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ORDOEZ V. GUSTILO [NOTE: THIS CASE SHOULD HAVE BEEN IN MUNICIPALITY, CHAPTER 3, CHIEF EXECUTIVE POWERS] 192 SCRA 469 (1990) MINI
self-correcting mechanism built in the Constitution for its amendment or revision. - The Solicitor General contends that Republic Act 7056 is a valid exercise of legislative power by Congress and that the regular amending process prescribed by the Constitution does not apply to its transitory provisions. ISSUE WON RA 7056 is unconstitutional. HELD YES. - Article XVIII, Sections 2 and 5 (Transitory Provisions) of the 1987 Constitution Sec. 2. The Senators, Members of the House of Representatives and the local officials first elected under this Constitution shall serve until noon of June 30, 1992. Of the Senators elected in the election in 1992, the first twelve obtaining the highest number of votes shall serve for six years and the remaining twelve for three years. Sec. 5. The six-year term of the incumbent President and Vice President elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992.The first regular elections for President and VicePresident under this Constitution shall be held on the second Monday of May, 1992. - It is clear from the aforequoted provisions of the 1987 Constitution that the terms of office of Senators, Members of the House of Representatives, the local officials, the President and the Vice-President have been synchronized to end on the same hour, date and year noon of June 30, 1992. - It is likewise evident from the wording of the abovementioned Sections that the term of synchronization is used synonymously as the phrase holding simultaneously since this is the precise intent in terminating their Office Tenure on the same day or occasion. This common termination date will synchronize future elections to once every three years . - That the election for Senators, Members of the House of Representatives and the local officials (under Sec. 2, Art. XVIII) will have to be synchronized with the election for President and Vice President (under Sec. 5, Art. XVIII) is likewise evident from the records of the proceedings in the Constitutional Commission. - It thus becomes very evident that the Constitution has mandated a synchronized national and local election prior to June 30,1992 or more specifically as provided for in Article XVIII, Sec. 5 on the second Monday of May, 1992. - The term of office of elective local officials, except barangay officials, is fixed by the Constitution at three years (Sec. 8, Art. X). The incumbent local officials were elected in January 1988. Therefore, their term would have expired on February 2, 1991. But their

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term was adjusted to expire at noon of June 30, 1992. The reason for the said adjustment, as well as those of the Senators, members of the House of Representatives, President and Vice-President, is the same - to synchronize the national and local elections. - Upon the other hand, and contrary to the express mandate of the 1987 Constitution, Republic Act 7056 provides for two (2) separate elections in 1992 as follows: Sec. 2. Start of Synchronization - To start the process of synchronization of election in accordance with the policy hereinbefore declared there shall be held: (a) An election for President and Vice-President of the Philippines, twenty four (24) Senators and all elective Members of the House of Representatives on the second Monday of May, 1992, and (b) An election of all provincial, city and municipal elective officials on the second Monday of November, 1992. - The purpose of Republic Act 7056:to start, as much as practicable, the synchronization of the elections so that the process can be completed in the 1995 elections with the result that beginning 1995 there shall be only one (1) simultaneous regular elections for national and local elective officials every three (3) years. - With the clear mandate of the 1987 Constitution to hold synchronized (simultaneous) national and local elections in the second Monday of May, 1992, the inevitable conclusion would be that Republic Act 7056 is clearly violative of the Constitution because it provides for the holding of a desynchronized election. Stated differently, Republic Act 7056 particularly Sections 1 and 2 thereof contravenes Article XVIII, Sections 2 and 5 of the 1987 Constitution. - There are other provisions of the Constitution violated by RA 7056. 1. Section 2, Article XVIII of the Constitution which provides that the local official first elected under the Constitution shall serve until noon of June 30, 1992. But under Sec. 3 of RA 7056, these incumbent local officials shall hold over beyond June 30, 1992 and shall serve until their successors shall have been duly elected and qualified. - It is not competent for the legislature to extend the term of officers by providing that they shall hold over until their successors are elected and qualified where the constitution has in effect or by clear implication prescribed the term and when the Constitution fixes the day on which the official term shall begin, there is no legislative authority to continue the office beyond that period even though the successors fail to qualify within the time. 2. Section 8, Article X of the Constitution: The term of office of elective local officials, except barangay officials which shall be determined by law shall be three years and no such official shall serve for more than three consecutive terms . . .

Term of Office [CONTINUED FROM


PAGE 68] OSMEA V COMELEC 199 SCRA 750 July 30, 1991; PARAS, J. LORA
FACTS - The petitioners pray for the Court to declare Republic Act No. 7056 An Act Providing for the National and Local Elections in 1992, Pave the Way for Synchronized and Simultaneous Elections Beginning 1995, and Authorizing Appropriations Therefor," as unconstitutional and, therefore, invalid and inoperative because: 1. It violates the mandate of the Constitution for the holding of synchronized national and local elections on the second Monday of May 1992. 2. Particularly Section 3, 2nd par. providing that all incumbent provincial, city and municipal officials shall hold over beyond June 30, 1992 and shall serve until their successors shall have been duly elected and qualified violates Section 2, Article XVIII (Transitory Provision) of the Constitution. 3. The same paragraph of Section 3 of Republic Act 7056, which in effect, shortens the term or tenure of office of local officials to be elected on the 2nd Monday of November, 1992 violates Section 8, Article X of the Constitution. 4. Section 8 of Republic Act 7056, providing for the campaign periods for Presidential, Vice-Presidential and Senatorial elections, violates the provision of Section 9, Article IX under the title Commission on Elections of the Constitution. 5. The so-called many difficult if not insurmountable problems mentioned in Republic Act 7056 to synchronized national and local elections set by the Constitution' on the second Monday of May, 1992, are not sufficient, much less, valid justification for postponing the local elections to the second Monday of November 1992, and in the process violating the Constitution itself If, at all, Congress can devise ways and means, within the parameters of the Constitution, to eliminate or at least minimize these problems and if this, still, is not feasible, resort can be made to the

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- But if the local election will be held on the second Monday of November 1992 under RA 7056, those to be elected will be serving for only two years and seven months, that is, from November 30, 1992 to June 30, 1995, not three years as provided for by the Constitution. 3. Section 9, Article IX of the Constitution: Unless otherwise fixed by the Commission in special cases, the election period shall commence ninety days before the day of election and shall end thirty days thereafter. - Under this provision the filing of the Certificate of Candidacy and the ensuing campaign period must be embraced or circumscribed within that election period of ninety days, except when in special cases, the Comelec (not Congress) alters the period. But RA 7056 provides for a different campaign period. Sec. 8: (a) For President and Vice-Presidential elections one hundred thirty (130) days before the day of election. (b) For Senatorial elections, ninety (90) days before the day of the election, and (c) For the election of Members of the House of Representatives and local elective provincial, city and municipal officials forty-five (45) days before the day of the elections. - All these - the postponement of the holding of a synchronized national and local election from 1992 to 1995; the hold-over provision for incumbent local officials; the reduction of the term of office of local officials to be elected on the second Monday of November 1992 and the change in the campaign periods, are violative of the 1987 Constitution. - The contention of the Solicitor General that the method of amendment or revision prescribed by the Constitution (Article XVIII) does not apply to the Transitory Provisions because in the nature of things Transitory Provisions are to be carried out as soon as practicable, and Congress can, in the exercise of its legislative power enact the needed legislation, in this case RA 7056, deserves no consideration at all. - The 1987 Constitution has stated in clear and categorical language that "the six-year term of the incumbent President and Vice-President elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992 (Article XVIII, Sec. 5)." As discussed earlier, the elections referred to, to be synchronized with the election of the President and Vice-President on the second Monday of May 1992, is the election for Senators, Members of the House of Representatives and local officials. - Synchronization - as the act or result of synchronizing; concurrence of events or motions in respect to time. - Synchronize - to happen or take place at the same time; to represent or arrange event so as to indicate coincidence or coexistence; to cause to agree in time. - The mere absence of a provision in the 1987 Constitution which would prohibit the holding of separate elections does not mean that the Constitution does not intend the holding of simultaneous or synchronized elections. Disposition. RA 7056 declared UNCONSTITUTIONAL, hence, NULL and VOID.

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a certificate (of candidacy) should be considered the overt act of abandoning or relinquishing his mandate to the people; he should therefore resign if he wants to seek another position which he feels he could be of better service. -Rather than cut short the term of office of elective public officials, this statutory provision seeks to ensure that such officials serve out their entire term of office by discouraging them from running for another public office and thereby cutting short their tenure by making it clear that should they fail in their candidacy, they cannot go back to their former position. This is consonant with the constitutional edict that all public officials must serve the people with utmost loyalty and not trifle with the mandate which they have received from their constituents. -In theorizing that the provision under consideration cuts short the term of office of a Member of Congress, petitioner seems to confuse "term" with "tenure" of office. As succinctly distinguished by the Solicitor General: The term of office prescribed by the Constitution may not be extended or shortened by the legislature (22 R.C.L.), but the period during which an officer actually holds the office (tenure), may be affected by circumstances within or beyond the power of said officer. Tenure may be shorter than the term or it may not exist at all. These situations will not change the duration of the term of office (see Topacio Nueno vs. Angeles, 76 Phil. 12). -Under the questioned provision, when an elective official covered thereby files a certificate of candidacy for another office, he is deemed to have voluntarily cut short his tenure, not his term. The term remains and his successor, if any, is allowed to serve its unexpired portion. -That the ground cited in BP881 is not mentioned in the Constitution itself as a mode of shortening the tenure of office of members of Congress, does not preclude its application to present members of Congress. Sec.2 of Art.XI2 clearly recognizes that the four (4) grounds found in Article VI of the Constitution3
2

MOHAMMAD ALI DIMAPORO vs HON. RAMON V. MITRA, JR. Davide, Jr.; 15 October 1991; 202 SCRA 779 MARGE
FACTS: -Mohamad Ali Dimaporo was elected Representative for the 2nd District of Lanao del Sur during the 1987 elections. He took his oath of office on 9 Jan 1987 and thereafter performed the duties and enjoyed the rights and privileges pertaining thereto. -15 Jan 1990: he filed with COMELEC a Certificate of Candidacy for the position of ARMM Regional Governor. The election was scheduled for 17 Feb 1990. -Upon being informed of this development, respondents Speaker and Secretary of the House of Representatives excluded Dimaporos name from the Roll of Members of the House of Representatives (HoR) pursuant to Sec 67, Art IX of the Omnibus Election Code (B.P. Blg. 881)1. -Having lost in the autonomous region elections, Dimaporo, in a letter dated 28 June 1990 addressed to Speaker Mitra, expressed his intention "to resume performing my duties and functions as elected Member of Congress." The record does not indicate what action was taken on this communication. -When Dimaporo failed in his bid to regain his seat in Congress, he filed, 31 Jan 1991, this petition praying for such relief. ISSUES 1. WON Sec.67, Art.IX, of BP881 is operative under the 1987 Constitution. 2. WON respondents may, by administrative act, exclude the petitioner from the rolls of the HoR HELD: 1. YES. -Legislative deliberations show the rationale behind the law: (a) to prevent abuse of facilities of power or the use of office facilities; and (b) to prevent elected officials from trifling with the mandate of the people, as mandated by the Constis new chapter on accountability of public officers. The mere fact of filing
1

Art. XI, Sec. 2. The President, the Vice-President, the Members of the Supreme Court, the Members of the Constitutional Commissions, and the Ombudsman may be removed from office on impeachment for, and conviction of, culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes, or betrayal of public trust. All other public officers and employees may be removed from office as provided by law, but not by impeachment.
3

Any elective official whether national or local running for any office other than the one which he is holding in a permanent capacity except for President and Vice-President shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy.

As summarized by the petitioner, these grounds are: a) 1987 Consti, Art VI, Sec 13: Forfeiture of his seat by holding any other office or employment in the govt or any subdivision, agency or instrumentality thereof, including GOCCs or subsidiaries; b) Sec 16 (3): Expulsion as a disciplinary action for disorderly behavior; c) Sec 17: Disqualification as determined by resolution of the Electoral Tribunal in an election contest; and d) Sec7, par.2: Voluntary renunciation of office.

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by which the tenure of a Congressman may be shortened are not exclusive. The expression in the constitution of the circumstances which shall bring about a vacancy does not necessarily exclude all others. Neither does it preclude the legislature from prescribing other grounds. -Even then, the concept of voluntary renunciation of office under Sec.7, Art.VI of the Consti is broad enough to include the situation envisioned in Sec.67, Art.IX of BP881. The term voluntary renunciation is more general than abandonment and resignation. The act of filing a certificate of candidacy for another office constitutes an overt, concrete act of voluntary renunciation of the elective office presently being held. [see discussions by the Constitutional Commissioners] -Monroy vs. CA: forfeiture (is) automatic and permanently effective upon the filing of the certificate of candidacy for another office. Only the moment and act of filing are considered. Once the certificate is filed, the seat is forever forfeited and nothing save a new election or appointment can restore the ousted official. -The ground for forfeiture in Sec.13, Art.VI of the 1987 Consti is different from the forfeiture decreed in Sec.67, Art.IX of BP881, which is actually a mode of voluntary renunciation of office under Sec.7,par.2 of Art.VI of the Consti. 2. YES. -The legal effects of filing a certificate of candidacy for another office having been spelled out in BP881 itself, no statutory interpretation was indulged in by respondents Speaker and Secretary of the HoR in excluding petitioner's name from the Roll of Members. The Speaker is the administrative head of the HoR and he exercises administrative powers and functions attached to his office. As administrative officers, both the Speaker and House Secretary-General perform ministerial functions. It was their duty to remove petitioners name from the Roll considering the unequivocal tenor of BP881. These officers cannot refuse to perform their duty on the ground of an alleged invalidity of the statute imposing the duty. Officers of the government from the highest to the lowest are creatures of the law and are bound to obey it. -A public office is a public trust. It is created for the interest and benefit of the people. As such, the holder thereof is subject to such regulations and conditions as the law may impose and he cannot complain of any restrictions which public policy may dictate on his office. Disposition Petition is dismissed for lack of merit. Voting 8 justices constituted the majority 3 dissented J. GUTIERREZ, JR., dissenting: -Respondents have no power, in purported implementation of an invalid statute, to erase from the Rolls of the House the name of a member duly elected by his sovereign constituents to represent them in Congress. -Congress cannot add by statute or administrative act to the causes for disqualification or removal of constitutional officers. Neither can Congress provide a different procedure for disciplining constitutional officers other than those provided in the Constitution. This is as true for the President and the members of this Court as it is for members of Congress itself. The causes and procedures for removal found in the Constitution are not mere disciplinary measures. They are intended to protect constitutional officers in the unhampered and independent discharge of their functions. -The grounds for removal mentioned in the Constitution are exclusive. The non-inclusion of physical causes like death, being permanently comatose on a hospital bed, or disappearance in the sinking of a ship does not justify in the slightest an act of Congress expelling one of its members for reasons other than those found in the Constitution. Resignation is provided for by the Constitution. It is voluntary renunciation. So is naturalization in a foreign country or express renunciation of Philippine citizenship. Conviction of a crime carrying a penalty of disqualification is a disqualification against running for public office. Whether or not the conviction for such a crime while the Congressman is in office may be a ground to expel him from Congress is a matter which we cannot decide obiter. We must await the proper case and controversy. My point is Congress cannot by statute or disciplinary action add to the causes for disqualification or removal of its members. Only the Constitution can do it. -All the earlier statutes about elective officials being considered resigned upon the filing of a certificate of candidacy refer to non-constitutional officers. Congress has not only the power but also the duty to prescribe causes for the removal of provincial, city, and municipal officials. It has no such power when it comes to constitutional officers. Such a provision could not be validly enacted by statute. It has to be in the constitution. -Running for another elective office is not voluntary renunciation. "Voluntary" refers to a state of the mind. It is true that intentions may be deduced from a person's acts; but for 50 yrs of our constitutional history, running for a local government position was not considered a voluntary renunciation. -In interpreting the meaning of voluntary renunciation, the Court should also be guided by the principle that

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all presumptions should be in favor of representation, strictly against disenfranchisement. If disenfranchisement should there be, the same should only be by due process of law, both substantive and procedural, and not by mere arbitrary, capricious, and ultra vires, 'administrative act' of the respondents. [end]

Permanent Vacancies
MENZON V PETILLA 197 SCRA 251 GUTIERREZ, JR.; May 20, 1991 ANTON
NATURE Motion for reconsideration of the resolution of the Court which initially denied the petition for certiorari and mandamus filed by then Acting Vice-Governor of Leyte, Aurelio D. Menzon. FACTS - February 16, 1988: by virtue of the fact that no Governor had been proclaimed in the province of Leyte, the Secretary of Local Government Luis Santos designated the Vice-Governor, Respondent Leopoldo E. Petilla (PETILLA) as Acting Governor of Leyte. - Petitioner Aurelio D. Menzon (MENZON), a senior member of the Sangguniang Panlalawigan was also designated by Secretary Luis Santos to act as the Vice-Governor for the province of Leyte. MENZON took his oath of office before then senator Alberto Romulo. - May 29, 1989: the Provincial Administrator, Tente U. Quintero inquired from the Undersecretary of the Department of Local Government, Jacinto T. Rubillar, Jr., as to the legality of the appointment of MENZON to act as the Vice-Governor of Leyte. - Undersecretary Rubillar, Jr. stated that since B.P. 337 has no provision relating to succession in the Office of the Vice-Governor in case of a temporary vacancy, the appointment of MENZON as the temporary ViceGovernor is not necessary since the Vice-Governor who is temporarily performing the functions of the Governor, could concurrently assume the functions of both offices. - As a result of the communications between Tentero and Rubillar, the Sangguniang Panlalawigan, issued Resolution No. 505 where it held invalid the appointment of the petitioner as acting ViceGovernor of Leyte. - MENZON sought clarification from Undersecretary Rubillar regarding the latters opinion. Rubillar explained that the designation extended by the Secretary of Local Government in favor of one of the Sangguniang Panlalawigan Members of Leyte to temporarily discharge the powers and duties of the

The respondents added the following grounds: resignation, death and conviction of a crime which carries a penalty of disqualification to hold public office.

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vice-governor does not contradict the stand we have on the matter; designation is merely an imposition of additional duties to be performed by the designee in addition to the official functions attached to his office. - In view of Rubillars clarificatory letter, the Regional Director of the Department of Local Government, Region 8, Resurreccion Salvatierra, wrote a letter addressed to the Acting-Governor of Leyte PETILLA, requesting the latter that Resolution No. 505 of the Sangguniang Panlalawigan be modified accordingly. Despite these several letters of request, the Acting Governor and the Sangguniang Panlalawigan, refused to correct Resolution No. 505 and correspondingly to pay the petitioner the emoluments attached to the Office of Vice-Governor. - MENZON filed before this Court a petition for certiorari and mandamus. The petition sought the nullification of Resolution No. 505 and for the payment of his salary for his services as the acting ViceGovernor of Leyte. - The pending election dispute was resolved in the meantime; LARRAZABAL was proclaimed governor of Leyte. - During the pendency of the petition, the provincial treasurer of Leyte, Florencio Luna allowed the payment to the petitioner of his salary as acting ViceGovernor of Leyte in the amount of P17,710.00, for the actual services rendered by the petitioner as acting Vice-Governor. - August 28, 1990: this Court dismissed the petition filed by MENZON. - PETILLA, by virtue of the above resolution requested Governor Larrazabal to direct the petitioner to pay back to the province of Leyte all the emoluments and compensation which he received while acting as the Vice-Governor of Leyte. - MENZON filed a motion for reconsideration of our resolution. The motion prayed that this Court uphold the petitioner's right to receive the salary and emoluments attached to the office of the ViceGovernor while he was acting as such. ISSUE(S) 1. WON there was a vacancy. 2. WON the Secretary of Local Government has the authority to make temporary appointments. HELD 1. YES Ratio There is a vacancy when there is no person lawfully authorized to assume and exercise at present the duties of the office (The law on Public Officers states that there is no vacancy whenever the office is occupied by a legally qualified incumbent.). Reasoning - It can be readily seen that the office of the ViceGovernor was left vacant when the duly elected ViceGovernor PETILLA was appointed Acting Governor. In the eyes of the law, the office to which he was elected was left barren of a legally qualified person to exercise the duties of the office of the Vice-Governor. - There is no satisfactory showing that PETILLA, notwithstanding his succession to the Office of the Governor, continued to simultaneously exercise the duties of the Vice-Governor. - The nature of the duties of a Provincial Governor call for a full-time occupant to discharge them. More so when the vacancy is for an extended period (almost two years). Precisely, it was PETILLAs automatic assumption to the acting Governorship that resulted in the vacancy in the office of the Vice-Governor. The fact that the Secretary of Local Government was prompted to appoint the petitioner shows the need to fill up the position during the period it was vacant. - A vacancy creates an anomalous situation and finds no approbation under the law for it deprives the constituents of their right of representation and governance in their own local government. 2. YES Ratio Considering the silence of the Local Government Code, the Court rules that, in order to obviate the dilemma resulting from an interregnum created by the vacancy, the President, acting through her alter ego, the Secretary of Local Government, may remedy the situation. The temporary appointment extended to MENZON to act as the Vice-Governor is therefore valid. The exigencies of public service demanded nothing less than the immediate appointment of an acting Vice-Governor. Reasoning - The contingency of having simultaneous vacancies in both offices cannot just be set aside. It was best for Leyte to have a full-time Governor and an acting ViceGovernor. Service to the public is the primary concern of those in the government. It is a continuous duty unbridled by any political considerations. - The Local Government Code (LGC) is silent on the mode of succession in the event of a temporary vacancy in the Office of the Vice-Governor. However, the silence of the law must not be understood to convey that a remedy in law is wanting. - The two-year interregnum which would result from the respondents' view of the law is disfavored as it would cause disruptions and delays in the delivery of basic services to the people and in the proper management of the affairs of the local government of Leyte. Definitely, it is incomprehensible that to leave the situation without affording any remedy was ever intended by the LGC. - Under Commonwealth Act No. 588 and the Revised Administrative Code of 1987, the President is empowered to make temporary appointments in certain public offices, in case of any vacancy that may occur (however, both laws deal only with the filling of vacancies in appointive positions). In the absence of any contrary provision in the LGC and in the best interest of public service, we see no cogent

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reason why the procedure thus outlined by the two laws may not be similarly applied in the present case. - As between the President who has supervision over local governments as provided by law and the members of the board who are junior to the vicegovernor, we have no problem ruling in favor of the President, until the law provides otherwise. - Whether or not the absence of a Vice-Governor would maim or prejudice the province of Leyte, is for higher officials to decide or, in proper cases, for the judiciary to adjudicate. - The appointment of the petitioner, moreover, is in full accord with the intent behind the Local Government Code. There is no question that Section 49 in connection with Section 52 of the Local Government Code shows clearly the intent to provide for continuity in the performance of the duties of the Vice-Governor. - The mode of succession provided for permanent vacancies may likewise be observed in case of a temporary vacancy in the same office. In this case, there was a need to fill the vacancy. - In view of the foregoing, the petitioner's right to be paid the salary attached to the Office of the Vice Governor is indubitable. Even granting that the President, acting through the Secretary of Local Government, possesses no power to appoint the petitioner, at the very least, the petitioner is a de facto officer entitled to compensation. - The appointment has the color of validity. The respondents themselves acknowledged the validity of the petitioner's appointment and dealt with him as such. DISPOSITION Motion for Reconsideration is granted.

GOVERNORS OF THE PHILIPPINES V. PIMENTEL G.R. No. 73823 JU-C GANDANGHARI AZURA

Permanent Sanggunian

Vacancies

in

the

FARIAS V. BARBA 256 SCRA 396 MENDOZA; April 19, 1996 MONCH
FACTS - Carlito B. Domingo was a member of the Sangguniang Bayan of San Nicolas, Ilocos Norte. He resigned after going without leave to the US. To fill the vacancy, Mayor Barba recomended to Gov. Farinas

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the appointment of Edward Palafox. A similar recommendation was made by the Sangguniang Bayan of San Nicolas but the recommendation was made to Mayor Barba. The resolution, containing the recommendation, was submitted to the Sangguniang Panlalawigan of Ilocos Norte. - The Sangguniang Panlalawigan disapproved the resolution, saying that the power to appoint Sanggunian Bayan members is lodged with the Governor. The Sangguniang Panlalawigan then recomended the appointment of Al Nacino. Nacino was appointed and sworn the same day. Mayor Barba, on the other hand, appointed Palafox for the same position. - Petitioners then filed with the Regional Trial Court of Ilocos Norte a petition for quo warranto and prohibition. The trial court upheld the appointment of Barba. MFR was denied. - Petitioners contend that the power to fill a vacancy in the Sangguniang Bayan, which is created as a result of the cessation from office of a member who does not belong to a political party, is vested in the provincial governor upon recommendation of the Sangguniang Panlalawigan. They cite Sec 45(c) of the LGC. Sec 45. Permanent Vacancies in the Sanggunian. (a) Permanent vacancies in the sanggunian where automatic successions provided above do not apply shall be filled by appointment in the following manner: (1) The President, through the Executive Secretary, in the case of the sangguniang panlalawigan and the sangguniang panlungsod of highly urbanized cities and independent component cities; (2) The governor, in the case of the sangguniang panlungsod of component cities and the sangguniang bayan; (3) The city or municipal mayor, in the case of the sangguniang barangay, upon recommendation of the sangguniang barangay concerned. (b) Except for the sangguniang barangay, only the nominee of the political party under which the sanggunian member concerned had been elected and whose elevation to the position next higher in rank created the last vacancy in the sanggunian shall be appointed in the manner hereinabove provided. The appointee shall come from the same political party as that of the sanggunian member who caused the vacancy and shall serve the unexpired term of the vacant office. In the appointment herein mentioned, a nomination and a certificate of membership of the appointee from the highest official of the political party concerned are conditions sine qua non, and any appointment without such nomination and certification shall be null and void ab initio and shall be a ground for administrative action against the official responsible therefor. (c) In case the permanent vacancy is caused by a sanggunian member who does not belong to any political party, the local chief executive shall, upon recommendation of the sanggunian concerned, appoint a qualified person to fill the vacancy. ISSUE/S 1. Who is entitled to the vacant seat (Palafox or Nacino) HELD: 1. Neither. Ratio Sec 45 should be construed to mean as I. Where the Permanent Vacancy is Caused by a Sanggunian Member Belonging to a Political Party A. Sangguniang Panlalawigan and Sangguniang Panlungsod of highly urbanized cities and independent component cities The President, through the Executive Secretary, upon the nomination and certification of the political party to which the member who caused the vacancy belonged, as provided in 45 (b). B. Sangguniang Panlungsod of component cities and Sangguniang Bayan The Governor upon the nomination and certification of the political party to which the member who caused the vacancy belonged, as provided in 45 (b). II. Where the Vacancy is Caused by a Sanggunian Member Not Belonging to a Political Party A. Sangguniang Panlalawigan and Sangguniang Panlungsod of highly urbanized and independent component cites The President, through the Executive Secretary, upon recommendation of the Sangguniang Panlalawigan or Sangguniang Panlungsod as the case may be B. Sangguniang Panlungsod of component cities and Sangguniang Bayan The Governor upon recommendation of the Sangguniang Panlungsod or Sangguniang Bayan as the case may be III. Where the Vacancy is Caused by a Member of the Sangguniang Barangay City or Municipal Mayor upon recommendation of the Sangguniang Barangay Reasoning But who is the "local chief executive" referred? And which is the "sanggunian concerned"? With respect to the first ("local chief executive"), petitioners look to Sec45(a) for the answer and say that it is the governor, with respect to vacancies in the Sangguniang Panlungsod of component cities and Sangguniang Bayan, or the mayor with respect to vacancies in the Sangguniang Barangay. - In support of this view, they cite, first of all, the following provision of the former Local Government Code (B.P. Blg. 337): Sec 50. Permanent Vacancies in the Local Sanggunians. In case of permanent vacancy in the sangguniang panlalawigan, sangguniang panlungsod, sangguniang bayan, or sangguniang barangay, the President of the Philippines, upon recommendation of the Minister of Local Government, shall appoint a qualified person to fill the vacancy in the sangguniang panlalawigan and the sangguniang panglungsod; the

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governor, in the case of sangguniang bayan members; or the city or municipal mayor, in the case of sangguniang barangay members. Except for the sangguniang barangay, the appointee shall come from the political party of the sanggunian member who caused the vacancy, and shall serve the unexpired term of the vacant office. and, second, the following provision of the present Code: Se 63. Preventive Suspension. (a) Preventive suspension may be imposed: (1) By the President, if the respondent is an elective official of a province, a highly urbanized or an independent component city; (2) By the governor, if the respondent is an elective official of a component city or municipality; or (3) By the mayor, if the respondent is an elective official of the barangay. . . - Reference to these provisions is appropriate not for the reason advanced by petitioners, i.e., that the power to appoint implies the power to remove, but because implicit in these provisions is a policy to vest in the President, the governor and the mayor in descending order the exercise of an executive power whether to appoint in order to fill vacancies in local councils or to suspend local officials. These provisions are in pari materia with Sec 45. - To be sure the President of the Philippines can not be referred to as "local chief executive" in Sec 45(c) but it is apparent that the phrase is a misnomer and that the choice of this phrase was simply dictated by the need to avoid, for stylistic reasons, interminably repeating the officials on whom the power to appoint is conferred. Perhaps "authorities concerned" would have been a more accurate generic phrase to use. - For that matter, to follow private respondents' interpretation would be to run into a similar, if not greater, difficulty. For Sec 45(a) (3) vests the power to fill vacancies in the Sangguniang Barangay in the mayor but the local chief executive of a barangay is not the mayor. It is the punong barangay. Yet "local chief executive" cannot be applied to the punong barangay without rendering Sec 45(a) (3) meaningless. For then there would never be any occasion when the mayor, under this provision, can appoint a replacement for a member of the Sangguniang Bayan who for one reason or another ceases from office for reason other than the expiration of his term. And why should a vacancy in the Sangguniang Panlalawigan be filled by a different authority (the governor, according to this view) simply because the vacancy was created by a member who does not belong to a political party when, according to Sec 45(a) (1), a vacancy created by a member who belongs to a political party must be filled by appointment by the President of the Philippines? - With reference to the phrase "sangguniang concerned" in Sec 45(c), petitioners say it means, with respect to a vacancy in the Sangguniang Bayan, the

