G.R. No.

L-22766 August 30, 1968

SURIGAO ELECTRIC, CO., INC. and ARTURO LUMANLAN, SR., petitioners,

vs.
MUNICIPALITY OF SURIGAO and HON. PUBLIC SERVICE COMMISSION, respondents.

David G. Nitafan for petitioners.

Provincial Fiscal Bernardo Ll. Salas for respondent Municipality of Surigao.
Office of the Solicitor General for respondent Public Service Commission.

FERNANDO, J.:

On June 18, 1960, Congress further amended the Public Service Act, one of the changes introduced
doing away with the requirement of a certificate of public convenience and necessity from the Public
Service Commission for "public services owned or operated by government entities or government-
owned or controlled corporations," but at the same time affirming its power of regulation,1 more
specifically as set forth in the next section of the law, which while exempting public services owned or
operated by any instrumentality of the government or any government-owned or controlled corporations
from its supervision, jurisdiction and control stops short of including "the fixing of rates."2

In this petition for review, a case of first impression, petitioner Surigao Electric Co., Inc., a legislative
franchise holder, and petitioner Arturo Lumanlan to whom, on February 16, 1962, the rights and
privileges of the former as well as its plant and facilities were transferred, challenge the validity of the
order of respondent Public Service Commission, dated July 11, 1963, wherein it held that it had "no other
alternative but to approve as [it did approve] the tentative schedule of rates submitted by the applicant,"
the other respondent herein, the Municipality of Surigao.3

In the above order, the issue, according to respondent Commission, "boils down to whether or not a
municipal government can directly maintain and operate an electric plant without obtaining a specific
franchise for the purpose and without a certificate of public convenience and necessity duly issued by
the Public Service Commission."4 Citing the above amendments introduced by Republic Act No. 2677,
respondent Commission answered the question thus: "A municipal government or a municipal
corporation such as the Municipality of Surigao is a government entity recognized, supported and utilized
by the National Government as a part of its government machinery and functions; a municipal
government actually functions as an extension of the national government and, therefore, it is
an instrumentality of the latter; and by express provisions of Section 14(e) of Act 2677, an instrumentality
of the national government is exempted from the jurisdiction of the PSC except with respect to the fixing
of rates. This exemption is even clearer in Section 13(a)." 5

The above formulation of respondent Commission could be worded differently. There is need for greater
precision as well as further elaboration. Its conclusion, however, can stand the test of scrutiny. We
sustain the Public Service Commission.

The question involved is one of statutory interpretation. We have to ascertain the intent of Congress in
introducing the above amendments, more specifically, in eliminating the requirement of the certificate of
public convenience and necessity being obtained by government entities, or by government-owned or
controlled corporations operating public services. Here, the Municipality of Surigao is not a government-
owned or controlled corporation. It cannot be said, however, that it is not a government entity.

As early as 1916, in Mendoza v. de Leon,6 there has been a recognition by this Court of the dual
character of a municipal corporation, one as governmental, being a branch of the general administration
of the state, and the other as quasi-private and corporate. A well-known authority, Dillon, was referred to
by us to stress the undeniable fact that "legislative and governmental powers" are "conferred upon a
municipality, the better to enable it to aid a state in properly governing that portion of its people residing
within its municipality, such powers [being] in their nature public, ..."7 As was emphasized by us in the
Mendoza decision: "Governmental affairs do not lose their governmental character by being delegated to
the municipal governments. Nor does the fact that such duties are performed by officers of the
municipality which, for convenience, the state allows the municipality to select, change their character.
To preserve the peace, protect the morals and health of the community and so on is to administer
government, whether it be done by the central government itself or is shifted to a local organization."8

It would, therefore, be to erode the term "government entities" of its meaning if we are to reverse the
Public Service Commission and to hold that a municipality is to be considered outside its scope. It may
be admitted that there would be no ambiguity at all had the term "municipal corporations" been
employed. Our function, however, is to put meaning to legislative words, not to denude them of their
contents. They may be at times, as Cohen pointed out, frail vessels in which to embark legislative hopes,
but we do not, just because of that, allow them to disappear perpetually from sight to find eternal slumber
in the deep. It would be far from manifesting fidelity to the judicial task of construing statutes if we were
to consider the order under review as a failure to abide by what the law commands.

The above construction gives significance to every word of the statute. It makes the entire scheme
harmonious. Moreover, the conclusion to which we are thus led is reinforced by a manifestation of public
policy as expressed in a legislative act of well-nigh contemporaneous vintage. We refer to the Local
Autonomy Act,9 approved a year earlier. It would be to impute to Congress a desire not to extend further
but to cut short what the year before it considered a laudatory scheme to enlarge the scope of municipal
power, if the amendatory act now under scrutiny were to be so restrictively construed. Municipal
corporations should not be excluded from the operation thereof.

There would be no warrant for such a view. Logic and common sense would be affronted by such a
conclusion, let alone the sense of esteem which under the theory of separation of powers is owed a
coordinate branch. Again, this is one instance where assuming the ambiguity of the words employed in a
statute, its overriding principle, to paraphrase Holmes, fixes the reach of statutory language.

With the view we thus take of the amendatory statute, the errors assigned by petitioner, which would
seek to fasten, mistakenly to our mind, an unwarranted restriction to the amendatory language of
Republic Act No. 2677, need not be passed upon.

An alleged error imputed to respondent Commission, however, needs further discussion. Petitioners
seek refuge in the legislative franchise granted them. 10 Whatever privilege may be claimed by petitioners
cannot override the specific constitutional restriction that no franchise or right shall be granted to any
individual or corporation except under a condition that it shall be subject to amendment, alteration or
repeal by Congress. 11 Such amendment or alteration need not be express; it may be implied from a
latter act of general applicability, such as the one now under consideration.

Moreover, under a well-settled principle of American origin, one which upon the establishment of the
Philippine Government under American tutelage was adopted here and continued under our
Constitution, no such franchise or right can be availed of to defeat the proper exercise of the police
power. An early expression of this view is found in the leading American case of Charles River Bridge v.
Warren Bridge, 12 an 1837 decision, the opinion being penned by Chief Justice Taney: "The continued
existence of a government would be of no great value, if by implications and presumptions it was
disarmed of the powers necessary to accomplish the ends of its creation; and the functions it was
designed to perform, transferred to the hands of privileged Corporations. .. While the rights of private
property are sacredly guarded, we must not forget that the community also have rights, and that the
happiness and well-being of every citizen depend on their faithful preservation." 13

Reference by petitioners to the statute providing the procedure for the taking over and operation by the
government of public utilities, 14 in their view "to further strengthen [their] contention", as to the
commission of this alleged error is unavailing, even if such statute were applicable, which it is not. In the
language of their own brief: "This Act provides for the procedure to be followed whenever the
Government or any political subdivision thereof decides to acquire and operate a public utility owned and
operated by any individual or private corporation." 15 What is to be regulated, therefore, by this enactment
is the exercise of eminent domain, which is a taking of private property for public use upon the payment
of just compensation. There is here no taking. There is here no appropriation. What was owned before
by petitioners continue to remain theirs. There is to be no transfer of ownership.

Rather, a municipal corporation, by virtue of Commonwealth Act No. 2677, may further promote
community welfare by itself engaging in supplying public services, without the need of a certificate of
public convenience. If at all then, the exercise of this governmental prerogative comes within the broad,
well-nigh, undefined scope of the police power. It is not here, of course, the ordinary case of restraint on
property or liberty, by the imposition of a regulation. What the amendatory act in effect accomplishes is to
lend encouragement and support for the municipal corporation itself undertaking an activity as a result of
which, profits of a competing private firm would be adversely affected.

Clearly, then, the relevancy of the statute providing for the taking or operation of the government of
public utilities, appears, to put it at its mildest, far from clear. Petitioners' contention as to this alleged
error being committed, therefore, far from being strengthened by such a reference, suffers from a fate
less auspicious.

No other alleged error committed need be considered.

WHEREFORE, the order of respondent Public Service Commission of July 11, 1963, as well as the order
of February 7, 1964, denying the motion for reconsideration, are affirmed. Costs against petitioners.
vG.R. No. 71159 November 15, 1989

CITY OF MANILA, and EVANGELINE SUVA, petitioners,

vs.
HON. INTERMEDIATE APPELLATE COURT, IRENE STO. DOMINGO and for and in behalf of
her minor children, VIVENCIO, JR., IRIS, VERGEL and IMELDA, all surnamed STO.
DOMINGO, respondents.

PARAS, J.:

This is a petition for review on certiorari seeking to reverse and set aside: (a) the Decision of the
Intermediate Appellate Court now Court of Appeals 1 promulgated on May 31, 1984 in AC-G.R. CV
No. 00613-R entitled Irene Sto. Domingo et al., v. City Court of Manila et al., modifying the decision
of the then Court of First Instance of Manila, Branch VIII 2 in Civil Case No. 121921 ordering the
defendants (herein petitioners,) to give plaintiffs (herein private respondents) the right to use a burial
lot in the North Cemetery corresponding to the unexpired term of the fully paid lease sued upon, to
search the remains of the late Vivencio Sto. Domingo, Sr. and to bury the same in a substitute lot to
be chosen by the plaintiffs; and (b) the Resolution of the Court of Appeals dated May 28, 1985
denying petitioner's motion for reconsideration.

As found by the Court of Appeals and the trial court, the undisputed facts of the case are as follows:

Brought on February 22, 1979 by the widow and children of the late Vivencio Sto.
Domingo, Sr. was this action for damages against the City of Manila; Evangeline
Suva of the City Health Office; Sergio Mallari, officer-in-charge of the North
Cemetery; and Joseph Helmuth, the latter's predecessor as officer-in-charge of the
said burial grounds owned and operated by the City Government of Manila.

Vivencio Sto. Domingo, Sr. deceased husband of plaintiff Irene Sto. Domingo and
father of the litigating minors, died on June 4,1971 and buried on June 6,1971 in Lot
No. 159, Block No. 194 of the North Cemetery which lot was leased by the city to
Irene Sto. Domingo for the period from June 6, 1971 to June 6, 2021 per Official
Receipt No. 61307 dated June 6, 1971 (see Exh. A) with an expiry date of June 6,
2021 (see Exh. A-1). Full payment of the rental therefor of P50.00 is evidenced by
the said receipt which appears to be regular on its face. Apart from the
aforementioned receipt, no other document was executed to embody such lease over
the burial lot in question. In fact, the burial record for Block No. 194 of Manila North
Cemetery (see Exh. 2) in which subject Lot No. 159 is situated does not reflect the
term of duration of the lease thereover in favor of the Sto. Domingos.

Believing in good faith that, in accordance with Administrative Order No. 5, Series of
1975, dated March 6, 1975, of the City Mayor of Manila (See Exh. 1) prescribing
uniform procedure and guidelines in the processing of documents pertaining to and
for the use and disposition of burial lots and plots within the North Cemetery, etc.,
subject Lot No. 159 of Block 194 in which the mortal remains of the late Vivencio Sto.
Domingo were laid to rest, was leased to the bereaved family for five (5) years only,
subject lot was certified on January 25, 1978 as ready for exhumation.

On the basis of such certification, the authorities of the North Cemetery then headed
by defendant Joseph Helmuth authorized the exhumation and removal from subject
burial lot the remains of the late Vivencio Sto. Domingo, Sr., placed the bones and
skull in a bag or sack and kept the same in the depository or bodega of the cemetery
y Subsequently, the same lot in question was rented out to another lessee so that
when the plaintiffs herein went to said lot on All Souls Day in their shock,
 consternation and dismay, that the resting place of their dear departed did not
anymore bear the stone marker which they lovingly placed on the tomb. Indignant
and disgusted over such a sorrowful finding, Irene Sto. Domingo lost no time in
inquiring from the officer-in-charge of the North Cemetery, defendant Sergio Mallari,
and was told that the remains of her late husband had been taken from the burial lot
in question which was given to another lessee.

Irene Sto. Domingo was also informed that she can look for the bones of her
deceased husband in the warehouse of the cemetery where the exhumed remains
from the different burial lots of the North Cemetery are being kept until they are
retrieved by interested parties. But to the bereaved widow, what she was advised to
do was simply unacceptable. According to her, it was just impossible to locate the
remains of her late husband in a depository containing thousands upon thousands of
sacks of human bones. She did not want to run the risk of claiming for the wrong set
of bones. She was even offered another lot but was never appeased. She was too
aggrieved that she came to court for relief even before she could formally present her
claims and demands to the city government and to the other defendants named in
the present complaint. (Decision, Court of Appeals, pp. 2-3; Rollo, pp. 34-55)

The trial court, on August 4, 1981, rendered its Decision, the dispositive portion of which states:

WHEREFORE, judgment is hereby rendered, ordering the defendants to give

plaintiffs the right to make use of another single lot within the North Cemetery for a
period of forty-three (43) years four (4) months and eleven (11) days, corresponding
to the unexpired term of the fully paid lease sued upon; and to search without let up
and with the use of all means humanly possible, for the remains of the late Vivencio
Sto. Domingo, Sr. and thereafter, to bury the same in the substitute lot to be chosen
by the plaintiffs pursuant to this decision.

For want of merit, defendant's counterclaim is DISMISSED.

No pronouncement as to costs.

SO ORDERED. (Rollo, p. 31)

The decision was appealed to the Court of Appeals which on May 31, 1984 rendered a decision
(Rollo, pp. 33-40) modifying the decision appealed from, the dispositive portion of which reads:

WHEREFORE, PREMISES CONSIDERED, the decision appealed from is hereby

REVERSED (is hereby modified) and another one is hereby entered:

1. Requiring in full force the defendants to look in earnest for the bones and skull of
the late Vivencio Sto. Domingo, Sr., and to bury the same in the substitute lot
adjudged in favor of plaintiffs hereunder;

2. Ordering defendants to pay plaintiffs-appellants jointly and severally P10,000.00

for breach of contract;

3. Ordering defendants to pay plaintiffs-appellants, jointly and severally, P20,000.00

for moral damages;

4. Ordering defendants to pay plaintiffs-appellants jointly and severally, P20,000.00

for exemplary damages;
 5. Ordering defendants to pay plaintiffs-appellants, jointly and severally, P10,000.00
as and for attorney's fees;

6. Ordering defendants, to pay plaintiffs-appellants, jointly and severally, on the

foregoing amounts legal rate of interest computed from filing hereof until fully paid;
and

7. Ordering defendants, to pay plaintiffs-appellants, jointly and severally, the cost of

suit.

SO ORDERED. (Rollo, p. 40)

The petitioners' motion for reconsideration was likewise denied.

Hence, this instant petition (Rollo, pp. 7-27) filed on July 27, 1985.

The grounds relied upon for this petition are as follows:

THE HONORABLE INTERMEDIATE APPELLATE COURT ERRED IN AWARDING

DAMAGES AGAINST THE PETITIONERS HEREIN, NOTWITHSTANDING THEIR
GOOD FAITH AND THEIR LACK OF KNOWLEDGE OR CONSENT TO THE
REMOVAL OF THE SKELETAL REMAINS OF THE LATE VIVENCIO STO.
DOMINGO, SR. FROM THE SUBJECT BURIAL LOT.

II

THE HON. INTERMEDIATE APPELLATE COURT ERRED IN HOLDING

PETITIONERS HEREIN RESPONSIBLE FOR THE ALLEGED TORTS OF THEIR
SUBORDINATE OFFICIALS AND EMPLOYEES, INSPITE OF THE PROVISIONS
OF SECTION 4 OF THE REPUBLIC ACT NO. 409 (REVISED CHARTER OF
MANILA) AND OTHER APPLICABLE JURISPRUDENCE ON THE SUBJECT
EXEMPTING THE PETITIONERS FROM DAMAGES FROM THE MALFEASANCE
OR MISFEASANCE OF THEIR OFFICIALS AND EMPLOYEES, IF THERE BE ANY
IN THIS CASE. (Brief for Petitioners, Rollo, pp. 93-94)

In the resolution dated November 13, 1985 (,Rollo, p. 84), the petition was given due course.

The pivotal issue of this case is whether or not the operations and functions of a public cemetery are
a governmental, or a corporate or proprietary function of the City of Manila. The resolution of this
issue is essential to the determination of the liability for damages of the petitioner city.

Petitioners alleged in their petition that the North Cemetery is exclusively devoted for public use or
purpose as stated in Sec. 316 of the Compilation of the Ordinances of the City of Manila. They
conclude that since the City is a political subdivision in the performance of its governmental function,
it is immune from tort liability which may be caused by its public officers and subordinate
employees. Further Section 4, Article I of the Revised Charter of Manila exempts the city from
liability for damages or injuries to persons or property arising from the failure of the Mayor, the
Municipal Board, or any other city officer, to enforce the provision of its charter or any other laws, or
ordinance, or from negligence of said Mayor, Municipal Board or any other officers while enforcing
or attempting to enforce said provisions. They allege that the Revised Charter of Manila being a
special law cannot be defeated by the Human Relations provisions of the Civil Code being a general
law.

Private respondents on the other hand maintain that the City of Manila entered into a contract of
lease which involve the exercise of proprietary functions with private respondent Irene Sto.
Domingo. The city and its officers therefore can be sued for any-violation of the contract of lease.

Private respondents' contention is well-taken.

Under Philippine laws, the City of Manila is a political body corporate and as such endowed with the
faculties of municipal corporations to be exercised by and through its city government in conformity
with law, and in its proper corporate name. It may sue and be sued, and contract and be contracted
with. Its powers are twofold in character-public, governmental or political on the one hand, and
corporate, private and proprietary on the other. Governmental powers are those exercised in
administering the powers of the state and promoting the public welfare and they include the
legislative, judicial, public and political. Municipal powers on the one hand are exercised for the
special benefit and advantage of the community and include those which are ministerial, private and
corporate. In McQuillin on Municipal Corporation, the rule is stated thus: "A municipal corporation
proper has ... a public character as regards the state at large insofar as it is its agent in government,
and private (so called) insofar as it is to promote local necessities and conveniences for its own
community (Torio v. Fontanilla, 85 SCRA 599 [1978]). In connection with the powers of a municipal
corporation, it may acquire property in its public or governmental capacity, and private or proprietary
capacity. The New Civil Code divides such properties into property for public use and patrimonial
properties (Article 423), and further enumerates the properties for public use as provincial roads,
city streets, municipal streets, the squares, fountains, public waters, promenades, and public works
for public service paid for by said provisions, cities or municipalities, all other property is patrimonial
without prejudice to the provisions of special laws (Article 424; Province of Zamboanga del Norte v.
City of Zamboanga, et al., 22 SCRA 1334 [1968]).

Thus in Torio v. Fontanilla, supra, the Court declared that with respect to proprietary functions the
settled rule is that a municipal corporation can be held liable to third persons ex
contractu (Municipality of Moncada v. Cajuigan, et al., 21 Phil. 184 (1912) or ex delicto (Mendoza v.
de Leon, 33 Phil. 508 (1916).

The Court further stressed:

Municipal corporations are subject to be sued upon contracts and in tort....

xxx xxx xxx

The rule of law is a general one, that the superior or employer must answer civilly for
the negligence or want of skill of its agent or servant in the course or line of his
employment, by which another who is free from contributory fault, is injured.
Municipal corporations under the conditions herein stated, fall within tile operation of
this rule of law, and are liable accordingly, to civil actions for damages when the
requisite elements of liability co-exist. ... (Emphasis supplied)

The Court added:

... while the following are corporate or proprietary in character, viz: municipal
waterworks, slaughter houses, markets, stables, bathing establishments, wharves,
ferries and fisheries. Maintenance of parks, golf courses, cemeteries and airports
among others, are also recognized as municipal or city activities of a proprietary
 character. (Dept. of Treasury v. City of Evansvulle, Sup. Ct. of Indiana, 60 N.E. 2nd
952, 954 cited in Torio v. Fontanilla, supra) (Emphasis supplied)

Under the foregoing considerations and in the absence of a special law, the North Cemetery is a
patrimonial property of the City of Manila which was created by resolution of the Municipal Board of
August 27, 1903 and January 7, 1904 (Petition, Rollo pp. 20-21 Compilation of the Ordinances of
the City of Manila). The administration and government of the cemetery are under the City Health
Officer (Ibid., Sec. 3189), the order and police of the cemetery (Ibid., See. 319), the opening of
graves, niches, or tombs, the exhuming of remains, and the purification of the same (Ibid., Sec. 327)
are under the charge and responsibility of the superintendent of the cemetery. The City of Manila
furthermore prescribes the procedure and guidelines for the use and dispositions of burial lots and
plots within the North Cemetery through Administrative Order No. 5, s. 1975 (Rollo, p. 44). With the
acts of dominion, there is, therefore no doubt that the North Cemetery is within the class of property
which the City of Manila owns in its proprietary or private character. Furthermore, there is no dispute
that the burial lot was leased in favor of the private respondents. Hence, obligations arising from
contracts have the force of law between the contracting parties. Thus a lease contract executed by
the lessor and lessee remains as the law between them. (Henson v. Intermediate Appellate Court,
148 SCRA 11 [1 987]). Therefore, a breach of contractual provision entitles the other party to
damages even if no penalty for such breach is prescribed in the contract. (Boysaw v. Interphil
Promotions, Inc., 148 SCRA 635 [1987]).

Noteworthy are the findings of the Court of Appeals as to the harrowing experience of private
respondents and their wounded feelings upon discovery that the remains of their loved one were
exhumed without their knowledge and consent, as said Court declared:

It has been fully established that the appellants, in spite or perhaps because, of their
lowly station in life have found great consolation in their bereavement from the loss of
their family head, by visiting his grave on special or even ordinary occasions, but
particularly on All Saints Day, in keeping with the deep, beautiful and Catholic Filipino
tradition of revering the memory of their dead. It would have been but fair and
equitable that they were notified of the intention of the city government to transfer the
skeletal remains of the late Vivencio Sto. Domingo to give them an opportunity to
demand the faithful fulfillment of their contract, or at least to prepare and make
provisions for said transfer in order that they would not lose track of the remains of
their beloved dead, as what has actually happened on this case. We understand fully
what the family of the deceased must have felt when on All Saints Day of 1978, they
found a new marker on the grave they were to visit, only to be told to locate their
beloved dead among thousands of skeletal remains which to them was desecration
and an impossible task. Even the lower court recognized this when it stated in its
decision thus:

All things considered, even as the Court commiserates with plaintiffs

for the unfortunate happening complained of and untimely desecration
of the resting place and remains of their deceased dearly beloved, it
finds the reliefs prayed for by them lacking in legal and factual basis.
Under the aforementioned facts and circumstances, the most that
plaintiffs ran ask for is the replacement of subject lot with another lot of
equal size and similar location in the North Cemetery which substitute
lot plaintiffs can make use of without paying any rental to the city
government for a period of forty-three (43) years, four (4) months and
eleven (11) days corresponding to the unexpired portion of the term of
the lease sued upon as of January 25, 1978 when the remains of the
late Vivencio Sto. Domingo, Sr. were prematurely removed from the
disputed lot; and to require the defendants to look in earnest for the
 bones and skull of the late Vivencio Sto. Domingo Sr. and to bury the
same in the substitute lot adjudged in favor of plaintiffs hereunder.
(Decision, Intermediate Appellate Court, p. 7, Rollo, p. 39)

As regards the issue of the validity of the contract of lease of grave lot No. 159, Block No. 195 of the
North Cemetery for 50 years beginning from June 6, 1971 to June 6, 2021 as clearly stated in the
receipt duly signed by the deputy treasurer of the City of Manila and sealed by the city government,
there is nothing in the record that justifies the reversal of the conclusion of both the trial court and
the Intermediate Appellate Court to the effect that the receipt is in itself a contract of lease.
(Decision, Intermediate Appellate Court, p. 3, Rollo, pp. 5-6).

Under the doctrine of respondent superior, (Torio v. Fontanilla, supra), petitioner City of Manila is
liable for the tortious act committed by its agents who failed to verify and check the duration of the
contract of lease. The contention of the petitioner-city that the lease is covered by Administrative
Order No. 5, series of 1975 dated March 6, 1975 of the City of Manila for five (5) years only
beginning from June 6, 1971 is not meritorious for the said administrative order covers new leases.
When subject lot was certified on January 25, 1978 as ready for exhumation, the lease contract for
fifty (50) years was still in full force and effect.

PREMISES CONSIDERED, the Decision of the Intermediate Appellate Court is hereby AFFIRMED.

SO ORDERED.
G.R. No. L-29993 October 23, 1978

LAUDENCIO TORIO, GUILLERMO EVANGELISTA, MANUEL DE GUZMAN, ALFONSO R.

MAGSANOC, JESUS MACARANAS, MAXIMO MANANGAN, FIDEL MONTEMAYOR, MELCHOR
VIRAY, RAMON TULAGAN, all Members of the Municipal Council of Malasiqui in 1959,
Malasiqui, Pangasinan, petitioners,
vs.
ROSALINA, ANGELINA, LEONARDO, EDUARDO, ARTEMIO, ANGELITA, ANITA, ERNESTO,
NORMA, VIRGINIA, REMEDIOS and ROBERTO, all surnamed FONTANILLA, and THE
HONORABLE COURT OF APPEALS, respondents.

G.R. No. L-30183 October 23, 1978

MUNICIPALITY OF MALASIQUI, petitioner,

vs.
ROSALINA, ANGELINA, LEONARDO, EDUARDO, ARTEMIO, ANGELITA, ANITA, ERNESTO,
NORMA, VIRGINIA, REMEDIOS and ROBERTO, all surnamed FONTANILLA, and the
Honorable COURT OF APPEALS, respondents.

MUOZ PALMA, J.:

These Petitions for review present the issue of whether or not the celebration of a town fiesta
authorized by a municipal council under Sec. 2282 of the Municipal Law as embodied in the
Revised Administrative Code is a governmental or a corporate or proprietary function of the
municipality.

A resolution of that issue will lead to another, viz the civil liability for damages of the Municipality of
Malasiqui, and the members of the Municipal Council of Malasiqui, province of Pangasinan, for a
death which occurred during the celebration of the town fiesta on January 22, 1959, and which was
attributed to the negligence of the municipality and its council members.

The following facts are not in dispute:

On October 21, 1958, the Municipal Council of Malasiqui, Pangasinan, passed Resolution No. 159
whereby "it resolved to manage the 1959 Malasiqui town fiesta celebration on January 21, 22, and
23, 1959." Resolution No. 182 was also passed creating the "1959 Malasiqui 'Town Fiesta
Executive Committee" which in turn organized a sub-committee on entertainment and stage, with
Jose Macaraeg as Chairman. the council appropriated the amount of P100.00 for the construction of
2 stages, one for the "zarzuela" and another for the cancionan Jose Macaraeg supervised the
construction of the stage and as constructed the stage for the "zarzuela" was "5- meters by 8
meters in size, had a wooden floor high at the rear and was supported by 24 bamboo posts 4 in a
row in front, 4 in the rear and 5 on each side with bamboo braces." 1

The "zarzuela" entitled "Midas Extravaganza" was donated by an association of Malasiqui

employees of the Manila Railroad Company in Caloocan, Rizal. The troupe arrived in the evening of
January 22 for the performance and one of the members of the group was Vicente Fontanilla. The
program started at about 10:15 o'clock that evening with some speeches, and many persons went
up the stage. The "zarzuela" then began but before the dramatic part of the play was reached, the
stage collapsed and Vicente Fontanilla who was at the rear of the stage was pinned underneath.
Fontanilia was taken to tile San Carlos General Hospital where he died in the afternoon of the
following day.

The heirs of Vicente Fontanilia filed a complaint with the Court of First Instance of Manila on
September 11, 1959 to recover damages. Named party-defendants were the Municipality of
Malasiqui, the Municipal Council of Malasiqui and all the individual members of the Municipal
Council in 1959.

Answering the complaint defendant municipality invoked inter alia the principal defense that as a
legally and duly organized public corporation it performs sovereign functions and the holding of a
town fiesta was an exercise of its governmental functions from which no liability can arise to answer
for the negligence of any of its agents.

The defendant councilors inturn maintained that they merely acted as agents of the municipality in
carrying out the municipal ordinance providing for the management of the town fiesta celebration
and as such they are likewise not liable for damages as the undertaking was not one for profit;
furthermore, they had exercised due care and diligence in implementing the municipal ordinance. 2

After trial, the Presiding Judge, Hon. Gregorio T. Lantin narrowed the issue to whether or not the
defendants exercised due diligence 'm the construction of the stage. From his findings he arrived at
the conclusion that the Executive Committee appointed by the municipal council had exercised due
diligence and care like a good father of the family in selecting a competent man to construct a stage
strong enough for the occasion and that if it collapsed that was due to forces beyond the control of
the committee on entertainment, consequently, the defendants were not liable for damages for the
death of Vicente Fontanilla. The complaint was accordingly dismissed in a decision dated July 10,
1962. 3

The Fontanillas appealed to the Court of Appeals. In a decision Promulgated on October 31, 1968,
the Court of Appeals through its Fourth Division composed at the time of Justices Salvador V.
Esguerra, Nicasio A. Yatco and Eulogio S. Serrano reversed the trial court's decision and ordered
all the defendants-appellees to pay jointly and severally the heirs of Vicente Fontanilla the sums of
P12,000.00 by way of moral and actual damages: P1200.00 its attorney's fees; and the costs. 4

The case is now before Us on various assignments of errors all of which center on the proposition
stated at the sentence of this Opinion and which We repeat:

Is the celebration of a town fiesta an undertaking in the excercise of a municipality's governmental

or public function or is it or a private or proprietary character?

1. Under Philippine laws municipalities are political bodies corporate and as such ag endowed with
the faculties of municipal corporations to be exercised by and through their respective municipal
governments in conformity with law, and in their proper corporate name, they may inter alia sue and
be sued, and contract and be contracted with. 5

The powers of a municipality are twofold in character public, governmental or political on the one
hand, and corporate, private, or proprietary on the other. Governmental powers are those exercised
by the corporation in administering the powers of the state and promoting the public welfare and
they include the legislative, judicial public, and political Municipal powers on the other hand are
exercised for the special benefit and advantage of the community and include those which are
ministerial private and corporate. 6

As to when a certain activity is governmental and when proprietary or private, that is generally a
difficult matter to determine. The evolution of the municipal law in American Jurisprudence, for
instance, has shown that; none of the tests which have evolved and are stated in textbooks have
set down a conclusive principle or rule, so that each case will have to be determined on the basis of
attending circumstances.

In McQuillin on Municipal Corporations, the rule is stated thus: "A municipal corporation proper has
... a public character as regards the state at large insofar as it is its agent in government, and private
(so-called) insofar as it is to promote local necessities and conveniences for its own community. 7

Another statement of the test is given in City of Kokomo v. Loy, decided by the Supreme Court of
Indiana in 1916, thus:

Municipal corporations exist in a dual capacity, and their functions are two fold. 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 the 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 in. individual
capacity, and not for the state or sovereign power. (112 N. E 994-995)

In the early Philippine case of Mendoza v. de Leon 1916, the Supreme Court, through Justice Grant
T. Trent, relying mainly on American Jurisprudence classified certain activities of the municipality as
governmental, e.g.: regulations against fire, disease, preservation of public peace, maintenance of
municipal prisons, establishment of schools, post-offices, etc. while the following are corporate or
proprietary in character, viz: municipal waterwork, slaughter houses, markets, stables, bathing
establishments, wharves, ferries, and fisheries. 8 Maintenance of parks, golf courses, cemeteries
and airports among others, are also recognized as municipal or city activities of a proprietary
character. 9

2. This 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.

If the injury is caused in the course of the performance of a governmental function or duty no
recovery, as a rule, can be. had from the municipality unless there is an existing statute on the
matter,10 nor from its officers, so long as they performed their duties honestly and in good faith or
that they did not act wantonly and maliciously. 11 In Palafox, et al., v. Province of Ilocos Norte, et
al., 1958, a truck driver employed by the provincial government of Ilocos Norte ran over Proceto
Palafox in the course of his work at the construction of a road. The Supreme Court in affirming the
trial court's dismissal of the complaint for damages held that the province could not be made liable
because its employee was in the performance of a governmental function the construction and
maintenance of roads and however tragic and deplorable it may be, the death of Palafox
imposed on the province no duty to pay monetary consideration. 12

With respect to proprietary functions, the settled rule is that a municipal corporation can be held
liable to third persons ex contract 13 or ex delicto. 14

Municipal corporations are subject to be sued upon contracts and in tort. ...

xxx xxx xxx

The rule of law is a general one, that the superior or employer must answer civilly for
the negligence or want of skill of its agent or servant in the course or fine of his
employment, by which another, who is free from contributory fault, is injured.
 Municipal corporations under the conditions herein stated, fall within the operation of
this rule of law, and are liable, accordingly, to civil actions for damages when the
requisite elements of liability co-exist. ... (Dillon on Municipal Corporations, 5th ed.
Sec. 1610,1647, cited in Mendoza v. de Leon, supra. 514)

3. Coming to the cam before Us, and applying the general tests given above, We hold that the ho of
the town fiesta in 1959 by the municipality of Malsiqui Pangasinan was an exercise of a private or
proprietary function of the municipality.

Section 2282 of the Chatter on Municipal Law of the Revised Administrative Code provides:

Section 2282. Celebration of fiesta. fiesta may be held in each municipality not
oftener than once a year upon a date fixed by the municipal council A fiesta s not be
held upon any other date than that lawfully fixed therefor, except when, for weighty
reasons, such as typhoons, foundations, earthquakes, epidemics, or other public ties,
the fiesta cannot be hold in the date fixed in which case it may be held at a later date
in the same year, by resolution of the council.

This provision simply gives authority to the municipality to accelebrate a yearly fiesta but it does not
impose upon it a duty to observe one. Holding a fiesta even if the purpose is to commemorate a
religious or historical event of the town is in essence an act for the special benefit of the community
and not for the general welfare of the public performed in pursuance of a policy of the state. The
mere fact that the celebration, as claimed was not to secure profit or gain but merely to provide
entertainment to the town inhabitants is not a conclusive test. For instance, the maintenance of
parks is not a source of income for the nonetheless it is private undertaking as distinguished from
the maintenance of public schools, jails, and the like which are for public service.

As stated earlier, there can be no hard and fast rule for purposes of determining the true nature of
an undertaking or function of a municipality; the surrounding circumstances of a particular case are
to be considered and will be decisive. The basic element, however beneficial to the public the
undertaking may be, is that it is governmental in essence, otherwise. the function becomes private
or proprietary in character. Easily, no overnmental or public policy of the state is involved in the
celebration of a town fiesta. 15

4. It follows that under the doctrine of respondent superior, petitioner-municipality is to be held liable
for damages for the death of Vicente Fontanilia if that was at- tributable to the negligence of the
municipality's officers, employees, or agents.

Art. 2176, Civil Code: Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. . .

Art. 2180, Civil Code: The obligation imposed by article 2176 is demandable not only
for one's own acts or omission, but also for those of persons for whom one is
responsible. . .

On this point, the Court of Appeals found and held that there was negligence.

The trial court gave credence to the testimony of Angel Novado, a witness of the defendants (now
petitioners), that a member of the "extravaganza troupe removed two principal braces located on
the front portion of the stage and u them to hang the screen or "telon", and that when many people
went up the stage the latter collapsed. This testimony was not believed however by respondent
appellate court, and rightly so. According to said defendants, those two braces were "mother" or
"principal" braces located semi-diagonally from the front ends of the stage to the front posts of the
ticket booth located at the rear of the stage and were fastened with a bamboo twine. 16 That being
the case, it becomes incredible that any person in his right mind would remove those principal
braces and leave the front portion of the stage practically unsuported Moreover, if that did happen,
there was indeed negligence as there was lack of suspension over the use of the stage to prevent
such an occurrence.

At any rate, the guitarist who was pointed to by Novado as the person who removed the two
bamboo braces denied having done go. The Court of Appeals said "Amor by himself alone could not
have removed the two braces which must be about ten meters long and fastened them on top of the
stags for the curtain. The stage was only five and a half meters wide. Surely, it, would be impractical
and unwieldy to use a ten meter bamboo pole, much more two poles for the stage curtain. 17

The appellate court also found that the stage was not strong enough considering that only P100.00
was appropriate for the construction of two stages and while the floor of the "zarzuela" stage was of
wooden planks, the Post and braces used were of bamboo material We likewise observe that
although the stage was described by the Petitioners as being supported by "24" posts, nevertheless
there were only 4 in front, 4 at the rear, and 5 on each side. Where were the rest?

The Court of Appeals thus concluded

The court a quo itself attributed the collapse of the stage to the great number of
onlookers who mounted the stage. The municipality and/or its agents had the
necessary means within its command to prevent such an occurrence. Having filed to
take the necessary steps to maintain the safety of the stage for the use of the
participants in the stage presentation prepared in connection with the celebration of
the town fiesta, particularly, in preventing non participants or spectators from
mounting and accumulating on the stage which was not constructed to meet the
additional weight- the defendant-appellees were negligent and are liable for the death
of Vicente Fontanilla . (pp. 30-31, rollo, L-29993)

The findings of the respondent appellate court that the facts as presented to it establish negligence
as a matter of law and that the Municipality failed to exercise the due diligence of a good father of
the family, will not disturbed by Us in the absence of a clear showing of an abuse of discretion or a
gross misapprehension of facts." 18

Liability rests on negligence which is "the want of such care as a person of ordinary prudence would
exercise under the circumstances of the case." 19

Thus, private respondents argue that the "Midas Extravaganza" which was to be performed during
the town fiesta was a "donation" offered by an association of Malasiqui employees of the Manila
Railroad Co. in Caloocan, and that when the Municipality of Malasiqui accepted the donation of
services and constructed precisely a "zarzuela stage" for the purpose, the participants in the stage
show had the right to expect that the Municipality through its "Committee on entertainment and
stage" would build or put up a stage or platform strong enough to sustain the weight or burden of
the performance and take the necessary measures to insure the personal safety of the
participants. 20 We agree.

Quite relevant to that argument is the American case of Sanders v. City of Long Beach, 1942, which
was an action against the city for injuries sustained from a fall when plaintiff was descending the
steps of the city auditorium. The city was conducting a "Know your City Week" and one of the
features was the showing of a motion picture in the city auditorium to which the general public was
invited and plaintiff Sanders was one of those who attended. In sustaining the award for Damages
in favor of plaintiff, the District Court of Appeal, Second district, California, held inter alia that the
"Know your City Week" was a "proprietary activity" and not a "governmental one" of the city, that
defendant owed to plaintiff, an invitee the duty of exercising ordinary care for her safety, and plaintiff
was entitled to assume that she would not be exposed to a danger (which in this case consisted of
lack of sufficient illumination of the premises) that would come to her through a violation of
defendant duty. 21

We can say that the deceased Vicente Fontanilla was similarly situated as Sander The Municipality
of Malasiqui resolved to celebrate the town fiesta in January of 1959; it created a committee in
charge of the entertainment and stage; an association of Malasiqui residents responded to the call
for the festivities and volunteered to present a stage show; Vicente Fontanilla was one of the
participants who like Sanders had the right to expect that he would be exposed to danger on that
occasion.

Lastly, petitioner or appellant Municipality cannot evade ability and/or liability under the c that it was
Jose Macaraeg who constructed the stage. The municipality acting through its municipal council
appointed Macaraeg as chairman of the sub-committee on entertainment and in charge of the
construction of the "zarzuela" stage. Macaraeg acted merely as an agent of the Municipality. Under
the doctrine of respondent superior mentioned earlier, petitioner is responsible or liable for the
negligence of its agent acting within his assigned tasks. 22

... when it is sought to render a municipal corporation liable for the act of servants or agents, a
cardinal inquiry is, whether they are the servants or agents of the corporation. If the corporation
appoints or elects them, can control them in the discharge of their duties, can continue or remove
the can hold them responsible for the manner in which they discharge their trust, and if those duties
relate to the exercise of corporate powers, and are for the benefit of the corporation in its local or
special interest, they may justly be regarded as its agents or servants, and the maxim of respondent
superior applies." ... (Dillon on Municipal Corporations, 5th Ed., Vol IV, p. 2879)

5. The remaining question to be resolved centers on the liability of the municipal councilors who
enacted the ordinance and created the fiesta committee.

The Court of Appeals held the councilors jointly and solidarity liable with the municipality for
damages under Article 27 of the Civil Code which provides that d any person suffering ing material
or moral loss because a public servant or employee refuses or neglects, without just cause to
perform his official duty may file an action for damages and other relief at the latter. 23

In their Petition for review the municipal councilors allege that the Court of Appeals erred in ruling
that the holding of a town fiesta is not a governmental function and that there was negligence on
their part for not maintaining and supervising the safe use of the stage, in applying Article 27 of the
Civil Code against them and in not holding Jose Macaraeg liable for the collapse of the stage and
the consequent death of Vicente Fontanilla. 24

We agree with petitioners that the Court of Appeals erred in applying Article 27 of the Civil Code
against the for this particular article covers a case of nonfeasance or non-performance by a public
officer of his official duty; it does not apply to a case of negligence or misfeasance in carrying out an
official duty.

If We are led to set aside the decision of the Court of Appeals insofar as these petitioners are
concerned, it is because of a plain error committed by respondent court which however is not
invoked in petitioners' brief.

In Miguel v. The Court of appeal. et al., the Court, through Justice, now Chief Justice, Fred Ruiz
Castro, held that the Supreme Court is vested with ample authority to review matters not assigned
as errors in an appeal if it finds that their consideration and resolution are indispensable or
necessary in arriving at a just decision in a given case, and that tills is author under Sec. 7, Rule 51
of the Rules of Court. 25 We believe that this pronouncement can well be applied in the instant case.
The Court of Appeals in its decision now under review held that the celebration of a town fiesta by
the Municipality of Malasiqui was not a governmental function. We upheld that ruling. The legal
consequence thereof is that the Municipality stands on the same footing as an ordinary private
corporation with the municipal council acting as its board of directors. It is an elementary principle
that a corporation has a personality, separate and distinct from its officers, directors, or persons
composing it 26 and the latter are not as a rule co-responsible in an action for damages for tort or
negligence culpa aquilla committed by the corporation's employees or agents unless there is a
showing of bad faith or gross or wanton negligence on their part. 27

xxx xxx xxx

The ordinary doctrine is that a director, merely by reason of his office, is not
personally Stable for the torts of his corporation; he Must be shown to have
personally voted for or otherwise participated in them ... Fletcher Encyclopedia
Corporations, Vol 3A Chapt 11, p. 207)

Officers of a corporation 'are not held liable for the negligence of the corporation
merely because of their official relation to it, but because of some wrongful or
negligent act by such officer amounting to a breach of duty which resulted in an injury
... To make an officer of a corporation liable for the negligence of the corporation
there must have been upon his part such a breach of duty as contributed to, or
helped to bring about, the injury; that is to say, he must be a participant in the
wrongful act. ... (pp. 207-208, Ibid.)

xxx xxx xxx

Directors who merely employ one to give a fireworks Ambition on the corporate are
not personally liable for the negligent acts of the exhibitor. (p. 211, Ibid.)

On these people We absolve Use municipal councilors from any liability for the death of Vicente
Fontanilla. The records do not show that said petitioners directly participated in the defective
construction of the "zarzuela" stage or that they personally permitted spectators to go up the
platform.

6. One last point We have to resolve is on the award of attorney's fees by respondent court.
Petitioner-municipality assails the award.

Under paragraph 11, Art. 2208 of the Civil Code attorney's fees and expenses of litigation may be
granted when the court deems it just and equitable. In this case of Vicente Fontanilla, although
respondent appellate court failed to state the grounds for awarding attorney's fees, the records
show however that attempts were made by plaintiffs, now private respondents, to secure an
extrajudicial compensation from the municipality: that the latter gave prorases and assurances of
assistance but failed to comply; and it was only eight month after the incident that the bereaved
family of Vicente Fontanilla was compelled to seek relief from the courts to ventilate what was
believed to be a just cause. 28

We hold, therefore, that there is no error committed in the grant of attorney's fees which after all is a
matter of judicial discretion. The amount of P1,200.00 is fair and reasonable.

PREMISES CONSIDERED, We AFFIRM in toto the decision of the Court of Appeals insofar as the
Municipality of Malasiqui is concerned (L-30183), and We absolve the municipal councilors from
liability and SET ASIDE the judgment against them (L-9993).

Without pronouncement as to costs.

SO ORDERED,
G.R. No. 110045 November 29, 1994

TOMAS R. OSMEA, petitioner,

vs.
COMMISSION ON AUDIT, and Honorable COMMISSIONERS DOMINGO, ESPIRITU and
ORSAL, respondents.

The City Attorney for petitioner.

NARVASA, C.J.:

In this special civil action of certiorari, petitioner Mayor of the City of Cebu seeks nullification of:

(a) the Decision of respondent Commission on Audit (No. 1364, dated June 15, 1990)
DISALLOWING the amount of P30,000.00 appropriated by the City of Cebu relative to a
compromise agreement entered into in Civil Case No. 4275 of the Regional Trial Court of
Cebu City (Branch 23) an action brought by the Spouses Benjamin and Evangeline de
la Cerna against the City and others which compromise was in due course embodied
in a judgment of the Court rendered on August 1, 1989; and

(b) said Commission's Decision (No. 2773, dated March 30, 1993) "denying due course"
to the city's motion for reconsideration of its Decision No. 1364 above mentioned.

The controversy had its origin in the stabbing by an unknown assailant of Reynaldo de la Cerna, the son
of the aforementioned de la Cerna Spouses, in the afternoon of September 6, 1985. He was rushed to
the Cebu City Medical Center, but unfortunately expired in the evening of that same day due to severe
loss of blood. His parents claimed that Reynaldo would not have died were it not for the "ineptitude,
gross negligence, irresponsibility, stupidity and incompetence of the medical staff" of the Medical Center.

The de la Cerna Spouses accordingly instituted in the Regional Trial Court of Cebu City the above
mentioned civil action, for recovery of damages, based on paragraph 5, Article 2180 of the Civil Code.
Named defendants were the city of Cebu, the Sangguniang Panlungsod, and five physicians of the Cebu
City Medical Center.1 The City of Cebu which, according to the complaint, "operates, maintains, and
manages the Cebu City Medical Center", was impleaded as defendant on the theory that as employer of
the alleged negligent doctors, it was vicariously responsible for the latter's negligence since it failed to
exercise due care and vigilance over the doctors while acting within the scope of their assigned tasks, to
prevent them from causing the death of Reynaldo. The Civil Code provision relied upon by plaintiffs,
pertinently reads as follows:

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own
acts or omissions, but also for those persons for whom one is responsible.

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry.

xxx xxx xxx

After the action had been pending for some time, negotiations for an amicable settlement were
commenced, which culminated in an agreement designed to put an end to the controversy in a manner
acceptable to the parties. Since the compromise agreement included a provision for the payment of the
sum of P30,000.00 to the plaintiffs by defendant City of Cebu, the agreement was submitted to
the Sangguniang Panlungsod of the City, which ratified it on July 31, 1989. The sanggunian authorized
"the City Budget Officer, Cebu City, to include in Supplemental Budget No. IV of the City . . . for the year
1989 the amount of THIRTY THOUSAND (P30,000.00) PESOS for financial assistance to the parents of
the late Reynaldo de la Cerna, all of Cebu City."2 The agreement was also submitted to the Regional
Trial Court which, on August 1, 1989, rendered a judgment "(f)inding the same to be in conformity with
law, morals and public policy" and enjoining the parties "to comply strictly with the terms and conditions
thereof." 3

The compromise agreement4 included the following stipulations and undertakings, viz.:

1. The plaintiffs after realizing that Defendants were not negligent in the performance of
their respective duties as regards the admission of their son Reynaldo de la Cerna at the
Cebu City Medical Center, have agreed to enter into this Compromise Agreement;

2. The Defendants in order to buy peace and without admitting any liability for the death
of Reynaldo de la Cerna hereby agree to grant financial assistance to the Plaintiffs in the
total amount of FIFTY THOUSAND PESOS (P50,000.00) (which) shall be paid by the
Defendants in the following proportion:

a) City of Cebu P 30,000.00

b) Dr. Francisco Dy, Jr. 4,000.00
c) Dr. Ernesto Medalle 4,000.00
d) Dr. Zaldy Buac 4,000.00
e) Dr. Revey Nuico 4,000.00
f) Dr. Carmencita Momongan 4,000.00

xxx xxx xxx

5. Plaintiffs hereby releases (sic) all the Defendants from any claims, causes of actions or
cases whether present or future which they may have in connection with the death of
their son, Reynaldo de la Cerna;

xxx xxx xxx

7. Plaintiffs and Defendants agree to dismiss and drop all claims, counter-claims, and
cross-claims which they have filed against each other in the above-captioned case.

xxx xxx xxx

About eleven (11) months later, however (and as already stated in the opening paragraph of this
opinion), respondent Commission on Audit (COA) disallowed the "financial assistance" thus granted to
the spouses de la Cerna, in its Decision No. 1364, contained in its 3rd Indorsement dated 15 June
1990, supra.5 This decision reads in part as follows:

. . . [I]t is not within the powers of the Sangguniang Panlungsod of Cebu to provide, either
under the general welfare clause or even on humanitarian grounds, monetary assistance
that would promote the economic condition and private interests of certain individuals
only. The giving away of public funds to a bereaved family in the form of financial
assistance has definitely no casual relation to the general welfare of the inhabitants of the
community. In fact, no real or substantial relation to the public health, morals, or general
welfare of the community can be perceived from the act of giving such financial
assistance.
Respondent further stressed that not being a party to the compromise agreement, it was not bound by it;
and that any money claim arising therefrom was subject to its usual audit "in pursuance of the valid
exercise and discharge of its constitutional power, authority and duty as an independent body to audit all
government accounts.

The City of Cebu filed a Motion for Reconsideration dated August 15, 1991, but as already stated, the
same was "denied due course" by respondent Commission in its Decision No. 2773.6 Respondent ruled
that the motion was filed more than a year after receipt by the City government of notice of its Decision
No. 364 dated June 15, 1990 and therefore, pursuant to Sections 50 and 51 of PD 1445,7 the decision
had already become final and executory.

In behalf of the City of Cebu, Mayor Tomas R. Osmea has come to this Court ascribing grave abuse of
discretion to the COA and its Members in so disallowing the city's appropriation of P30,000.00 made
conformably with the compromise agreement in the civil suit against the City, embodied in due course in
the Trial Court's judgment. Mayor Osmea assails respondents' characterization of the city government's
appropriation as mere "financial assistance to private persons," pointing out that the City would have
incurred a greater financial liability if it had not worked out such an amicable settlement.

The Court believes that public respondents' disallowance of the appropriation is indeed tainted by grave
abuse of discretion and should be correspondingly rectified.

There is to be sure no question that under the Constitution, respondent COA has the power, authority,
and duty to examine, audit, and settle all accounts pertaining to revenue and receipts of, and
expenditures, and uses of funds and property, owned or held in trust by, or pertaining to the
Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or
controlled corporations with original charters.8 In the exercise of its broad powers, particularly its auditing
functions, the COA is guided by certain principles and state policies to assure that "government funds
shall be managed, expended, utilized in accordance with law and regulations, and safeguarded against
loss or wastage . . . with a view to ensuring efficiency, economy and effectiveness in the operations of
government."9

There can thus be no question of the COA's competence to act on the supplemental budget for 1989 of
the City of Cebu. Whether it acted in the exercise of sound discretion in respect thereto is another
matter.

It appears to the Court that respondent COA grievously misconstrued the undertaking of Cebu City to
pay P30,000.00 to the heirs of the deceased Reynaldo de la Cerna. For some reason, perhaps partly
because of the imprecise phraseology of the Sangguniang Panlungsod's resolution,10 respondent
considered that undertaking as simply furnishing "monetary assistance that would promote the economic
condition and private interests of certain individuals only, . . . said financial assistance . . . definitely
(having) no causal relation to the general welfare of the inhabitants of the community."

The appropriation of P30,000.00 by the Sangguniang Panlungsod of Cebu City was considered by
respondent out of context; it was construed as intended only to promote the private interests of the de la
Cerna family, as merely a form of financial assistance to a bereaved family without causal relation to the
general welfare of the community. In truth, as respondent was well aware, the appropriation was a part of
the package agreed upon by all the parties in Civil Case No. 4275 of the Cebu RTC for the amicable
settlement of the controversy; it may not be considered independently of said amicable settlement; it
would be meaningless unless considered in the context of the compromise of the case.

The participation by the City in negotiations for an amicable settlement of a pending litigation and its
eventual execution of a compromise relative thereto, are indubitably within its authority and capacity as a
public corporation; and a compromise of a civil suit in which it is involved as a party, is a perfectly
legitimate transaction, not only recognized but even encouraged by law.
A compromise is a bilateral act or transaction that it expressly acknowledged as a juridical agreement by
the Civil Code and is therein dealt with in some detail. "A compromise," declares Article 2208 of said
Code, "is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an
end to one already commenced."

The definition is reflective of the general concept of a compromise in other jurisdictions, as "an
agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their
difficulties by mutual consent in the same manner which they agree on, and which everyone of them
prefers in the hope of gaining, balanced by the danger of losing." 11

The Civil Code not only defines and authorizes compromises, it in fact encourages them in civil actions.
Article 2029 states that "The Court shall endeavor to persuade the litigants in a civil case to agree upon
some fair compromise." And in line with this policy, the Code directs (a) the suspension, pursuant to the
Rules of Court, of every civil action or proceeding "(1) if willingness to discuss a possible compromise is
expressed by one or both parties, or (2) if it appears that one of the parties, before the commencement
of the action or proceeding, offered to discuss a possible compromise but the other party refused the
offer," 12 as well as (b) the mitigation of "the damages to be paid by the losing party who has shown a
sincere desire for a compromise." 13 The law regards compromises as standing on a higher plane than
ordinary agreements, for it declares them, once entered into, to constitute res judicata, although judicial
execution thereof is permitted only with respect to judicial compromises. 14

The Code also affirms the capacity of juridical persons to compromise, "in the form and with the
requisites which may be necessary to alienate their property." 15 As early as 1917, the Court, applying
substantially similar provisions in the (Spanish) Civil Code of 1889, made the following pronouncements
in the case of Municipality of San Joaquin v. Bishop of Jaro: 16

As a juridic person, the municipality of Miagao was authorized to execute a contract of

compromise in the manner and with the requisites necessary to alienate its property (Civ.
Code, art. 1812), and such requisites and formalities were fulfilled in accordance with the
provisions of Section 40, subsection (c) of the Municipal Code. The provincial governor
was of that opinion when he gave his approval to the contract of compromise, which was
deemed to benefit the contracting municipality for the reason that it thereby avoided a
lawsuit and got the Church to renounce other claims and to recognize the municipality's
right in the other real properties sought to be registered. Furthermore, the record does
not show that the Church, on its part, failed to comply with the condition imposed in the
compromise, and it is presumed that the latter was executed in accordance with law and
that the formalities established by law have been complied with (Code of Civ. Proc., sec.
334, Nos. 14, 18 and 310). There is no proof contrary to these presumptions.

That the City of Cebu complied with the relevant formalities contemplated by law can hardly be doubted.
The compromise agreement was submitted to its legislative council, the Sangguniang Panlungsod,
which approved it conformably with its established rules and procedure, particularly the stipulation for the
payment of P30,000.00 to the de la Cerna family. Neither may it be disputed that since, as a municipal
corporation, Cebu City has the power to sue and be sued, 17 it has the authority to settle or compromise
suits, 18 as well as the obligation to pay just and valid claims against it.

Obviously, respondent refused to take account of the foregoing legal principles in relation to the
antecedents of the provision in the supplemental budget of the City for payment of P30,000.00. It failed
to realize that payment thereof was part of the consideration, not merely for the settlement of a claim, but
for the settlement of an actual controversy, 19 and constituted one of the "reciprocal concessions" which
the law considers "the very heart and life of every compromise." 20 By making reciprocal concessions, the
parties in Civil Case No. 4275 of the Regional Trial Court of Cebu City (Branch 23) put an end to the
action in a manner acceptable to all of them. The City thus eliminated the contingency of being made to
assume heavier liability in said suit for damages instituted against it in connection with its operation and
management of the Cebu City Medical Center, activities being undertaken by it in its proprietary (as
distinguished from its government) functions and in accordance with which it may be held liable ex
contractu or ex delito, 21 for the negligent performance of its corporate, proprietary or business
functions. 22

It is noteworthy that the compromise in question was approved by, and embodied in the judgment of, the
Court, which pronounced it "to be in conformity with law, morals and public policy" and enjoined the
parties "to comply strictly with the terms and conditions thereof." 23

This judicial compromise is conclusive and binding on all the parties, including the City of Cebu. It is
enforceable by execution, as above stressed. There was no reason whatever to object to it, much less
disallow any disbursement therein stipulated. It should have been approved as a matter of course.

