01 midterms reviewer

A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES

I. HISTORICAL BACKGROUND OF LOCAL GOVERNMENTS IN THE PHILIPPINES

“History and Evolution of Philippine Local Government and Administration”

By Proserpina Tapales

“The Evolution of Local Government in the Philippines”

By De Guzman, et al.Pre-Spanish Period Barangays were the socio-economic and

political units. They are class societies. The basis of the barangay was the family, enlarged into the kinship group, the clan.

Each barangay is a state, which has all four elements of a state (people, government, sovereignty and territory) and is akin to city-states in Europe.

Barangays were indigenous political institutions, roughly equivalent to the Greek city-states. They are generally composed of 30-100 households, based largely on kinship.

Clusters of barangays sometimes grouped together (ex. Manila, under Rajah Soliman, Lakandula and Rajah Matanda)

There were also “superbarangay political institutions” (ex., Islamic sultanates of Sulu and Maguindanao)

Barangays established confederations (i.e., sultanates in Mindanao) which have external relations with the neighboring countries in SE Asia.

A barangay was headed by a datu, sometimes called hari, (who acted as legislator, judge and executioner) with the assistance of the council of elders, the babaylan (presides over religious ceremonies; also acts as doctor and astrologer), and the panday (responsible over technology).

A barangay was headed by a datu, also referred to as rajah, gat or lakan. The datu exercised executive, legislative, judicial, military and religious powers. He is assisted by a council of elders known as maginoos, who served as advisers.

Datu’s post was not always hereditary. It often passed on to the best, the most courageous or the brightest male in the community. But sometimes, women ascended the tribal throne (ex., Princess Urduja)

Datuship was attained through inheritance, physical prowess, wealth, wisdom or virtue, or a combination of two or more of these traits.

Spanish Period The residents of the barangays were portioned off to whomever encomendero was entrusted a portion of land. The Spaniards substituted barrios for barangays while many of the datus became cabezas de barangay, whose task was to collect taxes.

The Spaniards substituted barrios for barangays while many of the datus became cabezas de barangay, whose task was to collect taxes.

Through the Royal Decree of 1583, the country was later organized into provincias (provinces), pueblos (municipalities), cabildos (cities) and barrios (converted barangays).

The pueblo was headed by a gobernadorcillo, which was later changed to Capitan Municipal in 1893.

The pueblo was headed by a gobernadorcillo, who exercised executive and judicial functions, assisted by an assessor and a notary.

The cabildo had 2 alcaldes, 8 regidores, a registrar and a constable.

The cabildos were municipal corporations set up in fairly urban areas and given legislative authority. The cabildo had 2 alcaldes, 8 regidores (elder-men), a registrar and a constable.

The provincias had the Alcalde Mayor, who also presides over the provincial court (composed of the assessor and the notary)

The provincias were set up for the convenience of administration and constituted the immediate agencies through which the central government can extend its authority on numerous villages. The alcaldes

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mayores (governors) were appointed by the Spanish Gov.-Gen.

A system of indirect elections was initially utilized, where the electoral college (principalias, the learned taxpayers) selected the local leaders. The parish priest (the colonizer’s chief and often only representative in the locality) presides over these elections with the head of the local government.

The Maura Law of 1893 sought to confer upon the towns and provinces of Luzon and Visayas greater measure of local autonomy

Even the smallest item of local business required approval from Manila (the capital). The local inhabitants were not allowed to choose their officials and these officials, were allowed little discretion.

Under the Maura Law of 1893, local citizens were allowed to select some of their officers. Once selected however, these officials were subjected to supervision by insular authorities and had no authority to act on purely local matters.

Revolutionary Period The Malolos Constitution provided for:

(1) the creation of municipal assemblies to administer the affairs of towns and provincial assemblies for the provinces; and

(2) autonomous local units, over which the central government exercises a certain degree of supervision or intervention

The main features of the local government established by the Malolos Constitution are:

(1) popular and direct elections;

(2)publicity of sessions;

(3) publication of budgets, accounts, and important ordinances;

(4)intervention of the central government, in certain cases; and

(5) determination of their taxation powers.The town principalias elected a President, and an official for police and internal order, one for justice and civil registry and another for collection of taxes and management of real property.

The distinguished inhabitants of freed towns were asked to elect the chief of town, the headman for each barrio and three officials. (same as Tapales). These officials constituted the popular assembly.

At the provincial level, the chief (president) was elected by the town heads and there were also three councilors for each of the 3 services, as in the case of a town. There is also a military commander, who has no jurisdiction over civil affairs except during war.

While the Malolos Constitution provided for autonomous local units, such local autonomy was still curtailed given the precarious times the revolutionary government was in.

Together, these 4 officials compose the provincial council.

American Period Local governments had to be created for ease of administration. Under Gen. Orders No. 43 and Act No. 82, town (pueblo) government was the first form of local government established. Eventually, town government was composed of an elected President, a secretary, a treasurer, and a Chief of Police.

The pueblo was now called a municipality and the cabildo was now called a city. Both are headed by a mayor.

The organization of provinces was effected by Act. No. 83, which provided for the office of the elected provincial governor, treasure and supervisor of schools. These officials

The province is headed by the governor.

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served as supervisors of the municipalities.The Americans maintained a system of hierarchy and centralization that was attuned to Philippine experience. This was because centralization was so difficult to reduce.

The most notable feature of local government under the American regime was the fact that the local governments were under the supervision of the Executive Bureau until it was transferred to the Department of the Interior.

While supervision was different in character from that exercised during the Spanish period but the tradition of centralism was not radically changed.

The Executive Bureau (and later, the Department of the Interior) was in direct control of the various LGU’s. It issued orders and circulars, reviewed ordinances and resolutions, examined local budgets, and served as a centre for assistance to local officials.

Commonwealth Period The 1935 CONSTI mentioned local government only in connection with the President’s power of general supervision.

Among the significant change in the administration of national control over the local units was the transfer of financial supervision from the Interior Dept. to the Finance Dept.

Under Pres. Quezon, central supervision rapidly increased and was personally exercised by him to a degree previously unheard of. (ex. Appointments of some mayors from 1936 to 1940, presidential power to define territorial limits and to alter, merge, divide LGU’s, nationalization of the police service)

Third Republic That the Philippines became independent did not alter the centralist relationship between the national and local governments. But some notable changes happened during this period.

Exercising its constitutional authority to determine the parameters of presidential supervision, Congress passed several laws:

(1) RA 2259 (Omnibus Law on Cities) – provided electivity of the position of mayors, vice-mayors, and councilors;

(2) RA 2370, amended by RA 3590 (The Barrio Charter) – provided for the electivity of barrio officials;

(3) RA 2264 (Local Autonomy Act) – pertained to greater taxing powers to cities and municipalities;

(4) RA 5185 (Decentralization Act) – authorized local governments to supplement the national government in agricultural extension and rural health work.

The trend from 1946 to 1972 was towards decentralization. The SC moved away from its liberal interpretation of presidential supervision and went to a narrower approach. Congress passed several laws:

(1) RA 2370, amended by RA 3590 (The Barrio Charter) – recognized the barrio as a legal entity.

(2) RA 2264 (Local Autonomy Act) – also reorganized the structure of the provincial government and, in doing so, diminished national control over both provincial budgeting and the planning and implementation of public improvements.

(3) RA 5185 (Decentralization Act) – also removed national approval over a number of local actions and increased the shares of provinces in the internal revenue collections

Under Martial Law The 1973 CONSTI provided for a separate The 1973 CONSTI allowed the President to 3


Article on Local Government, mandating Congress to pass a local government code.

An Integrated Reorganization Plan was accomplished (through the first martial law presidential decree) resulting into the delineation of the Philippines into 11 regions and the establishment of the Dept. of Local Government and Community Development. To the DLGCD was delegated the President’s power of general supervision over local governments.

Added functions to the DLGCD include the management of cooperatives and the training of local officials.

Barrios were renamed into barangays and councils were renamed into sanggunians.

continue the exercise of legislative power, including the power to create, divide, merge, abolish and later the boundaries of LGU’s.

The martial law regime also renamed some of the LGU’s: barangays for barrios and sanggunian for council.

As chief legislator, Marcos issued quite a number of decrees affecting local government:

(1) PD 824 – the integration of Metro Manila into a political region under the governance of the Metropolitan Manila Commission with Imelda as governor.

(2) PD 826 – brought about the expansion of the membership of local councils (inclusion of sectoral representatives and youth leaders), making several Metro Manila councils too big and unwieldy.

(3) The creation of special regions out of the Muslim areas of Regions IX and XII.

The Sangguniang Bayan of the provinces is composed of the members of the provincial board, the vice-governor, representatives of each of the municipalities within the province, and the president of the Katipunan ng mga Kabataang Barangay in the province.

The Sangguniang Bayan of the cities and municipalities is composed of the members of the councils, including the vice-mayor, and as many barangay captains and representatives from other sectors as there were presidential appointee-members.

The local chief executives were the presiding officers of the sangguniang bayan.

Several organizations of these sanggunians were also created: Katipunan ng mga Sanggunian (composed of all sangguniang bayan in provinces and cities; and the Pampook na Katipunan ng mga Sanggunian (at the regional level, composed of the sangguniang panlalawigan members)

The Kabataang Barangay was also created, composed of all residents under 18 years (later increased to 21) of age, administered by a barangay youth chairman and 6 youth leaders (15-17 years old). The barangay youth chairman is an ex-officio member of the barangay council.

New Republic The Batasang Pambansa enacted the Local Government Code codifying several PD’s

Among the significant provisions in the newly-enacted LGC was the principle of

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affecting local government (including the old Local Tax Code). Among the changes brought about by this Code was the creation of LGU’s based on income and population; the classification cites into highly urbanized and component cities.

liberal interpretation of local government powers and a system of recall.

Aquino Administration The new Local Government Code was enacted in 1991. While somewhat a watered-down version of its author’s original proposal, it still considered as a landmark piece of legislation.

The Code’s most important feature is the decentralization of five basic services – health, agriculture, social welfare, public works, and environment and natural resources.

Other important features include a modified sectoral representation in legislative councils, a system of plebiscite, recall and referendum, and involvement in the planning and implementation of development programs

(De Guzman’s article ends with the drafting of the 1987 CONSTI)

II. NATURE AND STATUS

A. Definitions

1. Municipal Corporation - A body politic and corporate constituted by the incorporation of the inhabitants for the purpose of local government thereof. It is established by law partly as an agency of the state to assist in the civil government of the country but chiefly to regulate and administer the local or internal affairs of the city, town, or district which is incorporated. (MARTIN)

2. Local Government - is a political subdivision of the State which is constituted by law and possessed of substantial control over its own affairs. Remaining to be an intra sovereign subdivision of one sovereign nation, but not intended, however, to be an imperium in

imperio, the local government unit is autonomous in the sense that it is given more powers, authority, responsibilities and resources. Power which used to be highly centralized in Manila, is thereby deconcentrated, enabling especially the peripheral local government units to develop not only at their own pace and discretion but also with their own resources and assets. (Alvarez vs. Guingona, Basco vs. PAGCOR)

3. National Government – refers to the entire machinery of the central government, as distinguished from the different forms of local governments. (PIMENTEL, citing the Admin Code, Sec. 2, par. 2). It oversees the local governments.

Local government interchangeable with municipal corporations.

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GD-R: They are interchangeable because a local government is in fact a corporation for public purpose.

Alvarez vs. Guingona(1996)

FACTS: HB No. 8817, entitled "An Act Converting the Municipality of Santiago into an Independent Component City to be known as the City of Santiago," was filed in the HOR.

Meanwhile, a counterpart of HB No. 8817, Senate Bill No. 1243, entitled, "An Act Converting the Municipality of Santiago into an Independent Component City to be Known as the City of Santiago," was filed in the Senate just after the House of Representatives had conducted its first public hearing on HB No. 8817.

These two bills eventually became RA 7720.

Petitioners contend that RA 7720 is unconstitutional since: The Act did not originate exclusively from in the House

as mandated by Sec. 24, Art. VI of the 1987 Constitution.

Santiago has not met the minimum average annual income required under Sec. 450 of the LGC for it to be converted into a component city. (The petitioners argued that the income of an LGU does not include the IRA. The average annual income of Santiago was more than P20M. It is reduced to only P13M, however, if the IRA is excluded from the computation)

WON RA 7720 is unconstitutional.

HELD: NO. RA 7720 is constitutional.

A bill of local application like HB No. 8817 should, by constitutional prescription, originate exclusively in the HOR. In this case, it cannot be denied that HB No. 8817 was filed in the HOR first before SB No. 1243 was filed in the Senate. The filing of HB No. 8817 was thus precursive not only of the said Act in question but also of SB No. 1243. Thus, HB No. 8817, was the bill that initiated the legislative process that culminated in the enactment of Republic Act No. 7720. No violation of Section 24, Article VI, of the 1987 Constitution is perceptible under the circumstances attending the instant controversy.

The filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the House, does not contravene the constitutional requirement that a bill of local application should originate in the House of Representatives, for as long as the Senate does not act thereupon until it receives the House bill. (Tolentino vs. Sec. of Finance)

Internal Revenue Allotments form part of the income of Local Government Units. The IRAs are items of income because they form part of the gross accretion of the funds of the local government unit. The IRAs regularly and automatically accrue to the local treasury without need of any further action on the part of the local government unit. They thus constitute income which the local government can invariably rely upon as the source of much needed funds.

The acquisition of resources necessary to discharge its powers and effectively carry out its functions is effected through the vesting in every LGU of:

1. The right to create and broaden its own source of revenue;

2. The right to be allocated a just share in national taxes, such share being in the form of Internal Revenue Allotments (IRAs); and

3. The right to be given its equitable share in the proceeds of the utilization and development of the national wealth, if any, within its territorial boundaries.

The funds generated from local taxes, IRAs and National wealth utilization proceeds accrue to the general fund of the LGU and are used to finance its operations, subject to specified modes of spending the same as provided for in the LGC and its implementing rules and regulations.

Income- all revenues and receipts collected or received forming the gross accretions of funds of the LGU.

Basco vs. PAGCOR(1991)

FACTS: PAGCOR was created under P.D. 1896 to enable the Government to regulate and centralize all games of chance authorized by existing franchise or permitted by law. To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent therewith, are accordingly repealed, amended or modified.

Petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null and void" for being "contrary to morals, public policy and public order," monopolistic and tends toward "crony economy", and is violative of the equal protection clause and local autonomy as well as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution. Moreover, it constitutes a waiver of a right prejudicial to a 3rd person with a right recognized by law. (Allegedly, it waived the Manila City government’s right to impose taxes and license fees, thus violating local autonomy)

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WON PD 1896 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees.

HELD: NO. This doctrine emanates from the “supremacy” of the National Government over local governments.

1. The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes. Its "power to tax" therefore must always yield to a legislative act which is superior having been passed upon by the state itself which has the "inherent power to tax”.

2. The Charter of the City of Manila is subject to control by Congress. It should be stressed that "municipal corporations are mere creatures of Congress" which has the power to "create and abolish municipal corporations" due to its "general legislative powers".

3. 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 by P.D. No. 771 and was vested exclusively on the National Government.

4. Local governments have no power to tax instrumentalities of the National Government. PAGCOR is a government owned or controlled corporation with an original charter. All of its shares of stocks are owned by the National Government. In addition to its corporate powers, it also exercises regulatory powers.

WON PD 1896 violates local autonomy.

HELD: NO. The principle of local autonomy under the 1987 Constitution simply means "decentralization". As to what state powers should be "decentralized" and what may be delegated to local government units remains a matter of policy, which concerns wisdom. It is therefore a political question. 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.

B. Nature and Status of Municipal Corporations

MARTIN:

It is a subordinate branch of the government of the State, and municipal administration as an instrumentality of state administration. It exercises delegated powers of government. Its

charter is granted for the better government of the particular areas or districts.

It is a political division of the state and variedly described as an arm of the state, a miniature state, an instrumentality of the state, a mere creature of the same, an agent of the state, and the like.

Elements of a municipal corporation:

1. A legal corporation or incorporation;

2. A corporate name by which the artificial personality is known and in which all corporate acts are done;

3. Inhabitants constituting the population, who are invested with the political and corporate powers which are executed through duly constituted officers and agents;

4. A territory within which local civil government / corporate functions are exercised.

C. Kinds of Municipal Corporations

Civil Code

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins as soon as they have been constituted according to law;

(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder, partner or member. (35a)

Art. 45. Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed by the laws creating or recognizing them.

Private corporations are regulated by laws of general application on the subject.

Partnerships and associations for private interest or purpose are governed by the provisions of this Code concerning partnerships. (36 and 37a)

Art. 46. Juridical persons may acquire and possess property of all kinds, as well as incur obligations and bring civil or criminal actions, in conformity with the laws and regulations of their organization. (38a)

Art. 47. Upon the dissolution of corporations, institutions and other entities for public interest or purpose mentioned in No. 2 of

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Article 44, their property and other assets shall be disposed of in pursuance of law or the charter creating them. If nothing has been specified on this point, the property and other assets shall be applied to similar purposes for the benefit of the region, province, city or municipality which during the existence of the institution derived the principal benefits from the same. (39a)

MARTIN:

A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes, and properties expressly authorized by law or incident to its existence (Act 1459, Sec. 2). It is described as “an artificial being, invisible, intangible, and existing only in contemplation of law”.

Private corporations are those formed for some private purpose, benefit, aim, or end and are organized wholly for the profit and advantage of their own members, and cannot constitutionally be granted governmental powers. They are governed by the Corporation Code.

Public corporations are those formed or organized for the government of a portion of the State, for the accomplishment of its own public works. (examples: governments of provinces, chartered cities, barangays). They are created by their charters and other laws. They are further classified into:

1. Municipal Corporation Proper – generally refers to incorporated cities, towns, or villages invested with the power of local legislation and administration.

2. Quasi-Municipal Corporation - another term for a Quasi-corporation; they are created as agencies of the State for a narrow and limited purpose. They are sometimes “involuntary” corporations and are only local organizations which, for purpose of civil administration, are invested with few characteristics of corporate existence. They consist of various local government areas established to aid in the administration of public functions. (examples: counties school districts, fire districts, hospital districts water districts, etc.)

Distinction between municipal corporation proper and quasi-municipal corporation

Municipal Corporation Quasi-municipal corporation

It is governed by its charter. It operates directly as an agency of the state to help in the administration of public functions.

They have powers and liabilities of self-government.

They don’t have powers and liabilities of self-government.

They are called into existence either at direct solicitation or by the free consent of the persons composing them.

They are local subdivisions of the state, created by sovereign legislative power of its own sovereign will and without particular solicitation, consent or concurrent action of the people who inhabit them.

Criteria to determine whether a corporation is municipal or quasi-municipal:

Voluntary or involuntary nature of the corporation

Existence or nonexistence of a charter

Whether the purpose of the corporation is solely as a governmental agency or one for self-government

Distinction between municipal corporation proper and public corporation

All municipal corporations are public corporations but not all public corporations are municipal corporations. (“Public corporation” is a broader category)

D. Dual Nature

1. Dual nature and functions of municipal corporations

LGC, Sec. 15. Every local government unit created or recognized under this Code is a body politic and corporate endowed with powers to be exercised by it in conformity with law. As such, it shall exercise powers as a political subdivision of the National Government and as a corporate entity representing the inhabitants of its territory.

MARTIN:Every municipal corporation has a two-fold character:

Public / Governmental – The corporation acts as an agent of the State for the government of the territory and the people within the municipal limits. It exercises a part of the sovereignty of the state by delegation (i.e., police power, taxation, eminent domain)

Private – The corporation acts in a similar category as a business corporation, doing functions not strictly

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governmental or political. It stands for the community in the administration of local affairs, beyond the sphere of the public purposes for which its government powers are conferred.

Villas vs. City of Manila(1911)

FACTS: The petitioner in this case was a creditor of the Ayuntamiento of Manila as it existed before the cession of the Philippine Islands to the United States by the Treaty of Paris of December 10, 1898. The action was brought upon the theory that the city, under its present charter from the Government of the Philippine Islands, was the same juristic person, and liable upon the obligations of the old city.

The City of Manila argued that its charter has no reference to obligations or contracts of the old city; that their case is analogous to a principal and agent, where the sovereign gets changed, the city, as agent of the State, could no longer be held accountable for debts of the previous sovereign; that the city of Manila has been reincorporated under Act 183 of the Philippine Commission and thus not liable for the said obligations.

The Philippine SC held that the present municipality is a totally different corporate entity and in no way liable for the debts of the Spanish municipality. The case was appealed to the US SC.

WON the city of Manila is still liable for the obligations of the city incurred prior to the cession to the US.

HELD: YES. Municipal corporations exercise powers which are governmental and powers which are of a private or business character. In the one character a municipal corporation is a governmental subdivision, and for that purpose exercises by delegation a part of the sovereignty of the state. In the other character it is a mere legal entity or juristic person. In the latter character it stands for the community in the administration of local affairs wholly beyond the sphere of the public purpose for which its governmental powers are conferred.

Municipal laws that regulate private and domestic rights continue in force until abrogated or changed by the new ruler. Only laws of a political character are totally abrogated or changed by the new ruler. The property rights relinquished by Spain are limited to those which belong to the public domain. The juristic identity of the corporation has been in no wise affected, and, in law, the present city is, in every legal sense, the successor of the old. As such it is entitled to the property and property rights of the predecessor corporation, and is, in law, subject to all of its liabilities.

Absent any express legislative declaration, there is no reason to suppose that reincorporation intended to permit an escape from the obligations of the old city.

Lidasan vs. COMELEC(1967)

FACTS: The President signed into law RA 4790, creating the new municipality of Dianaton, Lanao del Sur. Some of the barrios included in the new municipality came from municipalities of Cotabato. Prompted by the coming elections, COMELEC adopted a resolution which affirms the new municipality. As the law stood, twelve barrios - in two municipalities in the province of Cotabato — are transferred to the province of Lanao del Sur. This brought about a change in the boundaries of the two provinces. Apprised of this development, the Office of the President, through the Assistant Executive Secretary, recommended to Comelec that the operation of the statute be suspended until "clarified by correcting legislation."

The COMELEC, stood by its own interpretation, and declared that the statute "should be implemented unless declared unconstitutional by the Supreme Court." Lidasan argues that the law is unconstitutional for violating the one bill, one subject rule.

WON RA 4790 is unconstitutional for violating the one bill, one subject rule.

HELD: YES. In the CAB, the title — "An Act Creating the Municipality of Dianaton, in the Province of Lanao del Sur" — projects the impression that solely the province of Lanao del Sur is affected by the creation of Dianaton. Not the slightest intimation is there that communities in the adjacent province of Cotabato are incorporated in this new Lanao del Sur town. The transfer of a sizeable portion of territory from one province to another of necessity involves reduction of area, population and income of the first and the corresponding increase of those of the other. This is as important as the creation of a municipality. And yet, the title did not reflect this fact.

WON RA 4790 may still be salvaged with reference to the 9 barrios in Lanao del Sur, with the mere nullification of the portion thereof which took away the twelve barrios in the municipalities of Cotabato.

HELD: NO. Municipal corporations perform twin functions. Firstly, they serve as an instrumentality of the State in carrying out the functions of government. Secondly, they act as an agency of the community in the administration of local affairs. It is in the latter character that they are a separate entity acting for their own purposes and not a subdivision of the State.

Consequently, several factors come to the fore in the consideration of whether a group of barrios is capable of maintaining itself as an independent municipality. Amongst these are population, territory, and income. When the foregoing bill was presented in Congress, unquestionably, the totality of the

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21barrios— not 9 barrios—was in the mind of the proponent thereof. That this is so, is plainly evident by the fact that the bill itself, thereafter enacted into law, states that the seat of the government is in Togaig, which is a barrio in Cotabato. And then the reduced area poses a number of questions, to which the SC may not supply the answers. With the known premise that Dianaton was created upon the basic considerations of progressive community, large aggregate population and sufficient income, the SC may not now say that Congress intended to create Dianaton with only nine—of the original twenty-one—barrios, with a seat of government still left to be conjectured. For, this unduly stretches judicial interpretation of congressional intent beyond credibility point. To do so, indeed, is to pass the line which circumscribes the judiciary and tread on legislative premises

Republic vs. City of Davao(2002)

FACTS: The City of Davao filed an application for a Certificate of Non-Coverage (CNC) for its proposed project, the Davao City Sports Dome with the Environmental Management Bureau (EMB) with the required documents. EMB denied the application after finding that the proposed project was w/in an environmentally critical area. It also held that Davao must undergo the environmental impact assessment (EIA) to secure Environmental Compliance Certificate (ECC) before it can proceed with construction of its project pursuant to Sec 2 of PD 1586, Environmental Impact Statement System, in relation to Sec 4 PD 1151, Philippine Environment Policy. Davao argues that its proposed project was neither an environmentally critical project nor within an environmentally critical area; thus it was outside the scope of the EIA system.

The TC ruled in favor of Davao, holding that only agencies and instrumentalities of the national government, including government owned or controlled corporations, as well as private corporations, firms and entities are mandated to go through the EIA process for their proposed projects which have significant effect on the quality of the environment. An LGU, not being an agency or instrumentality of the National Government, is deemed excluded under the principle of expressio unius est exclusio alterius.

WON the City of Davao was within the scope of the EIA.

HELD: YES. An LGU is a body politic and corporate endowed with powers to be exercised inconformity with law. It has dual functions:

Governmental – concerns health, safety, advancement, of public good and welfare. It acts as an agency of national government; and

Proprietary – seeks to obtain special corporate benefits or earn pecuniary profit and intended for private advantage and benefit. Acts as agent of community.

As a body politic endowed with governmental functions, LGU has the duty to promote the people’s right to a balanced ecology (Sec. 16, LGC) and to ensure quality of environment. Pursuant to this, Davao cannot claim exemption from the coverage of EIS law which has same the objectives.

Civil Code defines a person as either natural or juridical. The state and its subdivisions i.e. LGU’s are juridical persons. Thus, LGU’s are not excluded from EIS law.

Section 1 of EIS law intends to implement state policy to achieve a balance between socio-economic development and environmental protection. The Whereas clause of the same law stresses that this balance can only be achieved through a comprehensive and integrated program where all the sectors of the community – government and private – are involved. Thus, LGU’s as part of the machinery of the government cannot be deemed outside the scope of the EIS law.

HOWEVER, since it is clear that the said project is not classified as environmentally critical nor within critical area, DENR has no choice but to issue the CNC. It is a ministerial duty that can be compelled by a writ of mandamus.

GD-R: Ma’am believes that Environmental protection is still not fully devolved therefore Congress still oversees it closely. Hence, the title of the case: “Republic vs. City of Davao”.

2. Purposes

MARTIN: Municipal corporations are created for a two-fold purpose:

To serve as an agency or instrument of the state in carrying on the functions of government which the state cannot conveniently exercise; and

To act as an agency of the inhabitants of the community in the regulation of municipal franchises and public utilities promotion, management, of local affairs, maintenance of water system, ferries, wharves, etc.

3. General Powers and Attributes

(See Secs. 6-24 of the LGC; they will be thoroughly discussed later in the syllabus)

III. GENERAL PRINCIPLES AND POLICIES10


1987 CONSTI, Art. X, Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided.

PIMENTEL: Congress cannot simply pass a law to create another

territorial and political subdivision other than those exclusively listed in this provision. A constitutional amendment is required to do so.

NOTE: Only the ARMM (RA 6734) was successfully created and approved in a plebiscite. The proposed CAR (RA 6766) was rejected in the plebiscite held in the said region.

1987 CONSTI, Art. X, Section 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units.

PIMENTEL: The following are the notable features of the LGC passed by

Congress: System of decentralization Power of recall of abusive officers vested in the

people Power of independent initiation and approval of

local legislation vested in the people Power of voicing out the people’s stand on local

issues through referenda Qualifications of local elective officials Manner of election of local officials Term of office, salaries and emoluments of local

officials Appointment and discipline of local government

officials

NOTE: The LGC did not impliedly repeal the PAGCOR Charter (Magtajas vs.Pryce Properties Corp.)

1987 CONSTI, Art. X, Section 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy and shall be entitled to their own local executive and legislative assemblies.

The jurisdiction of the metropolitan authority that will thereby be created shall be limited to basic services requiring coordination.

PIMENTEL: Special metropolitan political subdivisions created under this

provision do not comprise another territorial and political subdivision similar to that created in Section 1 of this Article.

NOTE: RA 7924 created the MMDA, the agency that administers the metro-wide basic services affecting the LGU’s of Metro Manila.

“Metro-wide services” - those services which have metro-wide impact and transcend local political boundaries or entail huge expenditures such that it would not be viable for said services to be provided by the individual local government units (LGUs) comprising Metropolitan Manila. Its scope cover the following:

Development planning Transport and traffic management Solid waste disposal and management Flood control and sewerage management Urban renewal, zoning, and land use planning,

and shelter services Health and sanitation, urban protection and

pollution control Public safety

HOWEVER, the powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. There is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislative power. All its functions are administrative in nature and these are actually summed up in the charter itself. (MMDA vs. Bel-Air Village Association)

1987 CONSTI, Art. X, Section 12. Cities that are highly urbanized, as determined by law, and component cities whose charters prohibit their voters from voting for provincial elective officials, shall be independent of the province. The voters of component cities within a province, whose charters contain no such prohibition, shall not be deprived of their right to vote for elective provincial officials.

PIMENTEL: This system of classification is based upon the cities’ regular

annual income, which would tend to show WON a city is capable of existence and development as a relatively independent social, economic, and political unit. It would also show whether the city has sufficient economic or industrial activity as to warrant its independence from the province where it is geographically situated. Cities with

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smaller income need the continued support of the provincial government thus justifying the continued participation of the voters in the election of provincial officials in some instances. (Ceniza vs. COMELEC)

The practice of allowing voters in one component city to vote for provincial officials and denying the same privilege to voters in another component city is a matter of legislative discretion which violates neither the Constitution (equal protection) nor the voter's right of suffrage. (supra)

LGC, SEC 1. Title. - This Act shall be known and cited as the "Local Government Code of 1991".

LGC, SEC. 2. Declaration of Policy. –

(a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the national government to the local government units.

(b) It is also the policy of the State to ensure the accountability of local government units through the institution of effective mechanisms of recall, initiative and referendum.

(c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with appropriate local government units, non-governmental and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions.

PIMENTEL: This is basically a reiteration of the most important policies

on local autonomy enshrined in the CONSTI:

Genuine and meaningful local autonomy – even barangays are meant to possess this so that

they may develop fully as self-reliant communities (De Leon vs. Esguerra)

Accountable local officials – gives rise to people empowerment through the vesting in the constituents the powers of initiative, referendum and recall to effectively express their will.

Mandatory annual periodic consultation - this promotes smoother and harmonious relationships not only between the central government and the LGU’s but also between the government (local and central) and the people. (To prevent the Chico Dam fiasco from happening again)

LGC, SEC. 3. Operative Principles of Decentralization. - The formulation and implementation of policies and measures on local autonomy shall be guided by the following operative principles:

(a) There shall be an effective allocation among the different local government units of their respective powers, functions, responsibilities, and resources;

(b) There shall be established in every local government unit an accountable, efficient, and dynamic organizational structure and operating mechanism that will meet the priority needs and service requirements of its communities;

(c) Subject to civil service law, rules and regulations, local officials and employees paid wholly or mainly from local funds shall be appointed or removed, according to merit and fitness, by the appropriate appointing authority;

(d) The vesting of duty, responsibility, and accountability in local government units shall be accompanied with provision for reasonably adequate resources to discharge their powers and effectively carry out their functions; hence, they shall have the power to create and broaden their own sources of revenue and the right to a just share in national taxes and an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas;

(e) Provinces with respect to component cities and municipalities, and cities and municipalities with respect to component barangays, shall ensure that the acts of their component units are within the scope of their prescribed powers and functions;

(f) Local government units may group themselves, consolidate or coordinate their efforts, services, and resources for purposes commonly beneficial to them;

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(g) The capabilities of local government units, especially the municipalities and barangays, shall be enhanced by providing them with opportunities to participate actively in the implementation of national programs and projects;

(h) There shall be a continuing mechanism to enhance local autonomy not only by legislative enabling acts but also by administrative and organizational reforms;

(i) Local government units shall share with the national government the responsibility in the management and maintenance of ecological balance within their territorial jurisdiction, subject to the provisions of this Code and national policies;

(j) Effective mechanisms for ensuring the accountability of local government units to their respective constituents shall be strengthened in order to upgrade continually the quality of local leadership;

(k) The realization of local autonomy shall be facilitated through improved coordination of national government policies and programs and extension of adequate technical and material assistance to less developed and deserving local government units;

(l) The participation of the private sector in local governance, particularly in the delivery of basic services, shall be encouraged to ensure the viability of local autonomy as an alternative strategy for sustainable development; and

(m) The national government shall ensure that decentralization contributes to the continuing improvement of the performance of local government units and the quality of community life.

PIMENTEL: These provisions are meant to:

guide the national government in formulating and implementing policies and measures on local autonomy and decentralization

give leverage to local officials to enable them to monitor and, to some extent, demand the implementation of decentralization.

Section 12, Article X of the Constitution is explicit in that aside from highly-urbanized cities, component cities whose charters prohibit their voters from voting for provincial elective officials are independent of the province. In the same provision, it provides for other component cities within a province whose charters do not provide a similar prohibition. (Abella vs. COMELEC) Hence, cities are classified into highly urbanized, component and independent component.

Before the effectivity of the LGC, the protection of the environment was lodged in the DENR. Now, this duty is shared by the national government with the LGU’s (example: mandatory consultations)

HOWEVER, the LGU’s must not supplant or negate the national government policies on environment.

Modernization and development of the nation must be tempered with a concern for sound ecology and wholesome environment.

LGC, SEC. 4. Scope of Application. - This Code shall apply to all provinces, cities, municipalities, barangays, and other political subdivisions as may be created by law, and, to the extent herein provided, to officials, offices, or agencies of the national government.

PIMENTEL: “Other political subdivisions” – refers to special

metropolitan areas and autonomous political units. (NOTE: The ARMM is covered by the LGC until they shall have enacted their own Local Government Code)

The national officials, offices or agencies mentioned in this provision refers to those whose personnel and functions are devolved and discharged to appropriate LGU’s (example: DSWD, DOH, DA, DOT, DILG, DENR – to the extent that its shares with the LGU’s functions relating to ecology)

LGC, SEC. 5. Rules of Interpretation. - In the interpretation of the provisions of this Code, the following rules shall apply:

(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned;

(b) In case of doubt, any tax ordinance or revenue measure shall be construed strictly against the local government unit enacting it, and liberally in favor of the taxpayer. Any tax exemption, incentive or relief granted by any local government unit pursuant to the provisions of this Code shall be construed strictly against the person claiming it.

(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in accelerating economic development and upgrading the quality of life for the people in the community;

(d) Rights and obligations existing on the date of effectivity of this Code and arising out of contracts or any other source of

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prestation involving a local government unit shall be governed by the original terms and conditions of said contracts or the law in force at the time such rights were vested; and

(e) In the resolution of controversies arising under this Code where no legal provision or jurisprudence applies, resort may be had to the customs and traditions in the place where the controversies take place.

PIMENTEL: Interpretation comes into play only when the law does not

speak in clear and categorical language. (Saculdito vs. Montejo)

Every LGU shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. (LGC, Sec. 16)

Custom - a rule of conduct formed by repetition of acts, uniformly observed (practiced) as a social rule, legally binding and obligatory". The law requires that "a custom must be proved as a fact, according to the rules of evidence". A local custom as a source of right cannot be considered by a court of justice unless such custom is properly established by competent evidence like any other fact. (Yao Kee vs. Sy-Gonzales)

According to Gorospe, Filipino customary law (adat) synthesizes morality, legality and religion. Hence, in case of conflict between the adat and any exterior law (i.e., civil law, externally imposed religious law) the adat prevails.

Tradition – an inherited principle, standard or practice or bodies of these, serving as the established guide of an individual or group; a cultural feature preserved or evoked from the past of a tribe or cultural community.

HOWEVER, in Badua vs. Cordillera Bodong Administration, the SC held that since the creation of the Cordillera Autonomous Region was rejected the Cordillera Autonomous Region did not come to be. Hence, the indigenous and special courts nor the tribal courts for the indigenous cultural communities of the Cordillera region, do not legally exist. They are not a part of the Philippine judicial system which consists of the Supreme Court and the lower courts which have been established by law.

A. Local Autonomy

PIMENTEL: Autonomy – comes from the Greek word “autonomos” (to

live under one’s laws); it is the state of independence and self-government.

In Philippine context, local autonomy is the shift of the responsibilities and powers of governance (albeit limited in character) from the national government to the LGU’s. It means a more responsive and accountable local government structure instituted through a system of decentralization. HOWEVER, it does not make local governments sovereign within the state. (Alvarez vs. Guingona, Basco vs. Batanes)

1987 CONSTI

Art. II, Section 25. The State shall ensure the autonomy of local governments.

Art. X, Section 2. The territorial and political subdivisions shall enjoy local autonomy.

PIMENTEL: NOTE: While local autonomy is meant to break up the

monopoly of the national government over the affairs of local governments, it is not meant to usher federalism.

Pimentel vs. Aguirre(2000)

FACTS: President Ramos issued AO 372 entitled “Adoption of Economy Measures for FY 1998”, which includes the following provisions:

Section 1 directed all government departments and agencies, including LGUs, to reduce total expenditures for the year by at least 25%.

Section 4 provided that the amount equivalent to 10% of the internal revenue allotment to LGUs shall be withheld pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation.

AO 43 was issued by President Estrada when he assumed office. This reduced the amount withheld to 5%.

Pimentel sought to annul Sections 1 & 4 of Administrative Order No. 372. He argues that the president would in effect exercise the power of control over LGU’s, when only supervision is allowed by the CONSTI.

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The Solicitor General contended that this was issued to alleviate economic difficulties, that the AO merely “directs” LGUs to reduce their expenditures and that the 10% withholding is only temporary.

WON the said sections of the AO are valid exercises of the President's power of general supervision over local governments.

HELD: YES for Section 1. While the wordings of Sec. 1 have a rather commanding tone, and while the requirements of the LGC (Sec. 284) have not been satisfied, the directive to implement measures that will reduce total expenditures by 25% is merely advisory in character, and does not constitute a mandatory or binding order that interferes with local autonomy. All concerned could do well to heed this advisory. It is understood, however, that no legal sanction may be imposed upon LGUs and their officials who do not follow such advice.

