What is a public corporation?
Average annual income for the last
It is one created by the State either by general or special act for purposes of
administration of local government or rendering service in the public interest.
Distinguish public corporation from private corporation.
What are the classes of corporations?
1. Quasi‐public corporations – public corporations created as
agencies of the State for narrow and limited purposes without the
powers and liabilities of self‐governing corporations.
2. Municipal corporations – body politic and corporate constituted
by the incorporation of inhabitants for purposes of local
government. 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. (Dillon, Municipal Corporations,
Vol.2, pp. 58‐59.)
What is a Government Owned and Controlled Corporation (GOCC)?
A: any agency organized as a stock or non‐stock corporation vested with
functions relating to public needs whether governmental or proprietary in
nature, and owned by the government directly or indirectly through its
instrumentalities either wholly, or where applicable as in the case of stock
corporations to the extent of at least 51% of its capital stock. (Section 2 (13)
of Executive Order No. 292 (Administrative Code of 1987)
What are the essential elements of a municipal corporation?
1. Legal creation
2. Corporate name
3. Inhabitants constituting the population who are vested with political and
corporate powers
4. Territory (Rodriguez, p.4, LGC 5th Edition)
What is the nature and function of a municipal corporation?
A: It is body politic and corporate constituted by the incorporation of
inhabitants for purposes of local government. 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. (Dillon, Mun. Corp., Vol.2, pp. 58‐59.)
What are the essential requisites of a de facto corporation?
A: VACA
1. Valid law authorizing incorporation
2. Attempt in good faith to organize under it
3. Colorable compliance with law
4. Assumption of corporate powers (Rodriguez, p. 18, LGC 5th Edition)
Who has the authority to create municipal corporations? How is a
public corporation created?
A: A Local Government Unit may be created, divided, merged, abolished or
its boundaries substantially altered either by:
1. Law enacted by Congress in case of province, city, municipality or any
other political subdivision;
2. By an ordinance passed by the Sangguniang Panlalawigan or
Sangguniang Panlungsod concerned in the case of a barangay located within
its territorial jurisdiction, subject to such limitations and requirements
prescribed in the LGC. (Sec. 6, R.A. 7160)
What are the requisites or limitations imposed on the creation or
conversion of municipal corporations?
1. Plebiscite requirement – must be approved by majority of the votes cast in
a plebiscite called for such purpose in the political unit or units directly
affected.
2. Income requirement – must be sufficient 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.
consecutive year should be at least:
a. Province – P 20M
b. Highly Urbanized City – P 50M
c. City – P 20M (100M RA. 9009 amending Sec 450 of LGC)
d. Municipality – P 2.5M
3. Population requirement – to be determined as the total number of
inhabitants within the territorial jurisdiction of the local government unit
concerned. The required minimum population shall be:
a. Barangay – 2K
But 5K in:
i. Metro Manila
ii. Highly urbanized cities
b. Municipality – 25K
c. City – 150K
d. Province – 250K
4. Land requirement – must be contiguous, unless it comprises two or more
islands or is separated by a local government unit; properly identified by
metes and bounds; and sufficient to provide for such basic services and
facilities. Area requirements are:
a. Municipality – 50 sq. km (Sec.442 R.A. 7160)
b. City – 100 sq. km (Sec.450 R.A. 7160)
c. Province – 2,000 sq.km (Sec.461 R.A. 7160)
Are the Internal Revenue Allotments (IRAs) considered income and,
therefore, to be included in the computation of the average annual
income of a municipality for purposes of its conversion into an
independent component city?
Yes. The IRAs are items of income because they form part of the gross
accretion of the funds of the LGU. 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.
(Alvarez v. Guingona, G.R. No. 118303, Jan. 31, 1996)
League of Prov. vs. DENR
The Constitutional guarantee of local autonomy in the Article X, Sec. 2 of the
Constitution refers to the administrative autonomy of the LGUs or the
decentralization of government authority.
Hence, the enforcement of the small-scale mining law by the provincial
government is subject to the supervision, control and review of the DENR.
The LGC did not fully devolve to the provincial government the enforcement
of the small-scale mining law.
DENR Secretary shall exercise direct supervision and control over the
People’s Small-Scale Mining Program, and that the Provincial/City Mining
Regulatory Board’s (PMRB) powers and functions shall be subject to review
by the DENR Secretary.
