A REVIEWER IN LOCAL GOVERNMENT LAW PROF.

GISELLA DIZON-REYES
I. HISTORICAL BACKGROUND OF LOCAL GOVERNMENTS IN THE PHILIPPINES

“History and Evolution of “The Evolution of Local

Philippine Local Government Government in the
and Administration” Philippines”
By Proserpina Tapales By De Guzman, et al.
Pre-Spanish Period Barangays were the socio- Barangays were indigenous
economic and political units. political institutions, roughly
They are class societies. The equivalent to the Greek city-
basis of the barangay was the states. They are generally
family, enlarged into the kinship composed of 30-100
group, the clan. households, based largely on
kinship.
Each barangay is a state, which
has all four elements of a state
(people, government,
sovereignty and territory) and is
akin to city-states in Europe.
Clusters of barangays Barangays established
sometimes grouped together confederations (i.e., sultanates
(ex. Manila, under Rajah in Mindanao) which have
Soliman, Lakandula and Rajah external relations with the
Matanda) neighboring countries in SE
Asia.
There were also
“superbarangay political
institutions” (ex., Islamic
sultanates of Sulu and
Maguindanao)
A barangay was headed by a A barangay was headed by a
datu, sometimes called hari, datu, also referred to as rajah,
(who acted as legislator, judge gat or lakan. The datu exercised
and executioner) with the executive, legislative, judicial,
assistance of the council of military and religious powers.
elders, the babaylan (presides He is assisted by a council of
over religious ceremonies; also elders known as maginoos,
acts as doctor and astrologer), who served as advisers.
and the panday (responsible
over technology).
Datu’s post was not always Datuship was attained through
hereditary. It often passed on to inheritance, physical prowess,
the best, the most courageous wealth, wisdom or virtue, or a
or the brightest male in the combination of two or more of
community. But sometimes, these traits.
women ascended the tribal
throne (ex., Princess Urduja)
Spanish Period The residents of the barangays The Spaniards substituted
were portioned off to whomever barrios for barangays while
encomendero was entrusted a many of the datus became
portion of land. The Spaniards cabezas de barangay, whose
substituted barrios for task was to collect taxes.
barangays while many of the
datus became cabezas de
barangay, whose task was to
collect taxes.
Through the Royal Decree of 1583, the country was later
organized into provincias (provinces), pueblos
(municipalities), cabildos (cities) and barrios (converted

1
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
barangays).
The pueblo was headed by a
gobernadorcillo, which was
later changed to Capitan
Municipal in 1893.
The cabildo had 2 alcaldes, 8
regidores, a registrar and a
constable.
The provincias had the Alcalde
Mayor, who also presides over
the provincial court (composed
of the assessor and the notary)
A system of indirect elections
was initially utilized, where the
electoral college (principalias,
the learned taxpayers) selected
the local leaders. The parish
priest (the colonizer’s chief and
often only representative in the
locality) presides over these
elections with the head of the
local government.
The Maura Law of 1893 sought
to confer upon the towns and
provinces of Luzon and Visayas
greater measure of local
autonomy
Revolutionary Period The Malolos Constitution
provided for:
(1) the creation of municipal
assemblies to administer the
affairs of towns and provincial
assemblies for the provinces;
and
(2) autonomous local units, over
which the central government
exercises a certain degree of
supervision or intervention
The pueblo was headed by a
gobernadorcillo, who exercised
executive and judicial functions,
assisted by an assessor and a
notary.
The cabildos were municipal
corporations set up in fairly
urban areas and given
legislative authority. The
cabildo had 2 alcaldes, 8
regidores (elder-men), a
registrar and a constable.
The provincias were set up for
the convenience of
administration and constituted
the immediate agencies
through which the central
government can extend its
authority on numerous villages.
The alcaldes mayores
(governors) were appointed by
the Spanish Gov.-Gen.
Even the smallest item of local
business required approval from
Manila (the capital). The local
inhabitants were not allowed to
choose their officials and these
officials, were allowed little
discretion.
Under the Maura Law of 1893,
local citizens were allowed to
select some of their officers.
Once selected however, these
officials were subjected to
supervision by insular
authorities and had no authority
to act on purely local matters.
The main features of the local
government established by the
Malolos Constitution are:
(1) popular and direct elections;
(2)publicity of sessions;
(3) publication of budgets,
accounts, and important
ordinances;
(4)intervention of the central
government, in certain cases;
and
2
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES

(5) determination of their

taxation powers.
The town principalias elected a The distinguished inhabitants of
President, and an official for freed towns were asked to elect
police and internal order, one the chief of town, the headman
for justice and civil registry and for each barrio and three
another for collection of taxes officials. (same as Tapales).
and management of real These officials constituted the
property. popular assembly.
At the provincial level, the chief Together, these 4 officials
(president) was elected by the compose the provincial council.
town heads and there were also
three councilors for each of the
3 services, as in the case of a
town. There is also a military
commander, who has no
jurisdiction over civil affairs
except during war.

While the Malolos Constitution

provided for autonomous local
units, such local autonomy was
still curtailed given the
precarious times the
revolutionary government was
in.
American Period Local governments had to be The pueblo was now called a
created for ease of municipality and the cabildo
administration. Under Gen. was now called a city. Both are
Orders No. 43 and Act No. 82, headed by a mayor.
town (pueblo) government was
the first form of local
government established.
Eventually, town government
was composed of an elected
President, a secretary, a
treasurer, and a Chief of Police.

The organization of provinces The province is headed by the

was effected by Act. No. 83, governor.
which provided for the office of
the elected provincial governor,
treasure and supervisor of
schools. These officials served
as supervisors of the
municipalities.
The Americans maintained a While supervision was different
system of hierarchy and in character from that exercised
centralization that was attuned during the Spanish period but
to Philippine experience. This the tradition of centralism was
was because centralization was not radically changed.
so difficult to reduce.
The Executive Bureau (and
The most notable feature of later, the Department of the
Interior) was in direct control of
3
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
local government under the the various LGU’s. It issued
American regime was the fact orders and circulars, reviewed
that the local governments ordinances and resolutions,
were under the supervision of examined local budgets, and
the Executive Bureau until it served as a centre for
was transferred to the assistance to local officials.
Department of the Interior.
Commonwealth Period The 1935 CONSTI mentioned Among the significant change in
local government only in the administration of national
connection with the President’s control over the local units was
power of general supervision. the transfer of financial
supervision from the Interior
Dept. to the Finance Dept.

Under Pres. Quezon, central

supervision rapidly increased
and was personally exercised by
him to a degree previously
unheard of. (ex. Appointments
of some mayors from 1936 to
1940, presidential power to
define territorial limits and to
alter, merge, divide LGU’s,
nationalization of the police
service)
Third Republic That the Philippines became The trend from 1946 to 1972
independent did not alter the was towards decentralization.
centralist relationship between The SC moved away from its
the national and local liberal interpretation of
governments. But some notable presidential supervision and
changes happened during this went to a narrower approach.
period. Congress passed several laws:

Exercising its constitutional (1) RA 2370, amended by RA

authority to determine the
parameters of presidential
supervision, Congress passed
several laws:
(1) RA 2259 (Omnibus Law on
Cities) – provided electivity of
the position of mayors, vice-
mayors, and councilors;
(2) RA 2370, amended by RA
3590 (The Barrio Charter) –
provided for the electivity of
barrio officials;
(3) RA 2264 (Local Autonomy
Act) – pertained to greater
taxing powers to cities and
municipalities;
3590 (The Barrio Charter) –
recognized the barrio as a legal
entity.
(2) RA 2264 (Local Autonomy
Act) – also reorganized the
structure of the provincial
government and, in doing so,
diminished national control over
both provincial budgeting and
the planning and
implementation of public
improvements.
(3) RA 5185 (Decentralization
Act) – also removed national
approval over a number of local
actions and increased the
shares of provinces in the
4
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
(4) RA 5185 (Decentralization internal revenue collections
Act) – authorized local
governments to supplement the
national government in
agricultural extension and rural
health work.

Under Martial Law
The 1973 CONSTI provided for a The 1973 CONSTI allowed the
separate Article on Local President to continue the
Government, mandating exercise of legislative power,
Congress to pass a local including the power to create,
government code. divide, merge, abolish and later
the boundaries of LGU’s.
An Integrated Reorganization
Plan was accomplished (through The martial law regime also
the first martial law presidential renamed some of the LGU’s:
decree) resulting into the barangays for barrios and
delineation of the Philippines sanggunian for council.
into 11 regions and the
establishment of the Dept. of
Local Government and
Community Development. To
the DLGCD was delegated the
President’s power of general
supervision over local
governments.

Added functions to the DLGCD

include the management of
cooperatives and the training of
local officials.

Barrios were renamed into

barangays and councils were
renamed into sanggunians.

As chief legislator, Marcos The Sangguniang Bayan of the

issued quite a number of provinces is composed of the
decrees affecting local members of the provincial
government: board, the vice-governor,
representatives of each of the
(1) PD 824 – the integration of municipalities within the
Metro Manila into a political province, and the president of
region under the governance of the Katipunan ng mga
the Metropolitan Manila Kabataang Barangay in the
Commission with Imelda as province.
governor.
The Sangguniang Bayan of the
(2) PD 826 – brought about the cities and municipalities is
expansion of the membership of composed of the members of
local councils (inclusion of the councils, including the vice-
sectoral representatives and mayor, and as many barangay
youth leaders), making several captains and representatives
Metro Manila councils too big
5
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
and unwieldy. from other sectors as there
were presidential appointee-
(3) The creation of special members.
regions out of the Muslim areas
of Regions IX and XII. The local chief executives were
the presiding officers of the
sangguniang bayan.

Several organizations of these

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

The Kabataang Barangay was

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

New Republic The Batasang Pambansa Among the significant

enacted the Local Government provisions in the newly-enacted
Code codifying several PD’s LGC was the principle of liberal
affecting local government interpretation of local
(including the old Local Tax government powers and a
Code). Among the changes system of recall.
brought about by this Code was
the creation of LGU’s based on
income and population; the
classification cites into highly
urbanized and component
cities.

Aquino Administration The new Local Government (De Guzman’s article ends with
Code was enacted in 1991. the drafting of the 1987
While somewhat a watered- CONSTI)
down version of its author’s
original proposal, it still
considered as a landmark piece
of legislation.

The Code’s most important

feature is the decentralization

6
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
of five basic services – health,
agriculture, social welfare,
public works, and environment
and natural resources.

Other important features

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

II. NATURE AND STATUS highly centralized in Manila, is thereby

A. Definitions
1. Municipal Corporation - A body
politic and corporate constituted by the
incorporation of the inhabitants for the
purpose of local government thereof. It
is established by law partly as an
agency of the state to assist in the civil
government of the country but chiefly
to regulate and administer the local or
internal affairs of the city, town, or
district which is incorporated.
(MARTIN)
deconcentrated, enabling especially the
peripheral local government units to
develop not only at their own pace and
discretion but also with their own
resources and assets. (Alvarez vs.
Guingona, Basco vs. PAGCOR)
3. National Government – refers to the
entire machinery of the central
government, as distinguished from the
different forms of local governments.
(PIMENTEL, citing the Admin Code,
Sec. 2, par. 2). It oversees the local
governments.

2. Local Government - is a political Local government interchangeable with

subdivision of the State which is municipal corporations.
constituted by law and possessed of
substantial control over its own affairs. GD-R: They are interchangeable because a
Remaining to be an intra sovereign local government is in fact a corporation for
subdivision of one sovereign nation, but public purpose.
not intended, however, to be an
imperium in imperio, the local Alvarez vs. Guingona
government unit is autonomous in the (1996)
sense that it is given more powers,
authority, responsibilities and FACTS: HB No. 8817, entitled "An Act
resources. Power which used to be Converting the Municipality of Santiago into an
7
A REVIEWER IN LOCAL GOVERNMENT LAW
Independent Component City to be known as
the City of Santiago," was filed in the HOR.
Meanwhile, a counterpart of HB No. 8817,
Senate Bill No. 1243, entitled, "An Act
Converting the Municipality of Santiago into an
Independent Component City to be Known as
the City of Santiago," was filed in the Senate
just after the House of Representatives had
conducted its first public hearing on HB No.
8817.
These two bills eventually became RA 7720.
Petitioners contend that RA 7720 is
unconstitutional since:
• The Act did not originate exclusively
from in the House as mandated by Sec.
24, Art. VI of the 1987 Constitution.
• Santiago has not met the minimum
average annual income required under
Sec. 450 of the LGC for it to be
converted into a component city. (The
petitioners argued that the income of
an LGU does not include the IRA. The
average annual income of Santiago was
more than P20M. It is reduced to only
P13M, however, if the IRA is excluded
from the computation)
WON RA 7720 is unconstitutional.
HELD: NO. RA 7720 is constitutional.
• A bill of local application like HB No. 8817
should, by constitutional prescription,
originate exclusively in the HOR. In this
case, it cannot be denied that HB No. 8817
was filed in the HOR first before SB No.
1243 was filed in the Senate. The filing of
HB No. 8817 was thus precursive not only
of the said Act in question but also of SB
No. 1243. Thus, HB No. 8817, was the bill
that initiated the legislative process that
culminated in the enactment of Republic
Act No. 7720. No violation of Section 24,
Article VI, of the 1987 Constitution is
perceptible under the circumstances
attending the instant controversy.
PROF. GISELLA DIZON-REYES
The filing in the Senate of a substitute bill
in anticipation of its receipt of the bill from
the House, does not contravene the
constitutional requirement that a bill of
local application should originate in the
House of Representatives, for as long as
the Senate does not act thereupon until it
receives the House bill. (Tolentino vs. Sec.
of Finance)
• Internal Revenue Allotments form part of
the income of Local Government Units. The
IRAs are items of income because they
form part of the gross accretion of the
funds of the local government unit. The
IRAs regularly and automatically accrue to
the local treasury without need of any
further action on the part of the local
government unit. They thus constitute
income which the local government can
invariably rely upon as the source of much
needed funds.
The acquisition of resources necessary to
discharge its powers and effectively carry
out its functions is effected through the
vesting in every LGU of:
1. The right to create and broaden its own
source of revenue;
2. The right to be allocated a just share in
national taxes, such share being in the
form of Internal Revenue Allotments
(IRAs); and
3. The right to be given its equitable share
in the proceeds of the utilization and
development of the national wealth, if
any, within its territorial boundaries.
The funds generated from local taxes, IRAs
and National wealth utilization proceeds
accrue to the general fund of the LGU and
are used to finance its operations, subject
to specified modes of spending the same
as provided for in the LGC and its
implementing rules and regulations.
Income- all revenues and receipts collected
or received forming the gross accretions of
funds of the LGU.
Basco vs. PAGCOR
8
A REVIEWER IN LOCAL GOVERNMENT LAW
(1991)
FACTS: PAGCOR was created under P.D. 1896
to enable the Government to regulate and
centralize all games of chance authorized by
existing franchise or permitted by law. To
attain these objectives PAGCOR is given
territorial jurisdiction all over the Philippines.
Under its Charter's repealing clause, all laws,
decrees, executive orders, rules and
regulations, inconsistent therewith, are
accordingly repealed, amended or modified.
Petitioners, are questioning the validity of P.D.
No. 1869. They allege that the same is "null
and void" for being "contrary to morals, public
policy and public order," monopolistic and
tends toward "crony economy", and is violative
of the equal protection clause and local
autonomy as well as for running counter to the
state policies enunciated in Sections 11
(Personal Dignity and Human Rights), 12
(Family) and 13 (Role of Youth) of Article II,
Section 1 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of
the 1987 Constitution. Moreover, it constitutes
a waiver of a right prejudicial to a 3rd person
with a right recognized by law. (Allegedly, it
waived the Manila City government’s right to
impose taxes and license fees, thus violating
local autonomy)
WON PD 1896 constitutes a waiver of the
right of the City of Manila to impose
taxes and legal fees.
HELD: NO. This doctrine emanates from the
“supremacy” of the National Government over
local governments.
1. The City of Manila, being a mere
Municipal corporation has no inherent
right to impose taxes. Its "power to tax"
therefore must always yield to a
legislative act which is superior having
been passed upon by the state itself
which has the "inherent power to tax”.
2. The Charter of the City of Manila is
subject to control by Congress. It
PROF. GISELLA DIZON-REYES
should be stressed that "municipal
corporations are mere creatures of
Congress" which has the power to
"create and abolish municipal
corporations" due to its "general
legislative powers".
3. The City of Manila's power to impose
license fees on gambling, has long
been revoked. As early as 1975, the
power of local governments to regulate
gambling thru the grant of "franchise,
licenses or permits" was withdrawn by
P.D. No. 771 and was vested
exclusively on the National
Government.
4. Local governments have no power to
tax instrumentalities of the National
Government. PAGCOR is a government
owned or controlled corporation with an
original charter. All of its shares of
stocks are owned by the National
Government. In addition to its
corporate powers, it also exercises
regulatory powers.
WON PD 1896 violates local autonomy.
HELD: NO. The principle of local autonomy
under the 1987 Constitution simply means
"decentralization". As to what state powers
should be "decentralized" and what may be
delegated to local government units remains a
matter of policy, which concerns wisdom. It is
therefore a political question. What is settled is
that the matter of regulating, taxing or
otherwise dealing with gambling is a State
concern and hence, it is the sole prerogative of
the State to retain it or delegate it to local
governments.
B. Nature and Status of Municipal
Corporations
MARTIN:
It is a subordinate branch of the government
of the State, and municipal administration as
an instrumentality of state administration. It
exercises delegated powers of government. Its
charter is granted for the better government of
the particular areas or districts.
9
A REVIEWER IN LOCAL GOVERNMENT LAW
It is a political division of the state and variedly
described as an arm of the state, a miniature
state, an instrumentality of the state, a mere
creature of the same, an agent of the state,
and the like.
Elements of a municipal corporation:
1. A legal corporation or incorporation;
2. A corporate name by which the artificial
personality is known and in which all
corporate acts are done;
3. Inhabitants constituting the population,
who are invested with the political and
corporate powers which are executed
through duly constituted officers and
agents;
4. A territory within which local civil
government / corporate functions are
exercised.
C. Kinds of Municipal Corporations
Civil Code
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities
for public interest or purpose, created by law;
their personality begins as soon as they have
been constituted according to law;
(3) Corporations, partnerships and associations
for private interest or purpose to which the law
grants a juridical personality, separate and
distinct from that of each shareholder, partner
or member. (35a)
Art. 45. Juridical persons mentioned in Nos. 1
and 2 of the preceding article are governed by
the laws creating or recognizing them.
Private corporations are regulated by laws of
general application on the subject.
Partnerships and associations for private
interest or purpose are governed by the
provisions of this Code concerning
partnerships. (36 and 37a)
PROF. GISELLA DIZON-REYES
Art. 46. Juridical persons may acquire and
possess property of all kinds, as well as incur
obligations and bring civil or criminal actions,
in conformity with the laws and regulations of
their organization. (38a)
Art. 47. Upon the dissolution of corporations,
institutions and other entities for public
interest or purpose mentioned in No. 2 of
Article 44, their property and other assets shall
be disposed of in pursuance of law or the
charter creating them. If nothing has been
specified on this point, the property and other
assets shall be applied to similar purposes for
the benefit of the region, province, city or
municipality which during the existence of the
institution derived the principal benefits from
the same. (39a)
MARTIN:
A corporation is an artificial being created by
operation of law, having the right of
succession and the powers, attributes, and
properties expressly authorized by law or
incident to its existence (Act 1459, Sec. 2). It is
described as “an artificial being, invisible,
intangible, and existing only in contemplation
of law”.
Private corporations are those formed for
some private purpose, benefit, aim, or end and
are organized wholly for the profit and
advantage of their own members, and cannot
constitutionally be granted governmental
powers. They are governed by the Corporation
Code.
Public corporations are those formed or
organized for the government of a portion of
the State, for the accomplishment of its own
public works. (examples: governments of
provinces, chartered cities, barangays). They
are created by their charters and other laws.
They are further classified into:
1. Municipal Corporation Proper –
generally refers to incorporated
cities, towns, or villages invested
with the power of local legislation
and administration.
10
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
2. Quasi-Municipal Corporation - Criteria to determine whether a
another term for a Quasi- corporation is municipal or quasi-
corporation; they are created as municipal:
agencies of the State for a narrow
and limited purpose. They are • Voluntary or involuntary nature of the
sometimes “involuntary” corporation
corporations and are only local
organizations which, for purpose of • Existence or nonexistence of a charter
civil administration, are invested
• Whether the purpose of the corporation is
with few characteristics of corporate
solely as a governmental agency or one for
existence. They consist of various
self-government
local government areas established
to aid in the administration of public Distinction between municipal
functions. (examples: counties corporation proper and public
school districts, fire districts, corporation
hospital districts water districts,
etc.) All municipal corporations are public
corporations but not all public corporations are
municipal corporations. (“Public corporation” is
a broader category)

D. Dual Nature

1. Dual nature and functions of

municipal corporations
Distinction between municipal
corporation proper and quasi-municipal LGC, Sec. 15. Every local government unit
corporation created or recognized under this Code is a
body politic and corporate endowed with
Municipal Quasi-municipal powers to be exercised by it in conformity with
Corporation corporation law. As such, it shall exercise powers as a
political subdivision of the National
It is governed by its It operates directly as
Government and as a corporate entity
charter. an agency of the state
representing the inhabitants of its territory.
to help in the
administration of
MARTIN:
public functions.
They have powers They don’t have Every municipal corporation has a two-fold
and liabilities of self- powers and liabilities character:
government. of self-government. • Public / Governmental – The
They are called into They are local corporation acts as an agent of the
existence either at subdivisions of the State for the government of the
direct solicitation or state, created by territory and the people within the
by the free consent of sovereign legislative municipal limits. It exercises a part of
the persons power of its own the sovereignty of the state by
composing them. sovereign will and delegation (i.e., police power, taxation,
without particular eminent domain)
solicitation, consent or
concurrent action of • Private – The corporation acts in a
the people who similar category as a business
inhabit them. corporation, doing functions not strictly
governmental or political. It stands for
the community in the administration of
11
A REVIEWER IN LOCAL GOVERNMENT LAW
local affairs, beyond the sphere of the
public purposes for which its
government powers are conferred.
Villas vs. City of Manila
(1911)
FACTS: The petitioner in this case was a
creditor of the Ayuntamiento of Manila as it
existed before the cession of the Philippine
Islands to the United States by the Treaty of
Paris of December 10, 1898. The action was
brought upon the theory that the city, under
its present charter from the Government of the
Philippine Islands, was the same juristic
person, and liable upon the obligations of the
old city.
The City of Manila argued that its charter has
no reference to obligations or contracts of the
old city; that their case is analogous to a
principal and agent, where the sovereign gets
changed, the city, as agent of the State, could
no longer be held accountable for debts of the
previous sovereign; that the city of Manila has
been reincorporated under Act 183 of the
Philippine Commission and thus not liable for
the said obligations.
The Philippine SC held that the present
municipality is a totally different corporate
entity and in no way liable for the debts of the
Spanish municipality. The case was appealed
to the US SC.
WON the city of Manila is still liable for
the obligations of the city incurred prior
to the cession to the US.
HELD: YES. Municipal corporations exercise
powers which are governmental and powers
which are of a private or business character. In
the one character a municipal corporation is a
governmental subdivision, and for that
purpose exercises by delegation a part of the
sovereignty of the state. In the other character
it is a mere legal entity or juristic person. In
the latter character it stands for the
community in the administration of local
affairs wholly beyond the sphere of the public
purpose for which its governmental powers are
conferred.
PROF. GISELLA DIZON-REYES
Municipal laws that regulate private and
domestic rights continue in force until
abrogated or changed by the new ruler. Only
laws of a political character are totally
abrogated or changed by the new ruler. The
property rights relinquished by Spain are
limited to those which belong to the public
domain. The juristic identity of the corporation
has been in no wise affected, and, in law, the
present city is, in every legal sense, the
successor of the old. As such it is entitled to
the property and property rights of the
predecessor corporation, and is, in law, subject
to all of its liabilities.
Absent any express legislative declaration,
there is no reason to suppose that
reincorporation intended to permit an escape
from the obligations of the old city.
Lidasan vs. COMELEC
(1967)
FACTS: The President signed into law RA
4790, creating the new municipality of
Dianaton, Lanao del Sur. Some of the barrios
included in the new municipality came from
municipalities of Cotabato. Prompted by the
coming elections, COMELEC adopted a
resolution which affirms the new municipality.
As the law stood, twelve barrios - in two
municipalities in the province of Cotabato —
are transferred to the province of Lanao del
Sur. This brought about a change in the
boundaries of the two provinces. Apprised of
this development, the Office of the President,
through the Assistant Executive Secretary,
recommended to Comelec that the operation
of the statute be suspended until "clarified by
correcting legislation."
The COMELEC, stood by its own interpretation,
and declared that the statute "should be
implemented unless declared unconstitutional
by the Supreme Court." Lidasan argues that
the law is unconstitutional for violating the one
bill, one subject rule.
WON RA 4790 is unconstitutional for
violating the one bill, one subject rule.
12
A REVIEWER IN LOCAL GOVERNMENT LAW
HELD: YES. In the CAB, the title — "An Act
Creating the Municipality of Dianaton, in the
Province of Lanao del Sur" — projects the
impression that solely the province of Lanao
del Sur is affected by the creation of Dianaton.
Not the slightest intimation is there that
communities in the adjacent province of
Cotabato are incorporated in this new Lanao
del Sur town. The transfer of a sizeable portion
of territory from one province to another of
necessity involves reduction of area,
population and income of the first and the
corresponding increase of those of the other.
This is as important as the creation of a
municipality. And yet, the title did not reflect
this fact.
WON RA 4790 may still be salvaged with
reference to the 9 barrios in Lanao del
Sur, with the mere nullification of the
portion thereof which took away the
twelve barrios in the municipalities of
Cotabato.
HELD: NO. Municipal corporations perform
twin functions. Firstly, they serve as an
instrumentality of the State in carrying out the
functions of government. Secondly, they act as
an agency of the community in the
administration of local affairs. It is in the latter
character that they are a separate entity
acting for their own purposes and not a
subdivision of the State.
Consequently, several factors come to the fore
in the consideration of whether a group of
barrios is capable of maintaining itself as an
independent municipality. Amongst these are
population, territory, and income. When the
foregoing bill was presented in Congress,
unquestionably, the totality of the 21barrios—
not 9 barrios—was in the mind of the
proponent thereof. That this is so, is plainly
evident by the fact that the bill itself,
thereafter enacted into law, states that the
seat of the government is in Togaig, which is a
barrio in Cotabato. And then the reduced area
poses a number of questions, to which the SC
may not supply the answers. With the known
premise that Dianaton was created upon the
basic considerations of progressive
community, large aggregate population and
PROF. GISELLA DIZON-REYES
sufficient income, the SC may not now say that
Congress intended to create Dianaton with
only nine—of the original twenty-one—barrios,
with a seat of government still left to be
conjectured. For, this unduly stretches judicial
interpretation of congressional intent beyond
credibility point. To do so, indeed, is to pass
the line which circumscribes the judiciary and
tread on legislative premises
Republic vs. City of Davao
(2002)
FACTS: The City of Davao filed an application
for a Certificate of Non-Coverage (CNC) for its
proposed project, the Davao City Sports Dome
with the Environmental Management Bureau
(EMB) with the required documents. EMB
denied the application after finding that the
proposed project was w/in an environmentally
critical area. It also held that Davao must
undergo the environmental impact assessment
(EIA) to secure Environmental Compliance
Certificate (ECC) before it can proceed with
construction of its project pursuant to Sec 2 of
PD 1586, Environmental Impact Statement
System, in relation to Sec 4 PD 1151,
Philippine Environment Policy. Davao argues
that its proposed project was neither an
environmentally critical project nor within an
environmentally critical area; thus it was
outside the scope of the EIA system.
The TC ruled in favor of Davao, holding that
only agencies and instrumentalities of the
national government, including government
owned or controlled corporations, as well as
private corporations, firms and entities are
mandated to go through the EIA process for
their proposed projects which have significant
effect on the quality of the environment. An
LGU, not being an agency or instrumentality of
the National Government, is deemed excluded
under the principle of expressio unius est
exclusio alterius.
WON the City of Davao was within the
scope of the EIA.
HELD: YES. An LGU is a body politic and
corporate endowed with powers to be
13
A REVIEWER IN LOCAL GOVERNMENT LAW
exercised inconformity with law. It has dual
functions:
• Governmental – concerns health,
safety, advancement, of public good
and welfare. It acts as an agency of
national government; and
• Proprietary – seeks to obtain special
corporate benefits or earn pecuniary
profit and intended for private
advantage and benefit. Acts as agent of
community.
As a body politic endowed with governmental
functions, LGU has the duty to promote the
people’s right to a balanced ecology (Sec. 16,
LGC) and to ensure quality of environment.
Pursuant to this, Davao cannot claim
exemption from the coverage of EIS law which
has same the objectives.
Civil Code defines a person as either natural or
juridical. The state and its subdivisions i.e.
LGU’s are juridical persons. Thus, LGU’s are
not excluded from EIS law.
Section 1 of EIS law intends to implement
state policy to achieve a balance between
socio-economic development and
environmental protection. The Whereas clause
of the same law stresses that this balance can
only be achieved through a comprehensive
and integrated program where all the sectors
of the community – government and private –
are involved. Thus, LGU’s as part of the
machinery of the government cannot be
deemed outside the scope of the EIS law.
HOWEVER, since it is clear that the said
project is not classified as environmentally
critical nor within critical area, DENR has no
choice but to issue the CNC. It is a ministerial
duty that can be compelled by a writ of
mandamus.
GD-R: Ma’am believes that Environmental
protection is still not fully devolved therefore
Congress still oversees it closely. Hence, the
title of the case: “Republic vs. City of Davao”.
PROF. GISELLA DIZON-REYES
2. Purposes
MARTIN:
Municipal corporations are created for a two-
fold purpose:
• To serve as an agency or instrument of
the state in carrying on the functions of
government which the state cannot
conveniently exercise; and
• To act as an agency of the inhabitants
of the community in the regulation of
municipal franchises and public utilities
promotion, management, of local affairs,
maintenance of water system, ferries,
wharves, etc.
3. General Powers and Attributes
(See Secs. 6-24 of the LGC; they will be
thoroughly discussed later in the
syllabus)
III. GENERAL PRINCIPLES AND POLICIES
1987 CONSTI, Art. X, Section 1. The
territorial and political subdivisions of the
Republic of the Philippines are the provinces,
cities, municipalities, and barangays. There
shall be autonomous regions in Muslim
Mindanao and the Cordilleras as hereinafter
provided.
PIMENTEL:
• Congress cannot simply pass a law to
create another territorial and political
subdivision other than those exclusively
listed in this provision. A constitutional
amendment is required to do so.
• NOTE: Only the ARMM (RA 6734) was
successfully created and approved in a
plebiscite. The proposed CAR (RA 6766)
was rejected in the plebiscite held in the
said region.
1987 CONSTI, Art. X, Section 3. The
Congress shall enact a local government code
14
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
which shall provide for a more responsive and PIMENTEL:
accountable local government structure • Special metropolitan political subdivisions
instituted through a system of decentralization created under this provision do not
with effective mechanisms of recall, initiative, comprise another territorial and political
and referendum, allocate among the different subdivision similar to that created in
local government units their powers, Section 1 of this Article.
responsibilities, and resources, and provide for
the qualifications, election, appointment and • NOTE: RA 7924 created the MMDA, the
removal, term, salaries, powers and functions agency that administers the metro-wide
and duties of local officials, and all other basic services affecting the LGU’s of Metro
matters relating to the organization and Manila.
operation of the local units.
• “Metro-wide services” - those services
which have metro-wide impact and
transcend local political boundaries or
PIMENTEL:
entail huge expenditures such that it would
• The following are the notable features of not be viable for said services to be
the LGC passed by Congress: provided by the individual local
− System of decentralization government units (LGUs) comprising
− Power of recall of abusive officers Metropolitan Manila. Its scope cover the
vested in the people following:
− Power of independent initiation and − Development planning
approval of local legislation vested − Transport and traffic management
in the people − Solid waste disposal and
− Power of voicing out the people’s management
stand on local issues through − Flood control and sewerage
referenda management
− Qualifications of local elective − Urban renewal, zoning, and land use
officials planning, and shelter services
− Manner of election of local officials − Health and sanitation, urban
− Term of office, salaries and protection and pollution control
emoluments of local officials − Public safety
− Appointment and discipline of local
government officials
• HOWEVER, the powers of the MMDA are
limited to the following acts: formulation,
• NOTE: The LGC did not impliedly repeal the coordination, regulation, implementation,
PAGCOR Charter (Magtajas vs.Pryce preparation, management, monitoring,
Properties Corp.) setting of policies, installation of a system
and administration. There is no syllable
1987 CONSTI, Art. X, Section 11. The in R.A. No. 7924 that grants the MMDA
Congress may, by law, create special police power, let alone legislative
metropolitan political subdivisions, subject to a power. All its functions are administrative
plebiscite as set forth in Section 10 hereof. The in nature and these are actually summed
component cities and municipalities shall up in the charter itself. (MMDA vs. Bel-Air
retain their basic autonomy and shall be Village Association)
entitled to their own local executive and
legislative assemblies. The jurisdiction of the 1987 CONSTI, Art. X, Section 12. Cities
metropolitan authority that will thereby be that are highly urbanized, as determined by
created shall be limited to basic services law, and component cities whose charters
requiring coordination. prohibit their voters from voting for provincial