NO for Section 4. A basic feature of local fiscal autonomy is the automatic release of the shares of the LGUs in the national revenue. This is mandated by the Constitution and the LGC. Although what is provided for in Section 4 is merely temporary (pending assessment & evaluation by DBCC), it is equivalent to a holdback, which means “something held back or withheld, often temporarily.” Hence, the temporary nature of the retention by the national government does not matter. Any retention is prohibited.

Moreover, there are several requisites before the President may interfere in local fiscal matters: (1) an unmanaged public sector deficit of the national government; (2) consultations with the presiding officers of the Senate and the HOR and the presidents of the various local leagues; and (3) the corresponding recommendation of the secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore, any adjustment in the allotment shall in no case be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current one.

Under the Philippine concept of local autonomy, only administrative powers over local affairs are delegated to political subdivisions. To enable the country to develop as a whole, the programs and policies effected locally must be integrated and coordinated towards a common national goal. Thus, policy-setting for the entire country still lies in the President and Congress. Municipal governments are still agents of the national government.

San Juan vs. CSC(1991)

FACTS: Gov. San Juan appointed Santos as Acting PBO (Provincial Budget Officer) of Rizal Province and informed DBM Region IV Director, asking him to endorse the appointment. However, the Director recommended the appointment of Almajose as PBO since she is the only CPA among the

contenders. DBM Usec. signed the appointment papers of Almajose without the knowledge of Gov. San Juan. The new Reg. IV Director informed Gov. San Juan that Santos was not qualified and asked that he submit 3 other nominees. However, Gov. San Juan learned of Almajoses’s appointment by the Usec and filed a letter-protest with the DBM Secretary. DBM ruled that letter-protest is not meritorious. MFR was denied. Thus, Gov. San Juan appealed to Civil Service Commission (CSC) which issued a resolution dismissing Gov. San Juan’s claim.

WON the DBM can appoint another person if the governor recommend an unqualified person to the position of Provincial Budget Officer.

HELD: NO. The DBM cannot appoint anyone it wants when the recomendee of the Governor is unqualified.

The issue involves the application of a most important constitutional policy and principle, that of local autonomy. The clear mandate on local autonomy must be obeyed. Where a law is capable of two interpretations, one in favor of centralized power in Malacañang and the other beneficial to local autonomy, the scales must be weighed in favor of autonomy.

When CSC interpreted the recommending power of the Provincial Governor as purely directory, it went against the letter and spirit of the constitutional provisions on local autonomy. If the DBM Secretary jealously hoards the entirety of budgetary powers and ignores the right of local governments to develop self-reliance and resoluteness in the handling of their own funds, the goal of meaningful local autonomy is frustrated and set back.

The DBM may appoint only from the list of qualified recommendees nominated by the Governor. If none is qualified, he must return the list of nominees to the Governor explaining why no one meets the legal requirements and ask for new recommendees who have the necessary eligibilities and qualifications.

Our national officials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit of liberty upon which these provisions are based.

1987 CONSTI, Art. X, Section 4. The President of the Philippines shall exercise general supervision over local governments. Provinces with respect to component cities and municipalities, and cities and municipalities with respect to component barangays, shall ensure that the acts of their component units are within the scope of their prescribed powers and functions.

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PIMENTEL: NOTE: Supervision, not control! The President even has to

exercise such power through the larger LGU’s WRT their component LGU’s. This power is part of the system of checks and balances.

Supervision means overseeing or the authority of an officer to see that the subordinate officers perform their duties. The President's power of general supervision means no more than the power of ensuring that laws are faithfully executed, or that subordinate officers act within the law. Supervision is not incompatible with discipline. (Joson vs. Executive Secretary)

Supervision is not a meaningless thing. It is an active power. It is certainly not without limitation, but it at least implies authority to inquire into facts and conditions (investigation) in order to render the power real and effective. If supervision is to be conscientious and rational, and not automatic and brutal, it must be founded upon a knowledge of actual facts and conditions disclosed after careful study and investigation. (Planas vs. Gil)

Control, on the other hand, "means the power of an officer to alter or modify or nullify or set aside what a subordinate had done in the performance of their duties and to substitute the judgment of the former for that of the latter.” (Pimentel vs. Aguirre, San Juan vs. CSC)

Ganzon vs. CA(1991)

FACTS: A series of administrative complaints, ten in number, was filed against Mayor Ganzon by various city officials, on various charges, among them, abuse of authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable violation of the Constitution, and arbitrary detention.

Finding probable grounds and reasons, the DILG Secretary issued a preventive suspension order for a period of sixty days. In the other case, he ordered Guanzon's second preventive suspension for another sixty (60) days.

Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition against the respondent in the RTC. Presently, he instituted an action for prohibition, in the respondent CA. Meanwhile, the DILG Secretary issued another order, preventively suspending Mayor Ganzon for another sixty days, the third time in twenty months, and designating meantime the Vice-Mayor as acting mayor. Undaunted, Mayor Ganzon commenced before the CA, a petition for prohibition. However, the CA dismissed all the cases. Ganzon cries foul, arguing that he was denied due process and that the President has no power

to investigate or suspend local officials because of the deletion of a clause in the present CONSTI.

Whether or not the DILG Secretary, as the President's alter ego, can suspend and/or remove local officials.

HELD: YES. Notwithstanding the change in the constitutional language, the charter did not intend to divest the legislature of its right or the President of her prerogative as conferred by existing legislation to provide administrative sanctions against local officials. It is our opinion that the omission (of "as may be provided by law") signifies nothing more than to underscore local governments' autonomy from congress and to break Congress' "control" over local government affairs. The Constitution did not, however, intend, for the sake of local autonomy, to deprive the legislature of all authority over municipal corporations, in particular, concerning discipline. the deletion of "as may be provided by law" was meant to stress, sub silencio, the objective of the framers to strengthen local autonomy by severing congressional control of its affairs, as observed by the Court of Appeals, like the power of local legislation. The Constitution did nothing more, however, and insofar as existing legislation authorizes the President (through the Secretary of Local Government) to proceed against local officials administratively, the Constitution contains no prohibition.

It is noteworthy that under the Charter, "local autonomy" is not instantly self-executing, but subject to, among other things, the passage of a local government code, a local tax law, income distribution legislation, and a national representation law, and measures designed to realize autonomy at the local level. It is also noteworthy that in spite of autonomy, the Constitution places the local government under the general supervision of the Executive. It is noteworthy finally, that the Charter allows Congress to include in the local government code provisions for removal of local officials, which suggest that Congress may exercise removal powers, and as the existing Local Government Code has done, delegate its exercise to the President.

In resume the Court is laying down the following rules: 1. Local autonomy, under the Constitution, involves a

mere decentralization of administration, not of power, in which local officials remain accountable to the central government in the manner the law may provide;

2. The new Constitution does not prescribe federalism; 3. The change in constitutional language (with respect to

the supervision clause) was meant but to deny legislative control over local governments; it did not exempt the latter from legislative regulations provided regulation is consistent with the fundamental premise of autonomy;

4. Since local governments remain accountable to the national authority, the latter may, by law, and in the

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manner set forth therein, impose disciplinary action against local officials; and

5. "Supervision" and "investigation" are not inconsistent terms; "investigation" does not signify "control" (which the President does not have).

HOWEVER: While the President, through the DILG Secretary is not precluded from exercising a legal power, it appears that the DILG is exercised such power oppressively and with a grave abuse of discretion. What bothers the Court, and what indeed looms very large, is the fact that since the Mayor is facing ten administrative charges, the Mayor is in fact facing the possibility of 600 days of suspension, in the event that all ten cases yield prima facie findings. The Court is not of course tolerating misfeasance in public office (assuming that Ganzon is guilty of misfeasance) but it is certainly another question to make him serve 600 days of suspension, which is effectively, to suspend him out of office.

1987 CONSTI, Art. X, Section 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy and shall be entitled to their own local executive and legislative assemblies. The jurisdiction of the metropolitan authority that will thereby be created shall be limited to basic services requiring coordination.

1987 CONSTI, Art. X, Section 12. Cities that are highly urbanized, as determined by law, and component cities whose charters prohibit their voters from voting for provincial elective officials, shall be independent of the province. The voters of component cities within a province, whose charters contain no such prohibition, shall not be deprived of their right to vote for elective provincial officials.

Tan v COMELEC(1986)

FACTS: BP 885 was passed (“An Act Creating the Province of Negros del Norte.”) Tan et al., who are residents of the Province of Negros Occidental, filed with the SC a case for Prohibition for the purpose of stopping respondents COMELEC from conducting the plebiscite, required by the said law. The BP provided that the plebiscite was to be conducted 120 days from the approval of the Act and that the President was to appoint the first officials.

Tan et al. contend that BP 885 is unconstitutional and it is not in complete accord with the Local Government Code. The Constitution states that no province, city, municipality, or barrio may be created, divided, merged, abolished, or its boundaries

substantially altered, except in accordance with the criteria established in the Local Government Code, subject to approval by a majority of votes cast in a plebiscite. The LGC set as a standard that a province must have at least 3,500 square kilometers as its territory.

The Solicitor General argued that BP 885 enjoys a presumption of legality and that the question is moot since the province of Negros del Norte had already been proclaimed after the plebiscite which was held (notwithstanding the case) confined only to the inhabitants of the territory of Negros del Norte, to the exclusion of the voters from the rest of the province of Negros Occidental (parent province).

WON the province of Negros del Norte was validly created.

HELD: NO. Considering that the legality of the plebiscite itself is challenged for non-compliance with constitutional requisites, the fact that such plebiscite had been held and a new province proclaimed and its officials appointed, this case cannot truly be viewed as already moot and academic.

It can be plainly seen from Section 3 of Article XI of the 1973 CONSTI makes it imperative that there be first obtained "the approval of a majority of votes in the plebiscite in the unit or units affected" whenever a province is created, divided or merged and there is substantial alteration of the boundaries. It is thus inescapable to conclude that the boundaries of the existing province of Negros Occidental would necessarily be substantially altered by the division of its existing boundaries in order that there can be created the proposed new province of Negros del Norte. Plain and simple logic will demonstrate that two political units would be affected. The first would be the parent province of Negros Occidental because its boundaries would be substantially altered. The other affected entity would be composed of those in the area subtracted from the mother province to constitute the proposed province of Negros del Norte.

The Court noted that the case of Paredes vs. Executive Secretary, which involved the creation of a new municipality where the parent unit was not involved, could not be considered as a precedent. The reasons in this case invoked by respondents herein were formerly considered acceptable because of the views then taken that local autonomy would be better promoted. However, even this consideration no longer retains persuasive value. That case involved a barangay while this case involves a province.

Almost half of the sugar plantations would be dismembered form the parent province and some of its most important cities. Hence, the remaining portion of the parent province is as much an area affected. The substantial alteration of the boundaries of the parent province, not to mention the other adverse economic effects it might suffer, eloquently argue the points raised by the petitioners.

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The SC also considered the new province as lacking in the territory requirement since the land mass of the new territory was only 2,856 square kilometers. The Court rejected the suggestion of the Solicitor General that even the area of the EEZ should be considered in determining the territorial requirement.

Cordillera Broad Coalition v. COA(1990)

FACTS: After the 1996 EDSA Revolution, Balweg, broke off on ideological grounds from the CPP-NPA. After President Aquino was installed into office, she advocated a policy of national reconciliation. The Cordillera People’s Liberation Army (CPLA) heeded this call. Aqiuno and Balweg arrived at a joint agreement to draft 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 for the Cordilleras. Pursuant to the joint agreement, E.O. 220, creating the Cordillera Administrative Region (CAR) was signed into law.

During the pendency of this case, R.A. No. 6766 (Organic Act of CAR) was enacted and signed into law. The Act recognizes the CAR and the offices and agencies created under E.O. 220 and its transitory nature is reinforced. Cordillera Broad Coalition assailed E.O. 220 on the primary ground that the President pre-empts the enactment of an organic act by Congress and the approval of such act through a plebiscite.

WON E.O. 220 was invalid based on the grounds stated.

HELD: NO. EO 220 does not create the autonomous region contemplated in the Constitution. It merely provides for transitory measures in anticipation of the enactment of an organic act and the creation of an autonomous region. In short, it prepares the ground for autonomy. This does not necessarily conflict with the provisions of the Constitution on autonomous regions. The complex procedure for the creation of an autonomous region in the Cordilleras will take time. The President, in 1987 still exercising legislative powers, as the first Congress had not yet convened, saw it fit to provide for some measures to address the urgent needs of the Cordilleras in the meantime that the organic act had not yet been passed and the autonomous region created. These measures are in E.O. No. 220, and they do not violate the Constitution.

The bodies created by E.O. 220 do not supplant the existing local governmental structure, nor are they autonomous government agencies. They merely constitute the mechanism for an "umbrella" that brings together the existing local governments, the agencies of the National Government, the ethno-linguistic groups or tribes, and NGOs in a concerted effort to spur development in the Cordilleras.

Neither did E.O. 220 contravene the Constitution by creating a new territorial and political subdivision. The CAR is not a public corporation or a territorial and political subdivision. It does not have a separate juridical personality, unlike provinces, cities and municipalities. Neither is it vested with the powers that are normally granted to public corporations (the power to sue and be sued, the power to own and dispose of property, the power to create its own sources of revenue, etc.). The CAR was created primarily to coordinate the planning and implementation of programs and services in the covered areas.

The CAR is in the same genre as the administrative regions created under the Reorganization Plan, albeit under E.O. No. 220. The operation of the CAR requires the participation not only of the line departments and agencies of the National Government but also the local governments, ethno-linguistic groups and NGOs in bringing about the desired objectives and the appropriation of funds solely for that purpose.

Nor is E.O. 220 diminished the local autonomy of the covered provinces and city. It must be clarified that the constitutional guarantee of local autonomy in the Constitution refers to the administrative autonomy of local government units or, cast in more technical language, the decentralization of government authority.

On the other hand, the creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is peculiar to the 1987 Constitution contemplates the grant of political autonomy and not just administrative autonomy these regions. Thus, the provision in the Constitution for an autonomous regional government with a basic structure consisting of an executive department and a legislative assembly and special courts with personal, family and property law jurisdiction in each of the autonomous regions

GD-R: In relation to the ARMM, what does the CONSTI envision, when it refers to local autonomy and decentralization? The following are excerpts from Disomangcop vs. Datumanong (2004):

In Cordillera Broad Coalition v. Commission on Audit, the Court, with the same composition, ruled without any dissent that the creation of autonomous regions contemplates the grant of political autonomy—an autonomy which is greater than the administrative autonomy granted to local government units. It held that "the constitutional guarantee of local autonomy in the Constitution (Art. X, Sec. 2) refers to administrative autonomy of local government units or, cast in more technical language, the decentralization of government authority…. On the other hand, the creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is peculiar to the 1987 Constitution, contemplates the grant of political autonomy and not just administrative autonomy to these regions.”

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And by regional autonomy, the framers intended it to mean "meaningful and authentic regional autonomy." As articulated by a Muslim author, substantial and meaningful autonomy is "the kind of local self-government which allows the people of the region or area the power to determine what is best for their growth and development without undue interference or dictation from the central government.”

To this end, Section 16, Article X, limits the power of the President over autonomous regions. In essence, the provision also curtails the power of Congress over autonomous regions. Consequently, Congress will have to re-examine national laws and make sure that they reflect the Constitution's adherence to local autonomy. And in case of conflicts, the underlying spirit which should guide its resolution is the Constitution's desire for genuine local autonomy.

The aim of the Constitution is to extend to the autonomous peoples, the people of Muslim Mindanao in this case, the right to self-determination—a right to choose their own path of development; the right to determine the political, cultural and economic content of their development path within the framework of the sovereignty and territorial integrity of the Philippine Republic. Self-determination refers to the need for a political structure that will respect the autonomous peoples' uniqueness and grant them sufficient room for self-expression and self-construction.

In treading their chosen path of development, the Muslims in Mindanao are to be given freedom and independence with minimum interference from the National Government. This necessarily includes the freedom to decide on, build, supervise and maintain the public works and infrastructure projects within the autonomous region. The devolution of the powers and functions of the DPWH in the ARMM and transfer of the administrative and fiscal management of public works and funds to the ARG are meant to be true, meaningful and unfettered. This unassailable conclusion is grounded on a clear consensus, reached at the Constitutional Commission and ratified by the entire Filipino electorate, on the centrality of decentralization of power as the appropriate vessel of deliverance for Muslim Filipinos and the ultimate unity of Muslims and Christians in this country.

B. Decentralization

PIMENTEL: Decentralization is a decision by the central

government, authorizing its subordinates, whether geographically or functionally defined, to exercise authority in certain areas. It involves decision-making by sub-national units. It is typically a delegated power, wherein a larger government chooses to delegate certain authority to more local governments.

Decentralization differs intrinsically from federalism in that the sub-units that have been authorized to act (by delegation) do not possess any claim of right against the central government.

Decentralization comes in two forms—deconcentration and devolution. Deconcentration is administrative in nature; it involves the transfer of functions or the delegation of authority and responsibility from the national office to the regional and local offices. This mode of decentralization is also referred to as administrative decentralization.

Devolution, on the other hand, connotes political decentralization, or the transfer of powers, responsibilities, and resources for the performance of certain functions from the central government to local government units. This is a more liberal form of decentralization since there is an actual transfer of powers and responsibilities. It aims to grant greater autonomy to local government units in cognizance of their right to self-government, to make them self-reliant, and to improve their administrative and technical capabilities. (Disomangcop vs. Datumanong)

1987 CONSTI, Art. X, Section 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units.

1987 CONSTI, Art. X, Section 14. The President shall provide for regional development councils or other similar bodies composed of local government officials, regional heads of departments and other government offices, and representatives from non-governmental organizations within the regions for purposes of administrative decentralization to strengthen the autonomy of the units therein and to accelerate the economic and social growth and development of the units in the region.

PIMENTEL: This provision is a very clear illustration of local autonomy

as a means for development.

Limbona vs. Mangelin(1989)

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FACTS: The Sangguniang Pampook, in defiance of their Speaker’s (Limbona) advice, held a session and voted to declare the position of Speaker vacant. Limbona filed an action in the Court. Pending said action, Limbona was expelled from the Sangguniang Pampook on the ground that he authorized the payment of salaries and emoluments to a certain Abdula without authority from the Assembly. The Sanggunian members assail the jurisdiction of the SC, relying on their autonomy.

WON the so-called autonomous governments of Mindanao, as they are now constituted, subject to the jurisdiction of the national courts.

HELD: YES. Autonomy is either decentralization of administration or decentralization of power.

(1) in decentralization of administration – an autonomous government is under the supervision of the national government acting through the president (and the DILG)

If the Sangguniang Pampook is autonomous in this sense, it comes unarguably under the Court’s jurisdiction.

(2) in decentralization of power – an autonomous government is subject alone to the decree of the organic act creating it and accepted principles on the effects and limits of autonomy.

If the Sangguniang Pampook is autonomous in this sense, its acts are beyond the domain of the court in the same way that internal acts, say, of the Congress are beyond its jurisdiction.

An examination of PD No. 1618 creating the autonomous governments of Mindanao shows that they were never meant to exercise autonomy in the second sense, that is, in which the central government commits an act of self-immolation.

The P.D. mandates that the President shall have the power of general supervision and control over Autonomous Regions

The Sangguniang Pampook, their legislative arm, is made to discharge chiefly administrative services.

Upon the facts presented, the SC held that the November 2 and 5, 1987 sessions were invalid since at the time the petitioner called the "recess," it was not a settled matter whether or not he could. do so. In the second place, the invitation tendered by the Committee on Muslim Affairs of the House of Representatives provided a plausible reason for the intermission sought. Thirdly, assuming that a valid recess could not be called, it does not appear that the respondents called his attention to this mistake. What appears is that instead, they opened the sessions themselves behind his back in an apparent act of mutiny. Under

the circumstances, we find equity on his side. For this reason, the SC upheld the "recess" called on the ground of good faith.

IV. CREATION OF MUNICIPAL CORPORATIONS

A. Nature of the Power to Create Municipal Corporations

MARTIN: It is essentially legislative, exclusive and practically

unlimited. In the absence of any constitutional restriction, Congress may create any kind of corporation it deems essential for the more efficient administration of civil government.

In the absence of a constitutional provision permitting it, such power cannot be delegated by Congress to any inferior and subordinate tribunal or board.

HOWEVER: There is no undue delegation of legislative power when Congress passes a general law for the incorporation of municipal corporations, giving conditions on which they may be created, and determining whether such conditions exist.

Pelaez vs. Auditor General (1965)

FACTS: From Sept 4 - Oct 29,1964 the President of the Philippines, purporting to act pursuant to Sec 68 of the Revised Administrative Code of 1917, issued EO’s 93 to 121, 124 and 126 to 129, creating 33 municipalities. Soon after V.P. Pelaez instituted an action against the Auditor General, to restrain him from passing in audit any expenditure of public funds in implementation of said executive orders and/or any disbursement by said municipalities. Pelaez alleges that the EOs are null and void, upon the ground that said Section 68 has been impliedly repealed by RA 2370 (Barrio Charter Act) and constitutes an undue delegation of legislative power. He contends that according to the said law, barrios may not be created except upon Act of Congress or of the corresponding provincial board upon petition of a majority of the voters in the areas affected. Hence, logically, the president cannot create municipalities, too.

WON the Executive Orders were valid.

HELD: NO. When Republic Act No. 2370 became effective, barrios may "not be created or their boundaries altered nor their names changed" except by Act of Congress or of the corresponding provincial board "upon petition of a majority of the voters in the areas affected" and the "recommendation of the council of the municipality or municipalities in which the proposed barrio is situated."

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The Auditor General claims that a new municipality can be created without creating new barrios, such as, by placing old barrios under the jurisdiction of the new municipality.

This theory overlooks, that the statutory denial of the presidential authority to create a new barrio implies a negation of the bigger power to create municipalities, each of which consists of several barrios. Founded upon logic and experience, it cannot be offset except by a clear manifestation of the intent of Congress to the contrary, and no such manifestation, subsequent to the passage of Republic Act No. 2370 has been brought to our attention.

The Auditor General alleges that the power of the President to create municipalities under section 68 of the Revised Administrative Code does not amount to an undue delegation of legislative power, relying upon the allegedly settled case of Municipality of Cardona vs. Municipality of Binañgonan (36 Phil. 547).

Such claim is untenable, for said case involved, not the creation of a new municipality, but a mere transfer of territory — from an already existing municipality (Cardona) to another municipality (Binañgonan), likewise, existing at the time of and prior to said transfer in consequence of the fixing and definition, pursuant to Act No. 1748, of the common boundaries of two municipalities.

It is obvious, however, that the power to fix such common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of an administrative nature but the authority to create municipal corporations is essentially legislative in nature.

Although Congress may delegate to another branch of the government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself — it must set forth therein the policy to be executed, carried out or implemented by the delegate — and (b) fix a standard — the limits of which are sufficiently determinate or determinable — to which the delegate must conform in the performance of his functions. Section 68 of the Revised Administrative Code does not meet these requirements for a valid delegation of the power to fix the details in the enforcement of a law. Even if it did not entail an undue delegation of legislative powers, as it certainly does, said Section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly incompatible and inconsistent with said statutory enactment.

Municipality of Kapalong vs. Moya (1988)

FACTS: From portions of the Municipality of Kapalong, President Carlos P. Garcia created respondent Municipality of Sto.Tomas, and the latter now asserts jurisdiction over eight (8) barrios of Kapalong. For many years and on several occasions, this conflict of boundaries between the two municipalities was brought, at the instance of private respondent, to the Provincial Board of Davao for it to consider and decide. However, it appears that no action was taken on the same. The Municipality of Sto. Tomas eventually filed a complaint with the then Court of First Instance of Davao, presided over by herein public respondent Judge Felix L. Moya against the Municipality of Kapalong, for settlement of the municipal boundary dispute. The Municipality of Kapalong filed a MTD on the ground of lack of legal personality of the Municipality of Sto. Tomas.

WON the Municipality of Sto. Tomas legally exists.

HELD: NO. Rule 3, Section 1 of the Rules of Court expressly provides that only "entities authorized by law may be patties in a civil action." Now then, as ruled in the Pelaez case, the President has no power to create a municipality. Since private respondent has no legal personality, it can not be a party to any civil action, and as such, the case should have been dismissed, since further proceedings would be pointless.

B. Creation of Municipal Corporations

1. Constitutional provisions

1987 CONSTI, Art. X

Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided.

Section 10. 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.

Section 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy and shall be entitled to their own local executive and legislative assemblies. The jurisdiction of the metropolitan authority that will thereby be created shall be limited to basic services requiring coordination.

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1987 CONSTI, Art. X

Section 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines.

Section 18. The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative commission composed of representatives appointed by the President from a list of nominees from multi-sectoral bodies. The organic act shall define the basic structure of government for the region consisting of the executive department and legislative assembly, both of which shall be elective and representative of the constituent political units. The organic acts shall likewise provide for special courts with personal, family, and property law jurisdiction consistent with the provisions of this Constitution and national laws.

The creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the autonomous region.

Section 19. The first Congress elected under this Constitution shall, within eighteen months from the time of organization of both Houses, pass the organic acts for the autonomous regions in Muslim Mindanao and the Cordilleras.

Alvarez vs. Guingona(supra)

RA 7720 is constitutional.

It is true that for a municipality to be converted into a component city, it must, among others, have an average annual income of at least Twenty Million Pesos for the last two (2) consecutive years based on 1991 constant prices.1

Such income must be duly certified by the Department of Finance.

Internal Revenue Allotments form part of the income of Local Government Units. The IRAs are items of income because they form part of the gross accretion of the funds of the local government unit. The IRAs regularly and automatically accrue to the local treasury without need of any further action on the part of the local government unit. They thus constitute income which the local government can invariably rely upon as the source of much needed funds.

The acquisition of resources necessary to discharge its powers and effectively carry out its functions is effected through the vesting in every LGU of:

1. The right to create and broaden its own source of revenue;

2. The right to be allocated a just share in national taxes, such share being in the form of Internal Revenue Allotments (IRAs); and

3. The right to be given its equitable share in the proceeds of the utilization and development of the national wealth, if any, within its territorial boundaries.

The funds generated from local taxes, IRAs and National wealth utilization proceeds accrue to the general fund of the LGU and are used to finance its operations, subject to specified modes of spending the same as provided for in the LGC and its implementing rules and regulations.

2. Statutory provisions

LGC, SEC. 6. Authority to Create Local Government Units. - A local government unit may be created, divided, merged, abolished, or its boundaries substantially altered either by law enacted by Congress in the case of a province, city, municipality, or any other political subdivision, or by ordinance passed by the sangguniang panlalawigan or sangguniang panlungsod concerned in the case of a barangay located within its territorial jurisdiction, subject to such limitations and requirements prescribed in this Code. PIMENTEL: Congress is lodged with the power to create LGU’s but it is

not authorized to add to the list enumerated in Section 1 of Article X of the CONSTI by mere legislation.

The Sangguniang Panlalawigan and the Sangguniang Panlungsod are granted authority to create, divide, merge or abolish barangays in their respective jurisdictions; but not the Sangguiniang Bayan nor the barangay council!

The absence of the Local Government Code at the time of the enactment of an Act creating a municipality did not curtail nor was it intended to cripple legislative competence to create municipal corporations. It contains no requirement that the Local Government Code is a condition sine qua non

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http://www.lawphil.net/judjuris/juri1996/jan1996/gr_118303_1996.html#fnt1


for the creation of a municipality, in much the same way that the creation of a new municipality does not preclude the enactment of a LGC.

Hence, before the enactment of such Code, the legislative power remains plenary except that the creation of the new local government unit should be approved by the people concerned in a plebiscite called for the purpose. (Torralba vs. Municipality of SIbagat)

LGC, SEC. 7. Creation and Conversion. - As a general rule, the creation of a local government unit or its conversion from one level to another level shall be based on verifiable indicators of viability and projected capacity to provide services, to wit:

(a) Income. - It must be sufficient, based on acceptable standards, to provide for all essential government facilities and services and special functions commensurate with the size of its population, as expected of the local government unit concerned;

(b) Population. - It shall be determined as the total number of inhabitants within the territorial jurisdiction of the local government unit concerned; and

(c) Land Area. - It must be contiguous, unless it comprises two or more islands or is separated by a local government unit independent of the others; properly identified by metes and bounds with technical descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its populace. Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF), the National Statistics Office (NSO), and the Lands Management Bureau (LMB) of the Department of Environment and Natural Resources (DENR).

PIMENTEL:Annual Income

Population (this requirement is in the alternative with the land area requirement in provinces and cities)

Land Area

(this requirement is in the alternative with the population requirement in provinces and cities)

Province Php 20M 250000 2000 km2

City Php 100M (RA 9009)

150000 100 km2

Municipality Php 2.5M 25000 50 km2

Barangay No requirement (its viability becomes the obligation of the body

5000 (in Metro Manila and other metropolitan subdivisions); or 2000 (in

No requirement

creating it) others)

“Average annual income” includes any income accruing to the general fund but is exclusive of special funds, special accounts transfers and nonrecurring income.

Special funds refer to those that are created for a special purpose or object and used to meet specified expenditures or classes of expenditures.Fund transfers refer to those that are transferred from one item to another, usually to the general fund.

Nonrecurring items refer to those that cover particular purposes and are not regularly included in the normal expenditures of an LGU.

The word “land area” replaced the word “territory” in the old LGC, to emphasize that the area required of an LGU does not include the sea for purposes of compliance with the requirements of the Code for its creation. (Tan vs. COMELEC)

GEN RULE: The land area must be contiguous.

EXCEPT: (1) when it comprises of two or more islands; and (2) when another LGU is located in between parts of the LGU concerned.

ALSO, the creation of a new province, city or municipality must not so reduce the income, population, or land area of the original political subdivision as to render such parent LGU ineffectual in the delivery of essential governmental functions.

PROCEDURE FOR CREATION OF PROVINCES, CITIES, MUNICIPALITIES (LGC IRR)

Interested LGU’s shall submit a petition, in the form of a resolution, to their respective sanggunians requesting the creation of a new LGU to Congress, and furnish a copy thereof to the sanggunian of the affected LGU’s.

The sanggunian of the affected LGU’s shall submit to Congress its comments and recommendations on the petition for the creation of a new LGU.

The following documents shall be attached to the petition for creation:

DOF certification regarding income NSO certification regarding population.

In the case of cities and municipalities, the NSO must also certify as to the number and nature of existing industrial and commercial establishments in the proposed LGU.

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LMB certification regarding land area. In case of cities and municipalities, the LMB must also certify as to adequacy of disposable and alienable public lands in the proposed LGU to meet the needs of the population and the existence of:

1. Government center2. Market site3. Plaza or park4. School site5. Cemetery site

Map of the original LGU/s indicating the areas to be created into a new LGU

Such other information as the petitioners may deem relevant.

In case of cities and municipalities, a LWUA or MWSS certification regarding sources of potable water supply and a local engineer’s plans as to sewerage and waste disposal are also required.

Upon effectivity of the law creating the new LGU, the COMELEC shall conduct an intensive information campaign in the LGU’s concerned at least 20 days prior to the date of the plebiscite, as scheduled by the COMELEC.

Upon effectivity of the law creating the new LGU, plebiscite in the LGU/s directly affected within 120 days or within the period specified in the law.

PROCEDURE FOR CREATION OF BARANGAYS (LGC IRR)

A written petition of a majority of registered voters, or resolutions of the Sanggunian Barangays desiring to be merged, as the case may be, shall be presented to the Sanggunian Panlalawigan (upon recommendation of the Sanggunian Bayan) or the Sanggunian Panlungsod, for appropriate action. In case of municipalities in MM, such petitions or resolutions are to be submitted to Congress.

The following documents shall be attached to the petition for creation:

NSO certification regarding population. Map of the original LGU/s indicating the

areas to be created into a new LGU The Sanggunian Barangay of the affected

barangays shall submit to the Sanggunian Bayan its comments and recommendations on the petition for the creation of a new LGU within 20 days after receipt thereof.

The Sangguniang Panlalawigan or Panlungsod shall, within 15 days from submission of the petition, take action granting (2/3 votes) or denying the petition. The COMELEC must be

furnished a copy of the ordinance creating the barangay within 30 days before the proposed plebiscite.

The COMELEC shall conduct an intensive information campaign in the LGU’s concerned at least 10 days prior to the date of the plebiscite.

The Sanggunian of the different LGU’s may send petitions to Congress to propose the creation of provinces, cities, or municipalities.

HOWEVER, such petitions are not requirements, EXCEPT where barangays are sought to be created by the Sangguniang Panlalawigan.

Barangays may be merged or consolidated by an ordinance based on a merger or consolidation plan prepared by the governor or mayor as the case may be.

Conversion is the elevation of an LGU from one level to another. The requirement for conversion is the same as the requirements for creation.

LGC, SEC. 385. Manner of Creation [of Barangays] - A barangay may be created, divided, merged, abolished, or its boundary substantially altered, by law or by an ordinance of the sangguniang panlalawigan or sangguniang panlungsod, subject to approval by a majority of the votes cast in a plebiscite to be conducted by the Comelec in the local government unit or units directly affected within such period of time as may be determined by the law or ordinance creating said barangay. In the case of the creation of barangays by the sangguniang panlalawigan, the recommendation of the sangguniang bayan concerned shall be necessary.

LGC

SEC. 441. Manner of Creation [of Municipalities]. - A municipality may be created, divided, merged, abolished, or its boundary substantially altered only by an Act of Congress and subject to the approval by a majority of the votes cast in a plebiscite to be conducted by the COMELEC in the local government unit or units directly affected. Except as may otherwise be provided in the said Act, the plebiscite shall be held within one hundred twenty (120) days from the date of its effectivity.

SEC. 442. Requisites for Creation [of Municipalities]. –

(a) A municipality may be created if it has an average annual income, as certified by the provincial treasurer, of at least Two million five hundred thousand pesos (Php 2,500,000.00) for the last two (2) consecutive years based on the 1991 constant prices; a population of at least twenty-five thousand (25,000) inhabitants as certified by the National Statistics Office; and a contiguous territory of at least fifty (50) square kilometers as certified by the Lands Management Bureau: Provided, That the creation thereof shall not reduce the land area, population or income of the original municipality or municipalities at the time of said creation to less than the minimum requirements prescribed herein.

(b) The territorial jurisdiction of a newly-created municipality shall be properly identified by metes and bounds. The requirement on land area

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shall not apply where the municipality proposed to be created is composed of one (1) or more islands. The territory need not be contiguous if it comprises two (2) or more islands.

(c) The average annual income shall include the income accruing to the general fund of the municipality concerned, exclusive of special funds, transfers and non-recurring income.

(d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective set of elective municipal officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities.

PIMENTEL: The requisites for the creation of municipalities shall not

apply retroactively. Section 442 (d) has the effect of declaring as regular and de

jure those municipal districts described therein.

LGC

SEC. 449. Manner of Creation. - A city may be created, divided, merged, abolished, or its boundary substantially altered, only by an Act of Congress, and subject to approval by a majority of the votes cast in a plebiscite to be conducted by the Comelec in the local government unit or units directly affected. Except as may otherwise be provided in such Act, the plebiscite shall be held within one hundred twenty (120) days from the date of its effectivity.

SEC. 450. Requisites for Creation. –

(a) A municipality or a cluster of barangays may be converted into a component city if it has an average annual income, as certified by the Department of Finance, of at least Twenty million pesos (P20,000,000.00) for the last two (2) consecutive years based on 1991 constant prices, and if it has either of the following requisites:

(i) a contiguous territory of at least one hundred (100) square kilometers, as certified by the Lands Management Bureau; or,

(ii) a population of not less than one hundred fifty thousand (150,000) inhabitants, as certified by the National Statistics Office: Provided, That, the creation thereof shall not reduce the land area, population, and income of the original unit or units at the time of said creation to less than the minimum requirements prescribed herein.

(b) The territorial jurisdiction of a newly-created city shall be properly identified by metes and bounds. The requirement on land area shall not apply where the city proposed to be created is composed of one (1) or more islands. The territory need not be contiguous if it comprises two (2) or more islands.

(c) The average annual income shall include the income accruing to the general fund, exclusive of special funds, transfers, and non-recurring income.

PIMENTEL: RA 9009 increased the income requirement (from Php

20M to Php 100M) so as to prevent the apparent ease of converting of all of our municipalities into cities.

The requirement that the territorial jurisdiction of a newly-created city shall be properly identified by metes and bounds is not absolute, particularly in cases of LGU’s with unsettled boundary disputes.

The existence of a boundary dispute does not per se present an insurmountable difficulty which will prevent Congress from defining with reasonable certitude the territorial jurisdiction of a local government unit. (Mariano, Jr. vs. COMELEC)

LGC

SEC. 460. Manner of Creation. - A province may be created, divided, merged, abolished, or its boundary substantially altered, only by an Act of Congress and subject to approval by a majority of the votes cast in a plebiscite to be conducted by the Comelec in the local government unit or units directly affected. The plebiscite shall be held within one hundred twenty (120) days from the date of effectivity of said Act, unless otherwise provided therein.

SEC. 461. Requisites for Creation. –

(a) A province may be created if it has an average annual income, as certified by the Department of Finance, of not less than Twenty million pesos (Php 20,000,000.00) based on 1991 constant prices and either of the following requisites:

(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the Lands Management Bureau; or,

(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as certified by the National Statistics Office: Provided, That, the creation thereof shall not reduce the land area, population, and income of the original unit or units at the time of said creation to less than the minimum requirements prescribed herein.

(b) The territory need not be contiguous if it comprises two (2) or more islands or is separated by a chartered city or cities which do not contribute to the income of the province.

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(c) The average annual income shall include the income accruing to the general fund, exclusive of special funds, trust funds, transfers, and non-recurring income.

Cawaling vs. COMELEC (2001)

FACTS: Pres. Estrada signed into law R.A. No. 8806, an (Act Creating The City Of Sorsogon). Pursuant to Section 10, Article X of the Constitution, COMELEC conducted a plebiscite in the Municipalities of Bacon and Sorsogon and submitted the matter for ratification. The Plebiscite City Board of Canvassers (PCBC) proclaimed the creation of the City of Sorsogon as having been ratified and approved by the majority of the votes cast in the plebiscite. Cawaling, filed on 2 petitions seeking the annulment of the plebiscite and seeking to enjoin the further implementation of R.A. No. 8806 for being unconstitutional, contending that under Section 450(a) of the Code, a component city may be created only by converting "a municipality or a cluster of barangays," not by merging two municipalities, as what R.A. No. 8806 has done.

