CHAPTER 1 INTRODUCTION or state which is constituted by law and has a

substantial control of local affairs.”

 Local Government Unit is also defined in Section

The different meanings and concepts of “Local
15 of the Local Government Code of 1991 as
Government”
“body politic and corporate endowed with powers
to be exercised by it in conformity with law.”

 Distribution of powers to Local Government as
limitation to political authority
 The idea of distributing governmental powers is
one of the basic and minimum characteristics of
the concept of the rule of law. Horizontal and
vertical distribution prevents over-centration of
powers on one branch or agency of the
government and is another way of limiting
political authority.
 Local government are subordinate entities, having
no inherent powers and moust look up to the
higher governmental level for delegation of
authority.
 Concept of local gov. Does not only connote
higher authority but also territorial boundary of
governance . The International Union of Local
Authorities refer to it as “GEOGRAPHIC
SUBDIVISIONS” (higher authority + territorial
boundary).
Divisions:

Politically and
 By horizontal distribution of government
powers, the powers of government are terrestrially subdivided
distributed among the three (3) branches of to:
national government, namely: legislative,
executive, and judicial. In the US and the State different provinces or
Philippines, there is complete separation of cities (independent and
powers between the three branches. highly urbanized.

province Municipalities and/or

 By vertical distribution of government powers, component cities
the powers of government are distributed
among two (2) levels of government. At the
Independent and highly barangays
upper level is the national government and the
urbanized cities
lower level are the local governments.

Municipalities and barangays

component cities

 Local governments as political and territorial

subdivisions of the State
-a cluster of brgys. Compose a municipality/city

-a cluster of municipalities/ component cites =

 In MMDA vs Bel-air Village, local government province
is defined as a “political subdivision of a nation
  section 1, article X “provinces, cities,
municipalities and barangays are political and
territorial subdivision of the Republic of the
Phil. The Muslim Mindanao and the Cordilleras
are considered autonomous regions.
 Local governments as municipal corporations
a) Local governments are essentially municipal
corporations. As such, it is a body politic and
corporate constituted by the incorporation of the
inhabitants of a city or town for the purpose of
local government thereof.
b) Municipal corporations are established by law
as agent of the state to assist in the civil
government of the country and chiefly to
regulate and administer the local internal affairs
of the city, town, or district incorporated.
c) As a result of this concept of local governments
as municipal corporations, the “corporation” is
therefore legally considered distinct from its
members.
Local Gov. System
1. HISTORY
I. Pre-Spanish
 Datu- exercised all 3 gov. Function: Executive,
legis. And judiciary often upon
CONSULTATION with the Elders.
◦ Organized the Balangay (barangay) BUT
these Balangays are not yet perceived as
local governments but it has a status of
CITY STATES (independent, not
subordinate of higher gov.)
2. Spanish Period
 Centralization-main tool in colonizing and
controlling the country.
 Encomiendas (parcels of lands)- given to
privileged and favored persons who assisted them
in the pacification of the islands.
 They created: .. in ascending hierarchy
◦ Cabildos -cities
◦ Pueblos- municipalities
◦ Provincias- provinces
◦ Barangays- reduced to Barrios (it became the
lowest rung in ascending power of gov. power)
 Datus demoted to Cabezas de
Barangay(FUNCTION: assist higher gov. Only in
collecting tributes)
3. American Period
 Continued the convenient system of the Spaniards
 Why? Phil. Is so regionalized, centralization is
needed to wholly govern the Phil. For themselves
4. Later peiods
 1935 consti only one sec. In art. 7, sec 10 “pres.
Shall exercise gen. Supervision over local gov. As
provided by law”
 1972 Pres. And congress determined relationship
of national and local gov. Statutes and Eos
 1972 martial law- strengthened Pres. Power over
LGUs despite the provision in the 1973 consti and
creation of dep. Of local gv and community dev..
Marcos created and abolised offices changing the
relationship between the national and local gov.
 AFTER PEOPLE POWER- 1987 consti. Provided
for the special forms of LGU in response to ethnic
peculiarities in Muslim Mindanao and Cordilleras
◦ LGU code of 1991 was passed – devolution of
powers and services.
Structures and System of Philippine Local
Government
 Creation
 Although the LGC of 1991 provides for a
devolution of powers, the Philippines remains a
unitary state. The national government, by law,
creates, merges, or abolishes local government
units, endows them with powers within their
jurisdiction, and determines national-local
relations.
 Tiers of Local Government
 In the Philippines, there are several levels of
local authority. The province is the intermediate
unit, providing supervision to the municipalities
and component cities under it, and performing
services for national government.
 The Unitary System of Government
1) In a Unitary System of Government, municipal
governments are only agents of the national
government. Local councils exercise only
delegated legislative powers conferred upon
them by Congress as the national lawmaking
body. The delegate cannot be superior to the
principal or exercise powers higher than those
of the latter.
 Since ours is still a unitary form of government,
not a federal state, any for form of autonomy
granted to local governements will necessarily
be limited and confined within the extent
allowed by the central authority
SEE the other file for chapters 2
and 3
Chapter 4: Local Governments and Unions or
Federations of Local Governments in the
Philippines
Local Units and Autonomous Regions:
1. Local govt. units should be created by law.
The constitution does not create local
government units but merely ensures that no
law can abolish barangays.
2) Barangay – the basic political unit. It is
the primary and implementing unit of
government policies, plans, forums. It is
where the views of the people may be
expressed and considered. It is also
where disputes may be amicably settled.
3) Municipality – consists of a group of
barangays. Its purpose is the
consideration and delivery of basic,
regular, and direct services / effective
governance.
4) City – consists of more urbanized and
developed barangays. Its purpose is the
coordination and delivery of basic,
regular, and direct services / effective
governance.
5) Province – composed of a cluster of
municipalities and component cities. It
serves as a dynamic mechanism for
developmental processes. It governs the
LGUs under its jurisdiction.
Regular LGUs: provinces, cities,
municipalities, and barangays.
Autonomous Regions: Muslim Mindanao and
the cordilleras.
Classification of Cities:
 6) Highly Urbanized – they have an
income of at least 50 million pesos
7) Independent Component Cities – their
charter prohibits the city’s inhabitants
from voting for provincial elective
officials / to be voted as provincial
elective officials
8) Component Cities – all other cities
Special Metropolitan Political Subdivisions:
9) Can be created by congress through
law subject to plebiscite
10) Component cities / municipalities
regain basic autonomy and are entitled
to their own local executives and
legislative assemblies.
11) Their jurisdiction only includes basic
services. They cannot exercise local
political powers.
Loose Federations:
12) These are formed when LGUs group
themselves and coordinate their efforts,
services, and resources for purposes
beneficial to them
13) May be created through ordinances
enacted by the LGUs
14) Not considered a new corporate body
Regional Development Councils:
15) Composed of local government officials,
regional heads of departments and
govt. offices. Includes NGO
representatives to strengthen
autonomy of the LGU and accelerate
economic growth.
16) Established by president, no need for
authorization from congress.
CASES:
 Abella vs. COMELEC
Facts:
17) Silvestre Dela Cruz filed a petition with
the COMELEC to disqualify Larrazabal
from running as governor of Leyte
18) Dela Cruz claimed that Larrazabal wasn’t
truthful regarding her residence, and that
she lied in her Certificate of Candidacy.
He also claimed that she was a resident
of Ormoc.
19) The petition was granted but Larrazabal
was already governor.
Issue:
20) WON or not the person with the 2nd
highest votes can become governor if the
current governor ends up disqualified
Held:
21) No. They cannot. Larrazabal was
presumed to be a bonafide candidate at
the time of the election and the people
voted for her. The person with the
second highest votes still lost the election.
 Metro Manila Development Authority
(MMDA) vs. Bel-Air Village:
Facts:
22) MMDA, a government agency tasked
with delivering basic services in Manila,
sent Bel-Air a notice requesting that the
latter open Neptune Street to public
vehicles
23) Bel-Air refused and filed an injunction.
However, Bel-Air lost.
24) However, on appeal the court ruled that
MMDA had no authority to order the
opening of the street (which was inside a
private subdivision)
 Issue:  All general and special laws, acts, charters,
decrees, and executive orders that were
25) WON MMDA had the authority to open
inconsistent with the code were repealed
up Neptune Street
or modified accordingly.
Held:
Rules of Interpretation:
26) No. The MMDA only has the following
 Provisions on the powers of LGUs should
powers: formulation, coordination,
be interpreted liberally in the LGU’s favor.
regulation, implementation,
In case of doubts, it should be resolved in
preparation, management, monitoring,
favor of the devolution of powers
setting of policies, installation of a
 Tax ordinances or revenue measures
system and administration. They do
should be interpreted strictly against the
not have legislative powers. The
LGU. It should favor the tax payer.
powers granted in their charter are
HOWEVER when it comes to tax
limited, and their primary function is
exemptions, it should be interpreted
merely to help organize the
against the person claiming it.
transportation system.
Chapter 5: The Local Government Code of  General welfare provisions should be
1991 interpreted in favor of the LGU.

Constitutional Mandate:  Rights and obligations arising from

 The 1987 constitution mandates
congress to enact a local government
code that shall provide for a more
responsive and accountable LGU
structure through decentralization.
 This paradigm shift results from the
realization that genuine development
comes from strengthening local
autonomy.
Scope:
 All provinces, cities, municipalities,
barangays, political subdivisions.
Officials, offices and agencies of the
local government.
 Applies to autonomous regions until
they come up with their own local
government code.
 Existing tax ordinances remain in force
contracts should be governed by the
original terms.
 If no legal provisions or jurisprudence is
available, the controversy shall be
governed by the customs and traditions
of the place.
CHAPTER 6: CREATION, CONVERSION,
DIVISION, MERGER, SUBSTANTIAL CHANGE
OF BOUNDARY OF LOCAL GOVERNMENT
UNITS AND ABOLITION
Political Subdivisions
Section 10, Article X of the 1987 Constitution
provides:
“No province, city, municipality, or barangay may
be created, divided, merged, abolished, or its
boundary substantially altered, except in
accordance with the criteria established in the
local government code and subject to approval
by a majority of the votes cast in a plebiscite in
the political units directly affected.”
Creation and Conversion
 General Requirements
 LAW
-by law enacted by Congress in the case of a
provonce, city, municipality, or any other
politiical subdivision
-by ordinance passed by the Sangguniang
Panlalawigan or Sangguniang Panlungsod in
the case of a barangay located within its
territorial jursidiction
 PLEBISCITE
-The constitution specifically requires that a
plebiscite should be held in order to lawfully
create a municipal corporation (sec 10, art X)
 COMPLIANCE with CRITERIA on
INCOME, LAND AREA and
POPULATION
Income- it must be sufficient to provide for all
essential government facilties, services and
special functions commensurate with the size
of population.
Population- it shall be determined as the total
number of inhabitatants within the territorial
jurisdiction.
Land Area- it must be contiguos, unless
comprises 2 or more islands; properly
indentified by metes and sufficient to provide
for basic services.
NOTES:
 Sec. 7, LGC: compliance with the
following shall be attested by Dept. Of
Finance (DOF), National statistics office
(NSO) and Land Management Bureau
(LMB) of the DENR
 Compliance with the criteria is a question
of fact answered by DOF, NSO and DENR.
Such is binding unless there is grave
abuse of discretion amounting to excess
of jurisdiction or clear error of facts.
 INCOME (dept. Of finance order no. 35-
93)- all revenues and receipts collected or
received forming the gross accretions of
funds of the LGU from REGULAR sources
of local general funds including internal
revenue allotment (IRA).
 internal revenue allotment (IRA)- items
of income
◦ form part of gross accretion of LGU
funds
◦ regularly and automatically accrue to
local treasury without need for
further actions on the part of the LGU
◦ constitute income
 Converting municipality to city or cluster
of brgy to component city (because of RA
(9009 ammending sec 450 of LGC-
increase income from 20M to 100M(-IRAs
no longer included in the computation of
annual income for complying with
income requirement
 INHABITANTS- needed otherwise no
muncorp at all
 TERRITORY- boundaries must be definite,
fixed or certain otherwise void. (sec 7,
LGC)

 Specific Requirements
LGU Income Population Land Area
Baranga none 2,000- none 5. officers and agents terminate their relations
y 5,000 with offices
Municip P2.5M ave. 25,000 50 sq.kmm. Except 6. title to properties passed without
ality For 2 if an island
compensation
consecutive
preceding 7. its debts and obli assumed by annexing corp.
years Unless otherwise provided by law
Compon P100M in the 150,000 100 sq.km.
ent City case of Substantial Change of Boundaries
conversion of
a
municipality - No substantial alteration of boundaries shall
or a cluster of take effect unless approved by a majority of the
barangays votes cast in a plebiscite called for the purpose in
into a city per the political unit or units directly affected.
R.A 9009
(6/30/’01)
Highly P50M latest 200,000 Not anymore
Urbanize annual stated in law
d City income CASES:
Province P20M ave. 250,000 2,000sq.km
annual (contiguous)
 League of Cities of the Philippines vs.
income
COMELEC
Merger and Division
- The division and merger of existing LGU’s Facts:
shall comply with the same requirements
prescribed for their creation provided that  During the 11th Congress, 57 bills seeking
such division shall not reduce the income, the conversion of municipalities into
population, or land area of the LGU’s to less component cities were filed before the
than the minimum requirements. House of Representatives.
-Sec 8, LGC- income classification of LGU shall  However, Congress acted only on 33 bills.
be updated within 6 months upon effectivity During the 12th Congress, R.A. No. 9009
of this code became effective revising Section 450 of
- When two or more municipal corporations the Local Government Code. It increased
are consolidated under one government, the the income requirement to qualify for
old corporations become extinct in most conversion into a city from P20 million
instances. annual income to P100 million locally-
- new ones entitled to: generated income.
1. all assets and immunities  In the 13th Congress, 16 of the 24
2. severally liable for all its then subsisting municipalities filed, through their
debts respective sponsors, individual cityhood
3. vested power to raise revenue to pay them bills.
by levying taxes on property transferred and  Each of the cityhood bills contained a
people living there common provision exempting the
4. annexed territory dissolved and become particular municipality from the 100
part of annexing corp. million income requirement imposed by
R.A. No. 9009.

