LAW ON PUBLIC CORPORATIONS

(Local Government Code)

Subject Outline
Judge Mavil V. Majarucon-Sia

CONSTITUTIONAL PROVISION

Article X, Sec. 1
Article X, Sec. 2 – RA 7160, Sec. 2
Article X, Sec. 3 – RA 7160, Sec. 2
Article X, Sec. 4 – RA 7160, Sec. 25
Article X, Sec. 5 – RA 7160, Secs. 3(d), 18
Article X, Sec. 6 – RA 7160, Sec. 18
Article X, Sec. 7 – RA 7160, Sec. 18
Article X, Sec. 8 – RA 7160, Chapter I
Article X, Sec. 9 – RA 7160 Title II, Chapter III
Article X, Sec. 10 – RA 7160 Title I, Chapter II
Article X, Sec. 11
Article X, Sec. 12
Article X, Sec. 13
Article X, Sec. 14
AUTONOMOUS REGIONS – Article X, Secs. 15 – 21

GENERAL PRINCIPLES – PUBLIC CORPORATIONS/LOCAL GOVERNEMENT

Define Corporation
Classes of Corporation According to Purpose
Public Corporations v. Private Corporations
Public Corporations v. GOCC
Test to Determine whether a Corporation is GOCC or Private in Nature
 Philippine Society for the Prevention of Cruelty to Animals v. COA, GR 169752
Classifications of Public Corporations
Elements of a Municipal Corporation
Dual Nature of Municipal Corporations
Types of Municipal Corporations
1. Municipal Corporations by Prescription
 Camid v. Office of the President, GR 161414
2. De Jure Municipal Corporations
3. De Facto Municipal Corporations
 Requisites of De Facto Municipal Corporation

RA No. 7160

DECLARATION OF POLICY

Principles of Local Autonomy

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  Art. II, Sec. 25; Art. X, Sec.2
 Basco v. PAGCOR, GR 91649
 Dadole v. COA, GR 125360

Kinds of Autonomy – Limbonas v. Mangelin, GR 80391

1. Decentralization of Administration
2. Decentralization of Power

Salient Features of the Local Government Code of 1991

Territorial and Political Subdivisions Enjoying Local Autonomy

Persons in Authority and Agents in Authority – Sec. 388
 Milo v. Salanga, GR No. L-37007
 People v. Monton, GR L-23906

Local Fiscal Autonomy

 Pimentel v. Aguirre, GR No. 132988 (Issue: Power of the President over LGUs)

CREATION, CONVERSION, DIVISION, MERGER AND CONSOLIDATION and ABOLITION of LGUs

Authority to Create Local Government

Plebiscite Requirement
 League of Cities of the Philippines v. Comelec, GR 176951
 Tan v. Comelec, GR 73155
 Bagabuyo v. Comelec, GR 176970
 City of Pasig v. Comelec, GR 176970
 Abbas v. Comelec, GR 89651

Plebiscite is required for substantial changes of the Organic Act

 Datu Michael Abas Kida v. Senate of the Philippines, et. Al, GR 196271

Creation and Conversion of LGUs

 Essential Requisites for the Creation and Conversion of Municipal Corporation
 Verifiable Indicators for the Creation or Conversion of LGUs
Power of Congress to Create Barangays Create (Exception) – Sec. 386
Mariano v. Comelec, GR 118577
Municipality of Jimenez v. Baz, GR 105746
 RA 9054, Sec. 19
Sema v. Comelec and Dilangalen, GR 177597

Manner of Creation/Conversion of a Local Government Unit

1. Creation of Barangay, Sec. 384, 385 and 386
2. Creation of Municipalities, Sec. 440, 441 and 442
3. Creation of Component Cities, Sec. 448, 449 and 450
 Alvarez v. Guingona, GR 118303
4. Conversion of a Component City into a Highly Urbanized City, Sec. 452 and 453

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 5. Creation of Provinces, Sec. 459, 460 and 461
 Navarro, et al v. Executive Secretary Ermita, GR 180050
 Tan v. Comelec, GR 73155
6. Conversion of Sub-Provinces to Provinces, Sec. 462
7. Autonomous Regions, Art. X, Sec. 15
 Abbas v. Comelec, GR 89651
 Ordillo v. Comelec, GR 93054
8. Special Metropolitan Political Subdivision, Art. X, Sec. 11
 MMDA v. Bel Air Village Association, Inc., GR 135962

Division and Merger of LGUs, Sec. 8

Abolition of LGUs, Sec. 9
Beginning of Corporate Existence, Sec. 14
 Mejia v. Balolong, GR L-1925
Mode of Inquiry to Legal Existence of an LGU
 Malabang v. Benito, GR L-28113
Naming of LGUs and Public Places, Streets and Structures, Sec. 13
 Limitations
Interpretation of the Provisions of the LGC, Sec. 5

GENERAL ATTRIBUTES AND POWERS OF LGUs

Sources of Power of Municipal Corporations

POWERS OF THE LOCAL GOVERNMENT UNITS

1. Police Power, Sec. 16

 General Welfare Clause; 2 Branches of the General Welfare Clause
 Acebedo Optical Co. Inc. v. CA, GR 100152
 Rolando Canet v. Decena, GR 155344

