MUNICIPALITY OF JIMENEZ V EXECUTIVE SECRETARY OFFICE

(G.R. No. 105746, December 2, 1996)

On Public Corporations in the Philippines (De facto corporations)

FACTS:
The Municipality of Sinacaban was created by EO 258. By virtue of its Municipal Council Resolution,
Sinacaban laid claim to a portion of the territory of the Municipality of Jimenez, basing on the technical
description in the EO. Jimenez, while conceding that the disputed area is part of Sinacaban under EO 258,
asserted jurisdiction over said lands on the basis of an agreement they had with the latter which was
approved by the Provincial Board of Misamis, fixing their common boundary in 1950.

In 1989, the Provincial Board declared the disputed area to be part of Sinacaban holding that their
agreement was void because the Board had no power to alter boundaries as fixed in EO 258; the power
being vested in the Congress.

Consequently, Jimenez filed a petition and alleged that, in accordance with Pelaez v. Auditor General, the
power to create municipalities is essentially legislative. Thus Sinacaban, which was created by an
executive branch, had no legal personality and no right to assert territorial claim on Jimenez.

However, the petition was denied, with the RTC ruling that Sinacaban shall continue to exist and operate as
a regular municipality, that the act of fixing the boundaries is null and void as it is not in accordance with the
boundaries provided in the EO, that Sinacaban is a de facto corporation since it had completely organized
itself prior to the Pelaez case and exercised corporate powers for 40 years before its existence was
questioned, and that any question as to the legal existence of Sinacaban had been rendered moot by Sec.
442(d) of the LGC.

ISSUE:
Whether the Municipality of Sinacaban is a legal juridical entity, duly created in accordance with law; If not,
whether it is a de facto juridical entity.

RULING:
Municipality of Sinacaban is a DE JURE entity.

RATIO:
The SC have since held that where a municipality created as such by executive order is later impliedly
recognized and its acts are accorded legal validity, its creation can no longer be questioned.
In Municipality of San Narciso v. Mendez the Court considered the following factors as having validated the
creation of a municipal corporation: a) the fact that for nearly 30 years the validity of the creation of the
municipality had never been challenged; b) the fact that no quo warranto suit was filed to question the
validity of the executive order creating such municipality; and c) the fact that the municipality was later
classified as a fifth class municipality.
Above all, it was held that any doubt as to the de jure character of the municipality must be deemed to have
been put to rest by the Local Government Code of 1991, Sec 442(d) which provides that ‘municipal districts
organized pursuant to presidential issuances or executive orders and which have their respective sets of
elective officials holding office at the time of the effectivity of this Code shall henceforth be considered as
regular municipalities.’