During the pendency of these cases (May 2001 elections), the newly-created Sorsogon City had the first election of its officials. Since then, the City Government of Sorsogon has been regularly discharging its corporate and political powers pursuant to its charter, R.A. No. 8806.

WON the creation of the city of Sorsogon was valid.

Held: YES. RA 8806 is constitutional and plebiscite valid. Petitioner's constricted reading of Section 450(a) of the Code is erroneous. The phrase "A municipality or a cluster of barangays may be converted into a component city" is not a criterion but simply one of the modes by which a city may be created. Section 10, Article X of the Constitution, allows the merger of local government units to create a province city, municipality or barangay in accordance with the criteria established by the Code.

Cawaling’s argument that the Municipality of Sorsogon alone already qualifies to be upgraded to a component city goes into the wisdom of R.A. No. 8806, is a matter which the SC is not competent to rule. It is clear that "the judiciary does not pass upon questions of wisdom, justice or expediency of legislation." In the exercise of judicial power, the SC is allowed only "to settle actual controversies involving rights which are legally demandable and enforceable," and "may not annul an act of the

political departments simply because the SC feels it is unwise or impractical”.

Contrary to petitioner's assertion, there is only one subject embraced in the title of the law, that is, the creation of the City of Sorsogon. The abolition / cessation of the corporate existence of the Municipalities of Bacon and Sorsogon due to their merger is not a subject separate and distinct from the creation of Sorsogon City. Such abolition / cessation was but the logical, natural and inevitable consequence of the merger. It is well-settled that the "one title-one subject" rule does not require the Congress to employ in the title of the enactment language of such precision as to mirror, fully index or catalogue all the contents and the minute details therein. The rule is sufficiently complied with if the title is comprehensive enough as to include the general object which the statute seeks to effect, and where, as here, the persons interested are informed of the nature, scope and consequences of the proposed law and its operation. Moreover, this Court has invariably adopted a liberal rather than technical construction of the rule "so as not to cripple or impede legislation."

The 120-day period within which to conduct the plebiscite starts from the date of Act’s effectivity (i.e., after publication in at least two (2) newspapers of general and local circulation). Quite plainly, the last sentence of Section 10 mandates that the plebiscite shall be conducted within 120 days from the date of the effectivity of the law, not from its approval. While the same provision allows a law or ordinance to fix "another date" for conducting a plebiscite, still such date must be reckoned from the date of the effectivity of the law.

3. The Revised Administrative Code of 1917

The (Governor-General) President of the Philippines may by executive order define the boundary, or boundaries, of any province, subprovince, municipality, [township] municipal district, or other political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovinces, separate any political division other than a province, into such portions as may be required, merge any of such subdivisions or portions with another, name any new subdivision so created, and may change the seat of government within any subdivision to such place therein as the public welfare may require: Provided, That the authorization of the (Philippine Legislature) Congress of the Philippines shall first be obtained whenever the boundary of any province or subprovince is to be defined or any province is to be divided into one or more subprovinces. When action by the (Governor-General) President of the Philippines in accordance herewith makes necessary a change of the territory under the jurisdiction of any administrative officer or any judicial officer, the (Governor-General) President of the Philippines, with the recommendation and advice of the head of the Department having executive control of such officer, shall redistrict the territory of the several officers affected and assign such officers to the new districts so formed.

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Upon the changing of the limits of political divisions in pursuance of the foregoing authority, an equitable distribution of the funds and obligations of the divisions thereby affected shall be made in such manner as may be recommended by the (Insular Auditor) Auditor General and approved by the (Governor-General) President of the Philippines.

Pelaez vs. Auditor General (supra)

HELD: Section 68 of the RAC is VOID. The Auditor General alleges that the power of the President to create municipalities under section 68 of the Revised Administrative Code does not amount to an undue delegation of legislative power, relying upon the allegedly settled case of Municipality of Cardona vs. Municipality of Binañgonan (36 Phil. 547).

Such claim is untenable, for said case involved, not the creation of a new municipality, but a mere transfer of territory — from an already existing municipality (Cardona) to another municipality (Binañgonan), likewise, existing at the time of and prior to said transfer in consequence of the fixing and definition, pursuant to Act No. 1748, of the common boundaries of two municipalities.

It is obvious, however, that the power to fix such common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of an administrative nature but the authority to create municipal corporations is essentially legislative in nature.

Although Congress may delegate to another branch of the government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself — it must set forth therein the policy to be executed, carried out or implemented by the delegate — and (b) fix a standard — the limits of which are sufficiently determinate or determinable — to which the delegate must conform in the performance of his functions. Section 68 of the Revised Administrative Code does not meet these requirements for a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President. Neither does it give a standard sufficiently precise to avoid the evil effects above referred to. Even if it did not entail an undue delegation of legislative powers, as it certainly does, said Section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly incompatible and inconsistent with said statutory enactment.

4. Municipal corporation by prescription

MARTIN: (See also Sec. 442, par. d)

Municipal corporations may exist by prescription. Its existence shall be presumed where it is presumed that the community claimed and exercised corporate functions, with knowledge and acquiescence of legislature, without interruption or objection over a period long enough to afford title by prescription.

5. De facto municipal corporations

MARTIN: A de facto municipal corporation is one that exists in fact

although not in point of law as there is a certain defect in some essential feature of its organization, so long as it has met the following requirements:

1. Valid law authorizing incorporation;2. Attempt in good faith to organize it;3. Colorable compliance with the law;4. Assumption of corporate powers.

Municipality of Candijay v CA (1995)

FACTS: The Municipality of Candijay claimed that the barrio of Pagahat is within its territorial jurisdiction and that it is not a part of the Municipality of Alicia. After presentation of evidence, the Municipality of Candijay asked the TC to bar the respondent from presenting evidence on the ground that it had no juridical personality. Candijay argued that EO 265 issued by Pres. Quirino is null and void ab initio since Sec. 68 of the RAC constituted an undue delegation of legislative power to the President. The TC ruled for Candijay but this was reversed by the CA. The CA found that the plans submitted by the two municipalities are inadequate insofar as identifying the monuments of the boundary line between the petitioner and the Muncipality of Mabini. The CA ruled that in cases of equiponderance of evidence, the courts must find for the defendant. Hence, the Municipality of Candijay appeals to the SC.

WON a municipality, created under a void executive order, can be considered as having no juridical personality.

HELD: NO. The petitioner commenced its collateral attack on the juridical personality of the respondent on 19 January 1984 (35 yrs after its creation in 1949). The Municipality of Alicia was created by EO 265, or ten years ahead of the Municipality of San Andres, and had been in existence for 16 years when Pelaez decision was promulgated. Various governmental acts through the years all indicate the State’s recognition and acknowledgement of its existence. For instance, under Administrative Order No. 33 above-mentioned, the Municipality of Alicia was covered by the 7th Municipal Circuit Court of Alicia-Mabini for the province of Bohol. Likewise, under the Ordinance appended to the 1987 Constitution, the Municipality of Alicia is one of twenty municipalities comprising the Third District of

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Bohol. Alicia must benefit from the effects of Sec. 422 (d) of the LGC and should be considered a regular, de jure municipality.

According to Sec. 442 (d) of the LGC, municipal districts “organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of the Code shall henceforth be considered as regular municipalities.” “Curative laws, which in essence are retrospective, and aimed at giving validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with, are validly accepted in this jurisdiction, subject to the usual qualification against impairment of vested rights.”

6. Attack against invalidity of incorporation

MARTIN: The validity of incorporation and the corporate existence of

de jure or de facto municipal corporations may not be attacked collaterally. It may challenged only by the State in a direct proceeding (i.e., quo warranto)

HOWEVER, it is admitted that, where the corporation is an absolute nullity, it is subject to collateral attack by any person whose rights or interests are affected thereby, including the citizens of the territory incorporated UNLESS they are estopped by their conduct from doing so.

A person, who dealt with a municipal corporation and acquiesced in the exercise of it corporate functions or entered into a contract with said corporation, may be estopped to deny its corporate existence.

7. Beginning of corporate existence of municipal corporations

LGC, SEC. 14. Beginning of Corporate Existence. - When a new local government unit is created, its corporate existence shall commence upon the election and qualification of its chief executive and a majority of the members of its sanggunian, unless some other time is fixed therefor by the law or ordinance creating it.

PIMENTEL: “Upon election”, in this provision, refers to the date of the

proclamation as the chief executive or majority of the sanggunian members.

“Upon qualification” refers to the date of their assumption to office.

MARTIN: The legal existence of a municipal corporation is to be

determined by the law creating it, usually from the effectivity

of the law creating it, or upon the organization of the government, or upon the qualification of its officers.

The organization of the government of a municipal corporation presupposes the previous existence of the said corporation at the time its government was organized. (Mejia vs. Balolong)

V. ALTERATION AND DISSOLUTION OF MUNICIPAL CORPORATIONS

A. Nature of Power

MARTIN: The power to fix, change, alter and prescribe territorial limits

and boundaries of a municipal corporation is essentially legislative.

REMEMBER: Sec. 68 of the old Administrative Code is repealed for being an undue delegation of this legislative power.

In absence of any constitutional provision, Congress can alter and dissolve municipal corporations in any of the following ways:

Fixing, altering, changing the boundaries of municipal corporations, thus enlarging or decreasing its territory; or

Dividing a municipal corporation into 2 or more separate municipalities; or

Merging or consolidating 2 or more municipal corporations into one; or

Annexing one municipality to another; or Repealing its charter.

1. Necessity for defining territorial boundaries

1987 CONSTI, ARTICLE IThe national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial and aerial domains, including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines.MARTIN: Since municipal corporations cannot, without legal

authorization, exercise its powers beyond its own corporate limits, it is necessary that its boundaries are fixed, defined, ascertained and identified for everybody’s knowledge.

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Hence, it is essential that such boundaries are made part of a municipal corporation’s charter. Otherwise, such incorporation is void.

B. Manner or Mode

LGC SEC. 7. Creation and Conversion. - As a general rule, the creation of a local government unit or its conversion from one level to another level shall be based on verifiable indicators of viability and projected capacity to provide services, to wit:

(a) Income. - It must be sufficient, based on acceptable standards, to provide for all essential government facilities and services and special functions commensurate with the size of its population, as expected of the local government unit concerned;

(b) Population. - It shall be determined as the total number of inhabitants within the territorial jurisdiction of the local government unit concerned; and

(c) Land Area. - It must be contiguous, unless it comprises two or more islands or is separated by a local government unit independent of the others; properly identified by metes and bounds with technical descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its populace. Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF), the National Statistics Office (NSO), and the Lands Management Bureau (LMB) of the Department of Environment and Natural Resources (DENR).

SEC. 8. Division and Merger. - Division and merger of existinglocal government units shall comply with the same requirements herein prescribed for their creation: Provided, however, That such division shall not reduce the income, population, or land area of the local government unit or units concerned to less than the minimum requirements prescribed in this Code: Provided, further, That the income classification of the original local government unit or units shall not fall below its current income classification prior to such division.

The income classification of local government units shall be updated within six (6) months from the effectivity of this Code to reflect the changes in their financial position resulting from the increased revenues as provided herein.

PIMENTEL: The requirements for division and merger of LGU’s are

essentially the same as the requirements for their creation. The bottomline of these requirements is that the LGU’s created, divided or merged are able to deliver the essential services to their constituents.

The updating of the financial classification of the LGU’s is necessary to guide the government in determining changes in the staffing patterns and salary scales of such LGU’s.

NOTE: Upgrading theses financial classifications are essential, since an LGU’s taxation powers increase as its classification rises.

LGC, SEC. 9. Abolition of Local Government Units. - A local government unit may be abolished when its income, population, or land area has been irreversibly reduced to less than the minimum standards prescribed for its creation under Book III of this Code, as certified by the national agencies mentioned in Section 17 hereof to Congress or to the sanggunian concerned, as the case may be.

The law or ordinance abolishing a local government unit shall specify the province, city, municipality, or barangay with which the local government unit sought to be abolished will be incorporated or merged.

PIMENTEL: Abolition may be done through an act of Congress (in the

case of a province, city, municipality, barangay in Metro Manila or in cultural areas or any other political subdivision) or by the Sangguniang Panlalawigan or Sangguniang Panlungsod (in the case of barangays)

LGC, SEC. 10. Plebiscite Requirement. - No creation, division, merger, abolition, or substantial alteration of boundaries of local government units shall take effect unless approved by a majority of the votes cast in a plebiscite called for the purpose in the political unit or units directly affected. Said plebiscite shall be conducted by the Commission on Elections (Comelec) within one hundred twenty (120) days from the date of effectivity of the law or ordinance effecting such action, unless said law or ordinance fixes another date.

1987 CONSTI, Art. X, Section 10. 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.

MARTIN: The Court does not have the power to dissolve municipal

corporations. However, it may declare an Act creating municipal corporations as unconstitutional.

The power to dissolve them still lies in the Legislature. (GD-R: It is not automatic!)

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C. Effects

1. Effects of annexation or consolidation of municipal corporations

MARTIN:a) Unless otherwise provided by law, it dissolves the annexed

territory, and it shall fall under the jurisdiction of the annexing territory;

b) Unless otherwise provided by law, laws or ordinances of annexed corporation is subjected to all laws or ordinances by which annexing corporation is governed;

c) Unless otherwise provided by the legislature, officers or employees of the annexed or consolidated territory shall terminate their official relation with offices.

d) Unless otherwise provided by law, the annexing territory shall acquire title to property of the annexed territory without compensation. But, if the annexed territory forms part of a municipality from which it is taken, Congress may provide for payment of compensation for the indebtedness incurred on account of the property taken.

e) Debt or obligations of the annexed territory contracted before its annexation shall be assumed by the annexing territory.

2. Effects of division of a municipal corporation

MARTIN:a) The legal existence of original municipal corporation is

extinguished.b) Unless otherwise provided by law, each new municipality

acquires title to the properties, powers, rights, and obligations falling within its newly defined territorial limits.

D. When There is No Dissolution

1. Non-user or surrender of charter

MARTIN: Since Congress created them for public good, the municipal

corporations cannot bring about their own dissolution by mere surrender of their charter.

A municipal corporation is also not dissolved by non-user of its powers in whole or in part, or for its failure to exercise the functions of a municipality.

In such a case, such corporation would be suspended for the time but would not be civilly dead, since its dormant functions may be revived without action on the part of the sovereignty.

2. Failure to elect municipal officers

MARTIN: Unless otherwise provided by law, a municipal

corporation is not dissolved by the mere failure to elect or appoint its officers. REMEMBER: It is the inhabitants of the designated locality which are the incorporators, NOT the officers!

3. Change of sovereignty

Villas vs. City of Manila(supra)

HELD: The city of Manila is still liable for the obligations of the city incurred prior to the cession to the US. Municipal corporations exercise powers which are governmental and powers which are of a private or business character. In the one character a municipal corporation is a governmental subdivision, and for that purpose exercises by delegation a part of the sovereignty of the state. In the other character it is a mere legal entity or juristic person. In the latter character it stands for the community in the administration of local affairs wholly beyond the sphere of the public purpose for which its governmental powers are conferred.

Municipal laws that regulate private and domestic rights continue in force until abrogated or changed by the new ruler. Only laws of a political character are totally abrogated or changed by the new ruler. The property rights relinquished by Spain are limited to those which belong to the public domain. The juristic identity of the corporation has been in no wise affected, and, in law, the present city is, in every legal sense, the successor of the old. As such it is entitled to the property and property rights of the predecessor corporation, and is, in law, subject to all of its liabilities.

Absent any express legislative declaration, there is no reason to suppose that reincorporation intended to permit an escape from the obligations of the old city.

VI. PLEBISCITE REQUIREMENTS

1987 CONSTI, Art. X, Section 10. 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.

LGC, SEC. 10. Plebiscite Requirement. - No creation, division, merger, abolition, or substantial alteration of boundaries of local government units shall take effect unless approved by a majority of the votes cast in a plebiscite called for the purpose in the political unit or units directly affected. Said plebiscite shall be

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conducted by the Commission on Elections (COMELEC) within one hundred twenty (120) days from the date of effectivity of the law or ordinance effecting such action, unless said law or ordinance fixes another date.

PIMENTEL: This requirement is mandatory. It serves as a check on the

power of Congress or of the LGU concerned to carry out such actions.

There is no need for a plebiscite in the case of merging administrative regions. Administrative regions are not territorial and political subdivisions like provinces, cities, municipalities and barangays. While the power to merge administrative regions is not expressly provided for in the Constitution, it is a power which has traditionally been lodged with the President to facilitate the exercise of the power of general supervision over local governments.

There is no conflict between the power of the President to merge administrative regions with the constitutional provision requiring a plebiscite in the merger of local government units because the requirement of a plebiscite in a merger expressly applies only to provinces, cities, municipalities or barangays, not to administrative regions. (Abbas vs. COMELEC)

Padilla vs. COMELEC(1992)

FACTS: The COMELEC promulgated a Resolution pursuant to RA 7155 approving the creation of the Municipality of Tulay-na-Lupa in Camarines Norte to be composed of 12 barangays in the Municipality of Labo subject to the approval by a majority of votes cast pursuant to Sec 10, Art X of 1987 Constitution, and LGC.

The plebiscite held in the barangays comprising the proposed municipality and the remaining areas of the mother municipality Labo. Only 2,890 favored the creation of the new municipality while 3,439 voted against it. The Plebiscite Board of Canvassers declared the rejection and disapproval of the proposed municipality after the turn-out where a majority voted against the creation.

Governor Padilla files an action to set aside the plebiscite conducted and to undertake a new one, arguing that the plebiscite should have been conducted only in the 12 barangays comprising the proposed municipality.

WON the term “political units directly affected” only comprises those areas in the proposed LGU and not those from the mother LGU.

HELD: NO. Padilla’s contention that Art X, Section 10 has deleted the words “unit or” in Section 3, Art XI of the 1973 Constitution is untenable. As explained by CONCOM Commissioner Davide during the 1986 CONCOM debates, the deletion of the said words was done precisely because in the plebiscite to be conducted, it must involve all the units affected. When the law states that the plebiscite shall be conducted “in the political units directly affected,” it means that residents of the political entity who would be economically dislocated by the separation of a portion thereof have a right to vote in said plebiscite.

It stands to reason that when the law states that the plebiscite shall be conducted “in the political units directly affected,” it means that residents of the political entity who would be economically dislocated by the separation have a right to vote. The phrase “political units directly affected” contemplates the plurality of political units which would participate in the exercise.

Tan vs. COMELEC(supra)

HELD: It can be plainly seen from Section 3 of Article XI of the 1973 CONSTI makes it imperative that there be first obtained "the approval of a majority of votes in the plebiscite in the unit or units affected" whenever a province is created, divided or merged and there is substantial alteration of the boundaries. It is thus inescapable to conclude that the boundaries of the existing province of Negros Occidental would necessarily be substantially altered by the division of its existing boundaries in order that there can be created the proposed new province of Negros del Norte. Plain and simple logic will demonstrate that two political units would be affected. The first would be the parent province of Negros Occidental because its boundaries would be substantially altered. The other affected entity would be composed of those in the area subtracted from the mother province to constitute the proposed province of Negros del Norte.

The Court noted that the case of Paredes vs. Executive Secretary, which involved the creation of a new municipality where the parent unit was not involved, could not be considered as a precedent. The reasons in this case invoked by respondents herein were formerly considered acceptable because of the views then taken that local autonomy would be better promoted. However, even this consideration no longer retains persuasive value. That case involved a barangay while this case involves a province.

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Almost half of the sugar plantations would be dismembered form the parent province and some of its most important cities. Hence, the remaining portion of the parent province is as much an area affected. The substantial alteration of the boundaries of the parent province, not to mention the other adverse economic effects it might suffer, eloquently argue the points raised by the petitioners.

The SC also considered the new province as lacking in the territory requirement since the land mass of the new territory was only 2,856 square kilometers. The Court rejected the suggestion of the Solicitor General that even the area of the EEZ should be considered in determining the territorial requirement.

Miranda vs. Aguirre(1999)

FACTS: RA 7720 converted the municipality of Santiago, Isabela, into an independent component city. Subsequently, RA 8528 was enacted, amending RA 7720, changing the status of Santiago from an independent component city to a component city. Petitioners assailed the constitutionality of RA 8528, arguing that it lacked a provision submitting the law for ratification by the people of Santiago City in a plebiscite.

Respondent provincial officials of Isabela defended the constitutionality of R.A. No. 8528 by assailing the standing of petitioners to file the petition at bar. They also contend that the petition raises a political question over which this Court lacks jurisdiction.

The Solicitor General argued that the RA merely reclassified Santiago City from an independent component city to a component city. It allegedly did not involve any “creation, merger, abolition, or substantial alteration of boundaries of local government units.”

WON R.A. No. 8528 is unconstitutional for its failure to provide that the conversion of the city of Santiago from an independent component city to a component city should be submitted to its people in a proper plebiscite.

HELD: YES. A close analysis of the constitutional provision (Sec. 10 of Art. X) will reveal that the creation, division, merger, abolition or substantial alteration of boundaries of local government units involve a common denominator — material change in the political and economic rights of the local government units directly affected as well as the people therein. It is precisely for this reason that the Constitution requires the approval of the people "in the political units directly affected." Thus, the consent of the people of the local government unit directly affected was required to serve as a checking mechanism to any exercise of legislative power creating, dividing, abolishing,

merging or altering the boundaries of local government units. It is one instance where the people in their sovereign capacity decide on a matter that affects them — direct democracy of the people as opposed to democracy thru people's representatives. This plebiscite requirement is also in accord with the philosophy of the Constitution granting more autonomy to local government units.

The changes that will result from the downgrading of the city of Santiago from an independent component city to a component city are many and cannot be characterized as insubstantial. For one, the independence of the city as a political unit will be diminished. The city mayor will be placed under the administrative supervision of the provincial governor. The resolutions and ordinances of the city council of Santiago will have to be reviewed by the Provincial Board of Isabela. Taxes that will be collected by the city will now have to be shared with the province.

It is markworthy that when R.A. No. 7720 upgraded the status of Santiago City from a municipality to an independent component city, it required the approval of its people thru a plebiscite called for the purpose. There is neither rhyme nor reason why this plebiscite should not be called to determine the will of the people of Santiago City when R.A. No. 8528 downgrades the status of their city. Indeed, there is more reason to consult the people when a law substantially diminishes their right.

Moreover, Rule II, Article 6, paragraph (f) (1) of the Implementing Rules and Regulations of the Local Government Code is in accord with the Constitution when it provides that:

(f) Plebiscite — (1) no creation, conversion, division, merger, abolition, or substantial alteration of boundaries of LGUS shall take effect unless approved by a majority of the votes cast in a plebiscite called for the purpose in the LGU or LGUs affected. The plebiscite shall be conducted by the Commission on Elections (COMELEC) within one hundred twenty (120) days from the effectivity of the law or ordinance prescribing such action, unless said law or ordinance fixes another date.

xxx xxx xxx

The rules cover all conversions , whether upward or downward in character, so long as they result in a material change in the local government unit directly affected, especially a change in the political and economic rights of its people.

Tobias vs. Abalos(1994)

FACTS: The municipalities of Mandaluyong and San Juan belonged to only one legislative district. Cong. Zamora, the incumbent congressional representative of this legislative district, sponsored the bill which eventually became R.A. No. 7675,

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converting the municipality of Mandaluyong into a highly urbanized city. The people of Mandaluyong approved of the conversion of the Municipality of Mandaluyong into a highly urbanized city in a plebiscite only 14.41% of the voting population voted. Nevertheless, 18,621 voted "yes" whereas 7,911 voted "no." By virtue of these results, R.A. No. 7675 was deemed ratified and in effect.

Petitioners allege that the law isnembracing two principal subjects, namely: (1) the conversion of Mandaluyong into a highly urbanized city; and (2) the division of the congressional district of San Juan / Mandaluyong into two separate districts. This, in effect, has resulted in an increase in the composition of the House of Representatives beyond that provided in Article VI, Sec. 5(1) of the Constitution.

Petitioners also contend that the people of San Juan should have been made to participate in the plebiscite on R.A. No. 7675 as the same involved a change in their legislative district.

WON RA 7657 is unconstitutional.

HELD: NO. The creation of a separate congressional district for Mandaluyong is not a subject separate and distinct from the subject of its conversion into a highly urbanized city but is a natural and logical consequence of its conversion into a highly urbanized city.

As to the contention that the assailed law violates the present limit on the number of representatives as set forth in the Constitution, a reading of the applicable provision, Article VI, Section 5(1), as aforequoted, shows that the present limit of 250 members is not absolute. The Constitution clearly provides that the House of Representatives shall be composed of not more than 250 members, "unless otherwise provided by law." The inescapable import of the latter clause is that the present composition of Congress may be increased, if Congress itself so mandates through a legislative enactment. Therefore, the increase in congressional representation mandated by R.A. No. 7675 is not unconstitutional.

The contention that the people of San Juan should have beein included in the plebiscite is bereft of merit since the principal subject involved in the plebiscite was the conversion of Mandaluyong into a highly urbanized city. The matter of separate district representation was only ancillary thereto. Thus, the inhabitants of San Juan were properly excluded from the said plebiscite as they had nothing to do with the change of status of neighboring Mandaluyong.

VII. GENERAL POWERS OF LOCAL GOVERNMENTS

A. Police Power

General Welfare

LGC, SEC. 16. General Welfare. - Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

PIMENTEL: This provision is known as the General Welfare Clause.

Pursuant to this rule, LGU’s have the power to exercise just about any act that will benefit their constituencies. This clause has two branches:

General legislative power - authorizes the municipal council to enact ordinances not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred upon the municipal council by law.

Police power proper - authorizes the municipal council to enact ordinances as may be necessary and proper for the health and safety, prosperity, morals, peace, good order, comfort, and convenience of the municipality and its inhabitants, and for the protection of their property. (Rural Bank of Makati vs. Makati)

The State, through the legislature, has delegated the exercise of police power to local government units, as agencies of the State, in order to effectively accomplish and carry out the declared objects of their creation. This delegation of police power is embodied in the general welfare clause of the LGC.

Police power as an inherent attribute of sovereignty is the power to prescribe regulations to promote the health, morals, peace, education, good order or safety and general welfare of the people. (Acebedo Optical vs. CA)

The exercise of police power, however, is subject to the due process clause of the CONSTI and to the test of reasonableness.

Hence, while property may be regulated in the interest of the general welfare, and in its pursuit, the State may prohibit structures offensive to the sight, the State may not, under

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the guise of police power, permanently divest owners of the beneficial use of their property and practically confiscate them solely to preserve or assure the aesthetic appearance of the community… without just compensation and an opportunity to be heard. (People vs. Fajardo)

A local government is considered to have properly exercised its police powers only when the following requisites are met: (1) the interests of the public generally, as distinguished from those of a particular class, require the interference of the State; and (2) the means employed are reasonably necessary for the attainment of the object sought to be accomplished and not unduly oppressive. The first requirement refers to the equal protection clause and the second, to the due process clause of the Constitution. (Parayno vs. Municipality of Calasiao)

In sum, the valid use of police power of LGU’s are as follows:

Promotion of the general welfare and public interest (US vs. Torribio);

Promotion of public health, morals, safety and the general welfare of each inhabitant (US vs. Gomez Jesus);

Preservation of public order and prevention of offenses against the State and the establishment of rules of good manners and prevention of conflict of rights among neighbors (US vs. Pompeya);

Prohibition of all things harmful to the comfort, safety, and welfare of society (Rubi vs. Provincial Board); and

Abatement of nuisance (Tatel vs. Municipality of Virac).

NOTE: The abatement of a nuisance without judicial proceedings is possible only if it is a nuisance per se, or one affecting the immediate safety of persons and property. (Parayno vs. Municipality of Calasiao)

The operation of theaters, cinematographs and other places of public exhibition are subject to regulation by the municipal council in the exercise of delegated police power by the local government… However, while it is true that a business may be regulated, it is equally true that such regulation must be within the bounds of reason, that is, the regulatory ordinance must be reasonable, and its provisions cannot be oppressive amounting to an arbitrary interference with the business or calling subject of regulation. A lawful business or calling may not, under the guise of regulation, be unreasonably interfered with even by the exercise of police power. (Balacuit vs. CFI of Agusan del Norte)

A public plaza is beyond the commerce of man and so cannot be the subject of lease or any other contractual undertaking. Hence, the lease of a public plaza of the said municipality in favor of a private person is null and void Even assuming a valid lease of the property in dispute, the resolution could have effectively terminated the agreement for it is settled that the police power cannot be surrendered or bargained away through the medium of a contract. (Villanueva vs. Castañeda, Cavite vs. Rojas)

While the ordinance which regulates the exhumation and/or transfer of corpses from other burial grounds to those located in the City of Caloocan is within the legislative power of the respondent city government to enact, the imposition of the transfer fees under such ordinance, on the interment of the respective dead relatives in the La Loma cemetery, was not justified (Viray vs. City of Caloocan)

An ordinance prohibiting pinball machines was also held to be valid under the general welfare clause (Uy Ha vs. City of Manila)

The sanggunian of a municipality does not have contempt powers nor the power to issue subpoena against non-members of the sanggunian under the General Welfare clause. (Negros Oriental II Electric Cooperative vs. Sangguniang Panlungsod of Dumaguete)

Dela Cruz vs. Paras(1983)

FACTS: The petitioners are assailing the validity of an ordinance in Bocaue, Bulacan prohibiting the operation of night clubs and their employment of hostesses. The lower court, however, upheld the validity of such ordinances, arguing that by virtue of police power, the municipality can order the closure of such establishments. The lower court also argues that under RA 938, as amended, “the municipal or city board or council of each chartered city shall have the power to regulate and prohibit by ordinance, the establishment, maintenance and operation of night clubs, cabarets..”

WON a municipal corporation can prohibit the operation of night clubs and the employment of hostesses.

HELD: NO. It cannot be said that such a sweeping exercise of a lawmaking power by Bocaue could qualify under the term reasonable. The objective of fostering public morals, a worthy and desirable end can be attained by a measure that does not encompass too wide a field. Certainly the ordinance on its face is characterized by overbreadth. The purpose sought to be achieved could have been attained by reasonable restrictions rather than by an absolute prohibition. The admonition in Salaveria should be heeded: "The Judiciary should not lightly set

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aside legislative action when there is not a clear invasion of personal or property rights under the guise of police regulation." 16 It is clear that in the guise of a police regulation, there was in this instance a clear invasion of personal or property rights, personal in the case of those individuals desirous of patronizing those night clubs and property in terms of the investments made and salaries to be earned by those therein employed.

WRT RA 938, when such law was amended (including the word “prohibit”) the title of the original law was not changed (AN ACT GRANTING MUNICIPAL OR CITY BOARDS AND COUNCILS THE POWER TO REGULATE THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF CERTAIN PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE TERRITORIAL JURISDICTIONS). The Constitution mandates: "Every bill shall embrace only one subject which shall be expressed in the title thereof. " Since there is no dispute as the title limits the power to regulating, not prohibiting, it would result in the statute being invalid if, as was done by the Municipality of Bocaue, the operation of a night club was prohibited. There is a wide gap between the exercise of a regulatory power "to provide for the health and safety, promote the prosperity, improve the morals, in the language of the Administrative Code, such competence extending to all "the great public needs, to quote from Holmes, and to interdict any calling, occupation, or enterprise. In accordance with the well-settled principle of constitutional construction that between two possible interpretations by one of which it will be free from constitutional infirmity and by the other tainted by such grave defect, the former is to be preferred. A construction that would save rather than one that would affix the seal of doom certainly commends itself.

Reference is also made by respondents to Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila. There is a misapprehension as to what was decided by this Court. That was a regulatory measure. Necessarily, there was no valid objection on due process or equal protection grounds. It did not prohibit motels. It merely regulated the mode in which it may conduct business in order precisely to put an end to practices which could encourage vice and immorality. This is an entirely different case. What was involved is a measure not embraced within the regulatory power but an exercise of an assumed power to prohibit. Moreover, while it was pointed out in the aforesaid Ermita-Malate Hotel and Motel Operators Association, Inc. decision that there must be a factual foundation of invalidity, it was likewise made clear that there is no need to satisfy such a requirement if a statute were void on its face. That it certainly is if the power to enact such ordinance is at the most dubious and under the present Local Government Code non-existent.

Technology Developers vs. CA(1991)

FACTS: Technology Developers, Inc. (TDI) is a domestic private corporation engaged in the manufacture and export of charcoal briquette. It received a letter from acting mayor ordering full cessation of operation of its Sta. Maria plant and requesting Plant Managaer to bring to the office of the mayor several permits (Building Permit, Mayor’s Permit, and Pollution of Environment and Natural Resources Anti-Pollution Permit).

As to the Anti-Pollution Permit, TDI tried to secure it although it had previously secured before its operation a “Temporary Permit to Operate Air Pollution Installation” issued by Environmental Management Bureau (EMB). EMB is at a stage trying to determine correct kind of anti-pollution device to be installed for TDI’s renewal of its permit.

TDI didn’t have a mayor’s permit so it tried to secure one but it was not entertained. Mayor ordered padlocking of TDI’s plant premises without previous and reasonable notice upon TDI.

TDI instituted an action with RTC. The provincial prosecutor submitted the following evidence:

- Investigation report of the petitioner made by Marivic Guina recommending that the manufacturing process and raw materials used by the factory produced fumes that are hazardous to health so the company must shut down until the proper air pollution device is installed.

- Signatures of residents complaining about the pollution.- Letter addressed to Gov. Pagdanganan complaining

about the smoke.

RTC ruled in favor of mayor. The CA affirmed.

WON the mayor validly acted within the limits of his police power.

HELD: YES. The mayor can deny application for a permit to operate a business or close it by his police power unless appropriate measures are taken to control or avoid injury to the health of the residents of the community from emissions in the operation of the business.

While determination whether there is pollution of the environment that requires control (if not prohibition) of the operation of a business is essentially addressed to the EMB (National Pollution Control Commission before) of DENR, the mayor of a town has as much responsibility to protect its inhabitants from pollution.

It must be noted that his action of the Acting Mayor was in response to the complaint of the residents of Barangay Guyong, Sta. Maria, Bulacan, directed to the Provincial Governor through channels.

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Petitioner takes note of the plea of petitioner focusing on its huge investment in this dollar-earning industry. It must be stressed however, that 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.

Chua Huat vs CA (1991)

FACTS: Manuel Uy & Sons, Inc. requested Romulo del Rosario (city engineer of Manila) to condemn the dilapidated structures located Pedro Gil St. and Paz St., Paco, Manila, all occupied by Chua Huat, et al (petitioners). The city engineer issued notices of condemnation addressed to the petitioners. It stated that the buildings were found to be in dangerous condition and are therefore condemned. It also said that the notice is not a demolition order since it is still subject to the approval of the mayor. The orders were based on the inspection reports made by Evaluation Committee of the Office of the City Engineer. Petitioners protested such condemnation notices, pointing to a certification by a private civil engineer that the buildings are still structurally sound and have remaining economic life of up to eight years. The mayor eventually ordered the demolition of the said buildings. Hence, Chua Huat, et al. filed a complaint in the court.

WON Chua Huar et, al. have a valid grievance for the remedy of certiorari under Rule 65 of the Rules of Court to be available to them.

HELD: NO. It is explicitly clear from Section 1 of Rule 65 of the Rules of Court that for certiorari to be available: (a) a tribunal, board or office exercising judicial function acted without or in excess of its or his jurisdiction, or with grave abuse of discretion, and (b) that there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law. Petitioners failed to show the presence of both elements. 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 Official. He has the authority to order the condemnation and demolition of buildings which are found to be in a dangerous or ruinous condition. 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.

There is no grave abuse of discretion on the part of the respondent City Engineer because the orders were made only after thorough ocular inspections were conducted by the City's Building Inspectors. The results of the inspections were set forth in a memorandum dated 16 November 1982 where it was shown that all the buildings had architectural, structural, sanitary, plumbing and electrical defects of up to 80%.

The respondent Mayor's act of approving the condemnation orders was likewise done in accordance with law. The protest made by petitioners was submitted only on 22 February 1983, or three months after the notices of condemnation were issued, and clearly beyond the seven days prescribed under Section 276 of the Compilation of Ordinances of the City of Manila.

Moreover, appeal was likewise available to petitioners (fifteen-day period to the Secretary of Public Works), which they did not do. Hence, certiorari will not lie for failure to exhaust administrative remedies.

Binay vs. Domingo(1991)

FACTS: The Municipal Council of Makati issued a Resolution confirming and/or ratifying the ongoing burial assistance program initiated by the Office of the Mayor. Said resolution provided for a burial assistance program where qualified beneficiaries, who are bereaved families whose gross monthly income does not exceed Php 2000 per month, are given 500 pesos cash relief. It will be funded by the unappropriated available funds in the municipal treasury.

The Metro Manila Commission (MMC) approved Resolution No. 60. Thereafter, the municipal secretary certified a disbursement fund of P400, 000 for the implementation of the Burial Assistance Program. The resolution was then referred to the Commission on Audit (COA) for its expected allowance in audit. However, COA, after its preliminary findings, disapproved Resolution No. 60 and disallowed in audit the disbursement of funds for the implementation thereof. Mayor Binay filed two letters for reconsideration.

COA denied both letters for reconsideration. COA argues that there is no relation between the objective sought to be attained under Resolution No. 60 and the alleged public safety and general welfare of the people of Makati. Moreover, it is not for a public purpose. It only seeks to benefit a few individuals.

WON Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a valid exercise of police power under the general welfare clause.

HELD: YES. Police power is 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 which is the repository of the inherent powers of the State. A valid delegation may arise from express delegation, or be inferred from the mere fact of the creation of the corporation, and as a general rule, municipal corporations may exercise police powers within the fair intent and purpose of their creation which are reasonably proper to give effect to the powers

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expressly granted, and statutes conferring powers on public corporations have been construed as empowering them to do things essential to the enjoyment of life and desirable for the safety of the people.

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. In a sense it is the greatest and most powerful attribute of the government. It is elastic and must be responsive to various social conditions. On it depends the security of social order, the life and health of the citizen, the comfort of an existence in a thickly populated community, the enjoyment of private and social life, and the beneficial use of property, and it has been said to be the very foundation on which our social system rests.