Issue:
 Are the cityhood laws converting 16
municipalities into cities constitutional?
Held:
 The 16 Cityhood Laws are
constitutional. The Court stressed that
Congress clearly intended that the local
government units covered by the
Cityhood Laws be exempted from the
coverage of RA 9009. The Court
reiterated that while RA 9009 was
being deliberated upon, the Congress
was well aware of the pendency of
conversion bills of several
municipalities, including those covered
by the Cityhood Laws.
Province of North Cotabato vs Government of
the Republic of the Philippines
FACTS:
On August 5, 2008, the Government of the
Republic of the Philippines and the Moro
Islamic Liberation Front (MILF) were scheduled
to sign a Memorandum of Agreement of the
Ancestral Domain Aspect of the GRP - MILF
Tripoli Agreement on Peace of 2001 in Kuala
Lumpur, Malaysia.
Invoking the right to information on matters of
public concern, the petitioners seek to compel
respondents to disclose and furnish them the
complete and official copies of the MA-AD and
to prohibit the slated signing of the MOA-AD
and the holding of public consultation thereon.
They also pray that the MOA-AD be declared
unconstitutional. The Court issued a TRO
enjoining the GRP from signing the same.
ISSUES:
2. Whether or not there is a violation of the
people's right to information on matters of
public concern (Art 3 Sec. 7) under a state
policy of full disclosure of all its transactions
involving public interest (Art 2, Sec 28) including
public consultation under RA 7160 (Local
Government Code of 1991)
Yes. The Court finds that there is a grave
violation of the Constitution involved in the
matters of public concern (Sec 7 Art III) under a
state policy of full disclosure of all its
transactions involving public interest (Art 2, Sec
28) including public consultation under RA 7160
(Local Government Code of 1991).
3. Whether or not the signing of the MOA, the
Government of the Republic of the Philippines
would be binding itself
a) to create and recognize the Bangsamoro
Juridical Entity (BJE) as a separate state, or a
juridical, territorial or political subdivision not
recognized by law;
Yes. The provisions of the MOA indicate, among
other things, that the Parties aimed to vest in the
BJE the status of an associated state or, at any
rate, a status closely approximating it.
The concept of association is not recognized
under the present Constitution (sec. 1, art X
consti)
No province, city, or municipality, not even the
ARMM, is recognized under our laws as having
an “associative” relationship with the national
government. Indeed, the concept implies powers
that go beyond anything ever granted by the
Constitution to any local or regional government.
It also implies the recognition of the associated
entity as a state. The Constitution, however, does
not contemplate any state in this jurisdiction
other than the Philippine State, much less does it
provide for a transitory status that aims to
prepare any part of Philippine territory for
independence.
The BJE is a far more powerful entity than the
autonomous region recognized in the
Constitution.
b) to revise or amend the Constitution and
existing laws to conform to the MOA;
MOA-AD provides that “any provisions of the
MOA-AD requiring amendments to the existing
legal framework shall come into force upon the
signing of a Comprehensive Compact and upon
effecting the necessary changes to the legal
framework,” implying an amendment of the
Constitution to accommodate the MOA-AD.
This stipulation, in effect, guaranteed to the
MILF the amendment of the Constitution .
It will be observed that the President has
authority, as stated in her oath of office, only
to preserve and defend the Constitution. Such
presidential power does not, however, extend
to allowing her to change the Constitution, but
simply to recommend proposed amendments
or revision.
Creation and Conversion
1.law
Emmanuel Pelaez vs. The Auditor General
FACTS:
From September 4, 1964 to October 29, 1964
the President of the Philippines issued
executive orders to create thirty-three
municipalities pursuant to Section 69 of the
Revised Administrative Code. Public funds
thereby stood to be disbursed in the
implementation of said executive orders.
Suing as a private citizen and taxpayer, Vice
President Emmanuel Pelaez filed a petition
for prohibition with preliminary injunction
against the Auditor General. It seeks to
restrain from the respondent or any person
acting in his behalf, from passing in audit any
expenditure of public funds in implementation
of the executive orders aforementioned.
ISSUE:
Whether the executive orders are null and void,
upon the ground that the President does not have
the authority to create municipalities as this
power has been vested in the legislative
department.
RULING:
Section 10(1) of Article VII of the 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.”
The power of control under this provision implies
the right of the President to interfere in the
exercise of such discretion as may be vested by
law in the officers of the executive departments,
bureaus, or offices of the national government, as
well as to act in lieu of such officers. This power
is denied by the Constitution to the Executive,
insofar as local governments are concerned.
Such control does not include the authority to
either abolish an executive department or
bureau, or to create a new one. Section 68 of
the Revised Administrative Code does not merely
fail to comply with the constitutional mandate
above quoted, it also gives the President more
power than what was vested in him by the
Constitution.
The Executive Orders in question are hereby
declared null and void ab initio and the
respondent permanently restrained from passing
in audit any expenditure of public funds in
implementation of said Executive Orders or any
disbursement by the municipalities referred to.
2. plebiscite
 Miranda vs Aguirre
Facts:
  1994, RA No. 7720 effected the
conversion of the municipality of
Santiago, Isabela, into an independent
component city. July 4th, RA No. 7720
was approved by the people of
Santiago in a plebiscite.
 1998, RA No. 8528 was enacted and it
amended RA No. 7720 that practically
downgraded the City of Santiago from
an independent component city to a
component city.
 Petitioners assail the constitutionality
of RA No. 8528 for the lack of provision
to submit the law for the approval of
the people of Santiago in a proper
plebiscite.
Held:
 When an amendment of the law
involves creation, merger, division,
abolition or substantial alteration of
boundaries of local government units,
a plebiscite in the political units directly
affected is mandatory.
Requires participation of residents of orig.
LGU not just those residing in LGU sought to
be created:
Padilla vs COMELEC
Facts: Republic Act No. 7155 created the new
municipality of Tulay-Na-Lupa in the Province
of Camarines Norte and pursuant to this law,
the COMELEC (D) conducted a plebiscite for its
approval. In its resolution for the conduct of
the plebiscite, the COMELEC (D) included all
the voters of the Municipality of Labo—the
parent unit of the new municipality.
The result of the plebiscite showed that the
majority rejected the creation of the new
Municipality of Tulay-Na-Lupa. The governor,
Hon. Roy Padilla, Jr. (P), petitioned the court to
set aside the result arguing that the phrase
"political units directly affected" in Section 10,
Article X of the 1987 Constitution does not
include the parent political unit—the
Municipality of Labo.
Issues: Is the result of the plebiscite valid?
Ruling: Yes. When the law states that the
plebiscite shall be conducted "in the political
units directly affected," it means that residents
of the political entity who would be economically
dislocated by the separation thereof have a right
to vote in said plebiscite. What is contemplated
by the phrase "political units directly affected," is
the plurality of political units which would
participate in the plebiscite. Logically, those to
be included in such political areas are the
inhabitants of the proposed Municipality of
Tulay-Na-Lupa as well as those living in the the
parent Municipality of Labo, Camarines Norte.
HOWEVER in Abbas vs COMELEC, merger of
administrative regions which pertains to
executive branch will not require plebiscite.
 Navarro vs. Executive Secretary Ermita
Facts:
 The President of the Republic approved
into law (R.A.) No. 9355 (An Act Creating
the Province of Dinagat Islands).
 Then the COMELEC conducted the
mandatory plebiscite for the ratification
of the creation of the province under the
(LGC).
 November 10, 2006, petitioners filed
before this Court a petition for certiorari
and prohibition challenging the
constitutionality of R.A. No. 9355. The
Court dismissed the petition on technical
 grounds. Their motion
reconsideration was also denied.
Held:
 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 be found as an express provision in
the LGC-IRR.
CHAPTER 7: DE JURE and DE FACTO
MUNICIPAL CORPORATIONS
De Jure
-If its creation perfectly complies with all
the requirements of an incorporation, a
municipal corporation is considered de jure.
De Facto
-Not all requirements are complied with
provided certain elements are present:
1. Valid law authorizing incorporation;
2. Attempt in good faith to organize it;
3. Colorable compliance with law; and
4. Assumption of corporate powers.
CASES:
 Pelaez vs. Auditor General
- the Supreme Court denied the President the
power to create local government units
because the creation of LGU’s is essentially
legislative.
Pelaez vs Auditor General
undue delegation of legislative power
Facts:
for The President of the Philippines, purporting to
act pursuant to Section 68 of the Revised
Administrative Code, issued Executive Orders
Nos. 93 to 121, 124 and 126 to 129; creating
thirty-three (33) municipalities enumerated in
the margin. Petitioner Emmanuel Pelaez, as Vice
President of the Philippines and as taxpayer,
instituted the present special civil action, for a
writ of prohibition with preliminary injunction,
against the Auditor General, to restrain him, as
well as his representatives and agents, from
passing in audit any expenditure of public funds
in implementation of said executive orders
and/or any disbursement by said municipalities.
Petitioner alleges that said executive orders are
null and void, upon the ground that said Section
68 has been impliedly repealed by Republic Act
No. 2370 effective January 1, 1960 and
constitutes an undue delegation of legislative
power. The third paragraph of Section 3 of
Republic Act No. 2370, reads: “Barrios shall not
be created or their boundaries altered nor their
names changed except under the provisions of
this Act or by Act of Congress.”
Issues:
Whether or not Section 68 of Revised
Administrative Code constitutes an undue
delegation of legislative power.
Discussions:
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.

