G.R. No.

103702 December 6, 1994

MUNICIPALITY OF SAN NARCISO, QUEZON; MAYOR JUAN K. UY; COUNCILORS: DEOGRACIAS R.

ARGOSINO III, BENITO T. CAPIO, EMMANUEL R. CORTEZ, NORMANDO MONTILLA, LEONARDO C. UY,
FIDEL C. AURELLANA, PEDRO C. CARABIT, LEONARDO D. AURELLANA, FABIAN M. MEDENILLA,
TRINIDAD F. CORTEZ, SALVADOR M. MEDENILLA, CERELITO B. AUREADA and FRANCISCA A.
BAMBA, petitioners,
vs.
HON. ANTONIO V. MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th Judicial Region,
Gumaca, Quezon; MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR FRANCISCO DE LEON;
COUNCILORS: FE LUPINAC, TOMAS AVERIA, MANUEL O. OSAS, WILFREDO O. FONTANIL, ENRICO U.
NADRES, RODELITO LUZOIR, LENAC, JOSE L. CARABOT, DOMING AUSA, VIDAL BANQUELES and
CORAZON M. MAXIMO, respondents.

Manuel Laserna, Jr. for petitioners.

Florante Pamfilo for private respondents.

VITUG, J.:

On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630 of the
Revised Administrative Code, as amended, Executive Order No. 353 creating the municipal district of San
Andres, Quezon, by segregating from the municipality of San Narciso of the same province,
the barrios of San Andres, Mangero, Alibijaban, Pansoy, Camflora and Tala along with their
respective sitios.

Executive Order No. 353 was issued upon the request, addressed to the President and coursed through
the Provincial Board of Quezon, of the municipal council of San Narciso, Quezon, in its Resolution No. 8
of 24 May 1959.1

By virtue of Executive Order No. 174, dated 05 October 1965, issued by President Diosdado Macapagal,
the municipal district of San Andres was later officially recognized to have gained the status of a fifth
class municipality beginning 01 July 1963 by operation of Section 2 of Republic Act No. 1515.2 The
executive order added that "(t)he conversion of this municipal district into (a) municipality as proposed
in House Bill No. 4864 was approved by the House of Representatives."

On 05 June 1989, the Municipality of San Narciso filed a petition for quo warranto with the Regional
Trial Court, Branch 62, in Gumaca, Quezon, against the officials of the Municipality of San Andres.
Docketed Special Civil Action No. 2014-G, the petition sought the declaration of nullity of Executive
Order No. 353 and prayed that the respondent local officials of the Municipality of San Andres be
permanently ordered to refrain from performing the duties and functions of their respective
offices.3 Invoking the ruling of this Court in Pelaez v. Auditor General,4 the petitioning municipality
contended that Executive Order No. 353, a presidential act, was a clear usurpation of the inherent
powers of the legislature and in violation of the constitutional principle of separation of powers.
Hence, petitioner municipality argued, the officials of the Municipality or Municipal District of San
Andres had no right to exercise the duties and functions of their respective offices that righfully
belonged to the corresponding officials of the Municipality of San Narciso.
In their answer, respondents asked for the dismissal of the petition, averring, by way of affirmative and
special defenses, that since it was at the instance of petitioner municipality that the Municipality of San
Andres was given life with the issuance of Executive Order No. 353, it (petitioner municipality) should be
deemed estopped from questioning the creation of the new municipality; 5 that because the Municipality
of San Andres had been in existence since 1959, its corporate personality could no longer be assailed;
and that, considering the petition to be one for quo warranto, petitioner municipality was not the proper
party to bring the action, that prerogative being reserved to the State acting through the Solicitor
General.6

On 18 July 1991, after the parties had submitted their respective pre-trial briefs, the trial court resolved
to defer action on the motion to dismiss and to deny a judgment on the pleadings.

On 27 November 1991, the Municipality of San Andres filed anew a motion to dismiss alleging that the
case had become moot and academic with the enactment of Republic Act No. 7160, otherwise known as
the Local Government Code of 1991, which took effect on 01 January 1991. The movant municipality
cited Section 442(d) of the law, reading thusly:

Sec. 442. Requisites for Creation. — . . .

(d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate
as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and
which have their respective set of elective municipal officials holding office at the time of the effectivity
of this Code shall henceforth be considered as regular municipalities.

The motion was opposed by petitioner municipality, contending that the above provision of law was
inapplicable to the Municipality of San Andres since the enactment referred to legally existing
municipalities and not to those whose mode of creation had been void ab initio.7

In its Order of 02 December 1991, the lower court8 finally dismissed the petition9 for lack of cause of
action on what it felt was a matter that belonged to the State, adding that "whatever defects (were)
present in the creation of municipal districts by the President pursuant to presidential issuances and
executive orders, (were) cured by the enactment of R.A. 7160, otherwise known as Local Government
Code of 1991." In an order, dated 17 January 1992, the same court denied petitioner municipality's
motion for reconsideration.

Hence, this petition "for review on certiorari." Petitioners 10 argue that in issuing the orders of 02
December 1991 and 17 January 1992, the lower court has "acted with grave abuse of discretion
amounting to lack of or in excess of jurisdiction." Petitioners assert that . 11

Petitioners consider the instant petition to be one for "review on certiorari" under Rules 42 and 45 of the
Rules of Court; at the same time, however, they question the orders of the lower court for having been
issued with "grave abuse of discretion amounting to lack of or in excess of jurisdiction, and that there is
no other plain, speedy and adequate remedy in the ordinary course of law available to petitioners to
correct said Orders, to protect their rights and to secure a final and definitive interpretation of the legal
issues involved." 12 Evidently, then, the petitioners intend to submit their case in this instance under Rule
65. We shall disregard the procedural incongruence.

The special civil action of quo warranto is a "prerogative writ by which the Government can call upon any
person to show by what warrant he holds a public office or exercises a public franchise." 13 When the
inquiry is focused on the legal existence of a body politic, the action is reserved to the State in a
proceeding for quo warranto or any other credit proceeding. 14 It must be brought "in the name of the
Republic of the Philippines" 15 and commenced by the Solicitor General or the fiscal "when directed by
the President of the Philippines . . . ." 16 Such officers may, under certain circumstances, bring such an
action "at the request and upon the relation of another person" with the permission of the court. 17 The
Rules of Court also allows an individual to commence an action for quo warranto in his own name but
this initiative can be done when he claims to be "entitled to a public office or position usurped or
unlawfully held or exercised by another." 18 While the quo warranto proceedings filed below by
petitioner municipality has so named only the officials of the Municipality of San Andres as respondents,
it is virtually, however, a denunciation of the authority of the Municipality or Municipal District of San
Andres to exist and to act in that capacity.

At any rate, in the interest of resolving any further doubt on the legal status of the Municipality of San
Andres, the Court shall delve into the merits of the petition.

While petitioners would grant that the enactment of Republic Act

No. 7160 may have converted the Municipality of San Andres into a de facto municipality, they, however,
contend that since the petition for quo warranto had been filed prior to the passage of said law,
petitioner municipality had acquired a vested right to seek the nullification of Executive Order No. 353,
and any attempt to apply Section 442 of Republic Act 7160 to the petition would perforce be violative of
due process and the equal protection clause of the Constitution.

Petitioners' theory might perhaps be a point to consider had the case been seasonably brought.
Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but
it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally
decided to challenge the legality of the executive order. In the meantime, the Municipal District, and
later the Municipality, of San Andres, began and continued to exercise the powers and authority of a
duly created local government unit. In the same manner that the failure of a public officer to question
his ouster or the right of another to hold a position within a one-year period can abrogate an action
belatedly filed, 19 so also, if not indeed with greatest imperativeness, must a quo warranto proceeding
assailing the lawful authority of a political subdivision be timely raised. 20 Public interest
demands it.

Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutional
delegation of legislative power, the peculiar circumstances obtaining in this case hardly could offer a
choice other than to consider the Municipality of San Andres to have at least attained a status uniquely
of its own closely approximating, if not in fact attaining, that of a de facto municipal corporation.
Conventional wisdom cannot allow it to be otherwise. Created in 1959 by virtue of Executive Order No.
353, the Municipality of San Andres had been in existence for more than six years when, on 24
December 1965, Pelaez v. Auditor General was promulgated. The ruling could have sounded the call for a
similar declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case. On
the contrary, certain governmental acts all pointed to the State's recognition of the continued existence
of the Municipality of San Andres. Thus, after more than five years as a municipal district, Executive
Order No. 174 classified the Municipality of San Andres as a fifth class municipality after having
surpassed the income requirement laid out in Republic Act No. 1515. Section 31 of Batas Pambansa Blg.
129, otherwise known as the Judiciary Reorganization Act of 1980, constituted as municipal circuits, in
the establishment of Municipal Circuit Trial Courts in the country, certain municipalities that comprised
the municipal circuits organized under Administrative Order No. 33, dated 13 June 1978, issued by this
Court pursuant to Presidential Decree No. 537. Under this administrative order, the Municipality of San
Andres had been covered by the 10th Municipal Circuit Court of San Francisco-San Andres for the
province of Quezon.

At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the
Ordinance (adopted on 15 October 1986) apportioning the seats of the House of Representatives,
appended to the 1987 Constitution, the Municipality of San Andres has been considered to be one of the
twelve (12) municipalities composing the Third District of the province of Quezon. Equally significant is
Section 442(d) of the Local Government Code to the effect that municipal districts "organized pursuant
to presidential issuances or executive orders and which have their respective sets of elective municipal
officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as
regular municipalities." No pretension of unconstitutionality per se of Section 442(d) of the Local
Government Code is proferred. It is doubtful whether such a pretext, even if made, would succeed. The
power to create political subdivisions is a function of the legislature. Congress did just that when it has
incorporated Section 442(d) in the Code. Curative laws, which in essence are retrospective, 21 and aimed
at giving "validity to acts done that would have been invalid under existing laws, as if existing laws have
been complied with," are validly accepted in this jurisdiction, subject to the usual qualification against
impairment of vested rights. 22

All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now
be conceded.

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Costs against petitioners.

SO ORDERED.

Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno, Kapunan and
Mendoza, JJ. concur.

Feliciano, J., is on leave.

G.R. No. 116702 December 28, 1995

THE MUNICIPALITY OF CANDIJAY, BOHOL, acting through its Sanguniang Bayan and Mayor, petitioner,
vs.
COURT OF APPEALS and THE MUNICIPALITY OF ALICIA, BOHOL, respondents.

RESOLUTION

PANGANIBAN, J.:

This is a petition for review on certiorari of the Decision of the Court of Appeals 1 promulgated on June
28, 1994, reversing the judgment2 of the Regional Trial Court (Branch I) of the City of Tagbilaran, Bohol.

The lower court's decision, among other things, declared "barrio/barangay Pagahat as within the
territorial jurisdiction of the plaintiff municipality of Candijay, Bohol, therefore, said barrio forms part
and parcel of its territory, therefore, belonging to said plaintiff municipality", and further permanently
enjoined defendant municipality of Alicia "to respect plaintiff's control, possession and political
supervision of barangay Pagahat and never to molest, disturb, harass its possession and ownership over
the same barrio" (RTC decision, p. 4; Rollo, p. 86).

On appeal, the respondent Court stated that "(S)crutiny of the conflicting claims and the respective
evidence of the parties lead to the conclusion that the trial court committed an error in declaring that
Barrio Pagahat is within the territorial jurisdiction of plaintiff-appellee (municipality of Candijay)." Said
Court rejected the boundary line being claimed by petitioner based on certain exhibits, since it would in
effect place "practically all of Barrio Pagahat . . . , part of Barrio Cagongcagong and portions of Barrio
Putlongcam and La Hacienda and all of Barrio Mahayag and Barrio del Monte within the territorial
jurisdiction of plaintiff-appellee Candijay." Added the respondent Court, "As aptly pointed out by
defendant-appellant in its appeal brief, 'the plaintiff municipality will not only engulf the entire barrio of
Pagahat, but also of the barrios of Putlongcam, Mahayag, Del Monte, Cagongcagong, and a part of the
Municipality of Mabini. Candijay will eat up a big chunk of territories far exceeding her territorial
jurisdiction under the law creating her. Her claim opens the floodgate of controversies over boundaries,
including with Mabini.'" (Decision p. 4; rollo, p. 35.) The respondent Court concluded that "the trial court
erred in relying on Exh. X-Commissioner [exhibit for petitioner], because, in effect, it included portions of
Barrios Putlongcam and La Hacienda within the jurisdiction of appellee Candijay when said barrios are
undisputedly part of appellant's (Alicia) territory under Executive Order No. 265 creating the latter"
(Decision, p. 6, rollo, p. 37).

The respondent Court also found, after an examination of the respective survey plans of petitioner and
respondent submitted as exhibits, that "both plans are inadequate insofar as identifying the monuments
of the boundary line between [petitioner] and the Municipality of Mabini (which is not a party to this
case) as declared by the Provincial Board of Bohol. Neither plan shows where Looc-Tabasan, Lomislis
Island, Tagtang Canlirong, mentioned in the aforequoted boundary line declared by the Provincial Board
of Bohol, are actually located." (Decision, p. 4; rollo, p. 35.) The respondent Court, after weighing and
considering the import of certain official acts, including Executive Order No. 265 dated September 16,
1949 (which created the municipality of Alicia from out of certain barrios of the municipality of Mabini),
and Act No. 968 of the Philippine Commission dated October 31, 1903 (which set forth the respective
component territories of the municipalities of Mabini and Candijay), concluded that "Barrio Bulawan
from where barrio Pagahat originated is not mentioned as one of the barrios constituted as part of
defendant-appellant Municipality of Alicia. Neither do they show that Barrio Pagahat forms part of
plaintiff-appellant Municipality of Candijay."

On that basis, the respondent Court held that:

Clearly, from the foregoing, there is equiponderance of evidence. The Supreme Court has ruled:

Equiponderance of evidence rule states:

When the scale shall stand upon an equipoise and there is nothing in the evidence which shall incline it
to one side or the other, the court will find for the defendant.

Under said principle, the plaintiff must rely on the strength of his evidence and not on the weakness of
defendant's claim. Even if the evidence of the plaintiff may be stronger than that of the defendant, there
is no preponderance of evidence on his side if such evidence is insufficient in itself to establish his cause
of action.

(Sapu-an, et al. v. Court of Appeals, Oct. 19, 1992, 214 SCRA 701, 705-706.)

WHEREFORE, the appealed judgment is reversed and set aside. Another judgment is hereby entered
dismissing the complaint in Civil Case No. 2402. No costs. (Decision, p. 6, rollo, p. 37.)

Petitioner's motion for reconsideration having been rejected by the respondent Court, petitioner came
to this Court, alleging (i) improper application by the respondent Court of Appeals of the so-called
principle of "equiponderance of evidence", for having based its ruling against petitioner on documentary
evidence which, petitioner claims, are void, (ii) the respondent municipality's purported lack of juridical
personality, as a result of having been created under a void executive order, and (iii) that the challenged
Decision "does not solve the problem of both towns but throws them back again to their controversy."
(Petition, p. 6, rollo, p. 21.)

After deliberating on the petition, comment and reply, this Court is not persuaded to grant due course to
the petition.

With respect to the first and third grounds, we find that the issues of fact in this case had been
adequately passed upon by respondent Court in its Decision, which is well-supported by the evidence on
record. The determination of equiponderance of evidence by the respondent Court involves the
appreciation of evidence by the latter tribunal, which will not be reviewed by this Court unless shown to
be whimsical or capricious; here, there has been no such showing.

In connection with the foregoing, that the assailed Decision, in dismissing the complaint in Civil Case No.
2402, may leave the parties where they are or may not resolve their problem one way or the other, is of
no moment. The fact remains that, as correctly evaluated by the respondent Court, neither party was
able to make out a case; neither side could establish its cause of action and prevail with the evidence it
had. They are thus no better off than before they proceeded to litigate, and, as a consequence thereof,
the courts can only leave them as they are. In such cases, courts have no choice but to dismiss the
complaints/petitions.

On the second issue, we noted that petitioner commenced its collateral attack on the juridical
personality of respondent municipality on 19 January 1984 (or some thirty five years after respondent
municipality first came into existence in 1949) during the proceedings in the court a quo. It appears that,
after presentation of its evidence, herein petitioner asked the trial court to bar respondent municipality
from presenting its evidence on the ground that it had no juridical personality. Petitioner contended that
Exec. Order No. 265 issued by President Quirino on September 16, 1949 creating respondent
municipality is null and void ab initio, inasmuch as Section 68 of the Revised Administrative Code, on
which said Executive Order was based, constituted an undue delegation of legislative powers to the
President of the Philippines, and was therefore declared unconstitutional, per this Court's ruling
in Pelaez vs. Auditor General.3

In this regard, we call to mind the ruling of this Court in Municipality of San Narciso, Quezon vs. Mendez,
Sr.4 , which will be found very instructive in the case at bench. Therein we stated:

While petitioners would grant that the enactment of Republic Act No. 7160 [Local Government Code of
1991] may have converted the Municipality of San Andres into a de facto municipality, they, however,
contend that since the petition for quo warranto had been filed prior to the passage of said law,
petitioner municipality had acquired a vested right to seek the nullification of Executive Order No. 353,
and any attempt to apply Section 442 of Republic Act 7160 to the petition would perforce be violative of
due process and the equal protection clause of the Constitution.

