Police Power Case Digest

P o l i c e P o w e r | 1
QUEZON CITY V. ERICTA

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 & have been residents of QC for at
least 5 years prior to their death. 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 Sec 9 of the
Ordinance. CFI declared Sec 9 null and void. MR:
denied
Issue: WON the ordinance is authorized under QC
Charter and a valid exercise of police power. NO.
Restatement of certain basic principles:
Occupying the forefront in the bill of rights is the
provision which states that 'no person shall be
deprived of life, liberty or property without due
process of law' (Art. Ill, Section 1 subparagraph 1,
Constitution). On the other hand, there are three
inherent powers of government by which the state
interferes with the property rights, namely-. (1)
police power, (2) eminent domain, (3) taxation.
These are said to exist independently of the
Constitution as necessary attributes of
sovereignty.
Police power is defined by Freund as 'the power of
promoting the public welfare by restraining and
regulating the use of liberty and property' (Quoted
in Political Law by Tanada and Carreon, V-11, p.
50). It is usually exerted in order to merely
regulate the use and enjoyment of property of the
owner. If he is deprived of his property outright, it
is not taken for public use but rather to destroy in
order to promote the general welfare. In police
power, the owner does not recover from the
government for injury sustained in consequence
thereof (12 C.J. 623). It has been said that 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 (Ruby
vs. Provincial Board, 39 PhiL 660; Ichong vs.
Hernandez, 1,7995, May 31, 1957). This power
embraces the whole system of public regulation
(U.S. vs. Linsuya Fan, 10 PhiL 104). The Supreme
Court has said that police power is so far-reaching
in scope that it has almost become impossible to
limit its sweep. As it derives its existence from the
very existence of the state itself, it does not need
to be expressed or defined in its scope. Being
coextensive with self-preservation and survival
itself, it is the most positive and active of all
governmental processes, the most essential
insistent and illimitable Especially it is so under
the modern democratic framework where the
demands of society and nations have multiplied to
almost unimaginable proportions. The field and
scope of police power have become almost
boundless, just as the fields of public interest and
public welfare have become almost all embracing
and have transcended human foresight. Since the
Courts cannot foresee the needs and demands of
public interest and welfare, they cannot delimit
beforehand the extent or scope of the police power
by which and through which the state seeks to
attain or achieve public interest and welfare.
(Ichong vs. Hernandez, L-7995, May 31, 1957).
The police power being the most active power of
the government and the due process clause being
the broadest station on governmental power, the
conflict between this power of government and the
due process clause of the Constitution is
oftentimes inevitable.
It will be seen from the foregoing authorities that
police power is usually exercised in the form of
mere regulation or restriction in the use of liberty
or property for the promotion of the general
welfare. It does not involve the taking or
confiscation of property with the exception of a
few cases where there is a necessity to confiscate
private property in order to destroy it for the
purpose of protecting the peace and order and of
promoting the general welfare as for instance, the
confiscation of an illegally possessed article, such
as opium and firearms.
It seems to the court that Section 9 of Ordinance
No. 6118, Series of 1964 of Quezon City is not a
mere police regulation but an outright
confiscation. It deprives a person of his private
property without due process of law, nay, even
without compensation.
There is no reasonable relation between the setting
aside of at least six (6) percent of the total area of
an private cemeteries for charity burial grounds of
deceased paupers and the promotion of health,
morals, good order, safety, or the general welfare
of the people. The ordinance is actually a taking
without compensation of a certain area from a
private cemetery to benefit paupers who are
charges of the municipal corporation. Instead of
building or maintaining a public cemetery for this
purpose, the city passes the burden to private
cemeteries.

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 LGC, Batas
Pambansa Blg. 337 provides in Section 177 (q) that
a Sangguniang panlungsod may "provide for the
burial of the dead in such place and in such
manner as prescribed by law or ordinance" it
simply authorizes the city to provide its own city
owned land or to buy or expropriate private
properties to construct public cemeteries. This has
been the law and practise in the past. It continues
to the present. Expropriation, however, 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, 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.
DELA CRUZ V. PARAS
Facts: Ordinance 84 was passed by the
Municipality of Bocaue. Petitioners are business
owners who had been previously issued licenses
by the Municipal Mayor of Bocaue
Issues: WON a municipality may rely on its police
power to justify the enactment of the assailed
ordinance. NO.
Police power granted to municipal corporations:
"General power of council to enact ordinances and
make regulations.- The municipal council shall
enact such ordinances and make such regulations,
not repugnant to law, as may be necessary to carry
into effect and discharge the powers and duties
conferred upon it by law and such as shall seem
necessary and proper to provide for the health and
safety, promote the prosperity, improve the
morals, peace, good order, comfort, and
convenience of the municipality and the
inhabitants thereof, and for the protection of
property therein."
US v. Abendan: An ordinance enacted by virtue of
police power is valid unless it contravenes the
fundamental law, an act of the legislature, against
public policy, or is unreasonable, partial,
discriminating or in derogation of a common right.
US v. Salaveria: The general welfare clause has two
branches: 1. attaches itself to the main trunk of
municipal authority, and relates to such
ordinances and regulations as may be necessary to
carry into effect and discharge the powers and
duties conferred upon the municipal council by
law.
2.It authorizes such ordinances as shall seem
necessary and proper to provide for the health and
morals, peace, good order, comfort, and
convenience of the municipality and the
inhabitants thereof, and for the protection of
property therein. It is a general rule that
ordinances passed by virtue of the implied power
found in the general welfare clause must be
reasonable, consonant with the general powers
and purposes of the corporation, and not
inconsistent with the laws or policy of the State.
If night clubs were merely then regulated and not
prohibited, certainly the assailed ordinance would
pass the test of validity. **reasonableness,
consonance with the general powers and purposes
of municipal corporations, consistency with the
laws or policy of the State.
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.
WON a municipality has no authority to prohibit a
lawful business, occupation or calling. NO.
RA 938: the municipal or city board or council of
each chartered city shall have the power to
regulate by ordinance the establishment,
maintenance and operation of night clubs,

cabarets, dancing schools, pavilions, cockpits,
bars, saloons, bowling alleys, billiard pools, and
other similar places of amusement within its
territorial jurisdiction: . . . Then on May 21, 1954,
the first section was amended to include not
merely "the power to regulate, but likewise
"prohibit . . ." The title, however, remained the
same and the exact wording was followed. The
power granted remains that of regulation, not
prohibition. There is thus support for the view
advanced by petitioners that to construe RA 938 as
allowing the prohibition of the operation of night
clubs would give rise to a constitutional question.
There is a wide gap between the exercise of a
regulatory power "to provide for the health and
morals," in the language of the Administrative
Code, such competence extending to all "the great
public needs," and to interdict any calling,
occupation, or enterprise.
It is clear that municipal corporations cannot
prohibit the operation of might clubs. They may
be regulated, but not prevented from carrying on
their business.
BALACUIT V CFI JUNE 30, 1988
Facts: Petitioners, theater owners, assailed the
constitutionality of Ordinance No. 640 passed by
theMunicipal Board of the City of Butuan on April
21, 1969. This called for a reduction to of
theticket price given to minors from 7-12 years
old. There was a fine from 200-600 pesos or a 2-6
month imprisonment
The complaint was issued in the trial court. A TRO
was then issued to prevent the law from being
enforced. The respondent court entered its
decision declaring the law valid.
Petitioners attack the validity and constitutionality
of Ordinance No. 640 on the grounds that it is
ultra vires and an invalid exercise of police power.
Petitioners contend that Ordinance No. 640 is not
within the power of' the Municipal Board to enact
as provided for in Section 15(n) of Republic Act
No. 523 where it states that the Muncipal board
can only fix license fees for theaters and not
admission rates.
The respondent attempts to justify the enactment
of the ordinance by invoking the general welfare
clause embodied in Section 15 (nn) of the cited
law.
Issue: Does this power to regulate include the
authority to interfere in the fixing of prices
of admission to these places of exhibition and
amusement whether under its general grant of
power or under the general welfare clause as
invoked by the City?
Held: The ordinance is under neither and thus
unconstitutional. Petition granted.
1. Kwong Sing v. City of Manila- the word
"regulate" was interpreted to include the power to
control, to govern and to restrain, it would seem
that under its power to regulate places of
exhibitions and amusement, the Municipal Board
of the City of Butuan could make
proper policeregulations as to the mode in which
the business shall be exercised.
In this jurisdiction, it is already settled that 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.
People v. Chan- an ordinance of the City of Manila
prohibiting first run cinematographs from selling
tickets beyond their seating capacity was upheld
as constitutional for being a valid exercise
of police power.
The City of Butuan, apparently realizing that it has
no authority to enact the ordinance in question
under its power to regulate embodied in Section
15(n), now invokes the police power as delegated
to it under the general welfare clause to justify the
enactment of said ordinance
To invoke the exercise of police power, not only
must it appear that the interest of the public
generally requires an interference with private
rights, but the means adopted must be reasonably
necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals.
The legislature may not, under the guise of
protecting the public interest, arbitrarily interfere
with private business, or impose unusual and
unnecessary restrictions upon lawful occupations.
In other words, the determination as to what is a
proper exercise of its police power is not final or
conclusive, but is subject to the supervision of the
courts.
Petitioners maintain that Ordinance No. 640
violates the due process clause of the Constitution
for being oppressive, unfair, unjust, confiscatory,
and an undue restraint of trade, and violative of
the right of persons to enter into contracts,
considering that the theater owners are bound
under a contract with the film owners for
just admission prices for general admission,
balcony and lodge.

Homeowners Association- the exercise
of police power is necessarily subject to a
qualification, limitation or restriction demanded
by the regard, the respect and the obedience due
to the prescriptions of the fundamental law
The court agreed with petitioners that the
ordinance is not justified by any necessity for the
public interest. The police power legislation must
be firmly grounded on public interest and welfare,
and a reasonable relation must exist between
purposes and means.
The evident purpose of the ordinance is to help
ease the burden of cost on the part of parents who
have to shell out the same amount of money for
the admission of their children, as they would for
themselves. A reduction in the price
of admission would mean corresponding savings
for the parents; however, the petitioners are the
ones made to bear the cost of these savings. The
ordinance does not only make the petitioners
suffer the loss of earnings but it likewise penalizes
them for failure to comply with it. Furthermore, as
petitioners point out, there will be difficulty in its
implementation because as already experienced by
petitioners since the effectivity of the ordinance,
children over 12 years of age tried to pass off their
age as below 12 years in order to avail of the
benefit of the ordinance. The ordinance does not
provide a safeguard against this undesirable
practice and as such, the respondent City of
Butuan now suggests that birth certificates be
exhibited by movie house patrons to prove the age
of children. This is, however, not at all practicable.
We can see that the ordinance is clearly
unreasonable if not unduly oppressive upon the
business of petitioners. Moreover, there is no
discernible relation between the ordinance and the
promotion of public health, safety, morals and the
general welfare.
Respondent further alleges that by charging the
full price, the children are being exploited by
movie house operators. We fail to see how the
children are exploited if they pay the full price
ofadmission. They are treated with the same
quality of entertainment as the adults.
Moreover, as a logical consequence of the
ordinance, movie house and theater operators will
be discouraged from exhibiting wholesome movies
for general patronage, much less children's
pictures if only to avoid compliance with the
ordinance and still earn profits for themselves.
A theater ticket has been described to be either a
mere license, revocable at the will of the
proprietor of the theater or it may be evidence of a
contract whereby, for a valuable consideration, the
purchaser has acquired the right to enter the
theater and observe the performance on condition
that he behaves properly. Such ticket, therefore,
represents a right, Positive or conditional, as the
case may be, according to the terms of the original
contract of sale. This right is clearly a right of
property. The ticket which represents that right is
also, necessarily, a species of property. As such,
the owner thereof, in the absence of any condition
to the contrary in the contract by which he
obtained it, has the clear right to dispose of it, to
sell it to whom he pleases and at such price as he
can obtain.
In no sense could theaters be considered public
utilities. The State has not found it appropriate as
a national policy to interfere with
the admission prices to these performances. This
does not mean however, that theaters and
exhibitions are not affected with public interest
even to a certain degree. Motion pictures have
been considered important both as a medium for
the communication of Ideas and expression of the
artistic impulse. Their effects on the perceptions
by our people of issues and public officials or
public figures as well as the prevailing cultural
traits are considerable.
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.
A police measure for the regulation of the conduct,
control and operation of a business should not
encroach upon the legitimate and lawful exercise
by the citizens of their property rights. 34 The
right of the owner to fix a price at which his
property shall be sold or used is an inherent
attribute of the property itself and, as such, within
the protection of the due process clause.
Although the presumption is always in favor of the
validity or reasonableness of the ordinance, such
presumption must nevertheless be set aside when
the invalidity or unreasonableness appears on the
face of the ordinance itself or is established by
proper evidence
BINAY V. DOMINGO
Facts: Resolution 60 confirming the ongoing burial
assistance program initiated by the mayors office.
Under this program, bereaved families whose
gross family income does not exceed 2k/month
will receive a 500php cash relief to be taken out of

unappropriated available funds existing in the
municipal treasury. The Metro Manila Commission
approved Resolution 60. Thereafter, the municipal
secretary certified a disbursement of P400,000 for
the implementation of the Burial Assistance
Program. R 60 was referred to the Commission on
Audit for its expected allowance in audit. Based on
its preliminary findings, COA disapproved R 60
and disallowed in audit the disbursement of funds
for the implementation thereof. The program was
stayed by COA Decision No. 1159.
Issues: WON R 60 is a valid exercise of police
power under the general welfare clause. 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 of police
power may arise from express delegation, or be
inferred from the mere fact of the creation of the
municipal 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 expressly granted, and statutes
conferring powers on public corporations have
been construed as empowering them to do the
things essential to the enjoyment of life and
desirable for the safety of the people.
Municipal governments exercise this power under
the general welfare clause: authority to "enact such
ordinances and issue such regulations as may be
necessary to carry out and discharge the
responsibilities conferred upon it by law, and such
as shall be necessary and proper to provide for the
health, safety, comfort and convenience, maintain
peace and order, improve public morals, promote
the prosperity and general welfare of the
municipality and the inhabitants thereof, and
insure the protection of property therein."
Sec 7 of BP 337: every LGU shall exercise the
powers expressly granted, those necessarily
implied therefrom, as well as powers necessary
and proper for governance such as to promote
health and safety, enhance prosperity, improve
morals, and maintain peace and order in the LGU,
and preserve the comfort and convenience of the
inhabitants therein."
Police power: 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; greatest and most powerful
attribute of the government; elastic and must be
responsive to various social conditions.
COA: there is no perceptible connection or relation
between the objective sought to be attained under
R 60 and the alleged public safety, general welfare.
etc. of the inhabitants of Makati
Apparently, COA tries to re-define the scope of
police power by circumscribing its exercise to
"public safety, general welfare, etc. of the
inhabitants of Makati ."
Police power of a municipal corporation: 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.
Thus, it is deemed inadvisable to attempt to frame
any definition which shall absolutely indicate the
limits of police power.
COA is not attuned to the changing of the times.
Public purpose is not unconstitutional merely
because it incidentally benefits a limited number
of persons. OSG: "the drift is towards social
welfare legislation geared towards state policies to
provide adequate social services (Section 9, Art. II,
Constitution), the promotion of the general welfare
(Section 5, Ibid) social justice (Section 10, Ibid) as
well as human dignity and respect for human
rights. (Section 11, Ibid."
The care for the poor is generally recognized as a
public duty. The support for the poor has long
been an accepted exercise of police power in the
promotion of the common good.
There is no violation of the equal protection clause
in classifying paupers as subject of legislation.
Paupers may be reasonably classified. Different
groups may receive varying treatment. Precious to
the hearts of our legislators, down to our local
councilors, is the welfare of the paupers. Thus,
statutes have been passed giving rights and
benefits to the disabled, emancipating the tenant-
farmer from the bondage of the soil, housing the
urban poor, etc.
The resolution is a paragon of the continuing
program of our government towards social justice.

The Burial Assistance Program is a relief of
pauperism, though not complete. The loss of a
member of a family is a painful experience, and it
is more painful for the poor to be financially
burdened by such death. Resolution No. 60 vivifies
the very words of the late President Ramon
Magsaysay 'those who have less in life, should
have more in law."
MUNICIPALITY OF SAN FERNANDO, LA UNION V.
FIRME
Facts: At about 7 o'clock in the morning of
December 16, 1965, a collision occurred involving
a passenger jeepney driven by Bernardo Balagot
and owned by the Estate of Macario Nieveras, a
gravel and sand truck driven by Jose Manandeg
and owned by Tanquilino Velasquez and a dump
truck of the Municipality of San Fernando, La
Union and driven by Alfredo Bislig. Due to the
impact, several passengers of the jeepney
including Laureano Bania Sr. died as a result of
the injuries they sustained and four (4) others
suffered varying degrees of physical injuries. On
December 11, 1966, the private respondents
instituted a complaint for damages against the
Estate of Macario Nieveras and Bernardo Balagot,
owner and driver, respectively, of the passenger
jeepney, which was docketed Civil Case No. 2183
in the Court of First Instance of La Union, Branch I,
San Fernando, La Union. However, the aforesaid
defendants filed a Third Party Complaint against
the petitioner and the driver of a dump truck of
petitioner. Thereafter, the case was subsequently
transferred to Branch IV, presided over by
respondent judge and was subsequently docketed
as Civil Case No. 107-Bg. By virtue of a court order
dated May 7, 1975, the private respondents
amended the complaint wherein the petitioner and
its regular employee, Alfredo Bislig were
impleaded for the first time as defendants.
Petitioner filed its answer and raised affirmative
defenses such as lack of cause of action, non-
suability of the State, prescription of cause of
action and the negligence of the owner and driver
of the passenger jeepney as the proximate cause
of the collision.
In the course of the proceedings, the respondent
judge issued the following questioned orders: (1)
Order dated November 4, 1975 dismissing the
cross-claim against Bernardo Balagot; (2) Order
dated July 13, 1976 admitting the Amended
Answer of the Municipality of San Fernando, La
Union and Bislig and setting the hearing on the
affirmative defenses only with respect to the
supposed lack of jurisdiction; (3) Order dated
August 23, 1976 deferring the resolution of the
grounds for the Motion to Dismiss until the trial;
(4) Order dated February 23, 1977 denying the
motion for reconsideration of the order of July 13,
1976 filed by the Municipality and Bislig for
having been filed out of time; (5) Order dated
March 16, 1977 reiterating the denial of the
motion for reconsideration of the order of July 13,
1976; (6) Order dated July 26, 1979 declaring the
case deemed submitted for decision it appearing
that parties have not yet submitted their
respective memoranda despite the court's
direction; and (7) Order dated September 7, 1979
denying the petitioner's motion for
reconsideration and or order to recall prosecution
witnesses for cross examination. TC: defendants
Municipality of San Fernando, La Union and
Alfredo Bislig are ordered to pay jointly and
severally, plaintiffs Juana Rimando-Bania, Mrs.
Priscilla B. Surell, Laureano Bania, Jr., Sor Marietta
Bania, Mrs. Fe B. Soriano, Montano Bania, Orja
Bania and Lydia B. Bania the sums of P1,500.00
as funeral expenses and P24,744.24 as the lost
expected earnings of the late Laureano Bania Sr.,
P30,000.00 as moral damages, and P2,500.00 as
attorney's fees. Costs against said defendants.The
Complaint is dismissed as to defendants Estate of
Macario Nieveras and Bernardo Balagot. MR, MNT.
MR denied. Finally, the respondent judge issued an
order dated December 3, 1979 providing that if
defendants municipality and Bislig further wish to
pursue the matter disposed of in the order of July
26, 1979, such should be elevated to a higher
court in accordance with the Rules of Court.
Hence, this petition.
Issue: 1. WON the respondent court committed
grave abuse of discretion when it deferred and
failed to resolve the defense of non-suability of
the State amounting to lack of jurisdiction in a
motion to dismiss.
In the case at bar, the respondent judge deferred
the resolution of the defense of non-suability of
the State amounting to lack of jurisdiction until
trial. However, said respondent judge failed to
resolve such defense, proceeded with the trial and
thereafter rendered a decision against the
municipality and its driver. The respondent judge
did not commit grave abuse of discretion when in
the exercise of its judgment it arbitrarily failed to
resolve the vital issue of non-suability of the State
in the guise of the municipality. However, said
judge acted in excess of his jurisdiction when in
his decision dated October 10, 1979 he held the
municipality liable for the quasi-delict committed
by its regular employee.
The doctrine of non-suability of the State is
expressly provided for in Article XVI, Section 3 of
the Constitution, to wit: "the State may not be sued
without its consent." Stated in simple parlance, the
general rule is that the State may not be sued
except when it gives consent to be sued. Consent
takes the form of express or implied consent.
Express consent may be embodied in a general law
or a special law. The standing consent of the State

to be sued in case of money claims involving
liability arising from contracts is found in Act No.
3083. A special law may be passed to enable a
person to sue the government for an alleged quasi-
delict, as in Merritt v. Government of the
Philippine Islands. Consent is implied when the
government enters into business contracts,
thereby descending to the level of the other
contracting party, and also when the State files a
complaint, thus opening itself to a counterclaim.
Municipal corporations, for example, like
provinces and cities, are agencies of the State
when they are engaged in governmental functions
and therefore should enjoy the sovereign
immunity from suit. Nevertheless, they are subject
to suit even in the performance of such functions
because their charter provided that they can sue
and be sued.
A distinction should first be made between
suability and liability. "Suability depends on the
consent of the state to be sued, liability on the
applicable law and the established facts. The
circumstance that a state is suable does not
necessarily mean that it is liable; on the other
hand, it can never be held liable if it does not first
consent to be sued. Liability is not conceded by
the mere fact that the state has allowed itself to be
sued. When the state does waive its sovereign
immunity, it is only giving the plaintiff the chance
to prove, if it can, that the defendant is liable."
WON the municipality is liable for the torts
committed by its employee, the test of liability of
the municipality depends on whether or not the
driver, acting in behalf of the municipality, is
performing governmental or proprietary functions.
Torio v. Fontanilla: the distinction of powers
becomes important for purposes of determining
the liability of the municipality for the acts of its
agents which result in an injury to third persons.
City of Kokomo v. Loy: "Municipal corporations
exist in a dual capacity, and their functions are
twofold. In one they exercise the right springing
from sovereignty, and while in the performance of
the duties pertaining thereto, their acts are
political and governmental. Their officers and
agents in such capacity, though elected or
appointed by them, are nevertheless public
functionaries performing a public service, and as
such they are officers, agents, and servants of the
state. In the other capacity the municipalities
exercise a private, proprietary or corporate right,
arising from their existence as legal persons and
not as public agencies. Their officers and agents in
the performance of such functions act in behalf of
the municipalities in their corporate or individual
capacity, and not for the state or sovereign power.
It has already been remarked that municipal
corporations are suable because their charters
grant them the competence to sue and be sued.
Nevertheless, they are generally not liable for torts
committed by them in the discharge of
governmental functions and can be held
answerable only if it can be shown that they were
acting in a proprietary capacity. In permitting such
entities to be sued, the State merely gives the
claimant the right to show that the defendant was
not acting in its governmental capacity when the
injury was committed or that the case comes
under the exceptions recognized by law. Failing
this, the claimant cannot recover.
In the case at bar, the driver of the dump truck of
the municipality insists that "he was on his way to
the Naguilian river to get a load of sand and gravel
for the repair of San Fernando's municipal streets."
In the absence of any evidence to the contrary, the
regularity of the performance of official duty is
presumed pursuant to Section 3(m) of Rule 131 of
the Revised Rules of Court. Hence, We rule that the
driver of the dump truck was performing duties or
tasks pertaining to his office.
Palafox, et. al. v. Province of Ilocos Norte, the
District Engineer, and the Provincial Treasurer:
that "the construction or maintenance of roads in
which the truck and the driver worked at the time
of the accident are admittedly governmental
activities." After a careful examination of existing
laws and jurisprudence, We arrive at the
conclusion that the municipality cannot be held
liable for the torts committed by its regular
employee, who was then engaged in the discharge
of governmental functions. Hence, the death of the
passenger tragic and deplorable though it may
be imposed on the municipality no duty to pay
monetary compensation.
SOLICITOR GENERAL V. METRO MANILA
AUTHORITY
Facts: Malapira complained to the Court that when
he was stopped for an alleged traffic violation, his
driver's license was confiscated in Quezon City.
The Caloocan-Manila Drivers and Operators
Association then sent a letter to the Court asking
who should enforce the decision in the above-
mentioned case, whether they could seek damages
for confiscation of their driver's licenses, and
where they should file their complaints. Other
letters were received by the Court complaining
against the confiscation of driver's licenses. Still
another complaint was received by the Court for
removal of a front license plate and drivers
license. The traffic enforcers invoked Ordinance
No. 7, Series of 1988, of Mandaluyong, authorizing
the confiscation of driver's licenses and the
removal of license plates of motor vehicles for