The power of control under this provision
implies the right of the President to interfere
in the exercise of such discretion as may be
vested by law in the officers of the executive
departments, bureaus, or offices of the
national government, as well as to act in lieu
of such officers. This power is denied by the
Constitution to the Executive, insofar as local
governments are concerned. With respect to
the latter, the fundamental law permits him to
wield no more authority than that of checking
whether said local governments or the officers
thereof perform their duties as provided by
statutory enactments. Hence, the President
cannot interfere with local governments, so
long as the same or its officers act within the
scope of their authority.
Rulings:
Yes. It did entail an undue delegation of
legislative powers. 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.
Instead of giving the President less power over
local governments than that vested in him
over the executive departments, bureaus or
offices, it reverses the process and does the
exact opposite, by conferring upon him more
power over municipal corporations than that
which he has over said executive departments,
bureaus or offices.
 Sultan Osop Camid vs. Office of the
Pres.
-the Supreme Court confirmed that municipal
corporations may exist by prescription where
its is shown that the community has claimed
and exercised corporate functions, with the
knowledge of the legislature and without
interruption and objection.
CAMID VS OFFICE OF THE PRESIDENT,
(ARTICLE X Section 10: Creation, Abolition, Change
of boundaries)
FACTS: This is a petition for Certiorari arguing the
existence of Municipality of Andong in Lanao Del Sur.
This decision have noted the earlier decision of Pelaez
where the Executive orders of Former President
Macapagal creating 33 Municipalities of Lanao Del Sur
was considered null and void due to undue delegation of
legislative powers. Among the annulled executive orders
is EO107 creating Andong.The petitioner herein
represents himself as resident of Andong (asa private
citizen and taxpayer). Camid contends/argues the
following:
(1) Municipality of Andong evolved into a full-blown
municipality (since there is a complete set of officials
appointed to handle essential tasks and services, it has its
own highschool, Bureau of Post, DECS office, etc.
(2)17 barangays with chairman;
(3) he noted agencies and private groups recognizing
Andong and also the CENRO and DENR Certification
of land area and population of Andong.
In the Certification of DILG, thereis an enumeration of
existing municipalities including 18 0f the 33
Municipalities invalidated in Pelaez Case. Camid finds
this as an abuse of discretion and unequal treatment for
Andong. Likewise, Camid insists the continuing of EO
107, arguing that in Municipality of San Narciso v. Hon.
Mendez, the Court affirmed in making San Andres a de
facto municipal corporation. San Andres was created
through anexecutive order. Thus, this petition.
ISSUE:Whether or not theMunicipality ofAndong
berecognized as ade facto municipal corporation
HELD:SECTION 10. No province, city, municipality, or
barangay may be created, divided, merged, abolished, or
its boundary substantially altered, except in accordance
with the criteria established in the Local Government
Code and subject to approval by a majority of the votes
cast in a plebiscite in the political units directly affected.
Municipal corporations may exist by prescription where
it is shown that the community has claimed and
exercised corporate functions, with the knowledge
and acquiescence of the legislature,and without
interruption or objection for periodlong enough
toaffordtitle by prescription. The Certification has no
power or it does not bear any authority to create or
revalidate a municipality. Should the case of Andong
be treated same as the case of San Andres? No, for the
following reasons:
(A) There are facts found in the San Andres case that
are not present in the case at bar:
(1)The Executive Order creating San Andres was not
invalidated inPelaezCase,
(2) The municipality existed for 30 years before it was
questioned and
(3) The municipality was classified as a fifth class
municipality and was included in the legislative
district in the House of Representatives apportionment.
(B) Andong did not meet the requisites set by Local
Government Code of1991Sec.42par. d regarding
municipalities created by executive orders. It says:
Municipalities existing as of the date of the effectivity
of this Code shall continue to exist and operate as
such. Existing municipal districts organized pursuant
to presidential issuances or executive orders and
which have their respective set of elective municipal
officials holding office at the time of the effectivity of
this Codeshall henceforth be considered as regular
municipalities.
(C) The failure to appropriatefundsfor Andong and
theabsence ofelections inthe municipality are eloquent
indicia (indicators) that the State does not recognize
the existence of the municipality.
(D) The Ordinance appended in the 1987 Constitution
(which apportioned seats for the House
ofRepresentatives tothe different legislative districts
inthe Philippines, enumeratesthe various
municipalities encompassed inthe various districts)
did notinclude Andong.
Mun of San Narciso, Quezon vs Mendez Sr.
G.R. No. 103702 December 6, 1994
FACTS: On 20 August 1959, President Carlos P. Garcia,
issued, pursuant to the then Sections 68 and 2630 of the
Revised Administrative Code, as amended, Executive Order
No. 353 creating the municipal district of San Andres, Quezon, by
segregating from the municipality of San Narciso of the same
province, the barrios of San Andres, Mangero, Alibijaban, Pansoy,
Camflora and Tala along with their respective sitios.
EO No. 353 was issued upon the request, addressed to the
President and coursed through the Provincial Board of Quezon, of
the municipal council of San Narciso, Quezon
By virtue of EO No. 174, dated 05 October 1965, issued by
President Diosdado Macapagal, the municipal district of San
Andres was later officially recognized to have gained the status of
a fifth class municipality beginning 01 July 1963 by operation of
Section 2 of Republic Act No. 1515. 2 The executive order added
that “(t)he conversion of this municipal district into (a)
municipality as proposed in House Bill No. 4864 was approved by
the House of Representatives.”
Petitioner Municipality of San Narciso: filed a petition for quo
warranto with RTC which petition sought the declaration of
nullity of EO No. 353 Invoking the ruling of this Court in Pelaez v.
Auditor General.
Respondent San Andres: San Narciso is estopped from
questioning the creation of the new municipality and that the case
had become moot and academic with the enactment of Republic
Act No. 7160 (Sec. 442. Requisites for Creation. — . . .(d)
Municipalities existing as of the date of the effectivity of this
Code shall continue to exist and operate as such.)
Petitioner: The above provision of law was inapplicable to the
Municipality of San Andres since the enactment referred to legally
existing municipalities and not to those whose mode of creation
had been void ab initio.
ISSUE: W/N Municipality of San Andres is a de jure or de facto
municipal corporation.
HELD: Executive Order No. 353 creating the municipal district of
San Andres was issued on 20 August 1959 but it was only after
almost thirty (30) years, or on 05 June 1989, that the municipality
of San Narciso finally decided to challenge the legality of the
executive order.
Granting the Executive Order No. 353 was a complete nullity for
being the result of an unconstitutional delegation of legislative
power, the peculiar circumstances obtaining in this case hardly
could offer a choice other than to consider the Municipality of
San Andres to have at least attained a status uniquely of its
own closely approximating, if not in fact attaining, that of a de
facto municipal corporation. Conventional wisdom cannot allow
it to be otherwise. Created in 1959 by virtue of Executive Order
No. 353, the Municipality of San Andres had been in existence for
more than six years when, on 24 December 1965, Pelaez v.
Auditor General was promulgated. The ruling could have sounded
the call for a similar declaration of the unconstitutionality of
Executive Order No. 353 but it was not to be the case. On the
contrary, certain governmental acts all pointed to the State’s
recognition of the continued existence of the Municipality of that the earlier resolution approving the
San Andres. Thus, after more than five years as a municipal
agreement between the municipalities was void
district, Executive Order No. 174 classified the Municipality of
San Andres as a fifth class municipality after having surpassed
since the Board had no power to alter the
the income requirement laid out in Republic Act No. 1515. boundaries of Sinacaban as fixed in EO 258.
At the present time, all doubts on the de jure standing of the Jimenez argued that the power to create
municipality must be dispelled. Under the Ordinance (adopted municipalities is essentially legislative (as held in
on 15 October 1986) apportioning the seats of the House of Pelaez v Auditor General), then Sinacaban, which
Representatives, appended to the 1987 Constitution, the
was created thru and EO, had no legal
Municipality of San Andres has been considered to be one of
the twelve (12) municipalities composing the Third District of personality and no right to assert a territorial
the province of Quezon. Equally significant is Section 442(d) claim.
of the Local Government Code to the effect that municipal
districts “organized pursuant to presidential issuances or
executive orders and which have their respective sets of
elective municipal officials holding office at the time of the
Issue: Whether or not Sinacaban has juridical
effectivity of (the) Code shall henceforth be considered as personality. YES
regular municipalities.”
All considered, the de jure status of the Municipality of San
Andres in the province of Quezon must now be conceded. Held: Where a municipality created as such by
EO is later impliedly recognized and its acts are
Here SC considered the following factors
accorded legal validity, its creation can no longer
which validated the creation:
be questioned. In the case of Municipality of San
see p71
Narciso v Mendez, the SC laid the factors to
consider in validating the creation of a municipal
 Municipality of Jimenez Case corporation:
-Sincaban was considered to ahve attained de
facto status at the time of 1987 Constitution
took effect and was not subject to plebiscite
1. The fact that for 30 years, the validity of the
requirement. This requirement applies only to
corporation has not been challenged;
new municipalities created for the first time
under the Constitution. 2. The fact that no quo warranto suit was filed to
question the validity of the EO creating the
municipality; and
MUNICIPALITY OF JIMENEZ vs. BAZ
3. The fact that the municipality was later
Facts: The Municipality of Sinacaban was
classified as a 5th class municipality, organized as
created by EO 258 of then Pres. Quirino
part of a municipal circuit court and considered
pursuant to Sec. 68 of the Revised Admin.
part of a legislative district in the Constitution
Code.Sinacaban laid claim to several barrios
apportioning the seats in the House. In this case,
based on the technical description in EO 258.
the following factors are present:
The Municipality of Jimenez asserted
jurisdiction based on an agreement with
Sinacaban which was approved by the
Provincial Board of Misamis Occidental which 1. Sinacaban has been in existence for 16 years
fixed the common boundary of Sinacaban and when Pelaez was decided in 1965 and yet the
Jimenez. The Provincial Board declared the validity of EO 258 creating it had never been
disputed area to be part of Sinacaban. It held questioned. 2. It was only 40 years later that its
existence was questioned. 3. Rule 66, Sec. 16
of the Rules of COurt provides that a quo
warranto suit against a corporation for
forfeiture of its charter must be commenced
within 5 years from the time the act
complaned of was done or committed. 4. The
State and even Jimenez recognized
Sinacaban’s corporate existence by entering
into an agreement with it regarding the
boundary. Ex.: AO 33, Judiciary Reorganization
Act of 1980, etc. 5. Sinacaban is constituted as
part of a municipal circuit for purposes of the
establishment of MTCs in the country.
Moreover, the LGC of 1991, Sec. 442(d)
provides that “municipal districts organized
pursuant to presidential issuances or executive
orders and which have their respective sets of
elective officials holding office at the time of
the effectivity of this Code shall henceforth be
considered as regular municipalities.”
Sinacaban has attained de jure status by virtue
of the Ordinance appended to the 1987
Constitution, apportioning legislative districts
throughout the country, which considered
Sinacaban as part of the 2nd District of
Misamis Occidental. II. Sinacaban had attained
de facto status at the time the 1987
Constitution took effect. It is not subject to the
plebiscite requirement. It applies only to new
municipalities created for the first time under
the Constitution. The requirement of plebiscite
was originally contained in Art. XI, Section 3 of
the previous Constitution. It cannot be applied
to municipal corporations created before, such
as Sinacaban.
CHAPTER 8: POWER RELATIONS WITH
NATIONAL GOVERNMENT, SUPREME COURT,
PRESIDENT AND CONGRESS; INTER-
GOVERNMENTAL RELATIONS AND
HIERARCHICAL RELATIONS AMONG LOCAL
GOVERNMENT UNITS
LGUs and National Government in General:
LGUs are agents of the State
 Municipal governments are only agents
of the national government
 Local councils exercise only delegated
legislative powers conferred to them by
Congress as the national lawmaking body
Magtajas vs Pryce Properties
 PAGCOR expanded its operations to CDO.
It was met with various protests and
demonstrations by civic organizations
and religious elements.
 Petitioners contended that PAGCOR’s
operations is violative of City Ordinance
No. 3353 prohibiting the use of buildings
for the operation of a casino and
Ordinance No. 3375-93 prohibiting the
operation of casinos.
 Respondents invoke PD 1869 which
created PAGCOR to help regulate all
games of chance, including casinos on
land and sea within the territorial
jurisdiction of the Philippines.
 ISSUE: WON the City Ordinances are valid
 HELD: No. Cagayan de Oro, like other
political subdivisions, is empowered to
enact ordinances as expressed in Sec 16
of LGC. However, there is a requirement
that an ordinance should not contravene
with a statute. Municipal govts are only
agents of the national government. The
delegate cannot be superior to the
principal or exercise powers higher than
those of the latter.
 Casino gambling is authorized by PD 1869.
This decree has the status of a statute
that cannot be amended or nullified by a
mere ordinance.
LGUs and the Supreme Court: LGUs’ acts are
subject to Judicial Review
Acts of LGUs are within the scope of judicial
review, under Art 8 Sec 4(2), 1987 Constitution,
 The SC has jurisdiction over all cases
involving the constitutionality of a
treaty, international or executive
agreement, or law, which shall be
heard by the Supreme Court en banc,
and all other cases which under the
Rules of Court are required to be heard
en banc, including those involving the
constitutionality, application, or
operation of presidential decrees,
proclamations, orders, instructions,
ordinances, and other regulations
LGUs and the President: President exercises
General Supervision
 President shall exercise general
supervision over local governments, to
ensure that their acts are within the
scope of their prescribed powers and
functions.
 National agencies and offices with
project implementation functions shall
coordinate with one another and with
the LGUs concerned in the discharge of
these functions
Drilon v Lim
 Then Secretary of Justice Drilon
declared Ordinance No 7794 null and
void for non-compliance with the
procedure in the enactment of tax
ordinance and for containing certain
provisions contrary to law and public
policy.
 This power to revoke is provided in Sec
287 of the LGC which authorizes the
Secretary of Justice to review the
constitutionality or legality of the tax
ordinance, and of warranted, to revoke it
on either or both of these grounds.
 ISSUE: WON Sec 187 of the LGC is
constitutional
 HELD: Yes. When a Sec of Justice alters or
modifies or sets a tax ordinance, he is not
also permitted to substitute his own
judgement for the judgment of the local
government that enacted the measure.
Sec Drilon did set aside the ordinance,
but he did not replace it with his own
version of what the code should be. He
did not exercise an act of control but only
supervision.
Does the President’s power of general
supervision extend to the liga ng mga barangay,
which is not a local government unit?
-Yes. The liga ng mga barangay is an association,
federation, league or union created by law or by
authority of law, whose members are either
appointed or elected government officials.
 The Liga is an aggroupment of barangays
which are in turn represented by their
punong barangays.

LGUs and Congress: LGUs derive their existence
and powers from Congress
 No province, city, municipality or
barangay may be created, divided,
merged, abolished, or its boundary
substantially altered, except in
accordance with the criteria established
in the Local Government Code and
subject to approval by a majority of votes
cast ina plebiscite in the political units
directly affected.
Mother LGU and Component LGU: Mother LGU
reviews acts of component LGU
 d) In general
 The President of the Philippines shall
exercise general supervision over local
governments.
 This is to ensure that the acts of their
component units are within the scope
of their prescribed powers and
functions
e) Provincial relations with Component
Cities and Municipalities
 The province, through the governor,
shall ensure that every component city
and municipality within its territorial
jurisdiction acts within the scope of its
prescribed powers and functions.
 Highly urbanized cities and
independent component cities shall be
independent of the province
f) City and Municipal relations with
Component Barangays
 The city or municipality, through the
city or municipal Mayor concerned,
shall exercise general supervision over
component barangays to ensure that
said barangays act within the scope of
their prescribed powers and functions
Two types of reviews by a Mother LGU of acts
of Component LGU:
 Executive: Local Chief Executive (LCE)
of Mother LGU reviews Executive
Orders (Eos) of LCE of Component LGU
 The governor shall review all executive
orders promulgated by the component
city or municipal Mayor within his
jurisdiction (shall be forwarded to the
governor 3 days after issuance)
 The LCE concerned shall ensure that
such executive orders are within the
powers granted by law and in
conformity with provincial, city or
municipal ordinances.
 If there is inaction on the part of the
governor or the city or municipal mayor,
the EO shall be deemed valid.
 Legislative: Sanggunian of Mother LGU
reviews Ordinances of Sanggunian and
EOs of LCE of Component LGU
2.1 Component City and Municipal
Ordinances and Resolutions
 Within 3 days after approval, the
secretary to the sanggunian panlungsod
or sangguniang bayan shall forward to
the Sangguniang Panlalawigan for review,
copies of approved ordinances and
resolutions made by the local
development councils.
 Within 30 days after receipt of copies, the
Sangguniang Panlalawigan shall examine
the documents or transmit them to the
provincial attorney, or if there is none, to
the provincial atty for prompt execution
 The provincial atty shall inform the
Sangguniang Panlalawigan of his
comments and recommendations
 If the Sangguniang Panlalawigan finds
that such an ordinance or resolution is
beyond the power conferred upon the
Sangguniang Panlungsod or Sangguniang
Bayan concerned, it can declare such
ordinance as invalid
 Inaction by the Sangguniang
Panlalawigan within 30 days from
submission = ordinance presumed valid
◦ Barangay Ordinances
 Within 10 days from its enactment, the
sangguniang barangay shall furnish
copies of all barangay ordinances to the
Sangguniang Panlungsod or sangguniang
bayan concerned for review as to
whether the ordinance is consistent with
law and city or municipal ordinance
  Inaction by Sangguniang Panlungsod or
Sangguniang bayan within 30 days
from submission = ordinance deemed
valid
 If Sangguniang Panlungsod or Bayan
finds the barangay ordinances
inconsistent with law, it shall return
the same with its comments and
recommendations to the sangguniang
barangay concerned for adjustment,
amendment or modification
LGUs and National Agencies and Offices (with
project implementation functions): Prior
consultation and approval before
implementation
 No project or program shall be
implemented by government
authorities unless the consultations
mentioned in Sections 2(c) and 26 of
LGC are complied with, and prior
approval of the sanggunian concerned
is obtained, provided that occupants in
areas where such projects are to be
implemented shall not be evicted
unless appropriate relocation sites
have been provided, in accordance
with the provisions of the Constitution.
 The requirement of prior consultations
found in Sec 2(c) and 27 of the LGC
apply only to national programs and/or
projects that are to be implemented to
a particular or local community
 Since Lotto is neither a program nor a
project of the national government,
but of a charitable institution, the PCSO,
the provision on prior consultation will
not apply. (Lino vs Pano)
Lino vs Pano
FACTS:On December 29, 1995,
respondent Tony Calvento was
appointed agent by the Philippine
Charity Sweepstakes Office (PCSO) to
install Terminal OM 20 for the operation
of lotto. He asked Mayor Calixto Cataquiz,
Mayor of San Pedro, Laguna, for a
mayor’s permit to open the lotto outlet.
This was denied by Mayor Cataquiz in a
letter dated February 19, 1996. The
ground for said denial was an ordinance
passed by the Sangguniang Panlalawigan
of Laguna entitled Kapasiyahan Blg. 508,
T. 1995which was issued on September
18, 1995.As a result of this resolution of
denial, respondent Calvento filed a
complaint for declaratory relief with
prayer for preliminary injunction and
temporary restraining order. In the said
complaint, respondent Calvento asked
the Regional Trial Court of San Pedro
Laguna, Branch 93, for the following
reliefs: (1) a preliminary injunction or
temporary restraining order, ordering the
defendants to refrain from implementing
or enforcing Kapasiyahan Blg. 508, T.
1995; (2) an order requiring Hon.
Municipal Mayor Calixto R. Cataquiz to
issue a business permit for the operation
of a lotto outlet; and (3) an order
annulling or declaring as invalid
Kapasiyahan Blg. 508, T. 1995.On
February 10, 1997, the respondent judge,
Francisco Dizon Paño, promulgated his
decision enjoining the petitioners from
implementing or enforcing resolution or
Kapasiyahan Blg. 508, T. 1995.
ISSUE: WON Kapasiyahan Blg. 508, T.
1995 is valid
HELD: As a policy statement expressing
the local government’s objection to the
lotto, such resolution is valid. This is part
of the local government’s autonomy to
air its views which may be contrary to
that of the national government’s.
 However, this freedom to exercise implementation of any project or
contrary views does not mean that program that may cause pollution,
local governments may actually enact climatic change, depletion of non-
ordinances that go against laws duly renewable resources, loss of crop land,
enacted by Congress. Given this rangeland or forest cover, and extinction
premise, the assailed resolution in this of plant or animal species, to consult with
case could not and should not be the LGUs, NGOs and other sectors
interpreted as a measure or ordinance concerned and to explain the goals and
prohibiting the operation of lotto.n our objectives of the program, its impact
system of government, the power of upon the people and the measures that
local government units to legislate and will be undertaken to prevent or
enact ordinances and resolutions is minimize the adverse effects thereof (Sec
merely a delegated power coming from 26 of LGC)
Congress. As held in Tatel vs. Virac,
ordinances should not contravene an
LGUs and the PNP, Fire Protection Unit and Jail
existing statute enacted by Congress.
Management Personnel: Operational
The reasons for this is obvious, as
Supervision and Control by LGU
elucidated in Magtajas v. Pryce
Properties Corp
Andaya vs RTC