Petitioner's theory might perhaps be a point to consider had the case been seasonably brought.
Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but
it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally
decided to challenge the legality of the executive order. In the meantime, the Municipal district, and
later the Municipality of San Andres, began and continued to exercise the powers and authority of a duly
created local government unit. In the same manner that the failure of a public officer to question his
ouster or the right of another to hold a position within a one-year period can abrogate an action
belatedly file, so also, if not indeed with greatest imperativeness, must a quo warranto proceeding
assailing the lawful authority of a political subdivision be timely raised. Public interest demands it.

Granting that Executive Order No. 353 was a complete nullity for being the result of an unconstitutional
delegation of legislative power, the peculiar circumstances obtaining in this case hardly could offer a
choice other than to consider the Municipality of San Andres to have at least attained a status uniquely
of its own closely approximating, if not in fact attaining, that of a de facto municipal corporation.
Conventional wisdom cannot allow it to be otherwise. Created in 1959 by virtue of Executive Order No.
353, the Municipality of San Andres had been in existence for more than six years when, on 24
December 1965, Pelaez vs. Auditor General was promulgated. The ruling could have sounded the call for
a similar declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case.
On the contrary, certain governmental acts all pointed to the State's recognition of the continued
existence of the Municipality of San Andres. Thus, after more than five years as a municipal district,
Executive Order No. 174 classified the Municipality of San Andres as a fifth class municipality after having
surpassed the income requirement laid out in Republic Act No. 1515. Section 31 of Batas Pambansa Blg.
129, otherwise known as the Judiciary Reorganization Act of 1980, constituted as municipal circuits, in
the establishment of Municipal Circuit Trial Courts in the country, certain municipalities that comprised
the municipal circuits organized under Administrative Order No. 33, dated 13 June 1978, issued by this
court pursuant to Presidential Decree No. 537. Under this administrative order, the Municipality of San
Andres had been covered by the 10th Municipal Circuit Court of San Francisco-San Andres for the
province of Quezon.
At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the
Ordinance (adopted on 15 October 1986) apportioning the seats of the House of Representatives,
appended to the 1987 Constitution, the Municipality of San Andres has been considered to be one of the
twelve (12) municipalities composing the Third District of the province of Quezon. Equally significant is
Section 442 (d) of the Local Government Code to the effect that municipal districts "organized pursuant
to presidential issuances or executive orders and which have their respective sets of elective municipal
officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as
regular municipalities." No pretension of unconstitutionality per se of Section 442 (d) of the Local
Government Code is proffered. It is doubtful whether such a pretext, even if made, would succeed. The
power to create political subdivisions is a function of the legislature. Congress did just that when it has
incorporated Section 442 (d) in the Code. Curative laws, which in essence are retrospective, and aimed
at giving "validity to acts done that would have been invalid under existing laws, as if existing laws have
been complied with," are validly accepted in this jurisdiction, subject to the usual qualification against
impairment of vested rights.

All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now
be conceded.

Respondent municipality's situation in the instant case is strikingly similar to that of the municipality of
San Andres. Respondent municipality of Alicia was created by virtue of Executive Order No. 265 in 1949,
or ten years ahead of the municipality of San Andres, and therefore had been in existence for all of
sixteen years when Pelaez vs. Auditor General was promulgated. And various governmental acts
throughout the years all indicate the State's recognition and acknowledgment of the existence thereof.
For instance, under Administrative Order No. 33 above-mentioned, the Municipality of Alicia was
covered by the 7th Municipal Circuit Court of Alicia-Mabini for the province of Bohol. Likewise, under the
Ordinance appended to the 1987 Constitution, the Municipality of Alicia is one of twenty municipalities
comprising the Third District of Bohol.

Inasmuch as respondent municipality of Alicia is similarly situated as the municipality of San Andres, it
should likewise benefit from the effects of Section 442 (d) of the Local Government Code, and should
henceforth be considered as a regular, de jure municipality.

WHEREFORE, the instant petition for review on certiorari is hereby DENIED, with costs against petitioner.

SO ORDERED.

Romero, Melo and Vitug, JJ., concur.

G.R. No. L-7012 March 26, 1913

THE ILOILO ICE AND COLD STORAGE COMPANY, plaintiff-appellee,
vs.
THE MUNICIPAL COUNCIL OF ILOILO, ET AL., defendants-appellants.

Juan de Leon, Quirico Abeto, and Crecenciano Lozano, for appellants.

Bruce, Lawrence, Ross and Block, for appellee.

TRENT, J.:

According to the pleadings, the plaintiff, upon authority granted by the defendant, constructed an ice
and cold storage plant in the city of Iloilo. Some time after the plant had been completed and was in
operation, nearby residents made complaints to the defendant that the smoke from the plant was very
injurious to their health and comfort. Thereupon the defendant appointed a committee to investigate
and report upon the matters contained in said complaints. The committee reported that the
complaints were well-founded. The defendant counsel then passed a resolution which reads in part as
follows:

That after the approval by the honorable provincial board of this resolution, a period of one month will
be granted to the said entity. The Iloilo Ice and Cold Storage Company, in which to proceed with the
elevation of said smokestacks, and if not done, the municipal president will execute the order
requiring the closing or suspension of operations of said establishment.

Upon receipt of this resolution and order, the plaintiff commenced this action in the Court of First
Instance to enjoin the defendant from carrying into effect the said resolution. The fifth paragraph of
the complaint is as follows:

That the defendants intend and threaten to require compliance with said resolution administratively
and without the intervention of the court, and by force to compel the closing and suspension of
operations of the plaintiff's machinery and consequently of the entire plant, should the plaintiff not
proceed with the elevation of the smokestacks to one hundred feet, which the plaintiff maintains it is
not obliged to do and will not do.

Upon notice and after hearing, a preliminary injunction was issued. Subsequently thereto the
defendant answered, admitting paragraphs 1 and 4 and denying all the other allegations in the
complaint, and as a special defense alleged:

1. xxx xxx xxx.

2. That the factory of the plaintiff company stands in a central and populated district of the municipality;

3. That the quantity of smoke discharged from the smokestacks of said factory is so great and so dense
that it penetrates into the dwelling houses situated near it and causes great annoyance to the residents
and prejudice to their health;

4. That the municipal board of health of the city has reported that the smoke discharged from the
smokestacks of said factory is prejudicial and injurious to the public health;

5. That the plaintiff company has no right to maintain and operate machinery in its factory under the
conditions which it is at present operating the same, without complying with the regulations which were
imposed upon it when the license for its installation was granted, because it thereby violates the
ordinances of the city now in force upon the matter.

Wherefore, the defendant prays that it be absolved from the complaint and the plaintiff be declared to
have no right to the remedy asked, and that the preliminary injunction issued in this case be set aside,
with the costs against the plaintiff.

The plaintiff demurred to this answer upon the following grounds:

1. That the facts alleged in the answer do not constitute a defense; and

2. That the answer is vague and ambiguous and contains arguments and conclusions of law instead of
facts.

This demurrer was sustained, the court saying:

The defendant will amend his answer within five days or the injunction will be permanently granted as
prayed for, with costs to the defendant.

To this order the defendant excepted and, not desiring to amend its answer, appealed to this court.

It is alleged in paragraph 1 that both the plaintiff and the defendants are corporations duly organized
under the laws of the Philippine Islands; and paragraph 4 sets forth the resolution complained of, the
dispositive part of which is inserted above. The allegations in paragraph 2, 3, 5, 6, 7, and 8, which are
specifically denied in the answer, all (except the fifth) relate to the building of the plant under authority
granted by the defendant, the cost of its construction, the legality of the resolution in question, the
power of the defendant to pass such resolution, and the damages which will result if that resolution is
carried into effect. As before stated, the allegations in paragraph 5 to the effect that the defendants
intend and are threatening to close by force and without the intervention of the courts the plaintiff's
plant is specifically denied. The issue in this case, according to the pleadings, relates to the power of the
municipal council to declare the plant of the petitioner a nuisance as operated, and the method of
abating it.

The municipal council is, under section 39 (j) of the Municipal Code, specifically empowered "to
declare and abate nuisances." A nuisance is, according to Blackstone, "Any thing that worketh hurt,
inconvenience, or damages." (3 Black. Com., 216.) They arise from pursuing particular trades or
industries in populous neighborhoods; from acts of public indecency, keeping disorderly houses, and
houses of ill fame, gambling houses, etc. (2 Bouv., 248; Miller vs.Burch, 32 Tex., 208.) Nuisances have
been divided into two classes: Nuisances per se, and nuisances per accidens. To the first belong those
which are unquestionably and under all circumstances nuisances, such as gambling houses, houses of ill
fame, etc. The number of such nuisances is necessarily limited, and by far the greater number of
nuisances are such because of particular facts and circumstances surrounding the otherwise harmless
cause of the nuisance. For this reason, it will readily be seen that whether a particular thing is a nuisance
is generally a question of fact, to be determined in the first instance before the term nuisance can be
applied to it. This is certainly true of a legitimate calling, trade, or business such as an ice plant. Does the
power delegated to a municipal council under section 39 (j) of the Municipal Code commit to the
unrestrained will of that body the absolute power of declaring anything to be a nuisance? Is the decision
of that body final despite the possibility that it may proceed from animosity or prejudice, from partisan
zeal or enmity, from favoritism and other improper influences and motives, easy of concealment and
difficult to be detected and exposed? Upon principle and authority, we think it does not.

In Rutton vs. City of Camden, 39 N.J.L., 122, 129; 23 Am. Rep. 203, 209, the court said:

The authority to decide when a nuisance exists in an authority to find facts, to estimate their force,
and to apply rules of law to the case thus made. This is the judicial function, and it is a function
applicable to a numerous class of important interests. The use of land and buildings, the enjoyment of
water rights, the practice of many trades and occupations, and the business of manufacturing in
particular localities, all fall on some occasions, in important respects, within its sphere. To say to a man
that he shall not use his property as he pleases, under certain conditions, is to deprive him pro
tanto of the enjoyment of such property. To find conclusively against him that a state of facts exists with
respect to the use of his property, or the pursuit of his business, which subjects him to the
condemnation of the law, is to affect his rights in a vital point. The next thing to depriving a man of his
property is to circumscribe him in its use, and the right to use property is as much under the protection
of the law as the property itself, in any other aspect, is, and the one interest can no more be taken out of
the hands of the ordinary tribunal than the other can. If a man's property cannot be taken away from
him except upon trial by jury, or by the exercise of the right of eminent domain upon compensation
made, neither can be, in any other mode, be limited in the use of it. The right to abate public nuisances,
whether we regard it as existing in the municipalities, or in the community, or in the land of the
individual, is a common law right, and is derived, in every instance of its exercise, from the same source
— that of necessity. It is akin to the right of destroying property for the public safety, in case of the
prevalence of a devastating fire or other controlling exigency. But the necessity must be present to
justify the exercise of the right, and whether present or not, must be submitted to a jury under the
guidance of a court. The finding of a sanitary committee, or of a municipal council, or of any other
body of a similar kind, can have no effect whatever for any purpose, upon the ultimate disposition of
the matter of this kind. It cannot be used as evidence in any legal proceeding, for the end of
establishing, finally, the fact of nuisance, and if can be made testimony for any purpose, it would seem
that it can be such only to show that the persons acting in pursuance of it were devoid of that malicious
spirit which sometimes aggravates a trespass and swells the damages. I repeat that the question of
nuisance can conclusively be decided, for all legal uses, by the established courts of law or equity alone,
and that the resolutions of officers, or of boards organized by force of municipal charters, cannot, to any
degree, control such decision.

The leading case upon this point is Yates vs. Milwaukee, (10 Wall., 497; 19 L. ed., 984). The following
quotation from this case has been cited or quoted with approval in a great number of cases. (See Notes
to this case in 19 L. ed., Notes, page 356.)

But the mere declaration by the city council of Milwaukee that a certain structure was an encroachment
or obstruction did not make structure was an encroachment or obstruction did not make it so, nor could
such declaration make it a nuisance unless it in fact had that character. It is a doctrine not to be tolerated
in this country, that a municipal corporation, without any general laws either of the city or of the State,
within which a given structure can be shown to be a nuisance, can, by its mere declaration that it is one,
subject it to removal by any person supposed to be aggrieved, or even by the city itself. This would place
every house, every business, and all the property of the city at the uncontrolled will of the temporary
local authorities. Yet this seems to have been the view taken by counsel who defended this case in the
circuit court; for that single ordinance of the city, declaring the wharf of Yates a nuisance, and ordering
its abatement, is the only evidence in the record that it is a nuisance or an obstruction to navigation, or
in any manner injurious to the public.

In Cole vs. Kegler (64 la., 59, 61) the court said:

We do not think the general assembly intended to confer on cities and towns the power of finally and
conclusively determine, without notice or a hearing, and without the right of appeal, that any given
thing constitutes a nuisance, unless, probably, in cases of great emergency, so strong as to justify
extraordinary measures upon the ground of paramount necessity. The law does not contemplate such an
exigency, and therefore does not provide for it. If it did, it would no longer be the undefined law of
necessity. (Nelson, J., in The People vs. The Corporation of Albay, 11 Wend., 539.)

Nuisance may be abated by an individual, but they must in fact exist, The determination of the individual
that a nuisance exists does not make it so, and if he destroys property on the that it is a nuisance, he is
responsible, unless it is established that the property destroyed constituted a nuisance. This precise
power, and no more, is conferred by the statute on cities and towns. In Wood on Nuisances, section 740,
it is said: "If the authorities of a city abate a nuisance under authority of an ordinance of the city, they
are subject to the same perils and liabilities as an individual, if the thing in fact is not nuisance."

In Grossman vs. City of Oakland (30 Ore., 478, 483) the court said:

In our opinion this ordinance cannot be sustained as a legitimate exercise of municipal power. The
character of the city confers upon it the power to prevent and restrain nuisances, and to "declare what
shall constitute a nuisance;" but this does not authorize it to declare a particular use of property a
nuisance, unless such use comes within the common law or statutory idea of a nuisance. (2 Wood on
Nuisances (3d ed.), 977; Yates vs.Milwaukee, 77 U.S. (10 Wall.), 497; Village of Des Plaines vs. Poyer, 123
Ill., 348; 5 Am. St. Rep., 524; 14 N.E., 677; Quintini vs. City Board of Aldermen, 64 Miss., 483; 60 Am.
Rep., 62; 1 So., 625; Chicago & Rock Islands R.R. Co. vs. City of Joliet, 79 Ill., 44; Hutton vs. City of
Camden, 39 N.J. Law, 122; 23 Am. Rep., 203.) By this provision of the charter the city is clothed with
authority to declare by general ordinance under what circumstances and conditions certain specified
acts or things injurious to the health or dangerous to the public are to constitute and be deemed
nuisances, leaving the question of fact open for judicial determination as to whether the particular act or
thing complained of comes within the prohibited class; but it cannot by ordinance arbitrarily declare any
particular thing a nuisance which has not heretofore been so declared by law, or judicially determined to
be such. (City of Dener vs. Mullen, 7 Colo., 345).

In Western & Atlantic R. Co. vs. Atlanta (113 Ga., 537, 551), after an extensive review of the authorities,
the court, per Lumpkin, J., said:

It is our opinion that the provisions of our code require, when a municipal corporation is seeking to
abate a nuisance such as it was alleged the floor of the union passenger station was in this case, that the
parties interested be given reasonable notice of the time and place of hearing at which the fact whether
the property complained of is or is not a nuisance shall be inquired into and determined; that, without
such notice and a judgment on the facts by the body invested with power to abate the nuisance, it is
unlawful to enter thereon and remove or destroy it as a nuisance. If the thing, as we said, is declared by
law to be a nuisance, or if it is unquestionably a nuisance, such as a rabid dog, infected clothing, the
carcass of a dead animal on a private lot, the presence of a smallpox patient on the street, it may be
abated by the municipal authorities at once, by order, from the necessity of the case, and to meet an
emergency which exists, to at once protect the health and lives of the people.

In Everett vs. City of Council Bluffs (46 Ia., 66, 67), where the council passed an ordinance declaring trees
on certain streets to be a nuisance and ordering the marshall to abate the same, the court held:

The defendant is incorporated under a special charter, which provides that the city council has power "to
declare what shall be a nuisance, and to prevent, remove, or abate the same." This general grant of
power, however, will not authorize the council to declare anything a nuisance which is not such at
common law, or has been declared such by statute.

In Frostburg vs. Wineland (98 Md., 239, 243) the court said:

The first question, then, in the case revolves itself to this, was the summary proceeding of the appellants
in declaring the two trees in front of the appellee's property to be a nuisance and an obstruction to the
paving and curbing of the street, and directing them to be removed and destroyed, so far final as not to
be reviewable by the Courts?

This question we think was in effect settled by this court in the recent cases of New
Windsor vs. Stocksdale (95 Md., 215) and King vs. Hamil (97 Md., 103). In the latter case it is said that
equity will not lend its aid to enforce by injunction the by-laws or ordinances of a municipal corporation,
restraining an act, unless the act is shown to be a nuisance per se. . . .

It is clear, we think, both upon reason and authority, that when a municipality undertakes to destroy
private property which is not a nuisance per se, it then transcends its powers and its acts are reviewable
by a court of equity.