One last word. COA avers 24 that its Decision dated June 15, 1990
(No. 1364) became final and executory by reason of the City's failure to appeal the same to this Court
within thirty (30) days from notice thereof, pursuant to the Section 7, Article IX of the Constitution, and
Sections 50 and 51 of PD 1445. 25 This is not indubitable on the record. For against this contention, there
is the allegation in the motion (letter) for reconsideration dated August 15, 1991 of the City, thru its City
Attorney, 26 that notice of the decision was "received on July 26, 1991;" and there was at the time the far
from settled question as to whether or not the City Auditor, on whom said COA Decision No. 1364 dated
June 15, 1990, is not merely an extension (and transmitter of communications) of the Commission on
Audit, or may be deemed a proper officer (in lieu of or in addition to the Mayor) on whom such notice
should be given to effectively bind the City and to commence computation of the appeal period
prescribed by the Constitution and implementing rules. In view thereof, and in the interest of justice, the
Court declines to sustain the contention that the City's right of appeal had lapsed and thus resolve the
controversy at bar on the basis of the postulated procedural default on the part of the City.

WHEREFORE, the writ of certiorari prayed for is issued and the COA decisions dated 15 June 1990 (No.
1364) and 30 March 1993 (No. 2773) are hereby nullified and set aside. The respondent Commission on
Audit is ORDERED to approve and allow in audit the appropriation of P30,000.00 of Cebu City approved
in connection with the judicial compromise executed by it in Civil Case No. 4275 of the Regional Trial
Court of Cebu City (Branch 23).

IT IS SO ORDERED.
G.R. No. 93252 August 5, 1991

RODOLFO T. GANZON, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, respondents.

G.R. No. 93746 August 5,1991

MARY ANN RIVERA ARTIEDA, petitioner,

vs.
HON. LUIS SANTOS, in his capacity as Secretary of the Department of Local Government,
NICANOR M. PATRICIO, in his capacity as Chief, Legal Service of the Department of Local
Government and SALVADOR CABALUNA JR., respondents.

G.R. No. 95245 August 5,1991

RODOLFO T. GANZON, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, in his capacity as the Secretary of
the Department of Local Government, respondents.

Nicolas P. Sonalan for petitioner in 93252.

Romeo A. Gerochi for petitioner in 93746.
Eugenio Original for petitioner in 95245.

SARMIENTO, J.:

The petitioners take common issue on the power of the President (acting through the Secretary of Local
Government), to suspend and/or remove local officials.

The petitioners are the Mayor of Iloilo City (G.R. Nos. 93252 and 95245) and a member of the
Sangguniang Panglunsod thereof (G.R. No. 93746), respectively.

The petitions of Mayor Ganzon originated from a series of administrative complaints, ten in number, filed
against him by various city officials sometime in 1988, on various charges, among them, abuse of
authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable
violation of the Constitution, and arbitrary detention.1 The personalities involved are Joceleehn Cabaluna,
a clerk at the city health office; Salvador Cabaluna, her husband; Dr. Felicidad Ortigoza, Assistant City
Health Officer; Mansueto Malabor, Vice-Mayor; Rolando Dabao, Dan Dalido, German Gonzales, Larry
Ong, and Eduardo Pefia Redondo members of the Sangguniang Panglunsod; and Pancho Erbite, a
barangay tanod. The complaints against the Mayor are set forth in the opinion of the respondent Court of
Appeals.2 We quote:

xxx xxx xxx

In her verified complaint (Annex A), Mrs. Cabaluna, a clerk assigned to the City Health, Office of
Iloilo City charged that due to political reasons, having supported the rival candidate, Mrs. Rosa
0. Caram, the petitioner City Mayor, using as an excuse the exigency of the service and the
interest of the public, pulled her out from rightful office where her qualifications are best suited
and assigned her to a work that should be the function of a non-career service employee. To
make matters worse, a utility worker in the office of the Public Services, whose duties are alien to
the complainant's duties and functions, has been detailed to take her place. The petitioner's act
 are pure harassments aimed at luring her away from her permanent position or force her to
resign.

In the case of Dra. Felicidad Ortigoza, she claims that the petitioner handpicked her to perform
task not befitting her position as Assistant City Health Officer of Iloilo City; that her office was
padlocked without any explanation or justification; that her salary was withheld without cause
since April 1, 1988; that when she filed her vacation leave, she was given the run-around
treatment in the approval of her leave in connivance with Dr. Rodolfo Villegas and that she was
the object of a well-engineered trumped-up charge in an administrative complaint filed by Dr.
Rodolfo Villegas (Annex B).

On the other hand, Mansuelo Malabor is the duly elected Vice-Mayor of Iloilo City and
complainants Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong and Eduardo Pefia
Pedondo are members of the Sangguniang Panglunsod of the City of Iloilo. Their complaint
arose out from the case where Councilor Larry Ong, whose key to his office was
unceremoniously and without previous notice, taken by petitioner. Without an office, Councilor
Ong had to hold office at Plaza Libertad, The Vice-Mayor and the other complainants
sympathized with him and decided to do the same. However, the petitioner, together with its fully-
armed security men, forcefully drove them away from Plaza Libertad. Councilor Ong denounced
the petitioner's actuations the following day in the radio station and decided to hold office at the
Freedom Grandstand at Iloilo City and there were so many people who gathered to witness the
incident. However, before the group could reach the area, the petitioner, together with his
security men, led the firemen using a firetruck in dozing water to the people and the bystanders.

Another administrative case was filed by Pancho Erbite, a barangay tanod, appointed by former
mayor Rosa O. Caram. On March 13, 1988, without the benefit of charges filed against him and
no warrant of arrest was issued, Erbite was arrested and detained at the City Jail of Iloilo City
upon orders of petitioner. In jail, he was allegedly mauled by other detainees thereby causing
injuries He was released only the following day.3

The Mayor thereafter answered4 and the cases were shortly set for hearing. The opinion of the Court of
Appeals also set forth the succeeding events:

xxx xxx xxx

The initial hearing in the Cabaluna and Ortigoza cases were set for hearing on June 20-21, 1988
at the Regional Office of the Department of Local Government in Iloilo City. Notices, through
telegrams, were sent to the parties (Annex L) and the parties received them, including the
petitioner. The petitioner asked for a postponement before the scheduled date of hearing and
was represented by counsel, Atty. Samuel Castro. The hearing officers, Atty. Salvador Quebral
and Atty. Marino Bermudez had to come all the way from Manila for the two-day hearings but
was actually held only on June 20,1988 in view of the inability and unpreparedness of petitioner's
counsel.

The next hearings were re-set to July 25, 26, 27,1988 in the same venue-Iloilo City. Again, the
petitioner attempted to delay the proceedings and moved for a postponement under the excuse
that he had just hired his counsel. Nonetheless, the hearing officers denied the motion to
postpone, in view of the fact that the parties were notified by telegrams of the scheduled hearings
(Annex M).

In the said hearings, petitioner's counsel cross-examined the complainants and their witnesses.

Finding probable grounds and reasons, the respondent issued a preventive suspension order on
August 11, 1988 to last until October 11,1988 for a period of sixty (60) days.
 Then the next investigation was set on September 21, 1988 and the petitioner again asked for a
postponement to September 26,1988. On September 26, 1988, the complainants and petitioner
were present, together with their respective counsel. The petitioner sought for a postponement
which was denied. In these hearings which were held in Mala the petitioner testified in Adm.
Case No. C-10298 and 10299.

The investigation was continued regarding the Malabor case and the complainants testified
including their witnesses.

On October 10, 1988, petitioner's counsel, Atty. Original moved for a postponement of the
October 24, 1988 hearing to November 7 to 11, 1988 which was granted. However, the motion
for change of venue as denied due to lack of funds. At the hearing on November 7, 1988, the
parties and counsel were present. Petitioner reiterated his motion to change venue and moved
for postponement anew. The counsel discussed a proposal to take the deposition of witnesses in
Iloilo City so the hearing was indefinitely postponed. However, the parties failed to come to terms
and after the parties were notified of the hearing, the investigation was set to December 13 to 15,
1988.

The petitioner sought for another postponement on the ground that his witnesses were sick or
cannot attend the investigation due to lack of transportation. The motion was denied and the
petitioner was given up to December 14, 1988 to present his evidence.

On December 14,1988, petitioner's counsel insisted on his motion for postponement and the
hearing officers gave petitioner up to December 15, 1988 to present his evidence. On December
15, 1988, the petitioner failed to present evidence and the cases were considered submitted for
resolution.

In the meantime, a prima facie evidence was found to exist in the arbitrary detention case filed by
Pancho Erbite so the respondent ordered the petitioner's second preventive suspension dated
October 11, 1988 for another sixty (60) days. The petitioner was able to obtain a restraining order
and a writ of preliminary injunction in the Regional Trial Court, Branch 33 of Iloilo City. The
second preventive suspension was not enforced.5

Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition against the
respondent Secretary of Local Government (now, Interior) in the Regional Trial Court, Iloilo City, where
he succeeded in obtaining a writ of preliminary injunction. Presently, he instituted CA-G.R. SP No.
16417, an action for prohibition, in the respondent Court of Appeals.

Meanwhile, on May 3, 1990, the respondent Secretary issued another order, preventively suspending
Mayor Ganzon for another sixty days, the third time in twenty months, and designating meantime Vice-
Mayor Mansueto Malabor as acting mayor. Undaunted, Mayor Ganzon commenced CA-G.R. SP No.
20736 of the Court of Appeals, a petition for prohibition,6 (Malabor it is to be noted, is one of the
complainants, and hence, he is interested in seeing Mayor Ganzon ousted.)

On September 7, 1989, the Court of Appeals rendered judgment, dismissing CA-G.R. SP No. 16417. On
July 5, 1990, it likewise promulgated a decision, dismissing CA-G.R. SP No. 20736. In a Resolution
dated January 24, 1990, it issued a Resolution certifying the petition of Mary Ann Artieda, who had been
similary charged by the respondent Secretary, to this Court.

On June 26,1990, we issued a Temporary Restraining Order, barring the respondent Secretary from
implementing the suspension orders, and restraining the enforcement of the Court of Appeals' two
decisions.

In our Resolution of November 29, 1990, we consolidated all three cases. In our Resolutions of January
15, 1991, we gave due course thereto.
Mayor Ganzon claims as a preliminary (GR No. 93252), that the Department of Local Government in
hearing the ten cases against him, had denied him due process of law and that the respondent Secretary
had been "biased, prejudicial and hostile" towards him7 arising from his (Mayor Ganzon's) alleged refusal
to join the Laban ng Demokratikong Pilipino party8 and the running political rivalry they maintained in the
last congressional and local elections;9 and his alleged refusal to operate a lottery in Iloilo City.10 He also
alleges that he requested the Secretary to lift his suspension since it had come ninety days prior to an
election (the barangay elections of November 14, 1988),11 notwithstanding which, the latter proceeded
with the hearing and meted out two more suspension orders of the aforementioned cases.12 He likewise
contends that he sought to bring the cases to Iloilo City (they were held in Manila) in order to reduce the
costs of proceeding, but the Secretary rejected his request.13 He states that he asked for postponement
on "valid and justifiable"14 grounds, among them, that he was suffering from a heart ailment which
required confinement; that his "vital"15 witness was also hospitalized16 but that the latter unduly denied his
request.17

Mayor Ganzon's primary argument (G.R. Nos. 93252 and 95245) is that the Secretary of Local
Government is devoid, in any event, of any authority to suspend and remove local officials, an argument
reiterated by the petitioner Mary Ann Rivera Artieda (G.R. No. 93746).

As to Mayor Ganzon's charges of denial of due process, the records do not show very clearly in what
manner the Mayor might have been deprived of his rights by the respondent Secretary. His claims that
he and Secretary Luis-Santos were (are) political rivals and that his "persecution" was politically
motivated are pure speculation and although the latter does not appear to have denied these contentions
(as he, Mayor Ganzon, claims), we can not take his word for it the way we would have under less
political circumstances, considering furthermore that "political feud" has often been a good excuse in
contesting complaints.

The Mayor has failed furthermore to substantiate his say-so's that Secretary Santos had attempted to
seduce him to join the administration party and to operate a lottery in Iloilo City. Again, although the
Secretary failed to rebut his allegations, we can not accept them, at face value, much more, as judicial
admissions as he would have us accept them18 for the same reasons above-stated and furthermore,
because his say so's were never corroborated by independent testimonies. As a responsible public
official, Secretary Santos, in pursuing an official function, is presumed to be performing his duties
regularly and in the absence of contrary evidence, no ill motive can be ascribed to him.

As to Mayor Ganzon's contention that he had requested the respondent Secretary to defer the hearing
on account of the ninety-day ban prescribed by Section 62 of Batas Blg. 337, the Court finds the
question to be moot and academic since we have in fact restrained the Secretary from further hearing
the complaints against the petitioners.19

As to his request, finally, for postponements, the Court is afraid that he has not given any compelling
reason why we should overturn the Court of Appeals, which found no convincing reason to overrule
Secretary Santos in denying his requests. Besides, postponements are a matter of discretion on the part
of the hearing officer, and based on Mayor Ganzon's above story, we are not convinced that the
Secretary has been guilty of a grave abuse of discretion.

The Court can not say, under these circumstances, that Secretary Santos' actuations deprived Mayor
Ganzon of due process of law.

We come to the core question: Whether or not the Secretary of Local Government, as the President's
alter ego, can suspend and/or remove local officials.

It is the petitioners' argument that the 1987 Constitution20 no longer allows the President, as the 1935 and
1973 Constitutions did, to exercise the power of suspension and/or removal over local officials.
According to both petitioners, the Constitution is meant, first, to strengthen self-rule by local government
units and second, by deleting the phrase21 as may be provided by law to strip the President of the power
of control over local governments. It is a view, so they contend, that finds support in the debates of the
Constitutional Commission. The provision in question reads as follows:

Sec. 4. The President of the Philippines shall exercise general supervision over local
governments. Provinces with respect to component cities and municipalities, and cities and
municipalities with respect to component barangays shall ensure that the acts of their component
units are within the scope of their prescribed powers and functions.22

It modifies a counterpart provision appearing in the 1935 Constitution, which we quote:

Sec. 10. The President shall have control of all the executive departments, bureaus, or offices,
exercise general supervision over all Local governments as may be provided by law, and take
care that the laws be faithfully executed.23

The petitioners submit that the deletion (of "as may be provided by law") is significant, as their argument
goes, since: (1) the power of the President is "provided by law" and (2) hence, no law may provide for it
any longer.

It is to be noted that in meting out the suspensions under question, the Secretary of Local Government
acted in consonance with the specific legal provisions of Batas Blg. 337, the Local Government Code,
we quote:

Sec. 62. Notice of Hearing. Within seven days after the complaint is filed, the Minister of local
Government, or the sanggunian concerned, as the case may be, shall require the respondent to
submit his verified answer within seven days from receipt of said complaint, and commence the
hearing and investigation of the case within ten days after receipt of such answer of the
respondent. No investigation shall be held within ninety days immediately prior to an election,
and no preventive suspension shall be imposed with the said period. If preventive suspension
has been imposed prior to the aforesaid period, the preventive suspension shall be lifted.24

Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by the Minister
of Local Government if the respondent is a provincial or city official, by the provincial governor if
the respondent is an elective municipal official, or by the city or municipal mayor if the
respondent is an elective barangay official.

(2) Preventive suspension may be imposed at any time after the issues are joined, when there is
reasonable ground to believe that the respondent has committed the act or acts complained of,
when the evidence of culpability is strong, when the gravity of the offense so warrants, or when
the continuance in office of the respondent could influence the witnesses or pose a threat to the
safety and integrity of the records and other evidence. In all cases, preventive suspension shall
not extend beyond sixty days after the start of said suspension.

(3) At the expiration of sixty days, the suspended official shall be deemed reinstated in office
without prejudice to the continuation of the proceedings against him until its termination. However
' if the delay in the proceedings of the case is due to his fault, neglect or request, the time of the
delay shall not be counted in computing the time of suspension.25

The issue, as the Court understands it, consists of three questions: (1) Did the 1987 Constitution, in
deleting the phrase "as may be provided by law" intend to divest the President of the power to
investigate, suspend, discipline, and/or remove local officials? (2) Has the Constitution repealed Sections
62 and 63 of the Local Government Code? (3) What is the significance of the change in the constitutional
language?

It is the considered opinion of the Court that notwithstanding the change in the constitutional language,
the charter did not intend to divest the legislature of its right or the President of her prerogative as
conferred by existing legislation to provide administrative sanctions against local officials. It is our opinion
that the omission (of "as may be provided by law") signifies nothing more than to underscore local
governments' autonomy from congress and to break Congress' "control" over local government affairs.
The Constitution did not, however, intend, for the sake of local autonomy, to deprive the legislature of all
authority over municipal corporations, in particular, concerning discipline.

Autonomy does not, after all, contemplate making mini-states out of local government units, as in the
federal governments of the United States of America (or Brazil or Germany), although Jefferson is said to
have compared municipal corporations euphemistically to "small republics."26 Autonomy, in the
constitutional sense, is subject to the guiding star, though not control, of the legislature, albeit the
legislative responsibility under the Constitution and as the "supervision clause" itself suggest-is to wean
local government units from over-dependence on the central government.

It is noteworthy that under the Charter, "local autonomy" is not instantly self-executing, but subject to,
among other things, the passage of a local government code,27 a local tax law,28 income distribution
legislation,29 and a national representation law,30 and measures31 designed to realize autonomy at the
local level. It is also noteworthy that in spite of autonomy, the Constitution places the local government
under the general supervision of the Executive. It is noteworthy finally, that the Charter allows Congress
to include in the local government code provisions for removal of local officials, which suggest that
Congress may exercise removal powers, and as the existing Local Government Code has done,
delegate its exercise to the President. Thus:

Sec. 3. The Congress shall enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanisms of recall, initiative, and referendum, allocate among
the different local government units their powers, responsibilities and resources, and provide for
the qualifications, election, appointment and removal, term, salaries, powers and functions and
duties of local officials, and all other matters relating to the organization and operation of the local
units.32

As hereinabove indicated, the deletion of "as may be provided by law" was meant to stress, sub silencio,
the objective of the framers to strengthen local autonomy by severing congressional control of its affairs,
as observed by the Court of Appeals, like the power of local legislation.33 The Constitution did nothing
more, however, and insofar as existing legislation authorizes the President (through the Secretary of
Local Government) to proceed against local officials administratively, the Constitution contains no
prohibition.

The petitioners are under the impression that the Constitution has left the President mere supervisory
powers, which supposedly excludes the power of investigation, and denied her control, which allegedly
embraces disciplinary authority. It is a mistaken impression because legally, "supervision" is not
incompatible with disciplinary authority as this Court has held,34 thus:

xxx xxx xxx

It is true that in the case of Mondano vs. Silvosa, 51 Off. Gaz., No. 6 p. 2884, this Court had
occasion to discuss the scope and extent of the power of supervision by the President over local
government officials in contrast to the power of control given to him over executive officials of our
government wherein it was emphasized that the two terms, control and supervision, are two
different things which differ one from the other in meaning and extent. Thus in that case the
Court has made the following digression: "In administration law supervision means overseeing or
the power or authority of an officer to see that subordinate officers perform their duties. If the
latter fail or neglect to fulfill them the former may take such action or step as prescribed by law to
make them perform their duties. Control, on the other hand, means the power of an officer to
alter or modify or nullify of set aside what a subordinate officer had done in the performance of
his duties and to substitute the judgment of the former for that of the latter." But from this
pronouncement it cannot be reasonably inferred that the power of supervision of the President
over local government officials does not include the power of investigation when in his opinion
 the good of the public service so requires, as postulated in Section 64(c) of the Revised
Administrative Code. ...35

xxx xxx xxx

"Control" has been defined as "the power of an officer to alter or modify or nullify or set aside what a
subordinate officer had done in the performance of his duties and to substitute the judgment of the
former for test of the latter."36"Supervision" on the other hand means "overseeing or the power or
authority of an officer to see that subordinate officers perform their duties.37 As we held,38 however,
"investigating" is not inconsistent with "overseeing", although it is a lesser power than "altering". The
impression is apparently exacerbated by the Court's pronouncements in at least three cases, Lacson v.
Roque,39 Hebron v. Reyes,40 and Mondano v. Silvosa,41 and possibly, a fourth one, Pelaez v. Auditor
General.42 In Lacson, this Court said that the President enjoyed no control powers but only supervision
"as may be provided by law,"43 a rule we reiterated in Hebron, and Mondano. In Pelaez, we stated that
the President "may not . . . suspend an elective official of a regular municipality or take any disciplinary
action against him, except on appeal from a decision of the corresponding provincial board."44 However,
neither Lacsonnor Hebron nor Mondano categorically banned the Chief Executive from exercising acts of
disciplinary authority because she did not exercise control powers, but because no law allowed her to
exercise disciplinary authority. Thus, according to Lacson:

The contention that the President has inherent power to remove or suspend municipal officers is
without doubt not well taken. Removal and suspension of public officers are always controlled by
the particular law applicable and its proper construction subject to constitutional limitations.45

In Hebron we stated:

Accordingly, when the procedure for the suspension of an officer is specified by law, the same
must be deemed mandatory and adhered to strictly, in the absence of express or clear provision
to the contrary-which does not et with respect to municipal officers ...46

In Mondano, the Court held:

... The Congress has expressly and specifically lodged the provincial supervision over municipal
officials in the provincial governor who is authorized to "receive and investigate complaints made
under oath against municipal officers for neglect of duty, oppression, corruption or other form of
maladministration of office, and conviction by final judgment of any crime involving moral
turpitude." And if the charges are serious, "he shall submit written charges touching the matter to
the provincial board, furnishing a copy of such charges to the accused either personally or by
registered mail, and he may in such case suspend the officer (not being the municipal treasurer)
pending action by the board, if in his opinion the charge by one affecting the official integrity of
the officer in question." Section 86 of the Revised Administration Code adds nothing to the power
of supervision to be exercised by the Department Head over the administration of ...
municipalities ... . If it be construed that it does and such additional power is the same authority
as that vested in the Department Head by section 79(c) of the Revised Administrative Code, then
such additional power must be deemed to have been abrogated by Section 110(l), Article VII of
the Constitution.47

xxx xxx xxx

In Pelaez, we stated that the President can not impose disciplinary measures on local officials except on
appeal from the provincial board pursuant to the Administrative Code.48

Thus, in those case that this Court denied the President the power (to suspend/remove) it was not
because we did not think that the President can not exercise it on account of his limited power, but
because the law lodged the power elsewhere. But in those cases ii which the law gave him the power,
the Court, as in Ganzon v. Kayanan, found little difficulty in sustaining him.49
The Court does not believe that the petitioners can rightfully point to the debates of the Constitutional
Commission to defeat the President's powers. The Court believes that the deliberations are by
themselves inconclusive, because although Commissioner Jose Nolledo would exclude the power of
removal from the President,50 Commissioner Blas Ople would not.51

The Court is consequently reluctant to say that the new Constitution has repealed the Local Government
Code, Batas Blg. 37. As we said, "supervision" and "removal" are not incompatible terms and one may
stand with the other notwithstanding the stronger expression of local autonomy under the new Charter.
We have indeed held that in spite of the approval of the Charter, Batas Blg. 337 is still in force and
effect.52

As the Constitution itself declares, local autonomy means "a more responsive and accountable local
government structure instituted through a system of decentralization."53 The Constitution as we observed,
does nothing more than to break up the monopoly of the national government over the affairs of local
governments and as put by political adherents, to "liberate the local governments from the imperialism of
Manila." Autonomy, however, is not meant to end the relation of partnership and inter-dependence
between the central administration and local government units, or otherwise, to user in a regime of
federalism. The Charter has not taken such a radical step. Local governments, under the Constitution,
are subject to regulation, however limited, and for no other purpose than precisely, albeit paradoxically,
to enhance self- government.

As we observed in one case,54 decentralization means devolution of national administration but not power
to the local levels. Thus:

Now, autonomy is either decentralization of administration or decentralization of power. There is

decentralization of administration when the central government delegates administrative powers
to political subdivisions in order to broaden the base of government power and in the process to
make local governments "more responsive and accountable," and "ensure their fullest
development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress." At the same time, it relieves the central government
of the burden of managing local affairs and enables it to concentrate on national concerns. The
President exercises "general supervision" over them, but only to "ensure that local affairs are
administered according to law." He has no control over their acts in the sense that he can
substitute their judgments with his own.

Decentralization of power, on the other hand, involves an abdication of political power in the
favor of local governments units declared to be autonomous, In that case, the autonomous
government is free to chart its own destiny and shape its future with minimum intervention from
central authorities. According to a constitutional author, decentralization of power amounts to
"self-immolation," since in that event, the autonomous government becomes accountable not to
the central authorities but to its constituency.55

The successive sixty-day suspensions imposed on Mayor Rodolfo Ganzon is albeit another matter. What
bothers the Court, and what indeed looms very large, is the fact that since the Mayor is facing ten
administrative charges, the Mayor is in fact facing the possibility of 600 days of suspension, in the event
that all ten cases yield prima faciefindings. The Court is not of course tolerating misfeasance in public
office (assuming that Mayor Ganzon is guilty of misfeasance) but it is certainly another question to make
him serve 600 days of suspension, which is effectively, to suspend him out of office. As we held:56

2. Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His term of office does
not expire until 1986. Were it not for this information and the suspension decreed by the
Sandiganbayan according to the Anti-Graft and Corrupt Practices Act, he would have been all
this while in the full discharge of his functions as such municipal mayor. He was elected precisely
to do so. As of October 26, 1983, he has been unable to. it is a basic assumption of the electoral
process implicit in the right of suffrage that the people are entitled to the services of elective
officials of their choice. For misfeasance or malfeasance, any of them could, of course, be
 proceeded against administratively or, as in this instance, criminally. In either case, Ms culpability
must be established. Moreover, if there be a criminal action, he is entitled to the constitutional
presumption of innocence. A preventive suspension may be justified. Its continuance, however,
for an unreasonable length of time raises a due process question. For even if thereafter he were
acquitted, in the meanwhile his right to hold office had been nullified. Clearly, there would be in
such a case an injustice suffered by him. Nor is he the only victim. There is injustice inflicted
likewise on the people of Lianga They were deprived of the services of the man they had elected
to serve as mayor. In that sense, to paraphrase Justice Cardozo, the protracted continuance of
this preventive suspension had outrun the bounds of reason and resulted in sheer oppression. A
denial of due process is thus quite manifest. It is to avoid such an unconstitutional application
that the order of suspension should be lifted.57

The plain truth is that this Court has been ill at ease with suspensions, for the above reasons,58 and so
also, because it is out of the ordinary to have a vacancy in local government. The sole objective of a
suspension, as we have held,59 is simply "to prevent the accused from hampering the normal cause of
the investigation with his influence and authority over possible witnesses"60 or to keep him off "the
records and other evidence.61

It is a means, and no more, to assist prosecutors in firming up a case, if any, against an erring local
official. Under the Local Government Code, it can not exceed sixty days,62 which is to say that it need not
be exactly sixty days long if a shorter period is otherwise sufficient, and which is also to say that it ought
to be lifted if prosecutors have achieved their purpose in a shorter span.

Suspension is not a penalty and is not unlike preventive imprisonment in which the accused is held to
insure his presence at the trial. In both cases, the accused (the respondent) enjoys a presumption of
innocence unless and until found guilty.

Suspension finally is temporary and as the Local Government Code provides, it may be imposed for no
more than sixty days. As we held,63 a longer suspension is unjust and unreasonable, and we might add,
nothing less than tyranny.

As we observed earlier, imposing 600 days of suspension which is not a remote possibility Mayor
Ganzon is to all intents and purposes, to make him spend the rest of his term in inactivity. It is also to
make, to all intents and purposes, his suspension permanent.

It is also, in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not been proven.
Worse, any absolution will be for naught because needless to say, the length of his suspension would
have, by the time he is reinstated, wiped out his tenure considerably.

The Court is not to be mistaken for obstructing the efforts of the respondent Secretary to see that justice
is done in Iloilo City, yet it is hardly any argument to inflict on Mayor Ganzon successive suspensions
when apparently, the respondent Secretary has had sufficient time to gather the necessary evidence to
build a case against the Mayor without suspending him a day longer. What is intriguing is that the
respondent Secretary has been cracking down, so to speak, on the Mayor piecemeal apparently, to pin
him down ten times the pain, when he, the respondent Secretary, could have pursued a consolidated
effort.

We reiterate that we are not precluding the President, through the Secretary of Interior from exercising a
legal power, yet we are of the opinion that the Secretary of Interior is exercising that power oppressively,
and needless to say, with a grave abuse of discretion.

The Court is aware that only the third suspension is under questions, and that any talk of future
suspensions is in fact premature. The fact remains, however, that Mayor Ganzon has been made to
serve a total of 120 days of suspension and the possibility of sixty days more is arguably around the
corner (which amounts to a violation of the Local Government Code which brings to light a pattern of
suspensions intended to suspend the Mayor the rest of his natural tenure. The Court is simply
foreclosing what appears to us as a concerted effort of the State to perpetuate an arbitrary act.

As we said, we can not tolerate such a state of affairs.

We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third suspension and
lifting, for the purpose, the Temporary Restraining Order earlier issued. Insofar as the seven remaining
charges are concerned, we are urging the Department of Local Government, upon the finality of this
Decision, to undertake steps to expedite the same, subject to Mayor Ganzon's usual remedies of appeal,
judicial or administrative, or certiorari, if warranted, and meanwhile, we are precluding the Secretary from
meting out further suspensions based on those remaining complaints, notwithstanding findings of prima
facie evidence.

In resume the Court is laying down the following rules:

1. Local autonomy, under the Constitution, involves a mere decentralization of administration, not of
power, in which local officials remain accountable to the central government in the manner the law may
provide;

2. The new Constitution does not prescribe federalism;

3. The change in constitutional language (with respect to the supervision clause) was meant but to deny
legislative control over local governments; it did not exempt the latter from legislative regulations
provided regulation is consistent with the fundamental premise of autonomy;

4. Since local governments remain accountable to the national authority, the latter may, by law, and in
the manner set forth therein, impose disciplinary action against local officials;

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

6. The petitioner, Mayor Rodolfo Ganzon. may serve the suspension so far ordered, but may no longer
be suspended for the offenses he was charged originally; provided:

a) that delays in the investigation of those charges "due to his fault, neglect or request, (the time
of the delay) shall not be counted in computing the time of suspension. [Supra, sec. 63(3)]

b) that if during, or after the expiration of, his preventive suspension, the petitioner commits
another or other crimes and abuses for which proper charges are filed against him by the
aggrieved party or parties, his previous suspension shall not be a bar to his being preventively
suspended again, if warranted under subpar. (2), Section 63 of the Local Government Code.

WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary Restraining Order
issued is LIFTED. The suspensions of the petitioners are AFFIRMED, provided that the petitioner,
1wphi 1

Mayor Rodolfo Ganzon, may not be made to serve future suspensions on account of any of the
remaining administrative charges pending against him for acts committed prior to August 11, 1988. The
Secretary of Interior is ORDERED to consolidate all such administrative cases pending against Mayor
Ganzon.

The sixty-day suspension against the petitioner, Mary Ann Rivera Artieda, is AFFIRMED. No costs.

SO ORDERED.
G.R. No. 80391 February 28, 1989

SULTAN ALIMBUSAR P. LIMBONA, petitioner,

vs.
CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS CONDING, ACMAD TOMAWIS,
GERRY TOMAWIS, JESUS ORTIZ, ANTONIO DELA FUENTE, DIEGO PALOMARES, JR., RAUL
DAGALANGIT, and BIMBO SINSUAT, respondents.

Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner.

Makabangkit B. Lanto for respondents.

SARMIENTO, J.:

The acts of the Sangguniang Pampook of Region XII are assailed in this petition. The antecedent facts
are as follows:

1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was appointed as a

member of the Sangguniang Pampook, Regional Autonomous Government, Region XII,
representing Lanao del Sur.

2. On March 12, 1987 petitioner was elected Speaker of the Regional Legislative
Assembly or Batasang Pampook of Central Mindanao (Assembly for brevity).

3. Said Assembly is composed of eighteen (18) members. Two of said members,

respondents Acmad Tomawis and Pakil Dagalangit, filed on March 23, 1987 with the
Commission on Elections their respective certificates of candidacy in the May 11, 1987
congressional elections for the district of Lanao del Sur but they later withdrew from the
aforesaid election and thereafter resumed again their positions as members of the
Assembly.

4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the

Committee on Muslim Affairs of the House of Representatives, invited Mr. Xavier Razul,
Pampook Speaker of Region XI, Zamboanga City and the petitioner in his capacity as
Speaker of the Assembly, Region XII, in a letter which reads:

The Committee on Muslim Affairs well undertake consultations and

dialogues with local government officials, civic, religious organizations
and traditional leaders on the recent and present political developments
and other issues affecting Regions IX and XII.

The result of the conference, consultations and dialogues would hopefully

chart the autonomous governments of the two regions as envisioned and
may prod the President to constitute immediately the Regional
Consultative Commission as mandated by the Commission.

You are requested to invite some members of the Pampook Assembly of

your respective assembly on November 1 to 15, 1987, with venue at the
Congress of the Philippines. Your presence, unstinted support and
cooperation is (sic) indispensable.

5. Consistent with the said invitation, petitioner sent a telegram to Acting Secretary
Johnny Alimbuyao of the Assembly to wire all Assemblymen that there shall be no
session in November as "our presence in the house committee hearing of Congress take
(sic) precedence over any pending business in batasang pampook ... ."

6. In compliance with the aforesaid instruction of the petitioner, Acting Secretary

Alimbuyao sent to the members of the Assembly the following telegram:

TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE

TELEGRAM RECEIVED FROM SPEAKER LIMBONA QUOTE
CONGRESSMAN JIMMY MATALAM CHAIRMAN OF THE HOUSE
COMMITTEE ON MUSLIM AFFAIRS REQUESTED ME TO ASSIST
SAID COMMITTEE IN THE DISCUSSION OF THE PROPOSED
AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WERE ALL
ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN
NOVEMBER AS OUR PRESENCE IN THE HOUSE COMMITTEE
HEARING OF CONGRESS TAKE PRECEDENCE OVER ANY PENDING
BUSINESS IN BATASANG PAMPOOK OF MATALAM FOLLOWS
UNQUOTE REGARDS.

7. On November 2, 1987, the Assembly held session in defiance of petitioner's advice,

with the following assemblymen present:

1. Sali, Salic

2. Conding, Pilipinas (sic)

3. Dagalangit, Rakil

4. Dela Fuente, Antonio

5. Mangelen, Conte

6. Ortiz, Jesus

7. Palomares, Diego

8. Sinsuat, Bimbo

9. Tomawis, Acmad

10. Tomawis, Jerry

After declaring the presence of a quorum, the Speaker Pro-Tempore was authorized to
preside in the session. On Motion to declare the seat of the Speaker vacant, all
Assemblymen in attendance voted in the affirmative, hence, the chair declared said seat
of the Speaker vacant. 8. On November 5, 1987, the session of the Assembly resumed
with the following Assemblymen present:

1. Mangelen Conte-Presiding Officer

2. Ali Salic

3. Ali Salindatu

4. Aratuc, Malik
 5. Cajelo, Rene

6. Conding, Pilipinas (sic)

7. Dagalangit, Rakil

8. Dela Fuente, Antonio

9. Ortiz, Jesus

10 Palomares, Diego

11. Quijano, Jesus

12. Sinsuat, Bimbo

13. Tomawis, Acmad

14. Tomawis, Jerry

An excerpt from the debates and proceeding of said session reads:

HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the presence
of our colleagues who have come to attend the session today, I move to call the names
of the new comers in order for them to cast their votes on the previous motion to declare
the position of the Speaker vacant. But before doing so, I move also that the designation
of the Speaker Pro Tempore as the Presiding Officer and Mr. Johnny Evangelists as
Acting Secretary in the session last November 2, 1987 be reconfirmed in today's session.

HON. SALIC ALI: I second the motions.

PRESIDING OFFICER: Any comment or objections on the two motions presented? Me

chair hears none and the said motions are approved. ...

Twelve (12) members voted in favor of the motion to declare the seat of the Speaker
vacant; one abstained and none voted against. 1

Accordingly, the petitioner prays for judgment as follows:

WHEREFORE, petitioner respectfully prays that-

(a) This Petition be given due course;

(b) Pending hearing, a restraining order or writ of preliminary injunction be issued

enjoining respondents from proceeding with their session to be held on November 5,
1987, and on any day thereafter;

(c) After hearing, judgment be rendered declaring the proceedings held by respondents
of their session on November 2, 1987 as null and void;

(d) Holding the election of petitioner as Speaker of said Legislative Assembly or Batasan
Pampook, Region XII held on March 12, 1987 valid and subsisting, and

(e) Making the injunction permanent.

 Petitioner likewise prays for such other relief as may be just and equitable. 2

Pending further proceedings, this Court, on January 19, 1988, received a resolution filed by the
Sangguniang Pampook, "EXPECTING ALIMBUSAR P. LIMBONA FROM MEMBERSHIP OF THE
SANGGUNIANG PAMPOOK AUTONOMOUS REGION XII," 3 on the grounds, among other things, that
the petitioner "had caused to be prepared and signed by him paying [sic] the salaries and emoluments of
Odin Abdula, who was considered resigned after filing his Certificate of Candidacy for Congressmen for
the First District of Maguindanao in the last May 11, elections. . . and nothing in the record of the
Assembly will show that any request for reinstatement by Abdula was ever made . . ." 4 and that "such
action of Mr. Lim bona in paying Abdula his salaries and emoluments without authority from the
Assembly . . . constituted a usurpation of the power of the Assembly," 5 that the petitioner "had recently
caused withdrawal of so much amount of cash from the Assembly resulting to the non-payment of the
salaries and emoluments of some Assembly [sic]," 6 and that he had "filed a case before the Supreme
Court against some members of the Assembly on question which should have been resolved within the
confines of the Assembly," 7 for which the respondents now submit that the petition had become "moot
and academic". 8

The first question, evidently, is whether or not the expulsion of the petitioner (pending litigation) has
made the case moot and academic.

We do not agree that the case has been rendered moot and academic by reason simply of the expulsion
resolution so issued. For, if the petitioner's expulsion was done purposely to make this petition moot and
academic, and to preempt the Court, it will not make it academic.

On the ground of the immutable principle of due process alone, we hold that the expulsion in question is
of no force and effect. In the first place, there is no showing that the Sanggunian had conducted an
investigation, and whether or not the petitioner had been heard in his defense, assuming that there was
an investigation, or otherwise given the opportunity to do so. On the other hand, what appears in the
records is an admission by the Assembly (at least, the respondents) that "since November, 1987 up to
this writing, the petitioner has not set foot at the Sangguniang Pampook." 9 "To be sure, the private
respondents aver that "[t]he Assemblymen, in a conciliatory gesture, wanted him to come to Cotabato
City," 10 but that was "so that their differences could be threshed out and settled." 11Certainly, that avowed
wanting or desire to thresh out and settle, no matter how conciliatory it may be cannot be a substitute for
the notice and hearing contemplated by law.

While we have held that due process, as the term is known in administrative law, does not absolutely
require notice and that a party need only be given the opportunity to be heard, 12 it does not appear
herein that the petitioner had, to begin with, been made aware that he had in fact stood charged of graft
and corruption before his collegues. It cannot be said therefore that he was accorded any opportunity to
rebut their accusations. As it stands, then, the charges now levelled amount to mere accusations that
cannot warrant expulsion.

In the second place, (the resolution) appears strongly to be a bare act of vendetta by the other
Assemblymen against the petitioner arising from what the former perceive to be abduracy on the part of
the latter. Indeed, it (the resolution) speaks of "a case [having been filed] [by the petitioner] before the
Supreme Court . . . on question which should have been resolved within the confines of the
Assemblyman act which some members claimed unnecessarily and unduly assails their integrity and
character as representative of the people" 13 an act that cannot possibly justify expulsion. Access to
judicial remedies is guaranteed by the Constitution, 14 and, unless the recourse amounts to malicious
prosecution, no one may be punished for seeking redress in the courts.

We therefore order reinstatement, with the caution that should the past acts of the petitioner indeed
warrant his removal, the Assembly is enjoined, should it still be so minded, to commence proper
proceedings therefor in line with the most elementary requirements of due process. And while it is within
the discretion of the members of the Sanggunian to punish their erring colleagues, their acts are
nonetheless subject to the moderating band of this Court in the event that such discretion is exercised
with grave abuse.

It is, to be sure, said that precisely because the Sangguniang Pampook(s) are "autonomous," the courts
may not rightfully intervene in their affairs, much less strike down their acts. We come, therefore, to the
second issue: Are the so-called autonomous governments of Mindanao, as they are now constituted,
subject to the jurisdiction of the national courts? In other words, what is the extent of self-government
given to the two autonomous governments of Region IX and XII?

The autonomous governments of Mindanao were organized in Regions IX and XII by Presidential
Decree No. 1618 15 promulgated on July 25, 1979. Among other things, the Decree established "internal
autonomy" 16 in the two regions "[w]ithin the framework of the national sovereignty and territorial integrity
of the Republic of the Philippines and its Constitution," 17 with legislative and executive machinery to
exercise the powers and responsibilities 18specified therein.

It requires the autonomous regional governments to "undertake all internal administrative matters for the
respective regions," 19 except to "act on matters which are within the jurisdiction and competence of the
National Government," 20 "which include, but are not limited to, the following:

(1) National defense and security;

(2) Foreign relations;

(3) Foreign trade;

(4) Currency, monetary affairs, foreign exchange, banking and quasi-banking, and
external borrowing,

(5) Disposition, exploration, development, exploitation or utilization of all natural

resources;

(6) Air and sea transport

(7) Postal matters and telecommunications;

(8) Customs and quarantine;

(9) Immigration and deportation;

(10) Citizenship and naturalization;

(11) National economic, social and educational planning; and

(12) General auditing. 21

In relation to the central government, it provides that "[t]he President shall have the power of general
supervision and control over the Autonomous Regions ..." 22

Now, autonomy is either decentralization of administration or decentralization of power. There is

decentralization of administration when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power and in the process to make local
governments "more responsive and accountable," 23 "and ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national development and social
progress." 24 At the same time, it relieves the central government of the burden of managing local affairs
and enables it to concentrate on national concerns. The President exercises "general supervision" 25 over
them, but only to "ensure that local affairs are administered according to law." 26 He has no control over
their acts in the sense that he can substitute their judgments with his own. 27

Decentralization of power, on the other hand, involves an abdication of political power in the favor of
local governments units declare to be autonomous . In that case, the autonomous government is free to
chart its own destiny and shape its future with minimum intervention from central authorities. According
to a constitutional author, decentralization of power amounts to "self-immolation," since in that event, the
autonomous government becomes accountable not to the central authorities but to its constituency. 28

But the question of whether or not the grant of autonomy Muslim Mindanao under the 1987 Constitution
involves, truly, an effort to decentralize power rather than mere administration is a question foreign to this
petition, since what is involved herein is a local government unit constituted prior to the ratification of the
present Constitution. Hence, the Court will not resolve that controversy now, in this case, since no
controversy in fact exists. We will resolve it at the proper time and in the proper case.

Under the 1987 Constitution, local government units enjoy autonomy in these two senses, thus:

Section 1. The territorial and political subdivisions of the Republic of the Philippines are
the provinces, cities, municipalities, and barangays. Here shall be autonomous regions in
Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30

xxx xxx xxx

See. 15. Mere shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing
common and distinctive historical and cultural heritage, economic and social structures,
and other relevant characteristics within the framework of this Constitution and the
national sovereignty as well as territorial integrity of the Republic of the Philippines. 31

An autonomous government that enjoys autonomy of the latter category [CONST. (1987), art. X, sec.
15.] is subject alone to the decree of the organic act creating it and accepted principles on the effects
and limits of "autonomy." On the other hand, an autonomous government of the former class is, as we
noted, under the supervision of the national government acting through the President (and the
Department of Local Government). 32 If the Sangguniang Pampook (of Region XII), then, is autonomous
in the latter sense, its acts are, debatably beyond the domain of this Court in perhaps the same way that
the internal acts, say, of the Congress of the Philippines are beyond our jurisdiction. But if it is
autonomous in the former category only, it comes unarguably under our jurisdiction. An examination of
the very Presidential Decree creating the autonomous governments of Mindanao persuades us that they
were never meant to exercise autonomy in the second sense, that is, in which the central government
commits an act of self-immolation. Presidential Decree No. 1618, in the first place, mandates that "[t]he
President shall have the power of general supervision and control over Autonomous Regions."33 In the
second place, the Sangguniang Pampook, their legislative arm, is made to discharge chiefly
administrative services, thus:

SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook shall

exercise local legislative powers over regional affairs within the framework of national
development plans, policies and goals, in the following areas:

(1) Organization of regional administrative system;

(2) Economic, social and cultural development of the Autonomous Region;

(3) Agricultural, commercial and industrial programs for the Autonomous Region;
 (4) Infrastructure development for the Autonomous Region;

(5) Urban and rural planning for the Autonomous Region;

(6) Taxation and other revenue-raising measures as provided for in this Decree;

(7) Maintenance, operation and administration of schools established by the Autonomous

Region;

(8) Establishment, operation and maintenance of health, welfare and other social
services, programs and facilities;

(9) Preservation and development of customs, traditions, languages and culture

indigenous to the Autonomous Region; and

(10) Such other matters as may be authorized by law,including the enactment of such
measures as may be necessary for the promotion of the general welfare of the people in
the Autonomous Region.

The President shall exercise such powers as may be necessary to assure that enactment
and acts of the Sangguniang Pampook and the Lupong Tagapagpaganap ng Pook are in
compliance with this Decree, national legislation, policies, plans and programs.

The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa. 34

Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the expulsion in question,
with more reason can we review the petitioner's removal as Speaker.

Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds that: (1) the
Sanggunian, in convening on November 2 and 5, 1987 (for the sole purpose of declaring the office of the
Speaker vacant), did so in violation of the Rules of the Sangguniang Pampook since the Assembly was
then on recess; and (2) assuming that it was valid, his ouster was ineffective nevertheless for lack of
quorum.

Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were invalid. It is true that
under Section 31 of the Region XII Sanggunian Rules, "[s]essions shall not be suspended or adjourned
except by direction of the Sangguniang Pampook," 35 but it provides likewise that "the Speaker may, on
[sic] his discretion, declare a recess of "short intervals." 36 Of course, there is disagreement between the
protagonists as to whether or not the recess called by the petitioner effective November 1 through 15,
1987 is the "recess of short intervals" referred to; the petitioner says that it is while the respondents insist
that, to all intents and purposes, it was an adjournment and that "recess" as used by their Rules only
refers to "a recess when arguments get heated up so that protagonists in a debate can talk things out
informally and obviate dissenssion [sic] and disunity. 37 The Court agrees with the respondents on this
regard, since clearly, the Rules speak of "short intervals." Secondly, the Court likewise agrees that the
Speaker could not have validly called a recess since the Assembly had yet to convene on November 1,
the date session opens under the same Rules. 38 Hence, there can be no recess to speak of that could
possibly interrupt any session. But while this opinion is in accord with the respondents' own, we still
invalidate the twin sessions in question, since at the time the petitioner called the "recess," it was not a
settled matter whether or not he could. do so. In the second place, the invitation tendered by the
Committee on Muslim Affairs of the House of Representatives provided a plausible reason for the
intermission sought. Thirdly, assuming that a valid recess could not be called, it does not appear that the
respondents called his attention to this mistake. What appears is that instead, they opened the sessions
themselves behind his back in an apparent act of mutiny. Under the circumstances, we find equity on his
side. For this reason, we uphold the "recess" called on the ground of good faith.
It does not appear to us, moreover, that the petitioner had resorted to the aforesaid "recess" in order to
forestall the Assembly from bringing about his ouster. This is not apparent from the pleadings before us.
We are convinced that the invitation was what precipitated it.

In holding that the "recess" in question is valid, we are not to be taken as establishing a precedent, since,
as we said, a recess can not be validly declared without a session having been first opened. In upholding
the petitioner herein, we are not giving him a carte blanche to order recesses in the future in violation of
the Rules, or otherwise to prevent the lawful meetings thereof.

Neither are we, by this disposition, discouraging the Sanggunian from reorganizing itself pursuant to its
lawful prerogatives. Certainly, it can do so at the proper time. In the event that be petitioner should
initiate obstructive moves, the Court is certain that it is armed with enough coercive remedies to thwart
them. 39

In view hereof, we find no need in dwelling on the issue of quorum.

WHEREFORE, premises considered, the petition is GRANTED. The Sangguniang Pampook, Region XII,
is ENJOINED to (1) REINSTATE the petitioner as Member, Sangguniang Pampook, Region XII; and (2)
REINSTATE him as Speaker thereof. No costs.

SO ORDERED.
 [G.R. No. 152774. May 27, 2004]

THE PROVINCE OF BATANGAS, represented by its Governor, HERMILANDO I.

MANDANAS, petitioner, vs. HON. ALBERTO G. ROMULO, Executive Secretary and
Chairman of the Oversight Committee on Devolution; HON. EMILIA BONCODIN,
Secretary, Department of Budget and Management; HON. JOSE D. LINA, JR.,
Secretary, Department of Interior and Local Government, respondents.

DECISION
CALLEJO, SR., J.:

The Province of Batangas, represented by its Governor, Hermilando I. Mandanas, filed the
present petition for certiorari, prohibition and mandamus under Rule 65 of the Rules of Court, as
amended, to declare as unconstitutional and void certain provisos contained in the General
Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they uniformly earmarked for each
corresponding year the amount of five billion pesos (P5,000,000,000.00) of the Internal Revenue
Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) and imposed
conditions for the release thereof.
Named as respondents are Executive Secretary Alberto G. Romulo, in his capacity as
Chairman of the Oversight Committee on Devolution, Secretary Emilia Boncodin of the Department
of Budget and Management (DBM) and Secretary Jose Lina of the Department of Interior and Local
Government (DILG).

Background

On December 7, 1998, then President Joseph Ejercito Estrada issued Executive Order (E.O.)
No. 48 entitled ESTABLISHING A PROGRAM FOR DEVOLUTION ADJUSTMENT AND
EQUALIZATION. The program was established to facilitate the process of enhancing the capacities
of local government units (LGUs) in the discharge of the functions and services devolved to them by
the National Government Agencies concerned pursuant to the Local Government Code.[1] The
Oversight Committee (referred to as the Devolution Committee in E.O. No. 48) constituted under
Section 533(b) of Republic Act No. 7160 (The Local Government Code of 1991) has been tasked to
formulate and issue the appropriate rules and regulations necessary for its effective
implementation.[2] Further, to address the funding shortfalls of functions and services devolved to
the LGUs and other funding requirements of the program, the Devolution Adjustment and
Equalization Fund was created.[3] For 1998, the DBM was directed to set aside an amount to be
determined by the Oversight Committee based on the devolution status appraisal surveys
undertaken by the DILG.[4] The initial fund was to be sourced from the available savings of the
national government for CY 1998.[5] For 1999 and the succeeding years, the corresponding amount
required to sustain the program was to be incorporated in the annual GAA. [6] The Oversight
Committee has been authorized to issue the implementing rules and regulations governing the
equitable allocation and distribution of said fund to the LGUs.[7]

The LGSEF in the GAA of 1999

In Republic Act No. 8745, otherwise known as the GAA of 1999, the program was renamed as
the LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF). Under said appropriations
law, the amount of P96,780,000,000 was allotted as the share of the LGUs in the internal revenue
taxes. Item No. 1, Special Provisions, Title XXXVI A. Internal Revenue Allotment of Rep. Act No.
8745 contained the following proviso:

... PROVIDED, That the amount of FIVE BILLION PESOS (P5,000,000,000) shall be earmarked for the
Local Government Service Equalization Fund for the funding requirements of projects and activities arising
from the full and efficient implementation of devolved functions and services of local government units
pursuant to R.A. No. 7160, otherwise known as the Local Government Code of 1991: PROVIDED,
FURTHER, That such amount shall be released to the local government units subject to the implementing
rules and regulations, including such mechanisms and guidelines for the equitable allocations and distribution
of said fund among local government units subject to the guidelines that may be prescribed by the Oversight
Committee on Devolution as constituted pursuant to Book IV, Title III, Section 533(b) of R.A. No. 7160. The
Internal Revenue Allotment shall be released directly by the Department of Budget and Management to the
Local Government Units concerned.

On July 28, 1999, the Oversight Committee (with then Executive Secretary Ronaldo B. Zamora
as Chairman) passed Resolution Nos. OCD-99-003, OCD-99-005 and OCD-99-006 entitled as
follows:

OCD-99-005

RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP5 BILLION CY

1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF) AND
REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO ESTRADA TO
APPROVE SAID ALLOCATION SCHEME.

OCD-99-006

RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP4.0 BILLION

OF THE 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND AND ITS
CONCOMITANT GENERAL FRAMEWORK, IMPLEMENTING GUIDELINES AND
MECHANICS FOR ITS IMPLEMENTATION AND RELEASE, AS PROMULGATED BY
THE OVERSIGHT COMMITTEE ON DEVOLUTION.

OCD-99-003

RESOLUTION REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO

ESTRADA TO APPROVE THE REQUEST OF THE OVERSIGHT COMMITTEE ON
DEVOLUTION TO SET ASIDE TWENTY PERCENT (20%) OF THE LOCAL
GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF) FOR LOCAL
AFFIRMATIVE ACTION PROJECTS AND OTHER PRIORITY INITIATIVES FOR LGUs
INSTITUTIONAL AND CAPABILITY BUILDING IN ACCORDANCE WITH THE
IMPLEMENTING GUIDELINES AND MECHANICS AS PROMULGATED BY THE
COMMITTEE.
These OCD resolutions were approved by then President Estrada on October 6, 1999.
Under the allocation scheme adopted pursuant to Resolution No. OCD-99-005, the five billion
pesos LGSEF was to be allocated as follows:
1. The PhP4 Billion of the LGSEF shall be allocated in accordance with the allocation
scheme and implementing guidelines and mechanics promulgated and adopted by the
OCD. To wit:
 a. The first PhP2 Billion of the LGSEF shall be allocated in accordance with the codal formula
sharing scheme as prescribed under the 1991 Local Government Code;

b. The second PhP2 Billion of the LGSEF shall be allocated in accordance with a modified 1992
cost of devolution fund (CODEF) sharing scheme, as recommended by the respective leagues
of provinces, cities and municipalities to the OCD. The modified CODEF sharing formula is
as follows:

Province : 40%
Cities : 20%
Municipalities : 40%

This is applied to the P2 Billion after the approved amounts granted to individual
provinces, cities and municipalities as assistance to cover decrease in 1999 IRA share
due to reduction in land area have been taken out.
2. The remaining PhP1 Billion of the LGSEF shall be earmarked to support local affirmative
action projects and other priority initiatives submitted by LGUs to the Oversight
Committee on Devolution for approval in accordance with its prescribed guidelines as
promulgated and adopted by the OCD.
In Resolution No. OCD-99-003, the Oversight Committee set aside the one billion pesos or
20% of the LGSEF to support Local Affirmative Action Projects (LAAPs) of LGUs. This remaining
amount was intended to respond to the urgent need for additional funds assistance, otherwise not
available within the parameters of other existing fund sources. For LGUs to be eligible for funding
under the one-billion-peso portion of the LGSEF, the OCD promulgated the following:

III. CRITERIA FOR ELIGIBILITY:

1. LGUs (province, city, municipality, or barangay), individually or by group or multi-LGUs or

leagues of LGUs, especially those belonging to the 5th and 6th class, may access the fund to
support any projects or activities that satisfy any of the aforecited purposes. A barangay may
also access this fund directly or through their respective municipality or city.

2. The proposed project/activity should be need-based, a local priority, with high development
impact and are congruent with the socio-cultural, economic and development agenda of the
Estrada Administration, such as food security, poverty alleviation, electrification, and peace
and order, among others.

3. Eligible for funding under this fund are projects arising from, but not limited to, the following
areas of concern:

a. delivery of local health and sanitation services, hospital services and other tertiary services;

b. delivery of social welfare services;

c. provision of socio-cultural services and facilities for youth and community development;

d. provision of agricultural and on-site related research;

e. improvement of community-based forestry projects and other local projects on environment

and natural resources protection and conservation;

f. improvement of tourism facilities and promotion of tourism;

 g. peace and order and public safety;

h. construction, repair and maintenance of public works and infrastructure, including public
buildings and facilities for public use, especially those destroyed or damaged by man-
made or natural calamities and disaster as well as facilities for water supply, flood
control and river dikes;

i. provision of local electrification facilities;

j. livelihood and food production services, facilities and equipment;

k. other projects that may be authorized by the OCD consistent with the aforementioned
objectives and guidelines;

4. Except on extremely meritorious cases, as may be determined by the Oversight Committee on

Devolution, this portion of the LGSEF shall not be used in expenditures for personal costs or
benefits under existing laws applicable to governments. Generally, this fund shall cover the
following objects of expenditures for programs, projects and activities arising from the
implementation of devolved and regular functions and services:

a. acquisition/procurement of supplies and materials critical to the full and effective

implementation of devolved programs, projects and activities;

b. repair and/or improvement of facilities;

c. repair and/or upgrading of equipment;

d. acquisition of basic equipment;

e. construction of additional or new facilities;

f. counterpart contribution to joint arrangements or collective projects among groups of

municipalities, cities and/or provinces related to devolution and delivery of basic
services.

