds
for
a
motion
to
dismiss
but
rather
for
a
bill
of
particulars.
In
other
words,
a
complaint
should
not
be
dismissed
for
insufficiency
unless
it
appears
clearly
from
the
face
of
the
complaint
that
the
plaintiff
is
not
entitled
to
any
relief
under
any
state
of
facts
which
could
be
proved
within
the
facts
alleged
therein.
The
error
of
both
the
RTC
and
respondent
Court
of
Appeals
in
holding
that
the
complaint
failed
to
state
a
cause
of
action
stems
from
their
inflexible
application
of
the
rule
that:
when
the
motion
to
dismiss
is
based
on
the
ground
that
the
complaint
states
no
cause
of
action,
no
evidence
may
be
allowed
and
the
issue
should
only
be
determined
in
the
light
of
the
allegations
of
the
complaint.
However,
this
rule
is
not
without
exceptions.
The
trial
court
may
consider,
in
addition
to
the
complaint,
other
pleadings
submitted
by
the
parties
in
deciding
whether
or
not
the
complaint
should
be
dismissed
for
lack
of
cause
of
action.
In
the
case
at
bar,
the
petitioner
also
incorporated
in
their
complaint
for
eminent
domain
a
copy
of
Ordinance
No.
1418.
A
perusal
of
the
copy
of
said
ordinance
which
has
been
annexed
to
the
complaint
shows
that
the
fact
of
petitioner's
having
made
a
previous
valid
and
definite
offer
to
private
respondent
is
categorically
stated
therein.
Thus,
the
second
whereas
clause
of
the
said
ordinance
provides
as
follows:
The
city
government
has
made
a
valid
and
definite
offer
to
purchase
subject
lot(s)
for
the
public
use
aforementioned
but
the
registered
owner
Mrs.
Merlita
Cardeno
has
rejected
such
offer.
The
foregoing
showed
that
the
petitioner
had
in
fact
complied
with
the
condition
precedent
of
"a
valid
and
definite
offer"
set
forth
in
Sec.
19
of
R.A.
7160.
Francia
vs.
Mun.
of
Meycauyan
(2008)
FACTS:
•
Respondent
municipality
filed
a
complaint
for
Expropriation
against
petitioners
in
the
RTC
of
Bulacan
•
It
planned
to
establish
a
common
public
terminal
for
all
types
of
PUVs
with
a
weighing
scale
for
heavy
trucks
•
The
property
is
a
16,256
sq.
m.
idle
land
at
the
junction
of
North
Expressway,
Malhacan-‐Iba-‐Camalig
main
road
artery,
and
the
MacArthur
Highway.
•
Petitioners:
o
Property
is
not
raw
land;
in
fact
it
is
developed
o
The
offered
price
of
the
municipality
is
too
low
(P111.99/sq.
m.
or
a
total
of
P2,333,500)
•
RTC:
Expropriation
was
for
a
public
purpose
o
The
common
terminal
for
all
PUVs
would
improve
the
flow
of
traffic
during
rush
hours
o
The
property
is
best
suited
because
of
its
accessibility
o
Grants
immediate
possession
to
municipality
since
deposited
15%
of
FMV
based
on
current
tax
declarations
•
CA:
Partial
grant
for
petitioners
o
Petitioners
were
deprived
of
opportunity
to
controvert
respondent’s
allegations
o
Order
of
expropriation
nullified,
but
not
the
Writ
of
Possession
68
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
o
WoP
→
must
be
given
upon
the
deposit
of
the
required
amount.
No
hearing
is
necessary.
•
Petitioners’
contentions
in
the
SC:
there
is
a
need
for
prior
determination
of
public
purpose
in
the
issuance
of
a
WoP
ISSUES/HELD:
1.
WON
prior
determination
of
public
purpose
is
needed
for
the
issuance
of
a
WoP?
No.
•
Sec.
19
of
RA
7160
states:
Section
19.
Eminent
Domain.
A
local
government
unit
may,
through
its
chief
executive
and
acting
pursuant
to
an
ordinance,
exercise
the
power
of
eminent
domain
for
public
use,
or
purpose,
or
welfare
for
the
benefit
of
the
poor
and
the
landless,
upon
payment
of
just
compensation,
pursuant
to
the
provisions
of
the
Constitution
and
pertinent
laws;
Provided,
however,
That
the
power
of
eminent
domain
may
not
be
exercised
unless
a
valid
and
definite
offer
has
been
previously
made
to
the
owner,
and
that
such
offer
was
not
accepted;
Provided,
further,
That
the
local
government
unit
may
immediately
take
possession
of
the
property
upon
the
filing
of
the
expropriation
proceedings
and
upon
making
a
deposit
with
the
proper
court
of
at
least
fifteen
percent
(15%)
of
the
fair
market
value
of
the
property
based
on
the
current
tax
declaration
of
the
property
to
be
expropriated;
Provided,
finally,
That,
the
amount
to
be
paid
for
the
expropriated
property
shall
be
determined
by
the
proper
court,
based
on
the
fair
market
value
at
the
time
of
the
taking
of
the
property.
(emphasis
supplied)
•
Requirements
for
an
LGU
for
it
to
enter
into
possession
of
a
property:
o
File
a
complaint
for
expropriation
sufficient
in
form
and
in
substance
o
Deposit
with
the
court
at
least
15%
of
the
property’s
FMV
based
on
its
current
tax
declaration
•
The
law
does
NOT
make
the
determination
of
a
public
purpose
a
condition
precedent
to
the
issuance
of
a
WoP
Heirs
of
Ardona
v.
Reyes
(1983)
FACTS:
The
Philippine
Tourism
Authority
filed
complaints
with
the
CFI
of
Cebu
City
to
expropriate
282
hectares
of
rolling
land
in
several
barangays
in
Cebu
for
the
development
into
“integrated
resort
complexes
of
selected
and
well-‐
defined
geographic
areas
with
potential
tourism
value.”
The
PTA
wants
to
construct
a
sports
complex,
club
house,
golf
course,
playground
and
picnic
areas
on
said
land.
Furthermore,
an
electric
power
grid
as
well
as
a
deep
well
and
drainage
system
will
also
be
constructed.
Complimentary
sport
facilities
such
as
malls,
coffee
shops,
etc.
will
be
created
in
the
said
area.
The
defendants
argue
that
the
taking
is
(1)
not
impressed
with
“public
use”
contemplated
under
the
Constitution;
(2)
that
the
land
was
covered
by
the
land
reform
program
and
that
jurisdiction
of
the
case
should
be
with
the
Court
of
Agrarian
Relations
and
not
with
the
CFI;
and
(3)
that
the
expropriation
would
impair
the
obligation
of
contracts.
The
PTA
deposited
with
the
PNB
an
amount
equivalent
to
10%
of
the
value
of
the
properties
pursuant
to
PD
1533.
Thereafter,
the
CFI
issued
separate
orders
authorizing
PTA
to
take
immediate
possession
of
the
premises
and
directing
the
issuance
of
writs
of
possession.
Hence,
this
appeal.
ISSUE:
WON
there
is
compliance
with
the
“public
use”
requirement
under
the
Constitution
HELD/RATIO:
YES.
The
concept
of
public
use
is
not
limited
to
traditional
purposes
such
as
the
construction
of
roads,
waterworks,
schools,
markets,
etc.
The
idea
that
public
use
is
strictly
limited
to
clear
cases
of
“use
by
the
public”
has
long
been
discarded.
According
to
CJ
Fernando
in
his
book
entitled
The
Constitution
of
the
Philippines
stated
that
the
statutory
and
judicial
trend
is
that
as
long
as
the
purpose
of
the
taking
is
public,
then
the
power
of
eminent
69
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
domain
comes
into
play.
The
petitioners
argue
that
tourism
is
not
a
species
of
public
use
because
it
is
not
found
in
the
Constitution.
The
Court
held
that
the
policy
objectives
of
the
framers
can
be
expressed
only
in
general
terms
such
as
social
justice,
local
autonomy,
conservation
and
development
of
the
national
patrimony,
public
interest,
and
general
welfare,
among
others.
The
programs
to
achieve
these
objectives
vary
from
time
to
time
and
according
to
place.
To
freeze
specific
programs
like
Tourism
into
express
constitutional
provisions
would
make
the
Constitution
more
prolix
than
a
bulky
code
and
require
of
the
framers
prescience
beyond
Delphic
proportions.
The
particular
mention
in
the
Constitution
of
agrarian
reform
and
the
transfer
of
utilities
and
other
private
enterprises
to
public
ownership
merely
underscores
the
magnitude
of
the
problems
sought
to
be
remedied
by
these
programs.
They
do
not
preclude
nor
limit
the
exercise
of
the
power
of
eminent
domain
for
such
purposes
like
tourism
and
other
development
programs.
The
petitioners'
contention
that
the
promotion
of
tourism
is
not
"public
use"
because
private
concessioners
would
be
allowed
to
maintain
various
facilities
such
as
restaurants,
hotels,
stores,
etc.
inside
the
tourist
complex
is
impressed
with
even
less
merit.
Private
bus
firms,
taxicab
fleets,
roadside
restaurants,
and
other
private
businesses
using
public
streets
end
highways
do
not
diminish
in
the
least
bit
the
public
character
of
expropriations
for
roads
and
streets.
Moreover,
the
Court
also
said
that
the
petitioners
have
failed
to
overcome
the
deference
that
is
appropriately
accorded
to
formulations
of
national
policy
expressed
in
legislation.
The
US
case
of
Berman
v.
Parker
of
deference
to
legislative
policy
even
if
such
policy
might
mean
taking
from
one
private
person
and
conferring
on
another
private
person
is
also
applicable
in
the
Philippines.
The
case
mentioned
that
“the
public
end
may
be
as
well
or
better
served
through
an
agency
of
private
enterprise
than
through
a
department
of
government-‐or
so
the
Congress
might
conclude.
We
cannot
say
that
public
ownership
is
the
sole
method
of
promoting
the
public
purposes
of
community
redevelopment
projects.”
Moreover,
Philippine
cases
such
as
Visayan
Refining
Co.
vs.
Camus
shows
that
from
the
very
start
of
constitutional
government
in
our
country
judicial
deference
to
legislative
policy
has
been
clear
and
manifest
in
eminent
domain
proceedings.
The
expression
of
national
policy
are
found
in
PD
564
or
the
revised
PTA
Charter
wherein
it
was
said
that
it
is
the
avowed
aim
of
the
Philippine
government
to
promote
tourism
and
work
for
its
accelerated
and
balanced
growth.
Section
1
of
the
revised
PTA
Charter
further
states
that
it
is
the
policy
of
the
State
to
“promote,
encourage,
and
develop
Philippine
tourism
as
an
instrument
in
accelerating
the
development
of
the
country,
of
strengthening
the
country's
foreign
exchange
reserve
position,
and
of
protecting
Philippine
culture,
history,
traditions
and
natural
beauty,
internationally
as
well
as
domestically.”
Lastly,
the
power
of
eminent
domain
is
expressly
provided
under
Section
5
B(2)
of
the
Charter
to
achieve
the
aforementioned
State
policy.
Filstream
International
Inc.
vs.
CA(1998)
FACTS:
Filstream
International
is
the
registered
owner
of
adjacent
lots
in
Tondo,Manila
with
a
total
area
of
3,571
square
meters.
An
ejectment
suit
was
filed
by
Filstream
in
7
January
1993
against
private
respondents/residents
on
the
grounds
of
termination
of
the
lease
contract
and
non-‐payment
of
rentals.
MTC,
RTC
and
CA
ruled
in
favor
of
Filstream,
ordering
private
respondents
to
vacate
the
lots.
The
decision
became
final
and
executory
as
no
further
action
was
taken
beyond
the
CA.
The
MTC
subsequently
issued
a
writ
of
execution
as
well
as
a
Notice
to
Vacate,
both
of
which
were
assailed
by
the
private
respondents
alleging
that
supervening
events
had
taken
place.
Alleged
supervening
events:
•
City
of
Manila
approved
Ordinance
no.
7813
authorizing
Mayor
Lim
to
initiate
the
acquisition
by
legal
means
of
certain
parcels
of
land
including
a
large
part
of
the
land
owned
by
Filstream.
70
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
•
City
of
Manila
approved
Ordinance
no.
7855
declaring
the
expropriation
of
certain
lots
owned
by
Enrique
Gutierrez,
Filstream’s
predecessor-‐in-‐interest.
The
lots
were
to
be
sold
and
distributed
to
qualified
tenants.
