PUBLIC CORPORATION DUAL NATURE & FUNCTIONS OF MUNICIPAL CORPORATIONS:

INTRODUCTION Every local government unit created/organized under the Local

Government Code is a BODY POLITIC and CORPORATE endowed with
Political Law branch of public law which deals with the powers to be exercised by it in conformity with law. As such it shall
organization and operations of the governmental organs of the State exercise powers as a political subdivision of the National Government
and defines the relations of the State with the inhabitants of its and as a corporate entity representing the inhabitants of the territory
territory. (Section 15, RA7160). Accordingly, it has dual functions

(i) public or governmental acts as an agent of the State for the

DIVISIONS OF POLITICAL LAW: government of the territory and the inhabitants; and

(a) Constitutional Law branch of public law which deals with
the maintenance of the proper balance between authority as
represented by three inherent powers of the State and liberty
as guaranteed by the Bill of Rights.
(b) Administrative law branch of public law which fixes the
organization of government, determines competence of
administrative authorities who execute the law and indicates
to the individual remedies for violation of his rights.
(c) Law on Municipal Corporations
(d) Law of Public Officers
(e) Election Laws
(f) Public International Law
(ii) private or proprietary acts as an agent of the community in
the administration of local affairs, as such, acts as a separate
entity for its own purposes and not as a subdivision of the
State.
BASIC PRINCIPLES
Sec. 1 Act shall be known as the Local Government Code of 1991.
Under the 1987 Constitution, declared policy: The State
shall ensure the autonomy of local governments (Art. II, Sec. 25)

To highlight this policy, note, an entire Article (X) with

GENERAL PRINCIPLES fourteen sections is devoted to Local Governments. Section (3)
thereof mandates: Congress SHALL enact a local government code (a)
CORPORATION Defined: An artificial being created by operation of to provide a more responsive and accountable local government
law having the right of succession and powers, attributes and structure initiated through a system of DECENTRALIZATION with
properties expressly authorized by law or incident to its existence. effective mechanisms of recall, initiative and referendum, (a) allocate
among different local government units their powers, responsibilities
CLASSIFICATION OF CORPORATIONS: and resources, (c) provide for qualifications, elections appointment
and removal, term, salaries, powers and function and duties of local
(i) Public organized for the government of a portion of the officials and (d) other matters relating to the organization and
State; operation of local units.
(ii) Private formed for some private purpose, benefit, aim or
end; Autonomy is either decentralization of administration
(iii) Quasi-public private corporation that renders public service (deconcentration) or decentralization of power (devolution).
or supplies public wants.
Decentralization of administration delegation by the central
NOTE: Criterion to determine whether a corporation is public The government of administrative powers to local subdivisions in order
relationship of the corporation to the Sate, that is, if created by the to broaden the base of governmental power making such local
State as its own agency to help the State in carrying out its governments more responsive and accountable and insuring their
governmental functions then it is public, otherwise, it is private. fullest development as self-reliant communities and effective
partners in the pursuit of national development and progress
CLASSES OF PUBLIC CORPORATIONS: (declared policy of LGC); relieves central government of the burden
of managing local affairs, enabling it to concentrate on national
(i) Quasi-corporation created by the State for a narrow/limited concerns; the President exercises general supervision over them
purpose (PCSO, etc.); but only to ensure that local affairs are administered according to law
(ii) Municipal Corporations body politic and corporate (Presidents mandate to ensure faithful execution of the laws) but he
constituted by the incorporation of the inhabitants for the has no control over their acts (he cannot substitute their judgment
purpose of local government. with his own).

ELEMENTS OF MUNICIPAL CORPORATIONS: Decentralization of power abdication of political power in favor of

local government units declared to be autonomous; the autonomous
1. Legal creation or incorporation there must be a law government is free to chart its own destiny and shape its future with
creating/authorizing the creation or incorporation of a minimum intervention from central authorities; amount to self-
municipal corporation]; immolation since the autonomous government becomes accountable
2. Corporate name name by which the corporation is known; not to the central authority but to its constituency.
3. Inhabitants people residing in the territory of the
corporation; NOTE: Constitutional guarantee of Local Autonomy refers to
4. Territory land mass where the inhabitants reside together ADMINISTRATIVE AUTONOMY of local government units (or
with internal and external waters and air space above the land decentralization of government authority).
and waters.

Case: PROVINCE OF BATANGAS vs. ALBERTO G. ROMULO, G.R. No.

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152774, 5/27/2004.
FACTS: Province of Batangas filed a petition for certiorari to declare
unconstitutional and void certain provisos contained in the General
Appropriations Acts (GAA) of 1999, 2000 and 2001 earmarking for
said years five billion pesos (P5,000,000,000.00) of the Internal
Revenue Allotment (IRA) for the Local Government Service
Equalization Fund (LGSEF) and imposed conditions for the release
thereof such as modifying the allocation scheme for such allotment as
prescribed under the Local Government Code and securing approval
for local projects from the Oversight Committee on Devolution.
Muslim Mindanao and the Cordilleras, which is unique to the 1987
Constitution, contemplates grant of political autonomy and not just
administrative autonomy to those regions. Thus, Art. X, Section 18 of
Constitution mandates for Congress to enact an organic act for the
autonomous regions (with assistance and participation of
consultative commission composed of representatives appointed by
the President from list of nominees of multisectoral bodies) to
provide for an autonomous regional government with a basic
structure consisting of an executive department and a legislative
assembly and special courts with personal, family and property law
jurisdiction in each of the autonomous regions.

RULING: In Section 25, Article II of the Constitution, the State has Case: DISOMANGCOP vs. DPWH SECRETARY, G.R. No. 149848,
expressly adopted as a policy tha, The State shall ensure the 11/25/2004.
autonomy of local governments. The State policy on local autonomy
is amplified in Section 2 thereof, It is hereby declared the policy of FACTS: Pursuant to Sec. 15, Art. X of the Constitution (for the creation
the State that the territorial and political subdivisions of the State of autonomous regions in Muslim Mindanao and the Cordilleras), RA
shall enjoy genuine and meaningful local autonomy to enable them to 6734 (An Act Providing for An Organic Act for the Autonomous
attain their fullest development as self-reliant communities and make Region in Muslim Mindanao) was enacted. Subsequently, the four
them more effective partners in the attainment of national goals x x provinces of Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi, voting
x. in favor of autonomy, became the Autonomous Region in Muslim
Mindanao (provinces of Basilan, Cotabato, Davao del Sur, Lanao del
The assailed provisos in the GAAs of 1999, 2000 and 2001 and the Norte, Palawan, South Cotabato, Sultan Kudarat, Zamboanga del
OCD resolutions violate the constitutional precept on local autonomy. Norte, and Zamboanga del Sur, and the cities of Cotabato, Dapitan,
Section 6, Article X of the Constitution reads: Sec. 6. Local Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princesa
government units shall have a just share, as determined by law, in the and Zamboanga said no in the plebiscite) (later virtue of RA9054, the
national taxes which shall be automatically released to them. provinces of Basilan and Marawi City joined). In accordance with
"Automatic" means "involuntary either wholly or to a major extent so RA6734, EO426 was issued placing the control and supervision of the
that any activity of the will is largely negligible; of a reflex nature; offices of the DPWH within the autonomous region in Muslim
without volition; mechanical; like or suggestive of an automaton. Mindanao under the Autonomous Regional Government. Petitioners
Being "automatic," thus, connotes something mechanical, Arsadi M. Disomangcop and Ramir M. Dimalotang (Dimalotang), in
spontaneous and perfunctory. As such, the LGUs are not required to their capacity as Officer-in-Charge and District Engineer/Engineer II,
perform any act to receive the "just share" accruing to them from the respectively, of the 1st Engineering District of DPWH-ARMM in Lanao
national coffers. The "just share" of the LGUs is incorporated as the del Sur petitioned to nullify Dept. Order 119 and RA8999 (creating
IRA in the appropriations law or GAA enacted by Congress annually. the Marawi Sub-District Engineering Office and vesting it with
jurisdiction over all national infrastructure projects and facilities
The entire process involving the LGSEFs distribution and release is under the DPWH within Marawi City and Lanao del Sur. Petitioners
constitutionally impermissible. The LGSEF is part of the IRA or just contend that the challenged measures violate ARMMs constitutional
share of the LGUs in the national taxes. Submitting its distribution autonomy considering that the functions of the Marawi Sub-District
and release to the vagaries of the implementing rules including the Engineering Office have already been devolved to the DPWH-ARMM
guidelines and mechanisms unilaterally prescribed by the Oversight 1st Engineering District in Lanao del Sur.
Committee from time to time as sanctioned by the challenged laws
and OCD resolutions, makes the release not automatic a flagrant RULING: Petition GRANTED. DO119 is violative of the provisions of
violation of the constitutional and statutory mandate that LGUs just EO426 (issued pursuant to RA6734). The 1987 Constitution
share shall be automatically released to them. mandates regional autonomy to give a bold and unequivocal answer
to the cry for a meaningful, effective and forceful autonomy.
Autonomy, as a national policy, recognizes the wholeness of the
Meaning of Administrative Regions are mere grouping of Philippine society in its ethnolinguistic, cultural and even religious
contiguous provinces for administrative purposes, not for political diversities. It strives to free Philippine society of the strain and
representation. The division of the country into regions is intended to wastage caused by the assimilationist approach. Policies emanating
facilitate not only the administration of local governments which the from the legislature are invariably assimilationist in character despite
law requires to have regional offices. Creation of administrative channels being open for minority representation.
regions for purpose of expediting the delivery of services is nothing
new. The Integrated Reorganization plan of 1972, which was made A necessary prerequisite of autonomy is decentralization.
part of the law of the land by virtue of Presidential Decree No. 1, Decentralization is a decision by the central government authorizing
established 11 regions, later became 12. With definite regional its subordinates, whether geographically or functionally defined, to
centers and required departments and agencies of the Executive exercise authority in certain areas. It involves decision-making by
Branch of the National Government to set up field offices therein (DTI subnational units. It is typically a delegated power, wherein a larger
VII, DOLE VII, DPWH Regional Office). The functions of the regional government chooses to delegate certain authority to more local
offices is to be established pursuant the reorganization plan are: (a) governments. Federalism implies some measure of decentralization,
implement laws, policies, plans, programs, rules and regulation of the but unitary systems may also decentralize. Decentralization differs
department or agency in the regional area; (2) provide economical, intrinsically from federalism in that the sub-units that have been
efficient and effective services to the people in the area; (3) to authorized to act (by delegation) do not possess any claim of right
coordinate with regional offices of other departments, bureaus and against the central government.
agencies in the area; and (3) perform such other functions as may be
provided by law. Decentralization comes in two forms deconcentration and
devolution. Deconcentration (administrative decentralization) is
Meaning of Autonomous Regions creation of autonomous regions in administrative in nature; it involves the transfer of functions or the

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delegation of authority and responsibility from the national office to RULING: Game of lotto is a game of chance duly authorized by the
the regional and local offices. Devolution, on the other hand, connotes national government through an Act of Congress (RA1169), as
political decentralization, or the transfer of powers, responsibilities,amended by BP42, the law granting a franchise to the PCSO and
and resources for the performance of certain functions from the allows it to operate lotteries. This statute remains valid today. While
central government to local government units. lotto is a game of chance, the national government deems it wise and
proper to permit it. Hence, the Provincial Board of Laguna, as a LGU,
By regional autonomy, the framers intended it to mean "meaningful cannot issue a resolution or an ordinance that would seek to prohibit
and authentic regional autonomy (that is, a kind of local self- permits. What the national legislature allows by law, such as lotto, a
government which allows the people of the region or area the power provincial board may not disallow by ordinance or resolution.
to determine what is best for their growth and development without
undue interference or dictation from the central government). To this Ours is till a unitary government, not a federal state. Being so, any
end, Section 16, Article X limits the power of the President over form of autonomy granted to LGs will necessarily be limited and
autonomous regions. In essence, the provision also curtails the power confined within the extent allowed by the central government.
of Congress over autonomous regions. Consequently, Congress will Besides, the principle of local autonomy under the 1987 Constitution
have to re-examine national laws and make sure that they reflect the simply means decentralization. It does not make local governments
Constitution's adherence to local autonomy. And in case of conflicts, sovereign within the state or an imperium in imperio.
the underlying spirit which should guide its resolution is the
Constitution's desire for genuine local autonomy. Municipal governments are only agents of the national government.
Local councils exercise only delegated legislative powers conferred
E.O. 426 officially devolved the powers and functions of the DPWH in upon them by Congress as the national lawmaking body. The delegate
ARMM to the Autonomous Regional Government (ARG). More cannot be superior to the principal or exercise powers higher than
importantly, Congress itself through R.A. 9054 transferred and those of the latter. It is heresy to suggest that the LGUs can undo the
devolved the administrative and fiscal management of public works acts and negate by mere ordinance the mandate of the statute.
and funds for public works to the ARG. The aim of the Constitution is
to extend to the autonomous peoples, the people of Muslim Mindanao Section 2(c) requiring consultations should be read together with
in this case, the right to self-determination a right to choose their Section 26, 27, LGC (prior consultation by national agencies with lgus
own path of development; the right to determine the political, involving projects that may cause pollution, climatic change,
cultural and economic content of their development path within the depletion of non-renewable resources, loss of crop land, range-land
framework of the sovereignty and territorial integrity of the or forest cover and extinction of animal or plant species). Thus,
Philippine Republic. Self-determination refers to the need for a Section 2(c) does not apply to lotto, the latter being neither a
political structure that will respect the autonomous peoples' program nor project of the national government, but of a charitable
uniqueness and grant them sufficient room for self-expression and institution, the PCSO. Also, the argument is an afterthought, Mayor
self-construction. denied application for business permit solely on ground of KB508.