LGUs and National Agencies, offices and
GOCCs (with field units in the LGU): Monthly
Reportorial Requirement for Information and
Guidance
 National agencies and offices including
GOCCs with field units or branches in a
province, city, or municipality shall
furnish the local chief executive
concerned, for his information and
guidance, monthly reports including
duly certified budgetary allocations and
expenditures.
LGUs and National Agencies, offices and
GOCCs(with environmental programs):
Consultation
 It shall be the duty of every national
LGUs and NGOs: LGUs shall support, and may
agency or GOCC authorizing or
give assistance to, NGOs
involved in the planning and
 There was a vacancy in the position of
chief of police in Cebu. The regional
director of the Cebu police Andaya
submitted a list of 5 eligible appointed to
the position to the Mayor of Cebu
 However, the mayor refused to appoint
one because he wanted a certain
Sarmiento, who was not on the list due to
being disqualified.
 ISSUE: WON the mayor can require the
Regional Director to include the mayor’s
protégé in the list?
 HELD: No. The mayor has only the power
to choose from the list. It is the
prerogative of the regional director of the
police to choose the eligible person who
should be included in the list without
intervention from local executives (Sec 51
of R.A 6975)
LGUs shall promote the establishment amd
operation of people’s and NGOs to become
active partners in the pursuit of local
autonomy
CHAPTER 9: LOCAL TAXATION AND
RELATED POWERS AND PRIVILEGES
Power to Create Sources of Revenues and to
Levy Taxes, Fees and Charges
 Local Taxation Power
Under the sec 5 art X, 1987 Constitution, each
LGU has the power to create its own sources
of revenues and to levy taxes, fees and
charges subject to such guidelines and
limitations as the Congress may provode,
consistent with the basic policy of local
autonomy. Shall accrue to LGU
 This is only a general power to tax.
Their special power to tax is subject to
the guidelines and limitations as
Congress may provide
 The delegation to tax is not absolute
and unconditional; the legislature must
see to it that:
 The taxpayer will not be overburdened
or saddled with multiple and
unreasonable impositions
 Each LGU will have its fair share of
available resources
 The resources of the national
government will not be unduly
disturbed
 Local taxation will be fair, uniform and
just
Basco v PAGCOR (decided before the LGU code)
 P.D 1869, which exempts PAGCOR from
“paying any tax of any kind or form,
income or otherwise , as well as fees,
charges or levies of whatever nature,
whether National or Local” was
questioned by the Manila City
government and it allegedly waives the
latter’s right to impose taxes and license
fees, violating its constitutionally
enshrined principle of local autonomy
(Sec 5, Art X 1987 Constitution)
 ISSUE: Does the Local Government of
Manila have the power to impose taxes
on PAGCOR?
 HELD: The power of an LGU to impose
taxes and fees is always subject to
limitations which Congress may provide
by law
 Municipal corporations have no inherent
power to tax and their power to tax must
always yield to a legislative act for they
are mere creatures of Congress wherein
the latter has the power to create and
abolish municipal corporation due to its
general powers
Mactan Cebu International Airport Authority
(MCIAA) v Marcos
 The SC took a different path compared to
the previous case (Basco v PAGCOR) on
the same issue
 MCIAA was created by virtue of R.A 6958,
mandated to principally undertake the
economical, efficient, and effective
control, management, and supervision of
the MIA and Lahug Airport
 Since its time of creation, MCIAA enjoyed
the privilege of tax exemption of realty
 taxes in accordance with Sec 14 of its
charter.
 However, The Office of the Treasurer
of the City of Cebu, demanded
payment from realty taxes from MCIAA.
 MCIAA objected to the demand and
asserted that it is an instrumentality of
the government performing
governmental functions, citing Sec 133
of the LGC.
 ISSUE: WON MCIAA is a taxable person
 HELD: Taxation is the rule and
exemption is the exception. MCIAA’s
exemption from payment of taxes is
withdrawn by virtue of Sections 193
and 234 of the LGC. Statutes granting
tax exemptions shall be strictly
construed against the taxpayer and
liberally construed in favor of the
taxing authority.
 MCIAA cannot claim that it was never a
“taxable person” under its Charter. It
was only exempted from payment of
realty taxes.
 shall:
Manila International Airport Authority v CA
 SC reverted to the Basco doctrine
 The MIAA operates the NAIA Complex
in Parañaque City under EO 903.
 On March 1997, the Office of the
Government Corporate Counsel issued
Opinion No. 061 to the effect that the
LGC withdrew the exemption from real
estate tax granted to MIAA under Sec
21 of its Charter. Thus, MIAA paid real
estate taxes already due.
 OGCC clarified that the LGC requires
persons exempt from real estate tax to
show proof that MIAA is exempt from
real estate tax.
 MIAA then pointed out that it is
exempt from real estate tax
 ISSUE: WON airport lands and buildings
of MIAA are exempt from real estate tax?
 HELD: Yes. Because:
(1) MIAA is not a GOCC but an
instrumentality of the National
Government and thus exempt from local
taxation, and
(2) second, the real properties of MIAA
are owned by the Republic of the
Philippines and thus exempt from real
estate tax.
 Construction of Local Taxation
 Local tax measures, being in derogation
of property rights must also be construed
strictly against the local government unit
enacting it and liberally in favor of the
taxpayer in case of doubt
 The principle of “Taxation is the rule and
exemption is the exception” still applies
 Fundamental Principle in Local Taxation
 Taxation shall be uniform in each LGU
 Taxes, fees charges and other impositions
◦ Be equitable and based as far as
practicable on the taxpayer’s ability
to pay
◦ Be levied and collected only for public
purposes
◦ Not be unjust, excessive, oppressive,
or confiscatory
◦ Not be contrary to law, public policy,
national economic policy, or in
restraint of trade;
 The collection of local taxes, fees and
charges and other impositions shall in no
case be left to any private person
 The revenue collected pursuant to the
provisions of the Code shall inure solely
to the benefit of and be subject to
disposition by, the LGU levying the tax,
fee or other imposition unless otherwise
specified
  Each LGU shall, as far as practicable,
evolve a progressive system of taxation
 Taxing Authority
The power to impose a tax, fee, or charge to
generate revenue under the Code shall be
exercised by the sanggunian of the LGU
concerned through an appropriate ordinance.
Common Limitations on the Taxing Powers:
Unless otherwise provided in the code, the
exercise of the taxing powers of provinces,
cities, municipalities, and barangays shall not
extend to the levy of the following.
 Income tax, except when levied on
banks and other financial institutions
 Documentary stamp tax
 Taxes on estates, inheritance, gifts,
legacies, and other acquisitions in
mortis causa, except as otherwise
provided by the code.
 Custom duties, registration fees of
vessel and wharfage on wharves,
tonnage dues, and all other kinds of
customs fees, charges and dues except
when wharfage on wharves
constructed and maintained by the
LGU concerned
 Taxes, fees and charges and other
impositions upon goods carried into or
out of, or passing through the
territorial jurisdiction of the LGU in the
guise of charges for wharfage, tolls for
bridges or otherwise, or other taxes,
fees, or charges in any form
whatsoever upon such goods or
chandies.
 Taxes, fees or charges on agricultural and
aquatic products when sold by marginal
farmers or fishermen
 Taxes on business enterprises certified by
the Board of Investments as pioneer or
non-pioneer for a period of 6 and 4 years
from the date of registration
 Excise taxes on articles enumerated
under the National Internal Revenue
Code, as amended, and taxes, fees or
charges on petroleum products
 Percentages or VAT on sales, barters or
exchanges or similar transactions on
goods or services except as otherwise
provided
 Taxes on gross receipts of transportation
contractors and persons engaged in the
transportation of passengers or freight by
hire and common carriers by air, land, or
water.
 Taxes on premiums paid by way of
reinsurance or retrocession
 Taxes, fees or charges for the registration
of motor vehicles and for the issuance of
all kinds of licenses or permits for the
driving thereof
 Taxes and fees or other charges on
Philippine products actually exported,
except as otherwise provided in the code
 Taxes, fees or other charges on the
countryside and barangay business
enterprises and cooperatives duly
registered under R.A. No. 6810 and R.A.
No. 6938.
 Taxes, fees, or charges of any kind on the
National Government, its agencies and
 instrumentalities, and local
government units
The taxing powers of LGUs shall not extend to
the levy of any kind of tax on the national
government, its agencies, or its
instrumentalities.
Section 133 states that the common
limitations on taxing powers prevails over
section 193 which grants the LGU’s with taxing
powers, so the limitations prevail.
Procedural Matters Affecting Tax Ordinances
and Measures:
A) Public Hearing – a mandatory
requirement
Just Share in the National Taxes:
B) Questions on Constitutionality or
Legality of the Tax Ordinance – may be
raised on appeal 30 days from the
effectivity thereof. The Secretary of
Justice shall then render a decision 60
days from the date of receipt. The
appeal shall not have the effect of
suspending the effectivity
C) Publication and Public Dissemination –
Within 10 days of the approval,
Amount of Shares:
certified true copies of tax ordinances
must be published in full for three
consecutive days in a newspaper of
local circulation, or be posted for 2
days in a conspicuous and publicly
accessible place
D) Enforcement of Void or Suspended Tax
Measure – sufficient ground for
disciplinary action against the local
officials responsible for it
E) Tax Rate Adjustment – LGUs can adjust
them but not more than once every 5
years
F) Tax Exemption Privileges – may be
granted by LGUs through ordinances that
were approved. HOWEVER, under the
code unless otherwise provided, tax
exemptions – except those for local water
districts, cooperatives registered under
R.A. No. 6938, non-stock and non-profit
hospitals and educational institutions –
were withdrawn upon the code’s
effectivity
Despite this, congress may enact a law
restoring such exemptions or privileges.
G) LGUs have a just share to national taxes.
Their share is determined by law and
shall be automatically released to them.
The LGUs’ shares shall be released to
them on a quarterly basis.
H) The national government cannot
withhold part of this share for any
purpose.
I) Under the code, the LGU shall have a
share based on the collection of the third
fiscal year proceeding the current fiscal
year as follows:
 30% on the first year
 35% on the second year
 40% on the third year
In case of an unmanageable deficit, the
president is authorized upon
recommendation of the Secretary of
Finance to adjust the allotments.
HOWEVER, it cannot fall below 30% of
 the taxes collected during the third
fiscal year.
J) Before the president may interfere in
local matters there must be:
 Unmanaged public sector deficit
 Consultations with the officers of the
senate and house of reps / the
presidents of various local leagues
Equitable Share in the Proceeds of the
Utilization and Development of the National
 The corresponding recommendation of
Wealth Within their Respective Areas:
the secretaries of the department of
finance, interior and local govt, and
budges and management
Allocation of Shares:
K) Provinces – 23 %
L) Cities – 23 %
M) Municipalities – 34 %
N) Barangays - 20 %
The share of each province, city, and
municipality shall be determined by this
formula.
O) Population – 50 %
P) Land Area – 25 %
Q) Equal Sharing – 25 %
Share of each barangay with a population
not less than 100 shall not be less than
80,000 pesos per annum chargeable
against the 20% share of the barangay
from the internal revenue allotment, and
the balance to be allocated. This is the
formula:
R) On the first year:
Population – 40 %
Equal sharing – 60 %
S) On the second year:
a. Population – 50%
b. Equal Sharing – 50%
T) On the third year and thereafter
a. Population – 60%
b. Equal Sharing – 40%
To ensure that the shares benefit the
local community, each LGU shall
appropriate AT LEAST 20% of their annual
budget to developmental projects.
U) Before the code PNOC didn’t have to give
the LGUs anything, now they pay millions
of pesos to the LGUs.
V) LGUs are entitled to 40% of the gross
collection derived by the national
government from the preceding fiscal
year from mining taxes, royalties, forestry
and fishery charges and etc.
W) LGUs have a share from government
agencies or government cooperatives
engaged in the development of national
wealth.
X) The proceeds from the shares of LGUs
from the utilization and development of
national wealth shall be appropriated by
their respective sanggunian to finance
local development, but 80% derived from
the utilization of hydrothermal,
geothermal, and other sources of energy
shall be applied to lower the cost of
electricity in the LGU
Y) LGUs are empowered to create their own
sources of revenue and they also have
the authority to dispose of real or
personal property held by them in their
proprietary capacity to apply their
resources and assets for productive,
developmental, or welfare purposes.
Chapter 10 - LOCAL POLICE POWER
Police Power
1) It is the inherent power of the State to
regulate conduct for the promotion of
general welfare. It has been described as the
least limitable of the inherent powers of the
State.
27) Based on the ancient doctrine - salus populi
est suprema lex (the welfare of the people is the
supreme law.
28) In Rubi vs Provincial Board of Mindoro (39
Phil. 660), the SC stated that: “The police power of
the State is a power co-extensive with self
protection, and is not inaptly termed the ‘law
overruling necessity.’
29) Invariably described as “the most essential,
insistent, and illimitable of powers” and “in a
sense , the greatest and most powerful attribute of
government”
30) The exercise of police power may be
judicially inquired into and corrected only if it is
capricious, whimsical, unjust or unreasonable,
there having been denial of due process or a
violation of any other applicable constitutional
guarantee.
31) Thus, the state in order to promote general
welfare, may interfere with personal liberty, with
property, and with business and occupations.
Police Power in Municipal Corporations
 Police power is essentially legislative in
character and is inherently vested in Congress of
the Philippines.
 It is inherent in the State, but not in
municipal corporations. Before a municipal
corporation may exercise such power, there must
be a valid delegation of power by the Legislature
which may be through express delegation or
inferred by the mere fact of creation of the
municipal corporation.
Delegation through Local Government Code
 In matters that are deemed within the
competence of local governments to handle,
Congress delegates this power to local
governments under the Local Government Code,
through Section 16 thereof, the General Welfare
Clause.
 This clause provides that “every local
government unit shall exercise the powers
expressly granted, those necessarily implied
therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and
effective governance, and those which are essential
to the promotion of general welfare….” (See Sec.
16 of LGC)
 It is general rule that the ordinances passed
by virtue of the implied power found in the general
welfare clause must be reasonable, consonant with
the general powers and purposes of the corporation,
and not inconsistent with the laws or policy of the
State.
 Being Legislative in character, local police
power is exercised by the Sanggunian of the local
government through the enactment of the
appropriate ordinances.
Requisites for Valid Exercise of Local Police
Power
For an ordinance to be valid, it must not only
be within the corporate powers of the municipality to
enact but must also be passed according to the
procedure prescribed by law, and must be in
consonance with certain well established and basic
principles of a substantive nature.
These principles require that a municipal ordinance:
 Must not contravene the Constitution or any
statute,
 Must not be unfair or oppressive
 Must not be partial or discriminatory
 Must be general and consistent with public
policy
 Must not be unreasonable
As with the State, the local government may
be considered as having properly exercised its police
power only if the following requisites are met:
 The interests of public generally, as
distinguished from those of particular class,
require the interference of the State, and
 There must be concurrence of a lawful subject
and lawful method.
In Lim vs Pacquing, the national government
contended that Manila Ordinance No. 7065 which
purported to grant Associated Development
Corporation (ADC), a franchise to conduct jai alai
operations is void and ultra vires. The SC upheld
national government’s contention stating that jai alai
is not a mere economic activity which the law seeks
to regulate but is essentially gambling so that
whether it should be permitted and, if so, under what
conditions primarily for the lawmaking authority to
determine, taking into account national and local
interests. SC added that police power of the State
(not of local government) is paramount.
In Balacuit vs CFI of Agusan de Norte, SC agreed
with the petitioners(theater owners) that Ordinance
No. 640 of Butuan City is ultra vires and an invalid
exercise of police power. The said ordinance
penalized any person engaged in the business of
selling admission tickets to any movie or other
public exhibitions, games, contests, or other
performances who would require children between 7
and 12 yrs of age to pay full payment for admission
tickets intended for adults (they should only charge
one-half of the value of the said tickets). The Court
can see that the ordinance is clearly unreasonable if
not unduly oppressive upon the business of
petitioners.
In De la Cruz vs. Paras, the Supreme Court ruled
that municipal corporations cannot prohibit the
operation of night clubs. They may be regulated, but
not prevented from carrying on their business.
In Ermita-Malate Hotel and Motel Operations
Association Inc. vs. City Mayor of Manila, SC
affirmed the validity of a mere regulatory ordinance
that required the owner, manager, keeper, or duly
authorized representative of a hotel, motel, or
lodging house to refrain from entertaining or
accepting any guest or customer without his filling
up the prescribed form in the lobby open to public
view at all times in his presence.
In White Light Corporation vs City of Manila, SC
nullified the Manila City Ordinance as “overbreadth”
prohibiting hotels, motels, pension houses, and
similar establishments from offering a short-time
admission, as well as pro-rated or “wash up” rates to
minimize or eliminate the use of covered
establishments for illicit sex, prostitution, drug use
and alike.