In C.R.I. & P.R. Co. vs. City of Joilet (79 Ill., 25, 44) the court said:

As to the ordinance of the common council of the city of Joilet, of September, 1872, declaring the
railroad a nuisance, we regard that as without effect upon the case, although the charter of the city
confers upon the common council the power to abate and remove nuisances, and to punish the authors
thereof, and to define and declare what shall be deemed nuisances. We will, in this respect, but refer to
the language of the Supreme Court of the United State in Yates vs. Milwaukee (10 Wall., 505).
(See supra.)

In the leading case of Denver vs. Mullen (7 Colo., 345, 353) where an extended review of the authorities
is made, the court said:

The basis of authority for the action of the city in the premises is made to rest upon certain provisions of
the city charter, and certain ordinances, which are set out as exhibits in the testimony; and the following,
among other of the enumerated powers conferred by the legislature upon the city, in said charter, is
relied upon, viz: "To make regulations to secure the general health of the inhabitants, to declare what
shall be a nuisance, and to prevent and remove the same."

The proper construction of this language is that the city is clothed with authority to declare, by general
ordinance, what shall constitute a nuisance. That is to say, the city may, by such ordinance, define,
classify and enact what things or classes of things, and under what conditions and circumstances, such
specified things are to constitute and be deemed nuisances. For instance, the city might, under such
authority, declare by ordinance that slaughter-houses within the limits of the city, carcasses of dead
animals left lying within the city, goods, boxes, and the like, piled up or remaining for certain length of
time on the sidewalks, or other things injurious to health, or causing obstruction or danger to the public
in the use of the streets and sidewalks, should be deemed nuisances; not that the city council may, by a
mere resolution or motion, declare any particular thing a nuisance which has not theretofore been
pronounced to be such by law, or so adjudged by judicial determination. (Everett vs. Council Bluffs, 40
Iowa, 66; Yates vs. Milwaukee, 10 Wall., 497.) No law or ordinance, under which the city council assumed
to act in respect to this ditch, has been cited which defines nuisance, or within the meaning of which
such ditch is comprehended.

xxx xxx xxx

It is only certain kinds of nuisances that may be removed or abated summarily by the acts of individuals
or by the public, such as those which affect the health, or interfere with the safety of property or person,
or are tangible obstructions to streets and highways under circumstances presenting an emergency; such
clear cases of nuisances per se, are well understood, and need not to be further noticed here to
distinguish them from the case before us. If it were admitted that this ditch, by reason of its obstruction
to the use of the public streets, at the time of the acts complained of, was a nuisance, it must also be
admitted that it was not a nuisance per se. It was constructed for a necessary, useful and lawful purpose,
was used for such purpose, and therefore in its nature was not a nuisance, as a matter of law. Nor as a
matter of fact was it a nuisance while it was no hurt, detriment, or offense to the public, or to any private
citizen. If, then, it has become a nuisance, it is by reason of a change of circumstances brought about
neither by the ditch itself, nor its use. Indeed, the sole matter complained of, to warrant its being
regarded as a nuisance, is the absence of bridges at street crossings. The town has become populous; its
growth has extended beyond the ditch and along its line for a great distance; streets laid out across its
course have come to be traveled so much, that without bridges, the ditch, as appears by the testimony,
has become inconvenient, detrimental, and an obstruction to the full, safe and lawful use of such streets
as highways by the public. To this extent, and from these causes outside the ditch and its use per se, has
the ditch come to be a public nuisance, if, as a matter of fact, it is such. But whether it is such or not is a
fact which must first be ascertained by judicial determination before it can be lawfully abated, either by
the public or by a private person.

In Joyce vs. Woods (78 Ky., 386, 388) the court said:

There was no judicial determination that there was a nuisance, and no opportunity offered the owner of
the lot to contest that matter. Under the exercise of the police power, it may be conceded that
municipalities can declare and abate nuisances in cases of necessity, without citation and without
adjudication as to whether there is in fact a nuisance. But whenever the action of the municipality in
declaring and abating a nuisance goes so far as to fix a burden upon the owner of the property, he is
entitled to be heard upon the question as to the existence of the nuisance. This right to a hearing upon
this question may come before or after the nuisance is abated, as circumstances may require, but there
must be an opportunity offered him to be heard upon that matter before his property can be loaded
with the cost of the removal of the nuisance. To the extent that property is thus burdened by the action
of the city council, when there is no necessity to precipitate action without adjudication, the owner is
deprived of his property, regardless of "the law of the land." The meaning of that provision of the
constitution has generally been construed to be a law that hears before condemning, and arrives at a
judgment for the divestiture of the rights of property through what is ordinarily understood to be judicial
process — the general rules that govern society in reference, to the rights of property; and it is only in
extreme cases, where the preservation and repose of society or the protection of the property rights of a
large class of the community absolutely require a departure, that the courts recognize any exception. In
this case there is no pretense of a necessity for precipitate action. There is no reason why appellant
should not have been permitted to test the question as to the existence of the nuisance.

In Everett vs. Marquette (53 Mich., 450, 451) the court, per Cooley, J., said:

But it is not necessary in this case to determine whether the permission given by the village council was
in due form for the purposes of a permanent appropriation, or even whether the council had the power
to consent to such an appropriation. It is undoubted that the council had general control of the streets
under the village charter; and it was a part of its duty to prevent the creation of any public nuisance
within them. It is not to be assumed that consent would have been given to such a nuisance, and when,
by formal resolution the council assumed to give permission to complainant to make the openings and
build the stairways complained of, it must have been done in the belief that no public inconvenience
would follow. If the permission was effectual for no other purpose, it at least rebutted any presumption
which might otherwise have existed, that this partial appropriation of the street was per se a nuisance.

If the permission was a mere license, and the subsequent action of the city council is to be regarded as a
revocation of the license, it does not follow that the plaintiff has by the revocation immediately been
converted into a wrongdoer. The question will then be whether the act of the complainant in
maintaining his structures constitutes a public nuisance; and while the city council is entitled, under its
supervisory control of the public streets, to consider and pass upon that question for the purpose of
deciding upon the institution of legal proceedings for abatement, it cannot make itself the judge.
Maintaining a nuisance is a public offense; and the fact, as in other cases of alleged criminality, is to be
tried on proper accusation and in the regular courts. The mere fact that the party makes use of some
part of a public street for his private purposes does not make out the public offense. This was decided in
People vs. Carpenter (1 Mich., 273), and has never been doubted in this State.

The city in this case proceeding in an act of destruction on an assumption that the structures were
already condemned as illegal. This was unwarranted, and it was quite right that the action should be
restrained.

The above authorities are collated in Judge Dillon's work on Municipal Corporations, fifth edition, section
684, with the following comment by the author:

It is to secure and promote the public health, safety, and convenience that municipal corporations are so
generally and so liberally endowed with power to prevent and abate nuisances. This authority and its
summary exercise may be constitutionally conferred on the incorporated place, and it authorizes its
council to act against that which comes within the legal notion of a nuisance; but such power, conferred
in general terms, cannot be taken to authorize the extrajudicial condemnation and destruction of that as
a nuisance which, in its nature, situation, or use, is not such.

The questions discussed in this august array of authorities are exactly those of the present case, and the
controlling principles and the reasoning upon which they are founded are so fully and lucidly set forth as
to justify us in refraining from comment of our own. It is clear that municipal councils have, under the
code, the power to declare and abate nuisances, but it is equally clear that they do not have the power
to find as a fact that a particular thing is a nuisance when such thing is not a nuisance per se; nor can
they authorize the extrajudicial condemnation and destruction of that as a nuisance which in its nature,
situation, or use is not such. These things must be determined in the ordinary courts of law.

In the present case it is certain that the ice factory of the plaintiff is not a nuisance per se. It is a
legitimate industry, beneficial to the people, and conducive to their health and comfort. If it be in fact a
nuisance due to the manner of its operation, that question cannot be determined by a mere resolution
of the board. The petitioner is entitled to a fair and impartial hearing before a judicial tribunal.

The respondent has, we think, joined issued by its answer denying that it was intending to proceed with
the abatement of the alleged nuisance by arbitrary administrative proceedings. This is the issue of the
present case, and upon its determination depends whether the injunction should be made permanent
(but limited in its scope to prohibiting the closing of petitioner's factory by administrative action), or
whether the injunction should be dissolved, which will be done in case it be shown that the municipal
officials intend to proceed with the abatement of the alleged nuisance in an orderly and legal manner.

It is said that the plaintiff cannot be compelled to build its smokestack higher if said stack is in fact a
nuisance, for the reason that the stack was built under authority granted by the defendant, and in
accordance with the prescribed requirements. If the charter or license does not expressly subject the
business or industry to the exercise of the police power by the State, it is conceded by the great
preponderance of authority that such a reservation is implied to the extent that may be reasonably
necessary for the public welfare. (Freud, Police Power, § 361 et seq, and § 513 et seq.)

For the foregoing reasons, the order sustaining the plaintiff's demurrer to the defendant's answer is
reversed. The record will be returned to the court whence it came with instructions to proceed with the
trial of the cause in accordance with this opinion. No costs will be allowed in this instance. So ordered.

Arellano, C.J., Torres and Moreland, JJ., concur.

Johnson, J., dissents.

G.R. No. 161414 January 17, 2005

SULTAN OSOP B. CAMID, petitioner,

vs.
THE OFFICE OF THE PRESIDENT, DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT,
AUTONOMOUS REGION IN MUSLIM MINDANAO, DEPARTMENT of FINANCE, DEPARTMENT of BUDGET
AND MANAGEMENT, COMMISSION ON AUDIT, and the CONGRESS OF THE PHILIPPINES (HOUSE of
REPRESENTATIVES AND SENATE), respondents.

DECISION

TINGA, J.:

This Petition for Certiorari presents this Court with the prospect of our own Brigadoon1 —the
municipality of Andong, Lanao del Sur―which like its counterpart in filmdom, is a town that is not
supposed to exist yet is anyway insisted by some as actually alive and thriving. Yet unlike in the movies,
there is nothing mystical, ghostly or anything even remotely charming about the purported existence of
Andong. The creation of the putative municipality was declared void ab initio by this Court four decades
ago, but the present petition insists that in spite of this insurmountable obstacle Andong thrives on, and
hence, its legal personality should be given judicial affirmation. We disagree.

The factual antecedents derive from the promulgation of our ruling in Pelaez v. Auditor General2 in 1965.
As discussed therein, then President Diosdado Macapagal issued several Executive Orders 3 creating
thirty-three (33) municipalities in Mindanao. Among them was Andong in Lanao del Sur which was
created by virtue of Executive Order No. 107. 4

These executive orders were issued after legislative bills for the creation of municipalities involved in that
case had failed to pass Congress. 5 President Diosdado Macapagal justified the creation of these
municipalities citing his powers under Section 68 of the Revised Administrative Code. Then Vice-
President Emmanuel Pelaez filed a special civil action for a writ of prohibition, alleging in main that the
Executive Orders were null and void, Section 68 having been repealed by Republic Act No. 2370, 6 and
said orders constituting an undue delegation of legislative power. 7

After due deliberation, the Court unanimously held that the challenged Executive Orders were null and
void. A majority of five justices, led by the ponente, Justice (later Chief Justice) Roberto Concepcion,
ruled that Section 68 of the Revised Administrative Code did not meet the well-settled requirements for
a valid delegation of legislative power to the executive branch, 8 while three justices opined that the
nullity of the issuances was the consequence of the enactment of the 1935 Constitution, which reduced
the power of the Chief Executive over local governments. 9Pelaez was disposed in this wise:

WHEREFORE, the Executive Orders in question are declared null and void ab initio and the respondent
permanently restrained from passing in audit any expenditure of public funds in implementation of said
Executive Orders or any disbursement by the municipalities above referred to. It is so ordered. 10

Among the Executive Orders annulled was Executive Order No. 107 which created the Municipality of
Andong. Nevertheless, the core issue presented in the present petition is the continued efficacy of the
judicial annulment of the Municipality of Andong.

Petitioner Sultan Osop B. Camid (Camid) represents himself as a current resident of Andong, 11 suing as a
private citizen and taxpayer whose locus standi "is of public and paramount interest especially to the
people of the Municipality of Andong, Province of Lanao del Sur." 12 He alleges that Andong "has
metamorphosed into a full-blown municipality with a complete set of officials appointed to handle
essential services for the municipality and its constituents," 13 even though he concedes that since 1968,
no person has been appointed, elected or qualified to serve any of the elective local government
positions of Andong.14 Nonetheless, the municipality of Andong has its own high school, Bureau of Posts,
a Department of Education, Culture and Sports office, and at least seventeen (17) "barangay units" with
their own respective chairmen.15 From 1964 until 1972, according to Camid, the public officials of
Andong "have been serving their constituents through the minimal means and resources with least (sic)
honorarium and recognition from the Office of the then former President Diosdado Macapagal." Since
the time of Martial Law in 1972, Andong has allegedly been getting by despite the absence of public
funds, with the "Interim Officials" serving their constituents "in their own little ways and means." 16

In support of his claim that Andong remains in existence, Camid presents to this Court
a Certification issued by the Office of the Community Environment and Natural Resources (CENRO) of the
Department of Environment and Natural Resources (DENR) certifying the total land area of the
Municipality of Andong, "created under Executive Order No. 107 issued [last] October 1, 1964." 17 He also
submits a Certification issued by the Provincial Statistics Office of Marawi City concerning the population
of Andong, which is pegged at fourteen thousand fifty nine (14,059) strong. Camid also enumerates a list
of governmental agencies and private groups that allegedly recognize Andong, and notes that other
municipalities have recommended to the Speaker of the Regional Legislative Assembly for the immediate
implementation of the revival or re-establishment of Andong. 18

The petition assails a Certification dated 21 November 2003, issued by the Bureau of Local Government
Supervision of the Department of Interior and Local Government (DILG). 19 The Certification enumerates
eighteen (18) municipalities certified as "existing," per DILG records. Notably, these eighteen (18)
municipalities are among the thirty-three (33), along with Andong, whose creations were voided by
this Court in Pelaez. These municipalities are Midaslip, Pitogo, Naga, and Bayog in Zamboanga del Sur;
Siayan and Pres. Manuel A. Roxas in Zamboanga del Norte; Magsaysay, Sta. Maria and New Corella in
Davao; Badiangan and Mina in Iloilo; Maguing in Lanao del Sur; Gloria in Oriental Mindoro; Maasim in
Sarangani; Kalilangan and Lantapan in Bukidnon; and Maco in Compostela Valley. 20

Camid imputes grave abuse of discretion on the part of the DILG "in not classifying [Andong] as a
regular existing municipality and in not including said municipality in its records and official database
as [an] existing regular municipality."21 He characterizes such non-classification as unequal treatment to
the detriment of Andong, especially in light of the current recognition given to the eighteen (18)
municipalities similarly annulled by reason of Pelaez. As appropriate relief, Camid prays that the Court
annul the DILG Certification dated 21 November 2003; direct the DILG to classify Andong as a "regular
existing municipality;" all public respondents, to extend full recognition and support to Andong; the
Department of Finance and the Department of Budget and Management, to immediately release the
internal revenue allotments of Andong; and the public respondents, particularly the DILG, to recognize
the "Interim Local Officials" of Andong.22

Moreover, Camid insists on the continuing validity of Executive Order No. 107. He argues that Pelaez has
already been modified by supervening events consisting of subsequent laws and jurisprudence.
Particularly cited is our Decision in Municipality of San Narciso v. Hon. Mendez,23 wherein the Court
affirmed the unique status of the municipality of San Andres in Quezon as a "de facto municipal
corporation."24 Similar to Andong, the municipality of San Andres was created by way of executive order,
precisely the manner which the Court in Pelaez had declared as unconstitutional.
Moreover, San Narciso cited, as Camid does, Section 442(d) of the Local Government Code of 1991 as
basis for the current recognition of the impugned municipality. The provision reads:

Section 442. Requisites for Creation. - xxx

(d) 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 sets of elective municipal officials holding office at the time of the effectivity
of (the) Code shall henceforth be considered as regular municipalities. 25

There are several reasons why the petition must be dismissed. These can be better discerned upon
examination of the proper scope and application of Section 442(d), which does not sanction the
recognition of just any municipality. This point shall be further explained further on.
Notably, as pointed out by the public respondents, through the Office of the Solicitor General (OSG), the
case is not a fit subject for the special civil actions of certiorari and mandamus, as it pertains to the de
novo appreciation of factual questions. There is indeed no way to confirm several of Camid’s astonishing
factual allegations pertaining to the purported continuing operation of Andong in the decades since it
was annulled by this Court. No trial court has had the opportunity to ascertain the validity of these
factual claims, the appreciation of which is beyond the function of this Court since it is not a trier of
facts.

The importance of proper factual ascertainment cannot be gainsaid, especially in light of the legal
principles governing the recognition of de facto municipal corporations. It has been opined that
municipal corporations may exist by prescription where it is shown that the community has claimed and
exercised corporate functions, with the knowledge and acquiescence of the legislature, and without
interruption or objection for period long enough to afford title by prescription. 26 These municipal
corporations have exercised their powers for a long period without objection on the part of the
government that although no charter is in existence, it is presumed that they were duly incorporated
in the first place and that their charters had been lost. 27 They are especially common in England, which,
as well-worth noting, has existed as a state for over a thousand years. The reason for the development of
that rule in England is understandable, since that country was settled long before the Roman conquest
by nomadic Celtic tribes, which could have hardly been expected to obtain a municipal charter in the
absence of a national legal authority.

