Case 1: CRISOSTOMO B. AQUINO vs.

MUNICIPALITY OF MALAY, AKLAN

G.R. No. 211356, September 29, 2014

Facts:

The herein petitioner is the president and chief executive officer of Boracay Island West Cove Management
Philippines, Inc. (Boracay West Cove). The company applied for a zoning compliance with the municipal
government of Malay, Aklan. While the company was already operating a resort in the area, the application sought
the issuance of a building permit covering the construction of a three-storey hotel over a parcel of land which is
covered by a Forest Land Use Agreement for Tourism Purposes (FLAgT) issued by the Department of Environment
and Natural Resources (DENR) in favor of Boracay West Cove.

Such request was denied by the Municipal Zoning Administrator, through a Decision on Zoning dated January 20,
2010, on the ground that the proposed construction site was within the “no build zone” demarcated in Municipal
Ordinance 2000-131.

Petitioner then filed an appeal, and subsequently sent another letter to follow-up his appeal at the Office of the
Mayor, however, no action was taken.

A Notice of Assessment was then sent to petitioner demanding payment for unpaid real estate taxes under the pain
of closure due to its continuous operation without the required building permit. Aquino expressed his willingness to
pay, however the municipal treasurer refused to accept his payment.

On March 28, 2011, a Cease and Desist Order was issued by the municipal government, enjoining the expansion of
the resort, and on June 7, 2011, the Office of the Mayor of Malay, Aklan issued the assailed EO 10, ordering the
closure and demolition of Boracay West Cove’s hotel. The said EO was partially implemented on June 10, 2011 and
was followed with two more demolitions of the improvements introduced by Boracay West Cove, the most recent of
which was made in February 2014.

Petitioner then filed a Petition for Certiorari with prayer for injunctive relief with the CA Alleging that the order was
issued and executed with grave abuse of discretion. He contends that the hotel cannot summarily be abated because
it is not a nuisance per se, given the hundred million peso-worth of capital infused in the venture and that the
Municipality of Malay, Aklan should have first secured a court order before proceeding with the demolition.

PUBLIC CORPORATION_CASE
Respondent DIGEST_Week
through its representatives 1_September
however claimed that 19-20, 2020
the demolition needed no court order because the 1
municipal mayor has the express power under the Local Government Code (LGC) to order the removal of illegally
constructed buildings.

Issue:

Whether or not respondent mayor committed grave abuse of discretion when he issued EO 10.

Ruling:

No, the respondent mayor did not commit grave abuse of discretion when he issued EO 10.

a. Illegality of structures & procedural due process

Generally, LGUs have no power to declare a particular thing as a nuisance unless such a thing is a nuisance per se,
nor can it authorize the extrajudicial condemnation and destruction of that as a nuisance which in its nature, situation
or use is not such. Those things must be determined and resolved in the ordinary courts of law. However, despite the
hotel’s classification as a nuisance per accidens, the court ruled that in this case, the LGU may nevertheless
properly order the hotel’s demolition, in the former’s exercise of police power and the general welfare clause,
property rights of individuals may be subjected to restraints and burdens in order to fulfill the objectives of
the government.

Otherwise stated, the government may enact legislation that may interfere with personal liberty, property, lawful
businesses and occupations to promote the general welfare. Under the law, insofar as illegal constructions are
concerned, the mayor can, after satisfying the requirement of due notice and hearing, order their closure and
demolition.

One such piece of legislation is the LGC, which authorizes city and municipal governments, acting through their
local chief executives, to issue demolition orders. Under existing laws, the office of the mayor is given powers not
only relative to its function as the executive official of the town; it has also been endowed with authority to hear
issues involving property rights of individuals and to come out with an effective order or resolution thereon. This is

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banked on Sec. 444 (b)(3)(vi) of the LGC, which empowers the mayor to order the closure and removal of
illegally constructed establishments for failing to secure the necessary permits.

Furthermore, the petitioner admittedly failed to secure the necessary permits, clearances, and exemptions before the
construction, expansion, and operation of Boracay Wet Cove’s hotel in Malay, Aklan. To recall, petitioner declared
that the application for zoning compliance was still pending with the office of the mayor even though construction
and operation were already ongoing at the same time. As such, it could no longer be denied that petitioner openly
violated Municipal Ordinance 2000-131, which provides that: “No building or structure shall be allowed to start
construction unless a Building Permit therefore has been duly issued by the Office of the Municipal Engineer.”

The same ordinance also provides penalties for the aforementioned violation, “Sec. 10 Penalties - Any building,
structure, or contraption erected in any public place within the Municipality of Malay such as but not limited to
streets, thoroughfares, sidewalks, plazas, beaches or in any other public place are hereby declared as nuisance and
illegal structure. Such building structure or contraption shall be demolished by the owner thereof or any of his
authorized representative within ten (10) days from receipt of the notice to demolish. Failure or refusal on the part of
the owner or any of his authorized representative to demolish the illegal structure within the period here in above
specified shall automatically authorize the government of the Municipality of Malay to demolish the same, gather
and keep the construction materials of the demolished structure.”

The court further discussed that the inaction of the respondent mayor on his appeal, does not, in any way, imply that
petitioner can proceed with his infrastructure projects. On the contrary, this only means that the decision of the
zoning administrator denying the application still stands and that petitioner acquired no right to construct on the no
build zone. The illegality of the construction cannot be cured by merely tendering payment for the necessary fees
and permits since the LGU’s refusal rests on valid grounds.

In his defiance of the zoning administrator’s ruling, petitioner consciously chose to violate not only the Ordinance
but also Sec. 301 of PD 1096, laying down the requirement of building permits, which provides - Section 301.
Building Permits. No person, firm or corporation, including any agency or instrumentality of the government shall
erect, construct, alter, repair, move, convert or demolish any building or structure or cause the same to be done
without first obtaining a building permit therefor from the Building Official assigned in the place where the subject
building is located or the building work is to be done.

This twin violation of law and ordinance warranted the LGU’s invocation of Sec. 444 (b)(3)(vi) of the LGC, which
power is separate and distinct from the power to summarily abate nuisances per se. Under the law, insofar as illegal
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constructions DIGEST_Week
are concerned, the mayor 1_September
can, after satisfying 19-20, 2020 of due notice and hearing, order their
the requirement 2
closure and demolition.