5. To be eligible for funding, an LGU or group of LGU shall submit to the Oversight Committee on
Devolution through the Department of Interior and Local Governments, within the prescribed
schedule and timeframe, a Letter Request for Funding Support from the Affirmative Action
Program under the LGSEF, duly signed by the concerned LGU(s) and endorsed by
cooperators and/or beneficiaries, as well as the duly signed Resolution of Endorsement by the
respective Sanggunian(s) of the LGUs concerned. The LGU-proponent shall also be required
to submit the Project Request (PR), using OCD Project Request Form No. 99-02, that details
the following:

(a) general description or brief of the project;

(b) objectives and justifications for undertaking the project, which should highlight the
benefits to the locality and the expected impact to the local program/project arising
from the full and efficient implementation of social services and facilities, at the local
levels;

(c) target outputs or key result areas;

 (d) schedule of activities and details of requirements;

(e) total cost requirement of the project;

(f) proponents counterpart funding share, if any, and identified source(s) of counterpart funds
for the full implementation of the project;

(g) requested amount of project cost to be covered by the LGSEF.

Further, under the guidelines formulated by the Oversight Committee as contained in

Attachment - Resolution No. OCD-99-003, the LGUs were required to identify the projects eligible
for funding under the one-billion-peso portion of the LGSEF and submit the project proposals
thereof and other documentary requirements to the DILG for appraisal. The project proposals that
passed the DILGs appraisal would then be submitted to the Oversight Committee for review,
evaluation and approval. Upon its approval, the Oversight Committee would then serve notice to the
DBM for the preparation of the Special Allotment Release Order (SARO) and Notice of Cash
Allocation (NCA) to effect the release of funds to the said LGUs.

The LGSEF in the GAA of 2000

Under Rep. Act No. 8760, otherwise known as the GAA of 2000, the amount
of P111,778,000,000 was allotted as the share of the LGUs in the internal revenue taxes. As in the
GAA of 1999, the GAA of 2000 contained a proviso earmarking five billion pesos of the IRA for the
LGSEF. This proviso, found in Item No. 1, Special Provisions, Title XXXVII A. Internal Revenue
Allotment, was similarly worded as that contained in the GAA of 1999.
The Oversight Committee, in its Resolution No. OCD-2000-023 dated June 22, 2000, adopted
the following allocation scheme governing the five billion pesos LGSEF for 2000:

1. The PhP3.5 Billion of the CY 2000 LGSEF shall be allocated to and shared by the four levels of
LGUs, i.e., provinces, cities, municipalities, and barangays, using the following percentage-
sharing formula agreed upon and jointly endorsed by the various Leagues of LGUs:

For Provinces 26% or P 910,000,000

For Cities 23% or 805,000,000
For Municipalities 35% or 1,225,000,000
For Barangays 16% or 560,000,000

Provided that the respective Leagues representing the provinces, cities, municipalities and
barangays shall draw up and adopt the horizontal distribution/sharing schemes among the
member LGUs whereby the Leagues concerned may opt to adopt direct financial assistance or
project-based arrangement, such that the LGSEF allocation for individual LGU shall be
released directly to the LGU concerned;

Provided further that the individual LGSEF shares to LGUs are used in accordance with the
general purposes and guidelines promulgated by the OCD for the implementation of the
LGSEF at the local levels pursuant to Res. No. OCD-99-006 dated October 7, 1999 and
pursuant to the Leagues guidelines and mechanism as approved by the OCD;

Provided further that each of the Leagues shall submit to the OCD for its approval their
respective allocation scheme, the list of LGUs with the corresponding LGSEF shares and the
corresponding project categories if project-based;
 Provided further that upon approval by the OCD, the lists of LGUs shall be endorsed to the
DBM as the basis for the preparation of the corresponding NCAs, SAROs, and related
budget/release documents.

2. The remaining P1,500,000,000 of the CY 2000 LGSEF shall be earmarked to support the
following initiatives and local affirmative action projects, to be endorsed to and approved by
the Oversight Committee on Devolution in accordance with the OCD agreements,
guidelines, procedures and documentary requirements:

On July 5, 2000, then President Estrada issued a Memorandum authorizing then Executive
Secretary Zamora and the DBM to implement and release the 2.5 billion pesos LGSEF for 2000 in
accordance with Resolution No. OCD-2000-023.
Thereafter, the Oversight Committee, now under the administration of President Gloria
Macapagal-Arroyo, promulgated Resolution No. OCD-2001-29 entitled ADOPTING RESOLUTION
NO. OCD-2000-023 IN THE ALLOCATION, IMPLEMENTATION AND RELEASE OF THE
REMAINING P2.5 BILLION LGSEF FOR CY 2000. Under this resolution, the amount of one billion
pesos of the LGSEF was to be released in accordance with paragraph 1 of Resolution No. OCD-
2000-23, to complete the 3.5 billion pesos allocated to the LGUs, while the amount of 1.5 billion
pesos was allocated for the LAAP. However, out of the latter amount, P400,000,000 was to be
allocated and released as follows: P50,000,000 as financial assistance to the LAAPs of
LGUs; P275,360,227 as financial assistance to cover the decrease in the IRA of LGUs concerned
due to reduction in land area; and P74,639,773 for the LGSEF Capability-Building Fund.

The LGSEF in the GAA of 2001

In view of the failure of Congress to enact the general appropriations law for 2001, the GAA of
2000 was deemed re-enacted, together with the IRA of the LGUs therein and the proviso
earmarking five billion pesos thereof for the LGSEF.
On January 9, 2002, the Oversight Committee adopted Resolution No. OCD-2002-001
allocating the five billion pesos LGSEF for 2001 as follows:

Modified Codal Formula P 3.000 billion

Priority Projects 1.900 billion
Capability Building Fund .100 billion
P 5.000 billion

RESOLVED FURTHER, that the P3.0 B of the CY 2001 LGSEF which is to be allocated according to the
modified codal formula shall be released to the four levels of LGUs, i.e., provinces, cities, municipalities and
barangays, as follows:

LGUs Percentage Amount

Provinces 25 P 0.750 billion

Cities 25 0.750

Municipalities 35 1.050

Barangays 15 0.450
 100 P 3.000 billion

RESOLVED FURTHER, that the P1.9 B earmarked for priority projects shall be distributed according to the
following criteria:

1.0 For projects of the 4th, 5th and 6th class LGUs; or

2.0 Projects in consonance with the Presidents State of the Nation Address (SONA)/summit
commitments.

RESOLVED FURTHER, that the remaining P100 million LGSEF capability building fund shall be distributed
in accordance with the recommendation of the Leagues of Provinces, Cities, Municipalities and Barangays,
and approved by the OCD.

Upon receipt of a copy of the above resolution, Gov. Mandanas wrote to the individual
members of the Oversight Committee seeking the reconsideration of Resolution No. OCD-2002-
001. He also wrote to Pres. Macapagal-Arroyo urging her to disapprove said resolution as it violates
the Constitution and the Local Government Code of 1991.
On January 25, 2002, Pres. Macapagal-Arroyo approved Resolution No. OCD-2002-001.

The Petitioners Case

The petitioner now comes to this Court assailing as unconstitutional and void the provisos in the
GAAs of 1999, 2000 and 2001, relating to the LGSEF. Similarly assailed are the Oversight
Committees Resolutions Nos. OCD-99-003, OCD-99-005, OCD-99-006, OCD-2000-023, OCD-
2001-029 and OCD-2002-001 issued pursuant thereto. The petitioner submits that the assailed
provisos in the GAAs and the OCD resolutions, insofar as they earmarked the amount of five billion
pesos of the IRA of the LGUs for 1999, 2000 and 2001 for the LGSEF and imposed conditions for
the release thereof, violate the Constitution and the Local Government Code of 1991.
Section 6, Article X of the Constitution is invoked as it mandates that the just share of the LGUs
shall be automatically released to them. Sections 18 and 286 of the Local Government Code of
1991, which enjoin that the just share of the LGUs shall be automatically and directly released to
them without need of further action are, likewise, cited.
The petitioner posits that to subject the distribution and release of the five-billion-peso portion of
the IRA, classified as the LGSEF, to compliance by the LGUs with the implementing rules and
regulations, including the mechanisms and guidelines prescribed by the Oversight Committee,
contravenes the explicit directive of the Constitution that the LGUs share in the national taxes shall
be automatically released to them. The petitioner maintains that the use of the word shall must be
given a compulsory meaning.
To further buttress this argument, the petitioner contends that to vest the Oversight Committee
with the authority to determine the distribution and release of the LGSEF, which is a part of the IRA
of the LGUs, is an anathema to the principle of local autonomy as embodied in the Constitution and
the Local Government Code of 1991. The petitioner cites as an example the experience in 2001
when the release of the LGSEF was long delayed because the Oversight Committee was not able
to convene that year and no guidelines were issued therefor. Further, the possible disapproval by
the Oversight Committee of the project proposals of the LGUs would result in the diminution of the
latters share in the IRA.
Another infringement alleged to be occasioned by the assailed OCD resolutions is the improper
amendment to Section 285 of the Local Government Code of 1991 on the percentage sharing of the
IRA among the LGUs. Said provision allocates the IRA as follows: Provinces 23%; Cities 23%;
Municipalities 34%; and Barangays 20%.[8] This formula has been improperly amended or modified,
with respect to the five-billion-peso portion of the IRA allotted for the LGSEF, by the assailed OCD
resolutions as they invariably provided for a different sharing scheme.
The modifications allegedly constitute an illegal amendment by the executive branch of a
substantive law. Moreover, the petitioner mentions that in the Letter dated December 5, 2001 of
respondent Executive Secretary Romulo addressed to respondent Secretary Boncodin, the former
endorsed to the latter the release of funds to certain LGUs from the LGSEF in accordance with the
handwritten instructions of President Arroyo. Thus, the LGUs are at a loss as to how a portion of the
LGSEF is actually allocated. Further, there are still portions of the LGSEF that, to date, have not
been received by the petitioner; hence, resulting in damage and injury to the petitioner.
The petitioner prays that the Court declare as unconstitutional and void the assailed provisos
relating to the LGSEF in the GAAs of 1999, 2000 and 2001 and the assailed OCD resolutions
(Resolutions Nos. OCD-99-003, OCD-99-005, OCD-99-006, OCD-2000-023, OCD-2001-029 and
OCD-2002-001) issued by the Oversight Committee pursuant thereto. The petitioner, likewise, prays
that the Court direct the respondents to rectify the unlawful and illegal distribution and releases of
the LGSEF for the aforementioned years and release the same in accordance with the sharing
formula under Section 285 of the Local Government Code of 1991. Finally, the petitioner urges the
Court to declare that the entire IRA should be released automatically without further action by the
LGUs as required by the Constitution and the Local Government Code of 1991.

The Respondents Arguments

The respondents, through the Office of the Solicitor General, urge the Court to dismiss the
petition on procedural and substantive grounds. On the latter, the respondents contend that the
assailed provisos in the GAAs of 1999, 2000 and 2001 and the assailed resolutions issued by the
Oversight Committee are not constitutionally infirm. The respondents advance the view that Section
6, Article X of the Constitution does not specify that the just share of the LGUs shall be determined
solely by the Local Government Code of 1991. Moreover, the phrase as determined by law in the
same constitutional provision means that there exists no limitation on the power of Congress to
determine what is the just share of the LGUs in the national taxes.In other words, Congress is the
arbiter of what should be the just share of the LGUs in the national taxes.
The respondents further theorize that Section 285 of the Local Government Code of 1991,
which provides for the percentage sharing of the IRA among the LGUs, was not intended to be a
fixed determination of their just share in the national taxes. Congress may enact other laws,
including appropriations laws such as the GAAs of 1999, 2000 and 2001, providing for a different
sharing formula. Section 285 of the Local Government Code of 1991 was merely intended to be the
default share of the LGUs to do away with the need to determine annually by law their just
share. However, the LGUs have no vested right in a permanent or fixed percentage as Congress
may increase or decrease the just share of the LGUs in accordance with what it believes is
appropriate for their operation. There is nothing in the Constitution which prohibits Congress from
making such determination through the appropriations laws. If the provisions of a particular statute,
the GAA in this case, are within the constitutional power of the legislature to enact, they should be
sustained whether the courts agree or not in the wisdom of their enactment.
On procedural grounds, the respondents urge the Court to dismiss the petition outright as the
same is defective. The petition allegedly raises factual issues which should be properly threshed out
in the lower courts, not this Court, not being a trier of facts. Specifically, the petitioners allegation
that there are portions of the LGSEF that it has not, to date, received, thereby causing it (the
petitioner) injury and damage, is subject to proof and must be substantiated in the proper
venue, i.e., the lower courts.
 Further, according to the respondents, the petition has already been rendered moot and
academic as it no longer presents a justiciable controversy. The IRAs for the years 1999, 2000 and
2001, have already been released and the government is now operating under the 2003 budget. In
support of this, the respondents submitted certifications issued by officers of the DBM attesting to
the release of the allocation or shares of the petitioner in the LGSEF for 1999, 2000 and
2001. There is, therefore, nothing more to prohibit.
Finally, the petitioner allegedly has no legal standing to bring the suit because it has not
suffered any injury. In fact, the petitioners just share has even increased. Pursuant to Section 285 of
the Local Government Code of 1991, the share of the provinces is 23%. OCD Nos. 99-005, 99-006
and 99-003 gave the provinces 40% of P2 billion of the LGSEF. OCD Nos. 2000-023 and 2001-029
apportioned 26% of P3.5 billion to the provinces. On the other hand, OCD No. 2001-001 allocated
25% of P3 billion to the provinces. Thus, the petitioner has not suffered any injury in the
implementation of the assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD
resolutions.

The Ruling of the Court

Procedural Issues

Before resolving the petition on its merits, the Court shall first rule on the following procedural
issues raised by the respondents: (1) whether the petitioner has legal standing or locus standi to file
the present suit; (2) whether the petition involves factual questions that are properly cognizable by
the lower courts; and (3) whether the issue had been rendered moot and academic.

The petitioner has locus standi

to maintain the present suit

The gist of the question of standing is whether a party has alleged such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court so largely depends for illumination of difficult
constitutional questions.[9] Accordingly, it has been held that the interest of a party assailing the
constitutionality of a statute must be direct and personal. Such party must be able to show, not only
that the law or any government act is invalid, but also that he has sustained or is in imminent danger
of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby
in some indefinite way. It must appear that the person complaining has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to
some burdens or penalties by reason of the statute or act complained of.[10]
The Court holds that the petitioner possesses the requisite standing to maintain the present
suit. The petitioner, a local government unit, seeks relief in order to protect or vindicate an interest of
its own, and of the other LGUs. This interest pertains to the LGUs share in the national taxes or the
IRA. The petitioners constitutional claim is, in substance, that the assailed provisos in the GAAs of
1999, 2000 and 2001, and the OCD resolutions contravene Section 6, Article X of the Constitution,
mandating the automatic release to the LGUs of their share in the national taxes. Further, the injury
that the petitioner claims to suffer is the diminution of its share in the IRA, as provided under Section
285 of the Local Government Code of 1991, occasioned by the implementation of the assailed
measures. These allegations are sufficient to grant the petitioner standing to question the validity of
the assailed provisos in the GAAs of 1999, 2000 and 2001, and the OCD resolutions as the
petitioner clearly has a plain, direct and adequate interest in the manner and distribution of the IRA
among the LGUs.

The petition involves a significant

legal issue

The crux of the instant controversy is whether the assailed provisos contained in the GAAs of
1999, 2000 and 2001, and the OCD resolutions infringe the Constitution and the Local Government
Code of 1991. This is undoubtedly a legal question. On the other hand, the following facts are not
disputed:
1. The earmarking of five billion pesos of the IRA for the LGSEF in the assailed provisos in
the GAAs of 1999, 2000 and re-enacted budget for 2001;
2. The promulgation of the assailed OCD resolutions providing for the allocation schemes
covering the said five billion pesos and the implementing rules and regulations therefor;
and
3. The release of the LGSEF to the LGUs only upon their compliance with the
implementing rules and regulations, including the guidelines and mechanisms,
prescribed by the Oversight Committee.
Considering that these facts, which are necessary to resolve the legal question now before this
Court, are no longer in issue, the same need not be determined by a trial court.[11] In any case, the
rule on hierarchy of courts will not prevent this Court from assuming jurisdiction over the
petition. The said rule may be relaxed when the redress desired cannot be obtained in the
appropriate courts or where exceptional and compelling circumstances justify availment of a remedy
within and calling for the exercise of this Courts primary jurisdiction.[12]
The crucial legal issue submitted for resolution of this Court entails the proper legal
interpretation of constitutional and statutory provisions. Moreover, the transcendental importance of
the case, as it necessarily involves the application of the constitutional principle on local autonomy,
cannot be gainsaid. The nature of the present controversy, therefore, warrants the relaxation by this
Court of procedural rules in order to resolve the case forthwith.

The substantive issue needs to be resolved

notwithstanding the supervening events

Granting arguendo that, as contended by the respondents, the resolution of the case had
already been overtaken by supervening events as the IRA, including the LGSEF, for 1999, 2000
and 2001, had already been released and the government is now operating under a new
appropriations law, still, there is compelling reason for this Court to resolve the substantive issue
raised by the instant petition. Supervening events, whether intended or accidental, cannot prevent
the Court from rendering a decision if there is a grave violation of the Constitution.[13] Even in cases
where supervening events had made the cases moot, the Court did not hesitate to resolve the legal
or constitutional issues raised to formulate controlling principles to guide the bench, bar and
public.[14]
Another reason justifying the resolution by this Court of the substantive issue now before it is
the rule that courts will decide a question otherwise moot and academic if it is capable of repetition,
yet evading review.[15] For the GAAs in the coming years may contain provisos similar to those now
being sought to be invalidated, and yet, the question may not be decided before another GAA is
enacted. It, thus, behooves this Court to make a categorical ruling on the substantive issue now.
 Substantive Issue

As earlier intimated, the resolution of the substantive legal issue in this case calls for the
application of a most important constitutional policy and principle, that of local autonomy. [16] In
Article II of the Constitution, the State has expressly adopted as a policy that:

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

An entire article (Article X) of the Constitution has been devoted to guaranteeing and promoting
the autonomy of LGUs. Section 2 thereof reiterates the State policy in this wise:

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

Consistent with the principle of local autonomy, the Constitution confines the Presidents power
over the LGUs to one of general supervision.[17] This provision has been interpreted to exclude the
power of control. The distinction between the two powers was enunciated in Drilon v. Lim:[18]

An officer in control lays down the rules in the doing of an act. If they are not followed, he may, in his
discretion, order the act undone or re-done by his subordinate or he may even decide to do it
himself.Supervision does not cover such authority. The supervisor or superintendent merely sees to it that the
rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or
replace them. If the rules are not observed, he may order the work done or re-done but only to conform to the
prescribed rules. He may not prescribe his own manner for doing the act. He has no judgment on this matter
except to see to it that the rules are followed.[19]

The Local Government Code of 1991[20] was enacted to flesh out the mandate of the
Constitution.[21] The State policy on local autonomy is amplified in Section 2 thereof:

Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that the territorial and political
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their
fullest development as self-reliant communities and make them more effective partners in the attainment of
national goals. Toward this end, the State shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization whereby local government units shall be
given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed
from the National Government to the local government units.

Guided by these precepts, the Court shall now determine whether the assailed provisos in the
GAAs of 1999, 2000 and 2001, earmarking for each corresponding year the amount of five billion
pesos of the IRA for the LGSEF and the OCD resolutions promulgated pursuant thereto, transgress
the Constitution and the Local Government Code of 1991.

The assailed provisos in the GAAs of 1999, 2000

and 2001 and the OCD resolutions violate the
constitutional precept on local autonomy

Section 6, Article X of the Constitution reads:

Sec. 6. Local government units shall have a just share, as determined by law, in the national taxes which
shall be automatically released to them.
 When parsed, it would be readily seen that this provision mandates that (1) the LGUs shall
have a just share in the national taxes; (2) the just share shall be determined by law; and (3) the just
share shall be automatically released to the LGUs.
The Local Government Code of 1991, among its salient provisions, underscores the automatic
release of the LGUs just share in this wise:

Sec. 18. Power to Generate and Apply Resources. Local government units shall have the power and authority
to establish an organization that shall be responsible for the efficient and effective implementation of their
development plans, program objectives and priorities; to create their own sources of revenue and to levy taxes,
fees, and charges which shall accrue exclusively for their use and disposition and which shall be retained by
them; to have a just share in national taxes which shall be automatically and directly released to them without
need of further action;

...

Sec. 286. Automatic Release of Shares. (a) The share of each local government unit shall be released, without
need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be,
on a quarterly basis within five (5) days after the end of each quarter, and which shall not be subject to any
lien or holdback that may be imposed by the national government for whatever purpose.

(b) Nothing in this Chapter shall be understood to diminish the share of local government units under existing
laws.

Websters Third New International Dictionary defines automatic as involuntary either wholly or to
a major extent so that any activity of the will is largely negligible; of a reflex nature; without volition;
mechanical; like or suggestive of an automaton. Further, the word automatically is defined as in an
automatic manner: without thought or conscious intention. Being automatic, thus, connotes
something mechanical, spontaneous and perfunctory. As such, the LGUs are not required to
perform any act to receive the just share accruing to them from the national coffers. As emphasized
by the Local Government Code of 1991, the just share of the LGUs shall be released to them
without need of further action. Construing Section 286 of the LGC, we held in Pimentel, Jr. v.
Aguirre,[22] viz:

Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal autonomy is
the automatic release of the shares of LGUs in the National internal revenue. This is mandated by no less than
the Constitution. The Local Government Code specifies further that the release shall be made directly to the
LGU concerned within five (5) days after every quarter of the year and shall not be subject to any lien or
holdback that may be imposed by the national government for whatever purpose. As a rule, the
term SHALL is a word of command that must be given a compulsory meaning. The provision is,
therefore, IMPERATIVE.

Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 percent of the LGUs
IRA pending the assessment and evaluation by the Development Budget Coordinating Committee of the
emerging fiscal situation in the country. Such withholding clearly contravenes the Constitution and the
law. Although temporary, it is equivalent to a holdback, which means something held back or withheld, often
temporarily. Hence, the temporary nature of the retention by the national government does not matter. Any
retention is prohibited.

In sum, while Section 1 of AO 372 may be upheld as an advisory effected in times of national crisis, Section 4
thereof has no color of validity at all. The latter provision effectively encroaches on the fiscal autonomy of
local governments. Concededly, the President was well-intentioned in issuing his Order to withhold the LGUs
IRA, but the rule of law requires that even the best intentions must be carried out within the parameters of the
Constitution and the law. Verily, laudable purposes must be carried out by legal methods.[23]
 The just share of the LGUs is incorporated as the IRA in the appropriations law or GAA enacted
by Congress annually. Under the assailed provisos in the GAAs of 1999, 2000 and 2001, a portion
of the IRA in the amount of five billion pesos was earmarked for the LGSEF, and these provisos
imposed the condition that such amount shall be released to the local government units subject to
the implementing rules and regulations, including such mechanisms and guidelines for the equitable
allocations and distribution of said fund among local government units subject to the guidelines that
may be prescribed by the Oversight Committee on Devolution. Pursuant thereto, the Oversight
Committee, through the assailed OCD resolutions, apportioned the five billion pesos LGSEF such
that:

For 1999

P2 billion - allocated according to Sec. 285 LGC

P2 billion - Modified Sharing Formula (Provinces 40%;
Cities 20%; Municipalities 40%)
P1 billion projects (LAAP) approved by OCD.[24]

For 2000

P3.5 billion Modified Sharing Formula (Provinces 26%;

Cities 23%; Municipalities 35%; Barangays 16%);
P1.5 billion projects (LAAP) approved by the OCD.[25]

For 2001

P3 billion Modified Sharing Formula (Provinces 25%;

Cities 25%; Municipalities 35%; Barangays 15%)
P1.9 billion priority projects
P100 million capability building fund.[26]

Significantly, the LGSEF could not be released to the LGUs without the Oversight Committees
prior approval. Further, with respect to the portion of the LGSEF allocated for various projects of the
LGUs (P1 billion for 1999; P1.5 billion for 2000 and P2 billion for 2001), the Oversight Committee,
through the assailed OCD resolutions, laid down guidelines and mechanisms that the LGUs had to
comply with before they could avail of funds from this portion of the LGSEF. The guidelines required
(a) the LGUs to identify the projects eligible for funding based on the criteria laid down by the
Oversight Committee; (b) the LGUs to submit their project proposals to the DILG for appraisal; (c)
the project proposals that passed the appraisal of the DILG to be submitted to the Oversight
Committee for review, evaluation and approval. It was only upon approval thereof that the Oversight
Committee would direct the DBM to release the funds for the projects.
To the Courts mind, the entire process involving the distribution and release of the LGSEF is
constitutionally impermissible. The LGSEF is part of the IRA or just share of the LGUs in the
national taxes. To subject its distribution and release to the vagaries of the implementing rules and
regulations, including the guidelines and mechanisms unilaterally prescribed by the Oversight
Committee from time to time, as sanctioned by the assailed provisos in the GAAs of 1999, 2000 and
2001 and the OCD resolutions, makes the release not automatic, a flagrant violation of the
constitutional and statutory mandate that the just share of the LGUs shall be automatically released
to them. The LGUs are, thus, placed at the mercy of the Oversight Committee.
Where the law, the Constitution in this case, is clear and unambiguous, it must be taken to
mean exactly what it says, and courts have no choice but to see to it that the mandate is
obeyed.[27] Moreover, as correctly posited by the petitioner, the use of the word shall connotes a
mandatory order. Its use in a statute denotes an imperative obligation and is inconsistent with the
idea of discretion.[28]
 Indeed, the Oversight Committee exercising discretion, even control, over the distribution and
release of a portion of the IRA, the LGSEF, is an anathema to and subversive of the principle of
local autonomy as embodied in the Constitution. Moreover, it finds no statutory basis at all as the
Oversight Committee was created merely to formulate the rules and regulations for the efficient and
effective implementation of the Local Government Code of 1991 to ensure compliance with the
principles of local autonomy as defined under the Constitution.[29] In fact, its creation was placed
under the title of Transitory Provisions, signifying its ad hoc character. According to Senator Aquilino
Q. Pimentel, the principal author and sponsor of the bill that eventually became Rep. Act No. 7160,
the Committees work was supposed to be done a year from the approval of the Code, or on October
10, 1992.[30] The Oversight Committees authority is undoubtedly limited to the implementation of the
Local Government Code of 1991, not to supplant or subvert the same. Neither can it exercise
control over the IRA, or even a portion thereof, of the LGUs.
That the automatic release of the IRA was precisely intended to guarantee and promote local
autonomy can be gleaned from the discussion below between Messrs. Jose N. Nolledo and
Regalado M. Maambong, then members of the 1986 Constitutional Commission, to wit:

MR. MAAMBONG. Unfortunately, under Section 198 of the Local Government Code, the existence of
subprovinces is still acknowledged by the law, but the statement of the Gentleman on this point will have to
be taken up probably by the Committee on Legislation. A second point, Mr. Presiding Officer, is that under
Article 2, Section 10 of the 1973 Constitution, we have a provision which states:

The State shall guarantee and promote the autonomy of local government units, especially the
barrio, to insure their fullest development as self-reliant communities.

This provision no longer appears in the present configuration; does this mean that the concept of
giving local autonomy to local governments is no longer adopted as far as this Article is concerned?

MR. NOLLEDO. No. In the report of the Committee on Preamble, National Territory, and Declaration of
Principles, that concept is included and widened upon the initiative of Commissioner Bennagen.

MR. MAAMBONG. Thank you for that.

With regard to Section 6, sources of revenue, the creation of sources as provided by previous law was subject
to limitations as may be provided by law, but now, we are using the term subject to such guidelines as may be
fixed by law. In Section 7, mention is made about the unique, distinct and exclusive charges and contributions,
and in Section 8, we talk about exclusivity of local taxes and the share in the national wealth. Incidentally, I
was one of the authors of this provision, and I am very thankful. Does this indicate local autonomy, or was the
wording of the law changed to give more autonomy to the local government units?[31]

MR. NOLLEDO. Yes. In effect, those words indicate also decentralization because local political units can
collect taxes, fees and charges subject merely to guidelines, as recommended by the league of governors and
city mayors, with whom I had a dialogue for almost two hours. They told me that limitations may be
questionable in the sense that Congress may limit and in effect deny the right later on.

MR. MAAMBONG. Also, this provision on automatic release of national tax share points to more local
autonomy. Is this the intention?

MR. NOLLEDO. Yes, the Commissioner is perfectly right.[32]

The concept of local autonomy was explained in Ganzon v. Court of Appeals[33] in this wise:

As the Constitution itself declares, local autonomy means a more responsive and accountable local
government structure instituted through a system of decentralization. The Constitution, as we observed, does
nothing more than to break up the monopoly of the national government over the affairs of local governments
and as put by political adherents, to liberate the local governments from the imperialism of
Manila. Autonomy, however, is not meant to end the relation of partnership and interdependence between the
central administration and local government units, or otherwise, to usher in a regime of federalism. The
Charter has not taken such a radical step. Local governments, under the Constitution, are subject to regulation,
however limited, and for no other purpose than precisely, albeit paradoxically, to enhance self-government.

As we observed in one case, decentralization means devolution of national administration but not power to the
local levels. Thus:

Now, autonomy is either decentralization of administration or decentralization of power. There is

decentralization of administration when the central government delegates administrative powers to political
subdivisions in order to broaden the base of government power and in the process to make local governments
more responsive and accountable and ensure their fullest development as self-reliant communities and make
them more effective partners in the pursuit of national development and social progress. At the same time, it
relieves the central government of the burden of managing local affairs and enables it to concentrate on
national concerns. The President exercises general supervision over them, but only to ensure that local affairs
are administered according to law. He has no control over their acts in the sense that he can substitute their
judgments with his own.

Decentralization of power, on the other hand, involves an abdication of political power in the [sic] favor of
local governments [sic] units declared to be autonomous. In that case, the autonomous government is free to
chart its own destiny and shape its future with minimum intervention from central authorities. According to a
constitutional author, decentralization of power amounts to self-immolation, since in that event, the
autonomous government becomes accountable not to the central authorities but to its constituency.[34]

Local autonomy includes both administrative and fiscal autonomy. The fairly recent case
of Pimentel v. Aguirre[35] is particularly instructive. The Court declared therein that local fiscal
autonomy includes the power of the LGUs to, inter alia, allocate their resources in accordance with
their own priorities:

Under existing law, local government units, in addition to having administrative autonomy in the exercise of
their functions, enjoy fiscal autonomy as well. Fiscal autonomy means that local governments have the power
to create their own sources of revenue in addition to their equitable share in the national taxes released by the
national government, as well as the power to allocate their resources in accordance with their own priorities. It
extends to the preparation of their budgets, and local officials in turn have to work within the constraints
thereof. They are not formulated at the national level and imposed on local governments, whether they are
relevant to local needs and resources or not ...[36]

Further, a basic feature of local fiscal autonomy is the constitutionally

mandated automatic release of the shares of LGUs in the national internal revenue.[37]
Following this ratiocination, the Court in Pimentel struck down as unconstitutional Section 4 of
Administrative Order (A.O.) No. 372 which ordered the withholding, effective January 1, 1998, of ten
percent of the LGUs IRA pending the assessment and evaluation by the Development Budget
Coordinating Committee of the emerging fiscal situation.
In like manner, the assailed provisos in the GAAs of 1999, 2000 and 2001, and the OCD
resolutions constitute a withholding of a portion of the IRA. They put on hold the distribution and
release of the five billion pesos LGSEF and subject the same to the implementing rules and
regulations, including the guidelines and mechanisms prescribed by the Oversight Committee from
time to time. Like Section 4 of A.O. 372, the assailed provisos in the GAAs of 1999, 2000 and 2001
and the OCD resolutions effectively encroach on the fiscal autonomy enjoyed by the LGUs and
must be struck down. They cannot, therefore, be upheld.
The assailed provisos in the GAAs of 1999, 2000
and 2001 and the OCD resolutions cannot amend
Section 285 of the Local Government Code of 1991

Section 284[38] of the Local Government Code provides that, beginning the third year of its
effectivity, the LGUs share in the national internal revenue taxes shall be 40%. This percentage is
fixed and may not be reduced except in the event the national government incurs an unmanageable
public sector deficit" and only upon compliance with stringent requirements set forth in the same
section:

Sec. 284. ...

Provided, That in the event that the national government incurs an unmanageable public sector deficit, the
President of the Philippines is hereby authorized, upon recommendation of Secretary of Finance, Secretary of
Interior and Local Government and Secretary of Budget and Management, and subject to consultation with the
presiding officers of both Houses of Congress and the presidents of the liga, to make the necessary
adjustments in the internal revenue allotment of local government units but in no case shall the allotment be
less than thirty percent (30%) of the collection of the national internal revenue taxes of the third fiscal year
preceding the current fiscal year; Provided, further That in the first year of the effectivity of this Code, the
local government units shall, in addition to the thirty percent (30%) internal revenue allotment which shall
include the cost of devolved functions for essential public services, be entitled to receive the amount
equivalent to the cost of devolved personnel services.

Thus, from the above provision, the only possible exception to the mandatory automatic release
of the LGUs IRA is if the national internal revenue collections for the current fiscal year is less than
40 percent of the collections of the preceding third fiscal year, in which case what should be
automatically released shall be a proportionate amount of the collections for the current fiscal
year. The adjustment may even be made on a quarterly basis depending on the actual collections of
national internal revenue taxes for the quarter of the current fiscal year. In the instant case,
however, there is no allegation that the national internal revenue tax collections for the fiscal years
1999, 2000 and 2001 have fallen compared to the preceding three fiscal years.
Section 285 then specifies how the IRA shall be allocated among the LGUs:

Sec. 285. Allocation to Local Government Units. The share of local government units in the internal revenue
allotment shall be allocated in the following manner:

(a) Provinces Twenty-three (23%)

(b) Cities Twenty-three percent (23%);
(c) Municipalities Thirty-four (34%); and
(d) Barangays Twenty percent (20%).

However, this percentage sharing is not followed with respect to the five billion pesos LGSEF
as the assailed OCD resolutions, implementing the assailed provisos in the GAAs of 1999, 2000
and 2001, provided for a different sharing scheme. For example, for 1999, P2 billion of the LGSEF
was allocated as follows: Provinces 40%; Cities 20%; Municipalities 40%.[39] For 2000, P3.5 billion
of the LGSEF was allocated in this manner: Provinces 26%; Cities 23%; Municipalities 35%;
Barangays 26%.[40] For 2001, P3 billion of the LGSEF was allocated, thus: Provinces 25%; Cities
25%; Municipalities 35%; Barangays 15%.[41]
The respondents argue that this modification is allowed since the Constitution does not specify
that the just share of the LGUs shall only be determined by the Local Government Code of
1991. That it is within the power of Congress to enact other laws, including the GAAs, to increase or
decrease the just share of the LGUs. This contention is untenable. The Local Government Code of
1991 is a substantive law. And while it is conceded that Congress may amend any of the provisions
therein, it may not do so through appropriations laws or GAAs. Any amendment to the Local
Government Code of 1991 should be done in a separate law, not in the appropriations law, because
Congress cannot include in a general appropriation bill matters that should be more properly
enacted in a separate legislation.[42]
A general appropriations bill is a special type of legislation, whose content is limited to specified
sums of money dedicated to a specific purpose or a separate fiscal unit. [43] Any provision therein
which is intended to amend another law is considered an inappropriate provision. The category of
inappropriate provisions includes unconstitutional provisions and provisions which are intended to
amend other laws, because clearly these kinds of laws have no place in an appropriations bill.[44]
Increasing or decreasing the IRA of the LGUs or modifying their percentage sharing therein,
which are fixed in the Local Government Code of 1991, are matters of general and substantive
law. To permit Congress to undertake these amendments through the GAAs, as the respondents
contend, would be to give Congress the unbridled authority to unduly infringe the fiscal autonomy of
the LGUs, and thus put the same in jeopardy every year. This, the Court cannot sanction.
It is relevant to point out at this juncture that, unlike those of 1999, 2000 and 2001, the GAAs of
2002 and 2003 do not contain provisos similar to the herein assailed provisos. In other words, the
GAAs of 2002 and 2003 have not earmarked any amount of the IRA for the LGSEF. Congress had
perhaps seen fit to discontinue the practice as it recognizes its infirmity.Nonetheless, as earlier
mentioned, this Court has deemed it necessary to make a definitive ruling on the matter in order to
prevent its recurrence in future appropriations laws and that the principles enunciated herein would
serve to guide the bench, bar and public.

Conclusion

In closing, it is well to note that the principle of local autonomy, while concededly expounded in
greater detail in the present Constitution, dates back to the turn of the century when President
William McKinley, in his Instructions to the Second Philippine Commission dated April 7, 1900,
ordered the new Government to devote their attention in the first instance to the establishment of
municipal governments in which the natives of the Islands, both in the cities and in the rural
communities, shall be afforded the opportunity to manage their own affairs to the fullest extent of
which they are capable, and subject to the least degree of supervision and control in which a careful
study of their capacities and observation of the workings of native control show to be consistent with
the maintenance of law, order and loyalty.[45] While the 1935 Constitution had no specific article on
local autonomy, nonetheless, it limited the executive power over local governments to general
supervision ... as may be provided by law.[46] Subsequently, the 1973 Constitution explicitly stated
that [t]he State shall guarantee and promote the autonomy of local government units, especially the
barangay to ensure their fullest development as self-reliant communities.[47] An entire article on
Local Government was incorporated therein. The present Constitution, as earlier opined, has
broadened the principle of local autonomy. The 14 sections in Article X thereof markedly increased
the powers of the local governments in order to accomplish the goal of a more meaningful local
autonomy.
Indeed, the value of local governments as institutions of democracy is measured by the degree
of autonomy that they enjoy.[48] As eloquently put by M. De Tocqueville, a distinguished French
political writer, [l]ocal assemblies of citizens constitute the strength of free nations. Township
meetings are to liberty what primary schools are to science; they bring it within the peoples reach;
they teach men how to use and enjoy it. A nation may establish a system of free governments but
without the spirit of municipal institutions, it cannot have the spirit of liberty.[49]
Our national officials should not only comply with the constitutional provisions on local
autonomy but should also appreciate the spirit and liberty upon which these provisions are based.[50]
 WHEREFORE, the petition is GRANTED. The assailed provisos in the General Appropriations
Acts of 1999, 2000 and 2001, and the assailed OCD Resolutions, are declared
UNCONSTITUTIONAL.
SO ORDERED.
 [G.R. No. 129093. August 30, 2001]

HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA,

and HON. CALIXTO CATAQUIZ, petitioners, vs. HON. FRANCISCO
DIZON PAO and TONY CALVENTO, respondents.

DECISION
QUISUMBING, J.:

For our resolution is a petition for review on certiorari seeking the reversal of the
decision[1] dated February 10, 1997 of the Regional Trial Court of San Pedro, Laguna, Branch 93,
enjoining petitioners from implementing or enforcing Kapasiyahan Bilang 508, Taon 1995, of
the Sangguniang Panlalawigan of Laguna and its subsequent Order[2] dated April 21, 1997 denying
petitioners motion for reconsideration.
On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine
Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation of lotto. He asked
Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for a mayors permit to open the lotto
outlet. This was denied by Mayor Cataquiz in a letter dated February 19, 1996. The ground for said
denial was an ordinance passed by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan
Blg. 508, T. 1995 which was issued on September 18, 1995. The ordinance reads:

ISANG KAPASIYAHAN TINUTUTULAN ANG MGA ILLEGAL GAMBLING LALO NA

ANG LOTTO SA LALAWIGAN NG LAGUNA

SAPAGKAT, ang sugal dito sa lalawigan ng Laguna ay talamak na;

SAPAGKAT, ang sugal ay nagdudulot ng masasamang impluwensiya lalot higit sa mga

kabataan;

KUNG KAYAT DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at Kgg.
Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd. Meliton C. Larano at buong
pagkakaisang sinangayunan ng lahat ng dumalo sa pulong;

IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano mang uri
ng sugal dito sa lalawigan ng Laguna lalot higit ang Lotto;

IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang pinuno ng

Philippine National Police (PNP) Col. [illegible] na mahigpit na pag-ibayuhin ang
pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan ng Laguna lalo na ang
Jueteng.[3]

As a result of this resolution of denial, respondent Calvento filed a complaint for declaratory
relief with prayer for preliminary injunction and temporary restraining order. In the said complaint,
respondent Calvento asked the Regional Trial Court of San Pedro Laguna, Branch 93, for the
following reliefs: (1) a preliminary injunction or temporary restraining order, ordering the defendants
to refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring
Hon. Municipal Mayor Calixto R. Cataquiz to issue a business permit for the operation of a lotto
outlet; and (3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.
On February 10, 1997, the respondent judge, Francisco Dizon Pao, promulgated his decision
enjoining the petitioners from implementing or enforcing resolution or Kapasiyahan Blg. 508, T.
1995. The dispositive portion of said decision reads:

WHEREFORE, premises considered, defendants, their agents and representatives are

hereby enjoined from implementing or enforcing resolution or kapasiyahan blg. 508, T.
1995 of the Sangguniang Panlalawigan ng Laguna prohibiting the operation of the lotto in
the province of Laguna.

SO ORDERED.[4]

Petitioners filed a motion for reconsideration which was subsequently denied in an Order dated
April 21, 1997, which reads:

Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr. and the
Sangguniang Panlalawigan of Laguna, thru counsel, with the opposition filed by plaintiffs
counsel and the comment thereto filed by counsel for the defendants which were duly
noted, the Court hereby denies the motion for lack of merit.

SO ORDERED.[5]

On May 23, 1997, petitioners filed this petition alleging that the following errors were
committed by the respondent trial court:
I

THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM

IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE SANGGUNIANG
PANLALAWIGAN OF LAGUNA PROHIBITING THE OPERATION OF THE
LOTTO IN THE PROVINCE OF LAGUNA.
II

THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED BY

THE PETITIONERS THAT BEFORE ANY GOVERNMENT PROJECT OR
PROGRAM MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR
OFFICES, PRIOR CONSULTATION AND APPROVAL BY THE LOCAL
GOVERNMENT UNITS CONCERNED AND OTHER CONCERNED SECTORS IS
REQUIRED.

Petitioners contend that the assailed resolution is a valid policy declaration of the Provincial
Government of Laguna of its vehement objection to the operation of lotto and all forms of
gambling. It is likewise a valid exercise of the provincial governments police power under the
General Welfare Clause of Republic Act 7160, otherwise known as the Local Government Code of
1991.[6] They also maintain that respondents lotto operation is illegal because no prior consultations
and approval by the local government were sought before it was implemented contrary to the express
provisions of Sections 2 (c) and 27 of R.A. 7160.[7]
For his part, respondent Calvento argues that the questioned resolution is, in effect, a curtailment
of the power of the state since in this case the national legislature itself had already declared lotto as
legal and permitted its operations around the country.[8] As for the allegation that no prior
consultations and approval were sought from the sangguniang panlalawigan of Laguna, respondent
Calvento contends this is not mandatory since such a requirement is merely stated as a declaration of
policy and not a self-executing provision of the Local Government Code of 1991.[9] He also states
that his operation of the lotto system is legal because of the authority given to him by the PCSO,
which in turn had been granted a franchise to operate the lotto by Congress.[10]
The Office of the Solicitor General (OSG), for the State, contends that the Provincial
Government of Laguna has no power to prohibit a form of gambling which has been authorized by
the national government.[11] He argues that this is based on the principle that ordinances should not
contravene statutes as municipal governments are merely agents of the national government. The
local councils exercise only delegated legislative powers which have been conferred on them by
Congress. This being the case, these councils, as delegates, cannot be superior to the principal or
exercise powers higher than those of the latter. The OSG also adds that the question of whether
gambling should be permitted is for Congress to determine, taking into account national and local
interests. Since Congress has allowed the PCSO to operate lotteries which PCSO seeks to conduct in
Laguna, pursuant to its legislative grant of authority, the provinces Sangguniang
Panlalawigan cannot nullify the exercise of said authority by preventing something already allowed
by Congress.
The issues to be resolved now are the following: (1) whether Kapasiyahan Blg. 508, T. 1995 of
the Sangguniang Panlalawigan of Laguna and the denial of a mayors permit based thereon are valid;
and (2) whether prior consultations and approval by the concerned Sanggunian are needed before a
lotto system can be operated in a given local government unit.
The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a mayors permit for
the operation of a lotto outlet in favor of private respondent. According to the mayor, he based his
decision on an existing ordinance prohibiting the operation of lotto in the province of Laguna. The
ordinance, however, merely states the objection of the council to the said game. It is but a mere
policy statement on the part of the local council, which is not self-executing. Nor could it serve as a
valid ground to prohibit the operation of the lotto system in the province of Laguna. Even petitioners
admit as much when they stated in their petition that:

5.7. The terms of the Resolution and the validity thereof are express and clear. The
Resolution is a policy declaration of the Provincial Government of Laguna of its
vehement opposition and/or objection to the operation of and/or all forms of gambling
including the Lotto operation in the Province of Laguna.[12]

As a policy statement expressing the local governments objection to the lotto, such resolution is
valid. This is part of the local governments autonomy to air its views which may be contrary to that
of the national governments. However, this freedom to exercise contrary views does not mean that
local governments may actually enact ordinances that go against laws duly enacted by
Congress. Given this premise, the assailed resolution in this case could not and should not be
interpreted as a measure or ordinance prohibiting the operation of lotto.
 The game of lotto is a game of chance duly authorized by the national government through an
Act of Congress. Republic Act 1169, as amended by Batas Pambansa Blg. 42, is the law which
grants a franchise to the PCSO and allows it to operate the lotteries. The pertinent provision reads:

Section 1. The Philippine Charity Sweepstakes Office.- The Philippine Charity

Sweepstakes Office, hereinafter designated the Office, shall be the principal government
agency for raising and providing for funds for health programs, medical assistance and
services and charities of national character, and as such shall have the general powers
conferred in section thirteen of Act Numbered One thousand four hundred fifty-nine, as
amended, and shall have the authority:

A. To hold and conduct charity sweepstakes races, lotteries, and other similar activities,
in such frequency and manner, as shall be determined, and subject to such rules and
regulations as shall be promulgated by the Board of Directors.

This statute remains valid today. While lotto is clearly a game of chance, the national
government deems it wise and proper to permit it. Hence, the Sangguniang Panlalawigan of Laguna,
a local government unit, cannot issue a resolution or an ordinance that would seek to prohibit
permits. Stated otherwise, what the national legislature expressly allows by law, such as lotto, a
provincial board may not disallow by ordinance or resolution.
In our system of government, the power of local government units to legislate and enact
ordinances and resolutions is merely a delegated power coming from Congress. As held in Tatel vs.
Virac,[13]ordinances should not contravene an existing statute enacted by Congress. The reasons for
this is obvious, as elucidated in Magtajas v. Pryce Properties Corp.[14]

Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred upon 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 the corporation
themselves are concerned. They are, so to phrase it, the mere tenants at will of the
legislature (citing Clinton vs. Ceder Rapids, etc. Railroad Co., 24 Iowa 455).

Nothing in the present constitutional provision enhancing local autonomy dictates a different
conclusion.
The 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 (citing Art. X, Sec. 5, Constitution), 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.[15]

Ours is still a unitary form of government, not a federal state. Being so, any form of autonomy
granted to local governments will necessarily be limited and confined within the extent allowed by
the central authority. Besides, the principle of local autonomy under the 1987 Constitution simply
means decentralization. It does not make local governments sovereign within the state or
an imperium in imperio.[16]
To conclude our resolution of the first issue, respondent mayor of San Pedro, cannot avail
of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board of Laguna as justification to prohibit
lotto in his municipality. For said resolution is nothing but an expression of the local legislative unit
concerned. The Boards enactment, like spring water, could not rise above its source of power, the
national legislature.
As for the second issue, we hold that petitioners erred in declaring that Sections 2 (c) and 27 of
Republic Act 7160, otherwise known as the Local Government Code of 1991, apply mandatorily in
the setting up of lotto outlets around the country. These provisions state:

Section 2. Declaration of Policy. x x x

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

Section 27. Prior Consultations Required. No project or program shall be implemented

by government authorities unless the consultations mentioned in Section 2 (c) and 26
hereof are complied with, and prior approval of the sanggunian concerned is obtained;
Provided, that occupants in areas where such projects are to be implemented shall not be
evicted unless appropriate relocation sites have been provided, in accordance with the
provisions of the Constitution.

From a careful reading of said provisions, we find that these apply only to national programs
and/or projects which are to be implemented in a particular local community. Lotto is neither a
program nor a project of the national government, but of a charitable institution, the PCSO. Though
sanctioned by the national government, it is far fetched to say that lotto falls within the
contemplation of Sections 2 (c) and 27 of the Local Government Code.
 Section 27 of the Code should be read in conjunction with Section 26 thereof.[17] Section 26
reads:

Section 26. Duty of National Government Agencies in the Maintenance of Ecological

Balance. It shall be the duty of every national agency or government-owned or controlled
corporation authorizing or involved in the planning and implementation of any project or
program that may cause pollution, climatic change, depletion of non-renewable resources,
loss of crop land, range-land, or forest cover, and extinction of animal or plant species, to
consult with the local government units, nongovernmental organizations, and other
sectors concerned and explain the goals and objectives of the project or program, its
impact upon the people and the community in terms of environmental or ecological
balance, and the measures that will be undertaken to prevent or minimize the adverse
effects thereof.

Thus, the projects and programs mentioned in Section 27 should be interpreted to mean projects
and programs whose effects are among those enumerated in Section 26 and 27, to wit, those that: (1)
may cause pollution; (2) may bring about climatic change; (3) may cause the depletion of non-
renewable resources; (4) may result in loss of crop land, range-land, or forest cover; (5) may
eradicate certain animal or plant species from the face of the planet; and (6) other projects or
programs that may call for the eviction of a particular group of people residing in the locality where
these will be implemented. Obviously, none of these effects will be produced by the introduction of
lotto in the province of Laguna.
Moreover, the argument regarding lack of consultation raised by petitioners is clearly an
afterthought on their part. There is no indication in the letter of Mayor Cataquiz that this was one of
the reasons for his refusal to issue a permit. That refusal was predicated solely but erroneously on the
provisions of Kapasiyahan Blg. 508, Taon 1995, of the Sangguniang Panlalawigan of Laguna.
In sum, we find no reversible error in the RTC decision enjoining Mayor Cataquiz from
enforcing or implementing the Kapasiyahan Blg. 508, T. 1995, of the Sangguniang Panlalawigan of
Laguna. That resolution expresses merely a policy statement of the Laguna provincial board. It
possesses no binding legal force nor requires any act of implementation. It provides no sufficient
legal basis for respondent mayors refusal to issue the permit sought by private respondent in
connection with a legitimate business activity authorized by a law passed by Congress.
WHEREFORE, the petition is DENIED for lack of merit. The Order of the Regional Trial
Court of San Pedro, Laguna enjoining the petitioners from implementing or enforcing Resolution
or Kapasiyahan Blg. 508, T. 1995, of the Provincial Board of Laguna is hereby AFFIRMED. No
costs.
SO ORDERED.
 [G.R. No. 129093. August 30, 2001]

HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA,

and HON. CALIXTO CATAQUIZ, petitioners, vs. HON. FRANCISCO
DIZON PAO and TONY CALVENTO, respondents.

DECISION
QUISUMBING, J.:

For our resolution is a petition for review on certiorari seeking the reversal of the
decision[1] dated February 10, 1997 of the Regional Trial Court of San Pedro, Laguna, Branch 93,
enjoining petitioners from implementing or enforcing Kapasiyahan Bilang 508, Taon 1995, of
the Sangguniang Panlalawigan of Laguna and its subsequent Order[2] dated April 21, 1997 denying
petitioners motion for reconsideration.
On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine
Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation of lotto. He asked
Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for a mayors permit to open the lotto
outlet. This was denied by Mayor Cataquiz in a letter dated February 19, 1996. The ground for said
denial was an ordinance passed by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan
Blg. 508, T. 1995 which was issued on September 18, 1995. The ordinance reads:

ISANG KAPASIYAHAN TINUTUTULAN ANG MGA ILLEGAL GAMBLING LALO NA

ANG LOTTO SA LALAWIGAN NG LAGUNA

SAPAGKAT, ang sugal dito sa lalawigan ng Laguna ay talamak na;

SAPAGKAT, ang sugal ay nagdudulot ng masasamang impluwensiya lalot higit sa mga

kabataan;

KUNG KAYAT DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at Kgg.
Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd. Meliton C. Larano at buong
pagkakaisang sinangayunan ng lahat ng dumalo sa pulong;

IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano mang uri
ng sugal dito sa lalawigan ng Laguna lalot higit ang Lotto;

IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang pinuno ng

Philippine National Police (PNP) Col. [illegible] na mahigpit na pag-ibayuhin ang
pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan ng Laguna lalo na ang
Jueteng.[3]

As a result of this resolution of denial, respondent Calvento filed a complaint for declaratory
relief with prayer for preliminary injunction and temporary restraining order. In the said complaint,
respondent Calvento asked the Regional Trial Court of San Pedro Laguna, Branch 93, for the
following reliefs: (1) a preliminary injunction or temporary restraining order, ordering the defendants
to refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring
Hon. Municipal Mayor Calixto R. Cataquiz to issue a business permit for the operation of a lotto
outlet; and (3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.
On February 10, 1997, the respondent judge, Francisco Dizon Pao, promulgated his decision
enjoining the petitioners from implementing or enforcing resolution or Kapasiyahan Blg. 508, T.
1995. The dispositive portion of said decision reads:

WHEREFORE, premises considered, defendants, their agents and representatives are

hereby enjoined from implementing or enforcing resolution or kapasiyahan blg. 508, T.
1995 of the Sangguniang Panlalawigan ng Laguna prohibiting the operation of the lotto in
the province of Laguna.

SO ORDERED.[4]

Petitioners filed a motion for reconsideration which was subsequently denied in an Order dated
April 21, 1997, which reads:

Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr. and the
Sangguniang Panlalawigan of Laguna, thru counsel, with the opposition filed by plaintiffs
counsel and the comment thereto filed by counsel for the defendants which were duly
noted, the Court hereby denies the motion for lack of merit.

SO ORDERED.[5]

On May 23, 1997, petitioners filed this petition alleging that the following errors were
committed by the respondent trial court:
I

THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM

IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE SANGGUNIANG
PANLALAWIGAN OF LAGUNA PROHIBITING THE OPERATION OF THE
LOTTO IN THE PROVINCE OF LAGUNA.
II

THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED BY

THE PETITIONERS THAT BEFORE ANY GOVERNMENT PROJECT OR
PROGRAM MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR
OFFICES, PRIOR CONSULTATION AND APPROVAL BY THE LOCAL
GOVERNMENT UNITS CONCERNED AND OTHER CONCERNED SECTORS IS
REQUIRED.

Petitioners contend that the assailed resolution is a valid policy declaration of the Provincial
Government of Laguna of its vehement objection to the operation of lotto and all forms of
gambling. It is likewise a valid exercise of the provincial governments police power under the
General Welfare Clause of Republic Act 7160, otherwise known as the Local Government Code of
1991.[6] They also maintain that respondents lotto operation is illegal because no prior consultations
and approval by the local government were sought before it was implemented contrary to the express
provisions of Sections 2 (c) and 27 of R.A. 7160.[7]
For his part, respondent Calvento argues that the questioned resolution is, in effect, a curtailment
of the power of the state since in this case the national legislature itself had already declared lotto as
legal and permitted its operations around the country.[8] As for the allegation that no prior
consultations and approval were sought from the sangguniang panlalawigan of Laguna, respondent
Calvento contends this is not mandatory since such a requirement is merely stated as a declaration of
policy and not a self-executing provision of the Local Government Code of 1991.[9] He also states
that his operation of the lotto system is legal because of the authority given to him by the PCSO,
which in turn had been granted a franchise to operate the lotto by Congress.[10]
The Office of the Solicitor General (OSG), for the State, contends that the Provincial
Government of Laguna has no power to prohibit a form of gambling which has been authorized by
the national government.[11] He argues that this is based on the principle that ordinances should not
contravene statutes as municipal governments are merely agents of the national government. The
local councils exercise only delegated legislative powers which have been conferred on them by
Congress. This being the case, these councils, as delegates, cannot be superior to the principal or
exercise powers higher than those of the latter. The OSG also adds that the question of whether
gambling should be permitted is for Congress to determine, taking into account national and local
interests. Since Congress has allowed the PCSO to operate lotteries which PCSO seeks to conduct in
Laguna, pursuant to its legislative grant of authority, the provinces Sangguniang
Panlalawigan cannot nullify the exercise of said authority by preventing something already allowed
by Congress.
The issues to be resolved now are the following: (1) whether Kapasiyahan Blg. 508, T. 1995 of
the Sangguniang Panlalawigan of Laguna and the denial of a mayors permit based thereon are valid;
and (2) whether prior consultations and approval by the concerned Sanggunian are needed before a
lotto system can be operated in a given local government unit.
The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a mayors permit for
the operation of a lotto outlet in favor of private respondent. According to the mayor, he based his
decision on an existing ordinance prohibiting the operation of lotto in the province of Laguna. The
ordinance, however, merely states the objection of the council to the said game. It is but a mere
policy statement on the part of the local council, which is not self-executing. Nor could it serve as a
valid ground to prohibit the operation of the lotto system in the province of Laguna. Even petitioners
admit as much when they stated in their petition that:

5.7. The terms of the Resolution and the validity thereof are express and clear. The
Resolution is a policy declaration of the Provincial Government of Laguna of its
vehement opposition and/or objection to the operation of and/or all forms of gambling
including the Lotto operation in the Province of Laguna.[12]

As a policy statement expressing the local governments objection to the lotto, such resolution is
valid. This is part of the local governments autonomy to air its views which may be contrary to that
of the national governments. However, this freedom to exercise contrary views does not mean that
local governments may actually enact ordinances that go against laws duly enacted by
Congress. Given this premise, the assailed resolution in this case could not and should not be
interpreted as a measure or ordinance prohibiting the operation of lotto.
 The game of lotto is a game of chance duly authorized by the national government through an
Act of Congress. Republic Act 1169, as amended by Batas Pambansa Blg. 42, is the law which
grants a franchise to the PCSO and allows it to operate the lotteries. The pertinent provision reads:

Section 1. The Philippine Charity Sweepstakes Office.- The Philippine Charity

Sweepstakes Office, hereinafter designated the Office, shall be the principal government
agency for raising and providing for funds for health programs, medical assistance and
services and charities of national character, and as such shall have the general powers
conferred in section thirteen of Act Numbered One thousand four hundred fifty-nine, as
amended, and shall have the authority:

A. To hold and conduct charity sweepstakes races, lotteries, and other similar activities,
in such frequency and manner, as shall be determined, and subject to such rules and
regulations as shall be promulgated by the Board of Directors.