•
City
of
Manila
filed
a
complaint
for
eminent
domain
on
23
May
1994
(roughly
3
months
prior
to
CA
decision)
seeking
to
expropriate
Filstream’s
lots.
A
writ
of
possession
was
subsequently
issued
by
the
RTC
in
favor
of
the
City
of
Manila.
Filstream’s
motion
to
dismiss
and
its
motion
to
quash
the
writ
of
possession
were
denied
by
the
RTC
in
30
September
1994.
With
its
motion
for
reconsideration
denied
in
the
RTC,
Filstream
filed
a
petition
for
certiorari
with
the
CA
which
was
also
dismissed
for
being
insufficient
in
form
and
substance.
Filstream
thus
filed
a
(1st
petition)
petition
for
certiorari
under
Rule
45
with
the
SC.
MTC
denied
the
motion
to
quash
writ
of
execution
filed
by
the
private
respondents
in
the
first
case,
and,
in
22
April
1996,
issued
an
order
commanding
the
demolition
of
the
structure
erected
on
the
disputed
lots.
The
demolition,
however,
was
averted
when
the
RTC
issued
a
TRO
enjoining
the
execution
of
the
writ
issued
by
the
MTC
in
response
to
a
petition
for
certiorari
and
prohibition
filed
by
the
private
respondents.
A
latter
petition
for
certiorari
and
prohibition
filed
in
the
RTC
by
the
City
of
Manila
was
subsequently
consolidated
with
the
private
respondent’s
petition.
The
consolidated
petitions
pending
in
the
RTC
were
later
dismissed
for
violation
of
SC
Circular
No.
04-‐94
(forum
shopping)
because
the
same
parties,
causes
of
action
and
subject
matter
involved
therein
had
already
been
disposed
of
in
the
earlier
ejectment
case.
Upon
petition
of
the
defeated
parties,
the
CA
issued
a
TRO
ordering
the
MTC
to
desist
from
implementing
the
order
of
demolition.
Thus,
a
(2nd
petition)
petition
for
certiorari
and
prohibition
under
Rule
65
was
filed
with
the
SC
by
Filstream
assailing
the
CA’s
resolution
granting
the
TRO
against
the
demolition.
ISSUES/HELD:
1.
WON
City
of
Manila
may
exercise
right
of
eminent
domain
despite
the
existence
of
a
final
and
executory
judgment
ordering
private
respondents
to
vacate
the
lots.
YES.
The
City
of
Manila
has
an
undeniable
right
to
exercise
its
power
of
eminent
domain
within
its
jurisdiction.
The
right
to
expropriate
private
property
for
public
use
is
expressly
granted
under
Sec
19
of
the
Local
Govt
Code.
Sec
100
of
the
Revised
Charter
of
the
City
of
Manila
further
empowers
the
city
government
to
expropriate
private
property
in
the
pursuit
of
its
urban
land
reform
and
housing
program.
The
city’s
right
to
exercise
these
prerogatives
notwithstanding
the
existence
of
a
final
and
executory
judgment
over
the
property
to
be
expropriated
had
already
been
previously
upheld
by
the
court
in
the
case
of
Philippine
Columbian
Association
vs
Panis
in
21
December
1993.
2.
WON
expropriation
of
Filstream’s
lots
were
legally
and
validly
undertaken.
NO.
Local
government
units
are
not
given
an
unbridled
authority
when
exercising
their
power
of
eminent
domain.
Constitutional
provisions
on
due
process
and
just
compensation
for
the
expropriation
of
private
property
must
be
complied
with.
Other
laws
have
also
set
down
specific
rules
in
the
exercise
of
the
power
of
eminent
domain,
to
wit,
•
Sec
19
of
LGC
provides
that
such
exercise
must
be
pursuant
to
the
provisions
of
the
Constitution
and
pertinent
laws.
•
Sec
9
of
the
Urban
Development
and
Housing
Act
of
1992
(UDHA)
provides
an
order
ofpriority
in
the
acquisition
of
land
for
socialized
housing,
with
private
lands
listed
as
the
last
option.
•
Sec
10
of
UDHA
provides
that
expropriation
shall
be
resorted
to
only
when
other
modes
of
acquisition
such
as
community
mortgage,
land
swapping,
donation
to
the
government,
etc.
have
been
exhausted,
and,
where
expropriation
is
resorted
to,
parcels
of
land
owned
by
small
property
owners
shall
be
exempted.
71
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Compliance
with
the
above
legislated
conditions
are
deemed
mandatory
because
these
are
the
only
safeguards
in
securing
the
right
of
owners
of
private
property
to
DUE
PROCESS
when
their
property
is
expropriated
for
public
use.
The
court
found
nothing
in
the
records
which
would
indicate
that
the
City
of
Manila
complied
with
the
above
conditions.
There
was
thus
a
violation
of
petitioner
Filstream’s
right
to
due
process
in
the
manner
by
which
the
expropriation
of
its
private
property
was
undertaken
by
the
City
of
Manila.
CA
resolutions
upholding
the
expropriation
and
restraining
the
demolition
were
reversed
and
set
aside.
Lesson
in
a
Nutshell
The
power
of
eminent
domain
may
be
exercised
despite
the
existence
of
a
final
and
executory
decision
recognizing
a
private
party’s
ownership
rights
over
a
parcel
of
land,
BUT
due
process
requirements
must
be
complied
with
in
the
exercise
of
the
said
power.
Hagonoy
Market
Vendors
Assn.
Vs.
Mun.
of
Hagonoy,
Bulacan
(2002)
FACTS:
-‐
On
Oct.
1,
1996,
the
Sanguniang
Bayan
of
Hagonoy,
Bulacan
enacted
an
ordinance,
Kautusan
Blg.
28
which
increased
the
stall
rentals
of
market
vendors
in
Hagonoy.
Art.3
provided
that
it
shall
take
effect
upon
approval.
-‐
The
subject
ordinance
was
posted
from
Nov.
4-‐25,
1996.
In
the
last
week
of
Nov.
1997,
the
petitioner’s
members
were
personally
given
copies
of
the
approved
Ordinance
and
were
informed
that
it
shall
be
enforced
in
Jan.
1998.
-‐
On
Dec.
8,
1997,
the
petitioner’s
President
filed
an
appeal
with
the
Secretary
of
Justice
assailing
the
constitutionality
of
the
tax
ordinance.
-‐
Petitioner
claimed
it
was
unaware
of
the
posting
of
the
ordinance.
-‐
Respondent
opposed
the
appeal.
It
contended
that
the
ordinance
took
effect
on
October
6,
1996
and
that
the
ordinance,
as
approved,
was
posted
as
required
by
law.
Hence,
it
was
pointed
out
that
petitioner’s
appeal,
made
over
a
year
later,
was
already
time-‐barred.
-‐
The
Secretary
of
Justice
dismissed
the
appeal
on
the
ground
that
it
was
filed
out
of
time
–
beyond
the
30
days
from
the
effectivity
of
the
Ordinance
on
Oct.
1,
1996
as
prescribed
under
Sec.187
of
the
1991
LGC.
-‐
After
its
motion
for
reconsideration
was
denied,
petitioner
appealed
to
the
CA,
claiming
the
Sec.
erred
and
should
have
overlooked
the
technicality
and
ruled
on
its
petition
on
the
merits.
-‐
CA
dismissed
its
petition
for
being
formally
deficient
as
it
was
not
accompanied
by
certified
true
copies
of
the
assailed
Resolutions
of
the
Sec.
of
Justice.
ISSUES:
1.
WoN
the
petition
to
the
Court
of
Appeals
was
formally
deficient
as
it
was
not
accompanied
by
certified
true
copies
of
the
assailed
Resolutions
of
the
Sec.
of
Justice.
NO.
-‐
The
petitioner
insists
that
it
had
good
reasons
for
its
failure
to
comply
with
the
rule
and
the
CA
erred
in
refusing
to
accept
its
explanation.
-‐
This
Court
agrees
with
the
petitioner.
It
is
clear
from
the
records
that
the
petitioner
exerted
due
diligence
to
get
the
copies
of
its
appealed
Resolution
certified
by
the
Dept.
of
Justice
but
failed
to
do
so
on
account
of
typhoon
Loleng.
2.
WoN
the
petition
to
the
DOJ
Secretary
should
be
dismissed
for
being
time-‐barred.
YES.
-‐
Nonetheless,
the
Court
held
that
the
petition
should
be
dismissed
as
the
appeal
of
the
petitioner
with
the
Sec.
of
Justice
was
already
time-‐barred.
-‐
Sec.
187
of
the
1991
LGC
states
that
an
appeal
of
a
tax
ordinance
or
revenue
measure
should
be
made
to
72
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
the
Sec.
of
Justice
within
30
days
from
the
effectivity
of
the
assailed
ordinance
shall
not
be
suspended.
-‐
In
the
case
at
bar,
Mun.
Ord,
No.
28
took
effect
in
Oct.
1996.
Petitioner
filed
its
appeal
only
in
Dec.
1997.
The
periods
stated
in
Sec.
187
LGC
are
mandatory.
Being
a
revenue
measure,
the
collection
of
which
is
of
paramount
importance
thus
it
is
essential
that
the
validity
of
revenue
measures
is
not
left
uncertain
for
a
considerable
length
of
time.
3.
WoN
the
ordinance
is
unconstitutional
for
lacking
the
requirement
of
mandatory
public
hearing.
NO.
-‐
Petitioners
cannot
gripe
that
there
was
practically
no
public
hearing
conducted
as
its
objections
to
the
proposed
measure
were
not
considered
by
the
Sanguniang
Bayan.
Indeed,
they
participated
in
the
said
public
hearing.
-‐
Public
hearings
are
conducted
by
legislative
bodies
to
allow
interested
parties
to
ventilate
their
views
on
a
proposed
law
or
ordinance.
However,
the
views
are
not
binding
on
the
legislative
body
and
it
is
not
compelled
by
law
to
adopt
the
same.
4.
WoN
the
ordinance
is
unconstitutional
for
lacking
the
requirement
of
mandatory
publication
or
posting,
hence
they
were
unaware
of
the
approval
and
effectivity
of
the
ordinance.
NO.
-‐
The
records
is
bereft
of
any
evidence
to
prove
petitioner’s
negative
allegation
that
the
subject
ordinance
was
not
posted
as
required
by
law.
-‐
Municipal
Ordinace
No.
28
was
enacted
by
the
Sangguniang
Bayan
of
Hagonoy
on
Octover
1,
1996.
-‐
Then
Acting
Municipal
Mayor
Maria
Garcia
Santos
approved
the
Ordinance
on
October
7,
1996.
-‐
After
its
approval,
copies
of
the
Ordinance
were
given
to
the
Municipal
Treasurer
on
the
same
day.
-‐
On
November
9,
1996,
the
Ordinance
was
approved
by
the
Sangguniang
Panlalawigan.
-‐
The
Ordinance
was
posted
during
the
period
from
Nov.
4-‐25,
1996
in
three
(3)
public
places,
viz.:
in
front
of
the
municipal
building,
at
the
bulletin
board
of
the
Sta.
Ana
Parish
Church
and
on
the
front
door
of
the
Office
of
the
Market
Master
in
the
public
market.
-‐
Posting
was
validly
made
in
lieu
of
publication
as
there
was
no
newspaper
of
local
circulation
in
the
municipality
of
Hagonoy
(Sec.
188
of
the
Local
Gov’t
Code
provides
for
local
newspaper
or
in
at
least
two
conspicuous
and
publicly
accessible
places).
-‐
Also,
even
on
the
substantive
points
raised,
the
petition
must
fail.
Sec.
6c.04
of
the
1993
Mun.
Rev.
Code
&
Sec
191
of
the
LGC
limiting
the
percentage
of
increase
that
can
be
imposed
apply
to
tax
rates,
not
rentals.
Neither
can
it
be
said
that
the
rates
were
not
uniformly
imposed.
The
ordinance
covered
3
public
markets.
However,
it
excluded
Bagong
Munisipyo
from
the
increase
since
it
is
only
a
makeshift,
dilapidated
place
intended
for
transient
peddlers.
DISPOSITIVE:
The
petition
is
Dismissed
for
lack
of
merit.
Republic
of
the
Philippines
v.
CA
(2002)
FACTS:
•
Petitioner
instituted
expropriation
proceedings
covering
a
total
of
544,980
square
meters
of
contiguous
land
situated
along
MacArthur
Highway,
Malolos,
Bulacan,
to
be
utilized
for
the
continued
broadcast
operation
and
use
of
radio
transmitter
facilities
for
the
“Voice
of
the
Philippines”
project.