The court also emphasized that the hotel was demolished not exactly because it is a nuisance but because it
failed to comply with the legal requirements prior to construction. It just so happened that, in the case at bar, the
hotel’s incident that qualified it as a nuisance per accidens––its being constructed within the no build zone––further
resulted in the non-issuance of the necessary permits and clearances, which is a ground for demolition under the
LGC. Under the premises, a court order that is required under normal circumstances is hereby dispensed with.

b. The FLAgT cannot prevail over the municipal ordinance and PD 1096

On the issue of the prevalence of the FLAgT over the municipal ordinance and PD 1096, the court said that the
rights granted to petitioner under the FLAgT are not unbridled. Forestlands, although under the management of the
DENR, are not exempt from the territorial application of municipal laws, for local government units legitimately
exercise their powers of government over their defined territorial jurisdiction.

Thus, aside from complying with the provisions in the FLAgT granted by the DENR, it was incumbent on petitioner
to likewise comply with the no build zone restriction under Municipal Ordinance 2000-131, which was already in
force even before the FLAgT was entered into. On this point, it is well to stress that Sections 6 and 8 of the
Ordinance do not exempt petitioner from complying with the restrictions since these provisions adverted to grant
exemptions from the ban on constructions on slopes and swamps, not on the no build zone.

Additionally, the FLAgT does not excuse petitioner from complying with PD 1096. As correctly pointed out by
respondents, the agreement cannot and will not amend or change the law because a legislative act cannot be altered
by mere contractual agreement. Hence, petitioner has no valid reason for its failure to secure a building permit
pursuant to Sec. 301 of the National Building Code.

c. DENR has no primary jurisdiction of the controversy

Lastly, based on law and jurisprudence, the office of the mayor has quasi-judicial powers to order the closing and
demolition of establishments. The fact that the building to be demolished is located within a forestland under
the administration of the DENR is of no moment, for what is involved herein, strictly speaking, is not an issue
on environmental protection, conservation of natural resources, and the maintenance of ecological balance,
but the legality or illegality of the structure.
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The petition was denied for lack of merit, and the CA Decision was affirmed.

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Case 2: CAPITOL WIRELESS, INC. vs. THE PROVINCIAL TREASURER OF BATANGAS

G.R. No. 180110

Facts:

Petitioner Capitol Wireless Inc. (Capwire) is a Philippine corporation in the business of providing international
telecommunications services. As such provider, Capwire has signed agreements with other local and foreign
telecommunications companies covering an international network of submarine cable systems such as the Asia
Pacific Cable Network System (APCN) (which connects Australia, Thailand, Malaysia, Singapore, Hong Kong,
Taiwan, Korea, Japan, Indonesia and the Philippines); the Brunei-Malaysia-Philippines Cable Network System
(BMP-CNS), the Philippines-Italy (SEA-ME-WE-3 CNS), and the Guam Philippines (GP-CNS) systems. The
agreements provide for co-ownership and other rights among the parties over the network.

Petitioner Capwire claims that it is co-owner only of the so-called "Wet Segment" of the APCN, while the landing
stations or terminals and Segment E of APCN located in Nasugbu, Batangas are allegedly owned by the Philippine
Long Distance Telephone Corporation (PLDT). Moreover, it alleges that the Wet Segment is laid in international,
and not Philippine, waters.

Capwire claims that as co-owner, it does not own any particular physical part of the cable system but, consistent
with its financial contributions, it owns the right to use a certain capacity of the said system. This property right is
allegedly reported in its financial books as "Indefeasible Rights in Cable Systems.

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However, for loan restructuring purposes, Capwire claims that "it was required to register the value of its right,"
hence, it engaged an appraiser to "assess the market value of the international submarine cable system and the cost
to Capwire."

After the filing of the public respondents' Comment, on May 5, 2003, the RTC issued an Order dismissing the
petition for failure of the petitioner Capwire to follow the requisite of payment under protest as well as failure to
appeal to the Local Board of Assessment Appeals (LBAA), as provided for in Sections 206 and 226 of Republic Act
(R.A.) No. 7160, or the Local Government Code.

Issues:

(1) Is the case cognizable by the administrative agencies and covered by the requirements in Sections 226 and
229 of the Local Government Code which makes the dismissal of Capwire's petition by the RTC proper?

(2) May submarine communications cables be classified as taxable real property by the local governments?

Ruling:

(1) The petition is denied. The Supreme Court held that the appellate court correctly ruled that the case involves
factual questions that should have been resolved before the appropriate administrative bodies.

In disputes involving real property taxation, the general rule is to require the taxpayer to first avail of administrative
remedies and pay the tax under protest before allowing any resort to a judicial action, except when the assessment
itself is alleged to be illegal or is made without legal authority.
(2) Yes, submarine communications cables can be classified as taxable real property by the local governments.

Submarine or undersea communications cables are akin to electric transmission lines which this Court has recently
declared as "no longer exempted from real property tax" and may qualify as "machinery" subject to real property tax
under the Local Government Code.

As the Court takes judicial notice that Nasugbu is a coastal town and the surrounding sea falls within what the
United Nations
PUBLIC Convention on the DIGEST_Week
CORPORATION_CASE Law of the Sea1_September
(UNCLOS)19-20,
would2020
define as the country's territorial sea to the 4
extent of 12 nautical miles outward from the nearest baseline over which the country has sovereignty, including the
seabed and subsoil, it follows that indeed a portion of the submarine cable system lies within Philippine territory and
thus falls within the jurisdiction of the said local taxing authorities. And even if such portion does not lie in the 12-
nautical-mile vicinity of the territorial sea but further inward this Court held that "whether referred to as Philippine
'internal waters' under Article I of the Constitution or as 'archipelagic waters' under UNCLOS, the Philippines
exercises sovereignty over the body of water lying landward of its baselines, including the air space over it and the
submarine areas underneath."

As far as local government units are concerned, the area is considered subsumed under the term "municipal waters"
which, under the Local Government Code, includes "not only streams, lakes, and tidal waters within the
municipality, not being the subject of private ownership and not comprised within the national parks, public forest,
timber lands, forest reserves or fishery reserves, but also marine waters included between two lines drawn
perpendicularly to the general coastline from points where the boundary lines of the municipality or city touch the
sea at low tide and a third line parallel with the general coastline and 15 kilometers from it."

Thus, the jurisdiction or authority over such part of the subject submarine cable system lying within Philippine
jurisdiction includes the authority to tax the same and such authority has been delegated by the national legislature
to the local governments with respect to real property taxation.