traffic violations, and a memorandum dated
February 27, 1991, from the District Commander
of the Western Traffic District of the Philippine
National Police, authorizing such sanction under
certain conditions. Director General Nazareno of
the Philippine National Police assured the Court in
his own Comment that his office had never
authorized the removal of the license plates of
illegally parked vehicles and that he had in fact
directed full compliance with the above-mentioned
decision in a memorandum, copy of which he
attached, entitled Removal of Motor Vehicle
License Plates and dated February 28, 1991. Tano-
an, on the other hand, argued that the Gonong
decision prohibited only the removal of license
plates and not the confiscation of driver's licenses.
On May 24, 1990, the Metropolitan Manila
Authority issued Ordinance No. 11, Series of 1991,
authorizing itself "to detach the license plate/tow
and impound attended/ unattended/ abandoned
motor vehicles illegally parked or obstructing the
flow of traffic in Metro Manila."
On July 2, 1991, the Court issued a resolution on
Ord 11: sec 2 which allows the
Metropolitan Manila Authority, thru the Traffic
Operation Center, is authorized to detach the
license plate/tow and impound
attended/unattended/abandoned motor vehicles
illegally parked or obstructing the flow of traffic in
Metro Manila appears to be in conflict with the
decision of the Court in the case at bar, where it
was held that the license plates of motor vehicles
may not be detached except only under the
conditions prescribed in LOI 43. Additionally, the
Court has received several complaints against the
confiscation by police authorities of driver's
licenses for alleged traffic violations, which
sanction is, according to the said decision, not
among those that may be imposed under PD 1605.
Comments required.
MMA: defended the said ordinance on the ground
that it was adopted pursuant to the powers
conferred upon it by EO 392. It particularly cited
Section 2 thereof vesting in the Council (its
governing body) the responsibility among others
of:
1. Formulation of policies on the delivery of basic
services requiring coordination or consolidation
for the Authority; and 2. Promulgation of
resolutions and other issuances of metropolitan
wide application, approval of a code of basic
services requiring coordination, and exercise of its
rule-making powers. The Authority argued that
there was no conflict between the decision and the
ordinance because the latter was meant to
supplement and not supplant the latter. It stressed
that the decision itself said that the confiscation
of license plates was invalid in the absence of a
valid law or ordinance, which was why Ordinance
No. 11 was enacted. The Authority also pointed
out that the ordinance could not be attacked
collaterally but only in a direct action challenging
its validity.
SolGen: the ordinance was null and void because it
represented an invalid exercise of a delegated
legislative power. The flaw in the measure was
that it violated existing law, specifically PD 1605,
which does not permit, and so impliedly prohibits,
the removal of license plates and the confiscation
of driver's licenses for traffic violations in
Metropolitan Manila. He made no mention,
however, of the alleged impropriety of examining
the said ordinance in the absence of a formal
challenge to its validity.
On October 24, 1991, the Office of the Solicitor
General submitted a motion for the early
resolution of the questioned sanctions, to remove
once and for all the uncertainty of their validity. A
similar motion was filed by the Metropolitan
Manila Authority, which reiterated its contention
that the incidents in question should be dismissed
because there was no actual case or controversy
before the Court.
The Metropolitan Manila Authority is correct in
invoking the doctrine that the validity of a law or
act can be challenged only in a direct action and
not collaterally. That is indeed the settled
principle. However, that rule is not inflexible and
may be relaxed by the Court under exceptional
circumstances, such as those in the present
controversy. The Solicitor General notes that the
practices complained of have created a great deal
of confusion among motorists about the state of
the law on the questioned sanctions. More
importantly, he maintains that these sanctions are
illegal, being violative of law and the Gonong
decision, and should therefore be stopped. We also
note the disturbing report that one policeman who
confiscated a driver's license dismissed the
Gonong decision as "wrong" and said the police
would not stop their "habit" unless they received
orders "from the top." Regrettably, not one of the
complainants has filed a formal challenge to the
ordinances, including Monsanto and Trieste, who
are lawyers and could have been more assertive of
their rights.
Issue: WON MMA Ord 11 and Mandaluyong Ord 7
are valid. NO.
MMA sustains Ordinance No. 11, Series of 1991,
under the specific authority conferred upon it by
EO 392, while Ordinance No. 7, Series of 1988, is
justified on the basis of the General Welfare Clause
embodied in the LGC. It is not disputed that both

measures were enacted to promote the comfort
and convenience of the public and to alleviate the
worsening traffic problems in Metropolitan Manila
due in large part to violations of traffic rules.
valid delegation of legislative power: 1) the
completeness of the statute making the delegation;
and 2) the presence of a sufficient standard.
Under the first requirement, the statute must leave
the legislature complete in all its terms and
provisions such that all the delegate will have to
do when the statute reaches it is to implement it.
What only can be delegated is not the discretion to
determine what the law shall be but the discretion
to determine how the law shall be enforced. This
has been done in the case at bar.
As a second requirement, the enforcement may be
effected only in accordance with a sufficient
standard, the function of which is to map out the
boundaries of the delegate's authority and thus
"prevent the delegation from running riot." This
requirement has also been met. It is settled that
the "convenience and welfare" of the public,
particularly the motorists and passengers in the
case at bar, is an acceptable sufficient standard to
delimit the delegate's authority.
But the problem before us is not the validity of the
delegation of legislative power. The question we
must resolve is the validity of the exercise of such
delegated power. The measures in question are
enactments of local governments acting only as
agents of the national legislature. Necessarily, the
acts of these agents must reflect and conform to
the will of their principal. To test the validity of
such acts in the specific case now before us, we
apply the particular requisites of a valid ordinance
as laid down by the accepted principles governing
municipal corporations.
Elliot: a municipal ordinance, to be valid: 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 not be unreasonable;
and 6) must be general and consistent with public
policy.
Gonong decision: measures under consideration
do not pass the first criterion because they do not
conform to existing law. The pertinent law is PD
1605 which does not allow either the removal of
license plates or the confiscation of driver's
licenses for traffic violations committed in
Metropolitan Manila. There is nothing in the
following provisions of the decree authorizing the
Metropolitan Manila Commission (and now the
Metropolitan Manila Authority) to impose such
sanctions. In fact, the provisions prohibit the
imposition of such sanctions in Metropolitan
Manila. The Commission was allowed to "impose
fines and otherwise discipline" traffic violators
only "in such amounts and under such penalties as
are herein prescribed," that is, by the decree itself.
Nowhere is the removal of license plates directly
imposed by the decree or at least allowed by it to
be imposed by the Commission. Notably, Section 5
thereof expressly provides that "in case of traffic
violations, the driver's license shall not be
confiscated." These restrictions are applicable to
the Metropolitan Manila Authority and all other
local political subdivisions comprising
Metropolitan Manila, including the Municipality of
Mandaluyong.
The requirement that the municipal enactment
must not violate existing law explains itself. Local
political subdivisions are able to legislate only by
virtue of a valid delegation of legislative power
from the national legislature (except only that the
power to create their own sources of revenue and
to levy taxes is conferred by the Constitution
itself). They are mere agents vested with what is
called the power of subordinate legislation. As
delegates of the Congress, the local government
unit cannot contravene but must obey at all times
the will of their principal. In the case before us,
the enactments in question, which are merely local
in origin, cannot prevail against the decree, which
has the force and effect of a statute. The self-
serving language of Section 2 of the challenged
ordinance is worth noting. Curiously, it is the
measure itself, which was enacted by the
Metropolitan Manila Authority, that authorizes the
Metropolitan Manila Authority to impose the
questioned sanction.
Villacorta vs, Bernardo: the Court nullified an
ordinance enacted by the Municipal Board of
Dagupan City for being violative of the Land
Registration Act. The powers of the board in
enacting such a laudable ordinance cannot be held
valid when it shall impede the exercise of rights
granted in a general law and/or make a general law
subordinated to a local ordinance.
To sustain the ordinance would be to open the
floodgates to other ordinances amending and so
violating national laws in the guise of
implementing them. Thus, ordinances could be
passed imposing additional requirements for the
issuance of marriage licenses, to prevent bigamy;
the registration of vehicles, to minimize
carnapping; the execution of contracts, to forestall
fraud; the validation of parts, to deter imposture;
the exercise of freedom of speech, to reduce
disorder; and so on. The list is endless, but the
means, even if the end be valid, would be ultra
vires.

The measures in question do not merely add to the
requirement of PD 1605 but, worse, impose
sanctions the decree does not allow and in fact
actually prohibits. In so doing, the ordinances
disregard and violate and in effect partially repeal
the law.
We here emphasize the ruling in the Gonong case
that PD 1605 applies only to the Metropolitan
Manila area. It is an exception to the general
authority conferred by R.A. No. 413 on the
Commissioner of Land Transportation to punish
violations of traffic rules elsewhere in the country
with the sanction therein prescribed, including
those here questioned.
MAGTAJAS V. PRYCE PROPERTIES CORP &
PAGCOR
Facts: PAGCOR leased a portion of a building
belonging to Pryce Properties, renovated and
equipped the same, and prepared to inaugurate its
casino there during the Christmas season. The
Sangguniang Panlungsod of Cagayan de Oro City
enacted Ordinance No. 3353 which prohibits the
issuance of business permits and cancels existing
business permits to any establishment for the
using and allowing to be used its premises or
portions thereof for the operation of casinos.
Pryce assailed the ordinances before the Court of
Appeals, where it was joined by PAGCOR as
intervenor and supplemental petitioner. CA
declared the ordinances invalid and issued the
writ prayed for to prohibit their enforcement. MR
denied.
Issue: WON Ordinance 3353 is unconstitutional.
Basco v. Philippine Amusements and Gaming
Corporation: sustained the constitutionality of the
decree and even cited the benefits of the entity to
the national economy as the third highest revenue-
earner in the government, next only to the BIR and
the Bureau of Customs.
Cagayan de Oro City, like other local political
subdivisions, is empowered to enact ordinances
for the purposes indicated in the LGC. It is
expressly vested with the police power under what
is known as the General Welfare Clause. In
addition, Section 458 of the said Code specifically
declares that the Sangguniang Panlungsod, as the
legislative body of the city, shall enact ordinances,
approve resolutions and appropriate funds for the
general welfare of the city and its inhabitants. This
section also authorizes the LGUs to regulate
properties and businesses within their territorial
limits in the interest of the general welfare.
P: the Sangguniang Panlungsod may prohibit the
operation of casinos because they involve games
of chance, which are detrimental to the people.
Gambling is not allowed by general law and even
by the Constitution itself. The legislative power
conferred upon local government units may be
exercised over all kinds of gambling and not only
over "illegal gambling" as the respondents
erroneously argue. Even if the operation of casinos
may have been permitted under P.D. 1869, the
government of Cagayan de Oro City has the
authority to prohibit them within its territory
pursuant to the authority entrusted to it by the
LGC. Such interpretation is consonant with the
policy of local autonomy as mandated in Article II,
Section 25, and Article X of the Constitution, as
well as various other provisions therein seeking to
strengthen the character of the nation. In giving
the LGUs the power to prevent or suppress
gambling and other social problems, the LGC has
recognized the competence of such communities
to determine and adopt the measures best
expected to promote the general welfare of their
inhabitants in line with the policies of the State.
Valid Ordinance: 1) It must not contravene the
constitution or any statute. 2) It must not be unfair
or oppressive. 3) It must not be partial or
discriminatory. 4) It must not prohibit but may
regulate trade. 5) It must be general and consistent
with public policy. 6) It must not be unreasonable.
Under Sec. 458 of the LGC, LGUs are authorized to
prevent or suppress, among others, "gambling and
other prohibited games of chance." Obviously, this
provision excludes games of chance which are not
prohibited but are in fact permitted by law. The
petitioners are less than accurate in claiming that
the Code could have excluded such games of
chance but did not. In fact it does. The language of
the section is clear and unmistakable. Under the
rule of noscitur a sociis, a word or phrase should
be interpreted in relation to, or given the same
meaning of, words with which it is associated.
Accordingly, we conclude that since the word
"gambling" is associated with "and other
prohibited games of chance," the word should be
read as referring to only illegal gambling which,
like the other prohibited games of chance, must be
prevented or suppressed.
The apparent flaw in the ordinances in question is
that they contravene P.D. 1869 and the public
policy embodied therein insofar as they prevent
PAGCOR from exercising the power conferred on it
to operate a casino in Cagayan de Oro City. The
petitioners have an ingenious answer to this
misgiving. They deny that it is the ordinances that
have changed P.D. 1869 for an ordinance
admittedly cannot prevail against a statute. Their
theory is that the change has been made by the
LGC itself, which was also enacted by the national
lawmaking authority. In their view, the decree has
been, not really repealed by the Code, but merely

"modified pro tanto" in the sense that PAGCOR
cannot now operate a casino over the objection of
the local government unit concerned. This
modification of P.D. 1869 by the LGC is
permissible because one law can change or repeal
another law.
It seems to us that the petitioners are playing with
words. While insisting that the decree has only
been "modified pro tanto," they are actually
arguing that it is already dead, repealed and
useless for all intents and purposes because the
Code has shorn PAGCOR of all power to centralize
and regulate casinos. Strictly speaking, its
operations may now be not only prohibited by the
local government unit; in fact, the prohibition is
not only discretionary but mandated by Section
458 of the Code if the word "shall" as used therein
is to be given its accepted meaning. Local
government units have now no choice but to
prevent and suppress gambling, which in the
petitioners' view includes both legal and illegal
gambling. Under this construction, PAGCOR will
have no more games of chance to regulate or
centralize as they must all be prohibited by the
local government units pursuant to the mandatory
duty imposed upon them by the Code. In this
situation, PAGCOR cannot continue to exist except
only as a toothless tiger or a white elephant and
will no longer be able to exercise its powers as a
prime source of government revenue through the
operation of casinos.
It is noteworthy that the petitioners have cited
only Par. (f) of the repealing clause, conveniently
discarding the rest of the provision which
painstakingly mentions the specific laws or the
parts thereof which are repealed (or modified) by
the Code. Significantly, P.D. 1869 is not one of
them. A reading of the entire repealing clause,
which is reproduced below, will disclose the
omission: Sec. 534. Repealing Clause. (a) Batas
Pambansa Blg. 337, otherwise known as the "LGC,"
Executive Order No. 112 (1987), and Executive
Order No. 319 (1988) are hereby repealed. (b)
Presidential Decree Nos. 684, 1191, 1508 and such
other decrees, orders, instructions, memoranda
and issuances related to or concerning the
barangay are hereby repealed. (c) The provisions
of Sections 2, 3, and 4 of Republic Act No. 1939
regarding hospital fund; Section 3, a (3) and b (2)
of Republic Act. No. 5447 regarding the Special
Education Fund; Presidential Decree No. 144 as
amended by Presidential Decree Nos. 559 and
1741; Presidential Decree No. 231 as amended;
Presidential Decree No. 436 as amended by
Presidential Decree No. 558; and Presidential
Decree Nos. 381, 436, 464, 477, 526, 632, 752, and
1136 are hereby repealed and rendered of no force
and effect. (d) Presidential Decree No. 1594 is
hereby repealed insofar as it governs locally-
funded projects. (e) The following provisions are
hereby repealed or amended insofar as they are
inconsistent with the provisions of this Code:
Sections 2, 16, and 29 of Presidential Decree No.
704; Sections 12 of Presidential Decree No. 87, as
amended; Sections 52, 53, 66, 67, 68, 69, 70, 71,
72, 73, and 74 of Presidential Decree No. 463, as
amended; and Section 16 of Presidential Decree
No. 972, as amended, and (f) All general and
special laws, acts, city charters, decrees, executive
orders, proclamations and administrative
regulations, or part or parts thereof which are
inconsistent with any of the provisions of this
Code are hereby repealed or modified accordingly.
Furthermore, it is a familiar rule that implied
repeals are not lightly presumed in the absence of
a clear and unmistakable showing of such
intention. In Lichauco & Co. v. Apostol, this Court
explained: The cases relating to the subject of
repeal by implication all proceed on the
assumption that if the act of later date clearly
reveals an intention on the part of the lawmaking
power to abrogate the prior law, this intention
must be given effect; but there must always be a
sufficient revelation of this intention, and it has
become an unbending rule of statutory
construction that the intention to repeal a former
law will not be imputed to the Legislature when it
appears that the two statutes, or provisions, with
reference to which the question arises bear to each
other the relation of general to special.
There is no sufficient indication of an implied
repeal of P.D. 1869. On the contrary, as the private
respondent points out, PAGCOR is mentioned as
the source of funding in two later enactments of
Congress, to wit, R.A. 7309, creating a Board of
Claims under the Department of Justice for the
benefit of victims of unjust punishment or
detention or of violent crimes, and R.A. 7648,
providing for measures for the solution of the
power crisis. PAGCOR revenues are tapped by
these two statutes. This would show that the
PAGCOR charter has not been repealed by the LGC
but has in fact been improved as it were to make
the entity more responsive to the fiscal problems
of the government.
It is a canon of legal hermeneutics that instead of
pitting one statute against another in an inevitably
destructive confrontation, courts must exert every
effort to reconcile them, remembering that both
laws deserve a becoming respect as the handiwork
of a coordinate branch of the government. On the
assumption of a conflict between P.D. 1869 and
the Code, the proper action is not to uphold one
and annul the other but to give effect to both by
harmonizing them if possible. This is possible in
the case before us. The proper resolution of the
problem at hand is to hold that under the LGC,
local government units may (and indeed must)
prevent and suppress all kinds of gambling within

their territories except only those allowed by
statutes like P.D. 1869. The exception reserved in
such laws must be read into the Code, to make
both the Code and such laws equally effective and
mutually complementary.
This approach would also affirm that there are
indeed two kinds of gambling, to wit, the illegal
and those authorized by law. Legalized gambling
is not a modern concept; it is probably as old as
illegal gambling, if not indeed more so. The
petitioners' suggestion that the Code authorizes
them to prohibit all kinds of gambling would erase
the distinction between these two forms of
gambling without a clear indication that this is the
will of the legislature. Plausibly, following this
theory, the City of Manila could, by mere
ordinance, prohibit the Philippine Charity
Sweepstakes Office from conducting a lottery as
authorized by R.A. 1169 and B.P. 42 or stop the
races at the San Lazaro Hippodrome as authorized
by R.A. 309 and R.A. 983.
In light of all the above considerations, we see no
way of arriving at the conclusion urged on us by
the petitioners that the ordinances in question are
valid. On the contrary, we find that the ordinances
violate P.D. 1869, which has the character and
force of a statute, as well as the public policy
expressed in the decree allowing the playing of
certain games of chance despite the prohibition of
gambling in general.
The rationale of the requirement that the
ordinances should not contravene a statute is
obvious. Municipal governments are only agents of
the national government. Local councils exercise
only delegated legislative powers conferred on
them by Congress as the national lawmaking body.
The delegate cannot be superior to the principal or
exercise powers higher than those of the latter. It
is a heresy to suggest that the local government
units can undo the acts of Congress, from which
they have derived their power in the first place,
and negate by mere ordinance the mandate of the
statute.
Municipal corporations owe their origin to, and
derive their powers and rights wholly from the
legislature. It breathes into them the breath of life,
without which they cannot exist. As it creates, so it
may destroy. As it may destroy, it may abridge and
control. Unless there is some constitutional
limitation on the right, the legislature might, by a
single act, and if we can suppose it capable of so
great a folly and so great a wrong, sweep from
existence all of the municipal corporations in the
State, and the corporation could not prevent it. We
know of no limitation on the right so far as to the
corporation themselves are concerned. They are,
so to phrase it, the mere tenants at will of the
legislature.
This basic relationship between the national
legislature and the local government units has not
been enfeebled by the new provisions in the
Constitution strengthening the policy of local
autonomy. Without meaning to detract from that
policy, we here confirm that Congress retains
control of the local government units although in
significantly reduced degree now than under our
previous Constitutions. The power to create still
includes the power to destroy. The power to grant
still includes the power to withhold or recall. True,
there are certain notable innovations in the
Constitution, like the direct conferment on the
local government units of the power to tax, 12
which cannot now be withdrawn by mere statute.
By and large, however, the national legislature is
still the principal of the local government units,
which cannot defy its will or modify or violate it.
Court holds that the power of PAGCOR to
centralize and regulate all games of chance,
including casinos on land and sea within the
territorial jurisdiction of the Philippines, remains
unimpaired. P.D. 1869 has not been modified by
the LGC, which empowers the local government
units to prevent or suppress only those forms of
gambling prohibited by law. Casino gambling is
authorized by P.D. 1869. This decree has the
status of a statute that cannot be amended or
nullified by a mere ordinance. Hence, it was not
competent for the Sangguniang Panlungsod of
Cagayan de Oro City to enact Ordinance No. 3353
prohibiting the use of buildings for the operation
of a casino and Ordinance No. 3375-93 prohibiting
the operation of casinos.
GOVERNOR PABLO P. GARCIA, THE PROVINCE OF CEBU;
TOMAS R. OSMEA; MAYOR ALVIN B. GARCIA, THE CITY
OF CEBU; ALLAN C. GAVIOLA, City Administrator; JOSE A.
GUISADIO, City Planning and Development Officer;
METRO CEBU DEVELOPMENT PROJECT OFFICE; BASHIR D.
RASUMAN, Regional Director, Department of Public Works
and Highways (DPWH), Region VII; ROMEO C. ESCANDOR,
Regional Director, National Economic and Development
Board (NEDA), Region VII; and LANDBANK OF THE
PHILIPPINES, petitioners, vs. HON. JOSE P. BURGOS in his
capacity as presiding judge of the Regional Trial Court,
Branch 17, Cebu City; and MALAYAN INTEGRATED
INDUSTRIES CORPORATION, respondents.
D E C I S I O N
PANGANIBAN, J.:
Presidential Decree 1818 prohibits courts from issuing an injunction
against any infrastructure project, such as the Cebu South
Reclamation Project, in order not to disrupt or hamper the pursuit
of essential government projects or frustrate the economic
development effort of the nation. This Court will not tolerate a
violation of this prohibition.
Statement of the Case

Petitioners, through Rule 65 of the Rules of Court, assail the validity
of three Orders of Judge Jose P. Burgos of the Regional Trial Court of
Cebu.
[1]
The first assailed Order, dated February 22, 1996, denied
herein Petitioner Tomas R. Osmeas Omnibus Motion with
Opposition to the Application for Writ of Preliminary Injunction,

which prayed that said application be cancelled or its hearing
deferred, and that the temporary restraining order already issued in
favor of herein private respondent be lifted.
[2]

The respondent judges previous voluntary inhibition was set aside
by the second assailed Order dated March 12, 1996, which reads as
follows:
WHEREFORE, premises considered, the motion for reconsideration is
granted and accordingly, the order of the Presiding Judge in
voluntarily inhibiting himself from further sitting in the case dated
February 26, 1996 is reconsidered and set aside.
Set this case for another hearing on the application for preliminary
injunction on March 15, 1996 at 10 oclock in the morning whereby
defendants are ordered to show cause if any they have why the
injunction should not be granted.
SO ORDERED.
[3]

Meanwhile, the preliminary injunction sought by herein private
respondent was granted by respondent judge who, in his third
assailed Order dated March 18, 1996, ruled in this wise:
WHEREFORE, premises considered, and in order to preserve the
status quo, upon the filing of an injunction bond with this Court in
the amount of Two Million (P2,000,000.00) Pesos, let a writ of
preliminary injunction be issued, hereby enjoining all the
defendants, their assigns, agents and representatives or anyone
acting for any or all of them or in their behalf from implementing the
memorandum of agreement dated September 11, 1995, attached and
marked as Annex V in the original complaint dated January 18,
1996, except the construction of the Cebu South Coastal Road, and
all other agreements/contracts of defendants concerning the Cebu
South Reclamation Project tending to deprive plaintiff of its prior
contractual rights in the said Cebu South Reclamation Project until
further orders from this Court.
The amount of the required bond shall answer for all damages that
the defendants may sustain by reason of the injunction should the
Court finally decide that plaintiff was not entitled thereto.
SO ORDERED.
[4]

The Facts

In their pleadings, the parties tried their best to give detailed
accounts of the factual antecedents of this case. In fairness to them,
the Court hereby reproduces in toto their respective narrations.
Petitioners Version