•
Petitioner
took
over
the
premises
after
the
previous
lessee,
the
“Voice
of
America,”
had
ceased
its
operations
thereat.
Petitioner
made
a
deposit
of
P517,558.80,
the
sum
provisionally
fixed
as
being
the
reasonable
value
of
the
property.
On
26
February
1979,
or
more
than
nine
years
after
the
institution
of
the
expropriation
proceedings,
the
trial
court
issued
this
order
condemning
the
property
and
ordering
the
plaintiff
to
pay
the
defendants
the
just
compensation
for
the
property.
•
The
subject
of
the
case
is
the
76,589-‐square
meter
property
previously
owned
by
Luis
Santos,
predecessor-‐in-‐interest
of
respondents,
which
forms
part
of
the
expropriated
area.
73
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
•
It
is
alleged
that
national
government
failed
to
pay
to
respondents
the
compensation
pursuant
to
the
foregoing
decision,
such
that
a
little
over
five
years
later,
or
on
09
May
1984,
respondents
filed
a
manifestation
with
a
motion
seeking
payment
for
the
expropriated
property.
•
President
Estrada
issued
Proclamation
No.
22,
transferring
20
hectares
of
the
expropriated
property
to
the
Bulacan
State
University
for
the
expansion
of
its
facilities
and
another
5
hectares
to
be
used
exclusively
for
the
propagation
of
the
Philippine
carabao.
•
The
remaining
portion
was
retained
by
the
PIA.
This
fact
notwithstanding,
and
despite
the
1984
court
order,
the
Santos
heirs
remained
unpaid,
and
no
action
was
taken
on
their
case
until
September
1999
when
petitioner
filed
its
manifestation
and
motion
to
permit
the
deposit
in
court
of
the
amount
of
P4,664,000.00
by
way
of
just
compensation
for
the
expropriated
property
of
the
late
Luis
Santos
subject
to
such
final
computation
as
might
be
approved
by
the
court.
•
Santos’
heirs,
opposing
the
manifestation
and
motion,
submitted
a
counter-‐motion
to
adjust
the
compensation
from
P6.00
per
square
meter
previously
fixed
in
the
1979
decision
to
its
current
zonal
valuation
pegged
at
P5,000.00
per
square
meter
or,
in
the
alternative,
to
cause
the
return
to
them
of
the
expropriated
property.
•
On
01
March
2000,
the
Bulacan
RTC
ruled
in
favor
of
respondents
and
issued
the
assailed
order,
vacating
its
decision
of
26
February
1979
and
declaring
it
to
be
unenforceable
on
the
ground
of
prescription.
•
The
CA
denied
the
appeal
(failure
to
file
during
the
reglementary
period).
ISSUES:
WON
the
LGU
of
Bulacan
has
inherent
powers
of
eminent
domain?
WON
the
respondents
are
entitled
to
the
return
of
the
property
in
question?
HELD/RATIO:
On
the
right
of
eminent
domain
The
right
of
eminent
domain
is
usually
understood
to
be
an
ultimate
right
of
the
sovereign
power
to
appropriate
any
property
within
its
territorial
sovereignty
for
a
public
purpose.
In
the
hands
of
the
legislature,
the
power
is
inherent,
its
scope
matching
that
of
taxation,
even
that
of
police
power
itself,
in
many
respects.
It
reaches
to
every
form
of
property
the
State
needs
for
public
use
and,
as
an
old
case
so
puts
it,
all
separate
interests
of
individuals
in
property
are
held
under
a
tacit
agreement
or
implied
reservation
vesting
upon
the
sovereign
the
right
to
resume
the
possession
of
the
property
whenever
the
public
interest
so
requires
it
The
ubiquitous
character
of
eminent
domain
is
manifest
in
the
nature
of
the
expropriation
proceedings.
Expropriation
proceedings
are
not
adversarial
in
the
conventional
sense,
for
the
condemning
authority
is
not
required
to
assert
any
conflicting
interest
in
the
property.
Thus,
by
filing
the
action,
the
condemnor
in
effect
merely
serves
notice
that
it
is
taking
title
and
possession
of
the
property,
and
the
defendant
asserts
title
or
interest
in
the
property,
not
to
prove
a
right
to
possession,
but
to
prove
a
right
to
compensation
for
the
taking.
Obviously,
however,
the
power
is
not
without
its
limits:
first,
the
taking
must
be
for
public
use,
and
second,
that
just
compensation
must
be
given
to
the
private
owner
of
the
property.
These
twin
proscriptions
have
their
origin
in
the
recognition
of
the
necessity
for
achieving
balance
between
the
State
interests,
on
the
one
hand,
and
private
rights,
upon
the
other
hand,
by
effectively
restraining
the
former
and
affording
protection
to
the
latter.
In
determining
“public
use,”
two
approaches
are
utilized
-‐
the
first
is
public
employment
or
the
actual
use
by
the
public,
and
the
second
is
public
advantage
or
benefit
The
expropriated
property
has
been
shown
to
be
for
the
continued
utilization
by
the
PIA,
a
significant
portion
thereof
being
ceded
for
the
expansion
of
the
facilities
of
the
Bulacan
State
University
and
for
the
propagation
of
the
Philippine
carabao,
themselves
in
line
with
the
requirements
of
public
purpose.
Respondents
question
the
public
nature
of
the
utilization
by
petitioner
of
the
condemned
property,
pointing
out
that
its
present
use
differs
74
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
from
the
purpose
originally
contemplated
in
the
1969
expropriation
proceedings.
The
argument
is
of
no
moment.
The
property
has
assumed
a
public
character
upon
its
expropriation.
Surely,
petitioner,
as
the
condemnor
and
as
the
owner
of
the
property,
is
well
within
its
rights
to
alter
and
decide
the
use
of
that
property,
the
only
limitation
being
that
it
be
for
public
use,
which,
decidedly,
it
is.
On
Return
of
property
In
insisting
on
the
return
of
the
expropriated
property,
respondents
would
exhort
on
the
pronouncement
in
Provincial
Government
of
Sorsogon
vs.
Vda.
de
Villaroya
where
the
unpaid
landowners
were
allowed
the
alternative
remedy
of
recovery
of
the
property
there
in
question.
It
might
be
borne
in
mind
that
the
case
involved
the
municipal
government
of
Sorsogon,
to
which
the
power
of
eminent
domain
is
not
inherent,
but
merely
delegated
and
of
limited
application.
The
grant
of
the
power
of
eminent
domain
to
local
governments
under
RA
7160
cannot
be
understood
as
being
the
pervasive
and
all-‐encompassing
power
vested
in
the
legislative
branch
of
government.
For
local
governments
to
be
able
to
wield
the
power,
it
must,
by
enabling
law,
be
delegated
to
it
by
the
national
legislature,
but
even
then,
this
delegated
power
of
eminent
domain
is
not,
strictly
speaking,
a
power
of
eminent,
but
only
of
inferior,
domain
or
only
as
broad
or
confined
as
the
real
authority
would
want
it
to
be.
Thus,
in
Valdehueza
vs.
Republic
where
the
private
landowners
had
remained
unpaid
ten
years
after
the
termination
of
the
expropriation
proceedings,
this
Court
ruled
-‐
“The
points
in
dispute
are
whether
such
payment
can
still
be
made
and,
if
so,
in
what
amount.
Said
lots
have
been
the
subject
of
expropriation
proceedings.
By
final
and
executory
judgment
in
said
proceedings,
they
were
condemned
for
public
use,
as
part
of
an
airport,
and
ordered
sold
to
the
government.
x
x
x
It
follows
that
both
by
virtue
of
the
judgment,
long
final,
in
the
expropriation
suit,
as
well
as
the
annotations
upon
their
title
certificates,
plaintiffs
are
not
entitled
to
recover
possession
of
their
expropriated
lots
-‐
which
are
still
devoted
to
the
public
use
for
which
they
were
expropriated
-‐
but
only
to
demand
the
fair
market
value
of
the
same.”
The
judgment
rendered
by
the
Bulacan
RTC
in
1979
on
the
expropriation
proceedings
provides
not
only
for
the
payment
of
just
compensation
to
herein
respondents
but
likewise
adjudges
the
property
condemned
in
favor
of
petitioner
over
which
parties,
as
well
as
their
privies,
are
bound.
Petitioner
has
occupied,
utilized
and,
for
all
intents
and
purposes,
exercised
dominion
over
the
property
pursuant
to
the
judgment.
The
exercise
of
such
rights
vested
to
it
as
the
condemnee
indeed
has
amounted
to
at
least
a
partial
compliance
or
satisfaction
of
the
1979
judgment,
thereby
preempting
any
claim
of
bar
by
prescription
on
grounds
of
non-‐execution.
In
arguing
for
the
return
of
their
property
on
the
basis
of
non-‐payment,
respondents
ignore
the
fact
that
the
right
of
the
expropriatory
authority
is
far
from
that
of
an
unpaid
seller
in
ordinary
sales,
to
which
the
remedy
of
rescission
might
perhaps
apply.
An
in
rem
proceeding,
condemnation
acts
upon
the
property.
After
condemnation,
the
paramount
title
is
in
the
public
under
a
new
and
independent
title;
thus,
by
giving
notice
to
all
claimants
to
a
disputed
title,
condemnation
proceedings
provide
a
judicial
process
for
securing
better
title
against
all
the
world
than
may
be
obtained
by
voluntary
conveyance.
Respondents,
in
arguing
laches
against
petitioner
did
not
take
into
account
that
the
same
argument
could
likewise
apply
against
them.
Respondents
first
instituted
proceedings
for
payment
against
petitioner
on
09
May
1984,
or
five
years
after
the
1979
judgment
had
become
final.
The
unusually
long
delay
in
bringing
the
action
to
compel
payment
against
herein
petitioner
would
militate
against
them.
Consistently
with
the
rule
that
one
should
take
good
care
of
his
own
concern,
respondents
should
have
commenced
the
proper
action
upon
the
finality
of
the
judgment
which,
indeed,
resulted
in
a
permanent
deprivation
of
their
ownership
and
possession
of
the
property.
The
constitutional
limitation
of
“just
compensation”
is
considered
to
be
the
sum
equivalent
to
the
market
value
of
the
property,
broadly
described
to
be
the
price
fixed
by
the
seller
in
open
market
in
the
usual
and
ordinary
course
of
legal
action
and
competition
or
the
fair
value
of
the
property
as
between
one
who
receives,
and
one
who
desires
to
sell,
it
fixed
at
the
time
of
the
actual
taking
by
the
government.
Thus,
if
property
is
taken
for
public
use
before
compensation
is
deposited
with
the
court
having
jurisdiction
over
the
case,
the
final
compensation
must
include
interests
on
its
just
value
to
be
computed
from
the
time
the
property
is
taken
to
the
time
when
75
DECENTRALIZATION,
LOCAL
AUTONOMY,
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MUNICIPAL
CORPORATIONS
PART
II
compensation
is
actually
paid
or
deposited
with
the
court.
In
fine,
between
the
taking
of
the
property
and
the
actual
payment,
legal
interests
accrue
in
order
to
place
the
owner
in
a
position
as
good
as
(but
not
better
than)
the
position
he
was
in
before
the
taking
occurred.
The
Bulacan
trial
court,
in
its
1979
decision,
was
correct
in
imposing
interests
on
the
zonal
value
of
the
property
to
be
computed
from
the
time
petitioner
instituted
condemnation
proceedings
and
“took”
the
property
in
September
1969.
This
allowance
of
interest
on
the
amount
found
to
be
the
value
of
the
property
as
of
the
time
of
the
taking
computed,
being
an
effective
forbearance,
at
12%
per
annum
should
help
eliminate
the
issue
of
the
constant
fluctuation
and
inflation
of
the
value
of
the
currency
over
time.
Article
1250
of
the
Civil
Code,
providing
that,
in
case
of
extraordinary
inflation
or
deflation,
the
value
of
the
currency
at
the
time
of
the
establishment
of
the
obligation
shall
be
the
basis
for
the
payment
when
no
agreement
to
the
contrary
is
stipulated,
has
strict
application
only
to
contractual
obligations.
In
other
words,
a
contractual
agreement
is
needed
for
the
effects
of
extraordinary
inflation
to
be
taken
into
account
to
alter
the
value
of
the
currency.
DISPOSITIVE:
All
given,
the
trial
court
of
Bulacan
in
issuing
its
order,
dated
01
March
2000,
vacating
its
decision
of
26
February
1979
has
acted
beyond
its
lawful
cognizance,
the
only
authority
left
to
it
being
to
order
its
execution.