This statute remains valid today. While lotto is clearly a game of chance, the national
government deems it wise and proper to permit it. Hence, the Sangguniang Panlalawigan of Laguna,
a local government unit, cannot issue a resolution or an ordinance that would seek to prohibit
permits. Stated otherwise, what the national legislature expressly allows by law, such as lotto, a
provincial board may not disallow by ordinance or resolution.
In our system of government, the power of local government units to legislate and enact
ordinances and resolutions is merely a delegated power coming from Congress. As held in Tatel vs.
Virac,[13]ordinances should not contravene an existing statute enacted by Congress. The reasons for
this is obvious, as elucidated in Magtajas v. Pryce Properties Corp.[14]

Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred upon 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 the corporation
themselves are concerned. They are, so to phrase it, the mere tenants at will of the
legislature (citing Clinton vs. Ceder Rapids, etc. Railroad Co., 24 Iowa 455).

Nothing in the present constitutional provision enhancing local autonomy dictates a different
conclusion.
The 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 (citing Art. X, Sec. 5, Constitution), 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.[15]

Ours is still a unitary form of government, not a federal state. Being so, any form of autonomy
granted to local governments will necessarily be limited and confined within the extent allowed by
the central authority. Besides, the principle of local autonomy under the 1987 Constitution simply
means decentralization. It does not make local governments sovereign within the state or
an imperium in imperio.[16]
To conclude our resolution of the first issue, respondent mayor of San Pedro, cannot avail
of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board of Laguna as justification to prohibit
lotto in his municipality. For said resolution is nothing but an expression of the local legislative unit
concerned. The Boards enactment, like spring water, could not rise above its source of power, the
national legislature.
As for the second issue, we hold that petitioners erred in declaring that Sections 2 (c) and 27 of
Republic Act 7160, otherwise known as the Local Government Code of 1991, apply mandatorily in
the setting up of lotto outlets around the country. These provisions state:

Section 2. Declaration of Policy. x x x

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

Section 27. Prior Consultations Required. No project or program shall be implemented

by government authorities unless the consultations mentioned in Section 2 (c) and 26
hereof are complied with, and prior approval of the sanggunian concerned is obtained;
Provided, that occupants in areas where such projects are to be implemented shall not be
evicted unless appropriate relocation sites have been provided, in accordance with the
provisions of the Constitution.

From a careful reading of said provisions, we find that these apply only to national programs
and/or projects which are to be implemented in a particular local community. Lotto is neither a
program nor a project of the national government, but of a charitable institution, the PCSO. Though
sanctioned by the national government, it is far fetched to say that lotto falls within the
contemplation of Sections 2 (c) and 27 of the Local Government Code.
 Section 27 of the Code should be read in conjunction with Section 26 thereof.[17] Section 26
reads:

Section 26. Duty of National Government Agencies in the Maintenance of Ecological

Balance. It shall be the duty of every national agency or government-owned or controlled
corporation authorizing or involved in the planning and implementation of any project or
program that may cause pollution, climatic change, depletion of non-renewable resources,
loss of crop land, range-land, or forest cover, and extinction of animal or plant species, to
consult with the local government units, nongovernmental organizations, and other
sectors concerned and explain the goals and objectives of the project or program, its
impact upon the people and the community in terms of environmental or ecological
balance, and the measures that will be undertaken to prevent or minimize the adverse
effects thereof.

Thus, the projects and programs mentioned in Section 27 should be interpreted to mean projects
and programs whose effects are among those enumerated in Section 26 and 27, to wit, those that: (1)
may cause pollution; (2) may bring about climatic change; (3) may cause the depletion of non-
renewable resources; (4) may result in loss of crop land, range-land, or forest cover; (5) may
eradicate certain animal or plant species from the face of the planet; and (6) other projects or
programs that may call for the eviction of a particular group of people residing in the locality where
these will be implemented. Obviously, none of these effects will be produced by the introduction of
lotto in the province of Laguna.
Moreover, the argument regarding lack of consultation raised by petitioners is clearly an
afterthought on their part. There is no indication in the letter of Mayor Cataquiz that this was one of
the reasons for his refusal to issue a permit. That refusal was predicated solely but erroneously on the
provisions of Kapasiyahan Blg. 508, Taon 1995, of the Sangguniang Panlalawigan of Laguna.
In sum, we find no reversible error in the RTC decision enjoining Mayor Cataquiz from
enforcing or implementing the Kapasiyahan Blg. 508, T. 1995, of the Sangguniang Panlalawigan of
Laguna. That resolution expresses merely a policy statement of the Laguna provincial board. It
possesses no binding legal force nor requires any act of implementation. It provides no sufficient
legal basis for respondent mayors refusal to issue the permit sought by private respondent in
connection with a legitimate business activity authorized by a law passed by Congress.
WHEREFORE, the petition is DENIED for lack of merit. The Order of the Regional Trial
Court of San Pedro, Laguna enjoining the petitioners from implementing or enforcing Resolution
or Kapasiyahan Blg. 508, T. 1995, of the Provincial Board of Laguna is hereby AFFIRMED. No
costs.
SO ORDERED.
G.R. No. 91649 May 14, 1991

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND

LORENZO SANCHEZ,petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.

H.B. Basco & Associates for petitioners.

Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.

PARAS, J.:

A TV ad proudly announces:

"The new PAGCOR responding through responsible gaming."

But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the
Philippine Amusement and Gaming Corporation (PAGCOR) Charter PD 1869, because it is
allegedly contrary to morals, public policy and order, and because

A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law.
It waived the Manila City government's right to impose taxes and license fees, which is
recognized by law;

B. For the same reason stated in the immediately preceding paragraph, the law has intruded
into the local government's right to impose local taxes and license fees. This, in
contravention of the constitutionally enshrined principle of local autonomy;

C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR
conducted gambling, while most other forms of gambling are outlawed, together with
prostitution, drug trafficking and other vices;

D. It violates the avowed trend of the Cory government away from monopolistic and crony
economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p. 7, Rollo)

In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared
national policy of the "new restored democracy" and the people's will as expressed in the 1987
Constitution. The decree is said to have a "gambling objective" and therefore is contrary to Sections
11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the present
Constitution (p. 3, Second Amended Petition; p. 21, Rollo).

The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco
being also the Chairman of the Committee on Laws of the City Council of Manila), can question and
seek the annulment of PD 1869 on the alleged grounds mentioned above.

The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D.
1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January
1, 1977 "to establish, operate and maintain gambling casinos on land or water within the territorial
jurisdiction of the Philippines." Its operation was originally conducted in the well known floating
casino "Philippine Tourist." The operation was considered a success for it proved to be a potential
source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed
on June 2, 1978 for PAGCOR to fully attain this objective.

Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government
to regulate and centralize all games of chance authorized by existing franchise or permitted by law,
under the following declared policy

Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to

centralize and integrate all games of chance not heretofore authorized by existing franchises
or permitted by law in order to attain the following objectives:

(a) To centralize and integrate the right and authority to operate and conduct games of
chance into one corporate entity to be controlled, administered and supervised by the
Government.

(b) To establish and operate clubs and casinos, for amusement and recreation, including
sports gaming pools, (basketball, football, lotteries, etc.) and such other forms of amusement
and recreation including games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will: (1) generate sources of additional revenue to
fund infrastructure and socio-civic projects, such as flood control programs, beautification,
sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs,
Population Control and such other essential public services; (2) create recreation and
integrated facilities which will expand and improve the country's existing tourist attractions;
and (3) minimize, if not totally eradicate, all the evils, malpractices and corruptions that are
normally prevalent on the conduct and operation of gambling clubs and casinos without
direct government involvement. (Section 1, P.D. 1869)

To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its
Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent
therewith, are accordingly repealed, amended or modified.

It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau of
Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and
directly remitted to the National Government a total of P2.5 Billion in form of franchise tax,
government's income share, the President's Social Fund and Host Cities' share. In addition,
PAGCOR sponsored other socio-cultural and charitable projects on its own or in cooperation with
various governmental agencies, and other private associations and organizations. In its 3 1/2 years
of operation under the present administration, PAGCOR remitted to the government a total of P6.2
Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9) casinos
nationwide, directly supporting the livelihood of Four Thousand Four Hundred Ninety-Four (4,494)
families.

But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null
and void" for being "contrary to morals, public policy and public order," monopolistic and tends
toward "crony economy", and is violative of the equal protection clause and local autonomy as well
as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human
Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987 Constitution.

This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most
deliberate consideration by the Court, involving as it does the exercise of what has been described
as "the highest and most delicate function which belongs to the judicial department of the
government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).
As We enter upon the task of passing on the validity of an act of a co-equal and coordinate branch
of the government We need not be reminded of the time-honored principle, deeply ingrained in our
jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor
of its constitutionality. This is not to say that We approach Our task with diffidence or timidity. Where
it is clear that the legislature or the executive for that matter, has over-stepped the limits of its
authority under the constitution, We should not hesitate to wield the axe and let it fall heavily, as fall
it must, on the offending statute (Lozano v. Martinez, supra).

In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice
Zaldivar underscored the

. . . thoroughly established principle which must be followed in all cases where questions of
constitutionality as obtain in the instant cases are involved. All presumptions are indulged in
favor of constitutionality; one who attacks a statute alleging unconstitutionality must prove its
invalidity beyond a reasonable doubt; that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports the statute, it
will be upheld and the challenger must negate all possible basis; that the courts are not
concerned with the wisdom, justice, policy or expediency of a statute and that a liberal
interpretation of the constitution in favor of the constitutionality of legislation should be
adopted. (Danner v. Hass, 194 N.W. 2nd534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660,
663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v.
Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes, 125
SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v. Energy
Regulatory Board, 162 SCRA 521, 540)

Of course, there is first, the procedural issue. The respondents are questioning the legal personality
of petitioners to file the instant petition.

Considering however the importance to the public of the case at bar, and in keeping with the Court's
duty, under the 1987 Constitution, to determine whether or not the other branches of government
have kept themselves within the limits of the Constitution and the laws and that they have not
abused the discretion given to them, the Court has brushed aside technicalities of procedure and
has taken cognizance of this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas
Inc. v. Tan, 163 SCRA 371)

With particular regard to the requirement of proper party as applied in the cases before us,
We hold that the same is satisfied by the petitioners and intervenors because each of them
has sustained or is in danger of sustaining an immediate injury as a result of the acts or
measures complained of. And even if, strictly speaking they are not covered by the
definition, it is still within the wide discretion of the Court to waive the requirement and so
remove the impediment to its addressing and resolving the serious constitutional questions
raised.

In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
although they were involving only an indirect and general interest shared in common with the
public. The Court dismissed the objection that they were not proper parties and ruled that
"the transcendental importance to the public of these cases demands that they be settled
promptly and definitely, brushing aside, if we must technicalities of procedure." We have
since then applied the exception in many other cases. (Association of Small Landowners in
the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).

Having disposed of the procedural issue, We will now discuss the substantive issues raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of
gambling does not mean that the Government cannot regulate it in the exercise of its police power.

The concept of police power is well-established in this jurisdiction. It has been defined as the "state
authority to enact legislation that may interfere with personal liberty or property in order to promote
the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition
or restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an
exact definition but has been, purposely, veiled in general terms to underscore its all-comprehensive
embrace. (Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).

Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it
could be done, provides enough room for an efficient and flexible response to conditions and
circumstances thus assuming the greatest benefits. (Edu v. Ericta, supra)

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood
and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most
vital functions of governance. Marshall, to whom the expression has been credited, refers to it
succinctly as the plenary power of the state "to govern its citizens". (Tribe, American Constitutional
Law, 323, 1978). The police power of the State is a power co-extensive with self-protection and is
most aptly termed the "law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39
Phil. 660, 708) It is "the most essential, insistent, and illimitable of powers." (Smith Bell & Co. v.
National, 40 Phil. 136) It is a dynamic force that enables the state to meet the agencies of the winds
of change.

What was the reason behind the enactment of P.D. 1869?

P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an
appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st
whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling
operations in one corporate entity the PAGCOR, was beneficial not just to the Government but to
society in general. It is a reliable source of much needed revenue for the cash strapped
Government. It provided funds for social impact projects and subjected gambling to "close scrutiny,
regulation, supervision and control of the Government" (4th Whereas Clause, PD 1869). With the
creation of PAGCOR and the direct intervention of the Government, the evil practices and
corruptions that go with gambling will be minimized if not totally eradicated. Public welfare, then, lies
at the bottom of the enactment of PD 1896.

Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose
taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local
autonomy. They must be referring to Section 13 par. (2) 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 as fees,
charges or levies of whatever nature, whether National or Local."

(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form, income or
otherwise as well as fees, charges or levies of whatever nature, whether National or Local,
shall be assessed and collected under this franchise from the Corporation; nor shall any
form or tax or charge attach in any way to the earnings of the Corporation, except a
franchise tax of five (5%) percent of the gross revenues or earnings derived by the
Corporation from its operations under this franchise. Such tax shall be due and payable
quarterly to the National Government and shall be in lieu of all kinds of taxes, levies, fees or
assessments of any kind, nature or description, levied, established or collected by any
municipal, provincial or national government authority (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:

(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes
(Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality
of Caloocan, 7 SCRA 643). Thus, "the Charter or statute must plainly show an intent to confer that
power or the municipality cannot assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to
tax" therefore must always yield to a legislative act which is superior having been passed upon by
the state itself which has the "inherent power to tax" (Bernas, the Revised [1973] Philippine
Constitution, Vol. 1, 1983 ed. p. 445).

(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that
"municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909, January
18, 1957) which has the power to "create and abolish municipal corporations" due to its "general
legislative powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541).
Congress, therefore, has the power of control over Local governments (Hebron v. Reyes, G.R. No.
9124, July 2, 1950). And if Congress can grant the City of Manila the power to tax certain matters, it
can also provide for exemptions or even take back the power.

(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early
as 1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses
or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National
Government, thus:

Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered cities
and other local governments to issue license, permit or other form of franchise to operate,
maintain and establish horse and dog race tracks, jai-alai and other forms of gambling is
hereby revoked.

Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and dog
race tracks, jai-alai and other forms of gambling shall be issued by the national government
upon proper application and verification of the qualification of the applicant . . .

Therefore, only the National Government has the power to issue "licenses or permits" for the
operation of gambling. Necessarily, the power to demand or collect license fees which is a
consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila.

(d) Local governments have no power to tax instrumentalities of the National Government.
PAGCOR is a government owned or controlled corporation with an original charter, PD 1869. All of
its shares of stocks are owned by the National Government. In addition to its corporate powers
(Sec. 3, Title II, PD 1869) it also exercises regulatory powers thus:

Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the affiliated
entities, and shall exercise all the powers, authority and the responsibilities vested in the
Securities and Exchange Commission over such affiliating entities mentioned under the
preceding section, including, but not limited to amendments of Articles of Incorporation and
By-Laws, changes in corporate term, structure, capitalization and other matters concerning
the operation of the affiliated entities, the provisions of the Corporation Code of the
Philippines to the contrary notwithstanding, except only with respect to original incorporation.

PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the Government.
Being an instrumentality of the Government, PAGCOR should be and actually is exempt from local
taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a mere Local
government.
 The states have no power by taxation or otherwise, to retard, impede, burden or in any
manner control the operation of constitutional laws enacted by Congress to carry into
execution the powers vested in the federal government. (MC Culloch v. Marland, 4 Wheat
316, 4 L Ed. 579)

This doctrine emanates from the "supremacy" of the National Government over local governments.

Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of
power on the part of the States to touch, in that way (taxation) at least, the instrumentalities
of the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or
political subdivision can regulate a federal instrumentality in such a way as to prevent it from
consummating its federal responsibilities, or even to seriously burden it in the
accomplishment of them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis
supplied)

Otherwise, mere creatures of the State can defeat National policies thru extermination of what local
authorities may perceive to be undesirable activities or enterprise using the power to tax as "a tool
for regulation" (U.S. v. Sanchez, 340 US 42).

The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which
has the inherent power to wield it.

(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D.
1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides:

Sec. 5. Each local government unit shall have the power to create its own source of revenue
and to levy taxes, fees, and other charges subject to such guidelines and limitation as the
congress may provide, consistent with the basic policy on local autonomy. Such taxes, fees
and charges shall accrue exclusively to the local government. (emphasis supplied)

The power of local government to "impose taxes and fees" is always subject to "limitations" which
Congress may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed
or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception
to the exercise of the power of local governments to impose taxes and fees. It cannot therefore be
violative but rather is consistent with the principle of local autonomy.

Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in
Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does
not make local governments sovereign within the state or an "imperium in imperio."

Local Government has been described as a political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs. In a unitary system of
government, such as the government under the Philippine Constitution, local governments
can only be an intra sovereign subdivision of one sovereign nation, it cannot be
an imperium in imperio. Local government in such a system can only mean a measure of
decentralization of the function of government. (emphasis supplied)

As to what state powers should be "decentralized" and what may be delegated to local government
units remains a matter of policy, which concerns wisdom. It is therefore a political question. (Citizens
Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State
concern and hence, it is the sole prerogative of the State to retain it or delegate it to local
governments.

As gambling is usually an offense against the State, legislative grant or express charter
power is generally necessary to empower the local corporation to deal with the subject. . . .
In the absence of express grant of power to enact, ordinance provisions on this subject
which are inconsistent with the state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733
Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC
974, 22 Am St. Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis
supplied)

Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution,
because "it legalized PAGCOR conducted gambling, while most gambling are outlawed together
with prostitution, drug trafficking and other vices" (p. 82, Rollo).

We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the
well-accepted meaning of the clause "equal protection of the laws." The clause does not preclude
classification of individuals who may be accorded different treatment under the law as long as the
classification is not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not
have to operate in equal force on all persons or things to be conformable to Article III, Section 1 of
the Constitution (DECS v. San Diego, G.R. No. 89572, December 21, 1989).

The "equal protection clause" does not prohibit the Legislature from establishing classes of
individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). The
Constitution does not require situations which are different in fact or opinion to be treated in law as
though they were the same (Gomez v. Palomar, 25 SCRA 827).

Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal
protection is not clearly explained in the petition. The mere fact that some gambling activities like
cockfighting (P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and
races (RA 1169 as amended by B.P. 42) are legalized under certain conditions, while others are
prohibited, does not render the applicable laws, P.D. 1869 for one, unconstitutional.

If the law presumably hits the evil where it is most felt, it is not to be overthrown because
there are other instances to which it might have been applied. (Gomez v. Palomar, 25 SCRA
827)

The equal protection clause of the 14th Amendment does not mean that all occupations
called by the same name must be treated the same way; the state may do what it can to
prevent which is deemed as evil and stop short of those cases in which harm to the few
concerned is not less than the harm to the public that would insure if the rule laid down were
made mathematically exact. (Dominican Hotel v. Arizona, 249 US 2651).

Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government away
from monopolies and crony economy and toward free enterprise and privatization" suffice it to state
that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the
government's policies then it is for the Executive Department to recommend to Congress its repeal
or amendment.

The judiciary does not settle policy issues. The Court can only declare what the law is and
not what the law should be.1wphi1 Under our system of government, policy issues are
within the domain of the political branches of government and of the people themselves as
the repository of all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:

Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed. (Art. XII, National
Economy and Patrimony)

It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by the
Constitution. The state must still decide whether public interest demands that monopolies be
regulated or prohibited. Again, this is a matter of policy for the Legislature to decide.

On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and
13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational
Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely
statements of principles and, policies. As such, they are basically not self-executing, meaning a law
should be passed by Congress to clearly define and effectuate such principles.

In general, therefore, the 1935 provisions were not intended to be self-executing principles
ready for enforcement through the courts. They were rather directives addressed to the
executive and the legislature. If the executive and the legislature failed to heed the directives
of the articles the available remedy was not judicial or political. The electorate could express
their displeasure with the failure of the executive and the legislature through the language of
the ballot. (Bernas, Vol. II, p. 2)

Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil.
387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179
SCRA 287). Therefore, for PD 1869 to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution, not merely a doubtful and equivocal one. In other words, the
grounds for nullity must be clear and beyond reasonable doubt. (Peralta v. Comelec, supra) Those
who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the
basis for such a declaration. Otherwise, their petition must fail. Based on the grounds raised by
petitioners to challenge the constitutionality of P.D. 1869, the Court finds that petitioners have failed
to overcome the presumption. The dismissal of this petition is therefore, inevitable. But as to
whether P.D. 1869 remains a wise legislation considering the issues of "morality, monopoly, trend to
free enterprise, privatization as well as the state principles on social justice, role of youth and
educational values" being raised, is up for Congress to determine.

As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162
SCRA 521

Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in
its favor the presumption of validity and constitutionality which petitioners Valmonte and the
KMU have not overturned. Petitioners have not undertaken to identify the provisions in the
Constitution which they claim to have been violated by that statute. This Court, however, is
not compelled to speculate and to imagine how the assailed legislation may possibly offend
some provision of the Constitution. The Court notes, further, in this respect that petitioners
have in the main put in question the wisdom, justice and expediency of the establishment of
the OPSF, issues which are not properly addressed to this Court and which this Court may
not constitutionally pass upon. Those issues should be addressed rather to the political
departments of government: the President and the Congress.

Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when
the gambling resorted to is excessive. This excessiveness necessarily depends not only on the
financial resources of the gambler and his family but also on his mental, social, and spiritual outlook
on life. However, the mere fact that some persons may have lost their material fortunes, mental
control, physical health, or even their lives does not necessarily mean that the same are directly
attributable to gambling. Gambling may have been the antecedent, but certainly not necessarily the
cause. For the same consequences could have been preceded by an overdose of food, drink,
exercise, work, and even sex.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.
LEAGUE OF CITIES OF THE G.R. No. 176951
PHILIPPINES (LCP), represented by LCP
National President Jerry P. Treas; CITY
OF CALBAYOG, represented by Mayor
Mel Senen S. Sarmiento; and JERRY P.
TREAS, in his personal capacity as
Taxpayer,
Petitioners,

- versus -

COMMISSION ON
ELECTIONS; MUNICIPALITY OF
BAYBAY, PROVINCE OF LEYTE;
MUNICIPALITY OF BOGO, PROVINCE
OF CEBU; MUNICIPALITY OF
CATBALOGAN, PROVINCE OF
WESTERN SAMAR; MUNICIPALITY OF
TANDAG, PROVINCE OF SURIGAO
DEL SUR; MUNICIPALITY OF
BORONGAN, PROVINCE OF EASTERN
SAMAR; AND MUNICIPALITY OF
TAYABAS, PROVINCE OF QUEZON,
Respondents.
x----------------------x
LEAGUE OF CITIES OF THE
PHILIPPINES (LCP), represented by LCP
National President Jerry P. Treas; CITY
OF CALBAYOG, represented by Mayor
Mel Senen S. Sarmiento; and JERRY P. G.R. No. 177499
TREAS, in his personal capacity as
Taxpayer,
Petitioners,

versus

COMMISSION ON ELECTIONS;
MUNICIPALITY OF LAMITAN,
PROVINCE OF BASILAN;
MUNICIPALITY OF TABUK,
PROVINCE OF KALINGA;
MUNICIPALITY OF BAYUGAN,
PROVINCE OF AGUSAN DEL SUR;
MUNICIPALITY OF BATAC, PROVINCE
OF ILOCOS NORTE; MUNICIPALITY
OF MATI, PROVINCE OF DAVAO
ORIENTAL; AND MUNICIPALITY OF
GUIHULNGAN, PROVINCE OF
NEGROS ORIENTAL,
Respondents.
x----------------------x
LEAGUE OF CITIES OF THE
PHILIPPINES (LCP), represented by LCP
National President Jerry P. Treas; CITY
OF CALBAYOG, represented by Mayor
Mel Senen S. Sarmiento; and JERRY P.
TREAS, in his personal capacity as
Taxpayer,
Petitioners,
G.R. No. 178056
- versus -
Present:
COMMISSION ON ELECTIONS;
MUNICIPALITY OF CABADBARAN, CORONA, C.J.,
PROVINCE OF AGUSAN DEL NORTE; CARPIO,
MUNICIPALITY OF CARCAR, CARPIO MORALES,
PROVINCE OF CEBU; MUNICIPALITY VELASCO, JR.,
OF EL SALVADOR, PROVINCE OF NACHURA,
MISAMIS ORIENTAL; MUNICIPALITY LEONARDO-DE CASTRO,
OF NAGA, CEBU; and DEPARTMENT BRION,
OF BUDGET AND MANAGEMENT, PERALTA, and
Respondents. BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO, JJ.

Promulgated:

April 12, 2011

x-----------------------------------------------------------------------------------------x

RESOLUTION

BERSAMIN, J.:

We consider and resolve the Ad Cautelam Motion for Reconsideration filed by the petitioners vis--
vis the Resolution promulgated on February 15, 2011.

To recall, the Resolution promulgated on February 15, 2011 granted the Motion for
Reconsideration of the respondents presented against the Resolution dated August 24, 2010, reversed the
Resolution dated August 24, 2010, and declared the 16 Cityhood Laws Republic Acts Nos. 9389, 9390, 9391,
9392, 9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491 constitutional.

Now, the petitioners anchor their Ad Cautelam Motion for Reconsideration upon the primordial
ground that the Court could no longer modify, alter, or amend its judgment declaring the Cityhood Laws
unconstitutional due to such judgment having long become final and executory. They submit that the
Cityhood Laws violated Section 6 and Section 10 of Article X of the Constitution, as well as the Equal
Protection Clause.

The petitioners specifically ascribe to the Court the following errors in its promulgation of the
assailed February 15, 2011 Resolution, to wit:

I. THE HONORABLE COURT HAS NO JURISDICTION TO PROMULGATE THE

RESOLUTION OF 15 FEBRUARY 2011 BECAUSE THERE IS NO LONGER ANY
ACTUAL CASE OR CONTROVERSY TO SETTLE.
II. THE RESOLUTION CONTRAVENES THE 1997 RULES OF CIVIL PROCEDURE
AND RELEVANT SUPREME COURT ISSUANCES.

III. THE RESOLUTION UNDERMINES THE JUDICIAL SYSTEM IN ITS DISREGARD

OF THE PRINCIPLES OF RES JUDICATA AND THE DOCTRINE OF
IMMUTABILITY OF FINAL JUDGMENTS.

IV. THE RESOLUTION ERRONEOUSLY RULED THAT THE SIXTEEN (16)

CITYHOOD BILLS DO NOT VIOLATE ARTICLE X, SECTIONS 6 AND 10 OF THE
1987 CONSTITUTION.

V. THE SIXTEEN (16) CITYHOOD LAWS VIOLATE THE EQUAL PROTECTION

CLAUSE OF THE CONSTITUTION AND THE RIGHT OF LOCAL GOVERNMENTS
TO A JUST SHARE IN THE NATIONAL TAXES.

Ruling

Upon thorough consideration, we deny the Ad Cautelam Motion for Reconsideration for its lack of
merit.

I.
Procedural Issues

With respect to the first, second, and third assignments of errors, supra, it appears that the petitioners assail
the jurisdiction of the Court in promulgating the February 15, 2011Resolution, claiming that the decision
herein had long become final and executory. They state that the Court thereby violated rules of procedure, and
the principles of res judicataand immutability of final judgments.

The petitioners posit that the controversy on the Cityhood Laws ended with the April 28, 2009 Resolution
denying the respondents second motion for reconsideration vis--vis the November 18, 2008 Decision for being
a prohibited pleading, and in view of the issuance of the entry of judgment on May 21, 2009.

The Court disagrees with the petitioners.

In the April 28, 2009 Resolution, the Court ruled:

 By a vote of 6-6, the Motion for Reconsideration of the Resolution of 31 March 2009 is
DENIED for lack of merit. The motion is denied since there is no majority that voted to
overturn the Resolution of 31 March 2009.

The Second Motion for Reconsideration of the Decision of 18 November 2008 is

DENIED for being a prohibited pleading, and the Motion for Leave to Admit Attached
Petition in Intervention dated 20 April 2009 and the Petition in Intervention dated 20 April
2009 filed by counsel for Ludivina T. Mas, et al. are also DENIED in view of the denial of
the second motion for reconsideration. No further pleadings shall be entertained. Let entry of
judgment be made in due course.

Justice Presbitero J. Velasco, Jr. wrote a Dissenting Opinion, joined by Justices

Consuelo Ynares-Santiago, Renato C. Corona, Minita Chico-Nazario, Teresita Leonardo-De
Castro, and Lucas P. Bersamin. Chief Justice Reynato S. Puno and Justice Antonio Eduardo
B. Nachura took no part. Justice Leonardo A. Quisumbing is on leave.[1]

Within 15 days from receipt of the April 28, 2009 Resolution, the respondents filed a Motion To
Amend Resolution Of April 28, 2009 By Declaring Instead That Respondents Motion for Reconsideration Of
the Resolution Of March 31, 2009 And Motion For Leave To File, And To Admit Attached Second Motion For
Reconsideration Of The Decision Dated November 18, 2008 Remain Unresolved And To Conduct Further
Proceedings Thereon, arguing therein that a determination of the issue of constitutionality of the 16 Cityhood
Laws upon a motion for reconsideration by an equally divided vote was not binding on the Court as a valid
precedent, citing the separate opinion of then Chief Justice Reynato S. Puno in Lambino v. Commission on
Elections.[2]

Thus, in its June 2, 2009 Resolution, the Court issued the following clarification of the April 28,
2009 Resolution, viz:

As a rule, a second motion for reconsideration is a prohibited pleading pursuant to

Section 2, Rule 52 of the Rules of Civil Procedure which provides that: No second motion for
reconsideration of a judgment or final resolution by the same party shall be entertained. Thus,
a decision becomes final and executory after 15 days from receipt of the denial of the first
motion for reconsideration.

However, when a motion for leave to file and admit a second motion for
reconsideration is granted by the Court, the Court therefore allows the filing of the
second motion for reconsideration. In such a case, the second motion for reconsideration
is no longer a prohibited pleading.

In the present case, the Court voted on the second motion for reconsideration filed
by respondent cities. In effect, the Court allowed the filing of the second motion for
reconsideration. Thus, the second motion for reconsideration was no longer a prohibited
pleading. However, for lack of the required number of votes to overturn the 18
November 2008 Decision and 31 March 2009 Resolution, the Court denied the second
motion for reconsideration in its 28 April 2009 Resolution.[3]
 As the result of the aforecited clarification, the Court resolved to expunge from the records several
pleadings and documents, including respondents Motion To Amend Resolution Of April 28, 2009 etc.

The respondents thus filed their Motion for Reconsideration of the Resolution of June 2, 2009,
asseverating that their Motion To Amend Resolution Of April 28, 2009 etc.was not another motion for
reconsideration of the November 18, 2008 Decision, because it assailed the April 28, 2009 Resolution with
respect to the tie-vote on the respondents Second Motion For Reconsideration. They pointed out that
the Motion To Amend Resolution Of April 28, 2009 etc. was filed on May 14, 2009, which was within the 15-
day period from their receipt of the April 28, 2009 Resolution; thus, the entry of judgment had been
prematurely made. They reiterated their arguments with respect to a tie-vote upon an issue of constitutionality.

In the September 29, 2009 Resolution,[4] the Court required the petitioners to comment on the Motion
for Reconsideration of the Resolution of June 2, 2009 within 10 days from receipt.

As directed, the petitioners filed their Comment Ad Cautelam With Motion to Expunge.

The respondents filed their Motion for Leave to File and to Admit Attached Reply to Petitioners
Comment Ad Cautelam With Motion to Expunge, together with the Reply.

On November 17, 2009, the Court resolved to note the petitioners Comment Ad Cautelam With
Motion to Expunge, to grant the respondents Motion for Leave to File and Admit Reply to Petitioners
Comment Ad Cautelam with Motion to Expunge, and to note the respondents Reply to Petitioners Comment Ad
Cautelam with Motion to Expunge.

On December 21, 2009, the Court, resolving the Motion To Amend Resolution Of April 28, 2009
etc. and voting anew on the Second Motion For Reconsideration in order to reach a concurrence of a majority,
promulgated its Decision granting the motion and declaring the Cityhood Laws as constitutional, [5] disposing
thus:

WHEREFORE, respondent LGUs Motion for Reconsideration dated June 2, 2009, their
Motion to Amend the Resolution of April 28, 2009 by Declaring Instead that
Respondents Motion for Reconsideration of the Resolution of March 31, 2009 and Motion for
Leave to File and to Admit Attached Second Motion for Reconsideration of the Decision
Dated November 18, 2008 Remain Unresolved and to Conduct Further Proceedings, dated
May 14, 2009, and their second Motion for Reconsideration of the Decision dated November
18, 2008 are GRANTED. The June 2, 2009, the March 31, 2009, and April 31,
2009 Resolutions are REVERSED and SET ASIDE. The entry of judgment made on May 21,
2009 must accordingly be RECALLED.

The instant consolidated petitions and petitions-in-intervention are DISMISSED. The

cityhood laws, namely Republic Act Nos. 9389, 9390, 9391, 9392, 9393, 9394, 9398, 9404,
 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491 are
declared VALID and CONSTITUTIONAL.

SO ORDERED.

On January 5, 2010, the petitioners filed an Ad Cautelam Motion for Reconsideration against
the December 21, 2009 Decision.[6] On the same date, the petitioners also filed a Motion to Annul Decision
of 21 December 2009.[7]

On January 12, 2010, the Court directed the respondents to comment on the motions of the
petitioners.[8]

On February 4, 2010, petitioner-intervenors City of Santiago, City of Legazpi, and City of Iriga filed
their separate Manifestations with Supplemental Ad Cautelam Motions for Reconsideration.[9] Similar
manifestations with supplemental motions for reconsideration were filed by other petitioner-intervenors,
specifically: City of Cadiz on February 15, 2010;[10] City of Batangas on February 17, 2010;[11] and City
of Oroquieta on February 24, 2010.[12] The Court required the adverse parties to comment on the
motions.[13] As directed, the respondents complied.

On August 24, 2010, the Court issued its Resolution reinstating the November 18, 2008 Decision.[14]

On September 14, 2010, the respondents timely filed a Motion for Reconsideration of the Resolution
Dated August 24, 2010.[15] They followed this by filing on September 20, 2010 a Motion to Set Motion for
Reconsideration of the Resolution dated August 24, 2010 for Hearing.[16] On November 19, 2010, the
petitioners sent in their Opposition [To the Motion for Reconsideration of Resolution dated August 24,
2010].[17] On November 30, 2010,[18] the Court noted, among others, the petitioners Opposition.

On January 18, 2011,[19] the Court denied the respondents Motion to Set Motion for Reconsideration
of the Resolution dated August 24, 2010 for Hearing.

Thereafter, on February 15, 2011, the Court issued the Resolution being now challenged.

It can be gleaned from the foregoing that, as the June 2, 2009 Resolution clarified, the respondents Second
Motion For Reconsideration was not a prohibited pleading in view of the Courts voting and acting on it
having the effect of allowing the Second Motion For Reconsideration; and that when the respondents filed
their Motion for Reconsideration of the Resolution of June 2, 2009 questioning the expunging of their Motion
To Amend Resolution Of April 28, 2009 etc. (which had been filed within the 15-day period from receipt of
the April 28, 2009 Resolution), the Court opted to act on the Motion for Reconsideration of the Resolution of
June 2, 2009 by directing the adverse parties through its September 29, 2009 Resolution to comment. The
same permitting effect occurred when the Court, by its November 17, 2009 Resolution, granted the
respondents Motion for Leave to File and Admit Reply to Petitioners Comment Ad Cautelam with Motion to
Expunge, and noted the attached Reply.

Moreover, by issuing the Resolutions dated September 29, 2009 and November 17, 2009, the Court:
(a) rendered ineffective the tie-vote under the Resolution of April 28, 2009 and the ensuing denial of
the Motion for Reconsideration of the Resolution of March 31, 2009 for lack of a majority to overturn; (b), re-
opened the Decision of November 18, 2008 for a second look under reconsideration; and (c) lifted the
directive that no further pleadings would be entertained. The Court in fact entertained and acted on the
respondents Motion for Reconsideration of the Resolution of June 2, 2009. Thereafter, the Court proceeded to
deliberate anew on the respondents Second Motion for Reconsideration and ended up with the promulgation
of the December 21, 2009 Decision (declaring the Cityhood Laws valid and constitutional).

It is also inaccurate for the petitioners to insist that the December 21, 2009 Decision overturned the November
18, 2008 Decision on the basis of the mere Reflections of the Members of the Court. To be sure,
the Reflections were the legal opinions of the Members and formed part of the deliberations of the Court. The
reference in the December 21, 2009 Decision to the Reflections pointed out that there was still a pending
incident after the April 28, 2009 Resolution that had been timely filed within 15 days from its
receipt,[20] pursuant to Section 10, Rule 51,[21] in relation to Section 1, Rule 52,[22] of the Rules of Court.
Again, the Court did act and deliberate upon this pending incident, leading to the issuance of the December
21, 2009 Decision (declaring the Cityhood Laws free from constitutional infirmity). It was thereafter that the
Court rendered its August 24, 2010Resolution (reinstating the November 18, 2008 Decision), to correct which
the respondents Motion for Reconsideration of the Resolution Dated August 24, 2010 was filed. And, finally,
the Court issued its February 15, 2011 Resolution, reversing and setting aside the August 24, 2010 Resolution.

It is worth repeating that the actions taken herein were made by the Court en banc strictly in accordance with
the Rules of Court and its internal procedures. There has been no irregularity attending or tainting the
proceedings.

It also relevant to state that the Court has frequently disencumbered itself under extraordinary circumstances
from the shackles of technicality in order to render just and equitable relief.[23]

On whether the principle of immutability of judgments and bar by res judicata apply herein, suffice it
to state that the succession of the events recounted herein indicates that the controversy about the 16 Cityhood
Laws has not yet been resolved with finality. As such, the operation of the principle of immutability of
judgments did not yet come into play. For the same reason is an adherence to the doctrine of res judicata not
yet warranted, especially considering that the precedential ruling for this case needed to be revisited and set
with certainty and finality.
 II.
Substantive Issues
The petitioners reiterate their position that the Cityhood Laws violate Section 6 and Section 10 of
Article X of the Constitution, the Equal Protection Clause, and the right of local governments to a just share in
the national taxes.

The Court differs.

Congress clearly intended that the local government units covered by the Cityhood Laws be exempted
from the coverage of R.A. No. 9009. The apprehensions of the then Senate President with respect to the
considerable disparity between the income requirement of P20 million under the Local Government Code
(LGC) prior to its amendment, and the P100 million under the amendment introduced by R.A. No. 9009 were
definitively articulated in his interpellation of Senator Pimentel during the deliberations on Senate Bill No.
2157. The then Senate President was cognizant of the fact that there were municipalities that then had pending
conversion bills
during the 11th Congress prior to the adoption of Senate Bill No. 2157 as R.A. No. 9009, [24] including the
municipalities covered by the Cityhood Laws. It is worthy of mention that the pertinent deliberations on
Senate Bill No. 2157 occurred on October 5, 2000 while the 11th Congress was in session, and the conversion
bills were then pending in the Senate. Thus, the responses of Senator Pimentel made it obvious that R.A. No.
9009 would not apply to the conversion bills then pending deliberation in the Senate during the 11th Congress.

R.A. No. 9009 took effect on June 30, 2001, when the 12th Congress was incipient. By reason of the
clear legislative intent to exempt the municipalities covered by theconversion bills pending during the 11th
Congress, the House of Representatives adopted Joint Resolution No. 29, entitled Joint Resolution to Exempt
Certain Municipalities Embodied in Bills Filed in Congress before June 30, 2001 from the coverage of
Republic Act No. 9009. However, the Senate failed to act on Joint Resolution No. 29. Even so, the House of
Representatives readopted Joint Resolution No. 29 as
Joint Resolution No. 1 during the 12th Congress,[25] and forwarded Joint Resolution No. 1 to the Senate for
approval. Again, the Senate failed to approve Joint Resolution No. 1.

At this juncture, it is worthwhile to consider the manifestation of Senator Pimentel with respect to
Joint Resolution No. 1, to wit:
MANIFESTATION OF SENATOR PIMENTEL
House Joint Resolution No. 1 seeks to exempt certain municipalities seeking conversion into
cities from the requirement that they must have at least P100 million in income of locally
generated revenue, exclusive of the internal revenue share that they received from the central
government as required under Republic Act No. 9009.

The procedure followed by the House is questionable, to say the least. The House wants the
Senate to do away with the income requirement of P100 million so that, en masse, the
municipalities they want exempted could now file bills specifically converting them into
 cities. The reason they want the Senate to do it first is that Cong. Dodo Macias, chair of the
House Committee on Local Governments, I am told, will not entertain any bill for the
conversion of municipalities into cities unless the issue of income requirement is first
hurdled. The House leadership therefore wants to shift the burden of exempting certain
municipalities from the income requirement to the Senate rather than do it itself.

That is most unusual because, in effect, the House wants the Senate to pass a blanket
resolution that would qualify the municipalities concerned for conversion into cities on the
matter of income alone. Then, at a later date, the House would pass specific bills converting
the municipalities into cities. However, income is not only the requirement for municipalities
to become cities. There are also the requirements on population and land area.

In effect, the House wants the Senate to tackle the qualification of the municipalities they
want converted into cities piecemeal and separately, first is the income under the joint
resolution, then the other requirements when the bills are file to convert specific
municipalities into cities. To repeat, this is a most unusual manner of creating cities.

My respectful suggestion is for the Senate to request the House to do what they want to do
regarding the applications of certain municipalities to become cities pursuant to the
requirements of the Local Government Code. If the House wants to exempt certain
municipalities from the requirements of the Local Government Code to become cities, by all
means, let them do their thing.Specifically, they should act on specific bills to create cities
and cite the reasons why the municipalities concerned are qualified to become cities. Only
after the House shall have completed what they are expected to do under the law would it be
proper for the Senate to act on specific bills creating cities.

In other words, the House should be requested to finish everything that needs to be done in
the matter of converting municipalities into cities and not do it piecemeal as they are now
trying to do under the joint resolution.

In my long years in the Senate, this is the first time that a resort to this subterfuge is being
undertaken to favor the creation of certain cities. I am not saying that they are not
qualified. All I am saying is, if the House wants to pass and create cities out of certain
municipalities, by all means let them do that. But they should do it following the
requirements of the Local Government Code and, if they want to make certain
exceptions, they can also do that too. But they should not use the Senate as a ploy to get
things done which they themselves should do.

Incidentally, I have recommended this mode of action verbally to some leaders of the
House. Had they followed the recommendation, for all I know, the municipalities they had
envisioned to be covered by House Joint Resolution No. 1 would, by now if not all, at least
some have been converted into cities. House Joint Resolution No. 1, the House, in effect,
caused the delay in the approval in the applications for cityhood of the municipalities
concerned.

Lastly, I do not have an amendment to House Joint Resolution No. 1. What I am suggesting is
for the Senate to request the House to follow the procedure outlined in the Local Government
Code which has been respected all through the years. By doing so, we uphold the rule of law
and minimize the possibilities of power play in the approval of bills converting municipalities
into cities.[26]

Thereafter, the conversion bills of the respondents were individually

filed in the House of Representatives, and were all unanimously and
favorably voted upon by the Members of the House of Representatives.[27] The bills, when forwarded to the
Senate, were likewise unanimously approved by the Senate.[28] The acts of both Chambers of Congress show
that the exemption clauses ultimately incorporated in the Cityhood Laws are but the express articulations of
the clear legislative intent to exempt the respondents, without exception, from the coverage of R.A. No.
9009. Thereby, R.A. No. 9009, and, by necessity, the LGC, were amended, not by repeal but by way of the
express exemptions being embodied in the exemption clauses.

The petitioners further contend that the new income requirement of P100 million from locally generated
sources is not arbitrary because it is not difficult to comply with; that there are several municipalities that have
already complied with the requirement and have, in fact, been converted into cities, such as Sta. Rosa in
Laguna (R.A. No 9264), Navotas (R.A. No. 9387) and San Juan (R.A. No. 9388) in Metro Manila, Dasmarias
in Cavite (R.A. No. 9723), and Bian in Laguna (R.A. No. 9740); and that several other municipalities have
supposedly reached the income of P100 million from locally generated sources, such as Bauan in Batangas,
Mabalacat in Pampanga, and Bacoor in Cavite.

The contention of the petitioners does not persuade.

As indicated in the Resolution of February 15, 2011, fifty-nine (59) existing cities had failed as of
2006 to post an average annual income of P100 million based on the figures contained in the certification
dated December 5, 2008 by the Bureau of Local Government. The large number of existing cities, virtually
50% of them, still unable to comply with the P100 million threshold income five years after R.A. No. 9009
took effect renders it fallacious and probably unwarranted for the petitioners to claim that the P100 million
income requirement is not difficult to comply with.

In this regard, the deliberations on Senate Bill No. 2157 may prove enlightening, thus:
Senator Osmea III. And could the gentleman help clarify why a municipality would want to
be converted into a city?

Senator Pimentel. There is only one reason, Mr. President, and it is not hidden. It is the fact
that once converted into a city, the municipality will have roughly more than three times the
share that it would be receiving over the internal revenue allotment than it would have if it
were to remain a municipality. So more or less three times or more.

Senator Osmea III. Is it the additional funding that they will be able to enjoy from a larger
share from the internal revenue allocations?

Senator Pimentel. Yes, Mr. President.

Senator Osmea III. Now, could the gentleman clarify, Mr. President, why in the original
Republic Act No. 7160, known as the Local Government Code of 1991, such a wide gap was
made between a municipalitywhat a municipality would earnand a city? Because essentially,
to a persons mind, even with this new requirement, if approved by Congress, if a municipality
 is earning P100 million and has a population of more than 150,000 inhabitants but has less
than 100 square kilometers, it would not qualify as a city.

Senator Pimentel. Yes.

Senator Osmea III. Now would that not be quite arbitrary on the part of the municipality?

Senator Pimentel. In fact, Mr. President, the House version restores the or. So, this is a
matter that we can very well take up as a policy issue. The chair of the committee does not
say that we should, as we know, not listen to arguments for the restoration of the word or in
the population or territorial requirement.

Senator Osmea III. Mr. President, my point is that, I agree with the gentlemans and, but
perhaps we should bring down the area. There are certainly very crowded places in this
country that are less than 10,000 hectares100 square kilometers is 10,000 hectares. There
might only be 9,000 hectares or 8,000 hectares. And it would be unfair if these municipalities
already earning P100,000,000 in locally generated funds and have a population of over
150,000 would not be qualified because of the simple fact that the physical area does not
cover 10,000 hectares.

Senator Pimentel. Mr. President, in fact, in Metro Manila there are any number of
municipalities. San Juan is a specific example which, if we apply the present requirements,
would not qualify: 100 square kilometers and a population of not less than 150,000.

But my reply to that, Mr. President, is that they do not have to become a city?

Senator Osmea III. Because of the income.

Senator Pimentel. But they are already earning a lot, as the gentleman said. Otherwise, the
danger here, if we become lax in the requirements, is the metropolis-located local
governments would have more priority in terms of funding because they would have
more qualifications to become a city compared to far-flung areas in Mindanao or in the
Cordilleras, or whatever.

Therefore, I think we should not probably ease up on the requirements. Maybe we can restore
the word or so that if they do not have the 100 square kilometers of territory, then if they
qualify in terms of population and income, that would be all right, Mr. President.

Senator Osmea III. Mr. President, I will not belabor the point at this time. I know that the
distinguished gentleman is considering several amendments to the Local Government
Code. Perhaps this is something that could be further refined at a later time, with his
permission.

So I would like to thank the gentleman for his graciousness in answering our questions.

Senator Pimentel. I also thank the gentleman, Mr. President.[29]

The Court takes note of the fact that the municipalities cited by the petitioners as having generated the
threshold income of P100 million from local sources, including those already converted into cities, are either
in Metro Manila or in provinces close to Metro Manila. In comparison, the municipalities covered by the
Cityhood Laws are spread out in the different provinces of the Philippines, including the Cordillera
and Mindanao regions, and are considerably very distant from Metro Manila. This reality underscores the
danger the enactment of R.A. No. 9009 sought to prevent, i.e., that the metropolis-located local governments
would have more priority in terms of funding because they would have more qualifications to become a city
compared to the far-flung areas in Mindanao or in the Cordilleras, or whatever, actually resulting from the
abrupt increase in the income requirement. Verily, this result is antithetical to what the Constitution and LGC
have nobly envisioned in favor of countryside development and national growth. Besides, this result should be
arrested early, to avoid the unwanted divisive effect on the entire country due to the local government units
closer to the National Capital Region being afforded easier access to the bigger share in the national coffers
than other local government units.

There should also be no question that the local government units covered by the Cityhood Laws belong to a
class of their own. They have proven themselves viable and capable to become component cities of their
respective provinces. They are and have been centers of trade and commerce, points of convergence of
transportation, rich havens of agricultural, mineral, and other natural resources, and flourishing tourism spots.
In his speech delivered on the floor of the Senate to sponsor House Joint Resolution No. 1, Senator Lim
recognized such unique traits,[30] viz:

It must be noted that except for Tandag and Lamitan, which are both second-class
municipalities in terms of income, all the rest are categorized by the Department of Finance as
first-class municipalities with gross income of at least P70 million as per Commission of
Audit Report for 2005. Moreover, Tandag and Lamitan, together with Borongan, Catbalogan,
and Tabuk, are all provincial capitals.

The more recent income figures of the 12 municipalities, which would have increased
further by this time, indicate their readiness to take on the responsibilities of cityhood.

Moreover, the municipalities under consideration are leading localities in their

respective provinces. Borongan, Catbalogan, Tandag, Batac and Tabuk are ranked number
one in terms of income among all the municipalities in their respective provinces; Baybay and
Bayugan are number two; Bogo and Lamitan are number three; Carcar, number four; and
Tayabas, number seven.Not only are they pacesetters in their respective provinces, they are
also among the frontrunners in their regions Baybay, Bayugan and Tabuk are number two
income-earners in Regions VIII, XIII, and CAR, respectively; Catbalogan and Batac are
number three in Regions VIII and I, respectively; Bogo, number five in Region VII;
Borongan and Carcar are both number six in Regions VIII and VII, respectively. This simply
shows that these municipalities are viable.
Petitioner League of Cities argues that there exists no issue with respect to the cityhood of its member
cities, considering that they became cities in full compliance with the criteria for conversion at the time of
their creation.

The Court considers the argument too sweeping. What we pointed out was that the previous income
requirement of P20 million was definitely not insufficient to provide the essential government facilities,
services, and special functions vis--vis the population of a component city. We also stressed that the increased
income requirement of P100 million was not the only conclusive indicator for any municipality to survive and
remain viable as a component city. These observations were unerringly reflected in the respective incomes of
the fifty-nine (59) members of the League of Cities that have still failed, remarkably enough, to be compliant
with the new requirement of the P100 million threshold income five years after R.A. No. 9009 became law.

Undoubtedly, the imposition of the income requirement of P100 million from local sources under R.A. No.
9009 was arbitrary. When the sponsor of the law chose the specific figure of P100 million, no research or
empirical data buttressed the figure. Nor was there proof that the proposal took into account the after-effects
that were likely to arise. As already mentioned, even the danger the passage of R.A. No. 9009 sought to
prevent might soon become a reality. While the Constitution mandates that the creation of local government
units must comply with the criteria laid down in the LGC, it cannot be justified to insist that the Constitution
must have to yield to every amendment to the LGC despite such amendment imminently producing effects
contrary to the original thrusts of the LGC to promote autonomy, decentralization, countryside development,
and the concomitant national growth.

Moreover, if we were now to adopt the stringent interpretation of the Constitution the petitioners are
espousing, we may have to apply the same restrictive yardstick against the recently converted cities cited by
the petitioners, and find two of them whose conversion laws have also to be struck down for being
unconstitutional. The two laws are R.A. No. 9387[31] and R.A. No. 9388,[32] respectively converting the
municipalities of San Juan and Navotas into highly urbanized cities. A cursory reading of the laws indicates
that there is no indication of compliance with the requirements imposed by the LGC, for, although the two
local government units concerned presumably complied with the income requirement of P50 million under
Section 452 of the LGC and the income requirement of P100 million under the amended Section 450 of the
LGC, they obviously did not meet the requirements set forth under Section 453 of the LGC, to wit:

Section 453. Duty to Declare Highly Urbanized Status.It shall be the duty of the
President to declare a city as highly urbanized within thirty (30) days after it shall have met
the minimum requirements prescribed in the immediately preceding Section, upon proper
application therefor and ratification in a plebiscite by the qualified voters therein.

Indeed, R.A. No. 9387 and R.A. No. 9388 evidently show that the President had not classified San
Juan and Navotas as highly urbanized cities upon proper application and ratification in a plebiscite by the
qualified voters therein. A further perusal of R.A. No. 9387 reveals that San Juan did not qualify as a highly
urbanized city because it had a population of only 125,558, contravening the required minimum population of
200,000 under Section 452 of the LGC. Such non-qualification as a component city was conceded even by
Senator Pimentel during the deliberations on Senate Bill No. 2157.

The petitioners contention that the Cityhood Laws violated their right to a just share in the national
taxes is not acceptable.
 In this regard, it suffices to state that the share of local government units is a matter of percentage
under Section 285 of the LGC, not a specific amount. Specifically, the share of the cities is 23%, determined
on the basis of population (50%), land area (25%), and equal sharing (25%). This share is also dependent on
the number of existing cities, such that when the number of cities increases, then more will divide and share
the allocation for cities. However, we have to note that the allocation by the National Government is not a
constant, and can either increase or decrease. With every newly converted city becoming entitled to share the
allocation for cities, the percentage of internal revenue allotment (IRA) entitlement of each city will decrease,
although the actual amount received may be more than that received in the preceding year. That is a necessary
consequence of Section 285 and Section 286 of the LGC.

As elaborated here and in the assailed February 15, 2011 Resolution, the Cityhood Laws were not
violative of the Constitution and the LGC. The respondents are thus also entitled to their just share in the IRA
allocation for cities. They have demonstrated their viability as component cities of their respective provinces
and are developing continuously, albeit slowly, because they had previously to share the IRA with about 1,500
municipalities. With their conversion into component cities, they will have to share with only around 120
cities.

Local government units do not subsist only on locally generated income, but also depend on the IRA
to support their development. They can spur their own developments and thereby realize their great potential
of encouraging trade and commerce in the far-flung regions of the country. Yet their potential will effectively
be stunted if those already earning more will still receive a bigger share from the national coffers, and if
commercial activity will be more or less concentrated only in and near Metro Manila.

III.
Conclusion

We should not ever lose sight of the fact that the 16 cities covered by the Cityhood Laws not only had
conversion bills pending during the 11th Congress, but have also complied with the requirements of the LGC
prescribed prior to its amendment by R.A. No. 9009. Congress undeniably gave these cities all the
considerations that justice and fair play demanded. Hence, this Court should do no less by stamping
its imprimatur to the clear and unmistakable legislative intent and by duly recognizing the certain collective
wisdom of Congress.

WHEREFORE, the Ad Cautelam Motion for Reconsideration (of the Decision dated 15 February
2011) is denied with finality.

SO ORDERED.
BAI SANDRA S. A. SEMA, G.R. No. 177597
Petitioner,

- versus -

COMMISSION ON ELECTIONS
and DIDAGEN P. DILANGALEN,

Respondents.

x------------------------x

PERFECTO F. MARQUEZ, G.R. No. 178628

Petitioner,

Present:

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,

CARPIO,

AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
- versus - AZCUNA,
TINGA,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
REYES,
LEONARDO-DE CASTRO, and
BRION, JJ.

