Municipality of Malabang vs.

Benito

FACTS: Petitioner Balindong is the municipal mayor of Malabang, Lanao del Sur while
respondents are Mayor Benito and councilors of Municipality of Balabagan of the same
province. Balabagan (formerly part of Malabang) was created by Executive Order 386 of
the then President Carlos P. Garcia, out of barrios and sitios of the Malabang.

Citing Pelaez ruling that Republic Act 2370 (Barrio Charter Act), vested power to
create barrios in the provincial board, and Section 68 of the Administrative Code, insofar
as it gives the President the power to create municipalities, is unconstitutional. Petitioner
sought to nullify E.O. 386 and restrain respondents from performing their official
functions. Respondents argued that Pelaez ruling did not apply because unlike the
municipalities involved therein, the municipality of Balabagan is at least a de facto
corporation, having been organized under color of a statute before this was declared
unconstitutional (by Pelaez ruling), its officers having been either elected or appointed,
and the municipality itself having discharged its corporate functions for the past five
years preceding the institution of this action.

ISSUE: WON a corporation organized under a statute subsequently declared void

acquires status as ‘de facto’ corporation.

HELD: NO. A corporation organized under a statute subsequently declared invalid

cannot acquire the status of a ‘de facto’ corporation unless there is some other statute
under which the supposed corporation may be validly organized. Hence, in the case at
bar, the mere fact that the municipality was organized before the statute had been
invalidated cannot conceivably make it a ‘de facto’ corporation since there is no other
valid statute to give color of authority to its creation.