COA, in saying that there is no perceptible connection, tries to redefine the scope of police power by circumscribing its exercise to “public safety, general welfare, etc of the inhabitants of Makati.” 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. It covers a wide scope of subjects, and, while it is especially occupied with whatever affects the peace, security, health, morals, and general welfare of the community, it is not limited thereto, but is broadened to deal with conditions which exists so as to bring out of them the greatest welfare of the people by promoting public convenience or general prosperity, and to everything worthwhile for the preservation of comfort of the inhabitants of the corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame any definition which shall absolutely indicate the limits of police power.

As regards COA’s additional objection, it shows that it is not attuned to the changing of times. Public purpose is not unconstitutional merely because it incidentally benefits a limited number of persons. The care for the poor is general recognized as a public duty. The support for the poor has long been an accepted exercise of police power in the promotion of common good. There is no violation of the equal protection clause in classifying paupers as subject of legislation. Paupers may be reasonably classified.

Tatel v Municipality of Virac(1992)

FACTS: In 1966, complaints were received from the residents of barrio Sta. Elena against disturbance caused by operation of the abaca bailing machine inside the warehouse of Tatel. A committee was appointed by the municipal council of Virac to investigate on the matter. The committee noted the crowded

nature of the neighborhood with narrow roads and the surrounding residential houses so much so that accidental fire from the continued operations of the warehouse and storing of inflammable materials created danger to the lives and properties of the people.

Based on this report, the Municipal Council of passed a Resolution declaring the warehouse a nuisance within purview of Art 694 of the Civil Code. It also argued that Tatel’s warehouse violated Ordinance No. 13 which prohibited the construction of warehouses within 200 meters from a block of houses either in the poblacion or barrios.

Tatel counters that the said Ordinance is unconstitutional, contrary to due process and equal protection clause of the Constitution.

WON Ordinance No. 13 of the Municipality of Virac is unconstitutional and void.

HELD: NO. Ordinance No. 13, series of 1952, was passed by the Municipal Council of Virac in the exercise of its police power. 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. Its authority emanates from the general welfare clause.

For an ordinance to be valid, it must not only be within the corporate powers of the municipality to enact but must also be passed according to the procedure prescribed by law, and must be in consonance with certain well established and basic principles of substantive nature:

1) must not contravene the Constitution or any statue 2) must not be unfair or oppressive 3) must not be partial or discriminatory4) must not prohibit but may regulate trade5) must be general and consistent with public policy, and 6) must not be unreasonable

Section 1 and 2 of Ordinance No. 13 reads:

Sec. 1. It is strictly prohibited to construct warehouses in any form to any person, persons, entity, corporation or merchants, wherein to keep or store copra, hemp, gasoline, petroleum, alcohol, crude oil, oil of turpentine and the like products or materials if not within the distance of 200 meters from a block of houses either in the poblacion or barrios to avoid great losses of properties inclusive lives by fire accident.

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Sec. 2. Owners of warehouses in any form, are hereby given advice to remove their said warehouses this ordinance by the Municipal Council, provided however, that if those warehouses now in existence should no longer be utilized as such warehouse for the above-described products in Section 1 of this ordinance after a lapse of the time given for the removal of the said warehouses now in existence, same warehouses shall be exempted from the spirit of the provision of section 1 of this ordinance, provided further, that these warehouses now in existence, shall in the future be converted into non-inflammable products and materials warehouses.

A casual glance of the ordinance at once reveals a manifest disregard of the elemental rules of syntax. Experience, however, will show that this is not uncommon in law making bodies in small towns where local authorities and in particular the persons charged with the drafting and preparation of municipal resolutions and ordinances lack sufficient education and training and are not well grounded even on the basic and fundamental elements of the English language commonly used throughout the country in such matters.

In spite of its fractured syntax, basically, what is regulated by the ordinance is 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 and not the construction per se of a warehouse. 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.

As to the third assignment of error, that warehouses similarly situated as that of the petitioner were not prosecuted, suffice it to say that the mere fact that the municipal authorities of Virac have not proceeded against other warehouses in the municipality allegedly violating Ordinance No. 13 is no reason to claim that the ordinance is discriminatory. A distinction must be made between the law itself and the manner in which said law is implemented by the agencies in charge with its administration and enforcement. There is no valid reason for the petitioner to complain, in the absence of proof that the other bodegas mentioned by him are operating in violation of the ordinance and that the complaints have been lodged against the bodegas concerned without the municipal authorities doing anything about it.

Judge Tamin vs. CA (1992)

FACTS: Municipality of Dumingag alleges that it leased an area of 1,350 sq meters to the Medina and Rosellon (defendants), subject to the condition that they should vacate the place in case it is needed for public purposes. Medina and Roselllon paid

rentals until 1967, but they refused to pay after that period and refused to leave the lots. (The lot was eventually declared as a public plaza). Meanwhile, the national government had allotted funds for the construction of a municipal gym but it could not continue due to the presence of the buildings of the defendants. Hence, the Municipality of Dumingag filed an ejectment case against the defendants. It further argued that the funds might revert back to the national government and such would result to “irreparable damage, injury, and prejudice” to the municipality and its people who are expected to derive benefit from the accomplishment of the project.

The defendants argue that the subject parcel of land has been owned, occupied and possess by respondent Vicente Medina since 1947 when he bought the subject parcel from a Subanan native; that the other respondent Fortunata Rosellon leased from Medina a portion of the parcel of land; that the respondents were never lessees of the petitioner municipality; that Proclamation No-365 issued on March 15, 1968 recognized "private rights"; and, that a case is pending before the Cadastral court between Medina and petitioner municipality as regards the ownership of the subject parcel of land.

WON the petitioner municipality is entitled to a writ of possession and a writ of demolition even before the trial of the case starts.HELD: NO. While the complaint alleges factual circumstances of a complaint for abatement of public nuisance, the municipality municipality had three remedies from which to select its cause of action. It chose to file a civil action for the recovery of possession of the parcel of land occupied by the private respondents. Obviously, petitioner municipality was aware that under the then Local Government Code (B.P. Blg. 337) the Sangguniang Bayan has to first pass an ordinance before the municipality may summarily abate a public nuisance.

However, if, the allegations in the complaint are true and that the parcel of land being occupied by the private respondents is indeed a public plaza, then the writ of possession and writ of demolition would have been justified. In fact, under such circumstances, there would have been no need for a writ of possession in favor of the petitioner municipality since the private respondents' occupation over the subject parcel of land cannot be recognized by any law, since a public plaza is outside the commerce of man. A writ of demolition would have been sufficient to eject the private respondents.

However, not only did the municipality avoid the use of abatement without judicial proceedings, but the status of the subject parcel of land has yet to be decided.

It is to be noted that even before the Proclamation, the parcel of land was the subject of cadastral proceedings before another branch of the Regional Trial Court of Zamboanga del Sur. At the time of the filing of the instant case, the cadastral proceedings

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intended to settle the ownership over the questioned portion of the parcel of land under Proclamation No. 365 were still pending.

Under the cadastral system, the government through the Director of Lands initiates the proceedings by filing a petition in court after which all owners or claimants are compelled to act and present their answers otherwise they lose their right to their own property. The purpose is to serve the public interests by requiring that the titles to any lands "be settled and adjudicated." Hence, it is a prejudicial question in the present case.

Parenthetically, the issuance of the writ of possession and writ of demolition by the petitioner Judge in the ejectment proceedings was premature. What the petitioner should have done was to stop the proceedings in the instant case and wait for the final outcome of the cadastral proceedings.

Faced with these alternative possibilities, and in the interest of justice, we rule that the petitioner municipality must put up a bond to be determined by the trial court to answer for just compensation to which the private respondents may be entitled in case the demolition of their buildings is adjudged to be illegal.

Patalinghug v CA(1994)

FACTS: The Sangguinang Panlungsod of Davao enacted Ordinance No. 363 (Expanded Zoning Ordinance of Davao City). It provided that funeral homes must be established not less than 50 meters from any residential structures, churches, and other institutional buildings.

Upon approval and certification of zoning compliance by the zoning administrator, the building officer issued a building permit in favor of Patalinghug for the construction of the Metropolitan Funera Parlor at Cabaguio Ave.

Residents of Barangay Agdao complained that it violated the ordinance since it was within a 50-meter radius from the INC Chapel and several residential structures. The Sanggunian found out that the nearest residential structure (owned by Tepoot) was only 8 inches to the south.

Notwithstanding the findings of the Sangguniang Panlungsod, Patalinghug continued to construct his funeral parlor which was soon finished.

The residents then filed a case for declaration of nullity of a building permit. The trial court dismissed the complaint saying that:

1. The residential building owned by 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 certain Mr. Tepoot is adjacent to the funeral parlor, and is only separated therefrom by a concrete fence, said residential building is being rented by a certain Mr. Asiaten who actually devotes it to his laundry business with machinery thereon.

3. Private respondent's suit is premature as they failed to exhaust the administrative remedies provided by Ordinance No. 363.

The CA reversed the trial court and ruled that Tepoot’s land is a residential lot as reflected in the tax declaration.

WON Tepoot’s land is residential.

HELD: NO. The question of whether Mr. Tepoot’s building is residential or not is a factual determination which appellate courts should not disturb. Although the general rule is that factual findings of the Court of Appeals are conclusive on us, this admits of exceptions as when the findings or conclusions of the Court of Appeals and the trial court are contrary to each other. While the trial court ruled that Tepoot's building was commercial, the Appellate Court ruled otherwise. Thus we see the necessity of reading and examining the pleadings and transcripts submitted before the trial court.

The testimony of City Councilor Vergara shows that Mr. Tepoot’s buillding was used for a dual purpose: dwelling and for business. While its commercial aspect has been established by the presence of machineries and laundry equipment, its use as a residence was not fully substantiated.

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.

On the other hand, the findings of the trial court are supported by the fact that the Sanggunian declared the area as commercial or C-2. Once a local government has reclassified an area as commercial, that determination, for zoning purposes, must prevail. While the commercial character of the vicinity was declared through ordinance, the respondents have failed to substantiate their arguments that Cabaguio Avenue was still a residential zone.

The declaration of an 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 a locality. Corollary thereto, the state, in order to promote the general

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welfare, may interfere with personal liberty, with property, and with business and occupations. Persons may be subjected to certain kinds of restraints and burdens to secure the general welfare of the state.

Greater Balanga Development Corporation vs. Municipality of Balanga

(1994)

FACTS: GBDC applied with the Office of the Balanga Mayor for a business permit its property, certain portions of which has been "unlawfully usurped and invaded" by Balanga, which had "allowed/tolerated/abetted" the construction of shanties and market stalls while charging market fees and market entrance fees from the occupants and users of the area. Mayor issued a Mayor's Permit granting GBDC the privilege of a "real estate dealer/privately-owned public market operator" under the registered trade name of Balanga Public Market.

However, the Sangguniang Bayan passed a Resolution annulling the Mayor's permit issued to GBDC and advising the Mayor to revoke the permit. Mayor revoked the permit insofar as it authorized the operation of a public market.

GBDC filed this petition claiming that it had not violated any law or ordinance, thus there’s no reason to revoke the Mayor's permit. It further alleged that he EO and the resolution in question were quasi-judicial acts and not mere exercises of police power and that the Mayor also failed to observe due process in revoking the permit.

Balanga argues that Mayor may issue, deny or revoke municipal licenses and permits and that the resolution and EO were legitimate exercise of local legislative authority. It further argues that GBDC violated Section 3A-06(b) of the Balanga Revenue Code when it failed to inform the Mayor that the lot in controversy was the subject of adverse claims for which a civil case was filed and when it failed to apply for two separate permits for the two lines of business it proposed to engage in.

WON there has been a valid revocation of the permit.

HELD: NO. The authority of the Mayor to revoke a permit he issued is premised on a violation by the grantee of any of the conditions for which the permit had been granted.

The application for Mayor's permit requires the applicant to state what type of business, profession, occupation and/or calling privileges is being applied for. Petitioner left this entry blank in its application form. The permit should not have been issued without the required information given in the application form itself. Leaving an entry blank is not equal to false statement. There must be proof of willful misrepresentation and deliberate intent to make a false statement. Good faith is always presumed, and as it

happened, petitioner did not make any false statement in the pertinent entry.

Applying for two businesses in one permit is also not a ground for revocation. Par 2 Section 3A-06(b) does not expressly require two permits for their conduct of two or more businesses in one place, but only that separate fees be paid for each business. The powers of municipal corporations are to be construed in strictissimi juris (strictly in its legal terms) and any doubt or ambiguity must be construed against the municipality. Granting, however, that separate permits are actually required, the application form does not contain any entry as regards the number of businesses the applicant wishes to engage in.

The question of ownership over Lot 261-B had already been settled with finality by the Supreme Court in 1983. Entry of judgment was likewise, made in the same year. When the Mayor's permit was revoked, five years had already elapsed since the case was decided. GBDC was able to survey the land and have the survey approved. GBDC also obtained in its name TCT No. 120152 "without any memorandum of encumbrance or encumbrances pertaining to any decision rendered in any civil case. Clearly, for all intents and purposes, Greater Balanga appeared to be the true owner of Lot 261-B-6-A-3 when respondents revoked its permit to engaged in business on its own land.

Of course, the Sangguniang Bayan has the duty in the exercise of its police powers to regulate any business subject to municipal license fees and prescribe the conditions under which a municipal license already issued may be revoked. But the "anxiety, uncertainty, restiveness" among the stallholders and traders cannot be a valid ground for revoking the permit of petitioner. After all, the stallholders and traders were doing business on property not belonging to the Municipal government. Indeed, the claim that the executive order and resolution were measures "designed to promote peace and order and protect the general welfare of the people of Balanga" is too amorphous and convenient an excuse to justify respondents' acts.

Moreover, the manner by which the Mayor revoked the permit transgressed petitioner's right to due process. The alleged violation of Section 3A-06(b) of the Balanga Revenue Code was not stated in the order of revocation, and neither was petitioner informed of this specific violation until the Rejoinder was filed in the instant case. In fact, with all the more reason should due process have been observed in view of the questioned Resolution of the Sangguniang Bayan.

Tano vs. Socrates(1997)

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FACTS: Sangguniang Panlunsod of Puerto Princesa enacted an Ordinance banning the shipment of all live fish and lobster outside Puerto Princesa for 5 years.

To implement this, Acting City Mayor issued Office Order No. 23, allowing inspections of cargoes to determine whether the shipper possessed the required Mayor's Permit issued by this Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries and Aquatic Resources and as to compliance with all other existing rules and regulations on the matter.

Next, the Sangguniang Panlalawigan of Palawan enacted SR No. 33 and Ordinance No. 2 series of 1993 prohibiting the catching, gathering, possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms in and coming from Palawan waters for 5 years.

Petitioners, alleged violators of the ordinaces and the Airline Shippers’ Associatin, went to the SC arguing that the respondents implemented the said ordinances depriving all the fishermen of the whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and the petitioners Airline Shippers Association of Palawan and other marine merchants from performing their lawful occupation and trade.

WON the resolutions and ordinances issued were valid exercises of police power.

HELD: YES. There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. In their petition, petitioner Airline Shippers Association of Palawan is self-described as "a private association composed of Marine Merchants;" petitioners Robert Lim and Virginia Lim, as "merchants;" while the rest of the petitioners claim to be "fishermen," without any qualification, however, as to their status.

Since the Constitution does not specifically provide a definition of the terms "subsistence" or "marginal" fishermen, they should be construed in their general and ordinary sense. A marginal fisherman is an individual engaged in fishing whose margin of return or reward in his harvest of fish as measured by existing price levels is barely sufficient to yield a profit or cover the cost of gathering the fish, while a subsistence fisherman is one whose catch yields but the irreducible minimum for his livelihood. Section 131(p) of the LGC (R.A. No. 7160) defines a marginal farmer or fisherman as "an individual engaged in subsistence farming or fishing which shall be limited to the sale, barter or exchange of agricultural or marine products produced by himself and his immediate family." It bears repeating that nothing in the record supports a finding that any petitioner falls within these definitions. Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on

the duty of the State to protect the nation's marine wealth. What the provision merely recognizes is that the State may allow, by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays and lagoons.

Moreover, the ordinances in question are meant precisely to protect and conserve our marine resources to the end that their enjoyment may be guaranteed not only for the present generation, but also for the generations to come. Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC "shall be liberally interpreted to give more powers to the local government units in accelerating economic development and upgrading the quality of life for the people of the community."

The LGC vests municipalities with the power to grant fishery privileges in municipal waters and impose rentals, fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of applicable fishery laws.

The centerpiece of LGC is the system of decentralization as expressly mandated by the Constitution. Indispensable to decentralization is devolution and the LGC expressly provides that "any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned."

In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted therein to local government units under Section 16 (the General Welfare Clause), and under Sections 149, 447(a) (1) (vi), 458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of the questioned Ordinances cannot be doubted.

GD-R: Not all DENR powers were devolved to the LGU’s. The LGU’s merely implemented the programs of the DENR.

Closure and Opening of Roads

LGC, SEC. 21. Closure and Opening of Roads. –

(a) A local government unit may, pursuant to an ordinance, permanently or temporarily close or open any local road, alley, park, or square falling within its jurisdiction: Provided, however, That in case of permanent closure, such ordinance must be approved by at least two-thirds (2/3) of all the members of the sanggunian, and when necessary, an adequate substitute for the public facility that is subject to closure is provided.

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(b) No such way or place or any part thereof shall be permanently closed without making provisions for the maintenance of public safety therein. A property thus permanently withdrawn from public use may be used or conveyed for any purpose for which other real property belonging to the local government unit concerned may be lawfully used or conveyed: Provided, however, That no freedom park shall be closed permanently without provision for its transfer or relocation to a new site. (c) Any national or local road, alley, park, or square may be temporarily closed during an actual emergency, or fiesta celebrations, public rallies, agricultural or industrial fairs, or an undertaking of public works and highways, telecommunications, and waterworks projects, the duration of which shall be specified by the local chief executive concerned in a written order: Provided, however, That no national or local road, alley, park, or square shall set temporarily closed for athletic, cultural, or civic activities not officially sponsored, recognized, or approved by the local government unit concerned. (d) Any city, municipality, or barangay may, by a duly enacted ordinance, temporarily close and regulate the use of any local street, road, thoroughfare, or any other public place where shopping malls, Sunday, flea or night markets, or shopping areas may be established and where goods, merchandise, foodstuffs, commodities, or articles of commerce may be sold and dispensed to the general public.

PIMENTEL: The mayor cannot unilaterally close a road or a street even

if it is for public welfare except if the closure is only temporary and only during the circumstances mentioned in Sec. 21 (c). In other cases, an ordinance is needed to close such road or street.

When a subdivision road is withdrawn from the commerce of man as the open space required by law to be devoted for the use of the general public, its ownership is automatically vested in the municipal/city government and/or the Republic of the Philippines, without need of paying any compensation to the owner/developer of the said road, although it is still registered in the latter's name. Its donation by the owner/developer to the government is a mere formality. Indeed, the standard practice and requirement is that a developer must, among its mandatory obligations, develop the road lots in its subdivision at its own expense, before it can turn over the same to the government by way of a donation. (White Plains Association vs. Legaspi)

The last sentence of Sec. 21(b) is proof of Congress’ intent to preserve the sanctity of freedom parks and their large role as a mechanism of preserving democracy.

Freedom parks are places where public gatherings, meetings, and rallies may be held, especially in cases when the main plaza of a city or municipality is not available.

However, only a few LGU’s have designated freedom parks, as provided by Sec. 15 of BP 880. Hence, the SC held in a case that no permit may be required for the people’s exercise of their right to peacefully assemble and petition in any public park or plaza of a city or municipality until that city or municipality designates a freedom park. The Sc said that without such alternative forum, to deny the permit would be in effect to deny the right (Bayan vs. Ermita)

Sangalang vs. IAC(1989)

FACTS: As far back in 1977, Makati, has always been plagued by traffic. For this reason, during that time, Mayor Nemesio Yabut of Makati ordered that studies be made on ways on how to alleviate the traffic problem, particularly in the areas along the public streets adjacent to Bel-Air Village. The studies revealed that the subdivision plan of Bel-Air was approved by the Court of First. Distance of Rizal on the condition, among others, that its major thoroughfares connecting to public streets and highways shall be opened to public traffic.

Accordingly, it was deemed necessary by the Municipality of Makati in the interest of the general public to open to traffic Amapola, Mercedes, Zodiac, Jupiter, Neptune, Orbit and Pasco de Roxas streets. As a result, the gates owned by BAVA at Jupiter and Orbit were ordered demolished.

Mayor Yabut justified the opening of the streets on the following grounds:

1) Some time ago, Ayala Corporation donated Jupiter and Orbit Streets to Bel-Air on the condition that, under certain reasonable conditions and restrictions, the general public shall always be open to the general public. These conditions were evidenced by a deed of donation executed between Ayala and Bel-Air.

2) The opening of the streets was justified by public necessity and the exercise of the police power.

3) Bel-Air Village Association’s (BAVA) articles of incorporation recognized Jupiter Street as a mere boundary to the southwest – thus it cannot be said to be for the exclusive benefit of Bel-Air residents.

4) BAVA cannot hide behind the non-impairment clause on the ground that is constitutionally guaranteed. The reason is that it is not absolute, since it has to be reconciled with the legitimate exercise of police power.

BAVA, on the other hand, contended:

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1) Rufino Santos, president of BAVA, never agreed to the opening of the said streets

2) BAVA has always kept the streets voluntarily open anyway

3) The demolition of the gates abovementioned was a deprivation of property without process of law or expropriation without just compensation.

WON Mayor Yabut validly exercised police power.

HELD: YES. The Mayor is correct, for the reasons mentioned above. Also, the demolition of the gates is justified under Art. 436 of the Civil Code.

“When any property is condemned or seized by competent authority in the interest of health, safety or security, the owner thereof shall not be entitled to compensation, unless he can show that such condemnation or seizure is unjustified.”

In this case, BAVA has the burden of showing that the seizure of the gates is unjustified because police power can be exercised without provision for just compensation. The Court is of the opinion that the Mayor did not act unreasonably nor was the opening of the gates unjustified. In fact, the gates could even be considered public nuisances, of which summary abatement, as decreed under Art. 701 of the Civil Code, may be carried out by the Mayor.

Cabrera vs. CA (1991)

FACTS: The Provincial Board of Catanduanes issued Resolution No. 158 for the closure of a road leading to the Capitol Building

Owners of the properties traversed by the new road were given portions of the old road in exchange for their properties. Deeds of exchange were executed under which the province conveyed to several persons the portions of the closed road in exchange for their own respective properties on which was subsequently laid a new concrete road.

Cabrera, upon learning about the resolution, filed a complaint for the abatement of nuisance and annulment of resolutions and documents with damages. He alleged that Resolution No. 158 is not an order for a closure of the road but an authority to barter, and since the land fronting his house was a public road owned by the province in its governmental capacity it is beyond the commerce of man. WON the closure of the said road was valid.

HELD: YES. Resolution No. 158 clearly says that “it is hereby resolved to close the old road.” The closure is as plain as day except that the petitioner, with the blindness of those who will not

see, refuses to acknowledge it. The Court has little patience with such puerile arguments. They border dangerously on a trifling with the administration of justice and can only prejudice the pleader's cause.

In the case of Cebu Oxygen and Acetylene Co., Inc. v. Bercilles and Favis vs. City of Baguio the Court held the closure of a city street as within the powers of the city council, who is the authority competent to determine whether or not a certain property is still necessary for public use.

While it is true that the above cases dealt with city councils and not the provincial board, there is no reason for not applying the doctrine announced therein to the provincial board in connection with the closure of provincial roads. The provincial board has, after all, the duty of maintaining such roads for the comfort and convenience of the inhabitants of the province. Moreover, this authority is inferable from the grant by the national legislature of the funds to the Province of Catanduanes for the construction of provincial roads.

Also, Cabrera is not entitled to damages. One whose property does not abut on the closed section of the street has no right of compensation for its closure if he still has reasonable access to the general system of streets.To warrant recovery, the property owner must show that the situation is such that he has sustained special damage differing in kind, and not merely in degree, from those sustained by the public generally.

The Constitution does not undertake to guarantee to a property owner the public maintenance of the most convenient route to his door. The law will not permit him to be cut off from the public thoroughfares, but he must content himself with such route for outlet as the regularly constituted public authority may deem most compatible with the public welfare. His acquisition of city property is a tacit recognition of these principles.

Dacanay vs. Asistio(1992)

FACTS: MMC Ordinance No. 79-02 was enacted by the MMC, designating certain streets, roads and open spaces as sites for flea markets. The Caloocan city mayor Robles, pursuant to the Ordinance, opened up 7 flea markets in the city. He and the city engineer issued licenses for the conduct of vending activities upon application of some vendors.

In 1987, OIC mayor Martinez caused the demolition of market stalls on certain streets. Stall-owners filed an action for prohibition praying that the court issue a writ of preliminary injunction. RTC issued writ prayed for but later dismissed the petition and lifted the writ of preliminary injunction it had issued

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earlier. It found that the streets were of public dominion and hence, outside the commerce of man.

Shortly after the decision came out, the city administration changed hands. However, the new city mayor Asistio Jr. did not pursue the prior administration's policy of clearing and cleaning up the city streets. Petitioner wrote a letter to Asistio asking for the demolition of the illegally constructed stalls and invoking the decision in prior civil case. His letters however, were not acted on.

WON public streets or thoroughfares may be leased or licensed to market stallholders by virtue of a city ordinance or resolution of the Metro Manila Commission

HELD: NO. There is no doubt that the disputed areas from which the private respondents' market stalls are sought to be evicted are public streets. A public street is property for public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be the subject of lease or other contracts. As the stallholders pay fees to the City Government for the right to occupy portions of the public street, the City Government, contrary to law, has been leasing portions of the streets to them. Such leases or licenses are null and void for being contrary to law. The right of the public to use the city streets may not be bargained away through contract. The interests of a few should not prevail over the good of the greater number in the community whose health, peace, safety, good order and general welfare, the respondent city officials are under legal obligation to protect.

The Executive Order issued by Acting Mayor Robles authorizing the use of Heroes del '96 Street as a vending area for stallholders who were granted licenses by the city government contravenes the general law that reserves city streets and roads for public use. Mayor Robles' Executive Order may not infringe upon the vested right of the public to use city streets for the purpose they were intended to serve: i.e., as arteries of travel for vehicles and pedestrians. As early as 1989, the public respondents bad started to look for feasible alternative sites for flea markets. They have had more than ample time to relocate the street vendors.

Macasiano vs. Diokno(1992)

FACTS: Municipality of Paranaque passed Ordinance No. 86 which authorized the (1) closure of certain streets at Baclaran and (2) the establishment of a flea market thereon. Such was passed pursuant to an MMC Ordinance authorizing and regulating the use of certain city streets, roads and open spaces within Metro Manila as sites for flea markets or vending areas. Ordinance was later approved by the Metro Manila Authority subject to the certain conditions.

Paranaque mayor entered into an agreement with Palanyag, a service cooperative, for the establishment and operation of the flea market. PNP Superintendent Macasiano ordered the confiscation of stalls put up by Palanyag and the discontinuation of the operation of the flea market. The TC upheld validity of Ordinance No. 86 and enjoined Macasiano from enforcing his letter-order.

WON an ordinance or resolution issued by a municipal council authorizing the lease and use of public streets as sites for flea markets is valid.

HELD: NO. The ordinance by Paranaque authorizing the lease and use of public streets or thoroughfares as sites for flea market is invalid.

Streets are local roads used for public service and are therefore considered public properties. Properties of the local government which are devoted to public service are deemed public and are under the absolute control of Congress. Hence, local governments have no authority whatsoever to control or regulate the use of public properties unless specific authority is vested upon them by Congress.

Sec 10 Chapter II of the LGC, although authorizing LGUs to close roads and similar public places, should be deemed limited by Art 424 CC which provides that properties of public dominion devoted to public use and made available to the public in general are outside the commerce of man and cannot be disposed of or leased by the LGC to private persons.

Closure should also be done for the sole purpose of withdrawing the road or other public property from public use when circumstances show that such property is no longer intended or necessary for public use or service. When the property is already withdrawn from public use, it becomes patrimonial property of the LGU which it can then lawfully use or convey. However, those roads and streets which are available to the public in general and ordinarily used for vehicular traffic are still considered public property devoted to public use. In such case, the local government has no power to use it for another purpose or to dispose of or lease it to private persons.

The right of the public to use the city streets may not be bargained away through contract.

Even assuming that the municipality has the authority to pass the disputed ordinance, it cannot be considered approved by the Metro Manila Authority due to non-compliance with the imposed conditions:

1) That the aforenamed streets are not used for vehicular traffic, and that the majority of the residents does not

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oppose the establishment of the flea market/vending areas thereon;

2) That the 2-meter middle road to be used as flea market/vending area shall be marked distinctly, and that the 2 meters on both sides of the road shall be used by pedestrians;

3) That the time during which the vending area is to be used shall be clearly designated;

4) That the use of the vending areas shall be temporary and shall be closed once the reclaimed areas are developed and donated by the Public Estate Authority.

The municipality of Paranaque has not shown any iota of proof that it has complied with the foregoing conditions precedent to the approval of the ordinance. The allegations of respondent municipality that the closed streets were not used for vehicular traffic and that the majority of the residents do not oppose the establishment of a flea market on said streets are unsupported by any evidence that will show that this first condition has been met. Likewise, the designation by respondents of a time schedule during which the flea market shall operate is absent.

Further, it is of public notice that the streets along Baclaran area are congested with people, houses and traffic brought about by the proliferation of vendors occupying the streets. To license and allow the establishment of a flea market along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets in Baclaran would not help in solving the problem of congestion.

The local government should refrain from acting towards that which might prejudice or adversely affect the general welfare.

As what the SC have said in the Dacanay case, the general public have a legal right to demand the demolition of the illegally constructed stalls in public roads and streets and the officials of respondent municipality have the corresponding duty arising from public office to clear the city streets and restore them to their specific public purpose.

Pilapil v. CA(1992)

FACTS: Spouses Pilapil own a parcel of land in Bahak, Poblacion, Liloan, Cebu. Spouses Colomida, on the other hand, bought a parcel of land located also in Bahak. The Colomidas claim that they had acquired from Sesenando Longkit a road right of way which leads towards the National Road; this road right of way, however, ends at that portion of the property of the Pilapils where a camino vecinal (barrio road) exists all the way to the said National Road.

The Colomidas "tried to improve the road of "camino vecinal", for the convenience of the public," but the Pilapils harassed and threatened them with "bodily harm from making said

improvement." The Pilapils also threatened to fence off the camino vecinal. Thus, the Colomidas filed a complaint against the Pilapils.

The Pilapils denied the existence of the camino vecinal. They presented several witnesses. Among them was Engineer Epifanio Jordan, Municipal Planning and Development Coordinator of Liloan. Engineer Jordan testified on Liloan's Urban Land Use Plan 19 or zoning map which he prepared upon the instruction of then Municipal Mayor Cesar Butai and which was approved by the Sangguniang Bayan of Liloan. Per the said plan, the camino vecinal in sitio Bahak does not traverse, but runs along the side 20 of the Pilapil property

The Colomidas, on the other hand, relied on old-timers as witnesses – witnesses such as Florentino Pepito, who attested to the existence of the Camino vecinal and its availability to the general public since practically time immemorial.

WON the Municipality of Liloan’s camino vecinal should traverse the property of the Pilapils.

HELD: NO. A camino vecinal is a municipal road. It is also property for public use. Pursuant to the powers of a local government unit, the Municipality of Liloan had the unassailable authority to (a) prepare and adopt a land use map, (b) promulgate a zoning ordinance which may consider, among other things, the municipal roads to be constructed, maintained, improved or repaired and (c) close any municipal road.

The SC said that it didn’t matter what opinion the Colomidas or the engineer gave regarding the existence of the camino vecinal. To the SC, the issue of their credibility has been rendered moot by the unrebutted evidence which shows that the Municipality of Liloan, through its Sangguniang Bayan, had approved a zoning plan, otherwise called an Urban Land Use Plan. This plan indicates the relative location of the camino vecinal in sitio Bahak

It is beyond dispute that the establishment, closure or abandonment of the camino vecinal is the sole prerogative of the Municipality of Liloan. No private party can interfere with such a right. Hence, the decision of the Municipality of Liloan with respect to the said camino vecinal in sitio Bahak must prevail. It is thus pointless to concentrate on the testimonies of both witnesses since the same have, for all intents and purposes, become irrelevant.

And as per the zoning map, as further declared by Engineer Jordan, this camino vecinal in sitio Bahak "passes the side of the land of Socrates Pilapil. This is the proposed road leading to the national highway." Hence, said road should not traverse the Pikapil’s property.

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NOTE: What invested the zoning map with legal effect was neither the authority of the person who ordered its preparation nor the authority of the person who actually prepared it, but its approval by the Sangguniang Bayan. Furthermore, with or without the order of the Mayor or Sangguniang Bayan, Engineer Jordan, as the then Municipal Planning and Development Coordinator, had the authority to prepare the plan and admit it to the Sangguniang Bayan for approval. Among his functions under the governing law at the time was to formulate an integrated economic, social, physical and other development objectives and policies for the consideration and approval of the sangguniang bayan and the municipal mayor, and prepare municipal comprehensive plans and other development planning document.

MMDA v Bel-Air Village Assn., Inc.(2000)

FACTS: Neptune Street is owned by respondent Bel-Air Village Associaiton (BAVA). It is a private road inside Bel-Air Village, a private residential subdivision in the heart of the financial and commercial district of Makati City. It runs parallel to Kalayaan Avenue, a national road open to the general public. Dividing the two (2) streets is a concrete perimeter wall approximately fifteen (15) feet high. The western end of Neptune Street intersects Nicanor Garcia, formerly Reposo Street, a subdivision road open to public vehicular traffic, while its eastern end intersects Makati Avenue, a national road. Both ends of Neptune Street are guarded by iron gates.

BAVA received from MMDA a notice requesting it to open Neptune Street to public vehicular traffic. BAVA was also apprised that the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would be demolished.

BAVA institued a petition for injunction with TRO and preliminary writ of injunction against MMDA.

WON MMDA is endowed with police power to open such roads.

HELD: NO. Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same. The power is plenary and its scope is vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and the general welfare.

It bears stressing that police power is lodged primarily in the National Legislature. It cannot be exercised by any group or body of individuals not possessing legislative power. The National

Legislature, however, may delegate this power to the President and administrative boards as well as the lawmaking bodies of municipal corporations or local government units. Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national lawmaking body.

The MMDA is, as termed in the charter itself, a “development authority.” It is an agency created for purpose of laying down policies and coordinating with the various national government agencies, people’s organizations, non-governmental organizations and the private sector for the efficient and expeditious deliver of basic services in the vast metropolitan area. All its functions are ADMINISTRATIVE in nature.

The powers of the MMDA under RA 7924 are limited to the following acts: formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. There is nothing in RA NO. 7924 that grants MMDA police power, let alone legislative power.

The MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunner of the present MMDA, the charter of the MMC shows that the latter possessed greater powers which were not bestowed on the present MMDA.

The legislative debates would show that the MMDA was not intended as a political unit of the government or a public corporation endowed with legislative power. It is not even a “special metropolitan political subdivision”.

no plebiscite was conducted for its creation the chairman of the MMDA is not an official elected by

the people, but appointed by the president with the rank and privileges of a cabinet member.

Part of the chairman’s functions is to perform such other duties as may be assigned to him by the President, whereas in LGUs, the president merely exercises supervisory authority. This emphasizes the administrative character of the MMDA.

Clearly, the MMC is not the same entity as MMDA. Unlike the MMC, the MMDA has no power to enact ordinances for the welfare of the community. It is the LGUs, acting through their legislative councils, that possess legislative power and police power.

B. Eminent Domain

LGC, SEC. 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

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power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and 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.

1987 CONSTI, Section 9. Private property shall not be taken for public use without just compensation.

GD-R: Property, whether real or personal, may be subject of eminent domain!

PIMENTEL: Eminent domain, which is the power of a sovereign state to

appropriate private property to particular uses to promote public welfare, is essentially lodged in the legislature. While such power may be validly delegated to local government units (LGUs), other public entities and public utilities the exercise of such power by the delegated entities is not absolute. In fact, the scope of delegated legislative power is narrower than that of the delegating authority and such entities may exercise the power to expropriate private property only when authorized by Congress and subject to its control and restraints imposed through the law conferring the power or in other legislations. Indeed, LGUs by themselves have no inherent power of eminent domain.

Thus, strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but "inferior" since it must conform to the limits imposed by the delegation and thus partakes only of a share in eminent domain. The national legislature is still the principal of the LGUs and the latter cannot go against the principal’s will or modify the same. (Beluso vs. Municipality of Panay)

LGU’s do not possess unbridled authority to exercise their power of eminent domain… There are two legal provisions which limit the exercise of this power: (1) no person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws; and (2) private property shall not be taken for public use without just compensation. Thus, the exercise by local government units of the power of eminent domain is not absolute. In fact, Section 19 of RA 7160 itself explicitly states that such exercise must comply with the provisions of the Constitution and pertinent laws.

The power of eminent domain may now be exercised by an LGU without the need of approval by any national government authority or body.

HOWEVER, the ordinance authorizing the local chief executive must still be approved by the provincial board (in the case of municipalities)

NOTE: A mere resolution is not sufficient to comply with the requirement of the LGC.

Theoretically, barangays can exercise eminent domain, but the payment of just compensation may constitute too big a drain in their resources.

NOTE: Eminent domain may now be used to provide low-cost land for mass housing for the poor and the landless (“public welfare”). This may also be justified under its “general welfare powers” in Sec. 21 of the LGC.

Specific examples of public purposes are the construction of artesian wells or water systems, cemeteries or crematoriums, abattoirs, research buildings, and animal dispersal centers.

"Compensation" means an equivalent for the value of the land (property) taken. Anything beyond that is more and anything short of that is less than compensation. To compensate is to render something which is equal to that taken or received. The word "just" is used to intensify the meaning of the word "compensation;" to convey the idea that the equivalent to be rendered for the property taken shall be real, substantial, full, ample.

"Just compensation," (reasonable compensation) therefore… means a fair and full equivalent for the loss sustained." (City of Manila vs. Estrada)

The burden is on the LGU to prove that the mandatory requirement of a valid and definite offer to the owner of the property before filing its complaint and the rejection thereof by the latter. It is incumbent upon the condemnor to exhaust all reasonable efforts to obtain the land it desires by agreement. Failure to prove compliance with the mandatory requirement will result in the dismissal of the complaint.