Interpretation of the General Welfare Clause
Section 5 (c) of the LGC explicitly mandates
that the general welfare provisions of the LGC shall
be liberally interpreted to give more powers to the
local government units in accelerating economic
development and upgrading the quality of life for the
people of the community.
In Zoomzat, Inc. vs People, the SC court ruled that
under the general welfare clause, the LGU can
regulate operation of cable television but only when
it
Chapter 11 - LOCAL EMINENT DOMAIN
POWER
Eminent Domain
1. The right or power of a sovereign state to
appropriate private property to particular
uses to promote public welfare. It is an
indispensable attribute of sovereignty; a
power grounded in the primary duty of
government to serve the common need and
advance the general welfare.
2. This power is essentially legislative in
nature. It is firmly settled but may be
validly delegated to local government units,
other public entities and public utilities,
encroaches on public properties, such as the use of
public streets, rights of ways, the founding structures
and the parceling of large regions. Beyond these
parameters, its acts such as the grand of the franchise
to Spacelink, would be ultra vires.
In Tan vs Perena, the SC acknowledged the ability
of the national government to implement police
power measures that affect the subjects of municipal
government, especially if the subjects of the
regulation is a condition of universal character
irrespective of territorial jurisdictions. Cockfighting
is one of such conditions.
Territorial Limitations
It has been held that the municipality may exercise
police power in the protection of the territory to
insure cleanliness, and prevent any business and
conduct likely to corrupt the fountain of water
supply for the city.
although the scope of this delegated
legislative power is necessarily narrower
than that of the delegating authority and may
only be exercised in strict compliance with
the terms of the delegating law.
3. However, the right of expropriation is not an
inherent power in a municipal corporation,
and before it can be exercised, some law
must exist conferring the power upon it.
When the courts come to determine the question,
they must not only find
(a) that a law or authority exists for the exercise of
the right of eminent domain, but
 (b) also the right or authority is being exercised in
accordance with the law.
Specific requirements for local eminent domain
(Sec 19 of LGC)
 It is exercised through its chief executive and
acting pursuant to an ordinance;
 It is for public use, or purpose, or welfare for
the benefit of the poor and the landless;
 Payments of just compensation, pursuant to the
provisions of the Constitution and pertinent
laws; and
 A valid and definite offer has been previously
made to the owner, and such offer was not
accepted.
 Exercised through its chief executive and
acting pursuant to an ordinance
In Municipality of Paranaque vs V.M. Realty
Corporation, the SC ruled that the LGC of 1991,
which was the law already applicable, specifically
requires “ordinance,” such that a mere “resolution”
will not suffice. The court said that there is a
difference between an ordinance and a resolution
in that the former has the force and effect of laws
while the latter is merely an expression of the
sentiment of the local legislative body.
2. For public use, or purpose, or welfare for the
benefit of the poor and the landless
This concept of “public use,” was limited to the
uses that are readily available to any member of the
community like in the case of a public road, bridge,
or public plaza. However, this concept had been
expanded to mean “promotion of general welfare.”
The following shall be considered as public use,
purpose or welfare (Implementing Rules of the
Local Government Code):
 Socialized housing;
 Construction or extension of roads, streets,
sidewalks, viaducts, bridges, ferries, levees,
wharves, or piers;
 Construction or improvement of public buildings;
 Establishment of parks, playgrounds, or plazas;
 Establishment of market places;
 Construction of artesian wells or water supply
systems;
 Establishment of cemeteries or crematories;
 Establishment of drainage systems, cesspools, or
sewerage systems;
 Construction of irrigation canals or dams;
 Establishment of nurseries, health centers, or
hospitals;
 Establishment of abattoirs; and
 Building of research, breeding, or dispersal
centers for animals
In Lourdes de la Paz Masikip vs. City of Pasig,
where the taking by the State of private property is
done for the benefit of a small community which
seeks to have its own sports and recreational facility,
not withstanding that there is such a recreational
facility only a short distance away, cannot be
considered to be for public use.
3. Payments of just compensation (Sec 9 Art II of
the 1987 Constitution)
“Just Compensation” is described as a full and fair
equivalent of the property taken from the private
owner by the expropriator. This is to indemnify the
owner for the loss he has sustained as a result of the
expropriation.
 Where only a portion of the private property
is expropriated, the owner is entitled to a just
compensation on the basis of the fair market
value of the property plus consequential benefits.
The concept of “fair market value” also presupposes
that it shall be paid within a reasonable time or it is
no fair market value at all.
 The SC interpreted the requirement that
payment of just compensation should be made
within a reasonable time means that the
expropriator must pay the property owner just
compensation within five (5) years from the
finality of the judgement in the expropriation case.
In Republic vs. Lim, the SC mandated that “the
landowner is entitled to recover possession of the
property expropriated if the government fails to
fully pay just compensation to the owner within a
periof of five (5) years from the finality of the
judgement in expropriation proceeding.
4. A valid and definite offer has been previously
made to the owner, and such offer was not
accepted.
 As required, the Local Government must
first make an offer (must be in writing) to buy the
private property before it can legally initiate an
expropriation proceeding so that if the owner of
the property agrees to sell it, the local govt need
not expropriate the property.
 It shall specify the property sought to be
acquired, the reasons for acquisition and the price
offered.
 If the owner/owners accept the offer in its
entirety, a contract of sale shall be executed and
payment forthwith made.
 If the owner/owners are willing to sell their
property but at a price higher that that offered to
them, the local chief executed shall call them to the
conference for the purpose of reaching an
agreement on the selling price.
 If the LGU fails to acquire a private property for
public use, purpose, or welfare through purchase,
LGU may expropriate property through a
resolution of the Sanggunian authorizing its chief
executive to initiate expropriation proceedings.
 The Local chief executive shall cause the
provincial, city, or municipal attorney concerned
or, in his absence, the provincial or city prosecutor,
to file expropriation proceedings in the proper
court in accordance with the Rules of Court and
other pertinent laws.
 The LGU may immediately take position of the
property upon the filing of expropriation
proceedings and upon making a deposit with the
proper court of at least 15% of the fair market
value of the property based on the current tax
declaration of the property to the expropriated.
For expropriation of for purposes of urban land
reform and housing (RA 7279 Urban Development
Housing Act of 1992), read Sec. 9 and 10.

CHAPTER 12 – POWER TO RECLASSIFY
LANDS
A city or municipality may, through an
ordinance passed by the sanggunian after
conducting public hearing for that purpose,
authorize the reclassification of agricultural
lands and provide for the manner of their
utilization or disposition--
1) when the land ceases to be
economically feasible and sound for
agricultural purposes as determined by
the Department of Agriculture, or
2) where the land shall have substantially
greater economic value for residential,
commercial, or industrial purposes, as
determined by the sanggunian
concerned.
However, such reclassification shall be limited
to the following percentage of the total
agricultural land area at the time of the
passage of the ordinance:
1) For highly urbanized and independent
component cities, fifteen percent;
2) For component cities and first to third
class municipalities, ten percent;
3) For fourth to sixth class municipalities,
five percent.
The President may, when public interest so
requires and upon the recommendation of the
National Economic and Development Authority,
authorize a city or municipality to reclassify
lands in excess of the limits set forth above.
Nicolas Laynesa v. Uy
 The SC ruled that despite the
reclassification of an agricultural land to
non-agricultural land by a local
government unit, the DARAB still retains
jurisdiction over a complaint filed by a
tenant of the land in question for
threatened ejectment and redemption.
 The local government units need not
obtain the approval of the DAR to
convert or reclassify lands from
agricultural to non-agricultural use.
CHAPTER 13 – CLOSURE OF ROAD, ALLEY,
PARK OR SQUARE
A local government unit may, pursuant to an
ordinance, permanently or temporarily close or
open any local or national road, alley, park, or
square falling within its jurisdiction. However, it
is submitted that such power shall be deemed
implied in the General Welfare power of every
local government unit.
Permanent Closure
 The ordinance authorizing it must be
approved by at least 2/3 of all the
members of the sanggunian concerned,
and when necessary, an adequate
substitute for the public facility that is
subject to closure is provided.
 No such way or place or any part thereof
shall be permanently closed without
making provisions for the maintenance
of public safety therein.
 No park shall be closed permanently
without provision for its transfer or
relocation to a new site.
 No permanent closure of any local road,
street, alley, park, or square shall be
affected unless there exists a compelling
reason or sufficient justification thereof
such as, but not limited to:
 change in land use
  establishment of infrastructure
facilities
 projects
 or such other justifiable reasons as
public welfare may require.
 