Limbona vs. Mangelin
There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden
the base of government power and in the process to make local governments
"more responsive and accountable". At the same time, it relieves the central
government of the burden of managing local affairs and enables it to
concentrate on national concerns. The President exercises "general
supervision" over them, but only to "ensure that local affairs are administered
according to law." He has no control over their acts in the sense that he can
substitute their judgments with his own.
Decentralization of power, on the other hand, involves an abdication of
political power in the favor of local governments units declared to be
autonomous. In that case, the autonomous government is free to chart its
own destiny and shape its future with minimum intervention from central
authorities.
City of General Santos vs. COA
Section 5, paragraph (c) also provides that
"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."
Local autonomy allows an interpretation of Sections 76 and 16 as granting
petitioner city the authority to create its organization development program.
Judge Dadole vs. COA
LBC 55 is null and void.
Although our Constitution guarantees autonomy to local government units,
the exercise of local autonomy remains subject to the power of control by
Congress and the power of supervision by the President. The supervisory
power of the President has been interpreted to exclude the power of control.
The Chief Executive wielded no more authority than that of checking whether
local governments or their officials were performing their duties as provided
by the fundamental law and by statutes. He cannot interfere with local
governments, so long as they act within the scope of their authority.
Supervisory power, when contrasted with control, is the power of mere
oversight over an inferior body; it does not include any restraining authority
over such body.
LBC 55 goes beyond the law it seeks to implement. Section 458, par.
(a)(1)(xi), of RA 7160, the law that supposedly serves as the legal basis of
LBC 55, allows the grant of additional allowances to judges “when the
finances of the city government allow.”
Liga ng mga Barangay vs. Judge Paredes
[As the basic political unit, the barangay serves as the primary planning and
implementing unit of government policies, plans, programs, projects and
activities in the community, and as a forum wherein the collective views of
the people may be expressed, crystallized and considered, and where
disputes may be amicably settled.
The Liga ng mga Barangay is the organization of all barangays, the primary
purpose of which is the determination of the representation of the Liga in the
sanggunians, and the ventilation, articulation, and crystallization of issues
affecting barangay government administration and securing solutions
thereto, through proper and legal means.
President’s power of the general supervision, as exercised by the DILG
Secretary as his alter ego, extends to the Liga ng mga Barangay.
When judge Paredes appointed DILG as interim caretaker to manage and
administer the affairs of the Liga, she effectively removed the management
from the National Liga Board and vested control of the Liga on the DILG.
DILG’s prayer for appointment as interim caretaker of the Liga “to manage
and administer the affairs of the Liga, until such time that the new set of
National Liga officers shall have been duly elected and assumed office”
reveals that what the DILG wanted was to take control over the Liga.
As the entity exercising supervision over the Liga ng mga Barangay, the
DILG’s authority over the Liga is limited to seeing to it that the rules are
followed, but it cannot lay down such rules itself, nor does it have the
discretion to modify or replace them.
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Jose Miranda vs. Alexander Aguirre
The power to create, divide, merge, abolish or substantially alter boundaries
of local government units belongs to Congress
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 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.
2 conditions of the constitution
1) the creation, division, merger, abolition or substantial alteration of
boundary of a local government unit must meet the criteria fixed by the LGC
on income, population and land area
2) the law must be approved by the people "by a majority of the votes cast in
a plebiscite in the political units directly affected."
Tan vs. COMELEC
Article XI, Section 3 of the Constitution:
“SEC. 3. No province, city, municipality or barrio may be created, divided,
merged, abolished, or its boundary substantially altered, except in
accordance with the criteria established in the local government code, and
subject to the approval by a majority of the votes in a plebiscite in the unit or
units affected.”
 the Cityhood Laws were enacted. The exemption clauses found in the
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.
Logically, those to be included in such plebiscite would be the people living
in the area of the proposed new province and those living in the parent
province.
Gov. Aurelio Umali vs. COMELEC
"Political units directly affected" defined In identifying the LGU or LGUs that
should be allowed to take part in the plebiscite, what should primarily be
determined is whether or not the unit or units that desire to participate
will be "directly affected" by the change.
Thus, "political units directly affected" necessarily encompasses not only
Cabanatuan City but the entire province of Nueva Ecija. Hence, all the
registered voters in the province are qualified to cast their votes in
resolving the proposed conversion of Cabanatuan City.