In the United States, municipal corporations by prescription are less common, but it has been held that
when no charter or act of incorporation of a town can be found, it may be shown to have claimed and
exercised the powers of a town with the knowledge and assent of the legislature, and without objection
or interruption for so long a period as to furnish evidence of a prescriptive right. 28

What is clearly essential is a factual demonstration of the continuous exercise by the municipal
corporation of its corporate powers, as well as the acquiescence thereto by the other instrumentalities
of the state. Camid does not have the opportunity to make an initial factual demonstration of those
circumstances before this Court. Indeed, the factual deficiencies aside, Camid’s plaint should have
undergone the usual administrative gauntlet and, once that was done, should have been filed first with
the Court of Appeals, which at least would have had the power to make the necessary factual
determinations. Camid’s seeming ignorance of the principles of exhaustion of administrative remedies
and hierarchy of courts, as well as the concomitant prematurity of the present petition, cannot be
countenanced.

It is also difficult to capture the sense and viability of Camid’s present action. The assailed issuance is
the Certification issued by the DILG. But such Certification does not pretend to bear the authority to
create or revalidate a municipality. Certainly, the annulment of the Certification will really do nothing
to serve Camid’s ultimate cause- the recognition of Andong. Neither does the Certification even
expressly refute the claim that Andong still exists, as there is nothing in the document that comments
on the present status of Andong. Perhaps the Certification is assailed before this Court if only to present
an actual issuance, rather than a long-standing habit or pattern of action that can be annulled through
the special civil action of certiorari. Still, the relation of the Certification to Camid’s central argument is
forlornly strained.
These disquisitions aside, the central issue remains whether a municipality whose creation by executive
fiat was previously voided by this Court may attain recognition in the absence of any curative or
reimplementing statute. Apparently, the question has never been decided before, San Narciso and its
kindred cases pertaining as they did to municipalities whose bases of creation were dubious yet were
never judicially nullified. The effect of Section 442(d) of the Local Government Code on municipalities
such as Andong warrants explanation. Besides, the residents of Andong who belabor under the
impression that their town still exists, much less those who may comport themselves as the
municipality’s "Interim Government," would be well served by a rude awakening.

The Court can employ a simplistic approach in resolving the substantive aspect of the petition, merely by
pointing out that the Municipality of Andong never existed. 29 Executive Order No. 107, which established
Andong, was declared "null and void ab initio" in 1965 by this Court in Pelaez, along with thirty-three
(33) other executive orders. The phrase "ab initio" means "from the beginning,"30 "at first,"31 "from the
inception."32 Pelaez was never reversed by this Court but rather it was expressly affirmed in the cases
of Municipality of San Joaquin v. Siva, 33 Municipality of Malabang v. Benito, 34 and Municipality of
Kapalong v. Moya.35 No subsequent ruling by this Court declared Pelaez as overturned or inoperative. No
subsequent legislation has been passed since 1965 creating a Municipality of Andong. Given these facts,
there is hardly any reason to elaborate why Andong does not exist as a duly constituted municipality.

This ratiocination does not admit to patent legal errors and has the additional virtue of blessed austerity.
Still, its sweeping adoption may not be advisedly appropriate in light of Section 442(d) of the Local
Government Code and our ruling in Municipality of San Narciso, both of which admit to the possibility
of de facto municipal corporations.

To understand the applicability of Municipality of San Narciso and Section 442(b) of the Local
Government Code to the situation of Andong, it is necessary again to consider the ramifications of our
decision in Pelaez.

The eminent legal doctrine enunciated in Pelaez was that the President was then, and still is, not
empowered to create municipalities through executive issuances. The Court therein recognized "that
the President has, for many years, issued executive orders creating municipal corporations, and that the
same have been organized and in actual operation . . . ." 36 However, the Court ultimately nullified only
those thirty-three (33) municipalities, including Andong, created during the period from 4 September to
29 October 1964 whose existence petitioner Vice-President Pelaez had specifically assailed before this
Court. No pronouncement was made as to the other municipalities which had been previously created
by the President in the exercise of power the Court deemed unlawful.

Two years after Pelaez was decided, the issue again came to fore in Municipality of San Joaquin v.
Siva.37 The Municipality of Lawigan was created by virtue of Executive Order No. 436 in 1961. Lawigan
was not one of the municipalities ordered annulled in Pelaez. A petition for prohibition was filed
contesting the legality of the executive order, again on the ground that Section 68 of the Revised
Administrative Code was unconstitutional. The trial court dismissed the petition, but the Supreme Court
reversed the ruling and entered a new decision declaring Executive Order No. 436 void ab initio. The
Court reasoned without elaboration that the issue had already been squarely taken up and settled
in Pelaez which agreed with the argument posed by the challengers to Lawigan’s validity. 38
In the 1969 case of Municipality of Malabang v. Benito,39 what was challenged is the validity of the
constitution of the Municipality of Balabagan in Lanao del Sur, also created by an executive order, 40 and
which, similar to Lawigan, was not one of the municipalities annulled in Pelaez. This time, the officials of
Balabagan invoked de facto status as a municipal corporation in order to dissuade the Court from
nullifying action. They alleged that its status as a de facto corporation cannot be collaterally attacked but
should be inquired into directly in an action for quo warranto at the instance of the State, and not by a
private individual as it was in that case. In response, the Court conceded that an inquiry into the legal
existence of a municipality is reserved to the State in a proceeding for quo warranto, but only if the
municipal corporation is a de facto corporation.41

Ultimately, the Court refused to acknowledge Balabagan as a de facto corporation, even though it had
been organized prior to the Court’s decision in Pelaez. The Court declared void the executive order
creating Balabagan and restrained its municipal officials from performing their official duties and
functions.42 It cited conflicting American authorities on whether a de facto corporation can exist where
the statute or charter creating it is unconstitutional. 43But the Court’s final conclusion was unequivocal
that Balabagan was not a de facto corporation.1awphi1.nét

In the cases where a de facto municipal corporation was recognized as such despite the fact that the
statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration
that there was some other valid law giving corporate vitality to the organization. Hence, in the case at
bar, the mere fact that Balabagan was organized at a time when the statute had not been invalidated
cannot conceivably make it a de factocorporation, as, independently of the Administrative Code
provision in question, there is no other valid statute to give color of authority to its creation. 44

The Court did clarify in Malabang that the previous acts done by the municipality in the exercise of its
corporate powers were not necessarily a nullity. 45 Camid devotes several pages of his petition in citing
this point,46 yet the relevance of the citation is unclear considering that Camid does not assert the
validity of any corporate act of Andong prior to its judicial dissolution. Notwithstanding, the Court
in Malabang retained an emphatic attitude as to the unconstitutionality of the power of the President to
create municipal corporations by way of presidential promulgations, as authorized under Section 68 of
the Revised Administrative Code.

This principle was most recently affirmed in 1988, in Municipality of Kapalong v. Moya.47 The
municipality of Santo Tomas, created by President Carlos P. Garcia, filed a complaint against another
municipality, who challenged Santo Tomas’s legal personality to institute suit. Again, Santo Tomas had
not been expressly nullified by prior judicial action, yet the Court refused to recognize its legal existence.
The blunt but simple ruling: "Now then, as ruled in the Pelaez case supra, the President has no power to
create a municipality. Since [Santo Tomas] has no legal personality, it can not be a party to any civil
action…."48

Nevertheless, when the Court decided Municipality of San Narciso49 in 1995, it indicated a shift in the
jurisprudential treatment of municipalities created through presidential issuances. The questioned
municipality of San Andres, Quezon was created on 20 August 1959 by Executive Order No. 353 issued
by President Carlos P. Garcia. Executive Order No. 353 was not one of the thirty-three issuances
annulled by Pelaez in 1965. The legal status of the Municipality of San Andres was first challenged only
in 1989, through a petition for quo warranto filed with the Regional Trial Court of Gumaca, Quezon,
which did cite Pelaez as authority.50 The RTC dismissed the petition for lack of cause of action, and the
petitioners therein elevated the matter to this Court.

In dismissing the petition, the Court delved in the merits of the petition, if only to resolve further doubt
on the legal status of San Andres. It noted a circumstance which is not present in the case at bar—that
San Andres was in existence for nearly thirty (30) years before its legality was challenged. The Court did
not declare the executive order creating San Andres null and void. Still, acting on the premise that the
said executive order was a complete nullity, the Court noted "peculiar circumstances" that led to the
conclusion that San Andres had attained the unique status of a "de facto municipal corporation." 51 It
noted that Pelaez limited its nullificatory effect only to those executive orders specifically challenged
therein, despite the fact that the Court then could have very well extended the decision to invalidate San
Andres as well.52 This statement squarely contradicts Camid’s reading of San Narciso that the creation of
San Andres, just like Andong, had been declared a complete nullity on the same ground of
unconstitutional delegation of legislative power found in Pelaez.53

The Court also considered the applicability of Section 442(d) 54 of the Local Government Code of 1991. It
clarified the implication of the provision as follows:

Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts
"organized pursuant to presidential issuances or executive orders and which have their respective sets of
elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be
considered as regular municipalities." No pretension of unconstitutionality per se of Section 442(d) of
the Local Government Code is preferred. It is doubtful whether such a pretext, even if made, would
succeed. The power to create political subdivisions is a function of the legislature. Congress did just
that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence are
retrospective, and aimed at giving "validity to acts done that would have been invalid under existing
laws, as if existing laws have been complied with," are validly accepted in this jurisdiction, subject to the
usual qualification against impairment of vested rights. (Emphasis supplied) 55

The holding in San Narciso was subsequently affirmed in Municipality of Candijay v. Court of
Appeals56 and Municipality of Jimenez v. Baz57 In Candijay, the juridical personality of the Municipality of
Alicia, created in a 1949 executive order, was attacked only beginning in 1984. Pelaez was again invoked
in support of the challenge, but the Court refused to invalidate the municipality, citing San Narciso at
length. The Court noted that the situation of the Municipality of Alicia was strikingly similar to that
in San Narciso; hence, the town should likewise "benefit from the effects of Section 442(d) of the Local
Government Code, and should [be] considered as a regular, de juremunicipality." 58

The valid existence of Municipality of Sinacaban, created in a 1949 executive order, was among the
issues raised in Jimenez. The Court, through Justice Mendoza, provided an expert summation of the
evolution of the rule.

The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the
ruling in Pelaez v. Auditor General that the creation of municipal corporations is essentially a legislative
matter and therefore the President was without power to create by executive order the Municipality of
Sinacaban. The ruling in this case has been reiterated 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 creation can no longer be questioned. In Municipality of San
Narciso, Quezon v. Mendez, Sr., this Court considered the following factors as having validated the
creation of a municipal corporation, which, like the Municipality of Sinacaban, was created by executive
order of the President before the ruling in Pelaez v. Auditor General: (1) the fact that for nearly 30 years
the validity of the creation of the municipality had never been challenged; (2) the fact that following the
ruling in Pelaez no quo warranto suit was filed to question the validity of the executive order creating
such municipality; and (3) the fact that the municipality was later classified as a fifth class municipality,
organized as part of a municipal circuit court and considered part of a legislative district in the
Constitution apportioning the seats in the House of Representatives. Above all, it was held that whatever
doubt there might be as to the de jure character of the municipality must be deemed to have been put
to rest by the Local Government Code of 1991 (R. A. No. 7160), §442(d) of which provides that
"municipal districts organized pursuant to presidential issuances or executive orders and which have
their respective sets of elective officials holding office at the time of the effectivity of this Code shall
henceforth be considered as regular municipalities."

Here, the same factors are present so as to confer on Sinacaban the status of at least a de facto
municipal corporation in the sense that its legal existence has been recognized and acquiesced publicly
and officially. Sinacaban had been in existence for sixteen years when Pelaez v. Auditor General was
decided on December 24, 1965. Yet the validity of E.O. No. 258 creating it had never been questioned.
Created in 1949, it was only 40 years later that its existence was questioned and only because it had laid
claim to an area that apparently is desired for its revenue. This fact must be underscored because under
Rule 66, §16 of the Rules of Court, a quo warranto suit against a corporation for forfeiture of its charter
must be commenced within five (5) years from the time the act complained of was done or committed.
On the contrary, the State and even the Municipality of Jimenez itself have recognized Sinacaban's
corporate existence. Under Administrative Order No. 33 dated June 13, 1978 of this Court, as reiterated
by §31 of the Judiciary Reorganization Act of 1980 (B. P. Blg. 129), Sinacaban is constituted part of a
municipal circuit for purposes of the establishment of Municipal Circuit Trial Courts in the country. For its
part, Jimenez had earlier recognized Sinacaban in 1950 by entering into an agreement with it regarding
their common boundary. The agreement was embodied in Resolution No. 77 of the Provincial Board of
Misamis Occidental.

Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987
Constitution, apportioning legislative districts throughout the country, which considered Sinacaban part
of the Second District of Misamis Occidental. Moreover, following the ruling in Municipality of San
Narciso, Quezon v. Mendez, Sr., 442(d) of the Local Government Code of 1991 must be deemed to have
cured any defect in the creation of Sinacaban…. 591awphi1.nét

From this survey of relevant jurisprudence, we can gather the applicable rules. Pelaez and its offspring
cases ruled that the President has no power to create municipalities, yet limited its nullificatory effects to
the particular municipalities challenged in actual cases before this Court. However, with the
promulgation of the Local Government Code in 1991, the legal cloud was lifted over the municipalities
similarly created by executive order but not judicially annulled. The de facto status of such municipalities
as San Andres, Alicia and Sinacaban was recognized by this Court, and Section 442(b) of the Local
Government Code deemed curative whatever legal defects to title these municipalities had labored
under.
Is Andong similarly entitled to recognition as a de facto municipal corporation? It is not. There are
eminent differences between Andong and municipalities such as San Andres, Alicia and Sinacaban. Most
prominent is the fact that the executive order creating Andong was expressly annulled by order of this
Court in 1965. If we were to affirm Andong’s de facto status by reason of its alleged continued existence
despite its nullification, we would in effect be condoning defiance of a valid order of this
Court.l^vvphi1.net Court decisions cannot obviously lose their efficacy due to the sheer defiance by the
parties aggrieved.

It bears noting that based on Camid’s own admissions, Andong does not meet the requisites set forth by
Section 442(d) of the Local Government Code. Section 442(d) requires that in order that the municipality
created by executive order may receive recognition, they must "have their respective set of elective
municipal officials holding office at the time of the effectivity of [the Local Government] Code." Camid
admits that Andong has never elected its municipal officers at all. 60 This incapacity ties in with the fact
that Andong was judicially annulled in 1965. Out of obeisance to our ruling in Pelaez, the national
government ceased to recognize the existence of Andong, depriving it of its share of the public funds,
and refusing to conduct municipal elections for the void municipality.

The failure to appropriate funds for Andong and the absence of elections in the municipality in the last
four decades are eloquent indicia of the non-recognition by the State of the existence of the town. The
certifications relied upon by Camid, issued by the DENR-CENRO and the National Statistics Office, can
hardly serve the purpose of attesting to Andong’s legal efficacy. In fact, both these certifications qualify
that they were issued upon the request of Camid, "to support the restoration or re-operation of the
Municipality of Andong, Lanao del Sur," 61 thus obviously conceding that the municipality is at present
inoperative.1awphi1.nét

We may likewise pay attention to the Ordinance appended to the 1987 Constitution, which had also
been relied upon in Jimenez and San Narciso. This Ordinance, which apportioned the seats of the House
of Representatives to the different legislative districts in the Philippines, enumerates the various
municipalities that are encompassed by the various legislative districts. Andong is not listed therein as
among the municipalities of Lanao del Sur, or of any other province for that matter. 62 On the other hand,
the municipalities of San Andres, Alicia and Sinacaban are mentioned in the Ordinance as part of
Quezon,63 Bohol,64 and Misamis Occidental65 respectively.

How about the eighteen (18) municipalities similarly nullified in Pelaez but certified as existing in the
DILG Certification presented by Camid? The petition fails to mention that subsequent to the ruling
in Pelaez, legislation was enacted to reconstitute these municipalities. 66 It is thus not surprising that
the DILG certified the existence of these eighteen (18) municipalities, or that these towns are among
the municipalities enumerated in the Ordinance appended to the Constitution. Andong has not been
similarly reestablished through statute. Clearly then, the fact that there are valid organic statutes passed
by legislation recreating these eighteen (18) municipalities is sufficient legal basis to accord a different
legal treatment to Andong as against these eighteen (18) other municipalities.

We thus assert the proper purview to Section 442(d) of the Local Government Code—that it does not
serve to affirm or reconstitute the judicially dissolved municipalities such as Andong, which had been
previously created by presidential issuances or executive orders. The provision affirms the legal
personalities only of those municipalities such as San Narciso, Alicia, and Sinacaban, which may have
been created using the same infirm legal basis, yet were fortunate enough not to have been judicially
annulled. On the other hand, the municipalities judicially dissolved in cases such as Pelaez, San
Joaquin, and Malabang, remain inexistent, unless recreated through specific legislative enactments, as
done with the eighteen (18) municipalities certified by the DILG. Those municipalities derive their legal
personality not from the presidential issuances or executive orders which originally created them or
from Section 442(d), but from the respective legislative statutes which were enacted to revive
them.1a\^/phi1.net

And what now of Andong and its residents? Certainly, neither Pelaez or this decision has obliterated
Andong into a hole on the ground. The legal effect of the nullification of Andong in Pelaez was to revert
the constituent barrios of the voided town back into their original municipalities, namely the
municipalities of Lumbatan, Butig and Tubaran.67These three municipalities subsist to this day as part of
Lanao del Sur,68 and presumably continue to exercise corporate powers over the barrios which once
belonged to Andong.

