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INTRODUCTION
1991.
Under the 1987 Constitution, declared policy: The State
shall ensure the autonomy of local governments (Art. II, Sec. 25)
(ii)
them.
Meaning of Administrative Regions are mere grouping of
contiguous provinces for administrative purposes, not for political
representation. The division of the country into regions is
intended to facilitate not only the administration of local
governments which the law requires to have regional offices.
Creation of administrative regions for purpose of expediting the
delivery of services is nothing new. The Integrated Reorganization
plan of 1972, which was made part of the law of the land by
virtue of Presidential Decree No. 1, established 11 regions, later
became 12. With definite regional centers and required
departments and agencies of the Executive Branch of the
National Government to set up field offices therein (DTI VII, DOLE
VII, DPWH Regional Office). The functions of the regional offices is
to be established pursuant the reorganization plan are: (a)
implement laws, policies, plans, programs, rules and regulation of
the department or agency in the regional area; (2) provide
economical, efficient and effective services to the people in the
area; (3) to coordinate with regional offices of other departments,
bureaus and agencies in the area; and (3) perform such other
functions as may be provided by law.
Meaning of Autonomous Regions creation of autonomous
regions in Muslim Mindanao and the Cordilleras, which is unique
to the 1987 Constitution, contemplates grant of political
autonomy and not just administrative autonomy to those regions.
Thus, Art. X, Section 18 of Constitution mandates for Congress to
enact an organic act for the autonomous regions (with assistance
and participation of consultative commission composed of
representatives appointed by the President from list of nominees
of multisectoral bodies) to provide for an autonomous regional
government with a basic structure consisting of an executive
department and a legislative assembly and special courts with
personal, family and property law jurisdiction in each of the
autonomous regions.
lawmaking body. The delegate cannot be superior to the principal When is statute AMBIGIOUS? If capable of being understood by
or exercise powers higher than those of the latter. It is heresy to reasonably well-informed persons in either of two or more senses.
suggest that the LGUs can undo the acts and negate by mere
ordinance the mandate of the statute.
Power of judicial review can be exercised by courts to invalidate
constitutionally infirm acts. Ergo, courts are not bound by
Section 2(c) requiring consultations should be read together with legislative interpretation of their own acts.
Section 26, 27, LGC (prior consultation by national agencies with
lgus involving projects that may cause pollution, climatic change, De Facto Municipal Corporations requisites:
depletion of non-renewable resources, loss of crop land, range- Valid law authorizing incorporation; attempt in good faith to
land or forest cover and extinction of animal or plant species). organize under it; colorable compliance with law, assumption of
Thus, Section 2(c) does not apply to lotto, the latter being neither corporate powers.
a program nor project of the national government, but of a
charitable institution, the PCSO. Also, the argument is an
afterthought, Mayor denied application for business permit solely
MUNICIPAL CORPORATIONS
on ground of KB508.
Elements: (a) legal creation/incorporation there must be a law
Section 3, LGC Operative Principles of Decentralization policies creating/authorizing creation or incorporation of a municipal
and measures on local autonomy to be guided by these:
corporation; (b) corporate name- name by which the corporation
shall be known; (c) inhabitants people residing in the territory of
(a) effective allocation among the different LGUs of their the corporation; and (d) territory land mass where inhabitants
respective powers, functions and responsibilities [is provided for reside together with internal and external waters and airspace
by LGC],
above land and waters.
(b) establishment in every LGU of an accountable, efficient and
dynamic organizational structure and operating mechanism that
will meet priority needs and service requirements of its
communities,
DECISION: The principal basis for the view that Sinacaban was not
validly created as a municipal corporation is the Pelaez ruling that
the creation of municipal corporations is essentially a legislative
matter and therefore the President was without power to create
by executive order Sinacaban. The ruling in this case has been
reiterated in a number of cases later decided. However, we have
since held that where a municipality created as such by executive
order is later impliedly recognized and its acts are accorded legal
validity, its creation can no longer be questioned. Sinacaban is at
least a de facto municipal corporation in the sense that its legal
existence has been recognized and acquiesced publicly and
officially. Sinacaban had been in existence for sixteen years when
the Pelaez ruling yet the validity of E.O. No. 258 creating it had
never been questioned.