The petition is denied.

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Case 3 & 4: REPUBLIC vs. PROVINCIAL GOVERNMENT OF PALAWAN
G.R. No. 170867/185941, January 21, 2020
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Facts:

In December of 1990, the Department of Energy (DoE), in behalf of the Republic of the Philippines, entered into a
service contract with Shell Philippines Exploration B.V. and Occidental Philippines, Incorporated (collectively
SPEX/OXY), as Contractor, for the exclusive conduct of petroleum operations in the area known as "Camago-
Malampaya" located offshore northwest of Palawan. The exploration of the area led to the drilling of the Camago-
Malampaya natural gas reservoir about 80 kilometers from the main island of Palawan and 30 kms from the
platform. The Provincial Government of Palawan asserted its claim over forty percent (40%) of the National
Government's share in the proceeds of the project. The respondent argued that since the reservoir is located within
its territorial jurisdiction, it is entitled to said share under Section 290 of the Local Government Code. The National
Government disputed the claim, arguing that since the gas fields were approximately 80 kms from Palawan's
coastline, they are outside the territorial jurisdiction of the province and is within the national territory of the
Philippines.

Issues:

(1) Whether or not Palawan is entitled to 40% share in the proceeds of the Project?

(2) Whether or not the Doctrine of Federal Paramountcy Applicable in the Philippines?

Ruling:

(1) No, the Local Government Code does not define the term "territorial jurisdiction." Provisions therein, however,
indicate that territorial jurisdiction refers to the LGU's territorial boundaries. In the creation of municipalities, cities
and barangays, the Local Government Code uniformly requires that the territorial jurisdiction of these government
units be "properly identified by metes and bounds. The intention, therefore, is to consider an LGU's territorial
jurisdiction as pertaining to a physical location or area as identified by its boundaries. That "territorial jurisdiction"
refers to the LGU's territorial boundaries is a construction reflective of the discussion of the framers of the 1987
Constitution who referred to the local government as the "locality" that is "hosting" the national resources and a
"place where God chose to locate His bounty." It is also consistent with the language ultimately used by the
Constitutional Commission when they referred to the national wealth as those found within (the LGU's) respective
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areas. By definition, "area" refers to a particular extent of space or surface or a geographic region. The importance
of drawing with precise strokes the territorial boundaries of a local unit of government cannot be overemphasized.
Clearly, therefore, a local government's territorial jurisdiction cannot extend beyond the boundaries set by its
organic law.

The parties all agree that the Camago-Malampaya reservoir is located in the continental shelf, and according
to the organic law creating municipalities of Palawan and found that the municipalities of Palawan do not
include the continental shelf where the Camago-Malampaya reservoir is concededly located. In fact, with the
exception of Kalayaan, which includes the seabed, the subsoil and the continental margin as part of its demarcated
area, the municipalities are either located within an island or are comprised of islands.

(2) No, the Doctrine of Federal Paramountcy is a doctrine of constitutional law which gives priority to the
application of a federal statute where those terms conflict with the operation of a provincial statute. In the instant
case, if there is a conflict between the claim of federal government and the coastal state over the natural resources
found in the area of the coastal state, the claim of the Federal Government is given priority.)

There are several reasons why the foregoing doctrine cannot be applied to this case. First, the U.S. does not appear
to have an equitable sharing provision similar to Section 7, Article X of the 1987 Constitution. Second, the
Philippines is not composed of states that were previously independent nations. Third, the resolution of these cases
does not necessitate distinguishing between dominium and imperium since neither determines the LGU's entitlement
to the equitable share under Section 7 of Article X. Fourth, the Court is not called upon to determine who between
the Province of Palawan and the National Government has the paramount or dominant right to explore or exploit the
natural resources in the marginal sea or beyond. Fifth, adjudication of these cases does not entail upholding the
dominion of the National Government over a political subdivision since ownership of the natural resources is
concededly vested in the State. Sixth, it is settled that dominion over national wealth belongs to the State under the
regalian doctrine. Ownership of the subject reservoir, therefore, is a nonissue and what simply needs to be
determined is whether said resource is located within the area or territorial jurisdiction of the Province of Palawan.

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Case 5: MIAA vs. CA
G.R. No. 155650, July 20, 2006

Facts:

Manila International Airport Authority (MIAA), herein petitioner, operates the Ninoy Aquino International Airport
(NAIA) Complex in Parañaque City MIAA, and therefore administers the land, improvements and equipment
thereof. The MIAA Charter transferred to MIAA approximately 600 hectares of land and further provides that no
portion of the land transferred to MIAA shall be disposed of through sale or any other mode unless specifically
approved by the President of the Philippines.

The Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061 on March 21, 1997 and opined
that the Local Government Code of 1991 withdrew the exemption from real estate tax granted to MIAA under
Section 21 of the MIAA Charter. Thus, MIAA negotiated with respondent City of Parañaque to pay the real estate
taxPUBLIC CORPORATION_CASE
imposed by the City. MIAA DIGEST_Week
then paid some1_September
of the real 19-20,
estate 2020
tax already due. On 28 June 2001, MIAA 7
received Final Notices of Real Estate Tax Delinquency from the City of Parañaque for the taxable years 1992 to
2001. MIAA's real estate tax delinquency reached the amount of P 624,506,725.42, covering the period 1992-2001.

Thereafter, the City of Parañaque posted notices of auction sale of the land in issue and the same was published in a
newspaper of general circulation in the Philippines. The notices announced the public auction sale of the Airport
Lands and Buildings to the highest bidder on 7 February 2003, 10:00 a.m., at the Legislative Session Hall Building
of Parañaque City. Three (3) hours after the public auction, the respondents received a TRO.

On 29 March 2005, the Court heard the parties in oral arguments. In compliance with the directive issued during the
hearing, MIAA, respondent City of Parañaque, and the Solicitor General subsequently submitted their respective
Memoranda.

MIAA claims that the ownership over the properties in dispute which are devoted to public use and public service, is
still with the Republic of the Philippines. It further claims that the Airport Lands and Buildings are thus inalienable
and are not subject to real estate tax by local governments. To justify the exemption, MIAA invokes the principle
that the government cannot tax itself. MIAA points out that the reason for tax exemption of public property is that its
taxation would not inure to any public advantage, since in such a case the tax debtor is also the tax creditor.