LIMITATIONS:
a) Express grant by law
 MMDA v. Bel Air, GR 135962
b) Territoriality
 People v. Gozo, GR L-36409
 US v. Pompeya, GR L-10255
c) Equal Protection Clause
 People v. Gabriel, GR 18838
d) Due Process Clause
 City of Manila v. Laguio, GR 118127
e) Must not be contrary to law
 Lina v. Dizon Paño, GR 129093

TEST TO DETERMINE THE VALIDITY OF POLICE POWER

 NTC v. Philippine Veterans Bank, GR No. 84132-33

2. Power to Provide Basic Services and Facilities, Sec. 17

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3. Power of Eminent Domain, Sec. 19
 Requisites
 Municipality of Parañaque v. VM Realty Corp., GR 127820
Constitutional Limitations on the Exercise of Eminent Domain by LGUs
 Moday v. CA, GR 107916 (decided under the old LGC)
 Makati vs CA, 190 SCRA 206 (Prompt Payment)
 Napocor v. Hon. Zain B. Angas , GR 60225-26 (Delayed Payment)
 City of Cebu v. Spouses Apolonio, 381 SCRA 754
 Napocor v. Hon. Enrique Jocson, GR 94913-99
 Heirs of Suguitan v. City of Mandaluyong, GR 135087
 City of Manila v. Chinese Community, GR L-14355
 City of Cebu v. Dedamo, GR 142971
 Estate of Heirs of the Late Ex-Justice Jose B.L. Reyes v. City of Manila, GR 132431
 RA 7279, Sec. 4 and Sec. 9
 Province of Camarines Sur v. CA, GR 103125
 Barangay Matictic v. Elbinias, GR L-48769
4. Power of Taxation
Constitutional Basis : Art. X, Sec. 5
Statutory Bases: Sec. 18 LGC
Fundamental Principles, Sec. 130 LGC
 Basco v. PAGCOR, GR 91649
 Icard v. City Council of Baguio, GR L-1281
Share of the LGUs in the Internal Revenue; Sec. 284, 285, 287
 Philippine Petroleum Corp. v. Municipality of Pililla, GR 90776
 Pimentel v. Aguirre, GR 132988
 John Hay Peoples Alternative Coalition v. Lim, GR 119775
 Smart Communications v. City of Davao, GR 155491
 Mandanas v. Ochoa, Jr., GR 208488 (Mandanas Doctrine)
5. Corporate Powers, Sec. 22
Properties of LGUs
 Macasiano v. Diokno, GR No. 97764
 City of Naga v. GR L-37289
 Mendoza v. De Leon
 Salas v. Jarencio, GR L-29788
 Rebuco v. Villegas, GR L-24661
 Espiritu v. Municipal Council of Pozorrubio, Pangasina, GR L-11014
 Villanueva vs Castaneda, GR L-61311
Entering into Contracts
 Requisites
 Ultra Vires Contracts
 Breach of Contractual Obligations by LGU
City of Manila v. IAC, GR 71159
Mallari v. Asol, GR 150866
 Favis v. Municipality of Sabangan, GR L-26522
Power to Sue and be Sued
 General Rule: Sec. 481
 Exception – Ramos v. CA, GR 99425
 Traders Royal Bank v. IAC, GR 68514

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  City of Caloocan v. Allarde, GR 107271
6. Reclassification of Lands
Grounds – Sec. 20, Par (a)
Exception to percentage requirement – Sec. 20, Par (b)
In Relation to RA 6657 – Sec. 20, Par. a, 3
Approval of National Governement – Sec. 20. Par (d)
Fortich v. Corona, GR 131457
DAR v. Saranggani Agricultural Co., GR 165547
7. Closure and Opening of Roads
Permanent Closure, Sec. 21, Par (a) & (b)
Temporary Closure, Sec. 21, Par (c) & (d)
8. Authority to Secure and Negotiate Grants, Sec. 23
Sec. 455, Par. (b)
9. Local Legislative Power
Who may Exercise?
Lina v. Pano, GR 129093
Ordinance vs Resolution
Requisites of a Valid Ordinance
 Magtajas v. Pryce Properties Corporation, GR 111097
Presiding Officer, Sec. 49
 La Carlota City, Negros Occidental v. Rojo, GR 181367
Sessions, Sec. 52
 General Rule and Exception
Quorum, Sec. 53
 General Rule and Exception
Steps in the Approval of Ordinances
 Veto Power of the Local Chief Executive
De Los Reyes v. Sandiganbayan, GR 121215
Batangas CATV, Inc. v. CA, GR 138810
 Barangay Chairman has No Veto Power
 Effectivity of Ordinances or Resolutions
Requisites of Ordinance with Penal Sanctions
10. Power to License
Kinds of Municipal Licenses
Power to Tax v. Power to License
Local Initiative and Referendum
 Constitutional Basis, Art. X, Sec. 2
 Local Initiative, Secs. 120 & 121
Limitations, Sec. 124
 Local Referendum, Sec. 126