A. The Project
1. The Cebu South Reclamation Project (hereinafter referred to as
the PROJECT) is a FOUR BILLION PESO (P4,000,000,000.00) project
of the Government of the Republic of the Philippines (hereinafter
referred to as the GOVERNMENT), funded out of a loan taken out by
the government from the Government of Japan, through its
international financing institution, the Overseas Economic
Cooperation Fund (hereinafter referred to as the OECF).
2. The loan was made possible by virtue of an Exchange of Notes
between the Governments of the Republic of the Philippines and
Japan, whereby the latter extended a total loan package of ONE
HUNDRED BILLION NINE HUNDRED SIXTY-FOUR MILLION YEN
(Y101,964,000,000.00) [sic] to finance certain specified and listed
projects of the former. Among these projects to be financed by the
loan is the Cebu South Reclamation Project. (Refer to Annex E-
Petition)
3. The project is an integral part of the Third Phase of the Metro
Cebu Development Projects (hereinafter referred to as MCDP III),
which has been favorably endorsed and approved by the President of
the Republic of the Philippines, Fidel V. Ramos, as one of the
projects of the national government. (Refer to Annex F- Petition)
4. The project has likewise been approved by the National
Economic and Development Board (the NEDA), of which the
President is the Chairman, as an ICC Project, by virtue of NEDA
Resolution No. 1, Series of 1995. (Refer to Annex G- Petition)
5. The project is further certified as a project of the Government
of the Republic of the Philippines, by the Department of Foreign
[Affairs], through its Secretary, Domingo E. Siazon. (Refer to Annex
H- Petition)
6. In due course, loan agreements in implementation of the
Exchange of Notes between the two governments were executed
between the OECF and [P]etitioner Land Bank of the Philippines (the
LANDBANK). Under these agreements, the City of Cebu was
designated as the projects implementing agency. (Refer to Annex
I- Petition)
7. In accordance with the Constitution, the loan package to
finance, among others, the Cebu South Reclamation Project, was
granted final approval by the Monetary Board, by virtue of
Resolution No. 1260 issued on 07 November 1995. (Refer to Annex
J- Petition)
8. The loan arrangements having been entered into, and the
funds ready for release to the City of Cebu, the implementing agency
of the project, the City of Cebu, the Department of Public Works and
Highways (the DPWH) and the Metro Cebu Development Project
Office (the MCDPO) executed, on 11 September 1995, the
Implementing Arrangement for Metro Cebu Development Project
Phase III (MCDP III) (Refer to Annex K - Petition), under which
agreement is outlined the procedure for implementation of the
project as well as the rights and obligations of the parties thereto.
B. The Suit Filed Below by Private Respondent
9. On 19 January 1996, [P]rivate [R]espondent Malayan Integrated
Industries Corporation (hereinafter referred to as MALAYAN), filed
a case for Specific Performance, Declaration of Nullity, Damages and
Injunction, with Writ of Preliminary Injunction and Temporary
Restraining Order against herein petitioners, docketed as Civil Case
No. CEB-18292, before the Regional Trial Court of Cebu City. (Refer
to Annex L - Petition) The case was raffled to Branch 17 of the said
court.
10. Pursuant to Supreme Court Administrative Circular No. 20-95, a
summary hearing was conducted by respondent [j]udge to determine
the propriety of issuing the temporary restraining order (TRO)
prayed for by [R]espondent Malayan in its complaint.
11. During the summary hearing to determine whether the
temporary restraining order (TRO) should issue, defendants
questioned the jurisdiction of the court to issue the same, citing
Section 1 of Presidential Decree No. 1818, which provides:
Section 1. No court in the Philippines shall have jurisdiction to
issue any restraining order, preliminary injunction, or preliminary
mandatory injunction in any case,dispute,or controversy involving
an infrastructure project, or a mining, fishery, forest, or other
natural resource development project of the government, or any
public utility operated by the government, including among others
public utilities for the transport of the goods or commodities,
stevedoring and arrastre contracts, to prohibit any person or
persons, entity or government officials from proceeding with, or
continuing the execution or implementation of any such project, or
the operation of such public utility, or pursuing any lawful activity
necessary for such execution, implementation or operation. (Sec. 1,
P.D. 1818; emphasis supplied)
12. It was also pointed out to herein respondent [j]udge that the
Supreme Court, in Administrative Circular 13-93, pursuant to P.D.
1818, and in implementation of the policy behind the law, prohibited
all judges of all courts from issuing TROs and/or writs of
preliminary injunction against the implementation of government
infrastructure projects.
13. It was further manifested that the Supreme Court, observing
non-compliance with the above-cited Circular by judges of trial
courts was compelled to reiterate its earlier prohibition, with a
warning against further violation, for their strict compliance, under
Administrative Circular No. 68-94, issued on 3 November 1994,
which states:
There have been reports that despite Circular 13-93, dated March 5,
1993, some courts are still issuing temporary restraining orders
and/or preliminary injunctions even in cases, disputes, or
controversies involving government infrastructure projects in
violation of Section 1 of P.D. 1818 x x x
x x x x x
x x x x
In order to obviate complaints against the indiscriminate issuance
of restraining orders and court injunctions against government
public utilities and infrastructure projects in gross violation of the
aforesaid Presidential Decree, the provision of Circular No. 13-93
issued on March 5, 1993 is hereby reiterated for your strict
compliance.
x x x x x x x x x (Supreme Court Administrative Circular
No. 68-94; emphasis supplied)
14. In gross violation of the law and the circulars of the Honorable
Supreme Court, however, respondent [j]udge issued a temporary
restraining order on 5 February 1996, the dispositive portion of
which reads as follows:
The verified complaint being sufficient in form and substance and
in order to preserve the status quo, all the defendants and their
agents, employees, workers and all persons acting in their behalf are
temporarily restrained from implementing the alleged memorandum
of agreement dated September 11, 1995, and any and all such other
agreements/contracts entered into by any and all of the defendants,
covering the Cebu South Reclamation Project consisting of 330
hectares more or less (Refer to Annex M - Petition)
15. The hearing on [R]espondent Malayans application for the writ
of preliminary injunction was set for 14 February 1996. During the
said hearing, [P]etitioner Tomas R. Osmea filed an Omnibus Motion
for: (a) the immediate lifting of the Temporary Restraining Order; (b)
the cancellation of the hearing on the application for the writ of
preliminary injunction; and (c) the outright dismissal of the
complaint. The Omnibus Motion was subsequently adopted by the
defendants below. (Refer to Annex N - Petition)
16. The thrust of the Omnibus Motion was that the court below had,
under P.D. 1818, no jurisdiction and no compelling reason to issue

any TRO and/or writ of preliminary injunction against the
implementation of a government infrastructure project. Since it had
no jurisdiction to issue such TRO and/or writ of preliminary
injunction, much less does it have the jurisdiction to entertain any
application for the injunctive writ.
17. The Omnibus Motion likewise refuted respondent [j]udges
arguments in its Order dated 5 February 1996 granting the TRO,
wherein he attempted to remove the case from the ambit of P.D.
1818 thus:
(a) the ruling in Genaro R. Reyes Construction, Inc. v. Court of
Appeals, 234 SCRA 116 applies to the case at bar;
(b) plaintiff is not asking for enjoining the infrastructure project x
x x [but] the enjoining of the contract to be awarded to another
entity;
(c) inclusion of reclamation of submerged lands as being covered
under the term infrastructure project [is a] classification [that] has
yet to be determined in the light of existing Presidential
Proclamations, Orders and/or Executive Memorandums.
18. Respondent Judge -- apparently to verify whether the project
was an infrastructure project of the national government -- required
defendants below, petitioners herein, to show proof that the project
had the approval of the President of the Republic of the Philippines.
19. In compliance with the order of respondent [j]udge, petitioners,
during the continuation of the hearing on the Omnibus Motion, set
on 16 February 1996, presented the documents mentioned above
(Refer to Annexes D to J - Petition), proving that the project had
the favorable recommendation and approval, not only of the
President, but likewise of the NEDA, and certified as a project of the
Government of the Republic of the Philippines by the Department of
Foreign Affairs. Insofar as the loan agreements were concerned, the
Exchange of Notes (Annex D) and the resolution of the Monetary
Board (annex J) approving the loan agreement were presented. All
requirements for the implementation of a perfected contract are
present and submitted to the court.
20. Following the presentation of the foregoing documents,
respondent [j]udge gave the parties five (5) days to submit their
respective memoranda on the Omnibus Motion, after which the
incident would be deemed submitted for resolution.
21. On 21 February 1996, the parties filed their respective
memoranda. As the memorandum for [R]espondent Malayan
contained misstatements of the facts of the case, petitioner Tomas R.
Osmea filed a Reply to Plaintiffs Memorandum at 9:00 oclock in
the morning of the following day, 22 February 1996.
22. With unusual dispatch in a time frame of only a few hours,
however, and under suspicious circumstances, in the afternoon of
the same day, 22 February 1996, respondent [j]udge had issued an
Order (Refer to Annex A - Petition), a quite comprehensive five-
page resolution denying petitioners Omnibus Motion, received by
petitioners on 23 February 1996.
23. Without having to consider the unusual haste with which the
Order was issued -- considering that it was issued the day
immediately after the last day for the filing of the memoranda, and
on the day, and just hours after petitioner Osmeas Reply to
Plaintiffs Memorandum was filed, the Order dated 22 February
1996 was highly irregular for the most obvious reasons.
24. A cursory review of the Order dated 22 February 1996 would
reveal that it has practically decided the case on the merits, on a
mere resolution of an incident in the main case. The Order denying
the Omnibus Motion has practically ruled that: (a) [R]espondent
Malayan has valid, existing and enforceable contracts of reclamation
approved by the President of the Philippines; (b) petitioners
reclamation project did not have the approval of the President; and
(c) petitioners were violating [R]espondent Malayans contracts.
These were precisely the issue[s] in the main case for specific
performance.
24.1 It would be relevant to mention that in so ruling, respondent
Judge practically considered evidence which were non-existent in
favor of [R]espondent Malayan, and suppressed the evidence
presented by petitioners.
25. [I]n view of the actions of respondent [j]udge, [P]etitioner
Osmea filed, on 23 February 1996, an Omnibus Motion, praying,
among other things, for the voluntary inhibition of respondent
[j]udge on the ground of partiality manifested by the Order of 22
February 1996, which practically decided the case on the merits in
favor of [R]espondent Malayan, in a resolution of a mere incident in
the case.
26. In an Order dated 26 February 1996, respondent [j]udge
voluntarily inhibited himself. (Refer to Annex O - Petition)
27. Respondent Malayan, however, filed a motion for
reconsideration of the Order of voluntary inhibition, to which
petitioner Osmea filed an Opposition.
28. In the meantime, petitioner Osmea had filed a Motion for
Reconsideration of the Order dated 22 February 1996 denying the
Omnibus Motion, with the cautionary notice that it was not to be
deemed as a waiver of their opposition to the motion for
reconsideration filed by [R]espondent Malayan of respondent
[j]udges Order of voluntary inhibition. Instead, the said Motion for
Reconsideration with Cautionary Notice was to be heard by the court
to which the case was to be eventually re-raffled, and scheduled for
hearing on 22 March 1996.
29. On 12 March 1996, however, respondent [j]udge reversed
himself and reconsidered his Order of voluntary inhibition dated 26
February 1996, and set the hearing on [R]espondent Malayans
application for the writ of preliminary injunction for 15 March
1996. (Refer to Annex C - Petition)
30. Since the Motion for Reconsideration with Cautionary Notice was
still pending resolution (and the hearing thereon yet to be conducted
on 22 March 1996), petitioner filed an Urgent Motion for Resetting of
the hearing, considering that the Motion for Reconsideration with
Cautionary Notice -- which questioned the courts jurisdiction to
entertain the application for the writ of preliminary injunction --
was prejudicial to the hearing set for 15 March 1996, since it would
determine whether or not such proceedings should continue or not.
31. During the hearing on 15 March 1996, however, respondent
[j]udge denied petitioner Osmeas Urgent Motion for Resetting.
32. Again, with unusual dispatch, on 18 March 1996, respondent
[j]udge issued two (2) Orders, one granting the writ of preliminary
injunction prayed for by [R]espondent Malayan (Refer to Annex B -
Petition), and another one denying petitioners Motion for
Reconsideration with Cautionary Notice -- both issued even before
the hearing on the Motion for Reconsideration with Cautionary
Notice which was yet scheduled for 22 March 1996.
33. Hence, this petition for certiorari, questioning: (a) the validity of
the Orders of respondent [j]udge dated 22 February 1996 claiming it
had the jurisdiction to entertain and to issue a writ of preliminary
injunction against petitioners government infrastructure project,
and the Order of 18 March 1996, granting the writ of preliminary
injunction; and (b) the validity of the Order of respondent [j]udge
dated 12 March 1996, reconsidering his earlier Order of voluntary
inhibition, there being no other plain, speedy and adequate remedy
in the ordinary course of law.
[5]

Private Respondents Version
On May 22, 1967, Proclamation No. 200-A was issued which
reserved for national improvement purposes, a certain parcel of land
of the [p]ublic [d]omain situated in the foreshore of the District of
San Nicolas, Pardo, Cebu City and Tangkey, Talisay, Cebu. This area
was transferred and relinquished by the President of the Philippines
to the Province of Cebu in behalf of the [n]ational [g]overnment,
subject to private rights, if any there be. Copy of said proclamation
was attached as Annex 4 to respondents Comment.
On January 11, 1973, Presidential Decree No. 3-A was issued which
decreed that the reclamation of land under water, whether foreshore
or inland, throughout the Philippines belong to and are owned by
and limited to the [n]ational [g]overnment or to any person
authorized by it under a proper contract.
On October 14, 1977, pursuant to and in accordance with the above-
said Proclamation No. 200-A and Sec. 1 of P.D. No. 3-A, the
Sangguniang Panlalawigan of Cebu and the then Cebu Provincial
Governor Eduardo R. Gullas granted, awarded and authorized private
respondent to undertake the actual and physical reclamation and
development works of the foreshore, submerged and offshore areas
of Three Hundred Fifty (350) hectares, more or less, which is a
portion of the approximate area of 5,386,800 square meters or
438.6800 hectares, as described in Proclamation No. 200-A. Copy of
said Award was attached as Annex 5 to the Comment of
respondents.
On October 31, 1977, a Contract of Reclamation and Development
was entered into, signed and executed by and between the Province
of Cebu, represented by then Governor Eduardo R. Gullas, and
private respondent. Copy of said Contract was attached as Annex
6 to the Comment.
The said Contract of Reclamation and Development dated October
31, 1977 between Cebu Province and private respondent was
authorized by Resolution No. 475 dated October 4, 1977 of the
Sangguniang Bayan [sic] Panlalawigan of Cebu.
On September 15, 1978, the Sangguniang Panlalawigan of Cebu and
then Cebu Governor Eduardo R. Gullas considered and approved the
request of private respondent dated August 25, 1978 that the
reclamation area of 350 hectares, more or less be increased from
350 hectares to 625 hectares, more or less. Copy of said resolution
was attached as Annex 7 to respondents Comment.
On October 7, 1978, the Second Supplemental Contract of
Reclamation and Development between the Province of Cebu and
private respondent was entered into, signed and execu[t]ed by and
between the Province of Cebu and private respondent. Copy of said
contract was attached as Annex 8 to the respondents Comment.
On January 15, 1979, a Contract of Reclamation and Port
Development was entered into, executed and signed by and between

private respondent and Amsterdam Ballast Dredging Corporation
(BALLAST) in connection with and regarding the reclamation area of
625 hectares of the foreshore, submerged and offshore areas from
Pasil, Cebu City, to Tangke, Talisay, Cebu to Kawit Island and then to
Pasil, Cebu City. Copy of said contract was attached as Annex 9 to
respondents Comment.
On February 7, 1979, a Memorandum dated February 7, 1979
addressed to then President Marcos, was submitted by the Province
of Cebu, represented and signed by then Governor Eduardo R. Gullas,
and the City of Mandaue, represented and signed by then City Mayor
Demetrio M. Cortes for final consideration and approval. Copy of
said memorandum was attached as Annex 10 to respondents
Comment.
When the Province of Cebu and the City of Mandaue submitted to the
President the Cebu South Reclamation Project for approval per
memorandum dated February 7, 1979, attached as Annex 10 to
respondents Comment, it was premised on the following
consideration as stated in the first paragraph of said memo:
In our earnest desire to contribute our share to the program of Your
Excellency and of our government on industrialization, industrial
dispersal and regional development in the New Society, the Province
of Cebu and the City of Mandaue have authorized, subject to your
Excellencys reclamation of 625 and 360 hectares of foreshore and
offshore lands in South Cebu from Pasil, Cebu City to Tangke,
Talisay, Cebu by virtue of Presidential Proclamation No. 200-A,
promulgated on May 22, 1967 (ANNEX B), which gives the Province
of Cebu the authority to administer these areas within the City of
Cebu, and, in Mandaue City, from Subangdaku to the Cabahug
Coastways, by virtue of Sec. 94 of Republic Act No. 5519, which vests
ownership and possession of all foreshore lands and submerged
lands of the public domain in the City of Mandaue (ANNEX C),
respectively, under contracts of Reclamation and Port Development
with Malayan Integrated Industries Corporation, hereto attached as
Annexes D and E, which we believe offer the most advantageous
terms for the Province of Cebu, and City of Mandaue and the
[n]ational [g]overnment because not a single centavo will be spent by
the government in return for its share in the reclaimed areas and the
operation of the international and domestic port facilities thereof,
not to mention the socio-economic impact that the projects will
create in the Visayas and Mindanao. (Emphasis ours)
On August 13, 1979, the Cebu South Reclamation Project was
presented by the Province of Cebu and Mandaue City, was
considered and approved in principle by then President E. Marcos,
as per Presidential Memorandum directive dated August 13, 1979
and a copy thereof is attached as Annex Q of the petition. Among
the salient provisions of said presidential approval are:
a. That within twelve (12) months after the issuance of
[p]residential directive authorizing the Project, a detailed and
integrated development plan on land use including technical,
economic, marketing and financial feasibility studies be submitted to
the President for approval, otherwise, project approval may be
deemed automatically revoked; to enable the PEA to exercise its
responsibilities as the representative of the [n]ational [g]overnment
as landowner, the person or entity chosen by the contractor to
undertake the detailed feasibility studies shall report directly to the
PEA;
x x x
d. That Cebu City and Mandaue City shall enter into contract with
Public Estates Authority for the reclamation project pursuant to E.O.
525. The PEA is authorized to determine the terms and conditions
necessary for the implementation of the aforecited conditions
including specification of the sharing scheme and other
requirements of government entities on the reclaimed
areas. Furthermore, the PEA is authorized to review, modify, and
approve all contracts entered into or arising out of the reclamation
project consistent with existing government regulations and national
interests considerations. Finally, consideration of equity requires
that option rights of first refusal for a period as may be determined
by PEA, shall be granted to private entities which have made initial
investments on the project. (Emphasis ours)
In other words, herein private respondent was granted by said
[p]residential directive option rights of first refusal to undertake the
project because of the initial investments it made on the project.
On August 1, 1980, as provided in Presidential Memorandum
directive dated August 13, 1979 to submit within twelve (12) months
after the issuance of the said Presidential Memorandum directive the
detailed feasibility study for approval and to enable the PEA to
exercise its responsibilities as the representative of the [n]ational
[g]overnment as land owner, the person or entity chosen by the
contractor to undertake the detailed feasibility studies shall report
directly to the PEA, the Province of Cebu, the City of Mandaue, the
City of Lapulapu and the Municipality of Cordova submitted said
feasibility study to the President for approval, copy of which was
attached as Annex 12 to respondents Comment.
The Province of Cebu and private respondent entered into, signed
and executed a Confirmatory Agreement dated November 1979, by
virtue of which the services of MALAYAN was contracted to
undertake the preparation and making of the said Detailed and
Integrated Development Plan on Land use, etc., of the Cebu South
Reclamation Project at no cost to the Province of Cebu. Copy of said
Confirmatory Agreement was attached as Annex 13 to the
The said Confirmatory Agreement acknowledged that it was the
private respondent which made initial investments in the Cebu South
Reclamation Project and the entity granted the right of first refusal
or option rights to undertake the project as follows:
WHEREAS, the Memorandum dated 13 August 1979 embodied the
proviso that option rights of first refusal shall be granted to private
entities who have made initial investments in the reclamation
projects;
WHEREAS, the MALAYAN INTEGRATED INDUSTRIES CORPORATION,
which had made initial investments in the projects and had, as a
matter of fact, been previously bound by a contract with the
PROVINCE OF CEBU to undertake the reclamation project in South
Cebu evidenced by Document No. 145; Page No. 30; Book No. VI;
Series of 1977 before Notary Public Justino K. Hermosisima, by these
presents have offered to undertake and prepare, for and in behalf of
the PROVINCE OF CEBU, the detailed feasibility study for the
reclamation of the areas in the Municipalities of Talisay and
Cordova, Province of Cebu, in conjunction and coordination with the
Cebu South and the Mandaue Reclamation Projects, and which offer
had been accepted by the PROVINCE OF CEBU as the consequence of
the Reclamation contract by and between the two entities similarly
reconfirmed in a communication dated October 4, 1979;
On January 4, 1980, a Confirmatory Agreement was entered into,
executed and signed by and between the City of Cebu, and private
respondent in which they confirmed, affirmed, approved and agreed
that the Cebu South Reclamation Project dated January 15, 1979
between MALAYAN and BALLAST which was approved by the Province
of Cebu and City of Mandaue and were approved in principle by then
President Ferdinand E. Marcos, that its corresponding plan on land
use, including technical, economic, marketing and financial
feasibility studies of the Project be undertaken by the aforesaid Local
Goverment units concerned and to be submitted to the PEA and the
President of the Philippines within twelve (12) months after the
issuance of the Presidential Memorandum directive dated August 13,
1979, and in compliance with the above-said requirements, the City
of Cebu hired, awarded, engaged and contracted the services of
private respondent to undertake and prepare in behalf of the City of
Cebu the detailed and integrated development plan on land use, etc.,
of the Project covering the reclamation area of 400 to 625 hectares,
more or less, without any single expense, funding and at no cost
whatsoever to the City of Cebu. Copy of said Confirmatory
Agreemen[t] was attached as Annex 14 to the respondents
Comment.
Again, the City of Cebu recognized the option right or right of first
refusal of private respondent to undertake the project as the entity
[which] had made initial investments in the project as follows:
WHEREAS, the President also directed that option rights of first
refusal shall be granted to private entities which have made initial
investments in the reclamation projects;
WHEREAS, the MALAYAN INTEGRATED INDUSTRIES CORPORATION,
which has made initial investments on the project, and in fact, was
previously contracted by the Province of Cebu by virtue of
Proclamation No 200-A, P.D. No. 3-A and Executive Order No. 525 to
undertake the reclamation project for and in the City of Cebu and the
Municipality of Talisay, Province of Cebu, and prior to which
MALAYAN INTEGRATED had already invested substantial sums of
money, time and effort in preparatory activities on said reclamation
projects, by these presents have offered to undertake the detailed
and integrated development plan on land use, [including] feasibility
studies as required by the President, and the CITY OF CEBU has
accepted the said offer of MALAYAN INTEGRATED INDUSTRIES
CORPORATION;
On January 24, 1980, the Public Estates Authority (PEA) and the City
of Cebu entered into a Memorandum of Understanding which
recognized the pre-emptive right of plaintiff to undertake the project
as recognized in the Presidential directive dated August 13, 1979.
6. Pursuant to the Presidential Directive dated August 13, 1979, to
accord pre-emptive rights for the actual prosecution of the
reclamation project to private entities which have made initial
investments on the project:
Copy of said Memorandum of Understanding was attached as Annex
15 to respondents Comment.
On August 1, 1980, on the basis of the Confirmatory Agreement
dated November 1979 between the Province of Cebu and private
respondent and the Confirmatory Agreement dated January 4, 1980
between the City of Cebu and the City of Cebu have awarded, hired,

engaged and contracted the services of private respondent to
undertake and prepare, in behalf of the Province of Cebu and the
City of Cebu without any single expense, funding and at no cost to
said Province of Cebu and City of Cebu, the detailed and integrated
development plan on land use, etc., of the Cebu South Reclamation
Project, the Province of Cebu thru then Eduardo R. Gullas, the City of
Cebu thru then City Mayor Florentino S. S. Solon, the city of Mandaue
thru then City Mayor Demetrio M. Cortes, the City of Lapulapu thru
then City Mayor Maximo V. Patalingjug, Jr., and the Municipality of
Cordova, Cebu thru Municipal Mayor Celedonio B. Sitoy, filed and
submitted on August 1, 1980 the corresponding Detailed and
Integrated Development Plan on Land use, including technical,
economic, marketing and financial feasibility studies of the Cebu
South Reclamation Project for the final consideration and approval
by the Public Estates Authority and the Office of the President and
the President of the Philippines. Copy of said document was
attached as Annex 12 to respondents Comment.
On August 12, 1980, private respondent, for and in behalf of the
Province of Cebu, City of Cebu, City of Mandaue, City of Lapulapu,
Municipality of Talisay, Municipality of Cordova, in relation to the
above-said Memorandum dated August 1, 1980 as required, also filed
and submitted to the Office of the President and the President of the
Philippines thru the PEA the additional copies of the said complete
Project Studies and the Detailed and Integrated Development Plan on
Land Use, etc., of the Metro Cebu Reclamation and Development
Project which includes the Cebu South Reclamation Project. Copy of
said document was attached as Annex 16 to respondents
Comment.
On September 29, 1980, on the basis of the aforesaid Memorandum
dated August 1, 1980 the PEA, in its MEMO FOR THE PRESIDENT dated
September 29, 1980 indorsed and recommended to the President the
final consideration and approval of the Detailed and Integrated
Development Plan on Land Use of the Cebu South Reclamation
Project. Copy of said document was hereto attached as Annex 17
to the respondents Comment.
Since Septembe[r] 19, 1980, when the PEA approved the Metro Cebu
Reclamation and Development Project covering the reclamation area
of 4,910 hectares, which include the Cebu South Reclamation Project
covering 625 hectares, and its corresponding detailed and integrated
development plan on land use, etc., as per MEMO FOR THE
PRESIDENT dated September 29, 1980, the President of the
Philippines has not yet approved the detailed and integrated
development plan on land use, including technical, economic,
marketing and financial feasibility studies of the said project.
On December 29, 1995, the Office of the President thru President
Staff Director Vicente A. Galang, issued 1st Indorsement to the effect
that the detailed and integrated development plan on land use of the
project is still pending final consideration and approval by the
[O]ffice of the President until now or at the present date. Copy of
said resolution was attached as Annex 18 to the respondents
Comment.
On January 12, 1996, the Office of the President thru Presidential
Staff Director Vicente A. Galang, issued an official certification that
the Cebu South Reclamation Proj[e]ct covering 360 hectares, has
already long been considered and approved by the Office of the
President and the President of the Philippines as per Presidential
Memorandum directive dated August 13, 1979 but its corresponding
detailed and integrated development plan on land use, including
technical, economic, marketing and financial feasibility studies of
the project which was filed and submitted by the Province of Cebu,
City of Cebu, City of Mandaue, City of Lapulapu and Municipality of
Cordova with the PEA and the Office of the President on August 1,
1980 per Memorandum dated August 1, 1980 and approved by the
PEA in favor of the above-mentioned Local Government units
concerned per MEMO FOR THE PRESIDENT dated September 29, 1980,
is still pending final consideration and approval by the Office of the
President. Copy of said certification was attached as Annex 19 to
When the Province of Cebu and the City of Mandaue submitted to the
President the Cebu South Reclamation Project for approval per
memorandum dated February 7, 1979, it was premised on the
following consideration as stated in the first paragraph of said
memo:
In our earnest desire to contribute our share to the program of Your
Excellency and of our government on industrialization, industrial
dispersal and regional development in the New Society, the Province
of Cebu and the City of Mandaue have authorized, subject to your
Excellencys approval, pursuant to PD 3-A (ANNEX A), the
reclamation of 625 and 360 hectares of foreshore and offshore lands
in South Cebu from Pasil, Cebu City to Tangke, Talisay, Cebu by
virtue of Presidential Proclamation No. 200-A, promulgated on May
22, 1967 (ANNEX B), which gives the province of Cebu the authority
to administer these areas within the City of Cebu, and, in Mandaue
City, from Subangdaku to the Cabahug Coastways, by virtue of Sec.
94 of Republic Act No. 5519, which vests ownership and possession
of all foreshore lands and submerged lands of the public domain in
the City of Mandaue (ANNEX C), respectively, under contracts of
Reclamation and Port Development with Malayan Integrated
Industries Corporation, hereto attached as Annexes D and E,
which we believe offer the most advantageous terms for the Province
of Cebu, and City of Mandaue and the National Government because
not a single centavo will be spent by the government in return for its
share in the reclaimed areas and the operation of the international
and domestic port facilities thereof, not to mention the socio-
economic impact that the projects will create in the Visayas and
Mindanao. (Emphasis ours)
This was so because under Executive Order No. 525 dated February
14, 1979, all reclamation projects are subject to approval by the
President. After the reclamation project is approved by the
President, the project shall be undertaken by the Public Estates
Authority (PEA) or through a proper contract executed by the PEA
with any person or entity. This is so provided in Section 1 of said
Executive Order which reads as follows:
SECTION 1 - The Public Estates Authority (PEA) shall be primarily
responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National
Government. All reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken
by the PEA or through a proper contract executed by it with any
person or entity; provided, that, reclamation projects of any National
Government agency or entity authorized under its Charter shall be
undertaken in consultation with the PEA upon approval of the
President.
In other words, the President does not approve reclamation contracts
but approves only the reclamation project.
The President approved in principle the Cebu South Reclamation
Project on August 13, 1979 as shown by Exhibit A-13. The
approval was in principle only pending submission and presidential
approval of a detailed and integrated feasibility study on the land
use of said project. What is unique in said presidential approval was
that it recognized the reclamation contracts earlier entered into by
plaintiff with the Province of Cebu and the City of Mandaue by giving
plaintiff option rights of first refusal to undertake the project, when
said presidential memorandum stated:
x x x
x
Finally, considerations of equity requires that option rights of first
refusal for a period as may be determined by PEA, shall be granted to
private entities which have made initial investments on the project.
The presidential memorandum also directed the PEA, City of Cebu
and the City of Mandaue to enter into contracts with the PEA for the
Cebu South Reclamation Project and the Mandaue Reclamation
project, respectively.
Conformably, with said presidential directive, the PEA and the City of
Cebu entered into a memorandum of understanding with respect to
the Cebu South Reclamation project wherein paragraph 6 of its
Section II, it [sic] provided that the City of Cebu was obliged to
accord pre-emptive rights for the actual prosecution of the
reclamation project to private entities which have made initial
investments on the project, which entity is no other than herein
plaintiff. This option of first refusal or pre-emptive rights of
plaintiff to undertake the actual prosecution of the project has never
been cancelled, or rescinded.
The herein private respondent filed this case for injunction when the
respondents issued an invitation to bidders, Exhibit A-21
particularly section 3.2 thereof which provides for the conduct of
tenders and subsequent evaluation of bids for the Cebu South
Reclamation Project. In other words, the petitioners were going to
entertain bids from private contractors for the undertaking of the
Cebu South Reclamation Project in violation of the preemptive rights
or right of first refusal of private respondent to prosecute the
project.
[6]