COMMISSION ON ELECTIONS, Promulgated:

Respondent. July 16, 2008

x--------------------------------------------------x

DECISION

CARPIO, J.:

The Case
These consolidated petitions[1] seek to annul Resolution No. 7902, dated 10 May 2007, of the Commission on
Elections (COMELEC) treating Cotabato City as part of the legislative district of the Province of Shariff
Kabunsuan.[2]

The Facts

The Ordinance appended to the 1987 Constitution apportioned two legislative districts for
the Province of Maguindanao. The first legislative district consists of Cotabato City and eight
municipalities.[3] Maguindanao forms part of the Autonomous Region in Muslim Mindanao (ARMM), created
under its Organic Act, Republic Act No. 6734 (RA 6734), as amended by Republic Act No. 9054 (RA
9054).[4] Although under the Ordinance, Cotabato City forms part of Maguindanaos first legislative district, it
is not part of the ARMM but of Region XII, having voted against its inclusion in the ARMM in the plebiscite
held in November 1989.

On 28 August 2006, the ARMMs legislature, the ARMM Regional Assembly, exercising its power to create
provinces under Section 19, Article VI of RA 9054,[5] enacted Muslim Mindanao Autonomy Act No. 201
(MMA Act 201) creating the Province of Shariff Kabunsuan composed of the eight municipalities in the first
district of Maguindanao.MMA Act 201 provides:
Section 1. The Municipalities of Barira, Buldon, Datu Odin Sinsuat, Kabuntalan, Matanog,
Parang, Sultan Kudarat, Sultan Mastura, and Upi are hereby separated from
the Province of Maguindanao and constituted into a distinct and independent province, which
is hereby created, to be known as the Province of Shariff Kabunsuan.

xxxx

Sec. 5. The corporate existence of this province shall commence upon the
appointment by the Regional Governor or election of the governor and majority of the regular
members of the Sangguniang Panlalawigan.

The incumbent elective provincial officials of the Province of Maguindanao shall continue to
serve their unexpired terms in the province that they will choose or where they are
residents:Provided, that where an elective position in both provinces becomes vacant as a
consequence of the creation of the Province of Shariff Kabunsuan, all incumbent elective
provincial officials shall have preference for appointment to a higher elective vacant position
and for the time being be appointed by the Regional Governor, and shall hold office until their
successors shall have been elected and qualified in the next local elections; Provided, further,
that they shall continue to receive the salaries they are receiving at the time of the approval of
this Act until the new readjustment of salaries in accordance with law. Provided, furthermore,
that there shall be no diminution in the number of the members of the Sangguniang
Panlalawigan of the mother province.

Except as may be provided by national law, the existing legislative district, which includes
Cotabato as a part thereof, shall remain.
Later, three new municipalities[6] were carved out of the original nine municipalities constituting Shariff
Kabunsuan, bringing its total number of municipalities to 11. Thus, what was left of Maguindanao were the
municipalities constituting its second legislative district. Cotabato City, although part of Maguindanaos first
legislative district, is not part of the Province of Maguindanao.

The voters of Maguindanao ratified Shariff Kabunsuans creation in a plebiscite held on 29 October
2006.
On 6 February 2007, the Sangguniang Panlungsod of Cotabato City passed Resolution No. 3999
requesting the COMELEC to clarify the status of Cotabato City in view of the conversion of the First District
of Maguindanao into a regular province under MMA Act 201.
In answer to Cotabato Citys query, the COMELEC issued Resolution No. 07-0407 on 6 March
2007 "maintaining the status quo with Cotabato City as part of Shariff Kabunsuan in the First Legislative
District of Maguindanao. Resolution No. 07-0407, which adopted the recommendation of the COMELECs
Law Department under a Memorandum dated 27 February 2007,[7] provides in pertinent parts:

Considering the foregoing, the Commission RESOLVED, as it hereby resolves, to adopt the
recommendation of the Law Department that pending the enactment of the appropriate
law by Congress, to maintain the status quo with Cotabato City as part of Shariff Kabunsuan
in the First Legislative District of Maguindanao. (Emphasis supplied)

However, in preparation for the 14 May 2007 elections, the COMELEC promulgated on 29 March
2007 Resolution No. 7845 stating that Maguindanaos first legislative district is composed only
of Cotabato City because of the enactment of MMA Act 201.[8]

On 10 May 2007, the COMELEC issued Resolution No. 7902, subject of these petitions, amending Resolution
No. 07-0407 by renaming the legislative district in question
as Shariff Kabunsuan Province with Cotabato City (formerly First District of Maguindanao
[9]
with Cotabato City).

In G.R. No. 177597, Sema, who was a candidate in the 14 May 2007 elections for Representative of Shariff
Kabunsuan with Cotabato City, prayed for the nullification of COMELEC Resolution No. 7902 and the
exclusion from canvassing of the votes cast in Cotabato City for that office. Sema contended that Shariff
Kabunsuan is entitled to one representative in Congress under Section 5 (3), Article VI of the
Constitution[10] and Section 3 of the Ordinance appended to the Constitution.[11] Thus, Sema asserted that the
COMELEC acted without or in excess of its jurisdiction in issuing Resolution No. 7902 which maintained the
status quo in Maguindanaos first legislative district despite the COMELECs earlier directive in Resolution No.
7845 designating Cotabato City as the lone component of Maguindanaos reapportioned first legislative
district.[12] Sema further claimed that in issuing Resolution No. 7902, the COMELEC usurped Congress power
to create or reapportion legislative districts.

In its Comment, the COMELEC, through the Office of the Solicitor General (OSG), chose not to reach the
merits of the case and merely contended that (1) Sema wrongly availed of the writ of certiorari to nullify
COMELEC Resolution No. 7902 because the COMELEC issued the same in the exercise of its administrative,
not quasi-judicial, power and (2) Semas prayer for the writ of prohibition in G.R. No. 177597 became moot
with the proclamation of respondent Didagen P. Dilangalen (respondent Dilangalen) on 1 June 2007 as
representative of the legislative district of Shariff Kabunsuan Province with Cotabato City.

In his Comment, respondent Dilangalen countered that Sema is estopped from questioning COMELEC
Resolution No. 7902 because in her certificate of candidacy filed on 29 March 2007, Sema indicated that she
was seeking election as representative of Shariff Kabunsuan including Cotabato City. Respondent Dilangalen
added that COMELEC Resolution No. 7902 is constitutional because it did not apportion a legislative district
for Shariff Kabunsuan or reapportion the legislative districts in Maguindanao but merely renamed
Maguindanaos first legislative district. Respondent Dilangalen further claimed that the COMELEC could not
reapportion Maguindanaos first legislative district to make Cotabato City its sole component unit as the power
to reapportion legislative districts lies exclusively with Congress, not to mention that Cotabato City does not
meet the minimum population requirement under Section 5 (3), Article VI of the Constitution for the creation
of a legislative district within a city.[13]

Sema filed a Consolidated Reply controverting the matters raised in respondents Comments and reiterating
her claim that the COMELEC acted ultra vires in issuing Resolution No. 7902.

In the Resolution of 4 September 2007, the Court required the parties in G.R. No. 177597 to comment
on the issue of whether a province created by the ARMM Regional Assembly under Section 19, Article VI of
RA 9054 is entitled to one representative in the House of Representatives without need of a national law
creating a legislative district for such new province. The parties submitted their compliance as follows:

(1) Sema answered the issue in the affirmative on the following grounds: (a) the Court in Felwa v.
Salas[14] stated that when a province is created by statute, the corresponding representative district comes into
existence neither by authority of that statute which cannot provide otherwise nor by apportionment, but by
operation of the Constitution, without a reapportionment; (b) Section 462 of Republic Act No. 7160 (RA
7160) affirms the apportionment of a legislative district incident to the creation of a province; and (c) Section
5 (3), Article VI of the Constitution and Section 3 of the Ordinance appended to the Constitution mandate
the apportionment of a legislative district in newly created provinces.

(2) The COMELEC, again represented by the OSG, apparently abandoned its earlier stance on the
propriety of issuing Resolution Nos. 07-0407 and 7902 and joined causes with Sema, contending that Section
5 (3), Article VI of the Constitution is self-executing. Thus, every new province created by the ARMM
Regional Assembly is ipso facto entitled to one representative in the House of Representatives even in the
absence of a national law; and

(3) Respondent Dilangalen answered the issue in the negative on the following grounds: (a) the
province contemplated in Section 5 (3), Article VI of the Constitution is one that is created by an act of
Congress taking into account the provisions in RA 7160 on the creation of provinces; (b) Section 3, Article IV
of RA 9054 withheld from the ARMM Regional Assembly the power to enact measures relating to national
elections, which encompasses the apportionment of legislative districts for members of the House of
Representatives; (c) recognizing a legislative district in every province the ARMM Regional Assembly creates
will lead to the disproportionate representation of the ARMM in the House of Representatives as the Regional
Assembly can create provinces without regard to the requirements in Section 461 of RA 7160; and (d)
Cotabato City, which has a population of less than 250,000, is not entitled to a representative in the House of
Representatives.

On 27 November 2007, the Court heard the parties in G.R. No. 177597 in oral arguments on the
following issues: (1) whether Section 19, Article VI of RA 9054, delegating to the ARMM Regional
Assembly the power to create provinces, is constitutional; and (2) if in the affirmative, whether a province
created under Section 19, Article VI of RA 9054 is entitled to one representative in the House of
Representatives without need of a national law creating a legislative district for such new province. [15]

In compliance with the Resolution dated 27 November 2007, the parties in G.R. No. 177597 filed
their respective Memoranda on the issues raised in the oral arguments.[16] On the question of the
constitutionality of Section 19, Article VI of RA 9054, the parties in G.R. No. 177597 adopted the following
positions:

(1) Sema contended that Section 19, Article VI of RA 9054 is constitutional (a) as a valid delegation
by Congress to the ARMM of the power to create provinces under Section 20 (9), Article X of the
Constitution granting to the autonomous regions, through their organic acts, legislative powers over other
matters as may be authorized by law for the promotion of the general welfare of the people of the region and
(b) as an amendment to Section 6 of RA 7160.[17] However, Sema concedes that, if taken literally, the grant in
Section 19, Article VI of RA 9054 to the ARMM Regional Assembly of the power to prescribe standards
lower than those mandated in RA 7160 in the creation of provinces contravenes Section 10, Article X of the
Constitution.[18] Thus, Sema proposed that Section 19 should be construed as prohibiting the Regional
Assembly from prescribing standards x x x that do not comply with the minimum criteria under RA 7160.[19]

(2) Respondent Dilangalen contended that Section 19, Article VI of RA 9054 is unconstitutional on
the following grounds: (a) the power to create provinces was not among those granted to the autonomous
regions under Section 20, Article X of the Constitution and (b) the grant under Section 19, Article VI of RA
9054 to the ARMM Regional Assembly of the power to prescribe standards lower than those mandated in
Section 461 of RA 7160 on the creation of provinces contravenes Section 10, Article X of the Constitution
and the Equal Protection Clause; and

(3) The COMELEC, through the OSG, joined causes with respondent Dilangalen (thus effectively
abandoning the position the COMELEC adopted in its Compliance with the Resolution of 4 September 2007)
and contended that Section 19, Article VI of RA 9054 is unconstitutional because (a) it contravenes Section
10 and Section 6,[20] Article X of the Constitution and (b) the power to create provinces was withheld from the
autonomous regions under Section 20, Article X of the Constitution.

On the question of whether a province created under Section 19, Article VI of RA 9054 is entitled to
one representative in the House of Representatives without need of a national law creating a legislative district
for such new province, Sema and respondent Dilangalen reiterated in their Memoranda the positions they
adopted in their Compliance with the Resolution of 4 September 2007. The COMELEC deemed it
unnecessary to submit its position on this issue considering its stance that Section 19, Article VI of RA 9054
is unconstitutional.

The pendency of the petition in G.R. No. 178628 was disclosed during the oral arguments on 27
November 2007. Thus, in the Resolution of 19 February 2008, the Court ordered G.R. No. 178628
consolidated with G.R. No. 177597. The petition in G.R. No. 178628 echoed Sema's contention that the
COMELEC acted ultra vires in issuing Resolution No. 7902 depriving the voters of Cotabato City of a
representative in the House of Representatives. In its Comment to the petition in G.R. No. 178628, the
COMELEC, through the OSG, maintained the validity of COMELEC Resolution No. 7902 as a temporary
measure pending the enactment by Congress of the appropriate law.

The Issues

The petitions raise the following issues:

I. In G.R. No. 177597:

(A) Preliminarily
(1) whether the writs of Certiorari, Prohibition, and Mandamus are proper to test the constitutionality
of COMELEC Resolution No. 7902; and
(2) whether the proclamation of respondent Dilangalen as representative
of Shariff Kabunsuan Province with Cotabato City mooted the petition in G.R. No. 177597.
 (B) On the merits
(1) whether Section 19, Article VI of RA 9054, delegating to the ARMM Regional Assembly the
power to create provinces, cities, municipalities and barangays, is constitutional; and
(2) if in the affirmative, whether a province created by the ARMM Regional Assembly under MMA
Act 201 pursuant to Section 19, Article VI of RA 9054 is entitled to one representative in the House of
Representatives without need of a national law creating a legislative district for such province.

II. In G.R No. 177597 and G.R No. 178628, whether COMELEC Resolution No. 7902 is valid for
maintaining the status quo in the first legislative district of Maguindanao (as Shariff Kabunsuan Province with
Cotabato City [formerly First District of Maguindanao with Cotabato City]), despite the creation of the
Province of Shariff Kabunsuan out of such district (excluding Cotabato City).

The Ruling of the Court

The petitions have no merit. We rule that (1) Section 19, Article VI of RA 9054 is unconstitutional insofar
as it grants to the ARMM Regional Assembly the power to create provinces and cities; (2) MMA Act 201
creating the Province of Shariff Kabunsuan is void; and (3) COMELEC Resolution No. 7902 is valid.

On the Preliminary Matter

The Writ of Prohibition is Appropriate

to Test the Constitutionality of
Election Laws, Rules and Regulations

The purpose of the writ of Certiorari is to correct grave abuse of discretion by any tribunal, board, or
officer exercising judicial or quasi-judicial functions.[21] On the other hand, the writ of Mandamus will issue to
compel a tribunal, corporation, board, officer, or person to perform an act which the law specifically enjoins
as a duty.[22] True, the COMELEC did not issue Resolution No. 7902 in the exercise of its judicial or quasi-
judicial functions.[23] Nor is there a law which specifically enjoins the COMELEC to exclude from canvassing
the votes cast in Cotabato City for representative of Shariff Kabunsuan Province with Cotabato City. These,
however, do not justify the outright dismissal of the petition in G.R. No. 177597 because Sema also prayed for
the issuance of the writ of Prohibition and we have long recognized this writ as proper for testing the
constitutionality of election laws, rules, and regulations.[24]
Respondent Dilangalens Proclamation
Does Not Moot the Petition

There is also no merit in the claim that respondent Dilangalens proclamation as winner in the 14 May
2007 elections for representative of Shariff Kabunsuan Province with Cotabato City mooted this petition. This
case does not concern respondent Dilangalens election. Rather, it involves an inquiry into the validity of
COMELEC Resolution No. 7902, as well as the constitutionality of MMA Act 201 and Section 19, Article VI
of RA 9054. Admittedly, the outcome of this petition, one way or another, determines whether the votes cast
in Cotabato City for representative of the district of Shariff Kabunsuan Province with Cotabato City will be
included in the canvassing of ballots. However, this incidental consequence is no reason for us not to proceed
with the resolution of the novel issues raised here. The Courts ruling in these petitions affects not only the
recently concluded elections but also all the other succeeding elections for the office in question, as well as the
power of the ARMM Regional Assembly to create in the future additional provinces.

On the Main Issues

Whether the ARMM Regional Assembly

Can Create the Province of Shariff Kabunsuan

The creation of local government units is governed by Section 10, Article X of the Constitution, which
provides:

Sec. 10. No province, city, municipality, or barangay may be created, divided,

merged, abolished or its boundary substantially altered except in accordance with the
criteria established in the local government code and subject to approval by a majority of
the votes cast in a plebiscite in the political units directly affected.
Thus, the creation of any of the four local government units province, city, municipality or barangay must
comply with three conditions. First, the creation of a local government unit must follow the criteria fixed in
the Local Government Code. Second, such creation must not conflict with any provision of the
Constitution. Third, there must be a plebiscite in the political units affected.

There is neither an express prohibition nor an express grant of authority in the Constitution for Congress to
delegate to regional or local legislative bodies the power to create local government units. However, under
its plenary legislative powers, Congress can delegate to local legislative bodies the power to create local
government units, subject to reasonable standards and provided no conflict arises with any provision of the
Constitution. In fact, Congress has delegated to provincial boards, and city and municipal councils, the power
to create barangays within their jurisdiction,[25] subject to compliance with the criteria established in the
Local Government Code, and the plebiscite requirement in Section 10, Article X of the
Constitution. However, under the Local Government Code, only x x x an Act of Congress can create
provinces, cities or municipalities.[26]

Under Section 19, Article VI of RA 9054, Congress delegated to the ARMM Regional Assembly the power to
create provinces, cities, municipalities and barangays within the ARMM. Congress made the delegation
under its plenary legislative powers because the power to create local government units is not one of the
express legislative powers granted by the Constitution to regional legislative bodies.[27] In the present case,
the question arises whether the delegation to the ARMM Regional Assembly of the power to create
provinces, cities, municipalities and barangays conflicts with any provision of the Constitution.

There is no provision in the Constitution that conflicts with the delegation to regional legislative bodies of
the power to create municipalities and barangays, provided Section 10, Article X of the Constitution is
followed. However, the creation of provinces and cities is another matter. Section 5 (3), Article VI of the
Constitution provides, Each city with a population of at least two hundred fifty thousand, or each province,
shall have at least one representative in the House of Representatives. Similarly, Section 3 of the Ordinance
appended to the Constitution provides, Any province that may hereafter be created, or any city whose
population may hereafter increase to more than two hundred fifty thousand shall be entitled in the
immediately following election to at least one Member x x x.
 Clearly, a province cannot be created without a legislative district because it will violate Section 5
(3), Article VI of the Constitution as well as Section 3 of the Ordinance appended to the Constitution. For the
same reason, a city with a population of 250,000 or more cannot also be created without a legislative
district. Thus, the power to create a province, or a city with a population of 250,000 or more, requires also
the power to create a legislative district. Even the creation of a city with a population of less than 250,000
involves the power to create a legislative district because once the citys population reaches 250,000, the city
automatically becomes entitled to one representative under Section 5 (3), Article VI of the Constitution and
Section 3 of the Ordinance appended to the Constitution. Thus, the power to create a province or city
inherently involves the power to create a legislative district.

For Congress to delegate validly the power to create a province or city, it must also validly delegate
at the same time the power to create a legislative district. The threshold issue then is, can Congress validly
delegate to the ARMM Regional Assembly the power to create legislative districts for the House of
Representatives? The answer is in the negative.

Legislative Districts are Created or Reapportioned

Only by an Act of Congress

Under the present Constitution, as well as in past[28] Constitutions, the power to increase the allowable
membership in the House of Representatives, and to reapportion legislative districts, is vested exclusively in
Congress. Section 5, Article VI of the Constitution provides:

SECTION 5. (1) The House of Representatives shall be composed of not more than
two hundred and fifty members, unless otherwise fixed by law, who shall be elected from
legislative districts apportioned among the provinces, cities, and the Metropolitan Manila area
in accordance with the number of their respective inhabitants, and on the basis of a uniform
and progressive ratio, and those who, as provided by law, shall be elected through a party-list
system of registered national, regional, and sectoral parties or organizations.

xxxx
 (3) Each legislative district shall comprise, as far as practicable, contiguous, compact,
and adjacent territory. Each city with a population of at least two hundred fifty thousand, or
each province, shall have at least one representative.

(4) Within three years following the return of every census, the Congress shall make
a reapportionment of legislative districts based on the standards provided in this section.
(Emphasis supplied)

Section 5 (1), Article VI of the Constitution vests in Congress the power to increase, through a law,
the allowable membership in the House of Representatives. Section 5 (4) empowers Congress to reapportion
legislative districts. The power to reapportion legislative districts necessarily includes the power to create
legislative districts out of existing ones. Congress exercises these powers through a law that Congress itself
enacts, and not through a law that regional or local legislative bodies enact. The allowable membership of the
House of Representatives can be increased, and new legislative districts of Congress can be created, only
through a national law passed by Congress. In Montejo v. COMELEC,[29] we held that the power of
redistricting x x x is traditionally regarded as part of the power (of Congress) to make laws, and thus is vested
exclusively in Congress.

This textual commitment to Congress of the exclusive power to create or reapportion legislative
districts is logical. Congress is a national legislature and any increase in its allowable membership or in its
incumbent membership through the creation of legislative districts must be embodied in a national law. Only
Congress can enact such a law. It would be anomalous for regional or local legislative bodies to create or
reapportion legislative districts for a national legislature like Congress. An inferior legislative body, created
by a superior legislative body, cannot change the membership of the superior legislative body.

The creation of the ARMM, and the grant of legislative powers to its Regional Assembly under its
organic act, did not divest Congress of its exclusive authority to create legislative districts. This is clear from
the Constitution and the ARMM Organic Act, as amended. Thus, Section 20, Article X of the Constitution
provides:
 SECTION 20. Within its territorial jurisdiction and subject to the provisions of this
Constitution and national laws, the organic act of autonomous regions shall provide for
legislative powers over:
(1) Administrative organization;
(2) Creation of sources of revenues;
(3) Ancestral domain and natural resources;
(4) Personal, family, and property relations;
(5) Regional urban and rural planning development;
(6) Economic, social, and tourism development;
(7) Educational policies;
(8) Preservation and development of the cultural heritage; and
(9) Such other matters as may be authorized by law for the promotion of the general
welfare of the people of the region.

Nothing in Section 20, Article X of the Constitution authorizes autonomous regions, expressly or
impliedly, to create or reapportion legislative districts for Congress.

On the other hand, Section 3, Article IV of RA 9054 amending the ARMM Organic Act,
provides, The Regional Assembly may exercise legislative power x x x except on the following matters: x
x x (k) National elections. x x x. Since the ARMM Regional Assembly has no legislative power to enact laws
relating to national elections, it cannot create a legislative district whose representative is elected in national
elections. Whenever Congress enacts a law creating a legislative district, the first representative is always
elected in the next national elections from the effectivity of the law.[30]
Indeed, the office of a legislative district representative to Congress is a national office, and its
occupant, a Member of the House of Representatives, is a national official.[31] It would be incongruous for a
regional legislative body like the ARMM Regional Assembly to create a national office when its legislative
powers extend only to its regional territory. The office of a district representative is maintained by national
funds and the salary of its occupant is paid out of national funds. It is a self-evident inherent limitation on the
legislative powers of every local or regional legislative body that it can only create local or regional offices,
respectively, and it can never create a national office.

To allow the ARMM Regional Assembly to create a national office is to allow its legislative powers
to operate outside the ARMMs territorial jurisdiction. This violates Section 20, Article X of the
Constitution which expressly limits the coverage of the Regional Assemblys legislative powers [w]ithin
its territorial jurisdiction x x x.

The ARMM Regional Assembly itself, in creating Shariff Kabunsuan, recognized the exclusive nature
of Congress power to create or reapportion legislative districts by abstaining from creating a legislative district
for Shariff Kabunsuan. Section 5 of MMA Act 201 provides that:

Except as may be provided by national law, the existing legislative district, which
includes Cotabato City as a part thereof, shall remain. (Emphasis supplied)

However, a province cannot legally be created without a legislative district because the Constitution mandates
that each province shall have at least one representative. Thus, the creation of the Province of Shariff
Kabunsuan without a legislative district is unconstitutional.

Sema, petitioner in G.R. No. 177597, contends that Section 5 (3), Article VI of the Constitution, which
provides:

Each legislative district shall comprise, as far as practicable, contiguous, compact,

and adjacent territory. Each city with a population of at least two hundred fifty thousand,
or each province, shall have at least one representative. (Emphasis supplied)

and Section 3 of the Ordinance appended to the Constitution, which states:

Any province that may hereafter be created, or any city whose population may
hereafter increase to more than two hundred fifty thousand shall be entitled in the
immediately following election to at least one Member or such number of Members as it
may be entitled to on the basis of the number of its inhabitants and according to the
standards set forth in paragraph (3), Section 5 of Article VI of the Constitution. The
number of Members apportioned to the province out of which such new province was created
or where the city, whose population has so increased, is geographically located shall be
correspondingly adjusted by the Commission on Elections but such adjustment shall not be
made within one hundred and twenty days before the election. (Emphasis supplied)
serve as bases for the conclusion that the Province of Shariff Kabunsuan, created on 29 October 2006, is
automatically entitled to one member in the House of Representatives in the 14 May 2007 elections. As
further support for her stance, petitioner invokes the statement in Felwa that when a province is created by
statute, the corresponding representative district comes into existence neither by authority of that statute which
cannot provide otherwise nor by apportionment, but by operation of the Constitution, without a
reapportionment.

The contention has no merit.

First. The issue in Felwa, among others, was whether Republic Act No. 4695 (RA 4695), creating the
provinces of Benguet, Mountain Province, Ifugao, and Kalinga-Apayao and providing for congressional
representation in the old and new provinces, was unconstitutional for creati[ng] congressional districts without
the apportionment provided in the Constitution. The Court answered in the negative, thus:

The Constitution ordains:

The House of Representatives shall be composed of not more than one

hundred and twenty Members who shall be apportioned among the several
provinces as nearly as may be according to the number of their respective
inhabitants, but each province shall have at least one Member. The Congress
shall by law make an apportionment within three years after the return of
every enumeration, and not otherwise. Until such apportionment shall have
been made, the House of Representatives shall have the same number of
Members as that fixed by law for the National Assembly, who shall be
elected by the qualified electors from the present Assembly districts. Each
representative district shall comprise as far as practicable, contiguous and
compact territory.
Pursuant to this Section, a representative district may come into existence: (a)
indirectly, through the creation of a province for each province shall have at least one
member in the House of Representatives; or (b) by direct creation of several
representative districts within a province. The requirements concerning the apportionment
of representative districts and the territory thereof refer only to the second method of creation
of representative districts, and do not apply to those incidental to the creation of provinces,
under the first method. This is deducible, not only from the general tenor of the provision
above quoted, but, also, from the fact that the apportionment therein alluded to refers to that
which is made by an Act of Congress. Indeed, when a province is created by statute, the
corresponding representative district, comes into existence neither by authority of that
statute which cannot provide otherwise nor by apportionment, but by operation of the
Constitution, without a reapportionment.
There is no constitutional limitation as to the time when, territory of, or other conditions
under which a province may be created, except, perhaps, if the consequence thereof were to
exceed the maximum of 120 representative districts prescribed in the Constitution, which is
 not the effect of the legislation under consideration. As a matter of fact, provinces have been
created or subdivided into other provinces, with the consequent creation of additional
representative districts, without complying with the aforementioned
requirements.[32] (Emphasis supplied)

Thus, the Court sustained the constitutionality of RA 4695 because (1) it validly created legislative districts
indirectly through a special law enacted by Congress creating a province and (2) the creation of the
legislative districts will not result in breaching the maximum number of legislative districts provided under the
1935 Constitution. Felwa does not apply to the present case because in Felwa the new provinces were created
by a national law enacted by Congress itself. Here, the new province was created merely by a regional law
enacted by the ARMM Regional Assembly.

What Felwa teaches is that the creation of a legislative district by Congress does not emanate alone
from Congress power to reapportion legislative districts, but also from Congress power to create provinces
which cannot be created without a legislative district. Thus, when a province is created, a legislative district is
created by operation of the Constitution because the Constitution provides that each province shall have
at least one representative in the House of Representatives. This does not detract from the constitutional
principle that the power to create legislative districts belongs exclusively to Congress. It merely prevents any
other legislative body, except Congress, from creating provinces because for a legislative body to create a
province such legislative body must have the power to create legislative districts. In short, only an act of
Congress can trigger the creation of a legislative district by operation of the Constitution. Thus, only Congress
has the power to create, or trigger the creation of, a legislative district.

Moreover, if as Sema claims MMA Act 201 apportioned a legislative district to Shariff Kabunsuan
upon its creation, this will leave Cotabato City as the lone component of the first legislative district of
Maguindanao. However, Cotabato City cannot constitute a legislative district by itself because as of the
census taken in 2000, it had a population of only 163,849. To constitute Cotabato City alone as the surviving
first legislative district of Maguindanao will violate Section 5 (3), Article VI of the Constitution which
requires that [E]ach city with a population of at least two hundred fifty thousand x x x, shall have at least one
representative.
 Second. Semas theory also undermines the composition and independence of the House of
Representatives. Under Section 19,[33] Article VI of RA 9054, the ARMM Regional Assembly can create
provinces and cities within the ARMM with or without regard to the criteria fixed in Section 461 of RA
7160, namely: minimum annual income of P20,000,000, and minimum contiguous territory of 2,000 square
kilometers or minimum population of 250,000.[34] The following scenarios thus become distinct possibilities:

(1) An inferior legislative body like the ARMM Regional Assembly can create 100 or
more provinces and thus increase the membership of a superior legislative body, the House
of Representatives, beyond the maximum limit of 250 fixed in the Constitution (unless a
national law provides otherwise);

(2) The proportional representation in the House of Representatives based on one

representative for at least every 250,000 residents will be negated because the ARMM
Regional Assembly need not comply with the requirement in Section 461(a)(ii) of RA 7160
that every province created must have a population of at least 250,000; and

(3) Representatives from the ARMM provinces can become the majority in the House
of Representatives through the ARMM Regional Assemblys continuous creation of provinces
or cities within the ARMM.

The following exchange during the oral arguments of the petition in G.R. No. 177597 highlights the
absurdity of Semas position that the ARMM Regional Assembly can create provinces:

Justice Carpio:
So, you mean to say [a] Local Government can create legislative district[s] and pack
Congress with their own representatives [?]

Atty. Vistan II:[35]

Yes, Your Honor, because the Constitution allows that.
Justice Carpio:
So, [the] Regional Assembly of [the] ARMM can create and create x x x provinces x
x x and, therefore, they can have thirty-five (35) new representatives in the House of
Representatives without Congress agreeing to it, is that what you are saying? That
can be done, under your theory[?]

Atty. Vistan II:

 Yes, Your Honor, under the correct factual circumstances.

Justice Carpio:
Under your theory, the ARMM legislature can create thirty-five (35) new provinces,
there may be x x x [only] one hundred thousand (100,000) [population], x x x, and
they will each have one representative x x x to Congress without any national law, is
that what you are saying?

Atty. Vistan II:

Without law passed by Congress, yes, Your Honor, that is what we are saying.

xxxx
Justice Carpio:
So, they can also create one thousand (1000) new provinces, sen[d] one thousand
(1000) representatives to the House of Representatives without a national law[,]
that is legally possible, correct?

Atty. Vistan II:

Yes, Your Honor.[36] (Emphasis supplied)

Neither the framers of the 1987 Constitution in adopting the provisions in Article X on regional
autonomy,[37] nor Congress in enacting RA 9054, envisioned or intended these disastrous consequences that
certainly would wreck the tri-branch system of government under our Constitution. Clearly, the power to
create or reapportion legislative districts cannot be delegated by Congress but must be exercised by Congress
itself. Even the ARMM Regional Assembly recognizes this.

The Constitution empowered Congress to create or reapportion legislative districts, not the regional
assemblies. Section 3 of the Ordinance to the Constitution which states, [A]ny province that may hereafter be
created x x x shall be entitled in the immediately following election to at least one Member, refers to a
province created by Congress itself through a national law. The reason is that the creation of a province
increases the actual membership of the House of Representatives, an increase that only Congress can
decide.Incidentally, in the present 14th Congress, there are 219[38] district representatives out of the maximum
250 seats in the House of Representatives. Since party-list members shall constitute 20 percent of total
membership of the House, there should at least be 50 party-list seats available in every election in case 50
party-list candidates are proclaimed winners. This leaves only 200 seats for district representatives, much less
than the 219 incumbent district representatives. Thus, there is a need now for Congress to increase by law the
allowable membership of the House, even before Congress can create new provinces.

It is axiomatic that organic acts of autonomous regions cannot prevail over the Constitution. Section 20,
Article X of the Constitution expressly provides that the legislative powers of regional assemblies are
limited [w]ithin its territorial jurisdiction and subject to the provisions of the Constitution and national
laws, x x x. The Preamble of the ARMM Organic Act (RA 9054) itself states that the ARMM Government is
established within the framework of the Constitution. This follows Section 15, Article X of the Constitution
which mandates that the ARMM shall be created x x x within the framework of this Constitution and the
national sovereignty as well as territorial integrity of the Republic of the Philippines.

The present case involves the creation of a local government unit that necessarily involves also the
creation of a legislative district. The Court will not pass upon the constitutionality of the creation of
municipalities and barangays that does not comply with the criteria established in Section 461 of RA 7160, as
mandated in Section 10, Article X of the Constitution, because the creation of such municipalities and
barangays does not involve the creation of legislative districts. We leave the resolution of this issue to an
appropriate case.

In summary, we rule that Section 19, Article VI of RA 9054, insofar as it grants to the ARMM Regional
Assembly the power to create provinces and cities, is void for being contrary to Section 5 of Article VI and
Section 20 of Article X of the Constitution, as well as Section 3 of the Ordinance appended to the
Constitution. Only Congress can create provinces and cities because the creation of provinces and cities
necessarily includes the creation of legislative districts, a power only Congress can exercise under Section 5,
Article VI of the Constitution and Section 3 of the Ordinance appended to the Constitution. The ARMM
Regional Assembly cannot create a province without a legislative district because the Constitution mandates
that every province shall have a legislative district. Moreover, the ARMM Regional Assembly cannot enact a
law creating a national office like the office of a district representative of Congress because the legislative
powers of the ARMM Regional Assembly operate only within its territorial jurisdiction as provided in Section
20, Article X of the Constitution. Thus, we rule that MMA Act 201, enacted by the ARMM Regional
Assembly and creating the Province of Shariff Kabunsuan, is void.

Resolution No. 7902 Complies with the Constitution

Consequently, we hold that COMELEC Resolution No. 7902, preserving the geographic and
legislative district of the First District of Maguindanao with Cotabato City, is valid as it merely complies with
Section 5 of Article VI and Section 20 of Article X of the Constitution, as well as Section 1 of the Ordinance
appended to the Constitution.

WHEREFORE, we declare Section 19, Article VI of Republic Act No.

9054 UNCONSTITUTIONAL insofar as it grants to the Regional Assembly of the Autonomous Region in
Muslim Mindanao the power to create provinces and cities. Thus, we declare VOID Muslim Mindanao
Autonomy Act No. 201 creating the Province of Shariff Kabunsuan.Consequently, we rule that COMELEC
Resolution No. 7902 is VALID.
JUANITO MARIANO, JR. et al., petitioners,
vs.
THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY,
THE MUNICIPAL TREASURER, AND SANGGUNIANG BAYAN OF MAKATI, respondents.

G.R. No. 118627 March 7, 1995

JOHN R. OSMEA, petitioner,

vs.
THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY,
MUNICIPAL TREASURER, AND SANGGUNIANG BAYAN OF MAKATI, respondents.

PUNO, J.:

At bench are two (2) petitions assailing certain provisions of Republic Act No. 7854 as
unconstitutional. R.A. No. 7854 as unconstitutional. R.A. No. 7854 is entitled, "An Act Converting
the Municipality of Makati Into a Highly Urbanized City to be known as the City of Makati." 1

G.R. No. 118577 involves a petition for prohibition and declaratory relief. It was filed by petitioners
Juanito Mariano, Jr., Ligaya S. Bautista, Teresita Tibay, Camilo Santos, Frankie Cruz, Ricardo
Pascual, Teresita Abang, Valentina Pitalvero, Rufino Caldoza, Florante Alba, and Perfecto Alba. Of
the petitioners, only Mariano, Jr., is a resident of Makati. The others are residents of Ibayo Ususan,
Taguig, Metro Manila. Suing as taxpayers, they assail as unconstitutional sections 2, 51, and 52 of
R.A. No. 7854 on the following grounds:

1. Section 2 of R.A. No. 7854 did not properly identify the land area or territorial
jurisdiction of Makati by metes and bounds, with technical descriptions, in violation of
Section 10, Article X of the Constitution, in relation to Sections 7 and 450 of the Local
Government Code;

2. Section 51 of R.A. No. 7854 attempts to alter or restart the "three consecutive
term" limit for local elective officials, in violation of Section 8, Article X and Section 7,
Article VI of the Constitution.

3. Section 52 of R.A. No. 7854 is unconstitutional for:

(a) it increased the legislative district of Makati only by special law (the
Charter in violation of the constitutional provision requiring a general
reapportionment law to be passed by Congress within three (3) years
following the return of every census;

(b) the increase in legislative district was not expressed in the title of
the bill; and

(c) the addition of another legislative district in Makati is not in accord

with Section 5 (3), Article VI of the Constitution for as of the latest
survey (1990 census), the population of Makati stands at only
450,000.
G.R. No. 118627 was filed by the petitioner John H. Osmea as senator, taxpayer, and concerned
citizen. Petitioner assails section 52 of R.A. No. 7854 as unconstitutional on the same grounds as
aforestated.

We find no merit in the petitions.

Section 2, Article I of R.A. No. 7854 delineated the land areas of the proposed city of Makati, thus:

Sec. 2. The City of Makati. The Municipality of Makati shall be converted into a
highly urbanized city to be known as the City of Makati, hereinafter referred to as the
City, which shall comprise the present territory of the Municipality of Makati in
Metropolitan Manila Area over which it has jurisdiction bounded on the northeast by
Pasig River and beyond by the City of Mandaluyong and the Municipality of Pasig; on
the southeast by the municipalities of Pateros and Taguig; on the southwest by the
City of Pasay and the Municipality of Taguig; and, on the northwest, by the City of
Manila.

The foregoing provision shall be without prejudice to the resolution by the appropriate
agency or forum of existing boundary disputes or cases involving questions of
territorial jurisdiction between the City of Makati and the adjoining local government
units. (Emphasis supplied)

In G.R. No. 118577, petitioners claim that this delineation violates sections 7 and 450 of the Local
Government Code which require that the area of a local government unit should be made by metes
and bounds with technical descriptions.2

The importance of drawing with precise strokes the territorial boundaries of a local unit of
government cannot be overemphasized. The boundaries must be clear for they define the limits of
the territorial jurisdiction of a local government unit. It can legitimately exercise powers of
government only within the limits, its acts are ultra vires. Needless to state, any uncertainty in the
boundaries of local government units will sow costly conflicts in the exercise of governmental
powers which ultimately will prejudice the people's welfare. This is the evil sought to avoided by the
Local Government Code in requiring that the land area of a local government unit must be spelled
out in metes and bounds, with technical descriptions.

Given the facts of the cases at bench, we cannot perceive how this evil can be brought about by the
description made in section 2 of R.A. No. 7854, Petitioners have not demonstrated that the
delineation of the land area of the proposed City of Makati will cause confusion as to its boundaries.
We note that said delineation did not change even by an inch the land area previously covered by
Makati as a municipality. Section 2 did not add, subtract, divide, or multiply the established land
area of Makati. In language that cannot be any clearer, section 2 stated that, the city's land area
"shall comprise the present territory of the municipality."

The deliberations of Congress will reveal that there is a legitimate reason why the land area of the
proposed City of Makati was not defined by metes and bounds, with technical descriptions. At the
time of the consideration of R.A. No. 7854, the territorial dispute between the municipalities of
Makati and Taguig over Fort Bonifacio was under court litigation. Out of a becoming sense of
respect to co-equal department of government, legislators felt that the dispute should be left to the
courts to decide. They did not want to foreclose the dispute by making a legislative finding of fact
which could decide the issue. This would have ensued if they defined the land area of the proposed
city by its exact metes and bounds, with technical descriptions.3 We take judicial notice of the fact
that Congress has also refrained from using the metes and bounds description of land areas of
other local government units with unsettled boundary disputes.4

We hold that the existence of a boundary dispute does not per se present an insurmountable
difficulty which will prevent Congress from defining with reasonable certitude the territorial
jurisdiction of a local government unit. In the cases at bench, Congress maintained the existing
boundaries of the proposed City of Makati but as an act of fairness, made them subject to the
ultimate resolution by the courts. Considering these peculiar circumstances, we are not prepared to
hold that section 2 of R.A. No. 7854 is unconstitutional. We sustain the submission of the Solicitor
General in this regard, viz.:

Going now to Sections 7 and 450 of the Local Government Code, it is beyond cavil
that the requirement stated therein, viz.: "the territorial jurisdiction of newly created or
converted cities should be described by meted and bounds, with technical
descriptions" was made in order to provide a means by which the area of said
cities may be reasonably ascertained. In other words, the requirement on metes and
bounds was meant merely as tool in the establishment of local government units. It is
not an end in itself. Ergo, so long as the territorial jurisdiction of a city may be
reasonably ascertained, i.e., by referring to common boundaries with neighboring
municipalities, as in this case, then, it may be concluded that the legislative intent
behind the law has been sufficiently served.

Certainly, Congress did not intends that laws creating new cities must contain therein
detailed technical descriptions similar to those appearing in Torrens titles, as
petitioners seem to imply. To require such description in the law as a condition sine
qua non for its validity would be to defeat the very purpose which the Local
Government Code to seeks to serve. The manifest intent of the Code is to empower
local government units and to give them their rightful due. It seeks to make local
governments more responsive to the needs of their constituents while at the same
time serving as a vital cog in national development. To invalidate R.A. No. 7854 on
the mere ground that no cadastral type of description was used in the law would
serve the letter but defeat the spirit of the Code. It then becomes a case of the
master serving the slave, instead of the other way around. This could not be the
intendment of the law.

Too well settled is the rule that laws must be enforced when ascertained, although it
may not be consistent with the strict letter of the statute. Courts will not follow the
letter of the statute when to do so would depart from the true intent of the legislature
or would otherwise yield conclusions inconsistent with the general purpose of the act.
(Torres v. Limjap, 56 Phil., 141; Taada v. Cuenco, 103 Phil. 1051; Hidalgo v.
Hidalgo, 33 SCRA 1105). Legislation is an active instrument of government, which,
for purposes of interpretation, means that laws have ends to achieve, and statutes
should be so construed as not to defeat but to carry out such ends and purposes
(Bocolbo v. Estanislao, 72 SCRA 520). The same rule must indubitably apply to the
case at bar.

II

Petitioners in G.R. No. 118577 also assail the constitutionality of section 51, Article X of R.A. No.
7854. Section 51 states:

Sec. 51. Officials of the City of Makati. The represent elective officials of the
Municipality of Makati shall continue as the officials of the City of Makati and shall
exercise their powers and functions until such time that a new election is held and the
 duly elected officials shall have already qualified and assume their
offices: Provided, The new city will acquire a new corporate existence. The
appointive officials and employees of the City shall likewise continues exercising their
functions and duties and they shall be automatically absorbed by the city government
of the City of Makati.

They contend that this section collides with section 8, Article X and section 7, Article VI of the
Constitution which provide:

Sec. 8. The term of office of elective local officials, except barangay officials, which
shall be determined by law, shall be three years and no such official shall serve for
more than three consecutive terms. Voluntary renunciation of the office for any length
of time shall not be considered as an interruption in the continuity of his service for
the full term for which he was elected.

xxx xxx xxx

Sec. 7. The Members of the House of Representatives shall be elected for a term of
three years which shall begin, unless otherwise provided by law, at noon on the
thirtieth day of June next following their election.

No Member of the House of Representatives shall serve for more than three
consecutive terms. Voluntary renunciation of the office for any length of time shall not
be considered as an interruption in the continuity of his service for the full term for
which he was elected.

Petitioners stress that under these provisions, elective local officials, including Members of the
House of Representative, have a term of three (3) years and are prohibited from serving for more
than three (3) consecutive terms. They argue that by providing that the new city shall acquire a new
corporate existence, section 51 of R.A. No. 7854 restarts the term of the present municipal elective
officials of Makati and disregards the terms previously served by them. In particular, petitioners point
that section 51 favors the incumbent Makati Mayor, respondent Jejomar Binay, who has already
served for two (2) consecutive terms. They further argue that should Mayor Binay decide to run and
eventually win as city mayor in the coming elections, he can still run for the same position in 1998
and seek another three-year consecutive term since his previous three-year consecutive term
as municipal mayor would not be counted. Thus, petitioners conclude that said section 51 has been
conveniently crafted to suit the political ambitions of respondent Mayor Binay.

We cannot entertain this challenge to the constitutionality of section 51. The requirements before a
litigant can challenge the constitutionality of a law are well delineated. They are: 1) there must be an
actual case or controversy; (2) the question of constitutionality must be raised by the proper party;
(3) the constitutional question must be raised at the earliest possible opportunity; and (4) the
decision on the constitutional question must be necessary to the determination of the case itself.5

Petitioners have far from complied with these requirements. The petition is premised on the
occurrence of many contingent events, i.e., that Mayor Binay will run again in this coming mayoralty
elections; that he would be re-elected in said elections; and that he would seek re-election for the
same position in the 1998 elections. Considering that these contingencies may or may not happen,
petitioners merely pose a hypothetical issue which has yet to ripen to an actual case or controversy.
Petitioners who are residents of Taguig (except Mariano) are not also the proper parties to raise this
abstract issue. Worse, they hoist this futuristic issue in a petition for declaratory relief over which this
Court has no jurisdiction.

III
Finally, petitioners in the two (2) cases at bench assail the constitutionality of section 52, Article X of
R.A. No. 7854. Section 52 of the Charter provides:

Sec. 52. Legislative Districts. Upon its conversion into a highly-urbanized city,
Makati shall thereafter have at least two (2) legislative districts that shall initially
correspond to the two (2) existing districts created under Section 3(a) of Republic
Act. No. 7166 as implemented by the Commission on Elections to commence at the
next national elections to be held after the effectivity of this Act. Henceforth,
barangays Magallanes, Dasmarias and Forbes shall be with the first district, in lieu
of Barangay Guadalupe-Viejo which shall form part of the second district. (emphasis
supplied)

They contend. that the addition of another legislative district in Makati is unconstitutional for: (1)
reapportionment6cannot made by a special law, (2) the addition of a legislative district is not
expressed in the title of the bill7 and (3) Makati's population, as per the 1990 census, stands at only
four hundred fifty thousand (450,000).

These issues have been laid to rest in the recent case of Tobias v. Abalos.8 In said case, we ruled
that reapportionment of legislative districts may be made through a special law, such as in the
charter of a new city. The Constitution9 clearly provides that Congress shall be composed of not
more than two hundred fifty (250) members, unless otherwise fixed by law. As thus worded, the
Constitution did not preclude Congress from increasing its membership by passing a law, other than
a general reapportionment of the law. This is its exactly what was done by Congress in enacting
R.A. No. 7854 and providing for an increase in Makati's legislative district. Moreover, to hold that
reapportionment can only be made through a general apportionment law, with a review of all the
legislative districts allotted to each local government unit nationwide, would create an inequitable
situation where a new city or province created by Congress will be denied legislative representation
for an indeterminate period of time. 10 The intolerable situations will deprive the people of a new city
or province a particle of their sovereignty. 11 Sovereignty cannot admit of any kind of subtraction. It
is indivisible. It must be forever whole or it is not sovereignty.

Petitioners cannot insist that the addition of another legislative district in Makati is not in accord with
section 5(3), Article VI 12 of the Constitution for as of the latest survey (1990 census), the population
of Makati stands at only four hundred fifty thousand (450,000). 13 Said section provides, inter alia,
that a city with a population of at least two hundred fifty thousand (250,000) shall have at least one
representative. Even granting that the population of Makati as of the 1990 census stood at four
hundred fifty thousand (450,000), its legislative district may still be increased since it has met the
minimum population requirement of two hundred fifty thousand (250,000). In fact, section 3 of the
Ordinance appended to the Constitution provides that a city whose population has increased to
more than two hundred fifty thousand (250,000) shall be entitled to at least one congressional
representative. 14

Finally, we do not find merit in petitioners' contention that the creation of an additional legislative
district in Makati should have been expressly stated in the title of the bill. In the same case of Tobias
v. Abalos, op cit., we reiterated the policy of the Court favoring a liberal construction of the "one title-
one subject" rule so as not to impede legislation. To be sure, with Constitution does not command
that the title of a law should exactly mirror, fully index, or completely catalogue all its details. Hence,
we ruled that "it should be sufficient compliance if the title expresses the general subject and all the
provisions are germane to such general subject."

WHEREFORE, the petitions are hereby DISMISSED for lack of merit No costs.

SO ORDERED.
G.R. No. 73155 July 11, 1986

PATRICIO TAN, FELIX FERRER, JUAN M. HAGAD, SERGIO HILADO, VIRGILIO GASTON,
CONCHITA MINAYA, TERESITA ESTACIO, DESIDERIO DEFERIA, ROMEO GAMBOA,
ALBERTO LACSON, FE HOFILENA, EMILY JISON, NIEVES LOPEZ AND CECILIA
MAGSAYSAY, petitioners,
vs.
THE COMMISSION ON ELECTIONS and THE PROVINCIAL TREASURER OF NEGROS
OCCIDENTAL, respondents.

Gamboa & Hofilea Law Office for petitioners.

ALAMPAY, J.:

Prompted by the enactment of Batas Pambansa Blg. 885-An Act Creating a New Province in the
Island of Negros to be known as the Province of Negros del Norte, which took effect on December
3, 1985, Petitioners herein, who are residents of the Province of Negros Occidental, in the various
cities and municipalities therein, on December 23, 1985, filed with this Court a case for Prohibition
for the purpose of stopping respondents Commission on Elections from conducting the plebiscite
which, pursuant to and in implementation of the aforesaid law, was scheduled for January 3, 1986.
Said law provides:

SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of
Calatrava, Taboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and
Salvador Benedicto, all in the northern portion of the Island of Negros, are hereby
separated from the province to be known as the Province of Negros del Norte.

SEC. 2. The boundaries of the new province shall be the southern limits of the City of
Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the south
and the territorial limits of the northern portion to the Island of Negros on the west,
north and east, comprising a territory of 4,019.95 square kilometers more or less.

SEC. 3. The seat of government of the new province shall be the City of Cadiz.

SEC. 4. A plebiscite shall be conducted in the proposed new province which are the
areas affected within a period of one hundred and twenty days from the approval of
this Act. After the ratification of the creation of the Province of Negros del Norte by a
majority of the votes cast in such plebiscite, the President of the Philippines shall
appoint the first officials of the province.

SEC. 5. The Commission on Elections shall conduct and supervise the plebiscite
herein provided, the expenses for which shall be charged to local funds.

SEC. 6. This Act shall takeeffect upon its approval.(Rollo, pp. 23-24)

Petitioners contend that Batas Pambansa Blg. 885 is unconstitutional and it is not in
complete accord with the Local Government Code as in Article XI, Section 3 of our
Constitution, it is expressly mandated that

See. 3. No province, city, municipality or barrio may be created, divided, merged,

abolished, or its boundary substantially altered, except in accordance with the criteria
 established in the local government code, and subject to the approval by a majority of
the votes in a plebiscite in the unit or units affected.

Section 197 of the Local Government Code enumerates the conditions which must exist to provide
the legal basis for the creation of a provincial unit and these requisites are:

SEC. 197. Requisites for Creation. A province may be created if it has a territory of at
least three thousand five hundred square kilometers, a population of at least five
hundred thousand persons, an average estimated annual income, as certified by the
Ministry of Finance, of not less than ten million pesos for the last three consecutive
years, and its creation shall not reduce the population and income of the mother
province or provinces at the time of said creation to less than the minimum
requirements under this section. The territory need not be contiguous if it comprises
two or more islands.

The average estimated annual income shall include the income alloted for both the
general and infrastructural funds, exclusive of trust funds, transfers and nonrecurring
income. (Rollo, p. 6)

Due to the constraints brought about by the supervening Christmas holidays during which the Court
was in recess and unable to timely consider the petition, a supplemental pleading was filed by
petitioners on January 4, 1986, averring therein that the plebiscite sought to be restrained by them
was held on January 3, 1986 as scheduled but that there are still serious issues raised in the instant
case affecting the legality, constitutionality and validity of such exercise which should properly be
passed upon and resolved by this Court.

The plebiscite was confined only to the inhabitants of the territory of Negros del Nrte, namely: the
Cities of Silay, Cadiz, and San Carlos, and the municipalities of Calatrava, Taboso, Escalante,
Sagay, Manapla, Victorias, E.B. Magalona and Don Salvador Benedicto. Because of the exclusions
of the voters from the rest of the province of Negros Occidental, petitioners found need to change
the prayer of their petition "to the end that the constitutional issues which they have raised in the
action will be ventilated and given final resolution.'"At the same time, they asked that the effects of
the plebiscite which they sought to stop be suspended until the Supreme Court shall have rendered
its decision on the very fundamental and far-reaching questions that petitioners have brought out.

Acknowledging in their supplemental petition that supervening events rendered moot the prayer in
their initial petition that the plebiscite scheduled for January 3, 1986, be enjoined, petitioners plead,
nevertheless, that-

... a writ of Prohibition be issued, directed to Respondent Commission on Elections to

desist from issuing official proclamation of the results of the plebiscite held on
January 3, 1986.

Finding that the exclusion and non-participation of the voters of the Province of
Negros Occidental other than those living within the territory of the new province of
Negros del Norte to be not in accordance with the Constitution, that a writ of
mandamus be issued, directed to the respondent Commission on Elections, to
schedule the holding of another plebiscite at which all the qualified voters of the
entire Province of Negros Occidental as now existing shall participate, at the same
time making pronouncement that the plebiscite held on January 3, 1986 has no legal
effect, being a patent legal nullity;

And that a similar writ of Prohibition be issued, directed to the respondent Provincial
Treasurer, to desist from ordering the release of any local funds to answer for
 expenses incurred in the holding of such plebiscite until ordered by the Court. (Rollo
pp. 9-10).

Petitioners further prayed that the respondent COMELEC hold in abeyance the
issuance of any official proclamation of the results of the aforestated plebiscite.

During the pendency of this case, a motion that he be allowed to appear as amicus curiae in this
case (dated December 27, 1985 and filed with the Court on January 2, 1986) was submitted by
former Senator Ambrosio Padilla. Said motion was granted in Our resolution of January 2, 1986.

Acting on the petition, as well as on the supplemental petition for prohibition with preliminary
injunction with prayer for restraining order, the Court, on January 7, 1986 resolved, without giving
due course to the same, to require respondents to comment, not to file a motion to dismiss.
Complying with said resolution, public respondents, represented by the Office of the Solicitor
General, on January 14, 1986, filed their Comment, arguing therein that the challenged statute.-
Batas Pambansa 885, should be accorded the presumption of legality. They submit that the said law
is not void on its face and that the petition does not show a clear, categorical and undeniable
demonstration of the supposed infringement of the Constitution. Respondents state that the powers
of the Batasang-Pambansa to enact the assailed law is beyond question. They claim that Batas
Pambansa Big. 885 does not infringe the Constitution because the requisites of the Local
Government Code have been complied with. Furthermore, they submit that this case has now
become moot and academic with the proclamation of the new Province of Negros del Norte.

Respondents argue that the remaining cities and municipalities of the Province of Negros
Occidental not included in the area of the new Province of Negros del Norte, de not fall within the
meaning and scope of the term "unit or units affected", as referred to in Section 3 of Art. XI of our
Constitution. On this reasoning, respondents maintain that Batas Pambansa Blg. 885 does not
violate the Constitution, invoking and citing the case of Governor Zosimo Paredes versus the
Honorable Executive Secretary to the President, et al. (G.R. No. 55628, March 2, 1984 (128 SCRA
61), particularly the pronouncements therein, hereunder quoted:

1. Admittedly,this is one of those cases where the discretion of the Court is allowed
considerable leeway. There is indeed an element of ambiguity in the use of the
expression 'unit or units affected'. It is plausible to assert as petitioners do that when
certain Barangays are separated from a parent municipality to form a new one, all the
voters therein are affected. It is much more persuasive, however, to contend as
respondents do that the acceptable construction is for those voters, who are not from
the barangays to be separated, should be excluded in the plebiscite.

2. For one thing, it is in accordance with the settled doctrine that between two
possible constructions, one avoiding a finding of unconstitutionality and the other
yielding such a result, the former is to be preferred. That which will save, not that
which will destroy, commends itself for acceptance. After all, the basic presumption
all these years is one of validity. ...