With R.A. 8999, however, this freedom is taken away, and the National Section 3, LGC Operative Principles of Decentralization policies and
Government takes control again. The hands, once more, of the measures on local autonomy to be guided by these:
autonomous peoples are reined in and tied up. The challenged law
creates an office with functions and powers which, by virtue of E.O. (a) effective allocation among the different LGUs of their respective
426, have been previously devolved to the DPWH-ARMM, First powers, functions and responsibilities [is provided for by LGC],
Engineering District in Lanao del Sur.
(b) establishment in every LGU of an accountable, efficient and
Section 2, LGC- Declaration of Policy - LGU to enjoy genuine and dynamic organizational structure and operating mechanism that will
meaningful autonomy to enable them to attain their fullest meet priority needs and service requirements of its communities,
development as self-reliant communities and make them effective
partners in attainment of national goals thru decentralization. (c) local officials and employees, subject to civil service law, rules and
National agencies and offices to conduct periodic consultations with regulation, to be appointed or removed, according to merit and
appropriate lgu, ngo and po, before any proect or program is fitness, by the appropriate appointing authority,
implemented in their jurisdiction.
(d) vesting of duty, responsibility and accountability in LGUS shall be
The declaration of policy as stated in Section 2 of LGC reinforces accompanied with provision for reasonably adequate resources to
declared State policy (Art. II, Sec. 25 of Constitution) ensuring discharge their powers and effectively carry out their function they
autonomy to local government units. shall have the power to create and broaden their own sources of
revenue and the right to a just share in the national taxes and an
Case: LINA VS. PANO 364 SCRA 76 equitable share in proceeds of the utilization and development of the
national wealth within their respective areas
FACTS: Respondent Tony Calvento was appointed PSCO agent to
install and operate a lotto terminal. Mayor of San Pedro Laguna (e) provinces to component cities and municipalities; cites and
denied his application for a business permit citing an ordinance municipalities to component barangays to ensure that acts of
(Kapasyahan Blg. 508, taong 1995) passed by the Provincial Board of component units are within scope of prescribe powers and functions
Laguna, objecting/opposing any form of gambling including lotto in (supervisorial powers)
Laguna. Calvento arguing that KB508 is curtailment of State power
since in this case the national legislature itself already declared lotto (f) LGUs may group themselves, consolidate their efforts, services
as legal and permitted its operation around the country, filed for and resources for purposes commonly beneficial to them thus,
declaratory relief before the RTC, to annul KB 508 and compel the the MMDA;
local mayor to issue a business permit for the operation of a lotto
outlet. Suit decided in Calventos favor. MR by Respondent denied. NOTE: Autonomy denotes state of independence (referred
Petition with SC. previously to states) community autonomy, that is, local autonomy.
In the LGC, local autonomy does not mean total independence of

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LGUS from the central or national government. It only means creating/authorizing creation or incorporation of a municipal
decentralization of powers from national to local government. When corporation;
exercising governmental powers and performing duties, a LGU is an (b) corporate name- name by which the corporation shall be
agency of the national government. known;
(c) inhabitants people residing in the territory of the corporation;
Section 4, LGC Scope of Application scope means areas of coverage, (d) territory land mass where inhabitants reside together with
that is, to provinces, cities, municipalities and barangays and other internal and external waters and airspace above land and
political subdivisions as may be created by law and to the extent waters.
herein provided to officials, offices or agencies of the National
Government. Section 6 Authority to Create LGU (created, divided, merged,
abolished or borders substantially altered) either by LAW enacted by
Section 5, LGC Rules of Interpretation (a) provision on power of LG Congress in the case of province, city, municipality or any other
shall be liberally interpreted in its favor; in case of doubt, any political subdivision, or ORDINANCE by sangguniang
question shall be resolved in favor of devolution of powers and of the panlalawigan/panglungosd in the case of a barangay located within
lower LGU. Any fair and reasonable doubt as to existence of power, its territorial jurisdiction, subject to limitations prescribed in this
interpreted in favor of LGU concerned Code.

(b) doubt as to any tax ordinance or revenue measure, strictly Section 7 Creation/Conversion of LGU generally, creation of LGU or
construed against LGU, liberally in favor of taxpayer (deprivation of its conversion from one level to another, subject to verifiable
property). Tax exemption, incentive r relief granted any LGU, indicators of viability and projected capacity to provide services:
construed strictly against person claiming it (loss of income on part INCOME, POPULATION and LAND AREA, compliance with which to
of LGU). be attested to by the Dept. of Finance, NSO and Land Management
Bureau of DENR.
(c) liberal interpretation of general welfare provisions in order to
give more power to LGU in accelerating economic development and Income must be sufficient, based on acceptable standards to
upgrading quality of life for the people. provide all essential government facilities and services and special
functions commensurate with the size of its populations, as expected
Note: Basic precept in statutory construction that legislative intent is of the LGU concerned.
the controlling factor in the interpretation of statute. Power to
declare what the law shall be is a legislative power, power to declare Population total number of inhabitants within the territorial
what the law is or has been is judicial. When law is unambiguous and jurisdiction of the LGU concerned.
unequivocal, application and not interpretation thereof is
IMPERATIVE. Land Area must be contiguous, unless it comprises two (2) or more
islands or is separated by a LGU independent of the others properly
When is statute AMBIGIOUS? If capable of being understood by identified by metes and bounds with technical descriptions and
reasonably well-informed persons in either of two or more senses. sufficient to provide for such basic services and facilities to meet the
requirements of its populace.
Power of judicial review can be exercised by courts to invalidate
constitutionally infirm acts. Ergo, courts are not bound by legislative (READ GRINO VS. COMELEC 213 SCRA 672)
interpretation of their own acts.
Section 8 Division/Merger of existing LGUs to comply with same
When is statute AMBIGIOUS? If capable of being understood by requisites for creation under Section 7. No reduction in income,
reasonably well-informed persons in either of two or more senses. population or land area; no reduction in current income
classification.
Power of judicial review can be exercised by courts to invalidate
constitutionally infirm acts. Ergo, courts are not bound by legislative Section 9 Abolition LGU may be abolished when its income,
interpretation of their own acts. population or land aea has been irreversibly reduced to less than the
minimum standards prescribed for its creation (as certified by DOF,
De Facto Municipal Corporations requisites: NSO and LMB); law/ordinance abolishing an LGU to specify province,
Valid law authorizing incorporation; attempt in good faith to organize city, municipality or barangay to which the LGU to be abolished will
under it; colorable compliance with law, assumption of corporate be incorporated or merged.
powers.
Section 10 Plebiscite requirement pre-condition to creation,
abolition, merger, division or substantial alteration of boundaries of
LGUs; requires majority of the votes cast in plebiscite called for the
purpose in the political unit/s directly affected; plebiscite to be
conducted by COMELEC within 120 days from date of effectivity of
law/ordinance effecting such action, unless said law/ordinance fixes
another date.

Section 11- Seat of Government - considerations of GEOGRAPHICAL

CENTRALITY, ACCESSIBILITY, AVAILABILITY OF TRANSPORATION
AND COMMUNICATION FACILITIES, DRAINAGE AND SANITATION
DEVELOPMENT, ECONOMIC PROGRESS and OTHER RELEVANT
MUNICIPAL CORPORATIONS CONSIDERATIONS; transfer of seat when conditions and
development in LGU concerned has subsequently changed
Elements: significantly, requires 2/3 vote of members of sanggunian, after
(a) legal creation/incorporation there must be a law public hearing; transfer site shall not be outside the territorial

4
boundaries of the LGU; old site together with improvements thereon
may be disposed of by sale or lease or converted to such other use as
the sanggunian concerned may deem beneficial to the LGU and its
inhabitants.
"recommendation of the council of the municipality or municipalities
in which the proposed barrio is situated." This statutory denial of the
presidential authority to create a new barrio implies a negation of the
bigger power to create municipalities, each of which consists of
several barrios.

Section 12 Government Centers Provinces, cities and municipalities Whereas the power to fix a common boundary, in order to avoid or
shall endeavor to establish a government center where offices, settle conflicts of jurisdiction between adjoining municipalities, may
agencies or branches of the National Government, lgu or partake of an administrative nature involving, as it does, the
government-owned or controlled corporations may, as far as adoption of means and ways to carry into effect the law creating said
practicable, be located. In designating such a center, the lgu municipalities - the authority to create municipal corporations is
concerned shall take into account the existing facilities of the national essentially legislative in nature.
and local agencies and offices which may serve as the government
center as contemplated under this Section. The National Government, Case: MALABANG vs. BENITO, 27 SCRA 533
the lgu or gocc shall bear the expenses for the construction of its
buildings and facilities in the government center. FACTS: Petitioner Balindong (municipal mayor of Malabang, Lanao
del Sur), Respondents (Mayor Benito and councilors of Municipality
Section 13 Name of LGU and Public Places, Streets and Structures of Balabagan of the same province). Balabagan, (formerly part of
always in consultation with Philippine Historical Commission; Malabang) was created on March 15, 1960, by Executive Order 386 of
prohibition against naming after living persons, change of name not the then President Carlos P. Garcia, out of barrios and sitios of the
oftener than once every 10 years unless for justifiable reason; change Malabang.
requires prior plebiscite; change of name involving a lgu, public place,
street or structure with historical, cultural or ethnic significance can Citing Pelaez ruling (that Republic Act 2370 [Barrio Charter Act,
be done only by a UNANIMOUS VOTE of the sanggunian concerned approved January 1, 1960], vested power to create barrios in the
and in consultation with the PHC. provincial board, and Section 68 of the Administrative Code, insofar
as it gives the President the power to create municipalities, is
unconstitutional (a) because it constitutes an undue delegation of
Section 14 Beginning of Corporate Existence When a new LGU is legislative power and (b) because it offends against Section 10 (1) of
created, its corporate existence shall commence upon election and Article VII of the Constitution, which limits the President's power
qualification of its chief executive and majority of members of over local governments to mere supervision), Petitioner sought to
sanggunian. nullify E.O. 386 and restrain respondents from performing their
official functions.
MEJIA vs. BALOLING 81 PHIL 486 Since a city is a public
corporation or juridical entity, and as such cannot operate or transact Respondents argued that Pelaez ruling did not apply because, unlike
business by itself but through agents and officials, it is necessary that the municipalities involved therein, the municipality of Balabagan is
officials thereof be appointed or elected in order that it may transact at least a de facto corporation, having been organized under color of
business as such public corporation or city. a statute before this was declared unconstitutional (by Pelaez ruling),
its officers having been either elected or appointed, and the
municipality itself having discharged its corporate functions for the
NOTE: De Facto Municipal Corporations requisites: Valid law past five years preceding the institution of this action. That as a de
authorizing incorporation; attempt in good faith to organize under it; facto corporation, its existence cannot be collaterally attacked,
colorable compliance with law, assumption of corporate powers. although it may be inquired into directly in an action for quo
warranto at the instance of the State and not of an individual like the
Case: EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L- petitioner Balindong.
23825, 1/24/1965
DECISION: Petition granted, Executive Order 386 declared void.
FACTS: President of the Philippines, purporting to act pursuant to Generally, the inquiry into the legal existence of a municipality is
Sec. 68 of Revised Administrative Code (presidential authority to reserved to the State in a proceeding for quo warranto or other direct
define the boundary, or boundaries, of any province, sub-province, proceeding, and that only in a few exceptions may a private person
municipality, [township] municipal district or other political exercise this function of government. But the rule disallowing
subdivision, and increase or diminish the territory comprised collateral attacks applies only where the municipal corporation is at
therein, may divide any province into one or more subprovinces, least a de facto corporation. For where it is neither a corporation de
separate any political division other than a province, into such jure nor de facto, but a nullity, the rule is that its existence may be
portions as may be required, merge any of such subdivisions or questioned collaterally or directly in any action or proceeding by any
portions with another, name any new subdivision so created, and one whose rights or interests are affected thereby, including the
may change the seat of government within any subdivision to such citizens of the territory incorporated unless they are estopped by
place therein as the public welfare may require), issued several their conduct from doing so.
executive orders creating 33 municipalities. Petitioner (as Vice-
President and as taxpayer), instituted a special civil action seeking to A de facto municipal corporation is recognized as such despite the
enjoin Auditor General from passing in audit any expenditure of fact that the statute creating it was later invalidated, rests upon the
public funds in implementation of said certain executive orders consideration that there was some other valid law giving corporate
and/or disbursement by said municipalities. validity to the organization. Hence, in the case at bar, the mere fact
that Balabagan was organized at a time when the statute had not
DECISION: PETITION GRANTED. Since January 1, 1960, when been invalidated cannot conceivably make it a de facto corporation,
Republic Act No. 2370 became effective, barrios may "not be created as, independently of Section 68 of the Administrative Code, there is
or their boundaries altered nor their names changed" except by Act no other valid statute to give color of authority to its creation. Thus,
of Congress or of the corresponding provincial board "upon petition Executive Order 386 creating the municipality in question is a nullity
of a majority of the voters in the areas affected" and the pursuant to the ruling in Pelaez ruling. This is not to say, however,

5
that the acts done by the municipality of Balabagan in the exercise of
its corporate powers are a nullity because the executive order "is, in
legal contemplation, as inoperative as though it had never been
passed." Note, the existence of Executive Order 386 is "an operative
fact which cannot justly be ignored." The actual existence of a statute,
prior to such a determination, in an operative fact and may have
consequences which cannot justly be ignored. The past cannot always
be erased by a new judicial declaration. The effect of the subsequent
ruling as to invalidity may have to be considered in various aspects
with respect to particular relations, individual and corporate, and
particular conduct, private and official.
Section 15 Political and Corporate Nature of LGUs every LGU is a
body politic and corporate endowed with powers to be exercised by
it in conformity with law.
Dual Functions of LGU
(1) public/governmental acts as an agent of State for the
government of the territory and its inhabitants;
(2) proprietary/private acts as an agent of the community in the
administration of local affairs, and as such, it acts as a separate
entity for its own purposes and not as a subdivision of the
State.