Section 15 Political and Corporate Nature of LGUs every LGU is Points of Discussion Police power is inherent in the State,
a body politic and corporate endowed with powers to be exercised by the Legislature, but may be validly delegated. Upon
exercised by it in conformity with law.
valid delegation, the exercise thereof by the delegate being
limited only to such powers as conferred by the legislature.
Dual Functions of LGU (1) public/governmental acts as an Legislature has delegated police power to LGUs (Sec. 15, LGC)
agent of State for the government of the territory and its through their respective legislative bodies, under the General
inhabitants; (2) proprietary/private acts as an agent of the Welfare Clause (Sec. 16, LGC).
community in the administration of local affairs, and as such, it
acts as a separate entity for its own purposes and not as a
subdivision of the State.
NOTE: RA 7924 declared Metropolitan or Metro Manila (body
composed of several LGUs, i.e., twelve (12) cities of Caloocan,
Municipal Corporation in the Philippines:
Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa,
Las Pias, Marikina, Paraaque and Valenzuela, and the five (5)
(1) Province (Sec. 459, LGC) cluster of municipalities or municipalities of Malabon, Navotas, Pateros, San Juan and Taguig)
municipalities and component cities, as a political and as a "special development and administrative region" with the
corporate unit of government which serves as a dynamic administration of "metro-wide" basic services affecting the region
mechanism for developmental processes and effective placed under "a development authority" referred to as the MMDA
governance of LGUs within its territorial jurisdiction.
(governed by the Metro Manila Council composed of the mayors
of the component 12 cities and 5 municipalities, the president of
(2) City (Sec. 448) composed of more more urbanized and the Metro Manila Vice-Mayors' League and the president of the
developed barangays, serves as a general purpose Metro Manila Councilors' League) headed by the Chairman.
government for coordination and delivery of basic,
regular and direct services and effective governance of
the inhabitants within its jurisdiction;
NOTE: 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
(3) Municipality (Sec. 440, LGC) groups of barangays, were "without prejudice to the autonomy of the affected local
serves primarily as a general purpose government for government units." The character of the MMDA was clearly
coordination and delivery of basic, regular and direct defined in the legislative debates enacting its charter. MMDA not
services and effective governance of inhabitants within a special metropolitan political subdivision, because the latters
creation requires the approval by a majority of the votes cast in a
its jurisdiction;
plebiscite in the political units directly affected. 56 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
(4) Barangay (Sec. 384, LGC) basic political unit, serves as the people, but appointed by the President with the rank and
the primary planning and implementing unit of privileges of a cabinet member. In fact, part of his function is to
government policies, plans, programs, projects and perform such other duties as may be assigned to him by the
activities in the community and as a forum wherein President, 57 whereas in local government units, the President
collective views of people may be expressed, crystallized merely exercises supervisory authority. This emphasizes the
and considered where disputes are also amicably administrative character of the MMDA.
settled;
Section 16 General Welfare Clause LGUs shall exercise powers
(5) Autonomous Regions refer to Article 10 of the expressly granted, those necessarily implied therefrom, as well as
those necessary, appropriate or incidental for efficient and
Constitution.
effective governance (i.e. promote health, safety, enhance
prosperity, improve morals of inhabitants) is the statutory grant
of police power to LGUs through their respective legislative
Note: Metropolitan Manila Development Authority is not a local bodies empowering them to enact ordinances and approve
government unit. The power delegated to MMDA is that given to resolutions and appropriate functions for the general welfare of
the Metro Manila Council to promulgate administrative rules and the LGU.
regulations in the
Note: Police power is an inherent attribute of sovereignty vested
Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000
in Congress to make, ordain and establish all manners of
wholesome and reasonable laws for the common good; it is
FACTS: Petitioner is a government agency tasked with delivery of plenary and its scope is vast and pervasive. However, by virtue of
basic services in Metro Manila. Respondent Bel-Air Village valid delegation, it may be exercised by LGUs. The latter being
Association, Inc. is a non-stock, non-profit corporation composed only agents can only exercise such powers as are conferred upon
of homeowners in Bel-Air Village, a private subdivision in Makati them by Congress.