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Sangguniang Panlalawigan. Their reason is that under Sec 61 of the Code, the power to investigate complaints against elective municipal officials is vested in the Sangguniang Panlalawigan.This interpretation is inconsistent with the fact that in filling vacancies in the Sangguniang Barangay it is the Sangguniang Barangay which under Sec 45(a) (3) recommends the appointee, not the Sangguniang Panlungsod or the Sangguniang Bayan, which would be the case if petitioners' view were to prevail. We think that the phrase "sanggunian concerned" in Sec 45(c) should more properly be understood as referring to the Sanggunian in which the vacancy is created. - Is the appointing authority limited to the appointment of those "recommended" to him? The appointing authority is not bound to appoint anyone recommended to him by the Sanggunian concerned. The power of appointment is a discretionary power. On the other hand, neither is the appointing power vested with so large a discretion that he can disregard the recommendation of the Sanggunian concerned, Since the recommendation takes the place of nomination by political party, the recommendation must likewise be considered a condition sine qua non for the validity of the appointment, by analogy to the provision of Sec 45(b). - The upshot of this is that in the case at bar, since neither petitioner Al Nacino nor respondent Edward Palafox was appointed in the manner indicated in the preceding discussion, neither is entitled to the seat in the Sangguniang Bayan of San Nicolas, Ilocos Norte which was vacated by member Carlito B. Domingo. For while petitioner Al Nacino was appointed by the provincial governor, he was not recommended by the Sangguniang Bayan of San Nicolas. On the other hand, respondent Edward Palafox was recommended by the Sangguniang Bayan but it was the mayor and not the provincial governor who appointed him. cooperative, had its principal place of business. Specifically, the inquiry was to focus on the alleged installation and use by NORECO II of inefficient power lines in that city. The chairman and co-chairman of the committee on Public Utilities and Franchises signed a subpoena sent to Paterio Torres, Chairman of the Board of Directors, and Arturo Umbac, the General Manager, of NORECO II, requiring their attendance and testimony at the Committee's investigation. The two failed to show up, so the Committee on a latter date issued an order directing them to show cause why they should not be punished for legislative contempt due to their failure to appear at said investigation. The two filed a motion to Quash but was denied. Hence, this Petition for certiorari and Prohibition with Preliminary Injunction and/or Restraining Order. They contend that the Sangguniang Panlungsod of Dumaguete is bereft of the power to compel the attendance and testimony of witnesses, nor the power to order the arrest of witnesses who fail to obey its subpoena. And even if assuming that they do, still the investigation of matters affecting the terms and conditions of the franchise granted to NORECO II are beyond their jurisdiction. ISSUE WON the Ah Hoc committee of the Sangguinan has contempt powers. HELD NO. The court started by saying that a line should be drawn between the powers of Congress as the repository of the legislative power under the Constitution, and the powers that may be exercised by the legislative bodies of local government unit, e.g. the Sangguniang Panlungsod of Dumaguete which, as mere creatures of law, possess only delegated legislative power. While the Constitution does not expressly vest Congress with contempt powers, such has nevertheless been invoked by the legislative body as a means of preserving its authority and dignity. The exercise by Congress of this power was questioned for the first time in the leading case of Arnault v. Nazareno, where this Court held that the legislative body indeed possessed the contempt power. (The case involved a legislative inquiry into the acquisition by the Philippine Government of the Buenavista and Tambobong estates. During the Senate, investigation, Amault refused to reveal the Identity of the person to whom he gave the money. He was held in custody until he revealed so.) Even in the absence of an express Constitutional grant, said power must be considered implied or incidental to the exercise of legislative power in order for it to be able to require and compel the disclosure of such knowledge and information in its investigation. The exercise by the legislature of the contempt power

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is a matter of self-preservation as that branch of the government vested with the legislative power, independently of the judicial branch, asserts its authority and punishes contempts thereof. When the framers of the Constitution adopted the principle of separation of powers, making each branch supreme within the real of its respective authority, it must have intended each department's authority to be full and complete. And how could the authority and power become complete if for every act of refusal every act of defiance, the legislative body must resort to the judicial department for the appropriate remedy. The contempt power of the legislature is, therefore, sui generis, and local legislative bodies cannot correctly claim to possess it for the same reasons that the national legislature does. The power attaches not to the discharge of legislative functions per se but to the character of the legislature as one of the three independent and coordinate branches of government. The same thing cannot be said of local legislative bodies which are mere creations of law. There is no express provision either in the 1973 Constitution or in the LGC granting local legislative bodies such power. The contempt power and the subpoena power partake of a judicial nature. They cannot be implied in the grant of legislative power. Neither can they exist as mere incidents of the performance of legislative functions. To allow local legislative bodies or administrative agencies to exercise these powers without express statutory basis would run afoul of the doctrine of separation of powers. Thus, the contempt power, as well as the subpoena power, which the framers of the fundamental law did not expressly provide for but which the then Congress has asserted essentially for self-preservation as one of three co-equal branches of the government cannot be deemed implied in the delegation of certain legislative functions to local legislative bodies. This must be considered as an exception to Sec. 4 of B.P. 337 which provides for liberal rules of interpretation in favor of local autonomy. Since the existence of the contempt power inevitably poses a potential derogation of individual rights, the law cannot be liberally construed to have impliedly granted such powers to local legislative bodies. The grant of such power must be express. There being no provision in the Local Government Code explicitly granting local legislative bodies, the power to issue compulsory process and the power to punish for contempt, the Sanggunian Panlungsod of Dumaguete is devoid of power to punish the petitioners Torres and Umbac for contempt. And even if the committee possessed this power, the matter of their inquiry is beyond their jurisdiction. It comes evident that the inquiry would touch upon the efficiency of the electric service of NORECO II and, necessarily, its compliance with the franchise. Such

Local Legislative Power Contempt Powers


NEGROS ORIENTAL II ELECTRIC COOPERATIVE, INC. SANGGUNIANG PANLUNGSOD OF DUMAGUETE 155 SCRA 421 CORTES; November 5, 1987 AJANG
FACTS - The Ad Hoc Committee of the Sangguniang Panlungsod of Dumaguete was conducting an investigation in connection with pending legislation related to the operations of public utilities in the City of Dumaguete where NORECO II, an electric

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inquiry is beyond the jurisdiction of the respondent Sangguniang Panlungsod and its ad hoc committee as such is within the jurisdiction of the National Electrification Administration. such as dynamite fishing and other forms of destructive fishing, among others. - Without seeking redress from the concerned local government units, prosecutors office and courts, petitioners directly invoked our original jurisdiction by filing this petition. Petitioners contend: [1] The Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice of their trade, in violation Consti. [2] Office Order No. 23 contained neither regulation nor condition under which the Mayors permit could be granted or denied; in other words, the Mayor had the absolute authority to determine whether or not to issue permit. [3] Ordinance No. 2 took away the right of -fishermen to earn their livelihood in lawful ways; and that members of Airline Shippers Association were unduly prevented from pursuing their vocation and entering into contracts which are proper, necessary, and essential to carry out their business. [4] Since Ord. No. 2 is null and void, the criminal cases based thereon against petitioners Tano et al must be dismissed. - Respondents Gov. Socrates et al. defended the validity of the ordinances under the general welfare clause (Sec 16 LGC), and its specific power to protect the environment and impose appropriate penalties for acts that endanger the environment. Also, there was no violation of due process because public hearings were conducted, and that there was a lawful purpose and employed reasonable means. As to equal protection, a substantial distinction existed between a fisherman who catches live fish with the intention of selling it live, and a fisherman who catches live fish with no intention at all of selling it live, i.e., the former uses sodium cyanide while the latter does not. So the Ordinance applied equally to all those belonging to one class - Despite procedural obstacles, SC resolved to resolve the case on the merits. ISSUE WON the ordinances in question are unconstitutional HELD NO - It is settled that laws (including ordinances enacted by local government units) enjoy the presumption of constitutionality. To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution, not merely a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown beyond reasonable doubt. Where doubt exists, even if well founded, there can be no finding of unconstitutionality. To doubt is to sustain. - After a scrunity of the challenged Ordinances and the provisions of the Constitution petitioners claim to have been violated, we find petitioners contentions baseless and so hold that the former do not suffer

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from any infirmity, both under the Constitution and applicable laws. - Note the state policy enshrined in the Constitution regarding the duty of the State to protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature. See Oposa v. Factoran. - The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing the environment ... The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people to a balanced and healthful ecology. In fact, the General Welfare Clause (Sec16 LGC), expressly mentions this right: to enhance the right of the people to a balanced ecology. - Moreover, Section 5(c) of LGC explicitly mandates that the general welfare provisions of the LGC shall be liberally interpreted to give more powers to the local government units in accelerating economic development and upgrading the quality of life for the people of the community. - The LGC vests municipalities with the power to grant fishery privileges in municipal waters and to impose rentals, fees or charges; to penalize, thru ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of applicable fishery laws. Further, the sangguniang bayan, the sangguniang panlungsod and the sangguniang panlalawigan are directed to enact ordinances for the general welfare of the municipality and its inhabitants, which shall include, ordinances that protect the environment and impose appropriate penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing ... and such other activities which result in pollution, of rivers and lakes or of ecological imbalance. - The centerpiece of LGC is the system of decentralization as expressly mandated by the Consti. Indispensable thereto is devolution and the LGC expressly provides that any provision on a power of a LGU shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the LGU. Devolution refers to the act by which the National Government confers power and authority upon the various LGUs to perform specific functions and responsibilities. - One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery laws in municipal waters including the conservation of mangroves. This necessarily includes enactment of ordinances to effectively carry out such fishery laws within the municipal waters. - In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted to local government units under Sec 16 (the General Welfare Clause), and under Sections 149, 447

Validity of an Ordinance
LAGCAO V LABRA SUPRA PAGE 26 OF DIGEST AIDA TANO V. SOCRATES 278 SCRA 154 DAVIDE, JR; August 21, 1997 REAN
FACTS - Petitioners Tano et al. filed petition to SC among other to: (1) declare as unconstitutional: (a) Ordinance No. 15-92, of the Sangguniang Panlungsod of Puerto Princesa; (b) Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and (c) Resolution No. 33, Ordinance No. 2, Series of Sangguniang Panlalawigan of Palawan; and, (2) enjoin the enforcement thereof. - Without seeking redress from the concerned local government units, prosecutors office and courts, petitioners directly invoked SCs original jurisdiction by filing this petition - Ordinance No. 15-92 is: An ordinance banning the shipment of all live fish (except catfish, sea bass, mudfish, milkfish fries) and lobster outside Puerto Princesa City from Jan. 1 93 to Jan. 1 98, and providing for exemptions and penalties. - Office Order No. 23 to implement city ordinance, authorized and directed the proper authorities to check or conduct necessary inspections on cargoes containing live fish and lobster being shipped out from the Puerto Princesa Airport / Wharf or at any port within city jurisdiction. The purpose of the inspection is to ascertain whether the shipper possessed the required Mayors Permit issued by this Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries and Aquatic Resources and as to compliance with all other existing rules and regulations on the matter - Resolution No. 33 prohibited the catching, gathering, possessing, buying, selling ad shipment of live marine coral dwelling aquatic organisms like mameng, suno, panther or senorita, lobster below 200g, taklobo, mother pearl, giant clams, oysters, loba, tiger prawn breeder, and tropical aquarium fishes. This is to protect the environment and impose appropriate penalties upon acts which endanger the environment

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(a) (1) (vi), 458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of the questioned Ordinances cannot be doubted. Disposition Petition DISMISSED. to the Sanggunian, which may proceed to reconsider the same. The Sanggunian concerned, however, may override the veto by a 2/3 vote of all its members thereby making the ordinance/resolution effective. It is clear, therefore, that the concurrence of a local chief executive in the enactment of an ordinance or resolution requires, not only a flourish of the pen, but the application of judgment after meticulous analysis and intelligence as well. Reasoning Petitioner argues that the deliberations undertaken and the consequent passage of the RESOLUTION are legislative in nature. And as local chief executive, he has neither the official custody of nor the duty to prepare said resolution; hence, he could not have taken advantage of his official position in committing the crime of falsification. Petitioner would like to impress upon this Court that the final step in the approval of an ordinance or resolution, where the local chief executive affixes his signature, is purely a ministerial act. This view is erroneous. Art 109(b) of the LGC outlines the veto power of the Local Chief Executive which provides: The local chief executive, except the punong barangay shall have the power to veto any particular item or items of an appropriations ordinance, an ordinance or resolution adopting a local development plan and public investment program or an ordinance directing the payment of money or creating liability. . 2. YES. Reasoning As explained by Deputy Special Prosecutor Leonardo P. Tamayo in his comment, the other case relied upon by petitioner has no relation whatsoever with the one in question. Notably, the former case was subject of a separate complaint and preliminary investigation, hence, the findings and records therein could not be "made part of the case under consideration." The Ombudsman correctly relied on the minutes taken during the session of the SB held last July 27, 1992, which petitioner regards as inconclusive evidence of what actually transpired therein. In a long line of cases, the Court, in resolving conflicting assertions of the protagonists in a case, has placed reliance on the minutes or the transcribed stenographic notes to ascertain the truth of the proceedings therein. Here, the minutes of the session reveal that petitioner attended the session of the SB on July 27, 1992. It is evident, therefore, that petitioner approved the subject resolution knowing fully well that "the subject matter treated therein was neither taken up and discussed nor passed upon by the SB during the legislative session." The Court accords full recognition to the minutes as the official repository of what actually transpires in every proceeding. It has happened that the minutes may be corrected to reflect the true account of a proceeding, thus giving the Court more reason to accord them great weight for such subsequent

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corrections, if any, are made precisely to preserve the accuracy of the records. In light of the conflicting claims of the parties in the case at bar, the Court, without resorting to the minutes, will encounter difficulty in resolving the dispute at hand. With regard to the joint affidavit of some members of the SB attesting to the actual passage and approval of the RESOLUTION, the Court finds the same to have been belatedly submitted as a last minute attempt to bolster petitioner's position, and, therefore, could not in any way aid the latter's cause. Indeed, the arguments raised by petitioner's counsel are best taken up in the trial on the merits. Disposition WHEREFORE, in view of the foregoing, the instant petition is DISMISSED. The assailed resolutions of the Sandiganbayan dated December 29, 1994, and May 24, 1995, are hereby AFFIRMED. The temporary restraining order issued by this Court on September 18, 1995, is hereby LIFTED. The Sandiganbayan is DIRECTED to set Criminal Case No. 21073 for arraignment and trial.

Approval by Mayor Not a Ministerial Act


MAYOR OSCAR DE LOS REYES V SANDIGANBAYAN 281 SCRA 631 ROMERO; Nov 13, 1997 BRI
FACTS -Petitioner, with 2 others, was charged with falsification of a public document, specifically Resolution No. 57-S-92 (the RESOLUTION) dated July 27, 1992 of the Municipal Council of Mariveles, Bataan. The complaint alleged that the resolution, appropriating P8,500 for the payment of the terminal leave of 2 municipal employees, was anomalous for not having been approved by the said Council, as the minutes of the proceedings therein made no reference to the supposed approval thereof. It contended that its seeming passage was carried out by petitioner in connivance with Sangguniang Bayan (SB) Member Jesse Concepcion and SB Secretary Antonio Zurita. On Sep 21, 1994, an information was filed before the Sandiganbayan. -On Oct 14, 1994, prior to his arraignment, petitioner filed a Motion for Reinvestigation arguing, among other things, "that the Ombudsman previously dismissed a similar complaint against him involving the same factual setting." Likewise adduced in the motion is the joint affidavit of the other members of the SB of Mariveles attesting to the actual passage and approval of the RESOLUTION. -In a resolution dated Dec 29, 1994, respondent Sandiganbayan denied the Motion for Reinvestigation. Motion for Reconsideration was also denied on May 24, 1995. ISSUES 1. WON approval by mayor is a ministerial act 2. WON Sandiganbayans order was proper HELD 1. NO. Ratio The grant of the veto power confers authority beyond the simple mechanical act of signing an ordinance or resolution, as a requisite to its enforceability. It accords the local chief executive the discretion to sustain a resolution/ordinance in the first instance or to veto it and return it with his objections

Review of Component City and Municipality Ordinance


MODAY VS. CA (Agusan del Sur) 268 SCRA 586 ROMERO; February 20, 1997 RICKY
FACTS - In 1989, the Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed Resolution No. 43-89, authorizing the Municipal Mayor to Initiate the Petition for Expropriation of a One Hectare Portion of a certain lot along the National Highway owned by Percival Moday for the Site of the Bunawan Farmers Center and other government sports facilities. It was approved by Municipal Mayor Anuncio Bustillo and transmitted to the Sangguniang Panlalawigan for its approval. The Sangguniang Panlalawigan disapproved said Resolution and returned it with the comment that "expropriation is unnecessary considering that there are still available lots in Bunawan for the establishment of the government center." - The Municipality of Bunawan subsequently filed a petition for Eminent Domain against Moday before the Agusan del Sur RTC. The complaint was later amended to include the registered owners, Percival Moday's parents, as party defendants. The municipality filed a Motion to Take or Enter Upon the Possession of Subject Matter of This Case stating that it had already deposited with the municipal treasurer the necessary amount in accordance with Section 2, Rule 67 of the Revised ROC and that it would be in the government's

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best interest to be allowed to take possession of the property. - Despite Moday's opposition and after a hearing on the merits, the RTC granted the motion. It held that the Sangguniang Panlalawigan's failure to declare the resolution invalid leaves it effective. It added that the duty of the Sangguniang Panlalawigan is merely to review the ordinances and resolutions passed by the Sangguniang Bayan under Section 208 (1) of the old Local Government Code and that the exercise of eminent domain is not one of the two acts enumerated in Section 19 thereof requiring the approval of the Sangguniang Panlalawigan. The CA affirmed. ISSUE WON a municipality may expropriate private property by virtue of a municipal resolution which was disapproved by the Sangguniang Panlalawigan. HELD YES. Ratio The only ground upon which a provincial board may declare any municipal resolution, ordinance, or order invalid is when such resolution, ordinance, or order is "beyond the powers conferred upon the council or president making the same." Absolutely no other ground is recognized by the law. A strictly legal question is before the provincial board in its consideration of a municipal resolution, ordinance, or order. The provincial (board's) disapproval of any resolution, ordinance, or order must be premised specifically upon the fact that such resolution, ordinance, or order is outside the scope of the legal powers conferred by law. If a provincial board passes these limits, it usurps the legislative function of the municipal council or president. Reasoning The Sangguniang Panlalawigan was without the authority to disapprove Municipal Resolution No. 43-89 for the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and its Sangguniang Bayan the capacity to promulgate said resolution pursuant to B.P. 337 (old LGC). It follows that Resolution No. 43-89 is valid and binding and could be used as lawful authority to petition for the condemnation of petitioners' property. - As regards the accusation of political oppression, it is alleged that Moday incurred the ire of Mayor Bustillo when he refused to support the latter's candidacy for mayor in previous elections. Moday claims that Mayor Bustillo used the expropriation to retaliate by expropriating their land even if there were other properties belonging to the municipality and available for the purpose, specifically, a vacant seven-hectare property adjacent to his land evidenced by a sketch plan. The Court however found no evidentiary support for petitioners' allegations. The uncertified photocopy of the sketch plan does not conclusively prove that the municipality does own vacant land adjacent to petitioners' property suited to the purpose of the expropriation. Consequently, the Court held that Moday's demand that the mayor be personally liable for damages is without basis. Dispositive Decision of the CA is AFFIRMED.

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after initiating them, turned them over to Cruz, A Deed of Absolute Sale was prepared by Cruz who also initialed the supporting documents and transmitted them to District Engr. Data. - The Deed of Absolute Sale was signed by Data and Gutierrez. Data sent the papers to Director Anolin who recommended to the Asst Sec of Public Works the approval of the Deed of Sale. The documents were then returned to Data's office. The sale was registered and a TCT was issued in the name of the Government. - General Voucher No. 85-2-7809-52 for the amount of P1,520,320 bore fourth certifications of. (1) Cruz as Senior Civil Engineer; (2) Priscillo G. Fernando as Supervising Civil Engineer II; (3) Cresencio Data as District Engineer II and (4) Cesar V. Franco as Project Acting Accountant. The voucher and its supporting documents were pre-audited and approved for payment by the accused,Arias, as auditor of the Engineering District. 16 PNB checks for the total sum of Pl,520,320.00 were issued to Gutierrez as payment for Agleham's property. -During investigation, it was established that the deed of sale was pre-audited by Arias, auditor of the Rizal Engineering District, who approved the payment to Gutierrez without questioning the fact that the amount of the purchase price therein had been altered, i.e., "snow-flaked (sic) and later superimposed by the amount of P1,520,320 in words and figures, nor checking the veracity of the supporting documents listed at the back of the General Voucher, some of which were fake, forged or altered. - An information was filed against Data, Fernando, Cruz, Jose, Arcaya and Arias in the Sandiganbayan for violating Section 3, par (e), of the Anti Graft and Corrupt Practices Act. It was alleged that they conspired with accused Gutierrez to overprice the land. Sandiganbayan convicted Gutierrez, Data, Cruz, Jose and Arias. Arias and Data appealed. ISSUE WON Sandiganbayan erred in convicting Arias and Data HELD YES. - Under the SB decision, a department secretary, bureau chief, commission chairman, agency head, and all chief auditors would be equally culpable for every crime arising from disbursements which they have approved. The department head or chief auditor would be guilty of conspiracy simply because he was the last of a long line of officials and employees who acted upon or affixed their signatures to a transaction. Guilt must be premised on a more knowing, personal, and deliberate participation of each individual who is charged with others as part of a conspiracy. - Petitioners are not charged with conspiracy in the falsification of public documents or preparation of spurious supporting papers. The charge is causing

MUNICIPALITY OF PARANAQUE V VM REALTY SUPRA -PAGE 31 OF DIGEST AJANG

Grounds for Disciplinary Action Reliance on Good Faith


ARIAS v SANDIGANBAYAN 180 SCRA 309 GUTIERREZ; December 19, 1989 JOEY
FACTS (taken from Dissenting Opinion) - The implementation of the Manggahan Floodway Project was entrusted to the Pasig Engineering District headed by the District Engineer, Cresencio Data. He formed a committee composed of, among others, Supervising Civil Engineer Priscillo Fernando, as overall in charge, and Instrumentman Carlos Jose for surveys. - A memorandum was sent to Data by Public Works Director Anolin, directing that all affected lands covered by the Project shall be excluded from reevaluation and reassessment. - Among the lots affected was a portion of riceland registered in the name of Benjamin Agleham. The land was previously owned by the parents of the accused Natividad Gutierrez. - Agleham's property, classified as a "ricefield" was declared for taxation. Its assessed value was P0.15 per square meter. Another Tax Declaration was issued for the same ricefield" with declared market value of P150,850 (or P5 per square meter), and the assessed value of P60,340. - Ten months later, another Tax Declaration was issued wherein the market value of the same "ricefield," jumped P10 per square meter. Its assessed value was fixed at P120,680. -Natividad Gutierrez, armed with a SPA allegedly executed by Agleham in her favor, filed an application for payment at the District Engineer's Office. She submitted a falsified xerox copy of Tax Declaration No. 47895 bearing a false date, and describing the property as "residential", with a fair market value of P80 per square meter and assessed value of P724,056. - The documents supporting Agleham's claim were "examined" by the Administrative Officer Arcaya, who,

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undue injury to the Government and giving a private party unwarranted benefits through manifest partiality, evident bad faith, or inexcusable negligence. - The alleged undue injury is the Government purchase of land for P80.00 instead of the P5.00 value per square meter appearing in the tax declarations and fixed by the municipal assessor, not by the landowner. The assessor's tax valuation of P5.00 per square meter of land is completely unrealistic and arbitrary as the basis for conviction. - The property was acquired through negotiated purchase. It was, therefor, nothing more than an ordinary contract of sale where the purchase price had to be arrived at by agreement between the parties and could never be left to the discretion of one of the contracting parties. For it is the essence of a contract of sale that there must be a meeting of the minds between the seller and the buyer upon the thing which is the object of the contract and upon the price. Necessarily, the parties have to negotiate the reasonableness of the price, taking into consideration such other factors as location, potentials, surroundings and capabilities. - There can be no overpricing for purposes of a criminal conviction where no proof adduced during orderly proceedings has been presented and accepted. - It is doubtful if any auditor for a fairly sized office could personally do all these things in all vouchers presented for his signature. All heads of offices have to rely to a reasonable extent 'on their subordinates and on the good faith of those prepare bids, purchase supplies, or enter into negotiations. If a department secretary entertains important visitors, the auditor is not ordinarily expected to call the restaurant about the amount of the bill, question each guest whether he was present at the luncheon, inquire whether the correct amount of food was served and otherwise personally look into the reimbursement voucher's accuracy, propriety, and sufficiency. There has to be some added reason why he should examine each voucher in such detail. Any executive head of even small government agencies or commissions can attest to the volume of papers that must be signed. There are hundreds of document , letters and supporting paper that routinely pass through his hands. The number in bigger offices or departments is even more appalling. - There should be other grounds than the mere signature or approval appearing on a voucher to sustain a conspiracy charge and conviction. - Data did not take any direct and active part in the acquisition of land for the Manggahan floodway; on the basis of the supporting certified documents which appeared regular and complete on their face, Data, as head of the office and the signing authority at that level, merely signed but did not approve the deed of sale as the approval thereof was the prerogative of the Secretary of Public Works - Prosecution has not shown any positive and convincing evidence of conspiracy. Dispositive Sandiganbayan decision SET ASIDE. Arias and Data are acquitted on grounds of reasonable doubt. SEPARATE OPINION GRIO-AQUINO [dissent] - A conspiracy need not be proved by direct evidence of the acts charged, but may and generally must be proven by a number of indefinite acts, conditions and circumstances. This case presents a conspiracy of silence and inaction - It was too much of a coincidence that both petitioners were negligent at the same time over the same transaction. - The primary function of an auditor is to prevent irregular, unnecessary, excessive or extravagant expenditures of government funds. The auditorial function of an auditor, as a representative of the Commission on Audit, comprises three aspects: (1) examination; (2) audit: and (3) settlement of the accounts, funds, financial transactions and resources of the agencies under their respective audit jurisdiction. Examination, as applied to auditing, means "to probe records, or inspect securities or other documents; review procedures, and question persons, all for the purpose of arriving at an opinion of accuracy, propriety, sufficiency, and the like. - We reject Arias casuistic explanation that since his subordinates had passed upon the transaction, he could assume that it was lawful and regular for, if he would be a mere rubber stamp for his subordinates, his position as auditor would be useless and unnecessary. - Data claims innocence because he allegedly did not take any direct and active participation in the acquisition of the property. However, under the principle of command responsibility, he was responsible for the manner in which the committee performed its tasks for it was he who in fact signed the deed of sale prepared by the committee. By signing the deed of sale and certifications prepared for his signature by his committee, he in effect, made their acts his own. He is, therefore, equally guilty with those members of the committee who accepted the fake tax declarations and made false certifications regarding the use and value of the property. - We find no merit in the argument that the Agleham riceland was not overpriced because the price fixed in the deed of sale was reasonable. It was further argued that the valuation in the owner's genuine tax declaration may not be used as a standard in determining the fair market value of the property because PD Nos. 76 and 464 (making it mandatory in expropriation cases to fix the price at the value of the

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property as declared by the owner, or as determined by the assessor, whichever is lower), were declared null and void. That argument is not well taken because PD Nos. 76 and 464 (before they were nullified) applied to the expropriation of property for public use. The acquisition of Agleham's riceland was not done by expropriation but through a negotiated sale. In the course of the negotiations, there was absolutely no allegation nor proof that the price of P80 per square meter was its fair market value. What the accused did was to prove the value of the land through fake tax declarations, false certifications and a forged sworn statement on the current and fair market value of the real property submitted by the accused in support of the deed of sale. Because fraudulent documents were used, it may not be said that the State agreed to pay the price on the basis of its fairness, for the Government was in fact deceived concerning the reasonable value of the land.

DELOSO V. SANDIGANBAYAN 217 SCRA 49 Jan 13, 1993 CHRISCAPS


FACTS - Deloso is the incumbent Governor of Zambales, former Mayor of Botolan. - He was charged w/ violating Anti-Graft and Corrupt Practices Act, that while he was Mayor, he gave unwarranted benefits to 5 pvt individuals by issuing to them a tractor purchased by the municipality w/o any agreement as to payment of rentals, causing injury to the municipality. - Deloso filed Demurrer to evidence. Demurrer was denied as regards 3 cases but granted as to 2. - Sandiganbayan found Deloso guilty. - Other facts established - Sangguniang Bayan of Botolan authorized the obtention by Municipality of loan for purpose of purchasing 5 farm tractos to aid farmers in the area. - But not one farmer opted to make use thereof. - To make the best of a bad situation, Sanggunian planned to lease them to affluent landowners selected by the municipality. Deloso had no part in the selection. - Tractors were turned over to lessees w/o written contract. Resolution was adopted by Sanggunian setting out generally conditions for use. - Tractors were returned and eventually deteriorated and were sold as junk. - Sandiganbayans conclusions - Tractors were irresponsibly delivered w/o paper to evidence delivery. - There was no written agreement.