Case: MUN. OF JIMENEZ, vs. HON. VICENTE T. BAZ. JR., G.R. No. Municipal Corporation in the Philippines:
105746. 12/2/1996
(1) Province (Sec. 459, LGC) cluster of municipalities or
FACTS: In 1949, Pres. Elpidio Quirino (pursuant to Sec. 68 of Revised municipalities and component cities, as a political and
Admin Code) issued EO258 creating the Municipality of Sinacaban corporate unit of government which serves as a dynamic
consisting Petitioners southern portion. In 1988, the Municipality of mechanism for developmental processes and effective
Sinacaban filed with the Provincial Board of Misamis Occiental a governance of LGUs within its territorial jurisdiction.
claim against Petitioner over portions affecting certain barrios based
on the technical description in E.O. No. 258. Petitioner conceded that, (2) City (Sec. 448) composed of more more urbanized and
under EO258 the disputed area is part of Sinacaban, but nonetheless developed barangays, serves as a general purpose
asserted jurisdiction on the basis of an agreement it had with the government for coordination and delivery of basic, regular
Municipality of Sinacaban and approved by provincial board and direct services and effective governance of the
resolution in 1950. The board declared the disputed area to be part inhabitants within its jurisdiction;
of Sinacaban ruling that the previous resolution approving the
agreement between the municipalities was void because the Board (3) Municipality (Sec. 440, LGC) groups of barangays, serves
had no power to alter the boundaries of Sinacaban as fixed in E.O. No. primarily as a general purpose government for coordination
258, that power being vested in Congress pursuant to the and delivery of basic, regular and direct services and
Constitution and the LGC of 1983 (B.P. Blg. 337). Before the SC, effective governance of inhabitants within its jurisdiction;
Petitioner challenges the trial courts decision affirming the legal
existence of Sinacaban and ordering the relocation of its boundary (4) Barangay (Sec. 384, LGC) basic political unit, serves as the
for the purpose of determining whether certain areas claimed by it primary planning and implementing unit of government
belonged to it. policies, plans, programs, projects and activities in the
community and as a forum wherein collective views of
DECISION: The principal basis for the view that Sinacaban was not people may be expressed, crystallized and considered
validly created as a municipal corporation is the Pelaez ruling that where disputes are also amicably settled;
the creation of municipal corporations is essentially a legislative
matter and therefore the President was without power to create by (5) Autonomous Regions refer to Article 10 of the
executive order Sinacaban. The ruling in this case has been reiterated Constitution.
in a number of cases later decided. However, we have since held that
where a municipality created as such by executive order is later
impliedly recognized and its acts are accorded legal validity, its Note: Metropolitan Manila Development Authority is not a local
creation can no longer be questioned. Sinacaban is at least a de facto government unit. The power delegated to MMDA is that given to the
municipal corporation in the sense that its legal existence has been Metro Manila Council to promulgate administrative rules and
recognized and acquiesced publicly and officially. Sinacaban had been regulations in the
in existence for sixteen years when the Pelaez ruling yet the validity
of E.O. No. 258 creating it had never been questioned. Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000

The State and even the Municipality of Jimenez itself have recognized
Sinacaban's corporate existence entering in 1950 into an agreement
with it regarding their common boundary. Also, it has attained de
jure status, 442(d) of the LGC, must be deemed to have cured any
defect in the creation of Sinacaban. (Municipalities existing as of the
date of the effectivity of this Code shall continue to exist and operate
as such. Existing municipal districts organized pursuant to
presidential issuances or executive orders and which have their
respective set of elective municipal officials holding office at the time
of the effectivity of the Code shall henceforth be considered as
regular municipalities).
GENERAL POWERS & ATTRIBUTES OF LGUs
Sources of Powers Article II, Section 25 and Article X of the
Constitution; statutes (eg. RA7160), charter. DECISION: Petition DENIED. It is beyond doubt that MMDA is not a
FACTS: Petitioner is a government agency tasked with delivery of
basic services in Metro Manila. Respondent Bel-Air Village
Association, Inc. is a non-stock, non-profit corporation composed of
homeowners in Bel-Air Village, a private subdivision in Makati City.
Respondent had sought to enjoin Petitioners plan to demolition the
perimeter fence and open to public access Neptune Street, a road
(beside) privately/legally owned by the subdivision. The Court of
Appeals, in reversing the dismissal of Respondents complaint, ruled
that Petitioner did not have the authority to order the opening of the
street in issue. Before the SC, Petitioner asserted that, there was no
need for an ordinance from the City of Manila to open Neptune Street
to public because, as an agent of the State, it was endowed with
police power in the delivery of basic services in Metro Manila
including traffic management (involving regulation of the use of
thoroughfares to insure the safety, convenience and welfare of the
general public).

6
local government unit or a public corporation endowed with enact ordinances and approve resolutions and appropriate functions
legislative power. It is not even a special metropolitan political for the general welfare of the LGU.
subdivision as contemplated in Sec. 11, Art. X of the Constitution.
MMDAs powers are limited to formulation, coordination, regulation, Note: Police power is an inherent attribute of sovereignty vested in
implementation, preparation, management, monitoring, policy- Congress to make, ordain and establish all manners of wholesome
setting, installation of a system and administration. There is no and reasonable laws for the common good; it is plenary and its scope
syllabus in RA7924 that grants MMDA police power, let alone is vast and pervasive. However, by virtue of valid delegation, it may be
legislative power. exercised by LGUs. The latter being only agents can only exercise
such powers as are conferred upon them by Congress.
Clearly then, the MMC under P.D. No. 824 is not the same entity as the
MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has no Limits on LGUs police Power -
power to enact ordinances for the welfare of the community. It is the (1) Exercisable only within territorial limits of LGU
local government units, acting through their respective legislative (2) Equal Protection Clause ( interest of public vs. those of a
councils, that possess legislative power and police power. In the case particular class requires exercise of such power)
at bar, the Sangguniang Panlungsod of Makati City did not pass any (3) Due Process Clause (reasonable means employed and not
ordinance or resolution ordering the opening of Neptune Street, unduly oppressive case of Villavicencio vs. Lukban, GR No.
hence, its proposed opening by petitioner MMDA is illegal and the 14639, March 25, 1919)
respondent Court of Appeals did not err in so ruling. We desist from (4) Not contrary to the Constitution and the laws (It cannot legalize
ruling on the other issues as they are unnecessary. prohibited act under the guise of regulation. Likewise, it
cannot prohibit legal activities but only regulate)
Points of Discussion Police power is inherent in the State, exercised
by the Legislature, but may be validly delegated. Upon valid Note: Under Section 16, LGU to ensure and support preservation and
delegation, the exercise thereof by the delegate being limited only to enrichment of culture, promote health and safety, enhance peoples
such powers as conferred by the legislature. Legislature has right to balance and healthful ecology, improve public morals,
delegated police power to LGUs (Sec. 15, LGC) through their enhance economic prosperity and social justice, maintenance of
respective legislative bodies, under the General Welfare Clause (Sec. peace and order.
16, LGC).
Case: REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622,
NOTE: RA 7924 declared Metropolitan or Metro Manila (body 9/12/2002
composed of several LGUs, i.e., twelve (12) cities of Caloocan, Manila,
Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pin as, PD 1596 (The Environmental Impact Statement System) ensures
Marikina, Paran aque and Valenzuela, and the five (5) municipalities environmental protection and regulates certain government activities
of Malabon, Navotas, Pateros, San Juan and Taguig) as a "special affecting the environment. Related to PD 1151 (Philippine
development and administrative region" with the administration of Environment Policy), requires an environmental impact statement
"metro-wide" basic services affecting the region placed under "a from all agencies and instrumentalities of the national government,
development authority" referred to as the MMDA (governed by the including government-owned or controlled corporations, as well as
Metro Manila Council composed of the mayors of the component 12 private corporations, firms and entities, for every proposed project
cities and 5 municipalities, the president of the Metro Manila Vice- and undertaking which significantly affect the quality of the
Mayors' League and the president of the Metro Manila Councilors' environment.
League) headed by the Chairman.
Davao City in 2000, applied for a certificate of non-coverage (CNC) for
its proposed Davao City Artica Sports Dome project from the
NOTE: When R.A. No. 7924 took effect, Metropolitan Manila became a required Environmental Compliance Certificate (having been
"special development and administrative region" and the MMDA a certified that its project is not located in an environmentally critical
"special development authority" whose functions were "without area (ECA). Application denied for the reason that Davao City must
prejudice to the autonomy of the affected local government units." undergo the environmental impact assessment (EIA) process to
The character of the MMDA was clearly defined in the legislative secure an Environmental Compliance Certificate (ECC), before it can
debates enacting its charter. MMDA not a special metropolitan proceed with the construction of its project.
political subdivision, because the latters creation requires the
approval by a majority of the votes cast in a plebiscite in the political Denial of application lead to complaint for injunction against DENR
units directly affected. 56 R.A. No. 7924 was not submitted to the filed by Davao City. RTC ruled in latters favor reasoning that the laws
inhabitants of Metro Manila in a plebiscite. The Chairman of the do not require local government units (LGUs) to comply with the EIS
MMDA is not an official elected by the people, but appointed by the law. Only agencies and instrumentalities of the national government,
President with the rank and privileges of a cabinet member. In fact, including government owned or controlled corporations, as well as
part of his function is to perform such other duties as may be private corporations, firms and entities are mandated to go through
assigned to him by the President, 57 whereas in local government the EIA process for their proposed projects which have significant
units, the President merely exercises supervisory authority. This effect on the quality of the environment. A local government unit, not
emphasizes the administrative character of the MMDA. being an agency or instrumentality of the National Government, is
deemed excluded under the principle of expressio unius est exclusio
alterius.

Section 16 General Welfare Clause LGUs shall exercise powers
expressly granted, those necessarily implied therefrom, as well as
those necessary, appropriate or incidental for efficient and effective
governance (i.e. promote health, safety, enhance prosperity, improve
morals of inhabitants) is the statutory grant of police power to
LGUs through their respective legislative bodies empowering them to
Petition for certiorari filed by Republic from RTC decision. Case moot
and academic when subsequent change in administration of Davao
City which filed manifestation expressing that it needs to secure an
ECC for its proposed project. But Court, for the guidance of the
implementors of the EIS law and pursuant to our symbolic function
to educate the bench and bar, addressed the issue.