3. ... Adherence to such philosophy compels the conclusion that when there are
indications that the inhabitants of several barangays are inclined to separate from a
parent municipality they should be allowed to do so. What is more logical than to
ascertain their will in a plebiscite called for that purpose. It is they, and they alone,
who shall constitute the new unit. New responsibilities will be assumed. New burdens
will be imposed. A new municipal corporation will come into existence. Its birth will be
a matter of choice-their choice. They should be left alone then to decide for
themselves. To allow other voters to participate will not yield a true expression of
their will. They may even frustrate it, That certainly will be so if they vote against it for
 selfish reasons, and they constitute the majority. That is not to abide by the
fundamental principle of the Constitution to promote local autonomy, the preference
being for smaller units. To rule as this Tribunal does is to follow an accepted principle
of constitutional construction, that in ascertaining the meaning of a particular
provision that may give rise to doubts, the intent of the framers and of the people
may be gleaned from provisions in pari materia.

Respondents submit that said ruling in the aforecited case applies equally with force in the case at
bar. Respondents also maintain that the requisites under the Local Government Code (P.D. 337) for
the creation of the new province of Negros del Norte have all been duly complied with, Respondents
discredit petitioners' allegations that the requisite area of 3,500 square kilometers as so prescribed
in the Local Government Code for a new province to be created has not been satisfied. Petitioners
insist that the area which would comprise the new province of Negros del Norte, would only be
about 2,856.56 square kilometers and which evidently would be lesser than the minimum area
prescribed by the governing statute. Respondents, in this regard, point out and stress that Section 2
of Batas Pambansa Blg. 885 creating said new province plainly declares that the territorial
boundaries of Negros del Norte comprise an area of 4,019.95 square kilometers, more or less.

As a final argument, respondents insist that instant petition has been rendered moot and academic
considering that a plebiscite has been already conducted on January 3, 1986; that as a result
thereof, the corresponding certificate of canvass indicated that out of 195,134 total votes cast in
said plebiscite, 164,734 were in favor of the creation of Negros del Norte and 30,400 were against it;
and because "the affirmative votes cast represented a majority of the total votes cast in said
plebiscite, the Chairman of the Board of Canvassers proclaimed the new province which shall be
known as "Negros del Norte". Thus, respondents stress the fact that following the proclamation of
Negros del Norte province, the appointments of the officials of said province created were
announced. On these considerations, respondents urge that this case should be dismissed for
having been rendered moot and academic as the creation of the new province is now a "fait
accompli."

In resolving this case, it will be useful to note and emphasize the facts which appear to be agreed to
by the parties herein or stand unchallenged.

Firstly, there is no disagreement that the Provincial Treasurer of the Province of Negros Occidental
has not disbursed, nor was required to disburse any public funds in connection with the plebiscite
held on January 3, 1986 as so disclosed in the Comment to the Petition filed by the respondent
Provincial Treasurer of Negros Occidental dated January 20, 1986 (Rollo, pp. 36-37). Thus, the
prayer of the petitioners that said Provincial Treasurer be directed by this Court to desist from
ordering the release of any public funds on account of such plebiscite should not longer deserve
further consideration.

Secondly, in Parliamentary Bill No. 3644 which led to the enactment of Batas Pambansa Blg. 885
and the creation of the new Province of Negros del Norte, it expressly declared in Sec. 2 of the
aforementioned Parliamentary Bill, the following:

SEC. 2. The boundaries of the new province shall be the southern limits of the City of
Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the South
and the natural boundaries of the northern portion of the Island of Negros on the
West, North and East, containing an area of 285,656 hectares more or less.
(Emphasis supplied).

However, when said Parliamentary Bill No. 3644 was very quickly enacted into Batas Pambansa
Blg. 885, the boundaries of the new Province of Negros del Norte were defined therein and its
boundaries then stated to be as follows:
 SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of
Calatrava, Toboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and
Salvador Benedicto, all in the northern portion of the Island of Negros, are hereby
separated from the Province of Negros Occidental and constituted into a new
province to be known as the Province of Negros del Norte.

SEC. 1. The boundaries of the new province shall be the southern limits of the City of
Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the south
and the territorial limits of the northern portion of the Island of Negros on the West,
North and East, comprising a territory of 4,019.95 square kilometers more or less.

Equally accepted by the parties is the fact that under the certification issued by Provincial Treasurer
Julian L. Ramirez of the Province of Negros Occidental, dated July 16, 1985, it was therein certified
as follows:

xxx xxx xxx

This is to certify that the following cities and municipalities of Negros Occidental have
the land area as indicated hereunder based on the Special Report No. 3, Philippines
1980, Population, Land Area and Density: 1970, 1975 and 1980 by the National
Census and Statistics Office, Manila.

Land Area

(Sq. Km.)

1. Silay City ...................................................................214.8

2. E.B. Magalona............................................................113.3

3. Victorias.....................................................................133.9

4. Manapla......................................................................112.9

5. Cadiz City ..................................................................516.5

6. Sagay .........................................................................389.6

7. Escalante ....................................................................124.0

8. Toboso.......................................................................123.4

9. Calatrava.....................................................................504.5

10. San Carlos City...........................................................451.3

11. Don Salvador Benedicto.................................... (not available)

This certification is issued upon the request of Dr. Patricio Y. Tan for whatever
purpose it may serve him.

(SGD.) JULIAN L. RAMIREZ

 Provincial Treasurer (Exh. "C" of Petition, Rollo, p. 90).

Although in the above certification it is stated that the land area of the relatively new municipality of
Don Salvador Benedicto is not available, it is an uncontradicted fact that the area comprising Don
Salvador municipality, one of the component units of the new province, was derived from the City of
San Carlos and from the Municipality of Calatrava, Negros Occidental, and added thereto was a
portion of about one-fourth the land area of the town of Murcia, Negros Occidental. It is significant to
note the uncontroverted submission of petitioners that the total land area of the entire municipality of
Murcia, Negros Occidental is only 322.9 square kilometers (Exh. "D", Rollo, p. 91). One-fourth of
this total land area of Murcia that was added to the portions derived from the land area of Calatrava,
Negros Occidental and San Carlos City (Negros Occidental) would constitute, therefore, only 80.2
square kilometers. This area of 80.2 square kilometers if then added to 2,685.2 square kilometers,
representing the total land area of the Cities of Silay, San Carlos and Cadiz and the Municipalities of
E.R. Magalona, Victorias, Manapla, Sagay, Escalante, Taboso and Calatrava, will result in
approximately an area of only 2,765.4 square kilometers using as basis the Special Report,
Philippines 1980, Population, Land Area and Density: 1970, 1975 and 1980 of the National Census
and Statistics Office, Manila (see Exhibit "C", Rollo, p. 90).

No controversion has been made by respondent with respect to the allegations of petitioners that
the original provision in the draft legislation, Parliamentary Bill No. 3644, reads:

SEC. 4. A plebiscite shall be conducted in the areas affected within a period of one
hundred and twenty days from the approval of this Act. After the ratification of the
creation of the Province of Negros del Norte by a majority of the votes cast in such
plebiscite, the President shall appoint the first officials of the new province.

However, when Batas Pambansa Blg. 885 was enacted, there was a significant change in the
above provision. The statute, as modified, provides that the requisite plebiscite "shall be conducted
in the proposed new province which are the areas affected."

It is this legislative determination limiting the plebiscite exclusively to the cities and towns which
would comprise the new province that is assailed by the petitioners as violative of the provisions of
our Constitution. Petitioners submit that Sec. 3, ART XI thereof, contemplates a plebiscite that
would be held in the unit or units affected by the creation of the new province as a result of the
consequent division of and substantial alteration of the boundaries of the existing province. In this
instance, the voters in the remaining areas of the province of Negros Occidental should have been
allowed to participate in the questioned plebiscite.

Considering that the legality of the plebiscite itself is challenged for non-compliance with
constitutional requisites, the fact that such plebiscite had been held and a new province proclaimed
and its officials appointed, the case before Us cannot truly be viewed as already moot and
academic. Continuation of the existence of this newly proclaimed province which petitioners strongly
profess to have been illegally born, deserves to be inquired into by this Tribunal so that, if indeed,
illegality attaches to its creation, the commission of that error should not provide the very excuse for
perpetuation of such wrong. For this Court to yield to the respondents' urging that, as there has
been fait accompli then this Court should passively accept and accede to the prevailing situation is
an unacceptable suggestion. Dismissal of the instant petition, as respondents so propose is a
proposition fraught with mischief. Respondents' submission will create a dangerous precedent.
Should this Court decline now to perform its duty of interpreting and indicating what the law is and
should be, this might tempt again those who strut about in the corridors of power to recklessly and
with ulterior motives, create, merge, divide and/or alter the boundaries of political subdivisions,
either brazenly or stealthily, confident that this Court will abstain from entertaining future challenges
to their acts if they manage to bring about a fait accompli.
In the light of the facts and circumstances alluded to by petitioners as attending to the unusually
rapid creation of the instant province of Negros del Norte after a swiftly scheduled plebiscite, this
Tribunal has the duty to repudiate and discourage the commission of acts which run counter to the
mandate of our fundamental law, done by whatever branch of our government. This Court gives
notice that it will not look with favor upon those who may be hereafter inclined to ram through all
sorts of legislative measures and then implement the same with indecent haste, even if such acts
would violate the Constitution and the prevailing statutes of our land. It is illogical to ask that this
Tribunal be blind and deaf to protests on the ground that what is already done is done. To such
untenable argument the reply would be that, be this so, the Court, nevertheless, still has the duty
and right to correct and rectify the wrong brought to its attention.

On the merits of the case.

Aside from the simpler factual issue relative to the land area of the new province of Negros del
Norte, the more significant and pivotal issue in the present case revolves around in the
interpretation and application in the case at bar of Article XI, Section 3 of the Constitution, which
being brief and for convenience, We again quote:

SEC. 3. No province, city, municipality or barrio may be created, divided, merged

abolished, or its boundary substantially altered, except in accordance with the criteria
established in the local government code, and subject to the approval by a majority of
the votes in a plebiscite in the unit or units affected.

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

We find no way to reconcile the holding of a plebiscite that should conform to said constitutional
requirement but eliminates the participation of either of these two component political units. No
amount of rhetorical flourishes can justify exclusion of the parent province in the plebiscite because
of an alleged intent on the part of the authors and implementors of the challenged statute to carry
out what is claimed to be a mandate to guarantee and promote autonomy of local government units.
The alleged good intentions cannot prevail and overrule the cardinal precept that what our
Constitution categorically directs to be done or imposes as a requirement must first be observed,
respected and complied with. No one should be allowed to pay homage to a supposed fundamental
policy intended to guarantee and promote autonomy of local government units but at the same time
transgress, ignore and disregard what the Constitution commands in Article XI Section 3 thereof.
Respondents would be no different from one who hurries to pray at the temple but then spits at the
Idol therein.

We find no merit in the submission of the respondents that the petition should be dismissed
because the motive and wisdom in enacting the law may not be challenged by petitioners. The
principal point raised by the petitioners is not the wisdom and motive in enacting the law but the
infringement of the Constitution which is a proper subject of judicial inquiry.

Petitioners' discussion regarding the motives behind the enactment of B.P. Blg. 885 to say the least,
are most enlightening and provoking but are factual issues the Court cannot properly pass upon in
this case. Mention by petitioners of the unexplained changes or differences in the proposed
Parliamentary Bill No. 3644 and the enacted Batas Pambansa Blg. 885; the swift and surreptitious
manner of passage and approval of said law; the abrupt scheduling of the plebiscite; the reference
to news articles regarding the questionable conduct of the said plebiscite held on January 3, 1986;
all serve as interesting reading but are not the decisive matters which should be reckoned in the
resolution of this case.

What the Court considers the only significant submissions lending a little support to respondents'
case is their reliance on the rulings and pronouncements made by this Court in the case of
Governor Zosimo Paredes versus The Honorable Executive Secretary to the President, et al., G.R.
No. 55628, March 2, 1984 (128 SCRA 6). In said case relating to a plebiscite held to ratify the
creation of a new municipality from existing barangays, this Court upheld the legality of the
plebiscite which was participated in exclusively by the people of the barangay that would constitute
the new municipality.

This Court is not unmindful of this solitary case alluded to by respondents. What is, however, highly
significant are the prefatory statements therein stating that said case is "one of those cases where
the discretion of the Court is allowed considerable leeway" and that "there is indeed an element of
ambiguity in the use of the expression unit or units affected." The ruling rendered in said case was
based on a claimed prerogative of the Court then to exercise its discretion on the matter. It did not
resolve the question of how the pertinent provision of the Constitution should be correctly
interpreted.

The ruling in the aforestated case of Paredes vs. The Honorable Executive Secretary, et al.
(supra) should not be taken as a doctrinal or compelling precedent when it is acknowledged therein
that "it is plausible to assert, as petitioners do, that when certain Barangays are separated from a
parent municipality to form a new one, all the voters therein are affected."

It is relevant and most proper to mention that in the aforecited case of Paredes vs. Executive
Secretary, invoked by respondents, We find very lucidly expressed the strong dissenting view of
Justice Vicente Abad Santos, a distinguished member of this Court, as he therein voiced his
opinion, which We hereunder quote:

2. ... when the Constitution speaks of "the unit or units affected" it means all of the
people of the municipality if the municipality is to be divided such as in the case at
bar or an of the people of two or more municipalities if there be a merger. I see no
ambiguity in the Constitutional provision.

This dissenting opinion of Justice Vicente Abad Santos is the forerunner of the ruling which We
now consider applicable to the case at bar, In the analogous case of Emilio C. Lopez, Jr., versus the
Honorable Commission on Elections, L-56022, May 31, 1985, 136 SCRA 633, this dissent was
reiterated by Justice Abad Santos as he therein assailed as suffering from a constitutional infirmity a
referendum which did not include all the people of Bulacan and Rizal, when such referendum was
intended to ascertain if the people of said provinces were willing to give up some of their towns to
Metropolitan Manila. His dissenting opinion served as a useful guideline in the instant case.

Opportunity to re-examine the views formerly held in said cases is now afforded the present Court.
The reasons in the mentioned cases invoked by respondents herein were formerly considered
acceptable because of the views then taken that local autonomy would be better promoted
However, even this consideration no longer retains persuasive value.

The environmental facts in the case before Us readily disclose that the subject matter under
consideration is of greater magnitude with concomitant multifarious complicated problems. In the
earlier case, what was involved was a division of a barangay which is the smallest political unit in
the Local Government Code. Understandably, few and lesser problems are involved. In the case at
bar, creation of a new province relates to the largest political unit contemplated in Section 3, Art. XI
of the Constitution. To form the new province of Negros del Norte no less than three cities and eight
municipalities will be subtracted from the parent province of Negros Occidental. This will result in the
removal of approximately 2,768.4 square kilometers from the land area of an existing province
whose boundaries will be consequently substantially altered. It becomes easy to realize that the
consequent effects cf the division of the parent province necessarily will affect all the people living in
the separate areas of Negros Occidental and the proposed province of Negros del Norte. The
economy of the parent province as well as that of the new province will be inevitably affected, either
for the better or for the worse. Whatever be the case, either or both of these political groups will be
affected and they are, therefore, the unit or units referred to in Section 3 of Article XI of the
Constitution which must be included in the plebiscite contemplated therein.

It is a well accepted rule that "in ascertaining the meaning of a particular provision that may give rise
to doubts, the intent of the framers and of the people, may be gleaned from the provisions in pari
materia." Parliamentary Bill No. 3644 which proposed the creation of the new province of Negros
del Norte recites in Sec. 4 thereof that "the plebiscite shall be conducted in the areas affected within
a period of one hundred and twenty days from the approval of this Act." As this draft legislation
speaks of "areas," what was contemplated evidently are plurality of areas to participate in the
plebiscite. Logically, those to be included in such plebiscite would be the people living in the area of
the proposed new province and those living in the parent province. This assumption will be
consistent with the requirements set forth in the Constitution.

We fail to find any legal basis for the unexplained change made when Parliamentary Bill No. 3644
was enacted into Batas Pambansa Blg. 885 so that it is now provided in said enabling law that the
plebiscite "shall be conducted in the proposed new province which are the areas affected." We are
not disposed to agree that by mere legislative fiat the unit or units affected referred in the
fundamental law can be diminished or restricted by the Batasang Pambansa to cities and
municipalities comprising the new province, thereby ignoring the evident reality that there are other
people necessarily affected.

In the mind of the Court, the change made by those responsible for the enactment of Batas
Pambansa Blg. 885 betrays their own misgivings. They must have entertained apprehensions that
by holding the plebiscite only in the areas of the new proposed province, this tactic will be tainted
with illegality. In anticipation of a possible strong challenge to the legality of such a plebiscite there
was, therefore, deliberately added in the enacted statute a self-serving phrase that the new province
constitutes the area affected. Such additional statement serves no useful purpose for the same is
misleading, erroneous and far from truth. The remaining portion of the parent province is as much
an area affected. The substantial alteration of the boundaries of the parent province, not to mention
the other adverse economic effects it might suffer, eloquently argue the points raised by the
petitioners.

Petitioners have averred without contradiction that after the creation of Negros del Norte, the
province of Negros Occidental would be deprived of the long established Cities of Silay, Cadiz, and
San Carlos, as well as the municipality of Victorias. No controversion has been made regarding
petitioners' assertion that the areas of the Province of Negros Occidental will be diminished by
about 285,656 hectares and it will lose seven of the fifteen sugar mills which contribute to the
economy of the whole province. In the language of petitioners, "to create Negros del Norte, the
existing territory and political subdivision known as Negros Occidental has to be partitioned and
dismembered. What was involved was no 'birth' but "amputation." We agree with the petitioners that
in the case of Negros what was involved was a division, a separation; and consequently, as Sec. 3
of Article XI of the Constitution anticipates, a substantial alteration of boundary.

As contended by petitioners,
 Indeed, the terms 'created', 'divided', 'merged', 'abolished' as used in the
constitutional provision do not contemplate distinct situation isolated from the
mutually exclusive to each other. A Province maybe created where an existing
province is divided or two provinces merged. Such cases necessarily will involve
existing unit or units abolished and definitely the boundary being substantially
altered.

It would thus be inaccurate to state that where an existing political unit is divided or
its boundary substantially altered, as the Constitution provides, only some and not all
the voters in the whole unit which suffers dismemberment or substantial alteration of
its boundary are affected. Rather, the contrary is true.

It is also Our considered view that even hypothetically assuming that the merits of this case can
depend on the mere discretion that this Court may exercise, nevertheless, it is the petitioners' case
that deserve to be favored.

It is now time for this Court to set aside the equivocations and the indecisive pronouncements in the
adverted case of Paredes vs. the Honorable Executive Secretary, et al. (supra). For the reasons
already here express, We now state that the ruling in the two mentioned cases sanctioning the
exclusion of the voters belonging to an existing political unit from which the new political unit will be
derived, from participating in the plebiscite conducted for the purpose of determining the formation
of another new political unit, is hereby abandoned.

In their supplemental petition, dated January 4, 1986, it is prayed for by petitioners that a writ of
mandamus be issued, directing the respondent Commission on Elections, to schedule the holding of
another plebiscite at which all the qualified voters of the entire province of Negros Occidental as
now existing shall participate and that this Court make a pronouncement that the plebiscite held on
January 3, 1986 has no legal effect for being a patent nullity.

The Court is prepared to declare the said plebiscite held on January 3, 1986 as null and void and
violative of the provisions of Sec. 3, Article XI of the Constitution. The Court is not, however,
disposed to direct the conduct of a new plebiscite, because We find no legal basis to do so. With
constitutional infirmity attaching to the subject Batas Pambansa Big. 885 and also because the
creation of the new province of Negros del Norte is not in accordance with the criteria established in
the Local Government Code, the factual and legal basis for the creation of such new province which
should justify the holding of another plebiscite does not exist.

Whatever claim it has to validity and whatever recognition has been gained by the new province of
Negros del Norte because of the appointment of the officials thereof, must now be erased. That
Negros del Norte is but a legal fiction should be announced. Its existence should be put to an end
as quickly as possible, if only to settle the complications currently attending to its creation. As has
been manifested, the parent province of Negros del Norte has been impleaded as the defendant in
a suit filed by the new Province of Negros del Norte, before the Regional Trial Court of Negros (del
Norte), docketed as Civil Case No. 169-C, for the immediate allocation, distribution and transfer of
funds by the parent province to the new province, in an amount claimed to be at least
P10,000,000.00.

The final nail that puts to rest whatever pretension there is to the legality of the province of Negros
del Norte is the significant fact that this created province does not even satisfy the area requirement
prescribed in Section 197 of the Local Government Code, as earlier discussed.

It is of course claimed by the respondents in their Comment to the exhibits submitted by the
petitioners (Exhs. C and D, Rollo, pp. 19 and 91), that the new province has a territory of 4,019.95
square kilometers, more or less. This assertion is made to negate the proofs submitted, disclosing
that the land area of the new province cannot be more than 3,500 square kilometers because its
land area would, at most, be only about 2,856 square kilometers, taking into account government
statistics relative to the total area of the cities and municipalities constituting Negros del Norte.
Respondents insist that when Section 197 of the Local Government Code speaks of the territory of
the province to be created and requires that such territory be at least 3,500 square kilometers, what
is contemplated is not only the land area but also the land and water over which the said province
has jurisdiction and control. It is even the submission of the respondents that in this regard the
marginal sea within the three mile limit should be considered in determining the extent of the
territory of the new province. Such an interpretation is strained, incorrect, and fallacious.

The last sentence of the first paragraph of Section 197 is most revealing. As so stated therein
the "territory need not be contiguous if it comprises two or more islands." The use of the
word territory in this particular provision of the Local Government Code and in the very last sentence
thereof, clearly reflects that "territory" as therein used, has reference only to the mass of land area
and excludes the waters over which the political unit exercises control.

Said sentence states that the "territory need not be contiguous." Contiguous means (a) in physical
contact; (b) touching along all or most of one side; (c) near, text, or adjacent (Webster's New World
Dictionary, 1972 Ed., p. 307). "Contiguous", when employed as an adjective, as in the above
sentence, is only used when it describes physical contact, or a touching of sides of two solid
masses of matter. The meaning of particular terms in a statute may be ascertained by reference to
words associated with or related to them in the statute (Animal Rescue League vs. Assessors, 138
A.L.R. p. 110). Therefore, in the context of the sentence above, what need not be "contiguous" is
the "territory" the physical mass of land area. There would arise no need for the legislators to use
the word contiguous if they had intended that the term "territory" embrace not only land area but
also territorial waters. It can be safely concluded that the word territory in the first paragraph of
Section 197 is meant to be synonymous with "land area" only. The words and phrases used in a
statute should be given the meaning intended by the legislature (82 C.J.S., p. 636). The sense in
which the words are used furnished the rule of construction (In re Winton Lumber Co., 63 p. 2d., p.
664).

The distinction between "territory" and "land area" which respondents make is an artificial or
strained construction of the disputed provision whereby the words of the statute are arrested from
their plain and obvious meaning and made to bear an entirely different meaning to justify an absurd
or unjust result. The plain meaning in the language in a statute is the safest guide to follow in
construing the statute. A construction based on a forced or artificial meaning of its words and out of
harmony of the statutory scheme is not to be favored (Helvering vs. Hutchings, 85 L. Ed., p. 909).

It would be rather preposterous to maintain that a province with a small land area but which has a
long, narrow, extended coast line, (such as La Union province) can be said to have a larger territory
than a land-locked province (such as Ifugao or Benguet) whose land area manifestly exceeds the
province first mentioned.

Allegations have been made that the enactment of the questioned state was marred by "dirty tricks",
in the introduction and passing of Parliamentary Bill No. 3644 "in secret haste" pursuant to sinister
designs to achieve "pure and simple gerrymandering; "that recent happenings more than amply
demonstrate that far from guaranteeing its autonomy it (Negros del Norte) has become the fiefdom
of a local strongman" (Rollo, p. 43; emphasis supplied).

It is not for this Court to affirm or reject such matters not only because the merits of this case can be
resolved without need of ascertaining the real motives and wisdom in the making of the questioned
law. No proper challenge on those grounds can also be made by petitioners in this proceeding.
Neither may this Court venture to guess the motives or wisdom in the exercise of legislative powers.
Repudiation of improper or unwise actions taken by tools of a political machinery rests ultimately, as
recent events have shown, on the electorate and the power of a vigilant people.

Petitioners herein deserve and should receive the gratitude of the people of the Province of Negros
Occidental and even by our Nation. Commendable is the patriotism displayed by them in daring to
institute this case in order to preserve the continued existence of their historic province. They were
inspired undoubtedly by their faithful commitment to our Constitution which they wish to be
respected and obeyed. Despite the setbacks and the hardships which petitioners aver confronted
them, they valiantly and unfalteringly pursued a worthy cause. A happy destiny for our Nation is
assured as long as among our people there would be exemplary citizens such as the petitioners
herein.

WHEREFORE, Batas Pambansa Blg. 885 is hereby declared unconstitutional. The proclamation of
the new province of Negros del Norte, as well as the appointment of the officials thereof are also
declared null and void.

SO ORDERED.
G.R. No. 89651 November 10, 1989

DATU FIRDAUSI I.Y. ABBAS, DATU BLO UMPAR ADIONG, DATU MACALIMPOWAC
DELANGALEN, CELSO PALMA, ALI MONTANA BABAO, JULMUNIR JANNARAL, RASHID SABER,
and DATU JAMAL ASHLEY ABBAS, representing the other taxpayers of Mindanao, petitioners,
vs.
COMMISSION ON ELECTIONS, and HONORABLE GUILLERMO C. CARAGUE, DEPARTMENT
SECRETARY OF BUDGET AND MANAGEMENT, respondents.

G.R. No. 89965 November 10, 1989

ATTY. ABDULLAH D. MAMA-O, petitioner,

vs.
HON. GUILLERMO CARAGUE, in his capacity as the Secretary of the Budget, and the
COMMISSION ON ELECTIONS, respondents.

Abbas, Abbas, Amora, Alejandro-Abbas & Associates for petitioners in G.R. Nos. 89651 and 89965.

Abdullah D. Mama-o for and in his own behalf in 89965.

CORTES, J.:

The present controversy relates to the plebiscite in thirteen (13) provinces and nine (9) cities in
Mindanao and Palawan, 1 scheduled for November 19, 1989, in implementation of Republic Act No.
6734, entitled "An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao."

These consolidated petitions pray that the Court: (1) enjoin the Commission on Elections (COMELEC)
from conducting the plebiscite and the Secretary of Budget and Management from releasing funds to the
COMELEC for that purpose; and (2) declare R.A. No. 6734, or parts thereof, unconstitutional .

After a consolidated comment was filed by Solicitor General for the respondents, which the Court
considered as the answer, the case was deemed submitted for decision, the issues having been joined.
Subsequently, petitioner Mama-o filed a "Manifestation with Motion for Leave to File Reply on
Respondents' Comment and to Open Oral Arguments," which the Court noted.

The arguments against R.A. 6734 raised by petitioners may generally be categorized into either of the
following:

(a) that R.A. 6734, or parts thereof, violates the Constitution, and

(b) that certain provisions of R.A. No. 6734 conflict with the Tripoli Agreement.

The Tripoli Agreement, more specifically, the Agreement Between the government of the Republic of the
Philippines of the Philippines and Moro National Liberation Front with the Participation of the
Quadripartie Ministerial Commission Members of the Islamic Conference and the Secretary General of
the Organization of Islamic Conference" took effect on December 23, 1976. It provided for "[t]he
establishment of Autonomy in the southern Philippines within the realm of the sovereignty and territorial
integrity of the Republic of the Philippines" and enumerated the thirteen (13) provinces comprising the
"areas of autonomy." 2

In 1987, a new Constitution was ratified, which the for the first time provided for regional autonomy,
Article X, section 15 of the charter provides that "[t]here shall be created autonomous regions in Muslim
Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas
sharing common and distinctive historical and cultural heritage, economic and social structures, and
other relevant characteristics within the framework of this Constitution and the national sovereignty as
well as territorial integrity of the Republic of the Philippines."

To effectuate this mandate, the Constitution further provides:

Sec. 16. The President shall exercise general supervision over autonomous regions to
ensure that the laws are faithfully executed.

Sec. 17. All powers, functions, and responsibilities not granted by this Constitution or by
law to the autonomous regions shall be vested in the National Government.

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

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

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

Sec. 20. Within its territorial jurisdiction and subject to the provisions of this Constitution
and national laws, the organic act of autonomous regions shall provide for legislative
powers over:

(1) Administrative organization;

(2) Creation of sources of revenues;

(3) Ancestral domain and natural resources;

(4) Personal, family, and property relations;

(5) Regional urban and rural planning development;

(6) Economic, social and tourism development;

(7) Educational policies;

(8) Preservation and development of the cultural heritage; and

(9) Such other matters as may be authorized by law for the promotion of
the general welfare of the people of the region.

Sec. 21. The preservation of peace and order within the regions shall be the
responsibility of the local police agencies which shall be organized, maintained,
 supervised, and utilized in accordance with applicable laws. The defense and security of
the region shall be the responsibility of the National Government.

Pursuant to the constitutional mandate, R.A. No. 6734 was enacted and signed into law on August 1,
1989.

1. The Court shall dispose first of the second category of arguments raised by petitioners, i.e. that certain
provisions of R.A. No. 6734 conflict with the provisions of the Tripoli Agreement.

Petitioners premise their arguments on the assumption that the Tripoli Agreement is part of the law of the
land, being a binding international agreement . The Solicitor General asserts that the Tripoli Agreement
is neither a binding treaty, not having been entered into by the Republic of the Philippines with a
sovereign state and ratified according to the provisions of the 1973 or 1987 Constitutions, nor a binding
international agreement.

We find it neither necessary nor determinative of the case to rule on the nature of the Tripoli Agreement
and its binding effect on the Philippine Government whether under public international or internal
Philippine law. In the first place, it is now the Constitution itself that provides for the creation of an
autonomous region in Muslim Mindanao. The standard for any inquiry into the validity of R.A. No. 6734
would therefore be what is so provided in the Constitution. Thus, any conflict between the provisions of
R.A. No. 6734 and the provisions of the Tripoli Agreement will not have the effect of enjoining the
implementation of the Organic Act. Assuming for the sake of argument that the Tripoli Agreement is a
binding treaty or international agreement, it would then constitute part of the law of the land. But as
internal law it would not be superior to R.A. No. 6734, an enactment of the Congress of the Philippines,
rather it would be in the same class as the latter [SALONGA, PUBLIC INTERNATIONAL LAW 320 (4th
ed., 1974), citing Head Money Cases, 112 U.S. 580 (1884) and Foster v. Nelson, 2 Pet. 253 (1829)].
Thus, if at all, R.A. No. 6734 would be amendatory of the Tripoli Agreement, being a subsequent law.
Only a determination by this Court that R.A. No. 6734 contravened the Constitution would result in the
granting of the reliefs sought. 3

2. The Court shall therefore only pass upon the constitutional questions which have been raised by
petitioners.

Petitioner Abbas argues that R.A. No. 6734 unconditionally creates an autonomous region in Mindanao,
contrary to the aforequoted provisions of the Constitution on the autonomous region which make the
creation of such region dependent upon the outcome of the plebiscite.

In support of his argument, petitioner cites Article II, section 1(1) of R.A. No. 6734 which declares that
"[t]here is hereby created the Autonomous Region in Muslim Mindanao, to be composed of provinces
and cities voting favorably in the plebiscite called for the purpose, in accordance with Section 18, Article
X of the Constitution." Petitioner contends that the tenor of the above provision makes the creation of an
autonomous region absolute, such that even if only two provinces vote in favor of autonomy, an
autonomous region would still be created composed of the two provinces where the favorable votes
were obtained.

The matter of the creation of the autonomous region and its composition needs to be clarified.

Firs, the questioned provision itself in R.A. No. 6734 refers to Section 18, Article X of the Constitution
which sets forth the conditions necessary for the creation of the autonomous region. The reference to the
constitutional provision cannot be glossed over for it clearly indicates that the creation of the autonomous
region shall take place only in accord with the constitutional requirements. Second, there is a specific
provision in the Transitory Provisions (Article XIX) of the Organic Act, which incorporates substantially
the same requirements embodied in the Constitution and fills in the details, thus:

SEC. 13. The creation of the Autonomous Region in Muslim Mindanao shall take effect
when approved by a majority of the votes cast by the constituent units provided in
 paragraph (2) of Sec. 1 of Article II of this Act in a plebiscite which shall be held not
earlier than ninety (90) days or later than one hundred twenty (120) days after the
approval of this Act: Provided, That only the provinces and cities voting favorably in such
plebiscite shall be included in the Autonomous Region in Muslim Mindanao. The
provinces and cities which in the plebiscite do not vote for inclusion in the Autonomous
Region shall remain the existing administrative determination, merge the existing regions.

Thus, under the Constitution and R.A. No 6734, the creation of the autonomous region shall take effect
only when approved by a majority of the votes cast by the constituent units in a plebiscite, and only those
provinces and cities where a majority vote in favor of the Organic Act shall be included in the
autonomous region. The provinces and cities wherein such a majority is not attained shall not be
included in the autonomous region. It may be that even if an autonomous region is created, not all of the
thirteen (13) provinces and nine (9) cities mentioned in Article II, section 1 (2) of R.A. No. 6734 shall be
included therein. The single plebiscite contemplated by the Constitution and R.A. No. 6734 will therefore
be determinative of (1) whether there shall be an autonomous region in Muslim Mindanao and (2) which
provinces and cities, among those enumerated in R.A. No. 6734, shall compromise it. [See III RECORD
OF THE CONSTITUTIONAL COMMISSION 482-492 (1986)].

As provided in the Constitution, the creation of the Autonomous region in Muslim Mindanao is made
effective upon the approval "by majority of the votes cast by the constituent units in a plebiscite called for
the purpose" [Art. X, sec. 18]. The question has been raised as to what this majority means. Does it refer
to a majority of the total votes cast in the plebiscite in all the constituent units, or a majority in each of the
constituent units, or both?

We need not go beyond the Constitution to resolve this question.

If the framers of the Constitution intended to require approval by a majority of all the votes cast in the
plebiscite they would have so indicated. Thus, in Article XVIII, section 27, it is provided that "[t]his
Constitution shall take effect immediately upon its ratification by a majority of the votes cast in a
plebiscite held for the purpose ... Comparing this with the provision on the creation of the autonomous
region, which reads:

The creation of the autonomous region shall be effective when approved by majority of
the votes cast by the constituent units in a plebiscite called for the purpose, provided that
only provinces, cities and geographic areas voting favorably in such plebiscite shall be
included in the autonomous region. [Art. X, sec, 18, para, 2].

it will readily be seen that the creation of the autonomous region is made to depend, not on the total
majority vote in the plebiscite, but on the will of the majority in each of the constituent units and the
proviso underscores this. for if the intention of the framers of the Constitution was to get the majority of
the totality of the votes cast, they could have simply adopted the same phraseology as that used for the
ratification of the Constitution, i.e. "the creation of the autonomous region shall be effective when
approved by a majority of the votes cast in a plebiscite called for the purpose."

It is thus clear that what is required by the Constitution is a simple majority of votes approving the
organic Act in individual constituent units and not a double majority of the votes in all constituent units
put together, as well as in the individual constituent units.

More importantly, because of its categorical language, this is also the sense in which the vote
requirement in the plebiscite provided under Article X, section 18 must have been understood by the
people when they ratified the Constitution.

Invoking the earlier cited constitutional provisions, petitioner Mama-o, on the other hand, maintains that
only those areas which, to his view, share common and distinctive historical and cultural heritage,
economic and social structures, and other relevant characteristics should be properly included within the
coverage of the autonomous region. He insists that R.A. No. 6734 is unconstitutional because only the
provinces of Basilan, Sulu, Tawi-Tawi, Lanao del Sur, Lanao del Norte and Maguindanao and the cities
of Marawi and Cotabato, and not all of the thirteen (13) provinces and nine (9) cities included in the
Organic Act, possess such concurrence in historical and cultural heritage and other relevant
characteristics. By including areas which do not strictly share the same characteristics. By including
areas which do not strictly share the same characteristic as the others, petitioner claims that Congress
has expanded the scope of the autonomous region which the constitution itself has prescribed to be
limited.

Petitioner's argument is not tenable. The Constitution lays down the standards by which Congress shall
determine which areas should constitute the autonomous region. Guided by these constitutional criteria,
the ascertainment by Congress of the areas that share common attributes is within the exclusive realm of
the legislature's discretion. Any review of this ascertainment would have to go into the wisdom of the law.
This the Court cannot do without doing violence to the separation of governmental powers. [Angara v.
Electoral Commission, 63 Phil 139 (1936); Morfe v. Mutuc, G.R. No. L-20387, January 31, 1968, 22
SCRA 424].

After assailing the inclusion of non-Muslim areas in the Organic Act for lack of basis, petitioner Mama-o
would then adopt the extreme view that other non-Muslim areas in Mindanao should likewise be
covered. He argues that since the Organic Act covers several non-Muslim areas, its scope should be
further broadened to include the rest of the non-Muslim areas in Mindanao in order for the other non-
Muslim areas denies said areas equal protection of the law, and therefore is violative of the Constitution.

Petitioner's contention runs counter to the very same constitutional provision he had earlier invoked. Any
determination by Congress of what areas in Mindanao should compromise the autonomous region,
taking into account shared historical and cultural heritage, economic and social structures, and other
relevant characteristics, would necessarily carry with it the exclusion of other areas. As earlier stated,
such determination by Congress of which areas should be covered by the organic act for the
autonomous region constitutes a recognized legislative prerogative, whose wisdom may not be inquired
into by this Court.

Moreover, equal protection permits of reasonable classification [People v. Vera, 65 Phil. 56 (1963);
Laurel v. Misa, 76 Phil. 372 (1946); J.M. Tuason and Co. v. Land tenure Administration, G.R. No. L-
21064, February 18, 1970, 31 SCRA 413]. In Dumlao v. Commission on Elections G.R. No. 52245,
January 22, 1980, 95 SCRA 392], the Court ruled that once class may be treated differently from another
where the groupings are based on reasonable and real distinctions. The guarantee of equal protection is
thus not infringed in this case, the classification having been made by Congress on the basis of
substantial distinctions as set forth by the Constitution itself.

Both petitions also question the validity of R.A. No. 6734 on the ground that it violates the constitutional
guarantee on free exercise of religion [Art. III, sec. 5]. The objection centers on a provision in the Organic
Act which mandates that should there be any conflict between the Muslim Code [P.D. No. 1083] and the
Tribal Code (still be enacted) on the one had, and the national law on the other hand, the Shari'ah courts
created under the same Act should apply national law. Petitioners maintain that the islamic law (Shari'ah)
is derived from the Koran, which makes it part of divine law. Thus it may not be subjected to any "man-
made" national law. Petitioner Abbas supports this objection by enumerating possible instances of
conflict between provisions of the Muslim Code and national law, wherein an application of national law
might be offensive to a Muslim's religious convictions.

As enshrined in the Constitution, judicial power includes the duty to settle actual controversies involving
rights which are legally demandable and enforceable. [Art. VIII, Sec. 11. As a condition precedent for the
power to be exercised, an actual controversy between litigants must first exist [Angara v. Electoral
Commission, supra; Tan v. Macapagal, G.R. No. L-34161, February 29, 1972, 43 SCRA 677]. In the
present case, no actual controversy between real litigants exists. There are no conflicting claims
involving the application of national law resulting in an alleged violation of religious freedom. This being
so, the Court in this case may not be called upon to resolve what is merely a perceived potential conflict
between the provisions the Muslim Code and national law.
Petitioners also impugn the constitutionality of Article XIX, section 13 of R.A. No. 6734 which, among
others, states:

. . . Provided, That only the provinces and cities voting favorably in such plebiscite shall
be included in the Autonomous Region in Muslim Mindanao. The provinces and cities
which in the plebiscite do not vote for inclusion in the Autonomous Region shall remain in
the existing administrative regions: Provided, however, that the President may, by
administrative determination, merge the existing regions.

According to petitioners, said provision grants the President the power to merge regions, a power which
is not conferred by the Constitution upon the President. That the President may choose to merge
existing regions pursuant to the Organic Act is challenged as being in conflict with Article X, Section 10
of the Constitution which provides:

No province, city, municipality, or barangay may be created, divided, merged, abolished,

or its boundary substantially altered, except in accordance with the criteria established in
the local government code and subject to approval by a majority of the votes cast in a
plebiscite in the political units directly affected.

It must be pointed out that what is referred to in R.A. No. 6734 is the merger of administrative regions,
i.e. Regions I to XII and the National Capital Region, which are mere groupings of contiguous provinces
for administrative purposes [Integrated Reorganization Plan (1972), which was made as part of the law
of the land by Pres. dec. No. 1, Pres. Dec. No. 742]. Administrative regions are not territorial and political
subdivisions like provinces, cities, municipalities and barangays [see Art. X, sec. 1 of the Constitution].
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 [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.

Petitioners likewise question the validity of provisions in the Organic Act which create an Oversight
Committee to supervise the transfer to the autonomous region of the powers, appropriations, and
properties vested upon the regional government by the organic Act [Art. XIX, Secs. 3 and 4]. Said
provisions mandate that the transfer of certain national government offices and their properties to the
regional government shall be made pursuant to a schedule prescribed by the Oversight Committee, and
that such transfer should be accomplished within six (6) years from the organization of the regional
government.

It is asserted by petitioners that such provisions are unconstitutional because while the Constitution
states that the creation of the autonomous region shall take effect upon approval in a plebiscite, the
requirement of organizing an Oversight committee tasked with supervising the transfer of powers and
properties to the regional government would in effect delay the creation of the autonomous region.

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 delay the creation of the
autonomous region.

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 Organic 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 bases therefor.

Every law has in its favor the presumption of constitutionality [Yu Cong Eng v. Trinidad, 47 Phil. 387
(1925); Salas v. Jarencio, G.R. No. L-29788, August 30, 1979, 46 SCRA 734; Morfe v.
Mutuc, supra; Peralta v. COMELEC, G.R. No. L-47771, March 11, 1978, 82 SCRA 30]. Those who
petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the basis for
such a declaration. otherwise, their petition must fail. Based on the grounds raised by petitioners to
challenge the constitutionality of R.A. No. 6734, the Court finds that petitioners have failed to overcome
the presumption. The dismissal of these two petitions is, therefore, inevitable.

WHEREFORE, the petitions are DISMISSED for lack of merit.

 EN BANC
[G.R. No. 93054 : December 4, 1990.]
192 SCRA 100
Cordillera Regional Assembly Member ALEXANDER P. ORDILLO, (Banaue),
Ifugao Provincial Board Member CORAZON MONTINIG, (Mayoyao), Former
Vice-Mayor MARTIN UDAN (Banaue), Municipal Councilors MARTIN GANO,
(Lagawe), and TEODORO HEWE, (Hingyon), Barangay Councilman PEDRO W.
DULAG (Lamut); Aguinaldo residents SANDY B. CHANGIWAN, and DONATO
TIMAGO; Lamut resident REY ANTONIO; Kiangan residents ORLANDO
PUGUON, and REYNAND DULDULAO; Lagawe residents TOMAS KIMAYONG,
GREGORIO DANGO, GEORGE B. BAYWONG, and VICENTE LUNAG; Hingyon
residents PABLO M. DULNUAN and CONSTANCIO GANO; Mayoyao residents
PEDRO M. BAOANG, LEONARDO IGADNA, and MAXIMO IGADNA; and Banaue
residents PUMA-A CULHI, LATAYON BUTTIG, MIGUEL PUMELBAN, ANDRES
ORDILLO, FEDERICO MARIANO, SANDY BINOMNGA, GABRIEL LIMMANG,
ROMEO TONGALI, RUBEN BAHATAN, MHOMDY GABRIEL, and NADRES
GHAMANG, Petitioners, vs. THE COMMISSION ON ELECTIONS; The Honorable
FRANKLIN M. DRILON, Secretary of Justice; Hon. CATALINO MACARAIG,
Executive Secretary; The Cabinet Officer for Regional Development; Hon.
GUILLERMO CARAGUE, Secretary of Budget and Management; and Hon.
ROSALINA S. CAJUCOM, OIC, National Treasurer, Respondents.

DECISION

GUTIERREZ, JR., J.:

The question raised in this petition is whether or not the province of Ifugao, being the
only province which voted favorably for the creation of the Cordillera Autonomous
Region can, alone, legally and validly constitute such Region.
The antecedent facts that gave rise to this petition are as follows:
On January 30, 1990, the people of the provinces of Benguet, Mountain Province,
Ifugao, Abra and Kalinga-Apayao and the city of Baguio cast their votes in a plebiscite
held pursuant to Republic Act No. 6766 entitled "An Act Providing for an Organic Act for
the Cordillera Autonomous Region."
The official Commission on Elections (COMELEC) results of the plebiscite showed that
the creation of the Region was approved by a majority of 5,889 votes in only the
Ifugao Province and was overwhelmingly rejected by 148,676 votes in the rest of the
provinces and city above-mentioned.
Consequently, the COMELEC, on February 14, 1990, issued Resolution No. 2259 stating
that the Organic Act for the Region has been approved and/or ratified by majority of
the votes cast only in the province of Ifugao. On the same date, the Secretary of
Justice issued a memorandum for the President reiterating the COMELEC resolution and
provided:
". . . [A]nd considering the proviso in Sec. 13(A) that only the provinces and city voting
favorably shall be included in the CAR, the province of Ifugao being the only province
which voted favorably then, alone, legally and validly constitutes the CAR." (Rollo, p.
7)
As a result of this, on March 8, 1990, Congress enacted Republic Act No. 6861 setting
the elections in the Cordillera Autonomous Region of Ifugao on the first Monday of
March 1991.: nad
Even before the issuance of the COMELEC resolution, the Executive Secretary on
February 5, 1990 issued a Memorandum granting authority to wind up the affairs of
the Cordillera Executive Board and the Cordillera Regional Assembly created under
Executive Order No. 220.
On March 9, 1990, the petitioner filed a petition with COMELEC to declare the non-
ratification of the Organic Act for the Region. The COMELEC merely noted said petition.
On March 30, 1990, the President issued Administrative Order No. 160 declaring
among others that the Cordillera Executive Board and Cordillera Regional Assembly and
all the offices created under Executive Order No. 220 were abolished in view of the
ratification of the Organic Act.- nad
The petitioners maintain that there can be no valid Cordillera Autonomous Region in
only one province as the Constitution and Republic Act No. 6766 require that the said
Region be composed of more than one constituent unit.
The petitioners, then, pray that the Court: (1) declare null and void COMELEC
resolution No. 2259, the memorandum of the Secretary of Justice, the memorandum of
the Executive Secretary, Administrative Order No. 160, and Republic Act No. 6861 and
prohibit and restrain the respondents from implementing the same and spending public
funds for the purpose and (2) declare Executive Order No. 220 constituting the
Cordillera Executive Board and the Cordillera Regional Assembly and other offices to be
still in force and effect until another organic law for the Autonomous Region shall have
been enacted by Congress and the same is duly ratified by the voters in the constituent
units. We treat the Comments of the respondents as an answer and decide the case.
This petition is meritorious.
The sole province of Ifugao cannot validly constitute the Cordillera Autonomous Region.
It is explicit in Article X, Section 15 of the 1987 Constitution that:
"Section 15. There shall be created autonomous regions in Muslim Mindanao and
in the Cordillera consisting of provinces, cities, municipalities and geographical
areas sharing common and distinctive historical and cultural heritage, economic
and social structures, and other relevant characteristics within the framework of
this Constitution and the national sovereignty as well as territorial integrity of
the Republic of the Philippines." (Emphasis Supplied)
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. (Integrated Reorganization Plan (1972), which
was made as part of the law of the land by P.D. No. 1; P.D. No. 742) Ifugao is a
province by itself. To become part of a region, it must join other provinces, cities,
municipalities, and geographical areas. It joins other units because of their common
and distinctive historical and cultural heritage, economic and social structures and
other relevant characteristics. The Constitutional requirements are not present in this
case.- nad
The well-established rule in statutory construction that the language of the
Constitution, as much as possible should be understood in the sense it has in common
use and that the words used in constitutional provisions are to be given their ordinary
meaning except where technical terms are employed, must then, be applied in this
case. (See Baranda v. Gustilo, 165 SCRA 757, 770, [1988]; J.M. Tuason & Co., Inc. v.
Land Tenure Administration, 31 SCRA 413, 422-423 [1970]).
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.
Article III, Sections 1 and 2 of the Statute provide that the Cordillera Autonomous
Region is to be administered by the Cordillera government consisting of the Regional
Government and local government units. It further provides that:
"SECTION 2. The Regional Government shall exercise powers and functions
necessary for the proper governance and development of all provinces, cities,
municipalities, and barangay or ili within the Autonomous Region . . ."
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.
Article V, Sections 1 and 4 of Republic Act 6766 vest the legislative power in the
Cordillera Assembly whose members shall be elected from regional assembly districts
apportioned among provinces and the cities composing the Autonomous
Region. chanrobles virtual law library
If we follow the respondent's position, the members of such Cordillera Assembly shall
then be elected only from the province of Ifugao creating an awkward predicament of
having two legislative bodies the Cordillera Assembly and the Sangguniang
Panlalawigan exercising their legislative powers over the province of Ifugao. And
since Ifugao is one of the smallest provinces in the Philippines, population-wise, it
would have too many government officials for so few people.:-cralaw
Article XII, Section 10 of the law creates a Regional Planning and Development Board
composed of the Cordillera Governor, all the provincial governors and city mayors or
their representatives, two members of the Cordillera Assembly, and members
representing the private sector. The Board has a counterpart in the provincial level
called the Provincial Planning and Development Coordinator. The Board's functions
(Article XII, Section 10, par. 2, Republic Act No. 6766) are almost similar to those of
the Provincial Coordinator's (Title Four, Chapter 3, Article 10, Section 220 (4), Batas
Pambansa Blg. 337 Local Government Code). If it takes only one person in the
provincial level to perform such functions while on the other hand it takes an entire
Board to perform almost the same tasks in the regional level, it could only mean that a
larger area must be covered at the regional level. The respondent's theory of the
Autonomous Region being made up of a single province must, therefore, fail.
Article XXI, Section 13 (B) (c) alloting the huge amount of Ten Million Pesos
(P10,000,000.00) to the Regional Government for its initial organizational
requirements cannot be construed as funding only a lone and small province.
These sections of Republic Act No. 6766 show that a one province Cordillera
Autonomous Region was never contemplated by the law creating it.
The province of Ifugao makes up only 11% of the total population of the areas
enumerated in Article I, Section 2 (b) of Republic Act No. 6766 which include Benguet,
Mountain Province, Abra, Kalinga-Apayao and Baguio City. It has the second smallest
number of inhabitants from among the provinces and city above mentioned. The
Cordillera population is distributed in round figures as follows: Abra, 185,000; Benguet,
486,000; Ifugao, 149,000; Kalinga-Apayao, 214,000; Mountain Province, 116,000; and
Baguio City, 183,000; Total population of these five provinces and one city; 1,332,000
according to the 1990 Census (Manila Standard, September 30, 1990, p. 14).
There are other provisions of Republic Act No. 6766 which are either violated or which
cannot be complied with. Section 16 of Article V calls for a Regional Commission on
Appointments with the Speaker as Chairman and are (6) members coming from
different provinces and cities in the Region. Under the respondents' view, the
Commission would have a Chairman and only one member. It would never have a
quorum. Section 3 of Article VI calls for cabinet members, as far as practicable, to
come from various provinces and cities of the Region. Section 1 of Article VII creates a
system of tribal courts for the various indigenous cultural communities of the Region.
Section 9 of Article XV requires the development of a common regional language based
upon the various languages and dialects in the region which regional language in turn
is expected to enrich the national language.
The entirety of Republic Act No. 6766 creating the Cordillera Autonomous Region is
infused with provisions which rule against the sole province of Ifugao constituting the
Region.:-cralaw
To contemplate the situation envisioned by the respondent would not only violate the
letter and intent of the Constitution and Republic Act No. 6766 but would also be
impractical and illogical.
Our decision in Abbas, et al. v. COMELEC, (G.R. No. 89651, November 10, 1969), is
not applicable in the case at bar contrary to the view of the Secretary of Justice.
The Abbas case laid down the rate on the meaning of majority in the phrase "by
majority of the votes cast by the constituent units called for the purpose" found in the
Constitution, Article X, Section 18. It stated:
x x x
". . . [I]t is thus clear that what is required by the Constitution is simple majority
of votes approving the Organic Act in individual constituent units and not a
double majority of the votes in all constituent units put together, as well as in
the individual constituent units."
This was the pronouncement applied by the Secretary of Justice in arriving at his
conclusion stated in his Memorandum for the President that:
x x x
". . . [i]t is believed that the creation of the Cordillera Autonomous Region (CAR)
as mandated by R.A. No. 6766 became effective upon its approval by the
majority of the votes cast in the province of Ifugao. And considering the proviso
in Section 13 (a) that only the provinces and city voting favorably shall be
included in the CAR, the province of Ifugao being the only province which voted
favorably can, alone, legally and validly constitute the CAR." (Rollo. p. 40).
The plebiscites mandated by the Constitution and Republic Act No. 6766 for the
Cordillera and Republic Act No. 6734 for the Autonomous Region in Muslim Mindanao
determine (1) whether there shall be an autonomous region in the Cordillera and in
Muslim Mindanao and (2) which provinces and cities, among those enumerated in the
two Republic Acts, shall comprise said Autonomous Regions. (See III, Record of the
Constitutional Commission, 487-492 [1986]).
The Abbas case established the rule to follow on which provinces and cities shall
comprise the autonomous region in Muslim Mindanao which is, consequently, the same
rule to follow with regard to the autonomous region in the Cordillera. However, there is
nothing in the Abbas decision which deals with the issue on whether an autonomous
region, in either Muslim Mindanao or Cordillera could exist despite the fact that only
one province or one city is to constitute it.chanrobles virtual law library
Stated in another way, the issue in this case is whether the sole province of Ifugao can
validly and legally constitute the Cordillera Autonomous Region. The issue is not
whether the province of Ifugao is to be included in the Cordillera Autonomous Region.
It is the first issue which the Court answers in the instant case.
WHEREFORE, the petition is hereby GRANTED. Resolution No. 2259 of the Commission
on Elections, insofar as it upholds the creation of an autonomous region, the February
14, 1990 memorandum of the Secretary of Justice, the February 5, 1990 memorandum
of the Executive Secretary, Administrative Order No. 160, and Republic Act No. 6861
are declared null and void while Executive Order No. 220 is declared to be still in force
and effect until properly repealed or amended.
SO ORDERED.
 [G.R. No. 141616. March 15, 2001]

CITY OF QUEZON, petitioner, vs. LEXBER INCORPORATED, respondent.

DECISION
YNARES-SANTIAGO, J.:

Before us is a petition for review on certiorari assailing the October 18, 1999
decision of the Court of Appeals in CA-G.R. CV No. 59541[1] which affirmed in toto the
January 26, 1998 decision of the Regional Trial Court of Quezon City in Civil Case No.
Q-94-19405.[2]
Briefly stated, the facts are as follows
On August 27, 1990, a Tri-Partite Memorandum of Agreement[3] was drawn between
petitioner City of Quezon, represented by its then Mayor Brigido R. Simon, Jr.,
respondent Lexber, Inc. and the then Municipality of Antipolo, whereby a 26,010 square
meter parcel of land located in Antipolo[4] was to be used as a garbage dumping site by
petitioner and other Metro Manila cities or municipalities authorized by the latter, for a 5-
year period commencing in January 1991 to December 1995. Part of the agreement was
that the landowner, represented by respondent Lexber, shall be hired as the exclusive
supplier of manpower, heavy equipment and engineering services for the dumpsite and
shall also have the right of first refusal for contracting such services.
This led to the drawing of the first negotiated contract[5] between petitioner,
represented by Mayor Simon, and respondent Lexber on September 10, 1990, whereby
the latter was engaged to construct the necessary infrastructure at the dumpsite,
designated as the Quezon City Sanitary Landfill, for the contract price of
P4,381,069.00. Construction of said infrastructure was completed by respondent Lexber
on November 25, 1991, and the contract price agreed upon was accordingly paid to it by
petitioner.
Meanwhile, on November 8, 1990, a second negotiated contract[6] was entered into by
respondent Lexber with petitioner, again represented by Mayor Simon, whereby it was
agreed that respondent Lexber shall provide maintenance services in the form of
manpower, equipment and engineering operations for the dumpsite for the contract price
of P1,536,796.00 monthly. It was further agreed that petitioner shall pay respondent
Lexber a reduced fee of fifty percent (50%) of the monthly contract price, or
P768,493.00, in the event petitioner fails to dump the agreed volume of 54,000 cubic
meters of garbage for any given month. On December 11, 1991, respondent was notified
by petitioner, through the City Engineer, Alfredo Macapugay, Project Manager, Rene
Lazaro and Mayor Simon to commence maintenance and dumping operations at the site
starting on December 15, 1991.[7]
Respondent Lexber alleged that petitioner immediately commenced dumping garbage
on the landfill site continuously from December 1991 until May 1992. Thereafter,
petitioner ceased to dump garbage on the said site for reasons not made known to
respondent Lexber. Consequently, even while the dumpsite remained unused, respondent
Lexber claimed it was entitled to payment for its services as stipulated in the second
negotiated contract.
On December 12, 1992, respondents counsel sent a demand letter to petitioner
demanding the payment of at least 50% of its service fee under the said contract, in the
total amount of P9,989,174.00. In view of the idle state of the dumpsite for more than a
year, respondent also sought a clarification from petitioner regarding its intention on the
dumpsite project, considering the waste of equipment and manpower in the meantime, as
well as its loss of opportunity for the property.
Petitioner, this time acting through Mayor Ismael A. Mathay, Jr. who succeeded
Mayor Simon in the interim, denied any liability under the contract on the ground that the
same was invalid and unenforceable. According to Mayor Mathay, the subject contract
was signed only by Mayor Simon and had neither the approval nor ratification of the City
Council, and it lacked the required budget appropriation.
Thus, a complaint for Breach of Contract, Specific Performance or Rescission of
Contract and Damages was filed by respondent Lexber against petitioner on February 21,
1994 before the Regional Trial Court of Quezon City. Respondent Lexber averred that
because petitioner stopped dumping garbage on the dumpsite after May 1992, Lexbers
equipment and personnel were idle to its damage and prejudice.Respondent prayed that
petitioner be ordered to comply with its obligations under the subject contract or, in the
alternative, that the said contract be rescinded and petitioner be ordered to pay damages.
On January 26, 1998, after trial on the merits, the lower court rendered judgment in
favor of respondent, the dispositive portion of which states:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff

and against the defendant:

1. Ordering the defendant to pay the plaintiff the amount of SEVEN HUNDRED SIXTY
EIGHT THOUSAND FOUR HUNDRED NINETY THREE PESOS (P768,493.00) per
month starting December 15, 1991 until December 31, 1995 with legal interest starting
December 16, 1992, the date defendant received plaintiffs extra-judicial demand, until
defendant finally pays the entire amount;

2. Ordering defendant to pay costs of suit.

The claims for attorneys fees and other damages are hereby denied for lack of merit.