A reasonable offer in good faith, not merely perfunctory or pro forma offer, to acquire the property for a reasonable price must be made to the owner or his privy. A single bona fide offer that is rejected by the owner will suffice.

A mere letter of intent to acquire property or an invitation for one of the co-owners, to a conference to discuss the project and the price that may be mutually acceptable to both parties is not a valid and definite offer to purchase a specific

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portion of a property for a price certain. (Jesus Is Lord Christian School Foundation, Inc vs. Municipality of Pasig)

LGU’s can expropriate agricultural lands without prior authority from the DAR since the determination of the public use of the property subject to expropriation is considered an expression of public policy.

Republic Act No. 1899 authorized municipalities and chartered cities to reclaim foreshore lands, not submerged lands. Under Commonwealth Act No. 141, "foreshore and lands under water were not to be alienated and sold to private parties," and that such lands "remained property of the State." Justice Puno emphasized that "Commonwealth Act No. 141 has remained in effect at present." (Chavez vs. PEA)

RULES OF COURT RULE 67 – EXPROPRIATION

(a.k.a. CONDEMNATION)

A. COMPLAINT FOR EXPROPRIATION

Section 1: The complaint. The right of eminent domain shall be exercised by the filing of a verified complaint which shall: state with certainty the right and purpose of expropriation, describe the real or personal property sought to be

expropriated join as defendants all persons owning or claiming to own, or

occupying, any part thereof or interest therein, showing, so far as practicable, their separate interest.

In cases applicable, it must also be averred clearly in the complaint if: property is owned by the Republic but occupied by private

individuals, or the title is otherwise obscure or doubtful so that the plaintiff

cannot with accuracy or certainty specify who are the real owners.

B. ENTRY OF PLAINTIFF IN THE PROPERTY

Section 2: Entry of plaintiff upon depositing value with authorized government depositary. The plaintiff shall have the right to take or enter upon the possession of the real property involved, upon: filing of the expropriation complaint; with service of notice to the defendant; and deposit with the authorized government depositary an

amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court.

NOTE: The deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of the Philippines. If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be promptly fixed by the court.

After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of copies to the parties.

GD-R: Assessed value is the value given by the owner himself. But the full “just compensation” is still an issue to be tried in the expropriation proceedings.

Section 9: Uncertain ownership; conflicting claims. If there is uncertainty as to ownership of the property, the court may order any sum or sums awarded as compensation for the property to be paid to the court for the benefit of the person adjudged in the same proceeding to be entitled thereto.

C. THE ANSWER

Sec3: Defenses and objections. Defendant has no objection or defense to the action or the taking of his property:

Defendant has any objection or defense to the filing of complaint:

He shall file and serve a notice of appearance and a manifestation to that effect, specifically designating or identifying the property in which he claims to be interested, within the time stated in the summons. Thereafter, he shall be entitled to notice of all proceedings affecting the same.

He shall serve his answer within the time stated in the summons containing- specific designation or identification of the property in which he claims to have an interest, nature and extent of the interest claimed, all his objections and defenses to the taking of his property. No counterclaim, cross-claim or third-party complaint shall be alleged or allowed in the answer or any subsequent pleading.

GEN RULE: A defendant waives all defenses and objections not so alleged.

EXCEPT: But the court, in the interest of justice, may permit amendments to the answer to be made not later than ten (10) days from the filing thereof.

However, at the trial of the issue of just compensation, whether or not a defendant has previously appeared or answered, he may present evidence as to the amount of the compensation to be

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paid for his property, and he may share in the distribution of the award.

D. ORDER OF EXPROPRIATION

Section 4: Order of expropriation. The court may issue an order of expropriation: (declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first)

if the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, or

when no party appears to defend as required by this Rule.

A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just compensation to be paid.

After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable.

E. COMPENSATION

Section 5: Ascertainment of compensation. Upon the rendition of the order of expropriation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken

Copies of the order shall be served on the parties. Objections to the appointment filed with the court within ten (10) days from service, and shall be resolved within thirty (30) days after all the commissioners shall have received copies of the objections.

Section 6: Proceedings by commissioners. 1. Before entering upon the performance of their duties, the

commissioners shall take and subscribe an oath that they will faithfully perform their duties as commissioners, which oath shall be filed in court with the other proceedings in the case.

2. Evidence may be introduced by either party before the commissioners who are authorized to administer oaths on hearings before them;

3. The commissioners shall after due notice to the parties to attend, view and examine the property sought to be expropriated and its surroundings, and may measure the same UNLESS the parties consent to the contrary.

4. The commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owner from the public use or purpose of the property taken, the operation of its franchise by the corporation or the carrying on

of the business of the corporation or person taking the property. But in no case shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual value of his property so taken.

Section 7: Report by commissioners and judgment thereupon. The court may order the commissioners to report when any particular portion of the real estate shall have been passed upon by them, and may render judgment upon such partial report, and direct the commissioners to proceed with their work as to subsequent portions of the property sought to be expropriated, and may from time to time so deal with such property.

The commissioners shall make a full and accurate report to the court of all their proceedings, and such proceedings shall not be effectual until the court shall have accepted their report and rendered judgment in accordance with their recommendations.

Except as otherwise expressly ordered by the court, such report shall be filed within sixty (60) days from the date the commissioners were notified of their appointment, which time may be extended in the discretion of the court.

Upon the filing of such report, the clerk of the court shall serve copies thereof on all interested parties, with notice that they are allowed ten (10) days within which to file objections to the findings of the report, if they so desire. (7a)

Section 8: Action upon commissioners’ report. Upon the expiration of the period of ten (10) days referred to in the preceding section, or even before the expiration of such period but after all the interested parties have filed their objections to the report or their statement of agreement therewith, the court may, after hearing: accept the report and render judgment in accordance

therewith; or, for cause shown, it may recommit the same to the

commissioners for further report of facts; or it may set aside the report and appoint new commissioners;

or it may accept the report in part and reject it in part; and it may make such order or render such judgment as shall

secure to the plaintiff the property essential to the exercise of his right of expropriation, and to the defendant just compensation for the property so taken.

F. JUDGMENT

Section 13: Recording judgment, and its effect. The judgment entered in expropriation proceedings shall state definitely, by an adequate description, the particular property or interest therein expropriated, and the nature of the public use or purpose for which it is expropriated. When real estate is expropriated, a

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certified copy of such judgment shall be recorded in the registry of deeds of the place in which the property is situated, and its effect shall be to vest in the plaintiff the title to the real estate so described for such public use or purpose.

Section 10: Rights of plaintiff after judgment and payment. Upon payment by the plaintiff to the defendant of the compensation fixed by the judgment, with legal interest thereon from the taking of the possession of the property, or after tender to him of the amount so fixed and payment of the costs, the plaintiff shall have the right to enter upon the property expropriated and to appropriate it for the public use or purpose defined in the judgment, or to retain it should he have taken immediate possession thereof under the provisions of section 2 hereof.

If the defendant and his counsel absent themselves from the court, or decline to receive the amount tendered, the same shall be ordered to be deposited in court and such deposit shall have the same effect as actual payment thereof to the defendant or the person ultimately adjudged entitled thereto.

Section 11: Entry not delayed by appeal; effect of reversal. The right of the plaintiff to enter upon the property of the defendant and appropriate the same for public use or purpose shall NOT be delayed by an appeal from the judgment. But if the appellate court determines that plaintiff has no right of expropriation, judgment shall be rendered ordering the Regional Trial Court to forthwith enforce the restoration to the defendant of the possession of the property, and to determine the damages which the defendant sustained and may recover by reason of the possession taken by the plaintiff.

Section 12: Costs, by whom paid. The fees of the commis-sioners shall be taxed as a part of the costs of the proceedings. All costs, except those of rival claimants litigating their claims, shall be paid by the plaintiff, unless an appeal is taken by the owner of the property and the judgment is affirmed, in which event the costs of the appeal shall be paid by the owner.

Section 14: Power of guardian in such proceedings. The guardian or guardian ad litem of a minor or of a person judicially declared to be incompetent may, with the approval of the court first had, do and perform on behalf of his ward any act, matter, or thing respecting the expropriation for public use or purpose of property belonging to such minor or person judicially declared to be incompetent, which such minor or person judicially declared to be incompetent could do in such proceedings if he were of age or competent.

Moday vs. CA(1997)

FACTS: The Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed Resolution No. 43-89, authorizing the mayor to initiate the petition for expropriation of a 1-hectare land along the national highway owned by Moday for the site of Bunawan Farmers Center and Other Government Sports Facilities. The resolution was approved by Mayor Bustillo but subsequently disapproved by the Sangguniang Panlalawigan upon finding that expropriation is unnecessary considering that there are still other available lots in Bunawan for the establishment of the government center. The Municipality, however, still filed a petition for eminent domain and its motion to take or enter upon the possession of subject matter was subsequently granted by the RTC.

WON a municipality may expropriate private property by virtue of a municipal resolution which was disapproved by the Sangguniang Panlalawigan.

HELD: YES. The Municipality of Bunawan's power to exercise the right of eminent domain is not disputed as it is expressly provided for in BP 337, the LGC in force at the time expropriation proceedings were initiated. Section 9 of the law (BP 337) states that “a local government unit may, through its head and acting pursuant to a resolution of its sanggunian, exercise the right of eminent domain and institute condemnation proceedings for public use or purpose.”

Section 153 of BP 337, grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue. Absolutely no other ground is recognized by the law. The provincial (board's) disapproval of any resolution, ordinance, or order must be premised specifically upon the fact that such resolution, ordinance, or order is outside the scope of the legal powers conferred by law. If a provincial board passes these limits, it usurps the legislative function of the municipal council or president. Such has been the consistent course of executive authority.

Thus, the Sangguniang Panlalawigan was without the authority to disapprove Municipal Resolution No. 43-89 for the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and its Sangguniang Bayan the capacity to promulgate said resolution, pursuant to the earlier-quoted Section 9 of B.P. Blg. 337. Perforce, it follows that Resolution No. 43-89 is valid and binding and could be used as lawful authority to petition for the condemnation of petitioners' property.

Province of Camarines Sur vs. CA(1993)

FACTS: The Sangguniang Panlalawigan passed resolution No. 129, authorizing the Provincial Governor to purchase or expropriate property contiguous to the provincial capital site, in

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order to establish a pilot farm and a housing project for provincial government employees. Governor Villafuerte filed two separate cases for expropriation against Ernesto & Efren San Joaquin. The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for their property.

The Province of Camarines Sur claims that it has the authority to initiate the expropriation proceedings under Sections 4 and 7 of Local Government Code (BP 337) and that the expropriations are for a public purpose.

The TC allowed the Province of Camarines Sur to take possession of private respondents' lands. So, they appealed. The CA ordered the trial court to suspend the expropriation proceedings until after the Province of Camarines Sur shall have submitted the requisite approval of the Department of Agrarian

The Solicitor General is of the opinion that under Section 9 of the LGC, there was no need for the approval by the Office of the President of the exercise by the Sangguniang Panlalawigan of the right of eminent domain but the Province must first secure the approval of the DAR of the plan to expropriate the lands of petitioners for use as a housing project (Section 65 of RA 6657: Comprehensive Agrarian Reform Law requires the approval of the DAR before a parcel of land can be reclassified from an agricultural to a non-agricultural land.)

WON the expropriation is for a public purpose or public use.

YES. The old concept of public use is that the condemned property must actually be used by the general public (roads, bridges, public plazas) before the taking thereof could satisfy the constitutional requirement of public use.

But now, the new concept of public use means public advantage, convenience or benefit, which tends to contribute to the general welfare and the prosperity of the whole community, like a resort complex for tourists or housing projects. (Sumulong vs. Guerrero)

The establishment of pilot development center would inure to the direct benefit and advantage of the people of the province

WON the expropriation of agricultural lands by LGUs is subject to the prior approval of the Secretary of Agrarian Reform, as the implementor of the agrarian reform program.

NO. Section 9 of BP 337 does not intimate in the least that LGUs must first secure the approval of the Department of Land reform for the conversion of lands before they can institute the necessary expropriation proceedings. Moreover, there is no provision in the CARL which subjects the expropriation of agricultural lands by LGUs to the control of the DAR.

The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of 1987 cannot be the source of the authority of the DAR to determine the suitability of a parcel of agricultural land for the purpose to which it would be devoted by the expropriating authority. Said rules merely vest on the DAR the exclusive authority to approve or disapprove conversions of agricultural lands for residential, commercial or industrial uses, such authority is limited to the applications for reclassification submitted by the land owners or tenant beneficiaries.

Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the property sought to be expropriated shall be public, the same being an expression of legislative policy. Hence, the courts must defer to such legislative determination and will intervene only when a particular undertaking has no real or substantial relation to the public use.

The fears of private respondents that they will be paid on the basis of the valuation declared in the tax declarations of their property, are unfounded. This Court has declared as unconstitutional the Presidential Decrees fixing the just compensation in expropriation cases to be the value given to the condemned property either by the owners or the assessor, whichever was lower. The rules for determining just compensation are those laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on what they consider shall be the just compensation for their property.

Municipality of Meycauayan vs. IAC(1988)

FACTS: In 1975, PPMC filed with the Office of the Municipal Mayor of Meycauayan, Bulacan, an application for a permit to fence a parcel of land to enable the storage of their heavy equipment and various finished products such as large diameter steel pipes, pontoon pipes for ports, wharves, and harbors, bridge components, pre-stressed girders and piles, large diameter concrete pipes, and parts for low cost housing. In the same year, the Municipal Council of Meycauayan, headed by then Mayor Legaspi, passed Resolution No. 258, manifesting the intention to expropriate the same parcel of land. Such resolution was disapproved by the Provincial Board of Bulacan. So, PPMC reiterated its application.

However, in 1983, the Municipal Council of Meycauayan, now headed by Mayor Daez, passed Resolution No. 21 for the purpose of expropriating anew the PPMC's land, and convert the same into a public road, which would provide a connecting link between Malhacan Road and Bulac Road in Valenzuela and thereby ease the traffic in the area of vehicles coming from MacArthur Highway.. The Provincial Board of Bulacan, this time, approved the aforesaid resolution.

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WON there is a necessity for the expropriation of the land.

HELD: NO. The records reveal that there are four other connecting links between the aforementioned roads. The petitioner itself admits to this fact. And as found by the CA, there is also another available vacant lot offered for sale situated similarly as the lot in question and lying Idle, unlike the lot sought to be expropriated which was found by the Committee to be badly needed by the company as a site for its heavy equipment after it is fenced together with the adjoining vacant lot, the justification to condemn the same does not appear to be very imperative and necessary and would only cause unjustified damage to the firm. The desire of the Municipality of Meycauayan to build a public road to decongest the volume of traffic can be fully and better attained by acquiring the other available roads in the vicinity maybe at lesser costs without causing harm to an establishment doing legitimate business therein.

It must be remembered that the foundation of the right to exercise the power of eminent domain is genuine necessity (GD-R: i.e., there is an existing need at the time of the taking) and that necessity must be of a public character. Consequently, the courts have the power to inquire into the legality of the exercise of the right of eminent domain and to determine whether there is a genuine necessity therefor.

Quezon City vs. Ericta(1983)

FACTS: QC passed an Ordinance regulating the establishment, maintenance and operation of private memorial type cemetery or burial ground within the jurisdiction of QC. Section 9 of the Ordinance provides that at least 6% of the total area of a memorial park cemetery shall be set aside for charity burial of deceased persons who are paupers and have been residents of QC for at least 5 yrs prior to their death.

For several years, the said section of the Ordinance was not enforced by city authorities but seven years after the enactment of the Ordinance, the QC Council passed a resolution requesting the City Engineer to stop any further selling of memorial parks in QC where the owners have failed to donate the required 6% cemetery space. The City Engineer notified Himlayang Pilipino, Inc. that the Ordinance would be enforced, so Himlayan filed a petition with the CFI seeking to annul Section 9 of the Ordinance. CFI declared Section 9 null and void.

WON the said Ordinance was authorized under the QC Charter and thus, a valid exercise of police power.

NO. An examination of the Charter does not reveal any provision that would justify the ordinance in question except the provision granting police power to the City. Police power is the most essential of government powers, at times the most insistent, and

always one of the least limitable of the powers of government. It 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 necessity to confiscate private property in order to destroy it [not to devote it to public use] (i.e., in the case of confiscation of opium & firearms).

In this case, Section 9 of the Ordinance is not a mere police regulation but an outright confiscation. It deprives a person of his private property w/o due process…even w/o compensation.

There is no reasonable relation between the setting aside of at 6% of the total area of 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.

The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City, which empowers the city council to prohibit the burial of the dead within the center of population of the city and to provide for their burial in a proper place subject to the provisions of general law regulating burial grounds and cemeteries. When the Local Government Code, BP 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. This has been the law and practise in the past. It continues to the present.

WON it is a valid exercise of expropriation powers.

NO. Expropriation requires payment of just compensation. 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 salubrious and wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the subdivision developer when individual lots are sold to home-owners.

As a matter of fact, the petitioners rely solely on the general welfare clause or on implied powers of the municipal corporation,

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not on any express provision of law as statutory basis of their exercise of power. The clause has always received broad and liberal interpretation but we cannot stretch it to cover this particular taking. Moreover, the questioned ordinance was passed after Himlayang Pilipino, Inc. had incorporated. received necessary licenses and permits and commenced operating. The sequestration of six percent of the cemetery cannot even be considered as having been impliedly acknowledged by the private respondent when it accepted the permits to commence operations.

NAPOCOR vs. Jocson(1992)

FACTS: NAPOCOR filed seven (7) eminent domain cases before the RTC against several persons for the acquisition of a right-of-way easement over portions of the parcels of land described (GD-R: Remember real rights may also be expropriated!) in the complaints for its Negros-Panay Interconnection Project, and to enable it to construct its tower and transmission line in a manner that is compatible with the greatest good while at the same time causing the least private injury. NAPOCOR further alleged that the purpose for which the lands are principally devoted will not be impaired by the transmission lines as it will only acquire a right-of-way-easement thereon.

Eventually, the RTC issued several orders, fixing the provisional values of the subject areas, on the basis of the market value and the daily opportunity profit petitioner may derive and another order directing the NAPOCOR to deposit the amounts in escrow pending decision on the merits. NAPOCOR complied with such order and asked for a writ of possession. However, the RTC ordered that the writ of possession be issued in these cases after the property owners "have duly received the amounts."

NAPOCOR questioned such order, arguing that it violates Section 2 of Rule 67 of the ROC and that the issuance then of the writ of possession was an unqualified ministerial duty which respondent Judge failed to perform.

WON the RTC acted in GADALEJ.

HELD: YES. There are two (2) stages in every action of expropriation:

The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint."

An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. 43 So, too, would an order of condemnation be a final one, for thereafter as the Rules expressly state, in the proceedings before the Trial Court, "no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard."

The second phase of the eminent domain action is concerned with the determination by the Court of the "just compensation for the property sought to be taken." This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. . . .

HOWEVER, P.D. No. 42 repealed the "provisions of Rule 67 of the Rules of Court and of any other existing law contrary to or inconsistent" with it. Accordingly, it repealed Section 2 of Rule 67 insofar as the determination of the provisional value, the form of payment and the agency with which the deposit shall be made, are concerned. P.D. No. 42 effectively removes the discretion of the court in determining the provisional value. What is to be deposited is an amount equivalent to the assessed value for taxation purpose. No hearing is required for that purpose. All that is needed is notice to the owner of the property sought to be condemned.

In any event, NAPOCOR deposited the provisional value fixed by the court. As a matter of right, it was entitled to be placed in possession of the property involved in the complaints at once, pursuant to both Section 2 of Rule 67 and P.D. No. 42. The RTC had the corresponding duty to order the sheriff or any other proper officer to forthwith place the petitioner in such possession.

The RTC Judge's Order (directing the defendants to state in writing within twenty-four hours whether or not they would accept and withdraw the amounts deposited by the petitioner for each of them " as final and full satisfaction of the value of their respective properties affected by the expropriation" and stating at the same time that the writ will be issued after such manifestation and acceptance and receipt of the amounts) has absolutely no legal basis even as it also unjustly, oppressively and capriciously compels the petitioner to accept the respondent Judge's determination of the provisional value as the just compensation after the defendants shall have manifested their conformity thereto. He thus subordinated his own judgment to that of the defendants' because he made the latter the final authority to determine such just compensation, in violation of the principle

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that the determination of just compensation in eminent domain cases is a judicial function. If the legislature or the executive department cannot even impose upon the court how just compensation should be determined, it would be far more objectionable and impermissible for respondent Judge to grant the defendants in an eminent domain case such power and authority.

There is also a complete disregard by respondent Judge of the provisions of Rule 67 as to the procedure to be followed after the petitioner has deposited the provisional value of the property. It must be recalled that three (3) sets of defendants filed motions to dismiss 53 pursuant to Section 3, Rule 67 of the Rules of Court; Section 4 of the same rule provides that the court must rule on them and in the event that it overrules the motions or, when any party fails to present a defense as required in Section 3, it should enter an order of condemnation declaring that the petitioner has a lawful right to take the property sought to be condemned.

Accordingly, considering that the parties submitted neither a compromise agreement as to the just compensation nor a stipulation to dispense with the appointment of commissioners and to leave the determination of just compensation to the court on the basis of certain criteria, respondent Judge was duty bound to set in motion the procedure in Section 5 of Rule 67 (the appointment of commissioners)

City of Manila vs. Arellano College(1950)

FACTS: An action to condemn several parcels of land in Legarda St. was initiated in the CFI for the purpose of subdividing such lots and reselling it to private persons. Section 1 of Republic Act No. 267 provides:

Cities and municipalities are authorized to contract loans from the Reconstruction Finance Corporation, the Philippine National Bank, and/or other entity or person at the rate of interest not exceeding eight per cent annum for the purpose of purchasing or expropriating homesites within their respective territorial jurisdiction and reselling them at cost to residents of the said cities and municipalities.

The CFI ruled that this provision empowers cities to purchase but not to expropriate lands for the purpose of subdivision and resale.

WON the condemnation is proper.

HELD: NO. No fixed line of demarcation between what taking is for public use and what is not can made; each case has to be judged according to its peculiar circumstances. It suffices to say for the purpose of this decision that the case under consideration

is far wanting in those elements which make for public convenience or public use. It is patterned upon an ideology far removed from the majority of the citizens of this country.

In Guido and De Borja, the SC held that “the expropriation of large estates, trusts in perpetuity, and land that embraces a whole town, or large section of a town or city, bears direct relation to the public welfare. The size of the land expropriated, the large number of people benefited, and the extent of social and economic reform secured by the condemnation, clothes the expropriation with public interest and public use. The expropriation in such cases tends to abolish economic slavery, feudalistic practices, endless conflicts between landlords and tenants, and other evils inimical to community prosperity and contentment and public peace and order. Although courts are not in agreement as to the tests to applied in determining whether the use is public or not, some go so far in the direction of a liberal construction as to hold that public use is synonymous with public benefit, public utility, or public advantage, and to authorize the exercise of the power of eminent domain to promote such public benefit, etc., especially where the interest involved are of considerable magnitude.”

The SC noted that in all these cases and of similar nature extensive areas were involved and numerous people and the general public benefited by the action taken.

In the first place, the land that is the subject of the present expropriation is only one-third of the land sought to be taken in the Guido case, and about two-thirds of that involved in the Borja condemnation proceeding. In the second place, the Arellano Colleges' land is situated in a highly commercial section of the city and is occupied by persons who are not bona fide tenants. Lastly, this land was brought by the defendant for a university site to take the place of rented buildings that are unsuitable for schools of higher learning.

The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity must be of a public character. The ascertainment of the necessity must precede or accompany, and not follow, the taking of the land.

Necessity within the rule that the particular property to be expropriated must be necessary, does not mean an absolute but only a reasonable or practical necessity, such as would combine the greatest benefit to the public with the least inconvenience and expense to the condemning party and property owner consistent with such benefits. But measured even by this standard, and forgetting for a moment the private character of the intended use, necessity for the condemnation has not been shown. Arellano College, not only has invested a considerable amount for its property but had the plans for construction ready and would have completed the project a long time ago had it not been stopped by the city authorities. And again, while a handful of people stand to

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profit by the expropriation, the development of a university that has a present enrollment of 9,000 students would be sacrificed. Any good that would accrue to the public from providing homes to a few families fades into insignificance in comparison with the preparation of young men and young women for useful citizenship and for service to the government and the community, a task which the government alone is not in a position to undertake. “The necessity of the Arellano Law College to acquire a permanent site of its own is imperative not only because denial of the same would hamper the objectives of that educational institution, but it would likewise be taking a property intended already for public benefit." The Mayor of the City of Manila himself confessed that he believes the plaintiff is entitled to keep this land.

City of Manila vs. Chinese Community of Manila(1919)

FACTS: In 1916, the City of Manila presented a petition in the CFI of Manila praying that for the purpose of constructing a public improvement, namely the extension of Rizal Avenue, Manila, it is necessary for the City of Manila to acquire ownership in fee simple of certain parcels of land situated in the district of Binondo of said city within Block 83 of said district. The proposed extension of Rizal Avenue however will take a part of the Chinese cemetery, a public cemetery.

The Chinese Community of Manila opposed the petition contending that 1) the City of Manila cannot appropriate the cemetery or a portion thereof as said cemetery is public property, only private property may be expropriated and 2) there is no necessity for the improvement as a whole in the first place.

Whether expropriation is a legislative function exclusively, and hence the courts cannot intervene except for the purpose of determining the value of the land in question.

This contention is partly meritorious. There is no question that the court has authority to fix the values of the land question. As to the authority of determining whether a law granting the expropriation exists, a distinction must be made between a) laws granting special purpose and b) laws grating a general authority.

If the law in question grants expropriation of a particular parcel of land and for a specific public purpose, then the courts would be without jurisdiction to inquire into the purpose of that legislation, regardless of WON the land in question is private or public.

But if the Legislature should grant general authority to a municipal corporation then to expropriate private lands, for public purpose, the courts would have authority to make inquiry and to hear proof, upon an issue properly presented concerning WON

the land in question was private and whether the purpose was in fact, public.

The right of expropriation is not an inherent power in a municipal corporation, and before it can exercise the right some law must exist conferring the power upon it. When the courts come to determine the question, they must only find (a) that a law or authority exists for the exercise of the right of eminent domain, but (b) also that the right or authority is being exercised in accordance with the law.

In the present case there are two conditions imposed upon the authority conceded to the City of Manila: First, the land must be private; and, second, the purpose must be public. If the court, upon trial, finds that neither of these conditions exists or that either one of them fails, certainly it cannot be contended that the right is being exercised in accordance with law.

In the instant case, since the City of Manila was given a general grant of authority to expropriate private lands under its Charter, the Court has authority to inquire on whether the exercise of such expropriation by the City of Manila is indeed public- in other words, the Court may inquire into the necessity of the expropriation.

WON there is public necessity to expropriate in this case.

NONE. The ascertainment of the necessity must precede, and not follow, the taking of the property. The general power to exercise the right of eminent domain must not be confused with the right to exercise it in a particular case.

It is axiomatic that the taking of private property for public use is not justified unless there is a genuine public necessity for the taking. In the present case, even if granting that a necessity exists for the opening of the street in question, the record contain no proof of the necessity of opening the same through the cemetery. The records show that adjoining and adjacent lands have been offered to the city free of charge, which will answer every purpose of the city.

Where a cemetery is open to the public, it is a public use and no part of the ground can be taken for other public uses under a general authority.

WON public property may be subject of expropriation.

YES. As mentioned above public property may be expropriated provided a special grant of Authority for a particular parcel of land was passed by the Legislature. However, in this case the City of Manila was not granted such a special authority. Hence, the City of Manila is not authorized to expropriate public property. Since the city of Manila is only permitted to condemn private property for public use and since the Chinese Cemetery in the city of

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Manila is a public cemetery ( GD-R : It is a community cemetery!) already devoted to a public use, the city of Manila cannot condemn a portion of the cemetery for a public street.

Municipality of Parañaque vs. V.M. Realty Corp.(1998)

FACTS: Pursuant to SB Resolution No. 93-95, the Municipality of Parañaque filed a complaint for expropriation against VM Realty Corporation over 2 parcels of land. The purpose was to alleviate the living conditions of the poor by providing homes through socialized housing projects. The RTC of Makati issued an order giving it due course. It authorized the petitioner to take possession of the property upon deposit of an amount equivalent to 15% of its fair market value based on its current tax declaration.

VM Realty filed a motion to dismiss, on the ground that the complaint failed to state a cause of action since it was filed pursuant to a resolution and not to an ordinance as required by RA 7160.

The then municipality of Parañaque argues that a resolution substantially complies with the requirements of the law since the terms “ordinance” and “resolution” are synonymous for the “purpose of bestowing authority on the LGU through its chief executive to initiate the expropriation proceedings in court in the exercise of the power of eminent domain.”

WON a resolution duly approved by the municipal council has the same force and effect as an ordinance so as not to deprive an expropriation case of a valid cause of action.

NO. Strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but "inferior" domain, since it must conform to the limits imposed by the delegation, and thus partakes only of a share in eminent domain. Indeed, "the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it The power of eminent domain is lodged in Congress. An LGU may exercise the power to expropriate private property only when authorized by Congress and subject to the latter’s control and restraints, imposed “through the law conferring the power or in other legislations.”

Under Sec. 19 of the LGC, the following essential requisites must concur before an LGU can exercise the power of eminent domain:

1. An ordinance enacted by the local legislative council authorizing the local chief executive to exercise the power of eminent domain or pursue expropriation proceedings;

2. The power is exercised for public use, purpose, or welfare, or for the benefit of the poor and the landless;

3. There is payment of just compensation, as required under Sec. 9 Art. III of the Constitution and other pertinent laws;

4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated but that it was rejected.

In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to a resolution of the municipal council. Thus, there was no compliance with the first requisite that the mayor be authorized through an ordinance. Petitioner cites Camarines Sur vs. Court of Appeals 28 to show that a resolution may suffice to support the exercise of eminent domain by an LGU. This case, however, is not in point because the applicable law at that time was BP 337, the previous Local Government Code, which had provided that a mere resolution would enable an LGU to exercise eminent domain. In contrast, RA 7160, the present Local Government Code which was already in force when the Complaint for expropriation was filed, explicitly required an ordinance for this purpose.

A municipal ordinance is different from a resolution.

Ordinance ResolutionIt is a law It is merely a declaration of the

sentiment or opinion of a lawmaking body on a specific matter

It possesses a general and permanent character

It is temporary in nature

A third reading is necessary for an ordinance to be passed.

A third reading is not required, unless decided otherwise by a majority of all the Sanggunian members.

If Congress intended to allow LGUs to exercise the power through a resolution, it would have said so. Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private right of the people. Accordingly, the manifest change in the legislative language — from "resolution" under BP 337 to "ordinance" under RA 7160 — demands a strict construction. "No species of property is held by individuals with greater tenacity, and is guarded by the Constitution and laws more sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right and, for greater

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public purposes, appropriates the land of an individual without his consent, the plain meaning of the law should not be enlarged by doubtful interpretation

Also, Article 36, Rule VI of the IRR which requires only a resolution could not prevail over the law.

WON the principle of res judicata is applicable to the present case.

NO. The principle of res judicata, which finds application in generally all cases and proceedings, cannot bar the right of the State or its agent to expropriate private property. The very nature of eminent domain, as an inherent power of the State, dictates that the right to exercise the power be absolute and unfettered even by a prior judgment or res judicata. The scope of eminent domain is plenary and, like police power, can "reach every form of property which the State might need for public use." "All separate interests of individuals in property are held of the government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of property, remains in the government, or in the aggregate body of the people in their sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires it." Thus, the State or its authorized agent cannot be forever barred from exercising said right by reason alone of previous non-compliance with any legal requirement.

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it does apply to specific issues decided in a previous case. For example, a final judgment dismissing an expropriation suit on the ground that there was no prior offer precludes another suit raising the same issue; it cannot, however, bar the State or its agent from thereafter complying with this requirement, as prescribed by law, and subsequently exercising its power of eminent domain over the same property. By the same token, our ruling that petitioner cannot exercise its delegated power of eminent domain through a mere resolution will not bar it from reinstituting similar proceedings, once the said legal requirement and, for that matter, all others are properly complied with. Parenthetically and by parity of reasoning, the same is also true of the principle of "law of the case."

City of Cebu vs. Spouses Apolonio(2002)

FACTS: The City of Cebu filed a complaint for eminent domain against the Dedamo spouses. The Dedamos filed a MTD, alleging that there is no public purpose; that the City can just buy their lot; that the price offered was too low and that they have no other land in Cebu.

The parties then submitted to the court an agreement wherein they declared that they have partially settled the case (to cut the proceedings short, there was no more determination of WON the City has authority nor of WON there is public necessity). The trial court appointed 3 commissioners to determine the just compensation of the lots. The commissioners submitted their report on the basis of which the TC rendered its decision.

The City of Cebu interposed objections to the assessment made by the commissioners, arguing that the just compensation should be based on the prevailing market price of the property at the commencement of the expropriation proceedings.

WON just compensation in eminent domain cases by an LGU should be determined as of the date of the filing of the complaint

NO. The applicable law as to the point of reckoning for the determination of just compensation is Sec. 19, LGC, which expressly provides that just compensation shall be determined as of the time of actual taking.

The City of Cebu has misread the ruling in Napocor vs. CA. It was not categorically ruled in that case that just compensation should be determined as of the filing of the complaint. It was there stated that although the general rule in determining just compensation in eminent domain is the value of the property as of the date of the filing of the complaint, the rule admits of an exception: where the SC fixed the value of the property as of the date it was taken and not at the date of the commencement of the expropriation proceedings.

While Sec. 4, Rule 67 provides that just compensation shall be determined at the time of the filing of the complaint for expropriation, such law cannot prevail over the LGC, which is a substantive law.

WON the city is bound by the compensation fixed by the commissioners.

YES. More than anything else, the parties, by a solemn document freely and voluntarily agreed upon by them, agreed to be bound by the report of the commission and approved by the trial court. The agreement is a contract between the parties. It has the force of law between them and should be complied with in good faith.

Furthermore, during the hearing, the City of Cebu did not interpose a serious objection. It is therefore too late for the city to question the valuation now without violating the principle of equitable estoppel.

Republic of the Philippines vs. Court of Appeals(2002)

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FACTS: The Republic instituted expropriation proceedings covering a parcel of 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. PIA 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. In 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. However, it would appear that the national government failed to pay to herein respondents the compensation pursuant to the foregoing decision, such that a little over five years later, respondents filed a manifestation with a motion seeking payment for the expropriated property. RTC issued a writ of execution in 1984.

In the meantime, 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 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.

This time, the 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.

RTC ruled in favor of respondents and issued the assailed order, vacating its decision 1979 and declaring it to be unenforceable on the ground of prescription. The CA denied the appeal (for failure to file during the reglementary period).

WON there is still public purpose despite the fact that the expropriated property’s present use differs from the purpose originally contemplated in the 1969 expropriation proceedings.

YES. 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. (GD-R: Shouldn’t it be “actual” necessity?)

WON the decision in Provincial Government of Sorsogon vs. Vda. de Villaroya applies in this case.

NO. The case cited 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, what applies in the case at bar is the decision 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.

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 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.

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C. Taxation and Fiscal Administration

NOTE: I don’t think that the nitty-gritty of local taxation will come out in the exam. Ang haba ng provisions!

I just included the following excerpts from the BAROPS Reviewer, just in case.

1. Local Taxation

1987 CONSTI, Art. X, Section 5. Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments.

LGC

SEC. 128. Scope. - The provisions herein shall govern the exercise by provinces, cities, municipalities, and barangays of their taxing and other revenue-raising powers.

SEC. 129. Power to Create Sources of Revenue. - Each local government unit shall exercise its power to create its own sources of revenue and to levy taxes, fees, and charges subject to the provisions herein, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local government units.

FUNDAMENTAL PRINCIPLES – The following fundamental principles shall govern the exercise of the taxing and other revenue-raising powers of local government units:

(a) Taxation shall be Uniform in each local government unit;

NOTE: the uniformity required is only within the territorial jurisdiction of an LGU. (IRR)

(b) Taxes, fees, charges and other impositions shall:(1) be equitable and based as far as practicable on the

taxpayer's ability to pay;(2) be levied and collected only for Public purposes;(3) not be unjust, excessive, oppressive, or confiscatory;(4) not be contrary to law, public policy, national economic

policy, or in the restraint of trade;

(c) The collection of local taxes, fees, charges and other impositions shall not be let to any private person;

(d) The revenue collected pursuant to the provisions of this Code shall inure solely to the benefit of, and be subject to the disposition by, the local government unit levying the tax, fee,

charge or other imposition unless otherwise specifically provided herein; and

(e) Each local government unit shall, as far as practicable, evolve a progressive system of taxation. (SEC. 130, LGC)

LOCAL TAXING AUTHORITY – it shall be exercised by the SANGGUNIAN of the LGU concerned through an appropriate ordinance. (SEC. 132, LGC)

NOTE: HOWEVER, the local chief executive of the LGUs (except the punong barangay) possesses veto powers, as laid out in Sec. 55 of the LGC.

COMMON LIMITATIONS ON THE TAXING POWERS OF LOCAL GOVERNMENT UNITS (SEC 133, LGC)Unless otherwise provided, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall NOT EXTEND to the levy of the following:

1. Income tax, except when levied on banks and other financial institutions;

2. Documentary stamp tax;3. Taxes on Estates, inheritance, gifts, legacies and other

acquisitions mortis causa, except as otherwise provided herein;

4. Customs duties, registration fees of vessel and wharfage on wharves, tonnage dues, and all other kinds of customs fees, charges and dues except wharfage on wharves constructed and maintained by the LGU concerned;

5. Taxes, fees, and charges and other impositions upon goods carried into or out of, or passing through, the territorial jurisdictions of local government units in the guise of charges for wharfage, tolls for bridges or otherwise, or other taxes, fees, or charges in any form whatsoever upon such goods or merchandise;

6. Taxes, fees or charges on Agricultural and aquatic products when sold by marginal farmers or fishermen;

7. Taxes on business enterprises certified to by the Board of Investments as Pioneer or non-pioneer for a period of six (6) and four (4) years, respectively from the date of registration;

8. Excise taxes on articles enumerated under the NIRC, as amended, and taxes, fees or charges on petroleum products;

9. Percentage or VAT on sales, barters or exchanges or similar transactions on goods or services except as otherwise provided herein;

10. Taxes on the Gross receipts of transportation contractors and persons engaged in the transportation of passengers or freight by hire and common carriers by air, land or water, except as provided in this Code;

11. Taxes on Premiums paid by way or reinsurance or retrocession;

12. Taxes, fees or charges for the registration of motor vehicles and for the issuance of all kinds of licenses or permits for the driving thereof, except tricycles;

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13. Taxes, fees, or other charges on Philippine products actually Exported, except as otherwise provided herein;

14. Taxes, fees, or charges, on countryside and barangay business enterprises and cooperatives duly registered under the "Cooperative Code of the Philippines"; and

15. Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, and local government units.