City. Respondent had sought to enjoin Petitioners plan to
demolition the perimeter fence and open to public access Limits on LGUs police Power Neptune Street, a road (beside) privately/legally owned by the (1) Exercisable only within territorial limits of LGU
subdivision. The Court of Appeals, in reversing the dismissal of (2) Equal Protection Clause ( interest of public vs. those of a
Respondents complaint, ruled that Petitioner did not have the particular class requires exercise of such power)
authority to order the opening of the street in issue. Before the (3) Due Process Clause (reasonable means employed and not
SC, Petitioner asserted that, there was no need for an ordinance unduly oppressive case of Villavicencio vs. Lukban, GR No.
from the City of Manila to open Neptune Street to public because, 14639, March 25, 1919)
as an agent of the State, it was endowed with police power in the (4) Not contrary to the Constitution and the laws (It cannot
delivery of basic services in Metro Manila including traffic legalize prohibited act under the guise of regulation. Likewise, it
management (involving regulation of the use of thoroughfares to cannot prohibit legal activities but only regulate)
insure the safety, convenience and welfare of the general public).
Note: Under Section 16, LGU to ensure and support preservation
DECISION: Petition DENIED. It is beyond doubt that MMDA is not a and enrichment of culture, promote health and safety, enhance
local government unit or a public corporation endowed with peoples right to balance and healthful ecology, improve public
legislative power. It is not even a special metropolitan political morals, enhance economic prosperity and social justice,
subdivision as contemplated in Sec. 11, Art. X of the maintenance of peace and order.
Constitution. MMDAs powers are limited to formulation,
coordination,
regulation,
implementation,
preparation, Case: REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622,
management, monitoring, policy-setting, installation of a system 9/12/2002
and administration. There is no syllabus in RA7924 that grants
MMDA police power, let alone legislative power.
PD 1596 (The Environmental Impact Statement System) ensures
environmental protection and regulates certain government
Clearly then, the MMC under P.D. No. 824 is not the same entity activities affecting the environment. Related to PD 1151
as the MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has
5
the first place, and negate by mere ordinance the mandate of the
statute.
BALACUIT vs. CFI OF AGUSAN DEL NORTE 163 SCRA 182 Ordinance penalizing persons charging full payment for admission
of children ages (ages 7 to 12) in moviehouse was an invalid
exercise of the police power for being unreasonable and
oppressive on business of petitioners.
DE LA CRUZ vs. PARAS 123 SCRA 759 Ordinance of Bocaue, Case: HUMBERTO BASCO vs. PAGCOR, G.R. No. 91649, 5/14/1991
Bulacan prohibiting operation of nightclubs was declared invalid
because it was prohibitory and not merely regulatory in character. Under PD 1869, the Philippine Amusement and Gaming
Corporation (PAGCOR) was empowered to regulate and
Section 17, LGC Basic Services and Facilities LGU endeavor to centralized all games of chance authorized by existing franchise
be self-reliant and continue exercise powers and discharge their or permitted by law. Petitioners (as lawyers and taxpayers)
duties and functions currently vested upon them; also discharge challenging the constitutionality of PD1869, alleged that said law
functions and responsibilities of national agencies devlolved to waived Manila Citys right to impose taxes and license fees, which
them pursuant to the LGC; exercise such other powers and by law is recognized and thus, was an intrusion into LGUs right
discharge other functions as are necessary, appropriate or to impose local taxes and license fees in contravention of the
incidental to efficient and effective provision of basic services and constitutionally
enshrined
principle
of
local
autonomy.
facilities enumerate in Sec. 17. (see list of basic services and Specifically, the challenged is directed against Section 13 par. (2)
facilities)
of P.D. 1869 which exempts PAGCOR, as the franchise holder from
paying any "tax of any kind or form, income or otherwise, as well
Note: Public works and infrastructure projects and other facilities, as fees, charges or levies of whatever nature, whether National or
programs and services funded by national government under GAA Local", except for the 5% franchise tax due to the National
and other laws, not covered by Section 17 except where LGU is Government.
duly designated as the implementing agency for such
project/facilities/programs and services.