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- There was no bond w/c is usually posted. - Beneficiaries pd nary a cent until NBI questioned them. - Grant of tractors wasnt made thru canvass or public bidding. ISSUES WON Deloso was correctly found guilty HELD NO. - All 3 beneficiaries (Ferrer, Encarnacion, Lim) were presented and all declared that they rcvd tractors upon understanding that theyd pay rentals and keep them in good repair. The facts they established are the same as those demonstrated by the evidence of defense. - Sison (Municipal Treas) testified that payments were made by lessees. - Deloso himself took witness stand. He said he asked that the terms of lease be embodied in Resolution but Sanggunian had declined at that time, saying its unable to do so bec docs werent yet in its possession. What Deloso did was to instruct Municipal Treas to incorporate general terms in a memorandum receipt. Deloso also personally explained terms of lease to the beneficiaries. - Sandiganbayans conclusions are erroneous. The lease in this case isnt one of those required by law to be in writing / in any particular form to be valid / enforceable. Absence of bond doesnt make transactions criminal. Theres also no evidence that canvass / bidding is a requirement. - Lower court said that beneficiaries were suborned by Deloso. This is too tenuous a premise. - Also incorrect is that Deloso didnt follow requirement of Local Govt Audit Office that renting of govt equipment must be based on fees set by DPWH. No proof of such requirement. from office, without pay, and the Order, dated 29 July 1993, rejecting petitioners' motion for reconsideration. - Petitioner Nemesio Arturo S. Yabut, Vice Mayor of the municipality and Private respondent Paul Doran, an American national, figured in an altercation while the former was directing traffic. Doran stopped where Yabut was and asked "why it took so long to make a left turn?" Petitioner Yabut answered "Sorry, sir, its traffic." Doran then exclaimed, "Who the hell are you," and stuck a dirty finger sign at Yabut. Yabut's traffic officers joined the fray. They pulled out Doran from his car and started beating him until three men rescued Doran and brought him to the nearby Pacific Star Building. Both Yabut and Doran suffered injuries as a result of the scuffle. - Doran made a formal complaint against Yabut before the National Bureau of Investigation (NBI) - Yabut filed his affidavit and that of his witnesses. The NBI forthwith indorsed the case to respondent Office of the Ombudsman, which promptly imposed a ninetyday preventive suspension on Yabut. - Yabut moved for the reconsideration of the suspension order. - In an Order, dated 12 March 1993, the Ombudsman ordered that: 1. The complainant be furnished with copies of the affidavits of the respondent and his witnesses, and for the former, if he so desires, to make a reply thereto within ten (10) days from receipt of the same; 2. Ricardo M. Tamargo, security aide of the respondent, be named as a co-respondent in the above-entitled case; that he be furnished with copies of the sworn statements of the complainant and his witnesses; and that he may file further responsive pleadings, if he so desires, within ten (10) days from receipt of the same; 3. The resolution of the respondent's motion to lift suspension order be held in abeyance until and after the respective pleadings/evidence of the parties have been submitted. - During the preliminary conference held on 19 May 1993, the parties agreed to submit the case for resolution. Yabut also moved for the lifting of his preventive suspension. The following day, the preventive suspension order was lifted. - On 28 June 1993, the investigating officer submitted the questioned Resolution containing her findings and recommendation. - The resolution which was approved by the Overall Deputy Ombudsman recommended that respondents Yabut and Tamargo be meted with the penalty of suspension from office without pay for a period of two (2) months effective upon receipt of a copy of said resolution. Petitioner Yabut filed a "Motion for Clarification/Reconsideration which was denied. ISSUES:

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1. WON the Court may review decisions/resolutions of the Ombudsman in administrative cases 2. WON the preventive suspension meted by the Ombudsman to the petitioner prior to the resolution of the administrative case should be credited to the penalty of suspension imposed on him HELD: 1. YES. While the Ombudsman has the full discretion to determine whether or not a criminal case should be filed, this Court is not precluded from reviewing the Ombudsman's action when there is an abuse of discretion, in which case Rule 65 of the Rules of Court may exceptionally be invoked pursuant to Section I, Article VIII of the 1987 Constitution. Section 27 of Republic Act No. 6770 provides: Sec. 27. Effectivity and Finality of Decisions. (1) All provisionary orders at the Office of the Ombudsman are immediately effective and executory. A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be filed within five (5) days after receipt of written notice and shall be entertained only on any of the following grounds: (1) New evidence has been discovered which materially affects the order, directive or decision; (2) Errors of law or irregularities have been committed prejudicial to the interest of the movant. The motion for reconsideration shall be resolved within three (3) days from filing: Provided, That only one motion for reconsideration shall be entertained. Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive. Any order, directive or decision imposing the penalty of public censure or reprimand, suspension of not more than one month's salary shall be final and unappealable. In all administrative disciplinary cases, orders, directives, or decisions of the Office of the Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt of the written notice of the order, directive or decision or denial of the motion for reconsideration in accordance with Rule 45 of the Rules of Court. The above rules may be amended or modified by the Office of the Ombudsman as the interest of justice may require. Section 7 of Administrative Order No. 07 (Rules of Procedure of the Office of the Ombudsman) also provides thus: Sec. 7. Finality of Decision. Where the respondent is absolved of the charge, and in case of conviction where the penalty imposed is public censure or reprimand, suspension of not

Preventive Suspension
NEMESIO ARTURO S. YABUT and RICARDO M. TAMARGO v. OFFICE OF THE OMBUDSMAN and DR. PAUL DORAN G.R. No. 111304 VITUG; June 17, 1994 EDEL
FACTS: -This petition for review challenges the Resolution, dated 28 June 1993, of the Office of the Ombudsman finding petitioners guilty of simple misconduct and oppression in the performance of official duties and recommending the penalty of a 2-month suspension

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more than one month, or a fine equivalent to one month salary, the decision shall be final and unappealable. In all other cases, the decision shall become final after the expiration of ten (10) days from receipt thereof by the respondent, unless a motion for reconsideration or petition for certiorari shall have been filed by him as prescribed in Section 27 of RA 6770. However, in the instant petition, the Court finds neither an error of law nor grave abuse of discretion on the part of the Ombudsman. The attendant circumstances, it might be said, could have well caused tempers to rise and patience to break; nevertheless, they served no excuse for the mauling and shooting incidents that followed. While the Court does not condone the act of provocation made by Doran, which in the words of petitioners was no less than "an act of spite, degradation and mockery," it did not, however, justify an equally abhorrent reaction from them. Petitioners were public officers; Doran was not. The Court seconds the Solicitor General in this observation: A public official, more especially an elected one, should not be onion skinned. Strict personal discipline is expected of an occupant of a public office because a public official is a property of the public. He is looked upon to set the example how public officials should correctly conduct themselves even in the face of extreme provocation. Always he is expected to act and serve with the highest degree of responsibility, integrity, loyalty and efficiency and shall remain accountable for his conduct to the people. 2. NO. A preventive suspension decreed by the Ombudsman by virtue of his authority under Section 21 of Republic Act No. 6770, in relation to Section 9 of Administrative Order No. 07, is not meant to be a penalty but a means taken to insure the proper and impartial conduct of an investigation. The Court has ruled, in a number of times before, that a preventive suspension may be ordered even before the charges are heard, as well as before the official concerned is given an opportunity to prove his innocence, being merely a measure that is precisely designed in order not to hamper the normal course of an investigation through the use of influence and authority. Disposition Petition is DISMISSED for lack of merit. No special pronouncement on costs. -Petitioner Antonio Carpio as citizen, taxpayer and member of the Philippine Bar, filed this petition, questioning the constitutionality of RA 6975 with a prayer for TRO. -RA 6875, entitled AN ACT ESTABLISHIGN THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER PURPOSES, allegedly contravened Art. XVI, sec. 6 of the 1986 Constitution: The State shall establish and maintain one police force, which shall be national in scope and civilian in character, to be administered and controlled by a national police commission. The authority of local executives over the police units in their jurisdiction shall be provided by law. -petitioner herein respectfully advances the view that RA 6975 emasculated the National Police Commission by limiting its power "to administrative control" over the Philippine National Police (PNP), thus, "control" remained with the Department Secretary under whom both the National Police Commission and the PNP were placed ISSUE WON RA 6875 is unconstitutional HELD: NO -To begin with, one need only refer to the fundamentally accepted principle in Constitutional Law that the President has control of all executive departments, bureaus, and offices to lay at rest petitioner's contention on the matter. -This presidential power of control over the executive branch of government extends over all executive officers from Cabinet Secretary to the lowliest clerk and has been held by us, in the landmark case of Mondano vs. Silvosa, to mean "the power of [the President] to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former with that of the latter." - As a corollary rule to the control powers of the President is the Doctrine of Qualified Political Agency. As the President cannot be expected to exercise his control powers all at the same time and in person, he will have to delegate some of them to his Cabinet members. -Under this doctrine, which recognizes the establishment of a single executive, all executive and administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or law to act in person or the exigencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the

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Secretaries of such departments, performed and promulgated in the regular course of business, unless disapproved or reprobated by the Chief Executive, are presumptively the acts of the Chief Executive. -Thus, the Presidents power of control is directly exercised by him over the members of the Cabinet who, in turn, and by his authority, control the bureaus and other offices under their respective jurisdictions in the executive department. -The placing of NAPOLCOM and PNP under the reorganized DILG is merely an administrative realignment that would bolster a system of coordination and cooperation among the citizenry, local executives and the integrated law enforcement agencies and public safety agencies.

ESPIRITU v. MELGAR 206 SCRA 256 (1992) GRIO-AQUINO INA


FACTS - Ramir Garing charged Mayor Melgar of Naujan, Mindoro, in the DILG, Provincial Governors office, and Office of the President, with grave misconduct, oppression, abuse of authority, culpable violation of the Constitution and conduct prejudicial to the best interest of the public service. - According to Garing, the Mayor beat him up for no reason and ordered his arrest and detention without being charged with anything. - According to Mayor, while he was speaking solemnly at a graduation when Garing rudely clapped, and wouldnt stop. Mayor then asked a policeman to investigate. Garing was placed in custody for his own safety because he was drunk and a balisong was found in his possession. - The Sangguniang Panlalawigan of Mindoro recommended to Gov. Espiritu that Mayor be suspended for 45 days, pending the investigation. Soon, Mayor received the Order of Suspension. - Mayor went to RTC on certiorari. RTC granted writ of preliminary injunction to prevent the Provincial Governor from proceeding with the admin case. ISSUE WON Provincial Governor, is empowered by Section 63 of the LGC to place an elective municipal official under preventive suspension pending decision of an administrative case against the elective municipal official HELD YES. - (see Sec 63, LGC) - The provincial governor of Oriental Mindoro is authorized by law to preventively suspend the

CARPIO V. EXECUTIVE SECRETARY 206 SCRA 290 PARAS; February 14, 1992 JAVI
FACTS

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municipal mayor of Naujan at anytime after the issues had been joined and any of the following grounds were shown to exist: 1. When there is reasonable ground to believe that the respondent has committed the act or acts complained of; 2. When the evidence of culpability is strong; 3. When the gravity of the offense so warrants; or 4. When the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. - There is nothing improper in suspending an officer before the charges against him are heard and before he is given an opportunity to prove his innocence. Preventive suspension is allowed so that the respondent may not hamper the normal course of the investigation through the use of his influence and authority over possible witnesses. - Since respondent mayor believed that his preventive suspension was unjustified and politically motivated, he should have sought relief first from the Secretary of Interior and Local Government, not from the courts. Mayor Melgar's direct recourse to the courts without exhausting administrative remedies was premature. The RTC had no jurisdiction over the certiorari cases and gravely abused its discretion in refusing to dismiss the case. - As a general rule, the office or body that is invested with the power of removal or suspension should be the sole judge of the necessity and sufficiency of the cause. So, unless a flagrant abuse of the exercise of that power is shown, public policy and a becoming regard for the principle of separation of powers demand that the action of said officer or body should be left undisturbed. befitting her position as Assistant City Health Officer of Iloilo City; that her office was padlocked without any explanation or justification; that her salary was withheld without cause -Finding probable grounds and reasons in these cases, the respondent issued a preventive suspension order on August 11, 1988 to last until October 11,1988 for a period of sixty (60) days -Another administrative cases was that filed by Pancho Erbite, a barangay tanod. He alleged that without the benefit of charges filed against him and a warrant of arrest, he was arrested and detained at the City Jail of Iloilo upon orders of petitioner. In jail, he was allegedly mauled by other detainees thereby causing injuries. He was released only the following day -A prima facie evidence was found to exist in the arbitrary detention case filed by Pancho Erbite so the respondent ordered the petitioner's second preventive suspension dated October 11, 1988 for another sixty (60) days. The petitioner was able to obtain a restraining order and a writ of preliminary injunction in the RTC of Iloilo City. The second preventive suspension was not enforced. -Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition against the respondent Secretary of Local Government (now, Interior) in the RTC of Iloilo City, where he succeeded in obtaining a writ of preliminary injunction. -He instituted an action for prohibition in the CA -On May 3, 1990, the respondent Secretary issued another order, preventively suspending Mayor Ganzon for another sixty days, the third time in twenty months -Mayor Ganzon commenced another petition for prohibition with the CA -Both petitions for prohibition were dismissed ISSUE WON the Secretary of Local Government acted oppressively and in grave abuse of discretion in meting out the successive suspensions HELD Yes. -It is to be noted that in meting out the suspensions under question, the Secretary of Local Government acted in consonance with the specific legal provisions of Batas Blg. 337, the Local Government Code4
4

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-The successive sixty-day suspensions imposed on Mayor Rodolfo Ganzon is albeit another matter. What bothers the Court, and what indeed looms very large, is the fact that since the Mayor is facing ten administrative charges, the Mayor is in fact facing the possibility of 600 days of suspension, in the event that all ten cases yield prima facie findings. The Court is not of course tolerating misfeasance in public office (assuming that Mayor Ganzon is guilty of misfeasance) but it is certainly another question to make him serve 600 days of suspension, which is effectively, to suspend him out of office. -Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His term of office does not expire until 1986. Were it not for this information and the suspension decreed by the Sandiganbayan according to the Anti-Graft and Corrupt Practices Act, he would have been all this while in the full discharge of his functions as such municipal mayor. As of October 26, 1983, he has been unable to. -It is a basic assumption of the electoral process implicit in the right of suffrage that the people are entitled to the services of elective officials of their choice. For misfeasance or malfeasance, any of them could, of course, be proceeded against administratively or, as in this instance, criminally. In either case, culpability must be established. Moreover, if there be a criminal action, he is entitled to the constitutional presumption of innocence. A preventive suspension may be justified. Its continuance, however, for an unreasonable length of time raises a due process question. For even if thereafter he were acquitted, in the meanwhile his right to hold office had been nullified. Clearly,
aforesaid period, the preventive suspension shall be lifted. Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by the Minister of Local Government if the respondent is a provincial or city official, by the provincial governor if the respondent is an elective municipal official, or by the city or municipal mayor if the respondent is an elective barangay official. (2) Preventive suspension may be imposed at any time after the issues are joined, when there is reasonable ground to believe that the respondent has committed the act or acts complained of, when the evidence of culpability is strong, when the gravity of the offense so warrants, or when the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. In all cases, preventive suspension shall not extend beyond sixty days after the start of said suspension. (3) At the expiration of sixty days, the suspended official shall be deemed reinstated in office without prejudice to the continuation of the proceedings against him until its termination. However ' if the delay in the proceedings of the case is due to his fault, neglect or request, the time of the delay shall not be counted in computing the time of suspension.

RODOLFO T. GANZON V CA (SANTOS) 200 SCRA 271 SARMIENTO; August 5,1991 APPLE
FACTS -Petitioner Rodolfo Ganzon is the Mayor of Iloilo City -Respondent, Luis Santos, is the Secretary of Local Govenrment -10 administrative complaints were filed against Ganzon by various city officials sometime in 1988, on various charges, among them, abuse of authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable violation of the Constitution, and arbitrary detention. -In one of the cases, Mrs. Cabaluna, a clerk assigned to the City Health Office charged that due to political reasons, the petitioner, using as an excuse the exigency of the service and the interest of the public, pulled her out from rightful office -In the case of Dra. Felicidad Ortigoza, she claims that the petitioner handpicked her to perform a task not

Sec. 62. Notice of Hearing. Within seven days after the complaint is filed, the Minister of local Government, or the sanggunian concerned, as the case may be, shall require the respondent to submit his verified answer within seven days from receipt of said complaint, and commence the hearing and investigation of the case within ten days after receipt of such answer of the respondent. No investigation shall be held within ninety days immediately prior to an election, and no preventive suspension shall be imposed with the said period. If preventive suspension has been imposed prior to the

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there would be in such a case an injustice suffered by him. Nor is he the only victim. There is injustice inflicted likewise on the people of Lianga They were deprived of the services of the man they had elected to serve as mayor. -The plain truth is that this Court has been ill at ease with suspensions, for the above reasons, and so also, because it is out of the ordinary to have a vacancy in local government. The sole objective of a suspension, as we have held, is simply "to prevent the accused from hampering the normal cause of the investigation with his influence and authority over possible witnesses" or to keep him off "the records and other evidence. -Suspension is not a penalty and is not unlike preventive imprisonment in which the accused is held to insure his presence at the trial. In both cases, the accused (the respondent) enjoys a presumption of innocence unless and until found guilty. -As we observed earlier, imposing 600 days of suspension on Mayor Ganzon is to all intents and purposes, to make him spend the rest of his term in inactivity. It is also to make, to all intents and purposes, his suspension permanent. -It is also, in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not been proven. Worse, any absolution will be for naught because needless to say, the length of his suspension would have, by the time he is reinstated, wiped out his tenure considerably. -The Court is not to be mistaken for obstructing the efforts of the respondent Secretary to see that justice is done in Iloilo City, yet it is hardly any argument to inflict on Mayor Ganzon successive suspensions when apparently, the respondent Secretary has had sufficient time to gather the necessary evidence to build a case against the Mayor without suspending him a day longer. What is intriguing is that the respondent Secretary has been cracking down, so to speak, on the Mayor piecemeal apparently, to pin him down ten times the pain, when he, the respondent Secretary, could have pursued a consolidated effort. -We reiterate that we are not precluding the President, through the Secretary of Interior from exercising a legal power, yet we are of the opinion that the Secretary of Interior is exercising that power oppressively, and needless to say, with a grave abuse of discretion. -We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third suspension and lifting, for the purpose, the Temporary Restraining Order earlier issued. Insofar as the seven remaining charges are concerned, we are urging the Department of Local Government, upon the finality of this Decision, to undertake steps to expedite the same, subject to Mayor Ganzon's usual remedies of appeal, judicial or administrative, or certiorari, if warranted, and meanwhile, we are precluding the Secretary from meting out further suspensions based on those remaining complaints, notwithstanding findings of prima facie evidence.

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the Municipality of Muntinlupa, the fear of the Court that, unless they are preventively suspended, they may tamper with the records of that transaction, has no more validity. 2. The proceedings against the petitioners before the Second Division of the Sandiganbayan involves no factual issue but only the legal question of whether or not the cancellation by the petitioners of the Cooperative's subsisting lease contract over the Municipal Public Market was justified by public interest or general welfare. Consequently, nothing can possibly be compromised or hampered by their remaining in office, since the said proceedings will no longer be for the purpose of receiving evidence on factual issues but only to hear arguments, position papers on memoranda. Absent any need for testimonial and/or documentary evidence, any apprehension that the petitioners might intimidate or coerce prospective witnesses against them, or tamper with office records under their control, is "more imaginary than real." 3. Their preventive suspension will "sow havoc and confusion in the government of the Municipality of Muntinlupa, to the certain shattering of the peace and order thereat", for without a mayor, vice-mayor, and six (6) councilors, the local government would be paralyzed. Only eight (8) of the present members of the Sangguniang Bayan will remain to discharge the duties and responsibilities of that body. If two of them will be designated to take over the offices of the mayor and vice-mayor, the Sangguniang Bayan will be without a quorum to perform its functions. ISSUE WON the Sandiganbayan abused its discretion in ordering the preventive suspension of the petitioners HELD NO Ratio Section 13 of R.A. No. 3019, as amended, unequivocally provides that the accused public officials "shall be suspended from office" while the criminal prosecution is pending in court. Suspension of a public officer upon the filing of a valid information is mandatory (People vs. Albano). Preventive suspension is not violative of the Constitution as it is not a penalty. In fact, suspension particularly under Section 13 of Rep. Act 3019 is mandatory once the validity of the information is determined. Reasoning There is no merit in the petitioners' argument that because they have repeatedly admitted that they had committed the acts constituting the offense charged against them, there is no cause for apprehension that they might tamper with the records in the offices under their control, or intimidate prospective witnesses against them. The Solicitor General correctly replied that it is not for the petitioners to say that their admissions are all the

BUNYE V ESCAREAL G.R. No. 110216 GRIO-AQUINO; September 10, 1993 RACH
NATURE Petition for certiorari and prohibition FACTS -This was filed by the petitioners, who are the municipal mayor, vice-mayor and incumbent councilors or members of the Sangguniang Bayan of Muntinlupa, Metro Manila. The petition seeks to annul the resolution promulgated on May 11, 1993 by the Second Division of the Sandiganbayan preventively suspending them from office pending their trial for violation of Section 3 (e) of the Anti-Graft and Corrupt Practices Act. -After the information against them was filed: On the motion of the Public Prosecutor, and over the opposition of the accused, the Sandiganbayan issued on May 11, 1993 a resolution suspending them pendente lite from public office pursuant to Section 135 of Republic Act No. 3019. Petitioners Arguments 1. The petitioners' main argument against their preventive suspension is that it is unjustified or unnecessary for, having admitted repeatedly in no less than four (4) pleadings filed in related proceedings and found in the records of this case, that they did commit the acts constituting the offense charged against them, i.e., that they enacted and approved Kapasiyahan Blg. 45 and wrested the management and operation of the new public market in Alabang from the Kilusang Bayan sa Paglilingkod ng mga Magtitinda ng Bagong Pamilihan ng Muntinlupa, Inc. (or "Cooperative for brevity) and transferred it to
5

Section 13. Any public officer against whom any criminal prosecution under a valid information under this Act or under the provisions of the Revised Penal Code on bribery is pending in court, shall be suspended from office. Should he be convicted by final judgment, he shall lose all retirement or gratuity benefits under any law, but if he is acquitted, he shall been titled to reinstatement and to the salaries and benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him.

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evidence that the prosecution will need to hold up its case against them. -The fear of the petitioners that the municipal government of Muntinlupa will be paralyzed for ninety (90) days when they (petitioners) are preventively suspended, is remote. There will still remain eight (8) councilors who can meet as the Sangguniang Bayan. The President or his alter ego, the Secretary of Interior and Local Government, will surely know how to deal with the problem of filling up the temporarily vacant positions of mayor, vice-mayor and six councilors in accordance with the provisions of the Local Government Code. Disposition Petition for certiorari and prohibition is DISMISSED for lack of merit. passed for the recall of PETITIONER on the ground of loss of confidence, which was unanimously seconded. -July 7, PETITIONER filed with COMELEC a petition to deny due course to Resolution No. 1 alleging failure of PRAC to comply with the "substantive and procedural requirements" laid down in Section 70 of R.A. 7160 (LGC) -COMELEC: DISMISS petition, schedule recall elections on October 11. -PETITIONER filed petition for certiorari and prohibition with writ of preliminary injunction to annul COMELEC Resolution (arguments): a. Sec. 70, LGC unconstitutional because: (1) the people have the sole and exclusive right to decide whether or not to initiate recall proceedings, (2) it violated the right of elected local public officials belonging to the political minority to equal protection of law. b. the proceedings followed by the PRAC in passing Resolution No. 1 suffered from numerous defects, the most fatal of which was the deliberate failure to send notices of the meeting to sixty-five (65) members of the assembly. -SC: ordered respondents to file Comments, set petition for hearing. After hearing, granted petition on the narrow ground that the sending of selective notices to members of the PRAC violated the due process protection of the Constitution and fatally flawed the enactment of Resolution No. 1 (and not ruling on alleged constitutional infirmity of Sec.70). -In accord with the SC Resolution, Mayor De los Reyes AGAIN sent NOTICE OF SESSION to the members of the PRAC to convene and once more, PRAC passed a resolution calling for the recall of PETITIONER -Petitioner filed a supplemental Petition Petition and Reiteration of Extremely Urgent Motion presiding for a resolution of their contention that section 70 of R.A. 7160 is unconstitutional: a. the right to recall does not extend merely to the prerogative of the electorate to reconfirm or withdraw their confidence on the official sought to be recalled at a special election. Such prerogative necessarily includes the sole and exclusive right to
incumbent provincial governor Enrique T. Garcia for loss of confidence; Now, therefore, be it resolved as it is hereby resolved that having lost confidence on the incumbent provincial governor of Bataan, Enrique T. Garcia, recall proceedings be immediately initiated against him; Resolved Further, that copy of this resolution be furnished the Honorable Commission on Elections, Manila and the Provincial Election Supervisor, Balanga, Bataan. One hundred forty-six (146) names appeared in Resolution No. 1 but only eighty (80) carried the signatures of the members of the PRA. Of the eighty (80) signatures, only seventy-four (74) were found genuine. 3 The PRAC of the province had a membership of one hundred forty-four (144) 4 and its majority was seventy-three (73).

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decide on whether to initiate a recall proceedings or not b. in passing Resolution No. 1, the Bataan Preparatory Recall Assembly did not only initiate the process of recall but had de facto recalled petitioner Garcia from office, a power reserved to the people alone c. EPC argument: the local officials constituting the majority party can constitute itself into a PRA and initiate the recall of a duly elected provincial official belonging to the minority party thus rendering ineffectual his election by popular mandate ISSUE WON Section 70, of RA 7160 is unconstitutional HELD NO. The petition at bench appears to champion the sovereignty of the people, particularly their direct right to initiate and remove elective local officials thru recall elections. If the petition would succeed, the result will be a return to the previous system of recall elections which Congress found should be improved. The alternative mode of initiating recall proceedings thru a preparatory recall assembly is, however, an innovative attempt by Congress to remove impediments to the effective exercise by the people of their sovereign power to check the performance of their elected officials. The power to determine this mode was specifically given to Congress and is not proscribed by the Constitution. Ratio. (On presumption of validity of laws) Every law enjoys the presumption of validity. The presumption rests on the respect due to the wisdom, integrity, and the patriotism of the legislative, by which the law is passed, and the Chief Executive, by whom the law is approved. For upholding the Constitution is not the responsibility of the judiciary alone but also the duty of the legislative and executive. To strike down a law as unconstitutional, there must be a clear and unequivocal showing that what the fundamental law prohibits, the statute permits. The annulment cannot be decreed on a doubtful and arguable implication. The universal rule of legal hermeneutics is that all reasonable doubts should be resolved in favor of the constitutionality of a law. (RECALL DISCUSSION) Recall is a mode of removal of a public officer by the people before the end of his term of office. The people's prerogative to remove a public officer is an incident of their sovereign power and in the absence of constitutional restraint, the power is implied in all governmental operations. Such power has been held to be indispensable for the proper administration of public affairs. Not undeservedly, it is frequently described as a fundamental right of the people in a representative democracy. -Recall as a mode of removal of elective local officials made its maiden appearance in our 1973 Constitution

Recall Explained
GARCIA V. COMELEC 227 SCRA 100 PUNO, October 5, 1993 CHA
NATURE Original Petition and the Supplemental Petition assailing the constitutionality of section 70 of R.A. 7160 insofar as it allows a preparatory recall assembly to initiate the recall of local elective officials FACTS -May 11, 1992, Enrique Garcia (petitioner) was elected governor of Bataan. -BUT in the early evening of July 1, some mayors, vicemayors and members of the Sangguinang Bayan of the 12 municipalities of Bataan met at the NPC Compound and the following day, they proceeded to constitute themselves into a Preparatory Recall Assembly (PRAC) to initiate the recall election of PETITIONER. They chose Mayor De los Reyes (Mariveles) as Presiding Officer and Mayor Payumo (Dinalupihan) as Secretary of the assembly. ViceMayor Roque (Limay) moved that a resolution6 be
6

RESOLUTION NO. 1 Whereas, the majority of all the members of the Preparatory Recall Assembly in the Province of Bataan have voluntarily constituted themselves for the purpose of the recall of the incumbent provincial governor of the province of Bataan, Honorable Enrique T. Garcia pursuant to the provisions of Section 70, paragraphs (a), (b) and (c) of Republic Act 7160, otherwise known as the Local Government Code of 1991; Whereas, the total number of all the members of the Preparatory Recall Assembly in the province of Bataan is One Hundred and Forty-Six (146) composed of all mayors, vicemayors and members of the Sangguniang Bayan of all the 12 towns of the province of Bataan; Whereas, the majority of all the members of the Preparatory Recall Assembly, after a serious and careful deliberation have decided to adopt this resolution for the recall of the

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(AXI, S2). Pursuant to which, Batasang Pambansa enacted BP 337 (LGC of 1983) wherein Chap3, Sec54 provided only 1 mode of initiating recall elections of local elective officials (by petition of at least twentyfive percent (25%) of the total number of registered \voters in the local government unit concerned) -EDSA REVOLUTION: our people more than exercised their right of recall for they resorted to revolution and they booted out of office the highest elective officials of the land -1987 Consti: AXIII, Sec 15 and 16 (Peoples Participation) and AX, Sec3(Similar to 1973 Consti) (SEE CONSTI) -RA 7160 was enacted in response to these consti provisions. In this Code, Congress provided for a second mode of initiating the recall process through a preparatory recall assembly which in the provincial level is composed of all mayors, vice-mayors and sanggunian members of the municipalities and component cities7.
7

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-why add a second mode: the idea of empowering a preparatory recall assembly to initiate the recall from office of local elective officials originated from the House of Representatives and not the Senate. The legislative records reveal that there were two (2) principal reasons why this alternative mode of initiating the recall process thru an assembly was adopted, viz: (a) to diminish the difficulty of initiating recall thru the direct action of the people; and (b) to cut down on its expenses. Reasoning. On first argument: Consti did not provide that only the people have the right to decide on WON to initiate a recall; did not provide mode for initiating recall but gave CONGRESS the power to choose the effective mechanism of recall. AND Congress deemed it wise to enact an alternative mode of initiating recall elections to supplement the former mode of initiation by direct action of the people. Congress has made its choice as called for by the Constitution and it is not the prerogative of this Court to supplant this judgment. The choice may be erroneous but even then, the remedy against a bad law is to seek its amendment or repeal by the legislative. By the principle of separation of powers, it is the legislative that determines the necessity, adequacy, wisdom and expediency of any law. -on second argument: Initiation by the PRAC is also initiation by the people, albeit done indirectly through their representatives. It is not constitutionally impermissible for the people to act through their elected representatives. PRA resolution of recall merely starts the process. It is part of the process but is not the whole process. This ought to be self evident for a PRA resolution of recall that is not submitted to the COMELEC for validation will not recall its subject official. Likewise, a PRA resolution of recall that is rejected by the people in the election called for the purpose bears no effect whatsoever. The initiatory
the resolution or petition for recall in the case of the barangay, city, or municipal officials, and forty-five (45) days in the case of provincial officials. The official or officials sought to be recalled shall automatically be considered as duly registered candidate or candidates to the pertinent positions and, like other candidates, shall be entitled to be voted upon. Sec. 72. Effectivity of Recall. -- The recall of an elective local official shall be effective only upon the election and proclamation of a successor in the person of the candidate receiving the highest number of votes cast during the election on recall. Should the official sought to be recalled receive the highest number of votes, confidence in him is thereby affirmed, and he shall continue in office. Sec. 73. Prohibition from Resignation. -- The elective local official sought to be recalled shall not be allowed to resign while the recall process is in progress. Sec. 74. Limitations on Recall. (a) Any elective local official may be the subject of a recall election only once during his term of office for loss of confidence. (b) No recall shall take place within one (1) year from the date of the official's assumption to office or one (1) year immediately preceding a regular election.