TAX PROV. MUN. CITY BRGY.Tax on Transfer of Real Property Ownership (Sec. 135) - tax on sale, donation or on any other mode of transferring ownership.

x x

Tax on Business of Printing and Publication (Sec. 136) - imposed on business of persons engaged in the printing and/or publication of books, cards, posters, leaflets, handbills, certificates, receipts, pamphlets, and others of similar nature.

x x

Franchise Tax (Sec. 137) - imposed on businesses enjoying a franchise, notwithstanding any exemption granted by any law or other special law.

x x

TAX PROV. MUN. CITY BRGY.Tax on Sand, Gravel and Other Quarry Resources (Sec. 138) x x

Professional Tax (Sec. 139) - on each person engaged in the exercise or practice of his profession requiring government examination (i.e. exam conducted by PRC) Professionals EXCLUSIVELY employed in the governmentshall be EXEMPT.

x x

Amusement Tax (Sec. 140) - collected from the proprietors, lessees, or operators of theaters, cinemas,

x x

concert halls, circuses, boxing stadia, and other places of amusementAnnual Fixed Tax For Every Delivery Truck or Van of Manufacturers or Producers, Wholesalers of, Dealers, or Retailers in, Certain Products (Sec. 141) - for every truck, van or any vehicle used by manufacturers, producers, wholesalers, dealers or retailers in the delivery or distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes, and other products as may be determined by the sanggunian panlalawigan, to sales outlets, or consumers, whether directly or indirectly, within the province

x x

TAX PROV. MUN. CITY BRGY.Tax on Business (Sec. 143) – imposed on business enterprises. (See. Sec. 143 after table)

x x

Fees and Charges on regulation/licensing ofbusiness & occupation (Sec. 147) – except as reserved to the province in Section 139 of this Code, commensurate with the cost of regulation, inspection and licensing before any person may engage in such business or occupation, or practice such profession or calling.

x x

Fees for Sealing and Licensing of Weights and Measures (Sec.

x x

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148)Fishery Rentals, Fees and Charges (Sec. 149)

x x

Tax on Gross Sales or Receipts of Small-Scale Stores / Retailers (Sec. 152(a)

x

Service Fees on the use of Barangay-owned properties (Sec. 152(b))

x

Barangay Clearance (Sec. 152(c)) x

Other Fees and Charges on commercial breeding of fighting cocks, cockfights, cockpits; places of recreation which charge admission fees; outside ads (Sec. 152(d) )

x

Service Fees and Charges (Sec. 153)

x x x x

TAX PROV. MUN. CITY BRGY.Public Utility Charges – imposed for the operation of public utilities owned, operated and maintained by them within their jurisdiction. (Sec. 154 )

x x x x

Toll Fees or Charges – imposed for the use of any public road, pier or wharf, waterway, bridge, ferry or telecommunication system funded and constructed by the local government unit concerned (Sec. 155)

x x x x

Community Tax (Sec. 156) – imposed on every inhabitant of the Philippines eighteen (18) years of age or over who has been regularly employed on a wage or salary basis for at least thirty (30) consecutive working days during any calendar year, or who

x x

is engaged in business or occupation, or who owns real property with an aggregate assessed value of One thousand pesos (Php 1,000.00) or more, or who is required by law to file an income tax returnReal Property Tax (Sec. 232 x (MM) x

BUSINESS TAX (Sec. 143) - taxes imposed on the following businesses: On manufacturers, assemblers, repackers, processors,

brewers, distillers, rectifiers, and compounders of liquors, distilled spirits, and wines or manufacturers of any article of commerce of whatever kind or nature;

On wholesalers, distributors, or dealers in any article of commerce of whatever kind or ;

On exporters, and on manufacturers, millers, producers, wholesalers, distributors, dealers or retailers of essential commodities:

(1) Rice and corn; (2) Wheat or cassava flour, meat, dairy products,

locally manufactured, processed or preserved food, sugar, salt and other agricultural, marine, and fresh water products, whether in their original state or not;

(3) Cooking oil and cooking gas; (4) Laundry soap, detergents, and medicine; (5) Agricultural implements, equipment and post-

harvest facilities, fertilizers, pesticides, insecticides, herbicides and other farm inputs;

(6) Poultry feeds and other animal feeds; (7) School supplies; and (8) Cement.

On retailers; On contractors and other independent contractors; On banks and other financial institutions, from interest,

commissions and discounts from lending activities, income from financial leasing, dividends, rentals on property and profit from exchange or sale of property, insurance premium;

On peddlers engaged in the sale of any merchandise or article of commerce; and

On any business, not otherwise specified in the preceding paragraphs, which the sanggunian concerned may deem proper to tax.

COLLECTION OF TAXES

Tax Period -- unless otherwise provided in this Code, the tax period of all local taxes, fees and charges shall be the calendar year. (Sec. 165, LGC)

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Manner of Payment -- Such taxes, fees and charges may be paid in quarterly installments. (Sec. 165, LGC)

Accrual of Tax -- All local taxes, fees, and charges shall accrue on the first (1st) day of January of each year. However, new taxes, fees or charges, or changes in the rates thereof, shall accrue on the first (1st) day of the quarter next following the effectivity of the ordinance imposing such new levies or rates. (Sec. 166, LGC)

Time of Payment -- All local taxes, fees, and charges shall be paid within the first twenty days of January or of each subsequent quarter, as the case may be.(Jan 20, Apr 20, July 20, and Oct 20). The sanggunian concerned may, for a justifiable reason or cause, extend the time for payment of such taxes, fees, or charges without surcharges or penalties, but only for a period not exceeding six (6) months. (Sec. 167, LGC)

Surcharges and Penalties• 25% surcharge on taxes, fees or charges NOT paid on time, AND interest at the rate NOT exceeding 2% per month of the unpaid taxes, fees or charges INCLUDING surcharges, until the amount is fully paid.

NOTE: in no case shall the total interest exceed 36 months. (Sec. 168, LGC)

Collecting Authority – All local taxes, fees and charges shall be collected by the provincial, city, municipal, or barangay treasurer, or their duly authorized deputies. (Sec. 170, LGC)

Examination of Books – The local treasurer or his deputy duly authorised in writing, may examine the books, accounts and other pertinent records of any person, partnership, corporation, or association in order to ascertain, assess and collect the correct amount of tax. Such examination shall be made during the regular business hours, ONLY ONCE for every tax period, and shall be certified to by the examining official. (Sec. 171, LGC)

CIVIL REMEDIES (BOTH LGU AND TAXPAYER)

Personal Property Exempt from Distraint or Levy – the following property shall be EXEMPT from distraint or levy for delinquency in the payment of any LOCAL tax, fee or charge:

• tools and implements necessarily used by the delinquent taxpayer in his trade or employment

• one horse, cow, carabao, or other beast of burden, such as the delinquent taxpayer may select and necessarily used by him in his ordinary occupation

• his necessary clothing, and that of all his family• household furniture and utensils necessary for

housekeeping and used for that purpose by the delinquent taxpayer, such as he may select, of a value not exceeding P10,000

• provisions, including crops, actually provided for individual or family use sufficient for 4 months

• the professional libraries of doctors, engineers, (ehem) lawyers and judges

• one fishing boat and net, not exceeding the total value of P10,000 by the lawful use of which a fisherman earns his livelihood

• any material or article forming part of a house or improvement of any real property (Sec. 185, LGC)

PERIODS OF ASSESSMENT AND COLLECTION OF LOCAL TAXES

GEN RULE: Assessment shall be made within 5 years from the date they become due, and collection shall be made within 5 years from the date of assessment by administrative or judicial action.

EXCEPTION: In case of FRAUD, or INTENT TO EVADE PAYMENT OF TAX, the same may be assessed within 10 years from discovery of fraud or intent to evade payment. (Sec. 194, LGC)

When Running of Prescription of Above Periods is Suspended – The running of the periods of prescription above shall be suspended for the time during which:• the treasurer is legally prevented from making the

assessment or collection• the taxpayer requests for a reinvestigation and

executes a waiver in writing before expiration of the period within which to assess or collect

• the taxpayer is out of the country or otherwise cannot be located (Sec. 194 (d), LGC)

CLAIM FOR REFUND OR TAX CREDIT• No case or proceeding shall be maintained in any court for therecovery of any tax, fee, or charge erroneously or illegally collected until a WRITTEN CLAIM for refund or credit has been filed with the local treasurer.• No case or proceeding shall be entertained in any court AFTER the expiration of 2 years from the date of payment of such tax, or from the date the taxpayer is entitled to a refund or credit. (Sec. 196, LGC)

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REMEDY FOR ILLEGAL OR UNCONSTITUTIONAL TAX ORDINANCE

STEP 1: Any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within 30 days from the effectivity thereof to the Sec of Justice.

STEP 2: The Sec of Justice shall decide within 60 days from the date of receipt of the appeal. However, this appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax levied therein.

STEP 3: Within 30 days after receipt of the decision or the lapse of the 60-day period without the Sec of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction. (Sec 187, LGC)

MISCELLANEOUS PROVISIONS

Power to Levy Taxes, Fees or ChargesGEN RULE: LGU may exercise the power to levy taxes, fees or charges on ANY BASE OR SUBJECT not otherwise specifically enumerated in LGC or NIRC.

EXCEPTION: It must NOT be unjust, excessive, oppressive, confiscatory or contrary to declared national policy.(Sec. 186, LGC)

Requirements for a Valid Tax Ordinance 1. the ordinance shall only be enacted if there is a prior public hearing conducted for the purpose (Sec. 187)

2. within 10 days after the approval of the ordinance, it must be published in full for 3 consecutive days in a newspaper of local circulation, or if no such newspaper, it must be posted in at least 2 conspicuous and publicly accessible places. (Sec. 188)

Authority to Adjust Rates – LGU shall have the authority to adjust the tax rates prescribed in LGC NOT oftener than once every 5 years, but in no case shall such adjustment exceed 10% of the rates fixed. (Sec. 191, LGC)

Authority to Grant Exemption – LGU may, through ordinances, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary. (Sec. 192, LGC)

Hagonoy Market Vendor Association vs. Municipality of Hagonoy

(2002)

FACTS: In 1996, the Sangguniang Bayan (SB) of Hagonoy, Bulacan, enacted an ordinance, which increased the stall rentals of the market vendors in Hagonoy. It also provided that it shall take effect upon approval. The said ordinance was also duly posted.

In the last week of November 1997, the Market Association’s members were given copies of the approved ordinance and were informed that it will be enforced in January 1998. The association filed an appeal with the Sec. of Justice, assailing the constitutionality of the ordinance

The DOJ Sec. dismissed the appeal on the ground that it was filed out of time, i.e. beyond 30 days from the effectivity of the ordinance, as prescribed under the LGC. The date of effectivity of the subject ordinance retroacted to the date of its approval in October 1996, after the required publication or posting has been complied with, pursuant to Section 3 of said ordinance.

The Market Association contends that its period to appeal should be counted not from the time the ordinance took effect in 1996 but from the time its members were personally given copies of the approved ordinance in November 1997. It insists that it was unaware of the approval and effectivity of the subject ordinance in 1996 on two (2) grounds: first, no public hearing was conducted prior to the passage of the ordinance and, second, the approved ordinance was not posted.

WON the action has already prescribed.

HELD: YES. The appeal of the petitioner with the Secretary of Justice is already time-barred. Section 187 (Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings) of the LGC requires that an appeal of a tax ordinance or revenue measure should be made to the Secretary of Justice within 30 days from effectivity of the ordinance and even during its pendency, the effectivity of the assailed ordinance shall not be suspended.

In the case at bar, Municipal Ordinance No. 28 took effect in Oct. 1996. Petitioner filed its appeal only in Dec. 1987, more than a year after the effectivity of the ordiance in 1996. Clearly, the Secretary of Justice correctly dismissed it for being time-barred.

The periods stated in Section 187 of the Local Government Code are mandatory. Ordinance No. 28 is a revenue measure adopted by the municipality of Hagonoy to fix and collect public market stall rentals. Being its lifeblood, collection of revenues by the government is of paramount importance. The funds for the operation of its agencies and provision of basic services to its inhabitants are largely derived from its revenues and collections.

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Also, petitioner’s bold assertion that there was no public hearing conducted prior to the passage of Kautusan Blg. 28 is belied by its own evidence. In petitioner’s two (2) communications with the Secretary of Justice, it enumerated the various objections raised by its members before the passage of the ordinance in several meetings called by the Sanggunian for the purpose. These show beyond doubt that petitioner was aware of the proposed increase and in fact participated in the public hearings therefor. The respondent municipality likewise submitted the Minutes and Report of the public hearings conducted by the Sangguniang Bayan’s Committee on Appropriations and Market.

The record is also bereft of any evidence to prove petitioner’s negative allegation that the subject ordinance was not posted as required by law. In contrast, the respondent Sangguniang Bayan of the Municipality of Hagonoy, Bulacan, presented evidence which clearly shows that the procedure for the enactment of the assailed ordinance was complied with. After its approval, copies of the Ordinance were given to the Municipal Treasurer on the same day. The Ordinance was posted during the period from November 4 - 25, 1996 in three (3) public places, validly made in lieu of publication as there was no newspaper of local circulation in the municipality of Hagonoy. This fact was known to and admitted by petitioner.

Estanislao vs. Costales(1991)

FACTS: An Ordinance, imposing a P0.01 tax per liter of softdrinks produced, manufactured, and/or bottled within the territorial jurisdiction of the City of Zamboanga was passed by the Sangguniang Panglungsod of Zamboanga City. The Sanggunian sent a copy of the Ordinance to the then Minister of Finance by registered mail.

The Minister of Finance upon his review pursuant to P.D. No. 231 (Local Tax Code) sent the letter addressed to the Sanggunian, suspending the effectivity of Ordinance No. 44 on the ground that it contravenes Section 19(a) of the Local Tax Code.

The RTC rendered a decision finding that the tax levied under said Ordinance is not among those that the Sanggunian may impose under the Local Tax Code, but nonetheless, it upheld its validity on the ground that the Minister of Finance did not take appropriate action on the matter within the prescribed period of 120 days after receipt of a copy thereof.

WON the tax subject of the ordinance was valid.

HELD: NO. It is clear that a city, like public respondent Zamboanga City may impose, in lieu of the graduated fixed tax prescribed under Section 19 of the Local Tax Code, a percentage tax on the gross sales for the preceding calendar year of non-essential commodities at the rate of not exceeding two per cent

and on the gross sales of essential commodities at the rate of not exceeding one per cent.

Ordinance No. 44 of the respondent Zamboanga City imposes P0.01 per liter of softdrinks produced, manufactured, and/or bottled within the territorial jurisdiction of the City of Zamboanga. No doubt this Ordinance is ultra vires as it is not within the authority of the City to impose said tax. The authority of the City is limited to the imposition of a percentage tax on the gross sales or receipts of said product which, being non-essential, shall be at the rate of not exceeding 2% of the gross sales or receipts of the softdrinks for the preceding calendar year. The tax being imposed under said Ordinance is based on the output or production and not on the gross sales or receipts as authorized under the Local Tax Code. (THE Husband: Not the case anymore in the LGC)

Also, the ruling in Pepsi-Cola Bottling Company vs. Municipality of Tanauan is not applicable anymore since the law in that case has already been superseded by the Local Tax Code.

Moreover, the conclusion that since the Minister of Finance failed to act or otherwise suspend the effectivity of the tax ordinance within 120 days from receipt of a copy thereof, said Ordinance is valid and remains in force is mistaken. There is no authority under Section 44 of the Local Tax Code for this conclusion. All that is provided therein is that if the Secretary of Finance "takes no action as authorized in this section, the tax ordinance shall remain in force."

Even if the Secretary of Finance failed to review or act on the Ordinance within the prescribed period of 120 days it does not follow as a legal consequence thereof that an otherwise invalid ordinance is thereby validated.

Much less can it be interpreted to mean that the Secretary of Finance can no longer act by suspending and/or revoking an invalid ordinance even after the lapse of the 120-day period. All that the law says is that after said period the tax ordinance shall remain in force. The prescribed period for review is only directory and the Secretary of Finance may still review the ordinance and act accordingly even after the lapse of the said period provided he acts within a reasonable time.

Philippine Petroleum Corporation vs. Municipality of Pililia(1991)

FACTS: PPC manufactured lubricated oil basestock which is a petroleum product with its refinery plant in Malaya, Pililia, Rizal. The said Municipality enacted the Tax Code of Pililia, imposing 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

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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, while Section 139 of the disputed ordinance imposed surcharges and interests on unpaid taxes, fees or charges.

Enforcing the provisions of the above-mentioned ordinance, the Municipality 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 argues that, pursuant to the the Provincial Circular issued by the DOF, it is contrary to national economic policy to impose local taxes on the manufacture of petroleum products as they are already subject to specific tax under the NIRC and that it also covers all ordinances.WON PPC is liable to pay the said impositions.

HELD: PPC is liable to pay those from 1976 to 1986. There is no question that Pililla's Municipal Tax Ordinance No. 1 imposing the assailed taxes, fees and charges is valid especially Section 9 (A) which according to the trial court "was lifted in toto and/or is a literal reproduction of Section 19 (a) [Now Sec. 133(h)] of the Local Tax Code as amended by P.D. No. 426." It conforms with the mandate of said law.

But P.D. No. 426 amending the Local Tax Code is deemed to have repealed Provincial Circular Nos. 26-73 and 26 A-73 issued by the Secretary of Finance when Sections 19 and 19 (a), were carried over into P.D. No. 426 and no exemptions were given to manufacturers, wholesalers, retailers, or dealers in petroleum products.

Well-settled is the rule that administrative regulations must be in harmony with the provisions of the law. In case of discrepancy between the basic law and an implementing rule or regulation, the former prevails.

Furthermore, while Section 2 of P.D. 436 prohibits the imposition of local taxes on petroleum products, said decree did not amend Sections 19 and 19 (a) of P.D. 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.

However, since the Local Tax Code does not provide the prescriptive period for collection of local taxes, Article 1143 of the Civil Code applies. Said law provides that an action upon an obligation created by law prescribes within ten (10) years from the time the right of action accrues. The Municipality of Pililla can therefore enforce the collection of the tax on business of petitioner PPC due from 1976 to 1986, and NOT the tax that had accrued prior to 1976.

Floro Cement Corporation v. Gorospe(1991)

FACTS: The Municipality of Lugait (Misamis Oriental) filed a complaint for collection of taxes against Floro Cement Corporation. The taxes are “manufacturers” and “exporter’s” taxes for 1 Jan 1974- 30 Sept 1975 amounting to P161,875.00 plus 25% surcharge. They based it on Municipal Ordinance No. 5, passed pursuant to PD 231; and Ordinance No. 10.

Floro Cement opposed the imposition of the tax, arguing that it is not liable since the plaintiff’s powers to levy fees on “Mines, Mining Corporations and Mineral Products” was limited by Sec. 52 of PD 463. Secretary of Agriculture and Natural Resources granted us a certificate of tax exemption for a period of 5 years.

WON Ordinance Nos. 5 and 10 apply to petitioner Floro Corporation notwithstanding the limitation provided for in Sec. 5(m) of PD 231 and Sec. 52 of PD 463.

HELD: YES. The Municipality’s power to levy taxes on manufacturers and importers is provided in Art. 2, Sec. 19 of PD 231: Municipality may impose a tax on business except those for which fixed taxes are provided for in this Code.

Cement is not a mineral product but rather a manufactured product. It is the result of a definite process—crushing of minerals, grinding, mixing, etc. Its minerals had already undergone a chemical change before cement reaches its saleable form.

The power of taxation is a high prerogative of sovereignty. Its relinquishment is never presumed. 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 implication or inference. The exemptions mentioned in Sec. 52 of PD 463 only refers to machineries, equipment, tools, for production, etc., as provided in Sec. 53 of the same decree. The manufacture and export of cement do not fall under it since it is not a mineral product.

Tuzon and Mapagu vs. CA65


(1992)

FACTS: The Sangguniang Bayan of Camalaniugan, Cagayan unanimously adopted Resolution No.9 where 1% donation from thresher operators who will apply for a permit to thresh within its jurisdiction will be solicited to help finance construction of Sports and Nutrition Center.The municipal treasurer Mapagu prepared a document for signature of all thresher applying for a mayor’s permit to implement the resolution:

that thresher-owner-operator voluntarily agree to donate 1% of all palay threshed within jurisdiction of municipality… and agree to report weekly the total number of palay threshed…

Jurado sent his agent to municipal treasurer’s office to pay license fee of Php 285 for thresher operators but Mapagu refused to accept payment and required him to secure a mayor’s permit first. Mayor Tuzon said that he should first comply with Resolution9 and sign the agreement before permit could be issued.

Jurado ignored requirement and sent the Php 285 license fee by postal money order to the office of municipal treasurer. Mapago returned amount because of failure to comply with Resolution No.9.

Hence, a special civil action for mandamus with damages to compel issuance of mayor’s permit and license was filed with the CFI and also a petition for a declaratory judgment against the resolution and implementing agreement for being illegal either as a donation or as a tax measure.

WON the “donation” was a valid exercise of the LGU’s taxing power.

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. While it would appear from the wording of the resolution that the municipal government merely intends to "solicit" the 1% contribution from the threshers, the implementing agreement 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, on the other hand, it is to be considered a tax ordinance, then it must be shown in view of the challenge raised by the private respondents to have been enacted in accordance with the requirements of the Local Tax Code. These would include the holding of a public hearing on the measure and its subsequent approval by the Secretary of Finance, in addition to the usual requisites for publication of ordinances in general.

WON the Mayor and Treasurer are liable for damages.

NO. The Civil Code provision (Art. 27) has been remarked:- To have a purpose to end the bribery system, where public

official, for some flimsy excuse, delays or refuses the performance of his duty until he gets some kind of pabagsak” (Paras on Civil Code)

- To presuppose that the refusal or omission of a public official to perform his official duty is attributable to malice or inexcusable negligence (Phil. Match Co. vs. City of Cebu)

- In any event, the erring public functionary is justly punishable under it for whatever loss or damage complainant has sustained.

In the CAB, it has not been alleged that Mayor’s refusal to act on his application was an attempt to compel him to resort to bribery to obtain approval of his application.

It cannot be said also that mayor and treasurer were motivated by personal spite or were grossly negligent in refusing to issue permit and license to Jurado.

No evidence has been offered to show that they singled out Jurado for persecution.

Neither does it appear that they stood to gain personally from refusing to issue to Jurado the permit and license he needed. They were not his business competitors nor has it been established that they intended to favor his competitors.

On the contrary, record discloses that resolution was uniformly applied to all threshers in the municipality without discrimination or preference.

Petitioners acted within scope of their authority and in consonance with their honest interpretation of the resolution. In the absence of a judicial decision declaring it invalid, the legality of challenged measures 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 Sangguniang Bayan or annulled by the courts.

Drilon vs. Lim(1994)

FACTS: Pursuant to Sec 187 of the LGC, the Secretary of Justice had, on appeal to him of four oil companies and a taxpayer, declared Ordinance No. 7794, otherwise known as the Manila Revenue Code, null and void for non-compliance with the prescribed procedure in the enactment of tax ordinances and for containing certain provisions contrary to law and public policy.

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In Manila’s petition for certiorari, the Manila RTC sustained the ordinance. It also declared Section 187 of the LGC as unconstitutional since it vests in the Justice Secretary the power of control over LGUs in violation of the policy of local autonomy mandated in the Constitution.

The Secretary argues that the annulled Section 187 is constitutional and that the procedural requirements for the enactment of tax ordinances as specified in the Local Government Code has indeed not been observed. WON Sec. 187 of the LGC is constitutional.

HELD: YES. Every court, including the SC, is charged with the duty of a purposeful hesitation before declaring a law unconstitutional, on the theory that the measure was first carefully studied by the executive and the legislative departments and determined by them to be in accordance with the fundamental law before it was finally approved.

To doubt is to sustain. The presumption of constitutionality can be overcome only by the clearest showing that there was indeed an infraction of the Constitution, and only when such a conclusion is reached by the requipped majority may the Court pronounce, in the discharge of the duty it cannot escape, that the challenged act must be struck down.

In CAB, the RTC was rather hasty in invalidating the provision. Section 187 authorizes the Secretary of Justice to review only the constitutionality or legality of the tax ordinance and, if warranted, to revoke it on either or both of these grounds. When he alters or modifies or sets aside a tax ordinance, he is not also permitted to substitute his own judgment for the judgment of the local government that enacted the measure.

Secretary Drilon did set aside the Manila Revenue Code, but he did not replace it with his own version of what the Code should be. He did not pronounce the ordinance unwise or unreasonable as a basis for its annulment. He did not say that in his judgment it was a bad law. What he found only was that it was illegal. All he did in reviewing the said measure was determine if the petitioners were performing their functions is accordance with law, that is, with the prescribed procedure for the enactment of tax ordinances and the grant of powers to the city government under the Local Government Code. As we see it, that was an act not of control but of mere supervision.

An officer in control lays down the rules in the doing of an act. It they are not followed, he may, in his discretion, order the act undone or re-done by his subordinate or he may even decide to do it himself. Supervision does not cover such authority. The supervisor or superintendent merely sees to it that the rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or replace them. If the rules are not observed, he may order the work done or re-done but only to

conform to the prescribed rules. He may not prescribe his own manner for the doing of the act. He has no judgment on this matter except to see to it that the rules are followed. In the opinion of the Court, Secretary Drilon did precisely this, and no more nor less than this, and so performed an act not of control but of mere supervision.

Mactan Cebu International Airport Authority vs. Marcos (1996)

FACTS: The MCIAA is mandated to control, manage and supervise the Mactan International Airport and other airports in Cebu. City Treasurer demanded payment for realty taxes on lands belonging to MCIAA. Petitioner claimed in its favor the provision in its charter which exempts it from payment of realty taxes. It also claimed that it is an instrumentality of the government performing governmental functions, citing Sec. 133 of LGC.

WON the MCIAA is exempt from payment of realty taxes.

HELD: NO. Reading together Secs. 133, 232 and 234 of the LGC, the SC concluded that:

As a general rule, the taxing powers of LGUs cannot extend to the levy of “taxes, fees and charges of any kind on the National Government, its agencies and instrumentalities, and LGUs.” (Sec. 133)

However, provinces, cities and municipalities in the Metropolitan Manila Area may impose the real property tax except on “real property owned by the Republic of the Philippines or any of its political subdivisions (Sec. 232), except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person.” (Sec. 234)As to tax exemptions or incentives granted to or presently enjoyed by natural or judicial persons, including GOCC’s:

The general rule is that they are withdrawn upon the effectivity of the LGC, except those granted to local water districts, cooperatives duly registered under RA 6938, non-stock and non-profit hospitals and educational institutions, and unless otherwise provided in the LGC.

“Unless otherwise provided in the LGC” could refer to Sec. 234, which enumerates the properties exempt from real property tax.

But the last paragraph of Sec. 234 further qualifies the retention of the exemption insofar as real property taxes are concerned by limiting the retention only to those enumerated herein; all others not included in the enumeration lost the privilege upon the effectivity of the LGC.

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But even as to real property owned by the Republic or any of its political subdivisions covered by item (a) of the first paragraph of Section 234, the exemption is withdrawn if the beneficial use of such property has been granted to a taxable person for consideration or otherwise.

MCIAA is a GOCC. It necessarily follows that its exemption from real property tax granted it in its Charter has been withdrawn.

As to MCIAA’s contention that it is an instrumentality of the gov’t, it fails to consider the fact that the legislature used the phrase "National Government, its agencies and instrumentalities" in Section 133(o), but only the phrase "Republic of the Philippines or any of its political subdivisions" in Section 234(a). “Republic of the Philippines” is a broader term.

It is clear that Congress did not wish to expand the scope of the exemption in Section 234(a) to include real property owned by other instrumentalities or agencies of the government including GOCCs.

Also, the parcels of land in this case do not belong to the Republic whose beneficial use has been granted to MCIAA. This "transfer" is actually an absolute conveyance of the ownership thereof because the petitioner's authorized capital stock consists of "the value of such real estate owned and/or administered by the airports." Hence, the petitioner is now the owner of the land and the exception in Sec. 234(c) of the LGC is inapplicable.

(See the following notes on this case)

CONFLICTING CASES: Mactan Airport Authority vs. Pres. Marcos (September 11, 1996) and Manila Int’l Airport Authority vs. CA (July 20, 2006)

Both cases involves the following provisions:Sec 133(o), LGC: Unless otherwise provided herein, the LGUs are not allowed to levy… (o) taxes, fees or charges of any kind on the national gov’t, its agencies, instrumentalities and LGUs.

Sec 234(a), LGC: Properties exempt from PPT (a) real properties owned by the Republic or any of its political subdivisions…

MACTAN Case: The SC held that since Mactan Airport Authority is a GOCC and GOCCs are not among those enumerated as exempt, it is not exempted from RPT. Legislature in amending the law has specifically deleted GOCCS from the enumeration in Sec 234(a).

MIAA Case: SC held that MIAA is not a GOCC since it is neither a stock corporation nor a non-stock corporation as defined in the Administrative Code. Although not covered by the enumeration in Sec 234, MIAA is a public utility which falls under the term “instrumentality” outside the scope of LGS’s local taxing powers under Sec 133(o).

NOTE: The MIAA Case may be argued to have superseded the previous case, being a more recent ruling decided by SC en banc.

2. Real Property Taxation

NOTE: I don’t think that the nitty-gritty of real property taxation will come out in the exam. Ang haba ng provisions! I just included the following excerpts from the BAROPS Reviewer, just in case.

BASIC CONCEPTS

Definition: Real property tax has been defined as “a direct tax on the ownership of lands and buildings or other improvements thereon not specially exempted, and is payable regardless of whether the property is used or not, although the value may vary in accordance with such factor.”

NOTE: Real property tax is a fixed proportion of the assessed value of the property being taxed and requires, therefore, the intervention of assessors.

Characteristics of real property tax→ It is a direct tax on the ownership or use of real property.→ It is an ad valorem tax. Value is the tax base.→ It is proportionate because the tax is calculated on the basis of a certain percentage of the value assessed.→ It creates a single, indivisible obligation.→ It attaches on the property (i.e., a lien) and is enforceable against it.

Nature and scope of power to impose realty taxThe taxing power of local governments in real property taxation is a delegated power. Fundamental principles governing realproperty taxation 1. Real property shall be appraised at its current and fair

market value.2. Real property shall be classified for assessment

purposes on the basis of its actual use.3. Real property shall be assessed on the basis of a

Uniform classification within each local government unit.

4. The appraisal, assessment, levy and collection of real property tax shall not be let to any private person.

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5. The appraisal and assessment of real property shall be Equitable. [Section 197, Local Government Code]

Real properties subject to taxGenerally, Real Property Tax is imposed on lands, buildings, machineries and other improvements. The Local Government Code contains no definition of “real property”; however, the following terms are defined:

§ Improvement: It is a valuable addition made to a property or an amelioration in its condition amounting to more than a repair or replacement of parts involving capital expenditures and labor which is intended to enhance its value, beauty, or utility or to adopt it for new or further purposes. [Section 199(m), Local Government Code]

§ Machinery: Machinery embraces machines, equipment, mechanical contrivances, instruments, appliances or apparatus, which may or may not be attached, permanently or temporarily, to the real property. It includes the physical facilities for production, the installations and appurtenant service facilities, those which are mobile, self-powered or self-propelled, and those not permanently attached to the real property which are actually, directly, and exclusively used to meet the needs of the particular industry, business or activity and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial, industrial or agricultural purposes. [Section 199(o), Local Government Code]

§ NOTE: this definition of machinery is too all-encompassing and broad in that everything that is used even indirectly for the needs of the industry can be classifies as machinery which is REAL property, which in turn means that it is subject to RPT; example would be a SCREWDRIVER being used in an office – since this is used by the office and indirectly contributes the to smooth functioning of the general business then this can be treated as real property

§ This was solved by the LGC IRR on sec 290 (o) that now limits and qualifies this: this is known as the GENERAL PURPOSE RULE. This rule states that if it used in line or for the general purpose of the business but only indirectly, then it is NOT to be treated as real property. This means that a typewriter being used in the main office of a firm that manufactures cars is NOT real property as the typewriter is NOT used to actually make the car which is the main purpose of the company.

Generally the SC has held that Art 415 CC (which enumerates the kinds of real property) is an exclusive list as to what constitutes real property. BUT FOR TAX PURPOSES ONLY, it is common that certain properties be classified as real property even if according to the general

principles of the CC, they would only be classified as personal property. LESSON: the NIRC and the LGC code prevail in classifying property for tax purposes.

Properties EXEMPT from real property taxes

1. Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted for consideration or otherwise to a taxable person.Q: Are GOCCs covered by the exemption?No. The tax exemption of “property owned by the Republic of the Philippines” refers to properties owned by the government and by its agencies which do not have separate and distinct personalities, as distinguished from GOCCs which have separate and distinct personalities. [National Development Company v. Cebu City]

Q: What is the scope of the exemption?The exemption from tax of property owned by the government obtains even as to properties owned in a private, proprietary or patrimonial character. The law makes no distinction between property held in governmental capacity and those possessed in a proprietary capacity. [Board of Assessment Appeals of Laguna v. CTA]

2. Charitable institutions, churches, parsonages, or convents appurtenant thereto, mosques, non-profit or religious cemeteries, and all lands, buildings, and improvements actually, directly and exclusively used for religious, charitable, or educational purposes.

3. All machineries and equipment that are actually, directly and exclusively used by local water utilities and government-owned or controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power.

4. All real property owned by duly registered Cooperatives as provided for under Republic Act No. 6938.

5. Machinery and equipment used for Pollution control and environmental protection. [Section 234, Local Government Code]

NOTE: A taxpayer claiming exemption must submit sufficient documentary evidence to the local assessor within thirty (30) days from the date of the declaration of real property; otherwise, it shall be listed as taxable in the Assessment Roll. (Sec. 206, LGC)

Secretary of Finance vs. Ilarde(2005)

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FACTS: Cabaluna, Jr., the Regional Director of Regional Office No. VI of the Department of Finance in Iloilo City failed to pay the land taxes on his parcels of land for the years 1986 to 1992. Soon after Cabaluna, Jr. retired from his post, he filed a formal letter of protest with the City Treasurer of Iloilo City wherein he contends that the City Treasurer’s computation of penalties was erroneous since the rate of penalty applied exceeded twenty-four percent (24%) in contravention of Section 66 of P.D. No. 464, otherwise known as the Real Property Tax Code, as amended.

The City Treasurer turned down Cabaluna Jr.’s protest citing Sec. 4(c) of Joint Assessment Regulations No. 1-85 and Local Treasury Regulations No. 2-85 of the then Ministry (now Department) of Finance, which provides that the penalty of two percent (2%) per month of delinquency, or twenty-four percent (24%) per annum, as the case may be, shall continue to be imposed on the unpaid tax from the time the delinquency was incurred up to the time that it is paid for in full.

Cabaluna, Jr. now questions the validity of the said issuances.

WON the said issuances are valid.

HELD: NO. The subject Regulations must be struck down for being repugnant to Section 66 of P.D. No. 464 or the Real Property Tax Code, which is the law prevailing at the time material to this case.

Under Section 66 of P.D. No. 464, the maximum penalty for delinquency in the payment of real property tax shall in no case exceed twenty-four per centum of the delinquent tax. Upon the other hand, Section 4(c) of the challenged Joint Assessment Regulations No. 1-85 and Local Treasury Regulations No. 2-85 issued by respondent Secretary (formerly Minister) of Finance provides that “the penalty of two percent (2%) per month of delinquency or twenty-four percent (24%) per annum as the case may be, shall continue to be imposed on the unpaid tax from the time the delinquency was incurred up to the time that the delinquency is paid for in full.” As adeptly observed by the trial court, the penalty imposed under the assailed Regulations has no limit inasmuch as the 24% penalty per annum shall be continuously imposed on the unpaid tax until it is paid for in full unlike that imposed under Section 66 of the Real Property Tax Code where the total penalty is limited only to twenty-four percent of the delinquent tax.

Assuming argumenti that E.O. No. 73 has authorized the petitioner to issue the objected 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. Yes, President Corazon Aquino, at that time, was exercising both executive and legislative powers. But, the power delegated to the executive branch, in this case the Ministry of

Finance, to lay down implementing rules must, nevertheless, be germane to the general law it seeks to apply. The implementing rules cannot add to or detract from the provisions of the law it is designed to implement Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law they are intended to carry into effect, which in this case is merely to antedate the effectivity of the 1984 Real Property Tax values inasmuch as this is the raison d’être of E.O. No. 73.

In a last-ditch effort to salvage the impugned Regulations, petitioner pushes on that Joint Local Assessment/Treasury Regulations No. 2-86, or the so-called implementing rules of E.O. No. 73, is not contrary to Section 66 of P.D. No. 464 inasmuch as the latter applies merely to simple delinquency in the payment of real property taxes while the former covers cases wherein there was failure to promptly pay the real property tax due, including the increase in tax due and demandable for the tax year as a result of the application of the 1984 New or Revised Assessment of the value of the subject property. Such rationalization lacks legal traction. P.D. No. 464 makes no distinction as to whether it is simple delinquency or other forms thereof. The Real Property Tax Code covers the wide ilk of failure to promptly pay the real property taxes due and demandable for a particular period. Ubi lex non distinguit nec nos distinguere debemus. When the law does not distinguish, we must not distinguish. Further, P.D. No. 464 covers all real property titled to individuals who become delinquents in paying real estate tax. P.D. No. 464 is a law of general application.

Benguet Corporation vs. Central Board of Assessment Appeals(1992)

FACTS: The Benguet Provincial Assessor assessed real property tax on the bunkhouses of petitioner Benguet Corporation occupied for residential purposes by its rank and file employees under Tax Declaration Nos. 8471 (1985) and 10454 (1986). The tax exemptions of bunkhouses under Sec. 3 of PD 745 was withdrawn by PD 1955.