7
Decision: Sec. 15, LGC (a local government unit is body politic and the municipality and its inhabitants, and for the protection of their
corporate endowed with powers to be exercised by it in conformity property.
with law). As such, it performs dual functions, governmental and
proprietary. In exercise of governmental powers and performing In the present case, the ordinances imposing licenses and requiring
governmental duties, an LGU is an agency of the national permits for any business establishment, for purposes of regulation
government. enacted by the municipal council of Makati, fall within the purview of
the first branch of the general welfare clause. Moreover, the
Sec. 16, LGC - duty of the LGUs to promote the people's right to a ordinance of the municipality imposing the annual business tax is
balanced ecology. Pursuant to this, an LGU, like the City of Davao, can part of the power of taxation vested upon local governments.
not claim exemption from the coverage of PD 1586. As a body politic
endowed with governmental functions, an LGU has the duty to ensure RE (closure order) - The bank was not engaged in any illegal or
the quality of the environment, which is the very same objective of immoral activities to warrant its outright closure. The appropriate
PD 1586. remedies to enforce payment of delinquent taxes or fees are provided
for in Section 62 of the Local Tax Code, (by distraint of personal
Section 4 of PD 1586 clearly states that "no person, partnership or property, and by legal action). The law did not provide for closure
corporation shall undertake or operate any such declared which furthermore violated petitioner's right to due process.
environmentally critical project or area without first securing an
Environmental Compliance Certificate issued by the President or his Case: TANO vs. HON. GOV. SALVADOR P. SOCRATES, G.R. No. 110249,
duly authorized representative." 13 The Civil Code defines a person 8/21/ 1997
as either natural or juridical. The state and its political subdivisions,
i.e., the local government units 14 are juridical persons. 15 FACTS: City Council of Puerto Princesa, Palawan, to effectively free
Undoubtedly therefore, local government units are not excluded from city seawaters from cyanide and other obnoxious substances, passed
the coverage of PD 1586. Ordinance No. 15-92 (effective January 1, 1993) banning the
shipment of all live fish and lobster outside Puerto Princesa from
Note: Based on DENR-Community Environment and Natural January 1, 1993 to January 1, 1998. To implement said city ordinance,
Resources Office (CENRO-West) certification, project area not the acting city mayor issued Office Order No. 23, authorizing local law
environmentally critical area. SC is not trier of facts. Proclamation No. enforcers to to check or conduct necessary inspections on cargoes
2146 issued on December 14, 1981, lists areas and types of projects containing live fish and lobster being shipped out from the Puerto
as ECA and within EIS system under PD1586, eg., heavy industries, Princesa to ascertain whether the shipper possessed the required
iron and steel mills, smelting plants, major mining and quarrying Mayor's Permit issued by this Office and the shipment is covered by
projects, etc.) 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. Subsequently, the
Case: RURAL BANK OF MAKATI, INC. vs. MUNICIPALITY OF MAKATI, Provincial Board of Palawan issued a similar ordinance.
G.R. No. 150763, 7/2/2004
Petitioners, who were charged with violation of certain provisions of
FACTS: For non-payment of mayors permit fee and annual business the foregoing issuances upon the latters implementation, sought
taxes, criminal charges against certain officers of Petitioner. Pending relief with the SC contending that (a) the challenged ordinances
these charges, Respondent ordered the closure of the bank, deprived them of due process of law, their livelihood, and unduly
prompting the latter to pay, under protest P82,408.66 as mayors restricted them from the practice of their trade, in violation of
permit fee and annual business taxes. Petitioner filed a civil constitutional guarantees, and (b) the challenged office order
complaint for sum of money and damages against Respondent with contained no regulation nor condition under which the Mayor's
RTC alleging that the collection of subject fees and closure order were permit could be granted or denied, vesting the mayor absolute
oppressive and arbitrary which resulted loss of expected earnings. authority to determine whether or not to issue the permit.
RTC dismissed the complaint, which decision was sustained by the
CA holding that the closure order was a legitimate exercise of police DECISION: PETITION dismissed. It is of course settled that laws
power by Respondent. Hence, petition with SC. (including ordinances enacted by local government units) enjoy the
presumption of constitutionality. To overthrow this presumption,
DECISION: Assailed decision AFFIRMED with modification deleting there must be a clear and unequivocal breach of the Constitution, not
closure order. RE (imposition of fees) - Municipal corporations are merely a doubtful or argumentative contradiction. In short, the
agencies of the State for the promotion and maintenance of local self- conflict with the Constitution must be shown beyond reasonable
government and as such are endowed with police powers in order to doubt. Where doubt exists, even if well-founded, there can be no
effectively accomplish and carry out the declared objects of their finding of unconstitutionality. To doubt is to sustain.
creation. 20 The authority of a local government unit to exercise
police power under a general welfare clause is not a recent The right to a balanced and healthful ecology carries with it a
development. Thus, the closure of the bank was a valid exercise of correlative duty to refrain from impairing the environment . . . The
police power pursuant to the general welfare clause contained in and LGC provisions invoked by private respondents merely seek to give
restated by B.P. Blg. 337, which was then the law governing local flesh and blood to the right of the people to a balanced and healthful
government units. ecology. In fact, the General Welfare Clause, expressly mentions this
right.
The general welfare clause has two branches. The first, known as the
general legislative power, authorizes the municipal council to enact In light then of the principles of decentralization and devolution
ordinances and make regulations not repugnant to law, as may be enshrined in the LGC and the powers granted therein to local
necessary to carry into effect and discharge the powers and duties government units under Section 16 (the General Welfare Clause), and
conferred upon the municipal council by law. The second, known as under Sections 149, 447(a) (1) (vi), 458(a)(1)(vi) and 468(a)(1)(vi),
the police power proper, authorizes the municipality to enact which unquestionably involve the exercise of police power, the
ordinances as may be necessary and proper for the health and safety, validity of the questioned Ordinances cannot be doubted.
prosperity, morals, peace, good order, comfort, and convenience of

8
Case: TAN vs. PEREN A, G.R. No. 149743, 2/18/2005 A municipal ordinance must not contravene the Constitution or any
statute, otherwise it is void. Ordinance No. 7 unmistakably
FACTS: How many cockpits may be allowed to operate in a city or contravenes the Cockfighting Law in allowing three cockpits in
municipality? Comes into play, the traditional power of the national Daanbantayan.
government to enact police power measures, on one hand, and the
vague principle of local autonomy now enshrined in the Constitution Case: BATANGAS CATV, INC. vs. CA, G.R. No. 138810, 9/29/2004
on the other. PD449 (Cockfighting Law of 1974) provided that only
one cockpit shall be allowed in each city/municipality except that in In the late 1940s, John Walson, an appliance dealer in Pennsylvania,
cities or municipalities with a population of over 100T, two cockpits suffered a decline in the sale of television (tv) sets because of poor
may be established, maintained or operated. In 1993, the Municipal reception of signals in his community. Troubled, he built an antenna
Council of Daanbantaya, Cebu enacted municipal ordiances which on top of a nearby mountain. Using coaxial cable lines, he distributed
eventually allowed the operation of not more than three cockpits in the tv signals from the antenna to the homes of his customers.
the municipality. In 1995, Petitioner (Leonardo Tan) applied for a Walson's innovative idea improved his sales and at the same time
license to operate a cockpit. Respondent (Socorro Perena), who was gave birth to a new telecommunication system the Community
an existing licensee, filed a complaint with the RTC to enjoin Antenna Television (CATV) or Cable Television. The query in this case
Petitioner from operating his cockpit citing that the challenged is may a LGU regulate the subscriber rates charged by CATV
ordinance allowing the operation of not more than three cockpits operators within its territorial jurisdiction?
violated PD449. The trial court dismissed the complaint and upheld
Petitioners franchise reasoning that, while the ordiance may be in On July 28, 1986, Respondent city council enacted a resolution
conflict with PD449, any doubt in interpretation should be resolved granting Petitioner a permit to construct, install, and operate a CATV
in favor of the grant of more power to LGUs under the LGCs principle system in Batangas City with authority to charge subscribers the
of devolution. Court of Appeals reversed the trial courts decision. maximum rates specified therein with condition that rate increases
Hence, Petitioners appeal to the SC. would be subject to council approval. When Petitioner increased its
subscriber rates from P88.00 to P180.00 per month in 1993,
RULING: Petition DENIED. For Petitioner, Section 447(a)(3)(v) of the Respondent Mayor wrote/threatened Petitioner with the cancellation
LGC sufficiently repeals Section 5(b) of the Cockfighting Law, vesting of its permit unless it secures the approval of respondent City
as it does on LGUs the power and authority to issue franchises and Council. Petitioner claiming that, under EO205, the National
regulate the operation and establishment of cockpits in their Telecommunications Commission has sole authority to regulate the
respective municipalities, any law to the contrary notwithstanding. CATV operation in the Philippines, Petitioner filed a petition before
However, while the Local Government Code expressly repealed the RTC to enjoin from enforcing the questioned ordinance. The trial
several laws, PD449 was not among them. Section 534(f) of the LGC court granted the injunction reasoning that the sole agency of the
declares that all general and special laws or decrees inconsistent with government which can regulate CATV operation is the NTC, and that
the Code are hereby repealed or modified accordingly, but such the LGUs cannot exercise regulatory power over it without
clause is not an express repealing clause because it fails to identify or appropriate legislation. Trial courts ruling was reversed by the CA
designate the acts that are intended to be repealed. holding that, NTC (under EO205) has the authority to issue a
certificate of authority to operate a CATV system, this does not
While the sanggunian retains the power to authorize and license the preclude the city council from regulating the operation of such a
establishment, operation, and maintenance of cockpits, its discretion system in their locality under the powers conferred by the LGC (of
is limited in that it cannot authorize more than one cockpit per city or 1983).
municipality, unless such cities or municipalities have a population of
over one hundred thousand, in which case two cockpits may be RULING: Petition GRANTED. Significantly, President Marcos and
established. President Aquino, in the exercise of their legislative power, issued P.D.
No. 1512, E.O. No. 546 and E.O. No. 205. Hence, they have the force
Cockfighting Law arises from a valid exercise of police power by the and effect of statutes or laws passed by Congress. That the regulatory
national government. Of course, local governments are similarly power stays with the NTC is also clear from President Ramos' E.O. No.
empowered under Section 16 of the Local Government Code. We do 436 mandating that the regulation and supervision of the CATV
not doubt, however, the ability of the national government to industry shall remain vested "solely" in the NTC. In light of the above
implement police power measures that affect the subjects of laws and E.O. No. 436, the NTC exercises regulatory power over CATV
municipal government, especially if the subject of regulation is a operators to the exclusion of other bodies.
condition of universal character irrespective of territorial
jurisdictions. Cockfighting is one such condition. It is a traditionally But, lest we be misunderstood, nothing herein should be interpreted
regulated activity, due to the attendant gambling involved or maybe as to strip LGUs of their general power to prescribe regulations under
even the fact that it essentially consists of two birds killing each other the general welfare clause of the Local Government Code. It must be
for public amusement. Laws have been enacted restricting the days emphasized that when E.O. No. 436 decrees that the "regulatory
when cockfights could be held, and legislation has even been power" shall be vested "solely" in the NTC, it pertains to the
emphatic that cockfights could not be held on holidays celebrating "regulatory power" over those matters which are peculiarly within
national honor such as Independence Day and Rizal Day. the NTC's competence, such as, the: (1) determination of rates, (2)
issuance of "certificates of authority, (3) establishment of areas of
The obvious thrust of our laws designating when cockfights could be operation, (4) examination and assessment of the legal, technical and
held is to limit cockfighting and imposing the one-cockpit-per- financial qualifications of applicant operators, (5) granting of permits
municipality rule is in line with that aim. Cockfighting is a valid for the use of frequencies, (6) regulation of ownership and operation,
matter of police power regulation, as it is a form of gambling (7) adjudication of issues arising from its functions, and (8) other
essentially antagonistic to the aims of enhancing national similar matters. Within these areas, the NTC reigns supreme as it
productivity and self-reliance. Limitation on the number of cockpits possesses the exclusive power to regulate a power comprising
in a given municipality is a reasonably necessary means for the varied acts, such as "to fix, establish, or control; to adjust by rule,
accomplishment of the purpose of controlling cockfighting, for clearly method or established mode; to direct by rule or restriction; or to
more cockpits equals more cockfights. subject to governing principles or laws."

9
There is no dispute that respondent Sangguniang Panlungsod, like
other local legislative bodies, has been empowered to enact DE LA CRUZ vs. PARAS 123 SCRA 759 Ordinance of Bocaue, Bulacan
ordinances and approve resolutions under the general welfare clause prohibiting operation of nightclubs was declared invalid because it
of B.P. Blg. 337, the Local Government Code of 1983. That it continues was prohibitory and not merely regulatory in character.
to posses such power is clear under the new law, R.A. No. 7160.
Section 17, LGC Basic Services and Facilities LGU endeavor to be
The general welfare clause is the delegation in statutory form of the self-reliant and continue exercise powers and discharge their duties
police power of the State to LGUs. Through this, LGUs may prescribe and functions currently vested upon them; also discharge functions
regulations to protect the lives, health, and property of their and responsibilities of national agencies devlolved to them pursuant
constituents and maintain peace and order within their respective to the LGC; exercise such other powers and discharge other functions
territorial jurisdictions. Accordingly, we have upheld enactments as are necessary, appropriate or incidental to efficient and effective
providing, for instance, the regulation of gambling, the occupation of provision of basic services and facilities enumerate in Sec. 17. (see
rig drivers, the installation and operation of pinball machines, the list of basic services and facilities)
maintenance and operation of cockpits, the exhumation and transfer
of corpses from public burial grounds, and the operation of hotels, Note: Public works and infrastructure projects and other facilities,
motels, and lodging houses as valid exercises by local legislatures of programs and services funded by national government under GAA
the police power under the general welfare clause. and other laws, not covered by Section 17 except where LGU is duly
designated as the implementing agency for such
Like any other enterprise, CATV operation maybe regulated by LGUs project/facilities/programs and services.
under the general welfare clause. This is primarily because the CATV
system commits the indiscretion of crossing public properties. (It
uses public properties in order to reach subscribers.) The physical Section 18 Power to Generate & Apply Resources restates and
realities of constructing CATV system the use of public streets, implements Section 5, 6 and 7 of Article 10 of the Constitution, but
rights of ways, the founding of structures, and the parceling of large the power is subject to limitations imposed by Congress.
regions allow an LGU a certain degree of regulation over CATV -includes:
operators. This is the same regulation that it exercises over all private
enterprises within its territory. 1. Establishing an organization responsible for efficient and
effective implementation of their development plans, programs
But, while we recognize the LGUs' power under the general welfare and objective and priorities;
clause, we cannot sustain Resolution No. 210. We are convinced that 2. 2. Creating their own sources of revenue and to levy taxes, fees
respondents strayed from the well recognized limits of its power. The and charges which shall accrue exclusively to their own use and
flaws in Resolution No. 210 are: (1) it violates the mandate of existing disposition and which shall be retained by them;
laws and (2) it violates the State's deregulation policy over the CATV 3. Having a just share in national taxes which shall be
industry. automatically and directly released to them without need of
further action;
Resolution No. 210 is an enactment of an LGU acting only as agent of 4. Having an equitable share in proceeds and from utilization and
the national legislature. Necessarily, its act must reflect and conform development of national wealth and resources within their
to the will of its principal. To test its validity, we must apply the respective jurisdictions including sharing the same with
particular requisites of a valid ordinance as laid down by the inhabitants by way of direct benefits;
accepted principles governing municipal corporations. 5. To acquire, develop, lease, encumber and alienate or otherwise
dispose of real or personal property held by them in their
The apparent defect in Resolution No. 210 is that it contravenes E.O. private capacity and apply their resources and assets for
No. 205 and E.O. No. 436 insofar as it permits respondent productive, developmental or welfare purposes, in exercise or
Sangguniang Panlungsod to usurp a power exclusively vested in the furtherance of their governmental or proprietary powers and
NTC, i.e., the power to fix the subscriber rates charged by CATV functions and ensure thereby their development as self-feliant
operators. As earlier discussed, the fixing of subscriber rates is communities and active participants in attainment of national
definitely one of the matters within the NTC's exclusive domain. goals.