On the other hand, the Respondents invoke Section 193 of the Local Government Code, which expressly withdrew
the tax exemption privileges of "government-owned and-controlled corporations" upon the effectivity of the Local
Government Code. Moreover the Respondents cited the ruing in the case of Mactan International Airport v. Marcos
where it was held that the Local Government Code has withdrawn the exemption from real estate tax granted to
international airports. Respondents further argue that since MIAA has already paid some of the real estate tax
assessments, it is now estopped from claiming that the Airport Lands and Buildings are exempt from real estate tax.

Issues:

Whether or not the Airport Lands and Buildings of MIAA are exempt from real estate tax under existing laws.

Ruling:

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The Supreme Court ruled that MIAA's Airport Lands and Buildings are exempt from real estate tax imposed by
local governments. First, MIAA is not a government-owned or controlled corporation but an instrumentality of the
National Government and thus exempt from local taxation. Second, the real properties of MIAA are owned by the
Republic of the Philippines and thus exempt from real estate tax.

Case 6: FUNA vs. MECO

G.R. No. 193462, February 4, 2014

Facts:

MECO is a corporate entity "entrusted" by the Philippine government with the responsibility of fostering "friendly"
and "unofficial" relations with the people of Taiwan, particularly in the areas of trade, economic cooperation,
investment, cultural, scientific and educational exchanges. To enable it to carry out such responsibility, the MECO
was "authorized" by the government to perform certain "consular and other functions" that relates to the promotion,
protection and facilitation of Philippine interests in Taiwan.

On 23 August 2010, petitioner sent a letter to the COA requesting for a "copy of the latest financial and audit report"
of the MECO invoking, for that purpose, his "constitutional right to information on matters of public concern." The
petitioner made the request on the belief that the MECO, being under the "operational supervision" of the
Department of Trade and Industry (DTI), is a government owned and controlled corporation (GOCC) and thus
subject to the audit jurisdiction of the COA. COA issued a Memorandum stating that MECO was "not among the
agencies audited by any of the three Clusters of the Corporate Government Sector. However, COA further alleged
that despite being a non-governmental entity, the MECO may still be audited with respect to the "verification fees"
for overseas employment documents that it collects from Taiwanese employers on behalf of the DOLE.

Issues:

Whether or not MECO is a GOCC covered by the auditing power of COA.

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Ruling: 8

No, MECO is not a GOCC or government instrumentality. It is a sui generis private entity especially entrusted by
the government with the facilitation of unofficial relations with the people in Taiwan without jeopardizing the
country’s faithful commitment to the One China policy of the PROC. However, despite its non-governmental
character, the MECO handles government funds in the form of the "verification fees" it collects on behalf of the
DOLE and the "consular fees" it receives through the government, having been derived from the exercise of
consular functions entrusted to the MECO by the government. Hence, under existing laws, the accounts of the
MECO pertaining to its collection of such "verification fees" and "consular fees" should be audited by the COA.

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Case 7: CITY OF MANILA vs. INTERMEDIATE APPELLATE COURT
G.R. No. 71159, November 15, 1989

Facts:

Vivencio Sto. Domingo, Sr. deceased husband of plaintiff Irene Sto. Domingo and father of the litigating minors,
died on June 4, 1971 and buried on June 6, 1971 in Lot No. 159, Block No. 194 of the North Cemetery which lot
was leased by the city to Irene Sto. Domingo for the period from June 6, 1971 to June 6, 2021 per Official Receipt
No. 61307 dated June 6, 1971 (see Exh. A) with an expiry date of June 6, 2021 (see Exh. A-1). Full payment of the
rental therefor of P50.00 is evidenced by the said receipt which appears to be regular on its face.

Believing in good faith that, in accordance with Administrative Order No. 5, Series of 1975, dated March 6, 1975, of
the City Mayor of Manila (See Exh. 1) prescribing uniform procedure and guidelines in the processing of documents
pertaining to and for the use and disposition of burial lots and plots within the North Cemetery, etc., subject Lot No.
159 of Block 194 in which the mortal remains of the late Vivencio Sto. Domingo were laid to rest, was leased to the
bereaved family for five (5) years only, subject lot was certified on January 25, 1978 as ready for exhumation.

On the basis of such certification, the authorities of the North Cemetery then headed by defendant Joseph Helmuth
authorized the exhumation and removal from subject burial lot the remains of the late Vivencio Sto. Domingo, Sr.,
placed the bones and skull in a bag or sack and kept the same in the depository or bodega of the cemetery. On All
Souls Day, in their shock, consternation and dismay that the resting place of their dear departed did not anymore
bear the stone marker which they lovingly placed on the tomb.

The widow was too aggrieved that she came to court for relief, both courts decided in her favor.

Issues:

Whether or not the operations and functions of a public cemetery are a governmental, or a corporate or proprietary
function of the City of Manila

Ruling:
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Under the law, the City of Manila is a political body corporate and as such endowed with the faculties of municipal
corporations to be exercised by and through its city government in conformity with law, and in its proper corporate
name. It may sue and be sued, and contract and be contracted with.

With the acts of dominion, there is, therefore no doubt that the North Cemetery is within the class of property which
the City of Manila owns in its proprietary or private character. Furthermore, there is no dispute that the burial lot
was leased in favor of the private respondents. Hence, obligations arising from contracts have the force of law
between the contracting parties. Thus a lease contract executed by the lessor and lessee remains as the law between
them. Therefore, a breach of contractual provision entitles the other party to damages even if no penalty for such
breach is prescribed in the contract.

As regards the issue of the validity of the contract of lease of grave lot No. 159, Block No. 195 of the North
Cemetery for 50 years beginning from June 6, 1971 to June 6, 2021 as clearly stated in the receipt duly signed by the
deputy treasurer of the City of Manila and sealed by the city government, there is nothing in the record that justifies
the reversal of the conclusion of both the trial court and the Intermediate Appellate Court to the effect that the
receipt is in itself a contract of lease.

Under the doctrine of respondent superior, Petitioner City of Manila is liable for the tortious act committed by its
agents who failed to verify and check the duration of the contract of lease. The contention of the petitioner-city that
the lease is covered by Administrative Order No. 5, series of 1975 dated March 6, 1975 of the City of Manila for
five (5) years only beginning from June 6, 1971 is not meritorious for the said administrative order covers new
leases. When subject lot was certified on January 25, 1978 as ready for exhumation, the lease contract for fifty (50)
years was still in full force and effect.