SO ORDERED.[8]

On appeal to the Court of Appeals, the said Judgment was affirmed in toto. With the
denial of its Motion for Reconsideration on January 26, 2000, petitioner now comes to
this Court with the instant petition arguing that the Court of Appeals gravely erred:
(a) When it refused to hold that the second Negotiated Contract of November 8, 1990 is
null and void ab initio, notwithstanding that the execution thereof was in violation of
Secs. 85, 86 and 87 of the Auditing Code of the Philippines (PD 1445) and LOI 968.

(b) When it refused to categorically hold that the said Negotiated Contract of November
8, 1990 required the prior approval of the City Council, notwithstanding the fact that the
said contract would require the expenditure of public funds in the amount of
P18,817,920.00 for one-year dumping operation, or the total amount of P94,089,600.00
for five years, and that it is the City Council that is vested by the Local Government Code
(BP Blg. 337) with the power to appropriate city funds to cover expenses of the City
Government.

(c) When it held that Petitioner started to dump garbage at the dumpsite and paid for such
service, despite the fact that Respondents evidence proved otherwise; furthermore, the
Court of Appeals failed to cite any specific evidence to support said conclusions of fact.

(d) When it held that the said Negotiated Contract of November 8, 1990 was ratified by
the Petitioner by the aforesaid initial dumping of garbage and payment of services,
overlooking the elementary doctrine that a void contract cannot be ratified.

(e) When it wrongly applied an Executive Order and administrative resolution as the
applicable law to govern the aforesaid contract, notwithstanding that the Auditing Code
of the Philippines (PD 1445) and the Local Government Code (BP 337) then had not been
repealed by any legislative enactment, nor could the said executive issuances repeal them.

(f) When it held that the equities of the case should lean in favor of the respondent and
thus failed to apply the doctrine that Government is not estopped to question the illegal
acts of its officials.

(g) When it wrongly applied the Imus case, not the Osmea case, to the present case.[9]

Petitioners remonstrations can be reduced to two (2) essential arguments:

First. That the second negotiated contract is null and void ab initio because its execution was done
in violation of existing laws, more particularly Sections 85, 86 and 87 of Presidential
Decree No. 1445 (otherwise known as the Auditing Code of the Philippines) and Section
177 (b) of Batas Pambansa Blg. 337 (also known as the Local Government Code of
1983); and
Second. That the facts and evidence do not support the Court of Appeals conclusion that,
notwithstanding the lack of appropriation, subsequent acts of the petitioner constituted a
ratification of the subject negotiated contract.

The issue of whether or not the subject negotiated contract is null and void ab
initio will be discussed first.
Petitioner insists that the subject contract failed to comply with the mandatory
requirements of Presidential Decree No. 1445, otherwise known as the Auditing Code of
the Philippines.
 Section 85 thereof provides:

Section 85. Appropriation before entering into contract. (1) No contract involving the
expenditure of public funds shall be entered into unless there is an appropriation therefor,
the unexpected balance of which, free of other obligations, is sufficient to cover the
proposed expenditure; (2) Notwithstanding this provision, contracts for the procurement
of supplies and materials to be carried in stock may be entered into under regulations of
the Commission provided that when issued, the supplies and materials shall be charged to
the proper appropriation account. (Underscoring ours)

Section 86 of PD 1445 also provides as follows:

Section 86. Certificate showing appropriation to meet contract. Except in a case of a

contract for personal service, for supplies for current consumption or to be carried in
stock not exceeding the estimated consumption for three months, or banking transactions
of government-owned or controlled banks, no contract involving the expenditure of
public funds by any government agency shall be entered into or authorized unless the
proper accounting official or the agency concerned shall have certified to the officer
entering into the obligation that funds have been duly appropriated for the purpose and
that the amount necessary to cover the proposed contract for the current fiscal year is
available for expenditure on account thereof, subject to verification by the auditor
concerned. The certification signed by the proper accounting official and the auditor who
verified it, shall be attached to and become an integral part of the proposed contract, and
the sum so certified shall not thereafter be available for expenditure for any other purpose
until the obligation of the government agency concerned under the contract is fully
extinguished. (Underscoring ours)

Petitioner stresses that failure to comply with the requirements underlined in Sections
85 and 86 of PD 1445 rendered the subject contract void, invoking Section 87 of PD 1445
which provides:

Section 87. Void contract and liability of officer. Any contract entered into contrary to the
requirements of the two immediately preceding sections shall be void, and the officer or
officers entering into the contract shall be liable to the government or other contracting
party for any consequent damage to the same extent as if the transaction had been wholly
between private parties.

Is a contract entered into by the city mayor involving the expenditure of public funds
by the local government without prior appropriation by the city council valid and
binding? Petitioner insists that the answer is in the negative, arguing that there is no
escaping the stringent and mandatory requirement of a prior appropriation, as well as a
certification that funds are available therefor.
If we are to limit our disquisition to the cited provisions of Presidential Decree No.
1445, or the Auditing Code of the Philippines, in conjunction with Section 177 (b) of
Batas Pambansa Blg. 337, or the Local Government Code of 1983, which empowered the
Sangguniang Panlungsod to appropriate funds for expenses of the city government, and
fix the salaries of its officers and employees according to law, there would be no debate
that prior appropriation by the city council and a certification that funds are available
therefor is indeed mandatorily required.
There is no denying that Sections 85 and 86 of P.D. 1445 (Auditing Code of the
Philippines) provide that contracts involving expenditure of public funds:

1) can be entered into only when there is an appropriation therefor; and

2) must be certified by the proper accounting official/agency that funds have been duly
appropriated for the purpose, which certification shall be attached to and become an
integral part of the proposed contact.

However, the very same Presidential Decree No. 1445, which is the cornerstone of
petitioners arguments, does not provide that the absence of an appropriation law ipso
facto makes a contract entered into by a local government unit null and void. Section 84
of the statute specifically provides:

Revenue funds shall not be paid out of any public treasury or depository except in
pursuance of an appropriation law or other specific statutory authority. (Underscoring
ours)

Consequently, public funds may be disbursed not only pursuant to an appropriation

law, but also in pursuance of other specific statutory authority, i.e., Section 84 of PD
1445. Thus, when a contract is entered into by a city mayor pursuant to specific statutory
authority, the law, i.e., PD 1445 allows the disbursement of funds from any public
treasury or depository therefor. It can thus be plainly seen that the law invoked by
petitioner Quezon City itself provides that an appropriation law is not the only authority
upon which public funds shall be disbursed.
Furthermore, then Mayor Brigido Simon, Jr. did not enter into the subject contract
without legal authority. The Local Government Code of 1983, or B.P. Blg. 337, which
was then in force, specifically and exclusively empowered the city mayor to represent the
city in its business transactions, and sign all warrants drawn on the city treasury and all
bonds, contracts and obligations of the city.[10] Such power granted to the city mayor by
B.P. Blg. 337 was not qualified nor restricted by any prior action or authority of the city
council. We note that while the subsequent Local Government Code of 1991, [11] which
took effect after the execution of the subject contracts, provides that the mayors
representation must be upon authority of the sangguniang panlungsod or pursuant to law
or ordinance,[12] there was no such qualification under the old code.
We must differentiate the provisions of the old Local Government Code of 1983, B.P.
Blg. 337, which was then in force, from that of the Local Government Code of 1991,
R.A. No. 7160, which now requires that the mayors representation of the city in its
business transactions must be upon authority of the sangguniang panlungsod or pursuant
to law or ordinance (Section 455 [vi]). No such prior authority was required under B.P.
Blg. 337. This restriction, therefore, cannot be imposed on the city mayor then since the
two contracts were entered into before R.A. No. 7160 was even enacted.
Under B.P. Blg. 337, while the city mayor has no power to appropriate funds to
support the contracts, neither does said law prohibit him from entering into contracts
unless and until funds are appropriated therefor. In fact, it is his bounden duty to so
represent the city in all its business transactions. On the other hand, the city council must
provide for the depositing, leaving or throwing of garbage [13] and to appropriate funds for
such expenses.[14] (Section 177 [b]). It cannot refuse to so provide and appropriate public
funds for such services which are very vital to the maintenance of cleanliness of the city
and the good health of its inhabitants.
By entering into the two contracts, Mayor Simon did not usurp the city councils
power to provide for the proper disposal of garbage and to appropriate funds therefor. The
execution of contracts to address such a need is his statutory duty, just as it is the city
councils duty to provide for said services. There is no provision in B.P. Blg. 337,
however, that prohibits the city mayor from entering into contracts for the public welfare,
unless and until there is prior authority from the city council. This requirement was
imposed much later by R.A. No. 7160, long after the contracts had already been executed
and implemented.
Even the very Charter of Quezon City,[15] more particularly Section 9(f), Section 12(a)
and Section 12(m) thereof, simply provide that the mayor shall exercise general powers
and duties, such as signing all warrants drawn on the city treasurer and all bonds,
contracts, and obligations of the city,[16] even as it grants the City Council the power, by
ordinance or resolution, to make all appropriations for the expenses of the government of
the city,[17] as well as to prohibit the throwing or depositing of offal, garbage, refuse, or
other offensive matter in the same, and to provide for its collection and disposition x x
x.[18]
While the powers and duties of the Mayor and the City Council are clearly delineated,
there is nothing in the cited provisions, nor even in the statute itself, that requires prior
authorization by the city council by proper enactment of an ordinance before the City
Mayor can enter into contracts.
Private respondent Lexber asserts that the subject contract was entered into by Mayor
Simon in behalf of the Quezon City government pursuant to specific statutory authority,
more particularly the provisions of Executive Order No. 392. In accordance with Article
XVIII, Section 8 of the 1987 Constitution, then President Corazon C. Aquino issued E.O.
No. 392 constituting the Metropolitan Manila Authority (or MMA) to be composed of the
heads of the four (4) cities and thirteen (13) municipalities comprising the Metropolitan
Manila area. The said Executive Order empowered the MMA to have jurisdiction over the
delivery of basic urban services requiring coordination in the Metropolitan area, including
sanitation and waste management.[19]
To fulfill this mandate, the MMA, through Resolution No. 17, Series of 1990,
resolved that pursuant to Section 2 of E.O. No. 392, the:
x x x LGUs remitting their contributions to the MMA within the prescribed period shall
be entitled to a financial assistance in an amount equivalent to 20% of their remittances
provided that the amount is used exclusively to augment the effective delivery of basic
urban services requiring coordination.

The Metropolitan Manila Council (or MMC) also issued Resolution No. 15, Series of
1991, authorizing the Chairman of the MMC to enter into a memorandum of agreement
or (MOA) with any local chief executive in Metropolitan Manila for the purpose of
managing garbage collection and disposal, among other basic urban services. Taking their
cue from Executive Order No. 392 and the pertinent resolutions of the MMA and MMC,
the then Mayors of Quezon City and the Municipality of Antipolo entered into a tripartite
MOA with respondent Lexber, towards the establishment of the proposed Quezon City
Landfill Disposal System.
It is true that the first negotiated contract between Mayor Simon, Jr. and respondent
Lexber, which provided for the necessary infrastructure of the dumpsite, was executed
without prior authority or appropriation by the city council. Nevertheless, recognizing the
necessity, if not the urgency, of the project, petitioner honored the said contract and paid
respondent Lexber the contract price of P4,381,069.00.[20]
Respondent Lexber avers that immediately following the completion of the project in
December 1991, petitioner in fact availed of the facilities by delivering and dumping
garbage at the site in accordance with the stipulations in the second negotiated
contract. And yet, after having spent millions of public funds to build the necessary
infrastructure, as well as for site development of the sanitary landfill, petitioner, under the
newly-installed administration of Mayor Ismael Mathay, Jr., refused to honor the second
negotiated contract by: (1) discontinuing the citys use of the sanitary landfill; (2) refusing
to pay respondent Lexber for services already rendered from December of 1991 to May of
1992; and (3) denying any liability under the second negotiated contract, on the grounds
that the same was without prior authority of the city council, and that it was neither
approved nor ratified by the said body. Moreover, Mayor Mathay, Jr. refused to pay its
obligation to respondent Lexber since no provision therefor was made in the 1992/1993
annual city budget.
The trial court ruled that while there may not have been prior authority or
appropriation to enter into and implement the second negotiated contract, the project
denominated as Quezon City Landfill Disposal System was duly supported by a
Certificate of Availability of Funds dated April 4, 1991 signed by the Quezon City
Auditor, Reynaldo P. Ventura, and Treasurer, Montano L. Diaz, stating as follows:

Pursuant to the provisions of Section 86 of P.D. No. 1445, LOI 968 and Section 46 of
P.D. No. 177, I hereby certify that funds have been duly appropriated and alloted under
Advice of Allotment No. 1 and 2 dated March 31, 1991 and in the total amount of
P2,620,169.00; P11,783,399.00 covering the contract entered into with Lexber, Inc. with
business address at 65 Panay Avenue, Quezon City said amount is available for
expenditure on account thereof.[21]
 The existence of said document led the trial court to conclude thus:

However, a close examination of the Certificate of Availability of Funds dated December

3, 1990 shows that the appropriated amounts of P1,700,000.00, 2,641,922.00, and
P40,000.00 totaled P4,381,922.00 and not P4,341,922.00, which amount is, in fact,
P853.00 more than the contract price of Negotiated Contract dated September 10,
1990. This only shows that as of April 4, 1991, there was sufficient appropriation to cover
at least for a period of three (3) months, in order to comply with the provisions of Section
86 of PD 1445. Moreover, any payment made will comply with the provision of Section
84 of PD 1445 which states that: Revenue funds shall not be paid out of any public
treasury or depository except in pursuance of an appropriation law or other specific
statutory authority.

In any case, the defendant city can easily make available the necessary funds at the
beginning of the year in the general appropriation to cover the probable expenses which it
would have to incur, considering that pursuant to Resolution No, 72, Series of 1990 of the
Metropolitan Manila Authority, the Local Government Units are entitled to a financial
assistance in an amount equivalent to 20% of their remittances provided that the amount
is used exclusively to augment the effective delivery of basic services requiring
coordination. In fact, the amount of FIVE MILLION PESOS (P5,000,000.00) has already
been set aside in order to be available to augment garbage collection and disposal in
Quezon City.

It must be noted that the Negotiated Contract dated November 8, 1990 is not ipso facto
absolutely null and void. The subject thereof is perfectly within the authority of the city
government. It is pursuant to the Tripartite Agreement entered into between the plaintiff,
the defendant, and the Municipality of Antipolo. The plaintiff was given the exclusive
right to exercise acts stated in the two negotiated contracts, which are entered into to
further carry out and implement the provisions of the Tripartite Agreement. [22]

The Court of Appeals affirmed the trial courts findings that the second negotiated
contract was executed by virtue of a specific statutory authority, or pursuant to law,
holding that:

Executive Order No. 392 (constituting the Metropolitan Manila Authority, providing for
its powers and functions and for other purposes) and pertinent Resolution No. 72, Series
of 1990 of MMA, and Resolution No. 15, Series of 1991 of MMC, find application and
therefore should govern the subject transactions.

Worthy to stress at this point is the fact that pursuant to Sec. 1, E.O. 392, the then
Metropolitan Manila Authority was tasked, among others, with the delivery of basic
services in the Metropolitan Area, whose services include garbage collection and
disposal. To carry out this mandate and effectively deliver other basic urban services
requiring coordination of local government units, the Metropolitan Manila Authority
through its Resolution No. 72, Series of 1990, granted financial assistance to all local
government units (LGUs) comprising Metropolitan Manila in an amount equivalent to
20% of their remittances as provided under E.O. 392. Likewise, the Metropolitan Manila
Council, in its Resolution No. 15, Series of 1991, resolved to authorize the Chairman of
the MMC to enter into memorandum of Agreement (MOA) with the Local Chief
Executives in Metro Manila for the purpose of, among other things, the management of
garbage collection and its disposal.

The foregoing authorities therefore fully clothed Mayor Brigido Simon, Jr. with the
authority to enter and sign the subject contract for and in behalf of the city government
even without express authority from the City Council.[23]

While it is true that the MMA has no legislative power, E.O. No. 392 specifically
empowered the MMA to have jurisdiction over the delivery of basic urban services
requiring coordination, such as sanitation and waste management.[24] Said E.O. did not
repeal pertinent provisions of B.P. 337, but specifically exempts the MMA from the
application of E.O. 392[25] (Section 11 of E.O 392). There is no conflict as well with the
provisions of P.D. No. 1445 because Sec. 84 thereof also recognizes appropriation by
other statutory authority.
E.O. 392 and MMA Resolutions Nos. 72 and 15 allowed for direct coordination
between the MMA and the covered local government units to expedite the effective
delivery of basic services requiring coordination, such as collection and disposal of
garbage. To this end, the MMA Resolutions (series of 1990) granted financial assistance
to all covered local government units in an amount equivalent to 20% of their remittances
to fund the delivery of said services, pursuant to the provisions of Sec. 7 of E.O. No. 392:

x x x city and municipal treasurers of the local government units comprising Metropolitan
Manila shall continue to collect all revenues and receipts accruing to the Metropolitan
Manila Commission and remit the same to the Authority; Provided that such income
collections as well as the share of the authority from the regular sources of revenue in the
General Fund of the city or municipality as local counterpart for the integrated basic
services and developmental projects shall be treated as a trust fund in their
account. Provided further that the remittance thereof shall be effected within the first
thirty (30) days following the end of each month. x x x

There was, thus, no justifiable reason for petitioner not to allocate or appropriate
funds at the start of each fiscal year considering that a trust fund had been established to
pay for the effective delivery of basic urban services requiring coordination, foremost of
which is the collection and disposal of garbage.
LOI No. 968, signed by then President Marcos on December 17, 1979, also provides
in part that all contracts for capital projects and for supply of commodities and services,
including equipment, maintenance contracts, and other agreements requiring payment
which are chargeable to agency current operating on capital expenditure funds, shall be
signed by agency heads or other duly authorized official only when there are available
funds. The chief accountant of the contracting agency shall sign such contracts as witness
and contracts without such witness shall be considered as null and void.
However, this requirement does not apply to contracts executed by local chief
executives since the said LOI No. 968 was directed only to Ministries and Heads/Chief
Accountants of Ministry, Bureau, Office, Agency of the National Government, including
State Universities and Colleges, and the Chairman, Commission on Audit. Quezon City,
or any urbanized city for that matter, cannot be considered a ministry, bureau, office or
agency of the national government; neither is the city mayor a minister or head of a
ministry, bureau, office or agency of the national government. Hence, the mayor of
Quezon City is not covered by LOI No. 968. The prevailing law in this particular instance
is the Local Government Code of 1983 or B.P. Blg. 337.
Therefore, we find no cogent reason to disturb the conclusions of the trial court as
affirmed by the Court of Appeals in this regard. It is clear that the second negotiated
contract was entered into by Mayor Brigido Simon, Jr. pursuant to law or specific
statutory authority as required by P.D. No. 1445.
There is also no merit in petitioners claim that there was no appropriation therefor, for
it is evident that even as early as April 4, 1991, funds which were certified to as available
had been allocated for use in the first few months operation of the sanitary landfill. The
problem arose only because the new administration unjustifiably refused to abide by the
stipulations in the second negotiated contract. Hence, petitioners arguments on this issue
fail to convince this Court that the second negotiated contract was null and void ab
initio for lack of prior appropriation or authority on the part of Mayor Brigido Simon, Jr.
It is of no moment that the certificate referred to by the trial court did not state that
the amount necessary to cover the proposed contract for the current fiscal year is available
for expenditure on account thereof.[26] The Certificate of Availability of Funds,[27] though
dated December 3, 1990, merely showed that funds for the Landfill Disposal System was
available. Even if the surplus amount was just sufficient to cover at least three (3) months
of operations as of April 4, 1991, said monthly payments were not due yet as the
infrastructure was still being completed. The project was completed in December of 1991
and dumping was to commence only thereafter. Thus, the funds to cover the 1992 fiscal
year could have been made available and appropriated therefor at the beginning of said
year. That the Quezon City government later refused to appropriate and approve
payments to respondent Lexber under the contract despite its use of the facilities for
several months in 1992, is not respondents fault, and being the aggrieved party, it cannot
be made to suffer the damage wrought by the petitioners failure or refusal to abide by the
contract.
On the issue of subsequent ratification by petitioner, the Court of Appeals held:

Granting but without conceding that Mayor Brigido Simon, Jr. needs to secure prior
authorization from the City Council for the enforceability of the contracts entered into in
the name of the City government, which he failed to do according to the appellant, We
believe that such will not affect the enforceability of the contract because of the
subsequent ratification made by the City government. Thus, when appellant City
government, after the construction by the appellee of the dumpsite structure in accordance
with the contract plans and specifications, started to dump garbage collected in the City
and consequently paid the appellee for the services rendered, such acts produce and
constitute a ratification and approval of the negotiated contract and necessarily should
imply its waiver of the right to assail the contracts enforceability.[28]

We are not dissuaded by petitioners arguments that there can be no ratification due to
the absence of an explicit or tacit approval of the second negotiated contract. At the
outset, the issue raised by petitioner that the subject contract is null and void ab initio,
and therefore not capable of ratification, has been laid to rest by the inevitable conclusion
that the said contract is valid and binding. Consequently, ratification of the subject
contract is not necessary.
Be that as it may, it cannot be denied that there was constructive ratification on the
part of petitioner. The records show that upon completion of the infrastructure and other
facilities, petitioner, albeit still under the administration of Mayor Brigido Simon, Jr.,
started to dump garbage in the premises. In fact, on December 11, 1991, a Notice to
Commence Work,[29] implementing the contract for the maintenance of the sanitary
landfill starting December 15, 1991 to December 31, 1995, was issued by said Mayor, as
recommended by Project Manager Rene R. Lazaro and City Engineer Alfredo
Macapugay.
The records also reveal that petitioner issued Disbursement Vouchers [30] of various
amounts covering the period between March 1, 1992 to April 30, 1992 for the services
rendered by the Mud Regal Group, Incorporated to haul garbage to the sanitary
landfill. The said disbursement vouchers were passed in audit and duly approved and paid
by petitioner. These are facts and circumstances on record which led the trial court, the
appellate court, and this Court to affirm the conclusion that petitioner had actually ratified
the subject contract.[31]
Also part of the evidence on record are receipts of various amounts paid by
respondent Lexber to Mud Regal Group, Inc. for the supply of earth moving equipment
used by Lexber to maintain the sanitary landfill covering the period from December 1991
to August 1992.[32] There is also a collection letter from Mud Regal Group, Inc. addressed
to respondent Lexber for unpaid bills covering the period from September to December
1992.[33] While corresponding vouchers were prepared by petitioner to pay respondent
Lexber for work accomplished by the latter in the maintenance of the sanitary landfill for
the period spanning December 1991 to June 1992,[34] these were never processed and
approved for payment since action thereon was overtaken by the change in leadership of
the city government. By then, the new dispensation had already discontinued using the
sanitary landfill for reasons it did not make known to respondent Lexber.
It is evident that petitioner dealt unfairly with respondent Lexber. By the mere pretext
that the subject contract was not approved nor ratified by the city council, petitioner
refused to perform its obligations under the subject contract. Verily, the same was entered
into pursuant to law or specific statutory authority, funds therefor were initially available
and allocated, and petitioner used the sanitary landfill for several months. The present
leadership cannot unilaterally decide to disregard the subject contract to the detriment of
respondent Lexber.
The mere fact that petitioner later refused to continue dumping garbage on the
sanitary landfill does not necessarily prove that it did not benefit at the expense of
respondent Lexber. Whether or not garbage was actually dumped is of no moment, for
respondent Lexbers undertaking was to make available to petitioner the landfill site and to
provide the manpower and machinery to maintain the facility.Petitioner, by refusing to
abide by its obligations as stipulated in the subject negotiated contract, should be held
liable to respondent Lexber in accordance with the terms of the subject contract.
Petitioners refusal to abide by its commitments gave rise to an untenable situation
wherein petitioner effectively denied the existence and validity of the subject contract
even while respondent Lexber was still bound by it. This situation is inconsistent with the
principle that obligations arising from contracts have the force of law between the
contracting parties and each party is bound to fulfill what has been expressly stipulated
therein.[35] Only respondent Lexber was bound by the contract while petitioner acted as if it were free
therefrom.[36] The Court of Appeals held that:

Moreover, the contention of appellant, if sustained, will undeniably result in grave

injustice and inequity to appellate Lexber, Inc. The records will reveal that appellee never
solicited upon the City government to utilize its properties for a landfill site, as appellee
originally conceived of devoting its property to a more viable undertaking, bamboo
plantation in partnership with foreign firm. On the other hand, it was the City
government, then beset with serious garbage problem that enticed and convinced Lexber,
Inc. to offer its properties as a landfill site, with the assurance of the opportunities
contained in the tri-partite agreement. When appellee acceded to their request, three
contracts unilaterally prepared by the City government was presented to him, the terms
and conditions of which were all established and prescribed by appellant, and appellees
mere participation in the contracts perfection was simply the affixing of his signature
therein.

Clearly, the equities of the case are with appellee Lexber, Inc. Even fair dealing alone
would have required the appellant to abide by its representations, which it did in the
inception, but was later dishonored by the new administration of Mayor Mathay,
Jr. Appellee faithfully performed its undertakings set forth in the contract, upon the
appellants assurance that sufficient funds shall come from the citys statutory contribution
to the MMA. Had it not (sic) for the said assurance, Lexber, Inc. for sure, would not have
ventured into such costly business undertaking. No one in his right frame of mind would
have entered into such kind of contract and invest his fortune unless assured of the
availability of funds to compensate its financial investment.

As correctly pointed out by the court a quo, appellant having taken advantage of and
benefited from the appellee through the assailed negotiated contract shall not be permitted
to attack it on the ground that the contract did not bear the necessary approval. [37]
 Finally, we come to the issue raised by petitioner that the Court of Appeals gravely
erred in holding that the Imus case, not the Osmea case, is applicable to the instant
controversy. We note that the Court of Appeals did not discuss either case but merely
adopted the exhaustive discussion of the trial court on the matter. Before the court a quo,
herein respondent Lexber relied on the ruling of this Court in the case of Imus Electric
Company v. Municipality of Imus,[38] wherein this Court ruled:

The defendants contend that the contract in question is null and void on the ground that
the former municipal council of Imus approved it without having the necessary funds to
pay for the value of the service to be rendered by the plaintiff for a period of ten (10)
years, which amounted to P24,300, and without the provincial treasurers previous
certificate to the effect that said funds have been appropriated and were available, in
violation of the provisions of sections 606, 607 and 608 of the Regional Administrative
Code of 1917. The above-cited legal provisions read as follows:

SEC. 606. Appropriation antecedent to making of contract. No contract involving the

expenditure of public funds shall be made until there is an appropriation therefor, the
unexpended balance of which, free of other obligations, is sufficient to cover the
proposed expenditure. This provision shall not, however, be construed to prevent the
purchasing and carrying of supplies in stock, under the regulations of the Bureau of
Audits, provided that when issued such supplies shall be charged to the proper
appropriation account.

SEC. 607. Certificate showing appropriation to meet contract. Except in the case of a
contract for personal service or for supplies to be carried in stock, no contract involving
an expenditure by the Insular Government of three thousand pesos or more shall be
entered into or authorized until the Insular Auditor shall have certified to the officer
entering into such obligation that funds have been duly appropriated for such purpose and
that the amount necessary to cover the proposed contract is available for expenditure on
account thereof. When application is made to the Insular Auditor for the certificate herein
required, a copy of the proposed contract or agreement shall be submitted to him
accompanied by a statement in writing from the officer making the application showing
all obligations not yet presented for audit which have been incurred against the
appropriation to which the contract in question would be chargeable; and such certificate,
when signed by the Auditor, shall be attached to and become a part of the proposed
contract, and the sum so certified shall not thereafter be available for expenditure for any
other purpose until the Government is discharged from the contract in question.

Except in the case of a contract for supplies to be carried in stock, no contract involving
the expenditure by any province, municipality, township, or settlement of two thousand
pesos or more shall be entered into or authorized until the treasurer of the political
division concerned shall have certified to the officer entering into such contract that funds
have been duly appropriated for such purpose and that the amount necessary to cover the
proposed contract is available for expenditure on account thereof. Such certificate, when
signed by the said treasurer, shall be attached to and become a part of the proposed
contract and the sum so certified shall not thereafter be available for expenditure for any
other purpose until the contract in question is lawfully abrogated or discharged.

For the purpose of making the certificate hereinabove required ninety per centum of the
estimated revenues and receipts which should accrue during the current fiscal year, but
which are yet uncollected, shall be deemed to be in the treasury of the particular branch of
the Government against which the obligation in question would create a charge.

SEC. 608. Void contract; Liability of officer. A purported contract entered into contrary
to the requirements of the next preceding section hereof shall be wholly void, and the
officer assuming to make such contract shall be liable to the Government or other
contracting party for any consequent damage to the same extent as if the transaction had
been wholly between private parties. (Underscoring ours)

The defendants contend that the additional appropriation made by the then municipal
council was inadequate on the ground that it was the duty of the latter to appropriate
funds for the whole terms of the contract and that the contract in question falls within the
prohibition of section 608 because in reality there was no appropriation for the sum of
P24,300, nor did the provincial treasurer certify that such appropriation was made and
that the funds for the same were available. (Underscoring ours)

The inconsistency of the defendants claim becomes obvious merely by taking into
consideration that the contract entered into by the parties was for the sale of electric
current at the rate of P4.50 monthly for every lamp or light of 50 watts, or the sum of
P202.50 every month. Under this agreement, the municipality of Imus was not bound, nor
is it bound, to pay the price of the electric current until the same has been furnished, and
inasmuch as the period of one month was made the basis thereof, there is no doubt but
that neither is the said municipality obliged to pay for the current except at the end of
every month.It is true that the duration of the contract was fixed at ten (10) years, a
period which was accepted by the municipality on the ground that only under the terms of
the contract and the law, the municipality was not bound to make advanced payments
and, consequently, there was no reason for it to appropriate funds for the said public
service except for a period of one month or one year, at most, if it had sufficient funds, in
order to comply with the provisions of section 2296 of the Revised Administrative Code,
which requires that municipalities should, at the beginning of every year, make a general
appropriation containing the probable expenses which, they would have to
incur. (Emphasis supplied)

Petitioner, on the other hand, argued that the above-quoted ruling is no longer
applicable, citing this Courts ruling in the more recent case of Osmea v. Commission on
Audit,[39] to wit:

The Auditing Code of the Philippines (P.D. 1445) further provides that no contract
involving the expenditure of public funds shall be entered into unless there is an
appropriation therefor and the proper accounting official of the agency concerned shall
have certified to the officer entering into the obligation that funds have been duly
appropriated for the purpose and the amount necessary to cover the proposed contract
for the current fiscal year is available for expenditure on account thereof. Any contract
entered into contrary to the foregoing requirements shall be VOID.

Clearly then, the contract entered into by the former Mayor Duterte was void from the
very beginning since the agreed cost for the project (P8,368,920.00) was way beyond the
appropriated amount (P5,419,180.00) as certified by the City Treasurer. Hence, the
contract was properly declared void and unenforceable in COAs 2nd Indorsement, dated
September 4, 1986. The COA declared and we agree, that:

The prohibition contained in Sec. 85 of PD 1445 (Government Auditing Code) is explicit

and mandatory. Fund availability is, as it has always been, an indispensable prerequisite
to the execution of any government contract involving the expenditure of public funds by
all government agencies at all levels. Such contracts are not to be as final and binding
unless a certification as to the funds availability is issued (Letter of Instruction No. 767, s.
1978). Antecedent advance appropriation is thus essential to government liability on
contracts. This contract being violative of the legal requirement aforequoted, the same
contravenes Sec. 85 of PD 1445 and is null and void by virtue of Sec. 87.

The trial court, which was affirmed by the Court of Appeals, concluded that:

The contention of defendant that the Imus case is no longer applicable in view of the
explicit provisions of PD 1445 is without merit. The prohibitions expressed in Sections
85, 86, and 87 of PD 1445 are already embodied in the provision of Revised
Administrative Code, specifically Sections 606, 607 and 608, yet, the Supreme Court
treated the contract therein as valid and required the defendant municipality to comply
with its obligation despite the absence of prior approved appropriation at the time of the
execution of the contract. The reason is that the obligation is not payable until the
performance of the services contracted. That is the difference between the Imus case and
the Osmea case.

In the former, the obligation to be rendered is the furnishing or sale of electric current
which the defendant municipality is not bound to pay until the same has been furnished.

While in the latter, the contract is for the construction of a modern abattoir. The amount
payable is already fixed at the time the contract was executed. Moreover, what made the
Supreme Court declare the contract entered therein as invalid is the attainment of the
finality of the findings of the Commission on Audit, which the petitioner mayor
previously invoked.

Thus, the Highest Tribunal said, and this Court quotes:

As a matter of fact, the City of Cebu relied on the above pronouncement and interposed
the same as its affirmative defense, so much so that petitioner cannot now assert that it
was void having been issued in excess of COAs jurisdiction. A party cannot invoke the
jurisdiction of a court or an administrative body to secure affirmative relief against his
opponent and after obtaining or failing to obtain such relief, repudiate or question that
same jurisdiction. It is not right for a party who has affirmed and invoked the jurisdiction
of a court in a particular matter to secure an affirmative relief, to afterwards deny the
same jurisdiction to escape a penalty.

Besides, neither the petitioner nor HFCCI questioned the ruling of COA declaring the
invalidity of the abattoir contract, thereby resulting in its finality even before the civil
case was instituted. Petitioner could have brought the case to the Supreme Court on a
petition for certiorari within thirty days from receipt of a copy of the COA decision in the
manner provided by law and the Rules of Court. A decision of the Commission or any of
its Auditor not appealed within the period provided by law, shall be final and executory.[40]

Contrary to petitioners arguments, the facts in the Osmea case are not parallel to the
facts in the instant case. While in the former the construction of an abattoir entailed the
payment in full of a fixed amount, the case at bar involved a contract for services still to
be rendered which was payable on a monthly basis, just as in the Imus case. In the latter
case, the Supreme Court did not declare the contract null and void ab initio for the reason
that appropriation for the project can be made subsequent to the execution of the
contract. Consequently, the ruling in the Imus case is germane to the instant
case.Furthermore, the trial court noted that while herein petitioner would attack the
subject contract for being fatally defective, the Commission on Audit did not declare the
said contract as null and void, unlike in the Osmea case where the questioned contract
was declared invalid by the COA. Hence, the ruling in the Osmea case finds no
application in the instant controversy.
While the contracts were admittedly negotiated contracts, this fact was never raised
by the petitioner before the trial court, Court of Appeals, and in the instant petition. The
question of the validity of the said contracts never hinged on the fact that there was no
public bidding. What is on record is that it was Mayor Simon who initiated the
negotiations to convince respondent to allow the use of its property as a dumpsite.
Public bidding may have been dispensed with, not only because time is of the essence
but in recognition of the reality that offering property to be used as a dumpsite is not an
attractive nor lucrative option for property owners. This reality is all the more glaring in
the current situation where Metro Manila local government units are seemingly unable to
cope with the disastrous lack of garbage dumping sites. A major part of the problem is
that no one wants to be the dumping ground of someone elses garbage. This problem is
compounded by recent events where tragedy has befallen scavengers and residents in a
Quezon City dumpsite that should have been closed years ago. It would no longer be
prophetic to say that had Quezon City used the subject dumpsite and discontinued the use
of the Payatas dumpsite way back in 1991, tragedy therein would have been averted.
Finally, petitioners refusal to honor the contract is not only contrary to law, but also
grossly unfair to respondent Lexber. It was petitioner that first offered and later persuaded
respondent Lexber to convert the latters property into a sanitary landfill for petitioners
exclusive use. While the property could have been used for other more lucrative and
pleasant purposes, petitioner convinced respondent Lexber by its assurances and
stipulations in the contract. In turn, respondent Lexber relied on petitioner to abide by
their contract, only to be rebuffed after petitioner had already taken initial advantage of
the facilities. By virtue of the infrastructure intended for the sanitary landfill that was
erected thereon, respondent Lexber could not divert its use to other purposes. It is but fair
that respondent Lexber be compensated for the financial losses it has incurred in
accordance with the obligation of petitioner as stipulated in the second negotiated
contract.
WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in
CA-G.R. CV No. 59541 affirming the judgment of the Regional Trial Court of Quezon
City, Branch 220 in Civil Case No. Q-94-19405 is hereby AFFIRMED in toto. The
instant petition for review is DENIED for lack of merit.
No costs.
G.R. No. 97764 August 10, 1992

LEVY D. MACASIANO, Brigadier General/PNP Superintendent, Metropolitan Traffic

Command, petitioner,
vs.
HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch 62, Regional Trial Court of
Makati, Metro Manila, MUNICIPALITY OF PARAAQUE, METRO MANILA, PALANYAG
KILUSANG BAYAN FOR SERVICE, respondents.

MEDIALDEA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the
decision of the Regional Trial Court of Makati, Branch 62, which granted the writ of preliminary
injunction applied for by respondents Municipality of Paraaque and Palanyag Kilusang Bayan for
Service (Palanyag for brevity) against petitioner herein.

The antecedent facts are as follows:

On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series of 1990 which
authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets
located at Baclaran, Paraaque, Metro Manila and the establishment of a flea market thereon. The
said ordinance was approved by the municipal council pursuant to MMC Ordinance No. 2, Series of
1979, authorizing and regulating the use of certain city and/or municipal streets, roads and open
spaces within Metropolitan Manila as sites for flea market and/or vending areas, under certain terms
and conditions.

On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s. 1990 of the
municipal council of respondent municipality subject to the following conditions:

1. That the aforenamed streets are not used for vehicular traffic, and that the majority
of the residents do not oppose the establishment of the flea market/vending areas
thereon;

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

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

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

On June 20, 1990, the municipal council of Paraaque issued a resolution authorizing Paraaque
Mayor Walfrido N. Ferrer to enter into contract with any service cooperative for the establishment,
operation, maintenance and management of flea markets and/or vending areas.

On August 8, 1990, respondent municipality and respondent Palanyag, a service cooperative,

entered into an agreement whereby the latter shall operate, maintain and manage the flea market in
the aforementioned streets with the obligation to remit dues to the treasury of the municipal
government of Paraaque. Consequently, market stalls were put up by respondent Palanyag on the
said streets.

On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan
Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. Gabriel
St. in Baclaran. These stalls were later returned to respondent Palanyag.

On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent Palanyag
giving the latter ten (10) days to discontinue the flea market; otherwise, the market stalls shall be
dismantled.

Hence, on October 23, 1990, respondents municipality and Palanyag filed with the trial court a joint
petition for prohibition and mandamus with damages and prayer for preliminary injunction, to which
the petitioner filed his memorandum/opposition to the issuance of the writ of preliminary injunction.

On October 24, 1990, the trial court issued a temporary restraining order to enjoin petitioner from
enforcing his letter-order of October 16, 1990 pending the hearing on the motion for writ of
preliminary injunction.

On December 17, 1990, the trial court issued an order upholding the validity of Ordinance No. 86 s.
1990 of the Municipality' of Paraaque and enjoining petitioner Brig. Gen. Macasiano from enforcing
his letter-order against respondent Palanyag.

Hence, this petition was filed by the petitioner thru the Office of the Solicitor General alleging grave
abuse of discretion tantamount to lack or excess of jurisdiction on the part of the trial judge in
issuing the assailed order.

The sole issue to be resolved in this case is whether or not an ordinance or resolution issued by the
municipal council of Paraaque authorizing the lease and use of public streets or thoroughfares as
sites for flea markets is valid.

The Solicitor General, in behalf of petitioner, contends that municipal roads are used for public
service and are therefore public properties; that as such, they cannot be subject to private
appropriation or private contract by any person, even by the respondent Municipality of Paraaque.
Petitioner submits that a property already dedicated to public use cannot be used for another public
purpose and that absent a clear showing that the Municipality of Paraaque has been granted by
the legislature specific authority to convert a property already in public use to another public use,
respondent municipality is, therefore, bereft of any authority to close municipal roads for the
establishment of a flea market. Petitioner also submits that assuming that the respondent
municipality is authorized to close streets, it failed to comply with the conditions set forth by the
Metropolitan Manila Authority for the approval of the ordinance providing for the establishment of
flea markets on public streets. Lastly, petitioner contends that by allowing the municipal streets to be
used by market vendors the municipal council of respondent municipality violated its duty under the
Local Government Code to promote the general welfare of the residents of the municipality.

In upholding the legality of the disputed ordinance, the trial court ruled:

. . . that Chanter II Section 10 of the Local Government Code is a statutory grant of

power given to local government units, the Municipality of Paraaque as such, is
empowered under that law to close its roads, streets or alley subject to limitations
stated therein (i.e., that it is in accordance with existing laws and the provisions of
this code).

xxx xxx xxx

 The actuation of the respondent Brig. Gen. Levi Macasiano, though apparently within
its power is in fact an encroachment of power legally vested to the municipality,
precisely because when the municipality enacted the ordinance in question the
authority of the respondent as Police Superintendent ceases to be operative on the
ground that the streets covered by the ordinance ceases to be a public thoroughfare.
(pp. 33-34, Rollo)

We find the petition meritorious. In resolving the question of whether the disputed municipal
ordinance authorizing the flea market on the public streets is valid, it is necessary to examine the
laws in force during the time the said ordinance was enacted, namely, Batas Pambansa Blg. 337,
otherwise known as Local Government Code, in connection with established principles embodied in
the Civil Code an property and settled jurisprudence on the matter.

The property of provinces, cities and municipalities is divided into property for public use and
patrimonial property (Art. 423, Civil Code). As to what consists of property for public use, Article 424
of Civil Code states:

Art. 424. Property for public use, in the provinces, cities and municipalities, consists
of the provincial roads, city streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said provinces, cities or
municipalities.

All other property possessed by any of them is patrimonial and shall be governed by
this Code, without prejudice to the provisions of special laws.

Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets
are local roads used for public service and are therefore considered public properties of respondent
municipality. Properties of the local government which are devoted to public service are deemed
public and are under the absolute control of Congress (Province of Zamboanga del Norte v. City of
Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence, local governments have no
authority whatsoever to control or regulate the use of public properties unless specific authority is
vested upon them by Congress. One such example of this authority given by Congress to the local
governments is the power to close roads as provided in Section 10, Chapter II of the Local
Government Code, which states:

Sec. 10. Closure of roads. A local government unit may likewise, through its head
acting pursuant to a resolution of its sangguniang and in accordance with existing law
and the provisions of this Code, close any barangay, municipal, city or provincial
road, street, alley, park or square. No such way or place or any part of thereof shall
be close without indemnifying any person prejudiced thereby. A property thus
withdrawn from public use may be used or conveyed for any purpose for which other
real property belonging to the local unit concerned might be lawfully used or
conveyed. (Emphasis ours).

However, the aforestated legal provision which gives authority to local government units to close
roads and other similar public places should be read and interpreted in accordance with basic
principles already established by law. These basic principles have the effect of limiting such
authority of the province, city or municipality to close a public street or thoroughfare. Article 424 of
the Civil Code lays down the basic principle that properties of public dominion devoted to public use
and made available to the public in general are outside the commerce of man and cannot be
disposed of or leased by the local government unit to private persons. Aside from the requirement of
due process which should be complied with before closing a road, street or park, the closure should
be for the sole purpose of withdrawing the road or other public property from public use when
circumstances show that such property is no longer intended or necessary for public use or public
service. When it is already withdrawn from public use, the property then becomes patrimonial
property of the local government unit concerned (Article 422, Civil Code; Cebu Oxygen, etc. et al. v.
Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481). It is only then that the
respondent municipality can "use or convey them for any purpose for which other real property
belonging to the local unit concerned might be lawfully used or conveyed" in accordance with the
last sentence of Section 10, Chapter II of Blg. 337, known as Local Government Code. In one case,
the City Council of Cebu, through a resolution, declared the terminal road of M. Borces Street,
Mabolo, Cebu City as an abandoned road, the same not being included in the City Development
Plan. Thereafter, the City Council passes another resolution authorizing the sale of the said
abandoned road through public bidding. We held therein that the City of Cebu is empowered to
close a city street and to vacate or withdraw the same from public use. Such withdrawn portion
becomes patrimonial property which can be the object of an ordinary contract (Cebu Oxygen and
Acetylene Co., Inc. v. Bercilles, et al., G.R. No.
L-40474, August 29, 1975, 66 SCRA 481). However, those roads and streets which are available to
the public in general and ordinarily used for vehicular traffic are still considered public property
devoted to public use. In such case, the local government has no power to use it for another
purpose or to dispose of or lease it to private persons. This limitation on the authority of the local
government over public properties has been discussed and settled by this Court en banc in
"Francisco V. Dacanay, petitioner v. Mayor Macaria Asistio, Jr., et al., respondents, G.R. No. 93654,
May 6, 1992." This Court ruled:

There is no doubt that the disputed areas from which the private respondents' market
stalls are sought to be evicted are public streets, as found by the trial court in Civil
Case No. C-12921. A public street is property for public use hence outside the
commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man,
it may not be the subject of lease or others contract (Villanueva, et al. v. Castaeda
and Macalino, 15 SCRA 142 citing the Municipality of Cavite v. Rojas, 30 SCRA 602;
Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; And Muyot v. De la
Fuente, 48 O.G. 4860).

As the stallholders pay fees to the City Government for the right to occupy portions of
the public street, the City Government, contrary to law, has been leasing portions of
the streets to them. Such leases or licenses are null and void for being contrary to
law. The right of the public to use the city streets may not be bargained away through
contract. The interests of a few should not prevail over the good of the greater
number in the community whose health, peace, safety, good order and general
welfare, the respondent city officials are under legal obligation to protect.

The Executive Order issued by acting Mayor Robles authorizing the use of Heroes
del '96 Street as a vending area for stallholders who were granted licenses by the
city government contravenes the general law that reserves city streets and roads for
public use. Mayor Robles' Executive Order may not infringe upon the vested right of
the public to use city streets for the purpose they were intended to serve: i.e., as
arteries of travel for vehicles and pedestrians.

Even assuming, in gratia argumenti, that respondent municipality has the authority to pass the
disputed ordinance, the same cannot be validly implemented because it cannot be considered
approved by the Metropolitan Manila Authority due to non-compliance by respondent municipality of
the conditions imposed by the former for the approval of the ordinance, to wit:

1. That the aforenamed streets are not used for vehicular traffic, and that the majority
of the residents do(es) not oppose the establishment of the flea market/vending
areas thereon;
 2. That the 2-meter middle road to be used as flea market/vending area shall be
marked distinctly, and that the 2 meters on both sides of the road shall be used by
pedestrians;

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

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

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

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

. . . There have been many instances of emergencies and fires where ambulances
and fire engines, instead of using the roads for a more direct access to the fire area,
have to maneuver and look for other streets which are not occupied by stalls and
vendors thereby losing valuable time which could, otherwise, have been spent in
saving properties and lives.

Along G.G. Cruz Street is a hospital, the St. Rita Hospital. However, its ambulances
and the people rushing their patients to the hospital cannot pass through G.G. Cruz
because of the stalls and the vendors. One can only imagine the tragedy of losing a
life just because of a few seconds delay brought about by the inaccessibility of the
streets leading to the hospital.

The children, too, suffer. In view of the occupancy of the roads by stalls and vendors,
normal transportation flow is disrupted and school children have to get off at a
distance still far from their schools and walk, rain or shine.

Indeed one can only imagine the garbage and litter left by vendors on the streets at
the end of the day. Needless to say, these cause further pollution, sickness and
deterioration of health of the residents therein. (pp. 21-22, Rollo)

Respondents do not refute the truth of the foregoing findings and observations of petitioners.
Instead, respondents want this Court to focus its attention solely on the argument that the use of
public spaces for the establishment of a flea market is well within the powers granted by law to a
local government which should not be interfered with by the courts.

Verily, the powers of a local government unit are not absolute. They are subject to limitations laid
down by toe Constitution and the laws such as our Civil Code. Moreover, the exercise of such
powers should be subservient to paramount considerations of health and well-being of the members
of the community. Every local government unit has the sworn obligation to enact measures that will
enhance the public health, safety and convenience, maintain peace and order, and promote the
general prosperity of the inhabitants of the local units. Based on this objective, the local government
should refrain from acting towards that which might prejudice or adversely affect the general
welfare.

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

The instant case as well as the Dacanay case, involves an ordinance which is void and illegal for
lack of basis and authority in laws applicable during its time. However, at this point, We find it worthy
to note that Batas Pambansa Blg. 337, known as Local Government Lode, has already been
repealed by Republic Act No. 7160 known as Local Government Code of 1991 which took effect on
January 1, 1992. Section 5(d) of the new Code provides that rights and obligations existing on the
date of effectivity of the new Code and arising out of contracts or any other source of prestation
involving a local government unit shall be governed by the original terms and conditions of the said
contracts or the law in force at the time such rights were vested.

ACCORDINGLY, the petition is GRANTED and the decision of the respondent Regional Trial Court
dated December 17, 1990 which granted the writ of preliminary injunction enjoining petitioner as
PNP Superintendent, Metropolitan Traffic Command from enforcing the demolition of market stalls
along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets is hereby
RESERVED and SET ASIDE.

SO ORDERED.
RODOLFO G. NAVARRO, VICTOR F. G.R. No. 180050
BERNAL, and
RENE O. MEDINA, Present:
Petitioners, CORONA, C.J.,
CARPIO,
- versus - CARPIO MORALES,
VELASCO, JR.,
EXECUTIVE SECRETARY EDUARDO NACHURA,
ERMITA, representing the President of the LEONARDO-DE CASTRO,
Philippines; Senate of the Philippines, BRION,
represented by the SENATE PRESIDENT; PERALTA,
House of Representatives, represented by BERSAMIN,
the HOUSE SPEAKER; GOVERNOR DEL CASTILLO,
ROBERT ACE S. BARBERS, representing ABAD,
the mother province of Surigao del Norte; VILLARAMA, JR.,
GOVERNOR GERALDINE ECLEO PEREZ,
VILLAROMAN, representing the new MENDOZA, and
Province of Dinagat Islands, SERENO, JJ.
Respondents,

CONGRESSMAN FRANCISCO T.
MATUGAS, HON. SOL T. MATUGAS,
HON. ARTURO CARLOS A. EGAY, JR.,
HON. SIMEON VICENTE G.
CASTRENCE, HON. MAMERTO D.
GALANIDA, HON. MARGARITO M.
LONGOS, and HON. CESAR M.
BAGUNDOL,
Intervenors.

Promulgated:

April 12, 2011

x-----------------------------------------------------------------------------------------x

RESOLUTION

NACHURA, J.:

For consideration of the Court is the Urgent Motion to Recall Entry of Judgment dated October 20,
2010 filed by Movant-Intervenors[1] dated and filed on October 29, 2010, praying that the Court (a) recall the
entry of judgment, and (b) resolve their motion for reconsideration of the July 20, 2010 Resolution.

To provide a clear perspective of the instant motion, we present hereunder a brief background of the
relevant antecedents
 On October 2, 2006, the President of the Republic approved into law Republic Act (R.A.) No. 9355
(An Act Creating the Province of Dinagat Islands).[2] On December 3, 2006, the Commission on Elections
(COMELEC) conducted the mandatory plebiscite for the ratification of the creation of the province under the
Local Government Code (LGC).[3] The plebiscite yielded 69,943 affirmative votes and 63,502 negative
votes.[4] With the approval of the people from both the mother province of Surigao del
Norte and the Province of Dinagat Islands (Dinagat), the President appointed the interim set of provincial
officials who took their oath of office on January 26, 2007. Later, during the May 14, 2007 synchronized
elections, the Dinagatnons elected their new set of provincial officials who assumed office on July 1, 2007.[5]

On November 10, 2006, petitioners Rodolfo G. Navarro, Victor F. Bernal and Rene O. Medina,
former political leaders of Surigao del Norte, filed before this Court a petition for certiorari and prohibition
(G.R. No. 175158) challenging the constitutionality of R.A. No. 9355.[6] The Court dismissed the petition on
technical grounds. Their motion for reconsideration was also denied.[7]

Undaunted, petitioners, as taxpayers and residents of the Province of Surigao del Norte, filed another
petition for certiorari[8] seeking to nullify R.A. No. 9355 for being unconstitutional. They alleged that the
creation of Dinagat as a new province, if uncorrected, would perpetuate an illegal act of Congress, and would
unjustly deprive the people of Surigao del Norte of a large chunk of the provincial territory, Internal Revenue
Allocation (IRA), and rich resources from the area. They pointed out that when the law was passed, Dinagat
had a land area of 802.12 square kilometers only and a population of only 106,951, failing to comply with
Section 10, Article X of the Constitution and of Section 461 of the LGC, on both counts, viz.

Constitution, Article X Local Government

Section 10. No province, city, municipality, or barangay may be created, divided,

merged, abolished, or its boundary substantially altered, except in accordance with the
criteria established in the local government code and subject to the approval by a majority
of the votes cast in a plebiscite in the political units directly affected.

LGC, Title IV, Chapter I

Section 461. Requisites for Creation. (a) A province may be created if it has an
average annual income, as certified by the Department of Finance, of not less than Twenty
million pesos (P20,000,000.00) based on 1991 constant prices and either of the following
requisites:

(i) a continuous territory of at least two thousand (2,000) square

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

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

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

On February 10, 2010, the Court rendered its Decision[9] granting the petition.[10] The Decision
declared R.A. No. 9355 unconstitutional for failure to comply with the requirements on population and land
area in the creation of a province under the LGC. Consequently, it declared the proclamation of Dinagat and
the election of its officials as null and void. The Decision likewise declared as null and void the provision on
Article 9(2) of the Rules and Regulations Implementing the LGC (LGC-IRR), stating that, [t]he land
area requirement shall not apply where the proposed province is composed of one (1) or more islands for
being beyond the ambit of Article 461 of the LGC, inasmuch as such exemption is not expressly provided in
the law.[11]
The Republic, represented by the Office of the Solicitor General, and Dinagat filed their respective
motions for reconsideration of the Decision. In its Resolution[12] dated May 12, 2010,[13] the Court denied the
said motions.[14]

Unperturbed, the Republic and Dinagat both filed their respective motions for leave of court to admit
their second motions for reconsideration, accompanied by their second motions for reconsideration. These
motions were eventually noted without action by this Court in its June 29, 2010 Resolution.[15]

Meanwhile, the movants-intervenors filed on June 18, 2010 a Motion for Leave to Intervene and to
File and to Admit Intervenors Motion for Reconsideration of the Resolution dated May 12, 2010. They
alleged that the COMELEC issued Resolution No. 8790, relevant to this case, which provides

RESOLUTION NO. 8790

WHEREAS, Dinagat Islands, consisting of seven (7) municipalities, were previously

components of the First Legislative District of the Province of Surigao del Norte. In
December 2006 pursuant to Republic Act No. 9355, the Province of Dinagat Island[s] was
created and its creation was ratified on 02 December 2006 in the Plebiscite for this purpose;

WHEREAS, as a province, Dinagat Islands was, for purposes of the May 10, 2010 National
and Local Elections, allocated one (1) seat for Governor, one (1) seat for Vice Governor, one
(1) for congressional seat, and ten (10) Sangguniang Panlalawigan seats pursuant to
Resolution No. 8670 dated 16 September 2009;
WHEREAS, the Supreme Court in G.R. No. 180050 entitled Rodolfo Navarro, et al., vs.
Executive Secretary Eduardo Ermita, as representative of the President of the Philippines, et
al. rendered a Decision, dated 10 February 2010, declaring Republic Act No. 9355
unconstitutional for failure to comply with the criteria for the creation of a province
prescribed in Sec. 461 of the Local Government Code in relation to Sec. 10, Art. X, of the
1987 Constitution;

WHEREAS, respondents intend to file Motion[s] for Reconsideration on the above decision
of the Supreme Court;

WHEREAS, the electoral data relative to the: (1) position for Member, House of
Representatives representing the lone congressional district of Dinagat Islands, (2) names of
the candidates for the aforementioned position, (3) position for Governor, Dinagat Islands,
(4) names of the candidates for the said position, (5) position of the Vice Governor, (6) the
names of the candidates for the said position, (7) positions for the ten (10) Sangguniang
Panlalawigan Members and, [8] all the names of the candidates for Sangguniang
Panlalawigan Members, have already been configured into the system and can no longer be
revised within the remaining period before the elections on May 10, 2010.