"The rationale of the requirement that the ordinances should not

contravene a statute is obvious. Municipal governments are only
agents of the national government. Local councils exercise only
delegated legislative powers conferred on them by Congress as the
national lawmaking body. The delegate cannot be superior to the
principal or exercise powers higher than those of the latter. It is a
heresy to suggest that the local government units can undo the acts of
Congress, from which they have derived their power in the first place,
and negate by mere ordinance the mandate of the statute.
OTHER CASES: VELASCO vs. VILLEGAS 120 SCRA 568 Manilia
ordinance prohibiting barbershops from conducting massage
business in another room was held valid, as it was passed for
protection of public morals.
BALACUIT vs. CFI OF AGUSAN DEL NORTE 163 SCRA 182 - Ordinance
penalizing persons charging full payment for admission of children
ages (ages 7 to 12) in moviehouse was an invalid exercise of the
police power for being unreasonable and oppressive on business of
petitioners.
NOTE: Sections 128-383, Book II of LGC provides for detailed
provisions on Local Taxation and Fiscal Matters.
NOTE: Section 130, LGC (Fundamental Principles Governing Exercise
of Power to Tax and Generate Revenues by LGUs):
- Taxation shall be uniform in each LGU;
- Taxes, fees, charges and imposition shall be equitable
and based as far as practicable on taxpayers ability to
pay; levied only for a public purpose; not unjust,
excessive, oppressive or confiscatory; not contrary to
law, public policy, national economic policy or in
restraint of trade;
- Collection of taxes, fees, charges and other impositions
shall in no case be let to any private person;
- Revenue collection shall inure solely to the benefit of,
and be subject to the disposition by LGU unless
specifically provided herein; and
- Each LGU shall, as far as practicable, evolve a
progressive system of taxation

10

NOTE: Section 305, LGC (Fundamental Principles Governing Financial
Affairs, Transactions and Operations of LGU):
- No money to be paid out of local treasury except in
pursuance of an appropriation ordinance or law;
- Local government funds and monies shall be spent
solely for public purposes;
- Local revenue is generated only from sources expressly
authorized by law or ordinance, collection thereof shall
at all times be acknowledged properly;
- All monies officially received by a local government
officer in any capacity or on any occasion shall be
accounted for as local funds, unless otherwise,
provided by law;
- Trust funds in local treasury shall not be paid out
except in fulfillment of purpose for which trust was
created or funds received;
- Local budget shall operationalize approved
development plans.
Case: HUMBERTO BASCO vs. PAGCOR, G.R. No. 91649, 5/14/1991
Under PD 1869, the Philippine Amusement and Gaming Corporation
(PAGCOR) was empowered to regulate and centralized all games of
chance authorized by existing franchise or permitted by law.
Petitioners (as lawyers and taxpayers) challenging the
constitutionality of PD1869, alleged that said law waived Manila
Citys right to impose taxes and license fees, which by law is
recognized and thus, was an intrusion into LGUs right to impose
local taxes and license fees in contravention of the constitutionally
enshrined principle of local autonomy. Specifically, the challenged is
directed against Section 13 par. (2) of P.D. 1869 which exempts
PAGCOR, as the franchise holder from paying any "tax of any kind or
form, income or otherwise, as well as fees, charges or levies of
whatever nature, whether National or Local", except for the 5%
franchise tax due to the National Government.
RULING: Petition DISMISSED. Section 5, Article X of the 1987
Constitution (on Local Autonomy) provides that each local
government unit shall have the power to create its own source of
revenue and to levy taxes, fees, and other charges subject to such
guidelines and limitation as the congress may provide, consistent
with the basic policy on local autonomy. Such taxes, fees and charges
shall accrue exclusively to the local government." The power of local
government to "impose taxes and fees" is always subject to
"limitations" which Congress may provide by law. Since PD 1869
remains an "operative" law until "amended, repealed or revoked"
(Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains
as an exception to the exercise of the power of local governments to
impose taxes and fees. It cannot therefore be violative but rather is
consistent with the principle of local autonomy. Local governments
have no power to tax instrumentalities of the National Government.
PAGCOR is a government owned or controlled corporation with an
original charter, PD 1869. All of its shares of stocks are owned by the
National Government. In addition to its corporate powers (Sec. 3,
Title II, PD 1869) it also exercises regulatory powers, thus PAGCOR
has a dual role, to operate and to regulate gambling casinos. The
latter role is governmental, which places it in the category of an
agency or instrumentality of the Government. Being an
instrumentality of the Government, PAGCOR should be and actually is
exempt from local taxes. Otherwise, its operation might be burdened,
impeded or subjected to control by a mere Local government.
Otherwise, mere creatures of the State can defeat National policies
thru extermination of what local authorities may perceive to be
undesirable activates or enterprise using the power to tax as "a tool
for regulation"
Case: LUZ YAMANE vs. BA LEPANTO CONDOMINIUM CORP., G.R. No.
154993, 10/25/2005
FACST: Respondent, a duly organized condomium corporation
holding title to the common and limited common areas of the BA-
Lepanto Condominium, collected regular assessments from its
members for operating expenses, capital expenditures on the
common areas, and other special assessments, pursuant to its
Amended By-Laws.
Without citing as basis any specific provision of the Revenue Code of
Makati or the Local Government Code, Petitioner (City Treasurer of
Makati City) issued a notice of assessment holding Petitioner liable to
pay business taxes, fees and charges totaling P1,601,013.77 for the
years 1995 to 1997. Petitioner reasoned that Respondent is engaged
in a profit venture as the collection of dues from unit owners was
primarily "to sustain and maintain the expenses of the common
areas, giving full appreciative living values for the individual
condominium occupants, generating better marketable prices for
future sale of their units.
Upon denial of its protest, Respondent filed an appeal with the
Regional Trial Court which appeal was dismissed. On review by the
Court of Appeals, the latter reversed the trial courts decision and
declared that the corporation was not liable to pay business taxes to
the City of Makati. Her motion for reconsideration denied, Petitioner
filed a petition for review with the Supreme Court.
RULING: Petition DENIED. The power of local government units to
impose taxes within its territorial jurisdiction derives from the
Constitution itself, which recognizes the power of these units "to
create its own sources of revenue and to levy taxes, fees, and charges
subject to such guidelines and limitations as the Congress may
provide, consistent with the basic policy of local autonomy." These
guidelines and limitations as provided by Congress are in main
contained in the Local Government Code of 1991, which provides for
comprehensive instances when and how local government units may
impose taxes. The significant limitations are enumerated primarily in
Section 133 of the Code (prohibition on income taxes except when
levied on banks and other financial institutions). Found in Title I of
Book II of the Code are other taxes imposable by local government
units, including business taxes. Under Section 151 of the Code, cities
such as Makati are authorized to levy the same taxes fees and charges
as provinces and municipalities.
Section 143 of the Code specifically enumerates several types of
business on which municipalities and cities may impose taxes.
Moreover, the local sanggunian is also authorized to impose taxes on
any other businesses not otherwise specified under Section 143
which the sanggunian concerned may deem proper to tax.
The coverage of business taxation particular to the City of Makati is
provided by the Makati Revenue Code enacted through Municipal
Ordinance No. 92-072. Article A, Chapter III of said code governs
business taxes in Makati, and it is quite specific as to the particular
businesses which are covered by business taxes. The initial inquiry is
what provision of the Makati Revenue Code does the City Treasurer
rely on to make the Corporation liable for business taxes.
As stated earlier, local tax on businesses (that is, "trade or
commercial activity regularly engaged in as a means of livelihood or
with a view to profit") is authorized under Section 143 of the Local
Government Code. It is thus imperative that in order that Respondent
may be subjected to business taxes, its activities must fall within the
definition of business as provided in the Local Government Code. And
to hold that they do is to ignore the very statutory nature of a
condominium corporation.
11
The creation of the condominium corporation is sanctioned by RA International Airport Authority, except for the portions that the
No. 4726, (Condominium Act - a condominium is an interest in real Manila International Airport Authority has leased to private parties,
property consisting of a separate interest in a unit in a residential, are declared VOID.
industrial or commercial building and an undivided interest in
common, directly or indirectly, in the land on which it is located and As a rule, a government-owned or controlled corporation is not
in other common areas of the building). In line with the authority of exempt from real estate tax. However, MIAA is not a government-
the condominium corporation to manage the condominium project, it owned or controlled corporation. A government-owned or controlled
may be authorized, in the deed of restrictions, "to make reasonable corporation must be "organized as a stock or non-stock corporation."
assessments to meet authorized expenditures, each condominium MIAA is not organized as a stock or non-stock corporation. MIAA is
unit to be assessed separately for its share of such expenses in not a stock corporation because it has no capital stock divided into
proportion (unless otherwise provided) to its owner's fractional shares, has no stockholders or voting shares and its capital is not
interest in any common areas." The collection of these assessments divided into shares of stock. Neither is it a non-stock corporation
from unit owners is the basis for the City Treasurer's claim that the because it has no members. A non-stock corporation must have
Corporation is doing business as these collections are "with the end members. Even if the Government is considered as the sole member
view of getting full appreciative living values" for the condominium of MIAA, this will not make MIAA a non-stock corporation because
units, and as a result, profit is obtained once these units are sold atnon-stock corporations cannot distribute any part of their income to
higher prices. The Court cites with approval the two counterpoints their members and in MIAAs case, Section 11 of its Charter requires
raised by the Court of Appeals in rejecting this contention. First, if it to remit 20% of its annual gross operating income to the National
any profit is obtained by the sale of the units, it accrues not to the Treasury, thus, preventing MIAA from qualifying as a non-stock
corporation but to the unit owner. Second, if the unit owner does corporation. Further, non-stock corporations are organized for
obtain profit from the sale of his unit, he is already required to pay charitable, religious, educational, professional, cultural, recreational,
capital gains tax on the appreciated value of the condominium unit. fraternal, literary, scientific, social, civil service, or similar purposes,
like trade, industry, agriculture and like chambers. MIAA is not
Case: MIAA vs. CA, G.R. No. 155650. 7/20/2006 organized for any of these purposes. MIAA, a public utility, is
organized to operate an international and domestic airport for public
FACTS: Petitioner Manila International Airport Authority operates use.
the Ninoy Aquino International Airport (NAIA) Complex in
Paran aque City under Executive Order No. 903, otherwise known as MIAA is a government instrumentality vested with corporate powers
the Revised Charter of the Manila International Airport Authority. to perform efficiently its governmental functions. MIAA is like any
Subsequently, Executive Order Nos. 909 and 298 amended the MIAA other government instrumentality, the only difference is that MIAA is
Charter, where as operator of the international airport, MIAA vested with corporate powers. When the law vests in a government
administers the land, improvements and equipment within the NAIA instrumentality corporate powers, the instrumentality does not
Complex. The MIAA Charter transferred to MIAA approximately 600 become a corporation, unless the government instrumentality is
hectares of land, 3 including the runways and buildings then under organized as a stock or non-stock corporation. Thus, MIAA exercises
the Bureau of Air Transportation. the governmental powers of eminent domain, police authority and
the levying of fees and charges. At the same time, MIAA exercises "all
After, the Office of the Government Corporate Counsel (OGCC) issued the powers of a corporation under the Corporation Law, insofar as
Opinion No. 061 stating that the Local Government Code of 1991 these powers are not inconsistent with the provisions of this
withdrew the exemption from real estate tax granted to MIAA under Executive Order."
Section 21 of the MIAA Charter, MIAA negotiated with Respondent
City of Paran aque to pay the real estate tax imposed by the City and A government instrumentality like MIAA falls under Section 133(o)
paid some of said taxes already due. Later, MIAA received Final of the Local Government Code, which states that, unless otherwise
Notices of Real Estate Tax Delinquency (totaling P624,506,725.42) provided by the Code, the exercise of the taxing powers of provinces,
from the City of Paran aque for the taxable years 1992 to 2001. cities, municipalities, and barangays shall not extend to the levy of
taxes, fees or charges of any kind on the National Government, its
When Paran aque City issued notices of levy and warrants of levy on agencies and instrumentalities and local government units.
the Airport Lands and Buildings and threatened to sell at public
auction these properties if MIAA failed to pay the real estate tax Section 133(o) recognizes the basic principle that local governments
delinquency, MIAA sought clarification of OGCC Opinion No. 061. The cannot tax the national government, which historically merely
OGCC then issued Opinion No. 147 clarifying OGCC Opinion No. 061 delegated to local governments the power to tax. While the 1987
stating that Section 206 of the Local Government Code requires Constitution now includes taxation as one of the powers of local
persons exempt from real estate tax to show proof of exemption and governments, local governments may only exercise such power
that in the case of MIAA, Section 21 of the MIAA Charter is the proof "subject to such guidelines and limitations as the Congress may
that MIAA is exempt from real estate tax. provide."