If there is truly a strong impulse calling for the reconstitution of Andong, the solution is through the
legislature and not judicial confirmation of void title. If indeed the residents of Andong have, all these
years, been governed not by their proper municipal governments but by a ragtag "Interim Government,"
then an expedient political and legislative solution is perhaps necessary. Yet we can hardly sanction the
retention of Andong’s legal personality solely on the basis of collective amnesia that may have allowed
Andong to somehow pretend itself into existence despite its judicial dissolution. Maybe those who insist
Andong still exists prefer to remain unperturbed in their blissful ignorance, like the inhabitants of the
cave in Plato’s famed allegory. But the time has come for the light to seep in, and for the petitioner and
like-minded persons to awaken to legal reality.

WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against petitioner.

SO ORDERED.

Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-
Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur.

G.R. No. 176951 February 15, 2011

LEAGUE OF CITIES OF THE PHILIPPINES (LCP), Represented by LCP National President Jerry P. Treñas;
City of Calbayog, represented by Mayor Mel Senen S. Sarmiento; and Jerry P. Treñas, in his personal
capacity as Taxpayer, Petitioners,
vs.
COMMISSION ON ELECTIONS; Municipality of Baybay, Province of Leyte; Municipality of Bogo,
Province of Cebu; Municipality of Catbalogan, Province of Western Samar; Municipality of Tandag,
Province of Surigao del Sur; Municipality of Borongan, Province of Eastern Samar; and Municipality of
Tayabas, Province of Quezon, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 177499

LEAGUE OF CITIES OF THE PHILIPPINES (LCP), Represented by LCP National President Jerry P. Treñas;
City of Calbayog, represented by Mayor Mel Senen S. Sarmiento; and Jerry P. Treñas, in his personal
capacity as Taxpayer, Petitioners,
vs.
COMMISSION ON ELECTIONS; Municipality of Lamitan, Province of Basilan; Municipality of Tabuk,
Province of Kalinga; Municipality of Bayugan, Province of Agusan del Sur; Municipality of Batac,
Province of Ilocos Norte; Municipality of Mati, Province of Davao Oriental; and Municipality of
Guihulngan, Province of Negros Oriental, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 178056

LEAGUE OF CITIES OF THE PHILIPPINES (LCP), Represented by LCP National President Jerry P. Treñas;
City of Calbayog, represented by Mayor Mel Senen S. Sarmiento; and Jerry P. Treñas, in his personal
capacity as Taxpayer, Petitioners,
vs.
COMMISSION ON ELECTIONS; Municipality of Cabadbaran, Province of Agusan del Norte; Municipality
of Carcar, Province of Cebu; Municipality of El Salvador, Province of Misamis Oriental; Municipality of
Naga, Cebu; and Department of Budget and Management, Respondents.

RESOLUTION

BERSAMIN, J.:

For consideration of this Court are the following pleadings:

1. Motion for Reconsideration of the "Resolution" dated August 24, 2010 dated and filed on September
14, 2010 by respondents Municipality of Baybay, et al.; and

2. Opposition [To the "Motion for Reconsideration of the ‘Resolution’ dated August 24, 2010"].

Meanwhile, respondents also filed on September 20, 2010 a Motion to Set "Motion for Reconsideration
of the ‘Resolution’ dated August 24, 2010" for Hearing. This motion was, however, already denied by the
Court En Banc.

A brief background —

These cases were initiated by the consolidated petitions for prohibition filed by the League of Cities of
the Philippines (LCP), City of Iloilo, City of Calbayog, and Jerry P. Treñas, assailing the constitutionality of
the sixteen (16) laws,1 each converting the municipality covered thereby into a component city (Cityhood
Laws), and seeking to enjoin the Commission on Elections (COMELEC) from conducting plebiscites
pursuant to the subject laws.

In the Decision dated November 18, 2008, the Court En Banc, by a 6-5 vote, 2 granted the petitions and
struck down the Cityhood Laws as unconstitutional for violating Sections 10 and 6, Article X, and the
equal protection clause.

In the Resolution dated March 31, 2009, the Court En Banc, by a 7-5 vote, 3 denied the first motion for
reconsideration.

On April 28, 2009, the Court En Banc issued a Resolution, with a vote of 6-6, 4 which denied the second
motion for reconsideration for being a prohibited pleading.
In its June 2, 2009 Resolution, the Court En Banc clarified its April 28, 2009 Resolution in this wise—

As a rule, a second motion for reconsideration is a prohibited pleading pursuant to Section 2, Rule 52 of
the Rules of Civil Procedure which provides that: "No second motion for reconsideration of a judgment
or final resolution by the same party shall be entertained." Thus, a decision becomes final and
executory after 15 days from receipt of the denial of the first motion for reconsideration.

However, when a motion for leave to file and admit a second motion for reconsideration is granted by
the Court, the Court therefore allows the filing of the second motion for reconsideration. In such a
case, the second motion for reconsideration is no longer a prohibited pleading.

In the present case, the Court voted on the second motion for reconsideration filed by respondent
cities. In effect, the Court allowed the filing of the second motion for reconsideration. Thus, the second
motion for reconsideration was no longer a prohibited pleading. However, for lack of the required
number of votes to overturn the 18 November 2008 Decision and 31 March 2009 Resolution, the Court
denied the second motion for reconsideration in its 28 April 2009 Resolution.5

Then, in another Decision dated December 21, 2009, the Court En Banc, by a vote of 6-4, 6 declared the
Cityhood Laws as constitutional.

On August 24, 2010, the Court En Banc, through a Resolution, by a vote of 7-6, 7 resolved the Ad
Cautelam Motion for Reconsideration and Motion to Annul the Decision of December 21, 2009, both
filed by petitioners, and the Ad Cautelam Motion for Reconsideration filed by petitioners-in-intervention
Batangas City, Santiago City, Legazpi City, Iriga City, Cadiz City, and Oroquieta City, reinstating the
November 18, 2008 Decision. Hence, the aforementioned pleadings.

Considering these circumstances where the Court En Banc has twice changed its position on the
constitutionality of the 16 Cityhood Laws, and especially taking note of the novelty of the issues involved
in these cases, the Motion for Reconsideration of the "Resolution" dated August 24, 2010 deserves
favorable action by this Court on the basis of the following cogent points:

1.

The 16 Cityhood Bills do not violate Article X, Section 10 of the Constitution.

Article X, Section 10 provides—

Section 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or
its boundary substantially altered, except in accordance with the criteria established in the local
government code and subject to approval by a majority of the votes cast in a plebiscite in the political
units directly affected.

The tenor of the ponencias of the November 18, 2008 Decision and the August 24, 2010 Resolution is
that the exemption clauses in the 16 Cityhood Laws are unconstitutional because they are not written in
the Local Government Code of 1991 (LGC), particularly Section 450 thereof, as amended by Republic Act
(R.A.) No. 9009, which took effect on June 30, 2001, viz.—

Section 450. Requisites for Creation. –a) A municipality or a cluster of barangays may be converted into a
component city if it has a locally generated annual income, as certified by the Department of Finance, of
at least One Hundred Million Pesos (₱100,000,000.00) for at least two (2) consecutive years based on
2000 constant prices, and if it has either of the following requisites:

xxxx

(c) The average annual income shall include the income accruing to the general fund, exclusive of special
funds, transfers, and non-recurring income. (Emphasis supplied)

Prior to the amendment, Section 450 of the LGC required only an average annual income, as certified by
the Department of Finance, of at least ₱20,000,000.00 for the last two (2) consecutive years, based on
1991 constant prices.

Before Senate Bill No. 2157, now R.A. No. 9009, was introduced by Senator Aquilino Pimentel, there
were 57 bills filed for conversion of 57 municipalities into component cities. During the 11th Congress
(June 1998-June 2001), 33 of these bills were enacted into law, while 24 remained as pending bills.
Among these 24 were the 16 municipalities that were converted into component cities through the
Cityhood Laws.

The rationale for the enactment of R.A. No. 9009 can be gleaned from the sponsorship speech of Senator
Pimentel on Senate Bill No. 2157, to wit—

Senator Pimentel. Mr. President, I would have wanted this bill to be included in the whole set of
proposed amendments that we have introduced to precisely amend the Local Government Code.
However, it is a fact that there is a mad rush of municipalities wanting to be converted into cities.
Whereas in 1991, when the Local Government was approved, there were only 60 cities, today the
number has increased to 85 cities, with 41 more municipalities applying for conversion to the same
status. At the rate we are going, I am apprehensive that before long this nation will be a nation of all
cities and no municipalities.

It is for that reason, Mr. President, that we are proposing among other things, that the financial
requirement, which, under the Local Government Code, is fixed at P20 million, be raised to P100 million
to enable a municipality to have the right to be converted into a city, and the P100 million should be
sourced from locally generated funds.

What has been happening, Mr. President, is, the municipalities aspiring to become cities say that they
qualify in terms of financial requirements by incorporating the Internal Revenue share of the taxes of the
nation on to their regularly generated revenue. Under that requirement, it looks clear to me that
practically all municipalities in this country would qualify to become cities.

It is precisely for that reason, therefore, that we are seeking the approval of this Chamber to amend,
particularly Section 450 of Republic Act No. 7160, the requisite for the average annual income of a
municipality to be converted into a city or cluster of barangays which seek to be converted into a city,
raising that revenue requirement from ₱20 million to ₱100 million for the last two consecutive years
based on 2000 constant prices.8

While R.A. No. 9009 was being deliberated upon, Congress was well aware of the pendency of
conversion bills of several municipalities, including those covered by the Cityhood Laws, desiring to
become component cities which qualified under the ₱20 million income requirement of the old Section
450 of the LGC. The interpellation of Senate President Franklin Drilon of Senator Pimentel is revealing,
thus—

THE PRESIDENT. The Chair would like to ask for some clarificatory point.

SENATOR PIMENTEL. Yes, Mr. President.

THE PRESIDENT. This is just on the point of the pending bills in the Senate which propose the conversion
of a number of municipalities into cities and which qualify under the present standard.

We would like to know the view of the sponsor: Assuming that this bill becomes a law, will the Chamber
apply the standard as proposed in this bill to those bills which are pending for consideration?

SENATOR PIMENTEL. Mr. President, it might not be fair to make this bill, on the assumption that it is
approved, retroact to the bills that are pending in the Senate conversion from municipalities to cities.

THE PRESIDENT. Will there be an appropriate language crafted to reflect that view? Or does it not
become a policy of the Chamber, assuming that this bill becomes a law tomorrow, that it will apply to
those bills which are already approved by the House under the old version of the Local Government
Code and are now pending in the Senate? The Chair does not know if we can craft a language which will
limit the application to those which are not yet in the Senate. Or is that a policy that the Chamber will
adopt?

SENATOR PIMENTEL. Mr. President, personally, I do not think it is necessary to put that provision
because what we are saying here will form part of the interpretation of this bill. Besides, if there is no
retroactivity clause, I do not think that the bill would have any retroactive effect.

THE PRESIDENT. So the understanding is that those bills which are already pending in the Chamber will
not be affected.

SENATOR PIMENTEL. These will not be affected, Mr. President.

THE PRESIDENT. Thank you Mr. Chairman. 9

Clearly, based on the above exchange, Congress intended that those with pending cityhood bills during
the 11th Congress would not be covered by the new and higher income requirement of ₱100 million
imposed by R.A. No. 9009. When the LGC was amended by R.A. No. 9009, the amendment carried with it
both the letter and the intent of the law, and such were incorporated in the LGC by which the
compliance of the Cityhood Laws was gauged.

Notwithstanding that both the 11th and 12th Congress failed to act upon the pending cityhood bills,
both the letter and intent of Section 450 of the LGC, as amended by R.A. No. 9009, were carried on until
the 13th Congress, when the Cityhood Laws were enacted. The exemption clauses found in the
individual Cityhood Laws are the express articulation of that intent to exempt respondent municipalities
from the coverage of R.A. No. 9009.

Even if we were to ignore the above quoted exchange between then Senate President Drilon and
Senator Pimentel, it cannot be denied that Congress saw the wisdom of exempting respondent
municipalities from complying with the higher income requirement imposed by the amendatory R.A. No.
9009. Indeed, these municipalities have proven themselves viable and capable to become component
cities of their respective provinces. It is also acknowledged that they were centers of trade and
commerce, points of convergence of transportation, rich havens of agricultural, mineral, and other
natural resources, and flourishing tourism spots. In this regard, it is worthy to mention the distinctive
traits of each respondent municipality, viz—

Batac, Ilocos Norte – It is the biggest municipality of the 2nd District of Ilocos Norte, 2nd largest and
most progressive town in the province of Ilocos Norte and the natural convergence point for the
neighboring towns to transact their commercial ventures and other daily activities. A growing
metropolis, Batac is equipped with amenities of modern living like banking institutions, satellite cable
systems, telecommunications systems. Adequate roads, markets, hospitals, public transport systems,
sports, and entertainment facilities. [Explanatory Note of House Bill No. 5941, introduced by Rep. Imee
R. Marcos.]

El Salvador, Misamis Oriental – It is located at the center of the Cagayan-Iligan Industrial Corridor and
home to a number of industrial companies and corporations. Investment and financial affluence of El
Salvador is aptly credited to its industrious and preserving people. Thus, it has become the growing
investment choice even besting nearby cities and municipalities. It is home to Asia Brewery as
distribution port of their product in Mindanao. The Gokongwei Group of Companies is also doing
business in the area. So, the conversion is primarily envisioned to spur economic and financial prosperity
to this coastal place in North-Western Misamis Oriental. [Explanatory Note of House Bill No. 6003,
introduced by Rep. Augusto H. Bacullo.]

Cabadbaran, Agusan del Norte – It is the largest of the eleven (11) municipalities in the province of
Agusan del Norte. It plays strategic importance to the administrative and socio-economic life and
development of Agusan del Norte. It is the foremost in terms of trade, commerce, and industry. Hence,
the municipality was declared as the new seat and capital of the provincial government of Agusan del
Norte pursuant to Republic Act No. 8811 enacted into law on August 16, 2000. Its conversion will
certainly promote, invigorate, and reinforce the economic potential of the province in establishing itself
as an agro-industrial center in the Caraga region and accelerate the development of the area.
[Explanatory Note of House Bill No. 3094, introduced by Rep. Ma. Angelica Rosedell M. Amante.]

Borongan, Eastern Samar – It is the capital town of Eastern Samar and the development of Eastern Samar
will depend to a certain degree of its urbanization. It will serve as a catalyst for the modernization and
progress of adjacent towns considering the frequent interactions between the populace. [Explanatory
Note of House Bill No. 2640, introduced by Rep. Marcelino C. Libanan.]

Lamitan, Basilan – Before Basilan City was converted into a separate province, Lamitan was the most
progressive part of the city. It has been for centuries the center of commerce and the seat of the
Sultanate of the Yakan people of Basilan. The source of its income is agro-industrial and others notably
copra, rubber, coffee and host of income generating ventures. As the most progressive town in Basilan,
Lamitan continues to be the center of commerce catering to the municipalities of Tuburan, Tipo-Tipo and
Sumisip. [Explanatory Note of House Bill No. 5786, introduced by Rep. Gerry A. Salapuddin.]

Catbalogan, Samar – It has always been the socio-economic-political capital of the Island of Samar even
during the Spanish era. It is the seat of government of the two congressional districts of Samar. Ideally
located at the crossroad between Northern and Eastern Samar, Catbalogan also hosts trade and
commerce activates among the more prosperous cities of the Visayas like Tacloban City, Cebu City and
the cities of Bicol region. The numerous banks and telecommunication facilities showcases the healthy
economic environment of the municipality. The preeminent and sustainable economic situation of
Catbalogan has further boosted the call of residents for a more vigorous involvement of governance of
the municipal government that is inherent in a city government. [Explanatory Note of House Bill No.
2088, introduced by Rep. Catalino V. Figueroa.]

Bogo, Cebu – Bogo is very qualified for a city in terms of income, population and area among others. It
has been elevated to the Hall of Fame being a five-time winner nationwide in the clean and green
program. [Explanatory Note of House Bill No. 3042, introduced by Rep. Clavel A. Martinez.]

Tandag, Surigao del Sur – This over 350 year old capital town the province has long sought its conversion
into a city that will pave the way not only for its own growth and advancement but also help in the
development of its neighboring municipalities and the province as a whole. Furthermore, it can enhance
its role as the province’s trade, financial and government center. [Explanatory Note of House Bill No.
5940, introduced by Rep. Prospero A. Pichay, Jr.]

Bayugan, Agusan del Sur – It is a first class municipality and the biggest in terms of population in the
entire province. It has the most progressive and thickly populated area among the 14 municipalities that
comprise the province. Thus, it has become the center for trade and commerce in Agusan del Sur. It has
a more developed infrastructure and facilities than other municipalities in the province. [Explanatory
Note of House Bill No. 1899, introduced by Rep. Rodolfo "Ompong" G. Plaza.]