RULING: Petition DISMISSED. Section 5, Article X of the 1987
Constitution (on Local Autonomy) provides that each local
government unit shall have the power to create its own source of
Section 18 Power to Generate & Apply Resources restates and revenue and to levy taxes, fees, and other charges subject to
implements Section 5, 6 and 7 of Article 10 of the Constitution, such guidelines and limitation as the congress may provide,
but the power is subject to limitations imposed by Congress.
consistent with the basic policy on local autonomy. Such taxes,
-includes:
fees and charges shall accrue exclusively to the local
government." The power of local government to "impose taxes
1. Establishing an organization responsible for and fees" is always subject to "limitations" which Congress may
efficient and effective implementation of their provide by law. Since PD 1869 remains an "operative" law until
development plans, programs and objective and "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987
priorities;
Constitution), its "exemption clause" remains as an exception to
2. 2. Creating their own sources of revenue and to the exercise of the power of local governments to impose taxes
levy taxes, fees and charges which shall accrue and fees. It cannot therefore be violative but rather is consistent
exclusively to their own use and disposition and with the principle of local autonomy. Local governments have no
which shall be retained by them;
power to tax instrumentalities of the National Government.
3. Having a just share in national taxes which shall PAGCOR is a government owned or controlled corporation with an
be automatically and directly released to them original charter, PD 1869. All of its shares of stocks are owned by
without need of further action;
the National Government. In addition to its corporate powers
4. Having an equitable share in proceeds and from (Sec. 3, Title II, PD 1869) it also exercises regulatory powers, thus
utilization and development of national wealth PAGCOR has a dual role, to operate and to regulate gambling
and
resources
within
their
respective casinos. The latter role is governmental, which places it in the
jurisdictions including sharing the same with category of an agency or instrumentality of the Government.
inhabitants by way of direct benefits;
Being an instrumentality of the Government, PAGCOR should be
5. To acquire, develop, lease, encumber and and actually is exempt from local taxes. Otherwise, its operation
alienate or otherwise dispose of real or personal might be burdened, impeded or subjected to control by a mere
property held by them in their private capacity Local government. Otherwise, mere creatures of the State can
and apply their resources and assets for defeat National policies thru extermination of what local
productive, developmental or welfare purposes, authorities may perceive to be undesirable activates or enterprise
in exercise or furtherance of their governmental using the power to tax as "a tool for regulation"
or proprietary powers and functions and ensure
thereby their development as self-feliant Case: LUZ YAMANE vs. BA LEPANTO CONDOMINIUM CORP., G.R.
communities
and
active
participants
in No. 154993, 10/25/2005
attainment of national goals.
FACST: Respondent, a duly organized condomium corporation
holding title to the common and limited common areas of the BANOTE: Sections 128-383, Book II of LGC provides for detailed Lepanto Condominium, collected regular assessments from its
provisions on Local Taxation and Fiscal Matters.
members for operating expenses, capital expenditures on the
common areas, and other special assessments, pursuant to its
NOTE: Section 130, LGC (Fundamental Principles Governing Amended By-Laws.
Exercise of Power to Tax and Generate Revenues by LGUs):
Taxation shall be uniform in each LGU;
Without citing as basis any specific provision of the Revenue Code
Taxes, fees, charges and imposition shall be of Makati or the Local Government Code, Petitioner (City
equitable and based as far as practicable on Treasurer of Makati City) issued a notice of assessment holding
taxpayers ability to pay; levied only for a public Petitioner liable to pay business taxes, fees and charges totaling
purpose; not unjust, excessive, oppressive or P1,601,013.77 for the years 1995 to 1997. Petitioner reasoned
confiscatory; not contrary to law, public policy, that Respondent is engaged in a profit venture as the collection of
national economic policy or in restraint of trade;
dues from unit owners was primarily "to sustain and maintain the
Collection of taxes, fees, charges and other expenses of the common areas, giving full appreciative living
impositions shall in no case be let to any private values for the individual condominium occupants, generating
person;
better marketable prices for future sale of their units.