MIAA petitioned the CA for prohibition and injunction, with prayer
for preliminary injunction or temporary restraining order seeking to
restrain the City of Paran aque from imposing real estate tax on,
levying against, and auctioning for public sale the Airport Lands and
Buildings, which petition however was dismissed for having been
filed beyond the 60-day reglementary period. Hence, this petition for
review.
When local governments invoke the power to tax on national
government instrumentalities, such power is construed strictly
against local governments. The rule is that a tax is never presumed
and there must be clear language in the law imposing the tax. Any
doubt whether a person, article or activity is taxable is resolved
against taxation. This rule applies with greater force when local
governments seek to tax national government instrumentalities.

RULING: Petition GRANTED. The Airport Lands and Buildings of
MIAA are EXEMPT from the real estate tax imposed by the City of
Paran aque. All the real estate tax assessments, including the final
notices of real estate tax delinquencies, issued by the City of
Paran aque on the Airport Lands and Buildings of the Manila
The Airport Lands and Buildings of MIAA are property of public
dominion and therefore owned by the State or the Republic of the
Philippines. Properties of public dominion mentioned in Article 420
of the Civil Code, like "roads, canals, rivers, torrents, ports and
bridges constructed by the State," are owned by the State. The term

12
"ports" includes seaports and airports. The MIAA Airport Lands and be resolved in favor of the State.
Buildings constitute a "port" constructed by the State. The Airport
Lands and Buildings are devoted to public use because they are used In this case, the doubt must be resolved in favor of the City of Davao.
by the public for international and domestic travel and The in lieu of all taxes clause applies only to national internal
transportation. The fact that the MIAA collects terminal fees and revenue taxes and not to local taxes.
other charges from the public does not remove the character of the
Airport Lands and Buildings as properties for public use. The [T]he "in lieu of all taxes" clause in Smart's franchise refers only to
charging of fees to the public does not determine the character of the taxes, other than income tax, imposed under the National Internal
property whether it is of public dominion or not. Article 420 of the Revenue Code. The "in lieu of all taxes" clause does not apply to local
Civil Code defines property of public dominion as one "intended for taxes. The clear intent is for the "in lieu of all taxes" clause to apply
public use." only to taxes under the National Internal Revenue Code and not to
local taxes. Even with respect to national internal revenue taxes, the
As properties of public dominion, the airport properties are outside "in lieu of all taxes" clause does not apply to income tax.
the commerce of man. Properties of public dominion, being for public
use, are not subject to levy, encumbrance or disposition through Case: JUDGE TOMAS C. LEYNES vs. COA, G.R. No. 143596,
public or private sale. Any encumbrance, levy on execution or auction 12/11/2003
sale of any property of public dominion is void for being contrary to
public policy. Essential public services will stop if properties of public FACT: Petitioner was formerly receiving a P1600-monthly allowance
dominion are subject to encumbrances, foreclosures and auction sale. from the Municipality of Naujan while he was stationed there as
This will happen if the City of Paran aque can foreclose and compel judge of the municipal trial court. Respondent Commission on Audit
the auction sale of the 600-hectare runway of the MIAA for non- (upholding the Regional Director and Provincial Auditor) disallowed
payment of real estate tax. said allowance citing that the latter along with Petitioners RATA
from the Supreme Court violated certain budget circulars (NCC#67)
Case: SMART COMMUNICATIONS, INC. vs. CITY OF DAVAO, G.R. No. that no one shall be allowed to collect RATA from more than one
155491, 9/16/2008 source.

FACTS: The Tax Code of Davao City ISec. 1, Art. 10 thereof) provided RULING: On October 10, 1991, Congress enacted RA 7160, (Local
that: Notwithstanding any exemption granted by any law or other Government Code of 1991). The power of the LGUs to grant
special law, there is hereby imposed a tax on businesses enjoying a allowances and other benefits to judges and other national officials
franchise, at a rate of seventy-five percent (75%) of one percent (1%) stationed in their respective territories was expressly provided in
of the gross annual receipts for the preceding calendar year based on Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi) of the Code.
the income or receipts realized within the territorial jurisdiction of Section 447(a)(1)(xi) of RA 7160, the Local Government Code of
Davao City. 1991, provides: When the finances of the municipal government
allow, provide for additional allowances and other benefits to judges,
RULING: Smart is of the view that the only taxes it may be made to prosecutors, public elementary and high school teachers, and other
bear under its franchise are the national franchise tax (now VAT), national government officials stationed in or assigned to the
income tax, and real property tax. It claims exemption from the local municipality;
franchise tax because the in lieu of taxes clause in its franchise does
not distinguish between national and local taxes. We pay heed that The controversy actually centers on the seemingly sweeping
R.A. No. 7294 is not definite in granting exemption to Smart from provision in NCC No. 67 which states that "no one shall be allowed to
local taxation. Section 9 of R.A. No. 7294 imposes on Smart a collect RATA from more than one source." Does this mean that judges
franchise tax equivalent to three percent (3%) of all gross receipts of cannot receive allowances from LGUs in addition to the RATA from
the business transacted under the franchise and the said percentage the Supreme Court? By no stretch of the imagination can NCC No. 67
shall be in lieu of all taxes on the franchise or earnings thereof. R.A. be construed as nullifying the power of LGUs to grant allowances to
No 7294 does not expressly provide what kind of taxes Smart is judges under the Local Government Code of 1991. It was issued
exempted from. It is not clear whether the in lieu of all taxes primarily to make the grant of RATA to national officials under the
provision in the franchise of Smart would include exemption from national budget uniform. In other words, it applies only to the
local or national taxation. What is clear is that Smart shall pay national funds administered by the DBM, not the local funds of LGUs.
franchise tax equivalent to three percent (3%) of all gross receipts of
the business transacted under its franchise. But whether the To rule against the power of LGUs to grant allowances to judges as
franchise tax exemption would include exemption from exactions by what respondent COA would like us to do will subvert the principle of
both the local and the national government is not unequivocal. local autonomy zealously guaranteed by the Constitution. The Local
Government Code of 1991 was specially promulgated by Congress to
The uncertainty in the in lieu of all taxes clause in R.A. No. 7294 on ensure the autonomy of local governments as mandated by the
whether Smart is exempted from both local and national franchise Constitution. By upholding, in the present case, the power of LGUs to
tax must be construed strictly against Smart which claims the grant allowances to judges and leaving to their discretion the amount
exemption. Smart has the burden of proving that, aside from the of allowances they may want to grant, depending on the availability
imposed 3% franchise tax, Congress intended it to be exempt from all of local funds, we ensure the genuine and meaningful local autonomy
kinds of franchise taxes whether local or national. However, Smart of LGUs.
failed in this regard.

Tax exemptions are never presumed and are strictly construed
against the taxpayer and liberally in favor of the taxing authority.[22]
They can only be given force when the grant is clear and categorical.
The surrender of the power to tax, when claimed, must be clearly
shown by a language that will admit of no reasonable construction
consistent with the reservation of the power. If the intention of the
legislature is open to doubt, then the intention of the legislature must
Section 19,LGC LGUs Power of Eminent Domain LGU through its
Chief Executive acting pursuant to an ordinance; for public use or
purpose or welfare for the benefit of poor and landless; upon
payment of just compensation, pursuant to provisions of the
Constitution and pertinent laws.
Conditions for Exercise of Power of Eminent Domain: (i) Prior valid

13
and definite offer to owner which latter did not accept; (II) LGU may
take immediate possession of property upon filing of expropriation
proceedings (Rule 67 of Rules of Court) and payment of deposit of at
least 15% of fair market value of property based on current tax
declaration; amount to be paid for expropriation shall be determined
by proper court (reference to Commissioner) based on fair market
value at the time of taking.
through ordinance passed after conducting public hearings for that
purpose, may authorize the reclassification of agricultural lands and
provide for the manner of their utilization or disposition.
Agricultural Land, defined: Those public lands acquired from Spain
which are not timber or mineral land; land devoted to agriculture or
to any growth.

- Eminent Domain inherent attribute of sovereignty to take private Grounds for Reclassification: (i) When land ceases to be economically
property upon payment of just compensation. feasible and sound for agricultural purposes as determined by the
Dept. of Agriculture; and (ii) when land shall have substantially
Case: MUN. OF PARANAQUE vs. V.M. REALTY CORP. 292 SCRA 678 greater economic value for residential, commercial or industrial
purposes as determined by the Sanggunian;
FACTS: A resolution passed by Municipal Council authorized Chief
Executive to exercise police power. Conditions for Reclassification: Percentage limits, that is, of the total
agricultural area at the time of passage of reclassification (a) for
RULING: LGC in effect when complaint for expropriation was filed, highly urbanized cities and independent component cities 15%; (b)
explicitly requires an ordinance for this purpose. If Congress for component cities and 1 st to 3rd class municipalities 10%; and (c)
intended to allow LGU to exercise eminent domain through MERE for 4th to 6th class municipalities 5%
resolution, it would have simply adopted the language of the previous
local government code (BP 337 of 1983). Where the law is clear and Note: President (upon Natl Economic Devt Authoritys
ambiguous, the law is applied according to the express terms. recommendation), when public interest so requires, authorize a city
Eminent Domain necessarily involves a derogation of a fundamental or municipality to reclassify lands in excess of limits set in Section
or private right of the people, hence, manifest change in legislative 20(a).
language from resolution under BP337 to ordinance under
RA7160 demands strict interpretation. Petitioner relies on Art. 36 of - Under Sec. 20(e) Agricultural lands distributed to agrarian reform
Rule VI of the Implementing Rules which requires only a resolution beneficiaries pursuant to RA6657(CARL), shall not be affected by the
to authorize the LGU to exercise eminent domain. This is clearly reclassification and the conversion of such lands into other purposes
misplaced. Section 19 of the LGC, the law itself, surely prevails over shall be governed by Sec. 65 of CARL.
said rule which merely seeks to implement it. The clear letter of the
law is controlling and cannot be amended by mere administrative Note: Sec. 65 of RA6657 Conditions for conversion of agricultural
rule issued for its implementation. lands held by agrarian reform program beneficiaries to non-
agricultural use with DAR: (a) 5 year lapse from award of land; (ii)
Note: Resolution is a mere declaration of sentiment/opinion of land ceased to be economically feasible and sound for agricultural
lawmaking body on a specific matter; it is temporary in nature; third purpose; (iii) notice to affected parties; (iv) beneficiary has fully paid
reading not necessary unless decided otherwise by majority of all his obligation.
sangguniang members. Ordinance on the otherhand, is law and is of
general and permanent character and requires 3 readings. Section 21, LGC Closure & Opening of Roads The closure of
streets/roads is within the power of the local government unit
Case: AMOS FRANCIA, vs. MUN. OF MEYCAUAYAN, G.R. No. 170432, (through council by way of ordinance).
3/24/2008
- LGU (by ordinance) may permanently/temporarily close or open
FACTS: Respondent filed a complaint to expropriate Petitioners any local road, alley, park or square falling within its jurisdiction.
16,256 sq. m. idle property which it planned to use as a common
public terminal for all types of public utility vehicles with a weighing Note: In case of permanent closure, ordinance must be approved by,
scale for heavy trucks. In their answer, Petitioners averred that the at least 2/3 of all members of the sanggunian and when necessary, an
subject land was developed contrary to Respondents claim of being adequate substitute for the public facility subject of closure, is
raw land, for which reason, Respondents offer price of 333,500 (or provided.
P111.99 per square meter) was too low. Petitioners essentially aver
that the CA erred in upholding the RTC's order that, in expropriation - Property publicly withdrawn from public use may be
cases, prior determination of the existence of a public purpose was used/conveyed for any purpose for which other real property
not necessary for the issuance of a writ of possession. belonging to the LGU concerned may be lawfully used or conveyed.