Carcar, Cebu – Through the years, Carcar metamorphosed from rural to urban and now boast of its
manufacturing industry, agricultural farming, fishing and prawn industry and its thousands of large and
small commercial establishments contributing to the bulk of economic activities in the municipality.
Based on consultation with multi-sectoral groups, political and non-government agencies, residents and
common folk in Carcar, they expressed their desire for the conversion of the municipality into a
component city. [Explanatory Note of House Bill No. 3990, introduced by Rep. Eduardo R. Gullas.]

Guihulngan, Negros Oriental – Its population is second highest in the province, next only to the
provincial capital and higher than Canlaon City and Bais City. Agriculture contributes heavily to its
economy. There are very good prospects in agricultural production brought about by its favorable
climate. It has also the Tanon Strait that provides a good fishing ground for its numerous fishermen. Its
potential to grow commercially is certain. Its strategic location brought about by its existing linkage
networks and the major transportation corridors traversing the municipality has established Guihulngan
as the center of commerce and trade in this part of Negros Oriental with the first congressional district
as its immediate area of influence. Moreover, it has beautiful tourist spots that are being availed of by
local and foreign tourists. [Explanatory Note of House Bill No. 3628, introduced by Rep. Jacinto V. Paras.]

Tayabas, Quezon – It flourished and expanded into an important politico-cultural center in [the] Tagalog
region. For 131 years (1179-1910), it served as the cabecera of the province which originally carried the
cabecera’s own name, Tayabas. The locality is rich in culture, heritage and trade. It was at the outset one
of the more active centers of coordination and delivery of basic, regular and diverse goods and services
within the first district of Quezon Province. [Explanatory Note of House Bill No. 3348, introduced by Rep.
Rafael P. Nantes.]

Tabuk, Kalinga – It not only serves as the main hub of commerce and trade, but also the cultural center
of the rich customs and traditions of the different municipalities in the province. For the past several
years, the income of Tabuk has been steadily increasing, which is an indication that its economy is
likewise progressively growing. [Explanatory Note of House Bill No. 3068, introduced by Rep. Laurence P.
Wacnang.]

Available information on Baybay, Leyte; Mati, Davao Oriental; and Naga, Cebu shows their economic
viability, thus:

Covering an area of 46,050 hectares, Baybay [Leyte] is composed of 92 barangays, 23 of which are in the
poblacion. The remaining 69 are rural barangays. Baybay City is classified as a first class city. It is situated
on the western coast of the province of Leyte. It has a Type 4 climate, which is generally wet. Its
topography is generally mountainous in the eastern portion as it slopes down west towards the shore
line. Generally an agricultural city, the common means of livelihood are farming and fishing. Some are
engaged in hunting and in forestall activities. The most common crops grown are rice, corn, root crops,
fruits, and vegetables. Industries operating include the Specialty Products Manufacturing, Inc. and the
Visayan Oil Mill. Various cottage industries can also be found in the city such as bamboo and rattan craft,
ceramics, dress-making, fiber craft, food preservation, mat weaving, metal craft, fine Philippine furniture
manufacturing and other related activities. Baybay has great potential as a tourist destination, especially
for tennis players. It is not only rich in biodiversity and history, but it also houses the campus of the
Visayas State University (formerly the Leyte State University/Visayas State College of Agriculture/Visayas
Agricultural College/Baybay National Agricultural School/Baybay Agricultural High School and the Jungle
Valley Park.) Likewise, it has river systems fit for river cruising, numerous caves for spelunking, forests,
beaches, and marine treasures. This richness, coupled with the friendly Baybayanos, will be an element
of a successful tourism program. Considering the role of tourism in development, Baybay City intends to
harness its tourism potential. (<http://en.wikipedia.org/wiki/Baybay City> visited September 19, 2008)

Mati [Davao Oriental] is located on the eastern part of the island of Mindanao. It is one hundred sixty-
five (165) kilometers away from Davao City, a one and a half-hour drive from Tagum City. Visitors can
travel from Davao City through the Madaum diversion road, which is shorter than taking the Davao-
Tagum highway. Travels by air and sea are possible, with the existence of an airport and seaport. Mati
boasts of being the coconut capital of Mindanao if not the whole country. A large portion of its fertile
land is planted to coconuts, and a significant number of its population is largely dependent on it. Other
agricultural crops such as mango, banana, corn, coffee and cacao are also being cultivated, as well as the
famous Menzi pomelo and Valencia oranges. Mati has a long stretch of shoreline and one can find
beaches of pure, powder-like white sand. A number of resorts have been developed and are now open
to serve both local and international tourists. Some of these resorts are situated along the coast of
Pujada Bay and the Pacific Ocean. Along the western coast of the bay lies Mt. Hamiguitan, the home of
the pygmy forest, where bonsai plants and trees grow, some of which are believed to be a hundred years
old or more. On its peak is a lake, called "Tinagong Dagat," or hidden sea, so covered by dense
vegetation a climber has to hike trails for hours to reach it. The mountain is also host to rare species of
flora and fauna, thus becoming a wildlife sanctuary for these life forms. (<http://mati.wetpain.com/?
t=anon> accessed on September 19, 2008.)

Mati is abundant with nickel, chromite, and copper. Louie Rabat, Chamber President of the Davao
Oriental Eastern Chamber of Commerce and Industry, emphasized the big potential of the mining
industry in the province of Davao Oriental. As such, he strongly recommends Mati as the mining hub in
the Region.
(<http://www.pia.gov.ph/default.asp?m=12&sec=reader&rp=1&fi=p080115.htm&no.=9&date, accessed
on September 19, 2008)

Naga [Cebu]: Historical Background—In the early times, the place now known as Naga was full of huge
trees locally called as "Narra." The first settlers referred to this place as Narra, derived from the huge
trees, which later simply became Naga. Considered as one of the oldest settlements in the Province of
Cebu, Naga became a municipality on June 12, 1829. The municipality has gone through a series of
classifications as its economic development has undergone changes and growth. The tranquil farming
and fishing villages of the natives were agitated as the Spaniards came and discovered coal in the
uplands. Coal was the first export of the municipality, as the Spaniards mined and sent it to Spain. The
mining industry triggered the industrial development of Naga. As the years progressed, manufacturing
and other industries followed, making Naga one of the industrialized municipalities in the Province of
Cebu.

Class of Municipality 1st class

Province Cebu

Distance from Cebu City 22 kms.

Number of Barangays 28

No. of Registered Voters 44,643 as of May 14, 2007

Total No. of Precincts 237 (as of May 14, 2007)

Ann. Income (as of Dec. 31, 2006) Php112,219,718.35 Agricultural, Industrial, Agro-Industrial, Mining
Product

(<http://www.nagacebu.com/index.php?option=com.content&view=article id=53:naga-facts-and-
figures&catid=51:naga-facts-and-figures&Itemid=75> visited September 19, 2008)

The enactment of the Cityhood Laws is an exercise by Congress of its legislative power. Legislative power
is the authority, under the Constitution, to make laws, and to alter and repeal them. 10 The Constitution,
as the expression of the will of the people in their original, sovereign, and unlimited capacity, has vested
this power in the Congress of the Philippines. The grant of legislative power to Congress is broad,
general, and comprehensive. The legislative body possesses plenary powers for all purposes of civil
government. Any power, deemed to be legislative by usage and tradition, is necessarily possessed by
Congress, unless the Constitution has lodged it elsewhere. In fine, except as limited by the Constitution,
either expressly or impliedly, legislative power embraces all subjects, and extends to matters of general
concern or common interest.11

Without doubt, the LGC is a creation of Congress through its law-making powers. Congress has the
power to alter or modify it as it did when it enacted R.A. No. 9009. Such power of amendment of laws
was again exercised when Congress enacted the Cityhood Laws. When Congress enacted the LGC in
1991, it provided for quantifiable indicators of economic viability for the creation of local government
units—income, population, and land area. Congress deemed it fit to modify the income requirement
with respect to the conversion of municipalities into component cities when
it enacted R.A. No. 9009, imposing an amount of ₱100 million, computed only from locally-generated
sources. However, Congress deemed it wiser to exempt respondent municipalities from such a belatedly
imposed modified income requirement in order to uphold its higher calling of putting flesh and blood to
the very intent and thrust of the LGC, which is countryside development and autonomy, especially
accounting for these municipalities as engines for economic growth in their respective provinces.

Undeniably, R.A. No. 9009 amended the LGC. But it is also true that, in effect, the Cityhood Laws
amended R.A. No. 9009 through the exemption clauses found therein. Since the Cityhood Laws
explicitly exempted the concerned municipalities from the amendatory R.A. No. 9009, such Cityhood
Laws are, therefore, also amendments to the LGC itself. For this reason, we reverse the November 18,
2008 Decision and the August 24, 2010 Resolution on their strained and stringent view that the Cityhood
Laws, particularly their exemption clauses, are not found in the LGC.

2.

The Cityhood Laws do not violate Section 6, Article X and the equal protection clause of the Constitution.

Both the November 18, 2008 Decision and the August 24, 2010 Resolution impress that the Cityhood
Laws violate the equal protection clause enshrined in the Constitution. Further, it was also ruled that
Section 6, Article X was violated because the Cityhood Laws infringed on the "just share" that petitioner
and petitioners-in-intervention shall receive from the national taxes (IRA) to be automatically released to
them.

Upon more profound reflection and deliberation, we declare that there was valid classification, and the
Cityhood Laws do not violate the equal protection clause.

As this Court has ruled, the equal protection clause of the 1987 Constitution permits a valid
classification, provided that it: (1) rests on substantial distinctions; (2) is germane to the purpose of
the law; (3) is not limited to existing conditions only; and (4) applies equally to all members of the
same class.12

The petitioners argue that there is no substantial distinction between municipalities with pending
cityhood bills in the 11th Congress and municipalities that did not have pending bills, such that the mere
pendency of a cityhood bill in the 11th Congress is not a material difference to distinguish one
municipality from another for the purpose of the income requirement. This contention misses the point.

It should be recalled from the above quoted portions of the interpellation by Senate President Drilon
of Senator Pimentel that the purpose of the enactment of R.A. No 9009 was merely to stop the "mad
rush of municipalities wanting to be converted into cities" and the apprehension that before long the
country will be a country of cities and without municipalities. It should be pointed out that the
imposition of the ₱100 million average annual income requirement for the creation of component
cities was arbitrarily made. To be sure, there was no evidence or empirical data, such as inflation rates,
to support the choice of this amount. The imposition of a very high income requirement of ₱100
million, increased from ₱20 million, was simply to make it extremely difficult for municipalities to
become component cities. And to highlight such arbitrariness and the absurdity of the situation
created thereby, R.A. No. 9009 has, in effect, placed component cities at a higher standing than highly
urbanized cities under Section 452 of the LGC, to wit—
Section 452. Highly Urbanized Cities. – (a) Cities with a minimum population of two hundred thousand
(200,000) inhabitants, as certified by the National Statistics Office, and with the latest annual income of
at least Fifty Million Pesos (₱50,000,000.00) based on 1991 constant prices, as certified by the city
treasurer, shall be classified as highly urbanized cities.

(b) Cities which do not meet above requirements shall be considered component cities of the province in
which they are geographically located. (Emphasis supplied)

The ₱100 million income requirement imposed by R.A. No. 9009, being an arbitrary amount, cannot be
conclusively said to be the only amount "sufficient, based on acceptable standards, to provide for all
essential government facilities and services and special functions

commensurate with the size of its population," per Section 7 13 of the LGC. It was imposed merely
because it is difficult to comply with. While it could be argued that ₱100 million, being more than ₱20
million, could, of course, provide the essential government facilities, services, and special functions vis-à-
vis the population of a municipality wanting to become a component city, it cannot be said that the
minimum amount of ₱20 million would be insufficient. This is evident from the existing cities whose
income, up to now, do not comply with the ₱100 million income requirement, some of which have lower
than the ₱20 million average annual income. Consider the list 14 below—

CITY AVERAGE ANNUAL INCOME

1. Marawi City 5,291,522.10

2. Palayan City 6,714,651.77

3. Sipalay City 9,713,120.00

4. Canlaon City 13,552,493.79

5. Himamaylan City 15,808,530.00

6. Isabela City 16,811,246.79

7. Munoz City 19,693,358.61

8. Dapitan City 20,529,181.08

9. Tangub City 20,943,810.04

10. Bayawan City 22,943,810.04

11. Island Garden City of Samal 23,034,731.83

12. Tanjay City 23,723,612.44

13. Tabaco City 24,152,853.71

14. Oroquieta City 24,279,966.51

15. Ligao City 28,326,745.86

16. Sorsogon City 30,403,324.59

17. Maasin City 30,572,113.65

18. Escalante City 32,113,970.00

19. Iriga City 32,757,871.44

20. Gapan City 34,254,986.47

21. Candon City 36,327,705.86

22. Gingoog City 37,327,705.86

23. Masbate City 39,454,508.28

24. Passi City 40,314,620.00

25. Calbayog City 40,943,128.73

26. Calapan City 41,870,239.21

27. Cadiz City 43,827,060.00

28. Alaminos City 44,352,501.00

29. Bais City 44, 646,826.48

30. San Carlos City 46,306,129.13

31. Silay City 47,351,730.00

32. Bislig City 47,360,716.24

33. Tacurong City 49,026,281.56

34. Talisay City (Negros Occidental) 52,609,790.00

35. Kabankalan City 53,560,580.00

36. Malaybalay City 54,423,408.55

37. La Carlota City 54,760,290.00

38. Vigan City 56,831,797.19

39. Balanga City 61,556,700.49

40. Sagay City 64,266,350.00

41. Cavite City 64,566,079.05

42. Koronadal City 66,231,717.19

43. Cotabato City 66,302,114.52

44. Toledo City 70,157,331.12

45. San Jose City 70,309,233.43

46. Danao City 72,621,955.30

47. Bago City 74,305,000.00

48. Valencia City 74,557,298.92

49. Victorias City 75,757,298.92

50. Cauayan City 82,949,135.46

51. Santiago City 83,816,025.89

52. Roxas City 85,397,830.00

53. Dipolog City 85,503,262.85

54. Trece Martires City 87,413,786.64

55. Talisay City (Cebu) 87,964,972.97

56. Ozamis city 89,054,056.12

 57. Surigao City 89,960,971.33

58. Panabo City 91,425,301.39

59. Digos City 92,647,699.13

The undeniable fact that these cities remain viable as component cities of their respective provinces
emphasizes the arbitrariness of the amount of ₱100 million as the new income requirement for the
conversion of municipalities into component cities. This arbitrariness can also be clearly gleaned from
the respective distinctive traits and level of economic development of the individual respondent
municipalities as above submitted.

Verily, the determination of the existence of substantial distinction with respect to respondent
municipalities does not simply lie on the mere pendency of their cityhood bills during the 11th
Congress. This Court sees the bigger picture. The existence of substantial distinction with respect to
respondent municipalities covered by the Cityhood Laws is measured by the purpose of the law, not by
R.A. No. 9009, but by the very purpose of the LGC, as provided in its Section 2 (a), thus—

SECTION 2. Declaration of Policy.—(a) It is hereby declared the policy of the State that the territorial and
political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to
attain their fullest development as self-reliant communities and make them more effective partners in
the attainment of national goals. Toward this end, the State shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities and resources. The process of
decentralization shall proceed from the National Government to the local government units.

Indeed, substantial distinction lies in the capacity and viability of respondent municipalities to become
component cities of their respective provinces. Congress, by enacting the Cityhood Laws, recognized this
capacity and viability of respondent municipalities to become the State’s partners in accelerating
economic growth and development in the provincial regions, which is the very thrust of the LGC,
manifested by the pendency of their cityhood bills during the 11th Congress and their relentless pursuit
for cityhood up to the present. Truly, the urgent need to become a component city arose way back in the
11th Congress, and such condition continues to exist.

Petitioners in these cases complain about the purported reduction of their "just share" in the IRA. To be
sure, petitioners are entitled to a "just share," not a specific amount. But the feared reduction proved
to be false when, after the implementation of the Cityhood Laws, their respective shares increased,
not decreased. Consider the table15 below—

1avvphi1

CY 2006 IRA CY 2008 IRA

CITY (Before Implementation of Sixteen [16] (Actual Release After Implementation of Sixteen
Cityhood Laws) [16] Cityhood Laws)

Bais 219,338,056.00 242,193,156.00

Batangas 334,371,984.00 388,871,770.00

Bayawan 353,150,158.00 388,840,062.00

Cadiz 329,491,285.00 361,019,211.00

Calapan 227,772,199.00 252,587,779.00

Calbayog 438,603,378.00 485,653,769.00

Cauayan 250,477,157.00 277,120,828.00

Gen. Santos 518,388,557.00 631,864,977.00

Gingoog 314,425,637.00 347,207,725.00

Himamaylan 248,154,381.00 277,532,458.00

Iloilo 358,394,268.00 412,506,278.00

Iriga 183,132,036.00 203,072,932.00

Legaspi 235,314,016.00 266,537,785.00

Ligao 215,608,112.00 239,696,441.00

Oroquieta 191,803,213.00 211,449,720.00

Pagadian 292,788,255.00 327,401,672.00

San Carlos 239,524,249.00 260,515,711.00

San
182,320,356.00 204,140,940.00
Fernando

Santiago 508,326,072.00 563,679,572.00

Silay 216,372,314.00 241,363,845.00

Surigao 233,968,119.00 260,708,071.00

Tacurong 179,795,271.00 197,880,665.00

Tagaytay 130,159,136.00 152,445,295.00

 Tarlac 348,186,756.00 405,611,581.00

Tangub 162,248,610.00 180,640,621.00

Urdaneta 187,721,031.00 207,129,386.00

Victorias 176,367,959.00 194,162,687.00

Zamboanga 918,013,016.00 1,009,972,704.00

What these petitioner cities were stating as a reduction of their respective IRA shares was based on a
computation of what they would receive if respondent municipalities were not to become component
cities at all. Of course, that would mean a bigger amount to which they have staked their claim. After
considering these, it all boils down to money and how much more they would receive if respondent
municipalities remain as municipalities and not share in the 23% fixed IRA from the national government
for cities.