Case 8: MUNICIPALITY OF SAN FERNANDO vs. FIRME

G.R. No. L-52179, April 8, 1991

Facts:

Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and in accordance with
the laws of the Republic of the Philippines.

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On December 16, 1965, a passenger jeepney, a sand truck and a dump truck of the Municipality of San Fernando, La
Union collided. Due to the impact, several passengers including Laureano Baniña Sr. died. The heirs of Baniña
filed a complaint for damages against the owner and driver of the jeepney, who, in turn, filed a Third Party
Complaint against the Municipality and its dump truck driver, Alfredo Bislig. Municipality filed its answer and
raised the defense of non-suability of the State. After trial, the court ruled in favor of the plaintiffs and ordered
Municipality and Bislig to pay jointly and severally the heirs of Baniña.

Issues:

Whether or not the respondent court committed grave abuse of discretion when it deferred and failed to resolve the
defense of non-suability of the State amounting to lack of jurisdiction in a motion to dismiss.

Ruling:

The respondent judge did not commit grave abuse of discretion when in the exercise of its judgment it arbitrarily
failed to resolve the vital issue of non-suability of the State in the guise of the municipality. However, said judge
acted in excess of his jurisdiction when in his decision dated October 10, 1979 he held the municipality liable for the
quasi-delict committed by its regular employee.

The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Constitution, to
wit: "the State may not be sued without its consent."

Stated in simple parlance, the general rule is that the State may not be sued except when it gives consent to be sued.
Consent takes the form of express or implied consent.

Municipal corporations, like the Petitioner Municipality of San Fernando, La Union, are agencies of the State when
they are engaged in governmental functions and therefore should enjoy the sovereign immunity from suit.
Nevertheless, they are subject to suit even in the performance of such functions because their charter provided that
they can sue and be sued.

It has already been remarked that municipal corporations are suable because their charters grant them the
competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the
PUBLIC of
discharge CORPORATION_CASE
governmental functions DIGEST_Week 1_September
and can be held answerable 19-20,
only2020
if it can be shown that they were acting in a 10
proprietary capacity. Here, the driver of the dump truck of the municipality insists that "he was on his way to the
Naguilian river to get a load of sand and gravel for the repair of San Fernando's municipal streets." In the absence of
any evidence to the contrary, the regularity of the performance of official duty is presumed pursuant to Section 3(m)
of Rule 131 of the Revised Rules of Court. Hence, the Supreme Court ruled that the driver of the dump truck was
performing duties or tasks pertaining to his office.

Premises considered, the municipality cannot be held liable for the torts committed by its regular employee, who
was then engaged in the discharge of governmental functions. Therefore, the death of the passenger –– tragic and
deplorable though it may be –– imposed on the municipality no duty to pay monetary compensation.

Case 9: JOSE D. LINA, JR. vs. HON. FRANCISCO D. PAÑO

G.R. No. 129093, August 30, 2001

Facts:

On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine Charity Sweepstakes
Office (PCSO) to install Terminal OM 20 for the operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of
San Pedro, Laguna, for a mayor's permit to open the lotto outlet. This was denied by Mayor Cataquiz in a letter
dated February 19, 1996. The ground for said denial was an ordinance passed by the Sangguniang Panlalawigan of
Laguna entitled Kapasiyahan Blg. 508, T. 1995 which was issued on September 18, 1995, which objects the
establishment of any form of illegal gambling, moreso, Lotto and Jueteng.

After such denial, respondent Calvento filed a complaint asking the Regional Trial Court of San Pedro Laguna,
Branch 93, for the following reliefs: (1) a preliminary injunction or temporary restraining order, ordering the
defendants to refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon.
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Municipal Mayor Calixto R Cataquiz to issue a business permit for the operation of a lotto outlet; and (3) an order
annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.

Thereafter, respondent judge, Francisco Dizon Paño, promulgated his decision enjoining the petitioners from
implementing or enforcing resolution or Kapasiyahan Blg. 508, T. 1995. Petitioners then filed a Motion for
Reconsideration and the same was subsequently denied for lack of merit.

Hence, this petition. The petitioners contend that the assailed resolution is a valid policy declaration of the
Provincial Government of Laguna of its vehement objection to the operation of lotto and all forms of gambling. It is
likewise a valid exercise of the provincial government's police power under the General Welfare Clause of the Local
Government Code of 1991.
For his part, respondent Calvento argues that the questioned resolution is, in effect, a curtailment of the power of the
state since in this case the national legislature itself had already declared lotto as legal and permitted its operations
around the country.

Issue:

(1) Whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a
mayor's permit based thereon are valid;

(2) Whether prior consultations and approval by the concerned Sanggunian are needed before a lotto system
can be operated in a given local government unit;

Ruling:

(1) As to the first issue, the Supreme Court ruled that Kapasiyahan Blg. 508 is valid, but the denial of a mayor’s
permit based thereon is invalid.

The ordinance, which was the mayor’s basis for the prohibition, merely states the "objection" of the council to the
said game. It is but a mere policy statement on the part of the local council, which is not self-executing. Nor could it
serve as a valid ground to prohibit the operation of the lotto system in the province of Laguna. Even petitioners
admit that the said ordinance is a policy declaration in their petition.

AsPUBLIC
a policyCORPORATION_CASE
statement expressing the local government's
DIGEST_Week objection
1_September to the
19-20, 2020lotto, such resolution is valid. This is part 11
of the local government's autonomy to air its views which may be contrary to that of the national government's.
However, this freedom to exercise contrary views does not mean that local governments may actually enact
ordinances that go against laws duly enacted by Congress. Given this premise, the assailed resolution in this case
could not and should not be interpreted as a measure or ordinance prohibiting the operation of lotto.

(2) As to the second issue, the court said that ordinances should not contravene statutes as municipal governments
are merely agents of the national government. The local councils exercise only delegated legislative powers which
have been conferred on them by Congress. The delegate cannot be superior to the principal or exercise powers
higher than those of the latter. This being the case, these councils, as delegates, cannot be superior to the principal or
exercise powers higher than those of the latter. The question of whether gambling should be permitted is for
Congress to determine, taking into account national and local interests. Since Congress has allowed the PCSO to
operate lotteries which PCSO seeks to conduct in Laguna, pursuant to its legislative grant of authority, the
province's Sangguniang Panlalawigan cannot nullify the exercise of said authority by preventing something already
allowed by Congress.