In a Resolution dated March 27, 1997, the Court granted petitioners
prayer and issued a temporary restraining order enjoining the trial
judge from enforcing the assailed orders and from
conducting further proceedings in this case.
[7]

The Issues

In their Memorandum dated July 30, 1997, petitioners summarized
the issues as follows:
[8]

I
Whether or not respondent judge gravely abused his discretion in
issuing the orders dated 22 February 1996 and 18 March 1996, in
contumacious violation of Presidential Decree No. 1818, and
Supreme Court Administrative Circulars Nos. 13-93 and 68-94.
II
Whether or not, in grave abuse of discretion, the order dated 22
February 1996 and the order granting the writ of preliminary

injunction had the effect of practically deciding the case on the
merits.
III
Whether or not respondent judge acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in granting the
writ of preliminary injunction, as the applicant, [R]espondent
Malayan, had no clear and unmistakable right to be protected by the
injunctive writ.
IV
Respondent judge gravely abused his discretion in not dismissing
the complaint outright, the alleged cause of action being admittedly
premature, and a mere expectancy, or having otherwise been barred
by prescription and/or laches.
V
Whether respondent judge gravely abused his discretion in issuing
the order dated 12 March 1996, reconsidering his earlier order of
voluntary inhibition, there being strong grounds -- as respondent
judge himself admits -- for his voluntary inhibition.
VI
Whether or not, as claimed by private respondent, the omnibus
motion to dismiss filed below by petitioners was a mere scrap of
paper.
VII
Whether or not, as claimed by private respondent, a motion for
reconsideration was necessary before the filing of the present
petition.
The first, second, third and fourth issues are closely related and will
be discussed together.
The Courts Ruling

The petition is meritorious.
First Issue:

Preliminary Injunction Void and Improper

Section 1 of PD 1818 distinctly provides that [n]o court in the
Philippines shall have jurisdiction to issue any restraining order,
preliminary injunction, or preliminary mandatory injunction in any
case, dispute, or controversy involving an infrastructure project x x x
of the government, x x x to prohibit any person or persons, entity or
government official from proceeding with, or continuing the
execution or implementation of any such project, x x x or pursuing
any lawful activity necessary for such execution, implementation or
operation.
[9]
At the risk of being repetitious, we stress that the
foregoing statutory provision expressly deprives courts of
jurisdiction to issue injunctive writs against the implementation or
execution of an infrastructure project.
[10]

In the case at bar, the assailed March 18, 1996 Order of respondent
judge specifically enjoined petitioners from implementing their
Memorandum of Agreement dated September 11, 1995
[11]
(except as
to the Cebu South Coastal Road), which pertains to the
implementation of the Metro Cebu Development Project, Phase III, a
major component of which is the Cebu South Reclamation
Project. The petitioners were also enjoined from acting on or
implementing all other contracts involving the said reclamation
project. The issuance of said writ of preliminary injunction
evidently constitutes a blatant violation of PD 1818. The assailed
Order is therefore void for being issued with grave abuse of
discretion and without jurisdiction. On this ground alone, the Court
may already grant the petition. Nonetheless, we will proceed to
discuss the other issues raised.
Reclamation Is an

Infrastructure Project

Private respondent claims that the Cebu South Reclamation Project is
not an infrastructure project.
[12]
This is erroneous and
misleading. In Malayan Integrated Industries Corporation vs. Court
of Appeals,
[13]
the Court unequivocally held that the reclamation of
foreshore and submerged lands along the coast of Mandaue City up
to the Cebu City boundary for the purpose of developing the
reclaimed area into an industrial and trading center with a modern
harbor and port facilities for both domestic and international
commerce is an infrastructure project as contemplated under PD
1818.
[14]
Private respondent should know this not only because
everyone is presumed to know the law, but also because it was a
principal party in that case.
Cebu South Reclamation Project

Approved by the President

Private respondent further contends that, in spite of the prohibition
in PD 1818, the questioned injunctive writ may still validly issue
against petitioners, because the latter have not sufficiently shown
that (1) [t]he City of Cebu has a contract with the Public Estates
Authority (PEA) to undertake the Cebu South Reclamation Project
under P.D. 3-A, (2) [t]he PEA has favorably endorsed the Cebu South
Reclamation Project for approval by the President pursuant to
Executive Order No. 525, and (3) [t]he President has approved the
Cebu South Reclamation Project pursuant to P.D. 525.
[15]
The Court is
not persuaded.
In the August 13, 1979
[16]
Memorandum on the Cebu South and
Mandaue Reclamation Project, the President of the Philippines
addressed this clear statement to the city mayors of Cebu and
Mandaue, the chairman of the PEA and others concerned: Pursuant
to P.D. 3-A and E.O. 525, and upon recommendation of the Public
Estates Authority (PEA), the reclamation project covering 985 ha.[,]
more or less, of Cebu South and Mandaue foreshore areas is hereby
approved in principle; and the City of Cebu and the City of Mandaue
are hereby authorized to undertake the reclamation of subject areas
x x x.
[17]
Furthermore, even the certification from the Office of the
President dated January 12, 1996,
[18]
presented in evidence by
respondent itself, certifies that the Cebu South (and Mandaue)
Reclamation Project has been previously considered and approved
by the Office of the President and by the President of the Philippines,
then His Excellency President Ferdinand E. Marcos, in favor of the
Province of Cebu, City of Cebu, City of Mandaue,
the Public Estates Authority and others concerned as the
proponents x x x.
[19]
The approved reclamation project is distinct
from the reclamation contract itself.
Private Respondent Has No Vested

Right Violated by a Public Bidding

Private respondent argues that PD 1818 cannot be invoked to stop
the issuance of a preliminary injunction in this case, as the acts of
petitioners are tantamount to a violation of its vested rights. It
claims x x x a right to seek judicial intervention and relief when
petitioners violated its right of first refusal by issuing invitations to
bid the project to other contractors, without affording private
respondent its right of first refusal.
[20]
We disagree.
Undisputed is the fact that the private respondent and the
government have not entered into any validly approved and effective
reclamation contract covering the Cebu South Reclamation
Project. The City of Cebu and private respondents Contract of
Reclamation dated October 31, 1977
[21]
was never approved by the
President. Their Confirmatory Agreement dated January 4, 1980
merely shows that the City of Cebu engaged private respondent to
undertake and prepare the detailed and integrated development plan
on land use, including technical, economic, marketing and financial
feasibility studies x x x of the Cebu South Reclamation
Project.
[22]
Incidentally, the aforementioned certification, issued by
the Office of the President on January 12, 1996, manifests that
private respondents development plan and feasibility studies,
submitted pursuant to the said Confirmatory Agreement, are the
items pending final consideration and approval of the President.
Private respondent alleges that the injunctive writ merely protected
its alleged right of first refusal which arose from the Presidents
August 13, 1979 Memorandum addressed to the concerned public
officials, stating that considerations of equity [require] that option
rights of first refusal for a period as may be determined by the PEA
shall be granted to private entities which have made initial
investments on the project.
[23]
This memorandum, however, must be
construed in harmony with the aforecited PD 1818 and PD
1594,
[24]
which prescribed the policies, guidelines, rules and
regulations for government infrastructure
contracts. Said memorandum certainly could not be construed as a
law authorizing a repeal of PD 1818 and PD 1594. Indeed, laws are
repealed only by subsequent ones,
[25]
whether expressly or
impliedly. There is no express repeal of said laws, as they were not
even mentioned in the memorandum, either by number or by
text. Neither can there be an implied repeal, since it was not
convincingly and unambiguously demonstrated that the mention in
the memorandum of a right of first refusal was so repugnant and
inconsistent with said laws as to defy harmonization. Basic is the
rule in statutory construction that implied repeals are not
favored.
[26]
In addition,
the memorandum was merely an expression of an executive
directive to subordinates, not a legislative enactment. Hence, it
cannot obviate the operation of PD 1818 and PD 1594. Section 4 of
PD 1594 provides:
SEC. 4. Bidding. -- Construction projects shall generally be
undertaken by contract after competitive public bidding. Projects
may be undertaken by administration or force account or by
negotiated contract only in exceptional cases where time is of the
essence, or where there is lack of qualified bidders or contractors, or
where there is a conclusive evidence that greater economy and
efficiency would be achieved through this arrangement, and in
accordance with provision of laws and acts on the matter, subject to
the approval of the Ministry of Public Works, Transportation and
Communications, the Minister of Public Highways, or the Minister of
Energy, as the case may be, if the project cost is less than P1 Million,
and of the President of the Philippines, upon the recommendation of
the Minister, if the project cost is P1 Million or more.
In the award of government contracts, the law requires a competitive
public bidding. This is reasonable because [a] competitive public
bidding aims to protect the public interest by giving the public the

best possible advantages thru open competition. It is a mechanism
that enables the government agency to avoid or preclude anomalies
in the execution of public contracts.
[27]
Lawful and laudable,
therefore, is the petitioners Memorandum of Agreement mandating
the City of Cebu to conduct a competitive public bidding in
implementing the Cebu South Reclamation Project. The conduct of
such public bidding is not violative of private respondents alleged
vested right. In the Courts viewpoint, the said right may be
considered for the purpose of awarding the contract of reclamation,
only when the latters proposal are in all aspects equal to the bid of
another proponent. In this kind of situation, the private
respondents claim to a right of first refusal indeed entitles it to
priority in the award of the contract. But this claimed right of first
refusal cannot bar another proponent from submitting a bid or
proposal.
Note, however, that under Section 4 of PD 1594, a negotiated
contract may be allowed in exceptional circumstances enumerated
therein, subject to approval by the President. Executive Order No.
380,
[28]
which took effect November 27, 1989, also provided for the
Presidents approval of negotiated infrastructure contracts, the cost
of which, for the Department of Transportation and
Communications, amounts to P100 million and, for other
departments and government corporations, P50 million. Since the
project cost of the Cebu South Reclamation Project is over 4 billion
pesos,
[29]
it is ineluctable that the Presidents approval is
required. Consequently untenable is private respondents
contention that its right of first refusal ipso factoentitles it to a
contract of reclamation, because it fails to take into consideration
the legal requirement that negotiated infrastructure contracts with
costs beyond the specified ceiling must be approved by the
President. Private respondent has no legal basis to claim that,
because of its initial expenses in preparing its proposed plans and
feasibility studies, it could dispense with or, worse, arrogate unto
itself the Presidents power to ultimately decide or approve a
contract of reclamation. In Malayan Integrated Industries
Corporation vs. Court of Appeals,
[30]
the Court recognized the
Presidents authority to disapprove the reclamation contract
proposed by private respondent despite the latters initial
investments; in that case, the President approved, instead, the
contract between the City of Mandaue and F.F. Cruz, Inc. et al.
[31]

Issuance of Writ of Preliminary

Injunction Unjustified

From the foregoing discussion, it is clear that the respondent judge
gravely abused his discretion in issuing the Writ of Preliminary
Injunction. Section 3, Rule 58 of the Rules of Court, enumerates the
grounds for the issuance of a preliminary injunction. Although
private respondent alleged these grounds,
[32]
respondent judge had
the duty to take judicial notice
[33]
of PD 1818 and PD 1594. These
laws, based on the foregoing discussion, ineludibly show that private
respondent had no right to the relief it sought. It is well-settled that,
before a writ of preliminary injunction may be issued, there must
be a clear showing by the complaint that there exists a right to be
protected, and that the acts against which the writ is to be directed
are violative of the said right.
[34]
In hindsight, the respondent judges
grant of the writ is truly regrettable, as it unnecessarily delayed the
implementation of an important infrastructure project, a delay which
had far-reaching consequences on the economic development and
interest of Cebu, as well as the nation.
Second Issue:

Respondent Judges Voluntary Inhibition

Petitioners
[35]
contend that the respondent judge gravely abused his
discretion, when he made a volte face on his previous Order dated
February 26, 1996
[36]
inhibiting himself from hearing the case. In
issuing said Order, Judge Burgos noted that Petitioner Tomas
Osmeas Motion for Inhibition raised the ground of prejudgment
on the basis of statements made in his Order dated February 22,
1996. Judge Burgos disposed as follows:
WHEREFORE, premises considered, the motion is granted, and
accordingly, in order to disabuse the mind of the movant and to
further faithfully serve the cause of justice, the Presiding Judge of
this Court hereby voluntarily inhibits himself from further sitting in
the present case with instruction to the Branch Clerk of Court to
send the records to the Office of the Clerk of Court for approval by
the Honorable Executive Judge Priscila S. Agana for final re-raffling.
The scheduled hearing for February 26, 1996 is cancelled.
SO ORDERED.
[37]

However, respondent judge reversed his voluntary
inhibition,
[38]
meekly stating in his Order dated March 12, 1996 that
[t]he allegation of prejudgment and partiality is so bare and empty
as movant Osmea failed to present sufficient ground or proof for
the Presiding Judge to disqualify himself. The Judge realized the
mistake in granting the motion for inhibition when defendant
Osmea misled the Court in asserting that on the same day February
26, 1996, he would be filing an administrative case against the Judge
for violation of PD 1818 and Supreme Court Circulars issued in
relation to said decree x x x. In that eventuality, Osmea said, the
Judge would be bias[ed] and partial to him because he [was] the
complainant in the pending administrative case.
[39]

We find merit in petitioners contention. Judge Burgos inhibited
himself on the basis of Petitioner Osmeas allegation of
prejudgment. In reversing his voluntary inhibition, respondent
judge nebulously branded Osmeas allegations as so bare and
empty. Judge Burgos claim that he was misled by Osmeas threat
of an administrative case is obviously a mere afterthought that does
not inspire belief. Although inhibition is truly discretionary
[40]
on the
part of the judge, the flimsy reasons proffered above are insufficient
to justify reversal of his previous voluntary inhibition. As aptly
pointed out by petitioners in their Memorandum,
x x x a judge may not rescind his action and reassume jurisdiction
where good cause exists for the disqualification. Furthermore,
because a presumption arises, by reason of the judges prior order of
disqualification, of the existence of the factual reason for such
disqualification, where the regular judge who has been disqualified
revokes the order of disqualification, and objection is made to such
revocation, it is not sufficient for the judge to enter an order merely
saying that he or she is not disqualified; the record should clearly
reveal the facts upon which the revocation is made. (46 Am Jur 2d
234, p. 321)
[41]

We deem it important to point out that a judge must preserve the
trust and faith reposed in him by the parties as an impartial and
objective administrator of justice. When he exhibits actions that
give rise, fairly or unfairly, to perceptions of bias, such faith and
confidence are eroded, and he has no choice but to inhibit himself
voluntarily. It is basic that [a] judge may not be legally prohibited
from sitting in a litigation, but when circumstances appear that will
induce doubt [on] his honest actuations and probity in favor of
either party, or incite such state of mind, he should conduct a
careful self-examination. He should exercise his discretion in a way
that the peoples faith in the courts of justice is not impaired. The
better course for the judge is to disqualify himself.
[42]

Third Issue:

Omnibus Motion Ineffective?

Private respondent insists that the petitioners Omnibus
Motion
[43]
dated February 14, 1996 is a mere scrap of paper, as it
contained a notice of hearing addressed only to the clerk of court
with no proof of its service to the opposing counsel.
[44]
Private
respondent is clutching at straws. The petitioners Omnibus Motion
was filed pursuant to the trial courts own order to show cause why
the injunction should not issue. It actually partakes of a brief or
memorandum showing the trial courts lack of jurisdiction to issue
the preliminary injunction. The Omnibus Motion raised a very
important matter which the court itself could have ruled on,
even motu proprio, considering that a jurisdictional question may be
raised at any time, even for the first time on appeal.
[45]
Moreover, as
expressed by petitioners, the issue is now moot, since the private
respondent filed an Amended Complaint giving petitioner another
fifteen days to file a responsive pleading. Within the said period,
petitioners filed a Manifestation and Motion dated 7 March 1996,
adopting the Omnibus Motion of 14 February 1996 and the Motion
for Reconsideration with Cautionary Notice against the Amended
Complaint and the application for writ of preliminary injunction
therein contained.
[46]

Fourth Issue: Motion for Reconsideration Actually Filed

Finally, private respondent alleges that the petition should be
dismissed on the ground that petitioners did not file a motion for
reconsideration.
[47]
This allegation is negated by the simple fact that a
Motion for Reconsideration with Cautionary Notice,
[48]
although
denied by the trial court, was actually filed by petitioners within the
prescribed period.
Epilogue

Litigants, lawyers and judges sometimes forget that they share the
responsibility of unclogging the dockets of the judiciary. As a
lamentable consequence, this Court is compelled to resolve cases
which are utterly bereft of merit. This is one of those cases.
Private Respondent Malayan Integrated Industries Corporation
(Malayan, for brevity) was the petitioner in Malayan Integrated
Industries, Corp. vs. Court of Appeals, et al.,
[49]
in which this Court,
citing PD 1818, held that no writ of injunction may be issued to
prevent the implementation of the reclamation project along the
coast of Mandaue City, which was deemed an infrastructure
project. In the present case, Private Respondent Malayan,
nevertheless sought again the issuance of an injunctive writ to
restrain the implementation of a similar reclamation project in
adjacent Cebu City. In initiating the present proceedings, private
respondent evidently ignored our earlier pronouncement and
unnecessarily clogged the dockets of our courts.
The respondent trial judge, on the other hand, abetted Malayans
brazen disregard of this Courts earlier ruling. Worse, he ruled that

the earlier case did not apply, because E.O. No. 380 was not
presented by the parties for consideration by the High Court.
[50]
He
maintained that EO 380, dated November 27, 1989, did not include
reclamation projects in the definition of infrastructure projects.
As earlier stated, the ruling of the trial court is lamentable. We note
that, in the first place, EO 380 did not purport to be an exclusive
enumeration of infrastructure projects. Moreover, the Supreme
Court itself held -- after the effectivity of EO 380 -- that reclamation
projects are deemed infrastructure projects, thereby resolving the
present question with finality. It is unfortunate that the trial court
cavalierly contravened a categorical ruling of the Supreme
Court. But even more deplorable, it insinuated that this Court did
not take into account all applicable extant laws. To propound such
view is to undermine the peoples trust and confidence in the
judiciary. This, we cannot countenance. It is opportune to remind
judges of their sworn duty to follow the doctrines and rulings of this
Court.
In issuing writs of injunction, judges should observe the admonition
of the Court in Olalia vs. Hizon:
[51]

It has been consistently held that there is no power the exercise of
which is more delicate, which requires greater caution, deliberation
and sound discretion, or more dangerous in a doubtful case, than the
issuance of an injunction. It is the strong arm of equity that should
never be extended unless to cases of great injury, where courts of
law cannot afford an adequate or commensurate remedy in damages.
Every court should remember that an injunction is a limitation upon
the freedom of action of the defendant and should not be granted
lightly or precipitately. It should be granted only when the court is
fully satisfied that the law permits it and the emergency demands
it.
WHEREFORE, the petition is hereby GRANTED. The Orders of the
Regional Trial Court in Civil Case No. CEB-18292, dated February 22,
1996, March 12, 1996 and March 18, 1996, are REVERSED and SET
ASIDE. The temporary restraining order earlier issued is MADE
PERMANENT. Respondent judge is ordered to INHIBIT himself from
further hearing this case. Let Civil Case No. CEB-18292 be re-raffled
and the proceedings therein proceed with all deliberate dispatch.
SO ORDERED.
Davide, Jr.(Chairman), Bellosillo, Vitug, and Quisumbing, JJ., concur.
LAND TRANSPORTATION OFFICE (LTO) V. CITY
OF BUTUAN
KEYWORDS: Registration of Tricycles; LGUs have
the power to REGULATE the operation of tricycles
for hire and to GRANT FRANCHISES for the
operation thereof.
FACTS: The Sangguniang Panglungsod (SP) of
Butuan on August 16, 1992 passed an ordinance
entitled An Ordinance Regulating the Operation of
Tricycles for hire, providing mechanism for the
issuance of Franchise, Registration and Permit, and
imposing Penalties for Violations thereof and for
other purposes. The ordinance provided for,
among other things, the payment of franchise fees,
fees for registration of the vehicle, and fees for the
issuance of a permit for the driving thereof. The
City of Butuan asserts that Sec. 129 and Sec.133 of
the Local Government Code is their basis for said
ordinance and that, said provisions authorize
LGUs to collect registration fees or charges along
with, in its view, the corresponding issuance of all
kinds of licenses or permits for the driving of
tricycles.
LTO explains that one of the functions of
the National Government, that , indeed has been
transferred to LGUs is the franchising authority
over tricycles-for-hire of the LTFRB but NOT the
authority of the LTO to register all motor vehicles
and to issue to qualified persons of licenses to
drive such vehicles.
The RTC of Butuan decreed an issuance of
a PERMANENT WRIT OF INJUCTION against LTO
prohibiting and enjoining LTO, as well as its
employees and other persons acting in its behalf,
from (a) registering tricycles and (b) issuing
licenses to tricycle drivers. The CA sustained the
trial courts decision.
The adverse rulings of both Courts
prompted the LTO to file an instant petition for
review on certiorari to annul and set aside the
earlier Court decisions.
ISSUE: Whether under the present set-up the
power of the LTO to register, tricycles in
particular, as well as to issue licenses for the
driving thereof has likewise devolved to Local
Government Units.
HELD: No, said powers [to register and issue
licenses] remain under LTOs exclusive
jurisdiction.
The registration and licensing functions are
vested in the LTO (pursuant to Art. 3 Sec. 4(d) [1],
10 of RA 4136-Land Transportation and Traffic
Code) while franchising and regulatory
responsibilities are vested in the LTFRB (Land
Transportation Franchising and Regulatory Board;
pursuant to EO # 202). Under the Local
Government Code (specifically Sec. 458 (8)(3)(VI)),
the Local Government Units now have the power to
REGULATE (to fix, establish or control, to adjust by
rule, method or establish mode to direct by rule or
restriction; or to subject to governing principles or
laws) the operation of tricycles for hire and grant
franchises thereof but they are still subject to the
guidelines prescribed by the DOTC (Department of
Transportation and Communications; under Article
458(a) [3-VI] of the RA 7160).
LTO vs. City of Butuan; Power of LGU
Facts: Relying on the fiscal autonomy granted to
LGU's by the Constittuion and the provisons of the
Local Government Code, the Sangguniang
Panglunsod of the City of Butuan enacted an
ordinance "Regulating the Operation of Tricycles-
for-Hire, providing mechanism for the issuance of
Franchise, Registration and Permit, and Imposing
Penalties for Violations thereof and for other
Purposes." The ordinance provided for, among
other things, the payment of franchise fees for the
grant of the franchise of tricycles-for-hire, fees for
the registration of the vehicle, and fees for the
issuance of a permit for the driving thereof.

Petitioner LTO explains that one of the functions

of the national government that, indeed, has been
transferred to local government units is the
franchising authority over tricycles-for-hire of the
Land Transportation Franchising and Regulatory
Board ("LTFRB") but not, it asseverates, the
authority of LTO to register all motor vehicles and
to issue to qualified persons of licenses to drive
such vehicles.

The RTC and CA ruled that the power to give
registration and license for driving tricycles has
been devolved to LGU's.
Issue: Whether or not, the registration of
tricycles was given to LGU's, hence the ordinance
is a valid exercise of police power.

Ruling:
No, based on the-"Guidelines to Implement the
Devolution of LTFRBs Franchising Authority over
Tricycles-For-Hire to Local Government units
pursuant to the Local Government Code"- the newly
delegated powers to LGU's pertain to the
franchising and regulatory powers exercised by
the LTFRB and not to the functions of the LTO
relative to the registration of motor vehicles and
issuance of licenses for the driving thereof.
Corollarily, the exercised of a police power must
be through a valid delegation. In this case the
police power of registering tricycles was not
delegated to the LGUs, but remained in the LTO.

Clearly unaffected by the Local Government
Code are the powers of LTO under R.A. No.4136
requiring the registration of all kinds of motor
vehicles "used or operated on or upon any public
highway" in the country.

The Commissioner of Land Transportation and
his deputies are empowered at anytime to examine
and inspect such motor vehicles to determine
whether said vehicles are registered, or are
unsightly, unsafe, improperly marked or equipped,
or otherwise unfit to be operated on because of
possible excessive damage to highways, bridges
and other infrastructures. The LTO is additionally
charged with being the central repository and
custodian of all records of all motor vehicles.
Adds the Court, the reliance made by
respondents on the broad taxing power of local
government units, specifically under Section 133
of the Local Government Code, is tangential.

Police power and taxation, along with eminent
domain, are inherent powers of sovereignty which
the State might share with local government units
by delegation given under a constitutional or a
statutory fiat. All these inherent powers are for a
public purpose and legislative in nature but the
similarities just about end there. The basic aim of
police power is public good and welfare. Taxation,
in its case, focuses on the power of government to
raise revenue in order to support its existence and
carry out its legitimate objectives. Although
correlative to each other in many respects, the
grant of one does not necessarily carry with it the
grant of the other. The two powers are, by
tradition and jurisprudence, separate and distinct
powers, varying in their respective concepts,
character, scopes and limitations.