Revenue collection shall inure solely to the benefit
of, and be subject to the disposition by LGU unless Upon denial of its protest, Respondent filed an appeal with the
specifically provided herein; and
Regional Trial Court which appeal was dismissed. On review by
Each LGU shall, as far as practicable, evolve a the Court of Appeals, the latter reversed the trial courts decision
progressive system of taxation
and declared that the corporation was not liable to pay business
taxes to the City of Makati. Her motion for reconsideration denied,
NOTE: Section 305, LGC (Fundamental Principles Governing Petitioner filed a petition for review with the Supreme Court.
Financial Affairs, Transactions and Operations of LGU):
No money to be paid out of local treasury except in RULING: Petition DENIED. The power of local government units to
pursuance of an appropriation ordinance or law;
impose taxes within its territorial jurisdiction derives from the
Local government funds and monies shall be spent Constitution itself, which recognizes the power of these units "to
solely for public purposes;
create its own sources of revenue and to levy taxes, fees, and
8
Charter is the proof that MIAA is exempt from real estate tax.
MIAA petitioned the CA for prohibition and injunction, with prayer
for preliminary injunction or temporary restraining order seeking
to restrain the City of Paraaque from imposing real estate tax
on, levying against, and auctioning for public sale the Airport
Lands and Buildings, which petition however was dismissed for
having been filed beyond the 60-day reglementary period. Hence,
this petition for review.
RULING: Petition GRANTED. The Airport Lands and Buildings of
MIAA are EXEMPT from the real estate tax imposed by the City of
Paraaque. All the real estate tax assessments, including the final
notices of real estate tax delinquencies, issued by the City of
Paraaque on the Airport Lands and Buildings of the Manila
International Airport Authority, except for the portions that the
Manila International Airport Authority has leased to private
parties, are declared VOID.
As a rule, a government-owned or controlled corporation is not
exempt from real estate tax. However, MIAA is not a governmentowned or controlled corporation. A government-owned or
controlled corporation must be "organized as a stock or non-stock
corporation." MIAA is not organized as a stock or non-stock
corporation. MIAA is not a stock corporation because it has no
capital stock divided into shares, has no stockholders or voting
shares and its capital is not divided into shares of stock. Neither is
it a non-stock corporation because it has no members. A nonstock corporation must have members. Even if the Government is
considered as the sole member of MIAA, this will not make MIAA a
non-stock corporation because non-stock corporations cannot
distribute any part of their income to their members and in
MIAAs case, Section 11 of its Charter requires it to remit 20% of
its annual gross operating income to the National Treasury, thus,
preventing MIAA from qualifying as a non-stock corporation.
Further, non-stock corporations are organized for charitable,
religious, educational, professional, cultural, recreational,
fraternal, literary, scientific, social, civil service, or similar
purposes, like trade, industry, agriculture and like chambers.
MIAA is not organized for any of these purposes. MIAA, a public
utility, is organized to operate an international and domestic
airport for public use.
MIAA is a government instrumentality vested with corporate
powers to perform efficiently its governmental functions. MIAA is
like any other government instrumentality, the only difference is
that MIAA is vested with corporate powers. When the law vests in
a
government
instrumentality
corporate
powers,
the
instrumentality does not become a corporation, unless the
government instrumentality is organized as a stock or non-stock
corporation. Thus, MIAA exercises the governmental powers of
eminent domain, police authority and the levying of fees and
charges. At the same time, MIAA exercises "all the powers of a
corporation under the Corporation Law, insofar as these powers
are not inconsistent with the provisions of this Executive Order."
A government instrumentality like MIAA falls under Section 133(o)
of the Local Government Code, which states that, unless
otherwise provided by the Code, the exercise of the taxing
powers of provinces, cities, municipalities, and barangays shall
not extend to the levy of taxes, fees or charges of any kind on the
National Government, its agencies and instrumentalities and local
government units.