CHAPTER 5 -- RECALL Sec. 69. By Whom Exercised. -- The power of recall for loss of confidence shall be exercised by the registered voters of a local government unit to which the local elective official subject to such recall belongs. Sec. 70. Initiation of the Recall Process. (a) Recall may be initiated by a preparatory recall assembly or by the registered voters of the local government unit to which the local elective official subject to such recall belongs. (b) There shall be a preparatory recall assembly in every province, city, district, and municipality which shall be composed of the following: (1) Provincial level. -- all mayors, vice-mayors and sanggunian members of the municipalities and component cities; (2) City level. -- All punong barangay and sangguniang barangay members in the city; (3) Legislative District level. -- In cases where sangguniang panlalawigan members are elected by district, all elective municipal officials in the district; and in cases where sangguniang panlungsod members are elected by district, all elective barangay officials in the district; and (4) Municipal level. -- All punong barangay and sangguniang barangay members in the municipality. (c ) A majority of all the preparatory recall assembly members may convene in session in a public place and initiate a recall proceeding against any elective official in the local government unit concerned. Recall of provincial, city, or municipal officials shall be validly initiated through a resolution adopted by a majority of all the members of the preparatory recall assembly concerned during its session called for the purpose. (d) Recall of any elective provincial, city, municipal, or barangay official may be validly initiated upon petition of at least twenty-five (25) percent of the total number of registered voters in the local government unit concerned during the election in which the local official sought to be recalled was elected. Sec. 71. Election Recall -- Upon the filing of a valid resolution or petition for recall with the appropriate local office of the Comelec, the Commission or its duly authorized representative shall set the date of the election on recall, which shall not be later than thirty (30) days after the filing of

resolution merely sets the stage for the official concerned to appear before the tribunal of the people so he can justify why he should be allowed to continue in office. Before the people render their sovereign judgment, the official concerned remains in office but his right to continue in office is subject to question. This is clear in section 72 of the Local Government Code which explicitly states that "the recall of an elective local official shall be effective only upon the election and proclamation of a successor in the person of the candidate receiving the highest number of votes cast during the election on recall." -on EPC argument: The law does not give an asymmetrical treatment to locally elected officials belonging to the political minority. First to be considered is the politically neutral composition of the preparatory recall assembly. Under the law, all mayors, vice-mayors and sangguniang members of the municipalities and component cities are made members of the preparatory recall assembly at the provincial level. Its membership is not apportioned to political parties. No significance is given to the political affiliation of its members. Secondly; the preparatory recall assembly at the provincial level includes all the elected officials in the province concerned. Considering their number, the greater probability is that no one political party can control its majority. Thirdly, sec. 69 of the Code provides that the only ground to recall a locally elected public official is loss of confidence of the people. The members of the PRAC are in the PRAC not in representation of their political parties but as representatives of the people. By necessary implication, loss of confidence cannot be premised on mere differences in political party affiliation. Indeed, our Constitution encourages the multi-party system for the existence of opposition parties is indispensable to the growth and nurture of the democratic system. Clearly then, the law as crafted cannot be faulted for discriminating against elected local officials belonging to the minority. -The fear that a preparatory recall assembly may be dominated by a political party and that it may use its power to initiate the recall of officials of opposite political persuasions, especially those belonging to the minority, is not a ground to strike down the law as unconstitutional. To be sure, this argument has long been in disuse for there can be no escape from the reality that all powers are susceptible of abuse. The mere possibility of abuse cannot, however, infirm per se the grant of power to an individual or entity. To deny power simply because it can be abused by the grantee is to render government powerless and no people need an impotent government. There is no democratic government that can operate on the basis of fear and distrust of its officials, especially those elected by the people themselves. On the contrary, all our laws assume that our officials, whether appointed or elected, will act in good faith and will regularly perform the duties of their office. Such a presumption

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follows the solemn oath that they took after assumption of office, to faithfully execute all our laws. -lack of confidence (vote beyond any inquiry) accdg to Pimentel: "There is only one ground for the recall of local government officials: loss of confidence. This means that the people may petition or the Preparatory Recall Assembly may resolve to recall any local elective officials without specifying any particular ground except loss of confidence. There is no need for them to bring up any charge of abuse or corruption against the local elective officials who are the subject of any recall petition. In the case of Evardone vs. Commission on Elections, the Court ruled that "loss of confidence" as a ground for recall is a political question. In the words of the Court, "whether or not the electorate of the municipality of Sulat has lost confidence in the incumbent mayor is a political question." Disposition. IN VIEW WHEREOF, the original Petition and the Supplemental Petition assailing the constitutionality of section 70 of R.A. 7160 insofar as it allows a preparatory recall assembly to initiate the recall process are dismissed for lack of merit. This Decision is immediately executory. SO ORDERED. SEPARATE OPINIONS QUIASON, J., concurring: -The 1987 Constitution does not prescribe the procedure in the recall of elective officials. The intent is clear that the 1987 Constitution leaves it to Congress to provide the recall mechanism without any pre-ordained restrictions. The broad powers of Congress in prescribing the procedure for recall include the determination as to the number of electors needed to initiate the recall, the method of voting of the electors, the time and place of the voting and whether the process includes the election of the successor of the recalled official. -In the Local Government Code of 1991 (R.A. No. 7160), Congress adopted an alternative procedure for initiating the recall and made it as a mere stage of the recall process. -Congress also deigned it wise to give the electorate a chance to participate in the exercise twice: first, in the initiation of the recall; and, secondly, in the election of the person to occupy the office subject of the recall. This is in contrast with the first recall statute in the Philippines, the Festin Law (Com. Act No. 560) where the participation of the electorate ended after the voting for the recall. In the Festin Law, the electorate were denied the opportunity to vote for the retention of the official subject of the recall. -In a sense, the members of the PRA can be considered as constituting a segment of the electorate because they are all registered voters of the province. If they constitute less than one percent of the voters in the province, that miniscule number goes to the policy, not the validity of the law and the remedy to correct such a flaw is left with the legislature, not with the judiciary. VITUG, J., concurring: -it is not within the province of the courts to question the wisdom of, let alone supplant, legislative judgments laid down by Congress to the extent of its constitutional authority and mandate. -CAUTION against any idea of omnipotence in wielding the "power of recall" conferred to the "Preparatory Recall Assembly." Clearly implicit in any grant of power, like any other right, is an assumption of a correlative duty to exercise it responsibly. When it, therefore, becomes all too evident that there has been an abuse of that authority, appropriate judicial recourse to, and corrective relief by, this Court will not be denied.

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for the issuance of a TRO, Evardone filed the petition for prohibition only on 10 July 1990. - Indeed, this Court issued a TRO on 12 July 1990 but the signing of the petition for recall took place just the same on the scheduled date through no fault of the COMELEC and Apelado, et al. The signing process was undertaken by the constituents of the Municipality of Sulat and its Election Registrar in good faith and without knowledge of the TRO earlier issued by this Court. As attested by Election Registrar Sumbilla, about 2,050 of the 6,090 registered voters of Sulat, Eastern Samar or about 34% signed the petition for recall. As held in Paredes vs. Executive Secretary there is no turning back the clock. "The right to recall is complementary to the right to elect or appoint. It is included in the right of suffrage. It is based on the theory that the electorate must maintain a direct and elastic control over public functionaries. It is also predicated upon the idea that a public office is 'burdened' with public interests and that the representatives of the people holding public offices are simply agents or servants of the people with definite powers and specific duties to perform and to follow if they wish to remain in their respective offices." - Whether or not the electorate of the Municipality of Sulat has lost confidence in the incumbent mayor is a political question. It belongs to the realm of politics where only the people are the judge. "Loss of confidence is the formal withdrawal by an electorate of their trust in a person's ability to discharge his office previously bestowed on him by the same electorate." The constituents have made a judgment and their will to recall the incumbent mayor (Evardone) has already been ascertained and must be afforded the highest respect. Thus, the signing process held last 14 July 1990 in Sulat, Eastern Samar, for the recall of Mayor Felipe P. Evardone of said municipality is valid and has legal effect. - However, recall at this time is no longer possible because of the limitation provided in Sec. 55 (2) of B.P. Blg. 337, which states. "SEC. 55. Who May Be Recalled; Ground for Recall; When Recall May not be Held. - . . . (2) No recall shall take place within two years from the date of the official's assumption of office or one year immediately preceding a regular local election." - The Constitution has mandated a synchronized national and local election prior to 30 June 1992, or more specifically, as provided for in Article XVIII, Sec. 5 - on the second Monday of May, 1992. Thus, to hold an election on recall approximately seven (7) months before the regular local election will be violative of the above provisions of the applicable Local Government Code (B.P. Blg. 337).

EVARDONE v COMELEC 204 SCRA 464 Padilla; December 2, 1991 JOJO


FACTS - Felipe Evardone is the mayor of the Municipality of Sulat, Eastern Samar, having been elected to the position during the 1988 local elections. He assumed office immediately after proclamation. - In 1990, Apelado, Aclan and Nival filed a petition for the recall of Evardone with the Office of the Local Election Registrar, Municipality of Sulat. The Comelec issued a resolution approving the recommendation of the Election Registrar to hold and conduct the signing of the petition for recall against Evardone. The SC issued a TRO ordering the Comelec to cease and desist from holding the signing of the petition for recall. The notice of the TRO was received a day after the completion of the signing process. In an en banc resolution, the Comelec nullified the signing process for being violative of the TRO. Hence this petition to set aside the en banc resolution. ISSUE WON the TRO issued by the SC rendered nugatory the signing process of the petition for recall HELD NO. - In the present case, the records show that Evardone knew of the Notice of Recall filed by Apelado, et al. on or about 21 February 1990 as evidenced by the Registry Return Receipt; yet, he was not vigilant in following up and determining the outcome of such notice. Evardone alleges that it was only on or about 3 July 1990 that he came to know about the Resolution of COMELEC setting the signing of the petition for recall on 14 July 1990. But despite his urgent prayer

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- Petitions DISMISSED for having become moot and academic. Disposition WHEREFORE, the petition for certiorari is GRANTED

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PARAS vs. COMELEC FRANCISCO; November 4, 1996 ATHE
NATURE: Petition for certiorari with urgent prayer for injunction FACTS - A petition for recall of Danilo Paras, the incumbent Punong Barangay of Brgy. Pula, Cabanatuan City, was filed by at least 29.30% of the registered voters of the barangay. The (COMELEC) resolved to approve the petition. The petition signing was scheduled and the recall election was set on January 13, 1996. - To prevent the holding of the recall election, petitioner filed before the RTC of Cabanatuan City a petition for injunction, with the trial court issuing a temporary restraining order. Dismissed. Hence this petition. Argument of the Petitioner: Section 74 (b) of LGC states that SEC. 74. Limitations on Recall. (a) Any elective local official may be the subject of a recall election only once during his term of office for loss of confidence. (b) No recall shall take place within one (1) year from the date of the officials assumption to office or one (1) year immediately preceding a regular local election. Petitioner insists that the scheduled January 13, 1996 recall election is now barred as the Sangguniang Kabataan (SK) election was set by Republic Act No. 7808 on the first Monday of May 1996, and every three years thereafter. In support thereof, petitioner cites Associated Labor Union v. Letrondo-Montejo where the Court considered the SK election as a regular local election. Petitioner maintains that as the SK election is a regular local election, hence no recall election can be had for barely four months separate the SK election from the recall election. ISSUE WON the petitioner interpreted the provision correctly WON the recall is still possible HELD 1. NO. It is a rule in statutory construction that every part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole enactment. Reasoning a. The evident intent of Section 74 is to subject an elective local official to recall election once during his term of office. Paragraph (b) construed together with paragraph (a) merely designates the period when such elective local official may be subject of a recall election, that is, during the second year of his term of office. Thus, subscribing to petitioners interpretation of the phrase regular local election to include the SK election will unduly circumscribe the novel provision of the Local Government Code on recall, a mode of removal of public officers by initiation of the people before the end of his term. And if the SK election which is set by R.A. No. 7808 to be held every three years from May 1996 were to be deemed within the purview of the phrase regular local election, as erroneously insisted by petitioner, then no recall election can be conducted rendering inutile the recall provision of the Local Government Code. b. In the interpretation of a statute, the Court should start with the assumption that the legislature intended to enact an effective law, and the legislature is not presumed to have done a vain thing in the enactment of a statute. An interpretation should, if possible, be avoided under which a statute or provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative or nugatory. c. A statute should be interpreted in harmony with the Constitution. Thus, the interpretation of Section 74 of the Local Government Code, specifically paragraph (b) thereof, should not be in conflict with the Constitutional mandate of Section 3 of Article X of the Constitution to enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum x x x. d. The spirit, rather than the letter of a law determines its construction; hence, a statute, as in this case, must be read according to its spirit and intent. e. Finally, recall election is potentially disruptive of the normal working of the local government unit necessitating additional expenses, hence the prohibition against the conduct of recall election one year immediately preceding the regular local election. The proscription is due to the proximity of the next regular election for the office of the local elective official concerned. The electorate could choose the officials replacement in the said election who certainly has a longer tenure in office than a successor elected through a recall election. It would, therefore, be more in keeping with the intent of the recall provision of the Code to construe regular local election as one referring to an election where the office held by the local elective official sought to be

Election on Recall 25% Requirement Explained


ANGOBUNG V. COMELEC 269 SCRA 245 HERMOSISIMA, JR.; March 5, 1997 KIYO
FACTS - petitioner won as Mayor of the Municipality of Tumauini, Isabela in the 1995 elections in which private respondent Alban was also a candidate. Alban filed a Petition for Recall against petitioner with the Local Election Registrar in Timauini which was later forwarded to the COMELEC main office in Manila. Deputy Executive Director for Operations Joson submitted the petition to the COMELEC en banc which then issued the assailed Resolution No. 92-2951, approving the petition dated Oct. 1996 signed by only one registered voter (Alban), setting the further signing by the rest of the registered voters on Nov. 1996, and scheduling recall elections on Dec. 1996 in case such is signed by at least 25% of said voters. Hence this petition for certiorari to annul Resolution No. 92-2951. ISSUES WON Resolution No. 92-2951 is unconstitutional HELD YES. Recall is a mode of removal of a public officer before the end of his term and is an incident of the peoples sovereign power implied in all governmental operations in the absence of constitutional restraint. -Sec. 69(d) of the LGC expressly provides that recall of any elective municipal official may be validly initiated upon petition (as opposed to signed) by at least 25% of the total number of registered voters in the LGU concerned. The 25% requirement was pegged to prevent the capricious use of the speedy and direct remedy of the people for the removal of unsatisfactory officials. It must be pursued by the people, not just one disgruntled loser in the elections or an ill intentioned minority. However, once at least 25% of the electorate express their dissatisfaction, the constitution reserves the recall power to the will of the electorate. -the procedure of allowing just one person to file the initiatory recall petition and then setting a separate date for its signing (which amounts to courting the public, who may not even have entertained displeasure in such official) is not only violative of statutory law, but is an attempt to circumvent the law.

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recalled will be contested and be filled by the electorate. 2. NO. Recall at this time is no longer possible because of the limitation stated under Section 74 (b) of the Code considering that the next regular election involving the barangay office concerned is barely seven (7) months away, the same having been scheduled on May 1997. Disposition Petition is hereby dismissed for having become moot and academic. January 1989 with respondent National Irrigation Administration (NIA) which, however, denied the same; instead, she was offered separation benefits equivalent to one half (1/2) month basic pay for every year of service commencing from 1980. A recourse by petitioner to the CSC yielded negative results. She filed a letter for reconsideration claiming that the law merely requires that a government employee whether regular, temporary, emergency, or casual, should have two consecutive years of government service in order to be entitled to its benefits. She claimed to have met the requirement. Persons who are not entitled are consultants, experts and contractual(s). Her letter for reconsideration was denied by the CSC stating that: xxx xxx xxx The provision of Section 3.1 of Joint DBM-CSC Circular Letter No. 89-1 does not only require an applicant to have two years of satisfactory service on the date of separation/retirement but further requires said applicant to be on a casual, emergency, temporary or regular employment status as of December 2, 1988, the date of enactment of R.A. 6683. The law does not contemplate contractual employees in the coverage. Inasmuch as your employment as of December 31, 1988, the date of your separation from the service, is co-terminous with the NIA project which is contractual in nature, this Commission shall sustain its original decision. xxx xxx xxx - Chua then filed with the SC special action for certiorari. She claimed that she was entitled to the benefits of RA6683 as she was not included in the list of those excluded enumerated in Section 23 (sic) of the Joint DBM-CSC Circular Letter No. 88-1, implementing guidelines of R.A. No. 6683, provides: "2.3 Excluded from the benefits under R.A. No. 6683 are the following: a) Experts and Consultants hired by agencies for a limited period to perform specific activities or services with a definite expected output: i.e. membership in Task Force, Part-Time, Consultant/Employees. b) Uniformed personnel of the Armed Forces of the Philippines including those of the Philippine Constabulary and Integrated National Police (PCINP). c) Appointive officials and employees who retire or elect to be separated from the service for optional retirement with gratuity under R.A. No. 1616, 4968 or with pension under R.A. No. 186, as amended by R.A. No. 6680 or P.D. No. 1146, an amended, or vice- versa. d) Officials and employees who retired voluntarily prior to the enactment of this law and have received the corresponding benefits of that

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retirement/separation. e) Officials and employees with pending cases punishable by mandatory separation from the service under existing civil service laws, rules and regulations; provided that if such officials and employees apply in writing within the prescriptive period for the availment of the benefits herein authorized, shall be allowed only if acquitted or cleared of all charges and their application accepted and approved by the head of office concerned." - The NIA and CSC reiterate in their comment petitioner's exclusion from the benefits of RA 6683, because: 1. Petitioner's employment is co-terminous with the project per appointment papers kept by the Administrative Service in the head office of NIA (the service record was issued by the Watershed Management and Erosion Control Project (WMECP), Pantabangan, Nueva Ecija). The project, funded by the World Bank, was completed as of 31 December 1988, after which petitioner's position became functus officio. 2. Petitioner is not a regular and career employee of NIA her position is not included in its regular plantilla. She belongs to the non-career service (Sec. 6, P.D. No. 807) which is inherently shortlived, temporary and transient; on the other hand, retirement presupposes employment for a long period. The most that a non-career personnel can expect upon the expiration of his employment is financial assistance. Petitioner is not even qualified to retire under the GSIS law. 3. Assuming arguendo that petitioner's appointment is permanent, security of tenure is available only for the term of office . 4. The objective of RA6683 is not really to grant separation or retirement benefits but reorganization to streamline government functions. The application of the law must be made consistent with the purpose for which it was enacted. Thus, as the expressed purpose of the law is to reorganize the government, it will not have any application to special projects such as the WMECP which exists only for a short and definite period. This being the nature of special projects, there is no necessity for offering its personnel early retirement benefits just to induce voluntary separation as a step to reorganization. In fact, there is even no need of reorganizing the WMECP considering its short and limited life-span. 5. The law applies only to employees of the national government, GOCCs with original charters and LGUs. ISSUE WON Chua is entitled to the benefits of RA6683

Human Resources and Development Organizational Structure and Staffing Pattern Regular Employees
CHUA V. CSC 206 SCRA 65 PADILLA; February 7, 1992 GIULIA
FACTS - RA 6683 was approved on 2 December 1988 providing for benefits for early retirement and voluntary separation from the government service as well as for involuntary separation due to reorganization. Deemed qualified to avail of its benefits are those enumerated in Sec. 2 of the Act, as follows: Sec. 2. Coverage. - This Act shall cover all appointive officials and employees of the National Government, including governmentowned or controlled corporations with original charters, as well as the personnel of all local government units. The benefits authorized under this Act shall apply to all regular, temporary, casual and emergency employees, regardless of age, who have rendered at least a total of two (2) consecutive years of government service as of the date of separation. Uniformed personnel of the Armed Forces of the Philippines including those of the PC-INP are excluded from the coverage of this Act. - Lydia Chua believing that she is qualified to avail of the benefits of the program, filed an application on 30

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HELD Yes. (The court first defined the different classifications of employees.) Consider petitioner's record of service: - Service with the government commenced on 2 December 1974 designated as a laborer holding emergency status with the NIA Upper Pampanga River Project, R & R Division. From 24 March 1975 to 31 August 1975, she was a research aide with temporary status on the same project. On 1 September 1975 to 31 December 1976, she was with the NIA-FES III; R & R Division, then on 1 January 1977 to 31 May 1980, she was with NIA - UPR IIS DRD. On 1 June 1980, she went to NIA - W.M.E.C.P. retaining the status of temporary employee. While with this project, her designation was changed to personnel assistant on 5 November 1981; starting 9 July 1982, the status became permanent until the completion of the project on 31 December 1988. The appointment paper attached to the OSG's comment lists her status as coterminus with the Project. - The employment status of personnel hired under foreign-assisted projects is considered co-terminous, that is, they are considered employees for the duration of the project or until the completion or cessation of said project (CSC Memorandum Circular No. 39, S. 1990, 27 June 1990). - Resolution No. 87-104 of the CSC, 21 April 1987, provides: CSC is charged with the function of determining creditable services for retiring officers and employees of the national government; All previous services by an officer/employee pursuant to a duly approved appointment to a position in the Civil Service are considered creditable services, while Section 6 (a) thereof states that services rendered on contractual, emergency or casual status are noncreditable services; There is a need to clarify the aforesaid provisions inasmuch as some contractual, emergency or casual employment are covered by contracts or appointments duly approved by the Commission. The Commission resolved that services rendered on contractual, emergency or casual status, irrespective of the mode or manner of payment therefor shall be considered as creditable for retirement purposes subject to the following conditions: 1. These services are supported by approved appointments, official records and/or other competent evidence. Parties/agencies concerned shall submit the necessary proof of said services; 2. Said services are on full time basis and rendered prior to June 22, 1984, the effectivity date of Executive Order No. 966; and 3. The services for the three (3) years period prior to retirement are continuous and fulfill the service requirement for retirement. - There is no substantial differences between casual, emergency, seasonal, project, co-terminous or contractual personnel. All are tenurial employees with no fixed term, non-career, and temporary. The 12 May 1989 CSC letter of denial characterized herein petitioner's employment as co-terminous with the NIA project which in turn was contractual in nature. - A co-terminous employee is a non-career civil servant, like casual and emergency employees. There is no reason why the latter are extended benefits under the Early Retirement Law but the former are not. RA expressly extends its benefits for early retirement to regular, temporary, casual and emergency employees. But specifically excluded from the benefits are uniformed personnel of the AFP including those of the PC-INP. It can be argued that, expressio unius est exclusio alterius. The legislature would not have made a specific enumeration in a statute had not the intention been to restrict its meaning and confine its terms and benefits to those expressly mentioned or casus omissus pro omisso habendus est A person, object or thing omitted from an enumeration must be held to have been omitted intentionally. Yet adherence to these legal maxims can result in incongruities and in a violation of the equal protection clause of the Constitution. - Petitioner Lydia Chua was hired and re-hired in four (4) successive projects during a span of fifteen (15) years. Although no proof of the existence of a work pool can be assumed, her service record cannot be disregarded. - Art. III, Sec. 1 of the 1987 Constitution guarantees: "No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws." . . . In Felwa vs. Salas, L-26511, Oct. 29, 1966, We ruled that the equal protection clause applies only to persons or things identically situated and does not bar a reasonable classification of the subject of legislation, and a classification is reasonable where (1) it is based on substantial distinctions which make real differences; (2) these are germane to the purpose of the law; (3) the classification applies not only to present conditions but also to future conditions which are substantially identical to those of the present; (4) the classification applies only to those who belong to the same class. - Applying the criteria set forth above, the Early Retirement Law would violate the equal protection clause were we to sustain respondents' submission that the benefits of said law are to be denied a class of government employees who are similarly situated as those covered by said law. Dispositive WHEREFORE, the petition is GRANTED.

Page 88 Civil Service Law, Rules and Regulations, and other Related Issuances CSC Power of Appointment
MEDALLA v. STO. TOMAS 208 SCRA 351 PARAS, 1992 GLAISA
NATURE Petition for certiorari, prohibition and mandamus FACTS - Engr. Ricardo Medalla, petitioner herein, was appointed as a Geodetic Engineer of the then Manila International Airport Authority. - In 1986, he was promoted to Supervising Engineer A of its Buildings, Pavements and Ground Division, otherwise known as the B P and G Division. - On February 16, 1987, Engr. Elpidio Mendoza, the said Division's Department Manager, was likewise promoted, thereby leaving his position vacant. Engr. Armando Singson was designated as the Acting Division Manager on July 1, 1987. - The MIAA Selection/Promotion Board, however, unanimously appointed Medalla as the new Division Manager B of the B P and G Division. Medalla was issued his formal appointment by the then MIAA General Manager Aurelio German after which he immediately assumed his post. Apparently aggrieved over Medalla's appointment, Singson filed a protest on October 19, 1987 to the Merit Systems Protection Board (MSPB) of the Civil Service Commission. - Mr. German affirmed Medalla's promotional appointment and in effect dismissed Singson's protest. The latter appealed the decision once more to the MSPB which again referred the same to the MIAA General Manager for comment. - Mr. Evergisto C. Macatulad as the Officer-in-Charge, reiterated MIAA's position as contained in the letter of Mr. German, thus reaffirming Medalla's appointment. Macatulad added that their office will no longer submit supplemental comments on the matter. - MIAA underwent a reorganization pursuant to its Resolutions Nos. 87-55 and 87-68 dated as early as September 30 and October 22, 1987 respectively. Medalla and Singson were subsequently reappointed as Division Manager D and principal Engineer C respectively of the new Civil Works Division which replaced the former B P and G Division due to added functions. - MSPB still rendered its disputed ruling finding the appointment of appellee Mr. Medalla as Division

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Manager B revoked and directed Mr. Singson be appointed in his stead. ISSUE WON the act of the Commission through the MSPB in replacing an appointee with an employee of its choice is valid. HELD NO. The Commission has no such authority to do so. Its only function is limited to approving or reviewing appointments to determine their accordance with the requirements of the Civil Service Law. Thus, when the Commission finds the appointee to be qualified and all the other legal requirements have been satisfied, it has no choice but to attest to the appointment. - The determination of who among several candidates for a vacant position has the best qualifications is vested in the sound discretion of the Department Head or appointing authority and not in the Commission. This is because the appointing authority occupies the ideal vantage point from which to identify and designate the individual who can best fill the post and discharge its functions in the government agency he heads - Consequently, when the appointing authority has already exercised his power of appointment, the Commission cannot revoke the same on the ground that another employee is better qualified for that would constitute an encroachment on the decision vested in the appointing authority. - Appointment is a highly discretionary act that even this Court cannot compel. While the act of appointment may in proper cases be the subject of mandamus, the selection itself of the appointee taking into account the totality of his qualifications, including those abstract qualities that define his personality is the prerogative of the appointing authority. This is a matter addressed only to the discretion of the appointing authority. It is a political question that the Civil Service Commission has no power to review under the Constitution and the applicable laws." - The Commission appears to have overstepped its jurisdiction when it revoked the appointment of petitioner Medalla who was shown to have satisfied the requirements prescribed for the contested position, and instead directed the appointment of protestant Singson. No sanction, however, may yet be imposed on the Commission as the act complained of occurred before the promulgation of the aforestated Lapinid decision. Disposition a) the decision, order and resolutions appealed from are SET ASIDE and b) Engr. Ricardo Medalla and Engr. Armando Singson are REINSTATED to the posts of Division Manager D and Principal Engineer C respectively, of the Civil Works Division.

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LUEGO VS CIVIL SERVICE COMMISSION (TUOZO) 143 SCRA 327 Cruz, J: 1986 TITO ROMY
NATURE Petition for review on certiorari FACTS - Felimon Luego was appointed by Cebu City Mayor Solon on February 18, 1983 as Administrative Officer II. The appointment was described as permanent but the Civil Service Commission approved it as temporary pending final action in a protest filed by Tuozo and provided that there was no pending administrative case against Luego, no pending protest against the appointment and no decision by competent authority that will adversely affect the approval of the appointment. - After protracted hearings, the CSC found respondent better qualified and directed the appointment of Tuozo to the position in place of Luego. The new Mayor, Duterte so appointed Tuozo on June 28, 1984. - Hence this action in the SC ISSUE/S WON the CSC is authorized to disapprove a permanent appointment and order replacement of the permanent appointee. HELD 1. NO. Ratio The Civil Service Commission is not empowered to determine the kind or nature of the appointment extended by the appointing officer, its authority being limited to approving or reviewing the appointment in the light of the requirements of the Civil Service Law. Reasoning It is well settled that the determination of the kind of appointment to be extended lies in the official vested by law with the appointing power and not the Civil Service Commission. The Commissioner of Civil Service is not empowered to determine the kind or nature of the appointment extended by the appointing officer. When the appointee is qualified, as in this case, the Commissioner of Civil Service has no choice but to attest to the appointment. Under the Civil Service Law, Presidential Decree No. 807, the Commissioner is not authorized to curtail the discretion of the appointing official on the nature or kind of the appointment to be extended - Indeed, the approval is more appropriately called an attestation, that is, of the fact that the appointee is qualified for the position to which he has been named. As we have repeatedly held, such attestation is required of the Commissioner of Civil Service merely as a check to assure compliance with Civil Service Laws. - Appointment is an essentially discretionary power and must be performed by the officer in which it is vested according to his best lights, the only condition being that the appointee should possess the qualifications required by law. If he does, then the appointment cannot be faulted on the ground that there are others better qualified who should have been preferred. This is a political question involving considerations of wisdom which only the appointing authority can decide. Disposition The resolution of the CSC is set aside and the petitioner is declared entitled to the office in dispute.

CABAGNOT V CIVIL SERVICE COMMISSION 223 SCRA 59 ROMERO; June 3, 1993 OWEN
FACTS - 1988 - new organizational structure and staffing pattern of the provincial government of Aklan was approved subject to > qualification standards for each position in accordance with standards of CSC > no reduction in actual salary of the employees except in instances where salaries equal or exceed the salary of their immediate supervisor; TF actual salary of subordinate employees reduced by at least 1 step rate below the immediate supervisor > retained personnel shall be issued new appointments except those who are occupying elective positions and those appointed by national officials > placement of personnel shall be in accordance with RA 6656 and IRR issued by CSC - 1989 > list of employees newly appointed and reappointed was posted. 21 supposedly aggrieved employees jointly appealed to Gov. Cabagnot of Aklan praying that they be appointed to the positions they applied for to which they are eligible, having the required educational background, training and experience as they were new appointmented to positions lower in rank than their positions prior to the reorganization. - Gov. Cabagnot denied their appeal > since reorganization renders all positions vacant TF employees have no vested right to their original positions > as the appointing authority, she enjoys the prerogative to transfer employees to offices other than those they previously occupied if such is necessary to make them function more effectively

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> appointments did not violate Civil Service Law on security of tenure as the items offered them carried the same rate and salary they were receiving prior to the reorganization - 17 employees continued their appeal before Civil Service Regional Office in Iloilo City praying that: > declare reorganizational structure and new staffing pattern of the province of Aklan to be a failure > order Gov. Cabagnot to appoint rightful and qualified appointees to the positions applied > order Gov. Cabagnot to reinstate terminated employees and/or appoint them to positions where their qualification, experience, training and civil service eligibilities may fit them > order Gov. Cabagnot to direct the fiscal authorities of the province of Aklan to pay the salaries due them in the meantime that their appeals are being considered - 1st Resolution CSC > found irregularities attended the election of the 2 members representing the first and second level personnel to the Placement Committee based on the affidavit executed by Melgarejo and the letter appeal of some 37 employees of the provincial government of Aklan. Furthermore, it found Gov. Cabagnot to have violated Sec. 7 of the Rules on Reorganization and Memorandum Circular No. 5, s. of 1988 providing preference for appointment of employees holding permanent positions considering that private respondents who were all holding permanent appointments to regular items prior to the reorganization were proposed to positions much lower than their former items despite the fact that their old items were carried over in the new staffing pattern. - 2nd Resolution CSC > order calling for a new election and reconvening of the Placement Committee was deemed unnecessary in light of the new evidence presented by Gov. Cabagnot and the length of time the controversy has been raging. However, after a thorough study, it found that a wide disparity existed between the former positions held by private respondents (except Oczon) and the positions proposed for them by petitioner even if equivalent positions were available. Oczon was found to have been terminated/removed. Gov. Cabagnot was found to have violated Sec 4 of RA6656 providing preference for appointment of permanent employees to the new positions or if there are not enough comparable ones, to positions next lower in rank. - Gov. Cabagnot, believing that questioned resolutions were issued with grave abuse of discretion because they encroached on her power to appoint, filed the present petition. She anchors her case on these established principles which have been consistently applied in cases of contested appointments where the CSC revokes the appointment made by the appointing authority and directs the appointment of another person whom it believes to be better qualified. In these cases, we upheld the discretion of the appointing authority whenever it is exercised properly. - SC: issued TRO ordering CSC to cease and desist from implementing the resolutions ISSUE WON CSC committed grave abuse of discretion in declaring null and void the appointments made by Gov. Cabagnot HELD NO - The situation in the case at bar is different. Here, CSC is not revoking any appointment made by Gov. Cabagnot. It is merely ordering the reinstatement whom it found to have been demoted or terminated. Thus, the basic issue in this case is whether, as a result of the reorganization undertaken by the Provincial Government of Aklan, the security of tenure of private respondents is impaired. - Bautista, Miroy, Sayon Maquinica, Meren, Ruiz, Buensalido and Concepcion were given positions which were not only lower by two (2) to as much as fourteen (14) grades, but which were different in nature from the ones they previously held. - Martirez, Dala, Tolentino and Natal were offered positions lower by one grade although they applied for positions which they have shown to be comparable to the ones they previously held. - Silva, Poblacion and Lumio were given positions of the same salary grade but lower by one or two steps. Moreover, there was a change in the nature of their work and their status. Silva was demoted from clerk to janitor; Poblacion, from clerk also to security guard and Lumio was reduced to a mere subordinate from being a former division chief. - Briones had a change in the nature of her work -from clerk to bindery helper. - Sec I of RA 6656 declares as the policy of the State, the protection of the security of tenure of civil service officers and employees in the reorganization of the various agencies of the government. Section 2 requires prior determination of a valid cause after due notice and hearing before any officer or employee in the career service can be removed, or demoted, which in effect is a removal. - The letters sent by Gov. Cabagnot to private respondents simply informed them of their new assignments and required them to submit the pertinent documents. These were not accompanied by a copy of the evaluation (which were also riddled by anomalies) allegedly made by the Placement Committee or by any explanation for their demotion. It was only when private respondents protested their new assignments that petitioner, in her decisions dated February 7 and 18, 1989, explained that the new appointments and transfers to offices other than their original positions were done to enhance their efficiency and effectivity. - Mendoza v. Quisumbing: If a person is dismissed from his job, he should be informed of the reason. The

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reason should be in the Civil Service Law or, at least, in the law authorizing the removal. The reason must have a reasonable relationship to the employee's merit and fitness for the job. He must be given, before he is fired, an opportunity to show that the cause for removal does not apply to him. Elementary principles of fairness and compassion are essential. Only then can the reconciliation and unity so earnestly sought today be achieved. - Assigning an employee to a lower position in the same service which has a lower rate of compensation is a clear case of demotion tantamount to removal when no cause is shown for it or when it is not a part of any disciplinary action. Thus, Gov. Cabagnot stresses the fact that since private respondents would be receiving the same rate of salary they were receiving before the reorganization, therefore they are not demoted. In the case of Floreza, we ruled that there was demotion even if Floreza was allowed to receive the same salary as his previous higher position. Similarly, we find that private respondents, notwithstanding non-diminution of their salary, have been demoted. This arbitrariness has no place in a government that nurtures the constitutional mandates of security of tenure and due process. - Gov. Cabagnot also violated the rule on preference for appointment of permanent employees. The rule means that "old employees should be considered first" on the assumption, though not absolutely true, that they have gained "not only superior skills but also greater dedication to the public service." This is not to say, however, that they should be automatically appointed because "the law does not preclude the infusion of new blood, younger dynamism, or necessary talents into the government service" provided that the acts of the appointing power are "bonafide for the best interest of the public service and the person chosen has the needed qualifications." - Gayatao v. CSC: The CSC, after finding that the demotion was patently illegal, is merely restoring private respondent to his former position, just as it must restore other employees similarly affected to their positions before the reorganization. It is within the power of public respondent to order the reinstatement of government employees who have been unlawfully dismissed. The CSC, as the central personnel agency, has the obligation to implement and safeguard the constitutional provisions on security of tenure and due process. In the present case, the issuance by the CSC of the questioned resolutions, for the reasons clearly explained therein, is indubitably in the performance of its constitutional task of protecting and strengthening the civil service. Disposition Petition for 16 respondents is DISMISSED; Petition of Oczon is GRANTED. TRO issued on November 22, 1990 enjoining their reinstatement is accordingly LIFTED in the case of the 16 respondents but made PERMANENT with regard to Oczon.