To construe the tax provisions of Section 133 (1)
of the LGC indistinctively would result in the
repeal to that extent of LTO's regulatory power
which evidently has not been intended. If it were
otherwise, the law could have just said so in
Section 447 and 458 of Book III of the Local
Government Code in the same manner that the
specific devolution of LTFRB's power on
franchising of tricycles has been provided. Repeal
by implication is not favored.

The power over tricycles granted under Section
458(a)(3)(VI) of the Local Government Code to
LGUs is the power to regulate their operation and
to grant franchises for the operation thereof. The
exclusionary clause contained in the tax
provisions of Section 133 (1) of the Local
Government Code must not be held to have had
the effect of withdrawing the express power of
LTO to cause the registration of all motor vehicles
and the issuance of licenses for the driving
thereof. These functions of the LTO are essentially
regulatory in nature, exercised pursuant to the
police power of the State, whose basic objectives
are to achieve road safety by insuring the road
worthiness of these motor vehicles and the
competence of drivers prescribed by R. A. 4136.
Not insignificant is the rule that a statute must not
be construed in isolation but must be taken in
harmony with the extant body of laws.

LGUs indubitably now have the power to
regulate the operation of tricycles-for-hire and to
grant franchises for the operation thereof, and not
to issue registration.

Ergo, the ordinance being repugnant to a statute
is void and ultra vires.
MMDA V. BEL-AIR
Facts: BAVA is the registered owner of Neptune
Street, a road inside Bel-Air Village. Neptune 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.

On December 30, 1995, respondent received from
petitioner, through its Chairman, a notice dated
December 22, 1995 requesting respondent to open
Neptune Street to public vehicular traffic starting
January 2, 1996. On the same day, respondent
was apprised that the perimeter wall separating
the subdivision from the adjacent Kalayaan
Avenue would be demolished.
On January 2, 1996, respondent instituted against
petitioner before the Regional Trial Court, Branch
136, Makati City, Civil Case No. 96-001 for
injunction. Respondent prayed for the issuance of
a temporary restraining order and preliminary
injunction enjoining the opening of Neptune Street
and prohibiting the demolition of the perimeter
wall.
RTC: issued TRO, after due hearing, the trial court
denied issuance of a preliminary injunction.
CA: MMDA has no authority to order the opening
of Neptune Street, a private subdivision road and
cause the demolition of its perimeter walls. It held
that the authority is lodged in the City Council of
Makati by ordinance.
Issue: WON the MMDA has the mandate to open
Neptune Street to public traffic pursuant to its
regulator and police powers.
MMDA: it has the authority to open Neptune Street
to public traffic because it is an agent of the state
endowed with police power in the delivery of basic
services in Metro Manila. One of these basic
services is traffic management which involves the
regulation of the use of thoroughfares to insure
the safety, convenience and welfare of the general
public. It is alleged that the police power of MMDA
was affirmed by this Court in the consolidated
cases of Sangalang v. Intermediate Appellate
Court. From the premise that it has police power,
it is now urged that there is no need for the City of
Makati to enact an ordinance opening Neptune
street to the public.
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
LGUs. Once delegated, the agents can exercise only
such legislative powers as are conferred on them
by the national lawmaking body.
A local government is a "political subdivision of a
nation or state which is constituted by law and has
substantial control of local affairs." The LGC of
1991 defines a LGU as a "body politic and
corporate", one endowed with powers as a political
subdivision of the National Government and as a
corporate entity representing the inhabitants of its
territory. LGUs are the provinces, cities,
municipalities and barangays. They are also the
territorial and political subdivisions of the state.
Our Congress delegated police power to the LGUs
in the LGC of 1991. LGUs exercise police power
through their respective legislative bodies. The
legislative body of the provincial government is
the sangguniang panlalawigan, that of the city
government is the sangguniang panlungsod, that
of the municipal government is the sangguniang
bayan, and that of the barangay is the sangguniang
barangay. The LGC of 1991 empowers the
sangguniang panlalawigan, sangguniang
panlungsod and sangguniang bayan to "enact
ordinances, approve resolutions and appropriate
funds for the general welfare of the [province, city
or municipality, as the case may be], and its
inhabitants pursuant to Section 16 of the Code and
in the proper exercise of the corporate powers of
the [province, city municipality] provided under
the Code. The same Code gives the sangguniang
barangay the power to "enact ordinances as may
be necessary to discharge the responsibilities
conferred upon it by law or ordinance and to
promote the general welfare of the inhabitants
thereon."
Metropolitan or Metro Manila is a body composed
of several LGUs - i.e., twelve (12) cities and five (5)
municipalities, namely, the cities of Caloocan,
Manila, Mandaluyong, Makati, Pasay, Pasig,
Quezon, Muntinlupa, Las Pinas, Marikina,
Paranaque and Valenzuela, and the municipalities
of Malabon, , Navotas, , Pateros, San Juan and
Taguig. With the passage of Republic Act (R. A.)
No. 7924 [24] in 1995, Metropolitan Manila was
declared as a "special development and
administrative region" and the Administration of
"metro-wide" basic services affecting the region
placed under "a development authority" referred to
as the MMDA.

"Metro-wide services" are 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 LGUs comprising
Metro Manila." There are seven (7) basic metro-
wide services and the scope of these services
cover the following: (1) development planning; (2)
transport and traffic management; (3) solid waste
disposal and management; (4) flood control and
sewerage management; (5) urban renewal, zoning
and land use planning, and shelter services; (6)
health and sanitation, urban protection and
pollution control; and (7) public safety. The basic
service of transport and traffic management
includes the following: "(b) Transport and traffic
management which include the formulation,
coordination, and monitoring of policies,
standards, programs and projects to rationalize
the existing transport operations, infrastructure
requirements, the use of thoroughfares, and
promotion of safe and convenient movement of
persons and goods; provision for the mass
transport system and the institution of a system to
regulate road users; administration and
implementation of all traffic enforcement
operations, traffic engineering services and traffic
education programs, including the institution of a
single ticketing system in Metropolitan Manila;"
The scope of the MMDAs function is limited to the
delivery of the seven (7) basic services. One of
these is transport and traffic management which
includes the formulation and monitoring of
policies, standards and projects to rationalize the
existing transport operations, infrastructure
requirements, the use of thoroughfares and
promotion of the safe movement of persons and
goods. It also covers the mass transport system
and the institution of a system of road regulation,
the administration of all traffic enforcement
education programs, including the institution of a
single ticketing system in Metro Manila for traffic
violations. Under this service, the MMDA is
expressly authorized "to set the policies
concerning traffic" and "coordinate and regulate
the implementation of all traffic management
programs." In addition, the MMDA may "install and
administer a single ticketing system," fix, impose
and collect fines and penalties for all traffic
violations.
It will be noted that 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. Even the Metro Manila Council
has not been delegated any legislative power.
Unlike the legislative bodies of the LGUs, there is
no provision in R. A. No. 7924 that empowers the
MMDA or its Council to "enact ordinances, approve
resolutions and appropriate funds for the general
welfare" of the inhabitants of Metro Manila. The
MMDA is, as termed in the charter itself, a
"development authority."It is an agency created for
the purpose of laying down policies and
coordinating with the various national government
agencies, peoples organizations, non-
governmental organizations and the private sector
for the efficient and expeditious delivery of basic
services in the vast metropolitan area. All its
functions are administrative in nature.
Contrary to petitioners claim, the two Sangalang
cases do not apply to the case at bar. Firstly, both
involved zoning ordinances passed by the
municipal council of Makati and the MMC. In the
instant case, the basis for the proposed opening of
Neptune Street is contained in the notice of
December 22, 1995 sent by petitioner to
respondent BAVA, through its president. The
notice does not cite any ordinance or law, either
by the Sangguniang Panlungsod of Makati City or
by the MMDA, as the legal basis for the proposed
opening of Neptune Street. Petitioner MMDA
simply relied on its authority under its charter "to
rationalize the use of roads and/or thoroughfares
for the safe and convenient movement of persons."
Rationalizing the use of roads and thoroughfares
is one of the acts that fall within the scope of
transport and traffic management. By no stretch of
the imagination, however, can this be interpreted
as an express or implied grant of ordinance-
making power, much less police power. Secondly,
the MMDA is not the same entity as the MMC in
Sangalang. Although the MMC is the forerunner of
the present MMDA, an examination of Presidential
Decree (P. D.) No. 824, the charter of the MMC,
shows that the latter possessed greater powers
which were not bestowed on the present MMDA.
The MMC was the "central government" of Metro
Manila for the purpose of establishing and
administering programs providing services
common to the area. As a "central government" it
had the power to levy and collect taxes and special
assessments, the power to charge and collect fees;
the power to appropriate money for its operation,
and at the same time, review appropriations for
the city and municipal units within its jurisdiction.
It was bestowed the power to enact or approve
ordinances, resolutions and fix penalties for
violation of such ordinances and resolutions. It
also had the power to review, amend, revise or
repeal all ordinances, resolutions and acts of any
of the four (4) cities and thirteen (13)
municipalities comprising Metro Manila.
It was the MMC itself that possessed legislative
powers. All ordinances, resolutions and measures

recommended by the Sangguniang Bayan were
subject to the MMCs approval. Moreover, the
power to impose taxes and other levies, the power
to appropriate money, and the power to pass
ordinances or resolutions with penal sanctions
were vested exclusively in the MMC. Thus,
Metropolitan Manila had a "central government,"
i.e., the MMC which fully possessed legislative and
police powers. Whatever legislative powers the
component cities and municipalities had were all
subject to review and approval by the MMC.
Under the 1987 Constitution, the LGUs became
primarily responsible for the governance of their
respective political subdivisions. The MMAs
jurisdiction was limited to addressing common
problems involving basic services that
transcended local boundaries. It did not have
legislative power. Its power was merely to provide
the LGUs technical assistance in the preparation of
local development plans. Any semblance of
legislative power it had was confined to a "review
[of] legislation proposed by the local legislative
assemblies to ensure consistency among local
governments and with the comprehensive
development plan of Metro Manila," and to "advise
the local governments accordingly."
When R.A. No. 7924 took effect, Metropolitan
Manila became a "special development and
administrative region" and the MMDA a "special
development authority" whose functions were
"without prejudice to the autonomy of the affected
LGUs." The character of the MMDA was clearly
defined in the legislative debates enacting its
charter.
Clearly, the MMDA is not a political unit of
government. The power delegated to the MMDA is
that given to the Metro Manila Council to
promulgate administrative rules and regulations in
the implementation of the MMDAs functions.
There is no grant of authority to enact ordinances
and regulations for the general welfare of the
inhabitants of the metropolis. It is thus beyond
doubt that the MMDA is not a LGU or a public
corporation endowed with legislative power. It is
not even a "special metropolitan political
subdivision" as contemplated in Section 11, Article
X of the Constitution. The creation of a "special
metropolitan political subdivision" requires the
approval by a majority of the votes cast in a
plebiscite in the political units directly affected. R.
A. No. 7924 was not submitted to the inhabitants
of Metro Manila in a plebiscite. 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. In fact, part of his
function 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 then, the MMC under P. D. No. 824 is not
the same entity as the MMDA under R. A. No. 7924.
Unlike the MMC, the MMDA has no power to enact
ordinances for the welfare of the community. It is
the LGUs, acting through their respective
legislative councils, that possess legislative power
and police power. In the case at bar, the
Sangguniang Panlungsod of Makati City did not
pass any ordinance or resolution ordering the
opening of Neptune Street, hence, its proposed
opening by petitioner MMDA is illegal and the
respondent CA did not err in so ruling.
MMDA V. GARIN
Facts: Dante O. Garin was issued a traffic violation
receipt (TVR) for parking illegally along Gandara
Street, Binondo, Manila. His driver's license was
also confiscated. Shortly before the expiration of
the TVR's validity, the Garin addressed a letter to
then MMDA Chairman Oreta requesting the return
of his driver's license, and expressing his
preference for his case to be filed in court.
Receiving no immediate reply, Garin filed the
original complaint with application for preliminary
injunction contending that, in the absence of any
implementing rules and regulations, Sec. 5(f) of
Rep. Act No. 7924 grants the MMDA unbridled
discretion to deprive erring motorists of their
licenses, pre-empting a judicial determination of
the validity of the deprivation, thereby violating
the due process clause of the Constitution. The
respondent further contended that the provision
violates the constitutional prohibition against
undue delegation of legislative authority, allowing
as it does the MMDA to fix and impose unspecified
and therefore unlimited - fines and other
penalties on erring motorists. In support of his
application for a writ of preliminary injunction,
Garin alleged that he suffered and continues to
suffer great and irreparable damage because of the
deprivation of his license and that, absent any
implementing rules from the Metro Manila Council,
the TVR and the confiscation of his license have no
legal basis. For its part, the MMDA, represented by
the Office of the Solicitor General, pointed out that
the powers granted to it by Sec. 5(f) of RA 7924 are
limited to the fixing, collection and imposition of
fines and penalties for traffic violations, which
powers are legislative and executive in nature; the
judiciary retains the right to determine the validity
of the penalty imposed. It further argued that the
doctrine of separation of powers does not
preclude "admixture" of the three powers of
government in administrative agencies. The MMDA
also refuted Garin's allegation that the Metro
Manila Council, the governing board and policy
making body of the petitioner, has as yet to
formulate the implementing rules for Sec. 5(f) of

Rep. Act No. 7924 and directed the court's
attention to MMDA Memorandum Circular No. TT-
95-001 dated 15 April 1995. Respondent Garin,
however, questioned the validity of MMDA
Memorandum Circular No. TT-95-001, as he claims
that it was passed by the Metro Manila Council in
the absence of a quorum. RTC: issued a temporary
restraining order extending the validity of the TVR
as a temporary driver's license for twenty more
days. A preliminary mandatory injunction was
granted, and the MMDA was directed to return the
respondent's driver's license. RTC decision: a.
There was indeed no quorum in that First Regular
Meeting of the MMDA Council held on March 23,
1995, hence MMDA Memorandum Circular No. TT-
95-001, authorizing confiscation of driver's
licenses upon issuance of a TVR, is void ab initio.
b. The summary confiscation of a driver's license
without first giving the driver an opportunity to be
heard; depriving him of a property right (driver's
license) without DUE PROCESS; not filling (sic) in
Court the complaint of supposed traffic infraction,
cannot be justified by any legislation (and is)
hence unconstitutional.
Issues: 1. WON a license to operate a motor vehicle
is a privilege that the state may withhold in the
exercise of its police power. YES.
The petitioner correctly points out that a license to
operate a motor vehicle is not a property right, but
a privilege granted by the state, which may be
suspended or revoked by the state in the exercise
of its police power, in the interest of the public
safety and welfare, subject to the procedural due
process requirements.
State ex. Rel. Sullivan: "the legislative power to
regulate travel over the highways and
thoroughfares of the state for the general welfare
is extensive. It may be exercised in any reasonable
manner to conserve the safety of travelers and
pedestrians. Since motor vehicles are instruments
of potential danger, their registration and the
licensing of their operators have been required
almost from their first appearance. The right to
operate them in public places is not a natural and
unrestrained right, but a privilege subject to
reasonable regulation, under the police power, in
the interest of the public safety and welfare. The
power to license imports further power to
withhold or to revoke such license upon
noncompliance with prescribed conditions."
Commonwealth v. Funk: "Automobiles are vehicles of great
speed and power. The use of them constitutes an element
of danger to persons and property upon the highways.
Carefully operated, an automobile is still a dangerous
instrumentality, but, when operated by careless or
incompetent persons, it becomes an engine of destruction.
The Legislature, in the exercise of the police power of the
commonwealth, not only may, but must, prescribe how and
by whom motor vehicles shall be operated on the highways.
One of the primary purposes of a system of general
regulation of the subject matter, as here by the Vehicle
Code, is to insure the competency of the operator of motor
vehicles. Such a general law is manifestly directed to the
promotion of public safety and is well within the police
power."
The common thread running through the cited
cases is that it is the legislature, in the exercise of
police power, which has the power and
responsibility to regulate how and by whom motor
vehicles may be operated on the state highways.
WON the MMDA is vested with police power. NO.
Metro Manila Development Authority v. Bel-Air
Village Association, Inc., we categorically stated
that Rep. Act No. 7924 does not grant the MMDA
with police power, let alone legislative power, and
that all its functions are administrative in nature.
Tracing the legislative history of RA 7924 creating
the MMDA, we concluded that the MMDA is not a
local government unit or a public corporation
endowed with legislative power, and, unlike its
predecessor, the Metro Manila Commission, it has
no power to enact ordinances for the welfare of
the community. Thus, in the absence of an
ordinance from the City of Makati, its own order to
open the street was invalid.
Police power, as an inherent attribute of
sovereignty, is 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. Having been 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 (LGUs). Once delegated, the
agents can exercise only such legislative powers as
are conferred on them by the national lawmaking
body.
Congress delegated police power to the LGUs in
LGC. A local government is a "political subdivision
of a nation or state which is constituted by law
and has substantial control of local affairs." Local
government units are the provinces, cities,
municipalities and barangays, which exercise
police power through their respective legislative
bodies. Metropolitan or Metro Manila is a body
composed of several local government units. With
the passage of Rep. Act No. 7924 in 1995,
Metropolitan Manila was declared as a "special
development and administrative region" and the

administration of "metro-wide" basic services
affecting the region placed under "a development
authority" referred to as the MMDA. Thus: 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. Even the Metro Manila
Council has not been delegated any legislative
power. Unlike the legislative bodies of the local
government units, there is no provision in R. A.
No. 7924 that empowers the MMDA or its Council
to "enact ordinances, approve resolutions and
appropriate funds for the general welfare" of the
inhabitants of Metro Manila. The MMDA is, as
termed in the charter itself, a "development
authority." It is an agency created for the 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 delivery of basic services in the vast
metropolitan area.
Clearly, the MMDA is not a political unit of
government. The power delegated to the MMDA is
that given to the Metro Manila Council to
promulgate administrative rules and regulations in
the implementation of the MMDA's functions.
There is no grant of authority to enact ordinances
and regulations for the general welfare of the
inhabitants of the metropolis.
WON Sec. 5(f) grants the MMDA with the duty to
enforce existing traffic rules and regulations. YES.
Section 5 of RA 7924 enumerates the "Functions
and Powers of the Metro Manila Development
Authority." The contested clause in Sec. 5(f) states
that the petitioner shall "install and administer a
single ticketing system, fix, impose and collect
fines and penalties for all kinds of violations of
traffic rules and regulations, whether moving or
nonmoving in nature, and confiscate and suspend
or revoke drivers' licenses in the enforcement of
such traffic laws and regulations, the provisions of
RA 4136 and P.D. No. 1605 to the contrary
notwithstanding," and that "(f)or this purpose, the
Authority shall enforce all traffic laws and
regulations in Metro Manila, through its traffic
operation center, and may deputize members of
the PNP, traffic enforcers of local government
units, duly licensed security guards, or members
of non-governmental organizations to whom may
be delegated certain authority, subject to such
conditions and requirements as the Authority may
impose."
Thus, where there is a traffic law or regulation
validly enacted by the legislature or those agencies
to whom legislative powers have been delegated
(the City of Manila in this case), the petitioner is
not precluded and in fact is duty-bound to
confiscate and suspend or revoke drivers' licenses
in the exercise of its mandate of transport and
traffic management, as well as the administration
and implementation of all traffic enforcement
education programs.
BATANGAS CATV VS. C.A.
FACTS: On July 28, 1986, respondent Sangguniang
Panlungsod enacted Resolution No. 210 granting
petitioner a permit to construct, install, and
operate a CATV system in Batangas City. Section 8
of the Resolution provides that petitioner is
authorized to charge its subscribers the maximum
rates specified therein, provided, however, that
any increase of rates shall be subject to the
approval of the Sangguniang Panlungsod.

Sometime in November 1993, petitioner increased
its subscriber rates from P88.00 to P180.00 per
month. As a result, respondent Mayor wrote
petitioner a letter threatening to cancel its permit
unless it secures the approval of respondent
Sangguniang Panlungsod, pursuant to Resolution
No. 210.

Petitioner then filed with the RTC, Branch 7,
Batangas City, a petition for injunction alleging
that respondent Sangguniang Panlungsod has no
authority to regulate the subscriber rates charged
by CATV operators because under Executive Order
No. 205, the National Telecommunications
Commission (NTC) has the sole authority to
regulate the CATV operation in the Philippines.

ISSUE: May a local government unit (LGU) regulate
the subscriber rates charged by CATV operators
within its territorial jurisdiction?

HELD: The logical conclusion, therefore, is that in
light of the above laws and E.O. No. 436, the NTC
exercises regulatory power over CATV operators to
the exclusion of other bodies.

Like any other enterprise, CATV operation maybe
regulated by LGUs under the general welfare
clause. This is primarily because the CATV system
commits the indiscretion of crossing public
properties. (It uses public properties in order to
reach subscribers.) The physical realities of
constructing CATV system the use of public
streets, rights of ways, the founding of structures,
and the parceling of large regions allow an LGU a
certain degree of regulation over CATV operators.

But, while we recognize the LGUs power under the

general welfare clause, we cannot sustain
Resolution No. 210. We are convinced that
respondents strayed from the well recognized
limits of its power. The flaws in Resolution No.
210 are: (1) it violates the mandate of existing laws
and (2) it violates the States deregulation policy
over the CATV industry.

LGUs must recognize that technical matters
concerning CATV operation are within the
exclusive regulatory power of the NTC.
JESUS IS LORD CHRISTIAN SCHOOL
FOUNDATION, INC., petitioner, vs. MUNICIPALITY
(now CITY) OF PASIG, METRO
MANILA, respondent.
Before us is a petition for review of the Decision
[1]
of the
Court of Appeals (CA) in CA-G.R. CV No. 59050, and its
Resolution dated February 18, 2002, denying the motion
for reconsideration thereof. The assailed decision
affirmed the order of the Regional Trial Court (RTC) of
Pasig, Branch 160, declaring the respondent Municipality
(now City) of Pasig as having the right to expropriate and
take possession of the subject property.
The Antecedents
The Municipality of Pasig needed an access road from E.
R. Santos Street, a municipal road near the Pasig Public
Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to
70 houses, mostly made of light materials, were located.
The road had to be at least three meters in width, as
required by the Fire Code, so that fire trucks could pass
through in case of conflagration.
[2]
Likewise, the
residents in the area needed the road for water and
electrical outlets.
[3]
The municipality then decided to
acquire 51 square meters out of the 1,791-square meter
property of Lorenzo Ching Cuanco, Victor Ching Cuanco
and Ernesto Ching Cuanco Kho covered by Transfer
Certificate of Title (TCT) No. PT-66585,
[4]
which is
abutting E. R. Santos Street.
On April 19, 1993, the Sangguniang Bayan of Pasig
approved an Ordinance
[5]
authorizing the municipal
mayor to initiate expropriation proceedings to acquire
the said property and appropriate the fund therefor.
The ordinance stated that the property owners were
notified of the municipalitys intent to purchase the
property for public use as an access road but they
rejected the offer.
On July 21, 1993, the municipality filed a complaint,
amended on August 6, 1993, against the Ching Cuancos
for the expropriation of the property under Section 19 of
Republic Act (R.A.) No. 7160, otherwise known as the
Local Government Code. The plaintiff alleged therein
that it notified the defendants, by letter, of its intention
to construct an access road on a portion of the property
but they refused to sell the same portion. The plaintiff
appended to the complaint a photocopy of the letter
addressed to defendant Lorenzo Ching Cuanco.
[6]

The plaintiff deposited with the RTC 15% of the market
value of the property based on the latest tax declaration
covering the property. On plaintiffs motion, the RTC
issued a writ of possession over the property sought to
be expropriated. On November 26, 1993, the plaintiff
caused the annotation of a notice of lis pendens at the
dorsal portion of TCT No. PT-92579 under the name of
the Jesus Is Lord Christian School Foundation,
Incorporated (JILCSFI) which had purchased the
property.
[7]
Thereafter, the plaintiff constructed therein a
cemented road with a width of three meters; the road
was called Damayan Street.
In their answer,
[8]
the defendants claimed that, as early
as February 1993, they had sold the said property to
JILCSFI as evidenced by a deed of sale
[9]
bearing the
signature of defendant Ernesto Ching Cuanco Kho and
his wife.
When apprised about the complaint, JILCSFI filed a
motion for leave to intervene as defendant-in-
intervention, which motion the RTC granted on August
26, 1994.
[10]

In its answer-in-intervention, JILCSFI averred, by way of
special and affirmative defenses, that the plaintiffs
exercise of eminent domain was only for a particular
class and not for the benefit of the poor and the
landless. It alleged that the property sought to be
expropriated is not the best portion for the road and the
least burdensome to it. The intervenor filed a
crossclaim against its co-defendants for reimbursement
in case the subject property is expropriated.
[11]
In its
amended answer, JILCSFI also averred that it has been
denied the use and enjoyment of its property because
the road was constructed in the middle portion and that
the plaintiff was not the real party-in-interest. The
intervenor, likewise, interposed counterclaims against
the plaintiff for moral damages and attorneys fees.
[12]

During trial, Rolando Togonon, the plaintiffs messenger,
testified on direct examination that on February 23,
1993, he served a letter of Engr. Jose Reyes, the
Technical Assistant to the Mayor on Infrastructure, to
Lorenzo Ching Cuanco at his store at No. 18 Alkalde Jose
Street, Kapasigan, Pasig. A lady received the same and
brought it inside the store. When she returned the letter
to him, it already bore the signature of Luz Bernarte. He
identified a photocopy of the letter as similar to the one
he served at the store. On cross-examination, he
admitted that he never met Luz Bernarte.
[13]

Edgardo del Rosario, a resident of Sto. Tomas Bukid
since 1982 declared that he would pass through a
wooden bridge to go to E. R. Santos Street. At times, the
bridge would be slippery and many had met accidents
while walking along the bridge. Because of this, they
requested Mayor Vicente Eusebio to construct a road
therein. He attested that after the construction of the
cemented access road, the residents had water and
electricity.
[14]

Augusto Paz of the City Engineers Office testified that,
sometime in 1992, the plaintiff constructed a road
perpendicular from E. R. Santos Street to Sto. Tomas
Bukid; he was the Project Engineer for the said
undertaking. Before the construction of the road, the lot
was raw and they had to put filling materials so that
vehicles could use it. According to him, the length of
the road which they constructed was 70 meters long and
3 meters wide so that a fire truck could pass through.

