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Corporation- an artificial being created by operation of law, having the right of succession and the powers,
attributes and properties expressly authorized by law or incident to its existence.
b.
Classes of Corporations
Private Corporation
-those formed for some private
purpose, benefit, aim or end.
DEFINITION
-created for private aim, gain, or
benefits of its members
-created by the will of the
incorporators with the recognizance
of the State.
-constitute a voluntary agreement by
and among its members
PURPOSE OF
CREATION
CREATORS
Public Corporation
-one created by the State either by
general or special act for purposes of
administration of local government or
rendering service in the public interest.
-established for purposes connected with
the administration of civil or local
governments
-creations of the State either by general
or special act
-involuntary consequence of legislation
NATURE
e.
Private or Corporate
-acts in a similar category as a business corporation,
performing functions not strictly governmental or
political
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d.
g.
-patrimonial powers
This Act states the policy of the State to treat Metro Manila as a special development and administrative region and certain
basic services affecting or involving Metro Manila as metro wide services more efficiently and effectively planned,
supervised and coordinated by a development authority as created herein, without prejudice to the autonomy of the affected
LGU. Among its pertinent provisions are:
1) Scope of MMDA (metro-wide) services: Development planning; transport and traffic management; solid
waste disposal and management; Flood control; Urban renewal; zoning and land use planning; health
sanitation; Urban protection and pollution control; pu8blic safety;
2) Creation of Metro Manila Council (MMC) consisting of all mayors in Metro Manila
3) Powers and Functions of MMDA, mainly to formulate, coordinate, and regulate implementation of above
metro-wide services
4) Functions of MMC, mainly to approve projects of MMDA
5) Function of MMDA chairman: Execute policies of MMC and manage operations of MMDA; appointment
power; prepare budget of MMDA; disciplinary power on subordinates; ex officio board member (or his
representative) of departments related to activities of MMDA such as DOTC, DOH, etc.
6) Institutional linkages of MMDA: NEDA, NGOs , accredited peoples organizations
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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.
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 local government
units 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 Me tro Manila," and to "advise the local
governments accordingly."
The MMDA is not a political unit of government thus cannot validly exercise police power.
h.
Administrative Regions
DEFINITION
Chiongbian vs. Orobos 254 SCRA 253 (1995)
Administrative regions are mere groupings of contiguous Provinces for administrative
purposes. They are not territiorial and political subdivisions like Provinces, Cities, Municipalities and Barangays.
R. A. 6766 (Organic Act for Cordillera Autonomous Region of 1989)
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This Act provides for creation of the Cordillera Autonomous Region (CAR) shall consist of the cities and provinces that shall
vote favorable in a plebiscite pursuant ant 10, Sec. 18 of the Constitution. Those cities and provinces are Benguet, Ifugao,
Muslim Province, Abra, Kalinga-Apayao and Baguio
The Act consists of the following pertinent articles:
1) Guiding principles and policies similar to that of Art. 2 of the 1987 Constitution
2) Vesting of legislative power in the Cordillera Assembly; executive power Cordillera governor with a deputy
governor as well; creation of indigenous special courts whose decisions are final and executory but subject to
the original and appellate jurisdiction of the Supreme Court
3) Creation of a Regional Commission on Appointments
4) Measures to protect and develop the ancestral lands and ancestral domains of indigenous cultural communities
as well as the national economy and patrimony
The rest of its provisions are roughly similar to the Organic Act for ARMM (see11-c) CAR never came to existence. Only
Ifugao province voted in favor of CAR, so the Supreme Court in Ordillo v. COMELEC ruled that Ifugao could no constitute
itself into the CAR
The sole province of Ifugao cannot validly constitute the Cordillera Autonomous Region.
Cordillera Regional Assembly v. COMELEC, G. R. No. 93054, December 4, 1990
The keywords provinces, cities, municipalities and geographical areas connote that "region" is to be made
up of more than one constituent unit. The term "region" used in its ordinary sense means two or more provinces. This
is supported by the fact that the thirteen (13) regions into which the Philippines is divided for administrative purposes
are groupings of contiguous provinces.
Aside from the 1987 Constitution, a reading of the provisions of Republic Act No. 6766 strengthens the
petitioner's position that the Region cannot be constituted from only one province.
xxx
From these sections, it can be gleaned that Congress never intended that a single province may constitute the
autonomous region. Otherwise, we would be faced with the absurd situation of having two sets of officials, a set of
provincial officials and another set of regional officials exercising their executive and legislative powers over exactly
the same small area.