15
A REVIEWER IN LOCAL GOVERNMENT LAW
elective officials, shall be independent of the
province. The voters of component cities
within a province, whose charters contain no
such prohibition, shall not be deprived of their
right to vote for elective provincial officials.
PIMENTEL:
• This system of classification is based upon
the cities’ regular annual income, which
would tend to show WON a city is capable
of existence and development as a
relatively independent social, economic,
and political unit. It would also show
whether the city has sufficient economic or
industrial activity as to warrant its
independence from the province where it is
geographically situated. Cities with smaller
income need the continued support of the
provincial government thus justifying the
continued participation of the voters in the
election of provincial officials in some
instances. (Ceniza vs. COMELEC)
• The practice of allowing voters in one
component city to vote for provincial
officials and denying the same privilege to
voters in another component city is a
matter of legislative discretion which
violates neither the Constitution (equal
protection) nor the voter's right of suffrage.
(supra)
LGC, SEC 1. Title. - This Act shall be known
and cited as the "Local Government Code of
1991".
LGC, SEC. 2. Declaration of Policy. –
(a) It is hereby declared the policy of the State
that the territorial and political subdivisions of
the State shall enjoy genuine and meaningful
local autonomy to enable them to attain their
fullest development as self-reliant
PROF. GISELLA DIZON-REYES
communities and make them more effective
partners in the attainment of national goals.
Toward this end, the State shall provide for a
more responsive and accountable local
government structure instituted through a
system of decentralization whereby local
government units shall be given more powers,
authority, responsibilities, and resources. The
process of decentralization shall proceed from
the national government to the local
government units.
(b) It is also the policy of the State to ensure
the accountability of local government units
through the institution of effective
mechanisms of recall, initiative and
referendum.
(c) It is likewise the policy of the State to
require all national agencies and offices to
conduct periodic consultations with
appropriate local government units, non-
governmental and people's organizations, and
other concerned sectors of the community
before any project or program is implemented
in their respective jurisdictions.
PIMENTEL:
• This is basically a reiteration of the most
important policies on local autonomy
enshrined in the CONSTI:
− Genuine and meaningful local
autonomy – even barangays are
meant to possess this so that they
may develop fully as self-reliant
communities (De Leon vs. Esguerra)
− Accountable local officials –
gives rise to people empowerment
through the vesting in the
constituents the powers of initiative,
referendum and recall to effectively
express their will.
− Mandatory annual periodic
consultation - this promotes
smoother and harmonious
relationships not only between the
central government and the LGU’s
but also between the government
(local and central) and the people.
16
A REVIEWER IN LOCAL GOVERNMENT LAW
(To prevent the Chico Dam fiasco
from happening again)
LGC, SEC. 3. Operative Principles of
Decentralization. - The formulation and
implementation of policies and measures on
local autonomy shall be guided by the
following operative principles:
(a) There shall be an effective allocation
among the different local government units of
their respective powers, functions,
responsibilities, and resources;
(b) There shall be established in every local
government unit an accountable, efficient, and
dynamic organizational structure and
operating mechanism that will meet the
priority needs and service requirements of its
communities;
(c) Subject to civil service law, rules and
regulations, local officials and employees paid
wholly or mainly from local funds shall be
appointed or removed, according to merit and
fitness, by the appropriate appointing
authority;
(d) The vesting of duty, responsibility, and
accountability in local government units shall
be accompanied with provision for reasonably
adequate resources to discharge their powers
and effectively carry out their functions;
hence, they shall have the power to create and
broaden their own sources of revenue and the
right to a just share in national taxes and an
equitable share in the proceeds of the
utilization and development of the national
wealth within their respective areas;
(e) Provinces with respect to component cities
and municipalities, and cities and
municipalities with respect to component
barangays, shall ensure that the acts of their
component units are within the scope of their
prescribed powers and functions;
(f) Local government units may group
themselves, consolidate or coordinate their
PROF. GISELLA DIZON-REYES
efforts, services, and resources for purposes
commonly beneficial to them;
(g) The capabilities of local government units,
especially the municipalities and barangays,
shall be enhanced by providing them with
opportunities to participate actively in the
implementation of national programs and
projects;
(h) There shall be a continuing mechanism to
enhance local autonomy not only by legislative
enabling acts but also by administrative and
organizational reforms;
(i) Local government units shall share with the
national government the responsibility in the
management and maintenance of ecological
balance within their territorial jurisdiction,
subject to the provisions of this Code and
national policies;
(j) Effective mechanisms for ensuring the
accountability of local government units to
their respective constituents shall be
strengthened in order to upgrade continually
the quality of local leadership;
(k) The realization of local autonomy shall be
facilitated through improved coordination of
national government policies and programs
and extension of adequate technical and
material assistance to less developed and
deserving local government units;
(l) The participation of the private sector in
local governance, particularly in the delivery of
basic services, shall be encouraged to ensure
the viability of local autonomy as an
alternative strategy for sustainable
development; and
(m) The national government shall ensure
that decentralization contributes to the
continuing improvement of the performance of
local government units and the quality of
community life.
PIMENTEL:
• These provisions are meant to:
17
A REVIEWER IN LOCAL GOVERNMENT LAW
− guide the national government in
formulating and implementing
policies and measures on local
autonomy and decentralization
− give leverage to local officials to
enable them to monitor and, to
some extent, demand the
implementation of decentralization.
• Section 12, Article X of the Constitution is
explicit in that aside from highly-urbanized
cities, component cities whose charters
prohibit their voters from voting for
provincial elective officials are independent
of the province. In the same provision, it
provides for other component cities within
a province whose charters do not provide a
similar prohibition. (Abella vs. COMELEC)
Hence, cities are classified into highly
urbanized, component and independent
component.
• Before the effectivity of the LGC, the
protection of the environment was lodged
in the DENR. Now, this duty is shared by
the national government with the LGU’s
(example: mandatory consultations)
HOWEVER, the LGU’s must not supplant or
negate the national government policies on
environment.
• Modernization and development of the
nation must be tempered with a concern
for sound ecology and wholesome
environment.
LGC, SEC. 4. Scope of Application. - This
Code shall apply to all provinces, cities,
municipalities, barangays, and other political
subdivisions as may be created by law, and, to
the extent herein provided, to officials, offices,
or agencies of the national government.
PIMENTEL:
• “Other political subdivisions” – refers to
special metropolitan areas and
autonomous political units. (NOTE: The
ARMM is covered by the LGC until they
shall have enacted their own Local
Government Code)
PROF. GISELLA DIZON-REYES
• The national officials, offices or agencies
mentioned in this provision refers to those
whose personnel and functions are
devolved and discharged to appropriate
LGU’s (example: DSWD, DOH, DA, DOT,
DILG, DENR – to the extent that its shares
with the LGU’s functions relating to
ecology)
LGC, SEC. 5. Rules of Interpretation. - In
the interpretation of the provisions of this
Code, the following rules shall apply:
(a) Any provision on a power of a local
government unit shall be liberally interpreted
in its favor, and in case of doubt, any question
thereon shall be resolved in favor of devolution
of powers and of the lower local government
unit. Any fair and reasonable doubt as to the
existence of the power shall be interpreted in
favor of the local government unit concerned;
(b) In case of doubt, any tax ordinance or
revenue measure shall be construed strictly
against the local government unit enacting it,
and liberally in favor of the taxpayer. Any tax
exemption, incentive or relief granted by any
local government unit pursuant to the
provisions of this Code shall be construed
strictly against the person claiming it.
(c) The general welfare provisions in this Code
shall be liberally interpreted to give more
powers to local government units in
accelerating economic development and
upgrading the quality of life for the people in
the community;
(d) Rights and obligations existing on the date
of effectivity of this Code and arising out of
contracts or any other source of prestation
involving a local government unit shall be
governed by the original terms and conditions
of said contracts or the law in force at the time
such rights were vested; and
(e) In the resolution of controversies arising
under this Code where no legal provision or
jurisprudence applies, resort may be had to
the customs and traditions in the place where
the controversies take place.
18
A REVIEWER IN LOCAL GOVERNMENT LAW
PIMENTEL:
• Interpretation comes into play only when
the law does not speak in clear and
categorical language. (Saculdito vs.
Montejo)
• Every LGU shall exercise the powers
expressly granted, those necessarily
implied therefrom, as well as powers
necessary, appropriate, or incidental for its
efficient and effective governance, and
those which are essential to the promotion
of the general welfare. (LGC, Sec. 16)
• Custom - a rule of conduct formed by
repetition of acts, uniformly observed
(practiced) as a social rule, legally binding
and obligatory". The law requires that "a
custom must be proved as a fact,
according to the rules of evidence". A local
custom as a source of right cannot be
considered by a court of justice unless such
custom is properly established by
competent evidence like any other fact.
(Yao Kee vs. Sy-Gonzales)
According to Gorospe, Filipino customary
law (adat) synthesizes morality, legality
and religion. Hence, in case of conflict
between the adat and any exterior law
(i.e., civil law, externally imposed religious
law) the adat prevails.
• Tradition – an inherited principle,
standard or practice or bodies of these,
serving as the established guide of an
individual or group; a cultural feature
preserved or evoked from the past of a
tribe or cultural community.
HOWEVER, in Badua vs. Cordillera Bodong
Administration, the SC held that since the
creation of the Cordillera Autonomous
Region was rejected the Cordillera
Autonomous Region did not come to be.
Hence, the indigenous and special courts
nor the tribal courts for the indigenous
cultural communities of the Cordillera
region, do not legally exist. They are not a
part of the Philippine judicial system which
PROF. GISELLA DIZON-REYES
consists of the Supreme Court and the
lower courts which have been established
by law.
A. Local Autonomy
PIMENTEL:
• Autonomy – comes from the Greek word
“autonomos” (to live under one’s laws); it
is the state of independence and self-
government.
• In Philippine context, local autonomy is
the shift of the responsibilities and powers
of governance (albeit limited in character)
from the national government to the LGU’s.
It means a more responsive and
accountable local government structure
instituted through a system of
decentralization. HOWEVER, it does not
make local governments sovereign within
the state. (Alvarez vs. Guingona, Basco vs.
Batanes)
1987 CONSTI
Art. II, Section 25. The State shall ensure
the autonomy of local governments.
Art. X, Section 2. The territorial and political
subdivisions shall enjoy local autonomy.
PIMENTEL:
• NOTE: While local autonomy is meant to
break up the monopoly of the national
government over the affairs of local
governments, it is not meant to usher
federalism.
Pimentel vs. Aguirre
(2000)
FACTS: President Ramos issued AO 372
entitled “Adoption of Economy Measures for FY
1998”, which includes the following provisions:
19
A REVIEWER IN LOCAL GOVERNMENT LAW
• Section 1 directed all government
departments and agencies, including LGUs,
to reduce total expenditures for the year
by at least 25%.
• Section 4 provided that the amount
equivalent to 10% of the internal revenue
allotment to LGUs shall be withheld
pending the assessment and evaluation by
the Development Budget Coordinating
Committee of the emerging fiscal situation.
AO 43 was issued by President Estrada when
he assumed office. This reduced the amount
withheld to 5%.
Pimentel sought to annul Sections 1 & 4 of
Administrative Order No. 372. He argues that
the president would in effect exercise the
power of control over LGU’s, when only
supervision is allowed by the CONSTI.
The Solicitor General contended that this was
issued to alleviate economic difficulties, that
the AO merely “directs” LGUs to reduce their
expenditures and that the 10% withholding is
only temporary.
WON the said sections of the AO are valid
exercises of the President's power of
general supervision over local
governments.
HELD: YES for Section 1. While the
wordings of Sec. 1 have a rather commanding
tone, and while the requirements of the LGC
(Sec. 284) have not been satisfied, the
directive to implement measures that will
reduce total expenditures by 25% is merely
advisory in character, and does not constitute
a mandatory or binding order that interferes
with local autonomy. All concerned could do
well to heed this advisory. It is understood,
however, that no legal sanction may be
imposed upon LGUs and their officials who do
not follow such advice.
NO for Section 4. A basic feature of local
fiscal autonomy is the automatic release of the
shares of the LGUs in the national revenue.
This is mandated by the Constitution and the
LGC. Although what is provided for in Section 4
PROF. GISELLA DIZON-REYES
is merely temporary (pending assessment &
evaluation by DBCC), it is equivalent to a
holdback, which means “something held back
or withheld, often temporarily.” Hence, the
temporary nature of the retention by the
national government does not matter. Any
retention is prohibited.
Moreover, there are several requisites before
the President may interfere in local fiscal
matters: (1) an unmanaged public sector
deficit of the national government; (2)
consultations with the presiding officers of the
Senate and the HOR and the presidents of the
various local leagues; and (3) the
corresponding recommendation of the
secretaries of the Department of Finance,
Interior and Local Government, and Budget
and Management. Furthermore, any
adjustment in the allotment shall in no case be
less than thirty percent (30%) of the collection
of national internal revenue taxes of the third
fiscal year preceding the current one.
Under the Philippine concept of local
autonomy, only administrative powers over
local affairs are delegated to political
subdivisions. To enable the country to develop
as a whole, the programs and policies effected
locally must be integrated and coordinated
towards a common national goal. Thus, policy-
setting for the entire country still lies in the
President and Congress. Municipal
governments are still agents of the national
government.
San Juan vs. CSC
(1991)
FACTS: Gov. San Juan appointed Santos as
Acting PBO (Provincial Budget Officer) of Rizal
Province and informed DBM Region IV Director,
asking him to endorse the appointment.
However, the Director recommended the
appointment of Almajose as PBO since she is
the only CPA among the contenders. DBM
Usec. signed the appointment papers of
Almajose without the knowledge of Gov. San
Juan. The new Reg. IV Director informed Gov.
San Juan that Santos was not qualified and
asked that he submit 3 other nominees.
However, Gov. San Juan learned of Almajoses’s
appointment by the Usec and filed a letter-
20
A REVIEWER IN LOCAL GOVERNMENT LAW
protest with the DBM Secretary. DBM ruled
that letter-protest is not meritorious. MFR was
denied. Thus, Gov. San Juan appealed to Civil
Service Commission (CSC) which issued a
resolution dismissing Gov. San Juan’s claim.
WON the DBM can appoint another
person if the governor recommend an
unqualified person to the position of
Provincial Budget Officer.
HELD: NO. The DBM cannot appoint anyone it
wants when the recomendee of the Governor
is unqualified.
The issue involves the application of a most
important constitutional policy and principle,
that of local autonomy. The clear mandate on
local autonomy must be obeyed. Where a law
is capable of two interpretations, one in
favor of centralized power in Malacañang
and the other beneficial to local
autonomy, the scales must be weighed in
favor of autonomy.
When CSC interpreted the recommending
power of the Provincial Governor as purely
directory, it went against the letter and spirit
of the constitutional provisions on local
autonomy. If the DBM Secretary jealously
hoards the entirety of budgetary powers and
ignores the right of local governments to
develop self-reliance and resoluteness in the
handling of their own funds, the goal of
meaningful local autonomy is frustrated and
set back.
The DBM may appoint only from the list of
qualified recommendees nominated by the
Governor. If none is qualified, he must return
the list of nominees to the Governor explaining
why no one meets the legal requirements and
ask for new recommendees who have the
necessary eligibilities and qualifications.
Our national officials should not only comply
with the constitutional provisions on local
autonomy but should also appreciate the
spirit of liberty upon which these provisions
are based.
PROF. GISELLA DIZON-REYES
1987 CONSTI, Art. X, Section 4. The
President of the Philippines shall exercise
general supervision over local governments.
Provinces with respect to component cities and
municipalities, and cities and municipalities
with respect to component barangays, shall
ensure that the acts of their component units
are within the scope of their prescribed powers
and functions.
PIMENTEL:
• NOTE: Supervision, not control! The
President even has to exercise such power
through the larger LGU’s WRT their
component LGU’s. This power is part of the
system of checks and balances.
− Supervision means overseeing or
the authority of an officer to see
that the subordinate officers
perform their duties. The
President's power of general
supervision means no more than
the power of ensuring that laws are
faithfully executed, or that
subordinate officers act within the
law. Supervision is not incompatible
with discipline. (Joson vs. Executive
Secretary)
− Supervision is not a meaningless
thing. It is an active power. It is
certainly not without limitation, but
it at least implies authority to
inquire into facts and conditions
(investigation) in order to render
the power real and effective. If
supervision is to be conscientious
and rational, and not automatic and
brutal, it must be founded upon a
knowledge of actual facts and
conditions disclosed after careful
study and investigation. (Planas vs.
Gil)
− Control, on the other hand, "means
the power of an officer to alter or
modify or nullify or set aside what a
subordinate had done in the
performance of their duties and to
substitute the judgment of the
former for that of the latter.”
(Pimentel vs. Aguirre, San Juan vs.
CSC)
21
A REVIEWER IN LOCAL GOVERNMENT LAW
Ganzon vs. CA
(1991)
FACTS: A series of administrative complaints,
ten in number, was filed against Mayor Ganzon
by various city officials, on various charges,
among them, abuse of authority, oppression,
grave misconduct, disgraceful and immoral
conduct, intimidation, culpable violation of the
Constitution, and arbitrary detention.
Finding probable grounds and reasons, the
DILG Secretary issued a preventive suspension
order for a period of sixty days. In the other
case, he ordered Guanzon's second preventive
suspension for another sixty (60) days.
Amidst the two successive suspensions, Mayor
Ganzon instituted an action for prohibition
against the respondent in the RTC. Presently,
he instituted an action for prohibition, in the
respondent CA. Meanwhile, the DILG Secretary
issued another order, preventively suspending
Mayor Ganzon for another sixty days, the third
time in twenty months, and designating
meantime the Vice-Mayor as acting mayor.
Undaunted, Mayor Ganzon commenced before
the CA, a petition for prohibition. However, the
CA dismissed all the cases. Ganzon cries foul,
arguing that he was denied due process and
that the President has no power to investigate
or suspend local officials because of the
deletion of a clause in the present CONSTI.
Whether or not the DILG Secretary, as
the President's alter ego, can suspend
and/or remove local officials.
HELD: YES. Notwithstanding the change in
the constitutional language, the charter did
not intend to divest the legislature of its right
or the President of her prerogative as
conferred by existing legislation to provide
administrative sanctions against local officials.
It is our opinion that the omission (of "as may
be provided by law") signifies nothing more
than to underscore local governments'
autonomy from congress and to break
Congress' "control" over local government
affairs. The Constitution did not, however,
intend, for the sake of local autonomy, to
PROF. GISELLA DIZON-REYES
deprive the legislature of all authority over
municipal corporations, in particular,
concerning discipline. the deletion of "as may
be provided by law" was meant to stress, sub
silencio, the objective of the framers to
strengthen local autonomy by severing
congressional control of its affairs, as observed
by the Court of Appeals, like the power of local
legislation. The Constitution did nothing more,
however, and insofar as existing legislation
authorizes the President (through the
Secretary of Local Government) to proceed
against local officials administratively, the
Constitution contains no prohibition.
It is noteworthy that under the Charter, "local
autonomy" is not instantly self-executing, but
subject to, among other things, the passage of
a local government code, a local tax law,
income distribution legislation, and a national
representation law, and measures designed
to realize autonomy at the local level. It is also
noteworthy that in spite of autonomy, the
Constitution places the local government
under the general supervision of the
Executive. It is noteworthy finally, that the
Charter allows Congress to include in the local
government code provisions for removal of
local officials, which suggest that Congress
may exercise removal powers, and as the
existing Local Government Code has done,
delegate its exercise to the President.
In resume the Court is laying down the
following rules:
1. Local autonomy, under the
Constitution, involves a mere
decentralization of administration, not
of power, in which local officials remain
accountable to the central government
in the manner the law may provide;
2. The new Constitution does not
prescribe federalism;
3. The change in constitutional language
(with respect to the supervision clause)
was meant but to deny legislative
control over local governments; it did
not exempt the latter from legislative
regulations provided regulation is
consistent with the fundamental
premise of autonomy;
22
A REVIEWER IN LOCAL GOVERNMENT LAW
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; and
5. "Supervision" and "investigation" are
not inconsistent terms; "investigation"
does not signify "control" (which the
President does not have).
HOWEVER: While the President, through the
DILG Secretary is not precluded from
exercising a legal power, it appears that the
DILG is exercised such power oppressively and
with a grave abuse of discretion. What bothers
the Court, and what indeed looms very large,
is the fact that since the Mayor is facing ten
administrative charges, the Mayor is in fact
facing the possibility of 600 days of
suspension, in the event that all ten cases
yield prima facie findings. The Court is not of
course tolerating misfeasance in public office
(assuming that Ganzon is guilty of
misfeasance) but it is certainly another
question to make him serve 600 days of
suspension, which is effectively, to suspend
him out of office.
1987 CONSTI, Art. X, Section 11. The
Congress may, by law, create special
metropolitan political subdivisions, subject to a
plebiscite as set forth in Section 10 hereof. The
component cities and municipalities shall
retain their basic autonomy and shall be
entitled to their own local executive and
legislative assemblies. The jurisdiction of the
metropolitan authority that will thereby be
created shall be limited to basic services
requiring coordination.
1987 CONSTI, Art. X, Section 12. Cities
that are highly urbanized, as determined by
law, and component cities whose charters
prohibit their voters from voting for provincial
elective officials, shall be independent of the
province. The voters of component cities
PROF. GISELLA DIZON-REYES
within a province, whose charters contain no
such prohibition, shall not be deprived of their
right to vote for elective provincial officials.
Tan v COMELEC
(1986)
FACTS: BP 885 was passed (“An Act Creating
the Province of Negros del Norte.”) Tan et al.,
who are residents of the Province of Negros
Occidental, filed with the SC a case for
Prohibition for the purpose of stopping
respondents COMELEC from conducting the
plebiscite, required by the said law. The BP
provided that the plebiscite was to be
conducted 120 days from the approval of the
Act and that the President was to appoint the
first officials.
Tan et al. contend that BP 885 is
unconstitutional and it is not in complete
accord with the Local Government Code. The
Constitution states that no province, city,
municipality, or barrio may be created,
divided, merged, abolished, or its boundaries
substantially altered, except in accordance
with the criteria established in the Local
Government Code, subject to approval by a
majority of votes cast in a plebiscite. The LGC
set as a standard that a province must have at
least 3,500 square kilometers as its territory.
The Solicitor General argued that BP 885
enjoys a presumption of legality and that the
question is moot since the province of Negros
del Norte had already been proclaimed after
the plebiscite which was held (notwithstanding
the case) confined only to the inhabitants of
the territory of Negros del Norte, to the
exclusion of the voters from the rest of the
province of Negros Occidental (parent
province).
WON the province of Negros del Norte
was validly created.
HELD: NO. Considering that the legality of the
plebiscite itself is challenged for non-
compliance with constitutional requisites, the
fact that such plebiscite had been held and a
new province proclaimed and its officials
23
A REVIEWER IN LOCAL GOVERNMENT LAW
appointed, this case cannot truly be viewed as
already moot and academic.
It can be plainly seen from Section 3 of Article
XI of the 1973 CONSTI makes it imperative
that there be first obtained "the approval of a
majority of votes in the plebiscite in the unit or
units affected" whenever a province is
created, divided or merged and there is
substantial alteration of the boundaries. It is
thus inescapable to conclude that the
boundaries of the existing province of Negros
Occidental would necessarily be substantially
altered by the division of its existing
boundaries in order that there can be created
the proposed new province of Negros del
Norte. Plain and simple logic will demonstrate
that two political units would be affected. The
first would be the parent province of Negros
Occidental because its boundaries would be
substantially altered. The other affected entity
would be composed of those in the area
subtracted from the mother province to
constitute the proposed province of Negros del
Norte.
The Court noted that the case of Paredes vs.
Executive Secretary, which involved the
creation of a new municipality where the
parent unit was not involved, could not be
considered as a precedent. The reasons in this
case invoked by respondents herein were
formerly considered acceptable because of the
views then taken that local autonomy would
be better promoted. However, even this
consideration no longer retains persuasive
value. That case involved a barangay while
this case involves a province.
Almost half of the sugar plantations would be
dismembered form the parent province and
some of its most important cities. Hence, the
remaining portion of the parent province is as
much an area affected. The substantial
alteration of the boundaries of the parent
province, not to mention the other adverse
economic effects it might suffer, eloquently
argue the points raised by the petitioners.
The SC also considered the new province as
lacking in the territory requirement since the
land mass of the new territory was only 2,856
PROF. GISELLA DIZON-REYES
square kilometers. The Court rejected the
suggestion of the Solicitor General that even
the area of the EEZ should be considered in
determining the territorial requirement.
Cordillera Broad Coalition v. COA
(1990)
FACTS: After the 1996 EDSA Revolution,
Balweg, broke off on ideological grounds from
the CPP-NPA. After President Aquino was
installed into office, she advocated a policy of
national reconciliation. The Cordillera People’s
Liberation Army (CPLA) heeded this call.
Aqiuno and Balweg arrived at a joint
agreement to draft an Executive Order to
create a preparatory body that could perform
policy-making and administrative functions
and undertake consultations and studies
leading to a draft organic act for the
Cordilleras. Pursuant to the joint agreement,
E.O. 220, creating the Cordillera Administrative
Region (CAR) was signed into law.
During the pendency of this case, R.A. No.
6766 (Organic Act of CAR) was enacted and
signed into law. The Act recognizes the CAR
and the offices and agencies created under
E.O. 220 and its transitory nature is reinforced.
Cordillera Broad Coalition assailed E.O. 220 on
the primary ground that the President pre-
empts the enactment of an organic act by
Congress and the approval of such act through
a plebiscite.
WON E.O. 220 was invalid based on the
grounds stated.
HELD: NO. EO 220 does not create the
autonomous region contemplated in the
Constitution. It merely provides for transitory
measures in anticipation of the enactment of
an organic act and the creation of an
autonomous region. In short, it prepares the
ground for autonomy. This does not
necessarily conflict with the provisions of the
Constitution on autonomous regions. The
complex procedure for the creation of an
autonomous region in the Cordilleras will take
time. The President, in 1987 still exercising
legislative powers, as the first Congress had
not yet convened, saw it fit to provide for
24
A REVIEWER IN LOCAL GOVERNMENT LAW
some measures to address the urgent needs of
the Cordilleras in the meantime that the
organic act had not yet been passed and the
autonomous region created. These measures
are in E.O. No. 220, and they do not violate the
Constitution.
The bodies created by E.O. 220 do not
supplant the existing local governmental
structure, nor are they autonomous
government agencies. They merely constitute
the mechanism for an "umbrella" that brings
together the existing local governments, the
agencies of the National Government, the
ethno-linguistic groups or tribes, and NGOs in
a concerted effort to spur development in the
Cordilleras.
Neither did E.O. 220 contravene the
Constitution by creating a new territorial and
political subdivision. The CAR is not a public
corporation or a territorial and political
subdivision. It does not have a separate
juridical personality, unlike provinces, cities
and municipalities. Neither is it vested with the
powers that are normally granted to public
corporations (the power to sue and be sued,
the power to own and dispose of property, the
power to create its own sources of revenue,
etc.). The CAR was created primarily to
coordinate the planning and implementation of
programs and services in the covered areas.
The CAR is in the same genre as the
administrative regions created under the
Reorganization Plan, albeit under E.O. No. 220.
The operation of the CAR requires the
participation not only of the line departments
and agencies of the National Government but
also the local governments, ethno-linguistic
groups and NGOs in bringing about the desired
objectives and the appropriation of funds
solely for that purpose.
Nor is E.O. 220 diminished the local autonomy
of the covered provinces and city. It must be
clarified that the constitutional guarantee of
local autonomy in the Constitution refers to
the administrative autonomy of local
government units or, cast in more technical
language, the decentralization of government
authority.
PROF. GISELLA DIZON-REYES
On the other hand, the creation of autonomous
regions in Muslim Mindanao and the
Cordilleras, which is peculiar to the 1987
Constitution contemplates the grant of political
autonomy and not just administrative
autonomy these regions. Thus, the provision in
the Constitution for an autonomous regional
government with a basic structure consisting
of an executive department and a legislative
assembly and special courts with personal,
family and property law jurisdiction in each of
the autonomous regions
GD-R: In relation to the ARMM, what does
the CONSTI envision, when it refers to
local autonomy and decentralization? The
following are excerpts from Disomangcop vs.
Datumanong (2004):
In Cordillera Broad Coalition v. Commission on
Audit, the Court, with the same composition,
ruled without any dissent that the creation of
autonomous regions contemplates the grant of
political autonomy—an autonomy which is
greater than the administrative autonomy
granted to local government units. It held that
"the constitutional guarantee of local
autonomy in the Constitution (Art. X, Sec. 2)
refers to administrative autonomy of local
government units or, cast in more technical
language, the decentralization of government
authority…. On the other hand, the creation of
autonomous regions in Muslim Mindanao and
the Cordilleras, which is peculiar to the 1987
Constitution, contemplates the grant of
political autonomy and not just administrative
autonomy to these regions.”
And by regional autonomy, the framers
intended it to mean "meaningful and authentic
regional autonomy." As articulated by a
Muslim author, substantial and meaningful
autonomy is "the kind of local self-government
which allows the people of the region or area
the power to determine what is best for their
growth and development without undue
interference or dictation from the central
government.”
To this end, Section 16, Article X, limits the
power of the President over autonomous
regions. In essence, the provision also curtails
25
A REVIEWER IN LOCAL GOVERNMENT LAW
the power of Congress over autonomous
regions. Consequently, Congress will have to
re-examine national laws and make sure that
they reflect the Constitution's adherence to
local autonomy. And in case of conflicts, the
underlying spirit which should guide its
resolution is the Constitution's desire for
genuine local autonomy.
The aim of the Constitution is to extend to the
autonomous peoples, the people of Muslim
Mindanao in this case, the right to self-
determination—a right to choose their own
path of development; the right to determine
the political, cultural and economic content of
their development path within the framework
of the sovereignty and territorial integrity of
the Philippine Republic. Self-determination
refers to the need for a political structure that
will respect the autonomous peoples'
uniqueness and grant them sufficient room for
self-expression and self-construction.
In treading their chosen path of development,
the Muslims in Mindanao are to be given
freedom and independence with minimum
interference from the National Government.
This necessarily includes the freedom to
decide on, build, supervise and maintain the
public works and infrastructure projects within
the autonomous region. The devolution of the
powers and functions of the DPWH in the
ARMM and transfer of the administrative and
fiscal management of public works and funds
to the ARG are meant to be true, meaningful
and unfettered. This unassailable conclusion is
grounded on a clear consensus, reached at the
Constitutional Commission and ratified by the
entire Filipino electorate, on the centrality of
decentralization of power as the appropriate
vessel of deliverance for Muslim Filipinos and
the ultimate unity of Muslims and Christians in
this country.
B. Decentralization
PIMENTEL:
• Decentralization is a decision by the
central government, authorizing its
subordinates, whether geographically
or functionally defined, to exercise
authority in certain areas. It involves
PROF. GISELLA DIZON-REYES
decision-making by sub-national units.
It is typically a delegated power,
wherein a larger government chooses
to delegate certain authority to more
local governments.
Decentralization differs intrinsically
from federalism in that the sub-units
that have been authorized to act (by
delegation) do not possess any claim of
right against the central government.
Decentralization comes in two forms—
deconcentration and devolution.
Deconcentration is administrative in
nature; it involves the transfer of
functions or the delegation of authority
and responsibility from the national
office to the regional and local offices.
This mode of decentralization is also
referred to as administrative
decentralization.
Devolution, on the other hand,
connotes political decentralization, or
the transfer of powers, responsibilities,
and resources for the performance of
certain functions from the central
government to local government units.
This is a more liberal form of
decentralization since there is an actual
transfer of powers and responsibilities.
It aims to grant greater autonomy to
local government units in cognizance of
their right to self-government, to make
them self-reliant, and to improve their
administrative and technical
capabilities. (Disomangcop vs.
Datumanong)
1987 CONSTI, Art. X, Section 3. The
Congress shall enact a local government code
which shall provide for a more responsive and
accountable local government structure
instituted through a system of decentralization
with effective mechanisms of recall, initiative,
and referendum, allocate among the different
local government units their powers,
responsibilities, and resources, and provide for
the qualifications, election, appointment and
removal, term, salaries, powers and functions
and duties of local officials, and all other
26
A REVIEWER IN LOCAL GOVERNMENT LAW
matters relating to the organization and
operation of the local units.
1987 CONSTI, Art. X, Section 14. The
President shall provide for regional
development councils or other similar bodies
composed of local government officials,
regional heads of departments and other
government offices, and representatives from
non-governmental organizations within the
regions for purposes of administrative
decentralization to strengthen the autonomy
of the units therein and to accelerate the
economic and social growth and development
of the units in the region.
PIMENTEL:
• This provision is a very clear illustration of
local autonomy as a means for
development.
Limbona vs. Mangelin
(1989)
FACTS: The Sangguniang Pampook, in
defiance of their Speaker’s (Limbona) advice,
held a session and voted to declare the
position of Speaker vacant. Limbona filed an
action in the Court. Pending said action,
Limbona was expelled from the Sangguniang
Pampook on the ground that he authorized the
payment of salaries and emoluments to a
certain Abdula without authority from the
Assembly. The Sanggunian members assail the
jurisdiction of the SC, relying on their
autonomy.
WON the so-called autonomous
governments of Mindanao, as they are
now constituted, subject to the
jurisdiction of the national courts.
HELD: YES. Autonomy is either
decentralization of administration or
decentralization of power.
(1) in decentralization of administration –
an autonomous government is under the
supervision of the national government acting
through the president (and the DILG)
PROF. GISELLA DIZON-REYES
If the Sangguniang Pampook is
autonomous in this sense, it comes
unarguably under the Court’s
jurisdiction.
(2) in decentralization of power – an
autonomous government is subject alone to
the decree of the organic act creating it and
accepted principles on the effects and limits of
autonomy.
If the Sangguniang Pampook is
autonomous in this sense, its acts are
beyond the domain of the court in the
same way that internal acts, say, of the
Congress are beyond its jurisdiction.
An examination of PD No. 1618 creating the
autonomous governments of Mindanao shows
that they were never meant to exercise
autonomy in the second sense, that is, in
which the central government commits an act
of self-immolation.
− The P.D. mandates that the President shall
have the power of general supervision and
control over Autonomous Regions
− The Sangguniang Pampook, their
legislative arm, is made to discharge
chiefly administrative services.
Upon the facts presented, the SC held that the
November 2 and 5, 1987 sessions were invalid
since at the time the petitioner called the
"recess," it was not a settled matter whether
or not he could. do so. In the second place, the
invitation tendered by the Committee on
Muslim Affairs of the House of Representatives
provided a plausible reason for the
intermission sought. Thirdly, assuming that a
valid recess could not be called, it does not
appear that the respondents called his
attention to this mistake. What appears is that
instead, they opened the sessions themselves
behind his back in an apparent act of mutiny.
Under the circumstances, we find equity on his
side. For this reason, the SC upheld the
"recess" called on the ground of good faith.
27
A REVIEWER IN LOCAL GOVERNMENT LAW
IV. CREATION OF MUNICIPAL
CORPORATIONS
A. Nature of the Power to Create
Municipal Corporations
MARTIN:
• It is essentially legislative, exclusive
and practically unlimited. In the absence of
any constitutional restriction, Congress
may create any kind of corporation it
deems essential for the more efficient
administration of civil government.
• In the absence of a constitutional
provision permitting it, such power cannot
be delegated by Congress to any inferior
and subordinate tribunal or board.
HOWEVER: There is no undue delegation of
legislative power when Congress passes a
general law for the incorporation of
municipal corporations, giving conditions
on which they may be created, and
determining whether such conditions exist.
Pelaez vs. Auditor General
(1965)
FACTS: From Sept 4 - Oct 29,1964 the
President of the Philippines, purporting to act
pursuant to Sec 68 of the Revised
Administrative Code of 1917, issued EO’s 93 to
121, 124 and 126 to 129, creating 33
municipalities. Soon after V.P. Pelaez instituted
an action against the Auditor General, to
restrain him from passing in audit any
expenditure of public funds in implementation
of said executive orders and/or any
disbursement by said municipalities. Pelaez
alleges that the EOs are null and void, upon
the ground that said Section 68 has been
impliedly repealed by RA 2370 (Barrio Charter
Act) and constitutes an undue delegation of
legislative power. He contends that according
to the said law, barrios may not be created
except upon Act of Congress or of the
corresponding provincial board upon petition
of a majority of the voters in the areas
affected. Hence, logically, the president cannot
create municipalities, too.
PROF. GISELLA DIZON-REYES
WON the Executive Orders were valid.
HELD: NO. When Republic Act No. 2370
became effective, barrios may "not be created
or their boundaries altered nor their names
changed" except by Act of Congress or of the
corresponding provincial board "upon petition
of a majority of the voters in the areas
affected" and the "recommendation of the
council of the municipality or municipalities in
which the proposed barrio is situated."
The Auditor General claims that a new
municipality can be created without creating
new barrios, such as, by placing old barrios
under the jurisdiction of the new municipality.
− This theory overlooks, that the
statutory denial of the presidential
authority to create a new barrio implies
a negation of the bigger power to
create municipalities, each of which
consists of several barrios. Founded
upon logic and experience, it cannot be
offset except by a clear manifestation
of the intent of Congress to the
contrary, and no such manifestation,
subsequent to the passage of Republic
Act No. 2370 has been brought to our
attention.
The Auditor General alleges that the power of
the President to create municipalities under
section 68 of the Revised Administrative Code
does not amount to an undue delegation of
legislative power, relying upon the allegedly
settled case of Municipality of Cardona vs.
Municipality of Binañgonan (36 Phil. 547).
− Such claim is untenable, for said case
involved, not the creation of a new
municipality, but a mere transfer of
territory — from an already existing
municipality (Cardona) to another
municipality (Binañgonan), likewise,
existing at the time of and prior to said
transfer in consequence of the fixing
and definition, pursuant to Act No.
1748, of the common boundaries of two
municipalities.
It is obvious, however, that the power to fix
such common boundary, in order to avoid or
28
A REVIEWER IN LOCAL GOVERNMENT LAW
settle conflicts of jurisdiction between
adjoining municipalities, may partake of an
administrative nature but the authority to
create municipal corporations is essentially
legislative in nature.
Although Congress may delegate to another
branch of the government the power to fill in
the details in the execution, enforcement or
administration of a law, it is essential, to
forestall a violation of the principle of
separation of powers, that said law: (a) be
complete in itself — it must set forth therein
the policy to be executed, carried out or
implemented by the delegate — and (b) fix a
standard — the limits of which are sufficiently
determinate or determinable — to which the
delegate must conform in the performance of
his functions. Section 68 of the Revised
Administrative Code does not meet these
requirements for a valid delegation of the
power to fix the details in the enforcement of a
law. Even if it did not entail an undue
delegation of legislative powers, as it certainly
does, said Section 68, as part of the Revised
Administrative Code, approved on March 10,
1917, must be deemed repealed by the
subsequent adoption of the Constitution, in
1935, which is utterly incompatible and
inconsistent with said statutory enactment.
Municipality of Kapalong vs. Moya
(1988)
FACTS: From portions of the Municipality of
Kapalong, President Carlos P. Garcia created
respondent Municipality of Sto.Tomas, and the
latter now asserts jurisdiction over eight (8)
barrios of Kapalong. For many years and on
several occasions, this conflict of boundaries
between the two municipalities was brought,
at the instance of private respondent, to the
Provincial Board of Davao for it to consider and
decide. However, it appears that no action was
taken on the same. The Municipality of Sto.
Tomas eventually filed a complaint with the
then Court of First Instance of Davao, presided
over by herein public respondent Judge Felix L.
Moya against the Municipality of Kapalong, for
settlement of the municipal boundary dispute.
The Municipality of Kapalong filed a MTD on
PROF. GISELLA DIZON-REYES
the ground of lack of legal personality of the
Municipality of Sto. Tomas.
WON the Municipality of Sto. Tomas
legally exists.
HELD: NO. Rule 3, Section 1 of the Rules of
Court expressly provides that only "entities
authorized by law may be patties in a civil
action." Now then, as ruled in the Pelaez case,
the President has no power to create a
municipality. Since private respondent has no
legal personality, it can not be a party to any
civil action, and as such, the case should have
been dismissed, since further proceedings
would be pointless.
B. Creation of Municipal Corporations
1. Constitutional provisions
1987 CONSTI, Art. X
Section 1. The territorial and political
subdivisions of the Republic of the Philippines
are the provinces, cities, municipalities, and
barangays. There shall be autonomous regions
in Muslim Mindanao and the Cordilleras as
hereinafter provided.
Section 10. No province, city, municipality, or
barangay may be created, divided, merged,
abolished, or its boundary substantially
altered, except in accordance with the criteria
established in the local government code and
subject to approval by a majority of the votes
cast in a plebiscite in the political units directly
affected.
Section 11. The Congress may, by law, create
special metropolitan political subdivisions,
subject to a plebiscite as set forth in Section
10 hereof. The component cities and
municipalities shall retain their basic
autonomy and shall be entitled to their own
local executive and legislative assemblies. The
jurisdiction of the metropolitan authority that
will thereby be created shall be limited to
basic services requiring coordination.
1987 CONSTI, Art. X
29
A REVIEWER IN LOCAL GOVERNMENT LAW
Section 15. There shall be created
autonomous regions in Muslim Mindanao and
in the Cordilleras consisting of provinces,
cities, municipalities, and geographical areas
sharing common and distinctive historical and
cultural heritage, economic and social
structures, and other relevant characteristics
within the framework of this Constitution and
the national sovereignty as well as territorial
integrity of the Republic of the Philippines.
Section 18. The Congress shall enact an
organic act for each autonomous region with
the assistance and participation of the regional
consultative commission composed of
representatives appointed by the President
from a list of nominees from multi-sectoral
bodies. The organic act shall define the basic
structure of government for the region
consisting of the executive department and
legislative assembly, both of which shall be
elective and representative of the constituent
political units. The organic acts shall likewise
provide for special courts with personal,
family, and property law jurisdiction consistent
with the provisions of this Constitution and
national laws.
The creation of the autonomous region shall
be effective when approved by majority of the
votes cast by the constituent units in a
plebiscite called for the purpose, provided that
only provinces, cities, and geographic areas
voting favorably in such plebiscite shall be
included in the autonomous region.
Section 19. The first Congress elected under
this Constitution shall, within eighteen months
from the time of organization of both Houses,
pass the organic acts for the autonomous
regions in Muslim Mindanao and the
Cordilleras.
PROF. GISELLA DIZON-REYES
Alvarez vs. Guingona
(supra)
RA 7720 is constitutional.
• It is true that for a municipality to be
converted into a component city, it must,
among others, have an average annual
income of at least Twenty Million Pesos for
the last two (2) consecutive years based on
1991 constant prices.1 Such income must
be duly certified by the Department of
Finance.
Internal Revenue Allotments form part of
the income of Local Government Units. The
IRAs are items of income because they
form part of the gross accretion of the
funds of the local government unit. The
IRAs regularly and automatically accrue to
the local treasury without need of any
further action on the part of the local
government unit. They thus constitute
income which the local government can
invariably rely upon as the source of much
needed funds.
The acquisition of resources necessary to
discharge its powers and effectively carry
out its functions is effected through the
vesting in every LGU of:
1. The right to create and broaden its own
source of revenue;
2. The right to be allocated a just share in
national taxes, such share being in the
form of Internal Revenue Allotments
(IRAs); and
3. The right to be given its equitable share
in the proceeds of the utilization and
development of the national wealth, if
any, within its territorial boundaries.
The funds generated from local taxes, IRAs
and National wealth utilization proceeds
accrue to the general fund of the LGU and
are used to finance its operations, subject
to specified modes of spending the same
as provided for in the LGC and its
implementing rules and regulations.
30
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
2. Statutory provisions verifiable indicators of viability and projected
capacity to provide services, to wit:
LGC, SEC. 6. Authority to Create Local
Government Units. - A local government unit (a) Income. - It must be sufficient, based on
may be created, divided, merged, abolished, acceptable standards, to provide for all
or its boundaries substantially altered either essential government facilities and services
by law enacted by Congress in the case of a and special functions commensurate with the
province, city, municipality, or any other size of its population, as expected of the local
political subdivision, or by ordinance passed by government unit concerned;
the sangguniang panlalawigan or sangguniang
panlungsod concerned in the case of a (b) Population. - It shall be determined as the
barangay located within its territorial total number of inhabitants within the
jurisdiction, subject to such limitations and territorial jurisdiction of the local government
requirements prescribed in this Code. unit concerned; and
PIMENTEL:
• Congress is lodged with the power to (c) Land Area. - It must be contiguous, unless
create LGU’s but it is not authorized to add it comprises two or more islands or is
to the list enumerated in Section 1 of separated by a local government unit
Article X of the CONSTI by mere legislation. independent of the others; properly identified
by metes and bounds with technical
• The Sangguniang Panlalawigan and the descriptions; and sufficient to provide for such
Sangguniang Panlungsod are granted basic services and facilities to meet the
authority to create, divide, merge or requirements of its populace. Compliance with
abolish barangays in their respective the foregoing indicators shall be attested to by
jurisdictions; but not the Sangguiniang the Department of Finance (DOF), the National
Bayan nor the barangay council! Statistics Office (NSO), and the Lands
Management Bureau (LMB) of the Department
of Environment and Natural Resources (DENR).
• The absence of the Local Government
Code at the time of the enactment of an
Act creating a municipality did not curtail PIMENTEL:
nor was it intended to cripple legislative Annual Populati Land
competence to create municipal Income on (this Area (this
requireme requireme
corporations. It contains no requirement
nt is in the nt is in the
that the Local Government Code is a
alternative alternative
condition sine qua non for the creation of a with the with the
municipality, in much the same way that land area population
the creation of a new municipality does not requireme requireme
preclude the enactment of a LGC. nt in nt in
provinces provinces
Hence, before the enactment of such Code, and cities) and cities)
the legislative power remains plenary Province Php 20M 250000 2000
except that the creation of the new local km2
government unit should be approved by City Php 150000 100 km2
the people concerned in a plebiscite called 100M
for the purpose. (Torralba vs. Municipality (RA
of SIbagat) 9009)
Municipa Php 25000 50 km2
lity 2.5M
LGC, SEC. 7. Creation and Conversion. - As
Baranga No 5000 (in No
a general rule, the creation of a local
y require Metro requirem
government unit or its conversion from one
ment (its Manila ent
level to another level shall be based on
viability and other
31
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
becomes metropoli − Interested LGU’s shall submit a
the tan petition, in the form of a resolution,
obligation subdivisio to their respective sanggunians
of the ns); or requesting the creation of a new
body 2000 (in LGU to Congress, and furnish a copy
creating others) thereof to the sanggunian of the
it) affected LGU’s.
− The sanggunian of the affected
• “Average annual income” includes any LGU’s shall submit to Congress its
income accruing to the general fund but is comments and recommendations
exclusive of special funds, special accounts on the petition for the creation of a
transfers and nonrecurring income. new LGU.
− The following documents shall be
Special funds refer to those that are attached to the petition for creation:
created for a special purpose or object and  DOF certification regarding
used to meet specified expenditures or income
classes of expenditures.
 NSO certification regarding
Fund transfers refer to those that are
population. In the case of
transferred from one item to another,
cities and municipalities, the
usually to the general fund.
NSO must also certify as to
the number and nature of
Nonrecurring items refer to those that
existing industrial and
cover particular purposes and are not
commercial establishments
regularly included in the normal
in the proposed LGU.
expenditures of an LGU.
 LMB certification regarding
land area. In case of cities
• The word “land area” replaced the word
and municipalities, the LMB
“territory” in the old LGC, to emphasize
must also certify as to
that the area required of an LGU does not
adequacy of disposable and
include the sea for purposes of compliance
alienable public lands in the
with the requirements of the Code for its
proposed LGU to meet the
creation. (Tan vs. COMELEC)
needs of the population and
the existence of:
• GEN RULE: The land area must be 1. Government center
contiguous. 2. Market site
3. Plaza or park
EXCEPT: (1) when it comprises of two or 4. School site
more islands; and (2) when another LGU is 5. Cemetery site
located in between parts of the LGU  Map of the original LGU/s
concerned. indicating the areas to be
created into a new LGU
• ALSO, the creation of a new province, city  Such other information as
or municipality must not so reduce the the petitioners may deem
income, population, or land area of the relevant.
original political subdivision as to render
 In case of cities and
such parent LGU ineffectual in the delivery
municipalities, a LWUA or
of essential governmental functions.
MWSS certification regarding
sources of potable water
• PROCEDURE FOR CREATION OF supply and a local engineer’s
PROVINCES, CITIES, MUNICIPALITIES plans as to sewerage and
(LGC IRR)

32
A REVIEWER IN LOCAL GOVERNMENT LAW
waste disposal are also
required.
− Upon effectivity of the law creating
the new LGU, the COMELEC shall
conduct an intensive information
campaign in the LGU’s concerned at
least 20 days prior to the date of
the plebiscite, as scheduled by the
COMELEC.
− Upon effectivity of the law creating
the new LGU, plebiscite in the LGU/s
directly affected within 120 days or
within the period specified in the
law.
• PROCEDURE FOR CREATION OF
BARANGAYS (LGC IRR)
− A written petition of a majority of
registered voters, or resolutions of
the Sanggunian Barangays desiring
to be merged, as the case may be,
shall be presented to the
Sanggunian Panlalawigan (upon
recommendation of the Sanggunian
Bayan) or the Sanggunian
Panlungsod, for appropriate action.
In case of municipalities in MM, such
petitions or resolutions are to be
submitted to Congress.
− The following documents shall be
attached to the petition for creation:
 NSO certification regarding
population.
 Map of the original LGU/s
indicating the areas to be
created into a new LGU
− The Sanggunian Barangay of the
affected barangays shall submit to
the Sanggunian Bayan its
comments and recommendations
on the petition for the creation of a
new LGU within 20 days after
receipt thereof.
− The Sangguniang Panlalawigan or
Panlungsod shall, within 15 days
from submission of the petition,
take action granting (2/3 votes) or
denying the petition. The COMELEC
must be furnished a copy of the
ordinance creating the barangay
PROF. GISELLA DIZON-REYES
within 30 days before the proposed
plebiscite.
− The COMELEC shall conduct an
intensive information campaign in
the LGU’s concerned at least 10
days prior to the date of the
plebiscite.
• The Sanggunian of the different LGU’s may
send petitions to Congress to propose the
creation of provinces, cities, or
municipalities.
HOWEVER, such petitions are not
requirements, EXCEPT where barangays
are sought to be created by the
Sangguniang Panlalawigan.
• Barangays may be merged or consolidated
by an ordinance based on a merger or
consolidation plan prepared by the
governor or mayor as the case may be.
• Conversion is the elevation of an LGU
from one level to another. The requirement
for conversion is the same as the
requirements for creation.
LGC, SEC. 385. Manner of Creation [of
Barangays] - A barangay may be created, divided,
merged, abolished, or its boundary substantially
altered, by law or by an ordinance of the
sangguniang panlalawigan or sangguniang
panlungsod, subject to approval by a majority of the
votes cast in a plebiscite to be conducted by the
Comelec in the local government unit or units
directly affected within such period of time as may
be determined by the law or ordinance creating said
barangay. In the case of the creation of barangays
by the sangguniang panlalawigan, the
recommendation of the sangguniang bayan
concerned shall be necessary.
LGC
SEC. 441. Manner of Creation [of
Municipalities]. - A municipality may be created,
divided, merged, abolished, or its boundary
substantially altered only by an Act of Congress and
subject to the approval by a majority of the votes
cast in a plebiscite to be conducted by the
COMELEC in the local government unit or units
directly affected. Except as may otherwise be
provided in the said Act, the plebiscite shall be held
33
A REVIEWER IN LOCAL GOVERNMENT LAW
within one hundred twenty (120) days from the date
of its effectivity.
SEC. 442. Requisites for Creation [of
Municipalities]. –
(a) A municipality may be created if it has an
average annual income, as certified by the
provincial treasurer, of at least Two million five
hundred thousand pesos (Php 2,500,000.00) for the
last two (2) consecutive years based on the 1991
constant prices; a population of at least twenty-five
thousand (25,000) inhabitants as certified by the
National Statistics Office; and a contiguous territory
of at least fifty (50) square kilometers as certified
by the Lands Management Bureau: Provided, That
the creation thereof shall not reduce the land area,
population or income of the original municipality or
municipalities at the time of said creation to less
than the minimum requirements prescribed herein.
(b) The territorial jurisdiction of a newly-created
municipality shall be properly identified by metes
and bounds. The requirement on land area shall not
apply where the municipality proposed to be
created is composed of one (1) or more islands. The
territory need not be contiguous if it comprises two
(2) or more islands.
(c) The average annual income shall include the
income accruing to the general fund of the
municipality concerned, exclusive of special funds,
transfers and non-recurring income.
(d) Municipalities existing as of the date of the
effectivity of this Code shall continue to exist and
operate as such. Existing municipal districts
organized pursuant to presidential issuances or
executive orders and which have their respective
set of elective municipal officials holding office at
the time of the effectivity of this Code shall
henceforth be considered as regular municipalities.
PIMENTEL:
• The requisites for the creation of
municipalities shall not apply retroactively.
• Section 442 (d) has the effect of declaring
as regular and de jure those municipal
districts described therein.
LGC
SEC. 449. Manner of Creation. - A city may
be created, divided, merged, abolished, or its
boundary substantially altered, only by an Act
of Congress, and subject to approval by a
majority of the votes cast in a plebiscite to be
conducted by the Comelec in the local
government unit or units directly affected.
Except as may otherwise be provided in such
PROF. GISELLA DIZON-REYES
Act, the plebiscite shall be held within one
hundred twenty (120) days from the date of its
effectivity.
SEC. 450. Requisites for Creation. –
(a) A municipality or a cluster of barangays
may be converted into a component city if it
has an average annual income, as certified by
the Department of Finance, of at least Twenty
million pesos (P20,000,000.00) for the last two
(2) consecutive years based on 1991 constant
prices, and if it has either of the following
requisites:
(i) a contiguous territory of at least one
hundred (100) square kilometers, as certified
by the Lands Management Bureau; or,
(ii) a population of not less than one hundred
fifty thousand (150,000) inhabitants, as
certified by the National Statistics Office:
Provided, That, the creation thereof shall not
reduce the land area, population, and income
of the original unit or units at the time of said
creation to less than the minimum
requirements prescribed herein.
(b) The territorial jurisdiction of a newly-
created city shall be properly identified by
metes and bounds. The requirement on land
area shall not apply where the city proposed to
be created is composed of one (1) or more
islands. The territory need not be contiguous if
it comprises two (2) or more islands.
(c) The average annual income shall include
the income accruing to the general fund,
exclusive of special funds, transfers, and non-
recurring income.
PIMENTEL:
• RA 9009 increased the income
requirement (from Php 20M to Php
100M) so as to prevent the apparent
ease of converting of all of our
municipalities into cities.
• The requirement that the territorial
jurisdiction of a newly-created city shall
be properly identified by metes and
bounds is not absolute, particularly in
cases of LGU’s with unsettled boundary
disputes.
34
A REVIEWER IN LOCAL GOVERNMENT LAW
The existence of a boundary dispute
does not per se present an
insurmountable difficulty which will
prevent Congress from defining with
reasonable certitude the territorial
jurisdiction of a local government unit.
(Mariano, Jr. vs. COMELEC)
LGC
SEC. 460. Manner of Creation. - A province
may be created, divided, merged, abolished,
or its boundary substantially altered, only by
an Act of Congress and subject to approval by
a majority of the votes cast in a plebiscite to
be conducted by the Comelec in the local
government unit or units directly affected. The
plebiscite shall be held within one hundred
twenty (120) days from the date of effectivity
of said Act, unless otherwise provided therein.
SEC. 461. Requisites for Creation. –
(a) A province may be created if it has an
average annual income, as certified by the
Department of Finance, of not less than
Twenty million pesos (Php 20,000,000.00)
based on 1991 constant prices and either of
the following requisites:
(i) a contiguous territory of at least two
thousand (2,000) square kilometers, as
certified by the Lands Management Bureau; or,
(ii) a population of not less than two hundred
fifty thousand (250,000) inhabitants as
certified by the National Statistics Office:
Provided, That, the creation thereof shall not
reduce the land area, population, and income
of the original unit or units at the time of said
creation to less than the minimum
requirements prescribed herein.
(b) The territory need not be contiguous if it
comprises two (2) or more islands or is
separated by a chartered city or cities which
do not contribute to the income of the
province.
(c) The average annual income shall include
the income accruing to the general fund,
PROF. GISELLA DIZON-REYES
exclusive of special funds, trust funds,
transfers, and non-recurring income.
Cawaling vs. COMELEC
(2001)
FACTS: Pres. Estrada signed into law R.A. No.
8806, an (Act Creating The City Of Sorsogon).
Pursuant to Section 10, Article X of the
Constitution, COMELEC conducted a plebiscite
in the Municipalities of Bacon and Sorsogon
and submitted the matter for ratification. The
Plebiscite City Board of Canvassers (PCBC)
proclaimed the creation of the City of
Sorsogon as having been ratified and
approved by the majority of the votes cast in
the plebiscite. Cawaling, filed on 2 petitions
seeking the annulment of the plebiscite and
seeking to enjoin the further implementation
of R.A. No. 8806 for being unconstitutional,
contending that under Section 450(a) of the
Code, a component city may be created only
by converting "a municipality or a cluster of
barangays," not by merging two
municipalities, as what R.A. No. 8806 has
done.
During the pendency of these cases (May 2001
elections), the newly-created Sorsogon City
had the first election of its officials. Since then,
the City Government of Sorsogon has been
regularly discharging its corporate and political
powers pursuant to its charter, R.A. No. 8806.
WON the creation of the city of Sorsogon was
valid.
Held: YES. RA 8806 is constitutional and
plebiscite valid. Petitioner's constricted
reading of Section 450(a) of the Code is
erroneous. The phrase "A municipality or a
cluster of barangays may be converted into a
component city" is not a criterion but simply
one of the modes by which a city may be
created. Section 10, Article X of the
35
A REVIEWER IN LOCAL GOVERNMENT LAW
Constitution, allows the merger of local
government units to create a province city,
municipality or barangay in accordance with
the criteria established by the Code.
Cawaling’s argument that the Municipality of
Sorsogon alone already qualifies to be
upgraded to a component city goes into the
wisdom of R.A. No. 8806, is a matter which the
SC is not competent to rule. It is clear that "the
judiciary does not pass upon questions of
wisdom, justice or expediency of legislation."
In the exercise of judicial power, the SC is
allowed only "to settle actual controversies
involving rights which are legally demandable
and enforceable," and "may not annul an act
of the political departments simply because
the SC feels it is unwise or impractical”.
Contrary to petitioner's assertion, there is only
one subject embraced in the title of the law,
that is, the creation of the City of Sorsogon.
The abolition / cessation of the corporate
existence of the Municipalities of Bacon and
Sorsogon due to their merger is not a subject
separate and distinct from the creation of
Sorsogon City. Such abolition / cessation was
but the logical, natural and inevitable
consequence of the merger. It is well-settled
that the "one title-one subject" rule does not
require the Congress to employ in the title of
the enactment language of such precision as
to mirror, fully index or catalogue all the
contents and the minute details therein. The
rule is sufficiently complied with if the title is
comprehensive enough as to include the
general object which the statute seeks to
effect, and where, as here, the persons
interested are informed of the nature, scope
and consequences of the proposed law and its
operation. Moreover, this Court has invariably
adopted a liberal rather than technical
construction of the rule "so as not to cripple or
impede legislation."
The 120-day period within which to conduct
the plebiscite starts from the date of Act’s
effectivity (i.e., after publication in at least two
(2) newspapers of general and local
circulation). Quite plainly, the last sentence of
Section 10 mandates that the plebiscite shall
be conducted within 120 days from the date of
PROF. GISELLA DIZON-REYES
the effectivity of the law, not from its approval.
While the same provision allows a law or
ordinance to fix "another date" for conducting
a plebiscite, still such date must be reckoned
from the date of the effectivity of the law.
3. The Revised Administrative Code of
1917
The (Governor-General) President of the Philippines
may by executive order define the boundary, or
boundaries, of any province, subprovince,
municipality, [township] municipal district, or other
political subdivision, and increase or diminish the
territory comprised therein, may divide any
province into one or more subprovinces, separate
any political division other than a province, into
such portions as may be required, merge any of
such subdivisions or portions with another, name
any new subdivision so created, and may change
the seat of government within any subdivision to
such place therein as the public welfare may
require: Provided, That the authorization of the
(Philippine Legislature) Congress of the Philippines
shall first be obtained whenever the boundary of
any province or subprovince is to be defined or any
province is to be divided into one or more
subprovinces. When action by the (Governor-
General) President of the Philippines in accordance
herewith makes necessary a change of the territory
under the jurisdiction of any administrative officer
or any judicial officer, the (Governor-General)
President of the Philippines, with the
recommendation and advice of the head of the
Department having executive control of such
officer, shall redistrict the territory of the several
officers affected and assign such officers to the new
districts so formed.
Upon the changing of the limits of political divisions
in pursuance of the foregoing authority, an
equitable distribution of the funds and obligations of
the divisions thereby affected shall be made in such
manner as may be recommended by the (Insular
Auditor) Auditor General and approved by the
(Governor-General) President of the Philippines.
Pelaez vs. Auditor General
(supra)
HELD: Section 68 of the RAC is VOID. The
Auditor General alleges that the power of the
President to create municipalities under
section 68 of the Revised Administrative Code
does not amount to an undue delegation of
36
A REVIEWER IN LOCAL GOVERNMENT LAW
legislative power, relying upon the allegedly
settled case of Municipality of Cardona vs.
Municipality of Binañgonan (36 Phil. 547).
− Such claim is untenable, for said case
involved, not the creation of a new
municipality, but a mere transfer of
territory — from an already existing
municipality (Cardona) to another
municipality (Binañgonan), likewise,
existing at the time of and prior to said
transfer in consequence of the fixing
and definition, pursuant to Act No.
1748, of the common boundaries of two
municipalities.
It is obvious, however, that the power to fix
such common boundary, in order to avoid or
settle conflicts of jurisdiction between
adjoining municipalities, may partake of an
administrative nature but the authority to
create municipal corporations is essentially
legislative in nature.
Although Congress may delegate to another
branch of the government the power to fill in
the details in the execution, enforcement or
administration of a law, it is essential, to
forestall a violation of the principle of
separation of powers, that said law: (a) be
complete in itself — it must set forth therein
the policy to be executed, carried out or
implemented by the delegate — and (b) fix a
standard — the limits of which are sufficiently
determinate or determinable — to which the
delegate must conform in the performance of
his functions. Section 68 of the Revised
Administrative Code does not meet these
requirements for a valid delegation of the
power to fix the details in the enforcement of a
law. It does not enunciate any policy to be
carried out or implemented by the President.
Neither does it give a standard sufficiently
precise to avoid the evil effects above referred
to. Even if it did not entail an undue delegation
of legislative powers, as it certainly does, said
Section 68, as part of the Revised
Administrative Code, approved on March 10,
1917, must be deemed repealed by the
subsequent adoption of the Constitution, in
1935, which is utterly incompatible and
inconsistent with said statutory enactment.
PROF. GISELLA DIZON-REYES
4. Municipal corporation by
prescription
MARTIN: (See also Sec. 442, par. d)
• Municipal corporations may exist by
prescription. Its existence shall be
presumed where it is presumed that the
community claimed and exercised
corporate functions, with knowledge and
acquiescence of legislature, without
interruption or objection over a period long
enough to afford title by prescription.
5. De facto municipal corporations
MARTIN:
• A de facto municipal corporation is one
that exists in fact although not in point of
law as there is a certain defect in some
essential feature of its organization, so
long as it has met the following
requirements:
1. Valid law authorizing incorporation;
2. Attempt in good faith to organize it;
3. Colorable compliance with the law;
4. Assumption of corporate powers.
Municipality of Candijay v CA
(1995)
FACTS: The Municipality of Candijay claimed
that the barrio of Pagahat is within its
territorial jurisdiction and that it is not a part of
the Municipality of Alicia. After presentation of
evidence, the Municipality of Candijay asked
the TC to bar the respondent from presenting
evidence on the ground that it had no juridical
personality. Candijay argued that EO 265
issued by Pres. Quirino is null and void ab initio
since Sec. 68 of the RAC constituted an undue
delegation of legislative power to the
President. The TC ruled for Candijay but this
was reversed by the CA. The CA found that the
plans submitted by the two municipalities are
inadequate insofar as identifying the
monuments of the boundary line between the
petitioner and the Muncipality of Mabini. The
CA ruled that in cases of equiponderance of
evidence, the courts must find for the
defendant. Hence, the Municipality of Candijay
appeals to the SC.
37
A REVIEWER IN LOCAL GOVERNMENT LAW
WON a municipality, created under a void
executive order, can be considered as
having no juridical personality.
HELD: NO. The petitioner commenced its
collateral attack on the juridical personality of
the respondent on 19 January 1984 (35 yrs
after its creation in 1949). The Municipality of
Alicia was created by EO 265, or ten years
ahead of the Municipality of San Andres, and
had been in existence for 16 years when
Pelaez decision was promulgated. Various
governmental acts through the years all
indicate the State’s recognition and
acknowledgement of its existence. For
instance, under Administrative Order No. 33
above-mentioned, the Municipality of Alicia
was covered by the 7th Municipal Circuit Court
of Alicia-Mabini for the province of Bohol.
Likewise, under the Ordinance appended to
the 1987 Constitution, the Municipality of
Alicia is one of twenty municipalities
comprising the Third District of Bohol. Alicia
must benefit from the effects of Sec. 422 (d) of
the LGC and should be considered a regular,
de jure municipality.
According to Sec. 442 (d) of the LGC,
municipal districts “organized pursuant to
presidential issuances or executive orders and
which have their respective sets of elective
municipal officials holding office at the time of
the effectivity of the Code shall henceforth be
considered as regular municipalities.”
“Curative laws, which in essence are
retrospective, and aimed at giving validity to
acts done that would have been invalid under
existing laws, as if existing laws have been
complied with, are validly accepted in this
jurisdiction, subject to the usual qualification
against impairment of vested rights.”
6. Attack against invalidity of
incorporation
MARTIN:
• The validity of incorporation and the
corporate existence of de jure or de facto
municipal corporations may not be
attacked collaterally. It may challenged
only by the State in a direct proceeding
(i.e., quo warranto)
PROF. GISELLA DIZON-REYES
HOWEVER, it is admitted that, where the
corporation is an absolute nullity, it is
subject to collateral attack by any person
whose rights or interests are affected
thereby, including the citizens of the
territory incorporated UNLESS they are
estopped by their conduct from doing so.
• A person, who dealt with a municipal
corporation and acquiesced in the exercise
of it corporate functions or entered into a
contract with said corporation, may be
estopped to deny its corporate existence.
7. Beginning of corporate existence
of municipal corporations
LGC, SEC. 14. Beginning of Corporate
Existence. - When a new local government
unit is created, its corporate existence shall
commence upon the election and qualification
of its chief executive and a majority of the
members of its sanggunian, unless some other
time is fixed therefor by the law or ordinance
creating it.
PIMENTEL:
• “Upon election”, in this provision, refers
to the date of the proclamation as the chief
executive or majority of the sanggunian
members.
• “Upon qualification” refers to the date of
their assumption to office.
MARTIN:
• The legal existence of a municipal
corporation is to be determined by the law
creating it, usually from the effectivity of
the law creating it, or upon the
organization of the government, or upon
the qualification of its officers.
• The organization of the government of a
municipal corporation presupposes the
previous existence of the said corporation
at the time its government was organized.
(Mejia vs. Balolong)
38
A REVIEWER IN LOCAL GOVERNMENT LAW
V. ALTERATION AND DISSOLUTION OF
MUNICIPAL CORPORATIONS
A. Nature of Power
MARTIN:
• The power to fix, change, alter and
prescribe territorial limits and boundaries
of a municipal corporation is essentially
legislative.
• REMEMBER: Sec. 68 of the old
Administrative Code is repealed for being
an undue delegation of this legislative
power.
• In absence of any constitutional provision,
Congress can alter and dissolve municipal
corporations in any of the following ways:
− Fixing, altering, changing the
boundaries of municipal
corporations, thus enlarging or
decreasing its territory; or
− Dividing a municipal corporation
into 2 or more separate
municipalities; or
− Merging or consolidating 2 or more
municipal corporations into one; or
− Annexing one municipality to
another; or
− Repealing its charter.
1. Necessity for defining territorial
boundaries
1987 CONSTI, ARTICLE I
The national territory comprises the Philippine
archipelago, with all the islands and waters
embraced therein, and all other territories over
which the Philippines has sovereignty or
jurisdiction, consisting of its terrestrial, fluvial
and aerial domains, including its territorial sea,
the seabed, the subsoil, the insular shelves,
and other submarine areas. The waters
around, between, and connecting the islands
of the archipelago, regardless of their breadth
and dimensions, form part of the internal
waters of the Philippines.
MARTIN:
• Since municipal corporations cannot,
without legal authorization, exercise its
powers beyond its own corporate limits, it
PROF. GISELLA DIZON-REYES
is necessary that its boundaries are fixed,
defined, ascertained and identified for
everybody’s knowledge.
• Hence, it is essential that such boundaries
are made part of a municipal corporation’s
charter. Otherwise, such incorporation is
void.
B. Manner or Mode
LGC
SEC. 7. Creation and Conversion. - As a
general rule, the creation of a local
government unit or its conversion from one
level to another level shall be based on
verifiable indicators of viability and projected
capacity to provide services, to wit:
(a) Income. - It must be sufficient, based on
acceptable standards, to provide for all
essential government facilities and services
and special functions commensurate with the
size of its population, as expected of the local
government unit concerned;
(b) Population. - It shall be determined as the
total number of inhabitants within the
territorial jurisdiction of the local government
unit concerned; and
(c) Land Area. - It must be contiguous, unless
it comprises two or more islands or is
separated by a local government unit
independent of the others; properly identified
by metes and bounds with technical
descriptions; and sufficient to provide for such
basic services and facilities to meet the
requirements of its populace. Compliance with
the foregoing indicators shall be attested to by
the Department of Finance (DOF), the National
Statistics Office (NSO), and the Lands
Management Bureau (LMB) of the Department
of Environment and Natural Resources (DENR).
SEC. 8. Division and Merger. - Division and
merger of existinglocal government units shall
comply with the same requirements herein
prescribed for their creation: Provided,
however, That such division shall not reduce
the income, population, or land area of the
local government unit or units concerned to
39
A REVIEWER IN LOCAL GOVERNMENT LAW
less than the minimum requirements
prescribed in this Code: Provided, further, That
the income classification of the original local
government unit or units shall not fall below its
current income classification prior to such
division.
The income classification of local government
units shall be updated within six (6) months
from the effectivity of this Code to reflect the
changes in their financial position resulting
from the increased revenues as provided
herein.
PIMENTEL:
• The requirements for division and merger
of LGU’s are essentially the same as the
requirements for their creation. The
bottomline of these requirements is that
the LGU’s created, divided or merged are
able to deliver the essential services to
their constituents.
• The updating of the financial classification
of the LGU’s is necessary to guide the
government in determining changes in the
staffing patterns and salary scales of such
LGU’s.
NOTE: Upgrading theses financial
classifications are essential, since an LGU’s
taxation powers increase as its
classification rises.
LGC, SEC. 9. Abolition of Local
Government Units. - A local government unit
may be abolished when its income, population,
or land area has been irreversibly reduced to
less than the minimum standards prescribed
for its creation under Book III of this Code, as
certified by the national agencies mentioned in
Section 17 hereof to Congress or to the
sanggunian concerned, as the case may be.
The law or ordinance abolishing a local
government unit shall specify the province,
city, municipality, or barangay with which the
local government unit sought to be abolished
will be incorporated or merged.
PIMENTEL:
PROF. GISELLA DIZON-REYES
• Abolition may be done through an act of
Congress (in the case of a province, city,
municipality, barangay in Metro Manila or
in cultural areas or any other political
subdivision) or by the Sangguniang
Panlalawigan or Sangguniang Panlungsod
(in the case of barangays)
LGC, SEC. 10. Plebiscite Requirement. -
No creation, division, merger, abolition, or
substantial alteration of boundaries of local
government units shall take effect unless
approved by a majority of the votes cast in a
plebiscite called for the purpose in the political
unit or units directly affected. Said plebiscite
shall be conducted by the Commission on
Elections (Comelec) within one hundred twenty
(120) days from the date of effectivity of the
law or ordinance effecting such action, unless
said law or ordinance fixes another date.
1987 CONSTI, Art. X, Section 10. No
province, city, municipality, or barangay may
be created, divided, merged, abolished, or its
boundary substantially altered, except in
accordance with the criteria established in the
local government code and subject to approval
by a majority of the votes cast in a plebiscite
in the political units directly affected.
MARTIN:
• The Court does not have the power to
dissolve municipal corporations. However,
it may declare an Act creating municipal
corporations as unconstitutional.
• The power to dissolve them still lies in the
Legislature. (GD-R: It is not automatic!)
C. Effects
1. Effects of annexation or
consolidation of municipal
corporations
MARTIN:
a) Unless otherwise provided by law, it
dissolves the annexed territory, and it shall
fall under the jurisdiction of the annexing
territory;
40
A REVIEWER IN LOCAL GOVERNMENT LAW
b) Unless otherwise provided by law, laws or
ordinances of annexed corporation is
subjected to all laws or ordinances by
which annexing corporation is governed;
c) Unless otherwise provided by the
legislature, officers or employees of the
annexed or consolidated territory shall
terminate their official relation with offices.
d) Unless otherwise provided by law, the
annexing territory shall acquire title to
property of the annexed territory without
compensation. But, if the annexed territory
forms part of a municipality from which it is
taken, Congress may provide for payment
of compensation for the indebtedness
incurred on account of the property taken.
e) Debt or obligations of the annexed territory
contracted before its annexation shall be
assumed by the annexing territory.
2. Effects of division of a municipal
corporation
MARTIN:
a) The legal existence of original municipal
corporation is extinguished.
b) Unless otherwise provided by law, each
new municipality acquires title to the
properties, powers, rights, and obligations
falling within its newly defined territorial
limits.
D. When There is No Dissolution
1. Non-user or surrender of charter
MARTIN:
• Since Congress created them for public
good, the municipal corporations cannot
bring about their own dissolution by mere
surrender of their charter.
• A municipal corporation is also not
dissolved by non-user of its powers in
whole or in part, or for its failure to
exercise the functions of a municipality.
In such a case, such corporation would be
suspended for the time but would not be
PROF. GISELLA DIZON-REYES
civilly dead, since its dormant functions
may be revived without action on the part
of the sovereignty.
2. Failure to elect municipal officers
MARTIN:
• Unless otherwise provided by law, a
municipal corporation is not dissolved
by the mere failure to elect or appoint
its officers. REMEMBER: It is the
inhabitants of the designated locality
which are the incorporators, NOT the
officers!
3. Change of sovereignty
Villas vs. City of Manila
(supra)
HELD: The city of Manila is still liable for the
obligations of the city incurred prior to the
cession to the US. Municipal corporations
exercise powers which are governmental and
powers which are of a private or business
character. In the one character a municipal
corporation is a governmental subdivision, and
for that purpose exercises by delegation a part
of the sovereignty of the state. In the other
character it is a mere legal entity or juristic
person. In the latter character it stands for the
community in the administration of local
affairs wholly beyond the sphere of the public
purpose for which its governmental powers are
conferred.
Municipal laws that regulate private and
domestic rights continue in force until
abrogated or changed by the new ruler. Only
laws of a political character are totally
abrogated or changed by the new ruler. The
property rights relinquished by Spain are
limited to those which belong to the public
domain. The juristic identity of the corporation
has been in no wise affected, and, in law, the
present city is, in every legal sense, the
successor of the old. As such it is entitled to
the property and property rights of the
predecessor corporation, and is, in law, subject
to all of its liabilities.
41
A REVIEWER IN LOCAL GOVERNMENT LAW
Absent any express legislative declaration,
there is no reason to suppose that
reincorporation intended to permit an escape
from the obligations of the old city.
VI. PLEBISCITE REQUIREMENTS
1987 CONSTI, Art. X, Section 10. No
province, city, municipality, or barangay may
be created, divided, merged, abolished, or its
boundary substantially altered, except in
accordance with the criteria established in the
local government code and subject to approval
by a majority of the votes cast in a plebiscite
in the political units directly affected.
LGC, SEC. 10. Plebiscite Requirement. -
No creation, division, merger, abolition, or
substantial alteration of boundaries of local
government units shall take effect unless
approved by a majority of the votes cast in a
plebiscite called for the purpose in the political
unit or units directly affected. Said plebiscite
shall be conducted by the Commission on
Elections (COMELEC) within one hundred
twenty (120) days from the date of effectivity
of the law or ordinance effecting such action,
unless said law or ordinance fixes another
date.
PIMENTEL:
• This requirement is mandatory. It serves as
a check on the power of Congress or of the
LGU concerned to carry out such actions.
• There is no need for a plebiscite in the case
of merging administrative regions.
Administrative regions are not territorial
and political subdivisions like provinces,
cities, municipalities and barangays. While
the power to merge administrative regions
is not expressly provided for in the
Constitution, it is a power which has
traditionally been lodged with the
President to facilitate the exercise of the
power of general supervision over local
governments.
There is no conflict between the power of
the President to merge administrative
regions with the constitutional provision
PROF. GISELLA DIZON-REYES
requiring a plebiscite in the merger of local
government units because the requirement
of a plebiscite in a merger expressly
applies only to provinces, cities,
municipalities or barangays, not to
administrative regions. (Abbas vs.
COMELEC)
Padilla vs. COMELEC
(1992)
FACTS: The COMELEC promulgated a
Resolution pursuant to RA 7155 approving the
creation of the Municipality of Tulay-na-Lupa in
Camarines Norte to be composed of 12
barangays in the Municipality of Labo subject
to the approval by a majority of votes cast
pursuant to Sec 10, Art X of 1987 Constitution,
and LGC.
The plebiscite held in the barangays
comprising the proposed municipality and the
remaining areas of the mother municipality
Labo. Only 2,890 favored the creation of the
new municipality while 3,439 voted against it.
The Plebiscite Board of Canvassers declared
the rejection and disapproval of the proposed
municipality after the turn-out where a
majority voted against the creation.
Governor Padilla files an action to set aside the
plebiscite conducted and to undertake a new
one, arguing that the plebiscite should have
been conducted only in the 12 barangays
comprising the proposed municipality.
WON the term “political units directly
affected” only comprises those areas in
the proposed LGU and not those from the
mother LGU.
HELD: NO. Padilla’s contention that Art X,
Section 10 has deleted the words “unit or” in
Section 3, Art XI of the 1973 Constitution is
untenable. As explained by CONCOM
Commissioner Davide during the 1986
CONCOM debates, the deletion of the said
words was done precisely because in the
plebiscite to be conducted, it must involve all
the units affected. When the law states that
42
A REVIEWER IN LOCAL GOVERNMENT LAW
the plebiscite shall be conducted “in the
political units directly affected,” it means that
residents of the political entity who would be
economically dislocated by the separation of a
portion thereof have a right to vote in said
plebiscite.
It stands to reason that when the law states
that the plebiscite shall be conducted “in the
political units directly affected,” it means that
residents of the political entity who would be
economically dislocated by the separation
have a right to vote. The phrase “political units
directly affected” contemplates the plurality of
political units which would participate in the
exercise.
Tan vs. COMELEC
(supra)
HELD: It can be plainly seen from Section 3 of
Article XI of the 1973 CONSTI makes it
imperative that there be first obtained "the
approval of a majority of votes in the plebiscite
in the unit or units affected" whenever a
province is created, divided or merged and
there is substantial alteration of the
boundaries. It is thus inescapable to conclude
that the boundaries of the existing province of
Negros Occidental would necessarily be
substantially altered by the division of its
existing boundaries in order that there can be
created the proposed new province of Negros
del Norte. Plain and simple logic will
demonstrate that two political units would be
affected. The first would be the parent
province of Negros Occidental because its
boundaries would be substantially altered. The
other affected entity would be composed of
those in the area subtracted from the mother
province to constitute the proposed province
of Negros del Norte.
The Court noted that the case of Paredes vs.
Executive Secretary, which involved the
creation of a new municipality where the
PROF. GISELLA DIZON-REYES
parent unit was not involved, could not be
considered as a precedent. The reasons in this
case invoked by respondents herein were
formerly considered acceptable because of the
views then taken that local autonomy would
be better promoted. However, even this
consideration no longer retains persuasive
value. That case involved a barangay while
this case involves a province.
Almost half of the sugar plantations would be
dismembered form the parent province and
some of its most important cities. Hence, the
remaining portion of the parent province is as
much an area affected. The substantial
alteration of the boundaries of the parent
province, not to mention the other adverse
economic effects it might suffer, eloquently
argue the points raised by the petitioners.
The SC also considered the new province as
lacking in the territory requirement since the
land mass of the new territory was only 2,856
square kilometers. The Court rejected the
suggestion of the Solicitor General that even
the area of the EEZ should be considered in
determining the territorial requirement.
Miranda vs. Aguirre
(1999)
FACTS: RA 7720 converted the municipality of
Santiago, Isabela, into an independent
component city. Subsequently, RA 8528 was
enacted, amending RA 7720, changing the
status of Santiago from an independent
component city to a component city.
Petitioners assailed the constitutionality of RA
8528, arguing that it lacked a provision
submitting the law for ratification by the
people of Santiago City in a plebiscite.
Respondent provincial officials of Isabela
defended the constitutionality of R.A. No. 8528
by assailing the standing of petitioners to file
the petition at bar. They also contend that the
petition raises a political question over which
this Court lacks jurisdiction.
The Solicitor General argued that the RA
merely reclassified Santiago City from an
independent component city to a component
43
A REVIEWER IN LOCAL GOVERNMENT LAW
city. It allegedly did not involve any “creation,
merger, abolition, or substantial alteration of
boundaries of local government units.”
WON R.A. No. 8528 is unconstitutional for
its failure to provide that the conversion
of the city of Santiago from an
independent component city to a the people of Santiago City when R.A. No.
component city should be submitted to
its people in a proper plebiscite.
HELD: YES. A close analysis of the
constitutional provision (Sec. 10 of Art. X) will
reveal that the creation, division, merger,
abolition or substantial alteration of
boundaries of local government units involve a
common denominator — material change in
the political and economic rights of the local
government units directly affected as well as
the people therein. It is precisely for this
reason that the Constitution requires the
approval of the people "in the political units
directly affected." Thus, the consent of the
people of the local government unit directly
affected was required to serve as a checking
mechanism to any exercise of legislative
power creating, dividing, abolishing, merging
or altering the boundaries of local government
units. It is one instance where the people in
their sovereign capacity decide on a matter
that affects them — direct democracy of the
people as opposed to democracy thru people's
representatives. This plebiscite requirement is
also in accord with the philosophy of the
Constitution granting more autonomy to local
government units.
The changes that will result from the
downgrading of the city of Santiago from an
independent component city to a component
city are many and cannot be characterized as
insubstantial. For one, the independence of the
city as a political unit will be diminished. The
city mayor will be placed under the
administrative supervision of the provincial
governor. The resolutions and ordinances of
the city council of Santiago will have to be
reviewed by the Provincial Board of Isabela.
Taxes that will be collected by the city will now
have to be shared with the province.
PROF. GISELLA DIZON-REYES
It is markworthy that when R.A. No. 7720
upgraded the status of Santiago City from a
municipality to an independent component
city, it required the approval of its people thru
a plebiscite called for the purpose. There is
neither rhyme nor reason why this plebiscite
should not be called to determine the will of
8528 downgrades the status of their city.
Indeed, there is more reason to consult the
people when a law substantially diminishes
their right.
Moreover, Rule II, Article 6, paragraph (f) (1) of
the Implementing Rules and Regulations of the
Local Government Code is in accord with the
Constitution when it provides that:
(f) Plebiscite — (1) no creation, conversion,
division, merger, abolition, or substantial
alteration of boundaries of LGUS shall take
effect unless approved by a majority of the
votes cast in a plebiscite called for the purpose
in the LGU or LGUs affected. The plebiscite
shall be conducted by the Commission on
Elections (COMELEC) within one hundred
twenty (120) days from the effectivity of the
law or ordinance prescribing such action,
unless said law or ordinance fixes another
date.
xxx xxx xxx
The rules cover all conversions, whether
upward or downward in character, so long as
they result in a material change in the local
government unit directly affected, especially a
change in the political and economic rights of
its people.
Tobias vs. Abalos
(1994)
FACTS: The municipalities of Mandaluyong
and San Juan belonged to only one legislative
district. Cong. Zamora, the incumbent
congressional representative of this legislative
district, sponsored the bill which eventually
became R.A. No. 7675, converting the
municipality of Mandaluyong into a highly
urbanized city. The people of Mandaluyong
approved of the conversion of the Municipality
44
A REVIEWER IN LOCAL GOVERNMENT LAW
of Mandaluyong into a highly urbanized city in
a plebiscite only 14.41% of the voting
population voted. Nevertheless, 18,621 voted
"yes" whereas 7,911 voted "no." By virtue of
these results, R.A. No. 7675 was deemed
ratified and in effect.
Petitioners allege that the law isnembracing
two principal subjects, namely: (1) the
conversion of Mandaluyong into a highly
urbanized city; and (2) the division of the
congressional district of San Juan / GOVERNMENTS
Mandaluyong into two separate districts. This,
in effect, has resulted in an increase in the
composition of the House of Representatives
beyond that provided in Article VI, Sec. 5(1) of
the Constitution.
Petitioners also contend that the people of San
Juan should have been made to participate in
the plebiscite on R.A. No. 7675 as the same
involved a change in their legislative district.
WON RA 7657 is unconstitutional.
HELD: NO. The creation of a separate
congressional district for Mandaluyong is not a
subject separate and distinct from the subject
of its conversion into a highly urbanized city
but is a natural and logical consequence of its
conversion into a highly urbanized city.
As to the contention that the assailed law
violates the present limit on the number of
representatives as set forth in the
Constitution, a reading of the applicable
provision, Article VI, Section 5(1), as
aforequoted, shows that the present limit of
250 members is not absolute. The Constitution
clearly provides that the House of
Representatives shall be composed of not
more than 250 members, "unless otherwise
provided by law." The inescapable import of
the latter clause is that the present
composition of Congress may be increased, if
Congress itself so mandates through a
legislative enactment. Therefore, the increase
in congressional representation mandated by
R.A. No. 7675 is not unconstitutional.
The contention that the people of San Juan
should have beein included in the plebiscite is
PROF. GISELLA DIZON-REYES
bereft of merit since the principal subject
involved in the plebiscite was the conversion
of Mandaluyong into a highly urbanized city.
The matter of separate district representation
was only ancillary thereto. Thus, the
inhabitants of San Juan were properly excluded
from the said plebiscite as they had nothing to
do with the change of status of neighboring
Mandaluyong.
VII. GENERAL POWERS OF LOCAL
A. Police Power
General Welfare
LGC, SEC. 16. General Welfare. - Every
local government unit shall exercise the
powers expressly granted, those necessarily
implied therefrom, as well as powers
necessary, appropriate, or incidental for its
efficient and effective governance, and those
which are essential to the promotion of the
general welfare. Within their respective
territorial jurisdictions, local government units
shall ensure and support, among other things,
the preservation and enrichment of culture,
promote health and safety, enhance the right
of the people to a balanced ecology,
encourage and support the development of
appropriate and self-reliant scientific and
technological capabilities, improve public
morals, enhance economic prosperity and
social justice, promote full employment among
their residents, maintain peace and order, and
preserve the comfort and convenience of their
inhabitants.
PIMENTEL:
• This provision is known as the General
Welfare Clause. Pursuant to this rule, LGU’s
have the power to exercise just about any
act that will benefit their constituencies.
This clause has two branches:
− General legislative power -
authorizes the municipal council to
enact ordinances not repugnant to
law, as may be necessary to carry
into effect and discharge the
powers and duties conferred upon
the municipal council by law.
45
A REVIEWER IN LOCAL GOVERNMENT LAW
− Police power proper - authorizes
the municipal council to enact
ordinances as may be necessary
and proper for the health and
safety, prosperity, morals, peace,
good order, comfort, and
convenience of the municipality and
its inhabitants, and for the
protection of their property. (Rural
Bank of Makati vs. Makati)
• The State, through the legislature, has
delegated the exercise of police power to
local government units, as agencies of the
State, in order to effectively accomplish
and carry out the declared objects of their
creation. This delegation of police power is
embodied in the general welfare clause of
the LGC.
Police power as an inherent attribute of
sovereignty is the power to prescribe
regulations to promote the health, morals,
peace, education, good order or safety and
general welfare of the people. (Acebedo
Optical vs. CA)
• The exercise of police power, however, is
subject to the due process clause of the
CONSTI and to the test of reasonableness.
Hence, while property may be regulated in
the interest of the general welfare, and in
its pursuit, the State may prohibit
structures offensive to the sight, the State
may not, under the guise of police power,
permanently divest owners of the
beneficial use of their property and
practically confiscate them solely to
preserve or assure the aesthetic
appearance of the community… without
just compensation and an opportunity to
be heard. (People vs. Fajardo)
A local government is considered to have
properly exercised its police powers only
when the following requisites are met:
(1) the interests of the public generally, as
distinguished from those of a particular
class, require the interference of the State;
and (2) the means employed are
PROF. GISELLA DIZON-REYES
reasonably necessary for the attainment of
the object sought to be accomplished and
not unduly oppressive. The first
requirement refers to the equal protection
clause and the second, to the due process
clause of the Constitution. (Parayno vs.
Municipality of Calasiao)
• In sum, the valid use of police power of
LGU’s are as follows:
− Promotion of the general welfare
and public interest (US vs. Torribio);
− Promotion of public health, morals,
safety and the general welfare of
each inhabitant (US vs. Gomez
Jesus);
− Preservation of public order and
prevention of offenses against the
State and the establishment of rules
of good manners and prevention of
conflict of rights among neighbors
(US vs. Pompeya);
− Prohibition of all things harmful to
the comfort, safety, and welfare of
society (Rubi vs. Provincial Board);
and
− Abatement of nuisance (Tatel vs.
Municipality of Virac).
• NOTE: The abatement of a nuisance
without judicial proceedings is possible
only if it is a nuisance per se, or one
affecting the immediate safety of persons
and property. (Parayno vs. Municipality of
Calasiao)
• The operation of theaters, cinematographs
and other places of public exhibition are
subject to regulation by the municipal
council in the exercise of delegated police
power by the local government… However,
while it is true that a business may be
regulated, it is equally true that such
regulation must be within the bounds of
reason, that is, the regulatory ordinance
must be reasonable, and its provisions
cannot be oppressive amounting to an
arbitrary interference with the business or
calling subject of regulation. A lawful
business or calling may not, under the
guise of regulation, be unreasonably
46
A REVIEWER IN LOCAL GOVERNMENT LAW
interfered with even by the exercise of
police power. (Balacuit vs. CFI of Agusan
del Norte)
• A public plaza is beyond the commerce of
man and so cannot be the subject of lease
or any other contractual undertaking.
Hence, the lease of a public plaza of the
said municipality in favor of a private
person is null and void Even assuming a
valid lease of the property in dispute, the
resolution could have effectively
terminated the agreement for it is settled
that the police power cannot be
surrendered or bargained away through
the medium of a contract. (Villanueva vs.
Castañeda, Cavite vs. Rojas)
• While the ordinance which regulates the
exhumation and/or transfer of corpses from
other burial grounds to those located in the
City of Caloocan is within the legislative
power of the respondent city government
to enact, the imposition of the transfer fees
under such ordinance, on the interment of
the respective dead relatives in the La
Loma cemetery, was not justified (Viray vs.
City of Caloocan)
• An ordinance prohibiting pinball machines
was also held to be valid under the general
welfare clause (Uy Ha vs. City of Manila)
• The sanggunian of a municipality does not
have contempt powers nor the power to
issue subpoena against non-members of
the sanggunian under the General Welfare
clause. (Negros Oriental II Electric
Cooperative vs. Sangguniang Panlungsod
of Dumaguete)
Dela Cruz vs. Paras
(1983)
FACTS: The petitioners are assailing the
validity of an ordinance in Bocaue, Bulacan
prohibiting the operation of night clubs and
their employment of hostesses. The lower
court, however, upheld the validity of such
ordinances, arguing that by virtue of police
power, the municipality can order the closure
PROF. GISELLA DIZON-REYES
of such establishments. The lower court also
argues that under RA 938, as amended, “the
municipal or city board or council of each
chartered city shall have the power to regulate
and prohibit by ordinance, the establishment,
maintenance and operation of night clubs,
cabarets..”
WON a municipal corporation can prohibit
the operation of night clubs and the
employment of hostesses.
HELD: NO. It cannot be said that such a
sweeping exercise of a lawmaking power by
Bocaue could qualify under the term
reasonable. The objective of fostering public
morals, a worthy and desirable end can be
attained by a measure that does not
encompass too wide a field. Certainly the
ordinance on its face is characterized by
overbreadth. The purpose sought to be
achieved could have been attained by
reasonable restrictions rather than by an
absolute prohibition. The admonition in
Salaveria should be heeded: "The Judiciary
should not lightly set aside legislative action
when there is not a clear invasion of personal
or property rights under the guise of police
regulation." 16 It is clear that in the guise of a
police regulation, there was in this instance a
clear invasion of personal or property rights,
personal in the case of those individuals
desirous of patronizing those night clubs and
property in terms of the investments made
and salaries to be earned by those therein
employed.
WRT RA 938, when such law was amended
(including the word “prohibit”) the title of the
original law was not changed (AN ACT
GRANTING MUNICIPAL OR CITY BOARDS AND
COUNCILS THE POWER TO REGULATE THE
ESTABLISHMENT, MAINTENANCE AND
OPERATION OF CERTAIN PLACES OF
AMUSEMENT WITHIN THEIR RESPECTIVE
TERRITORIAL JURISDICTIONS). The Constitution
mandates: "Every bill shall embrace only one
subject which shall be expressed in the title
thereof. " Since there is no dispute as the title
limits the power to regulating, not prohibiting,
it would result in the statute being invalid if, as
was done by the Municipality of Bocaue, the
47
A REVIEWER IN LOCAL GOVERNMENT LAW
operation of a night club was prohibited. There
is a wide gap between the exercise of a
regulatory power "to provide for the health
and safety, promote the prosperity, improve
the morals, in the language of the
Administrative Code, such competence
extending to all "the great public needs, to
quote from Holmes, and to interdict any
calling, occupation, or enterprise. In
accordance with the well-settled principle of
constitutional construction that between two
possible interpretations by one of which it will
be free from constitutional infirmity and by the
other tainted by such grave defect, the former
is to be preferred. A construction that would
save rather than one that would affix the seal
of doom certainly commends itself.
Reference is also made by respondents to
Ermita-Malate Hotel and Motel Operators
Association, Inc. v. City Mayor of Manila. There
is a misapprehension as to what was decided
by this Court. That was a regulatory measure.
Necessarily, there was no valid objection on
due process or equal protection grounds. It did
not prohibit motels. It merely regulated the
mode in which it may conduct business in
order precisely to put an end to practices
which could encourage vice and immorality.
This is an entirely different case. What was
involved is a measure not embraced within the
regulatory power but an exercise of an
assumed power to prohibit. Moreover, while it
was pointed out in the aforesaid Ermita-Malate
Hotel and Motel Operators Association, Inc.
decision that there must be a factual
foundation of invalidity, it was likewise made
clear that there is no need to satisfy such a
requirement if a statute were void on its face.
That it certainly is if the power to enact such
ordinance is at the most dubious and under
the present Local Government Code non-
existent.
Technology Developers vs. CA
(1991)
FACTS: Technology Developers, Inc. (TDI) is a
domestic private corporation engaged in the
manufacture and export of charcoal briquette.
PROF. GISELLA DIZON-REYES
It received a letter from acting mayor ordering
full cessation of operation of its Sta. Maria
plant and requesting Plant Managaer to bring
to the office of the mayor several permits
(Building Permit, Mayor’s Permit, and Pollution
of Environment and Natural Resources Anti-
Pollution Permit).
As to the Anti-Pollution Permit, TDI tried to
secure it although it had previously secured
before its operation a “Temporary Permit to
Operate Air Pollution Installation” issued by
Environmental Management Bureau (EMB).
EMB is at a stage trying to determine correct
kind of anti-pollution device to be installed for
TDI’s renewal of its permit.
TDI didn’t have a mayor’s permit so it tried to
secure one but it was not entertained. Mayor
ordered padlocking of TDI’s plant premises
without previous and reasonable notice upon
TDI.
TDI instituted an action with RTC. The
provincial prosecutor submitted the following
evidence:
- Investigation report of the petitioner
made by Marivic Guina recommending
that the manufacturing process and
raw materials used by the factory
produced fumes that are hazardous to
health so the company must shut down
until the proper air pollution device is
installed.
- Signatures of residents complaining
about the pollution.
- Letter addressed to Gov. Pagdanganan
complaining about the smoke.
RTC ruled in favor of mayor. The CA affirmed.
WON the mayor validly acted within the
limits of his police power.
HELD: YES. The mayor can deny application
for a permit to operate a business or close it
by his police power unless appropriate
measures are taken to control or avoid injury
to the health of the residents of the
community from emissions in the operation of
the business.
48
A REVIEWER IN LOCAL GOVERNMENT LAW
While determination whether there is pollution
of the environment that requires control (if not
prohibition) of the operation of a business is
essentially addressed to the EMB (National
Pollution Control Commission before) of DENR,
the mayor of a town has as much
responsibility to protect its inhabitants from
pollution.
It must be noted that his action of the Acting
Mayor was in response to the complaint of the
residents of Barangay Guyong, Sta. Maria,
Bulacan, directed to the Provincial Governor
through channels.
Petitioner takes note of the plea of petitioner
focusing on its huge investment in this dollar-
earning industry. It must be stressed however,
that concomitant with the need to promote
investment and contribute to the growth of the
economy is the equally essential imperative of
protecting the health, nay the very lives of the
people, from the deleterious effect of the
pollution of the environment.
Chua Huat vs CA
(1991)
FACTS: Manuel Uy & Sons, Inc. requested
Romulo del Rosario (city engineer of Manila) to
condemn the dilapidated structures located
Pedro Gil St. and Paz St., Paco, Manila, all
occupied by Chua Huat, et al (petitioners). The
city engineer issued notices of condemnation
addressed to the petitioners. It stated that the
buildings were found to be in dangerous
condition and are therefore condemned. It also
said that the notice is not a demolition order
since it is still subject to the approval of the
mayor. The orders were based on the
inspection reports made by Evaluation
Committee of the Office of the City Engineer.
Petitioners protested such condemnation
notices, pointing to a certification by a private
civil engineer that the buildings are still
structurally sound and have remaining
economic life of up to eight years. The mayor
eventually ordered the demolition of the said
buildings. Hence, Chua Huat, et al. filed a
complaint in the court.
PROF. GISELLA DIZON-REYES
WON Chua Huar et, al. have a valid
grievance for the remedy of certiorari
under Rule 65 of the Rules of Court to be
available to them.
HELD: NO. It is explicitly clear from Section 1
of Rule 65 of the Rules of Court that for
certiorari to be available: (a) a tribunal, board
or office exercising judicial function acted
without or in excess of its or his jurisdiction, or
with grave abuse of discretion, and (b) that
there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of
law. Petitioners failed to show the presence of
both elements. The power to condemn
buildings and structures in the City of Manila
falls within the exclusive jurisdiction of the City
Engineer, who is at the same time the Building
Official. He has the authority to order the
condemnation and demolition of buildings
which are found to be in a dangerous or
ruinous condition. It is also clear from the
Compilation of Ordinances of the City of Manila
that the Mayor has the power to confirm or
deny the action taken by the Building Officials,
with respect to the dangerous or ruinous
buildings.
There is no grave abuse of discretion on the
part of the respondent City Engineer because
the orders were made only after thorough
ocular inspections were conducted by the
City's Building Inspectors. The results of the
inspections were set forth in a memorandum
dated 16 November 1982 where it was shown
that all the buildings had architectural,
structural, sanitary, plumbing and electrical
defects of up to 80%.
The respondent Mayor's act of approving the
condemnation orders was likewise done in
accordance with law. The protest made by
petitioners was submitted only on 22 February
1983, or three months after the notices of
condemnation were issued, and clearly beyond
the seven days prescribed under Section 276
of the Compilation of Ordinances of the City of
Manila.
Moreover, appeal was likewise available to
petitioners (fifteen-day period to the Secretary
of Public Works), which they did not do. Hence,
49
A REVIEWER IN LOCAL GOVERNMENT LAW
certiorari will not lie for failure to exhaust
administrative remedies.
Binay vs. Domingo
(1991)
FACTS: The Municipal Council of Makati issued
a Resolution confirming and/or ratifying the
ongoing burial assistance program initiated by
the Office of the Mayor. Said resolution
provided for a burial assistance program
where qualified beneficiaries, who are
bereaved families whose gross monthly
income does not exceed Php 2000 per month,
are given 500 pesos cash relief. It will be
funded by the unappropriated available funds
in the municipal treasury.
The Metro Manila Commission (MMC) approved
Resolution No. 60. Thereafter, the municipal
secretary certified a disbursement fund of
P400, 000 for the implementation of the Burial
Assistance Program. The resolution was then
referred to the Commission on Audit (COA) for
its expected allowance in audit. However, COA,
after its preliminary findings, disapproved
Resolution No. 60 and disallowed in audit the
disbursement of funds for the implementation
thereof. Mayor Binay filed two letters for
reconsideration.
COA denied both letters for reconsideration.
COA argues that there is no relation between
the objective sought to be attained under
Resolution No. 60 and the alleged public safety
and general welfare of the people of Makati.
Moreover, it is not for a public purpose. It only
seeks to benefit a few individuals.
WON Resolution No. 60, re-enacted under
Resolution No. 243, of the Municipality of
Makati is a valid exercise of police power
under the general welfare clause.
HELD: YES. Police power is inherent in the
state but not in municipal corporations. Before
a municipal corporation may exercise such
power, there must be a valid delegation of
such power by the legislature which is the
repository of the inherent powers of the State.
A valid delegation may arise from express
delegation, or be inferred from the mere fact
PROF. GISELLA DIZON-REYES
of the creation of the corporation, and as a
general rule, municipal corporations may
exercise police powers within the fair intent
and purpose of their creation which are
reasonably proper to give effect to the powers
expressly granted, and statutes conferring
powers on public corporations have been
construed as empowering them to do things
essential to the enjoyment of life and desirable
for the safety of the people.
Police power is the power to prescribe
regulations to promote the health, morals,
peace, education, good order or safety and
general welfare of the people. It is the most
essential, insistent, and illimitable of powers.
In a sense it is the greatest and most powerful
attribute of the government. It is elastic and
must be responsive to various social
conditions. On it depends the security of social
order, the life and health of the citizen, the
comfort of an existence in a thickly populated
community, the enjoyment of private and
social life, and the beneficial use of property,
and it has been said to be the very foundation
on which our social system rests.
COA, in saying that there is no perceptible
connection, tries to redefine the scope of
police power by circumscribing its exercise to
“public safety, general welfare, etc of the
inhabitants of Makati.” The police power of a
municipal corporation is broad, and has been
said to be commensurate with, but not to
exceed, the duty to provide for the real needs
of the people in their health, safety, comfort,
and convenience as consistently as may be
with private rights. It extends to all the great
public needs, and, in a broad sense includes all
legislation and almost every function of the
municipal government. It covers a wide scope
of subjects, and, while it is especially occupied
with whatever affects the peace, security,
health, morals, and general welfare of the
community, it is not limited thereto, but is
broadened to deal with conditions which exists
so as to bring out of them the greatest welfare
of the people by promoting public convenience
or general prosperity, and to everything
worthwhile for the preservation of comfort of
the inhabitants of the corporation (62 C.J.S.
Sec. 128). Thus, it is deemed inadvisable to
50
A REVIEWER IN LOCAL GOVERNMENT LAW
attempt to frame any definition which shall
absolutely indicate the limits of police power.
As regards COA’s additional objection, it shows
that it is not attuned to the changing of times.
Public purpose is not unconstitutional merely
because it incidentally benefits a limited
number of persons. The care for the poor is
general recognized as a public duty. The
support for the poor has long been an
accepted exercise of police power in the
promotion of common good. There is no
violation of the equal protection clause in
classifying paupers as subject of legislation.
Paupers may be reasonably classified.
Tatel v Municipality of Virac
(1992)
FACTS: In 1966, complaints were received
from the residents of barrio Sta. Elena against
disturbance caused by operation of the abaca
bailing machine inside the warehouse of Tatel.
A committee was appointed by the municipal
council of Virac to investigate on the matter.
The committee noted the crowded nature of
the neighborhood with narrow roads and the
surrounding residential houses so much so
that accidental fire from the continued
operations of the warehouse and storing of
inflammable materials created danger to the
lives and properties of the people.
Based on this report, the Municipal Council of
passed a Resolution declaring the warehouse a
nuisance within purview of Art 694 of the Civil
Code. It also argued that Tatel’s warehouse
violated Ordinance No. 13 which prohibited the
construction of warehouses within 200 meters
from a block of houses either in the poblacion
or barrios.
Tatel counters that the said Ordinance is
unconstitutional, contrary to due process and
equal protection clause of the Constitution.
WON Ordinance No. 13 of the
Municipality of Virac is unconstitutional
and void.
HELD: NO. Ordinance No. 13, series of 1952,
was passed by the Municipal Council of Virac in
PROF. GISELLA DIZON-REYES
the exercise of its police power. It is a settled
principle of law that municipal corporations are
agencies of the State for the promotion and
maintenance of local self-government and as
such are endowed with the police powers in
order to effectively accomplish and carry out
the declared objects of their creation. Its
authority emanates from the general welfare
clause.
For an ordinance to be valid, it must not only
be within the corporate powers of the
municipality to enact but must also be passed
according to the procedure prescribed by law,
and must be in consonance with certain well
established and basic principles of substantive
nature:
1) must not contravene the Constitution or
any statue
2) must not be unfair or oppressive
3) must not be partial or discriminatory
4) must not prohibit but may regulate
trade
5) must be general and consistent with
public policy, and
6) must not be unreasonable
Section 1 and 2 of Ordinance No. 13 reads:
Sec. 1. It is strictly prohibited to
construct warehouses in any form to
any person, persons, entity, corporation
or merchants, wherein to keep or store
copra, hemp, gasoline, petroleum,
alcohol, crude oil, oil of turpentine and
the like products or materials if not
within the distance of 200 meters from
a block of houses either in the
poblacion or barrios to avoid great
losses of properties inclusive lives by
fire accident.
Sec. 2. Owners of warehouses in any
form, are hereby given advice to
remove their said warehouses this
ordinance by the Municipal Council,
provided however, that if those
warehouses now in existence should no
longer be utilized as such warehouse
for the above-described products in
Section 1 of this ordinance after a lapse
51
A REVIEWER IN LOCAL GOVERNMENT LAW
of the time given for the removal of the
said warehouses now in existence,
same warehouses shall be exempted
from the spirit of the provision of
section 1 of this ordinance, provided
further, that these warehouses now in
existence, shall in the future be
converted into non-inflammable
products and materials warehouses.
A casual glance of the ordinance at once
reveals a manifest disregard of the elemental
rules of syntax. Experience, however, will show
that this is not uncommon in law making
bodies in small towns where local authorities
and in particular the persons charged with the
drafting and preparation of municipal
resolutions and ordinances lack sufficient
education and training and are not well
grounded even on the basic and fundamental
elements of the English language commonly
used throughout the country in such matters.
In spite of its fractured syntax, basically, what
is regulated by the ordinance is the
construction of warehouses wherein
inflammable materials are stored where such
warehouses are located at a distance of 200
meters from a block of houses and not the
construction per se of a warehouse. The
purpose is to avoid the loss of life and property
in case of fire which is one of the primordial
obligation of the government.
As to the third assignment of error, that
warehouses similarly situated as that of the
petitioner were not prosecuted, suffice it to
say that the mere fact that the municipal
authorities of Virac have not proceeded
against other warehouses in the municipality
allegedly violating Ordinance No. 13 is no
reason to claim that the ordinance is
discriminatory. A distinction must be made
between the law itself and the manner in
which said law is implemented by the agencies
in charge with its administration and
enforcement. There is no valid reason for the
petitioner to complain, in the absence of proof
that the other bodegas mentioned by him are
operating in violation of the ordinance and that
the complaints have been lodged against the
PROF. GISELLA DIZON-REYES
bodegas concerned without the municipal
authorities doing anything about it.
Judge Tamin vs. CA
(1992)
FACTS: Municipality of Dumingag alleges that
it leased an area of 1,350 sq meters to the
Medina and Rosellon (defendants), subject to
the condition that they should vacate the
place in case it is needed for public purposes.
Medina and Roselllon paid rentals until 1967,
but they refused to pay after that period and
refused to leave the lots. (The lot was
eventually declared as a public plaza).
Meanwhile, the national government had
allotted funds for the construction of a
municipal gym but it could not continue due to
the presence of the buildings of the
defendants. Hence, the Municipality of
Dumingag filed an ejectment case against the
defendants. It further argued that the funds
might revert back to the national government
and such would result to “irreparable damage,
injury, and prejudice” to the municipality and
its people who are expected to derive benefit
from the accomplishment of the project.
The defendants argue that the subject parcel
of land has been owned, occupied and possess
by respondent Vicente Medina since 1947
when he bought the subject parcel from a
Subanan native; that the other respondent
Fortunata Rosellon leased from Medina a
portion of the parcel of land; that the
respondents were never lessees of the
petitioner municipality; that Proclamation No-
365 issued on March 15, 1968 recognized
"private rights"; and, that a case is pending
before the Cadastral court between Medina
and petitioner municipality as regards the
ownership of the subject parcel of land.
WON the petitioner municipality is
entitled to a writ of possession and a writ
of demolition even before the trial of the
case starts.
HELD: NO. While the complaint alleges
factual circumstances of a complaint for
abatement of public nuisance, the municipality
municipality had three remedies from which to
select its cause of action. It chose to file a civil
52
A REVIEWER IN LOCAL GOVERNMENT LAW
action for the recovery of possession of the
parcel of land occupied by the private
respondents. Obviously, petitioner municipality
was aware that under the then Local
Government Code (B.P. Blg. 337) the
Sangguniang Bayan has to first pass an
ordinance before the municipality may
summarily abate a public nuisance.
However, if, the allegations in the complaint
are true and that the parcel of land being
occupied by the private respondents is indeed
a public plaza, then the writ of possession and
writ of demolition would have been justified. In
fact, under such circumstances, there would
have been no need for a writ of possession in
favor of the petitioner municipality since the
private respondents' occupation over the
subject parcel of land cannot be recognized by
any law, since a public plaza is outside the
commerce of man. A writ of demolition would
have been sufficient to eject the private
respondents.
However, not only did the municipality avoid
the use of abatement without judicial
proceedings, but the status of the subject
parcel of land has yet to be decided.
It is to be noted that even before the
Proclamation, the parcel of land was the
subject of cadastral proceedings before
another branch of the Regional Trial Court of
Zamboanga del Sur. At the time of the filing of
the instant case, the cadastral proceedings
intended to settle the ownership over the
questioned portion of the parcel of land under
Proclamation No. 365 were still pending.
Under the cadastral system, the government
through the Director of Lands initiates the
proceedings by filing a petition in court after
which all owners or claimants are compelled to
act and present their answers otherwise they
lose their right to their own property. The
purpose is to serve the public interests by
requiring that the titles to any lands "be
settled and adjudicated." Hence, it is a
prejudicial question in the present case.
Parenthetically, the issuance of the writ of
possession and writ of demolition by the
PROF. GISELLA DIZON-REYES
petitioner Judge in the ejectment proceedings
was premature. What the petitioner should
have done was to stop the proceedings in the
instant case and wait for the final outcome of
the cadastral proceedings.
Faced with these alternative possibilities, and
in the interest of justice, we rule that the
petitioner municipality must put up a bond to
be determined by the trial court to answer for
just compensation to which the private
respondents may be entitled in case the
demolition of their buildings is adjudged to be
illegal.
Patalinghug v CA
(1994)
FACTS: The Sangguinang Panlungsod of
Davao enacted Ordinance No. 363 (Expanded
Zoning Ordinance of Davao City). It provided
that funeral homes must be established not
less than 50 meters from any residential
structures, churches, and other institutional
buildings.
Upon approval and certification of zoning
compliance by the zoning administrator, the
building officer issued a building permit in
favor of Patalinghug for the construction of the
Metropolitan Funera Parlor at Cabaguio Ave.
Residents of Barangay Agdao complained that
it violated the ordinance since it was within a
50-meter radius from the INC Chapel and
several residential structures. The Sanggunian
found out that the nearest residential structure
(owned by Tepoot) was only 8 inches to the
south.
Notwithstanding the findings of the
Sangguniang Panlungsod, Patalinghug
continued to construct his funeral parlor which
was soon finished.
The residents then filed a case for declaration
of nullity of a building permit. The trial court
dismissed the complaint saying that:
1. The residential building owned by
Cribillo and Iglesia ni Kristo chapel are
63.25 meters and 55.95 meters away,
respectively from the funeral parlor.
53
A REVIEWER IN LOCAL GOVERNMENT LAW
2. Although the residential building owned
by certain
Mr. Tepoot is adjacent to the funeral
parlor, and is only separated therefrom
by a concrete fence, said residential
building is being rented by a certain Mr.
Asiaten who actually devotes it to his
laundry business with machinery
thereon.
3. Private respondent's suit is premature
as they failed to exhaust the
administrative remedies provided by
Ordinance No. 363.
The CA reversed the trial court and ruled that
Tepoot’s land is a residential lot as reflected in
the tax declaration.
WON Tepoot’s land is residential.
HELD: NO. The question of whether Mr.
Tepoot’s building is residential or not is a
factual determination which appellate courts
should not disturb. Although the general rule is
that factual findings of the Court of Appeals
are conclusive on us, this admits of exceptions
as when the findings or conclusions of the
Court of Appeals and the trial court are
contrary to each other. While the trial court
ruled that Tepoot's building was commercial,
the Appellate Court ruled otherwise. Thus we
see the necessity of reading and examining
the pleadings and transcripts submitted before
the trial court.
The testimony of City Councilor Vergara shows
that Mr. Tepoot’s buillding was used for a dual
purpose: dwelling and for business. While its
commercial aspect has been established by
the presence of machineries and laundry
equipment, its use as a residence was not fully
substantiated.
A tax declaration is not conclusive of the
nature of the property for zoning purposes. A
property may have been declared by its owner
as residential for real estate taxation purposes
but it may well be within a commercial zone. A
discrepancy may thus exist in the
determination of the nature of property for
PROF. GISELLA DIZON-REYES
real estate taxation purposes vis-a-vis the
determination of a property for zoning
purposes.
On the other hand, the findings of the trial
court are supported by the fact that the
Sanggunian declared the area as commercial
or C-2. Once a local government has
reclassified an area as commercial, that
determination, for zoning purposes, must
prevail. While the commercial character of the
vicinity was declared through ordinance, the
respondents have failed to substantiate their
arguments that Cabaguio Avenue was still a
residential zone.
The declaration of an area as a commercial
zone thru a municipal ordinance is an exercise
of police power to promote the good order and
general welfare of the people in a locality.
Corollary thereto, the state, in order to
promote the general welfare, may interfere
with personal liberty, with property, and with
business and occupations. Persons may be
subjected to certain kinds of restraints and
burdens to secure the general welfare of the
state.
Greater Balanga Development
Corporation vs. Municipality of Balanga
(1994)
FACTS: GBDC applied with the Office of the
Balanga Mayor for a business permit its
property, certain portions of which has been
"unlawfully usurped and invaded" by Balanga,
which had "allowed/tolerated/abetted" the
construction of shanties and market stalls
while charging market fees and market
entrance fees from the occupants and users of
the area. Mayor issued a Mayor's Permit
granting GBDC the privilege of a "real estate
dealer/privately-owned public market
operator" under the registered trade name of
Balanga Public Market.
However, the Sangguniang Bayan passed a
Resolution annulling the Mayor's permit issued
to GBDC and advising the Mayor to revoke the
permit. Mayor revoked the permit insofar as it
authorized the operation of a public market.
54
A REVIEWER IN LOCAL GOVERNMENT LAW
GBDC filed this petition claiming that it had not
violated any law or ordinance, thus there’s no
reason to revoke the Mayor's permit. It further
alleged that he EO and the resolution in
question were quasi-judicial acts and not mere
exercises of police power and that the Mayor
also failed to observe due process in revoking
the permit.
Balanga argues that Mayor may issue, deny or
revoke municipal licenses and permits and
that the resolution and EO were legitimate
exercise of local legislative authority. It further
argues that GBDC violated Section 3A-06(b) of
the Balanga Revenue Code when it failed to
inform the Mayor that the lot in controversy
was the subject of adverse claims for which a
civil case was filed and when it failed to apply
for two separate permits for the two lines of
business it proposed to engage in.
WON there has been a valid revocation of
the permit.
HELD: NO. The authority of the Mayor to
revoke a permit he issued is premised on a
violation by the grantee of any of the
conditions for which the permit had been
granted.
The application for Mayor's permit requires the
applicant to state what type of business,
profession, occupation and/or calling privileges
is being applied for. Petitioner left this entry
blank in its application form. The permit should
not have been issued without the required
information given in the application form itself.
Leaving an entry blank is not equal to false
statement. There must be proof of willful
misrepresentation and deliberate intent to
make a false statement. Good faith is always
presumed, and as it happened, petitioner did
not make any false statement in the pertinent
entry.
Applying for two businesses in one permit is
also not a ground for revocation. Par 2 Section
3A-06(b) does not expressly require two
permits for their conduct of two or more
businesses in one place, but only that separate
fees be paid for each business. The powers of
municipal corporations are to be construed in
PROF. GISELLA DIZON-REYES
strictissimi juris (strictly in its legal terms) and
any doubt or ambiguity must be construed
against the municipality. Granting, however,
that separate permits are actually required,
the application form does not contain any
entry as regards the number of businesses the
applicant wishes to engage in.
The question of ownership over Lot 261-B had
already been settled with finality by the
Supreme Court in 1983. Entry of judgment was
likewise, made in the same year. When the
Mayor's permit was revoked, five years had
already elapsed since the case was decided.
GBDC was able to survey the land and have
the survey approved. GBDC also obtained in
its name TCT No. 120152 "without any
memorandum of encumbrance or
encumbrances pertaining to any decision
rendered in any civil case. Clearly, for all
intents and purposes, Greater Balanga
appeared to be the true owner of Lot 261-B-6-
A-3 when respondents revoked its permit to
engaged in business on its own land.
Of course, the Sangguniang Bayan has the
duty in the exercise of its police powers to
regulate any business subject to municipal
license fees and prescribe the conditions
under which a municipal license already issued
may be revoked. But the "anxiety, uncertainty,
restiveness" among the stallholders and
traders cannot be a valid ground for revoking
the permit of petitioner. After all, the
stallholders and traders were doing business
on property not belonging to the Municipal
government. Indeed, the claim that the
executive order and resolution were measures
"designed to promote peace and order and
protect the general welfare of the people of
Balanga" is too amorphous and convenient an
excuse to justify respondents' acts.
Moreover, the manner by which the Mayor
revoked the permit transgressed petitioner's
right to due process. The alleged violation of
Section 3A-06(b) of the Balanga Revenue Code
was not stated in the order of revocation, and
neither was petitioner informed of this specific
violation until the Rejoinder was filed in the
instant case. In fact, with all the more reason
should due process have been observed in
55
A REVIEWER IN LOCAL GOVERNMENT LAW
view of the questioned Resolution of the
Sangguniang Bayan.
Tano vs. Socrates
(1997)
FACTS: Sangguniang Panlunsod of Puerto
Princesa enacted an Ordinance banning the
shipment of all live fish and lobster outside
Puerto Princesa for 5 years.
To implement this, Acting City Mayor issued
Office Order No. 23, allowing inspections of
cargoes to determine whether the shipper
possessed the required Mayor's Permit issued
by this Office and the shipment is covered by
invoice or clearance issued by the local office
of the Bureau of Fisheries and Aquatic
Resources and as to compliance with all other
existing rules and regulations on the matter.
Next, the Sangguniang Panlalawigan of
Palawan enacted SR No. 33 and Ordinance No.
2 series of 1993 prohibiting the catching,
gathering, possessing, buying, selling and
shipment of live marine coral dwelling aquatic
organisms in and coming from Palawan waters
for 5 years.
Petitioners, alleged violators of the ordinaces
and the Airline Shippers’ Associatin, went to
the SC arguing that the respondents
implemented the said ordinances depriving all
the fishermen of the whole province of
Palawan and the City of Puerto Princesa of
their only means of livelihood and the
petitioners Airline Shippers Association of
Palawan and other marine merchants from
performing their lawful occupation and trade.
WON the resolutions and ordinances
issued were valid exercises of police
power.
HELD: YES. There is absolutely no showing
that any of the petitioners qualifies as a
subsistence or marginal fisherman. In their
petition, petitioner Airline Shippers Association
of Palawan is self-described as "a private
association composed of Marine Merchants;"
petitioners Robert Lim and Virginia Lim, as
"merchants;" while the rest of the petitioners
PROF. GISELLA DIZON-REYES
claim to be "fishermen," without any
qualification, however, as to their status.
Since the Constitution does not specifically
provide a definition of the terms "subsistence"
or "marginal" fishermen, they should be
construed in their general and ordinary sense.
A marginal fisherman is an individual
engaged in fishing whose margin of return or
reward in his harvest of fish as measured by
existing price levels is barely sufficient to yield
a profit or cover the cost of gathering the fish,
while a subsistence fisherman is one whose
catch yields but the irreducible minimum for
his livelihood. Section 131(p) of the LGC (R.A.
No. 7160) defines a marginal farmer or
fisherman as "an individual engaged in
subsistence farming or fishing which shall be
limited to the sale, barter or exchange of
agricultural or marine products produced by
himself and his immediate family." It bears
repeating that nothing in the record supports a
finding that any petitioner falls within these
definitions. Besides, Section 2 of Article XII
aims primarily not to bestow any right to
subsistence fishermen, but to lay stress on the
duty of the State to protect the nation's
marine wealth. What the provision merely
recognizes is that the State may allow, by law,
cooperative fish farming, with priority to
subsistence fishermen and fishworkers in
rivers, lakes, bays and lagoons.
Moreover, the ordinances in question are
meant precisely to protect and conserve our
marine resources to the end that their
enjoyment may be guaranteed not only for the
present generation, but also for the
generations to come. Section 5(c) of the LGC
explicitly mandates that the general welfare
provisions of the LGC "shall be liberally
interpreted to give more powers to the local
government units in accelerating economic
development and upgrading the quality of life
for the people of the community."
The LGC vests municipalities with the power to
grant fishery privileges in municipal waters
and impose rentals, fees or charges therefor;
to penalize, by appropriate ordinances, the use
of explosives, noxious or poisonous
substances, electricity, muro-ami, and other
56
A REVIEWER IN LOCAL GOVERNMENT LAW
deleterious methods of fishing; and to
prosecute any violation of the provisions of
applicable fishery laws.
The centerpiece of LGC is the system of
decentralization as expressly mandated by the
Constitution. Indispensable to decentralization
is devolution and the LGC expressly provides
that "any provision on a power of a local
government unit shall be liberally interpreted
in its favor, and in case of doubt, any question
thereon shall be resolved in favor of devolution
of powers and of the lower local government
unit. Any fair and reasonable doubt as to the
existence of the power shall be interpreted in
favor of the local government unit concerned."
In light then of the principles of
decentralization and devolution enshrined in
the LGC and the powers granted therein to
local government units under Section 16 (the
General Welfare Clause), and under Sections
149, 447(a) (1) (vi), 458 (a) (1) (vi) and 468 (a)
(1) (vi), which unquestionably involve the
exercise of police power, the validity of the
questioned Ordinances cannot be doubted.
GD-R: Not all DENR powers were devolved to
the LGU’s. The LGU’s merely implemented the
programs of the DENR.
Closure and Opening of Roads
LGC, SEC. 21. Closure and Opening of
Roads. –
(a) A local government unit may, pursuant to
an ordinance, permanently or temporarily
close or open any local road, alley, park, or
square falling within its jurisdiction: Provided,
however, That in case of permanent closure,
such ordinance must be approved by at least
two-thirds (2/3) of all the members of the
sanggunian, and when necessary, an adequate
substitute for the public facility that is subject
to closure is provided.
(b) No such way or place or any part thereof
shall be permanently closed without making
provisions for the maintenance of public safety
therein. A property thus permanently
withdrawn from public use may be used or
PROF. GISELLA DIZON-REYES
conveyed for any purpose for which other real
property belonging to the local government
unit concerned may be lawfully used or
conveyed: Provided, however, That no
freedom park shall be closed permanently
without provision for its transfer or relocation
to a new site.
(c) Any national or local road, alley, park, or
square may be temporarily closed during an
actual emergency, or fiesta celebrations,
public rallies, agricultural or industrial fairs, or
an undertaking of public works and highways,
telecommunications, and waterworks projects,
the duration of which shall be specified by the
local chief executive concerned in a written
order: Provided, however, That no national or
local road, alley, park, or square shall set
temporarily closed for athletic, cultural, or civic
activities not officially sponsored, recognized,
or approved by the
local government unit concerned.
(d) Any city, municipality, or barangay may, by
a duly enacted ordinance, temporarily close
and regulate the use of any local street, road,
thoroughfare, or any other public place where
shopping malls, Sunday, flea or night markets,
or shopping areas may be established and
where goods, merchandise, foodstuffs,
commodities, or articles of commerce may be
sold and dispensed to the general public.
PIMENTEL:
• The mayor cannot unilaterally close a road
or a street even if it is for public welfare
except if the closure is only temporary and
only during the circumstances mentioned
in Sec. 21 (c). In other cases, an ordinance
is needed to close such road or street.
• When a subdivision road is withdrawn from
the commerce of man as the open space
required by law to be devoted for the use
of the general public, its ownership is
automatically vested in the municipal/city
government and/or the Republic of the
Philippines, without need of paying any
compensation to the owner/developer of
the said road, although it is still registered
in the latter's name. Its donation by the
57
A REVIEWER IN LOCAL GOVERNMENT LAW
owner/developer to the government is a
mere formality. Indeed, the standard
practice and requirement is that a
developer must, among its mandatory
obligations, develop the road lots in its
subdivision at its own expense, before it
can turn over the same to the government
by way of a donation. (White Plains
Association vs. Legaspi)
• The last sentence of Sec. 21(b) is proof of
Congress’ intent to preserve the sanctity of
freedom parks and their large role as a
mechanism of preserving democracy.
Freedom parks are places where public
gatherings, meetings, and rallies may be
held, especially in cases when the main
plaza of a city or municipality is not
available.
However, only a few LGU’s have
designated freedom parks, as provided by
Sec. 15 of BP 880. Hence, the SC held in a
case that no permit may be required for
the people’s exercise of their right to
peacefully assemble and petition in any
public park or plaza of a city or
municipality until that city or municipality
designates a freedom park. The Sc said
that without such alternative forum, to
deny the permit would be in effect to deny
the right (Bayan vs. Ermita)
Sangalang vs. IAC
(1989)
FACTS: As far back in 1977, Makati, has
always been plagued by traffic. For this
reason, during that time, Mayor Nemesio
Yabut of Makati ordered that studies be made
on ways on how to alleviate the traffic
problem, particularly in the areas along the
public streets adjacent to Bel-Air Village. The
studies revealed that the subdivision plan of
Bel-Air was approved by the Court of First.
Distance of Rizal on the condition, among
others, that its major thoroughfares
connecting to public streets and highways
shall be opened to public traffic.
PROF. GISELLA DIZON-REYES
Accordingly, it was deemed necessary by the
Municipality of Makati in the interest of the
general public to open to traffic Amapola,
Mercedes, Zodiac, Jupiter, Neptune, Orbit and
Pasco de Roxas streets. As a result, the gates
owned by BAVA at Jupiter and Orbit were
ordered demolished.
Mayor Yabut justified the opening of the
streets on the following grounds:
1) Some time ago, Ayala Corporation
donated Jupiter and Orbit Streets to
Bel-Air on the condition that, under
certain reasonable conditions and
restrictions, the general public shall
always be open to the general public.
These conditions were evidenced by a
deed of donation executed between
Ayala and Bel-Air.
2) The opening of the streets was justified
by public necessity and the exercise of
the police power.
3) Bel-Air Village Association’s (BAVA)
articles of incorporation recognized
Jupiter Street as a mere boundary to
the southwest – thus it cannot be said
to be for the exclusive benefit of Bel-Air
residents.
4) BAVA cannot hide behind the non-
impairment clause on the ground that
is constitutionally guaranteed. The
reason is that it is not absolute, since it
has to be reconciled with the legitimate
exercise of police power.
BAVA, on the other hand, contended:
1) Rufino Santos, president of BAVA, never
agreed to the opening of the said
streets
2) BAVA has always kept the streets
voluntarily open anyway
3) The demolition of the gates
abovementioned was a deprivation of
property without process of law or
expropriation without just
compensation.
WON Mayor Yabut validly exercised
police power.
HELD: YES. The Mayor is correct, for the
reasons mentioned above. Also, the demolition
58
A REVIEWER IN LOCAL GOVERNMENT LAW
of the gates is justified under Art. 436 of the
Civil Code.
“When any property is condemned or
seized by competent authority in the
interest of health, safety or security,
the owner thereof shall not be entitled
to compensation, unless he can show
that such condemnation or seizure is
unjustified.”
In this case, BAVA has the burden of showing
that the seizure of the gates is unjustified
because police power can be exercised
without provision for just compensation. The
Court is of the opinion that the Mayor did not
act unreasonably nor was the opening of the
gates unjustified. In fact, the gates could even
be considered public nuisances, of which
summary abatement, as decreed under Art.
701 of the Civil Code, may be carried out by
the Mayor.
Cabrera vs. CA
(1991)
FACTS: The Provincial Board of Catanduanes
issued Resolution No. 158 for the closure of a
road leading to the Capitol Building
Owners of the properties traversed by the new
road were given portions of the old road in
exchange for their properties. Deeds of
exchange were executed under which the
province conveyed to several persons the
portions of the closed road in exchange for
their own respective properties on which was
subsequently laid a new concrete road.
Cabrera, upon learning about the resolution,
filed a complaint for the abatement of
nuisance and annulment of resolutions and
documents with damages. He alleged that
Resolution No. 158 is not an order for a closure
of the road but an authority to barter, and
since the land fronting his house was a public
road owned by the province in its
governmental capacity it is beyond the
commerce of man.
WON the closure of the said road was
valid.
PROF. GISELLA DIZON-REYES
HELD: YES. Resolution No. 158 clearly says
that “it is hereby resolved to close the old
road.” The closure is as plain as day except
that the petitioner, with the blindness of those
who will not see, refuses to acknowledge it.
The Court has little patience with such puerile
arguments. They border dangerously on a
trifling with the administration of justice and
can only prejudice the pleader's cause.
In the case of Cebu Oxygen and Acetylene Co.,
Inc. v. Bercilles and Favis vs. City of Baguio the
Court held the closure of a city street as within
the powers of the city council, who is the
authority competent to determine whether or
not a certain property is still necessary for
public use.
While it is true that the above cases dealt with
city councils and not the provincial board,
there is no reason for not applying the doctrine
announced therein to the provincial board in
connection with the closure of provincial roads.
The provincial board has, after all, the duty of
maintaining such roads for the comfort and
convenience of the inhabitants of the province.
Moreover, this authority is inferable from the
grant by the national legislature of the funds
to the Province of Catanduanes for the
construction of provincial roads.
Also, Cabrera is not entitled to damages. One
whose property does not abut on the closed
section of the street has no right of
compensation for its closure if he still has
reasonable access to the general system of
streets.
To warrant recovery, the property owner must
show that the situation is such that he has
sustained special damage differing in kind, and
not merely in degree, from those sustained by
the public generally.
The Constitution does not undertake to
guarantee to a property owner the public
maintenance of the most convenient route to
his door. The law will not permit him to be cut
off from the public thoroughfares, but he must
content himself with such route for outlet as
the regularly constituted public authority may
deem most compatible with the public welfare.
59
A REVIEWER IN LOCAL GOVERNMENT LAW
His acquisition of city property is a tacit
recognition of these principles.
Dacanay vs. Asistio
(1992)
FACTS: MMC Ordinance No. 79-02 was
enacted by the MMC, designating certain
streets, roads and open spaces as sites for flea
markets. The Caloocan city mayor Robles,
pursuant to the Ordinance, opened up 7 flea
markets in the city. He and the city engineer
issued licenses for the conduct of vending
activities upon application of some vendors.
In 1987, OIC mayor Martinez caused the
demolition of market stalls on certain streets.
Stall-owners filed an action for prohibition
praying that the court issue a writ of
preliminary injunction. RTC issued writ prayed
for but later dismissed the petition and lifted
the writ of preliminary injunction it had issued
earlier. It found that the streets were of public
dominion and hence, outside the commerce of
man.
Shortly after the decision came out, the city
administration changed hands. However, the
new city mayor Asistio Jr. did not pursue the
prior administration's policy of clearing and
cleaning up the city streets. Petitioner wrote a
letter to Asistio asking for the demolition of the
illegally constructed stalls and invoking the
decision in prior civil case. His letters
however, were not acted on.
WON public streets or thoroughfares may
be leased or licensed to market
stallholders by virtue of a city ordinance
or resolution of the Metro Manila
Commission
HELD: NO. There is no doubt that the
disputed areas from which the private
respondents' market stalls are sought to be
evicted are public streets. A public street is
property for public use hence outside the
commerce of man (Arts. 420, 424, Civil Code).
Being outside the commerce of man, it may
not be the subject of lease or other contracts.
As the stallholders pay fees to the City
Government for the right to occupy portions of
PROF. GISELLA DIZON-REYES
the public street, the City Government,
contrary to law, has been leasing portions of
the streets to them. Such leases or licenses
are null and void for being contrary to law. The
right of the public to use the city streets may
not be bargained away through contract. The
interests of a few should not prevail over the
good of the greater number in the community
whose health, peace, safety, good order and
general welfare, the respondent city officials
are under legal obligation to protect.
The Executive Order issued by Acting Mayor
Robles authorizing the use of Heroes del '96
Street as a vending area for stallholders who
were granted licenses by the city government
contravenes the general law that reserves city
streets and roads for public use. Mayor Robles'
Executive Order may not infringe upon the
vested right of the public to use city streets for
the purpose they were intended to serve: i.e.,
as arteries of travel for vehicles and
pedestrians. As early as 1989, the public
respondents bad started to look for feasible
alternative sites for flea markets. They have
had more than ample time to relocate the
street vendors.
Macasiano vs. Diokno
(1992)
FACTS: Municipality of Paranaque passed
Ordinance No. 86 which authorized the (1)
closure of certain streets at Baclaran and (2)
the establishment of a flea market thereon.
Such was passed pursuant to an MMC
Ordinance authorizing and regulating the use
of certain city streets, roads and open spaces
within Metro Manila as sites for flea markets or
vending areas. Ordinance was later approved
by the Metro Manila Authority subject to the
certain conditions.
Paranaque mayor entered into an agreement
with Palanyag, a service cooperative, for the
establishment and operation of the flea
market. PNP Superintendent Macasiano
ordered the confiscation of stalls put up by
Palanyag and the discontinuation of the
operation of the flea market. The TC upheld
validity of Ordinance No. 86 and enjoined
Macasiano from enforcing his letter-order.
60
A REVIEWER IN LOCAL GOVERNMENT LAW
WON an ordinance or resolution issued
by a municipal council authorizing the
lease and use of public streets as sites
for flea markets is valid.
HELD: NO. The ordinance by Paranaque
authorizing the lease and use of public streets
or thoroughfares as sites for flea market is
invalid.
Streets are local roads used for public service
and are therefore considered public properties.
Properties of the local government which are
devoted to public service are deemed public
and are under the absolute control of
Congress. Hence, local governments have no
authority whatsoever to control or regulate the
use of public properties unless specific
authority is vested upon them by Congress.
Sec 10 Chapter II of the LGC, although
authorizing LGUs to close roads and similar
public places, should be deemed limited by Art
424 CC which provides that properties of
public dominion devoted to public use and
made available to the public in general are
outside the commerce of man and cannot be
disposed of or leased by the LGC to private
persons.
Closure should also be done for the sole
purpose of withdrawing the road or other
public property from public use when
circumstances show that such property is no
longer intended or necessary for public use or
service. When the property is already
withdrawn from public use, it becomes
patrimonial property of the LGU which it can
then lawfully use or convey. However, those
roads and streets which are available to the
public in general and ordinarily used for
vehicular traffic are still considered public
property devoted to public use. In such case,
the local government has no power to use it
for another purpose or to dispose of or lease it
to private persons.
The right of the public to use the city streets
may not be bargained away through contract.
PROF. GISELLA DIZON-REYES
Even assuming that the municipality has the
authority to pass the disputed ordinance, it
cannot be considered approved by the Metro
Manila Authority due to non-compliance with
the imposed conditions:
1) That the aforenamed streets are not
used for vehicular traffic, and that the
majority of the residents does not
oppose the establishment of the flea
market/vending areas thereon;
2) That the 2-meter middle road to be
used as flea market/vending area shall
be marked distinctly, and that the 2
meters on both sides of the road shall
be used by pedestrians;
3) That the time during which the vending
area is to be used shall be clearly
designated;
4) That the use of the vending areas shall
be temporary and shall be closed once
the reclaimed areas are developed and
donated by the Public Estate Authority.
The municipality of Paranaque has not shown
any iota of proof that it has complied with the
foregoing conditions precedent to the approval
of the ordinance. The allegations of
respondent municipality that the closed
streets were not used for vehicular traffic and
that the majority of the residents do not
oppose the establishment of a flea market on
said streets are unsupported by any evidence
that will show that this first condition has been
met. Likewise, the designation by respondents
of a time schedule during which the flea
market shall operate is absent.
Further, it is of public notice that the streets
along Baclaran area are congested with
people, houses and traffic brought about by
the proliferation of vendors occupying the
streets. To license and allow the establishment
of a flea market along J. Gabriel, G.G. Cruz,
Bayanihan, Lt. Garcia Extension and Opena
streets in Baclaran would not help in solving
the problem of congestion.
The local government should refrain from
acting towards that which might prejudice or
adversely affect the general welfare.
61
A REVIEWER IN LOCAL GOVERNMENT LAW
As what the SC have said in the Dacanay case,
the general public have a legal right to
demand the demolition of the illegally
constructed stalls in public roads and streets
and the officials of respondent municipality
have the corresponding duty arising from
public office to clear the city streets and
restore them to their specific public purpose.
Pilapil v. CA
(1992)
FACTS: Spouses Pilapil own a parcel of land in
Bahak, Poblacion, Liloan, Cebu. Spouses
Colomida, on the other hand, bought a parcel
of land located also in Bahak. The Colomidas
claim that they had acquired from Sesenando
Longkit a road right of way which leads
towards the National Road; this road right of
way, however, ends at that portion of the
property of the Pilapils where a camino vecinal
(barrio road) exists all the way to the said
National Road.
The Colomidas "tried to improve the road of
"camino vecinal", for the convenience of the
public," but the Pilapils harassed and
threatened them with "bodily harm from
making said improvement." The Pilapils also
threatened to fence off the camino vecinal.
Thus, the Colomidas filed a complaint against
the Pilapils.
The Pilapils denied the existence of the camino
vecinal. They presented several witnesses.
Among them was Engineer Epifanio Jordan,
Municipal Planning and Development
Coordinator of Liloan. Engineer Jordan testified
on Liloan's Urban Land Use Plan 19 or zoning
map which he prepared upon the instruction of
then Municipal Mayor Cesar Butai and which
was approved by the Sangguniang Bayan of
Liloan. Per the said plan, the camino vecinal in
sitio Bahak does not traverse, but runs along
the side 20 of the Pilapil property
The Colomidas, on the other hand, relied on
old-timers as witnesses – witnesses such as
Florentino Pepito, who attested to the
existence of the Camino vecinal and its
availability to the general public since
practically time immemorial.
PROF. GISELLA DIZON-REYES
WON the Municipality of Liloan’s camino
vecinal should traverse the property of
the Pilapils.
HELD: NO. A camino vecinal is a municipal
road. It is also property for public use.
Pursuant to the powers of a local government
unit, the Municipality of Liloan had the
unassailable authority to (a) prepare and
adopt a land use map, (b) promulgate a zoning
ordinance which may consider, among other
things, the municipal roads to be constructed,
maintained, improved or repaired and (c) close
any municipal road.
The SC said that it didn’t matter what opinion
the Colomidas or the engineer gave regarding
the existence of the camino vecinal. To the SC,
the issue of their credibility has been rendered
moot by the unrebutted evidence which shows
that the Municipality of Liloan, through its
Sangguniang Bayan, had approved a zoning
plan, otherwise called an Urban Land Use Plan.
This plan indicates the relative location of the
camino vecinal in sitio Bahak
It is beyond dispute that the establishment,
closure or abandonment of the camino vecinal
is the sole prerogative of the Municipality of
Liloan. No private party can interfere with such
a right. Hence, the decision of the Municipality
of Liloan with respect to the said camino
vecinal in sitio Bahak must prevail. It is thus
pointless to concentrate on the testimonies of
both witnesses since the same have, for all
intents and purposes, become irrelevant.
And as per the zoning map, as further declared
by Engineer Jordan, this camino vecinal in sitio
Bahak "passes the side of the land of Socrates
Pilapil. This is the proposed road leading to the
national highway." Hence, said road should not
traverse the Pikapil’s property.
NOTE: What invested the zoning map with
legal effect was neither the authority of the
person who ordered its preparation nor the
authority of the person who actually prepared
it, but its approval by the Sangguniang Bayan.
Furthermore, with or without the order of the
Mayor or Sangguniang Bayan, Engineer Jordan,
62
A REVIEWER IN LOCAL GOVERNMENT LAW
as the then Municipal Planning and
Development Coordinator, had the authority to
prepare the plan and admit it to the
Sangguniang Bayan for approval. Among his
functions under the governing law at the time
was to formulate an integrated economic,
social, physical and other development
objectives and policies for the consideration
and approval of the sangguniang bayan and
the municipal mayor, and prepare municipal
comprehensive plans and other development
planning document.
MMDA v Bel-Air Village Assn., Inc.
(2000)
FACTS: Neptune Street is owned by
respondent Bel-Air Village Associaiton (BAVA).
It is a private road inside Bel-Air Village, a
private residential subdivision in the heart of
the financial and commercial district of Makati
City. It runs parallel to Kalayaan Avenue, a
national road open to the general public.
Dividing the two (2) streets is a concrete
perimeter wall approximately fifteen (15) feet
high. The western end of Neptune Street
intersects Nicanor Garcia, formerly Reposo
Street, a subdivision road open to public
vehicular traffic, while its eastern end
intersects Makati Avenue, a national road.
Both ends of Neptune Street are guarded by
iron gates.
BAVA received from MMDA a notice requesting
it to open Neptune Street to public vehicular
traffic. BAVA was also apprised that the
perimeter wall separating the subdivision from
the adjacent Kalayaan Avenue would be
demolished.
BAVA institued a petition for injunction with
TRO and preliminary writ of injunction against
MMDA.
WON MMDA is endowed with police
power to open such roads.
HELD: NO. Police power is an inherent
attribute of sovereignty. It has been defined as
the power vested by the Constitution in the
legislature to make, ordain, and establish all
manner of wholesome and reasonable laws,
PROF. GISELLA DIZON-REYES
statutes and ordinances, either with penalties
or without, not repugnant to the Constitution,
as they shall judge to be for the good and
welfare of the commonwealth, and for the
subjects of the same. The power is plenary and
its scope is vast and pervasive, reaching and
justifying measures for public health, public
safety, public morals, and the general welfare.
It bears stressing that police power is lodged
primarily in the National Legislature. It cannot
be exercised by any group or body of
individuals not possessing legislative power.
The National Legislature, however, may
delegate this power to the President and
administrative boards as well as the
lawmaking bodies of municipal corporations or
local government units. Once delegated, the
agents can exercise only such legislative
powers as are conferred on them by the
national lawmaking body.
The MMDA is, as termed in the charter itself, a
“development authority.” It is an agency
created for purpose of laying down policies
and coordinating with the various national
government agencies, people’s organizations,
non-governmental organizations and the
private sector for the efficient and expeditious
deliver of basic services in the vast
metropolitan area. All its functions are
ADMINISTRATIVE in nature.
The powers of the MMDA under RA 7924 are
limited to the following acts: formulation,
coordination, regulation, implementation,
preparation, management, monitoring, setting
of policies, installation of a system and
administration. There is nothing in RA NO.
7924 that grants MMDA police power, let alone
legislative power.
The MMDA is not the same entity as the MMC
in Sangalang. Although the MMC is the
forerunner of the present MMDA, the charter of
the MMC shows that the latter possessed
greater powers which were not bestowed on
the present MMDA.
The legislative debates would show that the
MMDA was not intended as a political unit of
the government or a public corporation
63
A REVIEWER IN LOCAL GOVERNMENT LAW
endowed with legislative power. It is not even
a “special metropolitan political subdivision”.
• no plebiscite was conducted for its
creation
• the chairman of the MMDA is not an
official elected by the people, but
appointed by the president with the
rank and privileges of a cabinet
member.
• Part of the chairman’s functions is to
perform such other duties as may be
assigned to him by the President,
whereas in LGUs, the president merely
exercises supervisory authority. This
emphasizes the administrative
character of the MMDA.
Clearly, the MMC is not the same entity as
MMDA. Unlike the MMC, the MMDA has no
power to enact ordinances for the welfare of
the community. It is the LGUs, acting through
their legislative councils, that possess
legislative power and police power.
B. Eminent Domain
LGC, SEC. 19. Eminent Domain. - A local
government unit may, through its chief
executive and acting pursuant to an
ordinance, exercise the power of eminent
domain for public use, or purpose, or welfare
for the benefit of the poor and the landless,
upon payment of just compensation, pursuant
to the provisions of the Constitution and
pertinent laws: Provided, however, That the
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.
PROF. GISELLA DIZON-REYES
1987 CONSTI, Section 9. Private property
shall not be taken for public use without just
compensation.
GD-R: Property, whether real or personal, may
be subject of eminent domain!
PIMENTEL:
• Eminent domain, which is the power of a
sovereign state to appropriate private
property to particular uses to promote
public welfare, is essentially lodged in the
legislature. While such power may be
validly delegated to local government units
(LGUs), other public entities and public
utilities the exercise of such power by the
delegated entities is not absolute. In fact,
the scope of delegated legislative power is
narrower than that of the delegating
authority and such entities may exercise
the power to expropriate private property
only when authorized by Congress and
subject to its control and restraints
imposed through the law conferring the
power or in other legislations. Indeed, LGUs
by themselves have no inherent power of
eminent domain.
Thus, strictly speaking, the power of
eminent domain delegated to an LGU is in
reality not eminent but "inferior" since it
must conform to the limits imposed by the
delegation and thus partakes only of a
share in eminent domain. The national
legislature is still the principal of the LGUs
and the latter cannot go against the
principal’s will or modify the same. (Beluso
vs. Municipality of Panay)
• LGU’s do not possess unbridled authority to
exercise their power of eminent domain…
There are two legal provisions which limit
the exercise of this power: (1) no person
shall be deprived of life, liberty, or property
without due process of law, nor shall any
person be denied the equal protection of
the laws; and (2) private property shall not
be taken for public use without just
compensation. Thus, the exercise by local
government units of the power of eminent
64
A REVIEWER IN LOCAL GOVERNMENT LAW
domain is not absolute. In fact, Section 19
of RA 7160 itself explicitly states that such
exercise must comply with the provisions
of the Constitution and pertinent laws.
• The power of eminent domain may now be
exercised by an LGU without the need of
approval by any national government
authority or body.
HOWEVER, the ordinance authorizing the
local chief executive must still be approved
by the provincial board (in the case of
municipalities)
• NOTE: A mere resolution is not sufficient to
comply with the requirement of the LGC.
• Theoretically, barangays can exercise
eminent domain, but the payment of just
compensation may constitute too big a
drain in their resources.
• NOTE: Eminent domain may now be used
to provide low-cost land for mass housing
for the poor and the landless (“public
welfare”). This may also be justified under
its “general welfare powers” in Sec. 21 of
the LGC.
• Specific examples of public purposes are
the construction of artesian wells or water
systems, cemeteries or crematoriums,
abattoirs, research buildings, and animal
dispersal centers.
• "Compensation" means an equivalent for
the value of the land (property) taken.
Anything beyond that is more and anything
short of that is less than compensation. To
compensate is to render something which
is equal to that taken or received. The
word "just" is used to intensify the
meaning of the word "compensation;" to
convey the idea that the equivalent to be
rendered for the property taken shall be
real, substantial, full, ample.
"Just compensation," (reasonable
compensation) therefore… means a fair
and full equivalent for the loss sustained."
(City of Manila vs. Estrada)
PROF. GISELLA DIZON-REYES
• The burden is on the LGU to prove that the
mandatory requirement of a valid and
definite offer to the owner of the property
before filing its complaint and the rejection
thereof by the latter. It is incumbent upon
the condemnor to exhaust all reasonable
efforts to obtain the land it desires by
agreement. Failure to prove compliance
with the mandatory requirement will result
in the dismissal of the complaint.
A reasonable offer in good faith, not merely
perfunctory or pro forma offer, to acquire
the property for a reasonable price must be
made to the owner or his privy. A single
bona fide offer that is rejected by the
owner will suffice.
A mere letter of intent to acquire property
or an invitation for one of the co-owners, to
a conference to discuss the project and the
price that may be mutually acceptable to
both parties is not a valid and definite offer
to purchase a specific portion of a property
for a price certain. (Jesus Is Lord Christian
School Foundation, Inc vs. Municipality of
Pasig)
• LGU’s can expropriate agricultural lands
without prior authority from the DAR since
the determination of the public use of the
property subject to expropriation is
considered an expression of public policy.
• Republic Act No. 1899 authorized
municipalities and chartered cities to
reclaim foreshore lands, not submerged
lands. Under Commonwealth Act No. 141,
"foreshore and lands under water were not
to be alienated and sold to private parties,"
and that such lands "remained property of
the State." Justice Puno emphasized that
"Commonwealth Act No. 141 has remained
in effect at present." (Chavez vs. PEA)
RULES OF COURT
RULE 67 – EXPROPRIATION
(a.k.a. CONDEMNATION)
A. COMPLAINT FOR EXPROPRIATION
65
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
Section 1: The complaint. The right of report thereof to the court with service of
eminent domain shall be exercised by the copies to the parties.
filing of a verified complaint which shall:
− state with certainty the right and purpose GD-R: Assessed value is the value given by
of expropriation, the owner himself. But the full “just
− describe the real or personal property compensation” is still an issue to be tried in
sought to be expropriated the expropriation proceedings.
− join as defendants all persons owning or
claiming to own, or occupying, any part Section 9: Uncertain ownership;
thereof or interest therein, showing, so far conflicting claims. If there is uncertainty as
as practicable, their separate interest. to ownership of the property, the court may
order any sum or sums awarded as
In cases applicable, it must also be averred compensation for the property to be paid to
clearly in the complaint if: the court for the benefit of the person
− property is owned by the Republic but adjudged in the same proceeding to be
occupied by private individuals, or entitled thereto.
− the title is otherwise obscure or doubtful so
that the plaintiff cannot with accuracy or C. THE ANSWER
certainty specify who are the real owners.
Sec3: Defenses and objections.
B. ENTRY OF PLAINTIFF IN THE PROPERTY Defendant has no Defendant has any
objection or objection or
defense to the defense to the
Section 2: Entry of plaintiff upon
action or the taking filing of complaint:
depositing value with authorized
of his property:
government depositary. The plaintiff shall
He shall file and serve He shall serve his
have the right to take or enter upon the
a notice of answer within the
possession of the real property involved, upon:
appearance and a time stated in the
− filing of the expropriation complaint; with
manifestation to that summons containing-
− service of notice to the defendant; and effect, specifically specific designation or
− deposit with the authorized government designating or identification of the
depositary an amount equivalent to the identifying the property in which he
assessed value of the property for property in which he claims to have an
purposes of taxation to be held by such claims to be interest, nature and
bank subject to the orders of the court. interested, within the extent of the interest
time stated in the claimed, all his
NOTE: The deposit shall be in money, unless in summons. Thereafter, objections and
lieu thereof the court authorizes the deposit of he shall be entitled to defenses to the taking
a certificate of deposit of a government bank notice of all of his property. No
of the Republic of the Philippines. proceedings affecting counterclaim, cross-
the same. claim or third-party
If personal property is involved, its value shall complaint shall be
be provisionally ascertained and the amount to alleged or allowed in
be deposited shall be promptly fixed by the the answer or any
court. subsequent pleading.
− GEN RULE: A defendant waives all
After such deposit is made the court shall defenses and objections not so alleged.
order the sheriff or other proper officer to
forthwith place the plaintiff in possession of
− EXCEPT: But the court, in the interest
the property involved and promptly submit a
of justice, may permit amendments to the

66
A REVIEWER IN LOCAL GOVERNMENT LAW
answer to be made not later than ten (10)
days from the filing thereof.
However, at the trial of the issue of just
compensation, whether or not a defendant has
previously appeared or answered, he may
present evidence as to the amount of the
compensation to be paid for his property, and
he may share in the distribution of the award.
D. ORDER OF EXPROPRIATION
Section 4: Order of expropriation. The
court may issue an order of expropriation:
(declaring that the plaintiff has a lawful right
to take the property sought to be
expropriated, for the public use or purpose
described in the complaint, upon the payment
of just compensation to be determined as of
the date of the taking of the property or the
filing of the complaint, whichever came first)
− if the objections to and the defenses
against the right of the plaintiff to
expropriate the property are overruled, or
− when no party appears to defend as
required by this Rule.
A final order sustaining the right to expropriate
the property may be appealed by any party
aggrieved thereby. Such appeal, however,
shall not prevent the court from determining
the just compensation to be paid.
PROF. GISELLA DIZON-REYES
Copies of the order shall be served on the
parties. Objections to the appointment filed
with the court within ten (10) days from
service, and shall be resolved within thirty (30)
days after all the commissioners shall have
received copies of the objections.
Section 6: Proceedings by commissioners.
1. Before entering upon the performance of
their duties, the commissioners shall take
and subscribe an oath that they will faithfully
perform their duties as commissioners, which
oath shall be filed in court with the other
proceedings in the case.
2. Evidence may be introduced by either party
before the commissioners who are authorized
to administer oaths on hearings before them;
3. The commissioners shall after due notice to
the parties to attend, view and examine the
property sought to be expropriated and its
surroundings, and may measure the same
UNLESS the parties consent to the contrary.
4. The commissioners shall assess the
consequential damages to the property not
taken and deduct from such consequential
damages the consequential benefits to be
derived by the owner from the public use or
purpose of the property taken, the operation
of its franchise by the corporation or the
carrying on of the business of the corporation
or person taking the property. But in no case
shall the consequential benefits assessed
exceed the consequential damages assessed,
or the owner be deprived of the actual value
of his property so taken.

After the rendition of such an order, the

plaintiff shall not be permitted to dismiss or
discontinue the proceeding except on such
terms as the court deems just and equitable.
E. COMPENSATION
Section 5: Ascertainment
compensation. Upon the rendition of the
order of expropriation, the court shall appoint
not more than three (3) competent and
disinterested persons as commissioners to
ascertain and report to the court the just
compensation for the property sought to be
taken
Section 7: Report by commissioners and
judgment thereupon. The court may order
the commissioners to report when any
particular portion of the real estate shall have
been passed upon by them, and may render
judgment upon such partial report, and direct
the commissioners to proceed with their work
of
as to subsequent portions of the property
sought to be expropriated, and may from time
to time so deal with such property.
The commissioners shall make a full and
accurate report to the court of all their
proceedings, and such proceedings shall not
be effectual until the court shall have accepted
their report and rendered judgment in
accordance with their recommendations.
67
A REVIEWER IN LOCAL GOVERNMENT LAW
Except as otherwise expressly ordered by the
court, such report shall be filed within sixty
(60) days from the date the commissioners
were notified of their appointment, which time
may be extended in the discretion of the court.
Upon the filing of such report, the clerk of the
court shall serve copies thereof on all
interested parties, with notice that they are
allowed ten (10) days within which to file
objections to the findings of the report, if they
so desire. (7a)
Section 8: Action upon commissioners’
report.
Upon the expiration of the period of ten (10)
days referred to in the preceding section, or
even before the expiration of such period but
after all the interested parties have filed their
objections to the report or their statement of
agreement therewith, the court may, after
hearing:
− accept the report and render judgment in
accordance therewith; or,
− for cause shown, it may recommit the
same to the commissioners for further
report of facts; or
− it may set aside the report and appoint
new commissioners; or
− it may accept the report in part and reject
it in part; and
− it may make such order or render such
judgment as shall secure to the plaintiff the
property essential to the exercise of his
right of expropriation, and to the defendant
just compensation for the property so
taken.
F. JUDGMENT
Section 13: Recording judgment, and its
effect. The judgment entered in expropriation
proceedings shall state definitely, by an
adequate description, the particular property
or interest therein expropriated, and the
nature of the public use or purpose for which it
is expropriated. When real estate is
expropriated, a certified copy of such
judgment shall be recorded in the registry of
deeds of the place in which the property is
PROF. GISELLA DIZON-REYES
situated, and its effect shall be to vest in the
plaintiff the title to the real estate so described
for such public use or purpose.
Section 10: Rights of plaintiff after
judgment and payment.
Upon payment by the plaintiff to the defendant
of the compensation fixed by the judgment,
with legal interest thereon from the taking of
the possession of the property, or after tender
to him of the amount so fixed and payment of
the costs, the plaintiff shall have the right to
enter upon the property expropriated and to
appropriate it for the public use or purpose
defined in the judgment, or to retain it should
he have taken immediate possession thereof
under the provisions of section 2 hereof.
If the defendant and his counsel absent
themselves from the court, or decline to
receive the amount tendered, the same shall
be ordered to be deposited in court and such
deposit shall have the same effect as actual
payment thereof to the defendant or the
person ultimately adjudged entitled thereto.
Section 11: Entry not delayed by appeal;
effect of reversal.
The right of the plaintiff to enter upon the
property of the defendant and appropriate the
same for public use or purpose shall NOT be
delayed by an appeal from the judgment. But
if the appellate court determines that plaintiff
has no right of expropriation, judgment shall
be rendered ordering the Regional Trial Court
to forthwith enforce the restoration to the
defendant of the possession of the property,
and to determine the damages which the
defendant sustained and may recover by
reason of the possession taken by the plaintiff.
Section 12: Costs, by whom paid. The fees
of the commissioners shall be taxed as a part
of the costs of the proceedings. All costs,
except those of rival claimants litigating their
claims, shall be paid by the plaintiff, unless an
appeal is taken by the owner of the property
and the judgment is affirmed, in which event
the costs of the appeal shall be paid by the
owner.
68
A REVIEWER IN LOCAL GOVERNMENT LAW
Section 14: Power of guardian in such
proceedings. The guardian or guardian ad
litem of a minor or of a person judicially
declared to be incompetent may, with the
approval of the court first had, do and perform
on behalf of his ward any act, matter, or thing
respecting the expropriation for public use or
purpose of property belonging to such minor
or person judicially declared to be
incompetent, which such minor or person
judicially declared to be incompetent could do
in such proceedings if he were of age or
competent.
Moday vs. CA
(1997)
FACTS: The Sangguniang Bayan of the
Municipality of Bunawan in Agusan del Sur
passed Resolution No. 43-89, authorizing the
mayor to initiate the petition for expropriation
of a 1-hectare land along the national highway
owned by Moday for the site of Bunawan
Farmers Center and Other Government Sports
Facilities. The resolution was approved by
Mayor Bustillo but subsequently disapproved
by the Sangguniang Panlalawigan upon finding
that expropriation is unnecessary considering
that there are still other available lots in
Bunawan for the establishment of the
government center. The Municipality, however,
still filed a petition for eminent domain and its
motion to take or enter upon the possession of
subject matter was subsequently granted by
the RTC.
WON a municipality may expropriate
private property by virtue of a municipal
resolution which was disapproved by the
Sangguniang Panlalawigan.
HELD: YES. The Municipality of Bunawan's
power to exercise the right of eminent domain
is not disputed as it is expressly provided for in
BP 337, the LGC in force at the time
expropriation proceedings were initiated.
Section 9 of the law (BP 337) states that “a
local government unit may, through its head
and acting pursuant to a resolution of its
sanggunian, exercise the right of eminent
PROF. GISELLA DIZON-REYES
domain and institute condemnation
proceedings for public use or purpose.”
Section 153 of BP 337, grants the Sangguniang
Panlalawigan the power to declare a municipal
resolution invalid on the sole ground that it is
beyond the power of the Sangguniang Bayan
or the Mayor to issue. Absolutely no other
ground is recognized by the law. The provincial
(board's) disapproval of any resolution,
ordinance, or order must be premised
specifically upon the fact that such resolution,
ordinance, or order is outside the scope of the
legal powers conferred by law. If a provincial
board passes these limits, it usurps the
legislative function of the municipal council or
president. Such has been the consistent
course of executive authority.
Thus, the Sangguniang Panlalawigan was
without the authority to disapprove Municipal
Resolution No. 43-89 for the Municipality of
Bunawan clearly has the power to exercise the
right of eminent domain and its Sangguniang
Bayan the capacity to promulgate said
resolution, pursuant to the earlier-quoted
Section 9 of B.P. Blg. 337. Perforce, it follows
that Resolution No. 43-89 is valid and binding
and could be used as lawful authority to
petition for the condemnation of petitioners'
property.
Province of Camarines Sur vs. CA
(1993)
FACTS: The Sangguniang Panlalawigan
passed resolution No. 129, authorizing the
Provincial Governor to purchase or expropriate
property contiguous to the provincial capital
site, in order to establish a pilot farm and a
housing project for provincial government
employees. Governor Villafuerte filed two
separate cases for expropriation against
Ernesto & Efren San Joaquin. The San Joaquins
moved to dismiss the complaints on the
ground of inadequacy of the price offered for
their property.
The Province of Camarines Sur claims that it
has the authority to initiate the expropriation
proceedings under Sections 4 and 7 of Local
69
A REVIEWER IN LOCAL GOVERNMENT LAW
Government Code (BP 337) and that the
expropriations are for a public purpose.
The TC allowed the Province of Camarines Sur
to take possession of private respondents'
lands. So, they appealed. The CA ordered the
trial court to suspend the expropriation
proceedings until after the Province of
Camarines Sur shall have submitted the
requisite approval of the Department of
Agrarian
The Solicitor General is of the opinion that
under Section 9 of the LGC, there was no need
for the approval by the Office of the President
of the exercise by the Sangguniang
Panlalawigan of the right of eminent domain
but the Province must first secure the approval
of the DAR of the plan to expropriate the lands
of petitioners for use as a housing project
(Section 65 of RA 6657: Comprehensive
Agrarian Reform Law requires the approval of
the DAR before a parcel of land can be
reclassified from an agricultural to a non-
agricultural land.)
WON the expropriation is for a public
purpose or public use.
YES. The old concept of public use is that the
condemned property must actually be used by
the general public (roads, bridges, public
plazas) before the taking thereof could satisfy
the constitutional requirement of public use.
But now, the new concept of public use means
public advantage, convenience or benefit,
which tends to contribute to the general
welfare and the prosperity of the whole
community, like a resort complex for tourists
or housing projects. (Sumulong vs. Guerrero)
The establishment of pilot development center
would inure to the direct benefit and
advantage of the people of the province
WON the expropriation of agricultural
lands by LGUs is subject to the prior
approval of the Secretary of Agrarian
Reform, as the implementor of the
agrarian reform program.
PROF. GISELLA DIZON-REYES
NO. Section 9 of BP 337 does not intimate in
the least that LGUs must first secure the
approval of the Department of Land reform for
the conversion of lands before they can
institute the necessary expropriation
proceedings. Moreover, there is no provision in
the CARL which subjects the expropriation of
agricultural lands by LGUs to the control of the
DAR.
The rules on conversion of agricultural lands
found in Section 4 (k) and 5 (1) of Executive
Order No. 129-A, Series of 1987 cannot be the
source of the authority of the DAR to
determine the suitability of a parcel of
agricultural land for the purpose to which it
would be devoted by the expropriating
authority. Said rules merely vest on the DAR
the exclusive authority to approve or
disapprove conversions of agricultural lands
for residential, commercial or industrial uses,
such authority is limited to the applications for
reclassification submitted by the land
owners or tenant beneficiaries.
Ordinarily, it is the legislative branch of the
local government unit that shall determine
whether the use of the property sought to be
expropriated shall be public, the same being
an expression of legislative policy. Hence, the
courts must defer to such legislative
determination and will intervene only when a
particular undertaking has no real or
substantial relation to the public use.
The fears of private respondents that they will
be paid on the basis of the valuation declared
in the tax declarations of their property, are
unfounded. This Court has declared as
unconstitutional the Presidential Decrees fixing
the just compensation in expropriation cases
to be the value given to the condemned
property either by the owners or the assessor,
whichever was lower. The rules for
determining just compensation are those laid
down in Rule 67 of the Rules of Court, which
allow private respondents to submit evidence
on what they consider shall be the just
compensation for their property.
Municipality of Meycauayan vs. IAC
70
A REVIEWER IN LOCAL GOVERNMENT LAW
(1988)
FACTS: In 1975, PPMC filed with the Office of
the Municipal Mayor of Meycauayan, Bulacan,
an application for a permit to fence a parcel of
land to enable the storage of their heavy
equipment and various finished products such
as large diameter steel pipes, pontoon pipes
for ports, wharves, and harbors, bridge
components, pre-stressed girders and piles,
large diameter concrete pipes, and parts for
low cost housing. In the same year, the
Municipal Council of Meycauayan, headed by
then Mayor Legaspi, passed Resolution No.
258, manifesting the intention to expropriate
the same parcel of land. Such resolution was
disapproved by the Provincial Board of
Bulacan. So, PPMC reiterated its application.
However, in 1983, the Municipal Council of
Meycauayan, now headed by Mayor Daez,
passed Resolution No. 21 for the purpose of
expropriating anew the PPMC's land, and
convert the same into a public road, which
would provide a connecting link between
Malhacan Road and Bulac Road in Valenzuela
and thereby ease the traffic in the area of
vehicles coming from MacArthur Highway.. The
Provincial Board of Bulacan, this time,
approved the aforesaid resolution.
WON there is a necessity for the
expropriation of the land.
HELD: NO. The records reveal that there are
four other connecting links between the
aforementioned roads. The petitioner itself
admits to this fact. And as found by the CA,
there is also another available vacant lot
offered for sale situated similarly as the lot in
question and lying Idle, unlike the lot sought to
be expropriated which was found by the
Committee to be badly needed by the
company as a site for its heavy equipment
after it is fenced together with the adjoining
vacant lot, the justification to condemn the
same does not appear to be very imperative
and necessary and would only cause
unjustified damage to the firm. The desire of
the Municipality of Meycauayan to build a
public road to decongest the volume of traffic
can be fully and better attained by acquiring
PROF. GISELLA DIZON-REYES
the other available roads in the vicinity maybe
at lesser costs without causing harm to an
establishment doing legitimate business
therein.
It must be remembered that the foundation of
the right to exercise the power of eminent
domain is genuine necessity (GD-R: i.e., there
is an existing need at the time of the taking)
and that necessity must be of a public
character. Consequently, the courts have the
power to inquire into the legality of the
exercise of the right of eminent domain and to
determine whether there is a genuine
necessity therefor.
Quezon City vs. Ericta
(1983)
FACTS: QC passed an Ordinance regulating
the establishment, maintenance and operation
of private memorial type cemetery or burial
ground within the jurisdiction of QC. Section 9
of the Ordinance provides that at least 6% of
the total area of a memorial park cemetery
shall be set aside for charity burial of deceased
persons who are paupers and have been
residents of QC for at least 5 yrs prior to their
death.
For several years, the said section of the
Ordinance was not enforced by city authorities
but seven years after the enactment of the
Ordinance, the QC Council passed a resolution
requesting the City Engineer to stop any
further selling of memorial parks in QC where
the owners have failed to donate the required
6% cemetery space. The City Engineer
notified Himlayang Pilipino, Inc. that the
Ordinance would be enforced, so Himlayan
filed a petition with the CFI seeking to annul
Section 9 of the Ordinance. CFI declared
Section 9 null and void.
WON the said Ordinance was authorized
under the QC Charter and thus, a valid
exercise of police power.
NO. An examination of the Charter does not
reveal any provision that would justify the
ordinance in question except the provision
granting police power to the City. Police power
71
A REVIEWER IN LOCAL GOVERNMENT LAW
is the most essential of government powers, at
times the most insistent, and always one of
the least limitable of the powers of
government. It is usually exercised in the form
of mere regulation or restriction in the use
of liberty or property for the promotion of the
general welfare. It does NOT involve the
taking or confiscation of property with the
exception of a few cases where there is
necessity to confiscate private property in
order to destroy it [not to devote it to public
use] (i.e., in the case of confiscation of opium
& firearms).
In this case, Section 9 of the Ordinance is not a
mere police regulation but an outright
confiscation. It deprives a person of his private
property w/o due process…even w/o
compensation.
There is no reasonable relation between the
setting aside of at 6% of the total area of
private cemeteries for charity burial grounds
of deceased paupers and the promotion of
health, morals, good order, safety, or the
general welfare of the people. The ordinance is
actually a taking without compensation of a
certain area from a private cemetery to benefit
paupers who are charges of the municipal
corporation. Instead of building or maintaining
a public cemetery for this purpose, the city
passes the burden to private cemeteries.
The expropriation without compensation of a
portion of private cemeteries is not covered by
Section 12(t) of Republic Act 537, the Revised
Charter of Quezon City, which empowers the
city council to prohibit the burial of the dead
within the center of population of the city and
to provide for their burial in a proper place
subject to the provisions of general law
regulating burial grounds and cemeteries.
When the Local Government Code, BP 337
provides in Section 177 (q) that a Sangguniang
panlungsod may "provide for the burial of the
dead in such place and in such manner as
prescribed by law or ordinance" it simply
authorizes the city to provide its own city
owned land or to buy or expropriate private
properties to construct public cemeteries. This
has been the law and practise in the past. It
continues to the present.
PROF. GISELLA DIZON-REYES
WON it is a valid exercise of
expropriation powers.
NO. Expropriation requires payment of just
compensation. The questioned ordinance is
different from laws and regulations requiring
owners of subdivisions to set aside certain
areas for streets, parks, playgrounds, and
other public facilities from the land they sell to
buyers of subdivision lots. The necessities of
public safety, health, and convenience are
very clear from said requirements which are
intended to insure the development of
communities with salubrious and wholesome
environments. The beneficiaries of the
regulation, in turn, are made to pay by the
subdivision developer when individual lots are
sold to home-owners.
As a matter of fact, the petitioners rely solely
on the general welfare clause or on implied
powers of the municipal corporation, not on
any express provision of law as statutory basis
of their exercise of power. The clause has
always received broad and liberal
interpretation but we cannot stretch it to cover
this particular taking. Moreover, the
questioned ordinance was passed after
Himlayang Pilipino, Inc. had incorporated.
received necessary licenses and permits and
commenced operating. The sequestration of
six percent of the cemetery cannot even be
considered as having been impliedly
acknowledged by the private respondent when
it accepted the permits to commence
operations.
NAPOCOR vs. Jocson
(1992)
FACTS: NAPOCOR filed seven (7) eminent
domain cases before the RTC against several
persons for the acquisition of a right-of-way
easement over portions of the parcels of land
described (GD-R: Remember real rights may
also be expropriated!) in the complaints for its
Negros-Panay Interconnection Project, and to
enable it to construct its tower and
transmission line in a manner that is
compatible with the greatest good while at the
same time causing the least private injury.
72
A REVIEWER IN LOCAL GOVERNMENT LAW
NAPOCOR further alleged that the purpose for
which the lands are principally devoted will not
be impaired by the transmission lines as it will
only acquire a right-of-way-easement thereon.
Eventually, the RTC issued several orders,
fixing the provisional values of the subject
areas, on the basis of the market value and
the daily opportunity profit petitioner may
derive and another order directing the
NAPOCOR to deposit the amounts in escrow
pending decision on the merits. NAPOCOR
complied with such order and asked for a writ
of possession. However, the RTC ordered that
the writ of possession be issued in these cases
after the property owners "have duly received
the amounts."
NAPOCOR questioned such order, arguing that
it violates Section 2 of Rule 67 of the ROC and
that the issuance then of the writ of
possession was an unqualified ministerial duty
which respondent Judge failed to perform.
WON the RTC acted in GADALEJ.
HELD: YES. There are two (2) stages in every
action of expropriation:
− The first is concerned with the
determination of the authority of the
plaintiff to exercise the power of
eminent domain and the propriety of its
exercise in the context of the facts
involved in the suit. It ends with an
order, if not of dismissal of the action,
"of condemnation declaring that the
plaintiff has a lawful right to take the
property sought to be condemned, for
the public use or purpose described in
the complaint, upon the payment of
just compensation to be determined as
of the date of the filing of the
complaint." An order of dismissal, if this
be ordained, would be a final one, of
course, since it finally disposes of the
action and leaves nothing more to be
done by the Court on the merits. 43 So,
too, would an order of condemnation be
a final one, for thereafter as the Rules
expressly state, in the proceedings
before the Trial Court, "no objection to
PROF. GISELLA DIZON-REYES
the exercise of the right of
condemnation (or the propriety thereof)
shall be filed or heard."
− The second phase of the eminent
domain action is concerned with the
determination by the Court of the "just
compensation for the property sought
to be taken." This is done by the Court
with the assistance of not more than
three (3) commissioners. The order
fixing the just compensation on the
basis of the evidence before, and
findings of, the commissioners would
be final, too. It would finally dispose of
the second stage of the suit, and leave
nothing more to be done by the Court
regarding the issue. . . .
HOWEVER, P.D. No. 42 repealed the
"provisions of Rule 67 of the Rules of Court
and of any other existing law contrary to or
inconsistent" with it. Accordingly, it repealed
Section 2 of Rule 67 insofar as the
determination of the provisional value, the
form of payment and the agency with which
the deposit shall be made, are concerned. P.D.
No. 42 effectively removes the discretion of
the court in determining the provisional value.
What is to be deposited is an amount
equivalent to the assessed value for taxation
purpose. No hearing is required for that
purpose. All that is needed is notice to the
owner of the property sought to be
condemned.
In any event, NAPOCOR deposited the
provisional value fixed by the court. As a
matter of right, it was entitled to be placed in
possession of the property involved in the
complaints at once, pursuant to both Section 2
of Rule 67 and P.D. No. 42. The RTC had the
corresponding duty to order the sheriff or any
other proper officer to forthwith place the
petitioner in such possession.
The RTC Judge's Order (directing the
defendants to state in writing within twenty-
four hours whether or not they would accept
and withdraw the amounts deposited by the
petitioner for each of them " as final and full
satisfaction of the value of their respective
73
A REVIEWER IN LOCAL GOVERNMENT LAW
properties affected by the expropriation" and
stating at the same time that the writ will be
issued after such manifestation and
acceptance and receipt of the amounts) has
absolutely no legal basis even as it also
unjustly, oppressively and capriciously
compels the petitioner to accept the
respondent Judge's determination of the
provisional value as the just compensation
after the defendants shall have manifested
their conformity thereto. He thus subordinated
his own judgment to that of the defendants'
because he made the latter the final authority
to determine such just compensation, in
violation of the principle that the
determination of just compensation in eminent
domain cases is a judicial function. If the
legislature or the executive department cannot
even impose upon the court how just
compensation should be determined, it would
be far more objectionable and impermissible
for respondent Judge to grant the defendants
in an eminent domain case such power and
authority.
There is also a complete disregard by
respondent Judge of the provisions of Rule 67
as to the procedure to be followed after the
petitioner has deposited the provisional value
of the property. It must be recalled that three
(3) sets of defendants filed motions to dismiss
53 pursuant to Section 3, Rule 67 of the Rules
of Court; Section 4 of the same rule provides
that the court must rule on them and in the
event that it overrules the motions or, when
any party fails to present a defense as
required in Section 3, it should enter an order
of condemnation declaring that the petitioner
has a lawful right to take the property sought
to be condemned.
Accordingly, considering that the parties
submitted neither a compromise agreement as
to the just compensation nor a stipulation to
dispense with the appointment of
commissioners and to leave the determination
of just compensation to the court on the basis
of certain criteria, respondent Judge was duty
bound to set in motion the procedure in
Section 5 of Rule 67 (the appointment of
commissioners)
PROF. GISELLA DIZON-REYES
City of Manila vs. Arellano College
(1950)
FACTS: An action to condemn several parcels
of land in Legarda St. was initiated in the CFI
for the purpose of subdividing such lots and
reselling it to private persons. Section 1 of
Republic Act No. 267 provides:
Cities and municipalities are authorized
to contract loans from the
Reconstruction Finance Corporation,
the Philippine National Bank, and/or
other entity or person at the rate of
interest not exceeding eight per cent
annum for the purpose of purchasing or
expropriating homesites within their
respective territorial jurisdiction and
reselling them at cost to residents of
the said cities and municipalities.
The CFI ruled that this provision empowers
cities to purchase but not to expropriate lands
for the purpose of subdivision and resale.
WON the condemnation is proper.
HELD: NO. No fixed line of demarcation
between what taking is for public use and what
is not can made; each case has to be judged
according to its peculiar circumstances. It
suffices to say for the purpose of this decision
that the case under consideration is far
wanting in those elements which make for
public convenience or public use. It is
patterned upon an ideology far removed from
the majority of the citizens of this country.
In Guido and De Borja, the SC held that “the
expropriation of large estates, trusts in
perpetuity, and land that embraces a whole
town, or large section of a town or city, bears
direct relation to the public welfare. The size of
the land expropriated, the large number of
people benefited, and the extent of social and
economic reform secured by the
condemnation, clothes the expropriation with
public interest and public use. The
expropriation in such cases tends to abolish
economic slavery, feudalistic practices,
endless conflicts between landlords and
tenants, and other evils inimical to community
74
A REVIEWER IN LOCAL GOVERNMENT LAW
prosperity and contentment and public peace
and order. Although courts are not in
agreement as to the tests to applied in
determining whether the use is public or not,
some go so far in the direction of a liberal
construction as to hold that public use is
synonymous with public benefit, public utility,
or public advantage, and to authorize the
exercise of the power of eminent domain to
promote such public benefit, etc., especially
where the interest involved are of considerable
magnitude.”
The SC noted that in all these cases and of
similar nature extensive areas were involved
and numerous people and the general public
benefited by the action taken.
In the first place, the land that is the subject of
the present expropriation is only one-third of
the land sought to be taken in the Guido case,
and about two-thirds of that involved in the
Borja condemnation proceeding. In the second
place, the Arellano Colleges' land is situated in
a highly commercial section of the city and is
occupied by persons who are not bona fide
tenants. Lastly, this land was brought by the
defendant for a university site to take the
place of rented buildings that are unsuitable
for schools of higher learning.
The very foundation of the right to exercise
eminent domain is a genuine necessity, and
that necessity must be of a public character.
The ascertainment of the necessity must
precede or accompany, and not follow, the
taking of the land.
Necessity within the rule that the particular
property to be expropriated must be
necessary, does not mean an absolute but
only a reasonable or practical necessity, such
as would combine the greatest benefit to the
public with the least inconvenience and
expense to the condemning party and
property owner consistent with such benefits.
But measured even by this standard, and
forgetting for a moment the private character
of the intended use, necessity for the
condemnation has not been shown. Arellano
College, not only has invested a considerable
amount for its property but had the plans for
PROF. GISELLA DIZON-REYES
construction ready and would have completed
the project a long time ago had it not been
stopped by the city authorities. And again,
while a handful of people stand to profit by the
expropriation, the development of a university
that has a present enrollment of 9,000
students would be sacrificed. Any good that
would accrue to the public from providing
homes to a few families fades into
insignificance in comparison with the
preparation of young men and young women
for useful citizenship and for service to the
government and the community, a task which
the government alone is not in a position to
undertake. “The necessity of the Arellano Law
College to acquire a permanent site of its own
is imperative not only because denial of the
same would hamper the objectives of that
educational institution, but it would likewise be
taking a property intended already for public
benefit." The Mayor of the City of Manila
himself confessed that he believes the plaintiff
is entitled to keep this land.
City of Manila vs. Chinese Community of
Manila
(1919)
FACTS: In 1916, the City of Manila presented
a petition in the CFI of Manila praying that for
the purpose of constructing a public
improvement, namely the extension of Rizal
Avenue, Manila, it is necessary for the City of
Manila to acquire ownership in fee simple of
certain parcels of land situated in the district
of Binondo of said city within Block 83 of said
district. The proposed extension of Rizal
Avenue however will take a part of the Chinese
cemetery, a public cemetery.
The Chinese Community of Manila opposed the
petition contending that 1) the City of Manila
cannot appropriate the cemetery or a portion
thereof as said cemetery is public property,
only private property may be expropriated and
2) there is no necessity for the improvement
as a whole in the first place.
Whether expropriation is a legislative
function exclusively, and hence the
75
A REVIEWER IN LOCAL GOVERNMENT LAW
courts cannot intervene except for the
purpose of determining the value of the
land in question.
This contention is partly meritorious.
There is no question that the court has
authority to fix the values of the land question.
As to the authority of determining whether a
law granting the expropriation exists, a
distinction must be made between a) laws
granting special purpose and b) laws grating a
general authority.
If the law in question grants expropriation of a
particular parcel of land and for a specific
public purpose, then the courts would be
without jurisdiction to inquire into the purpose
of that legislation, regardless of WON the land
in question is private or public.
But if the Legislature should grant general
authority to a municipal corporation then to
expropriate private lands, for public purpose,
the courts would have authority to make
inquiry and to hear proof, upon an issue
properly presented concerning WON the land
in question was private and whether the
purpose was in fact, public.
The right of expropriation is not an inherent
power in a municipal corporation, and before it
can exercise the right some law must exist
conferring the power upon it. When the courts
come to determine the question, they must
only find (a) that a law or authority exists for
the exercise of the right of eminent domain,
but (b) also that the right or authority is being
exercised in accordance with the law.
In the present case there are two conditions
imposed upon the authority conceded to the
City of Manila: First, the land must be private;
and, second, the purpose must be public. If the
court, upon trial, finds that neither of these
conditions exists or that either one of them
fails, certainly it cannot be contended that the
right is being exercised in accordance with
law.
In the instant case, since the City of Manila
was given a general grant of authority to
expropriate private lands under its Charter,
PROF. GISELLA DIZON-REYES
the Court has authority to inquire on whether
the exercise of such expropriation by the City
of Manila is indeed public- in other words, the
Court may inquire into the necessity of the
expropriation.
WON there is public necessity to
expropriate in this case.
NONE. The ascertainment of the necessity
must precede, and not follow, the taking of the
property. The general power to exercise the
right of eminent domain must not be confused
with the right to exercise it in a particular
case.
It is axiomatic that the taking of private
property for public use is not justified unless
there is a genuine public necessity for the
taking. In the present case, even if granting
that a necessity exists for the opening of the
street in question, the record contain no proof
of the necessity of opening the same through
the cemetery. The records show that adjoining
and adjacent lands have been offered to the
city free of charge, which will answer every
purpose of the city.
Where a cemetery is open to the public, it is a
public use and no part of the ground can be
taken for other public uses under a general
authority.
WON public property may be subject of
expropriation.
YES. As mentioned above public property may
be expropriated provided a special grant of
Authority for a particular parcel of land was
passed by the Legislature. However, in this
case the City of Manila was not granted such a
special authority. Hence, the City of Manila is
not authorized to expropriate public property.
Since the city of Manila is only permitted to
condemn private property for public use and
since the Chinese Cemetery in the city of
Manila is a public cemetery (GD-R: It is a
community cemetery!) already devoted to a
public use, the city of Manila cannot condemn
a portion of the cemetery for a public street.
76
A REVIEWER IN LOCAL GOVERNMENT LAW
Municipality of Parañaque vs. V.M. Realty
Corp.
(1998)
FACTS: Pursuant to SB Resolution No. 93-95,
the Municipality of Parañaque filed a complaint
for expropriation against VM Realty
Corporation over 2 parcels of land. The
purpose was to alleviate the living conditions
of the poor by providing homes through
socialized housing projects. The RTC of Makati
issued an order giving it due course. It
authorized the petitioner to take possession of
the property upon deposit of an amount
equivalent to 15% of its fair market value
based on its current tax declaration.
VM Realty filed a motion to dismiss, on the
ground that the complaint failed to state a
cause of action since it was filed pursuant to a
resolution and not to an ordinance as required
by RA 7160.
The then municipality of Parañaque argues
that a resolution substantially complies with
the requirements of the law since the terms
“ordinance” and “resolution” are synonymous
for the “purpose of bestowing authority on the
LGU through its chief executive to initiate the
expropriation proceedings in court in the
exercise of the power of eminent domain.”
WON a resolution duly approved by the
municipal council has the same force and
effect as an ordinance so as not to
deprive an expropriation case of a valid
cause of action.
NO. Strictly speaking, the power of eminent
domain delegated to an LGU is in reality not
eminent but "inferior" domain, since it must
conform to the limits imposed by the
delegation, and thus partakes only of a share
in eminent domain. Indeed, "the national
legislature is still the principal of the local
government units, which cannot defy its will or
PROF. GISELLA DIZON-REYES
modify or violate it The power of eminent
domain is lodged in Congress. An LGU may
exercise the power to expropriate private
property only when authorized by Congress
and subject to the latter’s control and
restraints, imposed “through the law
conferring the power or in other legislations.”
Under Sec. 19 of the LGC, the following
essential requisites must concur before an LGU
can exercise the power of eminent domain:
1. An ordinance enacted by the local
legislative council authorizing the local
chief executive to exercise the power of
eminent domain or pursue
expropriation proceedings;
2. The power is exercised for public use,
purpose, or welfare, or for the benefit
of the poor and the landless;
3. There is payment of just compensation,
as required under Sec. 9 Art. III of the
Constitution and other pertinent laws;
4. A valid and definite offer has been
previously made to the owner of the
property sought to be expropriated but
that it was rejected.
In the case at bar, the local chief executive
sought to exercise the power of eminent
domain pursuant to a resolution of the
municipal council. Thus, there was no
compliance with the first requisite that the
mayor be authorized through an ordinance.
Petitioner cites Camarines Sur vs. Court of
Appeals 28 to show that a resolution may
suffice to support the exercise of eminent
domain by an LGU. This case, however, is not
in point because the applicable law at that
time was BP 337, the previous Local
Government Code, which had provided that a
mere resolution would enable an LGU to
exercise eminent domain. In contrast, RA
7160, the present Local Government Code
which was already in force when the Complaint
for expropriation was filed, explicitly required
an ordinance for this purpose.
A municipal ordinance is different from a
resolution.
Ordinance Resolution
It is a law It is merely a
77
A REVIEWER IN LOCAL GOVERNMENT LAW
declaration of the
sentiment or opinion
of a lawmaking body
on a specific matter
It possesses a general It is temporary in
and permanent nature
character
A third reading is A third reading is not
necessary for an required, unless
ordinance to be decided otherwise by
passed. a majority of all the
Sanggunian members.
If Congress intended to allow LGUs to exercise
the power through a resolution, it would have
said so. Moreover, the power of eminent
domain necessarily involves a derogation of a
fundamental or private right of the people.
Accordingly, the manifest change in the
legislative language — from "resolution" under
BP 337 to "ordinance" under RA 7160 —
demands a strict construction. "No species of
property is held by individuals with greater
tenacity, and is guarded by the Constitution
and laws more sedulously, than the right to
the freehold of inhabitants. When the
legislature interferes with that right and, for
greater public purposes, appropriates the land
of an individual without his consent, the plain
meaning of the law should not be enlarged by
doubtful interpretation
Also, Article 36, Rule VI of the IRR which
requires only a resolution could not prevail
over the law.
WON the principle of res judicata is
applicable to the present case.
NO. The principle of res judicata, which finds
application in generally all cases and
proceedings, cannot bar the right of the State
or its agent to expropriate private property.
The very nature of eminent domain, as an
inherent power of the State, dictates that the
right to exercise the power be absolute and
unfettered even by a prior judgment or res
judicata. The scope of eminent domain is
plenary and, like police power, can "reach
every form of property which the State might
need for public use." "All separate interests of
individuals in property are held of the
PROF. GISELLA DIZON-REYES
government under this tacit agreement or
implied reservation. Notwithstanding the grant
to individuals, the eminent domain, the
highest and most exact idea of property,
remains in the government, or in the
aggregate body of the people in their
sovereign capacity; and they have the right to
resume the possession of the property
whenever the public interest requires it." Thus,
the State or its authorized agent cannot be
forever barred from exercising said right by
reason alone of previous non-compliance with
any legal requirement.
While the principle of res judicata does not
denigrate the right of the State to exercise
eminent domain, it does apply to specific
issues decided in a previous case. For
example, a final judgment dismissing an
expropriation suit on the ground that there
was no prior offer precludes another suit
raising the same issue; it cannot, however, bar
the State or its agent from thereafter
complying with this requirement, as prescribed
by law, and subsequently exercising its power
of eminent domain over the same property. By
the same token, our ruling that petitioner
cannot exercise its delegated power of
eminent domain through a mere resolution will
not bar it from reinstituting similar
proceedings, once the said legal requirement
and, for that matter, all others are properly
complied with. Parenthetically and by parity of
reasoning, the same is also true of the
principle of "law of the case."
City of Cebu vs. Spouses Apolonio
(2002)
FACTS: The City of Cebu filed a complaint for
eminent domain against the Dedamo spouses.
The Dedamos filed a MTD, alleging that there
is no public purpose; that the City can just buy
their lot; that the price offered was too low and
that they have no other land in Cebu.
The parties then submitted to the court an
agreement wherein they declared that they
have partially settled the case (to cut the
proceedings short, there was no more
determination of WON the City has authority
nor of WON there is public necessity). The trial
78
A REVIEWER IN LOCAL GOVERNMENT LAW
court appointed 3 commissioners to determine
the just compensation of the lots. The
commissioners submitted their report on the
basis of which the TC rendered its decision.
The City of Cebu interposed objections to the
assessment made by the commissioners,
arguing that the just compensation should be
based on the prevailing market price of the
property at the commencement of the
expropriation proceedings.
WON just compensation in eminent
domain cases by an LGU should be
determined as of the date of the filing of
the complaint
NO. The applicable law as to the point of
reckoning for the determination of just
compensation is Sec. 19, LGC, which expressly
provides that just compensation shall be
determined as of the time of actual taking.
The City of Cebu has misread the ruling in
Napocor vs. CA. It was not categorically ruled
in that case that just compensation should be
determined as of the filing of the complaint. It
was there stated that although the general
rule in determining just compensation in
eminent domain is the value of the property as
of the date of the filing of the complaint, the
rule admits of an exception: where the SC
fixed the value of the property as of the date it
was taken and not at the date of the
commencement of the expropriation
proceedings.
While Sec. 4, Rule 67 provides that just
compensation shall be determined at the time
of the filing of the complaint for expropriation,
such law cannot prevail over the LGC, which is
a substantive law.
WON the city is bound by the
compensation fixed by the
commissioners.
YES. More than anything else, the parties, by
a solemn document freely and voluntarily
agreed upon by them, agreed to be bound by
the report of the commission and approved by
the trial court. The agreement is a contract
PROF. GISELLA DIZON-REYES
between the parties. It has the force of law
between them and should be complied with in
good faith.
Furthermore, during the hearing, the City of
Cebu did not interpose a serious objection. It
is therefore too late for the city to question the
valuation now without violating the principle of
equitable estoppel.
Republic of the Philippines vs. Court of
Appeals
(2002)
FACTS: The Republic instituted expropriation
proceedings covering a parcel of land situated
along MacArthur Highway, Malolos, Bulacan, to
be utilized for the continued broadcast
operation and use of radio transmitter facilities
for the “Voice of the Philippines” project. PIA
took over the premises after the previous
lessee, the “Voice of America,” had ceased its
operations thereat. Petitioner made a deposit
of P517,558.80, the sum provisionally fixed as
being the reasonable value of the property. In
1979, or more than nine years after the
institution of the expropriation proceedings,
the trial court issued this order condemning
the property and ordering the plaintiff to pay
the defendants the just compensation for the
property. However, it would appear that the
national government failed to pay to herein
respondents the compensation pursuant to the
foregoing decision, such that a little over five
years later, respondents filed a manifestation
with a motion seeking payment for the
expropriated property. RTC issued a writ of
execution in 1984.
In the meantime, President Estrada issued
Proclamation No. 22, transferring 20 hectares
of the expropriated property to the Bulacan
State University for the expansion of its
facilities and another 5 hectares to be used
exclusively for the propagation of the
Philippine carabao. The remaining portion was
retained by the PIA. This fact notwithstanding,
and despite the 1984 court order, the Santos
heirs remained unpaid, and no action was
taken on their case until 1999 when petitioner
filed its manifestation and motion to permit
the deposit in court of the amount of
P4,664,000.00 by way of just compensation for
79
A REVIEWER IN LOCAL GOVERNMENT LAW
the expropriated property of the late Luis
Santos subject to such final computation as
might be approved by the court.
This time, the Santos heirs, opposing the
manifestation and motion, submitted a
counter-motion to adjust the compensation
from P6.00 per square meter previously fixed
in the 1979 decision to its current zonal
valuation pegged at P5,000.00 per square
meter or, in the alternative, to cause the
return to them of the expropriated property.
RTC ruled in favor of respondents and issued
the assailed order, vacating its decision 1979
and declaring it to be unenforceable on the
ground of prescription. The CA denied the
appeal (for failure to file during the
reglementary period).
WON there is still public purpose despite
the fact that the expropriated property’s
present use differs from the purpose
originally contemplated in the 1969
expropriation proceedings.
YES. The property has assumed a public
character upon its expropriation. Surely,
petitioner, as the condemnor and as the owner
of the property, is well within its rights to alter
and decide the use of that property, the only
limitation being that it be for public use, which,
decidedly, it is. (GD-R: Shouldn’t it be
“actual” necessity?)
WON the decision in Provincial
Government of Sorsogon vs. Vda. de
Villaroya applies in this case.
NO. The case cited involved the municipal
government of Sorsogon, to which the power
of eminent domain is not inherent, but merely
delegated and of limited application. The
grant of the power of eminent domain to local
governments under RA 7160 cannot be
understood as being the pervasive and all-
encompassing power vested in the legislative
branch of government. For local governments
to be able to wield the power, it must, by
enabling law, be delegated to it by the
national legislature, but even then, this
delegated power of eminent domain is not,
PROF. GISELLA DIZON-REYES
strictly speaking, a power of eminent, but only
of inferior, domain or only as broad or confined
as the real authority would want it to be.
Thus, what applies in the case at bar is the
decision in Valdehueza vs. Republic, where the
private landowners had remained unpaid ten
years after the termination of the
expropriation proceedings, this Court ruled -
“The points in dispute are whether such
payment can still be made and, if so, in what
amount. Said lots have been the subject of
expropriation proceedings. By final and
executory judgment in said proceedings, they
were condemned for public use, as part of an
airport, and ordered sold to the government. x
x x It follows that both by virtue of the
judgment, long final, in the expropriation suit,
as well as the annotations upon their title
certificates, plaintiffs are not entitled to
recover possession of their expropriated lots -
which are still devoted to the public use for
which they were expropriated - but only to
demand the fair market value of the same.”
The judgment rendered by the Bulacan RTC in
1979 on the expropriation proceedings
provides not only for the payment of just
compensation to herein respondents but
likewise adjudges the property condemned in
favor of petitioner over which parties, as well
as their privies, are bound.
The constitutional limitation of “just
compensation” is considered to be the sum
equivalent to the market value of the property,
broadly described to be the price fixed by the
seller in open market in the usual and ordinary
course of legal action and competition or the
fair value of the property as between one who
receives, and one who desires to sell, it fixed
at the time of the actual taking by the
government. Thus, if property is taken for
public use before compensation is deposited
with the court having jurisdiction over the
case, the final compensation must include
interests on its just value to be computed from
the time the property is taken to the time
when compensation is actually paid or
deposited with the court. In fine, between the
taking of the property and the actual payment,
legal interests accrue in order to place the
80
A REVIEWER IN LOCAL GOVERNMENT LAW
owner in a position as good as (but not better
than) the position he was in before the taking
occurred.
C. Taxation and Fiscal Administration
NOTE: I don’t think that the nitty-gritty of local
taxation will come out in the exam. Ang haba
ng provisions!
I just included the following excerpts from the
BAROPS Reviewer, just in case.
1. Local Taxation
1987 CONSTI, Art. X, Section 5. Each local
government unit shall have the power to
create its own sources of revenues and to levy
taxes, fees and charges subject to such
guidelines and limitations as the Congress may
provide, consistent with the basic policy of
local autonomy. Such taxes, fees, and charges
shall accrue exclusively to the local
governments.
LGC
SEC. 128. Scope. - The provisions herein
shall govern the exercise by provinces, cities,
municipalities, and barangays of their taxing
and other revenue-raising powers.
SEC. 129. Power to Create Sources of
Revenue. - Each local government unit shall
exercise its power to create its own sources of
revenue and to levy taxes, fees, and charges
subject to the provisions herein, consistent
with the basic policy of local autonomy. Such
taxes, fees, and charges shall accrue
exclusively to the local government units.
FUNDAMENTAL PRINCIPLES – The following
fundamental principles shall govern the
exercise of the taxing and other revenue-
raising powers of local government units:
(a) Taxation shall be Uniform in each local
government unit;
NOTE: the uniformity required is only within
the territorial jurisdiction of an LGU. (IRR)
PROF. GISELLA DIZON-REYES
(b) Taxes, fees, charges and other impositions
shall:
(1) be equitable and based as far as
practicable on the taxpayer's ability to
pay;
(2) be levied and collected only for Public
purposes;
(3) not be unjust, excessive, oppressive, or
confiscatory;
(4) not be contrary to law, public policy,
national economic policy, or in the
restraint of trade;
(c) The collection of local taxes, fees, charges
and other impositions shall not be let to any
private person;
(d) The revenue collected pursuant to the
provisions of this Code shall inure solely to the
benefit of, and be subject to the disposition by,
the local government unit levying the tax, fee,
charge or other imposition unless otherwise
specifically provided herein; and
(e) Each local government unit shall, as far as
practicable, evolve a progressive system of
taxation. (SEC. 130, LGC)
LOCAL TAXING AUTHORITY – it shall be
exercised by the SANGGUNIAN of the LGU
concerned through an appropriate ordinance.
(SEC. 132, LGC)
NOTE: HOWEVER, the local chief executive of
the LGUs (except the punong barangay)
possesses veto powers, as laid out in Sec. 55
of the LGC.
COMMON LIMITATIONS ON THE TAXING
POWERS OF LOCAL GOVERNMENT UNITS
(SEC 133, LGC)
Unless otherwise provided, the exercise of the
taxing powers of provinces, cities,
municipalities, and barangays shall NOT
EXTEND to the levy of the following:
1. Income tax, except when levied on
banks and other financial institutions;
2. Documentary stamp tax;
3. Taxes on Estates, inheritance, gifts,
legacies and other acquisitions mortis
81
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
causa, except as otherwise provided TAX PRO MU CIT BRG
herein; V. N. Y Y.
4. Customs duties, registration fees of Tax on
vessel and wharfage on wharves, Transfer of
tonnage dues, and all other kinds of Real Property
customs fees, charges and dues except Ownership
wharfage on wharves constructed and (Sec. 135) - tax
x x
maintained by the LGU concerned; on sale,
5. Taxes, fees, and charges and other donation or on
impositions upon goods carried into or any other mode
out of, or passing through, the of transferring
territorial jurisdictions of local ownership.
government units in the guise of Tax on
charges for wharfage, tolls for bridges Business of
or otherwise, or other taxes, fees, or Printing and
charges in any form whatsoever upon Publication
such goods or merchandise; (Sec. 136) -
6. Taxes, fees or charges on Agricultural imposed on
and aquatic products when sold by business of
marginal farmers or fishermen; persons
7. Taxes on business enterprises certified engaged in the
to by the Board of Investments as printing and/or x x
Pioneer or non-pioneer for a period of publication of
six (6) and four (4) years, respectively books, cards,
from the date of registration; posters, leaflets,
8. Excise taxes on articles enumerated handbills,
under the NIRC, as amended, and certificates,
taxes, fees or charges on petroleum receipts,
products; pamphlets, and
9. Percentage or VAT on sales, barters or others of similar
exchanges or similar transactions on nature.
goods or services except as otherwise Franchise Tax
provided herein; (Sec. 137) -
10. Taxes on the Gross receipts of imposed on
transportation contractors and persons businesses
engaged in the transportation of enjoying a
passengers or freight by hire and franchise,
common carriers by air, land or water, notwithstanding x x
except as provided in this Code; any exemption
11. Taxes on Premiums paid by way or granted by any
reinsurance or retrocession; law or other
12. Taxes, fees or charges for the special law.
registration of motor vehicles and for
the issuance of all kinds of licenses or
permits for the driving thereof, except TAX PRO MU CIT BRG
tricycles; V. N. Y Y.
13. Taxes, fees, or other charges on Tax on Sand,
Philippine products actually Exported, Gravel and
except as otherwise provided herein; Other Quarry
x x
14. Taxes, fees, or charges, on countryside Resources
and barangay business enterprises and (Sec. 138)
cooperatives duly registered under the
"Cooperative Code of the Philippines"; Professional x x
and Tax (Sec. 139) -
15. Taxes, fees or charges of any kind on on each person
the National Government, its agencies engaged in the
and instrumentalities, and local exercise or
government units. practice of his
profession
82
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
requiring consumers,
government whether directly
examination or indirectly,
(i.e. exam within the
conducted by province
PRC)
Professionals
EXCLUSIVELY
employed in the TAX PRO MU CIT BRG
government V. N. Y Y.
shall be Tax on
EXEMPT. Business (Sec.
Amusement 143) – imposed
Tax (Sec. 140) - on business x x
collected from enterprises.
the proprietors, (See. Sec. 143
lessees, or after table)
operators of Fees and
theaters, x x Charges on
cinemas, regulation/lice
concert halls, nsing of
circuses, boxing business &
stadia, and occupation
other places of (Sec. 147) –
amusement except as
Annual Fixed reserved to the
Tax For Every province in
Delivery Truck Section 139 of
or Van of this Code,
x x
Manufacturers commensurate
or Producers, with the cost of
Wholesalers regulation,
of, Dealers, or inspection and
Retailers in, licensing before
Certain any person may
Products (Sec. engage in such
141) - for every business or
truck, van or occupation, or
any vehicle practice such
used by profession or
manufacturers, calling.
producers, Fees for
x x
wholesalers, Sealing and
dealers or Licensing of
retailers in the x x
Weights and
delivery or Measures (Sec.
distribution of 148)
distilled spirits, Fishery
fermented Rentals, Fees
liquors, soft x x
and Charges
drinks, cigars (Sec. 149)
and cigarettes, Tax on Gross
and other Sales or
products as may Receipts of
be determined Small-Scale x
by the Stores /
sanggunian Retailers (Sec.
panlalawigan, to 152(a)
sales outlets, or Service Fees x
83
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
on the use of (Sec. 155)
Barangay- Community
owned Tax (Sec. 156) –
properties imposed on
(Sec. 152(b)) every inhabitant
Barangay of the
Clearance Philippines
x
(Sec. 152(c)) eighteen (18)
years of age or
Other Fees over who has
and Charges been regularly
on commercial employed on a
breeding of wage or salary
fighting cocks, basis for at least
cockfights, thirty (30)
cockpits; consecutive
x
places of working days
recreation during any
x x
which charge calendar year,
admission or who is
fees; outside engaged in
ads (Sec. business or
152(d) ) occupation, or
Service Fees who owns real
and Charges property with an
(Sec. 153) aggregate
x x x x assessed value
of One thousand
pesos (Php
1,000.00) or
TAX PRO MU CIT BRG more, or who is
V. N. Y Y. required by law
Public Utility to file an
Charges – income tax
imposed for the return
operation of Real Property (MM
x x
public utilities Tax (Sec. 232 )
owned,
x x x x BUSINESS TAX (Sec. 143) - taxes imposed on
operated and
maintained by the following businesses:
them within • On manufacturers, assemblers, repackers,
their
processors, brewers, distillers, rectifiers,
jurisdiction.
(Sec. 154 ) and compounders of liquors, distilled
Toll Fees or x x x x spirits, and wines or manufacturers of any
Charges – article of commerce of whatever kind or
imposed for the nature;
use of any • On wholesalers, distributors, or dealers in
public road, pier
any article of commerce of whatever kind
or wharf,
waterway, or ;
bridge, ferry or • On exporters, and on manufacturers,
telecommunicat millers, producers, wholesalers,
ion system distributors, dealers or retailers of essential
funded and
commodities:
constructed by
the local (1) Rice and corn;
government (2) Wheat or cassava flour, meat, dairy
unit concerned products, locally manufactured,
84
A REVIEWER IN LOCAL GOVERNMENT LAW
processed or preserved food, sugar,
salt and other agricultural, marine,
and fresh water products, whether
in their original state or not;
(3) Cooking oil and cooking gas;
(4) Laundry soap, detergents, and
medicine;
(5) Agricultural implements, equipment
and post- harvest facilities,
fertilizers, pesticides, insecticides,
herbicides and other farm inputs;
(6) Poultry feeds and other animal
feeds;
(7) School supplies; and
(8) Cement.
• On retailers;
• On contractors and other independent
contractors;
• On banks and other financial
institutions, from interest, commissions
and discounts from lending activities,
income from financial leasing,
dividends, rentals on property and
profit from exchange or sale of
property, insurance premium;
• On peddlers engaged in the sale of any
merchandise or article of commerce;
and
• On any business, not otherwise
specified in the preceding paragraphs,
which the sanggunian concerned may
deem proper to tax.
COLLECTION OF TAXES
Tax Period -- unless otherwise provided in
this Code, the tax period of all local taxes,
fees and charges shall be the calendar
year. (Sec. 165, LGC)
Manner of Payment -- Such taxes, fees
and charges may be paid in quarterly
installments. (Sec. 165, LGC)
Accrual of Tax -- All local taxes, fees, and
charges shall accrue on the first (1st) day
PROF. GISELLA DIZON-REYES
of January of each year. However, new
taxes, fees or charges, or changes in the
rates thereof, shall accrue on the first (1st)
day of the quarter next following the
effectivity of the ordinance imposing such
new levies or rates. (Sec. 166, LGC)
Time of Payment -- All local taxes, fees,
and charges shall be paid within the first
twenty days of January or of each
subsequent quarter, as the case may be.
(Jan 20, Apr 20, July 20, and Oct 20). The
sanggunian concerned may, for a
justifiable reason or cause, extend the time
for payment of such taxes, fees, or charges
without surcharges or penalties, but only
for a period not exceeding six (6) months.
(Sec. 167, LGC)
Surcharges and Penalties
• 25% surcharge on taxes, fees or charges
NOT paid on time, AND interest at the rate
NOT exceeding 2% per month of the
unpaid taxes, fees or charges INCLUDING
surcharges, until the amount is fully paid.
NOTE: in no case shall the total interest
exceed 36 months. (Sec. 168, LGC)
Collecting Authority – All local taxes,
fees and charges shall be collected by the
provincial, city, municipal, or barangay
treasurer, or their duly authorized
deputies. (Sec. 170, LGC)
Examination of Books – The local
treasurer or his deputy duly authorised in
writing, may examine the books, accounts
and other pertinent records of any person,
partnership, corporation, or association in
order to ascertain, assess and collect the
correct amount of tax. Such examination
shall be made during the regular business
hours, ONLY ONCE for every tax period,
85
A REVIEWER IN LOCAL GOVERNMENT LAW
and shall be certified to by the examining
official. (Sec. 171, LGC)
CIVIL REMEDIES (BOTH LGU AND
TAXPAYER)
Personal Property Exempt from Distraint or
Levy – the following property shall be
EXEMPT from distraint or levy for
delinquency in the payment of any LOCAL
tax, fee or charge:
• tools and implements necessarily used
by the delinquent taxpayer in his trade
or employment
• one horse, cow, carabao, or other beast
of burden, such as the delinquent
taxpayer may select and necessarily
used by him in his ordinary occupation
• his necessary clothing, and that of all
his family
• household furniture and utensils
necessary for housekeeping and used
for that purpose by the delinquent
taxpayer, such as he may select, of a
value not exceeding P10,000
• provisions, including crops, actually
provided for individual or family use
sufficient for 4 months
• the professional libraries of doctors,
engineers, (ehem) lawyers and judges
• one fishing boat and net, not exceeding
the total value of P10,000 by the lawful
use of which a fisherman earns his
livelihood
• any material or article forming part of a
house or improvement of any real
property (Sec. 185, LGC)
PROF. GISELLA DIZON-REYES
PERIODS OF ASSESSMENT AND
COLLECTION OF LOCAL TAXES
GEN RULE: Assessment shall be made
within 5 years from the date they become
due, and collection shall be made within 5
years from the date of assessment by
administrative or judicial action.
EXCEPTION: In case of FRAUD, or INTENT
TO EVADE PAYMENT OF TAX, the same
may be assessed within 10 years from
discovery of fraud or intent to evade
payment. (Sec. 194, LGC)
When Running of Prescription of Above
Periods is Suspended – The running of the
periods of prescription above shall be
suspended for the time during which:
• the treasurer is legally prevented from
making the assessment or collection
• the taxpayer requests for a
reinvestigation and executes a waiver
in writing before expiration of the
period within which to assess or collect
• the taxpayer is out of the country or
otherwise cannot be located (Sec. 194
(d), LGC)
CLAIM FOR REFUND OR TAX CREDIT
• No case or proceeding shall be
maintained in any court for the
recovery of any tax, fee, or charge
erroneously or illegally collected until a
WRITTEN CLAIM for refund or credit has
been filed with the local treasurer.
• No case or proceeding shall be
entertained in any court AFTER the
expiration of 2 years from the date of
payment of such tax, or from the date the
86
A REVIEWER IN LOCAL GOVERNMENT LAW
taxpayer is entitled to a refund or credit.
(Sec. 196, LGC)
REMEDY FOR ILLEGAL OR
UNCONSTITUTIONAL TAX ORDINANCE
STEP 1: Any question on the
constitutionality or legality of tax
ordinances or revenue measures may be
raised on appeal within 30 days from the
effectivity thereof to the Sec of Justice.
STEP 2: The Sec of Justice shall decide
within 60 days from the date of receipt of
the appeal. However, this appeal shall not
have the effect of suspending the
effectivity of the ordinance and the accrual
and payment of the tax levied therein.
STEP 3: Within 30 days after receipt of the
decision or the lapse of the 60-day period
without the Sec of Justice acting upon the
appeal, the aggrieved party may file
appropriate proceedings with a court of
competent jurisdiction. (Sec 187, LGC)
MISCELLANEOUS PROVISIONS
Power to Levy Taxes, Fees or Charges
GEN RULE: LGU may exercise the power to
levy taxes, fees or charges on ANY BASE
OR SUBJECT not otherwise specifically
enumerated in LGC or NIRC.
EXCEPTION: It must NOT be unjust,
excessive, oppressive, confiscatory or
contrary to declared national policy.
(Sec. 186, LGC)
PROF. GISELLA DIZON-REYES
Requirements for a Valid Tax
Ordinance
1. the ordinance shall only be enacted if
there is a prior public hearing conducted
for the purpose (Sec. 187)
2. within 10 days after the approval of the
ordinance, it must be published in full for 3
consecutive days in a newspaper of local
circulation, or if no such newspaper, it
must be posted in at least 2 conspicuous
and publicly accessible places. (Sec. 188)
Authority to Adjust Rates – LGU shall
have the authority to adjust the tax rates
prescribed in LGC NOT oftener than once
every 5 years, but in no case shall such
adjustment exceed 10% of the rates fixed.
(Sec. 191, LGC)
Authority to Grant Exemption – LGU
may, through ordinances, grant tax
exemptions, incentives or reliefs under
such terms and conditions as they may
deem necessary. (Sec. 192, LGC)
Hagonoy Market Vendor Association vs.
Municipality of Hagonoy
(2002)
FACTS: In 1996, the Sangguniang Bayan (SB)
of Hagonoy, Bulacan, enacted an ordinance,
which increased the stall rentals of the market
vendors in Hagonoy. It also provided that it
shall take effect upon approval. The said
ordinance was also duly posted.
In the last week of November 1997, the Market
Association’s members were given copies of
the approved ordinance and were informed
that it will be enforced in January 1998. The
association filed an appeal with the Sec. of
Justice, assailing the constitutionality of the
ordinance
87
A REVIEWER IN LOCAL GOVERNMENT LAW
The DOJ Sec. dismissed the appeal on the
ground that it was filed out of time, i.e. beyond
30 days from the effectivity of the ordinance,
as prescribed under the LGC. The date of
effectivity of the subject ordinance retroacted
to the date of its approval in October 1996,
after the required publication or posting has
been complied with, pursuant to Section 3 of
said ordinance.
The Market Association contends that its
period to appeal should be counted not from
the time the ordinance took effect in 1996 but
from the time its members were personally
given copies of the approved ordinance in
November 1997. It insists that it was unaware
of the approval and effectivity of the subject
ordinance in 1996 on two (2) grounds: first, no
public hearing was conducted prior to the
passage of the ordinance and, second, the
approved ordinance was not posted.
WON the action has already prescribed.
HELD: YES. The appeal of the petitioner with
the Secretary of Justice is already time-barred.
Section 187 (Procedure for Approval and
Effectivity of Tax Ordinances and Revenue
Measures; Mandatory Public Hearings) of the
LGC requires that an appeal of a tax ordinance
or revenue measure should be made to the
Secretary of Justice within 30 days from
effectivity of the ordinance and even during its
pendency, the effectivity of the assailed
ordinance shall not be suspended.
In the case at bar, Municipal Ordinance No. 28
took effect in Oct. 1996. Petitioner filed its
appeal only in Dec. 1987, more than a year
after the effectivity of the ordiance in 1996.
Clearly, the Secretary of Justice correctly
dismissed it for being time-barred.
The periods stated in Section 187 of the Local
Government Code are mandatory. Ordinance
No. 28 is a revenue measure adopted by the
municipality of Hagonoy to fix and collect
public market stall rentals. Being its lifeblood,
collection of revenues by the government is of
paramount importance. The funds for the
operation of its agencies and provision of basic
PROF. GISELLA DIZON-REYES
services to its inhabitants are largely derived
from its revenues and collections.
Also, petitioner’s bold assertion that there was
no public hearing conducted prior to the
passage of Kautusan Blg. 28 is belied by its
own evidence. In petitioner’s two (2)
communications with the Secretary of Justice,
it enumerated the various objections raised by
its members before the passage of the
ordinance in several meetings called by the
Sanggunian for the purpose. These show
beyond doubt that petitioner was aware of the
proposed increase and in fact participated in
the public hearings therefor. The respondent
municipality likewise submitted the Minutes
and Report of the public hearings conducted
by the Sangguniang Bayan’s Committee on
Appropriations and Market.
The record is also bereft of any evidence to
prove petitioner’s negative allegation that the
subject ordinance was not posted as required
by law. In contrast, the respondent
Sangguniang Bayan of the Municipality of
Hagonoy, Bulacan, presented evidence which
clearly shows that the procedure for the
enactment of the assailed ordinance was
complied with. After its approval, copies of the
Ordinance were given to the Municipal
Treasurer on the same day. The Ordinance
was posted during the period from November
4 - 25, 1996 in three (3) public places, validly
made in lieu of publication as there was no
newspaper of local circulation in the
municipality of Hagonoy. This fact was known
to and admitted by petitioner.
Estanislao vs. Costales
(1991)
FACTS: An Ordinance, imposing a P0.01 tax
per liter of softdrinks produced, manufactured,
and/or bottled within the territorial jurisdiction
of the City of Zamboanga was passed by the
Sangguniang Panglungsod of Zamboanga City.
The Sanggunian sent a copy of the Ordinance
to the then Minister of Finance by registered
mail.
The Minister of Finance upon his review
pursuant to P.D. No. 231 (Local Tax Code) sent
88
A REVIEWER IN LOCAL GOVERNMENT LAW
the letter addressed to the Sanggunian,
suspending the effectivity of Ordinance No. 44
on the ground that it contravenes Section
19(a) of the Local Tax Code.
The RTC rendered a decision finding that the
tax levied under said Ordinance is not among
those that the Sanggunian may impose under
the Local Tax Code, but nonetheless, it upheld
its validity on the ground that the Minister of
Finance did not take appropriate action on the
matter within the prescribed period of 120
days after receipt of a copy thereof.
WON the tax subject of the ordinance
was valid.
HELD: NO. It is clear that a city, like public
respondent Zamboanga City may impose, in
lieu of the graduated fixed tax prescribed
under Section 19 of the Local Tax Code, a
percentage tax on the gross sales for the
preceding calendar year of non-essential
commodities at the rate of not exceeding two
per cent and on the gross sales of essential
commodities at the rate of not exceeding one
per cent.
Ordinance No. 44 of the respondent
Zamboanga City imposes P0.01 per liter of
softdrinks produced, manufactured, and/or
bottled within the territorial jurisdiction of the
City of Zamboanga. No doubt this Ordinance is
ultra vires as it is not within the authority of
the City to impose said tax. The authority of
the City is limited to the imposition of a
percentage tax on the gross sales or receipts
of said product which, being non-essential,
shall be at the rate of not exceeding 2% of the
gross sales or receipts of the softdrinks for the
preceding calendar year. The tax being
imposed under said Ordinance is based on the
output or production and not on the gross
sales or receipts as authorized under the Local
Tax Code. (THE Husband: Not the case
anymore in the LGC)
Also, the ruling in Pepsi-Cola Bottling Company
vs. Municipality of Tanauan is not applicable
anymore since the law in that case has already
been superseded by the Local Tax Code.
PROF. GISELLA DIZON-REYES
Moreover, the conclusion that since the
Minister of Finance failed to act or otherwise
suspend the effectivity of the tax ordinance
within 120 days from receipt of a copy thereof,
said Ordinance is valid and remains in force is
mistaken. There is no authority under Section
44 of the Local Tax Code for this conclusion.
All that is provided therein is that if the
Secretary of Finance "takes no action as
authorized in this section, the tax ordinance
shall remain in force."
Even if the Secretary of Finance failed to
review or act on the Ordinance within the
prescribed period of 120 days it does not
follow as a legal consequence thereof that an
otherwise invalid ordinance is thereby
validated.
Much less can it be interpreted to mean that
the Secretary of Finance can no longer act by
suspending and/or revoking an invalid
ordinance even after the lapse of the 120-day
period. All that the law says is that after said
period the tax ordinance shall remain in force.
The prescribed period for review is only
directory and the Secretary of Finance may
still review the ordinance and act accordingly
even after the lapse of the said period
provided he acts within a reasonable time.
Philippine Petroleum Corporation vs.
Municipality of Pililia
(1991)
FACTS: PPC manufactured lubricated oil
basestock which is a petroleum product with
its refinery plant in Malaya, Pililia, Rizal. The
said Municipality enacted the Tax Code of
Pililia, imposing a tax on business, except for
those for which fixed taxes are provided in the
Local Tax Code on manufacturers, importers,
or producers of any article of commerce of
whatever kind or nature, including brewers,
distillers, rectifiers, repackers, and
compounders of liquors, distilled spirits and/or
wines in accordance with the schedule found
in the Local Tax Code, as well as mayor's
permit, sanitary inspection fee and storage
permit fee for flammable, combustible or
explosive substances, while Section 139 of the
89
A REVIEWER IN LOCAL GOVERNMENT LAW
disputed ordinance imposed surcharges and
interests on unpaid taxes, fees or charges.
Enforcing the provisions of the above-
mentioned ordinance, the Municipality filed a
complaint against PPC for the collection of the
business tax from 1979 to 1986; storage
permit fees from 1975 to 1986; mayor's permit
and sanitary inspection fees from 1975 to
1984. PPC argues that, pursuant to the the
Provincial Circular issued by the DOF, it is
contrary to national economic policy to impose
local taxes on the manufacture of petroleum
products as they are already subject to
specific tax under the NIRC and that it also
covers all ordinances.
WON PPC is liable to pay the said
impositions.
HELD: PPC is liable to pay those from
1976 to 1986. There is no question that
Pililla's Municipal Tax Ordinance No. 1
imposing the assailed taxes, fees and charges
is valid especially Section 9 (A) which
according to the trial court "was lifted in toto
and/or is a literal reproduction of Section 19
(a) [Now Sec. 133(h)] of the Local Tax Code as
amended by P.D. No. 426." It conforms with
the mandate of said law.
But P.D. No. 426 amending the Local Tax Code
is deemed to have repealed Provincial Circular
Nos. 26-73 and 26 A-73 issued by the
Secretary of Finance when Sections 19 and 19
(a), were carried over into P.D. No. 426 and no
exemptions were given to manufacturers,
wholesalers, retailers, or dealers in petroleum
products.
Well-settled is the rule that administrative
regulations must be in harmony with the
provisions of the law. In case of discrepancy
between the basic law and an implementing
rule or regulation, the former prevails.
Furthermore, while Section 2 of P.D. 436
prohibits the imposition of local taxes on
petroleum products, said decree did not
amend Sections 19 and 19 (a) of P.D. 231 as
amended by P.D. 426, wherein the
municipality is granted the right to levy taxes
on business of manufacturers, importers,
PROF. GISELLA DIZON-REYES
producers of any article of commerce of
whatever kind or nature. A tax on business is
distinct from a tax on the article itself. Thus, if
the imposition of tax on business of
manufacturers, etc. in petroleum products
contravenes a declared national policy, it
should have been expressly stated in P.D. No.
436.
The exercise by local governments of the
power to tax is ordained by the present
Constitution. To allow the continuous
effectivity of the prohibition set forth in PC No.
26-73 (1) would be tantamount to restricting
their power to tax by mere administrative
issuances.
However, since the Local Tax Code does not
provide the prescriptive period for collection of
local taxes, Article 1143 of the Civil Code
applies. Said law provides that an action upon
an obligation created by law prescribes within
ten (10) years from the time the right of action
accrues. The Municipality of Pililla can
therefore enforce the collection of the tax on
business of petitioner PPC due from 1976 to
1986, and NOT the tax that had accrued prior
to 1976.
Floro Cement Corporation v. Gorospe
(1991)
FACTS: The Municipality of Lugait (Misamis
Oriental) filed a complaint for collection of
taxes against Floro Cement Corporation. The
taxes are “manufacturers” and “exporter’s”
taxes for 1 Jan 1974- 30 Sept 1975 amounting
to P161,875.00 plus 25% surcharge.
They based it on Municipal Ordinance No. 5,
passed pursuant to PD 231; and Ordinance No.
10.
Floro Cement opposed the imposition of the
tax, arguing that it is not liable since the
plaintiff’s powers to levy fees on “Mines,
Mining Corporations and Mineral Products” was
limited by Sec. 52 of PD 463. Secretary of
Agriculture and Natural Resources granted us
a certificate of tax exemption for a period of 5
years.
90
A REVIEWER IN LOCAL GOVERNMENT LAW
WON Ordinance Nos. 5 and 10 apply to
petitioner Floro Corporation
notwithstanding the limitation provided
for in Sec. 5(m) of PD 231 and Sec. 52 of
PD 463.
HELD: YES. The Municipality’s power to levy
taxes on manufacturers and importers is
provided in Art. 2, Sec. 19 of PD 231:
Municipality may impose a tax on business
except those for which fixed taxes are
provided for in this Code.
Cement is not a mineral product but rather a
manufactured product. It is the result of a
definite process—crushing of minerals,
grinding, mixing, etc. Its minerals had already
undergone a chemical change before cement
reaches its saleable form.
The power of taxation is a high prerogative of
sovereignty. Its relinquishment is never
presumed. The general rule is that any claim
for exemption from the tax statute should be
strictly construed against the taxpayer. He
who claims an exemption must be able to
point out some provision of law creating the
right; it cannot be allowed to exist upon a
mere implication or inference.
The exemptions mentioned in Sec. 52 of PD
463 only refers to machineries, equipment,
tools, for production, etc., as provided in Sec.
53 of the same decree. The manufacture and
export of cement do not fall under it since it is
not a mineral product.
Tuzon and Mapagu vs. CA
(1992)
FACTS: The Sangguniang Bayan of
Camalaniugan, Cagayan unanimously adopted
Resolution No.9 where 1% donation from
thresher operators who will apply for a permit
to thresh within its jurisdiction will be solicited
to help finance construction of Sports and
Nutrition Center.
The municipal treasurer Mapagu prepared a
document for signature of all thresher applying
for a mayor’s permit to implement the
resolution:
PROF. GISELLA DIZON-REYES
that thresher-owner-operator
voluntarily agree to donate 1% of all
palay threshed within jurisdiction of
municipality… and agree to report
weekly the total number of palay
threshed…
Jurado sent his agent to municipal treasurer’s
office to pay license fee of Php 285 for
thresher operators but Mapagu refused to
accept payment and required him to secure a
mayor’s permit first. Mayor Tuzon said that he
should first comply with Resolution9 and sign
the agreement before permit could be issued.
Jurado ignored requirement and sent the Php
285 license fee by postal money order to the
office of municipal treasurer. Mapago returned
amount because of failure to comply with
Resolution No.9.
Hence, a special civil action for mandamus
with damages to compel issuance of mayor’s
permit and license was filed with the CFI and
also a petition for a declaratory judgment
against the resolution and implementing
agreement for being illegal either as a
donation or as a tax measure.
WON the “donation” was a valid exercise
of the LGU’s taxing power.
The Court did not concern itself with the
validity of the Resolution since the issue
was not raised in the petition as an
assigned error of the CA. While it would
appear from the wording of the resolution that
the municipal government merely intends to
"solicit" the 1% contribution from the
threshers, the implementing agreement seems
to make the donation obligatory and a
condition precedent to the issuance of the
mayor's permit. This goes against the nature
of a donation, which is an act of liberality and
is never obligatory.
If, on the other hand, it is to be considered a
tax ordinance, then it must be shown in view
of the challenge raised by the private
respondents to have been enacted in
accordance with the requirements of the Local
Tax Code. These would include the holding of a
91
A REVIEWER IN LOCAL GOVERNMENT LAW
public hearing on the measure and its
subsequent approval by the Secretary of
Finance, in addition to the usual requisites for
publication of ordinances in general.
WON the Mayor and Treasurer are liable
for damages.
NO. The Civil Code provision (Art. 27) has
been remarked:
- To have a purpose to end the bribery
system, where public official, for some
flimsy excuse, delays or refuses the
performance of his duty until he gets some
kind of pabagsak” (Paras on Civil Code)
- To presuppose that the refusal or omission
of a public official to perform his official
duty is attributable to malice or
inexcusable negligence (Phil. Match Co. vs.
City of Cebu)
- In any event, the erring public functionary
is justly punishable under it for whatever
loss or damage complainant has
sustained.
In the CAB, it has not been alleged that
Mayor’s refusal to act on his application was
an attempt to compel him to resort to bribery
to obtain approval of his application.
It cannot be said also that mayor and treasurer
were motivated by personal spite or were
grossly negligent in refusing to issue permit
and license to Jurado.
No evidence has been offered to show that
they singled out Jurado for persecution.
Neither does it appear that they stood to gain
personally from refusing to issue to Jurado the
permit and license he needed. They were not
his business competitors nor has it been
established that they intended to favor his
competitors.
On the contrary, record discloses that
resolution was uniformly applied to all
threshers in the municipality without
discrimination or preference.
Petitioners acted within scope of their
authority and in consonance with their honest
PROF. GISELLA DIZON-REYES
interpretation of the resolution. In the absence
of a judicial decision declaring it invalid, the
legality of challenged measures would have to
be presumed. As executive officials of the
municipality, they had the duty to enforce it as
long as it had not been repealed by
Sangguniang Bayan or annulled by the courts.
Drilon vs. Lim
(1994)
FACTS: Pursuant to Sec 187 of the LGC, the
Secretary of Justice had, on appeal to him of
four oil companies and a taxpayer, declared
Ordinance No. 7794, otherwise known as the
Manila Revenue Code, null and void for non-
compliance with the prescribed procedure in
the enactment of tax ordinances and for
containing certain provisions contrary to law
and public policy.
In Manila’s petition for certiorari, the Manila
RTC sustained the ordinance. It also declared
Section 187 of the LGC as unconstitutional
since it vests in the Justice Secretary the
power of control over LGUs in violation of the
policy of local autonomy mandated in the
Constitution.
The Secretary argues that the annulled Section
187 is constitutional and that the procedural
requirements for the enactment of tax
ordinances as specified in the Local
Government Code has indeed not been
observed.
WON Sec. 187 of the LGC is
constitutional.
HELD: YES. Every court, including the SC, is
charged with the duty of a purposeful
hesitation before declaring a law
unconstitutional, on the theory that the
measure was first carefully studied by the
executive and the legislative departments and
determined by them to be in accordance with
the fundamental law before it was finally
approved.
To doubt is to sustain. The presumption of
constitutionality can be overcome only by the
clearest showing that there was indeed an
infraction of the Constitution, and only when
92
A REVIEWER IN LOCAL GOVERNMENT LAW
such a conclusion is reached by the requipped
majority may the Court pronounce, in the
discharge of the duty it cannot escape, that
the challenged act must be struck down.
In CAB, the RTC was rather hasty in
invalidating the provision. Section 187
authorizes the Secretary of Justice to review
only the constitutionality or legality of the tax
ordinance and, if warranted, to revoke it on
either or both of these grounds. When he
alters or modifies or sets aside a tax
ordinance, he is not also permitted to
substitute his own judgment for the judgment
of the local government that enacted the
measure.
Secretary Drilon did set aside the Manila
Revenue Code, but he did not replace it with
his own version of what the Code should be.
He did not pronounce the ordinance unwise or
unreasonable as a basis for its annulment. He
did not say that in his judgment it was a bad
law. What he found only was that it was illegal.
All he did in reviewing the said measure was
determine if the petitioners were performing
their functions is accordance with law, that is,
with the prescribed procedure for the
enactment of tax ordinances and the grant of
powers to the city government under the Local
Government Code. As we see it, that was an
act not of control but of mere supervision.
An officer in control lays down the rules in the
doing of an act. It they are not followed, he
may, in his discretion, order the act undone or
re-done by his subordinate or he may even
decide to do it himself. Supervision does not
cover such authority. The supervisor or
superintendent merely sees to it that the rules
are followed, but he himself does not lay down
such rules, nor does he have the discretion to
modify or replace them. If the rules are not
observed, he may order the work done or re-
done but only to conform to the prescribed
rules. He may not prescribe his own manner
for the doing of the act. He has no judgment
on this matter except to see to it that the rules
are followed. In the opinion of the Court,
Secretary Drilon did precisely this, and no
more nor less than this, and so performed an
act not of control but of mere supervision.
PROF. GISELLA DIZON-REYES
Mactan Cebu International Airport
Authority vs. Marcos (1996)
FACTS: The MCIAA is mandated to control,
manage and supervise the Mactan
International Airport and other airports in
Cebu. City Treasurer demanded payment for
realty taxes on lands belonging to MCIAA.
Petitioner claimed in its favor the provision in
its charter which exempts it from payment of
realty taxes. It also claimed that it is an
instrumentality of the government performing
governmental functions, citing Sec. 133 of
LGC.
WON the MCIAA is exempt from payment
of realty taxes.
HELD: NO. Reading together Secs. 133, 232
and 234 of the LGC, the SC concluded that:
As a general rule, the taxing powers of LGUs
cannot extend to the levy of “taxes, fees and
charges of any kind on the National
Government, its agencies and
instrumentalities, and LGUs.” (Sec. 133)
However, provinces, cities and municipalities
in the Metropolitan Manila Area may impose
the real property tax except on “real property
owned by the Republic of the Philippines or
any of its political subdivisions (Sec. 232),
except when the beneficial use thereof has
been granted, for consideration or otherwise,
to a taxable person.” (Sec. 234)
As to tax exemptions or incentives granted to
or presently enjoyed by natural or judicial
persons, including GOCC’s:
The general rule is that they are withdrawn
upon the effectivity of the LGC, except those
granted to local water districts, cooperatives
duly registered under RA 6938, non-stock and
non-profit hospitals and educational
institutions, and unless otherwise provided in
the LGC.
“Unless otherwise provided in the LGC” could
refer to Sec. 234, which enumerates the
properties exempt from real property tax.
93
A REVIEWER IN LOCAL GOVERNMENT LAW
But the last paragraph of Sec. 234 further
qualifies the retention of the exemption insofar
as real property taxes are concerned by
limiting the retention only to those
enumerated herein; all others not included in
the enumeration lost the privilege upon the
effectivity of the LGC.
But even as to real property owned by the
Republic or any of its political subdivisions
covered by item (a) of the first paragraph of
Section 234, the exemption is withdrawn if the
beneficial use of such property has been
granted to a taxable person for consideration
or otherwise.
MCIAA is a GOCC. It necessarily follows that its
exemption from real property tax granted it in
its Charter has been withdrawn.
As to MCIAA’s contention that it is an
instrumentality of the gov’t, it fails to consider
the fact that the legislature used the phrase
"National Government, its agencies and
instrumentalities" in Section 133(o), but only
the phrase "Republic of the Philippines or any
of its political subdivisions" in Section 234(a).
“Republic of the Philippines” is a broader term.
It is clear that Congress did not wish to expand
the scope of the exemption in Section 234(a)
to include real property owned by other
instrumentalities or agencies of the
government including GOCCs.
Also, the parcels of land in this case do not
belong to the Republic whose beneficial use
has been granted to MCIAA. This "transfer" is
actually an absolute conveyance of the
ownership thereof because the petitioner's
authorized capital stock consists of "the value
of such real estate owned and/or administered
by the airports." Hence, the petitioner is now
the owner of the land and the exception in
Sec. 234(c) of the LGC is inapplicable.
(See the following notes on this case)
PROF. GISELLA DIZON-REYES
CONFLICTING CASES: Mactan Airport
Authority vs. Pres. Marcos (September 11,
1996) and Manila Int’l Airport Authority vs.
CA (July 20, 2006)
Both cases involves the following
provisions:
Sec 133(o), LGC: Unless otherwise
provided herein, the LGUs are not allowed
to levy… (o) taxes, fees or charges of any
kind on the national gov’t, its agencies,
instrumentalities and LGUs.
Sec 234(a), LGC: Properties exempt from
PPT (a) real properties owned by the
Republic or any of its political
subdivisions…
MACTAN Case: The SC held that since
Mactan Airport Authority is a GOCC and
GOCCs are not among those enumerated
as exempt, it is not exempted from RPT.
Legislature in amending the law has
specifically deleted GOCCS from the
enumeration in Sec 234(a).
MIAA Case: SC held that MIAA is not a
GOCC since it is neither a stock corporation
nor a non-stock corporation as defined in
the Administrative Code. Although not
covered by the enumeration in Sec 234,
MIAA is a public utility which falls under the
term “instrumentality” outside the scope of
LGS’s local taxing powers under Sec
133(o).
NOTE: The MIAA Case may be argued to
have superseded the previous case, being
a more recent ruling decided by SC en
banc.
2. Real Property Taxation
94
A REVIEWER IN LOCAL GOVERNMENT LAW
NOTE: I don’t think that the nitty-gritty of real
property taxation will come out in the exam.
Ang haba ng provisions! I just included the
following excerpts from the BAROPS Reviewer,
just in case.
BASIC CONCEPTS
Definition: Real property tax has been
defined as “a direct tax on the ownership
of lands and buildings or other
improvements thereon not specially
exempted, and is payable regardless of
whether the property is used or not,
although the value may vary in accordance
with such factor.”
NOTE: Real property tax is a fixed
proportion of the assessed value of the
property being taxed and requires,
therefore, the intervention of assessors.
Characteristics of real property tax
→ It is a direct tax on the ownership or use
of real property.
→ It is an ad valorem tax. Value is the tax
base.
→ It is proportionate because the tax is
calculated on the basis of a certain
percentage of the value assessed.
→ It creates a single, indivisible obligation.
→ It attaches on the property (i.e., a lien)
and is enforceable against it.
Nature and scope of power to impose
realty tax
The taxing power of local governments in
real property taxation is a delegated
power. Fundamental principles governing
real
property taxation
PROF. GISELLA DIZON-REYES
1. Real property shall be appraised at its
current and fair market value.
2. Real property shall be classified for
assessment purposes on the basis of its
actual use.
3. Real property shall be assessed on the
basis of a Uniform classification within
each local government unit.
4. The appraisal, assessment, levy and
collection of real property tax shall not
be let to any private person.
5. The appraisal and assessment of real
property shall be Equitable. [Section
197, Local Government Code]
Real properties subject to tax
Generally, Real Property Tax is imposed on
lands, buildings, machineries and other
improvements. The Local Government
Code contains no definition of “real
property”; however, the following terms
are defined:
§ Improvement: It is a valuable addition
made to a property or an amelioration in
its condition amounting to more than a
repair or replacement of parts involving
capital expenditures and labor which is
intended to enhance its value, beauty, or
utility or to adopt it for new or further
purposes. [Section 199(m), Local
Government Code]
§ Machinery: Machinery embraces
machines, equipment, mechanical
contrivances, instruments, appliances or
apparatus, which may or may not be
attached, permanently or temporarily, to
the real property. It includes the physical
facilities for production, the installations
and appurtenant service facilities, those
which are mobile, self-powered or self-
propelled, and those not permanently
95
A REVIEWER IN LOCAL GOVERNMENT LAW
attached to the real property which are
actually, directly, and exclusively used to
meet the needs of the particular industry,
business or activity and which by their very
nature and purpose are designed for, or
necessary to its manufacturing, mining,
logging, commercial, industrial or
agricultural purposes. [Section 199(o),
Local Government Code]
§ NOTE: this definition of machinery is too
all-encompassing and broad in that
everything that is used even indirectly for
the needs of the industry can be classifies
as machinery which is REAL property,
which in turn means that it is subject to
RPT; example would be a SCREWDRIVER
being used in an office – since this is used
by the office and indirectly contributes the
to smooth functioning of the general
business then this can be treated as real
property
§ This was solved by the LGC IRR on sec
290 (o) that now limits and qualifies this:
this is known as the GENERAL PURPOSE
RULE. This rule states that if it used in line
or for the general purpose of the business
but only indirectly, then it is NOT to be
treated as real property. This means that a
typewriter being used in the main office of
a firm that manufactures cars is NOT real
property as the typewriter is NOT used to
actually make the car which is the main
purpose of the company.
Generally the SC has held that Art 415 CC
(which enumerates the kinds of real
property) is an exclusive list as to what
constitutes real property. BUT FOR TAX
PURPOSES ONLY, it is common that certain
properties be classified as real property
even if according to the general principles
of the CC, they would only be classified as
personal property. LESSON: the NIRC and
the LGC code prevail in classifying property
for tax purposes.
PROF. GISELLA DIZON-REYES
Properties EXEMPT from real property
taxes
1. Real property owned by the Republic of
the Philippines or any of its political
subdivisions except when the beneficial
use thereof has been granted for
consideration or otherwise to a taxable
person.
Q: Are GOCCs covered by the exemption?
No. The tax exemption of “property owned
by the Republic of the Philippines” refers to
properties owned by the government and
by its agencies which do not have separate
and distinct personalities, as distinguished
from GOCCs which have separate and
distinct personalities. [National
Development Company v. Cebu City]
Q: What is the scope of the exemption?
The exemption from tax of property owned
by the government obtains even as to
properties owned in a private, proprietary
or patrimonial character. The law makes no
distinction between property held in
governmental capacity and those
possessed in a proprietary capacity. [Board
of Assessment Appeals of Laguna v. CTA]
2. Charitable institutions, churches,
parsonages, or convents appurtenant
thereto, mosques, non-profit or religious
cemeteries, and all lands, buildings, and
improvements actually, directly and
exclusively used for religious, charitable, or
educational purposes.
3. All machineries and equipment that are
actually, directly and exclusively used by
local water utilities and government-owned
or controlled corporations engaged in the
supply and distribution of water and/or
96
A REVIEWER IN LOCAL GOVERNMENT LAW
generation and transmission of electric
power.
4. All real property owned by duly
registered Cooperatives as provided for
under Republic Act No. 6938.
5. Machinery and equipment used for
Pollution control and environmental
protection. [Section 234, Local Government
Code]
NOTE: A taxpayer claiming exemption must
submit sufficient documentary evidence to
the local assessor within thirty (30) days
from the date of the declaration of real
property; otherwise, it shall be listed as
taxable in the Assessment Roll. (Sec. 206,
LGC)
Secretary of Finance vs. Ilarde
(2005)
FACTS: Cabaluna, Jr., the Regional Director of
Regional Office No. VI of the Department of
Finance in Iloilo City failed to pay the land
taxes on his parcels of land for the years 1986
to 1992. Soon after Cabaluna, Jr. retired from
his post, he filed a formal letter of protest with
the City Treasurer of Iloilo City wherein he
contends that the City Treasurer’s
computation of penalties was erroneous since
the rate of penalty applied exceeded twenty-
four percent (24%) in contravention of Section
66 of P.D. No. 464, otherwise known as the
Real Property Tax Code, as amended.
The City Treasurer turned down Cabaluna Jr.’s
protest citing Sec. 4(c) of Joint Assessment
Regulations No. 1-85 and Local Treasury
Regulations No. 2-85 of the then Ministry (now
Department) of Finance, which provides that
the penalty of two percent (2%) per month of
delinquency, or twenty-four percent (24%) per
annum, as the case may be, shall continue to
be imposed on the unpaid tax from the time
the delinquency was incurred up to the time
that it is paid for in full.
PROF. GISELLA DIZON-REYES
Cabaluna, Jr. now questions the validity of the
said issuances.
WON the said issuances are valid.
HELD: NO. The subject Regulations must be
struck down for being repugnant to Section 66
of P.D. No. 464 or the Real Property Tax Code,
which is the law prevailing at the time material
to this case.
Under Section 66 of P.D. No. 464, the
maximum penalty for delinquency in the
payment of real property tax shall in no case
exceed twenty-four per centum of the
delinquent tax. Upon the other hand,
Section 4(c) of the challenged Joint
Assessment Regulations No. 1-85 and Local
Treasury Regulations No. 2-85 issued by
respondent Secretary (formerly Minister) of
Finance provides that “the penalty of two
percent (2%) per month of delinquency or
twenty-four percent (24%) per annum as the
case may be, shall continue to be imposed
on the unpaid tax from the time the
delinquency was incurred up to the time that
the delinquency is paid for in full.” As adeptly
observed by the trial court, the penalty
imposed under the assailed Regulations has no
limit inasmuch as the 24% penalty per
annum shall be continuously imposed on the
unpaid tax until it is paid for in full unlike that
imposed under Section 66 of the Real Property
Tax Code where the total penalty is limited
only to twenty-four percent of the delinquent
tax.
Assuming argumenti that E.O. No. 73 has
authorized the petitioner to issue the objected
Regulations, such conferment of powers is void
for being repugnant to the well-encrusted
doctrine in political law that the power of
taxation is generally vested with the
legislature. Yes, President Corazon Aquino, at
that time, was exercising both executive and
legislative powers. But, the power delegated
to the executive branch, in this case the
Ministry of Finance, to lay down implementing
rules must, nevertheless, be germane to the
general law it seeks to apply. The
implementing rules cannot add to or detract
97
A REVIEWER IN LOCAL GOVERNMENT LAW
from the provisions of the law it is designed to
implement Administrative regulations adopted
under legislative authority by a particular
department must be in harmony with the
provisions of the law they are intended to
carry into effect, which in this case is merely
to antedate the effectivity of the 1984 Real
Property Tax values inasmuch as this is the
raison d’être of E.O. No. 73.
In a last-ditch effort to salvage the impugned
Regulations, petitioner pushes on that Joint
Local Assessment/Treasury Regulations No. 2-
86, or the so-called implementing rules of E.O.
No. 73, is not contrary to Section 66 of P.D. No.
464 inasmuch as the latter applies merely to
simple delinquency in the payment of real
property taxes while the former covers cases
wherein there was failure to promptly pay the
real property tax due, including the increase in
tax due and demandable for the tax year as a
result of the application of the 1984 New or
Revised Assessment of the value of the subject
property.
Such rationalization lacks legal traction. P.D.
No. 464 makes no distinction as to whether it
is simple delinquency or other forms thereof.
The Real Property Tax Code covers the wide ilk
of failure to promptly pay the real property
taxes due and demandable for a particular
period. Ubi lex non distinguit nec nos
distinguere debemus. When the law does not
distinguish, we must not distinguish. Further,
P.D. No. 464 covers all real property titled to
individuals who become delinquents in paying
real estate tax. P.D. No. 464 is a law of
general application.
Benguet Corporation vs. Central Board of
Assessment Appeals
(1992)
FACTS: The Benguet Provincial Assessor
assessed real property tax on the bunkhouses
of petitioner Benguet Corporation occupied for
residential purposes by its rank and file
employees under Tax Declaration Nos. 8471
(1985) and 10454 (1986). The tax exemptions
of bunkhouses under Sec. 3 of PD 745 was
withdrawn by PD 1955.
PROF. GISELLA DIZON-REYES
The Benguet Corp. appealed the decision to
the LBAA of Benguet. The LBAA, however,
affirmed the taxability of the bunkhouses. The
CBAA held the exemption was withdrawn so
petitioner should have applied for restoration
of the exemption with the Fiscal Incentives
Review Board.
Benguet Corp., now argues that LGUs don’t
have any authority to levy realty taxes on
mines pursuant to Sec. 52 of PD 463 and Sec.
5 (m) of the Local Tax Code. The Solicitor
General counters that Benguet Corp. is
estopped from raising the question of lack of
authority as it was never raised before.
WON provincial assessors may validly
assess real property tax on the
properties of petitioner considering the
proscription in the Local Tax Code and
the Mineral Resources Development
Decree of 1974 against imposition of
taxes on mines by local governments
YES. The provisions of Sec. 52 of the Mineral
Resources Dev’t Decree of 1974 (PD 463) and
Sec. 5 (m) of the Local Tax Code are mere
limitations on the taxing power of LGUs; they
are not pertinent to the issue before the SC.
They cannot affect the imposition of the real
property tax by the national government.
Realty taxes are national taxes collected by
LGUs. While LGU’s are charged with fixing the
rate of real property taxes, it does not
necessarily follow from that authority the
determination of whether or not to impose the
tax. In fact, LGU’s have no alternative but to
collect taxes as mandated in Sec. 38 of the
Real Property Tax Code. It is thus clear that it
is the national government, expressing itself
through the legislative branch, that levies the
real property tax.
It is the national government that levies real
property tax. Consequently, when LGU’s are
required to fix the rates, they are merely
constituted as agents of the national
government in the enforcement of the Real
Property Tax Code. The delegation of taxing
power is not even involved here because the
national government has already imposed
98
A REVIEWER IN LOCAL GOVERNMENT LAW
realty tax in Sec. 38 leaving only the
enforcement to be done LGU’s.
Also, the real tax exemption granted under PD
745 was withdrawn by PD 1955. If the SC were
to sanction the interpretation of Benguet, then
necessarily all real properties exempt by any
law would be covered, and there would be no
need for congress to specify “Real Property
Tax Code, as amended” instead of stating
clearly realty tax exemption laws. The
intention is to limit the application of the
“exception clause” only to those given by the
Real Property Tax Code.
National Development Corp. vs. Cebu City
(1992)
FACTS: The NDC is authorized to engage in
commercial, industrial, mining, agricultural
and other enterprises needed for economic
development. In 1939, the President issued
Proclamation No. 430 which reserved Block
No. 4, Reclamation Area No. 4, of Cebu City,
consisting of 4,599 square meters, for
warehousing purposes under the
administration of NWC. NWC was succeeded
by NDC. In 1940, a warehouse with a floor area
of 1,940 square meters was constructed on it.
In 1948, Cebu City assessed and collected
from NDC real estate taxes on the land and
the warehouse. NDC paid under protest.
Cebu City argues that the land and warehouse
are taxable since no law grants NDC
exemption from real estate taxes. NDC, as
recipient of the land reserved by the President,
is liable for payment of ordinary taxes. They
have ceased to be exempt under the
Assessment Law when the government
disposed of them in favor of NDC. The SC has
also used the standard of “use” of property
rather than “ownership” as basis for real
estate taxability.
The NDC argues that the Assessment Law
exempts properties owned by the Republic
from real estate tax, relying on the case of
Board of Assessment Appeals v. CTA & NWSA,
where it was held that “properties of NWSA, a
GOCC, are exempt from real estate tax since
PROF. GISELLA DIZON-REYES
the law applies to all government properties
whether held in a proprietary or governmental
capacity.”
WON the NDC is exempt from paying the
imposed taxes.
NDC is exempt from the payment of real
estate taxes on the land.
To come within the ambit of the exemption, it
is important to establish that the property is
owned by the government or by its
unincorporated agency. Once government
ownership is determined, the nature of the use
of the property, whether for proprietary or
sovereign purposes, becomes immaterial.
However in CAB, what appears to have been
ceded to NDC is merely the administration of
the property while the government retains
ownership of what has been declared reserved
for warehousing purposes under the
proclamation.
As reserved land (public land that has been
withheld and kept back from sale or
disposition), it remains absolute property of
the government, because the government
does not part with its title by reserving them,
but simply gives notice to all that it desires
them for a certain purpose. As its title remains
with the Republic, the reserved land is covered
by the tax exemption provision.
NDC is NOT EXEMPT from the payment of
real estate taxes on the warehouse.
A different rule applies because “the
exemption of public property from taxation
does not extend to improvements on the
public lands made by preemptioners,
homesteaders and other claimants at their
own expense, and these are taxable by the
state…(CJS)”. Consequently, the warehouse
constructed on the reserved land by NDC
should properly be assessed real estate tax as
such improvement does not appear to belong
to the Republic.
Province of Tarlac vs. Judge Alcantara
(1992)
99
A REVIEWER IN LOCAL GOVERNMENT LAW
FACTS: Tarlac Enterprises Inc is the owner of
a parcel of land in Mabini, Tarlac, an ice drop
factory in said land, machinery shed and other
machinery. These properties were declared for
purposes of Taxation in the Provincial
Assessor’s Office. The Provincial Treasurer
found that real estate taxes for the years 1974
until 1992 in the amount of P532,435.55
including penalties were not yet paid.
Therefore, the Provincial Treasurer Jose Meru
filed a complaint praying that the company
pay the said sum as well as damages.
Tarlac Enterprises filed a motion to dismiss.
But the lower court denied the motion.
Thereafter, petitioner set the auction sale of
the private respondent's properties to satisfy
the real estate taxes due. This prompted the
private respondent to file a motion praying
that petitioner be directed to desist from
proceeding with the public auction sale. The
lower court issued an order granting said
motion to prevent mootness of the case
considering that the properties to be sold were
the, subjects of the complaint.
Tarlac Enterprises then filed an answer saying
that under Section 40(g) of PD 46 in relation to
PD 551, it was exempt from paying said tax.
The court rendered the decision dismissing the
complaint. It ruled that PD 551 expressly
exempts private respondent from paying the
real property taxes demanded, it being a
grantee of a franchise to generate, distribute
and sell electric current for light. The court
held that in lieu of said taxes, private
respondent had been required to pay 2%
franchise tax in line with the intent of the law
to give assistance to operators such as the
private respondent to enable the consumers to
enjoy cheaper rates.
WON Tarlac Enterprises, Inc. is exempt
from the payment of real property tax
under Sec. 40 (g) of P.D. No. 464 in
relation to P.D. No. 551, as amended.
HELD: NO. Sec. 40(g) of P.D. No. 464, the
Real Property Tax Code, provides: SEC. 40.
Exemptions from Real Property Tax. - The
exemption shall be as follows: (g) Real
property exempt under other laws.
PROF. GISELLA DIZON-REYES
Private respondent contends that the "other
laws" referred to in this Section is P.D. No. 551
(Lowering the Cost to Consumers of Electricity
by Reducing the Franchise Tax Payable by
Electric Franchise Holders and the Tariff on
Fuel Oils for the Generation of Electric Power
by Public Utilities). Its pertinent provisions
state: SECTION 1. Any provision of law or local
ordinance to the contrary notwithstanding, the
franchise tax payable by all grantees of
franchises to generate, distribute and sell
electric current for light, heat and power shall
be two (2%) of their gross receipts received
from the sale of electric current and from
transactions incident to the generation,
distribution
The SC did not agree with the lower court that
the phrase “in lieu of all taxes and
assessments of whatever nature” in the
second paragraph of Sec. 1 of PD 551
expressly exempts private respondent from
paying real property taxes. Said proviso is
modified and delimited by the phrase “on
earnings, receipts, income and privilege of
generation, distribution and sale” which
specifies the kinds of taxes and assessments
which shall not be collected in view of the
imposition of the franchise tax. Said
enumerated items have no relation to, and are
entirely different from, real properties subject
to tax.
If the intention of the law is to exempt electric
franchise grantees from paying real property
tax and to make the 2% franchise tax the only
imposable tax, then said enumerated items
would not have been added when PD 852 was
enacted to amend P.D. No. 551. The legislative
authority would have simply stopped after the
phrase "national or local authority" by putting
therein a period. On the contrary, it went on to
enumerate what should not be subject to tax
thereby delimiting the extent of the
exemption.
There is also no merit in the respondent’s
contention that the real properties being
taxed, the machinery for the generation and
distribution of electric power, the bldg housing
said machinery, and the land on which said
bldg is constructed, are necessary for the
100
A REVIEWER IN LOCAL GOVERNMENT LAW
operation of its business of generation,
distribution and sale of electric current and
should be exempt from taxation. The lower
court erred in exempting the private
respondents from paying real property tax on
its properties enumerated in the complaint.
The annexes attached to private respondent's
comment on the petition to prove by
contemporaneous interpretation its claimed
tax exemption are not of much help to it.
Department Order No. 35-74 dated September
16, 1974 11 regulating the implementation of
P.D. No. 551 merely reiterates the "in lieu of all
taxes" proviso. Local Tax Regulations No. 3-75
12 issued by then Secretary of Finance Cesar
Virata and addressed to all Provincial and City
Treasurers enjoins strict compliance with the
directive that "the franchise tax imposed
under Local Tax Ordinances pursuant to
Section 19 of the Local Tax Code, as amended,
shall be collected from business holding
franchises but not from establishments whose
franchise contains the in lieu of all taxes'
proviso," thereby clearly indicating that said
proviso exempts taxpayers like private
respondent from paying the franchise tax
collected by the provinces under the Local Tax
Code. Lastly, the letter 13 of the then Bureau
of Internal Revenue Acting Commissioner
addressed to the Matic Law Office granting
exemption to the latter's client from paying
the "privilege (fixed) tax which is an excise tax
on the privilege of engaging in business"
clearly excludes realty tax from such
exemption.
The SC also find misplaced the lower court's
and the private respondent's reliance on
Butuan Sawmill. Inc. v. City of Butuan. In that
case, the questioned tax is a tax on the gross
sales or receipts of said sawmill while the tax
involved herein is a real property tax. The City
of Butuan is categorically prohibited therein by
Sec. 2(j) of the Local Autonomy Act from
imposing "taxes of any kind . . . on person
paying franchise tax." On the other hand, P.D.
No. 551 is not as all-encompassing as said
provision of the Local Autonomy Act for it
enumerates the items which are not taxable
by virtue of the payment of franchise tax.
PROF. GISELLA DIZON-REYES
It has always been the rule that "exemptions
from taxation are construed in strictissimi juris
against the taxpayer and liberally in favor of
the taxing authority" primarily because "taxes
are the lifeblood of government and their
prompt and certain availability is an imperious
need." Thus, to be exempted from payment of
taxes, it is the taxpayer's duty to justify the
exemption "by words too plain to be mistaken
and too categorical to be misinterpreted.;
Private respondent has utterly failed to
discharge this duty.
3. Shares of LGU’s in the Proceeds of
National Taxes
1987 CONSTI, Art. X, Section 6. Local
government units shall have a just share, as
determined by law, in the national taxes which
shall be automatically released to them.
Pimentel vs. Aguirre
(supra)
HELD: Under existing law, local government
units, in addition to having administrative
autonomy in the exercise of their functions,
enjoy fiscal autonomy as well. Fiscal
autonomy means that local governments have
the power to create their own sources of
revenue in addition to their equitable share in
the national taxes released by the national
government, as well as the power to allocate
their resources in accordance with their own
priorities. It extends to the preparation of
their budgets, and local officials in turn have to
work within the constraints thereof. They are
not formulated at the national level and
imposed on local governments, whether they
are relevant to local needs and resources or
not. Hence, the necessity of a balancing of
viewpoints and the harmonization of proposals
from both local and national officials, who in
any case are partners in the attainment of
national goals.
There are therefore several requisites before
the President may interfere in local fiscal
matters: (1) an unmanaged public sector
deficit of the national government; (2)
consultations with the presiding officers of the
Senate and the House of Representatives and
101
A REVIEWER IN LOCAL GOVERNMENT LAW
the presidents of the various local leagues;
and (3) the corresponding recommendation of
the secretaries of the Department of Finance,
Interior and Local Government, and Budget
and Management. Furthermore, any
adjustment in the allotment shall in no case be
less than thirty percent (30%) of the collection
of national internal revenue taxes of the third
fiscal year preceding the current one.
A basic feature of local fiscal autonomy is the
automatic release of the shares of LGUs in the
national internal revenue. This is mandated by
no less than the Constitution. The Local
Government Code specifies further that the
release shall be made directly to the LGU
concerned within five (5) days after every
quarter of the year and "shall not be subject to
any lien or holdback that may be imposed by
the national government for whatever
purpose." As a rule, the term "shall" is a word
of command that must be given a compulsory
meaning. The provision is, therefore,
imperative.
Section 4 of AO 372, however, orders the
withholding, effective January 1, 1998, of 10
percent of the LGUs' IRA "pending the
assessment and evaluation by the
Development Budget Coordinating Committee
of the emerging fiscal situation" in the country.
Such withholding clearly contravenes the
Constitution and the law. Although temporary,
it is equivalent to a holdback, which means
"something held back or withheld, often
temporarily”. Hence, the "temporary" nature
of the retention by the national government
does not matter. Any retention is prohibited.
ALSO REMEMBER: In Alvarez, the SC held
that IRA is part of an LGU’s income.
1987 CONSTI, Art. X, Section 7. Local
governments shall be entitled to an equitable
share in the proceeds of the utilization and
development of the national wealth within
their respective areas, in the manner provided
by law, including sharing the same with the
inhabitants by way of direct benefits.
LGC
PROF. GISELLA DIZON-REYES
SEC. 284. Allotment of Internal Revenue
Taxes. - Local government units shall have a
share in the national internal revenue taxes
based on the collection of the third fiscal year
preceding the current fiscal year as follows:
(a) On the first year of the effectivity of this
Code, thirty percent (30%);
(b) On the second year, thirty-five percent
(35%); and
(c) On the third year and thereafter, forty
percent (40%).
Provided, That in the event that the national
government incurs an unmanageable public
sector deficit, the President of the Philippines
is hereby authorized, upon the
recommendation of Secretary of Finance,
Secretary of Interior and Local Government
and Secretary of Budget and Management,
and subject to consultation with the presiding
officers of both Houses of Congress and the
presidents of the liga, to make the necessary
adjustments in the internal revenue allotment
of local government units but in no case shall
the allotment be less than thirty percent (30%)
of the collection of national internal revenue
taxes of the third fiscal year preceding the
current fiscal year: Provided, further That in
the first year of the effectivity of this Code, the
local government units shall, in addition to the
thirty percent (30%) internal revenue
allotment which shall include the cost of
devolved functions for essential public
services, be entitled to receive the amount
equivalent to the cost of devolved personal
services.
SEC. 285. Allocation to Local Government
Units. - The share of local government units in
the internal revenue allotment shall be
allocated in the following manner:
(a) Provinces - Twenty-three percent (23%);
(b) Cities - Twenty-three percent (23%);
(c) Municipalities - Thirty-four percent (34%);
and
(d) barangays - Twenty percent (20%)
102
A REVIEWER IN LOCAL GOVERNMENT LAW
Provided, however, That the share of each
province, city, and municipality shall be
determined on the basis of the following
formula:
(a) Population - Fifty percent (50%);
(b) Land Area - Twenty-five percent (25%);
and
(c) Equal sharing - Twenty-five percent (25%)
Provided, further, That the share of each
barangay with a population of not less than
one hundred (100) inhabitants shall not be less
than Eighty thousand pesos (P=80,000.00) per
annum chargeable against the twenty percent
(20%) share of the barangay from the internal
revenue allotment, and the balance to be
allocated on the basis of the following formula:
(a) On the first year of the effectivity of this
Code:
(1) Population - Forty percent (40%); and
(2) Equal Sharing - Sixty percent (60%)
(b) On the second year:
(1) Population - Fifty percent (50%); and
(2) Equal Sharing - Fifty percent (50%)
(c) On the third year and thereafter:
(1) Population - Sixty percent (60%); and
(2) Equal Sharing - Forty percent (40%).
Provided, finally, That the financial
requirements of barangays created by local
government units after the effectivity of this
Code shall be the responsibility of the local
government unit concerned.
SEC. 286. Automatic Release of Shares. –
(a) The share of each local government unit
shall be released, without need of any further
action, directly to the provincial, city,
municipal or barangay treasurer, as the case
may be, on a quarterly basis within five (5)
days after the end of each quarter, and which
shall not be subject to any lien or holdback
that may be imposed by the national
government for whatever purpose.
PROF. GISELLA DIZON-REYES
(b) Nothing in this Chapter shall be
understood to diminish the share of local
government units under existing laws.
SEC. 287. Local Development Projects. -
Each local government unit shall appropriate
in its annual budget no less than twenty
percent (20%) of its annual internal revenue
allotment for development projects. Copies of
the development plans of local government
units shall be furnished the Department of
Interior and Local Government.
SEC. 288. Rules and Regulations. - The
Secretary of Finance, in consultation with the
Secretary of Budget and Management, shall
promulgate the necessary rules and
regulations for a simplified disbursement
scheme designed for the speedy and effective
enforcement of the provisions of this Chapter.
PIMENTEL:
• The automatic release of these funds is not
subject to any condition. Hence, Congress
may not impose any undertaking or event
(ex. Upon finding that the LGU has
complied with any guideline; or upon the
realization of the original revenue targets
submitted by the President to Congress)
before it releases the LGU’s shares in the
national taxes. (Batangas vs. Romulo,
ACORD, Inc. vs. Zamora)
LGC, SEC. 289. Share in the Proceeds
from the Development and Utilization of
the National Wealth. - Local government
units shall have an equitable share in the
proceeds derived from the utilization and
development of the national wealth within
their respective areas, including sharing the
same with the inhabitants by way of direct
benefits.
PIMENTEL:
• “National wealth” means the natural
resources of the nation (i.e., land, waters,
forests, the fishes, the minerals, etc.)
which are being utilized and developed
anywhere in the country.
103
A REVIEWER IN LOCAL GOVERNMENT LAW
LGC
SEC. 290. Amount of Share of Local
Government Units. - Local government units
shall, in addition to the internal revenue
allotment, have a share of forty percent (40%)
of the gross collection derived by the national
government from the preceding fiscal year
from mining taxes, royalties, forestry and
fishery charges, and such other taxes, fees, or
charges, including related surcharges,
interests, or fines, and from its share in any
co-production, joint venture or production
sharing agreement in the utilization and
development of the national wealth within
their territorial jurisdiction.
SEC. 291. Share of the Local
Governments from any Government
Agency or -Owned and -Controlled
Corporation. - Local government units shall
have a share based on the preceding fiscal
year from the proceeds derived by any
government agency or government-owned or
-controlled corporation engaged in the
utilization and development of the national
wealth based on the following formula
whichever will produce a higher share for the
local government unit:
(a) One percent (1%) of the gross sales or
receipts of the preceding calendar year; or
(b) Forty percent (40%) of the mining taxes,
royalties, forestry and fishery charges and
such other taxes, fees or charges, including
related surcharges, interests, or fines the
government agency or government -owned or
-controlled corporation would have paid if it
were not otherwise exempt.
SEC. 292. Allocation of Shares. - The share
in the preceding Section shall be distributed in
the following manner:
(a) Where the natural resources are located in
the province
(1) province - Twenty percent (20%);
PROF. GISELLA DIZON-REYES
(2) Component city/municipality - Forty-five
percent (45%); and
(3) barangay - Thirty-five percent (35%)
Provided, however, That where the natural
resources are located in two (2) or more
provinces, or in two (2) or more component
cities or municipalities or in two (2) or more
barangays, their respective shares shall be
computed on the basis of:
(1) Population - Seventy percent (70%); and
(2) Land area - Thirty percent (30%).
(b) Where the natural resources are located in
a highly urbanized or independent component
city:
(1) city - Sixty-five percent (65%); and
(2) barangay - Thirty-five percent (35%)
Provided, however, That where the natural
resources are located in such two (2) or more
cities, the allocation of shares shall be based
on the formula on population and land area as
specified in paragraph (a) of this Section.
SEC. 293 Remittance of the Share of
Local Government Units. - The share of
local government units from the utilization and
development of national wealth shall be
remitted in accordance with Section 286 of
this Code: Provided, however, That in the case
of any government agency or government-
owned or -controlled corporation engaged in
the utilization and development of the national
wealth, such share shall be directly remitted to
the provincial, city, municipal or barangay
treasurer concerned within five (5) days after
the end of each quarter.
SEC. 294. Development and Livelihood
Projects. - The proceeds from the share of
local government units pursuant to this
chapter shall be appropriated by their
respective sanggunian to finance local
development and livelihood projects: Provided,
however, That at least eighty percent (80%) of
the proceeds derived from the development
and utilization of hydrothermal, geothermal,
and other sources of energy shall be applied
104
A REVIEWER IN LOCAL GOVERNMENT LAW
solely to lower the cost of electricity in the
local government unit where such a source of
energy is located.
4. Credit Financing
LGC, SEC. 295. Scope. - This Title shall
govern the power of local government units to
create indebtedness and to enter into credit
and other financial transactions.
PIMENTEL:
• Under this provision, LGU’s have the power
to create indebtedness, like floating bonds
or borrowing money from government
financing institutions or domestic private
banks, to fund local infrastructure or other
socioeconomic development projects and
to stabilize local finances.
• LGU’s may also secure funds from foreign
sources subject to the approval of the
proper central government agency.
LGC, SEC. 296. General Policy. - (a) It shall
be the basic policy that any local government
unit may create indebtedness, and avail of
credit facilities to finance local infrastructure
and other socio-economic development
projects in accordance with the approved local
development plan and public investment
program.
(b) A local government unit may avail of credit
lines from government or private banks and
lending institutions for the purpose of
stabilizing local finances.
PIMENTEL:
• “Local infrastructure” means roads,
bridges, canals, dikes, ports, airports, and
other public facilities mainly for the use of
the locality.
• “Other socioeconomic development
projects” is borad enough to cover just
about any activity which LGU’s can
propose (ex. social housing for the
homeless, buy medical equipment for their
PROF. GISELLA DIZON-REYES
hospitals, build educational facilities for the
handicapped, and provide seed capital for
the livelihood projects of farmers, fisher
folks or the urban poor)
LGC
SEC. 297. Loans, Credits, and Other
Forms of Indebted ness of Local
Government Units. –
(a) A local government unit may contract
loans, credits, and other forms of indebtedness
with any government or domestic private bank
and other lending institutions to finance the
construction, installation, improvement,
expansion, operation, or maintenance of public
facilities, infrastructure facilities, housing
projects, the acquisition of real property, and
the implementation of other capital
investment projects, subject to such terms and
conditions as may be agreed upon by the local
government unit and the lender. The proceeds
from such transactions shall accrue directly to
the local government unit concerned.
(b) A local government unit may likewise
secure from any government bank and lending
institution short, medium and long-term loans
and advances against security of real estate or
other acceptable assets for the establishment,
development, or expansion of agricultural,
industrial, commercial, house financing
projects, livelihood projects, and other
economic enterprises.
(c) Government financial and other lending
institutions are hereby authorized to grant
loans, credits, and other forms of indebtedness
out of their loanable funds to local government
units for purposes specified above.
SEC. 298. Deferred-Payment and other
Financial Schemes. - Provincial, city and
municipal governments may likewise acquire
property, plant, machinery, equipment, and
such necessary accessories under a supplier's
credit, deferred payment plan, or other
financial scheme.
LGC, SEC. 299. Bonds and Other Long-
Term Securities. - Subject to the rules and
105
A REVIEWER IN LOCAL GOVERNMENT LAW
regulations of the Central Bank and the
Securities and Exchange Commission,
provinces, cities, and municipalities are hereby
authorized to issue bonds, debentures,
securities, collaterals, notes and other
obligations to finance self-liquidating, income-
producing development or livelihood projects
pursuant to the priorities established in the
approved local development plan or the public
investment program. The sanggunian
concerned shall, through an ordinance
approved by a majority of all its members,
declare and state the terms and conditions of
the bonds and the purpose for which the
proposed indebtedness is to be incurred.
PIMENTEL:
• “Bonds” are evidences of indebtedness in
the nature of promissory notes, usually
covering long periods of time and secured
by a mortgage on the property of the
issuer.
• “Debentures” are similar to bonds, except
that they usually cover short periods of
time and are not usually secured by a
mortgage.
• “Securities” are income-yielding
documents that can be traded, as on a
stock exchange. These may carry interest
and may be redeemable or irredeemable.
• “Collaterals” are impersonal securities
such as stocks and shares which are
different from personal security (ex.
guaranty)
• “Notes” may include promissory notes, as
evidences of indebtedness to another
party.
• GD-R: Remember that the vote required in
this is a majority of ALL members of the
sanggunian!
PROF. GISELLA DIZON-REYES
LGC
SEC. 300. Inter-Local Government Loans,
Grants, and Subsidies. - provinces, cities
and municipalities may, upon approval of the
majority of all members of the sanggunian
concerned and in amounts not exceeding their
surplus funds, extend loans, grants, or
subsidies to other local government units
under such terms and conditions as may be
agreed upon by the contracting parties. Local
government units may, upon approval of their
respective sanggunian, jointly or severally
contract loans, credits, and other forms of
indebtedness for purposes mutually beneficial
to them.
SEC. 301. Loans from Funds Secured by
the National Government from Foreign
Sources. –
(a) The President, or his duly authorized
representative, may, through any government
financial or other lending institution, relend to
any province, city, municipality, or barangay,
the proceeds of loans contracted with foreign
financial institutions or other international
funding agencies for the purpose of financing
the construction, installation, improvement,
expansion, operation, or maintenance of public
utilities and facilities, infrastructure facilities,
or housing projects, the acquisition of real
property, and the implementation of other
capital investment projects, subject to such
terms and conditions as may be agreed upon
by the President and the local government
unit. The proceeds from such loans shall
accrue directly to the local government
concerned.
(b) The President may likewise authorize the
relending to local government units the
proceeds of grants secured from foreign
sources, subject to the provisions of existing
laws and the applicable grant agreements.
(c) Repayment or amortization of loans
including accrued interest thereon, may be
financed partly from the income of the projects
106
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
or services and from the regular income of the (1) The provincial, city, or municipal engineer,
local government unit, which must be provided as the case may be, upon formal request in
for and appropriated regularly in its annual writing by the local chief executive, shall
budget until the loan and the interest thereon prepare the plans and specifications for the
shall have been fully paid. proposed project, which shall be submitted to
the sanggunian for approval.
PIMENTEL:
• Under the immediately preceding section, (2) Upon approval by the sanggunian of the
LGU’s, through the central government, project plans and specifications, the provincial,
are authorized to procure foreign loans. city, or municipal engineer shall, as the case
may be, cause to be published once every
week for two (2) consecutive weeks in at least
LGC, SEC. 302. Financing, Construction,
one (1) local newspaper which is circulated in
Maintenance, Operation, and
the region, province, city or municipality in
Management of Infrastructure Projects
which the project is to be implemented, a
by the Private Sector. –
notice inviting all duly qualified contractors to
participate in a public bidding for the projects
(a) Local government units may enter into
so approved. The conduct of public bidding
contracts with any duly prequalified individual
and award of contracts for local government
contractor, for the financing, construction,
projects under this Section shall be in
operation, and maintenance of any financially
accordance with this Code and other
viable infrastructure facilities, under the build-
applicable laws, rules and regulations.
operate-and-transfer agreement, subject to
the applicable provisions of Republic Act
In the case of a build-operate-and-transfer
Numbered Sixty-nine hundred fifty-seven (R.A.
agreement, the contract shall be awarded to
No. 6957) authorizing the financing,
the lowest complying bidder whose offer is
construction, operation and maintenance of
deemed most advantageous to the local
infrastructure projects by the private sector
government and based on the present value of
and the rules and regulations issued
its proposed tolls, fees, rentals, and charges
thereunder and such terms and conditions
over a fixed term for the facility to be
provided in this Section.
constructed, operated, and maintained
according to the prescribed minimum design
(b) Local government units shall include in
and performance standards, plans, and
their respective local development plans and
specifications. For this purpose, the winning
public investment programs priority projects
contractor shall be automatically granted by
that may be financed, constructed, operated
the local government unit concerned the
and maintained by the private sector under
franchise to operate and maintain the facility,
this Section. It shall be the duty of the local
including the collection of tolls, fees, rentals,
government unit concerned to disclose to the
and charges in accordance with subsection (c-
public all projects eligible for financing under
4) hereof.
this Section, including official notification of
duly registered contractors and publication in
In the case of a build-operate-and-transfer
newspapers of general or local circulation and
agreement, the contract shall be awarded to
in conspicuous and accessible public places.
the lowest complying bidder based on the
Local projects under the build-operate-and-
present value of its proposed schedule of
transfer agreement shall be confirmed by the
amortization payments for the facility to be
local development councils.
constructed according to the prescribed
minimum design and performance standards,
(c) Projects implemented under this Section
plans, and specifications.
shall be subject to the following terms and
conditions:

107
A REVIEWER IN LOCAL GOVERNMENT LAW
(3) Any contractor who shall undertake the
prosecution of any project under this Section
shall post the required bonds to protect the
interest of the province, city, or municipality,
in such amounts as may be fixed by the
sanggunian concerned and the provincial, city,
or municipal engineer shall not, as the case
may be, allow any contractor to initiate the
prosecution of projects under this Section
unless such contractor presents proof or
evidence that he has posted the required
bond.
(4) The contractor shall be entitled to a
reasonable return of its investment in
accordance with its bid proposal as accepted
by the local government unit concerned. In the
case of a build-operate-and-transfer
agreement, the repayment shall be made by
authorizing the contractor to charge and
collect reasonable tolls, fees, rentals, and
charges for the use of the project facility not
exceeding those proposed in the bid and
incorporated in the contract: Provided, That
the local government unit concerned shall,
based on reasonableness and equity, approve
the tolls, fees, rentals and charges: Provided,
further, That the imposition and collection of
tolls, fees, rentals and charges shall be for a
fixed period as proposed in the bid and
incorporated in the contract which shall in no
case exceed fifty (50) years: Provided, finally,
That during the lifetime of the contract, the
contractor shall undertake the necessary
maintenance and repair of the facility in
accordance with standards prescribed in the
bidding documents and in the contract. In the
case of a build-operate-and-transfer
agreement, the repayment shall be made
through amortization payments in accordance
with the schedule proposed in the bid and
incorporated in the contract. In case of land
reclamation or construction of industrial
estates, the repayment plan may consist of
the grant of a portion or percentage of the
reclaimed land or the industrial estate
constructed.
(5) Every infrastructure project undertaken
under this Section shall be constructed,
operated, and maintained by the contractor
PROF. GISELLA DIZON-REYES
under the technical supervision of the local
government unit and in accordance with the
plans, specifications, standards, and costs
approved by it.
(d) The provincial, city or municipal legal
officer shall, as the case may be, review the
contracts executed pursuant to this Section to
determine their legality, validity, enforceability
and correctness of form.
SEC. 303. Remedies and Sanctions. - Local
government units shall appropriate in their
respective annual budgets such amounts as
are sufficient to pay the loans and other
indebtedness incurred or redeem or retire
bonds, debentures, securities, notes and other
obligations issued under this Title: Provided,
That failure to provide the appropriations
herein required shall render their annual
budgets inoperative.
5. Local Fiscal Administration
LGC, SEC. 305. Fundamental principles
governing the financial affairs,
transactions and operations of LGUs :
• No money shall be paid out of the local
treasury except in pursuance of an
appropriations ordinance or law;
• Local government funds and monies
shall be spent solely for
• public purposes;
• Local revenue is generated only from
sources expressly authorized by law or
ordinance, and collection thereof shall at
all times be acknowledged properly;
108
A REVIEWER IN LOCAL GOVERNMENT LAW
• All monies officially received by a local
government officer in any capacity or on
any occasion shall be accounted for as
local funds, unless otherwise provided by
law;
• Trust funds in the local treasury shall
not be paid out except in fulfillment of the
purpose for which the trust was created or
the funds received;
• Every officer of the LGU whose duties
permit or require the possession or custody
of local funds shall be properly bonded,
and such officer shall be accountable and
responsible for said funds and for the
safekeeping thereof in conformity with the
provisions of law;
• Local governments shall formulate
sound financial plans, and the local
budgets shall be based on functions,
activities, and projects, in terms of
expected results;
• Local budgets shall operationalize
approved local development plans;
• LGUs shall ensure that their respective
budgets incorporate the requirements of
their component units and provide for
equitable allocation of resources among
these component units;
• National planning shall be based on
local planning to ensure that the needs and
aspirations of the people as articulated by
the local government units in their
respective local development plans are
PROF. GISELLA DIZON-REYES
considered in the formulation of budgets of
national line agencies or offices;
• Fiscal responsibility shall be shared by
all those exercising authority over the
financial affairs, transactions, and
operations of the local government units;
and
• The LGU shall endeavor to have a
balanced budget in each fiscal year of
operation.
• Annual Budget
LGC
SEC. 319. Legislative Authorization of the
Budget. - On or before the end of the current
fiscal year, the sanggunian concerned shall
enact, through an ordinance, the annual
budget of the local government unit for the
ensuing fiscal year on the basis of the
estimates of income and expenditures
submitted by the local chief executive.
SEC. 320. Effectivity of Budgets. - The
ordinance enacting the annual budget shall
take effect at the beginning of the ensuing
calendar year. An ordinance enacting a
supplemental budget, however, shall take
effect upon its approval or on the date fixed
therein. The responsibility for the execution of
the annual and supplemental budgets and the
accountability therefor shall be vested
primarily in the local chief executive
concerned.
SEC. 321. Changes in the Annual Budget.
- All budgetary proposals shall be included and
considered in the budget preparation process.
After the local chief executive concerned shall
have submitted the executive budget to the
sanggunian, no ordinance providing for a
supplemental budget shall be enacted, except
when supported by funds actually available as
certified by the local treasurer or by new
revenue sources.
109
A REVIEWER IN LOCAL GOVERNMENT LAW
A supplemental budget may also be enacted
in times of public calamity by way of
budgetary realignment to set aside
appropriations for the purchase of supplies
and materials or the payment of services
which are exceptionally urgent or absolutely
indispensable to prevent imminent danger to,
or loss of, life or property, in the jurisdiction of
the local government unit or in other areas
declared by the President in a state of
calamity. Such ordinance shall clearly indicate
the sources of funds available for
appropriations, as certified under oath by the
local treasurer and local accountant and
attested by the local chief executive, and the
various items of appropriations affected and
the reasons for the change.
SEC. 323. Failure to Enact the Annual
Appropriations. - In case the sanggunian
concerned fails to pass the ordinance
authorizing the annual appropriations at the
beginning of the ensuing fiscal year, it shall
continue to hold sessions, without additional
remuneration for its members, until such
ordinance is approved, and no other business
may be taken up during such sessions. If the
sanggunian still fails to enact such ordinance
after ninety (90) days from the beginning of
the fiscal year, the ordinance authorizing the
appropriations of the preceding year shall be
deemed reenacted and shall remain in force
and effect until the ordinance authorizing the
proposed appropriations is passed by the
sanggunian concerned. However, only the
annual appropriations for salaries and wages
of existing positions, statutory and contractual
obligations, and essential operating expenses
authorized in the annual and supplemental
budgets for the preceding year shall be
deemed reenacted and disbursement of funds
shall be in accordance therewith. In the
implementation of such reenacted ordinance,
the local treasurer concerned shall exclude
from the estimates of income for the
preceding fiscal year those realized from
nonrecurring sources, like national aids,
proceeds from loans, sale of assets, prior year
adjustments, and other analogous sources of
income. No ordinance authorizing
PROF. GISELLA DIZON-REYES
supplemental appropriations shall be passed in
place of the annual appropriations. In case the
revised income estimates be less than the
aggregate reenacted appropriations, the local
treasurer concerned shall accordingly advise
the sanggunian concerned which shall, within
ten (10) days from the receipt of such advice,
make the necessary adjustments or
reductions. The revised appropriations
authorized by the sanggunian concerned shall
then be the basis for disbursements.
SEC. 324. Budgetary Requirements. - The
budgets of local government units for any
fiscal year shall comply with the following
requirements:
(a) The aggregate amount appropriated shall
not exceed the estimates of income;
(b) Full provision shall be made for all
statutory and contractual obligations of the
local government unit concerned: Provided,
however, That the amount of appropriations
for debt servicing shall not exceed twenty
percent (20%) of the regular income of the
local government unit concerned;
(c) In the case of provinces, cities, and
municipalities, aid to component barangays
shall be provided in amounts of not less than
One thousand pesos (Php 1,000.00) per
barangay; and
(d) Five percent (5%) of the estimated
revenue from regular sources shall be set
aside as an annual lump sum appropriation for
unforeseen expenditures arising from the
occurrence of calamities: Provided, however,
That such appropriation shall be used only in
the area, or a portion thereof, of the local
government unit or other areas declared by
the President in a state of calamity.
SEC. 325. General Limitations. - The use of
the provincial, city, and municipal funds shall
be subject to the following limitations:
(a) The total appropriations, whether annual
or supplemental, for personal services of a
local government unit for one (1) fiscal year
110
A REVIEWER IN LOCAL GOVERNMENT LAW
shall not exceed forty-five percent (45%) in
the case of first to third class provinces, cities,
and municipalities, and fifty-five percent (55%)
in the case of fourth class or lower, of the total
annual income from regular sources realized in
the next preceding fiscal year. The
appropriations for salaries, wages,
representation and transportation allowances
of officials and employees of the public utilities
and economic enterprises owned, operated,
and maintained by the local government unit
concerned shall not be included in the annual
budget or in the computation of the maximum
amount for personal services. The
appropriations for the personal services of
such economic enterprises shall be charged to
their respective budgets;
(b) No official or employee shall be entitled to
a salary rate higher than the maximum fixed
for his position or other positions of equivalent
rank by applicable laws or rules and
regulations issued thereunder;
(c) No local fund shall be appropriated to
increase or adjust salaries or wages of officials
and employees of the national government,
except as may be expressly authorized by law;
(d) In cases of abolition of positions and the
creation of new ones resulting from the
abolition of existing positions in the career
service, such abolition or creation shall be
made in accordance with pertinent provisions
of this code and the civil service law, rules and
regulations;
(e) Positions in the official plantilla for career
positions which are occupied by incumbents
holding permanent appointments shall be
covered by adequate appropriations;
(f) No changes in designation or nomenclature
of positions resulting in a promotion or
demotion in rank or increase or decrease in
compensation shall be allowed, except when
the position is actually vacant, and the filling
of such positions shall be strictly made in
accordance with the civil service law, rules and
regulations; (g) The creation of new positions
PROF. GISELLA DIZON-REYES
and salary increases or adjustments shall in no
case be made retroactive; and
(h) The annual appropriations for
discretionary purposes of the local chief
executive shall not exceed two percent (2%) of
the actual receipts derived from basic real
property tax in the next preceding calendar
year. Discretionary funds shall be disbursed
only for public purposes to be supported by
appropriate vouchers and subject to such
guidelines as may be prescribed by law. No
amount shall be appropriated for the same
purpose except as authorized under this
Section.
D. Local Legislation
LGC, SEC. 48. Local Legislative Power. -
Local legislative power shall be exercised by
the sangguniang panlalawigan for the
province; the sangguniang panlungsod for the
city; the sangguniang bayan for the
municipality; and the sangguniang barangay
for the barangay.
PIMENTEL:
• Local political subdivisions are able to
legislate only by virtue of a valid
delegation of legislative power from the
national legislature (except WRT the
creation of their own sources of revenue
and the levying of taxes, which are vested
by the CONSTI itself).
• NOTE: They are mere agents vested with
what is called the power of subordinate
legislation.
Hence, as delegates of Congress, the LGU
cannot contravene but must obey at all
times the will of their principal. (Sol. Gen.
vs. Metro Manila Authority)
• Unlike the Senate and the HOR, LGU’s do
not have the inherent power to cite anyone
for contempt. There being no provision in
the Local Government Code explicitly
granting local legislative bodies, the power
to issue compulsory process and the power
to punish for contempt, the Sanggunian
111
A REVIEWER IN LOCAL GOVERNMENT LAW
Panlungsod of Dumaguete is devoid of
power to punish the petitioners… for
contempt. Such act by the sanggunian is
ultra vires. (Negros Oriental II Electric
Cooperative vs. Sangguniang Panlungsod
Of Dumaguete)
• Ordinances enacted by local government
units enjoy the presumption of
constitutionality. To overthrow this
presumption, there must be a clear and
unequivocal breach of the Constitution, not
merely a doubtful or argumentative
contradiction. In short, the conflict with the
Constitution must be shown beyond
reasonable doubt. (Tano vs. Socrates)
• For an ordinance to be valid, it must not
only be within the corporate powers of the
city or municipality to enact but must also
be passed according to the procedure
prescribed by law. It must be in accordance
with certain well-established basic
principles of a substantive nature. These
principles require that an ordinance (1)
must not contravene the Constitution or
any statute (2) must not be unfair or
oppressive (3) must not be partial or
discriminatory (4) must not prohibit but
may regulate trade (5) must be general
and consistent with public policy, and (6)
must not be unreasonable. (Lagcao vs.
Labra)
LGC, SEC. 49. Presiding Officer. –
(a) The vice-governor shall be the presiding
officer of the sangguniang panlalawigan;
the city vice-mayor, of the sangguniang
panlungsod; the municipal vice-mayor, of
the sangguniang bayan; and the punong
barangay, of the sangguniang barangay.
The presiding officer shall vote only to
break a tie.
(b) In the event of the inability of the
regular Presiding officer to preside at a
sanggunian session, the members present
and constituting a quorum shall elect from
among themselves a temporary presiding
officer. He shall certify within ten (10) days
PROF. GISELLA DIZON-REYES
from the passage of ordinances enacted
and resolutions adopted by the sanggunian
in the session over which he temporarily
presided.
PIMENTEL:
• The idea behind the said scheme of
presiding officers is to distribute powers
among the elective officials, so that the
legislative (the sanggunian), may properly
check the executive and vice versa and
exercise their respective functions without
undue interference from one by the other.
LGC, SEC. 50. Internal Rules of
Procedure. –
(a) On the first regular session following the
election of its members and within ninety (90)
days thereafter, the sanggunian concerned
shall adopt or update its existing rules of
procedure.
(b) The rules of procedure shall provide for
the following:
(1) The organization of the sanggunian and
the election of its officers as well as the
creation of standing committees which shall
include, but shall not be limited to, the
committees on appropriations, women and
family, human rights, youth and sports
development, environmental protection, and
cooperatives; the general jurisdiction of each
committee; and the election of the chairman
and members of each committee;
(2) The order and calendar of business for
each session;
(3) The legislative process;
(4) The parliamentary procedures which
include the conduct of members during
sessions;
(5) The discipline of members for disorderly
behavior and absences without justifiable
cause for four (4) consecutive sessions, for
112
A REVIEWER IN LOCAL GOVERNMENT LAW
which they may be censured, reprimanded, or
excluded from the session, suspended for not
more than sixty (60) days, or expelled:
Provided, That the penalty of suspension or
expulsion shall require the concurrence of at
least two-thirds (2/3) vote of all the
sanggunian members: Provided, further, That
a member convicted by final judgment to
imprisonment of at least one (1) year for any
crime involving moral turpitude shall be
automatically expelled from the sanggunian;
and
(6) Such other rules as the sanggunian may
adopt.
PIMENTEL:
• The LGC does not require the completion of
the updating or adoption of the internal
rules before the sanggunian could act on
any other matter like the enactment of an
ordinance. It simply requires that the
matter of adopting or updating the internal
rules of procedure be taken up during the
first day of session. (Malonzo vs. Zamora)
• There is nothing in the law that prohibits
the 3 readings of a proposed ordinance be
held in just one session day.
• While the sanggunian is allowd to create its
standing committees, the LGC makes the
ff. committees mandatory:
o Appropriations
o Women and Family
o Youth and Sports Development
o Environmental Protection
o Cooperatives
The inclusion of the last two committees
manifest the commitment of Congress to
enhance the quality of life of the people
and to upgrade their economic well-being.
LGC, SEC. 51. Full Disclosure of Financial
and Business Interests of Sanggunian
Members. –
(a) Every sanggunian member shall, upon
assumption to office, make a full disclosure of his
business and financial interests. He shall also
PROF. GISELLA DIZON-REYES
disclose any business, financial, or professional
relationship or any relation by affinity or
consanguinity within the fourth civil degree,
which he may have with any person, firm, or
entity affected by any ordinance or resolution
under consideration by the sanggunian of which
he is a member, which relationship may result in
conflict of interest. Such relationship shall
include:
(1) Ownership of stock or capital, or investment,
in the entity or firm to which the ordinance or
resolution may apply; and
(2) Contracts or agreements with any person or
entity which the ordinance or resolution under
consideration may affect. In the absence of a
specific constitutional or statutory provision
applicable to this situation, "conflict of interest"
refers in general to one where it may be
reasonably deduced that a member of a
sanggunian may not act in the public interest
due to some private, pecuniary, or other personal
considerations that may tend to affect his
judgment to the prejudice of the service or the
public.
(b) The disclosure required under this Act shall
be made in writing and submitted to the
secretary of the sanggunian or the secretary of
the committee of which he is a member. The
disclosure shall, in all cases, form part of the
record of the proceedings and shall be made in
the following manner:
(1) Disclosure shall be made before the member
participates in the deliberations on the ordinance
or resolution under consideration: Provided, That,
if the member did not participate during the
deliberations, the disclosure shall be made
before voting on the ordinance or resolution on
second and third readings; and
(2) Disclosure shall be made when a member
takes a position or makes a privilege speech on a
matter that may affect the business interest,
financial connection, or professional relationship
described herein.
PIMENTEL:
• “Fourth Civil Degree of Relationship”
extends up to one’s (a) great, great,
113
A REVIEWER IN LOCAL GOVERNMENT LAW
grandparents in the ascending direct line;
(b) great, great, grandchildren in the
descending direct line; (c) first cousins; and
(d) great grand uncles and aunts in the
collateral line.
• Disclosure of the sanggunian member’s
own business or financial interests is an
absolute requirement WON the sanggunian
member does anything at all during his
entire term.
LGC, SEC. 52. Sessions. –
(a) On the first day of the session immediately
following the election of its members, the
sanggunian shall, by resolution, fix the day,
time, and place of its regular sessions. The
minimum number of regular sessions shall be
once a week for the sangguniang
panlalawigan, sangguniang panlungsod, and
sangguniang bayan, and twice a month for the
sangguniang barangay.
(b) When public interest so demands, special
sessions may be called by the local chief
executive or by a majority of the members of
the sanggunian.
(c) All sanggunian sessions shall be open to
the public unless a closed-door session is
ordered by an affirmative vote of a majority of
the members present, there being a quorum,
in the public interest or for reasons of security,
decency, or morality. No two (2) sessions,
regular or special, may be held in a single day.
(d) In the case of special sessions of the
sanggunian, a written notice to the members
shall be served personally at the member's
usual place of residence at least twenty- four
(24) hours before the special session is held.
Unless otherwise concurred in by two-thirds
(2/3) vote of the sanggunian members
present, there being a quorum, no other
matters may be considered at a special
session except those stated in the notice.
PROF. GISELLA DIZON-REYES
(e) Each sanggunian shall keep a journal and
record of its proceedings which may be
published upon resolution of the sanggunian
concerned.
PIMENTEL:
• “Public interest” is a phrase so broad
that special sessions can theoretically be
called at any reasonable time.
• The law is sufficiently complied with if the
written notices required in Sec. 52(d) is
served at a different place where the
sanggunian member is found, and such
notice is received by such member.
LGC, SEC. 53. Quorum. –
(a) A majority of all the members of the
sanggunian who have been elected and
qualified shall constitute a quorum to transact
official business. Should a question of quorum
be raised during a session, the presiding
officer shall immediately proceed to call the
roll of the members and thereafter announce
the results.
(b) Where there is no quorum, the presiding
officer may declare a recess until such time as
a quorum is constituted, or a majority of the
members present may adjourn from day to
day and may compel the immediate
attendance of any member absent without
justifiable cause by designating a member of
the sanggunian, to be assisted by a member
or members of the police force assigned in the
territorial jurisdiction of the local government
unit concerned, to arrest the absent member
and present him at the session.
(c) If there is still no quorum despite the
enforcement of the immediately preceding
subsection, no business shall be transacted.
The presiding officer, upon proper motion duly
approved by the members present, shall then
declare the session adjourned for lack of
quorum.
PIMENTEL:
• “Quorum” is the fixed number of
members present at a session which is
114
A REVIEWER IN LOCAL GOVERNMENT LAW
considered legally sufficient to transact the
business of the sanggunian.
• Normally, a quorum is determined by
dividing the number of members into two
and adding one to the quotient.
PROF. GISELLA DIZON-REYES
(c) Ordinances enacted by the sangguniang
barangay shall, upon approval by the majority
of all its members, be signed by the punong
barangay.