The Benguet Corp. appealed the decision to the LBAA of Benguet. The LBAA, however, affirmed the taxability of the bunkhouses. The CBAA held the exemption was withdrawn so petitioner should have applied for restoration of the exemption with the Fiscal Incentives Review Board.

Benguet Corp., now argues that LGUs don’t have any authority to levy realty taxes on mines pursuant to Sec. 52 of PD 463 and Sec. 5 (m) of the Local Tax Code. The Solicitor General counters that Benguet Corp. is estopped from raising the question of lack of authority as it was never raised before.

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WON provincial assessors may validly assess real property tax on the properties of petitioner considering the proscription in the Local Tax Code and the Mineral Resources Development Decree of 1974 against imposition of taxes on mines by local governments

YES. The provisions of Sec. 52 of the Mineral Resources Dev’t Decree of 1974 (PD 463) and Sec. 5 (m) of the Local Tax Code are mere limitations on the taxing power of LGUs; they are not pertinent to the issue before the SC. They cannot affect the imposition of the real property tax by the national government.

Realty taxes are national taxes collected by LGUs. While LGU’s are charged with fixing the rate of real property taxes, it does not necessarily follow from that authority the determination of whether or not to impose the tax. In fact, LGU’s have no alternative but to collect taxes as mandated in Sec. 38 of the Real Property Tax Code. It is thus clear that it is the national government, expressing itself through the legislative branch, that levies the real property tax.

It is the national government that levies real property tax. Consequently, when LGU’s 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 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 LGU’s.

Also, the real tax exemption granted under PD 745 was withdrawn by PD 1955. If the SC were to sanction the interpretation of Benguet, then necessarily all real properties exempt by any law would be covered, and there would be no need for congress to specify “Real Property Tax Code, as amended” instead of stating clearly realty tax exemption laws. The intention is to limit the application of the “exception clause” only to those given by the Real Property Tax Code.

National Development Corp. vs. Cebu City(1992)

FACTS: The NDC is authorized to engage in commercial, industrial, mining, agricultural and other enterprises needed for economic development. In 1939, the President issued Proclamation No. 430 which reserved Block No. 4, Reclamation Area No. 4, of Cebu City, consisting of 4,599 square meters, for warehousing purposes under the administration of NWC. NWC was succeeded by NDC. In 1940, a warehouse with a floor area of 1,940 square meters was constructed on it.

In 1948, Cebu City assessed and collected from NDC real estate taxes on the land and the warehouse. NDC paid under protest.

Cebu City argues that the land and warehouse are taxable since no law grants NDC exemption from real estate taxes. NDC, as recipient of the land reserved by the President, is liable for payment of ordinary taxes. They have ceased to be exempt under the Assessment Law when the government disposed of them in favor of NDC. The SC has also used the standard of “use” of property rather than “ownership” as basis for real estate taxability.

The NDC argues that the Assessment Law exempts properties owned by the Republic from real estate tax, relying on the case of Board of Assessment Appeals v. CTA & NWSA, where it was held that “properties of NWSA, a GOCC, are exempt from real estate tax since the law applies to all government properties whether held in a proprietary or governmental capacity.”

WON the NDC is exempt from paying the imposed taxes.

NDC is exempt from the payment of real estate taxes on the land.

To come within the ambit of the exemption, it is important to establish that the property is owned by the government or by its unincorporated agency. Once government ownership is determined, the nature of the use of the property, whether for proprietary or sovereign purposes, becomes immaterial.

However in CAB, what appears to have been ceded to NDC is merely the administration of the property while the government retains ownership of what has been declared reserved for warehousing purposes under the proclamation.

As reserved land (public land that has been withheld and kept back from sale or disposition), it remains absolute property of the government, because the government does not part with its title by reserving them, but simply gives notice to all that it desires them for a certain purpose. As its title remains with the Republic, the reserved land is covered by the tax exemption provision.

NDC is NOT EXEMPT from the payment of real estate taxes on the warehouse.

A different rule applies because “the exemption of public property from taxation does not extend to improvements on the public lands made by preemptioners, homesteaders and other claimants at their own expense, and these are taxable by the state…(CJS)”. Consequently, the warehouse constructed on the reserved land by NDC should properly be assessed real estate tax as such improvement does not appear to belong to the Republic.

Province of Tarlac vs. Judge Alcantara(1992)

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FACTS: Tarlac Enterprises Inc is the owner of a parcel of land in Mabini, Tarlac, an ice drop factory in said land, machinery shed and other machinery. These properties were declared for purposes of Taxation in the Provincial Assessor’s Office. The Provincial Treasurer found that real estate taxes for the years 1974 until 1992 in the amount of P532,435.55 including penalties were not yet paid. Therefore, the Provincial Treasurer Jose Meru filed a complaint praying that the company pay the said sum as well as damages. Tarlac Enterprises filed a motion to dismiss. But the lower court denied the motion. Thereafter, petitioner set the auction sale of the private respondent's properties to satisfy the real estate taxes due. This prompted the private respondent to file a motion praying that petitioner 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 were the, subjects of the complaint.

Tarlac Enterprises then filed an answer saying that under Section 40(g) of PD 46 in relation to PD 551, it was exempt from paying said tax. The court rendered the decision dismissing the complaint. It ruled that PD 551 expressly exempts private respondent 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, private respondent had been required to pay 2% franchise tax in line with the intent of the law to give assistance to operators such as the private respondent to enable the consumers to enjoy cheaper rates.

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.

HELD: NO. Sec. 40(g) of P.D. No. 464, the Real Property Tax Code, provides: SEC. 40. Exemptions from Real Property Tax. - The exemption shall be as follows: (g) Real property exempt under other laws.

Private respondent contends that the "other laws" referred to in this Section is P.D. No. 551 (Lowering the 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

The SC did not agree with the lower court that the phrase “in lieu of all taxes and assessments of whatever nature” in the second paragraph of Sec. 1 of PD 551 expressly exempts private

respondent from paying real property taxes. 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 have no relation to, and are entirely different from, real properties subject to tax. 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. There is also no merit in the respondent’s contention that the real properties being taxed, the machinery for the generation and distribution of electric power, the bldg housing said machinery, and the land on which said bldg is constructed, are necessary for the operation of its business of generation, distribution and sale of electric current and should be exempt from taxation. The lower court erred in exempting the private respondents from paying real property tax on its properties enumerated in the complaint.

The annexes attached to private respondent'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.

The SC also find misplaced the lower court's and the private respondent's reliance on Butuan Sawmill. Inc. v. City of Butuan. 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

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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.

3. Shares of LGU’s in the Proceeds of National Taxes

1987 CONSTI, Art. X, Section 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.

Pimentel vs. Aguirre(supra)

HELD: Under existing law, local government units, in addition to having administrative autonomy in the exercise of their functions, enjoy fiscal autonomy as well. Fiscal autonomy means that local governments have the power to create their own sources of revenue in addition to their equitable share in the national taxes released by the national government, as well as the power to allocate their resources in accordance with their own priorities. It extends to the preparation of their budgets, and local officials in turn have to work within the constraints thereof. They are not formulated at the national level and imposed on local governments, whether they are relevant to local needs and resources or not. Hence, the necessity of a balancing of viewpoints and the harmonization of proposals from both local and national officials, who in any case are partners in the attainment of national goals.

There are therefore several requisites before the President may interfere in local fiscal matters: (1) an unmanaged public sector deficit of the national government; (2) consultations with the presiding officers of the Senate and the House of Representatives and the presidents of the various local leagues; and (3) the corresponding recommendation of the secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore, any adjustment in the allotment shall in no case be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current one.

A basic feature of local fiscal autonomy is the automatic release of the shares of LGUs in the national internal revenue. This is mandated by no less than the Constitution. The Local Government Code specifies further that the release shall be made directly to the LGU concerned within five (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." As a rule, the term "shall" is a word of command that must be given a compulsory meaning. The provision is, therefore, imperative.

Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation" in the country. Such withholding clearly contravenes the Constitution and the law. Although temporary, it is equivalent to a holdback, which means "something held back or withheld, often temporarily”. Hence, the "temporary" nature of the retention by the national government does not matter. Any retention is prohibited.

ALSO REMEMBER: In Alvarez, the SC held that IRA is part of an LGU’s income.

1987 CONSTI, Art. X, Section 7. Local governments shall be entitled to an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas, in the manner provided by law, including sharing the same with the inhabitants by way of direct benefits.

LGCSEC. 284. Allotment of Internal Revenue Taxes. - Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:

(a) On the first year of the effectivity of this Code, thirty percent (30%);

(b) On the second year, thirty-five percent (35%); and

(c) On the third year and thereafter, forty percent (40%).

Provided, That in the event that the national government incurs an unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and Local Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the presidents of the liga, to make the necessary adjustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year: Provided, further That in the first year of the effectivity of this Code, the local government units shall, in addition to the thirty percent (30%) internal revenue allotment which shall include the cost of devolved functions for essential public services, be entitled to

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receive the amount equivalent to the cost of devolved personal services.

SEC. 285. Allocation to Local Government Units. - The share of local government units in the internal revenue allotment shall be allocated in the following manner:

(a) Provinces - Twenty-three percent (23%); (b) Cities - Twenty-three percent (23%); (c) Municipalities - Thirty-four percent (34%); and (d) barangays - Twenty percent (20%)

Provided, however, That the share of each province, city, and municipality shall be determined on the basis of the following formula:

(a) Population - Fifty percent (50%); (b) Land Area - Twenty-five percent (25%); and (c) Equal sharing - Twenty-five percent (25%)

Provided, further, That the share of each barangay with a population of not less than one hundred (100) inhabitants shall not be less than Eighty thousand pesos (P=80,000.00) per annum chargeable against the twenty percent (20%) share of the barangay from the internal revenue allotment, and the balance to be allocated on the basis of the following formula:

(a) On the first year of the effectivity of this Code: (1) Population - Forty percent (40%); and (2) Equal Sharing - Sixty percent (60%)

(b) On the second year: (1) Population - Fifty percent (50%); and (2) Equal Sharing - Fifty percent (50%)

(c) On the third year and thereafter: (1) Population - Sixty percent (60%); and (2) Equal Sharing - Forty percent (40%).

Provided, finally, That the financial requirements of barangays created by local government units after the effectivity of this Code shall be the responsibility of the local government unit concerned.

SEC. 286. Automatic Release of Shares. – (a) The share of each local government unit shall be released, without need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a quarterly basis within five (5) days after the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose.

(b) Nothing in this Chapter shall be understood to diminish the share of local government units under existing laws.

SEC. 287. Local Development Projects. - Each local government unit shall appropriate in its annual budget no less than twenty percent (20%) of its annual internal revenue allotment for development projects. Copies of the development plans of local government units shall be furnished the Department of Interior and Local Government.

SEC. 288. Rules and Regulations. - The Secretary of Finance, in consultation with the Secretary of Budget and Management, shall promulgate the necessary rules and regulations for a simplified disbursement scheme designed for the speedy and effective enforcement of the provisions of this Chapter. PIMENTEL: The automatic release of these funds is not subject to any

condition. Hence, Congress may not impose any undertaking or event (ex. Upon finding that the LGU has complied with any guideline; or upon the realization of the original revenue targets submitted by the President to Congress) before it releases the LGU’s shares in the national taxes. (Batangas vs. Romulo, ACORD, Inc. vs. Zamora)

LGC, SEC. 289. Share in the Proceeds from the Development and Utilization of the National Wealth. - Local government units shall have an equitable share in the proceeds derived from the utilization and development of the national wealth within their respective areas, including sharing the same with the inhabitants by way of direct benefits.

PIMENTEL: “National wealth” means the natural resources of the nation

(i.e., land, waters, forests, the fishes, the minerals, etc.) which are being utilized and developed anywhere in the country.

LGCSEC. 290. Amount of Share of Local Government Units. - Local government units shall, in addition to the internal revenue allotment, have a share of forty percent (40%) of the gross collection derived by the national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its share in any co-production, joint venture or production sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction.

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SEC. 291. Share of the Local Governments from any Government Agency or -Owned and -Controlled Corporation. - Local government units shall have a share based on the preceding fiscal year from the proceeds derived by any government agency or government-owned or -controlled corporation engaged in the utilization and development of the national wealth based on the following formula whichever will produce a higher share for the local government unit:

(a) One percent (1%) of the gross sales or receipts of the preceding calendar year; or

(b) Forty percent (40%) of the mining taxes, royalties, forestry and fishery charges and such other taxes, fees or charges, including related surcharges, interests, or fines the government agency or government -owned or -controlled corporation would have paid if it were not otherwise exempt.

SEC. 292. Allocation of Shares. - The share in the preceding Section shall be distributed in the following manner:

(a) Where the natural resources are located in the province

(1) province - Twenty percent (20%);

(2) Component city/municipality - Forty-five percent (45%); and

(3) barangay - Thirty-five percent (35%) Provided, however, That where the natural resources are located in two (2) or more provinces, or in two (2) or more component cities or municipalities or in two (2) or more barangays, their respective shares shall be computed on the basis of:

(1) Population - Seventy percent (70%); and

(2) Land area - Thirty percent (30%).

(b) Where the natural resources are located in a highly urbanized or independent component city:

(1) city - Sixty-five percent (65%); and

(2) barangay - Thirty-five percent (35%) Provided, however, That where the natural resources are located in such two (2) or more cities, the allocation of shares shall be based on the formula on population and land area as specified in paragraph (a) of this Section.

SEC. 293 Remittance of the Share of Local Government Units. - The share of local government units from the utilization and development of national wealth shall be remitted in accordance with Section 286 of this Code: Provided, however, That in the case of any government agency or government-

owned or -controlled corporation engaged in the utilization and development of the national wealth, such share shall be directly remitted to the provincial, city, municipal or barangay treasurer concerned within five (5) days after the end of each quarter.

SEC. 294. Development and Livelihood Projects. - The proceeds from the share of local government units pursuant to this chapter shall be appropriated by their respective sanggunian to finance local development and livelihood projects: Provided, however, That at least eighty percent (80%) of the proceeds derived from the development and utilization of hydrothermal, geothermal, and other sources of energy shall be applied solely to lower the cost of electricity in the local government unit where such a source of energy is located.

4. Credit Financing

LGC, SEC. 295. Scope. - This Title shall govern the power of local government units to create indebtedness and to enter into credit and other financial transactions.

PIMENTEL: Under this provision, LGU’s have the power to create

indebtedness, like floating bonds or borrowing money from government financing institutions or domestic private banks, to fund local infrastructure or other socioeconomic development projects and to stabilize local finances.

LGU’s may also secure funds from foreign sources subject to the approval of the proper central government agency.

LGC, SEC. 296. General Policy. - (a) It shall be the basic policy that any local government unit may create indebtedness, and avail of credit facilities to finance local infrastructure and other socio-economic development projects in accordance with the approved local development plan and public investment program.

(b) A local government unit may avail of credit lines from government or private banks and lending institutions for the purpose of stabilizing local finances.

PIMENTEL: “Local infrastructure” means roads, bridges, canals, dikes,

ports, airports, and other public facilities mainly for the use of the locality.

“Other socioeconomic development projects” is borad enough to cover just about any activity which LGU’s can propose (ex. social housing for the homeless, buy medical equipment for their hospitals, build educational facilities for

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the handicapped, and provide seed capital for the livelihood projects of farmers, fisher folks or the urban poor)

LGCSEC. 297. Loans, Credits, and Other Forms of Indebted ness of Local Government Units. –

(a) A local government unit may contract loans, credits, and other forms of indebtedness with any government or domestic private bank and other lending institutions to finance the construction, installation, improvement, expansion, operation, or maintenance of public facilities, infrastructure facilities, housing projects, the acquisition of real property, and the implementation of other capital investment projects, subject to such terms and conditions as may be agreed upon by the local government unit and the lender. The proceeds from such transactions shall accrue directly to the local government unit concerned.

(b) A local government unit may likewise secure from any government bank and lending institution short, medium and long-term loans and advances against security of real estate or other acceptable assets for the establishment, development, or expansion of agricultural, industrial, commercial, house financing projects, livelihood projects, and other economic enterprises.

(c) Government financial and other lending institutions are hereby authorized to grant loans, credits, and other forms of indebtedness out of their loanable funds to local government units for purposes specified above.

SEC. 298. Deferred-Payment and other Financial Schemes. - Provincial, city and municipal governments may likewise acquire property, plant, machinery, equipment, and such necessary accessories under a supplier's credit, deferred payment plan, or other financial scheme.

LGC, SEC. 299. Bonds and Other Long-Term Securities. - Subject to the rules and regulations of the Central Bank and the Securities and Exchange Commission, provinces, cities, and municipalities are hereby authorized to issue bonds, debentures, securities, collaterals, notes and other obligations to finance self-liquidating, income-producing development or livelihood projects pursuant to the priorities established in the approved local development plan or the public investment program. The sanggunian concerned shall, through an ordinance approved by a majority of all its members, declare and state the terms and conditions of the bonds and the purpose for which the proposed indebtedness is to be incurred.

PIMENTEL: “Bonds” are evidences of indebtedness in the nature of

promissory notes, usually covering long periods of time and secured by a mortgage on the property of the issuer.

“Debentures” are similar to bonds, except that they usually cover short periods of time and are not usually secured by a mortgage.

“Securities” are income-yielding documents that can be traded, as on a stock exchange. These may carry interest and may be redeemable or irredeemable.

“Collaterals” are impersonal securities such as stocks and shares which are different from personal security (ex. guaranty)

“Notes” may include promissory notes, as evidences of indebtedness to another party.

GD-R: Remember that the vote required in this is a majority of ALL members of the sanggunian!

LGC SEC. 300. Inter-Local Government Loans, Grants, and Subsidies. - provinces, cities and municipalities may, upon approval of the majority of all members of the sanggunian concerned and in amounts not exceeding their surplus funds, extend loans, grants, or subsidies to other local government units under such terms and conditions as may be agreed upon by the contracting parties. Local government units may, upon approval of their respective sanggunian, jointly or severally contract loans, credits, and other forms of indebtedness for purposes mutually beneficial to them.

SEC. 301. Loans from Funds Secured by the National Government from Foreign Sources. –

(a) The President, or his duly authorized representative, may, through any government financial or other lending institution, relend to any province, city, municipality, or barangay, the proceeds of loans contracted with foreign financial institutions or other international funding agencies for the purpose of financing the construction, installation, improvement, expansion, operation, or maintenance of public utilities and facilities, infrastructure facilities, or housing projects, the acquisition of real property, and the implementation of other capital investment projects, subject to such terms and conditions as may be agreed upon by the President and the local government unit. The proceeds from such loans shall accrue directly to the local government concerned.

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(b) The President may likewise authorize the relending to local government units the proceeds of grants secured from foreign sources, subject to the provisions of existing laws and the applicable grant agreements.

(c) Repayment or amortization of loans including accrued interest thereon, may be financed partly from the income of the projects or services and from the regular income of the local government unit, which must be provided for and appropriated regularly in its annual budget until the loan and the interest thereon shall have been fully paid.

PIMENTEL: Under the immediately preceding section, LGU’s, through

the central government, are authorized to procure foreign loans.

LGC, SEC. 302. Financing, Construction, Maintenance, Operation, and Management of Infrastructure Projects by the Private Sector. –

(a) Local government units may enter into contracts with any duly prequalified individual contractor, for the financing, construction, operation, and maintenance of any financially viable infrastructure facilities, under the build-operate-and-transfer agreement, subject to the applicable provisions of Republic Act Numbered Sixty-nine hundred fifty-seven (R.A. No. 6957) authorizing the financing, construction, operation and maintenance of infrastructure projects by the private sector and the rules and regulations issued thereunder and such terms and conditions provided in this Section.

(b) Local government units shall include in their respective local development plans and public investment programs priority projects that may be financed, constructed, operated and maintained by the private sector under this Section. It shall be the duty of the local government unit concerned to disclose to the public all projects eligible for financing under this Section, including official notification of duly registered contractors and publication in newspapers of general or local circulation and in conspicuous and accessible public places. Local projects under the build-operate-and-transfer agreement shall be confirmed by the local development councils.

(c) Projects implemented under this Section shall be subject to the following terms and conditions:

(1) The provincial, city, or municipal engineer, as the case may be, upon formal request in writing by the local chief executive, shall prepare the plans and specifications for the proposed project, which shall be submitted to the sanggunian for approval.

(2) Upon approval by the sanggunian of the project plans and specifications, the provincial, city, or municipal engineer shall, as

the case may be, cause to be published once every week for two (2) consecutive weeks in at least one (1) local newspaper which is circulated in the region, province, city or municipality in which the project is to be implemented, a notice inviting all duly qualified contractors to participate in a public bidding for the projects so approved. The conduct of public bidding and award of contracts for local government projects under this Section shall be in accordance with this Code and other applicable laws, rules and regulations.

In the case of a build-operate-and-transfer agreement, the contract shall be awarded to the lowest complying bidder whose offer is deemed most advantageous to the local government and based on the present value of its proposed tolls, fees, rentals, and charges over a fixed term for the facility to be constructed, operated, and maintained according to the prescribed minimum design and performance standards, plans, and specifications. For this purpose, the winning contractor shall be automatically granted by the local government unit concerned the franchise to operate and maintain the facility, including the collection of tolls, fees, rentals, and charges in accordance with subsection (c-4) hereof.

In the case of a build-operate-and-transfer agreement, the contract shall be awarded to the lowest complying bidder based on the present value of its proposed schedule of amortization payments for the facility to be constructed according to the prescribed minimum design and performance standards, plans, and specifications.

(3) Any contractor who shall undertake the prosecution of any project under this Section shall post the required bonds to protect the interest of the province, city, or municipality, in such amounts as may be fixed by the sanggunian concerned and the provincial, city, or municipal engineer shall not, as the case may be, allow any contractor to initiate the prosecution of projects under this Section unless such contractor presents proof or evidence that he has posted the required bond.

(4) The contractor shall be entitled to a reasonable return of its investment in accordance with its bid proposal as accepted by the local government unit concerned. In the case of a build-operate-and-transfer agreement, the repayment shall be made by authorizing the contractor to charge and collect reasonable tolls, fees, rentals, and charges for the use of the project facility not exceeding those proposed in the bid and incorporated in the contract: Provided, That the local government unit concerned shall, based on reasonableness and equity, approve the tolls, fees, rentals and charges: Provided, further, That the imposition and collection of tolls, fees, rentals and charges shall be for a fixed period as proposed in the bid and incorporated in the contract which shall in no case exceed fifty (50) years: Provided, finally, That during the lifetime of the contract, the contractor shall undertake the necessary maintenance and repair of the facility in

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accordance with standards prescribed in the bidding documents and in the contract. In the case of a build-operate-and-transfer agreement, the repayment shall be made through amortization payments in accordance with the schedule proposed in the bid and incorporated in the contract. In case of land reclamation or construction of industrial estates, the repayment plan may consist of the grant of a portion or percentage of the reclaimed land or the industrial estate constructed.

(5) Every infrastructure project undertaken under this Section shall be constructed, operated, and maintained by the contractor under the technical supervision of the local government unit and in accordance with the plans, specifications, standards, and costs approved by it.

(d) The provincial, city or municipal legal officer shall, as the case may be, review the contracts executed pursuant to this Section to determine their legality, validity, enforceability and correctness of form.

SEC. 303. Remedies and Sanctions. - Local government units shall appropriate in their respective annual budgets such amounts as are sufficient to pay the loans and other indebtedness incurred or redeem or retire bonds, debentures, securities, notes and other obligations issued under this Title: Provided, That failure to provide the appropriations herein required shall render their annual budgets inoperative.

5. Local Fiscal Administration

LGC, SEC. 305. Fundamental principles governing the financial affairs, transactions and operations of LGUs :

No money shall be paid out of the local treasury except in pursuance of an appropriations ordinance or law;

Local government funds and monies shall be spent solely for

public purposes;

Local revenue is generated only from sources expressly authorized by law or ordinance, and collection thereof shall at all times be acknowledged properly;

All monies officially received by a local government officer in any capacity or on any occasion shall be accounted for as local funds, unless otherwise provided by law;

Trust funds in the local treasury shall not be paid out except in fulfillment of the purpose for which the trust was created or the funds received;

Every officer of the LGU whose duties permit or require the possession or custody of local funds shall be properly

bonded, and such officer shall be accountable and responsible for said funds and for the safekeeping thereof in conformity with the provisions of law;

Local governments shall formulate sound financial plans, and the local budgets shall be based on functions, activities, and projects, in terms of expected results;

Local budgets shall operationalize approved local development plans;

LGUs shall ensure that their respective budgets incorporate the requirements of their component units and provide for equitable allocation of resources among these component units;

National planning shall be based on local planning to ensure that the needs and aspirations of the people as articulated by the local government units in their respective local development plans are considered in the formulation of budgets of national line agencies or offices;

Fiscal responsibility shall be shared by all those exercising authority over the financial affairs, transactions, and operations of the local government units; and

The LGU shall endeavor to have a balanced budget in each fiscal year of operation.

Annual Budget

LGCSEC. 319. Legislative Authorization of the Budget. - On or before the end of the current fiscal year, the sanggunian concerned shall enact, through an ordinance, the annual budget of the local government unit for the ensuing fiscal year on the basis of the estimates of income and expenditures submitted by the local chief executive.

SEC. 320. Effectivity of Budgets. - The ordinance enacting the annual budget shall take effect at the beginning of the ensuing calendar year. An ordinance enacting a supplemental budget, however, shall take effect upon its approval or on the date fixed therein. The responsibility for the execution of the annual and supplemental budgets and the accountability therefor shall be vested primarily in the local chief executive concerned.

SEC. 321. Changes in the Annual Budget. - All budgetary proposals shall be included and considered in the budget preparation process. After the local chief executive concerned shall have submitted the executive budget to the sanggunian, no ordinance providing for a supplemental budget shall be enacted, except when supported by funds actually available as certified by the local treasurer or by new revenue sources.

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A supplemental budget may also be enacted in times of public calamity by way of budgetary realignment to set aside appropriations for the purchase of supplies and materials or the payment of services which are exceptionally urgent or absolutely indispensable to prevent imminent danger to, or loss of, life or property, in the jurisdiction of the local government unit or in other areas declared by the President in a state of calamity. Such ordinance shall clearly indicate the sources of funds available for appropriations, as certified under oath by the local treasurer and local accountant and attested by the local chief executive, and the various items of appropriations affected and the reasons for the change.

SEC. 323. Failure to Enact the Annual Appropriations. - In case the sanggunian concerned fails to pass the ordinance authorizing the annual appropriations at the beginning of the ensuing fiscal year, it shall continue to hold sessions, without additional remuneration for its members, until such ordinance is approved, and no other business may be taken up during such sessions. If the sanggunian still fails to enact such ordinance after ninety (90) days from the beginning of the fiscal year, the ordinance authorizing the appropriations of the preceding year shall be deemed reenacted and shall remain in force and effect until the ordinance authorizing the proposed appropriations is passed by the sanggunian concerned. However, only the annual appropriations for salaries and wages of existing positions, statutory and contractual obligations, and essential operating expenses authorized in the annual and supplemental budgets for the preceding year shall be deemed reenacted and disbursement of funds shall be in accordance therewith. In the implementation of such reenacted ordinance, the local treasurer concerned shall exclude from the estimates of income for the preceding fiscal year those realized from nonrecurring sources, like national aids, proceeds from loans, sale of assets, prior year adjustments, and other analogous sources of income. No ordinance authorizing supplemental appropriations shall be passed in place of the annual appropriations. In case the revised income estimates be less than the aggregate reenacted appropriations, the local treasurer concerned shall accordingly advise the sanggunian concerned which shall, within ten (10) days from the receipt of such advice, make the necessary adjustments or reductions. The revised appropriations authorized by the sanggunian concerned shall then be the basis for disbursements.

SEC. 324. Budgetary Requirements. - The budgets of local government units for any fiscal year shall comply with the following requirements:

(a) The aggregate amount appropriated shall not exceed the estimates of income;

(b) Full provision shall be made for all statutory and contractual obligations of the local government unit concerned: Provided,

however, That the amount of appropriations for debt servicing shall not exceed twenty percent (20%) of the regular income of the local government unit concerned;

(c) In the case of provinces, cities, and municipalities, aid to component barangays shall be provided in amounts of not less than One thousand pesos (Php 1,000.00) per barangay; and

(d) Five percent (5%) of the estimated revenue from regular sources shall be set aside as an annual lump sum appropriation for unforeseen expenditures arising from the occurrence of calamities: Provided, however, That such appropriation shall be used only in the area, or a portion thereof, of the local government unit or other areas declared by the President in a state of calamity.

SEC. 325. General Limitations. - The use of the provincial, city, and municipal funds shall be subject to the following limitations:

(a) The total appropriations, whether annual or supplemental, for personal services of a local government unit for one (1) fiscal year shall not exceed forty-five percent (45%) in the case of first to third class provinces, cities, and municipalities, and fifty-five percent (55%) in the case of fourth class or lower, of the total annual income from regular sources realized in the next preceding fiscal year. The appropriations for salaries, wages, representation and transportation allowances of officials and employees of the public utilities and economic enterprises owned, operated, and maintained by the local government unit concerned shall not be included in the annual budget or in the computation of the maximum amount for personal services. The appropriations for the personal services of such economic enterprises shall be charged to their respective budgets;

(b) No official or employee shall be entitled to a salary rate higher than the maximum fixed for his position or other positions of equivalent rank by applicable laws or rules and regulations issued thereunder;

(c) No local fund shall be appropriated to increase or adjust salaries or wages of officials and employees of the national government, except as may be expressly authorized by law;

(d) In cases of abolition of positions and the creation of new ones resulting from the abolition of existing positions in the career service, such abolition or creation shall be made in accordance with pertinent provisions of this code and the civil service law, rules and regulations;

(e) Positions in the official plantilla for career positions which are occupied by incumbents holding permanent appointments shall be covered by adequate appropriations;

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(f) No changes in designation or nomenclature of positions resulting in a promotion or demotion in rank or increase or decrease in compensation shall be allowed, except when the position is actually vacant, and the filling of such positions shall be strictly made in accordance with the civil service law, rules and regulations; (g) The creation of new positions and salary increases or adjustments shall in no case be made retroactive; and

(h) The annual appropriations for discretionary purposes of the local chief executive shall not exceed two percent (2%) of the actual receipts derived from basic real property tax in the next preceding calendar year. Discretionary funds shall be disbursed only for public purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law. No amount shall be appropriated for the same purpose except as authorized under this Section.

D. Local Legislation

LGC, SEC. 48. Local Legislative Power. - Local legislative power shall be exercised by the sangguniang panlalawigan for the province; the sangguniang panlungsod for the city; the sangguniang bayan for the municipality; and the sangguniang barangay for the barangay.

PIMENTEL: Local political subdivisions are able to legislate only by

virtue of a valid delegation of legislative power from the national legislature (except WRT the creation of their own sources of revenue and the levying of taxes, which are vested by the CONSTI itself).

NOTE: They are mere agents vested with what is called the power of subordinate legislation.

Hence, as delegates of Congress, the LGU cannot contravene but must obey at all times the will of their principal. (Sol. Gen. vs. Metro Manila Authority)

Unlike the Senate and the HOR, LGU’s do not have the inherent power to cite anyone for contempt. There being no provision in the Local Government Code explicitly granting local legislative bodies, the power to issue compulsory process and the power to punish for contempt, the Sanggunian Panlungsod of Dumaguete is devoid of power to punish the petitioners… for contempt. Such act by the sanggunian is ultra vires. (Negros Oriental II Electric Cooperative vs. Sangguniang Panlungsod Of Dumaguete)

Ordinances enacted by local government units enjoy the presumption of constitutionality. To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution, not merely a doubtful or argumentative

contradiction. In short, the conflict with the Constitution must be shown beyond reasonable doubt. (Tano vs. Socrates)

For an ordinance to be valid, it must not only be within the corporate powers of the city or municipality to enact but must also be passed according to the procedure prescribed by law. It must be in accordance with certain well-established basic principles of a substantive nature. These principles require that an ordinance (1) must not contravene the Constitution or any statute (2) must not be unfair or oppressive (3) must not be partial or discriminatory (4) must not prohibit but may regulate trade (5) must be general and consistent with public policy, and (6) must not be unreasonable. (Lagcao vs. Labra)

LGC, SEC. 49. Presiding Officer. –

(a) The vice-governor shall be the presiding officer of the sangguniang panlalawigan; the city vice-mayor, of the sangguniang panlungsod; the municipal vice-mayor, of the sangguniang bayan; and the punong barangay, of the sangguniang barangay. The presiding officer shall vote only to break a tie.

(b) In the event of the inability of the regular Presiding officer to preside at a sanggunian session, the members present and constituting a quorum shall elect from among themselves a temporary presiding officer. He shall certify within ten (10) days from the passage of ordinances enacted and resolutions adopted by the sanggunian in the session over which he temporarily presided.

PIMENTEL: The idea behind the said scheme of presiding officers is to

distribute powers among the elective officials, so that the legislative (the sanggunian), may properly check the executive and vice versa and exercise their respective functions without undue interference from one by the other.

LGC, SEC. 50. Internal Rules of Procedure. –

(a) On the first regular session following the election of its members and within ninety (90) days thereafter, the sanggunian concerned shall adopt or update its existing rules of procedure.

(b) The rules of procedure shall provide for the following:

(1) The organization of the sanggunian and the election of its officers as well as the creation of standing committees which shall include, but shall not be limited to, the committees on appropriations, women and family, human rights, youth and

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sports development, environmental protection, and cooperatives; the general jurisdiction of each committee; and the election of the chairman and members of each committee;

(2) The order and calendar of business for each session;

(3) The legislative process;

(4) The parliamentary procedures which include the conduct of members during sessions;

(5) The discipline of members for disorderly behavior and absences without justifiable cause for four (4) consecutive sessions, for which they may be censured, reprimanded, or excluded from the session, suspended for not more than sixty (60) days, or expelled: Provided, That the penalty of suspension or expulsion shall require the concurrence of at least two-thirds (2/3) vote of all the sanggunian members: Provided, further, That a member convicted by final judgment to imprisonment of at least one (1) year for any crime involving moral turpitude shall be automatically expelled from the sanggunian; and

(6) Such other rules as the sanggunian may adopt.

PIMENTEL: The LGC does not require the completion of the updating or

adoption of the internal rules before the sanggunian could act on any other matter like the enactment of an ordinance. It simply requires that the matter of adopting or updating the internal rules of procedure be taken up during the first day of session. (Malonzo vs. Zamora)

There is nothing in the law that prohibits the 3 readings of a proposed ordinance be held in just one session day.

While the sanggunian is allowd to create its standing committees, the LGC makes the ff. committees mandatory:

o Appropriationso Women and Familyo Youth and Sports Developmento Environmental Protectiono Cooperatives

The inclusion of the last two committees manifest the commitment of Congress to enhance the quality of life of the people and to upgrade their economic well-being.

LGC, SEC. 51. Full Disclosure of Financial and Business Interests of Sanggunian Members. –

(a) Every sanggunian member shall, upon assumption to office, make a full disclosure of his business and financial interests. He shall also disclose any business, financial, or professional relationship or any relation by affinity or consanguinity within the

fourth civil degree, which he may have with any person, firm, or entity affected by any ordinance or resolution under consideration by the sanggunian of which he is a member, which relationship may result in conflict of interest. Such relationship shall include:

(1) Ownership of stock or capital, or investment, in the entity or firm to which the ordinance or resolution may apply; and (2) Contracts or agreements with any person or entity which the ordinance or resolution under consideration may affect. In the absence of a specific constitutional or statutory provision applicable to this situation, "conflict of interest" refers in general to one where it may be reasonably deduced that a member of a sanggunian may not act in the public interest due to some private, pecuniary, or other personal considerations that may tend to affect his judgment to the prejudice of the service or the public.

(b) The disclosure required under this Act shall be made in writing and submitted to the secretary of the sanggunian or the secretary of the committee of which he is a member. The disclosure shall, in all cases, form part of the record of the proceedings and shall be made in the following manner:

(1) Disclosure shall be made before the member participates in the deliberations on the ordinance or resolution under consideration: Provided, That, if the member did not participate during the deliberations, the disclosure shall be made before voting on the ordinance or resolution on second and third readings; and

(2) Disclosure shall be made when a member takes a position or makes a privilege speech on a matter that may affect the business interest, financial connection, or professional relationship described herein.

PIMENTEL: “Fourth Civil Degree of Relationship” extends up to one’s

(a) great, great, grandparents in the ascending direct line; (b) great, great, grandchildren in the descending direct line; (c) first cousins; and (d) great grand uncles and aunts in the collateral line.

Disclosure of the sanggunian member’s own business or financial interests is an absolute requirement WON the sanggunian member does anything at all during his entire term.

LGC, SEC. 52. Sessions. –

(a) On the first day of the session immediately following the election of its members, the sanggunian shall, by resolution, fix the day, time, and place of its regular sessions. The minimum number of regular sessions shall be once a week for the sangguniang panlalawigan, sangguniang panlungsod, and

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sangguniang bayan, and twice a month for the sangguniang barangay.

(b) When public interest so demands, special sessions may be called by the local chief executive or by a majority of the members of the sanggunian.

(c) All sanggunian sessions shall be open to the public unless a closed-door session is ordered by an affirmative vote of a majority of the members present, there being a quorum, in the public interest or for reasons of security, decency, or morality. No two (2) sessions, regular or special, may be held in a single day.

(d) In the case of special sessions of the sanggunian, a written notice to the members shall be served personally at the member's usual place of residence at least twenty- four (24) hours before the special session is held. Unless otherwise concurred in by two-thirds (2/3) vote of the sanggunian members present, there being a quorum, no other matters may be considered at a special session except those stated in the notice.

(e) Each sanggunian shall keep a journal and record of its proceedings which may be published upon resolution of the sanggunian concerned.

PIMENTEL: “Public interest” is a phrase so broad that special sessions

can theoretically be called at any reasonable time.

The law is sufficiently complied with if the written notices required in Sec. 52(d) is served at a different place where the sanggunian member is found, and such notice is received by such member.

LGC, SEC. 53. Quorum. –

(a) A majority of all the members of the sanggunian who have been elected and qualified shall constitute a quorum to transact official business. Should a question of quorum be raised during a session, the presiding officer shall immediately proceed to call the roll of the members and thereafter announce the results.