R.A. 6732 (Organic Act for ARMM [Autonomous Region in Muslim Mindanao])
Mindanao, encompassing 13 provinces and 9 cities, through a plebiscite for that purpose. This government shall operate within
the framework of the Regional Government. The executive power is conferred on the Regional Governor. The legislative
power is conferred in the Regional Assembly. The Supreme Court, the Court of Appeals and the lower courts shall continue
to exercise their power as mandated in the Constitution; ho wever, there shall be a Shariah Appellate Court which shall also
be learned in Islamic law and jurisprudence. The Shariah Courts decisions shall be final and executory subject to the original
and appellate jurisdiction of the Supreme Court. Tribal Appellate Courts for cases dealing with tribal codes shall also be
established.
The Regional Government shall have fiscal autonomy or the power to create its own sources of revenue, subject to
the limitations of the Constitution and this Organic Act. The Organic Act also provides for: Protection of ancestral lands,
ancestral domain and indigenous cultural communities; urban and rural planning and development; power to enact laws
pertaining to the national economy and patrimony responsive to the needs of the Re gional Government; public order and
security; education, science and technology and sports development; social justice and services; and power to amend or revise
the Organic Act, either by Congress or by the Regional Assembly, the latter being subject to a pproval by Congress.
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lodged with the President to facilitate the exercise of the power of general supervision over local governments [see
Art. X, sec. 4 of the Constitution]. There is no conflict between the power of the President to merge administrative
regions with the constitutional provision requiring a plebiscite in the merger of local government units because the
requirement of a plebiscite in a merger expressly applies only to provinces, cities, municipalities or barangays, not to
administrative regions.
i.
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Section 536. Effectivity Clause. This code shall take effect on January first, ineteen hundred ninety-two, unless
otherwise provided herein, after its complete publication in at least one newspaper of general circulation.
(j) Effective mechanisms for ensuring the accountability of local government units to their respective
constituents shall be strengthened in order to upgrade continually the quality of local leadership;
(k) The realization of local autonomy shall be facilitated through improved coordination of national government
policies and programs and extension of adequate technical and material assistance to less developed and
deserving local government units;
(l) The participation of the private sector in local governance, particularly in the delivery of basic services, shall
be encouraged to ensure the viability of local autonomy as an alternative strategy for sustainable development;
and
(m) The national government shall ensure that decentralizatio n contributes to the continuing improvement of
the performance of local government units and the quality of community life.
The 1987 Constitution by deleting the phrase "as may be provided by law," did not stripped the
President of the power of control over local governments.
Provisional Constitution must be deemed to have been overtaken by Section 27, Article XVIII of the 1987
Constitution.
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LOCAL AUTONOMY
-means a more responsive and accountable local government structure instituted through a system of
decentralization.
-not meant to end the relation of partnership and interdependence between the central administration and LGU.
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FISCAL AUTONOMY
Internal Revenue Allotment forms part of a local governments annual income
The IRAs are items of income because they form part of the gross accretion of the funds of the local
government unit. The IRAs regularly and automatically accrue to the local treasury without need of any further
action on the part of the local government unit. They thus constitute income which the local government can
invariably rely upon as the source of much needed funds.
SEC. 4. Scope of Application. - This Code shall apply to all provinces, cities, municipalities, barangays, and
other political subdivisions as may be created by law, and, to the extent herein provided, to officials, offices, or
agencies of the national government.
Cordillera Broad Coalition vs. Commission on Audit G. R. No. 79956, January 29, 1990
We find that it [EO 220] did not create a new territorial and political subdivision or merge existing ones
into a larger subdivision. Firstly, the CAR is not a public corporation or a territorial and political subdivision. It does
not have a separate juridical personality, unlike provinces, cities and municipalities. Neither is it vested with the
powers that are normally granted to public corporations, e.g. the power to sue and be sued, the power to own and
dispose of property, the power to create its own sources of revenue, etc. As stated earlier, the CAR was created
primarily to coordinate the planning and implementation of programs and services in the covered areas.
Then, considering the control and supervision exercised by the President over the CAR and the offices
created under E.O. No. 220, and considering further the indispensable participation of the line departments of the
National Government, the CAR may be considered more than anything else as a regional coordinating agency of the
National Government, similar to the regional development councils which the President may create under the
Constitution. These councils are "composed of local government officials, regional heads of departments and other
government offices, and representatives from non-governmental organizations within the region for purposes of
administrative decentralization to strengthen the autonomy of the units therein and to accelerate the economic and
social growth and development of the units in the region." In this wise, the CAR may be considered as a more
sophisticated version of the regional development council.