Section 133(o) recognizes the basic principle that local
governments cannot tax the national government, which
historically merely delegated to local governments the power to
tax. While the 1987 Constitution now includes taxation as one of
the powers of local governments, local governments may only
exercise such power "subject to such guidelines and limitations as
the Congress may provide."
dominion or not. Article 420 of the Civil Code defines property of municipal government allow, provide for additional allowances
public dominion as one "intended for public use."
and other benefits to judges, prosecutors, public elementary and
high school teachers, and other national government officials
As properties of public dominion, the airport properties are stationed in or assigned to the municipality;
outside the commerce of man. Properties of public dominion,
being for public use, are not subject to levy, encumbrance or The controversy actually centers on the seemingly sweeping
disposition through public or private sale. Any encumbrance, levy provision in NCC No. 67 which states that "no one shall be
on execution or auction sale of any property of public dominion is allowed to collect RATA from more than one source." Does this
void for being contrary to public policy. Essential public services mean that judges cannot receive allowances from LGUs in
will stop if properties of public dominion are subject to addition to the RATA from the Supreme Court? By no stretch of
encumbrances, foreclosures and auction sale. This will happen if the imagination can NCC No. 67 be construed as nullifying the
the City of Paraaque can foreclose and compel the auction sale power of LGUs to grant allowances to judges under the Local
of the 600-hectare runway of the MIAA for non-payment of real Government Code of 1991. It was issued primarily to make the
estate tax.
grant of RATA to national officials under the national budget
uniform. In other words, it applies only to the national funds
Case: SMART COMMUNICATIONS, INC. vs. CITY OF DAVAO, G.R. No. administered by the DBM, not the local funds of LGUs.
155491, 9/16/2008
To rule against the power of LGUs to grant allowances to judges
FACTS: The Tax Code of Davao City ISec. 1, Art. 10 thereof) as what respondent COA would like us to do will subvert the
provided that: Notwithstanding any exemption granted by any principle of local autonomy zealously guaranteed by the
law or other special law, there is hereby imposed a tax on Constitution. The Local Government Code of 1991 was specially
businesses enjoying a franchise, at a rate of seventy-five percent promulgated by Congress to ensure the autonomy of local
(75%) of one percent (1%) of the gross annual receipts for the governments as mandated by the Constitution. By upholding, in
preceding calendar year based on the income or receipts realized the present case, the power of LGUs to grant allowances to
within the territorial jurisdiction of Davao City.
judges and leaving to their discretion the amount of allowances
they may want to grant, depending on the availability of local
RULING: Smart is of the view that the only taxes it may be made funds, we ensure the genuine and meaningful local autonomy of
to bear under its franchise are the national franchise tax (now LGUs.
VAT), income tax, and real property tax. It claims exemption from
the local franchise tax because the in lieu of taxes clause in its
franchise does not distinguish between national and local taxes. Section 19,LGC LGUs Power of Eminent Domain LGU through
We pay heed that R.A. No. 7294 is not definite in granting its Chief Executive acting pursuant to an ordinance; for public use
exemption to Smart from local taxation. Section 9 of R.A. No. or purpose or welfare for the benefit of poor and landless; upon
7294 imposes on Smart a franchise tax equivalent to three payment of just compensation, pursuant to provisions of the
percent (3%) of all gross receipts of the business transacted Constitution and pertinent laws.
under the franchise and the said percentage shall be in lieu of all
taxes on the franchise or earnings thereof. R.A. No 7294 does not Conditions for Exercise of Power of Eminent Domain: (i) Prior valid
expressly provide what kind of taxes Smart is exempted from. It is and definite offer to owner which latter did not accept; (II) LGU
not clear whether the in lieu of all taxes provision in the may take immediate possession of property upon filing of
franchise of Smart would include exemption from local or national expropriation proceedings (Rule 67 of Rules of Court) and
taxation. What is clear is that Smart shall pay franchise tax payment of deposit of at least 15% of fair market value of
equivalent to three percent (3%) of all gross receipts of the property based on current tax declaration; amount to be paid for
business transacted under its franchise. But whether the expropriation shall be determined by proper court (reference to
franchise tax exemption would include exemption from exactions Commissioner) based on fair market value at the time of taking.
by both the local and the national government is not unequivocal.