In sum, the Supreme Court finds no reversible error in the RTC decision, hence the petition was denied for lack of
merit and the aforesaid decision is affirmed.

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 PUBLIC CORPORATION_CASE DIGEST_Week 1_September 19-20, 2020 12

Case 10: MAYOR PABLO P. MAGTAJAS vs. PRYCE PROPERTIES INC., & PHILIPPINE
AMUSEMENTS & GAMING CORP.
G.R. No. 111097, July 20, 1994

Facts:

The announcement of PAGCOR’s casino opening in Cagayan de Oro received strong opposition from the religious
sector, women’s, and youth groups. Demonstrations led by the mayor and city legislators were even held as a sign of
opposition to the said opening which they claimed was affront to the city’s welfare.

In 1992, PAGCOR decided to expand its operation to Cagayan de Oro City, in pursuance of this, PAGCOR leased a
portion of a building belonging to Pryce Properties Corporation, Inc., one of the herein private respondents,
renovated and equipped the same, and prepared to inaugurate its casino there during the Christmas season.

In response to these developments, the Sangguniang Panglungsod of Cagayan de Oro City enacted Ordinance No.
3353 which prohibits the issuance of business permits and cancellation of existing business permits of any
establishment for the use or allowing the use of said building for the operation of a casino. Shortly after, ordinance
3375-93 was enacted, it was a sterner ordinance which prohibited the operation of a casino and providing penalty
therefor.

On the other hand, the respondents invoke P.D. 1869 which created PAGCOR to help centralize and regulate all
games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines.

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Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and
supplemental petitioner. The CA ruled in favor of the respondents. Hence, this petition for review.

Issues:

Whether or not Ordinance Nos. 3353 and 3375-93 are valid

Ruling:

The court finds that the subject ordinances are invalid as they violate P.D. 1869 – which has the character and
force of a statute, as well as the public policy expressed in the decree allowing the playing of certain games of
chance despite the prohibition of gambling in general.

Ordinances should not contravene a statute. Municipal governments are merely agents of the National Government.
Local Councils exercise only delegated powers conferred by Congress. The delegate cannot be superior to the
principal powers higher than those of the latter. PD 1869 authorized casino gambling. As a statute, it cannot be
amended/nullified by a mere ordinance.

In the case at bar, the Supreme Court enumerated the tests of a valid ordinance: (1) It must not contravene the
constitution or any statute, (2) It must not be unfair or oppressive, (3) It must not be partial or discriminatory,(4) It
must not prohibit but may regulate trade, (5) It must be general and consistent with public policy, and (6) It must not
be unreasonable.

Hence, having contravened the first substantive requirement, and all premises considered, both ordinances are
invalid. Thus the petition is denied and the challenged CA decision is affirmed.

PUBLIC CORPORATION_CASE DIGEST_Week 1_September 19-20, 2020 13

Case 11: ATTY. HUMBERTO BASCO, et. al. vs. PHILIPPINE AMUSEMENTS & GAMING CORP.
G.R. No. 91649, May 14, 1991

Facts:

The Philippine Amusement and Gaming Corp. was created by PD 1067-A and granted a franchise under PD 1067-B.
Subsequently, under PD 1869, the Government enabled it to regulate and centralize all games of chance authorized
by existing franchise or permitted by law, under declared policy. But the petitioners think otherwise, that is why,
they filed the instant petition seeking to annul the PAGCOR Charter — PD 1869, because it is allegedly contrary to
morals, public policy and order, and because –

A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law. It waived the
Manila City government's right to impose taxes and license fees, which is recognized by law;

B. For the same reason stated in the immediately preceding paragraph, the law has intruded into the local
government's right to impose local taxes and license fees. This, in contravention of the constitutionally
enshrined principle of local autonomy;

C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR — conducted
gambling, while most other forms of gambling are outlawed, together with prostitution, drug trafficking
and other vices;

D. It violates the avowed trend of the Cory government away from monopolistic and crony economy, and
toward free enterprise and privatization.

Issues:

(1) WON it waived the Manila City gov't's right to impose taxes and license fees, which is recognized by law.
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(2) WON it has intruded into the LGUs' right to impose local taxes and license fees, and thus contrary to the
principle of local autonomy enshrined in the Constitution.

Ruling:

(1) No. The fact that PAGCOR, under its charter, is exempt from paying tax of any kind is not violative of the
principle of local autonomy. LGUs' have no inherent right to impose taxes, thus their power to tax must always yield
to a legislative act which is superior having been passed by the state itself which has the inherent power to tax.
LGUs as mere creatures of Congress are subject to the control of the latter. Therefore, the Congress has the power of
control over LGUs, and if Congress can grant the City of Manila the power to tax certain matters, it can also provide
for exemptions or even take back that power.

(2) No. LGUs' right to impose license fees on "gambling", has long been revoked. As early as 1975, the power of
local governments to regulate gambling thru the grant of "franchise, licenses or permits" was withdrawn by P.D. No.
771 and was vested exclusively on the National Government. Furthermore, LGUs' have no power to tax
instrumentalities of the gov't such as PAGCOR which exercises governmental functions of regulating gambling
activities.

Case 12: GSIS vs. PROVINCE OF TARLAC

PUBLICG.R.
CORPORATION_CASE DIGEST_Week
No. 157860, December 1, 2003 1_September 19-20, 2020 14

Facts:

