Yusay vs.

Mandaluyong City Facts: The petitioners owned a parcel of land with an area of 1,044 square meters situated between Nueve de Febrero Street and Fernandez Street in Barangay Mauway, Mandaluyong City. Half of their land they used as their residence, and the rest they rented out to nine other families. Allegedly, the land was their only property and only source of income. On October 2, 1997, the Sangguniang Panglungsod of Mandaluyong City adopted Resolution No. 552, Series of 1997, to authorize then City Mayor Benjamin S. Abalos, Sr. to take the necessary legal steps for the expropriation of the land of the petitioners for the purpose of developing it for low cost housing for the less privileged but deserving city inhabitants. Notwithstanding that the enactment of Resolution No. 552 was but the initial step in the Citys exercise of its power of eminent domain granted under Section 19 of the Local Government Code of 1991, the petitioners became alarmed, and filed a petition for certiorari and prohibition in the RTC, praying for the annulment of Resolution No. 552 due to its being unconstitutional, confiscatory, improper, and without force and effect. The City countered that Resolution No. 552 was a mere authorization given to the City Mayor to initiate the legal steps towards expropriation, which included making a definite offer to purchase the property of the petitioners; hence, the suit of the petitioners was premature. Held: Republic Act No. 7160 (The Local Government Code) required the City to pass an ordinance, not adopt a resolution, for the purpose of initiating an expropriation proceeding. In this regard, Section 19 of The Local Government Code clearly provides, viz: Section 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property. League of Cities of the Philippines (LCP), et al. vs. Commission on Elections Facts: The 11th Congress enacted into law 33 bills converting 33 municipalities into cities. However, it did not act on bills converting 24 other municipalities into cities. Subsequently, the 12th Congress enacted Republic Act No. 9009 (RA 9009), which took effect on 20 June 2001, amending Section 450 of the Local Government Code by increasing the annual income requirement for conversion of a municipality into a city from P20million to P100million. Thereafter, 16 municipalities filed their individual cityhood bills. The 16 cityhood bills contained a common provision exempting all the 16 municipalities from the P100million income requirement of RA 9009. The cityhood bills were approved by the House of Representatives and the Senate, and lapsed into law without the Presidents signature. Said Cityhood Laws directed the Commission on Elections (COMELEC) to hold plebiscites to determine whether the voters in each municipality approved of the conversion. Petitioners sought to declare the 16 Cityhood Laws unconstitutional for violation of Section 10, Article X of the Constitution and the equal protection clause, lamenting that the wholesale conversion of municipalities into cities would reduce the share of existing cities in the Internal Revenue Allotment (IRA). On 18 November 2008, the Supreme Court En Banc, by a majority vote, declared the 16 Cityhood Laws to be in violation of Section 10, Article X of the 1987 Constitution, which provides that no city shall be created except in accordance with the criteria established in the local government code. The Supreme Court held that since respondent municipalities did not meet the P100million income requirement under Section 450 of the Local Government Code, as amended by RA 9009, the Cityhood Laws converting said municipalities into cities were unconstitutional. The Supreme Court also declared the 16 Cityhood Laws to be in violation of the equal protection clause since there was no valid classification between those entitled and those not entitled to exemption from the P100million income requirement: (1) there was no substantial distinction between municipalities with pending cityhood bills in the 11th Congress when RA 9009 was enacted and municipalities that did not have such pending bills; (2) the classification criterion mere pendency of a cityhood bill in the 11th Congress was not germane to the purpose of the law, which was to prevent fiscally nonviable