EO 220 which created CAR did not contravene the constitutional guarantee of local autonomy of the
member LGUs.
Cordillera Broad Coalition vs. Commission on Audit G. R. No. 79956, January 29, 1990
As we have said earlier, the CAR is a mere transitory coordinating agency that would prepare the stage for
political autonomy for the Cordilleras. It fills in the resulting gap in the process of transforming a group of adjacent
territorial and political subdivisions already enjoying local or administrative autonomy into an autonomous region
vested with political autonomy.
Abbas vs. COMELEC G.R. No. 89651 (1989)
Under the Constitution, the creation of the autonomous region hinges only on the result of the plebiscite. If
the Organic Act is approved by majority of the votes cast by constituent units in the scheduled plebiscite, the
creation of the autonomous region immediately takes effect. The questioned provisions in R.A. No. 6734 requiring
an Oversight Committee to supervise the transfer do not provide for a different date of effectivity. Much less would
the organization of the Oversight Committee cause an impediment to the operation of the Organ ic Act, for such is
evidently aimed at effecting a smooth transition period for the regional government. The constitutional objection on
this point thus cannot be sustained as there is no basis therefor.
As this Court observed in Abbas, while the power to merge administrative regions is not expressly
provided for in the Constitution, it is a power which has traditionally been lodged with the President to
facilitate the exercise of the power of general supervision over local governments. R.A. No. 5435 was passed
authorizing the President of the Philippines, with the help of a Commission on Reorganization, to reorganize the
different executive departments, bureaus, offices, agencies and instrumentalities of the government, including
banking or financial institutions and corporations owned or controlled by it. The purpose was to promote
simplicity, economy and efficiency in the government. The law provided that any reorganization plan submitted
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would become effective only upon the approval of Congress. Thus the creation and subsequent reorganization of
administrative regions have been exercised by the President pursuant to authority granted to him by law.
The power granted authorizes the reorganization even of regions, provinces and cities that did not take
part in the plebiscite on the creation of the Autonomous Region or did not vote in favor of it
While Article XIX, Section 13 provides that The provinces and cities which in the plebiscite do not vote for
inclusion in the Autonomous Region shall remain in the existing administrative regions, this provision is subject to
the qualification that the President may, by administrative determination, merge the existing regions. This means
that while non-assenting provinces and cities are to remain in the regions as designated upon the creation of
the Autonomous Region, they may nevertheless be regrouped with contiguous provinces forming other regions
as the exigency of administration may require.
On the applicability to only those which voted for inclusion in the Autonomous Region, the Presidents power
cannot be so limited without neglecting the necessities of administration.
A tribal court of the Cordillera Bodong Administration cannot render a valid and executory decision in a
land dispute
BADUA vs. CORDILLERA BODONG ADMINISTRATION 1991 Feb 14G.R. No. 92649
.
In "Cordillera Regional Assembly Member Alexander P. Ordillo, et al. vs. The Commission on Elections,
et al found that in the plebiscite that was held on January 23, 1990 pursuant to Republic Act 6766, the creation of the
Cordillera Autonomous Region was rejected by all the provinces and city of the Cordillera region, except Ifugao
province, hence, the Cordillera Autonomous Region did not come to be. As a logical consequence of that judicial
declaration, the Cordillera Bodong Administration created under Section 13 of Executive Order No. 220, the
indigenous and special courts for the indigenous cultural communities of the Cordillera region (Sec. 1, Art. VII,
Rep. Act 6766), and the Cordillera People's Liberation Army, as a regional police force or a regional command of
the Armed Forces of the Philippines (Secs. 2 and 4, Article XVIII of R.A. 6766), do not legally exist. Since the
Cordillera Autonomous Region did not come into legal existence, the Maeng Tribal Court was not constituted
into an indigenous or special court under R.A. No. 6766. Hence, the Maeng Tribal Court is an ordinary tribal
court existing under the customs and traditions of an indigenous cultural community.
Such tribal courts are not a part of the Philippine judicial system which consists of the Supreme
Court and the lower courts which have been established by law (Sec. 1, Art. VIII, 1987 Constitution). They do
not possess judicial power. Like the pangkats or conciliation panels created by P.D. No. 1508 in the
barangays, they are advisory and conciliatory bodies whose principal objective is to bring together the parties
to a dispute and persuade them to make peace, settle, and compromise.
