A.

PUBLIC CORPORATION
Municipality of Jimenez vs Executive Secretary
Facts:
Municipality of Sicaban was created by EO No. 258
promulgated a Municipal Resolution laying claim
to some barrios, based on the technical
description of EO No. 258
filed a claim against the Municipality of Jimenez
The Answer of Jimenez
conceded that the disputed area is part of
Sinacban by virtue of EO No. 258
nonetheless asserted that they still held
jurisdiction over the disputed barrios by virtue of
an agreement with Sincacaban
the agreement was approved by the Provincial
Board
Provincial Board's declaration
the disputed area is part of Sinacaban
the previous resolution approving the
agreement was void because the ProvBoard had
no power to alter the boundaries of Sinacaban
fixed by and EO
power is only vested in Congress
ProvBoard denied recon from Jimenez
Jimenez filed pet for certiorari, prohibition, and
mandamus in the RTC
power to create municipalities is essentially
legislative
Sinacaban had no legal personality and no right
to assert a territorial claim against Jimenez
Issues raised during pretrial

WON Sinacaban is a legal juridical entity, duly

created in accordance with law
If not, WON it is a de facto juridical entity
WON the validity of the existence of the
Municipality can be properly questioned in this
action on certiorari
WON Jimenez which had recognized the
existence of the municipality for more than 40
years is estopped to question its existence
WON the existence of the municipality has been
recognized by the laws of the land
WON the decision of the ProvBoard had acquired
finality
RTC Decision
Petition Denied
RTC declared Status Quo (i.e. Sinacaban shall
continue to exist and operate as a municipality)
RTC declared the ProvBoard resolution fixing the
boundaries as null and void, not being in
accordance with EO 258
Other issues
Sinacaban a defacto corporation
it had completely organized itself prior to Pelaez
case and exercised corporate powers for 40
years before the existence was questioned
Jimenez : no legal standing to question
existence of Sinacaban
Only reserved to the State (SolGen)
Jimenez by entering into an agreement with
Sinacaban is estopped from questioning the
legal existence of the same
question on legal existence has been rendered
moot by 442(d) of LGC [considered as regular

municipality since Sincacaban already as its

respective set of elective officials holding office
ATT of the effectivity of the LGC]
MR of Jimenez was denied
Petition for review to SC
Issues
WON Sinacaban has legal personality to file a claim
If it has, WON it is the boundary provided for in EO 258
or in the ProvBoard resolution which should be used as
basis for adjudicating Sinacaban's territorial claim
SC Decision
1: Sinacaban : de facto status as corporation
Two principles involved in the controversy:
[Pelaez] Creation of Municipal Corporations is a
legislative matter (Pres has no power to create
municipality
Municipality created by EO which is later
impliedly recognized and its acts accorded legal
validity : creation can no longer be questioned
Its legal existence has been recognized and
acquiesced publicly and officially via an
agreement entered into by Jimenez with
Sinacaban, and by its inclusion in a legislative
district
Legal personality also impliedly granted by the
LGC [Municipalities created through pres
issuances and EOs and which have their
respective set of elective officials ATT of the
effectivity of LGS are considered regular
municipalities

2: Unconstitutionality of 442(d) of RA 7160, since it

does not conform to the Consti and Statutory
requirements of holding of plebiscites in the creation of
new municipalities
Contention will not bear analysis
Plebiscite requirement does not apply to
Sinacaban since it was created and has attained
da facto status before the 1987 Consti took
effect
Plebiscite is required only for new municipalities
created for the first time under the 1987
Constitution
3: RTC erred in ordering the relocation survey of the
boundary of Sinacaban becasue the barangays
which Sinacaban are claiming are not enumerated
in EO 285
WHAT IS A PUBLIC CORPORATION? DIFFERENCE
FROM GOVERNMENT OWNED AND CONTROLLED
CORPORATION?
Boy Scout of the Phil vs COA
Feliciano vs COA
Facts
COA audited Leyte Metropolitan Water District
LMWD received a letter from COA requesting
payment of audit fees
Petitioner, GM, sent a reply stating that the LMWD
could not pay the auditing fees citing Secs. 6 and
20 of PD 198, and Sec. 18 of RA 6758
Petitioner also asked for a refund of all auditing
fees previously paid to COA