municipalities from converting into cities; (3) the pendency of a cityhood bill in the 11th Congress limited the exemption to a specific condition existing at the time of passage of RA 9009 a condition that would never happen again, violating the requirement that a valid classification must not be limited to existing conditions only; and (4) limiting the exemption only to the 16 respondent municipalities violated the requirement that the classification must apply to all similarly situated; municipalities with the same income as the 16 respondent municipalities could not convert into cities. On 31 March 2009, the Supreme Court En Banc, also by a majority vote, denied the respondent municipalities first motion for reconsideration. On 28 April 2009, the Supreme Court En Banc, by a split vote, denied the respondent municipalities second motion for reconsideration. The 18 November 2008 Decision became final and executory and was recorded in the Book of Entries of Judgments on 21 May 2009. However, on 21 December 2009, the Supreme Court En Banc reversed the 18 November 2008 Decision and upheld the constitutionality of the Cityhood Laws. The Court reasoned that: (1) When Section 10, Article X of the 1987 Constitution speaks of the local government code, the reference cannot be to any specific statute or codification of laws, let alone the Local Government Code (LGC) of 1991. It would be noted that at the time of the adoption of the 1987 Constitution, Batas Pambansa Blg. (BP) 337, the then LGC, was still in effect. Had the framers of the 1987 Constitution intended to isolate the embodiment of the criteria only in the LGC, they would have referred to BP 337. Also, they would not have provided for the enactment by Congress of a new LGC, as they did in Section 3, Article X of the Constitution. Accordingly, the criteria for creation of cities need not be embodied in the LGC. Congress can impose such criteria in a consolidated set of laws or a single-subject enactment or through amendatory laws. The passage of amendatory laws, such as RA 9009, was no different from the enactment of the cityhood laws specifically exempting a particular political subdivision from the criteria earlier mentioned. Congress, in enacting the exempting laws, effectively decreased the already codified indicators. (2) Deliberations on RA 9009, particularly the floor exchange between Senators Aquilino Pimentel and Franklin Drilon, indicated the following complementary legislative intentions: (a) the then pending cityhood bills would be outside the pale of the proposed P100million minimum income requirement; and (b) RA 9009 would not have any retroactive effect insofar as the pending cityhood bills were concerned. That said deliberations were undertaken in the 11th and/or 12th Congress (or before the cityhood laws were passed during the 13th Congress) and Congress was not a continuing legislative body, was immaterial. Debates, deliberations, and proceedings of Congress and the steps taken in the enactment of the law, in this case the cityhood laws in relation to RA 9009 or vice versa, were part of its legislative history and may be consulted, if appropriate, as aids in the interpretation of the law. (3) Petitioners could not plausibly invoke the equal protection clause because no deprivation of property resulted by the enactment of the Cityhood Laws. It was presumptuous on the part of petitioner LCP member-cities to already stake a claim on the IRA, as if it were their property, as the IRA was yet to be allocated. Furthermore, the equal protection clause does not preclude reasonable classification which (a) rests on substantial distinctions; (b) is germane to the purpose of the law; (c) is not be limited to existing conditions only; and (d) applies equally to all members of the same class. All of these requisites had been met by the subject Cityhood Laws: (a) Respondent municipalities were substantially different from other municipalities desirous to be cities. They had pending cityhood bills before the passage of RA 9009, and years before the enactment of the amendatory RA 9009, respondent municipalities had already met the income criterion exacted for cityhood under the LGC of 1991. However, due to extraneous circumstances (the impeachment of then President Estrada, the related jueteng scandal investigations conducted before, and the EDSA events that followed the aborted impeachment), the bills for their conversion remained unacted upon by Congress. To impose on them the much higher income requirement after what they had gone through would appear to be unfair; (b) the exemption of respondent municipalities from the P100million income requirement was meant to reduce the inequality, occasioned by the passage of the amendatory RA 9009, between respondent municipalities and the 33 other municipalities whose cityhood bills were enacted during the 11th Congress; and (c) the uniform exemption clause would apply to municipalities that had pending cityhood bills before the passage of RA 9009 and were compliant with then Sec. 450 of the LGC of 1991, which prescribed an income requirement of P20 million. (4) The existence of the cities consequent to the approval of the Cityhood Laws in the plebiscites held in the affected municipalities is now an operative fact. New cities appear to have been organized and are functioning accordingly, with new sets of officials and employees. Pursuant to the operative fact doctrine, the constitutionality of the Cityhood Laws in question should be upheld.