- Eminent Domain inherent attribute of sovereignty to take
The uncertainty in the in lieu of all taxes clause in R.A. No. 7294 private property upon payment of just compensation.
on whether Smart is exempted from both local and national
franchise tax must be construed strictly against Smart which Case: MUN. OF PARANAQUE vs. V.M. REALTY CORP. 292 SCRA 678
claims the exemption. Smart has the burden of proving that,
aside from the imposed 3% franchise tax, Congress intended it to FACTS: A resolution passed by Municipal Council authorized Chief
be exempt from all kinds of franchise taxes whether local or Executive to exercise police power.
national. However, Smart failed in this regard.
RULING: LGC in effect when complaint for expropriation was filed,
Tax exemptions are never presumed and are strictly construed explicitly requires an ordinance for this purpose. If Congress
against the taxpayer and liberally in favor of the taxing authority. intended to allow LGU to exercise eminent domain through MERE
[22] They can only be given force when the grant is clear and resolution, it would have simply adopted the language of the
categorical. The surrender of the power to tax, when claimed, previous local government code (BP 337 of 1983). Where the law
must be clearly shown by a language that will admit of no is clear and ambiguous, the law is applied according to the
reasonable construction consistent with the reservation of the express terms. Eminent Domain necessarily involves a derogation
power. If the intention of the legislature is open to doubt, then the of a fundamental or private right of the people, hence, manifest
intention of the legislature must be resolved in favor of the State. change in legislative language from resolution under BP337 to
ordinance under RA7160 demands strict interpretation.
In this case, the doubt must be resolved in favor of the City of Petitioner relies on Art. 36 of Rule VI of the Implementing Rules
Davao. The in lieu of all taxes clause applies only to national which requires only a resolution to authorize the LGU to
internal revenue taxes and not to local taxes.
exercise eminent domain. This is clearly misplaced. Section 19 of
the LGC, the law itself, surely prevails over said rule which merely
[T]he "in lieu of all taxes" clause in Smart's franchise refers only seeks to implement it. The clear letter of the law is controlling
to taxes, other than income tax, imposed under the National and cannot be amended by mere administrative rule issued for its
Internal Revenue Code. The "in lieu of all taxes" clause does not implementation.
apply to local taxes. The clear intent is for the "in lieu of all taxes"
clause to apply only to taxes under the National Internal Revenue Note: Resolution is a mere declaration of sentiment/opinion of
Code and not to local taxes. Even with respect to national internal lawmaking body on a specific matter; it is temporary in nature;
revenue taxes, the "in lieu of all taxes" clause does not apply to third reading not necessary unless decided otherwise by majority
income tax.
of all sangguniang members. Ordinance on the otherhand, is law
and is of general and permanent character and requires 3
Case: JUDGE TOMAS C. LEYNES vs. COA, G.R. No. 143596, readings.
12/11/2003
Case: AMOS FRANCIA, vs. MUN. OF MEYCAUAYAN, G.R. No.
FACT: Petitioner was formerly receiving a P1600-monthly 170432, 3/24/2008
allowance from the Municipality of Naujan while he was stationed
there as judge of the municipal trial court. Respondent FACTS: Respondent filed a complaint to expropriate Petitioners
Commission on Audit (upholding the Regional Director and 16,256 sq. m. idle property which it planned to use as a common
Provincial Auditor) disallowed said allowance citing that the latter public terminal for all types of public utility vehicles with a
along with Petitioners RATA from the Supreme Court violated weighing scale for heavy trucks. In their answer, Petitioners
certain budget circulars (NCC#67) that no one shall be allowed to averred that the subject land was developed contrary to
collect RATA from more than one source.
Respondents claim of being raw land, for which reason,
Respondents offer price of 333,500 (or P111.99 per square
RULING: On October 10, 1991, Congress enacted RA 7160, (Local meter) was too low. Petitioners essentially aver that the CA erred
Government Code of 1991). The power of the LGUs to grant in upholding the RTC's order that, in expropriation cases, prior
allowances and other benefits to judges and other national determination of the existence of a public purpose was not
officials stationed in their respective territories was expressly necessary for the issuance of a writ of possession.
provided in Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi)
of the Code. Section 447(a)(1)(xi) of RA 7160, the Local RULING: Petitioner DENIED. Sec. 19, LGC provides that, a LGU
Government Code of 1991, provides: When the finances of the may, through its chief executive and acting pursuant to an
10
thus withdrawn from public servitude for any purpose for which
other real property belonging to the City may be lawfully used or Case: MUNICIPALITY OF PILILIA vs. CA 233 SCRA 484
conveyed.