 COA denied the request and the subsequent MR

COA Ruling
The SC has already settled the COA's audit jurisdiction
over LWDs in [Davao Water District vs CSC and COA]
LWDs are not private corporations
The power to appoint members of the BoD belong
to the local executives where the LWD is located
In contrast, the power to elect members of the BoD
or trustee of a private corporation are elected from
among the stockholders; private corporation is
created for private purpose, benefit, ain abd ebd of
its stockholders/members; they have freedom to
choose who will compose the governing body
Issues
WON a LWD created under PD 198 is a GOCC subject
to audit jurisdiction by the COA
WON Sec. 20 of PD 198 prohibits COA's CPAs from
auditing LWDs
WON Sec. 18 of RA6758 prohibits coa from charging
GOCCs auditing fees.
SC Ruling
COA : mandated by the Constitution to audit all
government agencies including GOCCs with original
charters
An LWD is a GOCC with original charter
LWDs are GOCCs with original charters not Private
Corporations
Petitioner claims that LWDs are PrivCorps
PD 198 did not create LWDs since it does not
expressly direct the creation of such entities
SC : LWDs are not PrivCorps

Sec. 16 Art. XII of Consti (PrivCorps = general

law only; GOCCs = special charters)
Congress cannot enact a law creating a private
corporation with a special charter :
unconstitutional
IOW : When congress creates, by special
charter, any corporation, it necessarily has to be
a GOCC (OW : unconstitutional)
LWDs not privcorp since they are not created
under the Corporation Code [no SEC reg., no
arts. of incorporation, no incorporators, SH, or
members;] {mayor appoints directors of LWDs
for a fixed term}
PrivCorps : legal existence : general law =
Corporation Code
LWDs : legal existence : law/special charter =
PD 198
SB did not create LMWD : SB cannot create
LWDs : it may only avail of existing enabling
laws to form and incorporate water districts
[even if SB had the power to create
corporations, the LWDs would still remain
GOCCs subject to COA's audit jurisdiction]{SB
resolution creating an LWD is only intended to
implement the provisions of PD 158}
A GOCC does not need to be created directly or
explicitly by a law
Prohibition is only for the creation of one special
law for one private corporation [general law :
privcorp]
no prohibition on Congress to create several
GOCCs of the same class under one special
enabling charter

 Jurisdiction of the COA : determined by the

governments ownership or control of a corporation
regardless whether it is private, quasi-public, or
public
Sec. 20 of PD 198 : contravenes the Constitution
The Constitution itself provides for the
annulment of any law which may exempt the
Government or its instrumentalities form the
jurisdiction of the COA
Fees assessed by COA are allowed
Prohibited compensation are those salaries,
honoraria, allowances, and other emoluments
from any government entity, LGU, GOCC and
government financial institutions, except such
compensation paid directly by the COA out of its
appropriations and contribution
COA may charge GOCCs actual audit cost but
GOCCs must pay the same directly to COA and
not to COA auditors

CLASSES OF PUBLIC CORPORATIONS

QUASI CORPORATIONS
PSPCA vs COA
Facts
COA was about to audit petitioner, but the petitioner
filed a special civil action for Certiorari and Prohibition
under Rule 65 of the RoC

PSPCA was incorporated as a juridical entity by virtue

of Act. No. 1285 in 1905
Their objectives shall be to enforce laws relating
to cruelty inflicted upon animals or the
protection of animals in the Philippine islands
The enactment of AN 1285 antedated both the
Corporation Law and the constitution of the SEC
PSPCA had authority to apprehend violators of
anti-animal cruelty laws but such authority was
removed in recognition of the government's
obligation to enforce the laws of the State
In 2003 COA visited the office of petitioner to conduct
an audit survey
PSPCA demurred on the ground that it was a
private entity an not under the jurisdiction of
COA
Petitioner explained:
The creation of the petitioner necessarily
had to be done through a special
legislation since there was neither the
CorpLaw or any other general law under
which it may be organized, nor a SEC who
would have decided its organization or
incorporation
EO 63 which took away the petitioners
power to arrest, and the loss of its
operational funding, shows that it no
longer has governmental functions [gov't
itself confirmed petitioner as a private
juridical entity]

 COA audit survey was not conducted due to the refusal

of the petitioner because the latter maintained that it
was a privcorp

Petition granted and petitioner was declared a private

corporation
MUNICIPAL CORPORATIONS

Issue
COA committed GAOD resulting to lack or excess of
jurisdiction when it ruled that petitioner is subject to
its audit authority

ELEMENTS OF A MUNICIPAL CORPORATION- NATURE

AND FUNCTION

Petitioner is entitled to the relief sought, there being

no appeal, nor any plain, speedy and adequate remedy
in the ordinary course of law available to it
[WON the petitioner qualifies as a government agency
that may be subject to audit by COA]
Ruling of SC
The true criterion to determine whether a corporation
is public or private is found in the totality of the
relation of the corporation to the State
if a corporation is created by the State as the
latter's own agency or instrumentality to help it
in carrying out its governmental functions =
public
otherwise = private
COA argues that the charter of PSPCA requires them to
report to the president periodically
SC : reportorial requirement is applicable to all
corporations of whatever nature (since all kinds
of corporations are creatures of the state)