Verily,
private
respondents,
although
not
entitled
to
the
return
of
the
expropriated
property,
deserve
to
be
paid
promptly
on
the
yet
unpaid
award
of
just
compensation
already
fixed
by
final
judgment
of
the
Bulacan
RTC
on
26
February
1979
at
P6.00
per
square
meter,
with
legal
interest
thereon
at
12%
per
annum
computed
from
the
date
of
"taking"
of
the
property,
i.e.,
19
September
1969,
until
the
due
amount
shall
have
been
fully
paid.
4.6
Reclassification
of
lands
Fortich
vs.
Corona
(1999)
FACTS:
This
case
involves
a
144-‐hectare
land
located
at
San
Vicente,
Sumilao,
Bukidnon
owned
by
NQSRMDC.
The
property
was
leased
as
a
pineapple
plantation
to
Del
Monte
Philippines
for
a
period
of
10
years.
In
October
1991,
DAR
placed
the
said
property
under
compulsory
acquisition.
NQSRMDC
resisted
the
DAR’s
action
and
sought
relief
from
the
DAR
Adjudication
Board
(DARAB).
The
DARAB
ruled
in
favor
of
NQSRMDC
and
ordered
DAR
to
desist
from
pursuing
any
activity
concerning
the
subject
property.
Thereafter,
the
Provincial
Development
Council
of
Bukidnon
passed
Resolution
No.
6
designating
areas
along
Bukidnon-‐Sayre
Highway
as
part
of
the
Bukidnon
Agro-‐Industrial
Zones
where
the
subject
property
is
situated.
Pursuant
to
Section
20
of
the
LGC,
the
Sangguniang
Bayan
of
Sumilao
enacted
Ordinance
No.
24
converting
or
re-‐
classifying
the
subject
property
from
agricultural
to
industrial/institutional
with
a
view
of
providing
an
opportunity
to
attract
investors
and
provide
more
jobs
and
raise
income
of
its
people.
An
application
for
land
use
conversion
was
filed
by
the
BAIDA
and
NQSRMDC
before
the
DAR
concerning
the
144-‐
hectare
land.
Invoking
Section
65
of
RA
6657
(Comprehensive
Agrarian
Reform
Law),
then
DAR
Secretary
Garilao
denied
the
application
for
conversion
and
instead
placed
the
subject
property
under
the
compulsory
coverage
of
CARP.
He
ordered
the
distribution
of
the
land
to
qualified
landless
farmers.
BAIDA
and
NQSRMDC
filed
a
motion
for
reconsideration
which
was
however
denied
in
an
Order
by
the
DAR.
Bukidnon
governor
Carlos
Fortich
appealed
the
order
of
denial
to
the
OP
and
prayed
for
the
conversion
of
the
subject
property.
Executive
Secretary
Torres
issued
a
Decision
which
reversed
the
DAR
Order
and
upheld
the
power
of
the
local
government
units
to
convert
portions
of
their
agricultural
lands
into
industrial
areas.
The
DAR
belatedly
filed
a
motion
for
reconsideration
which
was
denied
by
Secretary
Torres
on
the
ground
that
the
OP
Decision
had
already
become
final
and
executory.
76
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Meanwhile,
during
the
pendency
of
the
appeal
by
Gov.
Fortich
to
the
OP,
DAR,
without
giving
just
compensation,
caused
the
cancellation
of
the
NQSRMDC’s
title
on
the
land
and
had
it
transferred
in
the
name
of
RP.
Thereafter,
it
caused
the
issuance
of
Certificates
of
Land
Ownership
Awards
(CLOA)
and
had
them
registered
in
the
name
of
137
farmer-‐beneficiaries.
Despite
the
denial
of
the
OP,
DAR
filed
a
second
motion
for
reconsideration
of
the
order
of
the
President.
Some
alleged
farmer-‐beneficiaries
staged
a
hunger-‐strike
in
front
of
the
DAR
compound
to
protest
the
OP
decision.
President
Ramos
constituted
the
Presidential
Fact-‐Finding
Task
Force
to
look
into
the
controversy.
Deputy
Executive
Secretary
Corona
then
issued
the
so-‐called
“Win-‐Win”
Resolution
which
substantially
modified
the
OP
Decision
by
awarding
100
hectares
of
the
subject
property
to
the
qualified
farmer-‐beneficiaries
and
allocating
only
44-‐hectares
for
the
establishment
of
an
industrial
and
commercial
zone.
First
SC
Decision
dated
14
April
1998
Petitioners
Gov.
Fortich
and
NQSRDMC
filed
a
petition
for
certiorari,
prohibition
and
injunction
before
the
SC.
They
sought
to
nullify
the
“Win-‐Win”
Resolution
and
argued
that
Deputy
Executive
Secretary
Corona
committed
grave
abuse
of
discretion
when
he
issued
the
same.
ISSUE:
WON
the
final
and
executory
OP
Decision
can
still
be
substantially
modified
by
the
“Win-‐Win”
Resolution
HELD:
No
The
SC
annulled
the
“Win-‐Win”
Resolution
and
applied
the
rule
on
finality
of
administrative
determination
in
declaring
the
OP
Decision
as
final
and
executory.
According
to
the
court,
when
the
OP
issued
the
said
decision,
it
had
lost
its
jurisdiction
to
re-‐open
the
case,
more
so
modify
its
decision.
It
had
no
authority
to
entertain
the
second
motion
for
reconsideration
filed
by
the
DAR.
Second
SC
Decision
dated
17
November
1998
Respondents
and
applicants
for
intervention
files
separate
motions
for
reconsiderations
seeking
the
reversal
of
the
first
SC
decision
nullifying
the
“Win-‐Win”
Resolution.
ISSUE:
WON
the
power
of
the
local
government
units
to
reclassify
lands
is
subject
to
the
approval
of
the
DAR
HELD:
No
The
said
issue
has
been
decided
by
the
SC
in
the
case
of
the
Province
of
Camarines
Sur
et
al.
vs.
CA
wherein
it
was
held
that
local
government
units
need
not
obtain
the
approval
of
the
DAR
to
convert
reclassify
lands
from
agricultural
to
non-‐agricultural
use.
The
SC
declared
that
when
the
OP
Decision
was
declared
final
and
executor,
vested
rights
were
acquired
by
the
petitioners
and
all
others
who
should
be
benefited
by
the
said
decision.
The
court
also
pointed
out
that
the
applicants
for
intervention
categorically
admitted
that
they
were
not
tenants
of
the
NQSRMDC
but
were
merely
seasonal
farm
workers
in
the
pineapple
plantation.
It
held
that,
being
merely
seasonal
farm
workers
without
a
right
to
own,
the
applicants
for
intervention
have
no
legal
or
actual
and
interest
over
the
subject
property.
The
SC
also
reiterated
the
pertinent
portion
of
the
OP
Decision
which
recognized
the
authority
of
the
Sangguniang
77
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
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PART
II
Bayan
of
Sumilao
to
reclassify
the
land
into
industrial/institutional
use:
“The
language
of
Sec.
20
of
RA
7160
is
clear
and
affords
no
room
for
any
other
interpretation.
By
unequivocal
legal
mandate,
it
grants
local
government
units
autonomy
in
their
local
affairs
including
the
power
to
convert
portions
of
their
agricultural
lands
and
provide
for
the
manner
of
their
utilization
and
disposition
to
enable
them
to
attain
their
fullest
development
as
self-‐reliant
communities.”
Third
SC
Decision
dated
19
August
1999
Separate
motions
for
reconsideration
were
again
filed
by
respondents
and
intervenors
this
time
to
assail
the
17
November
1998
Resolution.
Both
respondents
and
intervenors
prayed
that
the
case
be
referred
to
the
Court
en
banc
inasmuch
as
their
earlier
MRs
were
resolved
by
a
vote
of
two-‐two,
the
required
number
to
carry
a
decision
under
the
Constitution
(3
votes)
was
not
met.
ISSUE:
WON
failure
to
meet
the
three
votes
justifies
the
referral
of
the
case
to
the
court
en
banc
HELD:
No
A
careful
reading
of
the
constitutional
provision
reveals
the
intention
of
the
framers
to
draw
a
distinction
between
cases,
on
the
one
hand,
and
matters,
on
the
other
hand,
such
that
cases
are
“decided”
while
matters,
which
include
motions,
are
“resolved”.
Otherwise
put,
the
word
“decided”
must
refer
to
“cases”;
while
the
word
“resolved”
must
refer
to
“matters”,
applying
the
rule
of
reddendo
singula
singulis.
It
is
clear
that
only
cases
are
referred
to
the
Court
en
banc
for
decision
whenever
the
required
number
of
votes
is
not
obtained.
Conversely,
the
rule
does
not
apply
where,
as
in
this
case,
the
required
three
votes
is
not
obtained
in
the
resolution
of
a
MR.
Article
VIII,
Section
4(3)
pertains
to
the
disposition
of
cases
by
a
division.
If
there
is
a
tie
in
the
voting,
there
is
no
decision.
The
only
way
to
dispose
of
the
case
then
is
to
refer
it
to
the
Court
en
banc.
On
the
other
hand,
if
a
case
has
already
been
decided
by
the
division
and
the
losing
party
files
a
MR,
the
failure
of
the
division
to
resolve
the
motion
because
of
a
tie
in
the
voting
does
not
leave
the
case
undecided.
There
is
still
the
decision
which
must
stand
in
view
of
the
failure
of
the
members
of
the
division
to
muster
the
necessary
vote
for
its
reconsideration.
Quite
plainly,
if
the
voting
results
in
a
tie,
the
motion
for
reconsideration
is
lost.
The
assailed
decision
is
not
reconsidered
and
must
therefore
be
deemed
affirmed.
Such
was
the
ruling
of
this
Court
in
the
Resolution
of
November
17,
1998.
ISSUE:
WON
the
referral
to
the
court
en
banc
is
justified
on
the
ground
that
the
issues
are
of
first
impression
HELD:
No
The
issues
presented
by
the
movants
are
matters
of
no
extraordinary
import
to
merit
the
attention
of
the
Court
en
banc.
The
issue
of
whether
or
not
the
power
of
the
local
government
units
to
reclassify
lands
is
subject
to
the
approval
of
the
DAR
is
no
longer
novel,
this
having
been
decided
by
this
Court
in
the
case
of
Province
of
Camarines
Sur,
et
al.
vs.
Court
of
Appeals
wherein
we
held
that
local
government
units
need
not
obtain
the
approval
of
the
DAR
to
convert
or
reclassify
lands
from
agricultural
to
non-‐agricultural
use.
Moreover,
the
Decision
sought
to
be
reconsidered
was
arrived
at
by
a
unanimous
vote
of
all
five
(5)
members
of
the
Second
Division
of
this
Court.
Stated
otherwise,
the
Second
Division
is
of
the
opinion
that
the
matters
raised
by
movants
are
nothing
new
and
do
not
deserve
the
consideration
of
the
Court
en
banc.
Thus,
the
participation
of
the
full
Court
in
the
resolution
of
movants’
motions
for
reconsideration
would
be
inappropriate.
78
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
ISSUE:
WON
the
referral
to
the
court
en
banc
partakes
of
the
nature
of
a
second
MR
HELD:
Yes
The
contention
that
the
Resolution
of
November
17,
1998
did
not
dispose
of
the
earlier
MR
of
the
Decision
dated
April
24,
1998
is
flawed.
The
present
MR
necessarily
partakes
of
the
nature
of
a
second
motion
for
reconsideration
which,
according
to
the
clear
and
unambiguous
language
of
Rule
56,
Section
4,
in
relation
to
Rule
52,
Section
2,
of
the
1997
Rules
of
Civil
Procedure,
is
prohibited.
In
this
case,
not
only
did
movants
fail
to
ask
for
prior
leave
of
court,
but
more
importantly,
they
have
been
unable
to
show
that
there
are
exceptional
reasons
for
due
course
to
their
second
motions
for
reconsideration.
Stripped
of
the
arguments
for
referral
of
this
incident
to
the
Court
en
banc,
the
motions
subject
of
this
resolution
are
nothing
more
but
rehashes
of
the
motions
for
reconsideration
which
have
been
denied
in
the
Resolution
of
November
17,
1998.
To
be
sure,
the
allegations
contained
therein
have
already
been
raised
before
and
passed
upon
by
the
Court
in
the
said
Resolution.