He averred that there is no other road through which a
fire truck could pass to go to Sto. Tomas Bukid.
[15]

Manuel Tembrevilla, the Fire Marshall, averred that he
had seen the new road, that is, Damayan Street, and
found that a fire truck could pass through it. He
estimated the houses in the area to be around 300 to
400. Tembrevilla also stated that Damayan Street is the
only road in the area.
[16]

Finally, Bonifacio Maceda, Jr., Tax Mapper IV, testified
that, according to their records, JILCSFI became the
owner of the property only on January 13, 1994.
[17]

The plaintiff offered in evidence a photocopy of the
letter of Engr. Jose Reyes addressed to Lorenzo Ching
Cuanco to prove that the plaintiff made a definite and
valid offer to acquire the property to the co-owners.
However, the RTC rejected the same letter for being a
mere photocopy.
[18]

For the defendant-intervenor, Normita del Rosario,
owner of the property located across the subject
property, testified that there are other roads leading to
E. R. Santos Street. She asserted that only about ten
houses of the urban poor are using the new road because
the other residents are using an alternative right-of-way.
She averred that she did not actually occupy her
property; but there were times that she visited it.
[19]

Danilo Caballero averred that he had been a resident of
Sto. Tomas Bukid for seven years. From his house, he
could use three streets to go to E. R. Santos Street,
namely, Catalina Street, Damayan Street and Bagong
Taon Street. On cross-examination, he admitted that no
vehicle could enter Sto. Tomas Bukid except through the
newly constructed Damayan Street.
[20]

Eduardo Villanueva, Chairman of the Board of Trustees
and President of JILCSFI, testified that the parcel of land
was purchased for purposes of constructing a school
building and a church as worship center. He averred
that the realization of these projects was delayed due to
the passing of the ordinance for expropriation.
[21]

The intervenor adduced documentary evidence that on February 27, 1993,
Lorenzo Ching Cuanco and the co-owners agreed to sell their property covered
by TCT No. PT-66585 forP1,719,000.00.
[22]
It paid a down payment
of P1,000,000.00 for the property. After payment of the total purchase price,
the Ching Cuancos executed a Deed of Absolute Sale
[23]
over the property on
December 13, 1993. On December 21, 1993, TCT No. PT-92579 was issued in the
name of JILCSFI.
[24]
It declared the property for taxation purposes under its
name.
[25]

On September 3, 1997, the RTC issued an Order in favor of the plaintiff, the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing and in accordance with Section 4, Rule 67
of the Revised Rules of Court, the Court Resolves to DECLARE the plaintiff as
having a lawful right to take the property in question for purposes for which the
same is expropriated.
The plaintiff and intervenor are hereby directed to submit at least two (2) names
of their recommended commissioners for the determination of just
compensation within ten (10) days from receipt hereof.
SO ORDERED.
[26]

The RTC held that, as gleaned from the declaration in
Ordinance No. 21, there was substantial compliance with
the definite and valid offer requirement of Section 19 of
R.A. No. 7160, and that the expropriated portion is the
most convenient access to the interior of Sto. Tomas
Bukid.
Dissatisfied, JILCSFI elevated the case to the CA on the
following assignment of errors:
First Assignment of Error
THE LOWER COURT SERIOUS[LY] ERRED WHEN IT RULED THAT PLAINTIFF-
APPELLEE SUBSTANTIALLY COMPLIED WITH THE LAW WHEN IT EXPROPRIATED
JILS PROPERTY TO BE USED AS A RIGHT OF WAY.
Second Assignment of Error
THE LOWER COURT ERRED IN DISREGARDING JILS EVIDENCE PROVING THAT
THERE WAS NO PUBLIC NECESSITY TO WARRANT THE EXPROPRIATION OF THE
SUBJECT PROPERTY.
[27]

The Court of Appeals Decision
In a Decision dated March 13, 2001, the CA affirmed the
order of the RTC.
[28]
The CA agreed with the trial court
that the plaintiff substantially complied with Section 19
of R.A. No. 7160, particularly the requirement that a
valid and definite offer must be made to the owner. The
CA declared that the letter of Engr. Reyes, inviting
Lorenzo Ching Cuanco to a conference to discuss with
him the road project and the price of the lot, was a
substantial compliance with the valid and definite
offer requirement under said Section 19. In addition,
the CA noted that there was also constructive notice to
the defendants of the expropriation proceedings since a
notice of lis pendens was annotated at the dorsal portion
of TCT No. PT-92579 on November 26, 1993.
[29]

Finally, the CA upheld the public necessity for the
subject property based on the findings of the trial court
that the portion of the property sought to be
expropriated appears to be, not only the most
convenient access to the interior of Sto. Tomas Bukid,
but also an easy path for vehicles entering the area,
particularly fire trucks. Moreover, the CA took into
consideration the provision of Article 33 of the Rules
and Regulations Implementing the Local Government
Code, which regards the construction or extension of
roads, streets, sidewalks as public use, purpose or
welfare.
[30]

On April 6, 2001, JILCSFI filed a motion for
reconsideration of the said decision alleging that the CA
erred in relying on the photocopy of Engr. Reyes letter
to Lorenzo Ching Cuanco because the same was not
admitted in evidence by the trial court for being a mere
photocopy. It also contended that the CA erred in
concluding that constructive notice of the expropriation
proceeding, in the form of annotation of the notice of lis
pendens, could be considered as a substantial
compliance with the requirement under Section 19 of the
Local Government Code for a valid and definite offer.
JILCSFI also averred that no inspection was ever ordered
by the trial court to be conducted on the property, and,
if there was one, it had the right to be present thereat
since an inspection is considered to be part of the trial
of the case.
[31]

The CA denied the motion for reconsideration for lack of
merit. It held that it was not precluded from considering
the photocopy
[32]
of the letter, notwithstanding that the
same was excluded by the trial court, since the fact of its
existence was duly established by corroborative

evidence. This corroborative evidence consisted of the
testimony of the plaintiffs messenger that he personally
served the letter to Lorenzo Ching Cuanco, and
Municipal Ordinance No. 21 which expressly stated that
the property owners were already notified of the
expropriation proceeding. The CA noted that JILCSFI
failed to adduce controverting evidence, thus the
presumption of regularity was not overcome.
[33]

The Present Petition
In this petition, petitioner JILCSFI raises the following
issues: (1) whether the respondent complied with the
requirement, under Section 19 of the Local Government
Code, of a valid and definite offer to acquire the
property prior to the filing of the complaint; (2) whether
its property which is already intended to be used for
public purposes may still be expropriated by the
respondent; and (3) whether the requisites for an
easement for right-of-way under Articles 649 to 657 of
the New Civil Code may be dispensed with.
The petitioner stresses that the law explicitly requires
that a valid and definite offer be made to the owner of
the property and that such offer was not accepted. It
argues that, in this case, there was no evidence to show
that such offer has been made either to the previous
owner or the petitioner, the present owner. The
petitioner contends that the photocopy of the letter of
Engr. Reyes, notifying Lorenzo Ching Cuanco of the
respondents intention to construct a road on its
property, cannot be considered because the trial court
did not admit it in evidence. And assuming that such
letter is admissible in evidence, it would not prove that
the offer has been made to the previous owner because
mere notice of intent to purchase is not equivalent to an
offer to purchase. The petitioner further argues that the
offer should be made to the proper party, that is, to the
owner of the property. It noted that the records in this
case show that as of February 1993, it was already the
owner of the property. Assuming, therefore, that there
was an offer to purchase the property, the same should
have been addressed to the petitioner, as present
owner.
[34]

The petitioner maintains that the power of eminent
domain must be strictly construed since its exercise is
necessarily in derogation of the right to property
ownership. All the requirements of the enabling law
must, therefore, be strictly complied with. Compliance
with such requirements cannot be presumed but must be
proved by the local government exercising the power.
The petitioner adds that the local government should,
likewise, comply with the requirements for an easement
of right-of-way; hence, the road must be established at a
point least prejudicial to the owner of the property.
Finally, the petitioner argues that, if the property is
already devoted to or intended to be devoted to another
public use, its expropriation should not be allowed.
[35]

For its part, the respondent avers that the CA already
squarely resolved the issues raised in this petition, and
the petitioner failed to show valid and compelling
reason to reverse the CAs findings. Moreover, it is not
the function of the Supreme Court to weigh the evidence
on factual issues all over again.
[36]
The respondent
contends that the Ching Cuancos were deemed to have
admitted that an offer to purchase has been made and
that they refused to accept such offer considering their
failure to specifically deny such allegation in the
complaint. In light of such admission, the exclusion of
the photocopy of the letter of Engr. Reyes, therefore, is
no longer significant.
[37]

The Ruling of the Court
The petition is meritorious.
At the outset, it must be stressed that only questions of
law may be raised by the parties and passed upon by the
Supreme Court in petitions for review
on certiorari.
[38]
Findings of fact of the CA, affirming
those of the trial court, are final and conclusive and may
not be reviewed on appeal.
[39]

Nonetheless, where it is shown that the conclusion is a
finding grounded on speculations, surmises or
conjectures or where the judgment is based on
misapprehension of facts, the Supreme Court may
reexamine the evidence on record.
[40]

Eminent Domain: Nature and Scope
The right of eminent domain is usually understood to be
an ultimate right of the sovereign power to appropriate
any property within its territorial sovereignty for a
public purpose. The nature and scope of such power
has been comprehensively described as follows:
It is an indispensable attribute of sovereignty; a
power grounded in the primary duty of government to
serve the common need and advance the general
welfare. Thus, the right of eminent domain appertains
to every independent government without the necessity
for constitutional recognition. The provisions found in
modern constitutions of civilized countries relating to
the taking of property for the public use do not by
implication grant the power to the government, but limit
the power which would, otherwise, be without limit.
Thus, our own Constitution provides that [p]rivate
property shall not be taken for public use without just
compensation. Furthermore, the due process and equal
protection clauses act as additional safeguards against
the arbitrary exercise of this governmental power.
[41]

Strict Construction and Burden of Proof
The exercise of the right of eminent domain, whether
directly by the State or by its authorized agents, is
necessarily in derogation of private rights.
[42]
It is one of
the harshest proceedings known to the law.
Consequently, when the sovereign delegates the power
to a political unit or agency, a strict construction will be
given against the agency asserting the power.
[43]
The
authority to condemn is to be strictly construed in favor
of the owner and against the condemnor.
[44]
When the
power is granted, the extent to which it may be exercised
is limited to the express terms or clear implication of the
statute in which the grant is contained.
[45]

Corollarily, the respondent, which is the condemnor, has
the burden of proving all the essentials necessary to
show the right of condemnation.
[46]
It has the burden of
proof to establish that it has complied with all the

requirements provided by law for the valid exercise of
the power of eminent domain.
The grant of the power of eminent domain to local
government units is grounded on Section 19 of R.A. No.
7160 which reads:
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 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.
The Court declared that the following requisites for the
valid exercise of the power of eminent domain by a local
government unit must be complied with:
1. An ordinance is enacted by the local legislative
council authorizing the local chief executive, in behalf of
the local government unit, to exercise the power of
eminent domain or pursue expropriation proceedings
over a particular private property.
2. The power of eminent domain 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 Section 9, Article 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 said offer was not accepted.
[47]

Valid and Definite Offer
Article 35 of the Rules and Regulations Implementing the
Local Government Code provides:
ARTICLE 35. Offer to Buy and Contract of Sale. (a) The
offer to buy private property for public use or purpose
shall be in writing. It shall specify the property sought
to be acquired, the reasons for its acquisition, and the
price offered.
(b) If the owner or owners accept the offer in its
entirety, a contract of sale shall be executed and
payment forthwith made.
(c) If the owner or owners are willing to sell their
property but at a price higher than that offered to them,
the local chief executive shall call them to a conference
for the purpose of reaching an agreement on the selling
price. The chairman of the appropriation or finance
committee of the sanggunian, or in his absence, any
member of the sanggunian duly chosen as its
representative, shall participate in the conference. When
an agreement is reached by the parties, a contract of sale
shall be drawn and executed.
(d) The contract of sale shall be supported by the
following documents:
(1) Resolution of the sanggunian authorizing the
local chief executive to enter into a contract of sale. The
resolution shall specify the terms and conditions to be
embodied in the contract;
(2) Ordinance appropriating the amount specified
in the contract; and
(3) Certification of the local treasurer as to
availability of funds together with a statement that such
fund shall not be disbursed or spent for any purpose
other than to pay for the purchase of the property
involved.
The respondent was burdened to prove 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.
[48]
It is incumbent upon the
condemnor to exhaust all reasonable efforts to obtain
the land it desires by agreement.
[49]
Failure to prove
compliance with the mandatory requirement will result
in the dismissal of the complaint.
[50]

An offer is a unilateral proposition which one party
makes to the other for the celebration of a contract.
[51]
It
creates a power of acceptance permitting the offeree, by
accepting the offer, to transform the offerors promise
into a contractual obligation.
[52]
Corollarily, the offer
must be complete, indicating with sufficient clearness
the kind of contract intended and definitely stating the
essential conditions of the proposed contract.
[53]
An offer
would require, among other things, a clear certainty on
both the object and the cause or consideration of the
envisioned contract.
[54]

The purpose of the requirement of a valid and definite
offer to be first made to the owner is to encourage
settlements and voluntary acquisition of property
needed for public purposes in order to avoid the
expense and delay of a court action.
[55]
The law is
designed to give to the owner the opportunity to sell his
land without the expense and inconvenience of a
protracted and expensive litigation. This is a substantial
right which should be protected in every instance.
[56]
It
encourages acquisition without litigation and spares not
only the landowner but also the condemnor, the
expenses and delays of litigation. It permits the
landowner to receive full compensation, and the entity
acquiring the property, immediate use and enjoyment of
the property. 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.
[57]
A single bona fide offer that is
rejected by the owner will suffice.

The expropriating authority is burdened to make known
its definite and valid offer to all the owners of the
property. However, it has a right to rely on what
appears in the certificate of title covering the land to be
expropriated. Hence, it is required to make its offer only
to the registered owners of the property. After all, it is
well-settled that persons dealing with property covered
by a Torrens certificate of title are not required to go
beyond what appears on its face.
[58]

In the present case, the respondent failed to prove that
before it filed its complaint, it made a written definite
and valid offer to acquire the property for public use as
an access road. The only evidence adduced by the
respondent to prove its compliance with Section 19 of
the Local Government Code is the photocopy of the
letter purportedly bearing the signature of Engr. Jose
Reyes, to only one of the co-owners, Lorenzo Ching
Cuanco. The letter reads:
MR. LORENZO CHING CUANCO
18 Alcalde Jose Street
Capasigan, Pasig
Metro Manila
Dear Mr. Cuanco:
This refers to your parcel of land located along E. Santos Street, Barangay
Palatiw, Pasig, Metro Manila embraced in and covered by TCT No. 66585, a
portion of which with an area of fifty-one (51) square meters is needed by the
Municipal Government of Pasig for conversion into a road-right of way for the
benefit of several residents living in the vicinity of your property. Attached
herewith is the sketch plan for your information.
In this connection, may we respectfully request your presence in our office to
discuss this project and the price that may be mutually agreed upon by you and
the Municipality of Pasig.
Thank you.
Very truly yours,
(Sgd.)
ENGR. JOSE L. REYES
Technical Asst. to the Mayor
on Infrastructure
[59]

It bears stressing, however, that the respondent offered the letter only to prove
its desire or intent to acquire the property for a right-of-way.
[60]
The document
was not offered to prove that the respondent made a definite and valid offer to
acquire the property. Moreover, the RTC rejected the document because the
respondent failed to adduce in evidence the original copy thereof.
[61]
The
respondent, likewise, failed to adduce evidence that copies of the letter were
sent to and received by all the co-owners of the property, namely, Lorenzo
Ching Cuanco, Victor Ching Cuanco and Ernesto Kho.
The respondent sought to prove, through the testimony of its messenger,
Rolando Togonon, that Lorenzo Ching Cuanco received the original of the said
letter. But Togonon testified that he merely gave the letter to a lady, whom he
failed to identify. He stated that the lady went inside the store of Lorenzo Ching
Cuanco, and later gave the letter back to him bearing the signature purportedly
of one Luz Bernarte. However, Togonon admitted, on cross-examination, that he
did not see Bernarte affixing her signature on the letter. Togonon also declared
that he did not know and had never met Lorenzo Ching Cuanco and Bernarte:
Q And after you received this letter from that lady, what did you do
afterwards?
A I brought it with me, that letter, and then I went to Caruncho.
Q So, [M]r. Witness, you are telling this Honorable Court that this letter
intended to Mr. Lorenzo was served at Pasig Trading which was situated at No.
18 Alkalde Jose Street on February 23, 1993?
A Yes, Maam.
ATTY. TAN:
That is all for the witness, Your Honor.
COURT:
Do you have any cross-examination?
ATTY. JOLO:
Just a few cross, Your Honor, please. With the kind permission of the
Honorable Court.
COURT:
Proceed.
CROSS-EXAMINATION
BY ATTY. JOLO:
Q Mr. Witness, do you know Mr. Lorenzo Ching [Cuanco]
A I do not know him.
Q As a matter of fact, you have not seen him even once, isnt not (sic)?
A Yes, Sir.
Q This Luz Bernarte, do you know her?
A I do not know her.
Q As a matter of fact, you did not see Mrs. Bernarte even once?
A That is correct.
Q And as a matter of fact, [M]r. Witness, you did not see Mrs. Luz Bernarte
affixing her signature on the bottom portion of this demand letter, marked as
Exh. C-2?
A Yes, Sir.
[62]

Even if the letter was, indeed, received by the co-owners, the letter is not a valid
and definite offer to purchase a specific portion of the property for a price
certain. It is merely an invitation for only one of the co-owners, Lorenzo Ching
Cuanco, to a conference to discuss the project and the price that may be
mutually acceptable to both parties.
There is no legal and factual basis to the CAs ruling that
the annotation of a notice of lis pendens at the dorsal
portion of petitioners TCT No. PT-92579 is a substantial
compliance with the requisite offer. A notice of lis
pendens is a notice to the whole world of the pendency
of an action involving the title to or possession of real
property and a warning that those who acquire an
interest in the property do so at their own risk and that
they gamble on the result of the litigation over
it.
[63]
Moreover, the lis pendens was annotated at the
dorsal portion of the title only on November 26, 1993,
long after the complaint had been filed in the RTC
against the Ching Cuancos.
Neither is the declaration in one of the whereas clauses
of the ordinance that the property owners were already
notified by the municipality of the intent to purchase the
same for public use as a municipal road, a substantial
compliance with the requirement of a valid and definite
offer under Section 19 of R.A. No. 7160. Presumably,
the Sangguniang Bayan relied on the erroneous premise
that the letter of Engr. Reyes reached the co-owners of
the property. In the absence of competent evidence
that, indeed, the respondent made a definite and valid
offer to all the co-owners of the property, aside from the
letter of Engr. Reyes, the declaration in the ordinance is
not a compliance with Section 19 of R.A. No. 7160.
The respondent contends, however, that the Ching
Cuancos, impliedly admitted the allegation in its
complaint that an offer to purchase the property was
made to them and that they refused to accept the offer
by their failure to specifically deny such allegation in
their answer. This contention is wrong. As gleaned
from their answer to the complaint, the Ching Cuancos
specifically denied such allegation for want of sufficient
knowledge to form a belief as to its correctness. Under
Section 10,
[64]
Rule 8 of the Rules of Court, such form of
denial, although not specific, is sufficient.
Public Necessity
We reject the contention of the petitioner that its
property can no longer be expropriated by the
respondent because it is intended for the construction of
a place for religious worship and a school for its
members. As aptly explained by this Court in Manosca
v. Court of Appeals,
[65]
thus:
It has been explained as early as Sea v. Manila Railroad
Co., that:
A historical research discloses the meaning of the
term public use to be one of constant growth. As
society advances, its demands upon the individual
increases and each demand is a new use to which the
resources of the individual may be devoted. for
whatever is beneficially employed for the community is a
public use.
Chief Justice Enrique M. Fernando states:
The taking to be valid must be for public use. There was
a time when it was felt that a literal meaning should be
attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the
case of streets or parks. Otherwise, expropriation is not

allowable. It is not so any more. As long as the purpose
of the taking is public, then the power of eminent
domain comes into play. As just noted, the constitution
in at least two cases, to remove any doubt, determines
what is public use. One is the expropriation of lands to
be subdivided into small lots for resale at cost to
individuals. The other is the transfer, through the
exercise of this power, of utilities and other private
enterprise to the government. It is accurate to state then
that at present whatever may be beneficially employed
for the general welfare satisfies the requirements of
public use.
Chief Justice Fernando, writing the ponencia in J.M.
Tuason & Co. vs. Land Tenure Administration, has
viewed the Constitution a dynamic instrument and one
that is not to be construed narrowly or pedantically so
as to enable it to meet adequately whatever problems the
future has in store. Fr. Joaquin Bernas, a noted
constitutionalist himself, has aptly observed that what,
in fact, has ultimately emerged is a concept of public use
which is just as broad as public welfare.
Petitioners ask: But (w)hat is the so-called unusual
interest that the expropriation of (Felix Manalos)
birthplace become so vital as to be a public use
appropriate for the exercise of the power of eminent
domain when only members of the Iglesia ni
Cristo would benefit? This attempt to give some
religious perspective to the case deserves little
consideration, for what should be significant is the
principal objective of, not the casual consequences that
might follow from, the exercise of the power. The
purpose in setting up the marker is essentially to
recognize the distinctive contribution of the late Felix
Manalo to the culture of the Philippines, rather than to
commemorate his founding and leadership of the Iglesia
ni Cristo. The practical reality that greater benefit may
be derived by members of the Iglesia ni Cristo than by
most others could well be true but such a peculiar
advantage still remains to be merely incidental and
secondary in nature. Indeed, that only a few would
actually benefit from the expropriation of property, does
not necessarily diminish the essence and character of
public use.
The petitioner asserts that the respondent must comply
with the requirements for the establishment of an
easement of right-of-way, more specifically, the road
must be constructed at the point least prejudicial to the
servient state, and that there must be no adequate outlet
to a public highway. The petitioner asserts that the
portion of the lot sought to be expropriated is located at
the middle portion of the petitioners entire parcel of
land, thereby splitting the lot into two halves, and
making it impossible for the petitioner to put up its
school building and worship center.
The subject property is expropriated for the purpose of
constructing a road. The respondent is not mandated to
comply with the essential requisites for an easement of
right-of-way under the New Civil Code. Case law has it
that in the absence of legislative restriction, the grantee
of the power of eminent domain may determine the
location and route of the land to be taken
[66]
unless such
determination is capricious and wantonly
injurious.
[67]
Expropriation is justified so long as it is for
the public good and there is genuine necessity of public
character.
[68]
Government may not capriciously choose
what private property should be taken.
[69]

The respondent has demonstrated the necessity for
constructing a road from E. R. Santos Street to Sto.
Tomas Bukid. The witnesses, who were residents of Sto.
Tomas Bukid, testified that although there were other
ways through which one can enter the vicinity, no
vehicle, however, especially fire trucks, could enter the
area except through the newly constructed Damayan
Street. This is more than sufficient to establish that
there is a genuine necessity for the construction of a
road in the area. After all, absolute necessity is not
required, only reasonable and practical necessity will
suffice.
[70]

Nonetheless, the respondent failed to show the necessity
for constructing the road particularly in the petitioners
property and not elsewhere.
[71]
We note that the whereas
clause of the ordinance states that the 51-square meter
lot is the shortest and most suitable access road to
connect Sto. Tomas Bukid to E. R. Santos Street. The
respondents complaint also alleged that the said
portion of the petitioners lot has been surveyed as the
best possible ingress and egress. However, the
respondent failed to adduce a preponderance of
evidence to prove its claims.
On this point, the trial court made the following
findings:
The contention of the defendants that there is an
existing alley that can serve the purpose of the
expropriator is not accurate. An inspection of the
vicinity reveals that the alley being referred to by the
defendants actually passes thru Bagong Taon St. but
only about one-half (1/2) of its entire length is passable
by vehicle and the other half is merely a foot-path. It
would be more inconvenient to widen the alley
considering that its sides are occupied by permanent
structures and its length from the municipal road to the
area sought to be served by the expropriation is
considerably longer than the proposed access road. The
area to be served by the access road is composed of
compact wooden houses and literally a slum area. As a
result of the expropriation of the 51-square meter
portion of the property of the intervenor, a 3-meter wide
road open to the public is created. This portion of the
property of the intervenor is the most convenient access
to the interior of Sto. Tomas Bukid since it is not only a
short cut to the interior of the Sto. Tomas Bukid but also
an easy path for vehicles entering the area, not to
mention the 3-meter wide road requirement of the Fire
Code.
[72]

However, as correctly pointed out by the petitioner,
there is no showing in the record that an ocular
inspection was conducted during the trial. If, at all, the
trial court conducted an ocular inspection of the subject
property during the trial, the petitioner was not notified
thereof. The petitioner was, therefore, deprived of its
right to due process. It bears stressing that an ocular
inspection is part of the trial as evidence is thereby
received and the parties are entitled to be present at any
stage of the trial.
[73]
Consequently, where, as in this case,
the petitioner was not notified of any ocular inspection
of the property, any factual finding of the court based
on the said inspection has no probative weight. The

findings of the trial court based on the conduct of the
ocular inspection must, therefore, be rejected.
IN LIGHT OF ALL THE FOREGOING, the petition is
GRANTED. The Decision and Resolution of the Court of
Appeals are REVERSED AND SET ASIDE. The RTC is
ordered to dismiss the complaint of the respondent
without prejudice to the refiling thereof.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-
Nazario, JJ., concur.
CITY OF MANILA VS. LAGUIO
FACTS: The private respondent, Malate Tourist
Development Corporation (MTOC) is a corporation
engaged in the business of operating hotels,
motels, hostels, and lodgin 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.

March 30, 1993 - City Mayor Alfredo S. Lim
approved an ordinance enacted which prohibited
certain forms of amusement, entertainment,
services and facilities where women are used as
tools in entertainment and which tend to
disturb the community, annoy the inhabitants, and
adversely affect the social and moral welfare
of the community. TheOrdinance also provided
that in case of violation and conviction, the
premises of the erring establishment shall be
closed and padlocked permanently.