The plebiscite requirement under the constitutional provision should
equally apply to conversions as well. While conversion to an HUC is not
explicitly provided in Sec. 10, Art. X of the Constitution we nevertheless
observe that the conversion of a component city into an HUC is
substantial alteration of boundaries.
Griño vs. COMELEC
It is now moot and academic.
The law however is clear that in case of a negative vote, the elected officials
of the sub-province only shall be appointed by the President. The law did not
provide that the President shall also appoint provincial officials of the sub-
province because, by a negative vote, the people of the sub-province of
Guimaras shall continue to be represented by the provincial officials of the
province of Iloilo elected at large by registered voters of Iloilo province
including the sub-province of Guimaras.ch
Lopez vs. COMELEC
Metro Manila authority is not a local government unit.
In PD 824, reference was made to "the referendum held on February 27,
1975 wherein the residents of the Greater Manila Area authorized the
President to restructure the local governments into an integrated unit of the
manager or commission form of government.”
At that time there was no interim Batasang Pambansa. It was the President
who was entrusted with such responsibility. The legality of the law making
authority by the President during the period of Martial Law was already
established in Aquino vs Comelec.
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Alvarez v. Guingona
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.[11] They thus constitute income
which the local government can invariably rely upon as the source of much
needed funds.
Aquino III v. COMELEC
Section 5(3) of Art VI clearly distinguished a province from a city. Meaning a
province is automatically entitled to one representative while a city has to
meet the 250,000 population requirement first.
Population is not the only factor but is just one of several other factors in the
composition of the additional district (i.e. Local Gov’t Code’s requisite for
creating a province: not less than Php 20,000,000 annual income, plus at
least 2,000 sq. m. OR at least 250,000 inhabitants).
League of Cities of the Philippines v. COMELEC
Yes, The 16 cities covered by the Cityhood Laws not only had conversion
bills pending during the 11th Congress, but have also complied with the
requirements of the LGC prescribed prior to its amendment by R.A. No. 9009.
Congress undeniably gave these cities all the considerations that justice and
fair play demanded. Hence, this Court should do no less by stamping its
imprimatur to the clear and unmistakable legislative intent and by duly
recognizing the certain collective wisdom of Congress.
Notwithstanding that both the 11th and 12th Congress failed to act upon the
pending cityhood bills, both the letter and intent of Section 450 of the LGC,
as amended by R.A. No. 9009, were carried on until the 13th Congress, when
individual Cityhood Laws are the express articulation of that intent to exempt
respondent municipalities from the coverage of R.A. No. 9009.
Note: On November 18, 2008, the SC ruled the cityhood laws
unconstitutional. On December 21, 2009, it reversed the ruling. Then again,
on August 24, 2010, it decided to uphold the original ruling. And finally, last
April 12, 2011 it upheld the constitutionality of the creation of the 16 new
cities.
Rodolfo Navarro v. ES Eduardo Ermita
Yes, the Congress, recognizing the capacity and viability of Dinagat to
become a full-fledged province, enacted R.A. No. 9355, following the
exemption from the land area requirement, which, with respect to the creation
of provinces, can only be found as an express provision in the LGC-IRR.
Under Section 461 of R.A. No. 7610, otherwise known as The Local
Government Code, a province may be created if it has an average annual
income of not less than ₱20 million based on 1991 constant prices as certified
by the Department of Finance, and a population of not less than 250,000
inhabitants as certified by the NSO, or a contiguous territory of at least 2,000
square kilometers as certified by the Lands Management Bureau. The
territory need not be contiguous if it comprises two or more islands or is
separated by a chartered city or cities, which do not contribute to the income
of the province.
Malabang v. Benito
Municipality of Balabagan is not a de facto corporation. Its creation is void.
The color of authority requisite to the organization of a de facto municipal
corporation may be:
a) A valid law enacted by the legislature.
b) An unconstitutional law, valid on its face, which has either:
(1) been upheld for a time by the courts, or
(2) not yet been declared void; provided that a warrant for its
creation can be found in some other valid law or in the recognition
of its potential existence by the general laws or constitution of the
state.
Emmanuel Pelaez v. Auditor General
The alleged power of the President to create municipal corporations would
necessarily connote the exercise by him of an authority even greater than
that of control which he has over the executive departments, bureaus or
offices. In other words, Section 68 of the Revised Administrative Code does
not merely fail to comply with the constitutional mandate.