ISSUE:
WON
the
Win-‐Win
Resolution
was
valid
HELD:
No
The
resolution
is
void
and
of
no
legal
effect
considering
that
the
March
29,
1996
OP
Decision
had
already
become
final
and
executory
even
prior
to
the
filing
of
the
MR
which
became
the
basis
of
the
said
“Win-‐Win”
Resolution.
While
it
may
be
true
that
on
its
face
the
nullification
of
the
“Win-‐Win”
Resolution
was
grounded
on
a
procedural
rule
pertaining
to
the
reglementary
period
to
appeal
or
move
for
reconsideration,
the
underlying
consideration
therefor
was
the
protection
of
the
substantive
rights
of
petitioners.
“Just
as
a
losing
party
has
the
right
to
file
an
appeal
within
the
prescribed
period,
the
winning
party
also
has
the
correlative
right
to
enjoy
the
finality
of
the
resolution
of
his/her
case.”
In
other
words,
the
finality
of
the
March
29,
1996
OP
Decision
accordingly
vested
appurtenant
rights
to
the
land
in
dispute
on
petitioners
as
well
as
on
the
people
of
Bukidnon
and
other
parts
of
the
country
who
stand
to
be
benefited
by
the
development
of
the
property.
Roxas
&
Co.,
Inc.
v.
CA
(1999)
FACTS:
President
Cory
Aquino
on
July
1987
promulgated
Proclamation
Number
131
instituting
CARP
and
EO
No.
229
providing
for
mechanisms
necessary
to
implement
CARP.
Later,
when
congress
finally
covened,
it
passed
RA
6657
or
the
Comprehensive
Agrarian
Reform
Law.
This
case
involves
3
haciendas
in
Nasugbu,
Batangas
owned
by
Roxas
&
Co.,
Inc.
namely:
1.)
Hacienda
Palico,
2.)
Hacienda
Banilad
and
3.)
Hacienda
Caylaway.
Before
CARL
took
effect,
Roxas
&
Co.,
Inc.
(petitioner)
voluntarily
offered
to
sell
Hacienda
Caylaway
pursuant
to
EO
229.
79
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
The
other
2
were
placed
under
compulsory
acquisition
by
respondent
DAR
in
accordance
with
CARL.
Petitioner
instituted
a
case
with
DAR
Adjudication
Board
(DARAB)
to
re-‐classify
the
lands
into
non-‐agricultural
pursuant
to
Proclamation
No.
1520
issued
by
former
President
Marcos
declaring
Nasugbu,
Batangas
as
a
tourist
zone,
which
were
denied.
DARAB
held
that
the
case
involved
theprejudicial
question
of
whether
the
property
was
subject
to
agrarian
reform
and
should
be
submitted
to
the
Office
of
the
Secretary
of
Agrarian
Reform.
Petitioner
filed
a
case
with
the
CA
questioning
the
expropriation
of
the
properties
under
CARL
and
the
denial
of
due
process
in
the
acquisition
of
the
land.
CA
dismissed
the
petition
on
the
ground
of
failure
to
exhaust
administrative
remedies.
Hacienda
Palico
DAR,
through
Municipal
Agrarian
Reform
Officer
(MARO)
of
Nasugbu,
Batangas,
sent
a
notice
entitled
“Invitation
to
Parties”
to
petitioner
to
discuss
the
results
of
the
DAR
investigation
of
Hacienda
Palico,
which
was
“scheduled
for
compulsory
acquisition
this
year
under
the
CARP.
”Summary
Investigation
Reports
were
submitted
by
the
MARO,
representatives
of
the
Barangay
Agrarian
Reform
Committee
(BARC),
Land
Bank
(LBP)
and
the
Provincial
Agrarian
Reform
Officer
(PARO)
recommending
that
270
ha
and
75.3
ha
of
the
property
be
placed
under
compulsory
acquisition
at
a
compensation
of
P8,109,739.00
and
P2,188,195.47,
respectively.
DAR
through
Secretary
Miriam
Santiago
sent
a
“Notice
of
Acquisition”
to
petitioner.
Petitioner
was
informed
that
1,023.999
ha
of
its
land
in
Hacienda
Palico
were
subject
to
immediate
acquisition
and
distribution
by
the
government
under
the
CARL;
and
the
government
was
offering
compensation
of
P3.4
million
for
333.0800
hectares.
Almost
two
years
later,
the
DAR
Regional
Director
sent
to
the
LBP
Land
Valuation
Manager
three
(3)
separate
Memoranda
entitled
“Request
to
Open
Trust
Account.”
Each
Memoranda
requested
that
a
trust
account
representing
the
valuation
of
three
portions
of
Hacienda
Palico
be
opened
in
favor
of
the
petitioner
in
view
of
the
latter’s
rejection
of
its
offered
value.
Meanwhile,
petitioner
applied
with
the
DAR
for
conversion
of
Haciendas
Palico
and
Banilad
from
agricultural
to
non-‐agricultural
lands
under
the
provisions
of
the
CARL.
Despite
petitioner’s
application
for
conversion,
DAR
proceeded
with
the
acquisition
of
the
two
Haciendas.
The
LBP
trust
accounts
as
compensation
for
Hacienda
Palico
were
replaced
by
respondent
DAR
with
cash
and
LBP
bonds.
On
October
22,
1993,
from
the
mother
title
of
TCT
No.
985
of
the
Hacienda,
DAR
registered
Certificate
of
Land
Ownership
Award
(CLOA)
No.
6654.
On
October
30,
1993,
CLOA’s
were
distributed
to
farmer
beneficiaries.
Hacienda
Banilad.
DAR
through
the
MARO
of
Nasugbu
Batangas
sent
a
notice
of
acquisition
to
petitioner.
80
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Later,
the
MARO
sent
an
“Invitation
to
Parties”
again
to
Pimentel
inviting
the
latter
to
attend
a
conference
to
discuss
the
results
of
the
MARO’s
investigation
over
Hacienda
Banilad.
The
Reports
were
discussed
the
conference.
Present
in
the
conference
were
representatives
of
the
prospective
farmer
beneficiaries,
the
BARC,
the
LBP,
and
Jaime
Pimentel
on
behalf
of
the
landowner.
After
the
meeting,
it
was
recommended
that
737.2590
ha
under
Tax
Declaration
Nos.
0236
and
0237
be
likewise
placed
under
compulsory
acquisition
for
distribution.
DAR,
through
the
Department
Secretary,
sent
to
petitioner
two
(2)
separate
“Notices
of
Acquisition”
over
Hacienda
Banilad.
These
Notices
were
sent
on
the
same
day
as
the
Notice
of
Acquisition
over
Hacienda
Palico.
Unlike
the
Notice
over
Hacienda
Palico,
however,
the
Notices
over
Hacienda
Banilad
were
addressed
to
Roxas
y
Cia.Limited
in
Makati.
The
DAR
Regional
Director
sent
to
the
LBP
Land
Valuation
Manager
a
“Request
to
Open
Trust
Account”
in
petitioner’s
name
as
compensation
for
234.6493
hectares
of
Hacienda
Banilad.
A
second
“Request
to
Open
Trust
Account”
was
sent
on
November
18,
1991
over
723.4130
hectares
of
said
Hacienda.
On
May
4,
1993,
petitioner
applied
for
conversion
of
both
Haciendas
Palico
and
Banilad.
Hacienda
Caylaway.
Hacienda
Caylaway
was
voluntarily
offered
for
sale
to
the
government
on
May
6,
1988
before
the
effectivity
of
the
CARL.
DAR,
through
the
Regional
Director
for
Region
IV,
sent
to
petitioner
two
(2)
separate
Resolutions
accepting
petitioner’s
voluntary
offer
to
sell
Hacienda
Caylaway,
particularly
TCT
Nos.
T-‐44664
and
T-‐44663.
Nevertheless,
on
August
6,
1992,
petitioner,
through
its
President,
Eduardo
J.
Roxas,
sent
a
letter
to
the
Secretary
of
DAR
withdrawing
its
VOS
of
Hacienda
Caylaway.
The
Sangguniang
Bayan
of
Nasugbu,
Batangas
allegedly
authorized
the
reclassification
of
Hacienda
Caylaway
from
agricultural
to
non-‐agricultural.
As
a
result,
petitioner
informed
DAR
that
it
was
applying
for
conversion
of
Hacienda
Caylaway
from
agricultural
to
other
uses.
DAR
Secretary
informed
petitioner
that
a
reclassification
of
the
land
would
not
exempt
it
from
agrarian
reform.
The
Secretary
also
denied
petitioner’s
withdrawal
of
the
VOS
on
the
ground
that
withdrawal
could
only
be
based
on
specific
grounds
such
as
unsuitability
of
the
soil
for
agriculture,
or
if
the
slope
of
the
land
is
over
18
degrees
and
that
the
land
is
undeveloped.
Despite
the
denial
of
the
VOS
withdrawal
of
Hacienda
Caylaway,
on
May
11,
1993,
petitioner
filed
its
application
for
conversion
of
both
Haciendas
Palico
and
Banilad.
81
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
On
August
24,
1993,
petitioner
instituted
Case
No.
N-‐0017-‐96-‐46
(BA)
with
the
DARAB
praying
for
the
cancellation
of
the
CLOA’s
issued
by
DAR
in
the
name
of
several
persons.
Petitioner
alleged
that
the
Municipality
of
Nasugbu,
where
the
haciendas
are
located,
had
been
declared
a
tourist
zone,
that
the
land
is
not
suitable
for
agricultural
production,
and
that
the
Sangguniang
Bayan
of
Nasugbu
had
reclassified
the
land
to
non-‐agricultural.
DARAB
submitted
the
case
to
the
Office
of
the
Secretary
of
Agrarian
Reform
for
determination.
The
CA
filed
a
petition
for
before
the
CA
questioning
the
expropriation
of
its
properties
under
the
CARL.
Meanwhile,
the
petition
for
conversion
of
the
three
haciendas
was
denied
by
the
MARO.
The
CA
then
dismissed
the
petition.
ISSUE
1:
WON
the
Court
can
take
cognizance
of
this
petition
despite
petitioner’s
failure
to
exhaust
administrative
remedies
HELD
1:
Yes
RATIO
1:
Petitioner
rightly
sought
immediate
redress
in
the
courts.
There
was
a
violation
of
its
rights
and
to
require
it
to
exhaust
administrative
remedies
before
the
DAR
itself
was
not
a
plain,
speedy
and
adequate
remedy.
DAR
issued
CLOAs
to
farmer
beneficiaries
over
portions
of
petitioner’s
land
without
just
compensation
to
petitioner.
A
CLOA
is
evidence
of
ownership
of
land
by
a
beneficiary
under
R.A.
6657.
Before
this
may
be
awarded
to
a
farmer
beneficiary,
the
land
must
first
be
acquired
by
the
State
from
the
landowner
and
ownership
transferred
to
the
former.
The
transfer
of
possession
and
ownership
of
the
land
to
the
government
are
conditioned
upon
the
receipt
by
the
landowner
of
the
payment
or
deposit
by
the
DAR
of
the
compensation
with
an
accessible
bank.
Until
then,
title
remains
with
the
landowner.
There
was
no
receipt
by
petitioner
of
any
compensation
for
any
of
the
lands
acquired
by
the
government.
The
kind
of
compensation
to
be
paid
the
landowner
is
also
specific.
The
law
provides
that
the
deposit
must
be
made
only
in
“cash”
or
“LBP
bonds.”
DAR’s
opening
of
trust
account
deposits
in
petitioner’s
name
with
the
Land
Bank
does
not
constitute
payment
under
the
law.
Trust
account
deposits
are
not
cash
or
LBP
bonds.
The
replacement
of
the
trust
account
with
cash
or
LBP
bonds
did
not
ipso
facto
cure
the
lack
of
compensation;
for
essentially,
the
determination
of
this
compensation
was
marred
by
lack
of
due
process.
82
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
In
fact,
in
the
entire
acquisition
proceedings,
respondent
DAR
disregarded
the
basic
requirements
of
administrative
due
process.
Under
these
circumstances,
the
issuance
of
the
CLOA’s
to
farmer
beneficiaries
necessitated
immediate
judicial
action
on
the
part
of
the
petitioner.
ISSUE
2:
WON
the
acquisition
proceedings
over
the
three
haciendas
were
valid
and
in
accordance
with
law
HELD
2:
No
RATIO
2:
Mode
of
Acquisition
of
Land
Under
RA
6657.
Two
(2)
modes
of
acquisition
of
private
land:
compulsory
and
voluntary.
In
the
compulsory
acquisition
of
private
lands,
the
landholding,
the
landowners
and
the
farmer
beneficiaries
must
first
be
identified.