Macasiano v. Diokno
 aside from the requirement of due
process which should be complied with
before closing a road, street or park,
the closure should be for the sole
purpose of withdrawing the road or
other public property from public use
when circumstances show that such
property is no longer intended or
necessary for public use or public
service.
Cebu Oxygen and Acetelyne Co. v. Berciles
 The City Council of Cebu through a
resolution declared a terminal road as
an abandoned road and authorized its
sale through a public bidding.
 The SC held that the City of Cebu is
empowered to close a city street and to
vacate or withdraw the same from
public use.
LGC of 1991: “a property thus permanently
withdrawn from public use may be used or
conveyed for any purpose for which other real
property belonging to the locla government
unit concerned may be lawfully used or
conveyed.”
Temporary Closure
 Any national or local road, alley, park,
or square may be temporarily closed
during:
 an actual emergency or fiesta
celebrations
 public rallies or agricultural and
industrial fairs
 undertaking of public works and
highways, telecommunications, and
waterworks projects
The duration of which shall be specified
by the local chief executive concerned in
a written order.
 In case of fiesta celebration, the closure
should not exceed 9 days.
 No national or local road, alley, park, or
square shall be temporarily closed for
athletic, cultural, or civic activities not
officially sponsored, recognized, or
approved by the local government unit
concerned.
 Any city, municipality, or barangay may,
by a duly enacted ordinance,
temporarily close or regulate the use of
any local street, road, thoroughfare, or
any public place where shopping malls,
Sunday flea or night markets or
shopping areas may be established and
where goods, merchandise, foodstuffs,
commodities, or articles of commerce
may be sold and dispensed to the
general public.
No Just Compensation in general
 The closure of a road, alley, park or
square presupposes an exercise of
police power. Hence, for any loss or
inconvenience caused to a property
owner is a “damnum absque injuria”
(damage without injury) thus, no
compensation.
Sangalang v. IAC
 When any property is condemned or
seized by competent authority in the
interest of health, safety or security, the
 owner thereof shall not be entitled to
compensation.
Power to close road, etc., discretionary to LGU
 The local legislative body has the
competence to determine whether or
not a certain property is still necessary
for public use.
 Such discretion will not be ordinarily be
controlled or interfered with by the
courts.
Pilapil v. CA
 The establishment, closure or
abandonment of the camino vecinal
was found to be the sole prerogative of
the Municipality.
CHAPTER 14 – CORPORATE POWERS
The Local Government Code mandates that
every local government unit, as a corporation,
shall have the following powers: (Section 22,
LGC).
1. To have continuous succession in its
corporate name;
2. To sue and be sued;
3. To have and use a corporate seal;
4. To acquire and convey real or personal
property;
5. To enter into contracts; and
6. To exercise such other powers as are
granted to corporations, subject to the
limitations provided in this Code and
other laws.
1. To have continuous succession in its
corporate name
 In order to be able to act as a juridical
entity and exercise such corporate
powers granted to a local government, it
must first have a corporate name.
 Under the Code, the Sangguniang
Panlalawigan may, in consulation with
the Philippine Historical Institute,
change the name of component cities and
municipalities, upon the
recommendation of the Sanggunian
concerned, provided that the same shall
be effective only upon ratification in a
plebiscite conducted for the purpose in
the political unit directly affected.
 A change of name will not dissolve nor
destroy the identity of the municipal
corporation, nor affect its rights,
privileges or liabilities.
 It is prohibited to use the names of living
persons except for justifiable reasons.
 The term “corporate” signifies that a
local government unit has “distinct and
separate personality.”
 Local government units may only be
held liable for acts of its officers only
when they acted “by authority” annd “in
conformity with the requirements of the
law”. Otherwise, the officers will be held
personally liable.
2. To sue and be sued
 While it is not an inherent power of
municipal corporations, this power is
vested in the local government units not
only by the LGC of 1991, but also in the
charters creating them.
  This explicit grant of the power to sue
and be sued is one form of an express
consent on the part of the State to be
sued.
 Suability vs. Liability
 Suability depends on the consent of
the state to be sued, liability on the
applicable law, and the established
facts. The fact that the state is suable
does not mean that it is liable. It can
never be held liable if it does not
first consent to be sued.
 Liability is not conceded by the
mere fact that the state has allowed
itself to be sued. When the state
does waive its sovereign immunity,
it is only giving the plaintiff the
chance to prove, if it can, that the
defendants is liable.
 As a rule, the local government unit
sues through its local chief executive
and as authorized by the Sanggunian.
FACTS:
Respondents Mayor Cuizon and Tropical
Commercial Co. entered into a contract
involving the purchase of road construction
equipment for $520,912.00 cash from Tropical.
The City Council of Cebu filed with the CFI a
complaint to nullify said contract as having been
executed without prior authority from it.
Complaint was dismissed for lack of legal
capacity.
The lower court held that there is no provision
of law authorizing the city council to sue in
behalf of the city and that the authorized
representative under the LGC is the city mayor
for that purpose.
Hence the appeal.
ISSUE: Whether or not the city councilors have
the legal capacity to question the validity of the
contract entered into by the mayor.