On March 26, 1996, the Sangguniang Panlalawigan of Tarlac passed Resolution No. 068-96, which authorized and
approved the conversion of Urquico Memorial Athletic Field into a Government Center, as well as the segregation
and donation of portions of said land to different government agencies for the purpose of constructing or relocating
their office buildings. After receiving two letters of invitation regarding the project, the Government Service
Insurance System (GSIS) decided to put up an office at the site.
Thus, Tarlac Governor Margarita Cojuangco issued a Notice of Construction on December 13, 1996, for the
building of the GSIS office on the designated lot.
The Province of Tarlac and the GSIS then executed a Memorandum of Agreement (MOA) on December 13, 1997,
whereby the Province of Tarlac donated the said lot to the GSIS subject to the conditions stipulated therein. On the
same date, the Province executed a Deed of Donation over the subject lot in favor of the GSIS, which was duly
accepted by the latter. As stipulated in the MOA, the GSIS donated P2,000,000.00 to the Province of Tarlac as
financial assistance.
On September 17, 1997, the City of Tarlac issued a building permit to the GSIS for the construction of its office.
The Sangguniang Panlalawigan then passed Resolution No. 013-97, which reiterated the authority granted to Gov.
Cojuangco by Resolution No. 068-96.
Subsequently, Gov. Jose Yap was elected as the new chief executive of Tarlac, and he officially entered upon his
duties on July 1, 1998. He wrote a letter to the GSIS, inviting the latter to reevaluate their respective positions with
respect to the MOA of December 13, 1997. Evidently, Gov. Yap was of the opinion that the provisions of the Deed
of Donation were unfair to the Province. Later, the Provincial Administrator wrote the GSIS, demanding the
payment of P33,590,000.00 representing the balance of the value of the lot donated, which the GSIS refused to pay.
On March 11, 1999, the Province of Tarlac then filed a Complaint against the GSIS for declaration of nullity of
donation and memorandum of agreement, recovery of possession and enforcement of Article 449 in relation to
Articles 450 and 451 of the Civil Code, and damages, before the Regional Trial Court of Tarlac City, Branch 63.
During the pre-trial, the parties agreed to submit the case for decision on the basis of the pleadings and annexes
submitted by the parties, since only legal issues were involved.

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On August 25, 1999, the trial court rendered its decision in favor of the validity of the donation to the GSIS and
dismissed the complaint for declaration of nullity of donation and memorandum of agreement, recovery of
possession and enforcement of Article 449 in relation to Articles 450 and 451 of the Civil Code, and damages filed
by the Province of Tarlac.

Respondent Province of Tarlac appealed to the Court of Appeals, and decided that the donation of the subject
property by the Province of Tarlac to the GSIS was void, because it was executed without first securing an appraised
valuation of the property from the local committee on awards.

Issue:

Whether the Court of Appeals erred in holding that the subject Deed of Donation and Memorandum of Agreement
are null and void

Ruling:

The Appellate Court erred in its decision. The assailed Deed of Donation and Memorandum of Agreement
are both valid. The assailed donation is onerous, the rules on contracts will apply.

An appraised valuation from the local committee on awards for transfer of real property by a local government unit
to an instrumentality of the government does not appear to be one of the void contracts enumerated in Article 1409
of the Civil Code hence, such duly executed contract carries with it the presumption of validity.

Being a perfected contract, Tarlac (through Gov. Yap) cannot revoke or renounce the contract without the consent of
the other party. From the moment of perfection, parties are bound not only by the fulfillment of what is stipulated
but also all the consequences of the said agreements.

Case 13: RAMON ATIENZA vs. JOSE VILLAROSA

G.R. No. 161081, May 10, 2005

Facts:

Petitioner Atienza and respondent Villarosa were the Vice-Governor and Governor, respectively, of the Province of
Occidental Mindoro.
PUBLIC CORPORATION_CASE DIGEST_Week 1_September 19-20, 2020 15
On June 25, 2002, Gov. Jose Villarosa issued a memorandum stating that all purchase orders issued in connection
with the procurement of supplies, materials and equipment including fuel, repairs and maintenance needed in the
transaction of public business or in the pursuit of any undertaking, project or activity of the Sangguniang
Panlalawigan must be signed by the Governor, citing as basis DILG Opinion 148, s. 1993.

Vice Governor Ramon Atienza responded that according to DILG Opinion 96, s. 1995, as affirmed by COA
Opinions of Jun. 28, Apr. 11, and Feb. 9, 1994, coursing the subject Purchase Orders to the Governor for his
approval is no longer necessary and that Secs. 466 and 468 of the LGC already provides for the separation of powers
between the executive and legislative. Such authority even includes everything necessary for the legislative research
program of the Sanggunian.

On July 1, 2002 Villarosa issued another memorandum terminating the casual and job order employees
recommended or hired by Atienza. These employees included 28 plus clerks, 30 utility workers, and an x-ray
technician. Villarosa claims that the employees were redundant and that they bloated the bureaucracy.

Following through, Villarosa issued yet another memorandum enjoining strict compliance of the the previously
issued memoranda June 25 and July 3.

Thereafter, Atienza sent a letter raising his objections concerning both memoranda, invoking the separation of
powers at a provincial level, where the legislature is headed by the Vice Governor and the executive is headed by the
Governor. However, Villarosa insisted on the implementation of the subject memoranda by urging the deparment
heads of the provincial government to comply.

The petitioner Vice-Governor thus filed with the Court of Appeals the petition for prohibition assailing as having
been issued with grave abuse of discretion the respondent Governor's Memoranda dated June 25, 2002 and July 1,
2002. The petitioner Vice-Governor claimed that these memoranda excluded him from the use and enjoyment of his
office in violation of the pertinent provisions of Republic Act No. 7160, or the Local Government Code of 1991, and
its implementing rules and regulations. It was prayed that the respondent Governor be enjoined from implementing
the assailed memoranda.

The CA dismissed the petition and ruled that according to LGC Section 466(a)(1) it is the governor who has
authority to approve the purchase orders on question, since the provision states in part that "approval of the
disbursement voucher by the local chief executive himself shall be required whenever local funds are disbursed."
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CA further discussed that the question on the validity of the dismissal of the vice governor’s employees was moot,
as the act could no longer be enjoined.

Issues:

(1) Who between the petitioner and the respondent is authorized to approve purchase orders issued in
connection with the procurement of supplies, materials, equipment, including fuel, repairs and maintenance
of the Sangguniang Panlalawigan?

(2) Does respondent Villarosa, as local chief executive, have the authority to terminate or cancel the
appointments of casual/job order employees of the Sangguniang Panlalawigan Members and the Office of
the Vice-Governor?

Ruling:

(1) The Supreme Court held that it is the Vice-Governor who has such authority.

Rep. Act No. 7160, Sec. 344 specifically provides that - "vouchers and payrolls shall be certified to and
approved by the head of the department or office who has administrative control of the fund concerned." The
Vice-Governor, as the presiding officer of the Sangguniang Panlalawigan, has administrative control of the funds of
the said body. Accordingly, it is the Vice-Governor who has the authority to approve disbursement vouchers for
expenditures appropriated for the operation of the Sangguniang Panlalawigan.

The Supreme Court further stated that the reliance by the CA on the clause "approval of the disbursement voucher
by the local chief executive himself shall be required whenever local funds are disbursed" of the same section
(Section 344) to rule that it is the Governor who has the authority to approve purchase orders for the supplies,
materials or equipment for the operation of the Sangguniang Panlalawigan is misplaced. This clause cannot prevail
over the more specific clause of the same provision.