After
identification,
the
DAR
shall
send
a
Notice
of
Acquisition
to
the
landowner,
by
personal
delivery
or
registered
mail,
and
post
it
in
a
conspicuous
place
in
the
municipal
building
and
barangay
hall
of
the
place
where
the
property
is
located.
Within
thirty
days
from
receipt
of
the
Notice
of
Acquisition,
the
landowner,
his
administrator
or
representative
shall
inform
the
DAR
of
his
acceptance
or
rejection
of
the
offer.
If
the
landowner
accepts,
he
executes
and
delivers
a
deed
of
transfer
in
favor
of
the
government
and
surrenders
the
certificate
of
title.
Within
30
days
from
the
execution
of
the
deed
of
transfer,
the
LBP
pays
the
owner
the
purchase
price.
If
the
landowner
rejects
the
DAR’s
offer
or
fails
to
make
a
reply,
the
DAR
conducts
summary
administrative
proceedings
to
determine
just
compensation
for
the
land.
The
landowner,
the
LBP
representative
and
other
interested
parties
may
submit
evidence
on
just
compensation
within
fifteen
days
from
notice.
Within
30
days
from
submission,
the
DAR
shall
decide
the
case
and
inform
the
owner
of
its
decision
and
the
amount
of
just
compensation.
Upon
receipt
by
the
owner
of
the
corresponding
payment,
or,
in
case
of
rejection
or
lack
of
response
from
the
latter,
the
DAR
shall
deposit
the
compensation
in
cash
or
in
LBP
bonds
with
an
accessible
bank.
The
DAR
shall
immediately
take
possession
of
the
land
and
cause
the
issuance
of
a
transfer
certificate
of
title
in
the
name
of
the
Republic
of
the
Philippines.
The
land
shall
then
be
redistributed
to
the
farmer
beneficiaries.
Any
party
may
question
the
decision
of
the
DAR
in
the
regular
courts
for
final
determination
of
just
compensation.
For
a
valid
implementation
of
the
CAR
Program,
two
notices
are
required:
(1)
the
Notice
of
Coverage
and
letter
of
invitation
to
a
preliminary
conference
sent
to
the
landowner,
the
representatives
of
the
BARC,
LBP,
farmer
beneficiaries
and
other
interested
parties
pursuant
to
DAR
A.
O.
No.
12,
83
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Series
of
1989;
and
(2)
the
Notice
of
Acquisition
sent
to
the
landowner
under
Section
16
of
the
CARL.
The
importance
of
the
first
notice,
i.e.,
the
Notice
of
Coverage
and
the
letter
of
invitation
to
the
conference,
and
its
actual
conduct
cannot
be
understated.
They
are
steps
designed
to
comply
with
the
requirements
of
administrative
due
process.
The
implementation
of
the
CARL
is
an
exercise
of
the
State’s
police
power
and
the
power
of
eminent
domain.
To
the
extent
that
the
CARL
prescribes
retention
limits
to
the
landowners,
there
is
an
exercise
of
police
power
for
the
regulation
of
private
property
in
accordance
with
the
Constitution.
But
where,
to
carry
out
such
regulation,
the
owners
are
deprived
of
lands
they
own
in
excess
of
the
maximum
area
allowed,
there
is
also
a
taking
under
the
power
of
eminent
domain.
The
taking
contemplated
is
not
a
mere
limitation
of
the
use
of
the
land.
What
is
required
is
the
surrender
of
the
title
to
and
physical
possession
of
the
said
excess
and
all
beneficial
rights
accruing
to
the
owner
in
favor
of
the
farmer
beneficiary.
The
Bill
of
Rights
provides
that
“[n]o
person
shall
be
deprived
of
life,
liberty
or
property
without
due
process
of
law.”
The
CARL
was
not
intended
to
take
away
property
without
due
process
of
law.
The
exercise
of
the
power
of
eminent
domain
requires
that
due
process
be
observed
in
the
taking
of
private
property.
The
notice
requirements
under
the
CARL
are
not
confined
to
the
Notice
of
Acquisition
set
forth
in
Section
16
of
the
law.
They
also
include
the
Notice
of
Coverage
first
laid
down
in
DAR
A.
O.
No.
12,
Series
of
1989
and
subsequently
amended
in
DAR
A.
O.
No.
9,
Series
of
1990
and
DAR
A.
O.
No.
1,
Series
of
1993.
This
Notice
of
Coverage
does
not
merely
notify
the
landowner
that
his
property
shall
be
placed
under
CARP
and
that
he
is
entitled
to
exercise
his
retention
right;
it
also
notifies
him,
pursuant
to
DAR
A.
O.
No.
9,
Series
of
1990,
that
a
public
hearing
shall
be
conducted
where
he
and
representatives
of
the
concerned
sectors
of
society
may
attend
to
discuss
the
results
of
the
field
investigation,
the
land
valuation
and
other
pertinent
matters.
Under
DAR
A.
O.
No.
1,
Series
of
1993,
the
Notice
of
Coverage
also
informs
the
landowner
that
a
field
investigation
of
his
landholding
shall
be
conducted
where
he
and
the
other
representatives
may
be
present
Compulsory
Acquisition
of
Hacienda
Palico
and
Banilad.
In
the
case
at
bar,
DAR
claims
that
it,
through
MARO
Leopoldo
C.
Lejano,
sent
a
letter
of
invitation
entitled
“Invitation
to
Parties”
dated
September
29,
1989
to
petitioner,
through
Jaime
Pimentel,
the
administrator
of
Hacienda
Palico.
The
invitation
was
received
on
the
same
day
it
was
sent
as
indicated
by
a
signature
and
the
date
received
at
the
bottom
left
corner
of
said
invitation.
84
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
With
regard
to
Hacienda
Banilad,
DAR
claims
that
Pimentel,
administrator
also
of
Hacienda
Banilad,
was
notified
and
sent
an
invitation
to
the
conference.
Pimentel
actually
attended
the
conference
on
September
21,
1989
and
signed
the
Minutes
of
the
meeting
on
behalf
of
petitioner.
The
Minutes
was
also
signed
by
the
representatives
of
the
BARC,
the
LBP
and
farmer
beneficiaries.
No
letter
of
invitation
was
sent
or
conference
meeting
held
with
respect
to
Hacienda
Caylaway
because
it
was
subject
to
a
Voluntary
Offer
to
Sell
to
DAR.
When
DAR,
through
the
MARO,
sent
to
the
various
parties
the
Notice
of
Coverage
and
invitation
to
the
conference,
DAR
A.
O.
No.
12,
Series
of
1989
was
already
in
effect
more
than
a
month
earlier.
The
Operating
Procedure
in
DAR
Administrative
Order
No.
12
does
not
specify
how
notices
or
letters
of
invitation
shall
be
sent
to
the
landowner,
the
representatives
of
the
BARC,
the
LBP,
the
farmer
beneficiaries
and
other
interested
parties.
The
procedure
in
the
sending
of
these
notices
is
important
to
comply
with
the
requisites
of
due
process
especially
when
the
owner,
as
in
this
case,
is
a
juridical
entity.
Petitioner
is
a
domestic
corporation,
and
therefore,
has
a
personality
separate
and
distinct
from
its
shareholders,
officers
and
employees.
Jaime
Pimentel
is
not
the
president,
manager,
secretary,
cashier
or
director
of
petitioner
corporation.
Is
he,
as
administrator
of
the
two
Haciendas,
considered
an
agent
of
the
corporation?
The
purpose
of
all
rules
for
service
of
process
on
a
corporation
is
to
make
it
reasonably
certain
that
the
corporation
will
receive
prompt
and
proper
notice
in
an
action
against
it.
Service
must
be
made
on
a
representative
so
integrated
with
the
corporation
as
to
make
it
a
priori
supposable
that
he
will
realize
his
responsibilities
and
know
what
he
should
do
with
any
legal
papers
served
on
him,
and
bring
home
to
the
corporation
notice
of
the
filing
of
the
action.
Petitioner’s
evidence
does
not
show
the
official
duties
of
Pimentel
as
administrator
of
petitioner’s
haciendas.
The
evidence
does
not
indicate
whether
Pimentel’s
duties
is
so
integrated
with
the
corporation
that
he
would
immediately
realize
his
responsibilities
and
know
what
he
should
do
with
any
legal
papers
served
on
him.
At
the
time
the
notices
were
sent
and
the
preliminary
conference
conducted,
petitioner’s
principal
place
of
business
was
listed
in
DAR’s
records
as
“Soriano
Bldg.,
Plaza
Cervantes,
Manila,”
and
“7th
Flr.
Cacho-‐Gonzales
Bldg.,
101
Aguirre
St.,
Makati,
Metro
Manila.”
Pimentel
did
not
hold
office
at
the
principal
place
of
business
of
petitioner.
Neither
did
he
exercise
his
functions
in
Plaza
Cervantes,
Manila
nor
in
Cacho-‐Gonzales
Bldg.,
Makati,
Metro
Manila.
He
performed
his
official
functions
and
actually
resided
in
the
haciendas
in
Nasugbu,
Batangas,
a
place
over
two
hundred
kilometers
away
from
Metro
Manila.
85
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Curiously,
DAR
had
information
of
the
address
of
petitioner’s
principal
place
of
business.
The
Notices
of
Acquisition
over
Haciendas
Palico
and
Banilad
were
addressed
to
petitioner
at
its
offices
in
Manila
and
Makati.
These
Notices
were
sent
barely
three
to
four
months
after
Pimentel
was
notified
of
the
preliminary
conference.
Why
DAR
chose
to
notify
Pimentel
instead
of
the
officers
of
the
corporation
was
not
explained
by
the
said
respondent.
Nevertheless,
assuming
that
Pimentel
was
an
agent
of
petitioner
corporation,
and
the
notices
and
letters
of
invitation
were
validly
served
on
petitioner
through
him,
there
is
no
showing
that
Pimentel
himself
was
duly
authorized
to
attend
the
conference
meeting
with
the
MARO,
BARC
and
LBP
representatives
and
farmer
beneficiaries
for
purposes
of
compulsory
acquisition
of
petitioner’s
landholdings.
Even
DAR’s
evidence
does
not
indicate
this
authority.
On
the
contrary,
petitioner
claims
that
it
had
no
knowledge
of
the
letter-‐invitation,
hence,
could
not
have
given
Pimentel
the
authority
to
bind
it
to
whatever
matters
were
discussed
or
agreed
upon
by
the
parties
at
the
preliminary
conference
or
public
hearing.
Notably,
one
year
after
Pimentel
was
informed
of
the
preliminary
conference,
DAR
A.O.
No.
9,
Series
of
1990
was
issued
and
this
required
that
the
Notice
of
Coverage
must
be
sent
“to
the
landowner
concerned
or
his
duly
authorized
representative.”
Assuming
further
that
petitioner
was
duly
notified
of
the
CARP
coverage
of
its
haciendas,
the
areas
found
actually
subject
to
CARP
were
not
properly
identified
before
they
were
taken
over
by
DAR.
The
acquisition
of
the
landholdings
did
not
cover
the
entire
expanse
of
the
two
haciendas,
but
only
portions
thereof.
Hacienda
Palico
has
an
area
of
1,024
hectares
and
only
688.7576
hectares
were
targetted
for
acquisition.
Hacienda
Banilad
has
an
area
of
1,050
hectares
but
only
964.0688
hectares
were
subject
to
CARP.
The
haciendas
are
not
entirely
agricultural
lands.
In
fact,
the
various
tax
declarations
over
the
haciendas
describe
the
landholdings
as
“sugarland,”
and
“forest,
sugarland,
pasture
land,
horticulture
and
woodland.”
Upon
receipt
of
this
notice,
therefore,
petitioner
corporation
had
no
idea
which
portions
of
its
estate
were
subject
to
compulsory
acquisition,
which
portions
it
could
rightfully
retain,
whether
these
retained
portions
were
compact
or
contiguous,
and
which
portions
were
excluded
from
CARP
coverage.
Even
respondent
DAR’s
evidence
does
not
show
that
petitioner,
through
its
duly
authorized
representative,
was
notified
of
any
ocular
inspection
and
investigation
that
was
to
be
conducted
by
respondent
DAR.
Neither
is
there
proof
that
petitioner
was
given
the
opportunity
to
at
least
choose
and
identify
its
retention
area
in
those
portions
to
be
acquired
compulsorily.
The
right
of
retention
and
how
this
right
is
exercised,
is
guaranteed
in
Section
6
of
the
CARL.