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SEC. 5. Rules of Interpretation. - In the interpretation of the provisions of this Code, the following rules shall
apply:
(a)Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of
doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local
government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of
the local government unit concerned;
(b) In case of doubt, any tax ordinance or revenue measure shall be construed strictly against the local
government unit enacting it, and liberally in favor of the taxpayer. Any tax exemption, incentive or relief
granted by any local government unit pursuant to the provisions of this Code shall be construed strictly against
the person claiming it.
(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local
government units in accelerating economic developmen t and upgrading the quality of life for the people in the
community;
(d) Rights and obligations existing on the date of effectivity of this Code and arising out of contracts or any
other source of prestation involving a local government unit shall be gov erned by the original terms and
conditions of said contracts or the law in force at the time such rights were vested; and
(e)In the resolution of controversies arising under this Code where no legal provision or jurisprudence applies,
resort may be had to the customs and traditions in the place where the controversies take place.
Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC
shall be liberally interpreted to give more powers to the local government units in accelerating economic
development and upgrading the quality of life for the people of the community.
Rights existing on the date of effectivity of this Code involving a local government unit shall be governed
by the law in force at the time such rights were vested
THE SECRETARY OF HEALTH vs.COURT OF APPEALS G. R. No. 112243, Feb. 23, 1995
At the time of the commencement of the administrative action, the operative laws are the Administrative
Code of 1987 and Executive Order No. 119. Under the said laws, the Secretary of Health exercises control, direction
and supervision over his subordinates, which include private respondent. Consequently, since jurisdiction has been
acquired by the Secretary of Health over the person of private respondent before the effectivity of the Local
Government Code on January 1, 1992, it continues until the final disposition of the administrative case.
Greater Balanga Dev. Corp vs Balanga G. R. No. 83987, Dec. 27, 1994
The second paragraph of Section 3A-06(b) does not expressly require two permits for their conduct of two
or more businesses in one place, but only that separate fees be paid for each business. The powers of municipal
corporations are to be construed in strictiss imi juris and any doubt or ambiguity must be construed against the
municipality (City of Ozamiz v. Lumapas, 65 SCRA 33 [1975]). Granting, however, that separate permits are
actually required, the application form does not contain any entry as regards the n umber of businesses the applicant
wishes to engage in.
Evardone vs COMELEC GR. No. 95063, December 2, 1991
Art. 18 Sec. 3 of the Consti expressly provides that all existing laws not inconsistent with the 1987 Consti
shall remain operative until amended repealed or revoked. RA 7160 providing for the Local Government Code of
1991, expressly repeals BP 337. But, the new LGC will take effect only on January 1, 1992 therefore the old LGC
(BP 337) is still the applicable law to the present case.
The Court ruled that Resolution 2272 is valid and constitutional.
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SEC. 8. Division and Merger. - Division and merger of existinglocal government units shall comply with the
same requirements herein prescribed for their creation: Provided, however, That such division shall not reduce
the income, population, or land area of the local government unit or units concerned to less than the minimum
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SEC. 7. Creation and Conversion. - As a general rule, the creation of alocal government unit or its
conversion from one level to another level shall be based on verifiable indicators of viability and projected
capacity to provide services, to wit:
(a) Income. - It must be sufficient, based on acceptable standards, to provide for all essential government
facilities and services and special functions commensu- rate with the size of its population, as expected of the
local government unit concerned;
(b) Population. - It shall be determined as the total number of inhabitants within the territorial jurisdiction of
the local government unit concerned; and
(c) Land Area. - It must be contiguous, unless it comprises two or more islands or is separated by a local
government unit independent of the others; properly identified by metes and bounds with technical
descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its
populace. Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF),
the NationalStatistics Office (NSO), and the Lands Management Bureau(LMB) of the Depart ment of
Environment and Natural Resources(DENR).
requirements prescribed in this Code: Provided, further, That the income classification of the original local
government unit or units shall not fall below its current income classification prior to such division. The
income classification of local government units shall be updated within six (6) months from the effectivity of
this Code to reflect the changes in their financial position resulting from the increased revenues as provided
herein.
SEC. 9. Abolition of Local Government Units. - A local government unit may be abolished when its income,
population, or land area has been irreversibly reduced to less than the minimum standards prescribed for its
creation under Book III of this Code, as certified by the national agencies mentioned in Section 17 hereof to
Congress or to the sanggunian concerned, as the case may be.