This is also further supported by Section 39 of the Manual on the New Government Accounting System for Local
Government Units, prepared by the Commission on Audit (COA): Sec. 39. Approval of Disbursements. – Approval
of disbursements by the Local Chief Executive (LCE) himself shall be required whenever local funds are disbursed,
PUBLIC
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regularly recurring administrative 1_September
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expenses for light, water, telephone and telegraph services, remittances to government creditor agencies such
as GSIS, BIR, PHILHEALTH, LBP, DBP, NPO, PS of the DBM and others, where the authority to approve
may be delegated. Disbursement vouchers for expenditures appropriated for the operation of the Sanggunian
shall be approved by the provincial Vice Governor, the city Vice-Mayor or the municipal Vice-Mayor, as the
case may be.

While Rep. Act No. 7160 is silent as to the matter, the authority granted to the Vice-Governor to sign all warrants
drawn on the provincial treasury for all expenditures appropriated for the operation of the Sangguniang
Panlalawigan as well as to approve disbursement vouchers relating thereto necessarily includes the authority to
approve purchase orders covering the same applying the doctrine of necessary implication.

(2) No, the local chief executive has no authority to terminate or cancel the appointments of casual/job order
employees of the Sangguniang Panlalawigan Members and the Office of the Vice-Governor.

Generally, the Governor has the authority to appoint officials and employees whose salaries are paid out of the
provincial funds, this does not extend to the officials and employees of the Sangguniang Panlalawigan because such
authority is lodged with the Vice-Governor. In the same manner, the authority to appoint casual and job order
employees of the Sangguniang Panlalawigan belongs to the Vice-Governor.

However, in the case at bar, it does not appear whether the contractual/job order employees, whose appointments
were terminated or cancelled by the Memorandum dated July 1, 2002 issued by the respondent Governor, were paid
out of the provincial funds or the funds of the Sangguniang Panlalawigan.

Nonetheless, the Supreme Court held that the validity of the said memorandum cannot be upheld because it
absolutely prohibited the respondent Vice-Governor from exercising his authority to appoint the employees, whether
regular or contractual/job order, of the Sangguniang Panlalawigan and restricted such authority to one of
recommendatory nature only.26 This clearly constituted an encroachment on the appointment power of the
respondent Vice- Governor under Section 466(a)(2) of Rep. Act No. 7160.

The petition is granted and the assailed memoranda issued by respondent Governor Jose T. Villarosa are NULL
AND VOID.

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Case 14: AURELIO UMALI vs. COMELEC
G.R. No. 203974, April 22, 2014

Facts:

A Resolution was passed by the Sangguniang Panglungsod of Cabanatuan City on July 11, 2011 requesting the
President to declare the conversion of Cabanatuan City from a component city of the province of Nueva Ecija into a
Highly Urbanized City (HUC). The President then issued Presidential Proclamation No. 418, Series of 2012,
proclaiming the City of Cabanatuan as an HUC subject to "ratification in a plebiscite by the qualified voters therein,
as provided for in Section 453 of the Local Government Code of 1991."

COMELEC then issued a resolution requiring a plebiscite to convert the city to a highly urbanized city and that only
those registered residents of Cabanatuan City should participate in the said plebiscite, anchored on Sec. 453 of the
Local Government Code of 1991.

Thereafter, petitioner filed a Verified Motion for Reconsideration and maintained that the proposed conversion in
question will necessarily and directly affect the mother province of Nueva Ecija. His main argument is that Section
453 of the LGC should be interpreted in conjunction with Sec. 10, Art. X of the Constitution. He argues that while
the conversion in question does not involve the creation of a new or the dissolution of an existing city, the spirit of
the Constitutional provision calls for the people of the local government unit (LGU) directly affected to vote in a
plebiscite whenever there is a material change in their rights and responsibilities. The phrase "qualified voters
therein" used in Sec. 453 of the LGC should then be interpreted to refer to the qualified voters of the units directly
affected by the conversion and not just those in the component city proposed to be upgraded.

Private respondent Julius Cesar Vergara, city mayor of Cabanatuan, interposed an opposition on the ground that Sec.
PUBLIC
10, Art. XCORPORATION_CASE DIGEST_Week
does not apply to conversions, which1_September
is the meat 19-20,
of the2020
matter. He likewise argues that a specific 17
provision of the LGC, Sec. 453, as couched, allows only the qualified voters of Cabanatuan City to vote in the
plebiscite. Lastly, private respondent pointed out that when Santiago City was converted in 1994 from a
municipality to an independent component city pursuant to Republic Act No. (RA) 7720, the plebiscite held was
limited to the registered voters of the then municipality of Santiago.

COMELEC En Banc ruled in favor of the private respondent and orders to schedule the conduct of the Plebiscite.

Issues:

Whether or not the qualified registered voters of the entire province of Nueva Ecija can participate in the plebiscite
called for the conversion of Cabanatuan City from a component city into an HUC

Ruling:

Yes, qualified registered voters of the entire province of Nueva Ecija can participate in the plebiscite called
for the conversion of Cabanatuan City from a component city into an HUC.

The Court ruled that Sec. 453 of the LGC should be interpreted in accordance with Sec. 10, Art. X of the
Constitution. Sec. 10, Art. X of the Constitution should be the basis for determining the qualified voters who will
participate in the plebiscite to resolve the issue. Sec. 10, Art. X reads:
Section 10, Article X. – No province, city, municipality, or barangay may be created, divided, merged, abolished, or
its boundary substantially altered, except in accordance with the criteria established in the local government code
and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected. And the
statement “directly affected” does not include the city of Cabanatuan but also the entire Nueva Ecija.

With this, the Court ruled that conversion to an HUC is substantial alternation of boundaries governed by Sec. 10,
Art. X and resultantly, said provision applies, governs and prevails over Sec. 453 of the LGC. As the province will
inevitably suffer a corresponding decrease in territory brought about by Cabanatuan City’s gain of independence.
This sufficiently satisfies the requirement that the alteration be "substantial."

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Hence, it should be the entire Nuva Ecija that should be included in the plebiscite as they are all directly affected by
the conversion.

Wherefore, premises considered, the Petition for Certiorari, was GRANTED. COMELEC Minute Resolutions were
declared NULL and VOID.

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