NOW, THEREFORE, with the current system configuration, and depending on whether the
Decision of the Supreme Court in Navarro vs. Ermita is reconsidered or not, the Commission
RESOLVED, as it hereby RESOLVES, to declare that:

a. If the Decision is reversed, there will be no problem since the current system
configuration is in line with the reconsidered Decision, meaning that the
Province of Dinagat Islands and the Province of Surigao del Norte remain as two
(2) separate provinces;
b. If the Decision becomes final and executory before the election, the Province of
Dinagat Islands will revert to its previous status as part of the First Legislative
District, Surigao del Norte.

But because of the current system configuration, the ballots for the Province of
Dinagat Islands will, for the positions of Member, House of Representatives,
Governor, Vice Governor and Members, Sangguniang Panlalawigan, bear only
the names of the candidates for the said positions.

Conversely, the ballots for the First Legislative District of Surigao del Norte,
will, for the position of Governor, Vice Governor, Member, House of
Representatives, First District of Surigao del Norte and Members, Sangguniang
Panlalawigan, show only candidates for the said position. Likewise, the
whole Province of Surigao del Norte, will, for the position of Governor and Vice
Governor, bear only the names of the candidates for the said position[s].

Consequently, the voters of the Province of Dinagat Islands will not be able to
vote for the candidates of Members, Sangguniang Panlalawigan, and Member,
House [of] Representatives, First Legislative District, Surigao del Norte, and
candidates for Governor and Vice Governor for Surigao del Norte. Meanwhile,
voters of the First Legislative District of Surigao del Norte, will not be able to
vote for Members, Sangguniang Panlalawigan and Member, House of
Representatives, Dinagat Islands. Also, the voters of the
whole Province of Surigao del Norte, will not be able to vote for the Governor
and Vice Governor, Dinagat Islands. Given this situation, the Commission will
postpone the elections for Governor, Vice Governor, Member, House of
 Representatives, First Legislative District, Surigao del Norte, and Members,
Sangguniang Panlalawigan, First Legislative District, Surigao del Norte, because
the election will result in [a] failure to elect, since, in actuality, there are no
candidates for Governor, Vice Governor, Members, Sangguniang Panlalawigan,
First Legislative District, and Member, House of Representatives, First
Legislative District (with Dinagat Islands) of Surigao del Norte.

c. If the Decision becomes final and executory after the election, the Province of
Dinagat Islands will revert to its previous status as part of the First Legislative
District of Surigao del Norte. The result of the election will have to be nullified
for the same reasons given in Item b above. A special election for Governor,
Vice Governor, Member, House of Representatives, First Legislative District of
Surigao del Norte, and Members, Sangguniang Panlalawigan, First District,
Surigao del Norte (with Dinagat Islands) will have to be conducted.
xxxx

SO ORDERED.

They further alleged that, because they are the duly elected officials of Surigao del Norte whose
positions will be affected by the nullification of the election results in the event that the May 12, 2010
Resolution is not reversed, they have a legal interest in the instant case and would be directly affected by the
declaration of nullity of R.A. No. 9355.Simply put, movants-intervenors election to their respective offices
would necessarily be annulled since Dinagat Islands will revert to its previous status as part of the First
Legislative District of Surigao del Norte and a special election will have to be conducted for governor, vice
governor, and House of Representatives member and Sangguniang Panlalawigan member for the First
Legislative District of Surigao del Norte. Moreover, as residents of Surigao del Norte and as public servants
representing the interests of their constituents, they have a clear and strong interest in the outcome of this case
inasmuch as the reversion of Dinagat as part of the First Legislative District of Surigao del Norte will affect
the latter province such that: (1) the whole administrative set-up of the province will have to be restructured;
(2) the services of many employees will have to be terminated; (3) contracts will have to be invalidated; and
(4) projects and other developments will have to be discontinued. In addition, they claim that their rights
cannot be adequately pursued and protected in any other proceeding since their rights would be foreclosed if
the May 12, 2010 Resolution would attain finality.

In their motion for reconsideration of the May 12, 2010 Resolution, movants-intervenors raised three (3) main
arguments to challenge the above Resolution, namely: (1) that the passage of R.A. No. 9355 operates as an act
of Congress amending Section 461 of the LGC; (2) that the exemption from territorial contiguity, when the
intended province consists of two or more islands, includes the exemption from the application of the
minimum land area requirement; and (3) that the Operative Fact Doctrine is applicable in the instant case.

In the Resolution dated July 20, 2010,[16] the Court denied the Motion for Leave to Intervene and to
File and to Admit Intervenors Motion for Reconsideration of the Resolution dated May 12, 2010 on the
ground that the allowance or disallowance of a motion to intervene is addressed to the sound discretion of the
Court, and that the appropriate time to file the said motion was before and not after the resolution of this case.

On September 7, 2010, movants-intervenors filed a Motion for Reconsideration of the July 20, 2010
Resolution, citing several rulings[17] of the Court, allowing intervention as an exception to Section 2, Rule 19
of the Rules of Court that it should be filed at any time before the rendition of judgment. They alleged that,
prior to the May 10, 2010 elections, their legal interest in this case was not yet existent. They averred that
prior to the May 10, 2010 elections, they were unaware of the proceedings in this case. Even for the sake of
argument that they had notice of the pendency of the case, they pointed out that prior to the said elections, Sol
T. Matugas was a simple resident of Surigao del Norte, Arturo Carlos A. Egay, Jr. was a member of the
Sangguniang Panlalawigan of the Second District of Surigao del Norte, and Mamerto D. Galanida was the
Municipal Mayor of Socorro, Surigao del Norte, and that, pursuant to COMELEC Resolution No. 8790, it was
only after they were elected as Governor of Surigao del Norte, Vice Governor of Surigao del Norte and
Sangguniang Panlalawigan Member of the First District of Surigao del Norte, respectively, that they became
possessed with legal interest in this controversy.

On October 5, 2010, the Court issued an order for Entry of Judgment, stating that the decision in this case had
become final and executory on May 18, 2010. Hence, the above motion.

At the outset, it must be clarified that this Resolution delves solely on the instant Urgent Motion to Recall
Entry of Judgment of movants-intervenors, not on the second motions for reconsideration of the original
parties, and neither on Dinagats Urgent Omnibus Motion, which our

esteemed colleague, Mr. Justice Arturo D. Brion considers as Dinagats third motion for
reconsideration. Inasmuch as the motions for leave to admit their respective motions for reconsideration of the
May 12, 2010 Resolution and the aforesaid motions for reconsideration were already noted without action by
the Court, there is no reason to treat Dinagats Urgent Omnibus Motion differently. In relation to this, the
Urgent Motion to Recall Entry of Judgment of movants-intervenors could not be considered as a second
motion for reconsideration to warrant the application of Section 3, Rule 15 of the Internal Rules of the
Supreme Court.[18] It should be noted that this motion prays for the recall of the entry of judgment and for the
resolution of their motion for reconsideration of the July 20, 2010 Resolution which remained unresolved. The
denial of their motion for leave to intervene and to admit motion for reconsideration of the May 12, 2010
Resolution did not rule on the merits of the motion for reconsideration of the May 12, 2010 Resolution, but
only on the timeliness of the intended intervention. Their motion for reconsideration of this denial elaborated
on movants-intervenors interest in this case which existed only after judgment had been rendered. As such,
their motion for intervention and their motion for reconsideration of the May 12, 2010 Resolution merely
stand as an initial reconsideration of the said resolution.
 With due deference to Mr. Justice Brion, there appears nothing in the records to support the claim that
this was a ploy of respondents legal tactician to reopen the case despite an entry of judgment. To be sure, it is
actually COMELEC Resolution No. 8790 that set this controversy into motion anew. To reiterate, the
pertinent portion of the Resolution reads:

c. If the Decision becomes final and executory after the election, the Province of
Dinagat Islands will revert to its previous status as part of the First Legislative District of
Surigao del Norte. The result of the election will have to be nullified for the same reasons
given in Item b above. A special election for Governor, Vice Governor, Member, House
of Representatives, First Legislative District of Surigao del Norte, and Members,
Sangguniang Panlalawigan, First District, Surigao del Norte (with Dinagat Islands) will
have to be conducted. (Emphasis supplied.)

Indeed, COMELEC Resolution No. 8790 spawned the peculiar circumstance of proper party interest
for movants-intervenors only with the specter of the decision in the main case becoming final and
executory. More importantly, if the intervention be not entertained, the movants-intervenors would be left
with no other remedy as regards to the impending nullification of their election to their respective
positions. Thus, to the Courts mind, there is an imperative to grant the Urgent Motion to Recall Entry of
Judgment by movants-intervenors.

It should be remembered that this case was initiated upon the filing of the petition for certiorari way
back on October 30, 2007. At that time, movants-intervenors had nothing at stake in the outcome of this
case. While it may be argued that their interest in this case should have commenced upon the issuance of
COMELEC Resolution No. 8790, it is obvious that their interest in this case then was more imaginary than
real. This is because COMELEC Resolution No. 8790 provides that should the decision in this case attain
finality prior to the May 10, 2010 elections, the election of the local government officials stated therein would
only have to be postponed. Given such a scenario, movants-intervenors would not have suffered any injury or
adverse effect with respect to the reversion of Dinagat as part of Surigao del Norte since they would simply
have remained candidates for the respective positions they have vied for and to which they have been elected.

For a party to have locus standi, one must allege such a personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely
depends for illumination of difficult constitutional questions. Because constitutional cases are often public
actions in which the relief sought is likely to affect other persons, a preliminary question frequently arises as
to this interest in the constitutional question raised.[19]

It cannot be denied that movants-intervenors will suffer direct injury in the event their Urgent Motion to
Recall Entry of Judgment dated October 29, 2010 is denied and their Motion for Leave to Intervene and to
File and to Admit Intervenors Motion for Reconsideration of the Resolution dated May 12, 2010 is denied
with finality. Indeed, they have sufficiently shown that they have a personal and substantial interest in the
case, such that if the May 12, 2010 Resolution be not reconsidered, their election to their respective positions
during the May 10, 2010 polls and its concomitant effects would all be nullified and be put to naught. Given
their unique circumstances, movants-intervenors should not be left without any remedy before this Court
simply because their interest in this case became manifest only after the case had already been decided. The
consequences of such a decision would definitely work to their disadvantage, nay, to their utmost prejudice,
without even them being parties to the dispute. Such decision would also violate their right to due process, a
right that cries out for protection. Thus, it is imperative that the movants-intervenors be heard on the merits of
their cause. We are not only a court of law, but also of justice and equity, such that our position and the dire
repercussions of this controversy should be weighed on the scales of justice, rather than dismissed on account
of mootness.

The moot and academic principle is not a magical formula that can automatically dissuade the courts from
resolving a case. Courts will decide cases, otherwise moot and academic, if: (1) there is a grave violation of
the Constitution; (2) there is an exceptional character of the situation and the paramount public interest is
involved; (3) the constitutional issue raised requires formation of controlling principles to guide the bench, the
bar, and the public; and (4) the case is capable of repetition yet evading review.[20]The second exception
attends this case.

This Court had taken a liberal attitude in the case of David v. Macapagal-Arroyo,[21] where technicalities of
procedure on locus standi were brushed aside, because the constitutional issues raised were of paramount
public interest or of transcendental importance deserving the attention of the Court. Along parallel lines, the
motion for intervention should be given due course since movants-intervenors have shown their substantial
legal interest in the outcome of this case, even much more than petitioners themselves, and because of the
novelty, gravity, and weight of the issues involved.

Undeniably, the motion for intervention and the motion for reconsideration of the May 12, 2010 Resolution of
movants-intervenors is akin to the right to appeal the judgment of a case, which, though merely a statutory
right that must comply with the requirements of the rules, is an essential part of our judicial system, such that
courts should proceed with caution not to deprive a party of the right to question the judgment and its effects,
and ensure that every party-litigant, including those who would be directly affected, would have the amplest
opportunity for the proper and just disposition of their cause, freed from the constraints of technicalities. [22]

Verily, the Court had, on several occasions, sanctioned the recall entries of judgment in light of attendant
extraordinary circumstances.[23] The power to suspend or even disregard rules of procedure can be so
pervasive and compelling as to alter even that which this Court itself had already declared final. [24] In this
case, the compelling concern is not only to afford the movants-intervenors the right to be heard since they
would be adversely affected by the judgment in this case despite not being original parties thereto, but also to
arrive at the correct interpretation of the provisions of the LGC with respect to the creation of local
government units. In this manner, the thrust of the Constitution with respect to local autonomy and of the
LGC with respect to decentralization and the attainment of national goals, as hereafter elucidated, will
effectively be realized.
On the merits of the motion for intervention, after taking a long and intent look, the Court finds that
the first and second arguments raised by movants-intervenors deserve affirmative consideration.

It must be borne in mind that the central policy considerations in the creation of local government units are
economic viability, efficient administration, and capability to deliver basic services to their constituents. The
criteria prescribed by the LGC, i.e., income, population and land area, are all designed to accomplish these
results. In this light, Congress, in its collective wisdom, has debated on the relative weight of each of these
three criteria, placing emphasis on which of them should enjoy preferential consideration.

Without doubt, the primordial criterion in the creation of local government units, particularly of a province, is
economic viability. This is the clear intent of the framers of the LGC. In this connection, the following
excerpts from congressional debates are quoted hereunder

HON. ALFELOR. Income is mandatory. We can even have this doubled because we thought

CHAIRMAN CUENCO. In other words, the primordial consideration here is the economic
viability of the new local government unit, the new province?

xxxx

HON. LAGUDA. The reason why we are willing to increase the income, double than the
House version, because we also believe that economic viability is really a minimum. Land
area and population are functions really of the viability of the area, because you have an
income level which would be the trigger point for economic development, population will
naturally increase because there will be an immigration. However, if you disallow the
particular area from being converted into a province because of the population problems in
the beginning, it will never be able to reach the point where it could become a province
simply because it will never have the economic take off for it to trigger off that economic
development.

Now, were saying that maybe Fourteen Million Pesos is a floor area where it could pay for
overhead and provide a minimum of basic services to the population. Over and above that,
the provincial officials should be able to trigger off economic development which will attract
immigration, which will attract new investments from the private sector. This is now the
concern of the local officials. But if we are going to tie the hands of the proponents, simply
by telling them, Sorry, you are now at 150 thousand or 200 thousand, you will never be able
to become a province because nobody wants to go to your place. Why? Because you never
have any reason for economic viability.

xxxx

CHAIRMAN PIMENTEL. Okay, what about land area?

 HON. LUMAUIG. 1,500 square kilometers

HON. ANGARA. Walang problema yon, in fact thats not very critical, yong land area
because

CHAIRMAN PIMENTEL. Okay, ya, our, the Senate version is 3.5, 3,500 square meters, ah,
square kilometers.

HON. LAGUDA. Ne, Ne. A province is constituted for the purpose of administrative
efficiency and delivery of basic services.
CHAIRMAN PIMENTEL. Right.

HON. LAGUDA. Actually, when you come down to it, when government was instituted,
there is only one central government and then everybody falls under that. But it was later on
subdivided into provinces for purposes of administrative efficiency.

CHAIRMAN PIMENTEL. Okay.

HON. LAGUDA. Now, what were seeing now is that the administrative efficiency is no
longer there precisely because the land areas that we are giving to our governors is so wide
that no one man can possibly administer all of the complex machineries that are needed.

Secondly, when you say delivery of basic services, as pointed out by Cong. Alfelor, there are
sections of the province which have never been visited by public officials, precisely because
they dont have the time nor the energy anymore to do that because its so wide. Now, by
compressing the land area and by reducing the population requirement, we are, in effect,
trying to follow the basic policy of why we are creating provinces, which is to deliver basic
services and to make it more efficient in administration.

CHAIRMAN PIMENTEL. Yeah, thats correct, but on the assumption that the province is
able to do it without being a burden to the national government. Thats the assumption.

HON. LAGUDA. Thats why were going into the minimum income level. As we said, if we
go on a minimum income level, then we say, this is the trigger point at which this
administration can take place.[25]

Also worthy of note are the requisites in the creation of a barangay, a municipality, a city, and a province as
provided both in the LGC and the LGC-IRR, viz.

For a Barangay:

LGC: SEC. 386. Requisites for Creation. (a) A barangay may be created out of a contiguous
territory which has a population of at least two thousand (2,000) inhabitants as certified by
the National Statistics Office except in cities and municipalities within Metro Manila and
other metropolitan political subdivisions or in highly urbanized cities where such territory
shall have a certified population of at least five thousand (5,000) inhabitants: Provided, That
the creation thereof shall not reduce the population of the original barangay or barangays to
less than the minimum requirement prescribed herein.
To enhance the delivery of basic services in the indigenous cultural communities, barangays
may be created in such communities by an Act of Congress, notwithstanding the above
requirement.
(b) The territorial jurisdiction of the new barangay shall be properly identified by metes and
bounds or by more or less permanent natural boundaries. The territory need not be
contiguous if it comprises two (2) or more islands.

(c) The governor or city mayor may prepare a consolidation plan for barangays, based on the
criteria prescribed in this Section, within his territorial jurisdiction. The plan shall be
submitted to the sangguniang panlalawigan or sangguniang panlungsod concerned for
appropriate action. In the case of municipalities within the Metropolitan Manila area and
other metropolitan political subdivisions, the barangay consolidation plan can be prepared
and approved by the sangguniang bayan concerned.

LGC-IRR: ARTICLE 14. Barangays. (a) Creation of barangays by the sangguniang

panlalawigan shall require prior recommendation of the sangguniang bayan.

(b) New barangays in the municipalities within MMA shall be created only by Act of
Congress, subject to the limitations and requirements prescribed in this Article.

(c) Notwithstanding the population requirement, a barangay may be created in the indigenous
cultural communities by Act of Congress upon recommendation of the LGU or LGUs where
the cultural community is located.

(d) A barangay shall not be created unless the following requisites are present:

(1) Population which shall not be less than two thousand (2,000) inhabitants, except in
municipalities and cities within MMA and other metropolitan political subdivisions as
may be created by law, or in highly-urbanized cities where such territory shall have a
population of at least five thousand (5,000) inhabitants, as certified by the NSO. The
creation of a barangay shall not reduce the population of the original barangay or
barangays to less than the prescribed minimum/
(2) Land Area which must be contiguous, unless comprised by two (2) or more islands. The
territorial jurisdiction of a barangay sought to be created shall be properly identified by
metes and bounds or by more or less permanent natural boundaries.

Municipality:

LGC: SEC. 442. Requisites for Creation. (a) A municipality may be created if it has an
average annual income, as certified by the provincial treasurer, or at least Two million five
hundred thousand pesos (P2,500,000.00) for the last two (2) consecutive years based on the
1991 constant prices; a population of at least twenty-five thousand (25,000) inhabitants as
certified by the National Statistics Office; and a contiguous territory of at least fifty (50)
square kilometers as certified by the Lands
Management Bureau: Provided, That the creation thereof shall not reduce the land area,
population or income of the original municipality or municipalities at the time of said
creation to less than the minimum requirements prescribed herein.

(b) The territorial jurisdiction of a newly-created municipality shall be properly identified by

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

(c) The average annual income shall include the income accruing to the general fund of the
municipality concerned, exclusive of special funds, transfers and non-recurring income.
(d) Municipalities existing as of the date of effectivity of this Code shall continue to exist and
operate as such. Existing municipal districts organized pursuant to presidential issuances or
executive orders and which have their respective set of elective municipal officials holding
office at the time of the effectivity of this Code shall henceforth be considered regular
municipalities.

LGC-IRR: ARTICLE 13. Municipalities. (a) Requisites for Creation A municipality shall
not be created unless the following requisites are present:

(i) Income An average annual income of not less than Two Million Five Hundred
Thousand Pesos (P2,500,000.00), for the immediately preceding two (2) consecutive
years based on 1991 constant prices, as certified by the provincial treasurer. The
average annual income shall include the income accruing to the general fund,
exclusive of special funds, special accounts, transfers, and nonrecurring income;
(ii) Population which shall not be less than twenty five thousand (25,000)
inhabitants, as certified by NSO; and

(iii) Land area which must be contiguous with an area of at least fifty (50) square
kilometers, as certified by LMB. The territory need not be contiguous if it comprises
two (2) or more islands. The requirement on land area shall not apply where the
proposed municipality is composed of one (1) or more islands. The territorial
jurisdiction of a municipality sought to be created shall be properly identified by
metes and bounds.

The creation of a new municipality shall not reduce the land area, population, and income of
the original LGU or LGUs at the time of said creation to less than the prescribed minimum
requirements. All expenses incidental to the creation shall be borne by the petitioners.

City:

LGC: SEC. 450. Requisites for Creation. (a) A municipality or a cluster of barangays may
be converted into a component city if it has an average annual income, as certified by the
Department of Finance, of at least Twenty million pesos (P20,000,000.00) for the last two (2)
consecutive years based on 1991 constant prices, and if it has either of the following
requisities:

(i) a contiguous territory of at least one hundred (100) square kilometers, as

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

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

(c) The average annual income shall include the income accruing to the general fund,
exclusive of special funds, transfers, and non-recurring income.
LGC-IRR: ARTICLE 11. Cities. (a) Requisites for creation A city shall not be created
unless the following requisites on income and either population or land area are present:

(1) Income An average annual income of not less than Twenty Million Pesos
(P20,000,000.00), for the immediately preceding two (2) consecutive years based on
1991 constant prices, as certified by DOF. The average annual income shall include the
income accruing to the general fund, exclusive of special funds, special accounts,
transfers, and nonrecurring income; and
(2) Population or land area Population which shall not be less than one hundred fifty
thousand (150,000) inhabitants, as certified by the NSO; or land area which must be
contiguous with an area of at least one hundred (100) square kilometers, as certified by
LMB. The territory need not be contiguous if it comprises two (2) or more islands or is
separated by a chartered city or cities which do not contribute to the income of the
province. The land area requirement shall not apply where the proposed city is
composed of one (1) or more islands. The territorial jurisdiction of a city sought to be
created shall be properly identified by metes and bounds.

The creation of a new city shall not reduce the land area, population, and income of the
original LGU or LGUs at the time of said creation to less than the prescribed minimum
requirements.All expenses incidental to the creation shall be borne by the petitioners.

Provinces:

LGC: SEC. 461. Requisites for Creation. (a) A province may be created if it has an average
annual income, as certified by the Department of Finance, of not less than Twenty million
pesos (P20,000,000.00) based on 1991 prices and either of the following requisites:

(i) a contiguous territory of at least two thousand (2,000) square kilometers, as

certified by the Lands Management Bureau; or,
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as
certified by the National Statistics Office:

Provided, That the creation thereof shall not reduce the land area, population, and income of
the original unit or units at the time of said creation to less than the minimum requirements
prescribed herein.

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

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

LGC-IRR: ARTICLE 9. Provinces. (a) Requisites for creation A province shall not be
created unless the following requisites on income and either population or land area are
present:

(1) Income An average annual income of not less than Twenty Million pesos
(P20,000,000.00) for the immediately preceding two (2) consecutive years based on 1991
constant prices, as certified by DOF. The average annual income shall include the
income accruing to the general fund, exclusive of special funds, special accounts,
transfers, and non-recurring income; and
(2) Population or land area Population which shall not be less than two hundred fifty
thousand (250,000) inhabitants, as certified by NSO; or land area which must be
 contiguous with an area of at least two thousand (2,000) square kilometers, as certified
by LMB. The territory need not be contiguous if it comprises two (2) or more islands or
is separated by a chartered city or cities which do not contribute to the income of the
province. The land area requirement shall not apply where the proposed province is
composed of one (1) or more islands. The territorial jurisdiction of a province sought to
be created shall be properly identified by metes and bounds.

The creation of a new province shall not reduce the land area, population, and income of the
original LGU or LGUs at the time of said creation to less than the prescribed minimum
requirements. All expenses incidental to the creation shall be borne by the petitioners.
(Emphasis supplied.)

It bears scrupulous notice that from the above cited provisions, with respect to the creation of barangays, land
area is not a requisite indicator of viability. However, with respect to the creation of municipalities,
component cities, and provinces, the three (3) indicators of viability and projected capacity to provide
services, i.e., income, population, and land area, are provided for.

But it must be pointed out that when the local government unit to be created consists of one (1) or more
islands, it is exempt from the land area requirement as expressly provided in Section 442 and Section 450 of
the LGC if the local government unit to be created is a municipality or a component city, respectively. This
exemption is absent in the enumeration of the requisites for the creation of a province under Section 461 of the
LGC, although it is expressly stated under Article 9(2) of the LGC-IRR.

There appears neither rhyme nor reason why this exemption should apply to cities and municipalities, but not
to provinces. In fact, considering the physical configuration of the Philippine archipelago, there is a greater
likelihood that islands or group of islands would form part of the land area of a newly-created province than in
most cities or municipalities. It is, therefore, logical to infer that the genuine legislative policy decision was
expressed in Section 442 (for municipalities) and Section 450 (for component cities) of the LGC, but was
inadvertently omitted in Section 461 (for provinces). Thus, when the exemption was expressly provided in
Article 9(2) of the LGC-IRR, the inclusion was intended to correct the congressional oversight in Section 461
of the LGC and to reflect the true legislative intent. It would, then, be in order for the Court to uphold the
validity of Article 9(2) of the LGC-IRR.
This interpretation finds merit when we consider the basic policy considerations underpinning the principle of
local autonomy.

Section 2 of the LGC, of which paragraph (a) is pertinent to this case, provides

Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that the
territorial and political subdivisions of the State shall enjoy genuine and meaningful local
autonomy to enable them to attain their fullest development as self-reliant communities and
make them more effective partners in the attainment of national goals. Toward this end, the
State shall provide for a more responsive and accountable local government structure
instituted through a system of decentralization whereby local government units shall be given
 more powers, authority, responsibilities, and resources. The process of decentralization shall
proceed from the national government to the local government units.

This declaration of policy is echoed in Article 3(a) of the LGC-IRR[26] and in the Whereas clauses of
Administrative Order No. 270,[27] which read

WHEREAS, Section 25, Article II of the Constitution mandates that the State shall ensure the
autonomy of local governments;

WHEREAS, pursuant to this declared policy, Republic Act No. 7160, otherwise known as the
Local Government Code of 1991, affirms, among others, that the territorial and political
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them
to attain their fullest development as self-reliant communities and make them more effective
partners in the attainment of national goals;

WHEREAS, Section 533 of the Local Government Code of 1991 requires the President to
convene an Oversight Committee for the purpose of formulating and issuing the appropriate
rules and regulations necessary for the efficient and effective implementation of all the
provisions of the said Code; and

WHEREAS, the Oversight Committee, after due deliberations and consultations with all the
concerned sectors of society and consideration of the operative principles of local autonomy
as provided in the Local Government Code of 1991, has completed the formulation of the
implementing rules and regulations; x x x

Consistent with the declared policy to provide local government units genuine and meaningful local
autonomy, contiguity and minimum land area requirements for prospective local government units should be
liberally construed in order to achieve the desired results. The strict interpretation adopted by the February 10,
2010 Decision could prove to be counter-productive, if not outright absurd, awkward, and impractical. Picture
an intended province that consists of several municipalities and component cities which, in themselves, also
consist of islands. The component cities and municipalities which consist of islands are exempt from the
minimum land area requirement, pursuant to Sections 450 and 442, respectively, of the LGC. Yet, the
province would be made to comply with the minimum land area criterion of 2,000 square kilometers, even if it
consists of several islands. This would mean that Congress has opted to assign a distinctive preference to
create a province with contiguous land area over one composed of islands and negate the greater imperative of
development of self-reliant communities, rural progress, and the delivery of basic services to the
constituency. This preferential option would prove more difficult and burdensome if the 2,000-square-
kilometer territory of a province is scattered because the islands are separated by bodies of water, as compared
to one with a contiguous land mass.

Moreover, such a very restrictive construction could trench on the equal protection clause, as it actually
defeats the purpose of local autonomy and decentralization as enshrined in the Constitution. Hence, the land
area requirement should be read together with territorial contiguity.
Another look at the transcript of the deliberations of Congress should prove enlightening:

CHAIRMAN ALFELOR. Can we give time to Congressman Chiongbian,[28] with respect to

his

CHAIRMAN LINA. Okay.

HON. CHIONGBIAN. At the outset, Chairman Lina, we would like to apprise the
distinguished Senator about the action taken by the House, on House Bill No. 7166. This was
passed about two years ago and has been pending in the Senate for consideration. This is a
bill that I am not the only one involved, including our distinguished Chairman here. But then
we did want to sponsor the bill, being the Chairman then of the Local Government.

So, I took the cudgels for the rest of the Congressmen, who were more or less interested in the
creation of the new provinces, because of the vastness of the areas that were involved.

At any rate, this bill was passed by the House unanimously without any objection. And as I
have said a while ago, that this has been pending in the Senate for the last two years. And
Sen. Pimentel himself was just in South Cotabato and he delivered a speech that he will
support this bill, and he says, that he will incorporate this in the Local Government Code,
which I have in writing from him. I showed you the letter that he wrote, and naturally, we in
the House got hold of the Senate version. It becomes an impossibility for the
whole Philippines to create a new province, and that is quite the concern of the respective
Congressmen.

Now, insofar as the constitutional provision is concerned, there is nothing to stop the mother
province from voting against the bill, if a province is going to be created.

So, we are talking about devolution of powers here. Why is the province not willing to create
another province, when it can be justified. Even Speaker Mitra says, what will happen
to Palawan?We wont have one million people there, and if you look at Palawan, there will be
about three or four provinces that will comprise that island. So, the development will be
hampered.

Now, I would like to read into the record the letter of Sen. Pimentel, dated November 2,
1989. This was practically about a year after 7166 was approved by the House, House Bill
7166.

On November 2, 1989, the Senator wrote me:

Dear Congressman Chiongbian:

We are in receipt of your letter of 17 October. Please be informed that your

House No. 7166 was incorporated in the proposed Local Government Code, Senate
Bill No. 155, which is pending for second reading.

Thank you and warm regards.

 Very truly yours,

That is the very context of the letter of the Senator, and we are quite surprised that the Senate
has adopted another position.

So, we would like because this is a unanimously approved bill in the House, thats the only bill
that is involving the present Local Government Code that we are practically considering; and
this will be a slap on the House, if we do not approve it, as approved by the lower House. This
can be [an] irritant in the approval of the Conference Committee Report. And I just want to
manifest that insofar as the creation of the province, not only in my province, but the other
provinces. That the mother province will participate in the plebiscite, they can defeat the
province, lets say, on the basis of the result, the province cannot be created if they lose in the
plebiscite, and I dont see why, we should put this stringent conditions to the private people of
the devolution that they are seeking.

So, Mr. Senator, I think we should consider the situation seriously, because, this is an
approved version of the House, and I will not be the one to raise up and question the
Conference Committee Report, but the rest of the House that are interested in this bill. And
they have been approaching the Speaker about this. So, the Speaker reminded me to make
sure that it takes the cudgel of the House approved version.

So, thats all what I can say, Mr. Senator, and I dont believe that it is not, because its the wish
of the House, but because the mother province will participate anyhow, you vote them down;
and that is provided for in the Constitution. As a matter of fact, I have seen the amendment
with regards to the creation of the city to be urbanized, subject to the plebiscite. And why
should we not allow that to happen in the provinces! In other words, we dont want the people
who wants to create a new province, as if they are left in the devolution of powers, when they
feel that they are far away from civilization.

Now, I am not talking about other provinces, because I am unaware, not aware of their
situation. But the province of South Cotabato has a very unique geographical territorial
conglomerations.One side is in the other side of the Bay, of Sarangani Bay. The capital town
is in the North; while these other municipalities are in the East and in the West. And if they
have to travel from the last town in the eastern part of the province, it is about one hundred
forty kilometers to the capital town. And from the West side, it is the same distance. And
from the North side, it is about one hundred kilometers. So that is the problem there. And
besides, they have enough resources and I feel that, not because I am interested in the
province, I am after their welfare in the future. Who am I to dictate on those people? I have no
interest but then I am looking at the future development of these areas.

As a matter of fact, if I am in politics, its incidental; I do not need to be there, but I can
foresee what the creation of a new province will bring to these people. It will bring them
prosperity; it will bring them more income, and it will encourage even foreign investors. Like
the PAP now, they are concentrating in South Cotabato, especially in the City of
General Santos and the neighboring municipalities, and they are quite interested and even the
AID people are asking me, What is holding the creation of a new province when practically
you need it? Its not 20 or 30 kilometers from the capital town; its about 140 kilometers. And
imagine those people have to travel that far and our road is not like Metropolitan Manila. That
is as far as from here to Tarlac. And there are municipalities there that are just one
municipality is bigger than the province of La Union. They have the income. Of course, they
dont have the population because thats a part of the land of promise and people
from Luzon are migrating everyday because they feel that there are more opportunities here.
So, by creating the new provinces, not only in my case, in the other cases, it will enhance the
development of the Philippines, not because I am interested in my province. Well, as far as I
am concerned, you know, I am in the twilight years of my life to serve and I would like to
serve my people well. No personal or political interest here. I hope the distinguished
Chairman of the Committee will appreciate the House Bill 7166, which the House has already
approved because we dont want them to throw the Conference Committee Report after we
have worked that the house Bill has been, you know, drawn over board and not even
considered by the Senate. And on top of that, we are considering a bill that has not yet been
passed. So I hope the Senator will take that into account.

Thank you for giving me this time to explain.

CHAIRMAN LINA. Thank you very much, Congressman James. We will look into the
legislative history of the Senate version on this matter of creation of provinces. I am sure
there was an amendment. As I said, Ill look into it. Maybe the House version was
incorporated in toto, but maybe during the discussion, their amendments were introduced and,
therefore, Senator Pimentel could not hold on to the original version and as a result new
criteria were introduced.

But because of the manifestation that you just made, we will definitely, when we reach a
book, Title IV, on the matter of provinces, we will look at it sympathetically from your end so
that the objective that you want [to] achieve can be realized. So we will look at it with
sympathy. We will review our position on the matter, how we arrived at the Senate version
and we will adopt an open mind definitely when we come into it.

CHAIRMAN ALFELOR. Kanino yan?

CHAIRMAN LINA. Book III.

CHAIRMAN ALFELOR. Title?

CHAIRMAN LINA. Title IV.

CHAIRMAN ALFELOR. I have been pondering on the case of James, especially on

economic stimulation of a certain area. Like our case, because I put myself on our province,
our province is quite very big. Its composed of four (4) congressional districts and I feel it
should be five now. But during the Batasan time, four of us talked and conversed proposing to
divide the province into two.

There are areas then, when since time immemorial, very few governors ever tread on those
areas. That is, maybe youre acquainted with the Bondoc Peninsula of Quezon, fronting that
is RagayGulf. From Ragay there is a long stretch of coastal area. From Albay going to Ragay,
very few governors ever tread [there] before, even today. That area now is infested with
NPA. That is the area of Congressman Andaya.

Now, we thought that in order to stimulate growth, maybe provincial aid can be extended to
these areas. With a big or a large area of a province, a certain administrator or provincial
governor definitely will have no sufficient time. For me, if we really would like to stimulate
growth, I believe that an area where there is physical or geographical impossibilities, where
administrators can penetrate, I think we have to create certain provisions in the law where
maybe we can treat it with special considerations.
Now, we went over the graduate scale of the Philipppine Local Government Data as far as
provinces are concerned. It is very surprising that there are provinces here which only
composed of six municipalities, eight municipalities, seven municipalities. Like in Cagayan,
Tuguegarao, there are six municipalities. Ah, excuse me, Batanes.

CHAIRMAN LINA. Will you look at the case of --- how many municipalities are there in
Batanes province?

CHAIRMAN ALFELOR. Batanes is only six.

CHAIRMAN LINA. Six town. Siquijor?

CHAIRMAN ALFELOR. Siquijor. It is region?

CHAIRMAN LINA. Seven.

CHAIRMAN ALFELOR.L Seven. Anim.

CHAIRMAN LINA. Six also.

CHAIRMAN ALFELOR. Six also.

CHAIRMAN LINA. It seems with a minimum number of towns?

CHAIRMAN ALFELOR. The population of Siquijor is only 70 thousand, not even one
congressional district. But tumaas in 1982. Camiguin, that is Region 9. Wala dito. Nagtataka
nga ako ngayon.

CHAIRMAN LINA. Camiguin, Camiguin.

CHAIRMAN ALFELOR. That is region? Camiguin has five municipalities, with a population
of 63 thousand. But we do not hold it against the province because maybe thats one stimulant
where growth can grow, can start. The land area for Camiguin is only 229 square
kilometers. So if we hard fast on requirements of, we set a minimum for every province,
palagay ko we just leave it to legislation, eh. Anyway, the Constitution is very clear that in
case we would like to divide, we submit it to a plebiscite. Pabayaan natin ang tao. Kung
maglalagay tayo ng set ng minimum, tila yata mahihirapan tayo, eh. Because what is really
the thrust of the Local Government Code? Growth. To devolve powers in order for the
community to have its own idea how they will stimulate growth in their respective areas.

So, in every geographical condition, mayroon sariling id[i]osyncracies eh, we cannot make a
generalization.

CHAIRMAN LINA. Will the creation of a province, carved out of the existing province
because of some geographical id[i]osyncracies, as you called it, stimulate the economic
growth in the area or will substantial aid coming from the national government to a particular
area, say, to a municipality, achieve the same purpose?

CHAIRMAN ALFELOR. Ano tayo dito sa budget. All right, here is a province. Usually,
tinitingnan lang yun, provision eh, hindi na yung composition eh. You are entitled to, say,
20% of the area.

Theres a province of Camarines Sur which have the same share with that of Camiguin and
Siquijor, but Camiguin is composed only of five municipalities; in Siquijor, its composed of
six, but the share of Siquijor is the same share with that of the province of Camarines Sur,
having a bigger area, very much bigger.
 That is the budget in process.

CHAIRMAN LINA. Well, as I said, we are going to consider this very seriously and even
with sympathy because of the explanation given and we will study this very carefully.[29]

The matters raised during the said Bicameral Conference Committee meeting clearly show the manifest
intention of Congress to promote development in the previously underdeveloped and uninhabited land areas
by allowing them to directly share in the allocation of funds under the

national budget. It should be remembered that, under Sections 284 and 285
of the LGC, the IRA is given back to local governments, and the sharing is based on land area, population,
and local revenue.[30]

Elementary is the principle that, if the literal application of the law results in absurdity, impossibility, or
injustice, then courts may resort to extrinsic aids of statutory construction, such as the legislative history of the
law,[31] or may consider the implementing rules and regulations and pertinent executive issuances in the nature
of executive and/or legislative construction. Pursuant to this principle, Article 9(2) of the LGC-IRR should be
deemed incorporated in the basic law, the LGC.

It is well to remember that the LGC-IRR was formulated by the Oversight Committee consisting of
members of both the Executive and Legislative departments, pursuant to Section 533[32] of the LGC. As
Section 533 provides, the Oversight Committee shall formulate and issue the appropriate rules and
regulations necessary for the efficient and effective implementation of any and all provisions of this
Code, thereby ensuring compliance with the principles of local autonomy as defined under the
Constitution. It was also mandated by the Constitution that a local government code shall be enacted by
Congress, to wit

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

These State policies are the very reason for the enactment of the LGC, with the view to attain
decentralization and countryside development. Congress saw that the old LGC, Batas Pambansa Bilang 337,
had to be replaced with a new law, now the LGC of 1991, which is more dynamic and cognizant of the needs
of the Philippines as an archipelagic country. This accounts for the exemption from the land area requirement
of local government units composed of one or more islands, as expressly stated under Sections 442 and 450 of
the LGC, with respect to the creation of municipalities and cities, but inadvertently omitted from Section 461
with respect to the creation of provinces.Hence, the void or missing detail was filled in by the Oversight
Committee in the LGC-IRR.

With three (3) members each from both the Senate and the House of Representatives, particularly the
chairpersons of their respective Committees on Local Government, it cannot be gainsaid that the inclusion by
the Oversight Committee of the exemption from the land area requirement with respect to the creation of
provinces consisting of one (1) or more islands was intended by Congress, but unfortunately not expressly
stated in Section 461 of the LGC, and this intent was echoed through an express provision in the LGC-
IRR. To be sure, the Oversight Committee did not just arbitrarily and whimsically insert such an exemption in
Article 9(2) of the LGC-IRR. The Oversight Committee evidently conducted due deliberation and
consultations with all the concerned sectors of society and considered the operative principles of local
autonomy as provided in the LGC when the IRR was formulated.[33] Undoubtedly, this amounts not only to an
executive construction, entitled to great weight and respect from this Court, [34] but to legislative construction
as well, especially with the inclusion of representatives from the four leagues of local government units as
members of the Oversight Committee.

With the formulation of the LGC-IRR, which amounted to both executive and legislative construction
of the LGC, the many details to implement the LGC had already been put in place, which Congress
understood to be impractical and not too urgent to immediately translate into direct amendments to the
LGC. But Congress, recognizing the capacity and viability of Dinagat to become a full-fledged province,
enacted R.A. No. 9355, following the exemption from the land area requirement, which, with respect to the
creation of provinces, can only be found as an express provision in the LGC-IRR. In effect, pursuant to its
plenary legislative powers, Congress breathed flesh and blood into that exemption in Article 9(2) of the LGC-
IRR and transformed it into law when it enacted R.A. No. 9355 creating the Island Province of Dinagat.

Further, the bill that eventually became R.A. No. 9355 was filed and favorably voted upon in both
Chambers of Congress. Such acts of both Chambers of Congress definitively show the clear legislative intent
to incorporate into the LGC that exemption from the land area requirement, with respect to the creation of a
province when it consists of one or more islands, as expressly provided only in the LGC-IRR. Thereby, and by
necessity, the LGC was amended by way of the enactment of R.A. No. 9355.

What is more, the land area, while considered as an indicator of viability of a local government unit, is
not conclusive in showing that Dinagat cannot become a province, taking into account its average annual
income of P82,696,433.23 at the time of its creation, as certified by the Bureau of Local Government Finance,
which is four times more than the minimum requirement of P20,000,000.00 for the creation of a province. The
delivery of basic services to its constituents has been proven possible and sustainable.Rather than looking at
the results of the plebiscite and the May 10, 2010 elections as mere fait accompli circumstances which cannot
operate in favor of Dinagats existence as a province, they must be seen from the perspective that Dinagat is
ready and capable of becoming a province. This Court should not be instrumental in stunting such
capacity. As we have held in League of Cities of the Philippines v. Commission on Elections[35]
Ratio legis est anima. The spirit rather than the letter of the law. A statute must be
read according to its spirit or intent, for what is within the spirit is within the statute although
it is not within its letter, and that which is within the letter but not within the spirit is not
within the statute. Put a bit differently, that which is within the intent of the lawmaker is as
much within the statute as if within the letter, and that which is within the letter of the statute
is not within the statute unless within the intent of the lawmakers. Withal, courts ought not to
interpret and should not accept an interpretation that would defeat the intent of the law and its
legislators.
So as it is exhorted to pass on a challenge against the validity of an act of Congress, a co-
equal branch of government, it behooves the Court to have at once one principle in mind: the
presumption of constitutionality of statutes. This presumption finds its roots in the tri-partite
system of government and the corollary separation of powers, which enjoins the three great
departments of the government to accord a becoming courtesy for each others acts, and not to
interfere inordinately with the exercise by one of its official functions. Towards this end,
courts ought to reject assaults against the validity of statutes, barring of course their clear
unconstitutionality. To doubt is to sustain, the theory in context being that the law is the
product of earnest studies by Congress to ensure that no constitutional prescription or concept
is infringed. Consequently, before a law duly challenged is nullified, an unequivocal breach
of, or a clear conflict with, the Constitution, not merely a doubtful or argumentative one, must
be demonstrated in such a manner as to leave no doubt in the mind of the Court.

WHEREFORE, the Court resolved to:

1. GRANT the Urgent Motion to Recall Entry of Judgment by movants-intervenors, dated and filed
on October 29, 2010;

2. RECONSIDER and SET ASIDE the July 20, 2010 Resolution, and GRANT the Motion for
Leave to Intervene and to File and to Admit Intervenors Motion for Reconsideration of the Resolution dated
July 20, 2010;

3. GRANT the Intervenors Motion for Reconsideration of the Resolution dated May 12, 2010. The
May 12, 2010 Resolution is RECONSIDERED and SET ASIDE. The provision in Article 9(2) of the Rules
and Regulations Implementing the Local Government Code of 1991 stating, The land area requirement shall
not apply where the proposed province is composed of one (1) or more islands, is
declared VALID. Accordingly, Republic Act No. 9355 (An Act Creating the Province of Dinagat Islands) is
declared as VALID and CONSTITUTIONAL, and the proclamation of the Province of Dinagat Islands and
the election of the officials thereof are declared VALID; and

4. The petition is DISMISSED.

No pronouncement as to costs.
 [G.R. No. 135087. March 14, 2000]

HEIRS OF ALBERTO SUGUITAN, petitioner, vs. CITY OF

MANDALUYONG, respondent. frnaics

DECISION

GONZAGA_REYES, J.:

In this petition for review on certiorari under Rule 45, petitioners[1] pray for the reversal of the Order
dated July 28, 1998 issued by Branch 155 of the Regional Trial Court of Pasig in SCA No. 875
entitled "City of Mandaluyong v. Alberto S. Suguitan, the dispositive portion of which reads as
follows:

WHEREFORE, in view of the foregoing, the instant Motion to Dismiss is hereby

DENIED and an ORDER OF CONDEMNATION is hereby issued declaring that the
plaintiff, City of Mandaluyong, has a lawful right to take the subject parcel of land
together with existing improvements thereon more specifically covered by Transfer
Certificate Of Title No. 56264 of the Registry of Deeds for Metro Manila District II for
the public use or purpose as stated in the Complaint, upon payment of just
compensation.

Accordingly, in order to ascertain the just compensation, the parties are hereby
directed to submit to the Court within fifteen (15) days from notice hereof, a list of
independent appraisers from which the Court t will select three (3) to be appointed as
Commissioners, pursuant to Section 5, Rule 67, Rules of Court.

SO ORDERED.[2]ella

It is undisputed by the parties that on October 13, 1994, the Sangguniang Panlungsod of
Mandaluyong City issued Resolution No. 396, S-1994[3] authorizing then Mayor Benjamin S. Abalos
to institute expropriation proceedings over the property of Alberto Sugui located at Boni Avenue and
Sto. Rosario streets in Mandaluyong City with an area of 414 square meters and more particularly
described under Transfer Certificate of Title No. 56264 of the Registry of Deeds of Metro Manila
District II. The intended purpose of the expropriation was the expansion of the Mandaluyong
Medical Center.

Mayor Benjamin Abalos wrote Alberto Suguitan a letter dated January 20, 1995 offering to buy his
property, but Suguitan refused to sell.[4] Consequently, on March 13, 1995, the city of Mandaluyong
filed a complaint[5] for expropriation with the Regional Trial Court of Pasig. The case was docketed
as SCA No. 875. novero

Suguitan filed a motion to dismiss[6] the complaint based on the following grounds -(1) the power of
eminent domain is not being exercised in accordance with law; (2) there is no public necessity to
warrant expropriation of subject property; (3) the City of Mandaluyong seeks to expropriate the said
property without payment of just compensation; (4) the City of Mandaluyong has no budget and
appropriation for the payment of the property being expropriated; and (5) expropriation of Suguitan'
s property is but a ploy of Mayor Benjamin Abalos to acquire the same for his personal use.
Respondent filed its comment and opposition to the motion. On October 24, 1995, the trial court
denied Suguitan's motion to dismiss.[7]

On November 14, 1995, acting upon a motion filed by the respondent, the trial court issued an order
allowing the City of Mandaluyong to take immediate possession of Suguitan's property upon the
deposit of P621,000 representing 15% of the fair market value of the subject property based upon
the current tax declaration of such property. On December 15, 1995, the City of Mandaluyong
assumed possession of the subject property by virtue of a writ of possession issued by the trial court
on December 14, 1995.[8] On July 28, 1998, the court granted the assailed order of expropriation.

Petitioner assert that the city of Mandaluyong may only exercise its delegated power of eminent
domain by means of an ordinance as required by section 19 of Republic Act (RA) No. 7160, [9] and
not by means of a mere resolution.[10] Respondent contends, however, that it validly and legally
exercised its power of eminent domain; that pursuant to article 36, Rule VI of the Implementing
Rules and Regulations (IRR) of RA 7160, a resolution is a sufficient antecedent for the filing of
expropriation proceedings with the Regional Trial Court. Respondent's position, which was upheld
by the trial court, was explained, thus:[11]

...in the exercise of the respondent City of Mandaluyong's power of eminent domain,
a "resolution" empowering the City Mayor to initiate such expropriation proceedings
and thereafter when the court has already determine[d] with certainty the amount of
just compensation to be paid for the property expropriated, then follows an Ordinance
of the Sanggunian Panlungosd appropriating funds for the payment of the
expropriated property. Admittedly, title to the property expropriated shall pass from
the owner to the expropriator only upon full payment of the just
compensation.[12] novero

Petitioners refute respondent's contention that only a resolution is necessary upon the initiation of
expropriation proceedings and that an ordinance is required only in order to appropriate the funds
for the payment of just compensation, explaining that the resolution mentioned in article 36 of the
IRR is for purposes of granting administrative authority to the local chief executive to file the
expropriation case in court and to represent the local government unit in such case, but does not
dispense with the necessity of an ordinance for the exercise of the power of eminent domain under
section 19 of the Code.[13]

The petition is imbued with merit.

Eminent domain is the right or power of a sovereign state to appropriate private property to
particular uses to promote public welfare.[14] 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.[15] Thus, the right of eminent domain appertains to every independent government without
the necessity for constitutional recognition.[16] 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 a power which would otherwise be without limit.[17] Thus, our own
Constitution provides that "[p]rivate property shall not be taken for public use without just
compensation."[18] Furthermore, the due process and equal protection clauses[19] act as additional
safeguards against the arbitrary exercise of this governmental power.

Since the exercise of the power of eminent domain affects an individual's right to private property, a
constitutionally-protected right necessary for the preservation and enhancement of personal dignity
and intimately connected with the rights to life and liberty,[20] the need for its circumspect operation
cannot be overemphasized. In City of Manila vs. Chinese Community of Manila we said:[21]

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, and the rule in that
case is that the authority must be strictly construed. No species of property is held by
individuals with greater tenacity, and none is guarded by the constitution and the
laws more sedulously, than the right to the freehold of inhabitants. When the
legislature interferes with that right, and, for greater public purposes, appropriates the
land of an individual without his consent, the plain meaning of the law should not be
 enlarged by doubt[ful] interpretation. (Bensley vs. Mountainlake Water Co., 13 Cal.,
306 and cases cited [73 Am. Dec. 576].)

The statutory power of taking property from the owner without his consent is one of
the most delicate exercise of governmental authority. It is to be watched with jealous
scrutiny. Important as the power may be to the government, the inviolable sanctity
which all free constitutions attach to the right of property of the citizens, constrains
the strict observance of the substantial provisions of the law which are prescribed as
modes of the exercise of the power, and to protect it from abuse. ...(Dillon on
Municipal Corporations [5th Ed.], sec. 1040, and cases cited; Tenorio vs. Manila
Railroad Co., 22 Phil., 411.)

The power of eminent domain is essentially legislative in nature. It is firmly settled, however, that
such power may be validly delegated to local government units, other public entities and public
utilities, although the scope of this delegated legislative power is necessarily narrower than that of
the delegating authority and may only be exercised in strict compliance with the terms of the
delegating law.[22] micks

The basis for the exercise of the power of eminent domain by local government units is section 19 of
RA 7160 which provides that:

A local government unit may, through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public use, purpose, or welfare
for the benefits 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.

Despite the existence of this legislative grant in favor of local governments, it is still the duty of the
courts to determine whether the power of eminent domain is being exercised in accordance with the
delegating law.[23] In fact, the courts have adopted a more censorious attitude in resolving questions
involving the proper exercise of this delegated power by local bodies, as compared to instances
when it is directly exercised by the national legislature.[24]

The courts have the obligation to determine whether the following requisites have been complied
with by the local government unit concerned:

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 .calr

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.[25]

In the present case, the City of Mandaluyong seeks to exercise the power of eminent domain over
petitioners' property by means of a resolution, in contravention of the first requisite. The law in this
case is clear and free from ambiguity. Section 19 of the Code requires an ordinance, not a
resolution, for the exercise of the power of eminent domain. We reiterate our ruling in Municipality of
Paraaque v. V.M. Realty Corporation[26] regarding the distinction between an ordinance and a
resolution. In that 1998 case we held that:miso

We are not convinced by petitioner's insistence that the terms "resolution" and
"ordinance" are synonymous. A municipal ordinance is different from a resolution. An
ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion
of a lawmaking body on a specific matter. An ordinance possesses a general and
permanent character, but a resolution is temporary in nature. Additionally, the two are
enacted differently -a third reading is necessary for an ordinance, but not for a
resolution, unless decided otherwise by a majority of all the Sanggunian members.

We cannot uphold respondent's contention that an ordinance is needed only to appropriate funds
after the court has determined the amount of just compensation. An examination of the applicable
law will show that an ordinance is necessary to authorize the filing of a complaint with the proper
court since, beginning at this point, the power of eminent domain is already being exercised.

Rule 67 of the 1997 Revised Rules of Court reveals that expropriation proceedings are comprised of
two stages:

(1) the first is concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in the context
of the facts involved in the suit; it ends with an order, if not in a dismissal of the
action, of condemnation declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be determined as of the date of
the filing of the complaint;

(2) the second phase is concerned with the determination by the court of the just
compensation for the property sought to be taken; this is done by the court with the
assistance of not more than three (3) commissioners.[27]

Clearly, although the determination and award of just compensation to the defendant is
indispensable to the transfer of ownership in favor of the plaintiff, it is but the last stage of the
expropriation proceedings, which cannot be arrived at without an initial finding by the court that the
plaintiff has a lawful right to take the property sought to be expropriated, for the public use or
purpose described in the complaint. An order of condemnation or dismissal at this stage would be
final, resolving the question of whether or not the plaintiff has properly and legally exercised its
power of eminent domain.

Also, it is noted that as soon as the complaint is filed the plaintiff shall already have the right to enter
upon the possession of the real property involved upon depositing with the court 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.[28] Therefore, an ordinance promulgated by the local legislative body
authorizing its local chief executive to exercise the power of eminent domain is necessary prior to
the filing by the latter of the complaint with the proper court, and not only after the court has
determined the amount of just compensation to which the defendant is entitled.basra
Neither is respondent's position improved by its reliance upon Article 36 (a), Rule VI of the IRR
which provides that:

If the LGU fails to acquire a private property for public use, purpose, or welfare
through purchase, LGU may expropriate said property through a resolution of the
sanggunian authorizing its chief executive to initiate expropriation proceedings.

The Court has already discussed this inconsistency between the Code and the IRR, which is more
apparent than real, in Municipality of Paraaque vs. V.M. Realty Corporation,[29] which we quote
hereunder:

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only
a resolution to authorize an LGU to exercise eminent domain. This is clearly
misplaced, because Section 19 of RA 7160, the law itself, surely prevails over said
rule which merely seeks to implement it. It is axiomatic that the clear letter of the law
is controlling and cannot be amended by a mere administrative rule issued for its
implementation. Besides, what the discrepancy seems to indicate is a mere oversight
in the wording of the implementing rules, since Article 32, Rule VI thereof, also
requires that, in exercising the power of eminent domain, the chief executive of the
LGU must act pursuant to an ordinance.

Therefore, while we remain conscious of the constitutional policy of promoting local autonomy, we
cannot grant judicial sanction to a local government unit's exercise of its delegated power of
eminent domain in contravention of the very law giving it such power.

It should be noted, however, that our ruling in this case will not preclude the City of Mandaluyong
from enacting the necessary ordinance and thereafter reinstituting expropriation proceedings, for so
long as it has complied with all other legal requirements.[30]

WHEREFORE, the petition is hereby GRANTED. The July 28, 1998 decision of Branch 155 of the
Regional Trial Court of Pasig in SCA No. 875 is hereby REVERSED and SET ASIDE.akin

SO ORDERED.