Petitioners moved for reconsideration (ad cautelam) and for the annulment of 21 December 2009 Decision. Some petitioners-in-intervention also moved for reconsideration (ad cautelam). Held: The 16 Cityhood Laws are unconstitutional. (1) Section 10, Article X of the Constitution is clear the creation of local government units must follow the criteria established in the Local Government Code and not in any other law. There is only one Local Government Code. The Constitution requires Congress to stipulate in the Local Government Code all the criteria necessary for the creation of a city, including the conversion of a municipality into a city. Congress cannot write such criteria in any other law, like the Cityhood Laws. The clear intent of the Constitution is to insure that the creation of cities and other political units follows the same uniform, non-discriminatory criteria found solely in the Local Government Code. From the moment RA 9009 took effect (on 30 June 2001), the LGC required that any municipality desiring to become a city must satisfy the P100million income requirement. Section 450 of the LGC, as amended by RA 9009, does not contain any exemption from this income requirement, even for municipalities with pending cityhood bills in Congress when RA 9009 was passed. The uniform exemption clause in the Cityhood Laws, therefore, violated Section 10, Article X of the Constitution. To be valid, such exemption must be written in the Local Government Code and not in any other law, including the Cityhood Laws. RA 9009 is not a law different from the Local Government Code. RA 9009, by amending Section 450 of the Local Government Code, embodies the new and prevailing Section 450 of the Local Government Code. Since the law is clear, plain and unambiguous that any municipality desiring to convert into a city must meet the increased income requirement, there is no reason to go beyond the letter of the law. Moreover, where the law does not make an exemption, the Court should not create one. (2) Under the operative fact doctrine, the law is recognized as unconstitutional but the effects of the unconstitutional law, prior to its declaration of nullity, may be left undisturbed as a matter of equity and fair play. In fact, the invocation of the operative fact doctrine is an admission that the law is unconstitutional. Respondent municipalities theory that the implementation of the Cityhood Laws, which resulted in 16 municipalities functioning as new cities with new sets of officials and employees, operated to contitutionalize the unconstitutional Cityhood Laws, was a misapplication of the operative fact doctrine and would set a gravely dangerous precedent. This view would open the floodgates to the wanton enactment of unconstitutional laws and a mad rush for their immediate implementation before the Court could declare them unconstitutional. The operative fact doctrine never validates or constitutionalizes an unconstitutional law. Under the operative fact doctrine, the unconstitutional law remains unconstitutional, but the effects of the unconstitutional law, prior to its judicial declaration of nullity, may be left undisturbed as a matter of equity and fair play. Accordingly, the 16 Cityhood Laws remain unconstitutional because they violate Section 10, Article X of the Constitution. However, the effects of the implementation of the Cityhood Laws prior to the declaration of their nullity, such as the payment of salaries and supplies by the new cities or their issuance of licenses or execution of contracts, may be recognized as valid and effective, as a matter of equity and fair play, to innocent people who may have relied on the presumed validity of the Cityhood Laws prior to the Courts declaration of their unconstitutionality. (3) There is no substantial distinction between municipalities with pending cityhood bills in the 11th Congress and municipalities that did not have pending bills. The pendency of a cityhood bill in the 11th Congress does not affect or determine the level of income of a municipality. In short, the classification criterion mere pendency of a cityhood bill in the 11th Congress is not rationally related to the purpose of the law which is to prevent fiscally non-viable municipalities from converting into cities. Moreover, the pendency of a cityhood bill in the 11th Congress, as a criterion, limits the exemption to a specific condition existing at the time of passage of RA 9009. That specific condition will never happen again. This violates the requirement that a valid classification must not be limited to existing conditions only. Furthermore, limiting the exemption only to the 16 municipalities violates the requirement that the classification must apply to all similarly situated; municipalities with the same income as the 16 respondent municipalities cannot convert into cities, while the 16 respondent municipalities can.