86
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Voluntary
Acquisition
of
Hacienda
Caylaway.
First
of
all,
the
same
E.O.
229,
like
Section
16
of
the
CARL,
requires
that
the
land,
landowner
and
beneficiaries
of
the
land
subject
to
agrarian
reform
be
identified
before
the
notice
of
acquisition
should
be
issued.
Hacienda
Caylaway
was
voluntarily
offered
for
sale
in
1989.
The
Hacienda
has
a
total
area
of
867.4571
hectares
and
is
covered
by
four
(4)
titles.
In
two
separate
Resolutions
both
dated
January
12,
1989,
DAR,
through
the
Regional
Director,
formally
accepted
the
VOS
over
two
of
these
four
titles.
The
land
covered
by
the
two
titles
has
an
area
of
855.5257
hectares,
but
only
648.8544
hectares
thereof
fell
within
the
coverage
of
R.A.
6657.
Petitioner
claims
it
does
not
know
where
these
portions
are
located.
DAR,
on
the
other
hand,
avers
that
surveys
on
the
land
covered
by
the
four
titles
were
conducted
in
1989,
and
that
petitioner,
as
landowner,
was
not
denied
participation
therein.
The
results
of
the
survey
and
the
land
valuation
summary
report,
however,
do
not
indicate
whether
notices
to
attend
the
same
were
actually
sent
to
and
received
by
petitioner
or
its
duly
authorized
representative.
To
reiterate,
EO
229
does
not
lay
down
the
operating
procedure,
much
less
the
notice
requirements,
before
the
VOS
is
accepted
by
DAR.
Notice
to
the
landowner,
however,
cannot
be
dispensed
with.
It
is
part
of
administrative
due
process
and
is
an
essential
requisite
to
enable
the
landowner
himself
to
exercise,
at
the
very
least,
his
right
of
retention
guaranteed
under
the
CARL.
ISSUE
3:
Assuming
the
haciendas
may
be
reclassified
from
agricultural
to
non-‐agricultural,
WON
this
court
has
the
power
to
rule
on
this
issue
HELD
3:
No
RATIO
3:
It
is
petitioner’s
claim
that
the
three
haciendas
are
not
subject
to
agrarian
reform
because
they
have
been
declared
for
tourism,
not
agricultural
purposes.
In
1975,
then
President
Marcos
issued
Proclamation
No.
1520
declaring
the
municipality
of
Nasugbu,
Batangas
a
tourist
zone.
Lands
in
Nasugbu,
including
the
subject
haciendas,
were
allegedly
reclassified
as
non-‐agricultural
13
years
before
the
effectivity
of
RA
6657.
In
1993,
the
Regional
Director
for
Region
IV
of
the
DA
certified
that
the
haciendas
are
not
feasible
and
sound
for
agricultural
development.
On
March
20,
1992,
pursuant
to
Proclamation
No.
1520,
the
Sangguniang
Bayan
of
Nasugbu,
Batangas
adopted
Resolution
No.
19
reclassifying
certain
areas
of
Nasugbu
as
non-‐agricultural.
This
Resolution
approved
Municipal
Ordinance
No.
19,
Series
of
1992,
the
Revised
Zoning
Ordinance
of
Nasugbu
which
zoning
ordinance
was
based
on
a
Land
Use
Plan
for
Planning
Areas
for
New
Development
allegedly
prepared
87
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
by
the
University
of
the
Philippines.
Resolution
No.
19
of
the
Sangguniang
Bayan
was
approved
by
the
Sangguniang
Panlalawigan
of
Batangas
on
March
8,
1993.
Petitioner
claims
that
Proclamation
No.
1520
was
also
upheld
by
DAR
in
1991
when
it
approved
conversion
of
1,827
hectares
in
Nasugbu
into
a
tourist
area
known
as
the
Batulao
Resort
Complex,
and
13.52
hectares
in
Barangay
Caylaway
as
within
the
potential
tourist
belt.
Petitioner
presents
evidence
before
us
that
these
areas
are
adjacent
to
the
haciendas
subject
of
this
petition,
hence,
the
haciendas
should
likewise
be
converted.
Petitioner
urges
this
Court
to
take
cognizance
of
the
conversion
proceedings
and
rule
accordingly.
We
do
not
agree.
DAR’s
failure
to
observe
due
process
in
the
acquisition
of
petitioner’s
landholdings
does
not
ipso
facto
give
this
Court
the
power
to
adjudicate
over
petitioner’s
application
for
conversion
of
its
haciendas
from
agricultural
to
non-‐agricultural.
The
agency
charged
with
the
mandate
of
approving
or
disapproving
applications
for
conversion
is
the
DAR.
At
the
time
petitioner
filed
its
application
for
conversion,
the
Rules
of
Procedure
governing
the
processing
and
approval
of
applications
for
land
use
conversion
was
the
DAR
A.
O.
No.
2,
Series
of
1990.
Under
this
A.
O.,
the
application
for
conversion
is
filed
with
the
MARO
where
the
property
is
located.
The
MARO
reviews
the
application
and
its
supporting
documents
and
conducts
field
investigation
and
ocular
inspection
of
the
property.
The
findings
of
the
MARO
are
subject
to
review
and
evaluation
by
the
Provincial
Agrarian
Reform
Officer
(PARO).
The
PARO
may
conduct
further
field
investigation
and
submit
a
supplemental
report
together
with
his
recommendation
to
the
Regional
Agrarian
Reform
Officer
(RARO)
who
shall
review
the
same.
For
lands
less
than
five
hectares,
the
RARO
shall
approve
or
disapprove
applications
for
conversion.
For
lands
exceeding
five
hectares,
the
RARO
shall
evaluate
the
PARO
Report
and
forward
the
records
and
his
report
to
the
Undersecretary
for
Legal
Affairs.
Applications
over
areas
exceeding
fifty
hectares
are
approved
or
disapproved
by
the
Secretary
of
Agrarian
Reform.
Indeed,
the
doctrine
of
primary
jurisdiction
does
not
warrant
a
court
to
arrogate
unto
itself
authority
to
resolve
a
controversy
the
jurisdiction
over
which
is
initially
lodged
with
an
administrative
body
of
special
competence.
DAR
is
in
a
better
position
to
resolve
petitioner’s
application
for
conversion,
being
primarily
the
agency
possessing
the
necessary
expertise
on
the
matter.
The
power
to
determine
whether
Haciendas
Palico,
Banilad
and
Caylaway
are
non-‐agricultural,
hence,
exempt
from
the
coverage
of
the
CARL
lies
with
the
DAR,
not
with
this
Court.
88
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Finally,
we
stress
that
the
failure
of
DAR
to
comply
with
the
requisites
of
due
process
in
the
acquisition
proceedings
does
not
give
this
Court
the
power
to
nullify
the
CLOA’s
already
issued
to
the
farmer
beneficiaries.
To
assume
the
power
is
to
short-‐circuit
the
administrative
process,
which
has
yet
to
run
its
regular
course.
DAR
must
be
given
the
chance
to
correct
its
procedural
lapses
in
the
acquisition
proceedings.
In
Hacienda
Palico
alone,
CLOA's
were
issued
to
177
farmer
beneficiaries
in
1993.
Since
then
until
the
present,
these
farmers
have
been
cultivating
their
lands.
It
goes
against
the
basic
precepts
of
justice,
fairness
and
equity
to
deprive
these
people,
through
no
fault
of
their
own,
of
the
land
they
till.
Anyhow,
the
farmer
beneficiaries
hold
the
property
in
trust
for
the
rightful
owner
of
the
land.
4.7
Closure
and
Opening
of
Roads:
Cabrera
vs.
CA
(1991)
FACTS
:
The
Province
of
Catanduanes
sought
to
make
the
access
to
its
capitol
building
easier
by
replacing
the
old
road
with
a
new
road
that
was
directly
connected
to
the
pier.
The
provincial
council
enacted
Resolution
No.
158,
that
(1)
closed
the
old
road
to
the
capitol
building;
and
(2)
allowed
the
property
owners
that
will
be
affected
by
the
building
of
the
new
road
to
claim
portion
of
the
old
road
in
proportion
to
the
property
they
will
give
up
for
the
new
road.
Two
of
those
affected
property
owners,
Mr
Alejandro
and
Mr
Peña
decided
to
plant
vegetables
and
operate
a
piggery
farm.
Their
neighbour,
Mr
Cabrera,
who
was
an
original
occupant
of
the
northern
part
of
the
old
road
filed
with
the
CFI
an
action
for
Restoration
of
Public
Road
and/or
Abatement
of
Nuisance,
Annulment
of
Resolutions
and
Documents
with
Damages.
Mr
Cabrera
argued
that
the
road
cannot
be
appropriated
because
it
was
beyond
the
commerce
of
man.
He
argued
that
the
provincial
government
cannot
barter
private
property
with
public
road
without
prior
closure
of
the
road,
and
that
such
closure
has
injured
his
family
because
they
can
no
longer
use
the
national
road
to
the
capitol
and
now
must
use
a
smaller
road.
The
CFI
and
the
Court
of
Appeals
ruled
in
favour
of
the
provincial
government.
Based
on
Republic
Act
No.
5185
in
relation
to
Section
2246
of
the
Revised
Administrative
Code,
municipal
authorities
have
powers
to
close
thoroughfares.
ISSUES:
1.
Was
there
a
valid
closure
of
the
public
road?
2.
Is
Mr
Cabrera
entitled
to
damages?
HELD:
1.
Yes,
there
was
a
valid
closure
of
the
road.
The
questioned
resolution
clearly
stated
the
closure
of
the
road
before
barter
was
done.
It
is
within
the
scope
of
authority
of
the
provincial
government,
and
as
cited
in
the
cases
of
Cebu
Oxygen
and
Acetylene
Co.,
Inc.
v
Bercilles
and
Favis
v
City
of
Baguio.
The
intention
of
the
provincial
government
was
well
within
the
general
welfare
clause
as
the
new
road
is
more
accessible
and
convenient
for
the
rest
of
the
community.
2.
No,
Mr
Cabrera
is
not
entitled
to
damages.
He
was
not
left
without
a
recourse
due
to
the
closure
of
the
old
road.
He
still
had
a
way
in
and
out
of
his
property.
In
fact,
during
the
pendency
of
the
trial,
the
court
officials
did
not
have
difficulty
getting
to
Mr
Cabrera’s
property
during
ocular
inspection.
It
is
not
fair
for
the
entire
community
to
pay
for
the
price
of
his
inconvenience
when
everyone
else
will
have
a
more
convenient
time.
89
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
MMDA
vs.
Bel
Air
Village
Assn.
Inc.,
(2000)
FACTS
:
1.
Petitioner
MMDA
is
a
government
agency
tasked
with
the
delivery
of
basic
services
in
Metro
Manila,
including
“transport
and
traffic
management.”
Respondent
Bel-‐Air
Village
Association,
Inc.
is
the
registered
owner
of
Neptune
Street,
a
private
road
inside
Bel-‐Air
Village.
2.
Neptune
runs
parallel
to
Kalayaan
Avenue,
a
national
road
open
to
the
general
public.
3.
Bel-‐Air
received
from
MMDA,
through
its
Chairman,
a
notice
requesting
it
to
open
Neptune
Street
to
public
vehicular
traffic
“for
the
safe
and
convenient
movement
of
persons”.
Bel-‐Air
was
also
apprised
that
the
perimeter
wall
separating
the
subdivision
from
the
adjacent
Kalayaan
Avenue
would
be
demolished.
4.
Bel-‐Air
instituted
against
MMDA
a
case
for
injunction
and
prayed
for
the
issuance
of
a
temporary
restraining
order
and
preliminary
injunction
enjoining
the
opening
of
Neptune
Street
and
prohibiting
the
demolition
of
the
perimeter
wall.
5.
MMDA
claims
that
it
has
the
authority
to
open
Neptune
Street
to
public
traffic
because
it
is
an
agent
of
the
state
endowed
with
police
power
in
the
delivery
of
basic
services
in
Metro
Manila
so
that
there
is
no
need
for
the
City
of
Makati
to
enact
an
ordinance
opening
Neptune
Street
to
the
public.
ISSUE
:
Whether
or
not
the
Metropolitan
Manila
Development
Authority
(MMDA)
has
the
mandate
to
open
Neptune
Street
to
public
traffic
pursuant
to
its
regulatory
and
police
powers?
HELD
:
No.
RATIO
:
1.
Police
power
is
lodged
primarily
in
the
National
Legislature.
It
cannot
be
exercised
by
any
group
or
body
of
individuals
not
possessing
legislative
power.