Municipality cannot be represented by a private lawyer. Only
provincial fiscal or municipal attorney can represent a province or
In the case of Favis vs. City of Baguio, the Court upholding the municipality in lawsuits. This is mandatory. The municipalitys
power of the city council to close city streets and to vacate or authority to employ a private lawyer is limited to situations where
withdraw the same from public use was similarly assailed, the provincial fiscal is disqualified to present it which
declared that the city council is the authority competent to disqualification must appear on record. Fiscals refusal to
determine whether or not a certain property is still necessary for represent the municipality is not legal justification for employing
public use. This power to vacate a street or alley is discretionary, the services of private counsel, Municipality should request the
and will not ordinarily be controlled or interfered with by the Secretary of Justice to appoint an acting provincial fiscal in place
courts, absent a plain case of abuse or fraud or collusion. of the one who declined to handle it.
Faithfulness to the public trust will be presumed.
Case: RAMOS vs. CA 269 SCRA 34 Petitioners Ramos and Baliuag
Since that portion of the city street subject of petitioner's Market Vendors Association filed a petition to declare certain
application for registration of title was withdrawn from public use, ordinances illegal. In said suit, Petitioners challenged the
it follows that such withdrawn portion becomes patrimonial appearance of a private lawyer for the municipality. SC held, Only
property which can be the object of an ordinary contract provincial fiscal, under (Sec. 1683 of Revised Admin Code)
consisting with Article 422 of the Civil Code (that property of provincial attorney or municipal attorney may validly represent
public dominion, when no longer intended for public use or for the municipality. The legality of the representation of an
public service, shall form part of the patrimonial property of the unauthorized counsel may be raised at any stage of the
State).
proceedings.
Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000
sanggunian negotiate and secure in order to support the basic fails or neglects to perform their duties, the former may take such
services or facilities enumerated in Sec. 17.
steps/action as prescribed by law to make them perform their
duties. Supervision does not mean control. Control includes the
- No need of securing clearance/approval for grant/donation from power to alter/modify/set aside acts of a subordinate officer.
any department, agency or office of the national government or
from any higher LGU.
Note: National agencies/offices with project implementation
function shall coordinate with each other and with LGU concerned
- Projects financed by such grants/assistance with national in the discharge of these functions to ensure participation of LGU
security implications shall be approved by the national agency both in the planning and implementation of said national projects.
concerned. Failure of such agency to act on request within 30
days from receipt thereof, it is deemed approved.
Note: National agencies may be directed by the President, upon
LGUs request, to provide financial, technical or other forms of
- Local Chief shall, within 30 days, upon signing of such grant, assistance to LGU without extra cost to LGU.
agreement or deed of donation, report the nature, amount, terms
of such assistance to both Houses of Congress and the President. Note: National agencies (including GOCCs) with field
offices/branches in province/city/municipality to furnish local chief
Section 24, LGC Municipal Liability Rule: LGU and their officials executive concerned, for his information and guidance, monthly
are not exempt from liability for death or injury to reports including duly certified budgetary allocations and
persons/damage to property.
expenditures.
Damages in legal contemplation refers to the sum of money
which law awards or imposes as pecuniary compensation,
recompense or satisfaction for an injury done or a wrong
sustained as a consequence either of a breach of contractual
obligation or a tortuous act. It includes all kinds of damages
contemplated in the Civil Code; it is awarded to one as a
vindication of the wrongful invasion of his rights.
National
agency/GOCC
(in
planning/implementation) of a project/program have DUTY TO
INTERGOVERNMENTAL RELATIONS
CONSULT LGU on objectives/goals, impact to the people in terms
of
environmental/ecological
balance
and
measures
to
as a body political and corporate (to serve its constituents)
prevent/minimize adverse effects.
NATIONAL GOVERNMENT LGU RELATIONS: