oe _ US. v. Espiritusanto, 23 Phil. 610. i E aS US. v. Pompeya, 31 Phil. 245. Frenette os USS Sumutong, 30 Pa Canc eAG ir SCRA T- aly on INTRODUCTION Uy v. Contreras, 287 SCRA 167 ween eset x. ‘The strength of free nations resides in the local community. Vda, De Borromeo v. Pogoy, 126 SCRA 217 Local institutions are to liberty, what primary schools are to science, Vietoria v. COMELEC, 229 SCRA 269.0. a they bring it within people's reach, they tench people to wee and enjoy Vilar v. Paraiso, 96 Phil. 659 «0.00 ti iat it. Without local institutions, a nation may establish a free govern- Win City of Mania, 2 Pi 938 ae 7 rent, but it eannot have the sprit of liberty. Transient passions, 20° Ge a eee No, 008 c 652 soon any interests, a chance of cireumstances, may creato Lie ert, Villona x, Seeretaty oe a fe 270 “ 509 ‘nal forms of independence; but the despotic tendency which has been ST eC aoeea mpeg ut repressed inta the interior ‘of the social body will, sooner or later, TT Ea 6 appear on the surface. Y Alexis de Tocqueville, Yasay v. Flores, GR, No, 81047 woo = : 158 Democracy in America Before going into a full discussion on the Local Government Code, itis easential that basic definitions and fundamental Princ ples on the subject be reviewed. 4. Political law, defined. ‘Potitical law ie that branch of public law which deals with the organization and operation of the government organs of Hi state ore hfines the relations of the state with the inhabitants offs ter~ titory. (People v. Perfecto, 43 Phil. 887-) 2. Political law, its subdivisions. Political law embraces: (a) Constitutional law; (b) Administrative law; (©) Law of Public Officers; and (@)_ Law of Public Corporations2 ‘THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated 3) Corporation defined. Acorporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and prop- erties expressly authorized by law or incident to its existence. (See. 2, Corporation Code.) 4, Classes of Corporations. Corporations are classified into publie and private. Some au- thorities include quasi-public corporations in the classification. 5, Public Corporation, defined. A public corporation is one created by the state either by gen- eral or special act for purposes of administration of local government or rendering service in the publie interest. It is one formed or organized for the government of portion of a state (Sec. 3, Act No. 1459); it is created by the state as its own agency for the accomplishment of parts of its own publie works, (E10, Mon. Core., p. 1.) 6 Private Corporation, defined. Our old Corporation Law defines private corporations as “those formed for some private purpose, benefit, aim or end.” (See, 3, Act No. 1459.) 7. Public and Private Corporations, distinguished. Public corporations are established for purposes connected with the administration of civil or local governments; while private cor- Porations are created for private aim, gain or benefits of its mem- bers. Public corporations are creations of the state either by general or special act; while private corporations are created by the will of the incorporators with the recognizance of the state. Public corporations are involuntary consequence of the legis. lation; while private corporations constitute a voluntary agreoment by and among its members. INTRODUCTION 8 A, Decided Case 1. The Articles of Incorporation seeking to incorporate a barrio is unlawful for being violative of the Municipal Code. ASUNCION v. YRIARTE, 28 PHIL. 67, 9/24/14, Moreland, J. compel the acts: This san action to olan ari of mandamus o cme sete ancl af archives a the Exseutve Beat le certain Seto somoration, Lower cor ound favor of dsendant eld: We are ofthe opinion that it isthe duty ofthe ci division thon acs re preset fr ett orm etre Chet the craton egress rel We dol eto tat smply betse the nt of nerporaton ae ara tlt he ant ect and oso acorpration whieh We ranted fr some unl or ioral purpose Ter a nde of hecprin ht an oe ee as as ie seni fecal a ere alan Pe ee eam pens sale peat or "i bce the wart and have the igh of ote el din over the barrios within their respective territories. Judgment, AFFIRMED. Public Corporations, classes. of They ae 2) Quasi public corporations, which x be state for narrow and limited purposes without the powers and liabilities of self-governing corporations. They Fendor ple eervie or supply puble wants (6) Municipal corporations. 97 Municipal Corporation, defined. “ tie and corporate con- ‘A municipal corporation is a “body politic an stituted by the incorporation of the inhabitants for purposes of lo-4 ‘THE LOCAL GOVERNMENT CODE OF 1991 “Annotated cal government thereof; it is established by law partly as an agency of the state to assist in the eivil government of the country, but chiefly to regulate and administer the local or internal affairs of the city, town or district which is incorporated.” (Duton, Mun. Core., Vor. 2, pp. 58-59.) ‘The term municipal corporation has gradually given way to the more recent term, local government, which has a substantially iden- tieal definition as that of the former, Municipal corporations and local governments are therefore one and the same entity, 10 Municipal Corporation, elements. a) A legal ereation or incorporation; b) A corporate name by which the artificial personality or legal entity is known and in which all corporate acts are done; ©) Inhabitants constituting the population who are invested with the political and corporate power whieh are executed through duly constituted officers and agents; @) A place or territory within which the Local Civil Govern- ment and corporate functions are exercised. (Laure, Cases on Mow, Cone., p. 29, citing McQuituin, Mou. Conr., Vou. I, pp. 289-290.) 11. Local Government, defined. ‘The term Local Government refers to a “political subdivision of a nation or state which is constituted by law and has substantial control of local affairs.” (UP Law Center Constitution Revision Project, Part I, p. 712, citing Sapy, Improveuewr ov Loca Govenw- ber AND ApuuvisreaTioN ron DaveLoPMENT PURPOSE.) 12- Local Government, its dual personality. Local government has a dual personality, namely: 1) public or governmental; and 2) private or corporate. In its public or governmental capacity, itis an agent of the state for the government of the territory and the inhabitants within the local government limits. In its private capacity, it acts in a similar category as a business corporation, performing functions not strictly INTRODUCTION 5 governmental or political. In its governmental character, it exercises by delegation a part of the sovereignty of the state. Examples of the first class are: a) establishment and operation of schools; b) adoption of regulations against fire and diseases; and ©) preservation of the public peace, etc. Examples of the latter elass are: a) establishment of markets and slaughter houses; b) operation of telephone system; and ¢) op- ‘eration of ferry service, ete. ‘Municipal corporations perform twin functions. Firstly, they serve as an instrumentality of the State in earrying out the fune- tions of government. Secondly, they act as an agency of the commu- nity in the administration of local affairs. It is in the latter eharac- ter that they are a separate entity acting for their own purposes and not a subdivision of the State. (Surigao Electric Co., Inc. v. Munici pality of Surigao, 24 SCRA 898.) 13, Local Government, as an agency of the State. A. Decided Cases 1. A:municipal corporation (local government) is merely an agency instituted by the State for the purpose of carrying out in detail the objects of government. It is essentially a revocable agency. It has no vested powers or franchises. It is subject to the control of the legislative. (Coyle v. Gray, 30 Atlantic 728.) COYLE v. GRAY, 30 Atlantic 728 Pacts: An act was passed by the legislature establishing a board of water commissioners for the city of Wilmington, Delaware, taking the control of the waterworks of a municipal corporation from the mayor ‘and placing it under that of the special board. Its constitutionality was ‘questioned. Petitioners contend that the waterworks is a private prop- certy of the public corporation and guaranteed by the due process of aw clause; and this protection exempts it from regulation and con- trol of the State, Held: The Act of the Legislature is constitutional. A municipal corpo- ration being merely an agency of the State, the legislature may change its internal government at pleasure. A municipal corporation does no hold property, like waterworks, as a private corporation, so as to pre~ vent the legislature from modifying the management thereof at will, ‘There is no diversion of the property from its original use.{OVERNMENT CODE OF 1991 Annotated 2, The present City of Manila is not liable under the con- tract entered into by its predecessor, the Old Ayuntamiento because it is not its successor and such obligations are not incurred by the present city. AGUADO vy. CITY OF MANILA, 9 Phil. 513, 1/9/08, dohnson, J. Facts: Plaintiff Aguado was the successor of Mufioz. Muioz entered into certain contraet with Ayuntamiento de Manila for the sale of eoal ‘amounting to P3,070.40, and deposited with Ayuntamiento, P1,920 as ‘a guaranty for the fulfillment of the contract. It was admitted that Munoz had well and truly fulfilled all the terms and requirements of the contract and faithfully discharged the obligation contained. After fulfillment of such obligation, Mufioz made due demand in the man- ner required by law and by the terms of the contraet for the payment of coal and recovery of deposit totalling P5,621.40, which sums Ayuntamiento did not pay, In August 1898, Ayuntamiento was forcibly suspended and the Military Government succeeded it, possessing all its properties. In February 1899, Muftoz transferred all his rights and intorest to said eam unto plaintiff Aguado, who at various times mado due demand for said sum upon Military Government and the present successor City of Manila, which demand was not paid, Plaintiff thereaRer commenced this action in the Manila CFI against the City of Manila for the pur- pose of recovering from tho city the sum of P5,621.40 with interest ‘and cost. Trial court rendered judgment against defendant for Ue sun plus interest, Held: ‘The issue in this case is whether or not the present City of Manila is liable undor the contracts for the obligation created thei by Ayuntamiento as its successor, and, if itis, whether the plaintiff is entitled to a writ of execution against any of the property of the present city for the purpose of satisfying the liability ‘The old Ayuntamiento, as the contracts themselves show, making the contract did not act as trustee or agent; but in its corpo ‘rate capacity, subject to the limitations imposed by the law. So that when its principal, the Spanish Government in the Philippines, ceasod to have control over this territory, all its agents including the Ayuntamiento, also ceased to exist. Although the present city govern- ‘ment exercise certain powers which were formerly exercised by the ‘Ayuntamiento, it is not in law, the suecessor of the same and cannot be charged with the obligations of the latter. The City of Manila, there- fore, is not liable for the obligations ereated by eontracts executed by INTRODUCTION % + Ayuntamiento for tne were never ined by the present he Aruna Orci not Hable won te cna, no gues For tho aon a ae ot at of exouton agaist te prop oo ie inte presen cae (NB This was Over crt ore Court see ia Cty of Mania ifr) 3, The new City of Manila is liable to its creditors for obli- ations ineurred by the old City of Manila. For the mere change of caso ign authority does not necessarily dissolve the municipal corporation under the former sovereign. ‘YVILAS v. CITY OF MANILA, 42 Phil. 935, 4/8/11 Lurton, J. ited States by Facts: Before the cession of the Philippines to the Unites the treaty of Paris, Vilas was creditor of the City of Manila. When the City of Manila was incorporated under Act No, 188 of the Philip- pino Commission, he brought an aetion against the City of Manila te Peover the sum due to him. As a matter of defense, it was claimed That the old city of Manila which incurred the indebtedness had been ‘dissolved by the change of sovereignty and that by the incorporation Sf the new city under Act No. 183, the liability of the old city has al: ready been extinguished, Held: "The jrstie identity of the eomporation as inno wise beon af- re rm nw, Uh prevent eit en very Tegal see the sues sete asd As such is emitid tothe property and property rights a corporation, ad i in law wack tall of i Be a es ore change of the sovereign authority govering 8 Ou: abies essay dissolve te manip corporation organized ye former svereign. The argument that by the chang of 0%. mene ee i ‘manner as th rgnty Uh eld city was extinguished jn the same reign ih ote death of the principal, oes sight ofthe dual char aaa otaunicial corporations, corporate and governmental, Only ae mental Farctions as are tocompatible with the present sa pov may be considered suspended. The urate identity ofthe aor nat aflactad bythe change of sovereignty. The City of Manila stands lable to its ereditors 4, Armunicipality, the pueblo of Catbalogan, as a juridical under its own inde- ferson, may acquire patrimonial property un rer cnality and not as a mere agent of the Central Gow- ‘ernment.14. THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated MUNICIPALITY OF CATBALOGAN v. DIRECTOR OF LANDS, 17 Phil. 216, 10/17/10 “Torres, J. Facts: The Municipal President of the pueblo of Catbalogan applied with the Court of Land Registration asking for the registration of a parcel of land which the courthouse occupies, with the said pueblo ‘as absolute owner. The Attorney-General opposed. Held: The question in this case is whether the lot occupied by the court-house of the Municipality of Catbalogan, Samar belongs to the ‘said municipality or is a state land under the control of the Insular Government, If'a municipality, as a juridical person susceptible of rights and duties, can acquire all kinds of property such as that termed propios or patrimoniales, it undoubtedly merits the designation of owner with respect to the property which may have been awarded to it as its own, ‘The exercise on the part of the municipality of a right of ownership in land vested with the charactor of common (propio) or patrimonial land is very distinct from the administration proceedings or acts ex- cecuted by it, and from the contracts made by the same, inasmuch as, in the exercise of the right of ownership in the property of the exclu- sive ownership of the municipality, this entity has an independent personality of its own, and does not act as a mere agent of the Cen- tral Government; wherefore, the decision rendered in Aguado v. City of Manila is not applicable here. Local Governments, powers and functions. Sources of Power of Local Governments 1, The 1987 Constitution; its provisions in local govern- ments; 2. The Local Government Code of 1991; and 3. All existing laws, acts, decrees, executive orders, procla- mations and administrative regulations not inconsistent, with the 1987 Constitution and the Local Government, Code of 1991 Classification of Local Government Powers. 1. _ Express powers — those granted in express words. 2. Implied powers — those necessary or fairly implied in or incident to the powers expressly granted. INTRODUCTION 9 3. Inherent powers — those essential to the declared objects and purposes of the corporation not simply convenient but indispensable such as: a) to have perpetual succession; b) to sue and be sued; ©) to purchase, hold and sell property for the benefit of the municipal corporation; d) to have a common seal; ) _ tomake by-laws and ordinances for the government of the municipality. 4, Legislative and executive powers — a) ordinance to make Iaws; b) ordinance to execute laws, 5. Intramural and extramural powers — a) those exercised within the corporate limits of municipal corporation; b) those exercised without, like those given for the pro- tection of water supply, prevention of nuisance and also for police forces. 6 Governmental and municipal powers — a) administer the powers of the state and promoting the public welfare within it; b) those for the special benefit and advantage of the urban community. Among the governmental pow- em are: the power of eminent domain; of taxation, to pro- ‘mote public education, to maintain a fire department or police force. Among the municipal powers are: erection of waterworks, gas works, power electric plants, from which profits may derived by the municipality. 7, Mandatory and discretionary powers — a) those the ex- excise of which can be required of municipal corporations; b) those which it may perform or not, depending upon its judgment and discretion. Execution of Municipal Powers. When the charter or statute specifically prescribes the man- ner by which the certain corporate acts are to be executed and points ‘out the ageney or officers who are to exeeute them, no other method of procedure may be used in the premises. But if the law is silent on the matter of exercise, the corporate authorities are necessarily clothed with diseretion in determining the same. All the methods of executing such acts, as may be reasonably inferred, are deemed10 ‘THE LOCAL GOVERNMENT CODE OF 1991 Annotated granted, provided that the aetion taken is neither arbitrary nor ea- pricious and must be in good faith. Unless restrained by law, a ‘municipal corporation has the discretion to select the means and methods of exercising its powers, provided that the means thus se- lected must be reasonable. In making the selection, the common council may proceed either by way of ordinance or resolution. D. Decided Case. 1. RA 3120 is constitutional and is a manifestation of the leg- islature’s right to deal with the state property which includes those held by municipal corporations in its public or governmental eapa- city, ‘RABUCO v. VILLEGAS, 55 SCRA 656, 2/28/74 ‘Teehankee, J. Facts: RA. No, 3120 converted the Malate area, which are reserved as communal property, into disposable or alienable lands of the state to be placed under the administration and disposal of the LUA, for subdivisions into small lots not exceeding 120 meters per lot for sale in installments to the tenants or bona fide occupants thereof and ex- pressly prohibited ejectment and demolition of petitioner's homes under Soc. 2 of the Act. ‘Respondent city officials contended that the Act must be stricken down as unconstitutional for depriving the City of Manila of the lots ‘question, and providing for their sale without payment of just com pensation thus eonstituting deprivation of property without due proe- ‘ess of law. Held: The lots in question are manifestly owned by the city in its pub- lic and governmental capacity and not in its privato or proprietary capacity of which it could not be deprived without. due process and without just compensation. ‘The Act was intended to implement the cial justice poliey of the Constitution and the governmentis program ‘of and for the landless, It is a manifestation of the legislature's right and power to deal with the state property which includes those held by municipal corporation in ite public and governmental capacity. ‘Therefore, R.A. 3120 is constitutional 15. Local Governments, rules regarding their properties. A. Introduction. Art, 423 of the New Civil Code provides: INTRODUCTION "1 “The property of provinees, cities, and municipalities is divided into property for public use and patrimonial property. (343)” Art, 424 of the same Code provides: “Property for publie use, in the provinees, cities, and muniei- palities, consist of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and pub- lic works for public service paid for by said provinces, nicipalities. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws. (44a) B, Kinds of Properties of Local Government Units. Provinces, cities, municipalities or barangays have two kinds of properties, namely: 1. property for public use; and 2. patrimonial property. Properties for public use consists of: (1) Provincial, city, munieipal or barangay roads or streets, squares, fountains, public waters and promenades. These are open for use by everybody; and ©) Public works for public serviee paid for by said units, Examples are provincial, city, municipal or barangay buildings or water systems. These may not be freely used by everybody. All other properties are patrimonial properties of the units. ©, Alienation of the Properties of Local Government Units. 1. Properties for public use eannot be alienated as such and ‘may not be acquired by prescription. (Mun. of Oas v. Roa, 7 Phil. 20.) 2. Patrimonial properties may be alienated and acquired by prescription. (Mun. of Oas v. Roa, supra.) In City of Manila v. Garcia, 19 SCRA.413, squatters entered a piece of land belonging to the City of Manila and later secured per- mits or lease contracts from the cily mayor. The land later on was needed for the expansion of the elementary school adjacent to it.12 THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated ‘The Supreme Court ruled that the squatters never became ten- ants of the land. ‘The property being a public one, the Manila mayor did not have authority to give permits or execute leases, written or oral with defendants. Said permits or lease contracts are void. In Muyot v. De la Fuente, G.R. No. L-6534, 48 0.G. 4860, it was held that the City of Manila could not lease a portion of a pub- lie sidewalk on Plaza Sta. Cruz, being likewise beyond the commerce of man, In Espiritu v. Municipal Council of Pozzorubio, 102 Phil, 866, the Supreme Court declared: “There is absolutely no question that the town plaza cannot be used for the construction of market stalls, specially of residences, and that such structures constitute a nuisance subject to abatement aceording to law. Town plazas are properties of public dominion, to be devoted to public use and to be made available to the public general. They are outside the commerce of man and cannot be dis- posed of or even leased by the municipality to private parties.” In Villanueva v. Castaiteda, Jr, 164 SCRA 142, the pronounce- ‘ments in the above cases were cited when the Supreme Court ruled that the place occupied by the stalls forming a talipapa of the ven- dorsipetitioners is a public plaza and as such beyond the commerce of man and cannot be the subject of lease or any other contractual undertaking. The removal of the stalls was ordered. D. Properties Intended for Public Use or Service. In the case of Capitulo v. Aquino, 53 0.G. No. 5, 1477, the Su- preme Court ruled that under Art. 424 NCC, it does not matter that the property is not actually devoted for public use or for some pub- lic services. If the property has been intended for such use or serv- ice, and the city has not devoted it to other uses, or adopted any measure which amounted to withdrawal thereof from public use or service, the same remains property for public use In this case, where the lot was donated to the City of Manila by Sulucan Development exclusively for street purposes and plain- tiffs Capitulo, et al., occupied said lot and later secured lease con- tracts on said lot from the city mayor, the said occupation and lease contract are illegal because, even if not yet developed and opened for public use, it remains property for public use not subject to ap- propriation. INTRODUCTION 8 E, Withdrawal of Roads or Plazas from Public Use. See comments under Section 21 on Closure and Opening of Roads, Decided Case. 1. The 24 lots owned by the Provinee of Zamboanga in its publie and governmental capacity is subject to the control of Con- gress. However, the 26 remaining lots which are patrimonial prop- erties must be paid just compensation, PROVINCE OF ZAMBONGA DEL NORTE v. CITY OF ZAMBOANGA, 22 SCRA 1334 ‘8/28/68, Bengzon, J.P, J. Facts: The municipality of Zamboanga used to be the provineial eapi- tal of Zamboanga Provinee. In 1986, Commonwealth Act 39 converted it into a city. See. 50 provided that properties which the province shall abandon will be aequired and paid by the City of Zamboanga at a price fixed by the Auditor-General. The properties consisted of 50 lots and some buildings. The city paid P47,000 of the P704,000. However, in 1961, R.A. 3039 amended See. 50 providing for the acquisition of the properties “free of charge.” Provinee filed a suit and prayed for R.A. 3039 to be declared unconstitutional for depriving plaintiff of property without duo process of law and just compensa tion. The CFT declared R.A. 3039 unconstitutional and held the 50 properties as private properties of the province of Zamboanga, Issue: Whether the 50 properties are publie property or private prop- erty of the province, Held: 1. On control by State of Properties of Looal Goverament Units. ‘The principle is: a, If the property is owned by the municipality in its public and governmental capacity, the property is public and ‘Congress has absolute control over it. b. If the property is owned in its private or proprietary ca- pacity, then it is patrimonial and Congress has no abso- lute control. The municipality cannot be deprived of it without due process and payment of just compensation. 2. Which of Two Norms May Be Used in Classifying the Properties Held, a. Classification Under the Civil Code.“ ‘TIP LOCAL GOVERNMEN? CODE “Annotated P1991 Articles 428 and 424, NCC classify property of provinces, cities and municipalities into property for publie use and patrimonial prop: erty. Applying this norm, all the 50 lots and buildings thereon, except the two lots used as High School playgrounds, could be considered as patrimonial properties of the former Zamboanga province. Even the capitol site, the hospital and leprosarium sites, and the sehool sites will be considered patrimonial for they are nat for publie use ‘They would fall under the phrase “publie works for publie sery- ice” for it has been hold that under the ejusciem generis rule, such public works must be for free and indiscriminate use by anyone, just like the preceding enumerated properties in the first paragraph of Art. 424. (Cebu City x. NWSA, 107 Phil, 112.) Unlike in the Civil Code classification regarding State proper- ties, properties for public service in the municipalities are not: cla fied as public. b. Classification Under the Law of Municipal Corporations. Applying the norm obtaining under the principles constituting the law of Municipal Corporations, all those of the 50 properties in question which aro devoted to public service are deemed public, Un- der this norm, to be considered public itis enough that the property bbe held and devoted for governmental purposes like local administra- tion, public education, public health, ete. Following this classification, R.A. 3039, which provides that all properties of the former province of Zamboanga and located withi the City of Zamboanga are hereby transferred, free of charge, in favor of the said City of Zamboanga, is valid insofar as it affects the lots as capitol sites and its grounds, hospital and leprosarium sites and the high school playground sites totaling 24 lots, since they were held by the former Zamboanga provinee in its governmental capacity and therefore subject to the absolute control of Congress, But R.A. 3039 cannot be applied to deprive Zamboanga prov- ince of its share in the value of the 26 remaining lots which are patrimonial properties since they are not being utilized for distinctly governmental purposes. 8. Conclusion Reached by the Supreme Court. ‘The Supreme Court applied the latter norm or classifieation stating: “The controversy here is more along the domains of the law of ‘Municipal Corporations than along that of Civil Law." INTRODUCTION 6 (Note: The author agrees with the result reached by the deci- sion, However, he finds it unnecessary to distinguish between the two norms discussed by the decision above. It is quite clear from Article 424 that property for public use in the province, cities and municipalities consist of: 1) provincial, city or municipal roads or streets, etc.; and 2) public works for public service. “Public works for public services,” although not for free and indiscriminate by everyone, are therefore considered as property for public use. The phrase is placed together in the same paragraph on properties for public use and distinct from the other paragraph deal- ing on patrimonial property. And certainly the 24 properties above mentioned, eg, Cay lot. and building, hospital lot. and building ete, are public works for publie service and, are therefore considered as for public use. Hence, ‘Congress has control over them.) G. Decided Case. 1. Breach of a contractual obligation between the City of Manila and plaintiff, involving property which is patrimonial in character entitles the latter to damages. CITY OF MANILA v, INTERMEDIATE APPELLATE COURT 179 SCRA 428, 11/15/89 Paras, J. Facts: Vivencio Sto, Domingo, deceased husband of plaintiff Irene Sto. Domingo was buried in a lot of the North Cemetery, which lot was leased by the City of Manila to Irene from 1971 to 2021. Irene paid the full rental thereof. In January 1978, the cometery authorities exhumed and re- ‘moved the remains of Viveneio from the lot which were then placed in a bag and kept in the bodega of the cemetery. In November 1978 (All Souls Day), when Irene went to the cem= ‘tary, she was shoeked to learn that the remains of her husband were hot anymore in the lot, as the same had been rented out to another lessee. Held: Under Philippine laws, the City of Manila is a political body corporate and as such endowed with the faculties of municipal corpo- rations to be oxereised by and through its eity government in conform=16 ‘THE LOCAL GOVERNMENT CODE OF 1991 “Annotated ity with law, and its proper corporate name. It may sue and be sued, ‘and contract and be contracted with. Its powers are twofold in ehar- acter; public, governmental or political on one hand, and corporate, private and proprietary on the other. ‘In MeQuillin on Municipal Corporation, the rule is stated thus “A municipal corporation proper has... a publie character as regards the state at large insofar as it is its agent in government, and private ‘0 called) insofar as i is to promote local necessities and conveniences for its own community” (Torio v, Fontanilla, 85 SCRA 699 [1978). In Torio v, Fontanilla, supra, the Court declared that with re- spect to proprietary functions the settled rule is that a municipal eor- poration can be held liable to third persons ex eontractu, (Municipal ity of Moncada v. Canjuigan, et al,, 21 Phil. 184, 1912) or ex delicto (Mendoza v. de Leon, 33 Phil. 608, 1916.) Under the foregoing considerations and the absence of a special law, the North Cemetery is a patrimonial property of the City of Ma nila which was created by resolution of the Municipal Board of Au- gust 27, 1903 and January 7, 1904, The administration and govern ment of the cemetery are under the City of Health Officer (Tbid., See. 3189), the order and police of the cemetery (Ibid., See. 319), the open- ing of graves, niches, or tombs, the exhuming of remains, and the purification of the same (Ibid, See. 327) are under the charge and responsibility of the superintendent of the cemetery. ‘The City of Manila furthermore prescribes the procedure and guidelines for the use and dispositions of burial lots and plots within the North Cemetery Uiroughi Administrative Order No, 5,2. 1975. With the acts of dominion, there is, therefore no doubt that the North Cem- celery is within the elass of property which the City of Manila owns in its proprietary or private character. Furthermore, there is no dispute that the burial lot was leased in favor of the private respondents. Hence, obligation arising from contracts have the foree of law between the contracting parties. Thus ‘a lease contract executed by the lessor and lessee remains as the law etweon them, (Henson v, Intermediate Appellate Court, 148 SCRA 1, 1987.) Therefore a breach of contractual provision entitles the other party to damages even if no penalty for such breach is prescribed in the contract. (Boysaw v, Interphil Promotions, Inc,, 148 SCRA 636, 1987.) Under the doctrine of respondeat superior (Toria v. Fontanilla, supra), petitioner City of Manila is liable for the tortious act commit- ted by its agents who failed to verify and check the duration of the contract of lease. INTRODUCTION "7 H. Other Classification Based on Mode of Acquisition. Properties of local government units may also be classified as: 1) those acquired by the units by their own funds in their proprietary capacity. These may be disposed of by the units as they please. 2) those acquired by the units in its governmental capacity such as those aequired by suecession or by donation from the State or National Government or from funds received from the State. ‘These are held in trust by these units for the State, for the benefit of its inhabitants. These cannot be sold by the local government, units. ‘A municipality cannot acquire a lot through preseription since said lot has an owner and the owner ean bring an action to recover possession at any time because possession is one of the attributes of ownership of the land. (Municipality (now city) of Legaspi v. A.L. Ammen Transportation Co., Ine., 26 SCRA 218.) In the absence of title deed to any land claimed by the City of Manila as its own, showing that it is acquired with its private or corporate funds, the presumption is that such land came from the State upon the creation of the municipality. (Salas v. Jarencio, 45 SCRA 743.) Regardless of the source or classification of land in the posses- sion of a municipality, excepting those acquired with its own funds in its private or corporate capacity, such property is held in trust for the State for the benefit ofits inhabitants, whether it be for gov- ernmental or proprietary purposes, (Ibid) I. Properties for Publie Use Not Subject to Levy or Execution. Properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execu- tion sale to satisfy a money judgment against the municipality. Pub- lic funds are not subject to levy and execution. (Municipality of Makati v. Court of Appeals, 190 SCRA 206.) 16. Local Government, Types. 1. De jure municipal corporations — those created or recog nized by operation of law. 2, Municipal corporations by prescription — exercised theirJOCAL GOVERNMENT CODE OF 1991 Annotated powers from time immemorial with a charter, which is presumed to have been lost or destroyed. 3 De facto municipal corporations — where the people have organized themselves, under color of law, into ordinary municipal bodies, and have gone on, year after year, raising taxes, making improvements, and exercising their usual franchises, with their rights dependent quite as much as on acquiescence as on the regu- larity of their origin, ‘The essential requisites of a de facto corporation are: a) a valid law authorizing incorporation; b) an attempt in good faith to organize under it; © a colorable compliance with law; 4) an assumption of corporate powers. Where the mode of creating a municipal corporation and the conditions under which it may exist are prescribed by a general law, the legislature may properly leave to the courts or to a commission or board the duty of ascertaining the facts and deciding whether the prescribed conditions have heen satisfied and proper steps have been taken under the law to bring the municipal corporation into exist- 47. Local Governments, Extent of Legislative Control. 1. Historical view — holds that the municipal corporations have an inherent right to local self-government whieh eannol be taken away by statute, having regard to the long history of local autonomy enjoyed by towns and cities in the United States and the United Kingdom, the local governments antedating state govern- ‘ments; although it recognizes the fact that the state retains com- plete control of matters of general concern, such as health and sani- tation, and the maintenanee of peace and order, in respect of which the municipal corporation acts merely as the state agency or instru- mentality. It maintains that so long as such a corporation exists, it has the right which the state cannot take away, to regulate its in- ternal or local affairs. In the absence of express constitutional pro- visions, the greater weight of authority repudiates the historical 2. Legal view — This sanctions the possession by the State of absolute control over local governments, local government being INTRODUCTION 19 mere ereatures of the State. The right of municipal corporations to govern themselves in their purely local affairs will not be held to be abridged except upon clear expression of the legislative will. ‘The equal protection clause may be validly invoked by a mu- nicipal corporation to complain against a lesser grant of jurisdiction and functions in its charter as against a larger grant of powers and autonomy by Congress in the charters of other municipal corpora- tions, (Bnriquez v, Secretary of Finance, 27 SCRA 1261.) 18. Local Governments, History. ‘The cities, municipalities, and provinces of today evolved from the barangays of pre-Spanish times, the pueblos and eabildos of the Spanish colonial days and the townships of the American regime. A, The Barangays. The pre-Spanish barangays were the first political and social organizations of the Philippines. A barangay was a settlement of some 30 to 100 families and a governmental unit in itself. Each was independent from all the others. ‘There was no central government whatsoever, although confederations of barangays were formed for mutual protection and support. ‘The chief of the barangay was called a datu “an absolute ruler in whose hands were the legislative, executive, and judicial powers of the government.” Laws were unwritten, and derived largely from customs and traditions. They were formulated by the datu who also acted as judge in cases of disobedience to the law. The Chief exacted tribute of harvest and labor from his subjects. B. Spanish Conquest and Centralism. ‘The lack of unity in the warring barangays made conquest easier for the Spaniards Gradually, the datus were shorn of their powers. The barangays disintegrated as independent city states and ‘were transformed into “somewhat artificial subdivisions of the greater, more complex form of government that the colonists super- imposed.” The Spaniards established the encomienda system as the nucleus of local government in the country. An encomienda was prac- tically a “grant of Indians” to favored Spaniards. The grantee, called encomiendero, had the task of collecting the tribute from the natives. ‘The Spaniards organized pueblos (municipalities), cabildos (cit- ies), and provincias (provinces). The provinces were established “for20 ‘THE LOCAL GOVERNMENT CODE OF 1991 “Annotated the convenience of administration and constituted the immediate agencies through which the central government could extend its ‘authority on numerous villages.” In place of the barangay, barrios were established, and the datus were made into cabezas de barangay whose only remaining function was the collection of taxes for the Spanish government. ‘The eabildo was usually organized in fairly urban areas like Manila. It was a municipal corporation endowed with law-making powers and had two ordinary alcaldes, eight regidores (alderman), a registrar, and a constable. ‘The Gobernadorcillo headed the pueblo and exercised execu- tive and judicial functions in the locality. He was assisted by an ‘Assessor and a Notary. ‘The province constituted the larger local unit. Tt was headed by an Alcalde Mayor who was assisted by a chief of police and one Tieutenant each for poliee, for the field, and for the large cattle. Election of local officials was limited to a few by a few. The Gobernadorcillo was elected by an electoral college while the ordi- nary alealdes wore elected by house-holders. By virtues of the Laws of the Indies and royal decrees passed from time to time, taxes were collected by the local governments for ‘the national government. For their own revenue, they relied on re- sources coming from fisheries, urban property, rent or communal property, billiard halls, theaters, cockfighting, and weights and measures. Spanish colonization, therefore, effected strong centralism and tolled the death knell of indigenous political institutions. The sys- tem of local governments in the Philippines was partly responsible for the many uprisings against the Spaniards. The local institutions degenerated to “a point of decadence and confusion that local offi- ials who (had) not been corrupted (had) become atrophied or un- less.” ‘The need for reforms was recognized too late by the Spaniards. It took three ministers of the colonies to map out a plan of local government through the Maura Law of 1893 authored by Antonio Maura y Montaner who was then Minister of the Colonies. The law atiempted to “confer upon the towns and provinees of Luzon and Mindanao a greater measure of autonomy.” INTRODUCTION at ‘The Maura Law introduced many reforms affecting the pueblos. Each town “contributing one thousand cedula each year to the state was to have a Municipal Council of five members consisting of capitan municipal (municipal captain), teniente mayor (chief lieu- tenant), and three lieutenants. Munieipal officials were now elected by plurality through secret ballot, and relative autonomy granted to the pueblos in matters of local taxation. The Municipal Tribunal, aside from preparing the municipal budget, determined the amount. of real property tax. In addition to this source of income, the pueblos depended on fees from markets, tolls, and slaughterhouses. ‘The province remained the largest administrative division and acted as the intermediary between the national government and its subordinate local units. It was headed by a Governor. The Provin- Board was composed of a Prosecuting Attorney, an Administra- tor of Finance, Vicars of the Province, the parish priest of the capi- tal, and four prominent residents of the capital elected by the mu- nicipal eaptains in the province. Even after the enactment of the Maura Law, the eentralism characteristic of the Spanish regime continued. Smaller political subdivisions were wholly subordinated to the national government. Cabeza de barangay became merely collectors of taxes who were each rewarded fifty percont of the amount collected. The provineial gov- emnor had disciplinary power over members of the municipal coun- ‘This contralism was characterized in this wise: ‘The most striking character is undoubtedly the subordi- nation and even subserviency of the Municipal ‘Tribunal to other authorities ... The Maura Law itself closely hedges within a narrow circle of the activities of the Munieipal Tribu- nal and subjects this body to constant and unnecessary inspec- tion and supervision by the provineial couneil. Indeed, the pro- vineial council was not charged with the direct administration of the affairs of the province, but solely with the inspection and supervision of the bodies which administered the affairs of the pueblos ... (also) the captain, though a member and presiding officer of the tribunal, might ignore its decisions, being in truth a political representative of the general government, and, as it were, an arbitrary governor of the province. ©. Local Governments During the First Philippine Republic. ‘The importance of local governments was recognized by Gen. Emilio Aguinaldo and Apolinario Mabini in their program of gov-22 ‘THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated ‘ernment for the first Philippine Republic. Filipino leaders knew that “if a strong enduring Filipino nation was to be established, it must, be able to maintain itself in all emergencies, and the whole politi- cal fabric must be well founded on an efficient system of local gov- ernments.” In his Proclamation of June 18, 1898, General Aguinaldo stated “the urgent necessity of establishing in each town a solid, robust or- ganization, the strongest bulwark of public security and that sole means of serving the union and discipline which are indispensable for the establishment of the Republic, that is, government. of the people, for the people, and warding off the internal conflict which might arise.” Mabini saw that: it was imperative for every government to interpret the people's will, and recognized the need of surrounding General Aguinaldo with the best minds from the towns “to the end that, the truo necessities of exch town being known to them, meas- ‘ures may be adopted to meet the necessities and apply the remedies in accordance with the desire of all.” ‘After the establishment of the dictatorial government, the de- cree of June 18 and 20, 1898, organized the municipalities. Special ‘commissioners were appointed to supervise the municipalities. Each town had a President who was assisted by a delegate for police and internal order, another for justice and civil registyy, and a third for taxes and property. These officers were elected in a meeting by in- habitants of the municipality known for “high character, social po- sition and honorable conduct.” ‘The town President, with the headman of each village within the town and the delegates constituted the Popular Assembly which had the task of enforeing the law. Heads of all the towns in the prov- ince elected the chief and three councilors of the provinee. The of: ficers of the province supervised the enforcement of instruction from the central government. Municipal and previncial officials were given jurisdiction over criminal and civil case. Decisions of municipal of- ficials were appealable to the Provincial Board. ‘The Malolos Constitution provided a separate article on local government. (Title XI, Article 82.) Local autonomy was made explicit in the introductory portion which stipulated that. “the organization and powers of the provincial and municipal assemblies shall be gov- cerned by their respective laws.” Article 82 provided for “popular and direct election being the basis of the organization of said corpora- INTRODUCTION, 2 tions,” “publicity of local sessions and budgets, accounts and ordi- nances,” and “determination of their powers in matter of taxes, in order that the provincial and municipal taxation may never be an- tagonistic to the system of local taxation.” Despite the autonomy given to the Jocal government. units, however, central intervention in local affairs was retained. This as- sured “the intervention of the government and in a proper case by the national assembly, in order to prevent the provincial and mu- nicipal corporations from exceeding their powers, to the prejudice of general and individual interests.” The government of the First Philippine Republic encouraged greater participation by the local units but the intervention of the central government was deemed necessary because the existing conditions called for national unity. Tt was pointed out that “the idea itself was just an instance of the desire for a strong government; a government which needed great powers to give the people benefits they never had before.” D. Local Governments During the American Regime. ‘The Americans contribute very little, if at all, to the develop- ment of local autonomy. In fact, national-local relationship reverted to the strong centralism that characterized the Spanish colonial regime. ‘The first local government established during the American regime was the municipality. General Order No. 43, series 1899, provided for a municipal council in each town composed of a Prosi- dent and the headmen of the barrios within the town. ‘The council was charged with the maintenance of peace and order, the regula- tion of municipal affairs, and the adoption of ordinances for the ‘municipality. ‘Afier the establishment of the towns, the Schurman Commis- sion was instructed to prepare a simple scheme of municipal gov- ernment, *so similar to the old system as to be readily comprehen sible to the natives, but giving them liberties which they had never enjoyed before.” ‘The Commission's blueprint for town organization provided for a President to be elected viva voce by residents of the town with the approval of the Commanding Officer. His duty eon- sisted in the establishment of a police force, collection of taxes, en- forcement, of regulations on market and sanitation, establishment of schools, and the provision for lighting facilities. He was assisted by the village headmen.ey ‘THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated ‘The Council was given the funetion of the conducting pretimi- nary investigation in criminal cases and the determination of prop- ‘erty cases not exceeding $500. Military authorities exercised abso- Tute control over the local officials. Even Couneil ordinances were subject to approval by the American Commanding Officer in the town, who was responsible to the central government. ‘The establishment of civil government affected the pattern of government of local units. President McKinley's “Instruction to the Philippine Commission” of April 7, 1990 made specific mention of local autonomy: ‘The establishment of municipal government in which the natives of the islands, both in the cities and the rural commu- nities, shall be afforded the opportunity to manage their own local affairs to the fullest extent of which they are capable, and subject to the least degree of supervision and control . ... In the distribution of power among the governments organized by the commission, the presumption is always to be in favor of the smaller subdivision, so that all the powers which can properly be exercised by the municipal government shall be vested in that government... so that... . that central government of the Island . . . shall have no direct. administration except in matters of a purely general concern and shall have only such supervision and control over the local government as may be necessary to serve and enforee faithful and efficient. adminis- tration by local officials Pursuant to the President's Instruction, the Philippine Com- mission enacted Act No. 82 providing for the organization and gov- ernment of municipalities and Act No. 83, for the organization of provinces. ‘Under Act No. 82, each town was headed by a President as chief executive and presiding officer of the munieipal council. The coun- cil was composed of one representative from each of the barrios. It promulgated ordinances and was charged with the maintenance of peace and order in the locality. The other officials of the town in- cluded a Secretary, a Treasurer, and a Chief of Police. The town re- lied on revenue from real property taxes, rents, profits, tools, mar- kets, slaughterhouses, and tuition fees for intermediate schools. Provincial governments established by Act No. 83 had a Gov- ernor, a ‘Treasurer and a Supervisor (later replaced by a Division INTRODUCTION 25 Superintendent of Schools). Until 1907, the Governor was elected by the councilors of organized municipalities within the provinces. Subsequently, he was elected by popular vote. Special laws enacted by the Philippine Commission governed the eapital city of Manila and the summer capital of Baguio in the Mountain Province. While President McKinley's “Instructions” recognized local au- tonomy, the various laws passed and the rules for their implemen- tation only served to diminish local autonomy. Control over local affairs were exercised by the national government through its many agencies. The province, for instance, acted as a mere administrative agent of the national govern meet. “In practice,” commented Joseph Hayden, “it turned out that the most important work of the provin- cial government was the supervision of the governments of munici- palities,” through visitation, investigation, and supervision by pro- vineial officials. ‘The Provincial Board was also given a considerable amount of control over the municipal councils, whose orders and ordinances it serutinized and might disallow on grounds of illegality. ‘The central government directly supervised local governments through the Executive Bureau, whose task was to see “that provin- cial officials did not exceed or abuse their legal authority.” Likewise, it exercised control over local finance by controlling the budgets of provinces and regulating loans made from the treasury of the cen- tral government to the localities. This arrangement is a sharp con- trast with the autonomy enjoyed by the states in the American un- ion. It was a virtual carryover of the Spanish system of local gov- ernment in the Philippines. E. The Commonwealth and Centralism. ‘The forms and patterns of local government during the Ameri- in civil administration remained essentially the same during the ‘Commonwealth period. The only notable changes were the transfer of central supervision from the Executive Bureau to the Department, of Interior and the creation of more chartered cities. The relation- ship between the national and local governments became increas- ingly parasitic in the sense that the local units became very depend- cent on the national government.6 ‘THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated President Quezon, the central figure of the government dur- ing this period, even argued against. autonomy in the cities, hinting, that “under the unitary system of government which exists in the Philippines, the national chief executive does and should control all local offices.” Under the Commonwealth, “central supervision . not only rapidly increased, but, personally exercised by the chief ex- ecutive to a degree previously unheard of.” F, Local Governments under the Republic. The structure of local governments as established in Act Nos. 82 and 83 remained essentially the same under the 1935 and 1973 Constitutions. The national government. was supreme and local gov- ernments were merely its political and administrative subdivisions, Most of the formal and real powers were vested and exercised by the national government. Local units, however, possessed a certain degree of autonomy. The basic law on local governments was con- tained in the various provisions of the Revised Administrative Code. This Code has been amended by several laws, notably: Republic Act No. 2259 (making the positions of mayors, vice-mayors, and coun- cilors in chartered cities elective): Republic Act No. 2370, as amended by Republic Act No, 3590 (The Revised Barrio Charter); Republic ‘Act No. 5185 (The Decentralization Act of 1967.). Cities have sepa- rate charters for their own governance. G. Local Governments at present. On May 12, 1983, Batas Pambansa Blg. 337, otherwise known ‘as the Local Government Code took effect. On Feb. 2, 1987, the 1987 Constitution was ratified and took effect. On October 10, 1991, The Local Government Code of 1991 (R.A. 7160) was signed into law. ‘This Code ordained an authentic and workable local autonomy through the devolution of certain powers from the national govern- ment to the local governments, In 1995 there were 75 provinces, 1 sub-provinee, 60 cities, 1, municipalities and 40,000 barangays in the country. At present, there are 79 provineos, 113 cities, 1,496 municipali- ties and 41,933 barangays in the country. 19. INTRODUCTION Local Governments, 1987 Constitutional Provisions. Sec. 25, Art. II, 1987 Constitution, provides; “The State shall ensure the autonomy of local governments.” Article X, 1987 Constitution provides: LOCAL GOVERNMENT GENERAL PROVISIONS Section 1. The territorial and political subdi- Visions of the Republic of the Philippines are the provinces, cities, muni jes, and barangays. ‘There shall be autonomous rte in Muslim Min- danae and the Cordilleras as hereinafter provided. See. 2. The territorial and political subdivi- sions shall enjoy local autonomy. Sec. 3. The Congress shall enact a local govern- ‘ment code which shall provide for a more respon- ive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local gov- ernment units their powers, responsibilities, and resources, and provide for the qualifications, elec- tions, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units. Sec. 4. The President of the Philippines shall exereise general supervision over local govern- and municipalities, and cit with respect to component barangays shall ensure that the acts of their component units are withi the scope of their prescribed powers and functions. Sec. 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 a28 ‘THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated guidelines and limitations as the Congress may pro- vide, consistent with the basic policy of local au- tonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments. See. 6. Local government units shalll have a just share, as determined by law, in the national taxes which shall be automatically released to them. Sec. 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 inhabit- ants by way of direct benefits. See. 8. The term of office of elective local offi- cials, except barangay officials, which shall be de- termined by law, shall be three years and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an inter- ruption in the continuity of his service for the full term for which he was elected. See. 9. Legislative bodies of local governments shall have sectoral representation as may be pre- seribed by law. See. 10. No province, city, muntetpality, or barangay may be created, divided, merged, abol- ished, or its boundary substantially altered, except in accordance with a criteria established in the lo- eal government code and subject to approval by a majority of the votes cast in a plebiscite in the po- jeal units directly affected. Sec. 11. The Congress may, by law, create spe- cial 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 exeentives and legislative assemblies. The jurisdiction of the metropolitan authority that will thereby be created shall be limited to basic services requiring coordination. INTRODUCTION Sec. 12. Cities that are highly urbanized, as determined by law, and component cities whose charters prohibit their voters from voting for pro- vincial elective officials, shall be independent of the province. The voters of component cities within a province, whose charters contain no such probil tion, shall not be deprived of their right to vote for elective provincial official Sec. 13. Local government units may group themselves, consolidate or coordinate their efforts, services, and resources for purposes commonly ben- ficial to them in accordance with law. Sec. 14. The President shall provide for re- ional development councils or other similar bod- ies composed of local government officials, regional heads of departments and other government offices, and representatives from non-governmental organi- tions within the regions for purposes of admin- istrative decentralization to strengthen the au- tonomy of the units therein and to accelerate the ‘economic and social growth and development of the units in the region. AUTONOMOUS REGIONS See, 15. There shall be ereated autonomous regions in Muslim Mindanao and in (he Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and so- within the framework of this Constitu national sovereignty as well as territorial integrity of the Republic of the Philippines. Sec. 16. The President shall exereise general supervision over autonomous regions to ensure that laws are faithfully executed. Sec. 17. All powers, functions, and responsibili- not granted by this Constitution or by law to the autonomous regions shall be vested in the Na- tional Government. 29THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated See. 18. The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative com- mission composed of representatives appointed by the President from a list of nominees from mull sectoral bodies. The organic act shall define the basie structure of government for the region con- sisting of the executive department and legislative assembly, both of which shalll be elective and rep- resentative of the constituent political units. The organic acts shall likewise provide for specific courts with personal, family, and property law ju- risdiction 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 in a plebiscite called for the purpose, provided that only provinces, cit- ies, and geographic areas voting favorably in such plebiscite shall be included in the autonomous re- gion. See. 19. The first Congress elected under this Constitution shall, within eighteen months from the time of organization of both Houses, pass the or- ganic acts for the autonomous regions in Muslim Mindanao and the Cordilleras. See. 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous re- gions shall provide for legislative powers over: (1) Administrative organization; (2) Creation of sources of revenues; (8) Ancestral domain and natural resources; (4) Personal, family, and property relations; (5) Regional urban and rural planning develop- ment. (6) Economie, social, and tourism develop: ment; INTRODUCTION, a1 (7) Educational policies; (8) Preservation and development of the cul- tural heritage; and (9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region. See. 21. The preservation of peace and order ithin the regions shall be the responsibility of the local police agencies which shall be organized, maintained, supervised, and utilized in accordance with applicable laws. ‘The defense and security of the regions shall be the responsibility of the Na- tional Government. Salient Features of the Local Government, Code of 1991! ‘The Local Government Code is the key to the development of the countryside, ‘The Code will make possible the development of the far flung areas of the country without the necessity of appropriating additional funds, This it will make possible by allocating a substantial portion of the public money to and sharing a broad range of the powers now held by the national government with the local government units. ‘The Code mandates the devolution of certain national govern~ ment powers to and the increase of (a) the share of national taxes for the local government units, namely: provinces, cities, municipali- ties and barangays, and (b) their power to tax. Powers devolved Certain powers that used to be exercised hy the national gov- ‘ernment, to wit: (1) public works; (2) health; (3) agriculture; (4) s0- cial welfare; (5) certain tourism functions; and (6) construction of ‘school buildings and facilities are now devolved to local government, units. “Phin was published in a national paper throogh the office of Senator Aquilino Pimentel, dr, the principal author of the law.SSVUa===& ~=& @”””—§ Pa ‘THE. LOCAL GOVERNMENT CODE OF 1991 ‘Annotated Public works \ In public works, responsibility will now be fixed. For example, purely barangay roads will be the responsibility of the barangay; mu- Picipal roads will be that of the municipality and provincial roads, that of the provinee. Roads that lead from one barangay to another will be the re- sponsibility of the municipality. Roads that lead from one munici- pality to another will be the responsibility of the provinee, and the Meads that lead from one province to another will be the responsi- bility of the national government. Pending clarification by the Oversight Committee which will come up with the guidelines to ensure the faithful implementation of the provisions of the Code, national roads in island provinces may remain the responsibility of the national government. Health Under the Code, barangays now have power of establishment and maintenance of barangay health and day care centers. Municipalities now have power over the delivery of primary health eare, maternal and child care, communicable and non-com- municable diseases control services Provinces may establish and run hospitals and other tertiary health services. Cities may exercise the powers vested in municipalities and provinces on the matter of health serviees. Now, the purchase of medicines, medieal equipment and sup- plies is also lodged with local government units. Agriculture “Agricultural support services such as distribution of planting materials and operation of collecting and buying stations for farm produce will now be placed under the authority of barangays. “Municipalities will now take charge of agriculture extension and research services and delivery of services and facilities rolated tafisheries and agriculture and the enforcement of fishery laws and DENR laws relative to forestry conservation projects. Provinces will do agricultural extension and on-site research and on-site facilities. The organization of dairy farms, livestock INTRODUCTION 33 smarkets, and farmers and fishermen cooperatives is placed under the jurisdiction of the provinces. ‘The cities will exercise the powers over agriculture and fish- ing that provinces and municipalities have. Social Welfare Municipalities will now have powers over the welfare of chil dren und youth, family and community, women, elderly and dist: Hed persons, vagrants, beggars, strect children, scavengers 11° a recente, victims of drog abuse, nutrition and family plan- hing services and other pro-poor services. Provinces will now handle rebel returnees and evacuees Pro” rams, relief operations and population development services Cities will now exercise the powers of the provinces and the municipalities over the social welfare. ‘School buildings ‘The power to build schools is now lodged with Tocal government, units concerned. Tax share inereased ‘The share of taxes of the local government units has been in: creased feom the present, 11% to 40% under the following sched renee pon the effectivity of the Code on January 1, 1992; (2) 35% vn January 1, 1993; and (3) 40% on January 1, 1994. ‘Tacx power increased ‘Aside from being granted a huge increase in their share of the taxea if tne nation, the Toeal government units are invested by the (exes Government Code with increased powers to tax, thereby em Veering them with a wider capacity to raise their ewn revenues Within their respective territorial jurisdictions. Provincial taxes ‘As examples, the provinees may now impose a tax om (a) trans, fos of zeal properly’ (b) businesses of printing and publication [not ter sopapersh () franchises; () sand and gravel () professions: oo ant enterprises; and (g) delivery vans ofall kinds of prod- ucts.a ‘THE LOCAL GOVERNMENT CODE OF 1991 ‘Annotated Municipal taxes Municipalities may impose a tax on (a) manufacturers, proc essors, brewers, distillers, rectifiers, and compounders of liquors and distilled spirits; (b) wholesalers, distributors or dealers of any arti- cle of commeree; (©) exporters, manufacturers, millers, producer: wholesalers, distributors, dealers or retailers of essential commodi- ties; (d) retailers; (e) banks and other financial institutions; and (f) peddlers of merchandise. Municipalities may also levy fees for sealing and licensing weights and measures and impose fishery fees and for the use of ‘municipal waters. City taxes Cities may levy taxes, fees and charges which provinces and ‘municipalities may impose. Like municipalities, the cities may also impose a community tax, which is the new name for the residence tax, which has been deleted from our statute books. Barangay sales taxes City barangays may tax stores and retails whose gross sales do not exceed P50,000 per annum. Municipal barangays may tax ‘those whose sales do not exceed P30,000 per annum, Barangay fees Barangays may also impose fees for: (a) services rendered; (b) barangay clearances; (c) commercial breeding of fighting cocks; (d) cockfights; (e) cockpits; (1) places of recreation whieh charge admis- sion fees; (f) billboards; and (g) neon signs. Common revenue powers Provinces, cities and municipalities have common revenue rais- ing powers. They may impose (a) fees for services rendered by them; and (b) toll fees. Other sourees of revenue In addition, the local government units are entitled to definite shares in (a) the proceeds from development and utilization of mines, INTRODUCTION 35 forests, and marine resources up to 40% of the gross collections therefrom by the national government; (b) the proceeds of govern- ment owned or controlled corporations engaged in the utilization and development of the national wealth up to 1% of the gross sales or 40% of the gross collections made by the national government therefrom, whichever is higher. Distribution of shares from natural resources ‘The distribution of shares of the local government derived from the development and use of natural resources located in a province are as follows: (1) 20% to the province; (2) 45% to the component cily or municipality where located; and (3) 35% to the barangay where located If the natural resources is located in a highly urbanized city, the distribution of shares are as follows: (1) 65% to the city; and (2) 35% to the barangay. Real estate levy ‘A real estate levy may be imposed by the province or city as follows: (1) by the province, not exceeding 1% of the assessed value of the property; and (2) by the city, not exceeding 2% of the assessed value of the property. Special education fund ‘A special education fand may also be assessed in provinces, cities or Metropolitan Manila municipalities up to a maximum of 1% of the assessed value of a real property. Idle land levy Idle lands in provinces, cities or municipalities in Metro Ma- nila may be additionally taxed at not exceeding 5% of their assessed value. ‘Special levy Lands benefited by public works projects or improvements in provinces, cities and municipalities may be levied a special tax of not exceeding 60% of the actual cost of the project.6 /OCAL GOVERNMENT CODE OF 1991 ‘Annotated Billions for Development With 30% of national taxes going to local governments in 1992 (effectivity date: January 1), 35% by 1993 and 40% by 1994 we are talking here of billions of pesos for the development of the country- side. For 1992, the share of local government units will be P24.441 billion, for 1993, P36.414 billion and for 1994, P46.270 billion. Limits on Salary spending ‘The Code limits expenses for salaries to only 45% for highly urbanized cities and for Ist to Srd class provinces, cities and mu- nicipalities; 4th to Gth class cities and the barangays may go up to 55% of their budgets for salaries. The rest of the money must be spent for development purposes. Expected Results: Jobs and Peace ‘This means that there will be more money available for roads and bridges, water, light, medical care, school needs and other ba- ‘sie requirements for modern living for the people in the countryside. Also with the infrastructure in place, industries and business will be enticed to go to the countryside. Manila will be decongested and work will be available to the people in places far from the Na- tional Capital Region. ‘Hopefully with development there will be peace. LGU percentage shares ‘The amounts will be apportioned to the provinces, 23%; cities, 289%; municipalities, 34%; and the barangays, 20%. REPUBLIC ACT NO. 7160 AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991 Re it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled: BOOK I GENERAL PROVISIONS Title One BASIC PRINCIPLES CHAPTER 1. — The Code: Policy and Application SECTION 1. Title. — This Act shall be known and cited as the “Local Government Code of 1991.” A. Comments Originally, the laws on local governments were principally found in the Revised Administrative Code. In 1959, the Local Autonomy Act (R.A. 2264) was enacted. This was an act amending the laws governing local governments by in- creasing their autonomy and reorganizing the provincial govern- ments. In 1963, The Barrio Charter (R.A. 3590) was passed, which pro- vided for the organization of Barrios and provided for the powers, rights and duties of the barrio council. R.A. 5185 otherwise known as the Decentralization Act, an Act granting further autonomous powers to local governments, was passed in 1967.