RULING: Petitioner DENIED. Sec. 19, LGC provides that, a LGU may, Note: No freedom park shall be closed permanently without
through its chief executive and acting pursuant to an ordinance, provision for its transfer/relocation to a new site. (see related B.P.880
exercise the power of eminent domain for public use, or purpose, or Public Assembly Act).
welfare for the benefit of the poor and the landless, upon payment of
just compensation, pursuant to the provisions of the Constitution and - LGU has the power to close local and even national roads (Note: LGU
pertinent laws. Before a LGU may enter into possession of the has no authority to order permanent closure/opening of a national
property sought to be expropriated, it must (1) file a complaint for road, alley, park or square, such authority applies to local roads only,
expropriation sufficient in form and substance in the proper court see sec. 2[a]).
and (2) deposit with the said court at least 15% of the property's fair
market value based on its current tax declaration. The law does not Conditions for temporary closure of national/local roads under Sec.
make the determination of a public purpose a condition precedent to 2[c]: (i) occasion of actual emergency, fiesta celebrations, public
the issuance of a writ of possession. rallies, agricultural or industrial fairs, or undertaking of public works
and highways (eg. Banilad flyover); (ii) written order for temporary
closure by local chief executive; (iii) no national or local road, alley,
Section 20, LGC LGU Power to Reclassify Land City or Municipality park or square shall be temporarily closed for athletic, cultural or

14
civic activity not officially sponsored, recognized or approved by local door. The law will not permit him to be cut off from the public
LGU concerned. thoroughfares, but he must content himself with such route for outlet
as the regularly constituted public authority may deem most
Case: ANTONIO FAVIS vs. THE CITY OF BAGUIO, G.R. No. L-29910, compatible with the public welfare. When he acquires city property,
4/25/1969 he does so in tacit recognition of these principles. If, subsequent to
his appreciation, the city authorities abandon a portion of the street
FACTS: A resolution passed by the city council closed the dead-end to which his property is not immediately adjacent, he may suffer loss
portion of Lapu-lapu Street to public use. By subsequent resolution, because of the inconvenience imposed, but the public treasury
the Mayor as authorized therein, leased the closed portion to Shell cannot be required to recompense him. Such case is damnum absque
Corporation. Petitioner Favis protested the lease to Shell claiming injuria."
that said lease diminished the width of Lapu-Lapu Street and that the
City was bereft of authority to lease any portion of its public streets
in favor of anyone. Subsequently, Petitioner filed a complaint for Case: COACO, INC. vs. HON. PASCUAL A. BERCILLES, G.R. No. L-40474,
annulment of the lease with damages in the Court of First Instance of 8/29/1975
Baguio. The latter court dismissed his complaint. Hence, appeal to the
Supreme Court. FACTS: Petitioner Cebu Oxygen & Acytelene Co., Inc. applied for
registration of title over a portion of M. Gorces Street in Mabolo, Cebu
RULING: APPEAL Denied. Appellant may not challenge the city City. Said portion was declared an abandoned road by the City
council's act of withdrawing a strip of Lapu-Lapu Street at its dead Council of Cebu the same not being included in the Cebu
end from public use and converting the remainder thereof into an Development Plan, and later, by authority of the City Council, was
alley. These are acts well within the ambit of the power to close a city sold by the Acting Mayor to petitioner who was the highest bidder at
street. The city council is the authority competent to determine if a a public bidding. On motion by the Assistant Provincial Fiscal
certain property is still necessary for public use. This power is (alleging that the subject property being a public road intended for a
discretionary and will not ordinarily be controlled or interfered with public use, it is part of the public domain, outside the commerce of
by the courts, absent a plain case of abuse or fraud or collusion. men, and cannot be subject to registration by any private individual),
Faithfulness to the public trust will be presumed. The fact that some the trial court dismissed Petitioners application.
private interests may be served incidentally will not invalidate the
vacation ordinance. RULING: PETITION is granted. Order of dismissal set aside and trial
court ordered to proceed with the hearing of the petitioner's
Given the precept that the discretion of a municipal corporation is application for registration of title.
broad in scope and should thus be accorded great deference in the Under the Cebu City Charter, the City Council is empowered to close a
spirit of the Local Autonomy Law (R.A. 2264), and absent a clear city road or a street and further, use or convey property thus
abuse of discretion, we hold that the withdrawal for lease of the withdrawn from public servitude for any purpose for which other
disputed portion of Lapu-Lapu Street and the conversion of the real property belonging to the City may be lawfully used or conveyed.
remainder of the dead-end part thereof into an alley, does not call for,
and is beyond the reach of, judicial interference. In the case of Favis vs. City of Baguio, the Court upholding the power
of the city council to close city streets and to vacate or withdraw the
From the fact that the leased strip of 100 square meters was same from public use was similarly assailed, declared that the city
withdrawn from public use, it necessarily follows that such leased council is the authority competent to determine whether or not a
portion becomes patrimonial property. Article 422 of the Civil Code certain property is still necessary for public use. This power to vacate
indeed provides that property of public domain, "when no longer a street or alley is discretionary, and will not ordinarily be controlled
intended for public use or public service, shall form part of the or interfered with by the courts, absent a plain case of abuse or fraud
patrimonial property of the State." Authority is not wanting for the or collusion. Faithfulness to the public trust will be presumed.
proposition that "[property for public use of provinces and towns are
governed by the same principles as property of public dominion of Since that portion of the city street subject of petitioner's application
the same character." There is no doubt that the strip withdrawn from for registration of title was withdrawn from public use, it follows that
public use and held in private ownership may be given in lease. such withdrawn portion becomes patrimonial property which can be
the object of an ordinary contract consisting with Article 422 of the
The general rule is, one whose property does not abut on the closed Civil Code (that property of public dominion, when no longer
section of a street has no right to compensation for the closing or intended for public use or for public service, shall form part of the
vacation of the street, if he still has reasonable access to the general patrimonial property of the State).
system of streets. The circumstances in some cases may be such as to
give a right to damages to a property owner, even though his Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000
property does not abut on the closed section. But to warrant recovery
in any such case the property owner must show that the situation is FACTS: Petitioner issued an order to open to public traffic Neptune
such that he has sustained special damages differing in kind, and not Street (and to demolition its perimeter fence) a private road owned
merely in degree, from those sustained by the public generally." by Respondent.

In the case at bar, no private right of appellant has been invaded. No

RULING: Petition DENIED. While we hold that the general welfare
special damage or damages he will incur by reason of the closing of a
should be promoted, we stress that it should not be achieved at the
portion of Lapu-Lapu Street at its dead end. His property does not
expense of the rule of law. It is thus beyond doubt that the MMDA is
abut that street. In fact, the court has found that the remainingnot a local government unit or a public corporation endowed with
portion of Lapu-Lapu Street, which actually is 4 meters in width, is
legislative power. It is not even a "special metropolitan political
sufficient for the needs of appellant and that the leased portion
subdivision" as contemplated in Section 11, Article X of the
subject of this suit "was not necessary for public use." Constitution. The powers of the MMDA are limited to formulation,
coordination, regulation, implementation, preparation, management,
"The Constitution does not undertake to guarantee to a property monitoring, setting of policies, installation of a system and
owner the public maintenance of the most convenient route to his administration. It is the local government units, acting through their

15
respective legislative councils that possess legislative power and ordinances illegal. In said suit, Petitioners challenged the appearance
police power. In the case at bar, the Sangguniang Panlungsod of of a private lawyer for the municipality. SC held, Only provincial fiscal,
Makati City did not pass any ordinance or resolution ordering the under (Sec. 1683 of Revised Admin Code) provincial attorney or
opening of Neptune Street, hence, its proposed opening by Petitioner municipal attorney may validly represent the municipality. The
is illegal. legality of the representation of an unauthorized counsel may be
raised at any stage of the proceedings.
NOTE: Closure of Roads is not expropriation where the property
owner is entitled to just compensation. Construction of new road was RE: POWER TO ACQUIRE/CONVEY REAL OR PERSONAL PROPERTY
undertaken under the General Welfare Clause (police power), that is, LGU may acquire real/personal, tangible or intangible in any manner
for enjoyment of convenience, every individual must be prepared to allowed by law, eg., sale or donation, etc.
give his share.
Case: VILLANUEVA vs. CASTANEDA 454 SCRA 142 Public plaza is
Section 22, LGC Corporate Powers As a body corporate, has the beyond the commerce of man and cannot be the subject of a lease or
following powers; other contractual undertaking, and even assuming the existence of a
(a) To continuous succession in its corporate name; valid lease of the public plaza or part thereof, the municipal
(b) To sue and be sued; resolution effectively terminated the agreement, for it is settled that
(c) To have and use a corporate seal; the police power cannot be surrendered or bargained away through
(d) To acquire and convey real or personal property; the medium of a contract.
(e) To enter into contracts; such other powers as are granted
corporation subject to limits provided in LGC and other laws. RE: POWER TO ENTER INTO CONTRACTS requires: (i) LGU has
express/implied or inherent power to enter into the particular
Corporate Powers, defined: Corporations capacity/right to do certain contract (refer to LGC, special laws or charter); (ii) contract is
acts or engage in certain activities such as sue/be sued enter into entered into by the proper department, board, committee, officer or
contracts, borrow money and do suc other things necessary to obtain agent (under LGC, generally such authority is with the Local Chief
its purposes. Executive upon prior authorization by sanggunian); (iii) contract
must comply with certain substantive requirements, eg., when
NOTE: Local Chief Executive enters into contracts in behalf of LGU, expenditure of public funds is to be made, there must be actual
requires prior authorization by sangguniang concerned UNLESS appropriation and certificate of availability of funds; (iv) contract
otherwise provided in the LGC. must comply with formal requirements of written contracts, eg.
Statutes of fraud.
NOTE: Legible copy of contract to be posted in conspicuous place in
provincial capitol/city/municipality/barangay hall (for NOTE: A contract entered into without complying with (i) and (iii)
Transparency). above is ULTRA VIRES, ergo, NULL AND VOID. Such contract cannot
be ratified or validated. Ratification of defective contracts is possible
NOTE: Full autonomy in exercise of corporate powers (not acting as only when there is non-compliance with (ii) and (iv) requirements.
agent of the State), and limited only by LGC and other applicable
laws. Case: CITY OF QUEZON vs. LEXBER, INC., G.R. 141616, 3/15/01

RE: RIGHT TO SUE/BE SUED Case: CITY COUNCIL OF CEBU vs. FACTS; Before the effectivity of the LGC in 1991, a tri-partite
CUIZON 47 SCRA 325 agreement was signed by Lexber, Quezon City and the Municipality of
Antipolo whereby, with the conformity of Antipolo, Quezon City
FACTS: For lack of prior authority from the Council, the latter filed would lease and use the private land owned by Lexber as a dumpsite
with CFI-Cebu, a complaint to nullify the contract between Mayor situated in Antipolo in exchange for exclusive services and equipment
Cuizon and Tropical Commercial Co., Inc. involving the purchase of for landfill to be provided Lexber. From 1991-1992, Quezon City used
road construction equipments for $520,912.00 cash from Tropical. the site for dumping but suddenly stopped without any explanation.
Complaint was dismissed for lack of legal capacity as trial court Lexber sent a demand letter claiming that it was still entitled to
reasoned that there is no provision of law authorizing city council to compensation pursuant to the agreement but Mayor Mel Mathay of
sue in behalf of the city and that the authorized representative under Quezon City refused citing that the contract was void having been
the LGC is the city mayor for that purpose. signed by then Mayor Simon without the approval or ratification by
City Council and that there was no budget appropriation. Collection
RULING: Generally, suit is commenced by the local executive upon suit was filed by Lexber. RTC ruled in the latters favor and which
authority of the sanggunian, except where the city councilors decision was affirmed by the CA.
themselves and as representatives of/in behalf of the city, bring the
action to prevent unlawful disbursement of city funds. RULING: Petition DENIED. In the case at bar, the contract requires
P94M for a 5-year period. Quezon City invoked PD1445 (Auditing
Case: MUNICIPALITY OF PILILIA vs. CA 233 SCRA 484 Municipality Code of the Philippines) that contracts involving expenditure of
cannot be represented by a private lawyer. Only provincial fiscal or public funds can only be entered into when there is an appropriation
municipal attorney can represent a province or municipality in thereof to be certified by proper accounting official/agent that funds
lawsuits. This is mandatory. The municipalitys authority to employ a have been appropriated for that purpose. Also, Quezon City cited the
private lawyer is limited to situations where the provincial fiscal is LGC empowering the sanggunian with authority to appropriate funds
disqualified to present it which disqualification must appear on for expenses of the city government. PD1445 does not provide that
record. Fiscals refusal to represent the municipality is not legal the absence of appropriation law ipso facto makes a contract entered
justification for employing the services of private counsel, into by the LGU null and void. Under the LGC (1973), the power of a
Municipality should request the Secretary of Justice to appoint an mayor to enter contract is not subject to prior authorization by the
acting provincial fiscal in place of the one who declined to handle it. council.

Case: RAMOS vs. CA 269 SCRA 34 Petitioners Ramos and Baliuag Case: MANANTAN vs. MUNICIPLAITY OF LUNA (LA UNION) 82 Phil
Market Vendors Association filed a petition to declare certain 844 Contract of lease granting fishing privileges is a valid and

16
binding contract and cannot be impaired by a subsequent resolution NOTE: As to tort liability: LGU is not liable if engaged in
setting it aside and granting the privilege to another (unless the governmental function but liable if engaged in proprietary function.
subsequent resolution is a police power measure because the
exercise of the latter prevails over the non-impairment clause.

Section 23, LGC Grants and Donations sets forth the rules on grants
and donations to LGUs from local and foreign assistance agencies)
which local chief executive may upon authority of the sanggunian
negotiate and secure in order to support the basic services or
facilities enumerated in Sec. 17.

- No need of securing clearance/approval for grant/donation from

any department, agency or office of the national government or from
any higher LGU.

- Projects financed by such grants/assistance with national security

implications shall be approved by the national agency concerned.
Failure of such agency to act on request within 30 days from receipt
thereof, it is deemed approved.

- Local Chief shall, within 30 days, upon signing of such grant,

agreement or deed of donation, report the nature, amount, terms of
such assistance to both Houses of Congress and the President.

Section 24, LGC Municipal Liability Rule: LGU and their officials are
not exempt from liability for death or injury to persons/damage to
property.

Damages in legal contemplation refers to the sum of money which

law awards or imposes as pecuniary compensation, recompense or
satisfaction for an injury done or a wrong sustained as a consequence
either of a breach of contractual obligation or a tortuous act. It
includes all kinds of damages contemplated in the Civil Code; it is
awarded to one as a vindication of the wrongful invasion of his rights.