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HELD YES Ratio Contrary to Violas contention, the creation of the additional positions is authorized by the LGC which provides as follows:

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component municipal and city chapters shall constitute the provincial chapter or the metropolitan political subdivision chapter. The duly elected presidents of highly-urbanized cities, provincial chapters, the Metropolitan Manila chapter and metropolitan political subdivision chapters shall constitute the National Liga ng mga Brgy.

League of Local Government Units and Elective Officials Representation, Chapters, and Organization of the National Liga
VIOLA V. ALUNAN III 277 SCRA 409 MENDOZA; August 15, 1997 MAIA
NATURE Petition for prohibition FACTS Petitioner Viola brought this action as brgy chairman of Brgy 167, Manila against then SILG Alunan III, David, president/sec.gen. of the National Liga ng mga Brgy (NLB), and Angat, president of the City of Manila Liga ng mga Brgy, to restrain them from carrying out the elections for the 1st, 2nd, and 3rd vice-presidents and for auditors for the National Liga on July 3, 1994. They challenge the validity of Art. III, Sec. 1-2 of the Revised Implementing Rules and Guidelines for the General Elections of the Liga ng mga Brgy Officers so far as they provide for the election of the 1st, 2nd, and 3rd vice presidents and for auditors for the NLB and its chapters. Viola, et al. contend that such positions are in excess of those provided in the LGC, specifically Sec. 493 which mentions as elective positions only those of Pres, VP, and 5 members of the board of directors in each chapter at the municipal, city, provincial, metropolitan political subdivision, and national levels. This allegedly results in the expansion of the number of positions authorized in LGC, in violation of the principle that IRRs cannot add or detract from the provisions of the law they are designed to implement. *Although the elections are now over, the issues raised in this case are likely to arise again in future elections of officers of the Liga ng mga Brgy. For one thing, doubt may be cast on the validity of the acts of those elected. For another, this comes within the rule that courts will decide a question which is otherwise moot and academic if it is capable of repetition, yet evading review. ISSUE/S 1. WON the provision in the Implementing Rules and Guidelines is valid

Sec 493. The liga at the municipal, city, provincial, Metropolitan political subdivision, and national levels directly elect a president, a vice-president, and five (5) members of the board of directors. The board shall appoint its secretary and treasurer and create such other positions as it may deem necessary for the management of the chapter. A secretarygeneral shall be elected form among the members of the national liga and shall be charged with the overall operation of the liga on the national level. The board shall coordinate the activities of the chapters of the liga.

Reasoning Sec. 493 in fact requires and not merely authorizes the board of directors to create such other positions as it may deem necessary for the management of the chapter and belies petitioner's claim that said provision limits the officers of a chapter to the president, VP, 5 members of the board of directors, secretary, and treasurer. - Justice Davide contends in his dissent, however, that only the Board of Directors and not any other body is vested with the power to create other positions as may be necessary for the management of the chapter. However, pursuant to the IRR of the LCG, pending the organization of the Liga, the board of directors of the Pambansang Katipunan ng mga Brgy (PKB) was constituted into a committee with a two-fold mandate: [I] exercise the powers and duties of the NLB and [2] draft or amend the constitution and bylaws of the national liga to conform to the provisions of this Rule. The board of directors of the PKB, functioning in place of the board of directors of the NLB, exercised the power to create such additional positions as necessary for the management of a chapter. There is therefore no basis for the claim that because the power to create additional positions in the Liga on its chapters is vested only in the board of directors the exercise of this power by the Brgy National Assembly is unauthorized and illegal and positions created are void. The Brgy National Assembly was actually the Pambansang Katipunan ng mga Brgy or PKB. Pending the organization of the Liga ng mga Brgy, it served as the Liga. - It is contended in the dissent that Sec 493. . . vests the power to create additional positions in the Board of Directors of the chapter. The implication seems to be that the board of the directors at the national level did not have that power. Sec 492 provides Every brgy shall be represented in said liga by the punong
brgy, or in his absence or incapacity, by a sangguniang member duly elected for the purpose among its members, who shall attend all meetings or deliberations called by the different chapters of the liga. The liga shall have chapters at the municipal, city, provincial and metropolitan political subdivision levels. The municipal and city chapters of the liga shall be composed of brgy representatives of municipal and city brgys, respectively. The duly elected presidents of

While the board of directors of a local chapter can create additional positions to provide for the needs of the chapter, the board of directors of the NLB has the power to create additional positions not only for its management but also for that of all the chapters at the municipal, city, provincial and metropolitan political subdivision levels. Otherwise the National Liga would be no different from the local chapters. There would then be only so many local chapters without a national one, when what is contemplated in the LGC is that there should be one Liga ng mga Brgy with local chapters at all levels of local government units. The dissent, by denying to the board of directors at the NLB the power to create additional positions in the local chapters, would reduce such board to a board of a local chapter. The fact is that Sec 493 grants the power to create positions not only to the boards of the local chapters but to the board of the Liga at the national level as well. Indeed what was done in the Constitution and By-laws of their liga was to create additional positions in each chapters, whether national or local, without however precluding the boards of directors of the chapters as well as that of the national liga from creating other positions for their peculiar needs. The creation by the board of the National Liga of the positions of 1st, 2nd, and 3rd VP, auditors and public relations officers was intended to provide uniform officers for the various chapters. The various chapters could have different minor officers depending on their local needs, but they must have the same major elective officers, meaning to say, the additional vice-presidents and auditors. The dissent further argues that, following the rule of ejusdem generis, what may be created as additional positions can only be appointive ones because the positions of secretary and treasurer are appointive positions. The rule might apply if what is involved is the appointment of other officers. But what we are dealing with in this case is the creation of additional positions. Sec 493 actually gives the board the power to create such other positions as it may deem necessary for the management of the chapter. The additional positions to be created need not therefore be appointive positions. Nor is it correct to say that Sec 493, in providing that additional positions to be created must be those which are "deemed necessary for the management of the chapter," contemplates only appointive positions. Management positions are not necessarily limited to appointive positions. Elective officers, such as the VP, can be expected to be involved in the general administration or management of the chapter. Hence, the creation of other elective positions which may be

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deemed necessary for the management of the chapter is within the purview of Sec 493. Disposition Petition for prohibition is DISMISSED persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different both in the privileges conferred and liabilities imposed. Finally, under the Real Property Tax Code (PD 464), property must be appraised at its current and fair market value. The market value of the properties covered by PD 20, thus cannot be equated with the market value of properties not so covered. Such property covered by PD 20 has naturally a much lesser market value in view of the rental restrictions. Although taxes are the lifeblood of the government and should be collected without unnecessary hindrance, such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself. As the Reyeses are burdened by the Rent Freeze Laws (RA 6359 and PD 20), they should not be penalized by the same government by the imposition of excessive taxes they can not afford and would eventually result in the forfeiture of their properties, under the principle of social justice.

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issued by the City Engineer that such plan has already been submitted to his office and that the same is in order. Section 4. Any violation of this ordinance shall be punished by a fine not exceeding two hundred (P200.00) pesos or imprisonment not exceeding six (6) months or both in the discretion of the judge. The aforementioned ordinance was declared null and void by the trial court for contravening the laws enacted by Congress. ISSUE Whether or not the lower court erred in holding that the ordinance is invalid. HELD NO. Ratio An ordinance may not contravene or modify an act of Congress. Reasoning The Court takes note of the laudable purpose of the ordinance in bringing to a halt the surreptitious registration of lands belonging to the government. However, the powers of the board in enacting such a laudable ordinance cannot be held valid when it shall impede the exercise of rights granted in a general law and/or make a general law subordinated to a local ordinance. To sustain the ordinance would be to open the floodgates to other ordinances amending and so violating national laws in the guise of implementing them. Thus, ordinances could be passed imposing additional requirements for the issuance of marriage licenses, to prevent bigamy; the registration of vehicles, to minimize carnaping; the execution of contracts, to forestall fraud; the validation of passports, to deter imposture; the exercise of freedom of speech, to reduce disorder; and so on. The list is endless, but the means, even if the end be valid, would be ultra vires. So many excesses are attempted in the name of the police power that it is time, we feel, for a brief admonition. Regulation is a fact of life in any well-ordered community. As society becomes more and more complex, the police power becomes correspondingly ubiquitous. This has to be so for the individual must subordinate his interests to the common good, on the time honored justification of Salus populi est suprema lex. In this prolix age, practically everything a person does and owns affects the public interest directly or at least vicariously, unavoidably drawing him within the embrace of the police power. Increasingly, he is hemmed in by all manner of statutory, administrative and municipal requirements and restrictions that he may find officious and even oppressive. It is necessary to stress that unless the creeping interference of the government in essentially private

VII. RAISING MONEY Local Government Taxation Power to Tax


REYES V. ALMANZOR 196 SCRA 322, 327 PARAS; April 26, 1991 DA
FACTS JBL Reyes and others are owners of parcels of land in Manila which are leased and occupied as dwelling sites by tenants. In 1971, RA 6359 was passed prohibiting an increase of monthly rentals of dwelling units or of land on which another dwelling is located for one year after effectivity for rentals not exceeding P300 but allowing an increase of rent thereafter by not more than 10%. The Act also suspended the operation of Article 1673 of the Civil Code (ejectment of lessess). PD 20 amended RA 6359 by absolutely prohibiting the increase and indefinitely suspending Article 1673. The Reyeses, thus, were precluded from raising the rentals and from ejecting the tenants. In 1973, the City Assessor of Manila reclassified and reassessed the value of the properties based on the schedule of market values duly reviewed by the Secretary of Finance. As it entailed an increase of the corresponding tax rates, the Reyeses filed a memorandum of disagreement with the Board of Tax Assessment Appeals and averring therein that the reassessments were excessive, unwarranted, unequitable, confiscatory and unconstitutional inasmuch as the taxes imposed exceeded the annual income derived from their properties; and that the income approach should have been used in determining land values instead of the comparative sales approach which the assessor adopted. ISSUE WON the reassessment is not equitable. HELD Taxation is equitable when its burden falls on those better able to pay. Taxation is progressive when its rate goes up depending on the resources of the person affected. Taxes are uniform when all taxable articles or kinds of property of the same class are taxed at the same rate. The taxing power has the authority to make reasonable and natural classification for purposes of taxation. Laws should operate equally and uniformly, however, on all

Limitations
ESTANISLAO V COSTALES SUPRA PAGE 24 OF DIGEST EVA V ILLACORTA VS. BERNARDO 143 SCRA 480 CRUZ, J.: 1986 BRY
FACTS Municipal Board of Dagupan City passed Ordinance 22, with the following provisions: Section 1. Every proposed subdivision plan over any lot in the City of Dagupan, shalt before the same is submitted for approval and/or verification by the Bureau of Lands and/or the Land Registration Commission, be previously submitted to the City Engineer of the City who shall see to it that no encroachment is made on any portion of the public domain, that the zoning ordinance and all other pertinent rules and regulations are observed. Section 2. As service fee thereof, an amount equivalent to P0.30 per square meter of every lot resulting or win result from such subdivision shall be charged by the City Engineer's Office. Section 3. It shall be unlawful for the Register of Deeds of Dagupan City to allow the registration of a subdivision plan unless there is prior written certification

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matters is moderated, it is likely to destroy that prized and peculiar virtue of the free society: individualism. Every member of society, while paying proper deference to the general welfare, must not be deprived of the right to be left alone or, in the Idiom of the day, "to do his thing." As long as he does not prejudice others, his freedom as an individual must not be unduly curtailed. We therefore urge that proper care attend the exercise of the police power lest it deteriorate into an unreasonable intrusion into the purely private affairs of the individual. The so-called "general welfare" is too amorphous and convenient an excuse for official arbitrariness. would take place shall be covered by the operation of this Ordinance. That prior to September, 1966, Santiago Syjuco Inc., owned and operated a bottling plant at Muelle Loney Street, Iloilo City, which was doing business under the name of Seven-up Bottling Company of the Philippines and bottled the soft-drinks Pepsi-Cola and 7-up; however sometime on September 14,1966, Santiago Syjuco, Inc., informed all its employees that it (was) closing its Iloilo Plant due to financial losses and in fact closed the same and later sold the plant to the plaintiff Iloilo Bottlers, Inc. Thereafter, plaintiff operated the said plant by bottling the soft drinks Pepsi-Cola and 7-up; however, sometime in July 1968, plaintiff closed said bottling plant at Muelle Loney, Iloilo City, and transferred its bottling operations to its new plant in Barrio Ungca, Municipality of Pavia, Province of Iloilo, and which is outside the jurisdiction of the City of Iloilo; Plaintiff stopped paying the municipal license tax (after) October 21, 1968 (when) it transferred its plant to Barrio Ungca Municipality of Pavia, Iloilo which is outside the jurisdiction of the City of Iloilo; Plaintiff explained in a letter to the defendant that it could not anymore be liable to pay the municipal license fee because its bottling plant (was) not anymore inside the City of Iloilo, and that moreover, since it itself (sold) its own products to its (customers) directly, it could not be considered as a distributor . As a result of the said letter of the plaintiff, the defendant did not anymore press the plaintiff to pay the said municipal license tax; ISSUE WON the Iloilo Bottlers, Inc. which had its bottling plant in Pavia, Iloilo, but which sold softdrinks in Iloilo City, is liable under Iloilo City tax Ordinance No. 5, series of 1960, as amended, which imposes a municipal license tax on distributors of soft-drinks. HELD YES Ratio The tax ordinance imposes a tax on persons, firms, and corporations engaged in the business of: 1. distribution of soft-drinks 2. manufacture of softdrinks, and 3. bottling of softdrinks within the territorial jurisdiction of the City of Iloilo. There is no question that after it transferred its plant to Pavia, Iloilo province, Iloilo Bottlers, Inc. no longer manufactured/bottled its softdrinks within Iloilo City. Thus, it cannot be taxed as one falling under the second or the third type of business. The resolution of this case therefore hinges on whether the company may be considered engaged in the distribution of softdrinks in Iloilo City, even after it had transferred its bottling plant to Pavia, so as to be within the purview of the ordinance. Iloilo Bottlers, Inc. disclaims liability on two grounds: First, it contends that since it is not engaged in the independent business of distributing soft-drinks, but

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that its activity of selling is merely an incident to, or is a necessary consequence of its main or principal business of bottling, then it is NOT liable under the city tax ordinance. Second, it claims that only manufacturers or bottlers having their plants inside the territorial jurisdiction of the city are covered by the ordinance. The second ground is manifestly devoid of merit. It is clear from the ordinance that three types of activities are covered: (1) distribution, (2) manufacture and (3) bottling of softdrinks. A person engaged in any or all of these activities is subject to the tax. The first ground, however, merits serious consideration. This Court has always recognized that the right to manufacture implies the right to sell/distribute the manufactured products [See Central Azucarera de Don Pedro v. City of Manila and Sarmiento, 97 Phil. 627 (1955); Caltex (Philippines), Inc. v. City of Manila and Cudiamat, G.R. No. L-22764, July 28, 1969, 28 SCRA 840, 843.] Hence, for tax purposes, a manufacturer does not necessarily become engaged in the separate business of selling simply because it sells the products it manufactures. In certain cases, however, a manufacturer may also be considered as engaged in the separate business of selling its products. To determine whether an entity engaged in the principal business of manufacturing, is likewise engaged in the separate business of selling, its marketing system or sales operations must be looked into. In several cases this Court had occasion to distinguish two marketing systems: Under the first system, the manufacturer enters into sales transactions and invoices the sales at its main office where purchase orders are received and approved before delivery orders are sent to the company's warehouses, where in turn actual deliveries are made. No warehouse sales are made; nor are separate stores maintained where products may be sold independently from the main office. The warehouses only serve as storage sites and delivery points of the products earlier sold at the main office. Under the second system, sales transactions are entered into and perfected at stores or warehouses maintained by the company. Any one who desires to purchase the product may go to the store or warehouse and there purchase the merchandise. The stores and warehouses serve as selling centers. Entities operating under the first system are NOT considered engaged in the separate business of selling or dealing in their products, independent of their manufacturing business. Entities operating under the second system are considered engaged in the separate business of selling. In the case at bar, the company distributed its softdrinks by means of a fleet of delivery trucks which went directly to customers in the different places in lloilo province. Sales transactions with customers were

ILOILO BOTTLERS, INC. V. CITY OF ILOILO 164 SCRA 607 CORTES;August 19, 1988 MEL
FACTS - Iloilo Bottlers, Inc. filed a complaint with CFI Iloilo praying for the recovery of the sum of P3,329.20, which amount allegedly constituted payments of municipal license taxes under Ordinance No. 5 series of 1960, as amended, that the company paid under protest.Plaintiff is engaged in the business of bottling softdrinks under the trade name of Pepsi Cola And 7up and selling the same to its customers, with a bottling plant situated at Barrio Ungca Municipality of Pavia, Iloilo, Philippines and which is outside the jurisdiction of defendant; Defendant enacted an ordinance on January 11, 1960 known as Ordinance No. 5, Series of 1960 which ordinance was successively amended by Ordinance No. 28, Series of 1960; Ordinance No. 15, Series of 1964; and Ordinance No. 45, Series of 1964; which provides as follows: Section l. Any person, firm or corporation engaged in the distribution, manufacture or bottling of coca-cola, pepsi cola, tru-orange, seven-up and other soft drinks within the jurisdiction of the City of Iloilo, shall pay a municipal license tax of ten (P0.10) centavos for every case of twenty-four bottles; PROVIDED, HOWEVER, that softdrinks sold to the public at not more than five (P0.05) centavos per bottle shall pay a tax of one and one half (P0.015) (centavos) per case of twenty four bottles. Section 1-A. For purposes of this Ordinance, all deliveries and/or dispatches emanating or made at the plant and all goods or stocks taken out of the plant for distribution, sale or exchange irrespective (of) where it

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entered into and sales were perfected and consummated by route salesmen. Truck sales were made independently of transactions in the main office. The delivery trucks were not used solely for the purpose of delivering softdrinks previously sold at Pavia. They served as selling units. They were what were called, until recently, "rolling stores". The delivery trucks were therefore much the same as the stores and warehouses under the second marketing system. Iloilo Bottlers, Inc. thus falls under the second category above. That is, the corporation was engaged in the separate business of selling or distributing softdrinks, independently of its business of bottling them. The tax imposed under Ordinance No. 5 is an excise tax. It is a tax on the privilege of distributing, manufacturing or bottling softdrinks. Being an excise tax, it can be levied by the taxing authority only when the acts, privileges or businesses are done or performed within the jurisdiction of said authority [Commissioner of Internal Revenue v. British Overseas Airways Corp. and Court of Appeals, G.R. Nos. 6577374, April 30, 1987, 149 SCRA 395, 410.] Specifically, the situs of the act of distributing, bottling or manufacturing softdrinks must be within city limits, before an entity engaged in any of the activities may be taxed in Iloilo City. As stated above, sales were made by Iloilo Bottlers, Inc. in Iloilo City. Disposition the appealed decision is hereby REVERSED. The complaint in Civil Case No. 9046 is ordered DISMISSED - Provincial Treasurer of Bulacan assessed private respondent Republic Cement Corporation P2,524,692.13 for extracting limestone, shale and silica from several parcels of private land in the province during the third quarter of 1992 until the second quarter of 1993. Believing that the province, on the basis of above-said ordinance, had no authority to impose taxes on quarry resources extracted from private lands, Republic Cement formally contested the same. The same was, however, denied by the Provincial Treasurer. - Republic Cement, consequently filed a petition for declaratory relief with the RTC of Bulacan. The province filed a motion to dismiss Republic Cement's petition which was granted. - Republic Cement filed a petition for certiorari with the Supreme Court which was referred to the CA. - In the interim, the Province of Bulacan issued a warrant of levy against Republic Cement, allegedly because of its unpaid tax liabilities. Negotiations between Republic Cement and petitioners resulted in an agreement whereby Republic Cement agreed to pay under protest P1,262,346.00, 50% of the tax assessed by petitioner, in exchange for the lifting of the warrant of levy. Furthermore, Republic Cement and petitioners agreed to limit the issue for resolution by the Court of Appeals to the question as to whether or not the provincial government could impose and/or assess taxes on quarry resources extracted by Republic Cement from private lands pursuant to Section 21 of the Provincial Ordinance No. 3. - CA held that the Province of Bulacan under its Provincial Ordinance No. 3 had no legal authority to impose and assess taxes on quarry resources extracted by RCC from private lands, hence the assessment made by the Province of Bulacan against RCC is null and void. ISSUE WON the Ordinance is valid. HELD NO. A province has no authority to impose taxes on stones, sand, gravel, earth and other quarry resources extracted from private lands. The pertinent provisions of the Local Government Code are as follows: Sec. 134. Scope of Taxing Powers. - Except as otherwise provided in this Code, the province may levy only the taxes, fees, and charges as provided in this Article. Sec. 138. Tax on Sand, Gravel and Other Quarry Resources. - The province may levy and collect not more than ten percent (10%) of fair market value in the locality per cubic meter of ordinary stones, sand, gravel, earth, and other quarry resources, as defined under the National Internal Revenue Code, as amended, extracted from public lands or from the beds of seas, lakes, rivers, streams, creeks, and other public waters within its territorial jurisdiction.

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- The appellate court, on the basis of Section 134, ruled that a province was empowered to impose taxes only on sand, gravel, and other quarry resources extracted from public lands, its authority to tax being limited by said provision only to those taxes, fees and charges provided in Article One, Chapter 2, Title One of Book II of the Local Government Code. On the other hand, petitioners claim that Sections 129 and 186 of the Local Government Code authorizes the province to impose taxes other than those specifically enumerated under the LGC. - The CA erred in ruling that a province can impose only the taxes specifically mentioned under the LGC. Section 186 allows a province to levy taxes other than those specifically enumerated under the Code, subject to the conditions specified therein. - This finding, nevertheless, affords cold comfort to petitioners as they are still prohibited from imposing taxes on stones, sand, gravel, earth and other quarry resources extracted from private lands. The tax imposed by the Province of Bulacan is an excise tax, being a tax upon the performance, carrying on, or exercise of an activity. The LGC provides: Section 133. - Common Limitations on the Taxing Powers of Local Government Units. - Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: (h) Excise taxes on articles enumerated under the NIRC, as amended, and taxes, fees or charges on petroleum products; - A province may not, therefore, levy excise taxes on articles already taxed by the NIRC. Unfortunately for petitioners, the NIRC under Sec.151 levies a tax on all quarry resources, regardless of origin, whether extracted from public or private land. Thus, a province may not ordinarily impose taxes on stones, sand, gravel, earth and other quarry resources, as the same are already taxed under the NIRC. The province can, however, impose a tax on stones, sand, gravel, earth and other quarry resources extracted from public land because it is expressly empowered to do so under the LGC. - Petitioners may not invoke the Regalian doctrine to extend the coverage of their ordinance to quarry resources extracted from private lands, for taxes, being burdens, are not to be presumed beyond what the applicable statute expressly and clearly declares, tax statutes being construed strictissimi juris against the government. Dispositive Decision of the Court of Appeals is hereby AFFIRMED in toto.

PROVINCE OF BULACAN V. CA 299 SCRA 442 ROMERO; Nov.27, 1998 EVA


NATURE Petition for certiorari seeking the reversal of the CA decision declaring petitioner without authority to levy taxes on stones, sand, gravel, earth and other quarry resources extracted from private lands FACTS - On June 26, 1992, the Sangguniang Panlalawigan of Bulacan passed Provincial Ordinance No. 3, known as "An ordinance Enacting the Revenue Code of the Bulacan Province," which was to take effect on July 1, 1992, section 21 of the ordinance provides as follows: Section 21. Imposition of Tax. There is hereby levied and collected a tax of 10% of the fair market value in the locality per cubic meter of ordinary stones, sand, gravel, earth and other quarry resources, such, but not limited to marble, granite, volcanic cinders, basalt, tuff and rock phosphate, extracted from public lands or from beds of seas, lakes, rivers, streams, creeks and other public waters within its territorial jurisdiction.

Scope of Taxing Powers

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MUNICIPALITY OF SAN FERNANDO, LA UNION v STA. ROMANA G.R. No. L-30159 PARAS; Mar 31, 1987 KOOKY
FACTS: - The Municipality of San Fernando, La Union, which was undertaking a cement road construction around its Supermarket and other municipal projects, needed gravel and sand from the Municipality of Luna, but its trucks sent to the latter municipality to haul the road construction materials were allegedly charged unreasonable fees per truck load. - San Fernando, represented by Mayor Lorenzo Dacanay, filed a complaint for Injunction with Writ of Preliminary Injunction against the Municipality of Luna and its officials and authorized agents, praying that the latter be immediately enjoined from preventing plaintiff's truck obtaining road construction materials and from levying unreasonable fees. CFI granted Writ of Preliminary Injunction ex parte. - The Municipality of Luna, et al, in their answer, averred that the license fees collected from the hauling of sand and gravel excavated from the municipality are by virtue of Ordinance No. 18 duly approved by the Municipal Council in consonance with its power to tax, and that the fees collected are reasonable, fair and legal. - The CFI later made permanent the writ of preliminary injunction issued and further ordered the defendants not to prevent the plaintiff from getting sand and gravel. Appellants: The Municipality of Luna insists on the validity of Ordinance No. 1 imposing the license fees on the basis of its authority to exercise police power under Sec 2238 (the General Welfare Clause) of the Revised Administrative Code, and its power to levy licenses and fees for public purposes under RA 2264. It justifies the inclusion of the Municipality of San Fernando among the persons, partnership or corporation engaged in any business, occupation or calling to be charged for hauling sand and gravel from its seashore, claiming that San Fernando, in hauling sand and gravel for the improvement of its roads, is
8 Which reads: Section 1. There shall be collected from any person, partnership or corporation engaged in any business, occupation or calling or enjoying any privilege hereunder enumerated the following municipal license and/or fees at the rate set opposite each: xxx xxx xxx 14. Dealer and/or hauler of sand, gravel and/or stones for every truck load or fraction thereof: Sand.......................................................P1. 50 Gravel........................................................8.00 Course sand...........................................10.00 Selected stones or pea size..................15.00

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engaged in a proprietary function, as it can later exact higher license fees from those in the business center. Thus, for eventually obtaining profit by the improvement of its roads, San Fernando should pay license fees to the Municipality of Luna. Appellees: The Municipality of San Fernando alleges that the license fees in Ordinance No. 1 is beyond the authority of the Municipality of Luna to impose, as the sand and gravel deposits in the seashore of Nalvo Norte are classified as minerals under the Mining Laws of the Philippines and as such belong to the State, and fall under the administration and control of the Bureau of Mines and not of the Municipality of Luna. For this purpose, San Fernando obtained a gratuitous Revocable Permit from the Bureau of Mines. Even granting arguendo that the disposition of sand and gravel belongs to the Municipality of Luna, nevertheless, the Municipality of San Fernando does not fall under Ordinance No. 1 because the gravel and sand extracted by said municipality are used for the improvement of its streets which function is governmental. ISSUE: WON the Municipality of Luna has the authority to pass Ordinance No. 1 and impose the license fees in question. HELD: NO. - The issue is now governed by PD 231, enacting a Local Tax Code for Provinces, Cities, Municipalities and Barrios which took effect on July 1, 1973.9 Sec 10 of PD 231 was later amended by PD 426, and now reads: Sec. 10. Sand and gravel tax. - The province may levy and collect a tax of not exceeding seventyfive centavos per cubic meter of ordinary stones, sand, gravel earth and other materials extracted from public and private lands of the government or from the beds of seas, lakes, rivers, streams, creeks and other public waters within the jurisdiction of the province. The municipality where the materials are extracted shall share in the proceeds of the tax herein authorized at a rate of not less than thirty per cent thereof as may be determined by the Provincial Board. The permit to extract the materials shall be issued by the Director of Mines or his duly authorized representative and the extraction thereof shag be governed by regulations issued by the Director of Mines. - The authority to impose the license fees in dispute properly belongs to the province concerned and not to the Municipality of Luna, which is specifically prohibited under Sec 22 of the Local Tax Code 10 "from levying taxes, fees and charges that the province or city is authorized to levy in this Code. " On the other hand, the Municipality of San Fernando cannot extract sand and gravel from the Municipality of Luna without paying the corresponding taxes or fees that may be imposed by the province of La Union. Disposition Dismissed. CFIs Order affirmed.