Our
Congress
delegated
police
power
to
the
local
government
units
in
the
Local
Government
Code
of
1991.
But
the
MMDA
is
not
a
local
government
unit
or
a
public
corporation
endowed
with
legislative
power.
Even
its
governing
board,
the
Metro
Manila
Council
has
not
been
delegated
any
legislative
power,
unlike
the
legislative
bodies
of
local
government
units.
2.
The
functions
of
MMDA
are
administrative
in
nature.
According
to
its
Charter,
R.A.
7924:
"Sec.
2.
Creation
of
the
Metropolitan
Manila
Development
Authority.
-‐-‐
–x
x
x.
The
MMDA
shall
perform
planning,
monitoring
and
coordinative
functions,
and
in
the
process
exercise
regulatory
and
supervisory
authority
over
the
delivery
of
metro-‐wide
services
within
Metro
Manila,
without
diminution
of
the
autonomy
of
the
local
government
units
concerning
purely
local
matters."
3.
Petitioner
cannot
seek
refuge
in
the
cases
of
Sangalang
v.
Intermediate
Appellate
Court
where
the
Court
upheld
certain
ordinances
as
a
legitimate
exercise
of
police
power
because
both
Makati
and
the
then
Metro
Manila
Commission
which
issued
the
said
ordinances
had
the
power
to
enact
them.
The
MMC
under
P.
D.
No.
824
is
not
the
same
entity
as
the
MMDA
under
R.
A.
No.
7924.
Unlike
the
MMC,
the
MMDA
has
no
power
to
enact
ordinances
for
the
welfare
of
the
community.
Sangalang
vs.
IAC
(1988)
FACTS:
•
1.
Bel-‐Air
Village
is
located
north
of
Buendia
Avenue
extension
(now
Sen.
Gil
J.
Puyat
Ave.)
across
a
stretch
of
commercial
block
from
Reposo
Street
in
the
west
up
to
Zodiac
Street
in
the
east.
•
Plaintiffs
are
all
either
residents
of
Bel
Air
village
or
the
Bel
Air
Village
Association
(BAVA).
•
In
the
1950's
Bel
Air
Village
property
was
sold
by
Makati
Development
Corporation
which
was
later
merged
with
Ayala
Corporation.
90
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
•
The
lots
were
subject
to
certain
restrictions
namely:
1)All
lot
owners
would
automatically
be
a
member
of
BAVA
and
2)
The
lots
may
only
be
used
for
domestic
purposes,
which
would
last
for
a
period
of
50
years.
•
At
the
time
the
area
was
open
to
all
kinds
of
people
and
even
animals.
The
residents
decided
to
build
a
wall
along
the
commercial
side
of
jupiter
street.
•
Eventually
Ayala
Corporation
decided
to
sell
the
lots
on
the
commercial
side
of
jupiter
street
to
the
public.
In
1972,
Bava
and
Ayala
agreed
that
the
lot
owners
would
be
members
of
BAVA
and
would
be
subject
to
the
same
deed
of
restriction
of
other
residents
in
the
subdivision.
•
On
April
4,
1975,
the
municipal
council
of
Makati
enacted
its
ordinance
no
81,
providing
for
the
zonification
of
makati.
Uner
this
ordinance,
Bel
air
village
was
classified
as
a
class
A
residential
zone
with
its
boundary
in
the
south
EXTENDING
TO
THE
CENTER
LINE
OF
JUPITER
STREET.
The
other
side
of
the
street
in
between
buendia
and
until
the
center
line
of
Jupiter
street
was
made
an
Administrative
Office
Zone.
•
Jan
1977,
The
office
of
the
Mayor
wrote
to
BAVA
that
in
order
to
ease
traffic
congestion
Jupiter
street
would
be
opened
up
to
the
public.
BAVA
requested
for
the
indefinite
postponement
of
the
plan
because
of
the
concern
of
the
residents.
Finally
on
August
1977
the
officials
of
Makati
removed
the
gates
in
order
to
open
the
entire
length
of
Jupiter
street
to
the
public.
Because
of
this
there
was
a
huge
increase
of
traffic
along
Jupiter
street.
•
The
commercial
establishments
on
the
southern
side
of
jupiter
street
broke
down
the
wall
as
it
was
no
longer
necessary
and
set
up
shop.
•
Even
the
residential
lots
on
the
northern
side
of
Jupiter
street
some
chose
to
use
as
commercial
due
to
the
increase
in
traffic
in
the
area.
•
On
March
1981,
the
'comprehensive
zoning
ordinance'
was
passed
by
the
MMC
as
ordinance
81-‐
01.
This
ordinance
made
Bel
Air
village
BOUND
BY
JUPITER
STREET
and
no
longer
the
center
line.
Significantly
the
other
side
of
Jupiter
street
was
classified
as
High
Intensity
Commercial
zone.
•
Several
residents
as
well
as
BAVA
filed
suit
claiming
1)
Ayala
corp
for
breach
of
contract
in
allowing
the
wall
to
be
broken
down
ushering
in
a
full
commercialization
of
Jupiter
street
and
2)against
some
residents
that
had
used
their
lots
as
commercial
in
violation
of
the
restrictions..
LOWER
COURTS:
plaintiffs
won,
then
lost
on
appeal,
the
CA
upholding
the
ordinances
as
valid
under
police
power
and
that
they
reclassified
the
area
to
allow
commercial
lots.
ISSUES:
1) WON
Ayala
corp
was
liable
for
breach
of
contract
for
the
wall
and
the
limited
use
of
Jupiter
street?
2) WON
the
lot
owners
are
liable?
HELD/RATIO
:
NO.
Although
Jupiter
street
was
donated
to
BAVA
in
1978
there
was
no
intention
to
limit
its
use
to
bel
air
village
residents,
in
fact
the
deed
included
the
general
public.
Also
as
regards
the
wall
there
was
no
proof
that
there
was
any
such
agreement
between
the
residents
and
Ayala
corp
that
a
wall
be
maintained.
NO.
“we
likewise
exculpate
the
private
respondents
not
only
because
of
the
fact
that
jupiter
street
is
not
covered
by
the
deed
of
restrictions
but
chiefly
because
the
National
Government
itself
through
the
MMC
had
reclassified
Jupiter
street
into
a
high
density
commercial
zone
pursuant
to
its
ordinance
81-‐01.”
“It
is
not
that
we
are
saying
that
restrictive
easements,
especially
the
easements
herein
question,
are
invalid
or
ineffective.
As
far
as
the
bel
air
subdivision
itself
is
concerned,
certainly,
they
are
valid
and
enforceable.
But
they
are
like
all
contracts
subject
to
the
overriding
demands
needs
and
interests
of
the
greater
number
as
the
state
may
determine
in
the
legitimate
exercise
of
police
power.
Our
jurisdiction
guarantees
sanctity
of
the
contract
and
is
aid
to
be
the
law
between
the
contracting
parties,
but
while
it
is
so,
it
cannot
contravene
law,
morals,
good
customs,
public
order,
or
public
policy.
Above
all
it
cannot
be
raised
as
a
deterrent
to
police
power
designed
precisely
to
promote
health
safety,
peace,
and
enhance
the
common
good,
at
the
expense
of
contractual
rights,
whenever
necessary...
The
non
impairment
clause
is
secondary
to
the
more
compelling
interests
of
the
general
welfare.”
91
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
Macasiano
vs.
Diokno
(1992)
FACTS
:
-‐
June
13,
1990.
The
municipality
of
Parañaque
passed
Ordinance
No.
86,
which
authorized
the
closure
of
J.
Gabriel,
G.G.
Cruz,
Bayanihan,
Lt.
Garcia
Extension
and
Opena
Streets
at
Baclaran,
and
the
establishment
of
a
flea
market
thereon.
-‐
Metropolitan
Manila
Authority
approved
Ordinance
No.
86
subject
to
the
following
conditions:
(1)
streets
are
not
used
for
vehicular
traffic
and
majority
of
residents
do
not
oppose
the
establishment
of
flea
market/vending
areas;
(2)
2-‐meter
wide
middle
road
to
be
used
as
flea
market
to
be
marked
distinctly,
and
that
the
2
meters
on
both
sides
to
be
used
by
pedestrians;
(3)
time
during
which
the
vending
area
is
to
be
used
is
clearly
designated;
(4)
use
of
vending
areas
shall
be
temporary
and
shall
be
closed
once
the
reclaimed
areas
are
developed
and
donated
by
the
Public
Estate
Authority.
-‐
Municipality
and
Palanyag,
a
service
cooperative,
entered
into
an
agreement
whereby
Palanyag
shall
operate
a
flea
market
and
remit
dues
to
the
treasury
of
the
municipal
government.
-‐
Brig.
Gen.
Macasiano,
PNP
Superintendent
of
the
Metropolitan
Traffic
Command,
ordered
the
destruction
and
confiscation
of
stalls.
Macasiano
gave
Palanyag
10
days
to
discontinue
the
flea
market.
Otherwise,
the
stalls
shall
be
dismantled.
-‐
Municipality
and
Palanyag
filed
joint
petition
for
prohibition
and
mandamus.
RTC
issued
TRO.
Later,
it
upheld
the
validity
of
Ordinance
No.
86.
-‐
Macasiano,
thru
OSG,
filed
petition
with
SC.
ISSUE
:
Whether
or
not
an
ordinance
authorizing
the
lease
and
use
of
public
streets
or
thoroughfares
as
sites
for
flea
markets
is
valid.
Arguments
of
parties:
-‐
Sol
Gen,
in
behalf
of
Macasiano:
Municipal
roads
are
public
properties
and
cannot
be
subject
to
private
appropriation
or
private
contract.
The
municipality
cannot,
in
the
absence
of
specific
authority
granted
by
the
legislature,
convert
property
already
in
public
use
to
another
public
use.
Also,
assuming
that
the
municipality
was
authorized
to
close
the
streets,
it
failed
to
comply
with
conditions
set
forth
by
the
MMA.
-‐
RTC
decision
upholding
the
legality
of
Ordinance
No.
86:
Chap.
II
Sec.
10
of
the
LGC
(BP
337)
empowers
LGUs
to
close
its
roads,
streets
or
alleys
subject
to
limitations
stated
therein.
The
authority
of
Macasiano
as
Police
Superintendent
ceases
to
be
operative
on
the
ground
that
the
streets
covered
by
the
ordinance
cease
to
be
public
thoroughfares.
HELD
:
The
ordinance
is
invalid
-‐
Properties
of
the
local
government
devoted
to
public
service
are
under
the
absolute
control
of
Congress.
Local
governments
have
no
authority
to
control
or
regulate
the
use
of
public
properties
unless
specific
authority
is
vested
upon
them
by
Congress.
-‐
Sec.
10,
Chap.
II,
LGC
(BP
337):
Closure
of
roads.
–
A
local
government
unit
may
likewise,
through
its
head
acting
pursuant
to
a
resolution
of
its
sangguniang
and
in
accordance
with
existing
law
and
the
provisions
of
this
Code,
close
any
barangay
municipal,
city
or
provincial
road,
street,
alley,
park
or
square.
No
such
way
or
place
or
any
part
thereof
shall
be
closed
without
indemnifying
any
person
prejudiced
thereby.
A
property
thus
withdrawn
from
public
use
may
be
used
or
conveyed
for
any
purpose
for
which
other
real
property
belonging
to
the
local
unit
concerned
might
be
lawfully
used
or
conveyed.
-‐
The
above
provision
authorizes
the
LGU
to
close
a
public
street
or
thoroughfare
for
the
sole
purpose
of
withdrawing
it
from
public
use
when
circumstances
show
that
it
is
no
longer
intended
or
necessary
for
public
use
or
public
service.
It
then
becomes
patrimonial
property
of
the
LGU
which
can
be
the
object
of
an
ordinary
contract.
-‐
The
subject
roads
and
streets
are
ordinarily
used
for
vehicular
traffic
and
are
still
considered
public
property
devoted
to
public
use.
The
local
government
had
no
power
to
use
it
for
another
purpose
or
lease
it
to
private
92
DECENTRALIZATION,
LOCAL
AUTONOMY,
POWERS
OF
MUNICIPAL
CORPORATIONS
PART
II
persons.
-‐
Even
assuming
that
the
municipality
has
the
authority
to
pass
the
ordinance,
it
cannot
be
validly
implemented
because
the
municipality
failed
to
show
that
it
had
complied
with
the
conditions
set
forth
by
the
MMA.
Petition
granted;
decision
reversed
and
set
aside.
93