Case: CORREA vs. CFI of BULACAN 92 SCRA 312 Municipal

corporation is responsible only for acts of its officers only when they
have acted by authority of law and in conformity with requirements.
A public officer who commits a tort or wrongful act, done in excess or
beyond the scope of his duty, is not protected by his office and is
personally liable therefor like any private individual.

Case PILAR vs. SANGGUNIANG BAYAN OF DANSOL, PANGASINAN

128 SCRA 173 Municipal mayor is personally liable for damages
(moral and exemplary) and attorneys fees for having vetoed in bad
faith, resolution appropriating funds for salary of the vice-mayor.

Case: MENDOZA vs DE LEON 33 PHIL 508 Operation of ferry

service is a proprietary function. Municipality is negligent and
therefore liable for having awarded franchise to operate ferry service
to another notwithstanding previous grant of franchise to the
plaintiff.

Case: MUNICIPALITY OF JAASAN, MISAMIS ORIENTAL vs.

GENTALLAN, G.R. 154961, 5/9/2005 There being no malice or bad
faith in the illegal dismissal and refusal to reinstate respondent
Gentallan by her superior officers, the latter cannot be held
personally liable for her back salaries. Municipal government, ergo,
should disburse funds to answer for her claims.
INTERGOVERNMENTAL RELATIONS
NOTE: Liability for contracts Rule: LGU, like ordinary person is
liable on a contract it enters, provided that contract is ultra vires. as a body political and corporate (to serve its constituents)
Otherwise, become personal liability of the officer who acted beyond
his power. NATIONAL GOVERNMENT LGU RELATIONS:

See Articles 2189, 2180 and 34 of the Civil Code on provisions on Section 25, LGC National supervision over LGU despite the unitary
liability. and centralized Phil. Governmental structure, 1987 Constitution
limits the authority of the President over LGU only to GENERAL

17
SUPERVISION. two cases and the respondent Secretary has issued another order
preventively suspending the former for antoehr 60 days, the third
Presidents General Supervision time in twenty months. We are allowing the mayor to suffer the
(i) directs over provinces, highly urbanized cities and duration of his third suspension. Insofar as the remaining charges are
independent component cities, (through provinces over) concerned, we are urging the DILG, upon finality of this decision to
component cities and municipalities; and (through cities and undertake steps to expedite the same, subject to the mayors usual
municipalities over) barangays; remedies of appeal, judicial or administrative or certiorari, if
(ii) to ensure that acts of LGU are within the scope of their warranted and meanwhile, we are precluding the Secretary from
prescribed powers and functions; meting out further suspensions based on those remaining
(iii) Article X, Section 16 of 1987 Constitution President shall complaints, notwithstanding findings of prima facie evidence.
exercise general supervision over authonmous regions to
ensure that laws are faithfully executed. Section 26, LGC National agency/GOCC (in
planning/implementation) of a project/program have DUTY TO
Supervision defined means overseeing or power/authority of an CONSULT LGU on objectives/goals, impact to the people in terms of
office to see that subordinate performs their duties. If the latter fails environmental/ecological balance and measures to
or neglects to perform their duties, the former may take such prevent/minimize adverse effects.
steps/action as prescribed by law to make them perform their duties.
Supervision does not mean control. Control includes the power to NOTE: Project/Program intended may cause pollution, climactic
alter/modify/set aside acts of a subordinate officer. change, depletion of non-renewable resources, loss of cropland,
rangeland, forest cover or extinction of animal or plant species.
Note: National agencies/offices with project implementation function
shall coordinate with each other and with LGU concerned in the Section 27, LGC (read alongside Sec. 2 and Sec. 26) - Prior
discharge of these functions to ensure participation of LGU both in consultation with LGU (plus prior approval by sanggunian) is
the planning and implementation of said national projects. indispensable for implementation of program/project.

Note: National agencies may be directed by the President, upon LGUs NOTE: If project results in eviction, appropriate relocation sites to be
request, to provide financial, technical or other forms of assistance to provided.
LGU without extra cost to LGU.
See: REPUBLIC vs. CITY OF DAVAO, G.R. No. 148622, 9/12/2002;
Note: National agencies (including GOCCs) with field LINA VS. PANO 364 SCRA 76
offices/branches in province/city/municipality to furnish local chief
executive concerned, for his information and guidance, monthly
reports including duly certified budgetary allocations and LGU PNP RELATIONS:
expenditures.
Section 28, LGC LGU Power of Operational Supervision and Control
Case: RODOLFO GANZON vs. CA, G.R. No. 93252, 8/5/1991 over PNP
as as provided under RA 6975 (DILG Act of 1990) amended by RA
FACTS: Petitioner, Mayor of Iloilo City and a member of the 8551 (PNP Reorganization Act of 1991). These laws govern the
Sangguniang Panglungsod thereof, respectively, were charged extent of operational supervision and control of local chief executive
administratively on various charges, among them, abuse of authority, over police force, fire protection unit and jail management assigned
oppression, grave misconduct, disgraceful and immoral conduct, in their respective jurisdiction.
intimidation, culpable violation of the Constitution, and arbitrary
detention. Hearing on the charges ensued and the Respondent DILG, NOTE: Governors and mayors, upon having been elected and
upon finding of probable cause and reasons, issued successive qualified as such, are automatically deputized as representatives of
preventive suspension orders against Petitioner Mayor. Before the SC, NAPOLCOM in their respective jurisdiction and as such, they can
Petitioners primary argument is that the DILG Secretary (as inspect police forces and units, conduct audit and exercise such other
Presidents alter ego) is devoid, in any event, of any authority to functions as may be duly authorized.
suspend and remove local officials.
NOTE: Operational Control and Supervision (OCS), defined power
RULING: Since local governments remain accountable to the national to direct, oversee, superintend, the day to day functions of police
authority, the latter may, by law, and in the manner set forth therein, investigation of crimes and crime prevention activities and traffic
impose disciplinary action against local officials. In the case at bar, control in accordance with rules and regulations issued by the
the DILG Secretary, the Presidents alter ego, in consonance with the NAPOLCOM. It includes the power to employ and deploy police
specific provisions of BP337 (the existing Local Govt Code) can personnel and units.
suspend Petitioners.
NOTE: OCS for GOVERNOR: (a) choose the provincial police director
Supervision is not incompatible with disciplinary authority. As this from a list of three eligibles recommended by the PNP Director; and
Court held in Ganzon vs. Cayanan, 104 Phil 484, in administrative (b) as chair of peace and order council, oversee implementation of
law, supervision means overseeing or the power or authority of an provincial public safety plan. (Sec. 64, RA8551)
officer to see that subordinate officers perform their duties. If the
latter fail or neglect to fulfill them the former may take such action or NOTE: OCS for CITY/MUNICIPAL MAYOR: includes power to: (i)
step as prescribed by law to make them perform their duties. choose chief of police from list of 5 eligibles recommeneded by
provincial police director, preferably from same province, city or
While the respondent Secretary, as Presidents alter ego, under the municipality, no OIC to be for more than 30 days; local peace and
existing Local Govt Code, has the power to suspend the petitioner, order council through Mayor may recommend recall/reassignment of
such power cannot be exercised oppressively. Ten administrative chief of police when in its perception, the latter has been ineffective
cases have been successively filed against the city mayor. The latter in combating crime or maintaining peace and order in the LGU, relief
has been made to serve a total of 120 days of suspension for the first shall be based on guidelines established by NAPOLCOM; (ii)

18
recommend to provincial police director, transfer, reassignment or supervised and controlled by Provincial government within its
detail of PNP members outside their respective city/town residences; jurisdiction whose expenses shall be subsidized by National
(iii) authority to recommend from list of eligibles previously Government for not more than three years after effectivity of
screened by local peace and order council appointment of new PNP RA6975.
members to be assigned to the respective cities/municipalities
without which no such appointments shall be attested. Whenever 3. INTER-LOCAL GOVERNMENT RELATIONS - -
practicable and consistent with requirements of service, PNP
members shall be assigned to the city/municipaliy of their residence; Section 29, LGC Province has SUPERVISORY POWER (or oversight
(iv) control and supervision of anti-gambling operation within its power but does not include any restraining authority over supervised
jurisdiction. party) of province over components but not over highly urbanized
and independent component cities; Province (through Governor)
NOTE: Exercise operational supervision and control over PNP units shall ensure that every component city/municipality within its
in their respective jurisdiction, except, 30-day period immediately territorial jurisdiction acts within scope of its prescribed powers and
preceding and 30 days after any national or local and barangay functions.
elections in which instances, police under authority of COMELEC.
Section 30, LGC POWER TO REVIEW Governor has power of review
Note: City/Municipal mayors, in coordination with local peace and of all executive orders promulgated by component
order council which he CHAIRS, shall develop an integrated cities/municipalities within his jurisdiction. Exception: otherwise
area/community public safety plan embrancing a priority of action provided under the Constitution and special statues. City/municipal
and program thrusts for implementation by local PNP stations. mayor shall review all executive orders promulgated by the punong
barangay within his jurisdiction.
Case: ANDAYA vs. RTC 319 SCRA 696 PNP RD Andaya submitted a
list of 5 eligibles not including the name of P/Chief Insp. Andres NOTE: It is mandatory upon these named higher local chiefs to
Sarmiento, to Mayor of Cebu City. Mayor Garcia wants the name of review executive orders of the lower local chiefs.
Sarmiento on the list. Andaya claims Sarmiento not qualified. SC held
that, Mayor has no power to appoint, has only limited power of NOTE: Review to ensure that executive orders are within the
selecting, one from among list of eligibles to be named chief of police. powers granted by law and in conformity with the
Mayor cannot require Regional Director to include the name of any provincial/city/municipal ordinances, as the case may be, that is, to
officer, no matter how qualified, in the list. ensure that such orders do not violate existing law/ordinance.

NOTE: Executive order submitted to reviewing authority within 3

NOTE: Unless reversed by President, deputization may be days from issuance; inaction within 30 days from submission, the
withdrawn/revoked by Commission after consultation with same is deemed consistent with law and therefore valid.
Provincial Governor and congressman concerned. Deputization, upon
good cause shown, may be restored by President directly or through Section 31, LGC MUNICIPAL QUESTIONS questions affecting the
the Commission. Withdrawal/Revocation may be on grounds of municipality are to be submitted to the municipal legal officer, if
frequent unauthorized absence; abuse of authority; providing none, to the provincial legal officer, if none, to the provincial
material support to criminal elements; engaging in acts inimical to prosecutor.
national security or which negate effectiveness of peace and order
campaign. Section 32, LGC POWER OF GENERAL SUPERVISION
City/Municipality has power of general supervision over component
NOTE: LGU DISCIPLINARY POWERS OVER PNP MEMBERS barangays to ensure said barangays act within the scope of their
City/Municipal mayors, after due notice and summary hearing, shall prescribed powers and functions.
impose DISCIPLINARY PENALTIES for minor offenses committed by
PNP membes assigned to their respective jurisdiction as provided in Section 33, LGC LGUs through appropriate ordinance, may group
Section 41 of RA6975 (not involving moral turpitude, includes, but themselves, consolidate or coordinate their efforts/services and
not limited to, simple misconduct, insubordination, frequent resources for the purpose commonly beneficial to them. For such
absences, tardiness, habitual drunkenness, gambling as prohibited by undertaking, LGUs, upon approval of sangguniang concerned, after
law). public hearing conducted therefor, shall contribute funds, real estate,
equipment and other property, appoint/assign personnel under
RELATED ITEMS INVOLVING LGU CONTAINED IN RA 6975 (DILG Act terms agreed upon by participating LGU through a memorandum of
of 1990): agreement.

Section 55 Bureau of Fire Protection tasked with prevention and LGU PEOPLESS AND NON-GOVTAL ORGANIZATIONS RELATIONS
suppression of destructive fires, investigate all causes of fire, file Peoples organizations are bonafide associations of
complaint with fiscal; composed of provincial/district offices and citizens with demonstrated capacity to promote public interest and
city/municipal stations; LGU at city and municipal levels shall be with identifiable leadership, membership and structure (Art. XIII,
responsible for fire protection and various emergency services such Section 15 of 1987 Constitution).
as rescue and evaluation of injured people at fire-related incidents
and in general, all fire prevention and suppression measures to Section 16, Art. XIII of the Constitution The right of the people and
secure the safety of life and property of citizenry. their organizations to effective and reasonable levels of social,
political and economic decision-making shall not be abridged. The
Section 56 At least 1 fire station with adequate firefighting facilities State, by law, shall facilitate the establishment of adequate
and equipment for provincial capitol, city and municipality; LGU to consultation mechanisms.
provide the necessary site for the fire station.
NOTE: Sections 34, 35 and 36 of LGC implement Section 16, Art. XIII
Section 60 Bureau of Jail Management and Penology supervision of the 1987 Constitution.
and control over all city and municipal jails. Provincial jails shall be

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Section 34, LGC LGU to promote establishments and operation of PO
and NGO to become active partners in pursuit of local autonomy.

Section 35, LGC LGU may enter joint ventures and such other
cooperative arrangements with PO and NGO to engage in delivery of
certain basic services, capability and livelihood projects.

Section 36, LGC LGU may through local chief executive with the
concurrence of sanggunian, provide assistance, financial or otherwise
to such PO and NGO is for economic, socially-oriented, environmental
or cultural projects to be implemented within its territorial
jurisdiction.

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