June 28, 1993 - MTOC filed a Petition with the
lower court, praying that the Ordinance, insofar as
it included motels and inns as among its
prohibited establishments, be declared invalid and
unconstitutional for several reasons but mainly
because it is not a valid exercise of police power
and it constitutes a denial of equal
protection under the law.

Judge Laguio ruled for the petitioners. The case
was elevated to the Supreme Court.

ISSUES: W/N the City of Manila validly exercised
police power
W/N there was a denial of equal
protection under the law

HELD:

The Ordinance infringes the due process clause
since the requisites for a valid exercise of police
power are not met. The prohibition of the
enumerated establishments will not per se protect
and promote the social and moral welfare of the
community; it will not in itself eradicate the
alluded social ills fo prostitution, adultery,
fornication nor will it arrest the spread of sexual
diseases in Manila. It is baseless and insupportable
to bring within that classification sauna parlors,
massage parlors, karaoke bars, night clubs, day
clubs, super clubs, discotheques, cabarets, dance
halls, motels and inns. These are lawful pursuits
which are not per se offensive to the moral welfare
of the community.

Sexual immorality, being a human frailty, may take
place in the most innocent places.... Every house,
building, park, curb, street, or even vehicles for
that matter will not be exempt from the
prohibition. Simply because 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 Ordinance violates equal protection clause
and is repugnant to general laws; it is ultra vires.
The Local Government Code merely empowers
local government units to regulate, and not
prohibit, the establishments enumerated in Section
1 thereof.

All considered, the Ordinance invades
fundamental personal and property rights adn
impairs personal privileges. It is constitutionally
infirm. The Ordinance contravenes statutes; it is
discriminatory and unreasonable in its operation;
it is not sufficiently detailed and explicit that
abuses may attend the enforcement of its
sanctions. And not to be forgotten, the City
Council unde the Code had no power to enact
the Ordinance and is therefore ultra vires null and
void.
TAN VS. PEREA, G.R. NO. 149743, 2/18/2005
FACTS: How many cockpits may be allowed to
operate in a city or municipality?
Comes into play, the traditional power of the
national government to enact police power
measures, on one hand, and the vague principle of
local autonomy now enshrined in the Constitution
on the other. PD449 (Cockfighting Law of 1974)
provided that only one cockpit shall be allowed
in each city/ municipality except that in cities
or municipalities with a population of over
100T, two cockpits may be established,
maintained or operated. In 1993, the Municipal
Council of Daanbantaya, Cebu enacted municipal
ordinances which eventually allowed the
operation of not more than three cockpits in the
municipality. In 1995, Petitioner (Leonardo Tan)
applied for a license to operate a cockpit.

Respondent (Socorro Perena), who was an existing
licensee, filed a complaint with the RTC to enjoin.
Petitioner from operating his cockpit citing that
the challenged ordinance allowing the operation of
not more than three cockpits violated PD449.
The trial court dismissed the complaint and
upheld Petitioners franchise reasoning that, while
the ordinance may be in conflict with PD449, any
doubt in interpretation should be resolved in favor
of the grant of more power to LGUs under the
LGCs principle of devolution. Court of Appeals
reversed the trial courts decision. Hence,
Petitioners appeal to the SC.
RULING: Petition DENIED. For Petitioner, Section
447(a)(3)(v) of the LGC sufficiently repeals Section
5(b) of the Cockfighting Law, vesting as it does on
LGUs the power and authority to issue franchises
and regulate
the operation and establishment of cockpits in
their respective municipalities, any law to the
contrary notwithstanding.
However, while the Local Government Code
expressly repealed several laws, PD449 was not
among them. Section 534(f) of the LGC declares
that all general and special laws or decrees
inconsistent with the Code are hereby repealed or
modified accordingly, but such clause is not an
express repealing clause because it fails to identify
or designate the acts that are intended to be
repealed. While the sanggunian retains the power
to authorize and license the establishment,
operation, and maintenance of cockpits, its
discretion is limited in that it cannot authorize
more than one cockpit per city
or municipality, unless such cities or
municipalities have a population of over one
hundred thousand, in which case two cockpits
may be established. Cockfighting Law arises from
a valid exercise of police power by
the national government. Of course, local
governments are similarly empowered under
Section 16 of the Local Government Code.
We do not doubt, however, the ability of the
national government to implement police power
measures that affect the subjects of municipal
government, especially if the subject of regulation
is a condition of universal character irrespective
of territorial jurisdictions. Cockfighting is one
such condition. It is a traditionally
regulated activity, due to the attendant gambling
involved or maybe even the fact that it essentially
consists of two birds killing each other for public
amusement. Laws have been enacted restricting
the days when cockfights could be held, and
legislation has even been emphatic that cockfights
could not be held on holidays celebrating
national honor such as Independence Day and
Rizal Day. The obvious thrust of our laws
designating when cockfights could be held is to
limit cockfighting and imposing the one-cockpit-
per-municipality rule is in line with that aim.
Cockfighting is a valid matter of police power
regulation, as it is a form of gambling
essentiallyantagonistic to the aims of enhancing n
ational productivity and self-
reliance. Limitation on the number of cockpits in
a given municipality is a reasonably necessary
means for the accomplishment of the purpose of
controlling cockfighting, for clearly more cockpits
equals more cockfights. A municipal ordinance
must not contravene the Constitution or any
statute, otherwise it is void. Ordinance No. 7
unmistakably contravenes the Cockfighting Law in
allowing three cockpits in Daanbantayan.
LUCENA GRAND CENTRAL TERMINAL, INC.,
petitioner, vs. JAC LINER, INC., respondent.
G.R. No. 148339. February 23, 2005

Facts: The City of Lucena enacted an ordinance
which provides, inter alia, that: all buses, mini-
buses and out-of-town passenger jeepneys shall be
prohibited from entering the city and are hereby
directed to proceed to the common terminal, for
picking-up and/or dropping of their passengers;
and (b) all temporary terminals in the City of
Lucena are hereby declared inoperable starting
from the effectivity of this ordinance. It also
provides that all jeepneys, mini-buses, and buses
shall use the grand central terminal of the city.
JAC Liner, Inc. assailed the city ordinance as
unconstitutional on the ground that, inter alia, the
same constituted an invalid exercise of police
power, an undue taking of private property, and a
violation of the constitutional prohibition against
monopolies.

Issue: Whether or not the ordinance satisfies the
requisite of valid exercise of police power, i.e.
lawful subject and lawful means.

Held: The local government may be considered as
having properly exercised its police power only if
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 upon individuals. Otherwise stated,
there must be a concurrence of a lawful subject
and lawful method
The questioned ordinances having been enacted
with the objective of relieving traffic congestion in
the City of Lucena, they involve public interest
warranting the interference of the State. The first
requisite for the proper exercise of police power is
thus present. This leaves for determination the
issue of whether the means employed by the
Lucena Sangguniang Panlungsod to attain its
professed objective were reasonably necessary
and not unduly oppressive upon individuals. The

ordinances assailed herein are characterized by
overbreadth. They go beyond what is reasonably
necessary to solve the traffic problem.
Additionally, since the compulsory use of the
terminal operated by petitioner would subject the
users thereof to fees, rentals and charges, such
measure is unduly oppressive, as correctly found
by the appellate court. What should have been
done was to determine exactly where the problem
lies and then to stop it right there.
The true role of Constitutional Law is to effect an
equilibrium between authority and liberty so that
rights are exercised within the framework of the
law and the laws are enacted with due deference to
rights. It is its reasonableness, not its
effectiveness, which bears upon its
constitutionality. If the constitutionality of a law
were measured by its effectiveness, then even
tyrannical laws may be justified whenever they
happen to be effective.

ALBON v. FERNANDO
Corona, J.

FACTS: In May 1999, the City of Marikina
undertook a public works project to widen, clear
and repair the existing sidewalks of Marikina
Greenheights Subdivision. It was undertaken by
the city government pursuant to Ordinance No. 59.
Subsequently, petitioner Albon filed a taxpayers
suit for certiorari, prohibition and injunction with
damages against respondents City Engineer
Alfonso Espirito, Assistant City Engineer Anaki
Maderal and City Treasurer Natividad Cabalquinto.
According to the petitioner it was
unconstitutional and unlawful for respondents to
use government equipment and property, and to
disburse public funds, of the City of Marikina for
the grading, widening, clearing, repair and
maintenance of the existing sidewalks of Marikina
Greenheights Subdivision. He alleged that the
sidewalks were private property because Marikina
Greenheights Subdivision was owned by V.V.
Soliven, Inc. Hence, the city government could not
use public resources on them. In undertaking the
project, therefore, respondents allegedly violated
the constitutional proscription against the use of
public funds for private purposes as well as
Sections 335 and 336 of RA 7160 and the Anti-
Graft and Corrupt Practices Act.
The trial court ruled in favor of the
respondents. Ordinance No. 59 is a valid
enactment. The court recognized the inherent
police power of the municipality and with this it is
allowed to carry out the contested works. The
Court of Appeals sustained the decision of the trial
court stating that sidewalks of Marikina
Greenheights Subdivision were public in nature
and ownership thereof belonged to the City of
Marikina or the Republic of the Philippines
following the 1991 White Plains
Association decision. Thus, the improvement and
widening of the sidewalks pursuant to Ordinance
No. 59 of 1993 was well within the LGUs powers.

ISSUE: Whether the Court of Appeals erred in
upholding the validity of Ordinance No. 59

HELD: NO. Like all LGUs, the City of Marikina is
empowered to enact ordinances for the purposes
set forth in the Local Government Code (RA 7160).
It is expressly vested with police powers delegated
to LGUs under the general welfare clause of RA
7160. With this power, LGUs may prescribe
reasonable regulations to protect the lives, health,
and property of their constituents and maintain
peace and order within their respective territorial
jurisdictions.
Also, in the exercise of their inherent
police power the cities and municipalities have the
power to exercise such powers and discharge such
functions and responsibilities as may be
necessary, appropriate or incidental to efficient
and effective provisions of the basic services and
facilities, including infrastructure facilities
intended primarily to service the needs of their
residents and which are financed by their own
funds. These infrastructure facilities include
municipal or city roads and bridges and similar
facilities.
Regarding the nature of ownership of the
sidewalks in question, there is also no hindrance
in declaring that the sidewalks are of public
dominion. PD 957, as amended by PD 1216,
mandates subdivision owners to set aside open
spaces which shall be devoted exclusively for the
use of the general public.

LIM VS. COURT OF APPEALS
Facts: On 7 December 1992, Bistro Pigalle Inc. filed
before the trial court a petition for mandamus
andprohibition, with prayer for temporary
restraining order or writ of preliminary injunction,
against Alfredo Lim in his capacity as Mayor of the
City of Manila. The Bistro filed the case because
policemen under Lims instructions inspected and
investigated the Bistros license as well as the
work permits and health certificates of its staff.
This caused the stoppage of work in the Bistros
night club and restaurant operations (i.e. the New
Bangkok Club and the Exotic Garden Restaurant).
Lim also refused to accept the Bistros application
for a business license, as well as the work permit
applications of the Bistros staff, for the year 1993.
Acting on the Bistros application for injunctive
relief, the trial court issued the temporary
restraining order on 29 December 1992, ordering
Lim and/or his agents to refrain from inspecting or
otherwise interfering in the operation of the
establishments of the Bistro. At the hearing, the
parties submitted their evidence in support of

their respective positions. On 20 January 1993, the
trial court granted the Bistros application for a
writ of prohibitory preliminary injunction.
However, despite the trial courts order, Lim still
issued a closure order on the Bistros operations
effective 23 January 1993, even sending policemen
to carry out his closure order. Lim insisted that the
power of a mayor to inspect and investigate
commercial establishments and their staff is
implicit in the statutory power of the city mayor to
issue, suspend or revoke business permits and
licenses. This statutory power is expressly
provided for in Section 11 (l), Article II of the
Revised Charter of the City of Manila and in
Section 455, paragraph 3 (iv) of the Local
Government Code of 1991. On 25 January 1993,
the Bistro filed an "Urgent Motion for Contempt"
against Lim and the policemen who stopped the
Bistros operations on January 23, 1993. At the
hearing of the motion for contempt on 29 January
1993, the Bistro withdrew its motion on condition
that Lim would respect the courts injunction.
However, on February 12, 13, 15, 26 and 27, and
on March 1 and 2, 1993, Lim, acting through his
agents and policemen, again disrupted the Bistros
business operations. Meanwhile, on 17 February
1993, Lim filed a motion to dissolve the injunctive
order and to dismiss the case. The trial court
denied Lims motion to dissolve the injunction and
to dismiss the case in an order dated 2 March
1993. On 10 March 1993, Lim filed with the Court
of Appeals a petition for certiorari, prohibition and
mandamus against the Bistro and Judge Wilfredo
Reyes. The Court of Appeals sustained the RTC
orders in a decision on 25 March 1993, and denied
Lim's motion for reconsideration in a resolution
dated 13 July 1993. On 1 July 1993, Manila City
Ordinance 778314 took effect. On the same day,
Lim ordered the Western Police District Command
to permanently close down the operations of the
Bistro, which order the police implemented at
once. Lim filed the petition for review on certiorari
before the SupremeCourt.
Issue: Whether the Bistro should be given an
opportunity to rebut the allegations that it
violated the conditions of its licenses and permits.
Held: From the language of Section 11 (l), Article II
of the Revised Charter of the City of Manila and
Section 455 (3) (iv) of the Local Government Code,
it is clear that the power of the mayor to issue
business licenses and permits necessarily includes
the corollary power to suspend, revoke or even
refuse to issue the same.
However, the power to suspend or revoke these
licenses and permits is expressly premised on the
violation of the conditions of these permits and
licenses. The laws specifically refer to the
"violation of the condition(s)"on which the licenses
and permits were issued. Similarly, the power to
refuse to issue such licenses and permits is
premised on non-compliance with the
prerequisites for the issuance of such licenses and
permits.
The mayor must observe due process in exercising
these powers, which means that the mayor must
give the applicant or licensee notice and
opportunity to be heard. True, the mayor has the
power to inspect and investigate private
commercial establishments for any violation of the
conditions of their licenses and permits.
However, the mayor has no power to order a police
raid on these establishments in the guise of
inspecting or investigating these commercial
establishments. Lim has no authority to close
down Bistros business or any business
establishment in Manila without due process of
law. Lim cannot take refuge under the Revised
Charter of the City of Manila and the Local
Government Code. There is no provision in these
laws expressly or impliedly granting the mayor
authority to close down private commercial
establishments without notice and hearing, and
even if there is, such provision would be void. The
due process clause of the Constitution requires
that Lim should have given the Bistro an
opportunity to rebut the allegations that it
violated the conditions of its licenses and permits.
SJS V ATIENZA G.R. NO. 156052 MARCH 7, 2007
J. Corona
Facts: On November 20, 2001, the Sangguniang
Panlungsod of Manila enacted Ordinance No. 8027
and Atienza passed it the following
day. Ordinance No. 8027 reclassified the
area described therein from industrial to
commercial and directed the owners and operators
of businesses disallowed under Section 1 to cease
and desist from operating
their businesses within six months from the date
of effectivity of the ordinance. These were the
Pandacan oil depots of Shell and Caltex.
But the city of Manila and the DOE entered into an
MOU which only scaled down the property covered
by the depots and did not stop their operations. In
the same resolution, the Sanggunian declared that
the MOU was effective only for a period of six
months starting July 25, 2002. It was extended to
2003.
Petitioners filed for mandamus in SC urging the
city to implement Ordinance 8027. Respondents
defense is that Ordinance No. 8027 has been
superseded by the MOU and the resolutions and
that the MOU was more of a guideline to 8027.

Issues:
1. Whether respondent has the mandatory legal
duty to enforce Ordinance No. 8027 and order
theremoval of the Pandacan Terminals, and

2. Whether the June 26, 2002 MOU and the
resolutions ratifying it can amend or
repeal OrdinanceNo. 8027

Held: Yes to both, Petition granted

Ratio:
1. Rule 65, Section 316 of the Rules of Court-
mandamus may be filed when any tribunal,
corporation, board, officer or person unlawfully
neglects the performance of an act which the law
specifically enjoins as a duty resulting from an
office, trust or station. The petitioner should have
a well-defined, clear and certain legal right to the
performance of the act and it must be the clear
and imperative duty of respondent to do the act
required to be done.
Mandamus will not issue to enforce a right, or to
compel compliance with a duty, which is
questionable or over which a substantial doubt
exists. Unless the right to the relief sought is
unclouded, mandamus will not issue. When a
mandamus proceeding concerns a public right
and its object is to compel a public duty, the
people who are interested in the execution of
the laws are regarded as the real parties in
interest and they need not show any specific
interest. Petitioners are citizens of manila and
thus have a direct interest in the ordinances.

On the other hand, the Local Government Code
imposes upon respondent the duty, as city mayor,
to "enforce all laws and ordinances relative to the
governance of the city. "One of these
isOrdinance No. 8027. As the chief executive of the
city, he has the duty to enforce Ordinance No.
8027 as long as it has not been repealed by the
Sanggunian or annulled by the courts. He has no
other choice. It is his ministerial duty to do so.
These officers cannot refuse to perform their duty
on the ground of an alleged invalidity of the
statute imposing the duty. The reason for this is
obvious. It might seriously hinder the
transaction of public business if these officers
were to be permitted in all cases to question the
constitutionality of statutes and ordinances
imposing duties upon them and which have not
judicially been declared unconstitutional. Officers
of the government from the highest to the
lowest are creatures of the law and are bound to
obey it.
2. Need not resolve this issue. Assuming that the
terms of the MOU were inconsistent
withOrdinance No. 8027, the resolutions which
ratified it and made it binding on the City of
Manila expressly gave it full force and effect only
until April 30, 2003.

SEVERINO B. VERGARA V OMBUDSMAN

The Case

This petition for certiorari and
mandamus
[1]
assails the 17 March 2004
Resolution
[2]
and 22 August 2005 Order
[3]
of the Office
of the Deputy Ombudsman for Luzon (Ombudsman)
in OMB-L-C-02-1205-L. The Ombudsman dismissed
the case filed by Severino B. Vergara (petitioner) and
Edgardo H. Catindig against Severino J. Lajara as
Calamba City Mayor (Mayor Lajara), Virginia G. Baroro
(Baroro) as City Treasurer, Razul Requesto as
President of Pamana, Inc. (Pamana), and Lauro Jocson
as Vice President and Trust Officer of the Prudential
Bank and Trust Company (Prudential Bank) for
violation of Section 3(e) of the Anti Graft and Corrupt
Practices Act (RA 3019).
[4]

The Facts

On 25 June 2001, the City Council of Calamba
(City Council), where petitioner was a member, issued
Resolution No. 115, Series of 2001. The resolution
authorized Mayor Lajara to negotiate with landowners
within the vicinity of Barangays Real, Halang, and
Uno, for a new city hall site.
[5]
During the public
hearing on 3 October 2001, the choice for the new
city hall site was limited to properties owned by
Pamana and a lot in Barangay Saimsin, Calamba.
[6]

On 29 October 2001, the City Council passed
Resolution No. 280, Series of 2001, authorizing Mayor
Lajara to purchase several lots owned by Pamana with
a total area of 55,190 square meters for the price
of P129,017,600.
[7]
Mayor Lajara was also authorized
to execute, sign and deliver the required documents.
[8]

On 13 November 2001, the City Government of Calamba (Calamba City),
through Mayor Lajara, entered into the following agreements:

1. Memorandum of Agreement (MOA)
The MOA with Pamana and Prudential Bank discussed the terms
and conditions of the sale of 15 lots with a total area of 55,190
square meters. The total purchase price of P129,017,600 would
be payable in installment as follows: P10,000,000 on or before 15
November 2001, P19,017,600 on or before 31 January 2002, and
the balance ofP100,000,000 in four equal installments payable on
or before 31 April 2002, 31 July 2002, 31 October 2002, and 31
January 2003.
[9]

2. Deed of Sale
Under the Deed of Sale, Calamba City purchased from Pamana
and Prudential Bank 15 lots with a total area of 55,190 square
meters, more or less, located in Brgy. Lecheria/Real, Calamba,
Laguna with Transfer Certificate of Title (TCT) Numbers
159893, 159894, 159895, 159896, 159897, 158598, 162412,
162413, 204488, 66140, 61703, 66141, 66142, 66143, and
61705.
3. Deed of Real Estate Mortgage
Calamba City mortgaged to Pamana and Prudential Bank the same
properties subject of the Deed of Sale as security for the balance
of the purchase price.
4. Deed of Assignment of Internal Revenue Allotment (IRA)
Calamba Citys IRAs from January 2002 to 31 January 2003 were
assigned to Pamana and Prudential Bank in the amount
of P119,017,600.
On 19 November 2001, the above documents were endorsed to the City
Council. Petitioner alleged that all these documents were not ratified by the City
Council, a fact duly noted in an Audit Observation Memorandum dated 9 August
2002 and issued by State Auditor Ruben C. Pagaspas of the Commission on
Audit.

Petitioner stated that he called the attention of the City Council on the
following observations:

a) TCT Nos. 66141, 66142, 66143, 61705 and 66140 were registered
under the name of Philippine Sugar Estates Development
Company (PSEDC) and neither Pamana nor Prudential Bank owned
these properties. Petitioner pointed out that although PSEDC had

executed a Deed of Assignment
[10]
in favor of Pamana to maintain
the road lots within the PSEDC properties, PSEDC did not convey,
sell or transfer these properties to Pamana. Moreover, petitioner
claimed that the signature of Fr. Efren O. Rivera (Fr. Rivera) in
Annex A of the Deed of Assignment appeared to be a forgery. Fr.
Rivera had also submitted an Affidavit refuting his purported
signature in Annex A.
[11]

b) Petitioner claimed that there was no relocation survey prior to the
execution of the Deed of Sale.
[12]

c) Petitioner alleged that with respect to the two lots covered by TCT
No. 61703 with an area of 5,976 square meters and TCT No.
66140 with an area of 3,747 square meters, Fr. Boyd R. Sulpico
(Fr. Sulpico) of the Dominican Province of the Philippines had
earlier offered the same for only P300 per square meter.
[13]

d) Petitioner contended that TCT Nos. 66141, 66142, 66143 and
61705 are road lots. The dorsal sides of the TCTs bear the
common annotation that the road lots cannot be closed or
disposed without the prior approval of the National Housing
Authority and the conformity of the duly organized homeowners
association.
[14]

e) Petitioner claimed that an existing barangay road and an access
road to Bacnotan Steel Corporation and Danlex Corporation were
included in the Deed of Sale
[15]

Petitioner maintained that since the pieces of evidence in support of the
complaint were documentary, respondents have admitted them impliedly.
[16]

The Ruling of the Ombudsman

On 17 March 2004, the Ombudsman issued a
Resolution (Resolution) finding no probable cause to
hold any of the respondents liable for violation of
Section 3(e) of RA 3019.
[17]

The Ombudsman found that the subject
properties have been transferred and are now
registered in the name of Calamba City under new
Certificates of Title.
[18]
Moreover, the reasonableness
of the purchase price for the subject lots could be
deduced from the fact that Calamba City bought them
at P3,800 per square meter, an amount lower than
their zonal valuation at P6,000 per square meter. The
Ombudsman added that it was common knowledge
that the fair market value of the lots was higher than
their zonal valuation, yet the lots were acquired at a
lower price. The Ombudsman also found that the
terms and conditions of payment were neither
onerous nor burdensome to the city government as it
was able to immediately take possession of the lots
even if it had paid only less than ten percent of the
contract price and was even relieved from paying
interests on the installment payments. The
Ombudsman ruled that there was no compelling
evidence showing actual injury or damage to the city
government to warrant the indictment of respondents
for violation of Section 3(e) of RA 3019.
[19]

On 27 September 2004, petitioner filed a Motion
for Reconsideration. Petitioner questioned the lack of
ratification by the City Council of the contracts, the
overpricing of lots covered by TCT Nos. 61703 and
66140 in the amount of P19,812,546, the inclusion of
road lots and creek lots with a total value
of P35,000,000, and the lack of a relocation survey.
[20]

In an Order dated 22 August 2005 (Order), the
Ombudsman denied the Motion for Reconsideration
for lack of merit.
[21]
The Ombudsman held that the
various actions performed by Mayor Lajara in
connection with the purchase of the lots were all
authorized by the Sangguniang Panlungsod as
manifested in the numerous resolutions. With such
authority, it could not be said that there was evident
bad faith in purchasing the lands in question. The
lack of ratification alone did not characterize the
purchase of the properties as one that gave
unwarranted benefits to Pamana or Prudential Bank
or one that caused undue injury to Calamba City.
[22]

On the alleged overpricing of the lots covered
by TCT Nos. 61703 and 66140, the Ombudsman ruled
that it could be discerned from Fr. Sulpicos affidavit
that the said parcels of land were excluded from the
offer, being creek easement lots.
[23]

On the lots covered by TCT Nos. 66141, 66142,
and 66143, the Ombudsman resolved that new titles
were issued in the name of Pamana with PSEDC as the
former registered owner.
[24]

The Ombudsman finally declared that the
absence of a relocation survey did not affect the
validity of the subject transactions.
[25]

Petitioner contended that the assailed
Ombudsmans Resolution and Order discussed only
the alleged reasonableness of the price of the
property. The Ombudsman did not consider the
issue that Calamba City paid for lots that were either
easement/creeks, road lots or access roads. Petitioner
alleged that it is erroneous to conclude that the price
was reasonable because Calamba City should not
have paid for the creeks, road lots and access roads
at the same price per square meter. Petitioner
claimed that the additional evidence of overpricing
was a letter from Fr. Sulpico who offered the road
lots covered by TCT Nos. 61703 and 66140
at P300
[26]
per square meter.
[27]

In their Comment, Mayor Lajara and Baroro
(respondents) argued that as frequently ruled by this
Court, it is not sound practice to depart from the
policy of non-interference in the Ombudmans
exercise of discretion to determine whether to file an
information against an accused. In the assailed
Resolution and Order, the Ombudsman stated clearly
and distinctly the facts and the law on which the case
was based and as such, petitioner had the burden of
proving that grave abuse of discretion attended the
issuance of the Resolution and Order of the
Ombudsman. Respondents maintained that in a
meager three pages of argumentation, petitioner
failed to point out the grave errors in the assailed
Resolution and merely raised issues which have been
disposed of by the Ombudsman.
[28]

Respondents claimed that out of the six PSEDC-
owned lots that were sold to Calamba City, the
ownership of the four lots had already
been transferred to Pamana as evidenced by the new
TCTs. Respondents added that even if TCT Nos.
66140 and 61703 were still in PSEDCs name,
ownership of these lots had been transferred to
Pamana as confirmed by Fr. Sulpico, the custodian of
all the assets of the Dominican Province of the
Philippines.
[29]
Respondents also refuted the alleged
overpricing of the lots covered by TCT Nos. 66140
and 61703. Respondents contended that Fr. Sulpicos

letter offering the lots at P350
[30]
per square meter had
been superseded by his own denial of said offer
during the meeting of the Sangguniang Panlungsod
on 14 November 2002.
[31]

On the absence of ratification by the City
Council of the MOA, Deed of Sale, Deed of Mortgage,
and Deed of Assignment, respondents explained that
Section 22
[32]
of Republic Act No. 7160 (RA 7160)
spoke of prior authority and not ratification.
Respondents pointed out that petitioner did not deny
the fact that Mayor Lajara was given prior authority
to negotiate and sign the subject contracts. In fact, it
was petitioner who made the motion to enact
Resolution No. 280.
[33]

On the non-conduct of a relocation survey,
respondents noted that while a relocation survey may
be of use in determining which lands should be
purchased, the absence of a relocation survey would
not, in any manner, affect the validity of the subject
transactions.
[34]

The Ombudsman, as represented by the Office
of the Solicitor General, claimed that there was no
grave abuse of discretion committed in dismissing
the complaint-affidavit for violation of Section 3(e) of
RA 3019.
[35]
The Ombudsman reasoned that to warrant
conviction under Section 3(e) of RA 3019, the
following essential elements must concur: (a) the
accused is a public officer discharging
administrative, judicial, or official functions; (b) he
must have acted with manifest partiality, evident bad
faith, or inexcusable negligence; and (c) his action
caused undue injury to any party, including the
government, or gave any private party unwarranted
benefits, advantage, or preference in the discharge of
his functions.
[36]
The Ombudsman contended that
when Mayor Lajara entered into and implemented the
subject contracts, he complied with the resolutions
issued by the City Council.