Franchise Tax
NPC V PROVINCE OF ISABELA G.R. No. 165827 CALLEJO; June 16, 2006 AIDA
NATURE Petition for review on certiorari of the Decision of the Court of Appeals FACTS - Respondent Province of Isabela filed an action for sum of money against petitioner Napocor. - Respondent alleged in the complaint that Napocors Magat River Hydroelectric Plant is located within its territory and that, for this reason, it imposed a franchise tax on petitioner pursuant to Section 137 of the Local Government Code. - Napocor paid the franchise tax for the years 1992 and 1993 amounting to P9,473,275.00 but failed and refused to pay, despite demands, the franchise tax for the year 1994 amounting to P7,116,949.00. Respondent also sought the payment of interest. - Napocor argues that the hydroelectric plant is built on land owned by the National Irrigation Administration situated in Sto. Domingo, Ifugao. It admitted that it paid franchise tax to the respondent for the years 1992 and 1993, but that it did so only upon respondents representation that the plant is located within Isabelas jurisdiction. Napocor alleged that, due to the boundary dispute between the
10 SEC. 22. Specific limitations on power. - Except as otherwise provided in this Code, the municipality shall not levy the following: (a) Taxes, fees, and charges that the province or city is authorized to levy in this Code; (b) Taxes on articles, subject to specific tax under the provisions of the National Internal Revenue Code; and (c) Taxes and other impositions enumerated in Section 5, Chapter I of this Code.

It provides: SEC. 10. Sand and gravel fee. - The province may levy and collect a fee of not exceeding seventy-five centavos per cubic meter of ordinary stones, sand, gravel earth and other materials extracted from lakes, rivers, streams, creeks, and other public waters within the jurisdiction of the province.

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respondent and the Province of Ifugao, it is in a quandary as to whom it should pay the franchise tax. - With leave of court, the Province of Ifugao filed a Complaint-in-Intervention, later amended, against both Napocor and respondent, claiming that the plant is situated within its territory. All the principal structures of the power plant are within its jurisdiction; only those incidental structures which have nothing to do with the production of hydroelectric power are located within the respondents territory. - The Province of Ifugao alleged that it is the one actually maintaining the power plant, as it maintains the watershed that ensures the continuous flow of water to plants reservoir. It averred that, through misrepresentation, respondent succeeded in claiming and receiving payment of franchise tax from Napocor for 1992 and 1993. - Respondent argued that the plant is found within its territory. The plant is an expansion of the Magat River Irrigation System, constructed in 1957 and located in Ramon, Isabela, and the Siffu River Irrigation System, located along the boundaries of San Mateo and Ramon, Isabela. All communications received and sent during the construction of the power plant were addressed to the respondent and not the intervenor. If the power plant is located within the intervenors territorial boundary, it should have laid its claim over it during its construction in 1974. - Napocor asserts in its answer to the complaint-inintervention that it is a non-profit corporation and as such, it is not covered by the Local Government Code, and therefore not obliged to pay franchise tax. - The RTC Isabela ruled in favor of respondent and intervenor, ordering Napocor to mmediately deposit, in escrow, in favor of the plaintiffs, the amount representing the franchise taxes. - Napocor appealed to the CA which was denied. The CA ruled that Napocor is not exempted from paying the franchise tax. It held that Section 193 of the Local Government Code withdrew the tax exemption provided under the petitioners charter. - Napocor argued that the RTC Isabela had no basis in ordering it to pay franchise tax to respondent since the latters territorial dispute with the intervenor has not yet been resolved and because of failure to exhaust administrative remedies. - Napocor filed a petition for review with the SC. Petitioners Arguments: - Napocor contends that Section 193 thereof did not withdraw the tax exemption provided under Section 13 of its charter, Rep. Act No. 6395, stressing that there was no provision in the LGC expressly repealing the said provision; neither was there an implied repeal. - In any case, petitioner argues that, assuming that Section 13 of its charter has been repealed by Section 193 of the LGC, it will still not be liable for franchise tax for the following reasons: - Section 137 of the LGC is not applicable to it, as the said provision empowers local government units to impose franchise tax only with respect to private individuals and corporations. Napocor stresses that, under the LGC, "business" means a trade or commercial activity regularly engaged in as a means of livelihood or with a view to a profit. On the other hand, "franchise" means a right or privilege, affected with public interest which is conferred upon private persons or corporations, under such terms and conditions as the government and its political subdivisions may impose in the interest of public welfare, security and safety. Petitioner thus asserts that it cannot be held liable to pay franchise tax because it is neither a private corporation nor a business created for profit. - Napocor contends that the authority of respondent to tax does not extend to it, claiming that it is an instrumentality of the National Government, which is beyond the authority of local government units to tax. It points out that it remits the profits derived from its operations to the National Government; Congress approves its yearly budget, which forms part of the General Appropriations Act; and all of its indebtedness, foreign or domestic, is guaranteed by the National Government. - To require it to pay franchise tax could have deleterious effects on its operations. It would compel petitioner to borrow from domestic and foreign financial institutions to meet both its operational expenses and the franchise tax. Ultimately, it is the national government that will pay the tax, and the burden shouldered by the Filipino people. Respondents Comments: - Respondent, for its part, maintains that petitioner has failed to overcome the presumption that it is taxable. - Napocors status as a non-profit government corporation does not exempt it from liability to pay franchise tax to local government units. Petitioner, as a corporation created to undertake ministrant or proprietary function, has long been treated in this jurisdiction as akin to a private commercial corporation. ISSUE WON Napocor is liable for the payment of franchise taxes HELD YES Reasoning - The case is on all fours with the case of National Power Corporation v. City of Cabanatuan. - Indeed, taxation is the rule and exemption is the exception. The burden of proof rests upon the party claiming exemption to prove that it is, in fact, covered

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by the exemption so claimed. Tax exemptions should be granted only by clear and unequivocal provision of law on the basis of language too plain to be mistaken. They cannot be extended by mere implication or inference. In this case, Napocor relies solely on the exemption granted to it by its charter, arguing that its exemption from franchise tax remained despite the enactment of the LGC. - As settled in the Cabanatuan case, section 19311 of the LGC withdrew, subject to limited exceptions, the sweeping tax privileges previously enjoyed by private and public corporations. Contrary to the contention of petitioner, Section 193 of the LGC is an express, albeit general, repeal of all statutes granting tax exemptions from local taxes. Not being a local water district, a cooperative registered under R.A. No. 6938, or a nonstock and non-profit hospital or educational institution, petitioner clearly does not belong to the exception. It is therefore incumbent upon the petitioner to point to some provisions of the LGC that expressly grant it exemption from local taxes. - Even prior to the Cabanatuan case, the Court already declared in City Government of San Pablo, Laguna v. Reyes that the franchise tax may still be imposed despite any exemption enjoyed under special laws. - As to its argument that it was a business enjoying a franchise, in section 131 (m) of the LGC, Congress unmistakably defined a franchise in the sense of a secondary or special franchise. As commonly used, a franchise tax is "a tax on the privilege of transacting business in the state and exercising corporate franchises granted by the state." It is not levied on the corporation simply for existing as a corporation, upon its property or its income, but on its exercise of the rights or privileges granted to it by the government. Hence, a corporation need not pay franchise tax from the time it ceased to do business and exercise its franchise. - To determine whether the petitioner is covered by the franchise tax in question, the following requisites should concur: (1) that petitioner has a "franchise" in the sense of a secondary or special franchise; and (2) that it is exercising its rights or privileges under this franchise within the territory of the respondent city government. Petitioner fulfills the first requisite. Commonwealth Act No. 120, as amended by Rep. Act No. 6395, constitutes petitioners primary and secondary franchises. It serves as the petitioners charter, defining its composition, capitalization, the appointment and the specific
11

Sec. 193. Withdrawal of Tax Exemption Privileges. Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations, except local water districts, cooperatives duly registered under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code.

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duties of its corporate officers, and its corporate life span. As its secondary franchise, Commonwealth Act No. 120, as amended, vests the petitioner powers which are not available to ordinary corporations - Petitioner also fulfills the second requisite. It is operating within the respondent city governments territorial jurisdiction - Petitioner was created to "undertake the development of hydroelectric generation of power and the production of electricity from nuclear, geothermal and other sources, as well as the transmission of electric power on a nationwide basis. Pursuant to this mandate, petitioner generates power and sells electricity in bulk. Certainly, these activities do not partake of the sovereign functions of the government. They are purely private and commercial undertakings, albeit imbued with public interest. - As to its contention that it cannot be imposed a franchise tax because it is an instrumentality of the National Government, the SC deems this unmeritorious. Although as a general rule, LGUs cannot impose taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, this rule admits of an exception, i.e., when specific provisions of the LGC authorize the LGUs to impose taxes, fees or charges on the aforementioned entities. Section 137 is one of those exceptions, authorizing the province to impose a tax on business enjoying a franchise, at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the incoming receipt, or realized, within its territorial jurisdiction. - Napocors reliance on Basco vs. PAGCOR is erroneous as the doctrine is no longer true (i.e., that a government-owned and controlled corporation whose shares of stock are owned by the national government is exempt from local taxes). Dispositive Petition denied. with Malice and Abuse of Authority and Gross/Willful Violation of Law." - This case originated from a complaint filed with the then Human Settlements Regulatory Commission, Region VII, Cebu City, entitled " Veloso vs. del Rosario" for violation of P.D. No. 957, otherwise known as the Subdivision and Condominium Buyer's Protective Decree. - A decision was rendered on the aforesaid case wherein respondents (Del Rosarios)were ORDERED, jointly and severally: 1. to apply for and secure a Certificate of Registration from the Commission; 2. to accept installment payments from complainants with interest and to execute a Deed of Sale over subject lots once full payment of the unpaid balance of the purchase price is effected; 3. to register the Contract of Sale with the Office of the Register of Deeds of Cebu City; 4. to pay a fine of P2,000.00 for failure to secure certificate of registration and a license to sell from this Commission; 5. to develop the subdivision open space, park and playgrounds as advertised; and 6. to complete development of subdivision roads and underground drainage facilities up to lot lines. Arguments of the Complainant - Complainants alleged that respondent Deputy Sheriff is grossly ignorant of the law in implementing the writ of execution of the dispositive portion of the aforecited case which orders specific performance and hence, is governed by Section 9 of Rule 39 of the Rules of Court. They said that under this Section, no levy of personal or real properties is required but through gross ignorance, respondent executed the writ pursuant to Section 15 of Rule 39 and proceeded to levy on execution three (3) parcels of land having a total market value of P1 ,236,600.00 of Miradel Development Corporation wherein Esperanza del Rosario has alleged shares, interests and participation, in order to satisfy the judgment involving specific performance. - It is contended by the complainants that respondent is grossly ignorant of the law considering that the dispositive portion of the decision is for specific performance and the fine of P2,000.00 is not payable to the prevailing parties but to the Commission. Complainants asserted that the levy on the three (3) parcels of land belonging to the Miradel Corporation with a value of more than 1 million pesos is excessive considering that, apparently, the levy is for the payment of the fine of P2,000.00 and the implementation of the writ was tainted with malice and abuse of authority because he could have just levied on the personal properties of the herein complainants which could satisfy the alleged judgment and costs. Arguments of the Respondent

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Respondent contended that the levy was not made to satisfy the fine of two thousand pesos (P2,000.00) but to protect the rights of the prevailing parties considering that complainants refused to comply with the decretal portion of the decision. He stated that the lots he levied upon which are portions of the lots in controversy are vacant and there was malice and bad faith in the transfer of the lots in question to Miradel Development Corporation wherein complainant Esperanza del Rosario is the treasurer. ISSUE WON the act of respondent in levying the said property amounts to gross ignorance of the law, negligence and abuse of authority HELD YES. Respondent had no reason to make a levy of three parcels of land belonging to Miradel Development Corporation after having found that Esperanza del Rosario, one of the respondents in the HSRC case, was treasurer thereof on the pretext of protecting the prevailing parties whom he claims could eventually lose the lots by reason of the sale thereof by complainants to the said corporation. "It should be recalled that a purely ministerial act or duty is one which an officer or tribunal performs in a given state of facts, on a prescribed manner in obedience to the mandate of legal authority, without regard to the exercise of his own judgments, upon the propriety or impropriety of the act done (Lamb v. Phippa, 22 Phils. 456). Discretion, on the other hand, is a faculty conferred upon a court or official by which he may decide the question either way and still be right (Asuncion v. De Yriarte, 28 Phil. 67)." 1 - There is no doubt that respondent acted beyond the bounds of his duty by allocating unto himself the power of the Court to pierce the "veil of corporate" entity and improvidently assuming that since complainant Esperanza del Rosario is the treasurer of the Miradel Development Corporation, they are one and the same. It is well-settled doctrine both in law and equity that as a legal entity, a corporation has a personality distinct and separate from its individual stockholders or members. The mere fact that one is president of a corporation does not render the property he owns or possesses the property of the corporation, since the president, as individual, and the corporation are separate entities (Cruz v. Dalisay, 152 SCRA 483). More importantly, it was not incumbent upon him as sheriff to determine for himself the means how to safeguard the rights of the prevailing party in a case for specific performance. - There was failure, however, to establish with certainty that the actuation of respondent deputy sheriff was attended with malice and was done so as to prejudice a third party. As the respondent explained, he wanted to protect the interest of the prevailing parties over the lots in controversy. Though

Civil Remedies for Collection Revenues Sections 176 and 178


DEL ROSARlO vs BASCAR MEDIALDEA; March 3, 1992 ATHE

of

FACTS - In a verified letter-complaint Del Rosario, et al. charged Deputy Sheriff Bascar of (MTCC)Cebu City for "Gross Ignorance of the Law, Levying Properties Unreasonably and Unnecessarily Levying Properties

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he erroneously made the levy, the same cannot be looked upon with malicious intent although effected unreasonably. The withdrawal of notice of levy on execution dated June 9, 1989, filed by the respondent sheriff to rectify his error shows his lack of malice and serves to mitigate his liability. DISPOSITION: A fine of P5,000.00 is imposed on respondent and warned that a repetition of the same or of any act calling for disciplinary action, will be dealt with more severely. Secretary of Justice that their appeal was filed beyond the reglementary period. Instead, it urged that the Secretary of Justice should have overlooked this mere technicality and ruled on its petition on the merits. Unfortunately, its petition for review was dismissed by the Court of Appeals for being formally deficient as it was not accompanied by certified true copies of the assailed Resolutions of the Secretary of Justice. The petitioner moved for reconsideration but it was denied. ISSUE 1. WON the CA erred in dismissing Petitioners appeal 2. WON petitioner will suffer irreparable damage if the ordinance be not declared null and void and is allowed to be enforced retroactively HELD 1. NO. The CA erred in dismissing the petitioners appeal on the ground that it was formally deficient. It is clear from the records that the petitioner exerted due diligence to get the copies of its appealed Resolutions certified by the Department of Justice, but failed to do so on account of typhoon Loleng. Under the circumstances, respondent appellate court should have tempered its strict application of procedural rules in view of the fortuitous event considering that litigation is not a game of technicalities. NONETHELESS, we hold that the petition should be dismissed as the appeal of the petitioner with the Secretary of Justice is already time-barred. The applicable law is Section 187 of the 1991 Local Government Code which provides: SEC. 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings. - The procedure for the approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the receipt of the appeal: Provided, however, That such appeal shall not have the effect of suspending the effectivity of the ordinance and accrual and payment of the tax, fee or charge levied therein: Provided, finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings. The aforecited law requires that an appeal of a tax ordinance or revenue measure should be made to the Secretary of Justice within thirty (30) days from effectivity of the ordinance and even during its pendency, the effectivity of the assailed ordinance shall not be suspended. In the case at bar, Municipal

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Ordinance No. 28 took effect in October 1996. Petitioner filed its appeal only in December 1997, more than a year after the effectivity of the ordinance in 1996. Clearly, the Secretary of Justice correctly dismissed it for being time-barred. At this point, it is apropos to state that the timeframe fixed by law for parties to avail of their legal remedies before competent courts is not a mere technicality that can be easily brushed aside. The periods stated in Section 187 of the Local Government Code are mandatory. Ordinance No. 28 is a revenue measure adopted by the to fix and collect public market stall rentals. Being its lifeblood, collection of revenues by the government is of paramount importance. The funds for the operation of its agencies and provision of basic services to its inhabitants are largely derived from its revenues and collections. Thus, it is essential that the validity of revenue measures is not left uncertain for a considerable length of time. Hence, the law provided a time limit for an aggrieved party to assail the legality of revenue measures and tax ordinances. In a last ditch effort to justify its failure to file a timely appeal with the Secretary of Justice, the petitioner contends that its period to appeal should be counted not from the time the ordinance took effect in 1996 but from the time its members were personally given copies of the approved ordinance in November 1997. It insists that it was unaware of the approval and effectivity of the subject ordinance in 1996 on two (2) grounds: first, no public hearing was conducted prior to the passage of the ordinance and, second, the approved ordinance was not posted. Petitioners bold assertion that there was no public hearing conducted prior to the passage of Kautusan Blg. 28 is belied by its own evidence. In petitioners two (2) communications with the Secretary of Justice, it enumerated the various objections raised by its members before the passage of the ordinance in several meetings called by the Sanggunian for the purpose. These show beyond doubt that petitioner was aware of the proposed increase and in fact participated in the public hearings therefor. The respondent municipality likewise submitted the Minutes and Report of the public hearings conducted by the Sangguniang Bayans Committee on Appropriations and Market on February 6, July 15 and August 19, all in 1996, for the proposed increase in the stall rentals. Petitioner cannot gripe that there was practically no public hearing conducted as its objections to the proposed measure were not considered by the Sangguniang Bayan. To be sure, public hearings are conducted by legislative bodies to allow interested parties to ventilate their views on a proposed law or ordinance. These views, however, are not binding on the legislative body and it is not compelled by law to adopt the same. Sanggunian members are elected by the people to make laws that will promote the general interest of their constituents. They are mandated to

Procedure for Approval and Effectivity of Tax Ordinance and Revenue Measures; Mandatory Public Hearings
HAGONOY MARKET VENDORS ASSOC. V. MUNICIPALITY OF HAGONOY 376 SCRA 376 PUNO GIULIA
FACTS - The Sangguniang Bayan of Hagonoy, Bulacan, enacted an ordinance, Kautusan Blg. 28, which increased the stall rentals of the market vendors in Hagonoy. Article 3 provided that it shall take effect upon approval. - In the last week of November, 1997, the petitioners members were personally given copies of the approved Ordinance and were informed that it shall be enforced in January, 1998. The petitioners President filed an appeal with the Secretary of Justice assailing the constitutionality of the tax ordinance. Petitioner claimed it was unaware of the posting of the ordinance. - Respondent opposed the appeal. It contended that the ordinance took effect on and that the ordinance, as approved, was posted as required by law. Hence, it was pointed out that petitioners appeal, made over a year later, was already time-barred. - The Secretary of Justice dismissed the appeal on the ground that it was filed out of time, i.e., beyond thirty (30) days from the effectivity of the Ordinance on October 1, 1996, as prescribed under Section 187 of the 1991 Local Government Code. Citing the case of Taada vs. Tuvera, the Secretary of Justice held that the date of effectivity of the subject ordinance retroacted to the date of its approval in October 1996, after the required publication or posting has been complied with, pursuant to Section 3 of said ordinance. - After its motion for reconsideration was denied, petitioner appealed to the Court of Appeals. Petitioner did not assail the finding of the

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use their discretion and best judgment in serving the people. Parties who participate in public hearings to give their opinions on a proposed ordinance should not expect that their views would be patronized by their lawmakers. On the issue of publication or posting, Section 188 of the Local Government Code provides: Section 188. Publication of Tax Ordinance and Revenue Measures. Within ten (10) days after their approval, certified true copies of all provincial, city, and municipal tax ordinances or revenue measures shall be published in full for three (3) consecutive days in a newspaper of local circulation; Provided, however, That in provinces, cities and municipalities where there are no newspapers of local circulation, the same may be posted in at least two (2) conspicuous and publicly accessible places. The records is bereft of any evidence to prove petitioners negative allegation that the subject ordinance was not posted as required by law. In contrast, the respondent Sangguniang Bayan of the , Bulacan, presented evidence which clearly shows that the procedure for the enactment of the assailed ordinance was complied with. 2. NO. Finally, even on the substantive points raised, the petition must fail. Section 6c.04 of the 1993 Municipal Revenue Code and Section 191 of the Local Government Code limiting the percentage of increase that can be imposed apply to tax rates, not rentals. Neither can it be said that the rates were not uniformly imposed or that the public markets included in the Ordinance were unreasonably determined or classified. To be sure, the Ordinance covered the three (3) concrete public markets: the two-storey Bagong Palengke, the burnt but reconstructed Lumang Palengke and the more recent Lumang Palengke with wet market. However, the Palengkeng Bagong Munisipyo or Gabaldon was excluded from the increase in rentals as it is only a makeshift, dilapidated place, with no doors or protection for security, intended for transient peddlers who used to sell their goods along the sidewalk. Dispositive Petition dismissed.

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G.R. No. 156252 CHICO-NAZARIO, June 27, 2006 GLAISA
NATURE Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, assailing the Order of the RTC dismissing petitioners Petition for Injunction, and the Order denying petitioners Motion for Reconsideration. FACTS - Coca-Cola Bottlers Philippines, Inc. is a corporation engaged in the business of manufacturing and selling beverages and maintains a sales office located in the City of Manila. - City Mayor of Manila approved Tax Ordinance No. 7988 increased the tax rates applicable to certain establishments operating within the territorial jurisdiction of the City of Manila. - Petitioner filed a Petition before the DOJ questioning the constitutionality or legality of Section 21 of Tax Ordinance No. 7988. - DOJ Secretary issued a Resolution declaring Tax Ordinance No. 7988 null and void and without legal effect since the respondents failed to file their comments and present documentary evidence to show that the mandatory requirement of law on publication has been met. - The City of Manila failed to file a MFR nor lodge an appeal of said Resolution, thus the Resolution of the DOJ Secretary has lapsed into finality. - Lawyer of Singer Sewing Machine wrote BLGF requesting for an opinion on whether the Office of the City Treasurer of Manila has the right to enforce Tax Ordinance No. 7988 despite the Resolution of the DOJ Secretary. BLFG declared the Ordinance void. - Respondents continued to assess petitioner business tax for the year 2001 based on the tax rates prescribed under Tax Ordinance No. 7988. Thus, petitioner filed a Complaint with the RTC of Manila praying that respondents be enjoined from implementing the aforementioned tax ordinance. Granted. - During the pendency of the said case, the City Mayor of Manila approved Tax Ordinance No. 8011 entitled, An Ordinance Amending Certain Sections of Ordinance No. 7988. Said tax ordinance was again challenged by petitioner before the DOJ through a Petition questioning the legality of the aforementioned tax ordinance on the grounds that (1) said tax ordinance amends a tax ordinance previously declared null and void and without legal effect by the DOJ; and (2) said tax ordinance was likewise not published upon its approval. - DOJ Secretary issued a Resolution declaring Tax Ordinance No. 8011 null and void and legally not existing it being a mere amendatory ordinance of Ordinance No. 7988. - The City of Manila appealed the DOJ Resolution. RTC dismissed it for lack of jurisdiction. ISSUE WON Tax Ordinance No. 7988 is null and void and of no legal effect. HELD - YES. It is undisputed from the facts of the case that Tax Ordinance No. 7988 has already been declared by the DOJ Secretary, in its Order, dated 17 August 2000, as null and void and without legal effect due to respondents failure to satisfy the requirement that said ordinance be published for three consecutive days as required by law. Neither is there quibbling on the fact that the said Order of the DOJ was never appealed by the City of Manila, thus, it had attained finality after the lapse of the period to appeal. - Furthermore, the RTC of Manila, Branch 21, in its Decision dated 28 November 2001, reiterated the findings of the DOJ Secretary that respondents failed to follow the procedure in the enactment of tax measures as mandated by Section 188 of the Local Government Code of 1991, in that they failed to publish Tax Ordinance No. 7988 for three consecutive days in a newspaper of local circulation. From the foregoing, it is evident that Tax Ordinance No. 7988 is null and void as said ordinance was published only for one day in the 22 May 2000 issue of the Philippine Post in contravention of the unmistakable directive of the Local Government Code of 1991. - Despite the nullity of Tax Ordinance No. 7988, the court a quo, in the assailed Order, dated 8 May 2002, went on to dismiss petitioners case on the force of the enactment of Tax Ordinance No. 8011, amending Tax Ordinance No. 7988. Significantly, said amending ordinance was likewise declared null and void by the DOJ Secretary in a Resolution, dated 5 July 2001, elucidating that [I]nstead of amending Ordinance No. 7988, [herein] respondent should have enacted another tax measure which strictly complies with the requirements of law, both procedural and substantive. The passage of the assailed ordinance did not have the effect of curing the defects of Ordinance No. 7988 which, any way, does not legally exist. Said Resolution of the DOJ Secretary had, as well, attained finality by virtue of the dismissal with finality by this Court of respondents Petition for Review on Certiorari in G.R. No. 157490 assailing the dismissal by the RTC of Manila, Branch 17, of its appeal due to lack of jurisdiction in its Order, dated 11 August 2003. - This Court must reverse the Order of the RTC of Manila, Branch 21, dismissing petitioners case as there is no basis in law for such dismissal. The amending law, having been declared as null and void, in legal contemplation, therefore, does not exist.

Publication of Tax Ordinances and Revenue Measures


COCA-COLA BOTTLERS PHILIPPINES, INC v. CITY OF MANILA

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Furthermore, even if Tax Ordinance No. 8011 was not declared null and void, the trial court should not have dismissed the case on the reason that said tax ordinance had already amended Tax Ordinance No. 7988. As held by this Court in the case of People v. Lim, if an order or law sought to be amended is invalid, then it does not legally exist, there should be no occasion or need to amend it. Disposition WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The Orders of the RTC of Manila, Branch 21, dated 8 May 2002 and 5 December 2002, respectively, are hereby REVERSED and SET ASIDE. full appreciative living values [sic] for the individual condominium occupants and to command better marketable [sic] prices for those occupants who would in the future sell their respective units. Thus, she concluded since the chances of getting higher prices for well-managed common areas of any condominium are better and more effective that condominiums with poor [sic] managed common areas, the corporation activity is a profit venture making [sic]. - From the denial of the protest, the Corporation filed an Appeal with the Regional Trial Court (RTC) of Makati. On 1 March 2000, the Makati RTC Branch 57 rendered a Decision dismissing the appeal for lack of merit. Accepting the premise laid by the City Treasurer, the RTC acknowledged, in sadly risible language: Herein appellant, to defray the improvements and beautification of the common areas, collect [sic] assessments from its members. Its end view is to get appreciate living rules for the unit owners [sic], to give an impression to outsides [sic] of the quality of service the condominium offers, so as to allow present owners to command better prices in the event of sale. With this, the RTC concluded that the activities of the Corporation fell squarely under the definition of business under Section 13(b) of the Local Government Code, and thus subject to local business taxation. - On 7 June 2002, the Court of Appeals Special Sixteenth Division rendered the Decision now assailed before this Court. The appellate court reversed the RTC and declared that the Corporation was not liable to pay business taxes to the City of Makati. In doing so, the Court of Appeals delved into jurisprudential definitions of profit, and concluded that the Corporation was not engaged in profit. For one, it was held that the very statutory concept of a condominium corporation showed that it was not a juridical entity intended to make profit, as its sole purpose was to hold title to the common areas in the condominium and to maintain the condominium. - Hence this appeal to the SC. ISSUE/S WON the City of Makati may collect business taxes on condominium corporations. HELD 1. NO. Our careful examination of the record reveals a highly disconcerting fact. At no point has the City Treasurer been candid enough to inform the Corporation, the RTC, the Court of Appeals, or this Court for that matter, as to what exactly is the precise statutory basis under the Makati Revenue Code for the levying of the business tax on petitioner. We have examined all of the pleadings submitted by the City Treasurer in all the antecedent judicial proceedings,

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as well as in this present petition, and also the communications by the City Treasurer to the Corporation which form part of the record. Nowhere therein is there any citation made by the City Treasurer of any provision of the Revenue Code which would serve as the legal authority for the collection of business taxes from condominiums in Makati. - Local tax on businesses is authorized under Section 143 of the Local Government Code. The word business itself is defined under Section 131(d) of the Code as trade or commercial activity regularly engaged in as a means of livelihood or with a view to profit. This definition of business takes on importance, since Section 143 allows local government units to impose local taxes on businesses other than those specified under the provision. Moreover, even those business activities specifically named in Section 143 are themselves susceptible to broad interpretation. For example, Section 143(b) authorizes the imposition of business taxes on wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature. - The Condominium Act imposes several limitations on the condominium corporation that prove crucial to the disposition of this case. Under Section 10 of the law, the corporate purposes of a condominium corporation are limited to the holding of the common areas, either in ownership or any other interest in real property recognized by law; to the management of the project; and to such other purposes as may be necessary, incidental or convenient to the accomplishment of such purpose. Further, the same provision prohibits the articles of incorporation or by-laws of the condominium corporation from containing any provisions which are contrary to the provisions of the Condominium Act, the enabling or master deed, or the declaration of restrictions of the condominium project. - Obviously, none of these stated corporate purposes are geared towards maintaining a livelihood or the obtention of profit. Even though the Corporation is empowered to levy assessments or dues from the unit owners, these amounts collected are not intended for the incurrence of profit by the Corporation or its members, but to shoulder the multitude of necessary expenses that arise from the maintenance of the Condominium Project. Just as much is confirmed by Section 1, Article V of the Amended By-Laws, which enumerate the particular expenses to be defrayed by the regular assessments collected from the unit owners. These would include the salaries of the employees of the Corporation, and the cost of maintenance and ordinary repairs of the common areas. - Still, the City Treasurer has not posited the claim that the Corporation is engaged in business activities beyond the statutory purposes of a condominium corporation. The assessment appears to be based solely on the Corporations collection of assessments from unit owners, such assessments being utilized to

Protest of Assessment Defective Assessment


YAMANE V. BA LEPANTO CONDOMINIUM CORP. GR No. 154993 Puno, J.;October 25, 2005 TITO ROMY
NATURE Appeal by certiorari CA decision FACTS - Respondent BA-Lepanto Condominium Corporation (the Corporation) is a duly organized condominium corporation constituted in accordance with the Condominium Act, which owns and holds title to the common and limited common areas of the BA-Lepanto Condominium (the Condominium), situated in Paseo de Roxas, Makati City. Its membership comprises the various unit owners of the Condominium. - On 15 December 1998, the Corporation received a Notice of Assessment dated 14 December 1998 signed by the City Treasurer. The Notice of Assessment stated that the Corporation is liable to pay the correct city business taxes, fees and charges, computed as totaling P1,601,013.77 for the years 1995 to 1997. The Notice of Assessment was silent as to the statutory basis of the business taxes assessed. The assessment was protested as not being based on law as the Corporation is a non-profit corporation. - The protest was rejected by the City Treasurer in a letter dated 4 March 1999. She insisted that the collection of dues from the unit owners was effected primarily to sustain and maintain the expenses of the common areas, with the end in view [sic] of getting