RULING:
City Council of Cebu v. Cuizon
 The City of Cebu sued through its
councilors in a “representative suit” and Yes. Generally, suit is commenced by the local
as “taxpayers”, in order to declare null executive, i.e. the mayor, upon authority of the
and void a contract which was executed sanggunian, except where the city councilors
by defendant city mayor purportedly in themselves and as representatives in behalf of
behalf of the city without valid authority the city, bring the action to prevent unlawful
and which had been expressly declared disbursement of public funds.
by the Auditor-General to be null and
void ab initio.
Here where the defendant city mayor’s acts and
 This case is considered peculiar because
contracts purportedly entered into on behalf of
the local chief executive, the Mayor of
the city are precisely questioned as unlawful, the
Cebu City, could not have represented
city mayor would be the last person to file such
the local government unit as he was in
a suit on behalf of the city, since he precisely
fact the defendant in that case.
maintains the contrary position that his acts
have been lawful and thus duly bind the city.
To adhere to the lower court’s interpretation
would mean that no action against a city
mayor’s acts and contracts in the name and on
behalf of the city could ever be questioned and
subjected to judicial action for a declaration of
nullity and invalidity, since no city mayor
would file such an action on to question, much
less nullify, contracts executed by him on
behalf of the city and which he naturally
believes to be valid and within his authority.
Hence, the order appealed from is set aside and
the lower court is ordered to proceed with the
trial and disposition of the case.
Ramos v. Court of Appeals
 Under the Revised Administrative Code,
only provincial fiscal and the municipal
attorney can represent a province or
municipality in their lawsuits. It is only
when the government lawyer is clearly
disqualified to handle the case that the
local government unit may hire private
lawyers.
Bugnay Construction v. Laron Digest
G.R. No. 79983 August 10, 1989
Ponente: Regalado, J.:
Facts:
1. A lease contract between the City of
Dagupan and P & M Agro was executed for the
use of a city lot called the Magsaysay Market
Area. Subsequently, the City filed a case to
rescind the contract due to the failure of P&M to
comply with the lease contract conditions.
2. Thereafter, the City issued a resolution
granting the lease of said lot to the petitioner
Bugnay COnstruction for the establishment of a
Magsaysay Market building. As a result,
respondent Ravanzo filed a taxpayer's suit
against the City assailing the validity of the
lease contract between the petitioner and the city.
Ravanzo was the counsel of P&M Agro in the
earlier case.
Issue: Whether or not the respondent is the real
party in interest
NO.
1. The Court held that the respondent has no
standing to file the case. There was no
disbursement of public funds involved in this
case since it is the petitioner, a private party
which will fund the planned construction of the
market building.
Alinsug v. RTC Br. 58, San Carlos City,
Negros Occidental
 The law allows a private counsel to be
hired by a municipality only when the
municipality is an adverse party in a case
involving the provincial government or
another municipality or city within the
province.
3. To have and use a corporate seal
 Local government units may continue
using. Modifying, or changing their
existing corporate seal. It should be
registered with the Department of
Interior and Local Government (DILG).
4. To acquire and convey real or personal
property
 The corporate personality of the local
government unit allows it to acquire and
convey real and personal properties.
 A municipal corporation may acquire
property in its public or government
powers and private or propriety capacity.
4.1 Public and Patrimonial Properties
 The property of provinces, cities, and
municipalities is divided into property
for public use and patrimonial
property.(Art. 423, NCC)
 Local government units hold properties
in their:
a. government capacity as for properties
for public use; and
b. propriety capacity as for properties
deemed patrimonial.
 Property for public use in the provinces,
cities, and municipalities:(art. 424, NCC)
 provincial roads
 city streets
 municipal streets
 the squares
 fountains
 public waters
 promenades
 public works for public services
 All other property possessed by any of
them is patrimonial and shall be
governed by the New Civil Code,
without prejudice to the provisions of
special laws.
 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. But if the property is owned in its
private or proprietary capacity, then it is
patrimonial and Congress has no
absolute control.
 The manner by which it was acquired
and the kind of fund used in acquiring
the property may serve as guide to
identify whether the property is public or
matrimonial.
Knowing whether the property of the local
government unit is held in its governmental or
proprietary capacity is important in the
following areas of concern:
g) Property for public use is under the
control of Congress because the lgu in
this instance is merely a political agent
of the State/Natioanal Government.
h) Property for public use cannot be the
subject of a contract as it is beyond the
commerce of man.
i) Public property cannot be acquired by
prescription against the state.
j) Public property cannot be the subject of
attachment and execution.
 k) Public property cannot be burdened by
any voluntary easement.
Province of Zamboanga del Norte vs City of
Zamboanga (conflict between special law and
NCC, former prevails)
properties of a municipal
corporation, of which a province is one. The
principle itself is simple: If the property is
owned by the municipality (meaning municipal
corporation) in its public and governmental
capacity, the property is
public and Congress has absolute control over it.
But if the property is owned in its private or
proprietary capacity, then it is patrimonial and
Congress has no absolute control. The
municipality cannot be deprived of it without
due process and payment of just compensation
Art. 424 NCC: ...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. Law of Municipal Corporations
can be considered as “special laws”. Hence, the
classification of municipal property devoted for
distinctly governmental purposes as public
should prevail over the Civil Code
classification in this particular case
Rabuco v. Villegas
Facts:
The constitutionality of RA No. 3120 was
assailed by the city officials of the City of
Manila contending that the conversion of the
lots in Malate area into disposable and alienable
lands of the state and placing its administration
and disposal to the LTA to be subdivided into
lots and selling it to bona fide occupants thereof
in installments constitutes a deprivation of the
City of Manila of its property by providing for
its sale without the payment of just
compensation.
Issue:
Whether or not the properties in dispute may be
disposed without paying just compensation to
the City of Manila?
Held:
The court held that the assailed RA 3120 is
constitutional. The lots in question are owned by
the City of Manila in its public and
governmental capacity and are therefore public
property over which Congress has absolute
control as distinguished from patrimonial
property owned by it which cannot be deprived
from the City without just compensation and
without due process. RA 3120 expressly
provides that the properties are reserved for the
purpose of communal property and ordered its
conversion into disposable and alienable lands
of the state to be sold to its bona fide occupants.
It has been an established doctrine that the state
reserves its rights to classify its property under
its legislative prerogative and the court cannot
interfere on such power of the state.
Villanueva v. Castaneda (Very important case
guys)
Facts:
municipal council of San Fernando adopted
Resolution No. 218 authorizing 24 members of
Fernandino United Merchants and Traders
Association to construct permanent stalls and
sell in the subject property within the vicinity of
the public market. CFI issued writ of
preliminary injunction to prevent the
construction of stalls.
While the case was pending, the municipal
council adopted Resolution No. 29 which
declared the subject area as a parking place and
as the public plaza of the municipality. CFI
decided Civil Case No. 2040 and held that the
subject land was public in nature and was
beyond the commerce of man. The preliminary
injunction was made permanent.
Petitioners argued that they had right to occupy
the area by virtue of lease contracts entered into
with the municipal government, and later, by
virtue of space allocations made in their favor
for which they paid daily fees. The municipality
denied that they entered into said agreements. It
argued that even if the leases were valid, the
same could be terminated at will because rent
was collected daily.
ISSUE:
Whether or not the vendors had the right to
occupy and make use of the property.
HELD:
No. A public plaza is beyond the commerce of
man and so cannot be the subject of lease or
any other contractual undertaking. 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 according to law. Town plazas are
properties of public dominion, to be devoted to
public use and to be made available to the public
in general. They are outside the common of man
and cannot be disposed of or even leased by the
municipality to private parties.
Even assuming a valid lease of the property in
dispute, the resolution could have effectively
terminated the agreement for it is settled that the
police power cannot be surrendered or bargained
away through the medium of a contract.
Dacanay v. Asistio
ISSUE
May public streets be leased or licensed to
market stallholders by virtue of a city ordinance
or resolution of Metropolitan Manila
Commission?
HELD: NO
1. A public street is property for public use
hence outside the commerce of man. Being
outside the commerce of man, it may not be the
subject of lease or other contract
2. The vested right of the public to use city
streets for the purpose they were intended to
serve such as for traveling
3. Any executive order or city resolution cannot
change the nature of the public street because it
is going to be contrary to the general law
Viuda de tantoco v. Municipal Council of
Iloilo(very important too)
  NOTE: properties for public use held
in municipal corps. Are not subject to
levy and execution
FACTSThe widow of Tan Toco sued the
municipal council of Iloilo for the two strips of
land which the municipality of Iloilo had
appropriated for widening said street. On
account of lack of funds the municipality of
Iloilo was unable to pay the said judgment,
wherefore plaintiff had a writ of execution issue
against the property of the said municipality, by
virtue of which the sheriff attached two auto
trucks, one police patrol automobile, the police
stations on Mabini street, and in Molo and
Mandurriao and the concrete structures, with
the corresponding lots.
ISSUE
Whether the Municipal properties can be
executed in lieu of the unsatisfied obligation?
HELD
No, property for public use of the State is not
within the commerce of man and, consequently,
is unalienable and not subject to prescription.
Likewise, property for public use of the
municipality is not within the commerce of man
so long as it is used by the public and,
consequently, said property is also inalienable.
The rule is that property held for public uses,
such as public buildings, streets, squares, parks,
promenades, wharves landing places, fire
engines, hose and hose carriages, engine houses,
public markets, hospitals, cemeteries, and
generally everything held for governmental
purposes, is not subject to levy and sale under
execution against such corporation.
Municipality of Paoay vs Manaois
Issue:
May the fishery or municipal waters of the town
of Paoay or its usufruct may be levied upon and
subject to execution? How about the revenue or
income derived from the renting of these fishery
lots?
Held:
No, properties for public use held by municipal
corporation are not subject to levy and execution.
The reason= held in trust for the people.
HOWEVER, revenue or income coming from
the renting of these fishery lots is certainly
subject to execution. These are profitable, it is a
sort of sideline, so that even without it the
municipality may still continue functioning and
perform its essential duties as such municipal
corporations.
City of Angeles vs CA
ISSUE
Whether a subdivision owner/developer is
legally bound under Presidential Decree No.
1216 to donate to the city or municipality the
“open space” allocated exclusively for parks,
playground and recreational use
HELD:
YES. it is no longer optional on the part
of the subdivision owner/developer to donate the
open space for parks and playgrounds; rather
there is now a legal obligation to donate the
same.
These are non-alienable public lands, and
non-buildable. No portion of the parks andplay
grounds donated thereafter shall be converted to
any other purpose or purposes.
PD 1216: open space- an area reserved
exclusively for parks,playgrounds, recreational
 uses, schools, roads, places of worship, subject of the ammended longer foreshore or
hospitals, health centers, barangay centers and joint venture agreement submereged and may qualify
other similar facilities and amenities (JVA) are STILL as alienable public
SUBMERGED lands, agricultural lands.
therefore unalienable.
4. 2. Submerged Lands, foreshore lands, and --According to the JVA,
reclaimed lands PEA conveyed to Amari
the submerged lands even
 Generally: they belong to the state’s before their actual
inalienable natural resources. reclamation.
 Exception: after being reclaimed, in
accordance with the law, they cease to
be public properties and may be Illegal- There is an legal-ONLY an irrevocable
disposed as patrimonial properties. immediate transfer to the option to purchase of
joint venture. foreshore lands once actually
 QUESTION:Who may acquire such reclaimed
Amari’s right to own the
lands after being reclaimed?
submerged land is
IMMEDIATELY
effective upon approval
Chavez vs PEA and Amari Coastal Bay dev. of the ammended JVA,
Corp. (Amari case)- important case not merely an option to be
exercised in the future if
(take note of the comparison of this case to the reclamation is actually
Ponce case (Ponce et. al. Vs City of Cebu et. al) realized.
Amari case Ponce Case Same Amari case: Court reiterated the need for
PUBLIC BIDDING (sec. 379, LGC 1991)
ISSUE: WON private Admit that submerged lands
corp. (Amari) can still belong to the national  Who will reclassify the land? DENR
lawfully acquire gov. And inalienable except
submerged and reclaimed agricultural lands (sec 2, art.
submerged lands in XII constitution)
Manila bay? Constitutional Ban on acquisition of alienable
--Cebu city ordinance merely pub. Lands and pub. Corp; End-user
HELD: granted Essel Inc. An government agency doctrine
“irrevocable option to
Submerged lands, like
purchase the forshore lands
waters (sea or bay) above
AFTER reclamation, it did
them are inalienable. This
not actually sell the still to be  LGU is a pub. Corp. And is qualified
is also true to under the constitution to hold alienable
reclaimed foreshore lands.
FORESHORE lands. Any or even inalienable lands of public
sale of submerged or --Option to purchase referred domain.
forshore lands is void to RECLAIMED lands, not
being contrary to the foreshore lands which are
constitution. inalienable.
PHILIPPINE FISHERIES DEVELOPMENT
--Here, the bulk of lands --Reclaimed lands are no AUTHORITY vs CA
- The Iloilo Fishing [P]ort [Complex/IFPC]
constructed by the State for public use and/or
public service falls within the term “port” in the
aforecited provision which can’t be subject for
execution/sale. Whether there are
improvements in the fishing port complex that
should not be construed to be embraced within
the term ‘port’. Any doubt on whether the
entire IFPC may be levied upon to satisfy the
tax delinquency should be resolved against the
City of Iloilo.
The NFPC cannot be sold at public auction in
satisfaction of the tax delinquency. The land on
which the NFPC property sits is a reclaimed
land, which belongs to the State. In Chavez v.
Public Estates Authority, the Court declared
that reclaimed lands are lands of the public
domain and cannot, without Congressional fiat,
be subject of a sale, public or private.
5. To enter into contracts
 can enter into contracts
 must be respected by congress thus any
obligations arising out of municipal
contracts CANNOT be impaired by
congress.
 HOW? Local chief executive +
sangunian’s approval + posting
◦ SECTION 22, LGC
▪ unless otherwise provided by
this code, NO contract may be
entered into by the local chief
executive in behalf of LGU
without prior authorization of
the SANGGUNIAN concerned.
▪ Legible copy of such must be
posted at a conspicuous place in
the provincial capitol, city of
brgy. Hall.
5.1 Requisites for valid LGU contract
-conditions for a local chief executive may enter
into a contract in behalf of LGU: PSPACFPG
(Papa is SuPer ACtive For the
President’sGovernor)
A) LGU must have the POWER to enter
into the particular contract (note: LGU’s
cannot enter into contracts on extracting
natural resources, it is the national
government);
B) Prior authorization by the
SANGGUNIAN concerned and legible
copy of such must be POSTED at a
conspicuous place in the provincial
capitol, city of brgy. Hall.(sec. 22c, LGC);
C) If contract involves expenditure of public
funds there should be ACTUAL
APPROPRIATION and
CERTIFICATE OF AVAILABILITY
OF FUNDS by the treasurer of LGU
(Secs. 46 and 47, chapter subtitle B, Book V,
1987 admin, code);
D) Conform with FORMAL requisites of
written contracts prescribed by law;
E) If province is a party conveying real
property, it must be approved by the
PRESIDENT (sec 2068 revised admin code).
If a municipality is a party conveying
real property or any interest or creating
lien, must be approved by GOVERNOR
(sec 2196 revised admin code).
Note: statutes requiring pub. Bidding apply to contracts
already executed in compliance with law if such
amendments ALTER orig cont.
5.2 Prior authorization by Sanggunian
QUISUMBING, et al. vs GARCIA, et al.
(very important case)
Facts: COA conducted a financial audit on
the Province of Cebu and found out that
several contracts were not supported with
a Sangguniang Panlalawigan resolution
authorizing the Provincial Governor to
enter into a contract, as required under
Section 221 of R.A. No. 7160. Gov Garcia
sought reconsideration of this findings.
However, without waiting for its
resolution, filed an action for
declaratory relief with the RTC. Gov
claimed that the no prior authorization is
required because the expenditures incurred
are already authorized by the
appropriation ordinances of the previous
year which are deemed re-enacted. RTC
ruled that no prior authorization is
required.
HELD:
1. Reenacted- ONLY for salary and wages
2. Not reenacted- appropriation ordinance
describing new projects in generic terms
such as infrastructure, inter municipal
water works, drainage etc. It NEEDS
sanggunian’s approval.
5.3 EFFECTS OF COMPLIANCE of the
Requisites
Question (note: this might come out sa
exam) :
 Distinguish Ratification from
Authorization.
Ratification (after) presumes that
there is already an authorization
(before).
 Effects: (refer to 5.1 Requisites
for valid LGU contract)
Entered without Effect/Ratification
compliance
with:
A and C -Ultra Vires (acting or done beyond
requisites one's legal power or authority) and null
and void.
-Cannot be ratified.
B and D -Defective BUT can be ratified
requisites expressly or impliedly
-DOCTRINE OF ESTOPPEL will not apply to
void contracts when LGU already received
benefits because it will only validate the
void contract.
-DOCTRINE OF IMPLIED MUNICIPAL LIABILITY
apply to transactions without contracts
BUT could have been valid had one been
entered to to the extent of the benefit
received.
Vergara vs Ombudsman: (important case)
FACTS:
The City Government of Calamba (Calamba City),
through Mayor Lajara, entered into the following
agreements: MOA, Deed of Sale, Deed of Real
Estate Mortgage and Deed of Assignment of Internal
Revenue Allotment (IRA).
The above documents were subsequently endorsed
to the City Council. Petitioner, however, alleged that
all these documents were not ratified by the City
Council, a fact duly noted by the Commission on
Audit.
Respondents justified the absence of ratification by
the City Council of the MOA, Deed of Sale, Deed of
Mortgage, and Deed of Assignment. They cited
Section 22 of Republic Act No. 7160 (RA 7160)
which spoke of prior authority and not ratification.
Respondents pointed out that petitioner did not
deny the fact that Mayor Lajara was given prior
authority to negotiate and sign the subject
contracts. In fact, it was petitioner who made the
motion to enact Resolution No. 280.
ISSUE: Whether all the documents pertaining to
the purchase of the lots should bear the ratification
by the City Council of Calamba.
HELD:
Clearly, when the local chief executive
enters into contracts, the law speaks of
prior authorization or authority from the
Sangguniang Panlungsod and not
ratification. It cannot be denied that
the City Council issued Resolution No. 280
authorizing Mayor Lajara to purchase the
subject lots.
ratification by the City Council is not a condition
sine qua non for Mayor Lajara to enter into
contracts. With the resolution issued by the
Sangguniang Panlungsod, it cannot be said that
there was evident bad faith in purchasing the
subject lots.
Power to Negotiate and Secure Grants
SECTION 23, LCG
GENERAL RULE:
Local executive may, upon AUTHORITY of
sanggunian negotiate and secure financial
grants and donations in kind, in support
of services and facilities given in sec.
17, LGC from local and foreign assistance
agencies WITHOUT necessity of securing
clearance or approval from any department,
agency, or office of the national
government or from any higher LGU.
EXCEPTION:
projects finance by such grants or
assistance with national security
implications shall be approved by the
national agency concerned PROVIDED that
when national agency FAILS to act on
request for approval within 30 days from
receipt, it is deemed approved.
Local chief executive, within 30 days upon
signing of such grant agreement of deed of
donation, report the nature, amount, and
terms of such assistance to both houses
of congress and the President.
CHAPTER 15: LIABILITY FOR DAMAGES
Liability for Defective public works
 Article 2189, NCC “Provinces, cities and
municipalities shall be liable for
damages for death of, or injuries
suffered by, any person by reason of the
defective condition of the roads, streets,
bridges, public buildings and other
public works under their control and
supervision.
◦ requires only CONTROL and
SUPERVISION for liability to arise
regardless of ownership.
◦ Specific on defects on road...etc.
 Art. 471, rules and Regulations
Implementing LGC “ extent of liability
shall be governed by the provisions of
the civil code on quasi delict”.
Cases (okay, here comes the manholes :)