Pelaez vs. Auditor General

Camid vs. Office of the President
Municipality of San Narciso vs Mendez
Facts
President Carlos Garcia issued, pursuant to the Revised
Admin Code, EO 353 creating the municipal district of
San Andres by segregating from the municipality of
San Narciso some of the latter's barrios.
San Andres was later recognized as a fifth district
municipality and was recommended to the congress by
the president for conversion into a municipality.
MSN filed a petition for quo warranto with the RTC
against MSA. The petition sought the declaration of
nullity of EO 353 because it was a clear usurpation of
the inherent powers of the legislature
MSA's Answer
Petitioner is estopped
since it was at the instance of petitioner
municipality that the MSA was given life
with the issuance of EO 353

MSA's existence since 1959, its corporate

personality could no longer be assailed
petition for quo warranto : MSN was not the
proper party to bring the action, the prerogative
being reserved to the State acting through the
SolGen
MSA filed anew a motion to dismiss alleging that the
case had become moot and academic with the
enactment of RA 7160 citing 422(d) of the law
opposed by MSN, contending that the provisions
would not apply to MSA since the enactment
referred to legally existing municipalities and
not those whose mode of creation is void ab
initio
RTC dismissed the petition
lack of cause of action [quo warranto was a
matter that belonged to the State]
defects present in the creation of municipal
districts by the President ware cured by the LGC

Granting EO 353 is null and void, the peculiar

circumstances would have caused MSA to attain the
status of de facto municipal corporation
Pelaez case occurred 6 years after MSA's
creation as a municipality
certain government acts all pointed to the
State's recognition of the continued existence of
MSA
was declared as a fifth class municipality
was included in a Municipal Circuit Court
Doubts as to the de jure status of MSA must be
dispelled
MSA had been considered as one of the
municipalities composing the 3rd district of the
province of Quezon
422(d) of LGC [municipal districts organized
pursuant to presidential issuances or EOs and
which have their respective sets of elective
municipal officials] has cured this error

Petitioner recognizes the fact that RA 7160 has

granted de facto municipality status to MSA
Nonetheless, they still contend that since the
petition quo warranto had been filed prior to the
passage of the sad law, MSN had acquired a
vested right to seek nullification of EO 353

REQUISITES FOR CREATION, CONVERSION,

DIVISION, MERGER OR DISSOLUTION

The MSA has already began and continued to exercise

the powers and authority of a duly created LGU for 30
years prior to MSN's petition
the untimely raising of a quo warranto
proceeding assailing the authority of a political
subdivision is against public interest

League of Cities v. COMELEC

League of Citys of the Phil vs. Comelec April 28,

2009Dec. 21, 2009, August 24, 2010,February 15,
2011, April 12, 2011

Action:
These are consolidated petitions for prohibition with
prayer for the issuance of a writ of preliminary injunction
or temporary restraining order filed by the League of
Cities of the Philippines, City of Iloilo, City of Calbayog,

and Jerry P. Treas assailing the constitutionality of the

subject Cityhood Laws and enjoining the Commission on
Elections (COMELEC) and respondent municipalities from
conducting plebiscites pursuant to the Cityhood Laws.

municipalities filed, through their respective sponsors,

individual cityhood bills. The 16 cityhood bills contained a
common provision exempting all the 16 municipalities
from the P100 million income requirement in RA 9009.

Fact:
During the 11th Congress, Congress enacted into law 33
bills converting 33 municipalities into cities. However,
Congress did not act on bills converting 24 other
municipalities into cities.
During the 12th Congress, Congress enacted into law
Republic Act No. 9009 (RA 9009), which took effect on 30
June 2001. RA 9009 amended Section 450 of the Local
Government Code by increasing the annual income
requirement for conversion of a municipality into a city
from P20 million to P100 million. The rationale for the
amendment was to restrain, in the words of Senator
Aquilino Pimentel, the mad rush of municipalities to
convert into cities solely to secure a larger share in the
Internal Revenue Allotment despite the fact that they are
incapable of fiscal independence.

On 22 December 2006, the House of Representatives

approved the cityhood bills. The Senate also approved the
cityhood bills in February 2007, except that of Naga, Cebu
which was passed on 7 June 2007. The cityhood bills
lapsed into law (Cityhood Laws) on various dates from
March to July 2007 without the Presidents signature.