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defray the necessary expenses for the Condominium Project and the common areas. There is no contemplation of business, no orientation towards profit in this case. Hence, the assailed tax assessment has no basis under the Local Government Code or the Makati Revenue Code, and the insistence of the city in its collection of the void tax constitutes an attempt at deprivation of property without due process of law. Disposition Petition is denied. quarter of 1999 up to the 3rd quarter of 2000. Its tax payments for the 2nd, 3rd, and 4th quarter of 1999, and 1st and 2nd quarter of 2000 were made under protest. - Allied Banking made written protest to the City Treasurer assailing Sec 3 of ordinance as null and void as it is violative of the equal protection and uniformity of taxation clauses of the Constitution and that proviso is unjust, excessive, oppressive, unreasonable, confiscatory and contrary to Section 130 of the Local Government Code which provides: Section 130. Fundamental Principles. The following fundamental principles shall govern the exercise of the taxing and revenue-raising powers of local government units: (a) Taxation shall be uniform in each local government unit; (b) Taxes, fees, charges and other impositions shall: (1) be equitable and based as far as practicable on the taxpayers ability to pay; (2) be levied and collected only for public purposes; (3) not be unjust, excessive, oppressive, or confiscatory; (4) not be contrary to law, public policy, national economic policy, or in restraint of trade; - 2000 > RTC > petition for prohibition and declaratory relief filed for the declaration of nullity of Section 3 of the ordinance enjoining of Quezon City Treasurer, Quezon City Assessor, and City Mayor of Quezon City from further implementing the ordinance; refund and attys fees - 2001 > Quezon City Govt enacted Ordinance No. SP1032, S-2001 which repealed the assailed proviso in Section 3 of the 1995 Ordinance because the implementation of the Section 3 creates a situation where owners of newly acquired land for remuneratory consideration beginning January 1, 1996 and forward will have to pay higher taxes than its adjoining/adjacent lot or lots in the adjoining blocks, or nearby lots within its immediate vicinity which have remained undisturbed, not having been sold, ceded, transferred, and/or conveyed - Allied Banking opposed the motion to dismiss since its claim for refund and attorneys fees had not been mooted, and the trial court still had to determine if Section 3 is null and void ab initio and perforce, may not be enforced during the intervening period from the time of its enactment until the time of its repeal. Quezon City Govt maintained that assailed proviso remained in full force and effect until the date of its repeal, based on the rule that a statute is construed prospectively unless the legislative intent was to give it retrospective application. - 2002:> RTC> granted Quezon City Govts motion to dismiss as there is no need for this Court to resolve whether the subject Ordinance is null and void as the same was already declared to be violative of, and

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repugnant to the uniformity rule on taxation by the Quezon City Council itself thru its pronouncements in Quezon City Ordinance No. 1032, Series of 2001 ISSUES 1. WON Allied Banking must exhaust administrative remedies 2. WON Section 3, Quezon City Ordinance No. 357, Series of 1995, which was abrogated for being UNCONSTITUTIONAL can be the basis of collecting real estate taxes prior to its repeal HELD 1. YES Petitioners claim for refund must be lodged with the Local Board of Assessment Appeals, if it is not barred by the statute of limitations. 2. NO Ratio Accordingly, this Court holds that the proviso directing that the real property tax be based on the actual amount reflected in the deed of conveyance or the prevailing BIR zonal value is invalid not only because it mandates an exclusive rule in determining the fair market value but more so because it departs from the established procedures stated in the Local Assessment Regulations No. 1-92 and unduly interferes with the duties statutorily placed upon the local assessor[ by completely dispensing with his analysis and discretion which the Code and the regulations require to be exercised. An ordinance that contravenes any statute is ultra vires and void. Reasoning This Court holds that the proviso in question is invalid as it adopts a method of assessment or appraisal of real property contrary to the Local Government Code, its Implementing Rules and Regulations and the Local Assessment Regulations No. 1-92[46] issued by the Department of Finance. - Real properties shall be appraised at the current and fair market value prevailing in the locality where the property is situated and classified for assessment purposes on the basis of its actual use. Fair market value is the price at which a property may be sold by a seller who is not compelled to sell and bought by a buyer who is not compelled to buy, taking into consideration all uses to which the property is adapted and might in reason be applied. The criterion established by the statute contemplates a hypothetical sale. Hence, the buyers need not be actual and existing purchasers. - Reyes v. Almanzor > assessors, in fixing the value of real property, have to consider all the circumstances and elements of value, and must exercise prudent discretion in reaching conclusions. In this regard, Local Assessment Regulations No. 1-92 establishes the guidelines to assist assessors in classifying, appraising and assessing real property. - Local Assessment Regulations No. 1-92 suggests three approaches in estimating the fair market value,

Real Property Taxation Valuation of Real Property


ALLIED BANKING CORP (AS TRUSTEE FOR THE TRUST FUND OF CAP) V QUEZON CITY GOVT 472 SCRA 303 CARPIO MORALES; October 11, 2005 OWEN
NATURE Appeal by Certiorari of Resolution issued by RTC Quezon City dismissing the petition for prohibition and declaratory relief of Allied Banking Corporation FACTS - 1995 > Quezon City Govt enacted City Ordinance No. 357 containing general revision of real property assessments using as basis the newly approved schedule applying the new assessment level of 15% for residential and 40% for commercial and industrial classification of the 1993 Quezon City Revenue Code to determine the assessed value of the land Provided that parcels of land sold, ceded, transferred and conveyed for remuneratory consideration after the effectivity of this revision shall be subject to real estate tax based on the actual amount reflected in the deed of conveyance or the current approved zonal valuation of the BIR prevailing at the time of sale, cession, transfer and conveyance, whichever is higher, as evidenced by the certificate of payment of the capital gains tax issued (Sec 3). - 1998 > Allied Banking purchased from Natividad a 1,000 sqm land in Aurora Boulevard, Quezon City for P38M. Prior to the sale, Natividad had been paying the total amount of P85,050.00 as annual real property tax based on the propertys fair market value of P4,500,000.00 and assessed value of P1,800,000.00 under Tax Declaration No. D-102-03778. After acquisition, Allied Babking was required to pay P102K as quarterly real estate tax (or P410K annually) under Tax Declaration No. D-102-03780 which pegged the market value of the property at P38,000,000.00 the consideration appearing in the Deed of Absolute Sale, and its assessed value at P15,200,000.00. Allied Banking paid quarterly real estate tax from the 1st

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namely: (1) the sales analysis or market data approach; (2) the income capitalization approach; and (3) the replacement or reproduction cost approach. (1) sales analysis approach > the price paid in actual market transactions is considered by taking into account valid sales data accumulated from among the various sources stated in Sections 202, 203, 208, 209, 210, 211 and 213 of the Code. (2) income capitalization approach > the value of an income-producing property is no more than the return derived from it. An analysis of the income produced is necessary in order to estimate the sum which might be invested in the purchase of the property. (3) reproduction cost approach > is a factual approach used exclusively in appraising manmade improvements such as buildings and other structures, based on such data as materials and labor costs to reproduce a new replica of the improvement. - Given these different approaches to guide the assessor, it can readily be seen that the Code did not intend to have a rigid rule for the valuation of property, which is affected by a multitude of circumstances which no rule could foresee or provide for. Thus, what a thing has cost is no singular and infallible criterion of its market value. - Using the consideration appearing in the deed of conveyance to assess or appraise real properties is not only illegal since the appraisal, assessment, levy and collection of real property tax shall not be let to any private person, but it will completely destroy the fundamental principle in real property taxation that real property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it. Necessarily, allowing the parties to a private sale to dictate the fair market value of the property will dispense with the distinctions of actual use stated in the Code and in the regulations. Disposition Petition is GRANTED. Section 3 of Quezon City Ordinance No. 357, Series of 1995 is declared invalid. Petition for Certiorari under Rule 65 (seeking to set aside ombudsmans resolution that dismissed/ suspended petitioners from government office) FACTS A general revision of assessment was conducted by the Office of the City Assessor in 1988 and sometime thereafter. Notices of assessment together with the new tax declarations were subsequently sent to the property owners. Thereafter, Callanta, et al., without the authority from LBAA, reassessed the values of certain properties. The assessment resulted in the reduction of assessed values of the properties. The City of Cebu simultaneously filed criminal and administrative charges against the officers and staff of the City Assessor's Office for violations of the Real Property Tax Code, gross negligence or willful underassessment of real properties within the city's taxing jurisdiction and for violation of the Anti-Graft and Corrupt Practices Act, causing undue injury to the City Government by giving private persons unwarranted benefits, advantages or preferences in the discharge of their official and administrative functions through manifest partiality, evident bad faith or gross inexcusable negligence by reassessing the real properties without any authority whatsoever, thereby resulting in the reduction of tax assessments to the prejudice of the city government. Defense: acts complained of were done within the bounds of their official duties and functions. The Law upon which the complaints were based does not prohibit the Assessor from either correcting from whatever error or flaw he and his deputies may have made. Also, they have not derived any benefit from the adjustments nor caused injury to any party particularly the City of Cebu. The general revision of real property assessments for the City of Cebu has not been completed nor has the City Assessor certified its completion to the SOF, thus taxes under these revised tax declarations are not yet due, had not yet accrued, are not yet collectible and cannot serve as basis for alleged injury. The deputy ombudsman, ruling purely on the administrative aspect of the cases, held in the assailed Resolution that approval by the SOF is not necessary for the assessments to take effect, and the taxes thereunder to accrue and become payable. In addition, even no law expressly prohibits the local assessor or his authorized deputies from making corrections or adjustments in assessments, the unrestricted exercise of such authority in all stages of the appraisal assessment process would open the floodgates to corruption. Besides, the assessments were done pursuant to the general revision; hence, requests for readjustment are effectively petitions for reappraisal reassessment which are not allowed under the law. Instead, appeal should have been made to the LBAA. Thus, the dismissal from service.

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ISSUE/S 1. WON officials and employees of the Office of the City Assessor can reduce the new assessed values of real properties upon requests of the affected property owners (WON petitioners can accommodate requests for reconsideration of the revised assessments) HELD 1. NO Ratio To forestall the practice of initially setting unreasonably high reassessment values only to eventually change them to unreasonably lower values upon requests of property owners, the law gives no such authority to the city assessor or his subalterns. Seemingly innocuous occasions for mischief and veiled opportunities for graft should be excised from the public system. Built-in checks should be zealously observed so that the ingenious and shrewd cannot circumvent them and the audacious cannot violate them with impunity. Reasoning PD 464, Sec. 22: Valuation of Real Property. Upon the discovery of real property or during the general revision of property assessments or at any time when requested by the person in whose name the property is declared, the provincial or city assessor or his authorized deputy shall make an appraisal and assessment of the real property listed and described in the declaration irrespective of any previous assessment or taxpayer's valuation thereon: Provided, however, That the assessment of real property shall not be increased oftener once every five years in the absence of new improvements increasing the value of said property or of any change in its use, except as otherwise provided. Sec. 22 clearly provides 3 occasions when assessments of real properties may be made by the local assessor: 1) upon the discovery of real property; 2) during the general revision of property assessments as provided in Section 21 of the Code; and 3) at anytime when requested by the person in whose name the property is declared. In the case at bar, the second instance gave rise to the revised assessed values for which the property owners subsequently sought reconsideration. Sec. 30 of the same Code is equally clear that the aggrieved owners should have brought their appeals before the LBAA. Unfortunately, despite the advice to this effect contained in their respective notices of assessment, the owners chose to bring their requests for a review/readjustment before the city assessor, a remedy not sanctioned by the law. To allow this procedure would indeed invite corruption in the system of appraisal and assessment. It conveniently courts a graft-prone situation where values of real property may be initially set unreasonably high, and then subsequently reduced upon the request of a property owner. In the latter instance, allusions of a possible covert, illicit trade-off cannot be avoided, and

CALLANTA V. OFFICE OF THE OMBUDSMAN 285 SCRA 648, 663 PANGANIBAN; January 30, 1998 MAIA
NATURE

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in fact can conveniently take place. Such occasion for mischief must be prevented and excised from our system. To make the same appraisal and assessment upon the request of the property owners who were not satisfied with the result of the first valuation of their property is grossly out of context in the application of the third instance allowed by Sec. 22. What the property owners involved were actually asking were practically a reappraisal and reassessment of the properties (because an appraisal and assessment had already been made under the second instance and their request was prompted by the receipt of the written notice of such valuation), the allowance for which is nowhere to be discerned in the provisions of Sec. 22. The Court observes that the old values of some properties were increased by more than 1,000% (or 10 times) in the general revision, but were reduced to only about half under the unauthorized adjustments. The large discrepancies seem to indicate a tendency to overvalue initially and thereafter to reduce the increases upon request of the property owner affected. To avoid this dubious, suspicious, bribable and compromising situation, the law itself specifically provided an appellate body, the LBAA, before which property owners may seek relief. Neither habit nor good faith can amend this appellate procedure provided under the law. Whenever the local assessor sends a notice to the owner or lawful possessor of real property of its revised assessed value, the former shall thereafter no longer have any jurisdiction to entertain any request for a review or readjustment. The appropriate remedy is appeal to the LBAA. it is an instrumentality of the government performing governmental functions, and that the Local Govt Code (Sec 133) prevents LGU from taxing the National Government, its agencies and instrumentalities, and local government units. - Section 133. Common Limitations on the Taxing Powers of Local Government Units. -- Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: a) x x x o) Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, and local government units - The City contended that MCIAA is not an instrumentality of the government but merely a government owned corporation performing proprietary functions, whose tax exemption privilege has been withdrawn by virtue of Sections 193 and 234 of the Local Government Code. - Section 193. Withdrawal of Tax Exemption Privilege. Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons whether natural or juridical, including government-owned or controlled corporations, except local water districts, cooperatives duly registered under RA No. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code - Section 234. Exemptions from Real Property Taxes. x x x (a) xxx xxx (e) xxx Except as provided herein, any exemption from payment of real property tax previously granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations are hereby withdrawn upon the effectivity of this Code - MCIAA paid under protest. It also filed a Petition for Declaratory Relief with the Regional Trial Court. It contended that by the nature of its powers and functions, it has the footing of an agency or instrumentality of the national government. The RTC denied the petition, citing that close reading of the LGC provides the express cancellation and withdrawal of tax exemptions of GOCCs. ISSUE/S 1. WON MCIAA is exempted from realty taxes HELD 1. NO Reasoning The states have no power by taxation or otherwise, to retard, impede, burden or in any manner control the operation of constitutional laws enacted by Congress to carry into execution the powers vested in the federal government. This doctrine emanates from

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the supremacy of the National Government over local governments. Otherwise, mere creatures of the State can defeat National policies thru extermination of what local authorities may perceive to be undesirable activities or enterprise using the power to tax as a tool for regulation - Tax statutes must be construed strictly against the government and liberally in favor of the taxpayer. But since taxes are what we pay for civilized society,or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken. Elsewise stated, taxation is the rule, exemption therefrom is the exception. However, if the grantee of the exemption is a political subdivision or instrumentality, the rigid rule of construction does not apply because the practical effect of the exemption is merely to reduce the amount of money that has to be handled by the government in the course of its operations - There can be no question that under Section 14 of R.A. No. 6958 the petitioner is exempt from the payment of realty taxes. However, exemption may thus be withdrawn at the pleasure of the taxing authority. . The only exception to this rule is where the exemption was granted to private parties based on material consideration of a mutual nature, which then becomes contractual and is thus covered by the non-impairment clause of the Constitution. - Sec 133 of the Local Govt Code provides for a limitation on the LGUs power to tax. Under the said provision, it cannot demand any tax, fee, or charge. Among these taxes is the real property tax, which is governed by Sec 232 of said Code - SEC. 232. Power to Levy Real Property Tax. A province or city or a municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property such as land, building, machinery, and other improvements not hereafter specifically exempted - Section 234 of the LGC provides for the exemptions from payment of real property taxes and withdraws previous exemptions therefrom granted to natural and juridical persons, including government-owned and controlled corporations, except as provided therein. Of note is letter a) of said provision - Section 234. Exemptions from Real Property Taxes a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof had been granted, for consideration or otherwise, to a taxable person - Thus, reading together Secs. 133, 232 & 234 of the LGC, we conclude that as a general rule, as laid down in Sec. 133 the taxing powers of LGUs cannot extend to the levy of "taxes, fees, and charges of any kind of the National Government, its agencies and

GOCC v. Government Instrumentalities


MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY V. MARCOS 261 SCRA 667 DAVIDE; September 11, 1996 DA
NATURE Petition for review on certiorari under Rule 45 FACTS - Mactan Cebu International Airport Authority (MCIAA) was created by virtue of Republic Act 6958. It also granted them exemption from payment of realty taxes. - The office of the treasurer in Cebu demanded payment for realty taxes on several parcels of land belonging to MCIAA. MCIAA objected since it claims it is exempt by virtue of its charter. It also asserted that

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instrumentalities, and local government units"; however, pursuant to Sec. 232, provinces, cities, municipalities in the Metropolitan Manila Area may impose the real prop tax except on "real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial used thereof has been granted, for consideration or otherwise, to a taxable person", as provided in item (a) of the first paragraph of Sec. 234. - For petitioner to be exempt, he must show that the lands in question fall within 234 (a). Also, it is petitioners theory that the lands fall under 234 (a) since the term Republic of the Philippines could be expanded to embrace its instrumentalities and agencies. This view is untenable. In the first place, the petitioners claim that it is an instrumentality of the Government is based on Section 133(o), which expressly mentions the word instrumentalities; and, in the second place, it fails to consider the fact that the legislature used the phrase National Government, its agencies and instrumentalities in Section 133(o), but only the phrase Republic of the Philippines or any of its political subdivisions in Section 234(a). - The terms "Republic of the Philippines" & "National Government" are not interchangeable. The former is boarder & synonymous w/ "Government of the Republic of the Philippines" w/c the Administrative Code of the 1987 defines as the "corporate governmental entity though which the functions of the government are exercised through at the Philippines, including, saves as the contrary appears from the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the autonomous reason, the provincial, city, municipal or barangay subdivision or other forms of local government." These autonomous regions, provincial, city, municipal or barangay subdivisions" are the political subdivision. - On the other hand, "National Government" refers "to the entire machinery of the central government, as distinguished from the different forms of local Governments." The National Government then is composed of the three great departments the executive, the legislative and the judicial. - An "agency" of the Government refers to "any of the various units of the Government, including a department, bureau, office instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein;" while an "instrumentality" refers to "any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy; usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned and controlled corporations" - If Section 234(a) intended to extend the exception therein to the withdrawal of the exemption from payment of real property taxes under the last sentence of the said section to the agencies and instrumentalities of the National Government mentioned in Section 133(o), then it should have restated the wording of the latter. Yet, it did not. - Is the land in question owned by the Republic and therefore the petitioner is only given beneficial use of it? No, under MCIAA charter, the land in question was transferred to it, indicating a conveyance of ownership. - The petitioner cannot also claim that it was never a taxable person under its Charter. It was only exempted from the payment of real property taxes. The grant of the privilege only in respect of this tax is conclusive proof of the legislative intent to make it a taxable person subject to all taxes, except real property tax - Finally, even if the petitioner was originally not a taxable person for purposes of real property tax, in light of the foregoing disquisitions, it had already become, even if it be conceded to be an agency or instrumentality of the Government, a taxable person for such purpose in view of the withdrawal in the last paragraph of Section 234 of exemptions from the payment of real property taxes, which, as earlier adverted to, applies to the petitioner Disposition Petition denied.

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consolidated her ownership under a petition granted by the Regional Trial Court (RTC) of Quezon City on September 25, 1985.Accordingly, TCT No. 260878 was cancelled and a new one was issued under TCT No. 339476 in the name of Aida Linao. Petitioners Aquino claimed that they learned of the sale only in April 1987 after they were informed by people squatting on the property that Aida Linao was taking steps to eject them. They then filed an action for annulment of title, reconveyance and damages against respondents Quezon City local government, its Treasurer, the Register of Deeds of Quezon City and Aida Linao before the RTC of Quezon City. They charged that the Quezon City local government sold their property without informing them of their tax default, in derogation of the notice requirements of the law. They also impute bad faith upon Aida Linao in buying their property despite knowledge of the infirmities leading to the auction sale. CASE 2: The second case, docketed as G.R. No. 138624, deals with a 407-square meter property located at No. 20 North Road, Cubao, Quezon City under TCT No. 21996 in the name of Solomon Torrado. TCT No. 21996 covers two lots, Lots 7 & 8, but only the latter is the subject of the controversy. According to the Heirs of Solomon Torrado (Petitioner Heirs), Solomon Torrado paid taxes on the improvements on Lot 8 for 1976, 1977, 1978, 1979, 1981 and 1982 but not on the lot itself because the Treasurers Office could not locate the index card for that property. For failure to pay real property taxes on Lot 8 from 1976 to 1982, the City Treasurer sent a Notice of Intent to Sell dated October 6, 1982 to Solomon Torrado to his address indicated in the tax register, which simply states as Butuan City. The notice was returned by reason of Insufficient Address. Next sent was a Notice of Sale of Delinquent Property dated December 10, 1982. This was sent to the same address and similarly returned unclaimed. Thereafter, a public auction for Lot 8 was held on February 23, 1983 and the lot was sold to Veronica Baluyot, the winning bidder. A Notice of Sold Property was subsequently sent to Solomon Torrado to Butuan City, which was returned unclaimed. On May 29, 1985, a Final Bill of Sale was executed by the City Treasurer. On that basis, TCT No. 21996 was cancelled in part and TCT No. 355133, covering Lot 8, was issued in the name of Veronica Baluyot. Veronica Baluyot later mortgaged the property to spouses Corazon and Maximino Uy. For failure to pay the mortgage debt, Lot 8 was foreclosed and TCT No. 355133 was cancelled and substituted with TCT No. 45536 in the name of spouses Uy. Spouses Uy then sold the lot to DNX Corporation and TCT No. 45536 was cancelled and substituted with TCT No. N-162170, in the name of DNX Corporation.

Notice of Delinquency in the Payment of Real Property Tax Posting and Publication
EFREN AQUINO and ANGELICA AQUINO VS. QUEZON CITY (August 03, 2006) AZCUNA, J.: BRY
FACTS CASE 1: The first case deals with a 612-square meter lot in East Avenue Subdivision, Diliman, Quezon City. The lot was formerly owned by petitioner spouses Efren and Angelica Aquino (Petitioners Aquino) under Transfer Certificate of Title (TCT) No. 260878. By their own admission, Petitioners Aquino withheld payment of the real property taxes thereto from 1975 to 1982 as a form of protest against the government of then President Marcos. As a result of the nonpayment, the property was sold by the Quezon City local government, through the Treasurers Office, at public auction on February 29, 1984 to private respondent Aida Linao, the highest bidder. Aida Linao eventually

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Meanwhile, on January 13, 1989, Solomon Torrado commenced an action with the RTC of Quezon City against the spouses Baluyot, the Quezon City local government, the City Treasurer and Register of Deeds. [8] On March 12, 1992, the RTC of Quezon City dismissed the action. ISSUES 1. Whether or not the notice requirements were met. 2. Whether or not lack of publication would nullify the tax sale. 3. Whether or not the notice was in any case void since it was not actually received by petitioners. RULING 1. YES. Ratio (The Supreme Court agreed with petitioners on the contention that there are two notice requirements under the statute but nevertheless the Court was satisfied by evidence presented that the same requirements were met by the respondent Quezon City) There are two notices required and the same were complied with in this case. Sections 65 and 73 of Presidential Decree (P.D.) No. 464 (the Real Property Tax Code then in force) provide: xxx SECTION 65. Notice of delinquency in the payment of the real property tax. Upon the real property tax or any installment thereof becoming delinquent, the provincial or city treasurer shall immediately cause NOTICE OF THE FACT TO BE POSTED AT THE MAIN ENTRANCE OF THE PROVINCIAL BUILDING AND OF ALL MUNICIPAL BUILDINGS OR MUNICIPAL OR CITY HALL AND IN A PUBLIC AND CONSPICUOUS PLACE IN EACH BARRIO OF THE MUNICIPALITY OF THE PROVINCE OR CITY AS THE CASE MAY be. The notice of delinquency shall also be published once a week for three consecutive weeks, in a newspaper of general circulation in the province or city, if any there be, and announced by a crier at the market place for at least three market days. Such notice shall specify the date upon which tax became delinquent, and shall state that personal property may be seized to effect payment. It shall also state that, at any time, before the seizure of personal property, payment may be made with penalty in accordance with the next following section, and further, that unless the tax and penalties be paid before the expiration of the year for which the tax is due, or the tax shall have been judicially set aside, the entire delinquent real property will be sold at public auction, and that thereafter the full title to the property will be and remain with the purchaser, subject only to the right of delinquent taxpayer or any other person in his behalf to redeem the sold property within one year from the date of sale. xxx SECTION 73. Advertisement of sale of real property at public auction. After the expiration of the year for which the tax is due, the provincial or city treasurer shall advertise the sale at public auction of the entire delinquent real property, except real property mentioned in subsection (a) of Section forty hereof, to satisfy all the taxes and penalties due and the costs of sale. Such advertisement shall be made by posting a notice for three consecutive weeks at the main entrance of the provincial building and of all municipal buildings in the province, or at the main entrance of the city or municipal hall in the case of cities, and in a public and conspicuous place in the barrio or district wherein the property is situated, in English, Spanish and the local dialect commonly used, and by announcement at least three market days at the market by crier, and, in the discretion of the provincial or city treasurer, by publication once a week for three consecutive weeks in a newspaper of general circulation published in the province or city. The notice, publication, and announcement by crier shall state the amount of the taxes, penalties and costs of sale; the date, hour, and place of sale, the name of the taxpayer against whom the tax was assessed; and the kind or nature of property and, if land, its approximate areas, lot number, and location stating the street and block number, district or barrio, municipality and the province or city where the property to be sold is situated. Copy of the notice shall forthwith be sent either by registered mail or by messenger, or through the barrio captain, to the delinquent taxpayer, at his address as shown in the tax rolls or property tax record cards of the municipality or city where the property is located, or at his residence, if known to said treasurer or barrio captain: Provided, however, That a return of the proof of service under oath shall be filed by the person making the service with the provincial or city treasurer concerned. Reasoning While the Court agrees with the respondents interpretation12 that there are three methods by which taxes may be enforced, petitioners are correct in insisting that two notices must be sent to the taxpayer concerned. Nevertheless, respondents still prevail because the Court is satisfied that the two-notice requirement has been complied with by the Treasurers Office. Contrary to the stand taken by Petitioners Aquino, despite the provisions of Section 65, the local
12

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government concerned need not post and publish the notice of delinquency, it being sufficient that personal service was done. In Talusan v. Tayag, one of the issues raised was the lack of publication of the notice of delinquency. 2. NO Ratio Unlike land registration proceedings which are in rem, cases involving an auction sale of land for the collection of delinquent taxes are in personam. Personal notice would suffice. Reasoning Petitioners Aquino admit that notice of delinquency was mailed, hence, they cannot complain that their rights were not adequately protected. Publication and posting not being indispensable, there was proper compliance with Section 65. Petitioner Heirs, on the other hand, made no such admission but, on the contrary, argued that no notice of delinquency was prepared by the City Treasurer much less sent to Solomon Torrado. The Court holds, for one, that this is a question of fact that will generally not be resolved on a petition for review. Second, records bear out that a Notice of Intent to Sell dated October 6, 1982 was sent by the Treasurers Office to Solomon Torrado. While this was not captioned as a Notice of Delinquency, its contents sufficiently inform the recipient of the deficiency in real property taxes, and this notice is apart from the subsequent Notice of Sale sent immediately prior to the auction sale. Hence, on the common issue concerning compliance with P.D. No. 464, the Court rules in favor of respondents. 3. NO. Ratio The applicable provision in regard to this issue is found in the last paragraph of Section 73, quoted above. Under said provision, notices of the sale at public auction may be sent to the delinquent taxpayer, either (i) at the address as shown in the tax rolls or property tax record cards of the municipality or city where the property is located or (ii) at his residence, if known to such treasurer or barrio captain. Plainly, Section 73 gives the treasurer the option of where to send the notice of sale. In giving the treasurer the option, nowhere in the wordings is there an indication of a requirement that notice must actually be received by the intended recipient. Compliance by the treasurer is limited to strictly following the provisions of the statute: he may send it at the address of the delinquent taxpayer as shown in the tax rolls or tax records or to the residence if known by him or the barrio captain. Reasoning In both petitions, the City Treasurer opted to comply with the first option. Petitioners Aquino and Petitioner Heirs do not deny that notices were sent to

Respondents argues that here are three remedies in favor of the local government : One method is by distraint of personal property under Sections 65, 68, 70, 71 and 72. The second method is by sale of the delinquent real property itself under Sections 73 to 81. The third method is by filing a case in court under Section 82. Respondents submit that the real property in issue was sold under the second method.

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their or their predecessors address, as shown in the tax records. The named persons in the notices sent by City Treasurer were the correct delinquent taxpayers and were the registered owners of the property subject to tax, albeit the mailing addresses were not to their actual residences. Therefore, the prescribed procedure in auction sales of property for tax delinquency was followed punctiliously. Had the City Treasurer sent the notices to an address other than the one indicated in the tax records, and such address is not the residence known to the treasurer or barangay captain, or if sent to a person who is not the registered owner of the property, then the Court would be able to declare non-compliance with the law. But the fact that petitioners were not able to read their notices is of no consequence to the annulment of the auction sale. Additionally, Petitioner Heirs maintain that the Treasurers Office was already aware that Solomon Torrados address stated in the tax records as Butuan City was insufficient so that the notices could not possibly be sufficient for the notices to reach the recipient. There was however a more complete address indicated in the tax records for the improvements to Lot 8, which was No. 20 North Road, Cubao, Quezon City. Petitioner Heirs argue that the City Treasurer could have used this address instead of repeatedly sending notice to an insufficient address which for certain would be returned unclaimed. The fault herein lies with Solomon Torrado and not with the City Treasurer. Solomon Torrados use in his tax declarations for Lot 8, as well as in TCT No. 21996, the minimal address of Butuan City, is further compounded by the fact that he can no longer be found in Butuan City as he had moved to Quezon City since 1959.[15] He, therefore, had more than 25 years, or 25 opportunities, to amend his address and provide the City Treasurer of a more complete and reliable one. By neglecting to do so, he was aware of the chances he was taking should notices be sent to him by the Treasurers Office. Instead, he maintained the terse address of Butuan City. In contrast, the Treasurers Office cannot be faulted for not sending the notices to Solomon Torrados address at No. 20 North Road, Cubao, Quezon City, which was indicated in his tax declarations to his other properties. As discussed, the last paragraph of Section 73 instructs the treasurer on where to send the notice of sale: either at the address as shown in the tax rolls or property tax record cards of the municipality or city where the property is located or at his residence, if known to such treasurer or barrio captain. Petitioner Heirs have not shown that the City Treasurer or arrio captain actually knew that Solomon Torrados residence was No. 20 North Road, Cubao, Quezon City. Therefore, the City Treasurer could not be blamed for having mailed the notices to the address shown in the tax records, which was in conformity with Section 73.