THE MUNICIPALITY OF HAGONOY, BULACAN v. HON. SIMEON P. DUMDUM, JR. Facts: Respondent, doing business as KD Surplus was contacted by petitioner Ople. Respondent had entered into an agreement with petitioner municipality through Ople for the delivery of motor vehicles, which supposedly were needed to carry out certain developmental undertakings in the municipality. However, despite having made several deliveries, Ople allegedly did not heed respondents claim for payment. Petitioners filed a Motion to Dismiss claiming that the action was unenforceable under the statute of frauds. Petitioners also filed a Motion to Dissolve and/or Discharge the Writ of Preliminary Attachment Already Issued, invoking among others, immunity of the state from suit. Held: The general rule spelled out in Section 3, Article XVI of the Constitution is that the state and its political subdivisions may not be sued without their consent. Otherwise put, they are open to suit but only when they consent to it. Consent is implied when the government enters into a business contract, as it then descends to the level of the other contracting party; or it may be embodied in a general or special law such as that found in Book I, Title I, Chapter 2, Section 22 of the Local Government Code of 1991, which vests local government units with certain corporate powers one of them is the power to sue and be sued. Be that as it may, a difference lies between suability and liability. As held in City of Caloocan v. Allarde, where the suability of the state is conceded and by which liability is ascertained judicially, the state is at liberty to determine for itself whether to satisfy the judgment or not. Execution may not issue upon such judgment, because statutes waiving non-suability do not authorize the seizure of property to satisfy judgments recovered from the action. These statutes only convey an implication that the legislature will recognize such judgment as final and make provisions for its full satisfaction. Thus, where consent to be sued is given by general or special law, the implication thereof is limited only to the resultant verdict on the action before execution of the judgment. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects.The writ of attachment in this case would only prove to be useless and unnecessary under the premises, since the property of the municipality may not, in the event that respondents claim is validated, be subjected to writs of execution and garnishment unless, of course, there has been a corresponding appropriation provided by law. MUNICIPALITY OF TIWI, REPRESENTED BY HON. MAYOR JIAME C. VILLANUEVA AND SANGGUNIANG BAYAN OF TIWI V. ANTONIO B. BETITO Facts: National Power corporation (NPC) is liable for unpaid real estate taxes on it s properties located in the Province of Albay. The said properties were sold at an auction sale conducted by Albay to satisfy NPCs tax liabilities. As the sole bidder at the auction, Albay acquired ownership of said properties. The NPC and Albay, entered into a Memorandum of Agreement (MOA) where the former agreed to settle its tax liabilities. Mayor Naomi C. Corral of Tiwi formally requested Governor Salalima to remit the rightful tax shares of Tiwiand its barangays where the NPCs properties were located relative to the payments already made by NPC to Albay. Governor Salalima replied that the request cannot be granted as the initial payment amounting toP17,763,000.00 was only an earnest money and that the total amount to be collected from the NPC was still being validated. Mayor Corral, representing Tiwi, and respondent and Atty. Lawenko entered into a Contract of Legal Services. The subject contract provided, among others, that respondent and Atty. Lawenko would receive a 10% contingent fee on whatever amount of realty taxes that would be recovered by Tiwi through their efforts. The Office of the President, through then Chief Presidential Legal Counsel Antonio T. Carpio, opined that the MOA entered into by NPC and Albay merely recognized and established NPCs realty taxes. He further clarified that the sharing scheme and those entitled to the payments to be made by NPC under the MOA should be that provided under the law, and since Tiwi is entitled to share in said realty taxes, NPC may remit such share directly to Tiwi. Ruling: Pursuant to Section 444(b)(1)(vi) of the LGC, the municipal mayor is required to secure the prior authorization of the Sangguniang Bayan before entering into a contract on behalf of the municipality. In the instant case, the Sangguniang Bayan of Tiwi unanimously passed Resolution No. 15-92 authorizing Mayor Corral to hire a lawyer of her choice to represent the interest of Tiwi in the execution of this Courts Decision in National Power Corporation v. Province of Albay. The above-quoted authority necessarily carried with it the power to negotiate, execute and sign on behalf of Tiwi the Contract of Legal Services. On its face, and there is no allegation to the contrary, this prior authorization appears to have been given by the council in good faith to