After the effectivity of RA 9009, the House of

Representatives of the 12th Congress adopted Joint
Resolution No. 29, which sought to exempt from the P100
million income requirement in RA 9009 the 24
municipalities whose cityhood bills were not approved in
the 11th Congress. However, the 12th Congress ended
without the Senate approving Joint Resolution No. 29.
During the 13th Congress, the House of Representatives
re-adopted Joint Resolution No. 29 as Joint Resolution No.
1 and forwarded it to the Senate for approval. However,
the Senate again failed to approve the Joint Resolution.
Following the advice of Senator Aquilino Pimentel, 16

The Cityhood Laws direct the COMELEC to hold plebiscites

to determine whether the voters in each respondent
municipality approve of the conversion of their
municipality into a city.
Petitioners filed the present petitions to declare the
Cityhood Laws unconstitutional for violation of Section 10,
Article X of the Constitution, as well as for violation of the
equal protection clause. Petitioners also lament that the
wholesale conversion of municipalities into cities will
reduce the share of existing cities in the Internal Revenue
Allotment because more cities will share the same
amount of internal revenue set aside for all cities under
Section 285 of the Local Government Code.
Issue:
The petitions raise the following fundamental issues:
1. Whether the Cityhood Laws violate Section 10, Article X
of the Constitution; and
2. Whether the Cityhood Laws violate the equal protection
clause.

Held:
We grant the petitions.
The Cityhood Laws violate Sections 6 and 10, Article X of
the Constitution, and are thus unconstitutional.
First, applying the P100 million income requirement in RA
9009 to the present case is a prospective, not a
retroactive application, because RA 9009 took effect in
2001 while the cityhood bills became law more than five
years later.
Second, the Constitution requires that Congress shall
prescribe all the criteria for the creation of a city in the
Local Government Code and not in any other law,
including the Cityhood Laws.
Third, the Cityhood Laws violate Section 6, Article X of the
Constitution because they prevent a fair and just
distribution of the national taxes to local government
units.
Fourth, the criteria prescribed in Section 450 of the Local
Government Code, as amended by RA 9009, for
converting a municipality into a city are clear, plain and
unambiguous, needing no resort to any statutory
construction.
Fifth, the intent of members of the 11th Congress to
exempt certain municipalities from the coverage of RA
9009 remained an intent and was never written into
Section 450 of the Local Government Code.
Sixth, the deliberations of the 11th or 12th Congress on
unapproved bills or resolutions are not extrinsic aids in
interpreting a law passed in the 13th Congress.

Seventh, even if the exemption in the Cityhood Laws were

written in Section 450 of the Local Government Code, the
exemption would still be unconstitutional for violation of
the equal protection clause.
B. LOCAL GOVERNMENT
Republic Act 7160(The Local Government Code)
PRINCIPLES OF LOCAL AUTONOMY
League of Prov. vs. DENR
WHAT ARE THE POWERS OF LGUs?
1. Police Power (general welfare clause)Roble Arrastre vs CA, Gr. No. 128509 Aug. 22, 2006
Fernando vs. St. Scholastica Gr. No. 161107 March
12, 2013
City of Manila vs. Laquio Jr. 495 Phil 289
2. Eminent Domain
Municipality of Paranaque vs VM Realty Corp Gr.
127820 July 20, 1998
3. Taxing Power
MMSMC vs. Toledo Gr, no. 190818 June 05, 2013
Pelizloy Corp vs, Prov. Of Benguet Gr. No. 183137
April 10, 2013(relate to Ultra vires acts)
NAPOCOR versus Province of Quezon July 15, 2009
GR. No. 171586

4. Closure and Opening of Roads

Figuracion vs. Cresenciano Nov, 28, 2007
New Sun Valley Homeowners association vs.
SBBSV Gr no. 156686 July 27, 2011
5. Legislative Power
Requisites for a valid ordinance
Light Corporation vs. City of Manila Gr no. 122846
Jan. 20, 2009
Social Justice Society vs. Atienza Feb 3, 2008 545
Scra 92
What is local initiative /Referendum?
SBMA vs. COmelec Gr. No. 125416 Sept. 26, 1996
Santiago vs. Comelec March 19, 1997
6. Corporate Powers
SUE AND BE SUED

Municipality of Hagonoy Bulacan vs. Simeon

Dumdum Gr. No.168289 March 22, 2010
ACQUISITION AND SALE OF PROPERTY/ENTER INTO
CONTRACTS
Municipality of Camiling v. Lopez 99 Phil. 187.
(1956)
The Estate of Pedro Gonzales Vs Marcos Perez GR.
No. 169681 Nov. 5, 200
REQUISITES, ULTRA VIRES ACTS /LIABILITY OF
LGUS
Land Bank of the Phil. Vs. Cacayuran G.r No.191667
April 17 ,2013
SETTLEMENT OF BOUNDARY DISPUTES
Municiplity of Kananga vs. Madrona GR No. 141375
April 30, 2003;