Section 10 (1) of Article VII of our fundamental law ordains:
The President shall have control of all the executive departments, bureaus,
or offices, exercise general supervision over all local governments as may be
provided by law, and take care that the laws be faithfully executed.
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Magtajas v. Pryce
The ordinances enacted are invalid. Ordinances should not contravene a
statute. Municipal governments are merely agents of the National
Government. Local Councils exercise only delegated powers conferred by
Congress. The delegate cannot be superior to the principal powers higher
than those of the latter. PD 1869 authorized casino gambling. As a statute, it
cannot be amended/nullified by a mere ordinance.
The tests of a valid ordinance are well established. A long line of decisions
has held that to be valid, an ordinance must conform to the following
substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
Parayno v. Jovellano
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 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.
Respondent Municipality of Calasiao is hereby directed to cease and desist
from enforcing Resolution No. 50 against petitioner insofar as it seeks to
close down or transfer her gasoline station to another location.
Emilio Gancayco v. City Govt of QC
Sangguniang Bayan cannot declare a particular thing as a nuisance per se
and order its condemnation. It does not have the power to find, as a fact, that
a particular thing is a nuisance when such thing is not a nuisance per se; nor
can it authorize the extrajudicial condemnation and destruction of that as a
nuisance which in its nature, situation or use is not such. Those things must
be determined and resolved in the ordinary courts of law.
Tano v. Socrates
The enacted resolution and ordinance of the LGU were not violative of their
preferential rights. The court recognized these laws as a valid exercise of the
police power of the LGUs to protect public interests.
The general welfare provisions in the Local Government Code of 1991 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. Power is given to the LGUs to enact fishery laws in
its municipal waters which necessarily includes the enactment of ordinances
in order to effectively carry out the enforcement of fishery laws in their local
community
Lim v. Pacquing
The Congress did not delegate to the City of Manila the power “to franchise”
wagers or betting, including the jai-alai, but retained for itself such power “to
franchise”. What Congress delegated to the City of Manila in R.A. No. 409,
with respect to wagers or betting, was the power to “license, permit or
regulate” which therefore means that a license or permit issued by the City
of Manila to operate a wager or betting activity, such as the jai-alai where
bets are accepted, would not amount to something meaningful UNLESS the
holder of the permit or license was also FRANCHISED by the national
government to so operate. Since ADC has no franchise from Congress to
operate the jai-alai, it may not so operate even if it has license or permit from
the City Mayor to operate the jai-alai in the City of Manila.
Olivarez v. Sandiganbayan
Olivarez, as a municipal mayor, is expressly authorized and has the power
to issue permits and licenses for the holding of activities for any charitable or
welfare purpose. Hence, he cannot really feign total lack of authority to act
on the letter-application of BCCI.
Laguna Lake Devt Authority v. CA
LLDA has jurisdiction over such matters because the charter of the LLDA
prevails over the Local Government Code of 1991.
The said charter constitutes a special law, while the latter is a general law.
The Local Government Code of 1991, has not repealed the provisions of the
charter of the Laguna Lake Development Authority, Republic Act No. 4850,
as amended.
In addition, the charter of the LLDA embodies a valid exercise of police power
for the purpose of protecting and developing the Laguna Lake region, as
opposed to the Local Government Code, which grants powers to
municipalities to issue fishing permits for revenue purposes.
Binay v. Domingo
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 of police power may arise
from express delegation, or be inferred from the mere fact of the creation of
the municipal 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 the things essential to the enjoyment of life and
desirable for the safety of the people.
Public purpose is not unconstitutional merely because it incidentally benefits
a limited number of persons. As correctly pointed out by the Office of the
Solicitor General, "the drift is towards social welfare legislation geared
towards state policies to provide adequate social services, the promotion of
the general welfare social justice (Section 10, Ibid) as well as human dignity
and respect for human rights.
Terrado v. CA
The Ordinance is clearly against the provisions of the law for it granted
exclusive fishery privileges to the private respondent without benefit of public
bidding. Under the Fisheries Act, the Municipality may not delegate to a
private individual as Manager-Administrator to "use or dispose of the fisheries
portion in accordance with the general law on municipal waters" nor to charge
foes for fishing and hunting in the park, much less sell forest products, wild
games and fish from the area.
Neither can the Municipality grant the exclusive privilege of fishing for a
period more than five (5) years, whereas in the instant case, the period
granted the Manager-Administrator was for twenty-five (25) years, renewable
for another twenty-five years.