the end of expeditiously safeguarding the rights of Tiwi. Under the particular circumstances of this case, there is, thus, nothing objectionable to this manner of prior authorization. Prescinding therefrom, petitioners next contention that the subject contract should first be ratified in order to become enforceable as against Tiwi must necessarily fail. As correctly held by the CA, the law speaks of prior authorization and not ratification with respect to the power of the local chief executive to enter into a contract on behalf of the local government unit. THE PROVINCE OF NEGROS OCCIDENTAL, REPRESENTED BY ITS GOVERNOR ISIDRO P. ZAYCO v. THE COMMISSIONERS, COMMISSION ON AUDIT, ET AL. Facts: The Sangguniang Panlalawigan of Negros Occidental passed a resolution allocating P4,000,000 of its retained earnings for the hospitalization and health care insurance benefits of 1,949 officials and employees of the province. The Committee on Awards granted the insurance coverage to Philam Care Health System Incorporated (Philam Care). Petitioner Province of Negros Occidental, and Philam Care entered into a Group Health Care Agreement. After a post-audit investigation, the Provincial Auditor issued Notice of Suspension suspending the premium payment because of lack of approval from the Office of the President as provided under Administrative Order No. 103 (AO 103). Then President Joseph E. Estrada directed the COA to lift the suspension but only in the amount ofP100,000. The Provincial Auditor ignored the directive of the President. The COA ruled that under AO 103, no government entity, including a local government unit, is exempt from securing prior approval from the President granting additional benefits to its personnel. This is in conformity with the policy of standardization of compensation laid down in RA 6758. Ruling: It is clear from Section 1 of AO 103 that the President authorized all agencies of the national government as well as LGUs to grant the maximum amount of P2,000 productivity incentive benefit to each employee who has rendered at least one year of service as of 31 December 1993. In Section 2, the President enjoined all heads of government offices and agencies from granting productivity incentive benefits or any and all similar forms of allowances and benefits without the Presidents prior approval. From a close reading of the provisions of AO 103, petitioner did not violate the rule of prior approval from the President since Section 2 states that the prohibition applies only to government offices/agencies, including government-owned and/or controlled corporations, as well as their respective governing boards. Nowhere is it indicated in Section 2 that the prohibition also applies to LGUs. The President may only point out that rules have not been followed but the President cannot lay down the rules, neither does he have the discretion to modify or replace the rules. Thus, the grant of additional compensation like hospitalization and health care insurance benefits in the present case does not need the approval of the President to be valid. RODOLFO G. NAVARRO, ET AL. v. EXECUTIVE SECRETARY EDUARDO ERMITA, ETC. ET AL Facts: When the Dinagat Islands was proclaimed a new province on December 3, 2006, it had an official population of only 106,951 based on the 2000 Census of Population conducted by the National Statistics Office (NSO), which population is short of the statutory requirement of 250,000 inhabitants. Moreover, the land area of the province failed to comply with the statutory requirement of 2,000 square kilometers. R.A. No. 9355 specifically states that the Province of Dinagat Islands contains an approximate land area of 802.12 square kilometers. Hence, Republic Act No. 9355, otherwise known as An Act Creating the Province of Dinagat Islands was held unconstitutional and the provision in Article 9 (2) of the Rules and Regulations Implementing the Local Government Code of 1991 stating, "The land area requirement shall not apply where the proposed province is composed of one (1) or more islands," was declared NULL and VOID. Respondents instead asserted that the province, which is composed of more than one island, is exempted from the land area requirement based on the provision in the Rules and Regulations Implementing the Local Government Code of 1991 (IRR), specifically paragraph 2 of Article 9 which states that "[t]he land area requirement shall not apply where the proposed province is composed of one (1) or more islands." Held: There are two requirements for land area: (1) the land area must be contiguous; and (2) the land area must be sufficient to provide for such basic services and facilities to meet the requirements of its populace. The requirement of a contiguous territory and the requirement of a land area of at least 2,000 square kilometers are distinct and separate requirements for land area. The exemption above pertains only to the requirement of territorial contiguity. It clearly states that the requirement of territorial contiguity may be dispensed with in the case of a province comprising two or more islands, or is separated by a chartered city or cities which do not contribute to the income of the province.

Nowhere in paragraph (b) is it expressly stated or may it be implied that when a province is composed of two or more islands, or when the territory of a province is separated by a chartered city or cities, such province need not comply with the land area requirement of at least 2,000 square kilometers or the requirement in paragraph (a) (i) of Section 461of the Local Government Code.