The Ombudsman cites the following
circumstances to show that the action taken by Mayor
Lajara neither caused any undue injury to Calamba
City nor gave a private party any unwarranted
benefits, advantage, or preference. First, the
purchase price of P3,800 per square meter or a total
of P129,017,600 for the site of the new City Hall was
reasonable. The initial offer of the seller for the
property was P6,000 per square meter, an amount
equal to the zonal value. Second, Calamba City took
immediate possession of the properties despite an
initial payment of only P10,000,000 out of the total
purchase price. Third, the total purchase price was
paid under liberal terms as it was paid in installments
for one year from date of purchase. Fourth, the
parties agreed that the last installment
of P25,000,000 was subject to the condition that
titles to the properties were first transferred to
Calamba City.
[37]

In its Memorandum, the Ombudsman asserted
that petitioner had not substantiated his claim by
clear and convincing evidence that TCT Nos. 66141,
66142, and 66143 are road lots. The sketch plan
presented by petitioner could not be regarded as
conclusive evidence to support his claim. The
Ombudsman also refuted petitioners claim that TCT
Nos. 68601 and 68603 were included in the Deed of
Sale.
[38]

The Ombudsman maintained that petitioners
contention that the prices for TCT Nos. 66140 and
61703 were jacked up was belied by the affidavit of
Fr. Sulpico stating that the said lots were excluded
from the offer as they were creek/easement lots.
[39]

The Ombudsman explained that ratification by
the City Council was not a condition sine qua non for
the local chief executive to enter into contracts on
behalf of the city. The law requires prior
authorization from the City Council and in this case,
Resolution Nos. 115 and 280 were the City Councils
stamp of approval and authority for Mayor Lajara to
purchase the subject lots.
[40]

The Ombudsman added that mandamus is not
meant to control or review the exercise of judgment
or discretion. To compel the Ombudsman to pursue a
criminal case against respondents is outside the
ambit of the courts.
[41]

Aggrieved by the Ombudmans Resolution and
Order, petitioner elevated the case before this Court.
Hence, this petition.

The Issues

The issues in this petition are:
1. Whether the Ombudsman committed
grave abuse of discretion amounting to
lack or excess of jurisdiction when the
Ombudsman dismissed for lack of
probable cause the case against
respondents for violation of Section 3(e)
of RA 3019;
2. Whether the Ombudsman committed
grave abuse of discretion amounting to
lack or excess of jurisdiction when the
Ombudsman failed to consider the issue
that Calamba City had acquired road lots
which should not have been paid at the
same price as the other lots; and
3. Whether all the documents pertaining to
the purchase of the lots should bear the
ratification by the City Council of
Calamba.

The Ruling of the Court

On the determination of probable cause by the
Ombudsman
and the grave abuse of discretion in the acquisition of
road lots

The mandate of the Office of the Ombudsman is
expressed in Section 12, Article XI of the Constitution
which states:

Sec. 12. The Ombudsman and
his Deputies, as protectors of the
people, shall act promptly on
complaints filed in any form or
manner against public officials or
employees of the Government, or any
subdivision, agency or
instrumentality thereof, including
government-owned or controlled
corporations, and shall, in
appropriate cases, notify the
complainants of the action taken and
the result thereof.

Section 13, Article XI of the Constitution vests
in the Office of the Ombudsman the following
powers, functions, and duties:

Sec. 13. The Office of the
Ombudsman shall have the following
powers, functions, and duties:
(1) Investigate on its own,
or on complaint by any person, any act
or omission of any public official,
employee, office or agency, when such
act or omission appears to be illegal,
unjust, improper, or inefficient.
(2) Direct, upon complaint or
at its own instance, any public official or
employee of the government, or any
subdivision, agency or instrumentality
thereof, as well as of any government-
owned or controlled corporation with
original charter, to perform and expedite
any act or duty required by law, or to
stop, prevent, and correct any abuse or
impropriety in the performance of duties.
(3) Direct the officer
concerned to take appropriate action
against a public official or employee at
fault, and recommend his removal,
suspension, demotion, fine, censure, or
prosecution, and ensure compliance
therewith.
(4) Direct the officer
concerned, in any appropriate case, and
subject to such limitations as may be
provided by law, to furnish it with copies
of documents relating to contracts or
transactions entered into by his office
involving the disbursement or use of
public funds or properties, and report
any irregularity to the Commission on
Audit for appropriate action.
(5) Request any government
agency for assistance and information
necessary in the discharge of its
responsibilities, and to examine, if
necessary, pertinent records and
documents.
(6) Publicize matters covered by
its investigation when circumstances so
warrant and with due prudence.
(7) Determine the causes of
inefficiency, red tape, mismanagement,
fraud, and corruption in the government,
and make recommendations for their
elimination and the observance of high
standards of ethics and efficiency.
(8) Promulgate its rules of
procedure and exercise such other
powers or perform such functions or
duties as may be provided by law.
(Boldfacing supplied)

Republic Act No. 6770 (RA 6770), or the
Ombudsman Act of 1989, granted the Office of the
Ombudsman full administrative authority. Section 13
of RA 6770 restates the mandate of the Office of the
Ombudsman:

Sec. 13. Mandate. - The
Ombudsman and his Deputies, as
protectors of the people, shall act
promptly on complaints filed in any
form or manner against officers or
employees of the government, or of
any subdivision, agency or
instrumentality thereof, including
government-owned or controlled
corporations, and enforce their
administrative, civil and criminal
liability in every case where the
evidence warrants in order to
promote efficient service by the
Government to the people.

Section 15(1) of RA 6770 substantially reiterates
the investigatory powers of the Office of the
Ombudsman:
Sec. 15. Powers, Functions and Duties. - The
Office of the Ombudsman shall have the following
powers, functions and duties:
(1) Investigate and prosecute on its own
or on complaint by any person, any act
or omission of any public officer or
employee, office or agency, when such
act or omission appears to be illegal,
unjust, improper or inefficient. It has
primary jurisdiction over cases
cognizable by the Sandiganbayan and, in
the exercise of his primary jurisdiction,
it may take over, at any stage, from any
investigatory agency of government, the
investigation of such cases;

Jurisprudence explains that the Office of the
Ombudsman is vested with the sole power to
investigate and prosecute, motu proprio or on
complaint of any person, any act or omission of any
public officer or employee, office, or agency when
such act or omission appears to be illegal, unjust,
improper, or inefficient.
[42]
The Ombudsmans power
to investigate and to prosecute is plenary and
unqualified.
[43]

The Ombudsman has the discretion to
determine whether a criminal case, given its
attendant facts and circumstances, should be filed or

not. The Ombudsman may dismiss the complaint
should the Ombudsman find the complaint
insufficient in form or substance, or the Ombudsman
may proceed with the investigation if, in the
Ombudsmans view, the complaint is in due form and
substance.
[44]
Hence, the filing or non-filing of the
information is primarily lodged within the full
discretion of the Ombudsman.
[45]

This Court has consistently adopted a policy of
non-interference in the exercise of the Ombudsmans
constitutionally mandated powers. The Ombudsman,
which is beholden to no one, acts as the champion
of the people and the preserver of the integrity of the
public service.
[46]
However, this Court is not
precluded from reviewing the Ombudsmans action
when there is grave abuse of discretion, in which case
the certiorari jurisdiction of the Court may be
exceptionally invoked pursuant to Section 1, Article
VIII of the Constitution.
[47]
We have enumerated
instances where the courts may interfere with the
Ombudsmans investigatory powers:
(a) To afford protection to the constitutional rights of the
accused;
(b) When necessary for the orderly administration of
justice or to avoid oppression or multiplicity of actions;
(c) When there is a prejudicial question which is sub
judice;
(d) When the acts of the officer are without or in excess
of authority;
(e) Where the prosecution is under an invalid law,
ordinance or regulation;
(f) When double jeopardy is clearly apparent;
(g) Where the court has no jurisdiction over the offense;
(h) Where it is a case of persecution rather than
prosecution;
(i) Where the charges are manifestly false and motivated
by the lust for vengeance.
[48]

These exceptions are not present in this
case. However, petitioner argues that the assailed
Resolution of the Ombudsman dwelt only on the
alleged reasonableness of the price of the property.
Petitioner claims that the Resolution did not pass
upon the more serious issue that Calamba City had
paid for several lots that the City should not have
paid for because they were road lots.

The Ombudsman, in issuing the assailed
Resolution, found no probable cause to hold any of
the respondents liable for violation of Section 3(e) of
RA 3019. The Ombudsman found that the subject lots
were bought at P3,800 per square meter, an amount
lower than their zonal valuation of P6,000 per square
meter.

Based on this computation, Calamba City paid
for a total area of 33,952 square meters
[49]
instead of
the original 55,000 square meters as authorized in
the City Councils Resolution No. 280, Series of 2001.
Contrary to petitioners allegation that Lot 5 with an
area of 3,062 square meters and Lot 8 with an area of
3,327 square meters are easement/creeks and road
lot respectively,
[50]
the sketch plan
[51]
submitted by
petitioner as Annex L in his Affidavit-Complaint and
the TCTs
[52]
of the properties indicate that these are
parcels of land.

A perusal of the records shows that the findings
of fact by the Ombudsman are supported by
substantial evidence. As long as substantial evidence
supports it, the Ombudsmans ruling will not be
overturned.
[53]
Petitioner, in arguing that the
Ombudsman committed grave abuse of discretion,
raises questions of fact. This Court is not a trier of
facts, more so in the extraordinary writ of certiorari
where neither questions of fact nor even of law are
entertained, but only questions of lack of jurisdiction
or grave abuse of discretion can be raised.
[54]
The
rationale behind this rule is explained in this wise:

The rule is based not only upon
respect for the investigatory and
prosecutory powers granted by the
Constitution to the Office of the
Ombudsman but upon practicality as well.
Otherwise, the functions of the courts will
be grievously hampered by innumerable
petitions assailing the dismissal of
investigatory proceedings conducted by
the Office of the Ombudsman with regard
to complaints filed before it, in much the
same way that the courts would be
extremely swamped if they could be
compelled to review the exercise of
discretion on the part of the fiscals or
prosecuting attorneys each time they
decide to file an information in court or
dismiss a complaint by a private
complainant.
[55]

In this case, the Ombudsman dismissed
petitioners complaint for lack of probable cause
based on the Ombudsmans appreciation and review
of the evidence presented. In dismissing the
complaint, the Ombudsman did not commit grave
abuse of discretion.

Probable cause is defined as the existence of
such facts and circumstances as would excite the
belief in a reasonable mind, acting on the facts within
the knowledge of the prosecutor, that the person
charged was guilty of the crime for which he was
prosecuted.
[56]
Probable cause need not be based on
clear and convincing evidence of guilt, or on evidence
establishing guilt beyond reasonable doubt, and
definitely not on evidence establishing absolute
certainty of guilt, but it certainly demands more than
bare suspicion and can never be left to
presupposition, conjecture, or even convincing
logic.
[57]

In Rubio v. Ombudsman,
[58]
this Court held that
what is contextually punishable under Section 3(e) of
RA 3019 is the act of causing any undue injury to any
party, or the giving to any private party unwarranted
benefits, advantage or preference in the discharge of
the public officers functions. In this case, after
evaluating the evidence presented,
[59]
the Ombudsman
categorically ruled that there was no evidence to
show actual injury or damage to the city government
to warrant the indictment of respondents for
violation of Section 3(e) of RA 3019. Further, this
Court held in Pecho v. Sandiganbayan,
[60]
that
causing undue injury to any party, including the

government, could only mean actual injury or
damage which must be established by evidence.
Here, the Ombudsman found that petitioner had not
substantiated his claim against respondents for the
crime charged. This Court is not inclined to interfere
with the evaluation of the evidence presented before
the Ombudsman.

We reiterate the rule that courts do not interfere
in the Ombudsmans exercise of discretion in
determining probable cause unless there are
compelling reasons. The Ombudsmans finding of
probable cause, or lack of it, is entitled to great
respect absent a showing of grave abuse of
discretion. Besides, to justify the issuance of the writ
of certiorari on the ground of abuse of discretion, the
abuse must be grave, as when the power is exercised
in an arbitrary or despotic manner by reason of
passion or personal hostility, and it must be so
patent as to amount to an evasion of a positive duty
or to a virtual refusal to perform the duty enjoined,
or to act at all, in contemplation of law, as to be
equivalent to having acted without jurisdiction.
[61]

On the ratification by the City Council of all
documents pertaining to the purchase of the lots

Petitioner contends that all the documents, like
the Memorandum of Agreement, Deed of Sale, Deed
of Mortgage, and Deed of Assignment, do not bear the
ratification by the City Council.

In the assailed Order, the Ombudsman held that
the various actions performed by Mayor Lajara in
connection with the purchase of the lots were all
authorized by the Sangguniang Panlungsod as
manifested in numerous resolutions. The lack of
ratification alone does not characterize the purchase
of the properties as one that gave unwarranted
benefits.

In its Memorandum submitted before this
Court, the Ombudsman, through the Office of the
Solicitor General, pointed out that the ratification by
the City Council is not a condition sine qua non for
the local chief executive to enter into contracts on
behalf of the city. The law requires prior
authorization from the City Council and in this case,
Resolution No. 280 is the City Councils stamp of
approval and authority for Mayor Lajara to purchase
the subject lots.

Section 22(c), Title I of RA 7160, otherwise
known as the Local Government Code of 1991,
provides:
Section 22. Corporate Powers. - x x x

(c) Unless otherwise
provided in this Code, no contract
may be entered into by the local
chief executive in behalf of the local
government unit without prior
authorization by the sanggunian
concerned. A legible copy of such
contract shall be posted at a
conspicuous place in the provincial
capitol or the city, municipal or
barangay hall. (Boldfacing and
underscoring supplied)

Section 455, Title III of RA 7160 enumerates the
powers, duties, and compensation of the Chief
Executive. Specifically, it states that :
Section 455. Chief Executive:
Powers, Duties and Compensation. -
x x x
(b) For efficient, effective and
economical governance the purpose
of which is the general welfare of the
city and its inhabitants pursuant to
Section 16 of this Code, the city
mayor shall:
x x x
(vi) Represent the city in all its
business transactions and sign in its
behalf all bonds, contracts, and
obligations, and such other
documents upon authority of the
sangguniang panlungsod or pursuant
to law or ordinance; (Boldfacing and
underscoring supplied)

Clearly, when the local chief executive enters into contracts, the law
speaks of prior authorization or authority from the Sangguniang Panlungsod and
not ratification. It cannot be denied that the City Council issued Resolution No.
280 authorizing Mayor Lajara to purchase the subject lots.

Resolution No. 280 states:
RESOLUTION NO. 280
Series of 2001

A RESOLUTION AUTHORIZING THE CITY MAYOR OF
CALAMBA, HON. SEVERINO J. LAJARA TO PURCHASE LOTS
OF PAMANA INC. WITH A TOTAL AREA OF FIFTY FIVE
THOUSAND SQUARE METERS (55,000 SQ. M.) SITUATED
AT BARANGAY REAL, CITY OF CALAMBA FOR A LUMP SUM
PRICE OF ONE HUNDRED TWENTY NINE MILLION
SEVENTEEN THOUSAND SIX HUNDRED PESOS
(P129,017,600), SUBJECT TO THE AVAILABILITY OF
FUNDS, AND FOR THIS PURPOSE, FURTHER AUTHORIZING
THE HON. MAYOR SEVERINO J. LAJARA TO REPRESENT
THE CITY GOVERNMENT AND TO EXECUTE, SIGN AND
DELIVER SUCH DOCUMENTS AND PAPERS AS MAYBE SO
REQUIRED IN THE PREMISES.

WHEREAS, the City of Calamba is in need of
constructing a modern City Hall to adequately meet the
requirements of governing new city and providing all
adequate facilities and amenities to the general public
that will transact business with the city government.

WHEREAS, as the City of Calamba has at present
no available real property of its own that can serve as an
appropriate site of said modern City Hall and must
therefore purchase such property from the private sector
under terms and conditions that are most beneficial and
advantageous to the people of the City of Calamba;

NOW THEREFORE, on motion of Kagawad S.
VERGARA duly seconded by Kagawad R. HERNANDEZ, be
it resolved as it is hereby resolved to authorize the City
Mayor of Calamba, Hon. Severino J. Lajara to purchase
lots of Pamana, Inc. with a total area of fifty five
thousand square meters (55,000 sq.m.) situated at
Barangay Real, City of Calamba for a lump sum price of
One Hundred Twenty Nine Million Seventeen Thousand
Six Hundred Pesos (P129,017,600) subject to the
availability of funds, and for this purpose, further
authorizing the Hon. Mayor Severino J. Lajara to
represent the City Government and to execute, sign
and deliver such documents and papers as maybe so
required in the premises.
[62]
(Emphasis supplied)


As aptly pointed out by the Ombudsman, ratification by the City Council is
not a condition sine qua non for Mayor Lajara to enter into contracts. With the
resolution issued by the Sangguniang Panlungsod, it cannot be said that there
was evident bad faith in purchasing the subject lots. The lack of ratification
alone does not characterize the purchase of the properties as one that gave
unwarranted benefits to Pamana or Prudential Bank or one that caused undue
injury to Calamba City.

In sum, this Court has maintained its policy of non-interference with the
Ombudsmans exercise of its investigatory and prosecutory powers in the
absence of grave abuse of discretion, not only out of respect for these
constitutionally mandated powers but also upon considerations of practicality
owing to the myriad functions of the courts.
[63]
Absent a clear showing of grave
abuse of discretion, we uphold the findings of the Ombudsman.

WHEREFORE, we DISMISS the petition. We AFFIRM the Resolution and
Order of the Ombudsman in OMB-L-C-02-1205-L dated 17 March 2004 and 22
August 2005, respectively.

SO ORDERED.

CALANZA VS. PICOP
On 23 August 1991, petitioners Leonora P. Calanza
and other petitioners filed with the DENR of Davao
City, applications for small-scale mining permits
for the purpose of extracting gold. In their
applications, petitioners stated that the area where
they will conduct mining operations was in the
Municipality of Boston, Davao Oriental.
December 1992, the governor of Davao Oriental,
Rosalind Y. Lopez, approved the applications and
issued six small-scale mining permits in favor of
the petitioners.
3
Since the mining areas applied for
by petitioners were within the respondent Paper
Industries Corporation of the Philippines (PICOP)
logging concession area under Timber License
Agreements (TLAs) that covered large tracts of
forest lands of the Provinces in Davao Oriental.
PICOP, through its officer Roberto A. Dormendo,
refused petitioners entry into the mining area on
the grounds that it has the exclusive right of
occupation, possession and control over the area
being a logging concessionaire thereof; that
petitioners mining permits are defective since
they were issued by the governor of Davao
Oriental
PICOP also claimed that the issuance of
petitioners permits were void abinitio since the
same violated Section 5 of Republic Act No.
7076, otherwise known as the Peoples Small-Scale
Mining Act of 1991, which allegedly prohibits the
issuance of mining permits over areas covered by
forest rights such as TLAs or forest reservations
unless their status as such is withdrawn by the
competent authority.

Whether the small-scale mining permits of
petitioners are valid.
Moreover, petitioners small-scale mining permits
are legally questionable. Under Presidential Decree
No. 1899, applications of small-scale miners are
processed with the Director of the Mines and Geo-
Sciences Bureau. Pursuant to Republic Act No.
7076, which took effect
10
on 18 July 1991,
approval of the applications for mining permits
and for mining contracts are vested in the
Provincial/City Mining Regulatory Board.
Composed of the DENR representative, a
representative from the small-scale mining sector,
a representative from the big-scale mining
industry and a representative from an
environmental group, this body is tasked to
approve small-scale mining permits and contracts.
In the case under consideration, petitioners filed
their small-scale mining permits on 23 August
1991, making them bound by the procedures
provided for under the applicable and prevailing
statute, Republic Act No. 7076. Instead of
processing and obtaining their permits from the
Provincial Mining Regulatory Board, petitioners
were able to get the same from the governor of
Davao del Norte. Considering that the governor is
without legal authority to issue said mining
permits, the same permits are null and void.
In the case of Calanza vs. PICOP (G.R. No. 146622,
April 24, 2009), it was ruled:
PROVINCIAL GOVERNORS HAVE NO AUTHORITY
TO ISSUE SMALL SCALE MINING PERMITS
Under Presidential Decree No. 1899, applications
of small-scale miners are processed with the
Director of the Mines and Geo-Sciences Bureau.
Pursuant to Republic Act No. 7076, which took
effect
10
on 18 July 1991, approval of the
applications for mining permits and for mining
contracts are vested in the Provincial/City Mining
Regulatory Board. Composed of the DENR
representative, a representative from the small-
scale mining sector, a representative from the big-
scale mining industry and a representative from
an environmental group, this body is tasked to
approve small-scale mining permits and contracts.
In the case under consideration, petitioners filed
their small-scale mining permits on 23 August
1991, making them bound by the procedures
provided for under the applicable and prevailing
statute, Republic Act No. 7076. Instead of
processing and obtaining their permits from the
Provincial Mining Regulatory Board, petitioners
were able to get the same from the governor of
Davao del Norte. Considering that the governor is
without legal authority to issue said mining
permits, the same permits are null and void.
WHITELIGHT CORP V CITY OF MANILA

On 3 Dec 1992, then Mayor Lim signed into law
Ord 7774 entitled An Ordinance prohibiting
short timeadmission in hotels, motels, lodging

houses, pension houses and similar
establishments in the City of Manila. White Light
Corp is an operator of mini hotels and motels who
sought to have the Ordinance be nullified as the
said Ordinance infringes on the private rights of
their patrons. The RTC ruled in favor of WLC. It
ruled that theOrdinance strikes at the personal
liberty of the individual guaranteed by the
Constitution. The City maintains that
the ordinance is valid as it is a valid exercise of
police power. Under the LGC, the City is
empowered to regulate the establishment,
operation and maintenance of cafes, restaurants,
beerhouses, hotels, motels, inns, pension houses,
lodging houses and other similar establishments,
including tourist guides and transports. The CA
ruled in favor of the City.

ISSUE: Whether or not Ord 7774 is valid.

HELD: The SC ruled that the said ordinance is null
and void as it indeed infringes upon individual
liberty. It also violates the due process clause
which serves as a guaranty for protection against
arbitrary regulation or seizure. The
said ordinance invades private rights. Note that
not all who goes into motels and hotels for wash
up rate are really there for obscene purposes only.
Some are tourists who needed rest or to wash up
or to freshen up. Hence, the infidelity sought to be
avoided by the said ordinance is more or less
subjected only to a limited group of people. The
SC reiterates that individual rights may be
adversely affected only to the extent that may
fairly be required by the legitimate demands of
public interest or public welfare.

Due process; local autonomy; police power.
Department of Agrarian Reform (DAR)
Administrative Order No. 01-02, as amended,
which sets out rules on land use conversion, does
not violate the due process clause, because in
providing administrative and criminal penalties,
the Secretary of Agrarian Reform simply
implements the provisions of the Comprehensive
Agrarian Reform Law and the Agriculture and
Fisheries Modernization Act, both of which
provide penalties for illegal land conversion.
Contrary to petitioners assertions, the penalties
provided under DAR AO No. 01-02 are imposed
upon the illegal or premature conversion of lands
within DARs jurisdiction.

In providing that reclassification of agricultural
lands by local government units (LGUs) shall be
subject to the requirements of, and procedures
for, land use conversion, including DAR approval
or clearance, DAR AO No. 01-02 did not violate the
autonomy of the LGUs. The power of LGUs to
reclassify agricultural lands is not absolute, and
the Local Government Code recognizes the
authority of DAR to approve conversion of
agricultural lands. DAR Memorandum No. 88,
which temporarily suspended the processing and
approval of all land use conversion applications, is
a valid exercise of police power, as it was issued
upon the instruction of the President in order to
address the unabated conversion of prime
agricultural lands for real estate development
because of the worsening rice shortage in the
country at that time. Such measure was made in
order to ensure that there are enough agricultural
lands in which rice cultivation and production may
be carried into. Chamber of Real Estate and
Builders Associations, Inc. vs. The Secretary of
Agrarian Reform, G.R. No. 183409, June 18, 2010.

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