• However, there are instances when a PIMENTEL:

special quorum is required: ordinance resolution
o A session intending to override a a law merely a declaration
veto of the local chief executive. of the sentiment or
(This session requires a quorum of opinion of a
not less than 2/3 of all members of lawmaking body on a
the sanggunian) specific matter
o When there is a majority of all possesses a general temporary in nature
members “elected and qualified” and permanent
present, there may be a quorum. character
(ex. When some of its members are a third reading is not for a resolution,
facing electoral protests and necessary for an unless decided
therefore not yet “elected and ordinance otherwise by a
qualified”) majority of all the
Sanggunian members
• Any business or transaction conducted
during a session with no quorum is void ab • Also, matters relating to the proprietary
initio. functions and private concerns shall be
acted upon by resolutions.

LGC, SEC. 54. Approval of Ordinances. –
(a) Every ordinance enacted by the
sangguniang panlalawigan, sangguniang
panlungsod, or sangguniang bayan shall be
presented to the provincial governor or city or
municipal mayor, as the case may be. If the
local chief executive concerned approves the
same, he shall affix his signature on each and
every page thereof; otherwise, he shall veto it
and return the same with his objections to the
sanggunian, which may proceed to reconsider
the same. The sanggunian concerned may
override the veto of the local chief executive
by two-thirds (2/3) vote of all its members,
thereby making the ordinance or resolution
effective for all legal intents and purposes.
(b) The veto shall be communicated by the
local chief executive concerned to the
sanggunian within fifteen (15) days in the case
of a province, and ten (10) days in the case of
a city or a municipality; otherwise, the
ordinance shall be deemed approved as if he
had signed it.
• While the first 2 sentences of this section
does not refer to resolutions as among the
acts of the sanggunian that must be
approved and signed by the local chief
executive, the 3rd sentence thereof refer to
resolutions as among those that may be
vetoed and such veto be overridden by the
sanggunian concerned.
Hence, resolutions, in practice are
submitted to the local chief executive for
his signature.
• The approval of a Sanggunian resolution by
a mayor is NOT a ministerial duty. The
grant of the veto power confers authority
beyond the simple mechanical act of
signing an ordinance or resolution, as a
requisite to its enforceability. Such power
accords the local chief executive the
discretion to sustain a resolution or
ordinance in the first instance or to veto it
and return it with his objections to the
Sanggunian, which may proceed to
reconsider the same. The Sanggunian
concerned, however, may override the
115
A REVIEWER IN LOCAL GOVERNMENT LAW
veto by a two-thirds (2/3) vote of all its
members thereby making the ordinance or
resolution effective for all legal intents and
purposes. It is clear, therefore, that the
concurrence of a local chief executive in
the enactment of an ordinance or
resolution requires, not only a flourish of
the pen, but the application of judgment
after meticulous analysis and intelligence
as well. (De Los Reyes vs. Sandiganbayan,
3rd Division)
• Trial courts should take judicial notice of
municipal ordinances within their
respective jurisdictions. This means that
the enactment of an ordinance and its
provisions are supposed to be known by
the trial courts of the area where the
municipality concerned may be located
and therefore, it need not be proven at the
proceedings in such courts. (Gallego vs.
People of the Philippines)
LGC, SEC. 55. Veto Power of the Local Chief
Executive. –
(a) The local chief executive may veto any
ordinance of the sangguniang panlalawigan,
sangguniang panlungsod, or sangguniang bayan
on the ground that it is ultra vires or prejudicial
to the public welfare, stating his reasons therefor
in writing.
(b) The local chief executive, except the punong
barangay, shall have the power to veto any
particular item or items of an appropriations
ordinance, an ordinance or resolution adopting a
local development plan and public investment
program, or an ordinance directing the payment
of money or creating liability. In such a case, the
veto shall not affect the item or items which are
not objected to. The vetoed item or items shall
not take effect unless the sanggunian overrides
the veto in the manner herein provided;
otherwise, the item or items in the appropriations
ordinance of the previous year corresponding to
those vetoed, if any, shall be deemed reenacted.
(c) The local chief executive may veto an
ordinance or resolution only once. The
sanggunian may override the veto of the local
chief executive concerned by two-thirds (2/3)
vote of all its members, thereby making the
PROF. GISELLA DIZON-REYES
ordinance effective even without the approval of
the local chief executive concerned.
PIMENTEL:
• The Punong Barangay has no veto power
over the ordinances enacted by the
Sangguniang Barangay.
• “ultra vires” means that the ordinance or
parts thereof are beyond the power of the
sanggunian to enact.
• The veto may apply to: (a) entire
ordinances or (b) particular items of certain
ordinances and resolutions:
o An appropriations ordinance;
o An ordinance or resolution adopting
a local development plan and public
investment program; or
o An ordinance directing the payment
of money or creating liability.
• Once overridden, the veto may not be
reimposed on the same ordinance or
subject matter.
LGC, SEC. 56. Review of Component City
and Municipal Ordinances or Resolutions by
the Sangguniang Panlalawigan. –
(a) Within three (3) days after approval, the
secretary to the sanggunian panlungsod or
sangguniang bayan shall forward to the
sangguniang panlalawigan for review, copies of
approved ordinances and the resolutions
approving the local development plans and
public investment programs formulated by the
local development councils.
(b) Within thirty (30) days after receipt of copies
of such ordinances and resolutions, the
sangguniang panlalawigan shall examine the
documents or transmit them to the provincial
attorney, or if there be none, to the provincial
prosecutor for prompt examination. The
provincial attorney or provincial prosecutor shall,
within a period of ten (10) days from receipt of
the documents, inform the sangguniang
panlalawigan in writing of his comments or
recommendations, which may be considered by
116
A REVIEWER IN LOCAL GOVERNMENT LAW
the sangguniang panlalawigan in making its
decision.
(c) If the sangguniang panlalawigan finds that
such an ordinance or resolution is beyond the
power conferred upon the sangguniang
panlungsod or sangguniang bayan concerned, it
shall declare such ordinance or resolution invalid
in whole or in part. The sangguniang
panlalawigan shall enter its action in the minutes
and shall advise the corresponding city or
municipal authorities of the action it has taken.
(d) If no action has been taken by the
sangguniang panlalawigan within thirty (30) days
after submission of such an ordinance or
resolution, the same shall be presumed
consistent with law and therefore valid.
PIMENTEL:
• It is the Sangguniang Panlalawigan, not
the provincial governor, which has the
power to review the certain ordinances of
its component cities and municipalities.
• The law grants the Sangguniang
Panlalawigan the power to declare a
municipal resolution invalid on the sole
ground that it is beyond the power of the
Sangguniang Bayan or the Mayor to issue.
LGC, SEC. 57. Review of Barangay
Ordinances by the sangguniang
panlungsod or sangguniang bayan. –
(a) Within ten (10) days after its enactment,
the sangguniang barangay shall furnish copies
of all barangay ordinances to the sangguniang
panlungsod or sangguniang bayan concerned
for review as to whether the ordinance is
consistent with law and city or municipal
ordinances.
(b) If the sangguniang panlungsod or
sangguniang bayan, as the case may be, fails
to take action on barangay ordinances within
thirty (30) days from receipt thereof, the same
shall be deemed approved.
(c) If the sangguniang panlungsod or
sangguniang bayan, as the case may be, finds
the barangay ordinances inconsistent with law
PROF. GISELLA DIZON-REYES
or city or municipal ordinances, the
sanggunian concerned shall, within thirty (30)
days from receipt thereof, return the same
with its comments and recommendations to
the sangguniang barangay concerned for
adjustment, amendment, or modification; in
which case, the effectivity of the barangay
ordinance is suspended until such time as the
revision called for is effected.
LGC, SEC. 58. Enforcement of
Disapproved ordinances or Resolutions. -
Any attempt to enforce any ordinance or any
resolution approving the local development
plan and public investment program, after the
disapproval thereof, shall be sufficient ground
for the suspension or dismissal of the official or
employee concerned.
LGC, SEC. 59. Effectivity of Ordinances or
Resolutions.
(a) Unless otherwise stated in the ordinance or
the resolution approving the local
development plan and public investment
program, the same shall take effect after ten
(10) days from the date a copy thereof is
posted in a bulletin board at the entrance of
the provincial capitol or city, municipal, or
barangay hall, as the case may be, and in at
least two (2) other conspicuous places in the
local government unit concerned.
(b) The secretary to the sanggunian
concerned shall cause the posting of an
ordinance or resolution in the bulletin board at
the entrance of the provincial capitol and the
city, municipal, or barangay hall in at least two
(2) conspicuous places in the local government
unit concerned not later than five (5) days
after approval thereof.
The text of the ordinance or resolution shall be
disseminated and posted in Filipino or English
and in the language or dialect understood by
the majority of the people in the local
government unit concerned, and the secretary
to the sanggunian shall record such fact in a
book kept for the purpose, stating the dates of
approval and posting.
117
A REVIEWER IN LOCAL GOVERNMENT LAW
(c) The gist of all ordinances with penal
sanctions shall be published in a newspaper of
general circulation within the province where
the local legislative body concerned belongs.
In the absence of any newspaper of general
circulation within the province, posting of such
ordinances shall be made in all municipalities
and cities of the province where the
sanggunian of origin is situated.
(d) In the case of highly urbanized cities, the
main features of the ordinance or resolution
duly enacted or adopted shall, in addition to
being posted, be published once in a local
newspaper of general circulation within the
city: Provided, That in the absence thereof the
ordinance or resolution shall be published in
any newspaper of general circulation.
PIMENTEL:
• The ordinance or resolution mentioned in
Par. (a) takes effect on the 11th day from
the date of posting.
• Par. (d) Only the main features are
required to be published.
1987 CONSTI, Art. X, Section 9. Legislative
bodies of local governments shall have
sectoral representation as may be prescribed
by law.
PIMENTEL:
• Section 446 (b) and Section 457 (b) of the
LGC provides that there shall be three (3)
sectoral representatives in the sanggunian:
o one (1) from the women; and, as
shall be determined by the
sanggunian concerned within ninety
(90) days prior to the holding of
local elections;
o one (1) from the agricultural or
industrial workers; and
o one (1) from the other sectors,
including the urban poor,
indigenous cultural communities, or
disabled persons.
• RATIO: So that, all sectors of the
community can participate in the system of
PROF. GISELLA DIZON-REYES
governance and not just a few wealthy
hands.
Casiño vs. Court of Appeals
(1991)
FACTS: Casiño was a licensee of a cockpit
under Sections 2285 to 2286 of the Revised
Administrative Code. Sometime in 1984, the
Sangguniang Panlungsod (SP) of Gingoog City
issued Resolution No. 49 classifying certain
areas of the city as residential zones, including
the cockpit. The classification led to the
cancellation of petitioner's license to operate
the cockpit.
In 1985 Resolution No. 378, the area was
reclassified as within the recreational zone,
allegedly amending Resolution No. 49. In the
session passing this resolution, 9 SP members
participated:
4 voting for the amendment, 4 voted against
it, while 1 abstained. The vice-mayor, as
presiding officer, broke the deadlock by voting
for the amendment.
By virtue of said Resolution No. 378, the
succeeding city mayor issued to Casiño the
permit to operate a cockpit in 1986, which was
renewed by another permit issued in 1987.
An action for prohibition and mandamus with
preliminary injunction was filed by Gallera
before the RTC, against petitioner, on the
ground that Resolution No. 378, purportedly
amending zoning Ordinance No. 49, is invalid
for failing to obtain the ¾ votes required by
the zoning ordinance to be amended.
WON there was a valid amendment of the
zoning ordinance by Resolution No. 378.
HELD: NONE. Although the charter of the City
of Gingoog and the Local Government Code
require only a majority for the enactment of an
ordinance, Resolution No. 49 cannot be validly
amended by the resolution in question without
complying with the categorical requirement of
a three-fourths vote incorporated in the very
same ordinance sought to be amended. The
pertinent provisions in the aforesaid city
118
A REVIEWER IN LOCAL GOVERNMENT LAW
charter and the Local Government Code
obviously are of general application and
embrace a wider scope or subject matter. In
the enactment of ordinances in general, the
application of the aforementioned laws cannot
be disputed. Undeniably, however, Section
6.44 of said ordinance regarding amendments
thereto is a specific and particular provision for
said ordinance and explicitly provides for a
different number of votes.
Where there is in the same statute a particular
enactment and also a general one which in its
most comprehensive sense would include what
is embraced in the former, the particular
enactment must be operative, and the general
statement must be taken to affect only such
cases within its language as are not within the
provisions of the particular enactment.
Moreover, the Sanggunian is in a better
position to know how to best amend the law
that it enacted.
Gamboa vs. Aguirre
(1999)
FACTS: In August 1995, the Governor of
Negros Occidental designated Vice-Governor
Gamboa as Acting Governor for the duration of
the former’s trip abroad. When the
Sangguniang Panlalawigan held its regular
session, Aguirre et. al questioned the authority
of Gamboa to preside in the said session on
the ground of his designation as the Acting
Governor and asked him to vacate the Chair..
Seven members of the SP voted to allow the
petitioner to continue presiding, four voted
against it and one abstained.
Respondents filed a petition for declaratory
relief and prohibition. The TC rendered a
decision and declared petitioner as
"temporarily legally incapacitated to preside
over the sessions of the SP during the period
that he is the Acting Governor."
WON an incumbent Vice-Governor, while
concurrently the Acting Governor, may
continue to preside over the sessions of
the Sangguniang Panlalawigan.
PROF. GISELLA DIZON-REYES
HELD: NO. Sections 49(a) and 466(a)(1) of RA
7160 provide that the Vice Governor shall be
the presiding officer of the SP. In addition to
that, he becomes the Governor and assumes
the higher office for the unexpired term of his
predecessor, in case of “permanent vacancy”
therein. In case of a temporary vacancy, he
shall automatically exercise the powers and
perform the duties and functions of the
Governor. It is true that in this case, the Vice
Governor only “acts” and does not “become”
the governor.
A Vice-Governor who is concurrently an Acting
Governor is actually a quasi-Governor. This
means, that for the purposes of exercising his
legislative prerogatives and powers, he is
deemed as a non-member of the SP for the
time being. Unlike the old Code where the
Governor is not only the provincial Chief
Executive but also the presiding officer of the
local executive body, the new Code delineated
the union of the executive-legislative powers
in the provincial, city and municipal levels
except in the Barangay. The Governor is no
longer a member of the SP. Not being included
in the enumeration, the Governor is deemed
excluded. Being the Acting Governor, the Vice
Governor cannot continue to simultaneously
exercise the duties of the latter office since the
nature of the duties of the provincial Governor
call for a full-time occupant to discharge them.
Being the Acting Governor, the Vice-Governor
cannot continue to simultaneously exercise
the duties of the latter office, since the nature
of the duties of the provincial Governor call for
a full-time occupant to discharge them. Such is
not only consistent with but also appears to be
the clear rationale of the new Code wherein
the policy of performing dual functions in both
offices has already been abandoned. To
repeat, the creation of a temporary vacancy in
the office of the Governor creates a
corresponding temporary vacancy in the office
of the Vice-Governor whenever the latter acts
as Governor by virtue of such temporary
vacancy. This event constitutes an "inability"
on the part of the regular presiding officer
(Vice Governor) to preside during the SP
sessions, which thus calls for the operation of
the remedy set in Article 49(b) of the Local
119
A REVIEWER IN LOCAL GOVERNMENT LAW
Government Code — concerning the election
of a temporary presiding officer. The continuity
of the Acting Governor's (Vice Governor)
powers as presiding officer of the SP is
suspended so long as he is in such capacity.
Under Section 49(b), "(i)n the event of the
inability of the regular presiding officer to
preside at the sanggunian session, the
members present and constituting a quorum
shall elect from among themselves a
temporary presiding officer."
1. Local Initiative and Referendum
LGC, SEC. 120. Local Initiative Defined. -
Local initiative is the legal process whereby
the registered voters of a local government
unit may directly propose, enact, or amend
any ordinance.
PIMENTEL:
• Section 32 of Article VI of the CONSTI
provides that “Congress shall, as early as
possible, provide for a system of initiative
and referendum, and the exceptions
therefrom, whereby the people can directly
propose and enact laws or approve or
reject any act or law or part thereof passed
by the Congress or local legislative body…”
• This section fleshes out the constitutional
mandate which is in Section 3 of Art. X
which provides that “the LGC shall provide
for a more responsive and accountable
local government structure instituted
through a system of decentralization with
effective mechanisms of recall, initiative,
and referendum”
• A direct initiative is envisioned in this
section. Hence, no positive act of the
sanggunian is required before the initiative
process is commenced by the voters.
• A direct initiative is a good means of
arousing civic consciousness and training
in popular, direct and democratic action. It
is also a good device to check sanggunian
indifference or apathy towards measures
which the people may wish enacted for the
advancement of their welfare.
PROF. GISELLA DIZON-REYES
• All matters which are within the
competence of the sanggunian to legislate
on are proper subjects of the initiative
process.
• NOTE: These provisions on initiative and
referendum do not apply to the ARMM.
• RA 6735 also provides for a system of
indirect initiative, the process by which a
proposal to enact, amend, or repeal a law
or an ordinance is submitted by a required
number of voters for the national
legislature or the local council to act upon.
The voters course their action through their
elected representatives.
The procedure to be followed for the
enactment of the indirect initiative
measure is the same as the enactment of
any legislative measure before the HOR
except that the said initiative bill shall have
precedence over the pending legislative
measures on the committee. (It does not
mean that the proponents of the measure
are allowed to participate in the debates)
Garcia vs. COMELEC
(1994)
FACTS: The Sangguniang Bayan (SB) of
Morong, Bataan in its Resolution 10 agreed to
the inclusion of the municipality as part of the
Subic Special Economic Zone. Garcia, et al
filed a petition before the SB, seeking to annul
the said resolution.
When the municipality did not take action on
the petition of Garcia and others to annul the
resolution, the latter resorted to their power of
initiative under the LGC and started soliciting
the signatures. The Vice Mayor and Presiding
Officer of the SB,wrote the COMELEC
requesting a denial of the petition for local
initiative as the exercise “will just promote
divisiveness, counter productive and futility.”
The COMELEC denied the petition for local
initiative on the ground that the subject was
merely a resolution and not an ordinance.
120
A REVIEWER IN LOCAL GOVERNMENT LAW
WON Resolution 10 is the proper subject
of an initiative.
HELD: YES. The Constitution clearly includes
not only ordinances but resolutions as
appropriate subjects of a local initiative. An
act includes a resolution (Black’s Law
Dictionary). In enacting RA 6735, Congress
implemented the constitutional command to
include acts (resolutions) as appropriate
subjects of initiative. (Sec. 32, Art. VI of the
1987 CONSTI)
The 1991 LGC did not change the scope of
coverage of local initiative as limiting the
coverage to ordinances alone. Sec. 120
merely defines the concept of local initiative
as the legal process whereby registered voters
of a LGU may directly propose, enact or
amend any ordinance. It does not deal with
subjects or matters that can be taken up in a
local initiative.
Sec. 124 (which deals with local initiative
subjects or matters) clearly does not limit its
application to ordinances, but to all “subjects
or matters which are within the legal powers of
the Sanggunians to enact” which undoubtedly
includes resolutions.
Sec. 125 providing for limitations upon
Sanggunians supports the interpretation,
where inclusion of the word proposition is
inconsistent with respondents’ thesis that only
ordinances can be the subject of local
initiatives.
Moreover, the subject matter of the resolution
in CAB does not merely temporarily affect the
people of Morong for it directs a permanent
rule of conduct or government. Its inclusion as
part of SSEZ has far reaching implications in
the governance of its people. It is not material
that the decision of the municipality came in
the form of a resolution for what matters is its
enduring effect on the welfare of the people of
Morong.
LGC, SEC. 121. Who May Exercise. - The
power of local initiative and referendum may
be exercised by all registered voters of the
PROF. GISELLA DIZON-REYES
provinces, cities, municipalities, and
barangays.
SEC. 122. Procedure in Local Initiative. –
(a) Not less than one thousand (1,000)
registered voters in case of provinces and
cities, one hundred (100) in case of
municipalities, and fifty (50) in case of
barangays, may file a petition with the
sanggunian concerned proposing the adoption,
enactment, repeal, or amendment of an
ordinance.
(b) If no favorable action thereon is taken by
the sanggunian concerned within thirty (30)
days from its presentation, the proponents,
through their duly authorized and registered
representatives, may invoke their power of
initiative, giving notice thereof to the
sanggunian concerned.
(c) The proposition shall be numbered serially
starting from Roman numeral I. The COMELEC
or its designated representative shall extend
assistance in the formulation of the
proposition.
(d) Two (2) or more propositions may be
submitted in an initiative.
(e) Proponents shall have ninety (90) days in
case of provinces and cities, sixty (60) days in
case of municipalities, and thirty (30) days in
case of barangays, from notice mentioned in
subsection (b) hereof to collect the required
number of signatures.
(f) The petition shall be signed before the
election registrar, or his designated
representatives, in the presence of a
representative of the proponent, and a
representative of the sanggunian concerned in
a public place in the local government unit, as
the case may be. Stations for collecting
121
A REVIEWER IN LOCAL GOVERNMENT LAW
signatures may be established in as many
places as may be warranted.
(g) Upon the lapse of the period herein
provided, the COMELEC, through its office in
the local government unit concerned, shall
certify as to whether or not the required
number of signatures has been obtained.
Failure to obtain the required number defeats
the proposition.
(h) If the required number of signatures is
obtained, the COMELEC shall then set a date
for the initiative during which the proposition
shall be submitted to the registered voters in
the local government unit concerned for their
approval within sixty (60) days from the date
of certification by the COMELEC, as provided in
subsection (g) hereof, in case of provinces and
cities, forty-five (45) days in case of
municipalities, and thirty (30) days in case of
barangays. The initiative shall then be held on
the date set, after which the results thereof
shall be certified and proclaimed by the
COMELEC.
PIMENTEL:
• The original expenses to formulate the
proposal and gather the required number
of votes are necessarily charged to the
proponents while the official costs are
borne by the government.
• The petition shall state the following:
− contents or text of the proposed law
sought to be enacted, approved or
rejected, amended or repealed, as
the case may be;
− the proposition;
− reason or reasons therefor;
− that it is not one of the exceptions
provided under Sec. 124 of the LGC
or Art. 149 of its IRR;
− signatures of the petitioners or
registered voters;
− a formal designation of the duly
authorized representatives of the
petitioners; and
− an abstract or summary in not more
than 100 words which shall be
legibly written or printed at the top
of every page of the petition.
PROF. GISELLA DIZON-REYES
LGC, SEC. 123. Effectivity of Local
Propositions. - If the proposition is approved
by a majority of the votes cast, it shall take
effect fifteen (15) days after certification by
the COMELEC as if affirmative action thereon
had been made by the sanggunian and local
chief executive concerned. If it fails to obtain
said number of votes, the proposition is
considered defeated.
SEC. 124. Limitations on Local Initiatives.
–
(a) The power of local initiative shall not be
exercised more than once a year.
(b) Initiative shall extend only to subjects or
matters which are within the legal powers of
the sanggunians to enact.
(c) If at any time before the initiative is held,
the sanggunian concerned adopts in toto the
proposition presented and the local chief
executive approves the same, the initiative
shall be canceled. However, those against
such action may, if they so desire, apply for
initiative in the manner herein provided.
SEC. 125. Limitations upon Sanggunians.
- Any proposition or ordinance approved
through the system of initiative and
referendum as herein provided shall not be
repealed, modified or amended by the
sanggunian concerned within six (6) months
from the date of the approval thereof, and
may be amended, modified or repealed by the
sanggunian within three (3) years thereafter
by a vote of three-fourths (3/4) of all its
members: Provided, That in case of barangays,
the period shall be eighteen (18) months after
the approval thereof.
PIMENTEL:
122
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
Comelec labeled the exercise as a
Period Status Vote Required "Referendum"; the counting of votes was
(To repeal, amend entrusted to a "Referendum Committee"; the
or modify) documents were called "referendum returns";
From Day 1 up to 6 Absolute protection; the canvassers, "Referendum Board of
mos. of adoption no changes allowed Canvassers" and the ballots themselves bore
From the end of 6 Qualified protection; the description "referendum". To repeat, not
mos. plus 3 years ¾ vote of all once was the word "initiative" used in said
(municipalities, cities, sanggunian members body of Resolution No. 2848. And yet, this
provinces) or plus 1 exercise is unquestionably an INITIATIVE.
year (barangays)
After 3 years (or 1 No more protection; In enacting the "Initiative and Referendum Act,
year) and 6 mos. from simple majority Congress differentiated one term from the
the adoption of the other, thus:
initiative.
(a) "Initiative" is the power of the people to
• RATIO: To ensure that due respect is propose amendments to the Constitution or to
accorded to the will of the electorate of a propose and enact legislations through an
locality so that it is not easily substituted election called for the purpose.
by the will of only a few members of the
Sanggunian. There are three (3) systems of initiative,
namely:
• REMEMBER: The initiative proposal passed
by the direct vote of the people is not 1. Initiative on the Constitution which
subject to the veto of the local chief refers to a petition proposing
executive. amendments to the Constitution;

SBMA vs. COMELEC 2. Initiative on statutes which refers to

(1996)
FACTS: This is the continuation of the Garcia
vs. COMELEC case. During the pendency of the
said case in the SC, the COMELEC issued
Resolution No. 2848 providing for "the rules
and guidelines to govern the conduct of the
referendum proposing to annul or repeal
Resolution No. 10.
SBMA instituted the present petition for
certiorari and prohibition contesting the
validity of Resolution No. 2848 and alleging,
inter alia, that public respondent "is intent on
proceeding with a local initiative that proposes
an amendment of a national law. . .”
WON the COMELEC erred in scheduling a
“referendum” which seeks the
amendment of a national law.
HELD: YES. The process started by Garcia et.
al was an initiative but COMELEC made
preparations for a referendum only. The
a petition proposing to enact a
national legislation; and
3. Initiative on local legislation which
refers to a petition proposing to
enact a regional, provincial, city,
municipal, or barangay law,
resolution or ordinance.
(b) "Indirect initiative" is exercise of initiative
by the people through a proposition sent to
Congress or the local legislative body for
action.
(c) "Referendum" is the power of the
electorate to approve or reject a legislation
through an election called for the purpose. It
may be of two classes, namely:
1. Referendum on statutes which
refers to a petition to approve or
reject an act or law, or part thereof,
passed by Congress; and
123
A REVIEWER IN LOCAL GOVERNMENT LAW
2. Referendum on local law which
refers to a petition to approve or
reject a law, resolution or ordinance
enacted by regional assemblies and
local legislative bodies.
PROF. GISELLA DIZON-REYES
• This system originated in Switzerland.
Bouvier’s Law Dictionary adds that a
referendum is “the referring of legislative
acts to the electorate for their final
acceptance or rejection.”

Prescinding from these definitions, we gather • In RA 6735, referendum on a local law

that initiative is resorted to (or initiated) by the
people directly either because the law-making
body fails or refuses to enact the law,
ordinance, resolution or act that they desire or
because they want to amend or modify one
already existing. On the other hand, in a local
referendum, the law-making body submits to
the registered voters of its territorial
jurisdiction, for approval or rejection, any
ordinance or resolution which is duly enacted
or approved by such law-making authority.
In sum, the differences between an initiative
and referendum are as follows:
refers to “a petition to approve or reject a
law, resolution or ordinance enacted by
regional assemblies and local legislative
bodies.”
• The expenses are borne by the LGU
although the COMELEC may set aside
funds for this purpose.
• GD-R: The petitioners asking for a
referendum are usually oppositors of the
ordinance.

Initiative Referendum
- entirely the work of - begun and
LGC, SEC. 127. Authority of Courts. -
the electorate consented to by the
Nothing in this Chapter shall prevent or
law-making body.
- process of law- - drawn up or enacted preclude the proper courts from declaring null
making by the people by a legislative body. and void any proposition approved pursuant to
themselves without this Chapter for violation of the Constitution or
the participation and want of capacity of the sanggunian concerned
against the wishes of to enact the said measure.
their elected reps.
- process and voting - voters simply write Compare LGC with RA 6735 (wrt
more complex either “yes” or “no” in Initiative)
the ballot
LGC RA 6735
Who may all registered Same.
LGC, SEC. 126. Local Referendum exercise voters of the However,
Defined. - Local referendum is the legal LGU’s however, it
process whereby the registered voters of the concerned. also
local government units may approve, amend recognizes the
or reject any ordinance enacted by the right of any
sanggunian. The local referendum shall be duly
held under the control and direction of the accredited
COMELEC within sixty (60) days in case of people’s
provinces and cities, forty-five (45) days in organization,
case of municipalities and thirty (30) days in to file a
case of barangays. The COMELEC shall certify petition for
and proclaim the results of the said indirect
referendum. initiative with
the
PIMENTEL: appropriate

124
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
legislative votes is met, set a date for
bodies the initiative from the date
Number of • Not less than 1,000 of the certification
Voters registered voters (provinces abovementioned: 60 days
required and cities) (provinces and cities) 45
• Not less than 100 days (municipalities) and 30
(municipalities) days (barangays)
• Not less than 50 • Submit the initiative to the
(barangays) people for approval
Subject Ordinance (in Ordinance and • Proclaim and certify the
matter of the letter of resolutions (in results
initiative the law) but the letter of Effectivity of If the proposition is approved
resolutions the law) local by a majority of the votes cast,
are not propositions it shall take effect fifteen (15)
prohibited. days after certification by the
Numbering The petition The petition COMELEC.
of petition shall be shall be Limitations • shall not be exercised more
numbered numbered on local than once a year.
serially serially initiatives. • shall extend only to
starting from starting from subjects or matters which
Roman one (1). Two are within the legal powers
numeral I. or more of the sanggunians to
Two or more propositions enact.
propositions are allowed in • if at any time before the
are allowed in one petition. initiative is held, the
one petition. sanggunian concerned
Assisting COMELEC DILG adopts in toto the
agency Secretary proposition presented and
Condition If no favorable action on the
the local chief executive
precedent petition is taken by the
approves the same, the
before sanggunian concerned within
initiative shall be canceled.
exercise of thirty (30) days from its
However, those against
power presentation
such action may, if they so
Notice to the
desire, apply for initiative in
sanggunian
YES the manner herein
before
provided.
exercise
Period to From the date of notice to the
2. Acts of Sanggunian
Gather sanggunian:
a. Ordinance and Resolution
signatures • 90 days (provinces and
b. Formalities
cities)
i. Vote
• 60 days (municipalities)
• 30 days (barangays) Ortiz vs. Posadas
COMELEC • In a public place, witness (1931)
duties the signing of the petition.
regarding • Establish stations for the FACTS: Seven of the thirteen members
local collection of signatures. present, including the president, of the
initiative • Certify as to whether or not municipal council of Tabaco, Albay, voted in
the required number of favor of Ordinance No. 25, concerning
signatures has been cockpits, and six members voted against the
obtained. ordinance, with three members absent.
• If the required number of
125
A REVIEWER IN LOCAL GOVERNMENT LAW
WON Ordinance is valid
HELD: NO. Section 2224 of the Administrative
Code is clear. It needs only application, not
interpretation. The ayes and noes are taken
upon (1) the passage of all ordinances, (2) all
propositions to create any liability against the
municipality, and (3) any other proposition,
upon the request of any member. The same
idea is carried into the succeeding sentence.
For the passage of (1) any ordinance or (2) any
proposition creating indebtedness, the
affirmative vote of a majority of all the
members of the municipal council shall be
necessary. Other measures prevail upon the
majority vote of the members present.
"Creating indebtedness" refers to "proposition"
and not to "ordinance." The contention that
only ordinances creating indebtedness require
the approval of a majority of all the members
of the municipal council, is devoid of merit.
The basic idea of the legislative body to make
impossible the approval of ordinances or of
propositions creating indebtedness by minority
votes of municipal councils, at meetings
hastily called is wise. Legislative intention
should be effectuated.
Section 2224 of the Administrative Code,
requiring in mandatory language the
affirmative vote of a majority of all the
members of the municipal council for the
passage of any ordinance, whether or not an
ordinance creating indebtedness, an ordinance
passed by less than that majority is invalid.
ii. Essential Requisites of
a Valid Ordinance
City of Manila vs. Laguio
(2005)
FACTS: MTDC is a corporation engaged in the
business of operating hotels, motels, hostels
and lodging houses. It built and opened
Victoria Court in Malate which was licensed as
a motel although duly accredited with the
Department of Tourism as a hotel. MTDC filed
a Petition for Declaratory Relief with Prayer for
a Writ of Preliminary Injunction and/or
Temporary Restraining Order with the lower
court impleading as defendants, the City of
PROF. GISELLA DIZON-REYES
Manila, Hon. Mayor Lim, and the members of
the City Council of Manila (City Council). MTDC
prayed that the Ordinance, insofar as it
includes motels and inns as among its
prohibited establishments, be declared invalid
and unconstitutional on the following gorunds:
(1) The City Council has no power to prohibit
the operation of motels as Section 458 (a) 4
(iv) of the Local Government Code of 1991 (the
Code) grants to the City Council only the
power to regulate the establishment, operation
and maintenance of hotels, motels, inns,
pension houses, lodging houses and other
similar establishments;
(2) The Ordinance is void as it is violative of
Presidential Decree (P.D.) No. 499 which
specifically declared portions of the Ermita-
Malate area as a commercial zone with certain
restrictions;
(3) The Ordinance does not constitute a proper
exercise of police power as the compulsory
closure of the motel business has no
reasonable relation to the legitimate municipal
interests sought to be protected;
(4) The Ordinance constitutes an ex post facto
law by punishing the operation of Victoria
Court which was a legitimate business prior to
its enactment;
(5) The Ordinance violates MTDC's
constitutional rights in that: (a) it is
confiscatory and constitutes an invasion of
plaintiff's property rights; (b) the City Council
has no power to find as a fact that a particular
thing is a nuisance per se nor does it have the
power to extrajudicially destroy it; and
(6) The Ordinance constitutes a denial of equal
protection under the law as no reasonable
basis exists for prohibiting the operation of
motels and inns, but not pension houses,
hotels, lodging houses or other similar
establishments, and for prohibiting said
business in the Ermita-Malate area but not
outside of this area.
WON the ordinance is valid
126
A REVIEWER IN LOCAL GOVERNMENT LAW
HELD: NO. The Ordinance is so replete with
constitutional infirmities that almost every
sentence thereof violates a constitutional
provision. The prohibitions and sanctions
therein transgress the cardinal rights of
persons enshrined by the Constitution. The
Court is called upon to shelter these rights
from attempts at rendering them worthless.
The tests of a valid ordinance are well
established. A long line of decisions has held
that for an ordinance to be valid, it must not
only be within the corporate powers of the
local government unit to enact and must be
passed according to the procedure prescribed
by law, it must also conform to the following
substantive requirements: (1) must not
contravene the Constitution or any statute; (2)
must not be unfair or oppressive; (3) must not
be partial or discriminatory; (4) must not
prohibit but may regulate trade; (5) must be
general and consistent with public policy; and
(6) must not be unreasonable.
The requirement that the enactment must not
violate existing law gives stress to the precept
that local government units are able to
legislate only by virtue of their derivative
legislative power, a delegation of legislative
power from the national legislature. The
delegate cannot be superior to the principal or
exercise powers higher than those of the latter
There are no "pure" places where there are
impure men.
The Ordinance seeks to legislate morality but
fails to address the core issues of morality. Try
as the Ordinance may to shape morality, it
should not foster the illusion that it can make a
moral man out of it because immorality is not
a thing, a building or establishment; it is in the
hearts of men. The City Council instead should
regulate human conduct that occurs inside the
establishments, but not to the detriment of
liberty and privacy which are covenants,
premiums and blessings of democracy.
While petitioners' earnestness at curbing
clearly objectionable social ills is
commendable, they unwittingly punish even
the proprietors and operators of "wholesome,"
"innocent" establishments. In the instant case,
PROF. GISELLA DIZON-REYES
there is a clear invasion of personal or
property rights, personal in the case of those
individuals desirous of owning, operating and
patronizing those motels and property in terms
of the investments made and the salaries to
be paid to those therein employed. If the City
of Manila so desires to put an end to
prostitution, fornication and other social ills, it
can instead impose reasonable regulations
such as daily inspections of the establishments
for any violation of the conditions of their
licenses or permits; it may exercise its
authority to suspend or revoke their licenses
for these violations; and it may even impose
increased license fees. In other words, there
are other means to reasonably accomplish the
desired end.
The Ordinance is in contravention of the Code
as the latter merely empowers local
government units to regulate, and not prohibit,
the establishments enumerated in Section 1
thereof. Clearly, with respect to cafes,
restaurants, beerhouses, hotels, motels, inns,
pension houses, lodging houses, and other
similar establishments, the only power of the
City Council to legislate relative thereto is to
regulate them to promote the general welfare.
The Code still withholds from cities the power
to suppress and prohibit altogether the
establishment, operation and maintenance of
such establishments.
iii. Judicial Intervention
ROC, Rule 64, Sec. 4. Local government
ordinances. — In any action involving the
validity of a local ordinance, the corresponding
prosecutor or attorney of the local
governmental unit involved shall be similarly
notified and entitled to be heard. If such
ordinance is alleged to be unconstitutional, the
Solicitor General shall be notified and entitled
to be heard. (4a)
Perez vs. Dela Cruz
(1969)
FACTS: Vice Mayor Perez (Naga City), who
was presiding a private conference with 7 city
councilors in the matter of selecting the
secretary of the municipal board and the
127
A REVIEWER IN LOCAL GOVERNMENT LAW
chairman of various standing committees of
the board, expressed her intention to join the
vote on these matters – to create a tie vote
and thereafter to exercise her power as
presiding officer to break the deadlock after it
was made known that 4 Nacionalista Party
councilors desire to vote for a particular
person as secretary of the board and to hold
the chairmanship of the committee on markets
for one of them.
The four Nacionalistas sought to prevent the
Vice Mayor by filing with CFI of Camarines Sur
contending that the vice mayor is not a
member of the board but only its presiding
officer, that as such, he cannot vote except in
case of a tie.
Meanwhile, the Liberal Party councilors passed
an amendment to the Rules of Procedure of
the Naga municipal board granting the
chairman thereof the right to vote as a
member, and as presiding officer the right to
vote again in case of a tie.
WON the vice mayor, besides being a
presiding officer of a municipal board, is
also a member thereof.
HELD: NO. The Vice Mayor of Naga City as
presiding officer of the Municipal Board cannot
be a member of the same board. In the
absence of any statutory authority constituting
the vice-mayor as a member of the municipal
board, in addition to being the presiding officer
thereof, it cannot be read into the law
something that is not there. Differences in law
beget differences in legal effects.
The mere fact that the vice-mayor was made
the “presiding officer” of the board did not
ipso jure make him a member thereof; and
even if he “is an integral part of the Municipal
board” such fact does not necessarily confer
on him” either the status of a regular member
of its municipal board or the powers and
attributes of a municipal councilor.
There is nothing in the Charter of Naga City
which provides that the vice-mayor of said city
is a member of the municipal board. He was
PROF. GISELLA DIZON-REYES
not even designated as “Acting Mayor” in case
of temporary incapacity of the Mayor.
The Vice-Mayor is allowed to vote only in case
of a tie. He is not allowed to vote twice (to
create a tie and break the deadlock). Since
there are 7 councilors, a tie is not possible.
The Vice Mayor’s vote in case of a tie is no
longer necessary.
Doctrine in Vera vs. Avelino that prohibition
refers only to proceedings of any tribunal,
corporation, board or person not exercising
legislative functions is based on the principle
of separation of powers and checks and
balances which is not applicable to local
governments. The case is irrelevant to the
issue in CAB in addition to the actuality that
executives at the local or municipal level are
vested with both legislative and sometimes
judicial functions, in addition to their purely
executive duties.
By explicit statutory command, courts are
given authority to determine the validity of
municipal proceedings. And in CAB, the
petitioner, in insisting to exercise the right to
vote twice in the municipal board, acted
without jurisdiction and power to do so, and
may be validly prevented and restrained by a
writ of prohibition.
In reply to petitioner’s assertion that the acts
sought to be restrained are mere “probable
individual actuations” beyond the reach of a
prohibitory writ, suffice it to state that
prohibition is essentially a preventive remedy
and is not intended to provide for remedy for
acts already accomplished.
Petitioner’s threat of voting twice was not an
empty or meaningless gesture for record
shows that she voted twice for the approval of
the alleged amendment to the rules of
procedure.
Homeowner’s Association of the
Philippines, Inc. vs. Municipal Board of
Manila
(1968)
FACTS: Homeowner’s Association brought
action for declaratory relief to nullify Manila
128
A REVIEWER IN LOCAL GOVERNMENT LAW
Municipal Ordinance 4841 declaring that a
state of emergency existed in the matter of
housing accommodations in Manila, in view of
prevailing scarcity of land and buildings for
residential purposes there.
Sections 1 and 2 of the assailed ordinance
provides that lessors and sublessors of land
and buildings primarily devoted to residential
purposes cannot increase their rentals beyond
certain conditions.
The CFI declared it void, arguing that the
power to declare a state of emergency
exclusively pertains to Congress. Moreover,
there is no longer a state of emergency which
justifies the regulation of house rentals. And
the ordinance also illegally limits the use of
private properties.
WON the ordinance is valid and may be
made effective permanently.
NO. Assuming that the City had such powers
and assuming the existence of the emergency,
ordinance is illegal and unconstitutional (Note:
Court did not decide if the city has power to
declare a state of emergency and if such
emergency existed)
The police power of municipal corporations is
subject to constitutional limitations. Individual
rights may be adversely affected by the
exercise of police power only to the extent
that may be fairly required by the legitimate
demands of public interest or public welfare.
When the demands of public interest are
brought about by a state of emergency, the
interference upon individual rights must be co-
terminus with the existence of the state of
emergency. The statute passed to meet a
given emergency, should limit the period of its
effectivity.
Otherwise, that which was intended to meet a
temporary emergency may become a
permanent law. Hence, when the cause for the
grant of power was temporary, so should the
grant be, for the effect cannot remain in
existence upon the removal of its cause.
PROF. GISELLA DIZON-REYES
Appellant assails the validity of the
proceedings in the lower court upon the round
that, although petitioners herein had assailed
Municipal Ordinance No. 4841, not merely as
ultra vires, but, also, as unconstitutional, the
Solicitor General had been neither heard nor
notified in connection therewith, in violation of
Section 4 of Rule 64 of the Rules of Court.
The determination of the question whether or
not the Solicitor General should be required to
appear "in any action involving the validity of
any treaty, law, ordinance or executive order,
rules or regulation" is a matter left to the
"discretion" of the Court, pursuant to Section
23 of Rule 3 of the Rules of Court. Inasmuch as
said requirement is not mandatory, but
discretionary, non-compliance therewith and
with Section 4 of Rule 64 — the interpretation
of which should be harmonized with said
Section 23 of Rule 3 — affected neither the
jurisdiction of the trial court nor the validity of
the proceedings therein, in connection with
the present case.
The requirement regarding notification to the
Provincial Fiscal of the pendency of an action
involving the validity of a municipal ordinance,
as provided in Sec. 4, Rule 64 of ROC, is not
jurisdictional; and failure on the part of
petitioner to notify the Provincial Fiscal will not
be a sufficient ground to throw the case out of
court. We believe the purpose of the above-
quoted rule is simply to give the Provincial
Fiscal, who is the legal officer of the local
governments, a chance to participate in the
deliberation to determine the validity of a
questioned municipal ordinance before the
competent court. If it appears, however, that
the ordinance in question is patently illegal, as
in the present case, and the matter had
already been passed upon by a competent
court, the requirements of Sec. 4 of Rule 64 of
the Revised Rules of Court may be dispensed
with.
129
A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES

130