Page 106 Extent of Levy


DEL ROSARIO V. BASCAR, SUPRA MEL
FACTS - This case originated from a complaint filed with the then Human Settlements Regulatory Commission entitled "Angel Veloso, et al. vs. Esperanza del Rosario, et al." for violation of P.D. No. 957, otherwise known as the Subdivision and Condominium Buyer's Protective Decree. The case was decided against the defendants del Rosario. - Complainants alleged that respondent, Deputy Sheriff is grossly ignorant of the law in implementing the writ of execution of the dispositive portion of the aforecited cost which orders specific performance and hence, is governed by Section 9 of Rule 39 of the Rules of Court. They said that under this Section, no levy of personal or real properties is required but through gross ignorance, respondent executed the writ pursuant to Section 15 of Rule 39 and proceeded to levy on execution three (3) parcels of land having a total market value of P1,236,600.00 of, Miradel Development Corporation wherein Esperanza del Rosario has alleged shares, interests and participation, in order to satisfy the judgment involving specific performance. Complainants alleged further that the levy on execution involved registered lands and hence, must be in accordance with Section 71, R.A. 496 which requires that levy on execution of registered lands must contain a reference to the number of the Certificate of Title of the land to be affected and the volume and page in the registry book where the certificate is registered. - As per respondent: As amply explained by respondent Bascar, his purpose in levying on the three (3) lots was to keep them from being disposed of. He felt it was important to do it since the judgment ordered therein respondents to accept installment payments from the Veloso spouses and to execute the corresponding document of sale as soon as the lots were paid in full. Certainly, the favorable judgment for the Veloso spouses would be frustrated if in the meantime subject lots were transferred to others. In levying on the throe (3) lots of the Corporation, respondent Bascar honestly believed that said lots were derived from those that bad been sold on installment in favor of Angel Veloso and unless these were secured from further disposition the judgment in favor of the latter could no longer be executed. Respondent Bascar might have been wrong in. his belief and conclusion, but he cannot be faulted for having done so under the circumstances of the case. It is noteworthy that complainant Manuel del Rosario exhibited an uncooperative if not antagonistic attitude as he made no attempt to conceal his intention not to abide by the HSRC judgment. ISSUE WON respondents manner properties in question is valid of levying on the

HELD No Ratio The manner in which respondent conducted the levy leaves no room for doubt that he was unmindful of the rule that in the exercise of his ministerial duty of enforcing writs, it was incumbent upon him to ensure that only that portion of a decision decreed in the dispositive part should be the subject of execution, no more, no less. He made no effort to limit the levy to the amount called for in the writ. Respondent had no reason to make a levy of three parcels of land belonging to Miradel Development Corporation after having found that Esperanza del Rosario, one of the respondents in the HSRC case, was treasurer thereof on the pretext of protecting the prevailing parties whom he claims could eventually lose the lots by reason of the sale thereof by complainants to the said corporation. "It should be recalled that a purely ministerial act or duty is one which an officer or tribunal performs in a given state of facts, on a prescribed manner-in obedience to the mandate of legal authority, without regard to, the exercise of his own judgments, upon the propriety or impropriety of the act done (Lamb v. Phipps, 22 Phils. 456). Discretion, on the other hand, is a faculty conferred upon court or official by which he may decide the question either way and still be right (Asuncion v. De Yriarte, 28, Phil. 67)." 1 There is no doubt that respondent acted beyond the bounds of his duty by allocating unto himself the power of the Court to pierce the "veil of corporate" entity and improvidently assuming that since complainant Esperanza del Rosario is the treasurer of the Miradel Development Corporation, they are one and the same. It is well-settled doctrine both in law and equity that as a legal entity, a corporation has a personality distinct and separate from its individual stockholders or members. The mere fact that one is president of a corporation does not render the property he owns or possesses the property of the corporation, since the president, as individual, and the corporation are separate entities (Cruz v. Dalisay, 152 SCRA 483). More importantly, it was not incumbent upon him as sheriff to determine for himself the means how to safeguard the rights of the prevailing party in a case for specific performance. All that he was called upon to do in such instance his to serve the writ of execution with a certified copy of the judgment requiring specific performance upon the party/parties

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against whom the same was rendered and in case of failure to abide, it is at the prevailing party's instance not the sheriff's that the aid of' the court may be sought. There was failure, however, to establish with certainty that the actuation of respondent deputy sheriff was attended with malice and was done so as to prejudice a third party. As the respondent explained, he wanted to protect the interest of the prevailing parties over the lots in controversy. Disposition ACCORDINGLY, a fine of P5,000.00 is hereby imposed on respondent Deputy Sheriff Jose Bascar, Jr., Municipal Trial Court in Cities, Branch 4, Cebu City, for conduct prejudicial to the best interest of the service, payable within thirty (30) days from notice. Respondent s hereby warned that a repetition of the same or of any act calling for disciplinary action, will be dealt with more severely. NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and direct: SECTION 1. All government departments and agencies, including state universities and colleges, government-owned and controlled corporations and local governments units will identify and implement measures in FY 1998 that will reduce total expenditures for the year by at least 25% of authorized regular appropriations for non-personal services items, along the following suggested areas: 1. Continued implementation of the streamlining policy on organization and staffing by deferring action on the following: a. Operationalization of new agencies; b. Expansion of organizational units and/or creation of positions; c. Filling of positions; and d. Hiring of additional/new consultants, contractual and casual personnel, regardless of funding source. 2. Suspension of the following activities: a. Implementation of new capital/infrastructure projects, except those which have already been contracted out; b. Acquisition of new equipment and motor vehicles; c. All foreign travels of government personnel, except those associated with scholarships and trainings funded by grants; d. Attendance in conferences abroad where the cost is charged to the government except those clearly essential to Philippine commitments in the international field as may be determined by the Cabinet; e. Conduct of trainings/workshops/seminars, except those conducted by government training institutions and agencies in the performance of their regular functions and those that are funded by grants; f. Conduct of cultural and social celebrations and sports activities, except those associated with the Philippine Centennial celebration and those involving regular competitions/events; g. Grant of honoraria, except in cases where it constitutes the only source of compensation from government received by the person concerned; h. Publications, media advertisements and related items, except those required by law or those already being undertaken on a regular basis; i. Grant of new/additional benefits to employees, except those expressly and specifically authorized by law; and j. Donations, contributions, grants and gifts, except those given by institutions to victims of calamities. 3. Suspension of all tax expenditure subsidies to all GOCCs and LGUs 4. Reduction in the volume of consumption of fuel, water, office supplies, electricity and other utilities

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5. Deferment of projects that are encountering significant implementation problems 6. Suspension of all realignment of funds and the use of savings and reserves SECTION 2. Agencies are given the flexibility to identify the specific sources of cost-savings, provided the 25% minimum savings under Section 1 is complied with. SECTION 3. A report on the estimated savings generated from these measures shall be submitted to the Office of the President, through the Department of Budget and Management, on a quarterly basis using the attached format. SECTION 4. Pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation, the amount equivalent to 10% of the internal revenue allotment to local government units shall be withheld. SECTION 5. The Development Budget Coordination Committee shall conduct a monthly review of the fiscal position of the National Government and if necessary, shall recommend to the President the imposition of additional reserves or the lifting of previously imposed reserves. SECTION 6. This Administrative Order shall take effect January 1, 1998 and shall remain valid for the entire year unless otherwise lifted. - December 10, 1998, President Joseph E. Estrada issued AO 43, amending Section 4 of AO 372, by reducing to 5% the amount of IRA to be withheld from the LGUs. - Petitioner contends that the President, in issuing AO 372, was in effect exercising the power of control over LGUs. The Constitution vests in the President, however, only the power of general supervision over LGUs, consistent with the principle of local autonomy. Petitioner further argues that the directive to withhold 10% of their IRA is in contravention of Sec.286 of the LGC and of Sec.6 Art.X of the Constitution, providing for the automatic release to each of these units its share in the national internal revenue. - The solicitor general claims on the other hand that AO 372 was issued to alleviate the "economic difficulties brought about by the peso devaluation" and constituted merely an exercise of the President's power of supervision over LGUs. It allegedly does not violate local fiscal autonomy, because it merely directs local governments to identify measures that will reduce their total expenditures for non-personal services by at least 25 percent. Likewise, the withholding of 10% of the LGUs IRA does not violate the statutory prohibition on the imposition of any lien or holdback on their revenue shares, because such withholding is "temporary in nature pending the assessment and evaluation by the Development Coordination Committee of the emerging fiscal situation." ISSUES

Shares of LGUs in the Proceeds of the National Taxes Share in the National Taxes
PIMENTEL V. AGUIRRE, SUPRA G.R. No. 132988 PANGANIBAN;July 19, 2000 EVA

NATURE Petition for Certiorari and Prohibition seeking (1) to annul Section 1 of Administrative Order No. 372, insofar as it requires LGUs to reduce their expenditures by 25% of their authorized regular appropriations for non-personal services; and (2) to enjoin respondents from implementing Section 4 of the Order, which withholds a portion of their internal revenue allotments. FACTS - November 17, 1998, Roberto Pagdanganan filed a Motion for Intervention. At the time, intervenor was the provincial governor of Bulacan, national president of the League of Provinces of the Philippines and chairman of the League of Leagues of Local Governments. - On December 27, 1997, the President issued AO 372. Its full text is as follows: ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998 WHEREAS, the current economic difficulties brought about by the peso depreciation requires continued prudence in government fiscal management to maintain economic stability and sustain the country's growth momentum; WHEREAS, it is imperative that all government agencies adopt cash management measures to match expenditures with available resources;

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1. WON Sec.1 of AO 372 is a valid exercise of the Presidents power of general supervision over local governments. 2. WON Sec.4 is a valid exercise of the President's power of general supervision over local governments. HELD 1. YES 2. NO The Constitution vests the President with the power of supervision, not control, over LGUs. Such power enables him to see to it that LGUs and their officials execute their tasks in accordance with law. While he may issue advisories and seek their cooperation in solving economic difficulties, he cannot prevent them from performing their tasks and using available resources to achieve their goals. He may not withhold or alter any authority or power given them by the law. Thus, the withholding of a portion of internal revenue allotments legally due them cannot be directed by administrative fiat. - The Constitution confines the President's power over local governments to one of general supervision. This provision has been interpreted to exclude the power of control. - In Mondano v. Silvosa, the Court distinguished supervision and control as follows: In administrative law, supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer has done in the performance of his duties and to substitute the judgment of the former for that of the latter." - In Drilon v. Lim, the difference between control and supervision was further delineated. Officers in control lay down the rules in the performance or accomplishment of an act. On the other hand, supervising officials merely see to it that the rules are followed, but they themselves do not lay down such rules, nor do they have the discretion to modify or replace them. They have no discretion on this matter except to see to it that the rules are followed. - Hand in hand with the constitutional restraint on the President's power over local governments is the state policy of ensuring local autonomy. - In Ganzon v. Court of Appeals, local autonomy signified "a more responsive and accountable local government structure instituted through a system of decentralization." The grant of autonomy is intended to "break up the monopoly of the national government over the affairs of local governments, x x x not x x x to end the relation of partnership and interdependence between the central administration and local government units x x x." Paradoxically, local governments are still subject to regulation, however limited, for the purpose of enhancing selfgovernment. - The AO was a "cash management measure" adopted by the government "to match expenditures with available resources," which were presumably depleted at the time due to "economic difficulties brought about by the peso depreciation." Because of a looming financial crisis, the President deemed it necessary to "direct all government agencies, state universities and colleges, GOCCs as well as local governments to reduce their total expenditures by at least 25% along suggested areas mentioned. - Under existing law, LGUs, in addition to having administrative autonomy in the exercise of their functions, enjoy fiscal autonomy as well. Fiscal autonomy means that local governments have the power to create their own sources of revenue in addition to their equitable share in the national taxes released by the national government, as well as the power to allocate their resources in accordance with their own priorities. It extends to the preparation of their budgets, and local officials in turn have to work within the constraints thereof. They are not formulated at the national level and imposed on local governments, whether they are relevant to local needs and resources or not. Hence, the necessity of a balancing of viewpoints and the harmonization of proposals from both local and national officials, who in any case are partners in the attainment of national goals. - Local fiscal autonomy does not however rule out any manner of national government intervention by way of supervision, in order to ensure that local programs, fiscal and otherwise, are consistent with national goals. Significantly, the President, by constitutional fiat, is the head of the economic and planning agency of the government, primarily responsible for formulating and implementing continuing, coordinated and integrated social and economic policies, plans and programs for the entire country. However, under the Constitution, the formulation and the implementation of such policies and programs are subject to "consultations with the appropriate public agencies, various private sectors, and local government units." The President cannot do so unilaterally. - under the LGC there are several requisites before the President may interfere in local fiscal matters: (1) an unmanaged public sector deficit of the national government; (2) consultations with the presiding officers of the Senate and the House of Representatives and the presidents of the various local leagues; and (3) the corresponding recommendation of the secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore, any adjustment in the allotment shall in no case be less than 30% of the collection of national internal revenue taxes of the third fiscal year preceding the current one. - ON FIRST ISSUE: While the wordings of Sec.1 have a rather commanding tone, and while we agree with petitioner that the requirements of Sec.284 of the LGC

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have not been satisfied, we are prepared to accept the solicitor general's assurance that the directive to "identify and implement measures x x x that will reduce total expenditures x x x by at least 25% of authorized regular appropriation" is merely advisory in character, and does not constitute a mandatory or binding order that interferes with local autonomy. The provision is merely an advisory to prevail upon local executives to recognize the need for fiscal restraint in a period of economic difficulty. Indeed, all concerned would do well to heed the President's call to unity, solidarity and teamwork to help alleviate the crisis. It is understood, however, that no legal sanction may be imposed upon LGUs and their officials who do not follow such advice. It is in this light that we sustain the solicitor general's contention in regard to Section 1. - ON SECOND ISSUE: Sec.4 cannot, however, be upheld. A basic feature of local fiscal autonomy is the automatic release of the shares of LGUs in the national internal revenue. This is mandated by no less than the Constitution. The LGC specifies further that the release shall be made directly to the LGU concerned within 5days after every quarter of the year and "shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose." As a rule, the term "shall" is a word of command that must be given a compulsory meaning. The provision is, therefore, imperative. - Section 4 of AO 372, however, orders the withholding of 10% of the LGUs' IRA "pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation" in the country. Such withholding clearly contravenes the Constitution and the law. Although temporary, it is equivalent to a holdback, which means "something held back or withheld, often temporarily." Hence, the "temporary" nature of the retention by the national government does not matter. Any retention is prohibited. NOT RELATED TO THE TOPIC Refutation of Justice Kapunan's Dissent - Justice Kapunan dissents on the grounds that, allegedly, (1) the Petition is premature; (2) AO 372 falls within the powers of the President as chief fiscal officer; and (3) the withholding of the LGUs IRA is implied in the President's authority to adjust it in case of an unmanageable public sector deficit. - First, on prematurity. According to the Dissent, when "the conduct has not yet occurred and the challenged construction has not yet been adopted by the agency charged with administering the administrative order, the determination of the scope and constitutionality of the executive action in advance of its immediate adverse effect involves too remote and abstract an inquiry for the proper exercise of judicial function."

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This is a rather novel theory -- that people should await the implementing evil to befall on them before they can question acts that are illegal or unconstitutional. The real issue here is whether the Constitution and the law are contravened by Section 4 of AO 372, not whether they are violated by the acts implementing it. When an act of the President, who in our constitutional scheme is a coequal of Congress, is seriously alleged to have infringed the Constitution and the laws, as in the present case, settling the dispute becomes the duty and the responsibility of the courts. Besides, the issue that the Petition is premature has not been raised by the parties; hence it is deemed waived. - Second, on the President's power as chief fiscal officer of the country. Justice Kapunan posits that Section 4 conforms with the President's role as chief fiscal officer, who allegedly "is clothed by law with certain powers to ensure the observance of safeguards and auditing requirements, as well as the legal prerequisites in the release and use of IRAs, taking into account the constitutional and statutory mandates." He cites instances when the President may lawfully intervene in the fiscal affairs of LGUs. Precisely, such powers referred to in the Dissent have specifically been authorized by law and have not been challenged as violative of the Constitution. On the other hand, Section 4, as explained earlier, contravenes explicit provisions of the LGC and the Constitution. In other words, the acts alluded to in the Dissent are indeed authorized by law; but, quite the opposite, Section 4 of AO 372 is bereft of any legal or constitutional basis. - Third, on the President's authority to adjust the IRA of LGUs in case of an unmanageable public sector deficit. It must be emphasized that in striking down Section 4, this Court is not ruling out any form of reduction in the IRAs of LGUs. Indeed, as the President may make necessary adjustments in case of an unmanageable public sector deficit, as stated in the main part of this Decision, and in line with Section 284 of the LGC, which Justice Kapunan cites. He, however, merely glances over a specific requirement in the same provision -- that such reduction is subject to consultation with the presiding officers of both Houses of Congress and, more importantly, with the presidents of the leagues of local governments. In addition, Justice Kapunan cites Section 287 of the LGC as impliedly authorizing the President to withhold the IRA of an LGU, pending its compliance with certain requirements. Even a cursory reading of the provision reveals that it is totally inapplicable to the issue at bar. It directs LGUs to appropriate in their annual budgets 20 percent of their respective IRAs for development projects. It speaks of no positive power granted the President to priorly withhold any amount. Dispositive Petition is GRANTED. Respondents and their successors are hereby permanently PROHIBITED from implementing AO Nos. 372 and 43.

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guidelines required (a) the LGUs to identify the projects eligible for funding based on the criteria laid down by the OCD; (b) the LGUs to submit their project proposals to the DILG for appraisal; (c) the project proposals that passed the appraisal of the DILG to be submitted to the OCD for review, evaluation and approval; (d) Upon its approval, the OCD would then serve notice to the DBM for the preparation of the Special Allotment Release Order (SARO) and Notice of Cash Allocation (NCA) to effect the release of funds to the said LGUs. - In the GAA of 2000, P111.778B was allotted as the share of the LGUs in the internal revenue taxes. The GAA of 2000 also contained a proviso earmarking P5B for the LGSEF. The OCD passed Resolutions No. OCD2000-023 (allocating P3.5B to and shared by the provinces, cities, municipalities, and barangays, and the remaining P1.5B shall be earmarked to support the initiatives and local affirmative action projects). An initial release of P2.5B was approved by Pres. Estrada. Subsequently, OCD, now under Pres. Arroyo, promulgated Resolution No. OCD-2001-29 releasing the remaining P2.5B. - Congress failed to enact GAA for 2001, so the GAA of 2000 was deemed re-enacted, together with the IRA of the LGUs and the proviso earmarking P5B for the LGSEF. The OCD adopted Resolution No. OCD-2002001 where P3B is to be allocated according to the modified codal formula and shall be released to provinces, cities, municipalities and barangays, and that P1.9B is earmarked for priority projects, and the remaining P100M LGSEF capability building fund shall be distributed in accordance with the recommendation of the Leagues of Provinces, Cities, Municipalities and Barangays, and approved by the OCD. - Gov. Mandanas wrote to the individual members of the OCD seeking the reconsideration of Resolution No. OCD-2002-001. He also wrote to Pres. Arroyo urging her to disapprove said resolution as it violates the Constitution and the LGC. Pres. Macapagal-Arroyo approved Resolution No. OCD-2002-001. Petitioners Arguments: The assailed provisos in the GAAs and OCD resolutions, insofar as they earmarked P5B of the IRA of the LGUs for 1999, 2000 and 2001 for the LGSEF and imposed conditions for the release thereof, violate the Constitution and the LGC. He invokes Art X, sec 6 of the Constitution as it mandates that the "just share" of the LGUs shall be automatically released to them, and Secs 18 and 286 of the LGC, which enjoin that the "just share" of the LGUs shall be "automatically and directly" released to them "without need of further action". He argues that to subject the distribution and release of the P5B portion of the IRA, classified as the LGSEF, to compliance by the LGUs with the implementing rules and regulations, including the mechanisms and guidelines prescribed by the OCD, contravenes the explicit directive of the Constitution. The use of the word "shall" must be given a compulsory meaning. He

PROVINCE OF BATANGAS V. ROMULO 429 SCRA 736 May 27, 2004; CALLEJO, SR. KOOKY
FACTS - On Dec 7, 1998, then Pres Estrada issued EO No. 48 entitled "ESTABLISHING A PROGRAM FOR DEVOLUTION ADJUSTMENT AND EQUALIZATION." to "facilitate the process of enhancing the capacities of LGUs in the discharge of the functions and services devolved to them by the National Government Agencies...". To address the funding shortfalls of functions and services devolved to the LGUs and other funding requirements of the program, the "Devolution Adjustment and Equalization Fund" was created. The power to make implementing rules and regulations, including such mechanisms and guidelines for the equitable allocations and distribution of said fund among local government units and other guidelines was given to the Oversight Committee on Devolution (OCD). The program was later renamed as the Local Government Service Equalization Fund (LGSEF). - In the GAA of 1999, P96.78B was allotted as the share of LGUs in the internal revenue taxes, with a proviso that P5B shall be earmarked for the LGSEF. The OCD then passed the ff resolutions: OCD-99-003 (adopting P5B allocation scheme for the 1999 LGSEF); OCD-99-005 (allocating P4B of 1999 LGSEF according to OCD guidelines and general framework, implementation, and release, where P2B will be allocated according to LGC codal formula, and the other P2B in accordance with cost of devolution fund scheme as recommended by leagues of provinces, cities and municipalities); and OCD-99-006 (requesting president to approve request of OCD to set aside 20% of LGSEF the remaining P1B for local affirmative action projects and priority initiatives for LGUs). For LGUs to be eligible for funding under the P1B portion of the LGSEF, the proposed project/activity should be need-based, a local priority, with high development impact and are congruent with the socio-cultural, economic and development agenda of the Estrada Administration, such as projects arising from delivery of local health and sanitation services, hospital services and other tertiary services; delivery of social welfare services; provision of socio-cultural services and facilities for youth and community development, provision of agricultural and on-site related research, etc. LGUs who wish to avail of the funding should send a Letter Request for Funding Support from the Affirmative Action Program under the LGSEF. The

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adds that to vest the OCD with the authority to determine the distribution and release of the LGSEF is anathema to the principle of local autonomy. Further, the possible disapproval by the OCD of the project proposals of the LGUs would result in the diminution of the latter's share in the IRA. There is also the improper amendment to Sec 285 of the LGC on the percentage sharing of the IRA among the LGUs, as the OCD resolutions invariably provided for a different sharing scheme. He notes that LGUs are at a loss as to how a portion of the LGSEF is actually allocated. Further, there are still portions of the LGSEF that, to date, have not been received by the petitioner; hence, resulting in damage and injury to the petitioner. Respondents Arguments The assailed provisos and resolutions are not constitutionally infirm. Art X sec 6 of the Constitution does not specify that the "just share" of the LGUs shall be determined solely by the LGC. Moreover, the phrase "as determined by law" in the same constitutional provision means that there exists no limitation on the power of Congress to determine what is the "just share" of the LGUs in the national taxes. In other words, Congress is the arbiter of what should be the "just share" of the LGUs in the national taxes. Also, Sec 285 of the LGC, which provides for the percentage sharing of the IRA among the LGUs, was not intended to be a fixed determination of their "just share" in the national taxes. Congress may enact other laws, including appropriations laws, providing for a different sharing formula. This section was merely intended to be the "default share" of the LGUs to do away with the need to determine annually by law their "just share." However, the LGUs have no vested right in a permanent or fixed percentage as Congress may increase or decrease the "just share" of the LGUs in accordance with what it believes is appropriate for their operation. (Repondents also raised procedural issues: petition raises questions of fact; petition has been rendered moot and academic; and petitioner has no legal standing to bring the suit.) ISSUE: (Procedural issues omitted) WON the assailed provisos contained in the GAAs of 1999, 2000 and 2001, and the OCD resolutions infringe: a. the Constitution b. Local Government Code of 1991. HELD: a. YES. The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions violate the constitutional precept on local autonomy. - Art X, sec 6 of the Constitution mandates that (1) the LGUs shall have a "just share" in the national taxes; (2) the "just share" shall be determined by law; and (3) the "just share" shall be automatically released to the LGUs. The LGC underscores the automatic release of the LGUs' "just share" in Secs 1814 and 28615 - Being "automatic" connotes something mechanical, spontaneous and perfunctory. As such, the LGUs are not required to perform any act to receive the "just share" accruing to them from the national coffers. As emphasized by the LGC, the "just share" of the LGUs shall be released to them "without need of further action." - Pimentel, Jr. v. Aguirre: xxx A basic feature of local fiscal autonomy is the automatic release of the shares of LGUs in the National internal revenue. This is mandated by no less than the Constitution. The LGC specifies further that the release shall be made directly to the LGU concerned within five (5) days after every quarter of the year and "shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose." As a rule, the term "SHALL" is a word of command that must be given a compulsory meaning. The provision is, therefore, IMPERATIVE. - The LGSEF could not be released to the LGUs without the OCD's prior approval. Further, the OCD laid down guidelines and mechanisms that the LGUs had to comply with before they could avail of funds from the portion of the LGSEF allocated for various projects. It was only upon approval thereof that the OCD would direct the DBM to release the funds for the projects. This is constitutionally impermissible. It makes the release not automatic, a flagrant violation of the constitutional and statutory mandate that the "just
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share" of the LGUs "shall be automatically released to them." The LGUs are, thus, placed at the mercy of the OCD. - The OCD was created merely to formulate the rules and regulations for the efficient and effective implementation of the LGC to ensure "compliance with the principles of local autonomy as defined under the Constitution", and not to supplant or subvert the same. Neither can it exercise control over the IRA, or even a portion thereof, of the LGUs. - Local autonomy includes both administrative and fiscal autonomy. In Pimentel v. Aguirre, it was held that local fiscal autonomy includes the power of the LGUs to, inter alia, allocate their resources in accordance with their own priorities. xxx Fiscal autonomy means that local governments have the power to create their own sources of revenue in addition to their equitable share in the national taxes released by the national government, as well as the power to allocate their resources in accordance with their own priorities. It extends to the preparation of their budgets, and local officials in turn have to work within the constraints thereof. They are not formulated at the national level and imposed on local governments, whether they are relevant to local needs and resources or not Further, a basic feature of local fiscal autonomy is the constitutionally mandated automatic release of the shares of LGUs in the national internal revenue. - Also, the assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions cannot amend Sec 285 of the LGC. Under this provision, provinces receive 23%, cities 23%, municipalities 34%, and barangays 20%. However, this percentage sharing is not followed with respect to the LGSEF as the OCD resolutions provided for a different sharing scheme. (1999: provinces 40%, cities 20%, municipalities 40%; 2000: provinces 26%, citites 23%, municipalitites 35%, barangays 26%; 2001: provinces 25%, Cities 25%, Municipalities 35%, Barangays 15%) Disposition Petition GRANTED

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Sec. 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. 14 Sec. 18. Power to Generate and Apply Resources. Local government units shall have the power and authority to establish an organization that shall be responsible for the efficient and effective implementation of their development plans, program objectives and priorities; to create their own sources of revenue and to levy taxes, fees, and charges which shall accrue exclusively for their use and disposition and which shall be retained by them; to have a just share in national taxes which shall be automatically and directly released to them without need of further action; xxx 15 Sec. 286. Automatic Release of Shares. (a) The share of each local government unit shall be released, without need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a quarterly basis within five (5) days after the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose. (b) Nothing in this Chapter shall be understood to diminish the share of local government units under existing laws.

Local Fiscal Administration Local Funds Not Subject to Execution


MUNICIPALITY OF MAKATI V CA 190 SCRA 206 CORTES; October 1, 1990 AIDA
FACTS - An action for eminent domain was filed by the Municipality of Makati against respondent Admiral Finance Creditors Consortium, Inc., Home Building System & Realty Corporation and Arceli P. Jo, involving

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a parcel of land and improvements thereon located in San Antonio Village, Makati registered in the name of Jo. A bank account certification was attached, stating that a bank account had been opened with the PNB Buendia Branch under petitioner's name containing the sum of P417,510.00. - After due hearing, the RTC judge fixed the appraised value of the property at P5,291,666.00 and ordered petitioner to pay this amount minus the advanced payment of P338,160.00 - When the decision became final and executory, respondent Admiral Finance moved for the issuance of a writ of execution which was granted. A notice of garnishment was executed after the writ was issued and served with Pastrana, the PNB Buendia manager. The sheriff was informed that the account had a hold code, prompting respondent to file a motion raying that an order be issued directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance due under the RTC decision. - Petitioner moved to lift the motion of garnishment on the ground that the RTC decision failed to state that the payment should be made in installments. - Pending resolution of the motions, petitioner filed a manifestation to inform the court that a new title over the property had been issued in the name of PS Bank. In compliance with a court order to make the documents regarding PS Banks transaction with Admiral Finance over the property available, PS Bank informed the court that it had consolidated its ownership over the property at a foreclosure sale and that it had entered into a compromise agreement with Admiral Finance to divide the proceeds of the expropriation proceedings. - The RTC approved the compromise agreement and ordered PNB Buendia Branch to immediately release to PS Bank the corresponding balance of the appraised value of the property amounting to P4,953,506.45 which corresponds to the balance of the appraised value of the subject property under the RTC decision from the garnished account of petitioner. The motion to lift the garnishment was denied. - PNB Buendia failed to comply with the court order, explaining that it was still waiting for proper authorization from the PNB head office enabling him to make a disbursement for the amount so ordered. Petitioner contends that its funds at the PNB Buendia Branch could neither be garnished nor levied upon execution, for to do so would result in the disbursement of public funds without the proper appropriation required under the law, citing the case of Republic of the Philippines v. Palacio. - The RTC held that the doctrine enunciated in Republic v. Palacio did not apply to the case because petitioner's PNB account was specifically opened for the expropriation proceedings of the subject property. - Respondent RTC judge likewise declared PNB bank manager Bautista guilty of contempt of court and ordered his arrest and detention until the order to release the balance was complied with. - Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions for certiorari with the Court of Appeals, which were eventually consolidated. Both petitions were dismissed prompting petitioner to file a petition for review with prayer for preliminary injunction. - In the CA, petitioner alleges for the first time that it has actually two accounts with the PNB Buendia Branch: 1) an account exclusively for the expropriation of the subject property, with an outstanding balance of P99,743.94 and 2) a second account for statutory obligations and other purposes of the municipal government, with a balance of P170,098,421.72. ISSUE WON the RTC judges order to PNB Buendia to release the amount to PS Bank of P4,953,506.45 is valid HELD NO Reasoning - Petitioner poses no objection to the garnishment or the levy under execution of the funds deposited therein amounting to P99,743.94. However, it is petitioner's main contention that inasmuch as the assailed orders of respondent RTC judge involved the net amount of P4,965,506.45, the funds garnished by respondent sheriff in excess of P99,743.94, which are public funds earmarked for the municipal government's other statutory obligations, are exempted from execution without the proper appropriation required under the law. - The funds deposited in the second PNB account are public funds of the municipal government. In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless otherwise provided for by statute. - More particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution. - Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision, less the sum of P99,743.94 deposited in the first account no levy under execution may be validly effected on the public funds of petitioner deposited in the second account. - Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the

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enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds. Dispositive Court Resolved to ORDER petitioner Municipality of Makati to immediately pay Philippine Savings Bank, Inc. and private respondent the amount of P4,953,506.45. The order of respondent RTC judge is SET ASIDE.