The law or ordinance abolishing a local government unit shall sp ecify the province, city, municipality, or
barangay with which thelocal government unitsought to be abolished will be incorporated or merged.
SEC. 10. Plebiscite Requirement. - No creation, division, merger, abolition, or substantial alteration of
boundaries of local government units shall take effect unless approved by a majority of the votes cast in a
plebiscite called for the purpose in the political unit or units directly affected. Said plebiscite shall be conducted
by the Commission on Elections (Comelec) within one hundred twenty (120) days from the date of effectivity
of the law or ordinance effecting such action, unless said law or ordinance fixes another date.
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"SEC. 462. Existing Subprovinces. Existing sub-provinces are hereby converted into regular provinces
upon approval by a majority of the votes cast in a plebiscite to be held in the said sub -provinces and the original
provinces directly affected. The plebiscite shall be conducted by the Comelec simultaneously with the national
elections following the effectivity of this Code.
"The new legislative districts created as a result of such conversion shall continue to be represented in
Congress by the duly elected representatives of the original districts out of which said new provinces or districts
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Grio v. COMELEC
were created until their own representatives shall have been elected in the next regular congressional elections and
qualified.
As it is worded, Section 462 completely addresses an eventuality where the people of both the original district and
the people of the new district to be created agree to the proposed creation of the latter.
Mun. of San Narciso, Quezon v. Mendez
Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but
it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally decided to
challenge the legality of the executive order. In the meantime, the Municipal District, and later the Municipality, of
San Andres, began and continued to exercise the powers and authority of a duly created local government unit.
Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts "organized
pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal
officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular
municipalities."
Tan v. COMELEC 142 SCRA 727
The phrase subject to the approval by a majority of the votes in a plebiscite in the unit or units affected
must be construed to mean that the remaining areas in the province of Negros Occidental should have been allowed
to participate in the said plebiscite. The reason is that cities belonging to Negros Occidental will be added to Negros
del Norte, thus Negros Occidentals land area will be dismembered. Certainly, the people of Negros Occidental
should have been allowed to vote in the plebiscite as they are directly affected by the diminution in land size of their
province.
A reading of the last sentence of the first paragraph of Section 197 LGC of 1983 says. The territory need not be
contiguous if it comprises 2 or more islands. The use of the word territory clearly reflects that the law re fers only
to the land mass and excludes the waters over which the political unit has control. In other words, Negros del Norte
failed to meet the required land area of 3,500 sq. km for it to become a province.
Lopez v. COMELEC G. R. No. L-56022 & L-56124, May 31, 1985
The Court xxx came to the conclusion that the constitutional provision on the need for a majority of the
votes cast in the plebiscite in the unit or units affected would be satisfied even if "those voters who are not from the
barangay to be separated [were] excluded in the plebiscite." It cannot be argued therefore that the plebiscite held in
the areas affected to constitute Metropolitan Manila, having manifested their will, the constitutional provision relied
upon by petitioners has been satisfied.
Mun. of Malabang v. Benito G.R. No. L-28113, March 28, 1969
In the cases where a de facto municipal corporation was recognized as such despite the fact that the
statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was
some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that
Balabagan was organized at a time when the statute had not been invalidated cannot conceivably make it a de facto
corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to
give color of authority to its creation.
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Xxx the creation of municipalities, is not an administrative function, but one which is essentially
and eminently legislative in character. The question of whether or not "public interest" demands the exercise of
such power is not one of fact. it is "purely a legislative question or a political question.
Upon the other hand if the President could create a municipality, he could, in effect, remove any of its
officials, by creating a new municipality and including therein the barrio in which the official concerned resides, for
his office would thereby become vacant.6 Thus, by merely brandishing the power to create a new municipality (if he
had it), without actually creating it, he could compel local officials to submit to his dictation, thereby, in effect,
exercising over them the power of control denied to him by the Constitution.
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Note:
TYPES OF LOCAL GOVERNM ENTS
1. De jure Municipal Corporations- those created or recognized by operation of law
2.
De facto municipal corporations- where the people have organized themselves, under color of law, into
ordinary municipal bodies, and have gone on, year after year, raising taxes, making improvements, and
exercising their usual franchises, with their rights dependent quite as much on acquiescence as on the
regularity of their origin
Elements:
a. A valid law authorizing incorporation
b. An attempt in good faith to organize under it
c. A colorable compliance with law
d. An assumption of corporate powers
3.
Municipal Corporation by prescription- exercised their powers from time immemorial with a charter
which is presumed to have been lost or destroyed.
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