MUNICIPAL LIABILITIES
 Sec. 24
 United States of America v. Guinto, GR 76607
 Liabilities of LGUs under Specific Provisions of Law
1. Liability for Contracts
Doctrine of Implied Municipal Liability
 Province of Cebu v. IAC, GR L-72841

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  San Diego v. Municipality of Naujan, GR L-9920
2. Statutory Provisions on Liability
 Defective Conditions of Roads under their control or supervision (Art. 2189, Civil
Code)
City of Manila v. Teotico, GR L-23052
 When the States acts through a special agent (Art. 2180, Civil Code)
Meritt v. Government of the Philippine Islands, GR L-11154
 When a member of the Police force refuses or fails to render service or aid (Art. 34,
Civil Code)
3. Liability for Torts, Sec. 24
a) Exercising governmental functions – NOT LIABLE
 Palafox v. Province of Ilocos Norte, GR L-10659
 Municipality of San Fernando v. Judge Firme, GR L-52179
b) Proprietary Functions – LIABLE
 Mendoza v. De Leon, GR L-9596
 Torio v. Fontanilla, GR L-29993
4. Violation of Law
Abella v. Municipality of Naga, GR L-3738
Moday v. CA, GR 107916

INTERGOVERNMENTAL RELATIONS

National Supervision over LGUs, Sec. 25

1. Power of General Supervision
 Gov. Luis Raymund Villafuerte, Jr. v. Hon. Jesse Robredo, GR 195390
 Joson v. Executive Secretary, 290 SCRA 279 (Power to Discipline)
 Planas v. Gil. 67 Phil 62 (Power to Investigate)--0
2. Coordination with National Agencies
3. Consultation

INTER-LOCAL GOVERNMENTAL RELATIONS

 Sec. 29
 Sec. 32
 Sec. 33
 Sec. 34

RULES ON SETTLEMENT OF BOUNDARY DISPUTES

 General Rule; Sec. 118
 Rules on Settlement of Disputes
 NHA v. COSLAP, GR 142601
 Mariano v. Comelec, GR 118577

LOCAL OFFICIALS
 Qualifications of Elective Local Officials
Citizenship
 Frivaldo v. Comelec, 174 SCRA 245
 Labo v. Comelec, 176 SCRA 1
 Salcedo v. Comelec, 312 SCRA 447

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  Mercado v. Manzano, 307 SCRA 630
Residency
 Romualdez-Marcos v. Comelec, GR L-6379
 Coquilla v. Comelec, 385 SCRA 607
 Co v. Electoral Tribunal of the House, 199 SCRA 692
 Dumpit-Michelena v. Boado, 475 SCRA 290
 Abella v. Comelec, 201 SCRA 253
 Aquino v. Comelec, 248 SCRA 400
 Torayno v. Comelec, 337 SCRA 574
Age
 Garvida v. Sales, Jr., 271 SCRA 767
 Disqualifications of Elective Local Officials
 Caasi v. CA, 191 SCRA 229
 Moreno v. Comelec, GR 168550
 Rodriguez v. Comelec, 259 SCRA 296
 Term of Office/Limitations
 Borja v. Comelec, 295 SCRA 157
 Socrates v. Comelec, 291 SCRA 457
 Manner of Election
 Provisions applicable to Elective and Appointive Local Officials

KATARUNGANG PAMBARANGAY
Lupong Tagapamayapa
Functions of the Lupon
Subject Matter of Amicable Settlement in the Katarungang Pambarangay
 General Rule
 Exceptions
Conciliation, Sec. 412
Procedure for Amicable Settlement, Sec. 410
 Candido v. Macapagal, GR 101328
 Alinsugay v. Cagampang, GR L-69334
 Montoyo v. Escayo, GR 82211-12
 Bañares II v. Escayo, GR 132624

VACANCIES AND SUCCESSION

 Permanent Vacancy, Sec. 44
 Rules on Succession in case of Permanent Vacancy
 Permanent Vacancy on the Sanggunian, Sec. 45
Requirement for the Appointee
 Navarro v. CA, GR 141307
 In case of Temporary Vacancy
Local Chief Executive, Sec. 46
 Gamboa v. Aguirre, GR 134213
 Compensation, Sec. 81
 Resignation, Sec. 82

DISCIPLINE OF LOCAL OFFICIALS

Grounds for Disciplinary Actions

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  Aguinaldo v. Santos, GR 94115
 Pablico v. Villapando, GR 147870
Jurisdiction, Sec. 61
Notice of Hearing
Preventive Suspension
 Who may impose, Sec. 63
 When it may be imposed
 Limitation
 Hagad v. Gozo-Dadole, GR No. 108072
 Preventively suspended elective officials when deemed reinstated
 Salary of Respondent Official pending Preventive Suspension, Sec. 64
 Notice of Decision
 Salalima v. Guingona, GR 117589-92
 Administrative Appeal
 Malinao v. Reyes, GR 117618
 Execution Pending Appeal
 Berces v. Executive Secretary, GR 112099
 Effect of Re-Election
 Malinao v. Reyes, GR 117618
 Doctrine of Condonation
Administrative Discipline, Sec. 84

RECALL

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