Jimenez vs City of Manila
A victim fell in an uncovered opening in a
public market managed by Asiatic Integrated
corp.
Respondent City of Manila maintains that it
cannot be held liable for the injuries sustained
by the petitioner because under the
Management and Operating Contract, Asiatic
Integrated Corporation assumed all
responsibility for damages which may be
suffered by third persons for... any cause attri-
butable to it.
However Article 2189 of the Civil Code which
governs liability due to "defective streets,...
public buildings and other public works"
requires only that the province, city or
municipality has either "control or supervision"
over the public building in question. There is
no question that the Sta. Ana Public Market,
despite the Management and Operating
Contract between respondent City and Asiatic
Integrated Corporation remained under the
control of the former. In fact it employed a
market master to take direct supervision and
control to check the safety of the place.
Guilatco vs City of Dagupan
Facts: Florentina Guilatco was about to board
a tricycle at a sidewalk located at Perez Blvd. (a
national road) when she accidentally fell into
an open manhole resulting in her
hospitalization and continuing difficulty in
locomotion. City of Dagupan denied liability on
the ground that the manhole was located on a
national road, which was not under the control
or supervision of the City of Dagupan.
ISSUE:
Whether the City of Dagupan is liable to Guilatco.
HELD:
Yes, the City of Dagupan is liable. For Article 2189
to apply, it is not necessary for the defective road or
street to belong to the province, city or municipality.
The article only requires that either control or
supervision is exercised over the defective road or
street.
Here, control or supervision is provided for in the
charter of Dagupan and is exercised through the City
Engineer, whose duties include the care and custody
of the public system of waterworks and sewers.
Municipality of San Juan, Metro Manila Vs. CA
Municipal liability for injuries caused by failure to
regulate drilling and excavation attaches weather it
be in a national or municipal road so long as it is
within the latter’s jurisdiction.
LIABILITY for Torts
If LGU is engaged in governmental functions, it is
not liable for such damages but if it is engaged in
proprietary functions, it is liable.
Cases:
Municipality of San Fernando La Union vs Firme -
this case was decided on Feb. 1989 when LGC was
not yet effective (take note of the difference of this
case to the case of Sps. Jayme vs Apostol)
The test of liability of the municipality depends on
whether or not the driver acting in behalf of the
municipality is performing governmental or
proprietary functions. Municipal corporations are
suable because their charters grant them the
competence to sue and be sued. Nevertheless, they
are generally not liable for torts committed by them
in the discharge of governmental functions and can
be held answerable only if it can be shown that they
were acting in a proprietary capacity. In permitting
such entities to be sued, the State merely gives the
claimant the right to show that the defendant was
not acting in its governmental capacity when the
injury was committed or that the case comes under
the exceptions recognized by law. Failing this, the
claimant cannot recover.
NOTE HOWEVER that under section 24, LGC, LGU
and their official are liable are NOT EXEMPT from
liability for death or injury to persons or damage to
property
Sps. Jayme vs Apostol
Liability of LGU under art. 2180 of the NCC is clear
that the obligation imposed in 2176 is demandable
not only for ones acts and omissions but also for
those whom he is responsible.
Torio vs Funtanilla
Municipal council of Malasiqui ordered the
construction of wooden stage for the town fiesta
however it collapsed causing serious physical
injuries to the participants.
Held: Municipality is liable for holding a fiesta is a
proprietary function not for general welfare. The
councilors were however absolved for they can be
likened to members of the board of directors in
private corp. having a distinct personality since
celebration of fiesta is not a government function.
They are not liable for damages for negligence of
an agent and the employees of government unless
there is a showing of bad faith or gross negligence.
City of Manila vs IAC
in the absence of special law, North cemetery is a
patrimonial property of the city of Manila. The
administration and government of the cemetery
were under the city health officer and the order
and police of the cemetery, opening graves etc.
were under the superintendent of the cemetery.
City is therefore liable for the tortuous acts of its
employees under the principle of respondeat
superior.
Liability for Contracts:
 LGU’s 2 fold power:
1. public, governmental or political-
▪ administering power of the
state and promoting public
welfare
▪ including: legislative, judicial,
public and political functions.
2. corporate, private and proprietary-
▪ for special benefit and
advantage of the community.
▪ Including: ministerial, private
and corporate
1. Doctrine of Implied Municipal Liability
 municipality may be obligated upon an
implied contract to pay the reasonable
value of benefits accepted or appropriated
by it as to which it has general power to
contract.
 Apply to all cases where money and
property is receive under general law
 principles rests on the theory that the
obligation implied by law to pay does not
originate in unlawful contract but arises
from considerations outside it.
Province of Cebu vs IAC
by reaping benefits out of the contract, city of Cebu
is estopped from questioning its validity
2. Doctrine of Estoppel, not applicable to VOID
contracts
limitation of no. 1. It cannot be applied to mun. corp.
to validate a contract which corp. has no power to
make or which it is not authorized to do so.
-Otherwise, it will allow the Mun. to do acts
indirectly what it cannot do directly. (San Diego vs
Mun. of Naujan)
Liability for Illegal Dismissal of Employees
-an illegally dismissed employee who is later
reinstated is entitled to back wages and other
monetary benefits at the time of dismissal to
reinstatement.
BUT who will be liable? The LGU or the officer who
effected it?
1. Municipal liability
Municipality of Jasaan vs Gentallan
permanent appointee to the position, Gentallan is
entitled to security of tenure and benefits. So who
should be liable for damages? Since no finding of
malice or bad faith which attended illegal dismissal
and refusal to reinstate Gentallan by her superior
officers, latter can’t be accountable for back
salaries so municipal government was ordered to
disburse funds to answer to such.
HOWEVER, if the LGU approved or permitted the
illegal act of the officials in removing its employees,
it may be held jointly and severally with the pub.
Official (Laganapan vs Asedillo).
2. Enforcement of Monetary Judgment
2.1. remedy- levy on patrimonial property of the
government (Municipality of Paoay vs Manaois)
2.2. But is the LGU do not have patrimonial
properties- Remedy file petition for mandamus to
compel it to pay to satisfy judgment (Mun of
Makati vs CA)
2.3. file money claim with Comm. Of Audit (COA)
--- HOWEVER, the money of LGU in the bank
CANNOT be GARNISHED if it came from PUBLIC
FUNDS. Such is exempted (Mun. of Makati vs CA)
3. Personal Liability of Officials
General rule: they can be held liable for acts
claimed to be in connection to their official duty
where they acted ultra vires or there is bad faith
(Chavez vs SB)
Rama vs CA
gov, v-gov, members of sanggunian, prov. Auditor,
treasurer and engineer- solidarily liable for
damages to some 200 employees of prov. Of Cebu
who were eased out because of party affiliations.
Correa vs CFI Bulacan
Gen: LGU is liable for the acts of its officers acting
within the scope of their authority
Exception: a pub. Officer who commits tort or act in
excess of beyond his scope of duty is not protected
by his office and is like to a private individual.
In JONES vs LOVING- However, legislative officers
are not personally liable for the adoption of
ordinances. They are exempt for passing such within
their authority, nor their motives be inquired.
Chapter 16: Elective Officials
I. Qualifications
a. For LGU Officials (sec. 39, LGC)
1.) Citizen of the Philippines
 Need not be a natural
born citizen at the time of
the election
 Naturalized officials are
allowed to run provided
they surrender their
other citizenship
2. Registered Voter in the barangay,
municipality, city or province (For a
member of the sangguniang
panlalawigan, panlunsod or bayan- the
District where he intends to be elected)
3.) Resident therein for at least 1 year
immediately preceeding the day of the
election
4.) Able to Read and write Filipino or any
other local language or dialect
b. For Gov, VG/Member of the s.
panlalawigan/Mayor or VM for s. panlungod
5.) At least 23 years of age on election
day
c. For M or VM of independent component
cities/municipalities
6.) At least 21 years of age on ED
d. For members of the s. panlungsod/s.bayan
7.) At least 18 years on ED
e. For Punong Barangay/ member of s.
barangay
8.) At least 18 years on ED
f. For S. Kabataan
9.) at least 15 y/o but not more than 21
(or 24) on ED
Frivaldo v COMELEC
“Philippines citizenship is an indispensable
requirement for holding an elective public
office, and the purpose of such qualification is
none other than to ensure that no alien shall
govern our people and our country or a unit of
territory thereof.”
 Definition for “at the time of election” =
on the day of the proclamation
 It is immaterial WON you were not a
Filipino during the filing of the
candidacy, but what matters is that you
are a Filipino at the time of election
 Therefore, Frivaldo is not considered as
a Filipino citizen because although he
did lose his naturalized American
citizenship, such forfeiture did not have
the effect of automatically restoring his
citizenship in the PH that he had
renounced. Qualifications for public
office are continuing requirements and
must be posessesd not only at the time
of appointment or election or
assumption of office but during the
officer’s entire tenure.
Romualdez-Marcos v COMELEC
Residence- one’s permanent or temporary
place of abode
Domicile- the fixed place of abode where one
has an intention on returning
 A person can only have a single
domicile, unless for various reasons, he
successfully abandons his domicile in
favor of another domicile of choice
 Rationale for the requirement: To give
the candidates the opportunity to be
familiar with the needs, difficulties,
aspirations, potentials for growth and all
matters vital to the welfare of their
constituents
Ruling: Therefore, Imelda was qualified to
run for the reason that Leyte is her domicile
even tho she claims to have more than 1
residence
Torayno v COMELEC
3 Classifications of Domicile (BLC)
1. Domicile by Birth
2. Domicile by Law
3. Domicile by Choice
Ruling: residence is required because electives
are needed to be familiar with the issues
surrounding that specific place. Thus, Emano
was allowed to run, satisfying the 1 year
requirement for having an ancestral home in
CDO.
II. Disqualifications
LGC. Sec. 40
1. Those sentenced by Final Judgment for an
offense involving moral turpitude or for an
offense punishable by 1 year or more of
imprisonment
 Moral Turpitude- everything which is
done contrary to justice, modesty or
good morals.
 Moreno v COMELEC
When an officer is under probation (for
the commission of a crime), it does not
mean that he is disqualified from office
because probation suspends his
sentence. Furthermore, probation will
 restore all civil rights lost because of
conviction
 Therefore, Moreno’s probation
granted him the right to run for
public office because Probation
law provides that the final
discharge of the probationer
shall operate to restore to him
all civil rights lost or suspended
as a result of his convuction and
to fully discharge his liability for
any fine imposed as to the
offense
2. Those removed from office as a result for an
Administrative case
3. Those convicted by final judgment for
violating the Oath of allegiance to the republic
4. Those with Dual citizenship
 Rule: Dual Citizenship is not a ground
for disqualification, HOWEVER, dual
allegiance is.
 Mercado v Manzano
Dual Citizenship- a person is considered
to be a national of a country because of
an involuntary decision
Dual Allegiance- it is the voluntary
decision to be a national of a country
5. Fugitives from justice in a criminal or non-
political case here or abroad
 Marquez v COMELEC
“Fugitive from justice” refers to:
- a person fleeing from conviction to
avoid punishment, or;
- a person, who after being charged,
flees to avoid prosecution
6. Permanent residents in a foreign country of
those who have acquired the right to reside
abroad and continue to avail of the same right
 Acquistion of residence abroad = positive
act of abandonment
 Caasi v COMELEC
Rule: any person who is not a permanent
resident or an immigrant to a foreign
country shall not be qualified to run for any
elective office UNLESS the person has
waived his status as a permanent resident
or immigrant of a foreign country.
 Although the LGC does not mention
the word “immigrant”, it is
understood to mean a permanent
resident in foreign country or those
who have acquired the right to
reside abroad
 Rationale: the law reserves the
privilege for its citizens who have
cast their loyalty to the republic
without mental reservation
7. The Insane of feeble-minded
Chp. 17: Disciplinary Actions of Public
Officials
I. Sources
1. Local Government Code of 1991
2. RA 3019
3. Code of Ethics
4. Revised Penal Code
5. 1987 Constitution
6. The Ombudsman Law
7. The Sandiganbayan Law
8. Plunder Law
II. Grounds for Disciplinary Action
(DOA-DOA-CU)
1. Disloyalty to the Republic of the PH
2. Comission of an Offense involving moral
turpitude or of an offense punishable by at
least prision mayor
3. Abuse of authority
4. Dishonesty, oppression, misconduct in office,
gross negligence or dereliction of duty
5. Other grounds provided by law
6. Application for, or acquisition of, foreign
citizenship or resident or immigrant status
7. Culpable violation of the constitution
8. Unauthorized absence for 15 consective
working days, EXCEPT in the case of members
of the sangguniang
Ombudsman v Rodriguez
Ruling: Elective officials can only be removed
by the courts because the court, being an
unelected entity, is free from any political
intervention. The Local Government Code is
the basis, and the Ombudsman has the
jurisdiction
Pablico v Villapardo
Ruling: the sandiganbayan has the jurisdiction
to prosecute erring local elective officers
III. Preventive Suspension
Objective: (PA)
1. To Prevent the accused from hampering the
normal course of the investigation with his
influence and authority over possible
witnesses or to keep him off the records and
other evidence
2. To Assist prosecutors in firming up a case
against erring local officials.
Imposed by: (PGM)
 The President- if the respondent
is an elective of a province,
highly urbanized or an
independent component city
 The Governor- if respondent is
an elective official of a
component city or municipality
 The Mayor- if the respondent is
an elective offial of the barangay
Requisites of Preventive Suspension:
Joson III v CA
 After the issues are joined (when
the complaint has been
answered and there are no
longer any substantial
preliminary issues)
 When the evidence of guilt is
strong
 Great probability that the
continuance in office of the
respondent could influence the
witness or pose a threat to the
safety and integrity of the
records and other evidences
Rule: PS shall not extend beyond 60 days
Rule: PS shall not extend beyond 90 days within
a single year on the same ground if several
administrative cases are filed against an erring
local official
Rule: The respondent official preventively
suspended from office shall receive no salary or
compensation during such suspension
Except: he shall be paid full salary or
compensation upon exoneration and
reinstatement
IV. Penalty: Effects
1. The investigation of the case shall be VI. The Aguinaldo Doctrine
terminated within 90 days from the start
A public official cannot be removed for
thereof. Within 30 days after the end of the
administrative conduct committed during a
investigation, the Office of the President or the
prior term.
sangguniang concerned shall render a decision
in writing stating clearly and distinctly the facts Rationale: a candidate’s re-election signifies a
and the reasons for such decision. Copies of condonation of the offenses committed during
said decision shall immediately be furnished to his prior term because the public now knows of
the respondent and all interested parties. his character and life, hence the reason why
they elected him.
2. The penalty of suspension shall not eceed
the unexpired term of the respondent or a Carpio-Morales v CA & Binay
period of 6 months for every administrative
offense, nor shall said penalty be a bar to the Overturned the Aguinaldo Doctrine for the
candidacy of the respondent so suspended as reason that the same has no legal basis;
long as he meets the qualification required for election is not a mode of condoming
the office. administrative offenses. The decision was based
from the Pascual Doctrine (US Jurisprudence)
VII. Removal of Local Elective
3. The penalty of removal from office as a
The office of the President is without any power to
result of an administrative investigation shall
remove elected officials, since such power is
be considered a bar to the candidacy of the exclusively vested in the proper courts.
respondent for any elective position.
V. Administrative Appeals
Decisions in administrative cases may, within
30 days from receipt thereof, be appealed to
the ff:
1. The S. Panlalawigan- of decisions
from the S. Panlulungod of component
cities and S. Bayan

2. Office of the Pres- of decisions from

the S. Panlalawigan and Panlungod of
highly urbanized cities and independent
component cities. Decisions from the
Office of the President shall be final and
executory

Rule: an appeal shall not prevent a decision

from becoming final and executory.