Moreover, the debates in the Senate on R.A. No. 9009, should prove enlightening:

SENATOR SOTTO. Mr. President, we just want to be enlightened again on the previous qualification and
the present one being proposed. Before there were three…

SENATOR PIMENTEL. There are three requisites for a municipality to become a city. Let us start with the
finance.

SENATOR SOTTO. Will the distinguished sponsor please refresh us? I used to be the chairman of the
Committee on Local Government, but the new job that was given to me by the Senate has erased
completely my memory as far as the Local Government Code is concerned.

SENATOR PIMENTEL. Yes, Mr. President, with pleasure. There are three requirements. One is financial.

SENATOR SOTTO. All right. It used to be P20 million.

SENATOR PIMENTEL. It is P20 million. Now we are raising it to P100 million of locally generated funds.

SENATOR SOTTO. In other words, the P20 million before includes the IRA.

SENATOR PIMENTEL. No, Mr. President.

SENATOR SOTTO. It should not have been included?

SENATOR PIMENTEL. The internal revenue share should never have been included. That was not the
intention when we first crafted the Local Government Code. The financial capacity was supposed to be
demonstrated by the municipality wishing to become a city by its own effort, meaning to say, it should
not rely on the internal revenue share that comes from the government. Unfortunately, I think what
happened in past conversions of municipalities into cities was, the Department of Budget and
Management, along with the Department of Finance, had included the internal revenue share as a
part of the municipality, demonstration that they are now financially capable and can measure up to
the requirement of the Local Government Code of having a revenue of at least P20 million.

SENATOR SOTTO. I am glad that the sponsor, Mr. President, has spread that into the Record because
otherwise, if he did not mention the Department of Finance and the Department of Budget and
Management, then I would have been blamed for the misinterpretation. But anyway, the gentleman is
correct. That was the interpretation given to us during the hearings.

So now, from P20 million, we make it P100 million from locally generated income as far as population is
concerned.

SENATOR PIMENTEL. As far as population is concerned, there will be no change, Mr. President. Still
150,000.

SENATOR SOTTO. Still 150,000?

SENATOR PIMENTEL. Yes.

SENATOR SOTTO. And then the land area?

SENATOR PIMENTEL. As to the land area, there is no change; it is still 100 square kilometers.

SENATOR SOTTO. But before it was "either/or"?

SENATOR PIMENTEL. That is correct. As long as it has one of the three requirements, basically, as long as
it meets the financial requirement, then it may meet the territorial requirement or the population
requirement.

SENATOR SOTTO. So, it remains "or"?

SENATOR PIMENTEL. We are now changing it into AND.

SENATOR SOTTO. AND?

SENATOR PIMENTEL. Yes.

SENATOR SOTTO. I see.

SENATOR PIMENTEL. That is the proposal, Mr. President. In other words…

SENATOR SOTTO. Does the gentleman not think there will no longer be any municipality that will qualify,
Mr. President?

SENATOR PIMENTEL. There may still be municipalities which can qualify, but it will take a little time. They
will have to produce more babies. I do not know—expand their territories, whatever, by reclamation or
otherwise. But the whole proposal is geared towards making it difficult for municipalities to convert into
cities.

On the other hand, I would like to advert to the fact that in the amendments that we are proposing for
the entire Local Government Code, we are also raising the internal revenue share of the municipalities.

SENATOR SOTTO. I see.

SENATOR PIMENTEL. So that, more or less, hindi naman sila dehado in this particular instance.
SENATOR SOTTO. Well, then, because of that information, Mr. President, I throw my full support behind
the measure.

Thank you, Mr. President.

SENATOR PIMENTEL. Thank you very much, Mr. President. (Emphasis supplied) 16

From the foregoing, the justness in the act of Congress in enacting the Cityhood Laws becomes obvious,
especially considering that 33 municipalities were converted into component cities almost immediately
prior to the enactment of R.A. No. 9009. In the enactment of the Cityhood Laws, Congress merely took
the 16 municipalities covered thereby from the disadvantaged position brought about by the abrupt
increase in the income requirement of R.A. No. 9009, acknowledging the "privilege" that they have
already given to those newly-converted component cities, which prior to the enactment of R.A. No.
9009, were undeniably in the same footing or "class" as the respondent municipalities. Congress
merely recognized the capacity and readiness of respondent municipalities to become component cities
of their respective provinces.

Petitioners complain of the projects that they would not be able to pursue and the expenditures that
they would not be able to meet, but totally ignored the respondent municipalities’ obligations arising
from the contracts they have already entered into, the employees that they have already hired, and the
projects that they have already initiated and completed as component cities. Petitioners have completely
overlooked the need of respondent municipalities to become effective vehicles intending to accelerate
economic growth in the countryside. It is like the elder siblings wanting to kill the newly-borns so that
their inheritance would not be diminished.

Apropos is the following parable:

There was a landowner who went out at dawn to hire workmen for his vineyard. After reaching an
agreement with them for the usual daily wage, he sent them out to his vineyard. He came out about
midmorning and saw other men standing around the marketplace without work, so he said to them,
"You too go along to my vineyard and I will pay you whatever is fair." They went. He came out again
around noon and mid-afternoon and did the same. Finally, going out in late afternoon he found still
others standing around. To these he said, "Why have you been standing here idle all day?" "No one has
hired us," they told him. He said, "You go to the vineyard too." When evening came, the owner of the
vineyard said to his foreman, "Call the workmen and give them their pay, but begin with the last group
and end with the first." When those hired late in the afternoon came up they received a full day’s pay,
and when the first group appeared they thought they would get more, yet they received the same daily
wage. Thereupon they complained to the owner, "This last group did only an hour’s work, but you have
paid them on the same basis as us who have worked a full day in the scorching heat." "My friend," he
said to one in reply, "I do you no injustice. You agreed on the usual wage, did you not? Take your pay and
go home. I intend to give this man who was hired last the same pay as you. I am free to do as I please
with my money, am I not? Or are you envious because I am generous?" 17

Congress, who holds the power of the purse, in enacting the Cityhood Laws, only sought the well-being
of respondent municipalities, having seen their respective capacities to become component cities of
their provinces, temporarily stunted by the enactment of R.A. No. 9009. By allowing respondent
municipalities to convert into component cities, Congress desired only to uphold the very purpose of the
LGC, i.e., to make the local government units "enjoy genuine and meaningful local autonomy to enable
them to attain their fullest development as self-reliant communities and make them more effective
partners in the attainment of national goals," which is the very mandate of the Constitution.

Finally, we should not be restricted by technical rules of procedure at the expense of the transcendental
interest of justice and equity. While it is true that litigation must end, even at the expense of errors in
judgment, it is nobler rather for this Court of last resort, as vanguard of truth, to toil in order to dispel
apprehensions and doubt, as the following pronouncement of this Court instructs:

The right and power of judicial tribunals to declare whether enactments of the legislature exceed the
constitutional limitations and are invalid has always been considered a grave responsibility, as well as a
solemn duty. The courts invariably give the most careful consideration to questions involving the
interpretation and application of the Constitution, and approach constitutional questions with great
deliberation, exercising their power in this respect with the greatest possible caution and even
reluctance; and they should never declare a statute void, unless its invalidity is, in their judgment,
beyond reasonable doubt. To justify a court in pronouncing a legislative act unconstitutional, or a
provision of a state constitution to be in contravention of the Constitution x x x, the case must be so clear
to be free from doubt, and the conflict of the statute with the constitution must be irreconcilable,
because it is but a decent respect to the wisdom, the integrity, and the patriotism of the legislative body
by which any law is passed to presume in favor of its validity until the contrary is shown beyond
reasonable doubt. Therefore, in no doubtful case will the judiciary pronounce a legislative act to be
contrary to the constitution. To doubt the constitutionality of a law is to resolve the doubt in favor of its
validity.18

WHEREFORE, the Motion for Reconsideration of the "Resolution" dated August 24, 2010, dated and filed
on September 14, 2010 by respondents Municipality of Baybay, et al. is GRANTED. The Resolution dated
August 24, 2010 is REVERSED and SET ASIDE. The Cityhood Laws—Republic Acts Nos. 9389, 9390, 9391,
9392, 9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491—are declared
CONSTITUTIONAL.

SO ORDERED.

LUCAS P. BERSAMIN

G.R. No. 198860 July 23, 2012

ABRAHAM RIMANDO, Petitioner,

vs.
NAGUILIAN EMISSION TESTING CENTER, INC., represented by its President, ROSEMARIE LLARENAS and
HON. COURT OF APPEALS, Respondents.

RESOLUTION

REYES, J.:

Before us is a petition for review on certiorari 1 under Rule 45 of the Rules of Court seeking to annul and
set aside Decision2 dated March 30, 2011 of the Court of Appeals (CA) in CA-G.R. SP NO. 112152.

The Facts
The present controversy stemmed from a petition for mandamus and damages filed before Branch 67
of the Regional Trial Court (RTC) of Bauang, La Union, by Naguilian Emission Testing Center, Inc.,
represented by its President, Rosemarie Llarenas (respondent) against Abraham P. Rimando (petitioner),
who, at the time material to the case, was the sitting mayor of the Municipality of Naguilian, La Union.

The petition prayed for the issuance of a writ of mandamus to compel the petitioner to issue a business
permit in favor of the respondent.

In support of its plea, the respondent claimed that its business is being conducted on a parcel of land
which formerly belonged to the national government but later on certified by the Department of
Environment and Natural Resources (DENR) as an alienable and disposable land of the public domain.
The respondent had operated its business of emission testing on the land from 2005 to 2007. On
January 18, 2008, the respondent filed an application for the renewal of its business permit and paid
the corresponding fees therefor.

The petitioner, however, refused to issue a business permit unless and until the respondent executes a
contract of lease with the Municipality of Naguilian. The respondent was amenable to signing such
contract subject to some proposed revisions, which, however, were not acceptable to the petitioner.
The parties did not reach a common ground hence, the petition for mandamus.

The Ruling of the RTC

On May 26, 2009, the RTC denied the petition for lack of merit based on the ratiocinations that: (a) the
Municipality of Naguilian is the declared owner of the subject parcel of land by virtue of Tax Declaration
No. 002-01197; (b) under Section 6A.01 of the Revenue Code of the Municipality of Naguilian, the
municipality has the right to require the petitioner to sign a contract of lease because its business
operation is being conducted on a real property owned by the municipality; and (c) a mayor’s duty to
issue business permits is discretionary in nature which may not be enforced by a mandamus writ. The
decretal portion of the decision reads:

WHEREFORE, premises considered, the petition is DENIED for lack of merit.

SO ORDERED.4

The Ruling of the CA

Unwaivering, the respondent appealed to the CA. In its Decision 5 dated March 30, 2011, the CA held that
the appeal was dismissible on the ground of mootness considering that the period for which the
business period was being sought had already lapsed. As such, any ruling on the matter would bring no
practical relief. Nonetheless, the CA proceeded to resolve the issues involved in the appeal for academic
purposes.

The CA disagreed with the RTC and found that the factual milieu of the case justifies the issuance of a
writ of mandamus. The CA reasoned that the tax declaration in the name of the municipality was
insufficient basis to require the execution of a contract of lease as a condition sine qua non for the
renewal of a business permit. The CA further observed that Sangguniang Bayan Resolution No. 2007-81,
upon which the municipality anchored its imposition of rental fees, was void because it failed to comply
with the requirements of the Local Government Code and its Implementing Rules and Regulations.
The CA held that the petitioner may not be held liable for damages since his action or inaction, for that
matter, was done in the performance of official duties that are legally protected by the presumption of
good faith. The CA likewise stressed that the civil action filed against the petitioner had already become
moot and academic upon the expiration of his term as the mayor of Naguilian, La Union.

Despite its incessant declarations on the mootness of the case, the CA disposed of the appeal in this
wise:

WHEREFORE, the Decision dated 26 May 2009 of the Regional Trial Court, First Judicial Region, Bauang,
La Union, Branch 67, in Special Civil Action Case No. 72-BG, is hereby REVERSED and SET ASIDE.

SO ORDERED.6

The petitioner moved for reconsideration 7 questioning the pronouncement of the CA that Sangguniang
Bayan Resolution No. 2007-81 was void and arguing that a petition for mandamus is not the proper
vehicle to determine the issue on the ownership of the subject land. The motion was denied in the CA
Resolution8 dated September 30, 2011.

The petitioner is now before this Court reiterating the arguments raised in his motion for
reconsideration.

Our Ruling

We agree with the CA that the petition for mandamus has already become moot and academic owing to
the expiration of the period intended to be covered by the business permit.

An issue or a case becomes moot and academic when it ceases to present a justiciable controversy so
that a determination thereof would be without practical use and value 9 or in the nature of things, cannot
be enforced.10 In such cases, there is no actual substantial relief to which the applicant would be entitled
to and which would be negated by the dismissal of the petition. 11 As a rule, courts decline jurisdiction
over such case, or dismiss it on ground of mootness. 12

The objective of the petition for mandamus to compel the petitioner to grant a business permit in favor
of respondent corporation for the period 2008 to 2009 has already been superseded by the passage of
time and the expiration of the petitioner’s term as mayor. Verily then, the issue as to whether or not the
petitioner, in his capacity as mayor, may be compelled by a writ of mandamus to release the
respondent’s business permit ceased to present a justiciable controversy such that any ruling thereon
would serve no practical value. Should the writ be issued, the petitioner can no longer abide thereby;
also, the effectivity date of the business permit no longer subsists.

While the CA is not precluded from proceeding to resolve the otherwise moot appeal of the respondent,
we find that the decretal portion of its decision was erroneously couched.

The CA’s conclusions on the issue of ownership over the subject land and the invalidity of Sangguniang
Bayan Resolution No. 2007-81, aside from being unsubstantiated by convincing evidence, can no longer
be practically utilized in favor of the petitioner. Thus, the overriding and decisive factor in the final
disposition of the appeal was its mootness and the CA should have dismissed the same along with the
petition for mandamus that spawned it.
More importantly, a mayor cannot be compelled by mandamus to issue a business permit since the
exercise of the same is a delegated police power hence, discretionary in nature. This was the
pronouncement of this Court in Roble Arrastre, Inc. v. Hon. Villaflor 13 where a determination was made
on the nature of the power of a mayor to grant business permits under the Local Government
Code,14 viz:

Central to the resolution of the case at bar is a reading of Section 444(b)(3)(iv) of the Local Government
Code of 1991, which provides, thus:

SEC. 444. The Chief Executive: Powers, Duties, Functions and Compensation.

(b) For efficient, effective and economical governance the purpose of which is the general welfare of the
municipality and its inhabitants pursuant to Section 16 of this Code, the municipal mayor shall:

xxxx

3) Initiate and maximize the generation of resources and revenues, and apply the same to the
implementation of development plans, program objectives and priorities as provided for under Section
18 of this Code, particularly those resources and revenues programmed for agro-industrial development
and country-wide growth and progress, and relative thereto, shall:

xxxx

(iv) Issue licenses and permits and suspend or revoke the same for any violation of the conditions upon
which said licenses or permits had been issued, pursuant to law or ordinance.

As Section 444(b)(3)(iv) so states, the power of the municipal mayor to issue licenses is pursuant to
Section 16 of the Local Government Code of 1991, which declares:

SEC. 16. General Welfare. – Every local government unit shall exercise the powers expressly granted,
those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its
efficient and effective governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government units shall ensure and support,
among other things, the preservation and enrichment of culture, promote health and safety, enhance
the right of the people to a balanced ecology, encourage and support the development of appropriate
and self-reliant scientific and technological capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment among their residents, maintain peace and order,
and preserve the comfort and convenience of their inhabitants.

Section 16, known as the general welfare clause, encapsulates the delegated police power to local
governments.1âwphi1Local government units exercise police power through their respective legislative
bodies. Evidently, the Local Government Code of 1991 is unequivocal that the municipal mayor has the
power to issue licenses and permits and suspend or revoke the same for any violation of the conditions
upon which said licenses or permits had been issued, pursuant to law or ordinance. x x x

xxxx

Section 444(b)(3)(iv) of the Local Government Code of 1991, whereby the power of the respondent
mayor to issue license and permits is circumscribed, is a manifestation of the delegated police power of a
municipal corporation. Necessarily, the exercise thereof cannot be deemed ministerial. As to the
question of whether the power is validly exercised, the matter is within the province of a writ of
certiorari, but certainly, not of mandamus.15 (Citations omitted)

Indeed, as correctly ruled by the RTC, the petition for mandamus filed by the respondent is
incompetent to compel the exercise of a mayor’s discretionary duty to issue business permits.