(b) Where there is no quorum, the presiding officer may declare a recess until such time as a quorum is constituted, or a majority of the members present may adjourn from day to day and may compel the immediate attendance of any member absent without justifiable cause by designating a member of the sanggunian, to be assisted by a member or members of the police force assigned in the territorial jurisdiction of the local government unit concerned, to arrest the absent member and present him at the session.

(c) If there is still no quorum despite the enforcement of the immediately preceding subsection, no business shall be

transacted. The presiding officer, upon proper motion duly approved by the members present, shall then declare the session adjourned for lack of quorum.

PIMENTEL: “Quorum” is the fixed number of members present at a

session which is considered legally sufficient to transact the business of the sanggunian.

Normally, a quorum is determined by dividing the number of members into two and adding one to the quotient.

However, there are instances when a special quorum is required:

o A session intending to override a veto of the local chief executive. (This session requires a quorum of not less than 2/3 of all members of the sanggunian)

o When there is a majority of all members “elected and qualified” present, there may be a quorum. (ex. When some of its members are facing electoral protests and therefore not yet “elected and qualified”)

Any business or transaction conducted during a session with no quorum is void ab initio.

LGC, SEC. 54. Approval of Ordinances. –

(a) Every ordinance enacted by the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan shall be presented to the provincial governor or city or municipal mayor, as the case may be. If the local chief executive concerned approves the same, he shall affix his signature on each and every page thereof; otherwise, he shall veto it and return the same with his objections to the sanggunian, which may proceed to reconsider the same. The sanggunian concerned may override the veto of the local chief executive by two-thirds (2/3) vote of all its members, thereby making the ordinance or resolution effective for all legal intents and purposes.

(b) The veto shall be communicated by the local chief executive concerned to the sanggunian within fifteen (15) days in the case of a province, and ten (10) days in the case of a city or a municipality; otherwise, the ordinance shall be deemed approved as if he had signed it.

(c) Ordinances enacted by the sangguniang barangay shall, upon approval by the majority of all its members, be signed by the punong barangay.

PIMENTEL:ordinance resolution

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a law merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter

possesses a general and permanent character

temporary in nature

a third reading is necessary for an ordinance

not for a resolution, unless decided otherwise by a majority of all the Sanggunian members

Also, matters relating to the proprietary functions and private concerns shall be acted upon by resolutions.

While the first 2 sentences of this section does not refer to resolutions as among the acts of the sanggunian that must be approved and signed by the local chief executive, the 3 rd

sentence thereof refer to resolutions as among those that may be vetoed and such veto be overridden by the sanggunian concerned.

Hence, resolutions, in practice are submitted to the local chief executive for his signature.

The approval of a Sanggunian resolution by a mayor is NOT a ministerial duty. The grant of the veto power confers authority beyond the simple mechanical act of signing an ordinance or resolution, as a requisite to its enforceability. Such power accords the local chief executive the discretion to sustain a resolution or ordinance in the first instance or to veto it and return it with his objections to the Sanggunian, which may proceed to reconsider the same. The Sanggunian concerned, however, may override the veto by a two-thirds (2/3) vote of all its members thereby making the ordinance or resolution effective for all legal intents and purposes. It is clear, therefore, that the concurrence of a local chief executive in the enactment of an ordinance or resolution requires, not only a flourish of the pen, but the application of judgment after meticulous analysis and intelligence as well. (De Los Reyes vs. Sandiganbayan, 3rd

Division)

Trial courts should take judicial notice of municipal ordinances within their respective jurisdictions. This means that the enactment of an ordinance and its provisions are supposed to be known by the trial courts of the area where the municipality concerned may be located and therefore, it need not be proven at the proceedings in such courts. (Gallego vs. People of the Philippines)

LGC, SEC. 55. Veto Power of the Local Chief Executive. –

(a) The local chief executive may veto any ordinance of the sangguniang panlalawigan, sangguniang panlungsod, or

sangguniang bayan on the ground that it is ultra vires or prejudicial to the public welfare, stating his reasons therefor in writing.

(b) The local chief executive, except the punong barangay, shall have the power to veto any particular item or items of an appropriations ordinance, an ordinance or resolution adopting a local development plan and public investment program, or an ordinance directing the payment of money or creating liability. In such a case, the veto shall not affect the item or items which are not objected to. The vetoed item or items shall not take effect unless the sanggunian overrides the veto in the manner herein provided; otherwise, the item or items in the appropriations ordinance of the previous year corresponding to those vetoed, if any, shall be deemed reenacted.

(c) The local chief executive may veto an ordinance or resolution only once. The sanggunian may override the veto of the local chief executive concerned by two-thirds (2/3) vote of all its members, thereby making the ordinance effective even without the approval of the local chief executive concerned.

PIMENTEL: The Punong Barangay has no veto power over the

ordinances enacted by the Sangguniang Barangay.

“ultra vires” means that the ordinance or parts thereof are beyond the power of the sanggunian to enact.

The veto may apply to: (a) entire ordinances or (b) particular items of certain ordinances and resolutions:

o An appropriations ordinance; o An ordinance or resolution adopting a local

development plan and public investment program; or

o An ordinance directing the payment of money or creating liability.

Once overridden, the veto may not be reimposed on the same ordinance or subject matter.

LGC, SEC. 56. Review of Component City and Municipal Ordinances or Resolutions by the Sangguniang Panlalawigan. –

(a) Within three (3) days after approval, the secretary to the sanggunian panlungsod or sangguniang bayan shall forward to the sangguniang panlalawigan for review, copies of approved ordinances and the resolutions approving the local development plans and public investment programs formulated by the local development councils.

(b) Within thirty (30) days after receipt of copies of such ordinances and resolutions, the sangguniang panlalawigan shall examine the documents or transmit them to the provincial attorney, or if there be none, to the provincial prosecutor for prompt examination. The provincial attorney or provincial prosecutor shall, within a period of

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ten (10) days from receipt of the documents, inform the sangguniang panlalawigan in writing of his comments or recommendations, which may be considered by the sangguniang panlalawigan in making its decision.

(c) If the sangguniang panlalawigan finds that such an ordinance or resolution is beyond the power conferred upon the sangguniang panlungsod or sangguniang bayan concerned, it shall declare such ordinance or resolution invalid in whole or in part. The sangguniang panlalawigan shall enter its action in the minutes and shall advise the corresponding city or municipal authorities of the action it has taken.

(d) If no action has been taken by the sangguniang panlalawigan within thirty (30) days after submission of such an ordinance or resolution, the same shall be presumed consistent with law and therefore valid.

PIMENTEL: It is the Sangguniang Panlalawigan, not the provincial

governor, which has the power to review the certain ordinances of its component cities and municipalities.

The law grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue.

LGC, SEC. 57. Review of Barangay Ordinances by the sangguniang panlungsod or sangguniang bayan. –

(a) Within ten (10) days after its enactment, the sangguniang barangay shall furnish copies of all barangay ordinances to the sangguniang panlungsod or sangguniang bayan concerned for review as to whether the ordinance is consistent with law and city or municipal ordinances.

(b) If the sangguniang panlungsod or sangguniang bayan, as the case may be, fails to take action on barangay ordinances within thirty (30) days from receipt thereof, the same shall be deemed approved.

(c) If the sangguniang panlungsod or sangguniang bayan, as the case may be, finds the barangay ordinances inconsistent with law or city or municipal ordinances, the sanggunian concerned shall, within thirty (30) days from receipt thereof, return the same with its comments and recommendations to the sangguniang barangay concerned for adjustment, amendment, or modification; in which case, the effectivity of the barangay ordinance is suspended until such time as the revision called for is effected.

LGC, SEC. 58. Enforcement of Disapproved ordinances or Resolutions. - Any attempt to enforce any ordinance or any resolution approving the local development plan and public

investment program, after the disapproval thereof, shall be sufficient ground for the suspension or dismissal of the official or employee concerned.

LGC, SEC. 59. Effectivity of Ordinances or Resolutions.

(a) Unless otherwise stated in the ordinance or the resolution approving the local development plan and public investment program, the same shall take effect after ten (10) days from the date a copy thereof is posted in a bulletin board at the entrance of the provincial capitol or city, municipal, or barangay hall, as the case may be, and in at least two (2) other conspicuous places in the local government unit concerned.

(b) The secretary to the sanggunian concerned shall cause the posting of an ordinance or resolution in the bulletin board at the entrance of the provincial capitol and the city, municipal, or barangay hall in at least two (2) conspicuous places in the local government unit concerned not later than five (5) days after approval thereof. The text of the ordinance or resolution shall be disseminated and posted in Filipino or English and in the language or dialect understood by the majority of the people in the local government unit concerned, and the secretary to the sanggunian shall record such fact in a book kept for the purpose, stating the dates of approval and posting.

(c) The gist of all ordinances with penal sanctions shall be published in a newspaper of general circulation within the province where the local legislative body concerned belongs. In the absence of any newspaper of general circulation within the province, posting of such ordinances shall be made in all municipalities and cities of the province where the sanggunian of origin is situated.

(d) In the case of highly urbanized cities, the main features of the ordinance or resolution duly enacted or adopted shall, in addition to being posted, be published once in a local newspaper of general circulation within the city: Provided, That in the absence thereof the ordinance or resolution shall be published in any newspaper of general circulation.

PIMENTEL: The ordinance or resolution mentioned in Par. (a) takes

effect on the 11th day from the date of posting.

Par. (d) Only the main features are required to be published.

1987 CONSTI, Art. X, Section 9. Legislative bodies of local governments shall have sectoral representation as may be prescribed by law.

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PIMENTEL: Section 446 (b) and Section 457 (b) of the LGC provides

that there shall be three (3) sectoral representatives in the sanggunian:

o one (1) from the women; and, as shall be determined by the sanggunian concerned within ninety (90) days prior to the holding of local elections;

o one (1) from the agricultural or industrial workers; and

o one (1) from the other sectors, including the urban poor, indigenous cultural communities, or disabled persons.

RATIO: So that, all sectors of the community can participate in the system of governance and not just a few wealthy hands.

Casiño vs. Court of Appeals(1991)

FACTS: Casiño was a licensee of a cockpit under Sections 2285 to 2286 of the Revised Administrative Code. Sometime in 1984, the Sangguniang Panlungsod (SP) of Gingoog City issued Resolution No. 49 classifying certain areas of the city as residential zones, including the cockpit. The classification led to the cancellation of petitioner's license to operate the cockpit.

In 1985 Resolution No. 378, the area was reclassified as within the recreational zone, allegedly amending Resolution No. 49. In the session passing this resolution, 9 SP members participated:4 voting for the amendment, 4 voted against it, while 1 abstained. The vice-mayor, as presiding officer, broke the deadlock by voting for the amendment.

By virtue of said Resolution No. 378, the succeeding city mayor issued to Casiño the permit to operate a cockpit in 1986, which was renewed by another permit issued in 1987.

An action for prohibition and mandamus with preliminary injunction was filed by Gallera before the RTC, against petitioner, on the ground that Resolution No. 378, purportedly amending zoning Ordinance No. 49, is invalid for failing to obtain the ¾ votes required by the zoning ordinance to be amended.

WON there was a valid amendment of the zoning ordinance by Resolution No. 378.

HELD: NONE. Although the charter of the City of Gingoog and the Local Government Code require only a majority for the enactment of an ordinance, Resolution No. 49 cannot be validly amended by the resolution in question without complying with the categorical requirement of a three-fourths vote incorporated in

the very same ordinance sought to be amended. The pertinent provisions in the aforesaid city charter and the Local Government Code obviously are of general application and embrace a wider scope or subject matter. In the enactment of ordinances in general, the application of the aforementioned laws cannot be disputed. Undeniably, however, Section 6.44 of said ordinance regarding amendments thereto is a specific and particular provision for said ordinance and explicitly provides for a different number of votes.

Where there is in the same statute a particular enactment and also a general one which in its most comprehensive sense would include what is embraced in the former, the particular enactment must be operative, and the general statement must be taken to affect only such cases within its language as are not within the provisions of the particular enactment.

Moreover, the Sanggunian is in a better position to know how to best amend the law that it enacted.

Gamboa vs. Aguirre(1999)

FACTS: In August 1995, the Governor of Negros Occidental designated Vice-Governor Gamboa as Acting Governor for the duration of the former’s trip abroad. When the Sangguniang Panlalawigan held its regular session, Aguirre et. al questioned the authority of Gamboa to preside in the said session on the ground of his designation as the Acting Governor and asked him to vacate the Chair.. Seven members of the SP voted to allow the petitioner to continue presiding, four voted against it and one abstained.

Respondents filed a petition for declaratory relief and prohibition. The TC rendered a decision and declared petitioner as "temporarily legally incapacitated to preside over the sessions of the SP during the period that he is the Acting Governor."

WON an incumbent Vice-Governor, while concurrently the Acting Governor, may continue to preside over the sessions of the Sangguniang Panlalawigan.

HELD: NO. Sections 49(a) and 466(a)(1) of RA 7160 provide that the Vice Governor shall be the presiding officer of the SP. In addition to that, he becomes the Governor and assumes the higher office for the unexpired term of his predecessor, in case of “permanent vacancy” therein. In case of a temporary vacancy, he shall automatically exercise the powers and perform the duties and functions of the Governor. It is true that in this case, the Vice Governor only “acts” and does not “become” the governor.

A Vice-Governor who is concurrently an Acting Governor is actually a quasi-Governor. This means, that for the purposes of exercising his legislative prerogatives and powers, he is deemed

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as a non-member of the SP for the time being. Unlike the old Code where the Governor is not only the provincial Chief Executive but also the presiding officer of the local executive body, the new Code delineated the union of the executive-legislative powers in the provincial, city and municipal levels except in the Barangay. The Governor is no longer a member of the SP. Not being included in the enumeration, the Governor is deemed excluded. Being the Acting Governor, the Vice Governor cannot continue to simultaneously exercise the duties of the latter office since the nature of the duties of the provincial Governor call for a full-time occupant to discharge them.

Being the Acting Governor, the Vice-Governor cannot continue to simultaneously exercise the duties of the latter office, since the nature of the duties of the provincial Governor call for a full-time occupant to discharge them. Such is not only consistent with but also appears to be the clear rationale of the new Code wherein the policy of performing dual functions in both offices has already been abandoned. To repeat, the creation of a temporary vacancy in the office of the Governor creates a corresponding temporary vacancy in the office of the Vice-Governor whenever the latter acts as Governor by virtue of such temporary vacancy. This event constitutes an "inability" on the part of the regular presiding officer (Vice Governor) to preside during the SP sessions, which thus calls for the operation of the remedy set in Article 49(b) of the Local Government Code — concerning the election of a temporary presiding officer. The continuity of the Acting Governor's (Vice Governor) powers as presiding officer of the SP is suspended so long as he is in such capacity. Under Section 49(b), "(i)n the event of the inability of the regular presiding officer to preside at the sanggunian session, the members present and constituting a quorum shall elect from among themselves a temporary presiding officer."

1. Local Initiative and Referendum

LGC, SEC. 120. Local Initiative Defined. - Local initiative is the legal process whereby the registered voters of a local government unit may directly propose, enact, or amend any ordinance.

PIMENTEL: Section 32 of Article VI of the CONSTI provides that

“Congress shall, as early as possible, provide for a system of initiative and referendum, and the exceptions therefrom, whereby the people can directly propose and enact laws or approve or reject any act or law or part thereof passed by the Congress or local legislative body…”

This section fleshes out the constitutional mandate which is in Section 3 of Art. X which provides that “the LGC shall provide for a more responsive and accountable local government structure instituted through a system of

decentralization with effective mechanisms of recall, initiative, and referendum”

A direct initiative is envisioned in this section. Hence, no positive act of the sanggunian is required before the initiative process is commenced by the voters.

A direct initiative is a good means of arousing civic consciousness and training in popular, direct and democratic action. It is also a good device to check sanggunian indifference or apathy towards measures which the people may wish enacted for the advancement of their welfare.

All matters which are within the competence of the sanggunian to legislate on are proper subjects of the initiative process.

NOTE: These provisions on initiative and referendum do not apply to the ARMM.

RA 6735 also provides for a system of indirect initiative, the process by which a proposal to enact, amend, or repeal a law or an ordinance is submitted by a required number of voters for the national legislature or the local council to act upon. The voters course their action through their elected representatives.

The procedure to be followed for the enactment of the indirect initiative measure is the same as the enactment of any legislative measure before the HOR except that the said initiative bill shall have precedence over the pending legislative measures on the committee. (It does not mean that the proponents of the measure are allowed to participate in the debates)

Garcia vs. COMELEC(1994)

FACTS: The Sangguniang Bayan (SB) of Morong, Bataan in its Resolution 10 agreed to the inclusion of the municipality as part of the Subic Special Economic Zone. Garcia, et al filed a petition before the SB, seeking to annul the said resolution.

When the municipality did not take action on the petition of Garcia and others to annul the resolution, the latter resorted to their power of initiative under the LGC and started soliciting the signatures. The Vice Mayor and Presiding Officer of the SB,wrote the COMELEC requesting a denial of the petition for local initiative as the exercise “will just promote divisiveness, counter productive and futility.”

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The COMELEC denied the petition for local initiative on the ground that the subject was merely a resolution and not an ordinance.

WON Resolution 10 is the proper subject of an initiative.

HELD: YES. The Constitution clearly includes not only ordinances but resolutions as appropriate subjects of a local initiative. An act includes a resolution (Black’s Law Dictionary). In enacting RA 6735, Congress implemented the constitutional command to include acts (resolutions) as appropriate subjects of initiative. (Sec. 32, Art. VI of the 1987 CONSTI)

The 1991 LGC did not change the scope of coverage of local initiative as limiting the coverage to ordinances alone. Sec. 120 merely defines the concept of local initiative as the legal process whereby registered voters of a LGU may directly propose, enact or amend any ordinance. It does not deal with subjects or matters that can be taken up in a local initiative.

Sec. 124 (which deals with local initiative subjects or matters) clearly does not limit its application to ordinances, but to all “subjects or matters which are within the legal powers of the Sanggunians to enact” which undoubtedly includes resolutions.

Sec. 125 providing for limitations upon Sanggunians supports the interpretation, where inclusion of the word proposition is inconsistent with respondents’ thesis that only ordinances can be the subject of local initiatives.

Moreover, the subject matter of the resolution in CAB does not merely temporarily affect the people of Morong for it directs a permanent rule of conduct or government. Its inclusion as part of SSEZ has far reaching implications in the governance of its people. It is not material that the decision of the municipality came in the form of a resolution for what matters is its enduring effect on the welfare of the people of Morong.

LGC, SEC. 121. Who May Exercise. - The power of local initiative and referendum may be exercised by all registered voters of the provinces, cities, municipalities, and barangays.

SEC. 122. Procedure in Local Initiative. –

(a) Not less than one thousand (1,000) registered voters in case of provinces and cities, one hundred (100) in case of municipalities, and fifty (50) in case of barangays, may file a petition with the sanggunian concerned proposing the adoption, enactment, repeal, or amendment of an ordinance.

(b) If no favorable action thereon is taken by the sanggunian concerned within thirty (30) days from its presentation, the proponents, through their duly authorized and registered representatives, may invoke their power of initiative, giving notice thereof to the sanggunian concerned.

(c) The proposition shall be numbered serially starting from Roman numeral I. The COMELEC or its designated representative shall extend assistance in the formulation of the proposition.

(d) Two (2) or more propositions may be submitted in an initiative.

(e) Proponents shall have ninety (90) days in case of provinces and cities, sixty (60) days in case of municipalities, and thirty (30) days in case of barangays, from notice mentioned in subsection (b) hereof to collect the required number of signatures.

(f) The petition shall be signed before the election registrar, or his designated representatives, in the presence of a representative of the proponent, and a representative of the sanggunian concerned in a public place in the local government unit, as the case may be. Stations for collecting signatures may be established in as many places as may be warranted.

(g) Upon the lapse of the period herein provided, the COMELEC, through its office in the local government unit concerned, shall certify as to whether or not the required number of signatures has been obtained. Failure to obtain the required number defeats the proposition.

(h) If the required number of signatures is obtained, the COMELEC shall then set a date for the initiative during which the proposition shall be submitted to the registered voters in the local government unit concerned for their approval within sixty (60) days from the date of certification by the COMELEC, as provided in subsection (g) hereof, in case of provinces and cities, forty-five (45) days in case of municipalities, and thirty (30) days in case of barangays. The initiative shall then be held on the date set, after which the results thereof shall be certified and proclaimed by the COMELEC. PIMENTEL: The original expenses to formulate the proposal and gather

the required number of votes are necessarily charged to the proponents while the official costs are borne by the government.

The petition shall state the following: contents or text of the proposed law sought to be

enacted, approved or rejected, amended or repealed, as the case may be;

the proposition;

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reason or reasons therefor; that it is not one of the exceptions provided under

Sec. 124 of the LGC or Art. 149 of its IRR; signatures of the petitioners or registered voters; a formal designation of the duly authorized

representatives of the petitioners; and an abstract or summary in not more than 100

words which shall be legibly written or printed at the top of every page of the petition.

LGC, SEC. 123. Effectivity of Local Propositions. - If the proposition is approved by a majority of the votes cast, it shall take effect fifteen (15) days after certification by the COMELEC as if affirmative action thereon had been made by the sanggunian and local chief executive concerned. If it fails to obtain said number of votes, the proposition is considered defeated.

SEC. 124. Limitations on Local Initiatives. –

(a) The power of local initiative shall not be exercised more than once a year.

(b) Initiative shall extend only to subjects or matters which are within the legal powers of the sanggunians to enact.

(c) If at any time before the initiative is held, the sanggunian concerned adopts in toto the proposition presented and the local chief executive approves the same, the initiative shall be canceled. However, those against such action may, if they so desire, apply for initiative in the manner herein provided.

SEC. 125. Limitations upon Sanggunians. - Any proposition or ordinance approved through the system of initiative and referendum as herein provided shall not be repealed, modified or amended by the sanggunian concerned within six (6) months from the date of the approval thereof, and may be amended, modified or repealed by the sanggunian within three (3) years thereafter by a vote of three-fourths (3/4) of all its members: Provided, That in case of barangays, the period shall be eighteen (18) months after the approval thereof.

PIMENTEL:

Period Status Vote Required (To repeal, amend or modify)

From Day 1 up to 6 mos. of adoption

Absolute protection; no changes allowed

From the end of 6 mos. plus 3 years (municipalities, cities, provinces) or plus 1 year (barangays)

Qualified protection; ¾ vote of all sanggunian members

After 3 years (or 1 year) and 6 mos. from the adoption of the initiative.

No more protection; simple majority

RATIO: To ensure that due respect is accorded to the will of the electorate of a locality so that it is not easily substituted by the will of only a few members of the Sanggunian.

REMEMBER: The initiative proposal passed by the direct vote of the people is not subject to the veto of the local chief executive.

SBMA vs. COMELEC(1996)

FACTS: This is the continuation of the Garcia vs. COMELEC case. During the pendency of the said case in the SC, the COMELEC issued Resolution No. 2848 providing for "the rules and guidelines to govern the conduct of the referendum proposing to annul or repeal Resolution No. 10.

SBMA instituted the present petition for certiorari and prohibition contesting the validity of Resolution No. 2848 and alleging, inter alia, that public respondent "is intent on proceeding with a local initiative that proposes an amendment of a national law. . .”

WON the COMELEC erred in scheduling a “referendum” which seeks the amendment of a national law.

HELD: YES. The process started by Garcia et. al was an initiative but COMELEC made preparations for a referendum only. The Comelec labeled the exercise as a "Referendum"; the counting of votes was entrusted to a "Referendum Committee"; the documents were called "referendum returns"; the canvassers, "Referendum Board of Canvassers" and the ballots themselves bore the description "referendum". To repeat, not once was the word "initiative" used in said body of Resolution No. 2848. And yet, this exercise is unquestionably an INITIATIVE.

In enacting the "Initiative and Referendum Act, Congress differentiated one term from the other, thus:

(a) "Initiative" is the power of the people to propose amendments to the Constitution or to propose and enact legislations through an election called for the purpose.

There are three (3) systems of initiative, namely:

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1. Initiative on the Constitution which refers to a petition proposing amendments to the Constitution;

2. Initiative on statutes which refers to a petition proposing to enact a national legislation; and

3. Initiative on local legislation which refers to a petition proposing to enact a regional, provincial, city, municipal, or barangay law, resolution or ordinance.

(b) "Indirect initiative" is exercise of initiative by the people through a proposition sent to Congress or the local legislative body for action.

(c) "Referendum" is the power of the electorate to approve or reject a legislation through an election called for the purpose. It may be of two classes, namely:

1. Referendum on statutes which refers to a petition to approve or reject an act or law, or part thereof, passed by Congress; and

2. Referendum on local law which refers to a petition to approve or reject a law, resolution or ordinance enacted by regional assemblies and local legislative bodies.

Prescinding from these definitions, we gather that initiative is resorted to (or initiated) by the people directly either because the law-making body fails or refuses to enact the law, ordinance, resolution or act that they desire or because they want to amend or modify one already existing. On the other hand, in a local referendum, the law-making body submits to the registered voters of its territorial jurisdiction, for approval or rejection, any ordinance or resolution which is duly enacted or approved by such law-making authority.

In sum, the differences between an initiative and referendum are as follows:

Initiative Referendum - entirely the work of the electorate

- begun and consented to by the law-making body.

- process of law-making by the people themselves without the participation and against the wishes of their elected reps.

- drawn up or enacted by a legislative body.

- process and voting more complex

- voters simply write either “yes” or “no” in the ballot

LGC, SEC. 126. Local Referendum Defined. - Local referendum is the legal process whereby the registered voters of the local government units may approve, amend or reject any ordinance enacted by the sanggunian. The local referendum shall be held under the control and direction of the COMELEC within sixty (60) days in case of provinces and cities, forty-five (45) days in case of municipalities and thirty (30) days in case of barangays. The COMELEC shall certify and proclaim the results of the said referendum.

PIMENTEL: This system originated in Switzerland. Bouvier’s Law

Dictionary adds that a referendum is “the referring of legislative acts to the electorate for their final acceptance or rejection.”

In RA 6735, referendum on a local law refers to “a petition to approve or reject a law, resolution or ordinance enacted by regional assemblies and local legislative bodies.”

The expenses are borne by the LGU although the COMELEC may set aside funds for this purpose.

GD-R: The petitioners asking for a referendum are usually oppositors of the ordinance.

LGC, SEC. 127. Authority of Courts. - Nothing in this Chapter shall prevent or preclude the proper courts from declaring null and void any proposition approved pursuant to this Chapter for violation of the Constitution or want of capacity of the sanggunian concerned to enact the said measure.

Compare LGC with RA 6735 (wrt Initiative)

LGC RA 6735Who may exercise

all registered voters of the LGU’s concerned.

Same. However, however, it also recognizes the right of any duly accredited people’s organization, to file a petition for indirect initiative with the appropriate legislative bodies

Number of Voters required

Not less than 1,000 registered voters (provinces and cities)

Not less than 100 (municipalities) Not less than 50 (barangays)

Subject matter of initiative

Ordinance (in the letter of the law) but

Ordinance and resolutions (in the

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resolutions are not prohibited.

letter of the law)

Numbering of petition

The petition shall be numbered serially starting from Roman numeral I. Two or more propositions are allowed in one petition.

The petition shall be numbered serially starting from one (1). Two or more propositions are allowed in one petition.

Assisting agency COMELEC DILG SecretaryCondition precedent before exercise of power

If no favorable action on the petition is taken by the sanggunian concerned within thirty (30) days from its presentation

Notice to the sanggunian before exercise

YES

Period to Gather signatures

From the date of notice to the sanggunian: 90 days (provinces and cities) 60 days (municipalities) 30 days (barangays)

COMELEC duties regarding local initiative

In a public place, witness the signing of the petition.

Establish stations for the collection of signatures.

Certify as to whether or not the required number of signatures has been obtained.

If the required number of votes is met, set a date for the initiative from the date of the certification abovementioned: 60 days (provinces and cities) 45 days (municipalities) and 30 days (barangays)

Submit the initiative to the people for approval

Proclaim and certify the resultsEffectivity of local propositions

If the proposition is approved by a majority of the votes cast, it shall take effect fifteen (15) days after certification by the COMELEC.

Limitations on local initiatives.

shall not be exercised more than once a year.

shall extend only to subjects or matters which are within the legal powers of the sanggunians to enact.

if at any time before the initiative is held, the sanggunian concerned adopts in toto the proposition presented and the local chief executive approves the same, the initiative shall be canceled. However, those against such action may, if they so desire, apply for initiative in the manner herein provided.

2. Acts of Sangguniana. Ordinance and Resolutionb. Formalities

i. Vote

Ortiz vs. Posadas(1931)

FACTS: Seven of the thirteen members present, including the president, of the municipal council of Tabaco, Albay, voted in favor of Ordinance No. 25, concerning cockpits, and six members voted against the ordinance, with three members absent.

WON Ordinance is valid

HELD: NO. Section 2224 of the Administrative Code is clear. It needs only application, not interpretation. The ayes and noes are taken upon (1) the passage of all ordinances, (2) all propositions to create any liability against the municipality, and (3) any other proposition, upon the request of any member. The same idea is carried into the succeeding sentence. For the passage of (1) any ordinance or (2) any proposition creating indebtedness, the affirmative vote of a majority of all the members of the municipal council shall be necessary. Other measures prevail upon the majority vote of the members present. "Creating indebtedness" refers to "proposition" and not to "ordinance." The contention that only ordinances creating indebtedness require the approval of a majority of all the members of the municipal council, is devoid of merit.The basic idea of the legislative body to make impossible the approval of ordinances or of propositions creating indebtedness by minority votes of municipal councils, at meetings hastily called is wise. Legislative intention should be effectuated.

Section 2224 of the Administrative Code, requiring in mandatory language the affirmative vote of a majority of all the members of the municipal council for the passage of any ordinance, whether or not an ordinance creating indebtedness, an ordinance passed by less than that majority is invalid.

ii. Essential Requisites of a Valid Ordinance

City of Manila vs. Laguio(2005)

FACTS: MTDC is a corporation engaged in the business of operating hotels, motels, hostels and lodging houses. It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel. MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order with the lower court impleading as defendants, the City of

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Manila, Hon. Mayor Lim, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional on the following gorunds:

(1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv) of the Local Government Code of 1991 (the Code) grants to the City Council only the power to regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and other similar establishments;

(2) The Ordinance is void as it is violative of Presidential Decree (P.D.) No. 499 which specifically declared portions of the Ermita-Malate area as a commercial zone with certain restrictions;

(3) The Ordinance does not constitute a proper exercise of police power as the compulsory closure of the motel business has no reasonable relation to the legitimate municipal interests sought to be protected;

(4) The Ordinance constitutes an ex post facto law by punishing the operation of Victoria Court which was a legitimate business prior to its enactment;

(5) The Ordinance violates MTDC's constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiff's property rights; (b) the City Council has no power to find as a fact that a particular thing is a nuisance per se nor does it have the power to extrajudicially destroy it; and

(6) The Ordinance constitutes a denial of equal protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns, but not pension houses, hotels, lodging houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area but not outside of this area.

WON the ordinance is valid

HELD: NO. The Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates a constitutional provision. The prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The Court is called upon to shelter these rights from attempts at rendering them worthless.

The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and must be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the

Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.

The requirement that the enactment must not violate existing law gives stress to the precept that local government units are able to legislate only by virtue of their derivative legislative power, a delegation of legislative power from the national legislature. The delegate cannot be superior to the principal or exercise powers higher than those of the latter

There are no "pure" places where there are impure men.

The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinance may to shape morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The City Council instead should regulate human conduct that occurs inside the establishments, but not to the detriment of liberty and privacy which are covenants, premiums and blessings of democracy.While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the proprietors and operators of "wholesome," "innocent" establishments. In the instant case, there is a clear invasion of personal or property rights, personal in the case of those individuals desirous of owning, operating and patronizing those motels and property in terms of the investments made and the salaries to be paid to those therein employed. If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose reasonable regulations such as daily inspections of the establishments for any violation of the conditions of their licenses or permits; it may exercise its authority to suspend or revoke their licenses for these violations; and it may even impose increased license fees. In other words, there are other means to reasonably accomplish the desired end.

The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof. Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the general welfare. The Code still withholds from cities the power to suppress and prohibit altogether the establishment, operation and maintenance of such establishments.

iii. Judicial Intervention

ROC, Rule 64, Sec. 4. Local government ordinances. — In any action involving the validity of a local ordinance, the corresponding prosecutor or attorney of the local governmental

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unit involved shall be similarly notified and entitled to be heard. If such ordinance is alleged to be unconstitutional, the Solicitor General shall be notified and entitled to be heard. (4a)

Perez vs. Dela Cruz(1969)

FACTS: Vice Mayor Perez (Naga City), who was presiding a private conference with 7 city councilors in the matter of selecting the secretary of the municipal board and the chairman of various standing committees of the board, expressed her intention to join the vote on these matters – to create a tie vote and thereafter to exercise her power as presiding officer to break the deadlock after it was made known that 4 Nacionalista Party councilors desire to vote for a particular person as secretary of the board and to hold the chairmanship of the committee on markets for one of them.

The four Nacionalistas sought to prevent the Vice Mayor by filing with CFI of Camarines Sur contending that the vice mayor is not a member of the board but only its presiding officer, that as such, he cannot vote except in case of a tie.

Meanwhile, the Liberal Party councilors passed an amendment to the Rules of Procedure of the Naga municipal board granting the chairman thereof the right to vote as a member, and as presiding officer the right to vote again in case of a tie.

WON the vice mayor, besides being a presiding officer of a municipal board, is also a member thereof.

HELD: NO. The Vice Mayor of Naga City as presiding officer of the Municipal Board cannot be a member of the same board. In the absence of any statutory authority constituting the vice-mayor as a member of the municipal board, in addition to being the presiding officer thereof, it cannot be read into the law something that is not there. Differences in law beget differences in legal effects.

The mere fact that the vice-mayor was made the “presiding officer” of the board did not ipso jure make him a member thereof; and even if he “is an integral part of the Municipal board” such fact does not necessarily confer on him” either the status of a regular member of its municipal board or the powers and attributes of a municipal councilor.

There is nothing in the Charter of Naga City which provides that the vice-mayor of said city is a member of the municipal board. He was not even designated as “Acting Mayor” in case of temporary incapacity of the Mayor.

The Vice-Mayor is allowed to vote only in case of a tie. He is not allowed to vote twice (to create a tie and break the deadlock).

Since there are 7 councilors, a tie is not possible. The Vice Mayor’s vote in case of a tie is no longer necessary.

Doctrine in Vera vs. Avelino that prohibition refers only to proceedings of any tribunal, corporation, board or person not exercising legislative functions is based on the principle of separation of powers and checks and balances which is not applicable to local governments. The case is irrelevant to the issue in CAB in addition to the actuality that executives at the local or municipal level are vested with both legislative and sometimes judicial functions, in addition to their purely executive duties.

By explicit statutory command, courts are given authority to determine the validity of municipal proceedings. And in CAB, the petitioner, in insisting to exercise the right to vote twice in the municipal board, acted without jurisdiction and power to do so, and may be validly prevented and restrained by a writ of prohibition.

In reply to petitioner’s assertion that the acts sought to be restrained are mere “probable individual actuations” beyond the reach of a prohibitory writ, suffice it to state that prohibition is essentially a preventive remedy and is not intended to provide for remedy for acts already accomplished.Petitioner’s threat of voting twice was not an empty or meaningless gesture for record shows that she voted twice for the approval of the alleged amendment to the rules of procedure.

Homeowner’s Association of the Philippines, Inc. vs. Municipal Board of Manila

(1968)

FACTS: Homeowner’s Association brought action for declaratory relief to nullify Manila Municipal Ordinance 4841 declaring that a state of emergency existed in the matter of housing accommodations in Manila, in view of prevailing scarcity of land and buildings for residential purposes there.

Sections 1 and 2 of the assailed ordinance provides that lessors and sublessors of land and buildings primarily devoted to residential purposes cannot increase their rentals beyond certain conditions.

The CFI declared it void, arguing that the power to declare a state of emergency exclusively pertains to Congress. Moreover, there is no longer a state of emergency which justifies the regulation of house rentals. And the ordinance also illegally limits the use of private properties.

WON the ordinance is valid and may be made effective permanently.

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NO. Assuming that the City had such powers and assuming the existence of the emergency, ordinance is illegal and unconstitutional (Note: Court did not decide if the city has power to declare a state of emergency and if such emergency existed)

The police power of municipal corporations is subject to constitutional limitations. Individual rights may be adversely affected by the exercise of police power only to the extent that may be fairly required by the legitimate demands of public interest or public welfare.

When the demands of public interest are brought about by a state of emergency, the interference upon individual rights must be co-terminus with the existence of the state of emergency. The statute passed to meet a given emergency, should limit the period of its effectivity.

Otherwise, that which was intended to meet a temporary emergency may become a permanent law. Hence, when the cause for the grant of power was temporary, so should the grant be, for the effect cannot remain in existence upon the removal of its cause.

Appellant assails the validity of the proceedings in the lower court upon the round that, although petitioners herein had assailed Municipal Ordinance No. 4841, not merely as ultra vires, but, also, as unconstitutional, the Solicitor General had been neither heard nor notified in connection therewith, in violation of Section 4 of Rule 64 of the Rules of Court.The determination of the question whether or not the Solicitor General should be required to appear "in any action involving the validity of any treaty, law, ordinance or executive order, rules or regulation" is a matter left to the "discretion" of the Court, pursuant to Section 23 of Rule 3 of the Rules of Court. Inasmuch as said requirement is not mandatory, but discretionary , non-compliance therewith and with Section 4 of Rule 64 — the interpretation of which should be harmonized with said Section 23 of Rule 3 — affected neither the jurisdiction of the trial court nor the validity of the proceedings therein , in connection with the present case.

The requirement regarding notification to the Provincial Fiscal of the pendency of an action involving the validity of a municipal ordinance, as provided in Sec. 4, Rule 64 of ROC, is not jurisdictional; and failure on the part of petitioner to notify the Provincial Fiscal will not be a sufficient ground to throw the case out of court. We believe the purpose of the above-quoted rule is simply to give the Provincial Fiscal, who is the legal officer of the local governments, a chance to participate in the deliberation to determine the validity of a questioned municipal ordinance before the competent court. If it appears, however, that the ordinance in question is patently illegal, as in the present case, and the matter had already been passed upon by a competent court, the

requirements of Sec. 4 of Rule 64 of the Revised Rules of Court may be dispensed with.

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