WHEREFORE, premises considered, the Decision dated March 30, 2011 of the Court of Appeals in CA-
G.R. SP No. 112152 is hereby SET ASIDE. The Decision dated May 26, 2009 of the Regional Trial Court of
Bauang, La Union is REINSTATED.

SO ORDERED.

BIENVENIDO L. REYES

G.R. No. 131512 January 20, 2000

LAND TRANSPORTATION OFFICE [LTO], represented by Assistant Secretary Manuel F. Bruan, LTO
Regional Office, Region X represented by its Regional Director, Timoteo A. Garcia; and LTO Butuan
represented by Rosita G. Sadiaga, its Registrar, petitioners,
vs.
CITY OF BUTUAN, represented in this case by Democrito D. Plaza II, City Mayor, respondents.

VITUG, J.:

The 1987 Constitution enunciates the policy that the territorial and political subdivisions shall enjoy local
autonomy.1In obedience to that mandate of the fundamental law, Republic Act ("R.A.") No. 7160,
otherwise known as the Local Government Code,2 expresses that the territorial and political subdivisions
of the State shall enjoy genuine and meaningful local autonomy in order to enable them to attain their
fullest development as self-reliant communities and make them more effective partners in the
attainment of national goals, and that it is a basic aim of the State to provide for a more responsive and
accountable local government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities and resources.

While the Constitution seeks to strengthen local units and ensure their viability, clearly, however, it has
never been the intention of that organic law to create an imperuim in imperio and install
an infra sovereign political subdivision independent of a single sovereign state.

The Court is asked in this instance to resolve the issue of whether under the present set up the power of
the Land Registration Office ("LTO") to register, tricycles in particular, as well as to issue licenses for the
driving thereof, has likewise devolved to local government units.

The Regional Trial Court (Branch 2) of Butuan City held3 that the authority to register tricycles, the
grant of the corresponding franchise, the issuance of tricycle drivers' license, and the collection of fees
therefor had all been vested in the Local Government Units ("LGUs"). Accordingly, it decreed the
issuance of a permanent writ of injunction against LTO, prohibiting and enjoining LTO, as well as its
employees and other persons acting in its behalf, from (a) registering tricycles and (b) issuing licenses to
drivers of tricycles. The Court of Appeals, on appeal to it, sustained the trial court.
The adverse rulings of both the court a quo and the appellate court prompted the LTO to file the instant
petition for review on certiorari to annul and set aside the decision,4 dated 17 November 1997, of the
Court of Appeals affirming the permanent injunctive writ order of the Regional Trial Court (Branch 2) of
Butuan City.

Respondent City of Butuan asserts that one of the salient provisions introduced by the Local
Government Code is in the area of local taxation which allows LGUs to collect registration fees or
charges along with, in its view, the corresponding issuance of all kinds of licenses or permits for the
driving of tricycles.

The 1987 Constitution provides:

Each local government unit shall have the power to create its own sources of revenues and to levy taxes,
fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with
the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local
governments.5

Sec. 129 and Section 133 of the Local Government Code read:

Sec. 129. Power to Create Sources or Revenue. — Each local government unit shall exercise its power to
create its own sources of revenue and to levy taxes, fees, and charges subject to the provisions herein,
consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively
to the local government units.

Sec. 133. Common Limitations on the Taxing Powers of Local Government Units. — Unless otherwise
provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays
shall not extend to the levy of the following:

xxx xxx xxx

(l) Taxes, fees or charges for the registration of motor vehicles and for the issuance of all kinds of licenses
or permits for the driving thereof, except tricycles.

Relying on the foregoing provisions of the law, the Sangguniang Panglungsod ("SP") of Butuan, on 16
August 1992, passed SP Ordinance No. 916-92 entitled "An Ordinance Regulating the Operation of
Tricycles-for-Hire, providing mechanism for the issuance of Franchise, Registration and Permit, and
imposing Penalties for Violations thereof and for other Purposes." The ordinance provided for, among
other things, the payment of franchise fees for the grant of the franchise of tricycles-for-hire, fees for the
registration of the vehicle, and fees for the issuance of a permit for the driving thereof.

Petitioner LTO explains that one of the functions of the national government that, indeed, has been
transferred to local government units is the franchising authority over tricycles-for-hire of the Land
Transportation Franchising and Regulatory Board ("LTFRB") but not, it asseverates, the authority of LTO
to register all motor vehicles and to issue to qualified persons of licenses to drive such vehicles.

In order to settle the variant positions of the parties, the City of Butuan, represented by its City Mayor
Democrito D. Plaza, filed on 28 June 1994 with the trial court a petition for "prohibition, mandamus,
injunction with a prayer for preliminary restraining order ex-parte" seeking the declaration of the
validity of SP Ordinance No. 962-93 and the prohibition of the registration of tricycles-for-hire and the
issuance of licenses for the driving thereof by the LTO.
LTO opposed the prayer in the petition.

On 20 March 1995, the trial court rendered a resolution; the dispositive portion read:

In view of the foregoing, let a permanent injunctive writ be issued against the respondent Land
Transportation Office and the other respondents, prohibiting and enjoining them, their employees,
officers, attorney's or other persons acting in their behalf from forcing or compelling Tricycles to be
registered with, and drivers to secure their licenses from respondent LTO or secure franchise from LTFRB
and from collecting fees thereon. It should be understood that the registration, franchise of tricycles
and driver's license/permit granted or issued by the City of Butuan are valid only within the territorial
limits of Butuan City.

No pronouncement as to costs.6

Petitioners timely moved for a reconsideration of the above resolution but it was to no avail. Petitioners
then appealed to the Court of Appeals. In its now assailed decision, the appellate court, on 17 November
1997, sustained the trial court. It ruled:

WHEREFORE, the petition is hereby DISMISSED and the questioned permanent injunctive writ issued by
the court a quo dated March 20, 1995 AFFIRMED.7

Coming up to this Court, petitioners raise this sole assignment of error, to wit:

The Court of Appeals [has] erred in sustaining the validity of the writ of injunction issued by the trial
court which enjoined LTO from (1) registering tricycles-for-hire and (2) issuing licenses for the driving
thereof since the Local Government Code devolved only the franchising authority of the LTFRB.
Functions of the LTO were not devolved to the LGU's. 8

The petition is impressed with merit.

The Department of Transportation and Communications 9 ("DOTC"), through the LTO and the LTFRB, has
since been tasked with implementing laws pertaining to land transportation. The LTO is a line agency
under the DOTC whose powers and functions, pursuant to Article III, Section 4 (d) [1], 10 of R.A. No. 4136,
otherwise known as Land Transportation and Traffic Code, as amended, deal primarily with the
registration of all motor vehicles and the licensing of drivers thereof. The LTFRB, upon the other hand, is
the governing body tasked by E.O. No. 202, dated 19 June 1987, to regulate the operation of public
utility or "for hire" vehicles and to grant franchises or certificates of public convenience ("CPC"). 11 Finely
put, registration and licensing functions are vested in the LTO while franchising and regulatory
responsibilities had been vested in the LTFRB.

Under the Local Government Code, certain functions of the DOTC were transferred to the LGUs, thusly:

Sec. 458. Powers, Duties, Functions and Compensation. —

xxx xxx xxx

(3) Subject to the provisions of Book II of this Code, enact ordinances granting franchises and authorizing
the issuance of permits or licenses, upon such conditions and for such purposes intended to promote
the general welfare of the inhabitants of the city and pursuant to this legislative authority shall:

xxx xxx xxx

(VI) Subject to the guidelines prescribed by the Department of Transportation and
Communications, regulate the operation of tricycles and grant franchises for the operation thereof
within the territorial jurisdiction of the city. (Emphasis supplied).

LGUs indubitably now have the power to regulate the operation of tricycles-for-hire and to grant
franchises for the operation thereof. "To regulate" means to fix, establish, or control; to adjust by rule,
method, or established mode; to direct by rule or restriction; or to subject to governing principles or
laws.12 A franchise is defined to be a special privilege to do certain things conferred by government on
an individual or corporation, and which does not belong to citizens generally of common right.13 On the
other hand, "to register" means to record formally and exactly, to enroll, or to enter precisely in a list
or the like,14 and a "driver's license" is the certificate or license issued by the government which
authorizes a person to operate a motor vehicle. 15 The devolution of the functions of the DOTC,
performed by the LTFRB, to the LGUs, as so aptly observed by the Solicitor General, is aimed at curbing
the alarming increase of accidents in national highways involving tricycles. It has been the perception
that local governments are in good position to achieve the end desired by the law-making body because
of their proximity to the situation that can enable them to address that serious concern better than the
national government.

It may not be amiss to state, nevertheless, that under Article 458 (a)[3-VI] of the Local Government
Code, the power of LGUs to regulate the operation of tricycles and to grant franchises for the
operation thereof is still subject to the guidelines prescribed by the DOTC. In compliance therewith, the
Department of Transportation and Communications ("DOTC") issued "Guidelines to Implement the
Devolution of LTFRBs Franchising Authority over Tricycles-For-Hire to Local Government units pursuant
to the Local Government Code." Pertinent provisions of the guidelines state:

In lieu of the Land Transportation Franchising and Regulatory Board (LTFRB) in the DOTC, the
Sangguniang Bayan/Sangguniang Panglungsod (SB/SP) shall perform the following:

(a) Issue, amend, revise, renew, suspend, or cancel MTOP and prescribe the appropriate terms and
conditions therefor;

xxx xxx xxx

Operating Conditions:

1. For safety reasons, no tricycles should operate on national highways utilized by 4 wheel vehicles
greater than 4 tons and where normal speed exceed 40 KPH. However, the SB/SP may provide
exceptions if there is no alternative route.

2. Zones must be within the boundaries of the municipality/city. However, existing zones within more
than one municipality/city shall be maintained, provided that operators serving said zone shall secure
MTOP's from each of the municipalities/cities having jurisdiction over the areas covered by the zone.

3. A common color for tricycles-for-hire operating in the same zone may be imposed. Each unit shall be
assigned and bear an identification number, aside from its LTO license plate number.

4. An operator wishing to stop service completely, or to suspend service for more than one month,
should report in writing such termination or suspension to the SB/SP which originally granted the MTOP
prior thereto. Transfer to another zone may be permitted upon application.
5. The MTOP shall be valid for three (3) years, renewable for the same period. Transfer to another zone,
change of ownership of unit or transfer of MTOP shall be construed as an amendment to an MTOP and
shall require appropriate approval of the SB/SP.

6. Operators shall employ only drivers duly licensed by LTO for tricycles-for-hire.

7. No tricycle-for-hire shall be allowed to carry more passengers and/or goods than it is designed for.

8. A tricycle-for-hire shall be allowed to operate like a taxi service, i.e., service is rendered upon demand
and without a fixed route within a zone. 16

Such as can be gleaned from the explicit language of the statute, as well as the corresponding guidelines
issued by DOTC, the newly delegated powers pertain to the franchising and regulatory powers
theretofore exercised by the LTFRB and not to the functions of the LTO relative to the registration of
motor vehicles and issuance of licenses for the driving thereof. Clearly unaffected by the Local
Government Code are the powers of LTO under R.A. No. 4136 requiring the registration of all kinds of
motor vehicles "used or operated on or upon any public highway" in the country. Thus —

Sec. 5. All motor vehicles and other vehicles must be registered. — (a) No motor vehicle shall be used or
operated on or upon any public highway of the Philippines unless the same is properly registered for the
current year in accordance with the provisions of this Act (Article 1, Chapter II, R.A. No. 4136).

The Commissioner of Land Transportation and his deputies are empowered at anytime to examine and
inspect such motor vehicles to determine whether said vehicles are registered, or are unsightly, unsafe,
improperly marked or equipped, or otherwise unfit to be operated on because of possible excessive
damage to highways, bridges and other infrastructures. 17 The LTO is additionally charged with being the
central repository and custodian of all records of all motor vehicles. 18

The Court shares the apprehension of the Solicitor General if the above functions were to likewise
devolve to local government units; he states:

If the tricycle registration function of respondent LTO is decentralized, the incidence of theft of
tricycles will most certainly go up, and stolen tricycles registered in one local government could be
registered in another with ease. The determination of ownership thereof will also become very difficult.

Fake driver's licenses will likewise proliferate. This likely scenario unfolds where a tricycle driver, not
qualified by petitioner LTO's testing, could secure a license from one municipality, and when the same is
confiscated, could just go another municipality to secure another license.

Devolution will entail the hiring of additional personnel charged with inspecting tricycles for road
worthiness, testing drivers, and documentation. Revenues raised from tricycle registration may not be
enough to meet salaries of additional personnel and incidental costs for tools and equipment. 19

The reliance made by respondents on the broad taxing power of local government units, specifically
under Section 133 of the Local Government Code, is tangential. Police power and taxation, along with
eminent domain, are inherent powers of sovereignty which the State might share with local government
units by delegation given under a constitutional or a statutory fiat. All these inherent powers are for a
public purpose and legislative in nature but the similarities just about end there. The basic aim of police
power is public good and welfare. Taxation, in its case, focuses and the power of government to raise
revenue in order to support its existence and carry out its legitimate objectives. Although correlative to
each other in many respects, the grant of one does not necessarily carry with it the grant of the other.
The two powers are, by tradition and jurisprudence, separate and distinct powers, varying in their
respective concepts, character, scopes and limitations. To construe the tax provisions of Section 133(1)
indistinctively would result in the repeal to that extent of LTO's regulatory power which evidently has not
been intended. If it were otherwise, the law could have just said so in Section 447 and 458 of Book III of
the Local Government Code in the same manner that the specific devolution of LTFRB's power on
franchising of tricycles has been provided. Repeal by implication is not favored. 20 The power over
tricycles granted under Section 458(8)(3)(VI) of the Local Government Code to LGUs is the power to
regulate their operation and to grant franchises for the operation thereof. The exclusionary clause
contained in the tax provisions of Section 133(1) of the Local Government Code must not be held to have
had the effect of withdrawing the express power of LTO to cause the registration of all motor vehicles
and the issuance of licenses for the driving thereof. These functions of the LTO are essentially regulatory
in nature, exercised pursuant to the police power of the State, whose basic objectives are to achieve
road safety by insuring the road worthiness of these motor vehicles and the competence of drivers
prescribed by R.A. 4136. Not insignificant is the rule that a statute must not be construed in isolation
but must be taken in harmony with the extant body of laws. 21

The Court cannot end this decision without expressing its own serious concern over the seeming laxity in
the grant of franchises for the operation of tricycles-for-hire and in allowing the indiscriminate use by
such vehicles on public highways and principal thoroughfares. Senator Aquilino C. Pimentel, Jr., the
principal author and sponsor of the bill that eventually has become to be known as the Local
Government Code, has aptly remarked:

Tricycles are a popular means of transportation, specially in the countryside. They are, unfortunately,
being allowed to drive along highways and principal thoroughfares where they pose hazards to their
passengers arising from potential collisions with buses, cars and jeepneys.

The operation of tricycles within a municipality may be regulated by the Sangguniang Bayan. In this
connection, the Sangguniang concerned would do well to consider prohibiting the operation of tricycles
along or across highways invite collisions with faster and bigger vehicles and impede the flow of traffic. 22

The need for ensuring public safety and convenience to commuters and pedestrians alike is
paramount. It might be well, indeed, for public officials concerned to pay heed to a number of provisions
in our laws that can warrant in appropriate cases an incurrence of criminal and civil liabilities. Thus —

The Revised Penal Code —

Art. 208. Prosecution of offenses; negligence and tolerance. — The penalty of prision correccional in its
minimum period and suspension shall be imposed upon any public officer, or officer of the law, who, in
dereliction of the duties of his office, shall maliciously refrain from instituting prosecution for the
punishment of violators of the law, or shall tolerate the commission of offenses.

The Civil Code —

Art. 27. Any person suffering material or moral loss because a public servant or employee refuses or
neglects, without just cause, to perform his official duty may file an action for damages and other relief
against the latter, without prejudice to any disciplinary administrative action that may be
taken.1âwphi1.nêt
Art. 34. When a member of a city or municipal police force refuses or fails to render aid or protection to
any person in case of danger to life or property, such peace officer shall be primarily liable for damages,
and the city or municipality shall be subsidiarily responsible therefor. The civil action herein recognized
shall be independent of any criminal proceedings, and a preponderance of evidence shall suffice to
support such action.

Art. 2189. Provinces, cities and municipalities shall be liable for damages for the death of, or injuries
suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings,
and other public works under their control or supervision.

The Local Government Code —

Sec. 24. Liability for Damages. — Local government units and their officials are not exempt from liability
for death or injury to persons or damage to property.

WHEREFORE, the assailed decision which enjoins the Land Transportation Office from requiring the due
registration of tricycles and a license for the driving thereof is REVERSED and SET ASIDE.

No pronouncements on costs.

Let copies of this decision be likewise furnished the Department of Interior and Local Governments, the
Department of Public Works and Highways and the Department of Transportation and Communication.

SO ORDERED.

Melo, Panganiban, Purisima and Gonzaga-Reyes, JJ., concur.