Case no.

77

Cabrera vs. Court of Appeals

195 SCRA 314

Principle: Police Power (Closure and Opening of Roads)

Digested by: Arthur Kenneth M. Lavapiz

Facts of the case:

The Provincial Board of Catanduanes adopted Resolution No. 158 (Closing the old road leading
to the new Capitol Building and giving owners of properties traversed by the new road an area form the
old raod). Pursuant thereto, Deeds of Exchange were executed under which the Province conveyed to
Remedios R. Bagadiong, Fredeswindo F. Alcala, Elena S. Latorre, Baldomero Tolentino, Eulogia T.
Alejandro, Angeles S. Vargas, and Juan S. Reyes portions of the closed road in exchange for their own
respective properties, on which was subsequently laid a new concrete road leading to the Capitol
Building.

Learning about Resolution 158, the petitioner filed a complaint with the CFI of Catanduanes for
"Restoration of Public Road and/or Abatement of Nuisance, Annulment of Resolutions and Documents
with Damages." He alleged that the land fronting his house was a public road owned by the Province in
its governmental capacity and therefore beyond the commerce of man. He contended that Resolution
No. 158 and the deeds of exchange were invalid, as so too was the closure of the road.

The judge sustained the authority of the provincial board to enact said Resolution. The CA
affirmed and found that the road was not a public road but just a trail. Also, pursuant to RA 5185,
municipal authorities, subject to the approval of the Provincial Board, can close thoroughfares pursusant
to Sec 2246 of the Revised Administrative Code.

Petitioner insists that Sec. 2246 is not applicable because Resolution No. 158 is not an order for
the closure of the road in question but an authority to barter or exchange it with private properties. He
maintains that the public road was owned by the province in its governmental capacity and, without a
prior order of closure, could not be the subject of a barter. Control over public roads, he insists, is with
Congress and not with the provincial board.

Issue:

WON the Provincial Board can validly enact said resolution

Ratio Decidendi:

The closure of city streets is within the powers of the city council; The closure of provincial
streets is within the power of the provincial board.

Ruling: Yes

Resolution 158 clearly says that it is "hereby resolved to close the old road." The closure is as
plain as day except that the petitioner, with the blindness of those who will not see, refuses to
acknowledge it. The Court has little patience with such puerile arguments. They border dangerously on a
trifling with the administration of justice and can only prejudice the pleader's cause.

The authority of the provincial board to close that road and use or convey it for other purposes
is derived from the following provisions of Republic Act No. 5185 in relation to Section 2246 of the
Revised Administrative Code: It sustained the subsequent sale of the land as being in accordance not
only with the charter but also with Article 422 of the Civil Code, which provides: "Property of public
dominion, when no longer intended for public use or for public service, shall form part of the
patrimonial property of the State." In the case of Favis vs. City of Baguio, the power of the City Council
of Baguio City to close city streets and withdraw them from public use was also assailed. This Court said:

5. So it is, that appellant may not challenge the city council's act of withdrawing a strip of Lapu-
Lapu Street at its dead end from public use and converting the remainder thereof into an alley. These
are acts well within the ambit of the power to close a city street. The city council, it would seem to us, is
the authority competent to determine whether or not a certain property is still necessary for public use.

Such power to vacate a street or alley is discretionary. And the discretion will not ordinarily be
controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion.
Faithfulness to the public trust will be presumed. So the fact that some private interests may be served
incidentally will not invalidate the vacation ordinance.

While it is true that the cases dealt with city councils and not the provincial board, there is no
reason for not applying the doctrine announced therein to the provincial board in connection with the
closure of provincial roads. The provincial board has, after all, the duty of maintaining such roads for the
comfort and convenience of the inhabitants of the province. Moreover, this authority is inferable from
the grant by the national legislature of the funds to the Province for the construction of provincial roads.

The lower court found the petitioner's allegation of injury and prejudice to be without basis
because he had "easy access anyway to the national road, for in fact the vehicles used by the Court and
the parties during the ocular inspection easily passed and used it, reaching beyond plaintiff's house."
However, the CA ruled that the he "was prejudiced by the closure of the road which formerly fronted his
house. He and his family were undoubtedly inconvenienced by the loss of access to their place of
residence for which we believe they should be compensated." On this issue, the governing principle was
laid down in Favis thus:

. . . The general rule is that one whose property does not abut on the closed section of a street
has no right to compensation for the closing or vacation of the street, if he still has reasonable access to
the general system of streets. The circumstances in some cases may be such as to give a right to
damages to a property owner, even though his property does not abut on the closed section. But to
warrant recovery in any such case the property owner must show that the situation is such that he has
sustained special damages differing in kind, and not merely in degree, from those sustained by the
public generally.

Petitioner is not entitled to damages because the injury he has incurred, such as it is, is the price
he and others like him must pay for the welfare of the entire community. This is not a case where his
property has been expropriated and he is entitled to just compensation. The construction of the new
road was undertaken under the general welfare clause. As the trial judge acutely observed, whatever
inconvenience the petitioner has suffered "pales in significance compared to the greater convenience
the new road, which is wide and concrete, straight to the veterans fountain and down to the pier, has
been giving to the public, plus the fact that the new road adds beauty and color not only to the town of
Virac but also to the whole province of Catanduanes." For the enjoyment of those benefits, every
individual in the province, including the petitioner, must be prepared to give his share.
Case no. 78

Cebu Oxygen & Acetylene Co. vs. Berciles

66 SCRA 481

Digested by: Arthur Kenneth M. Lavapiz

Principle: Police Power (Closure and Opening or Roads)

Facts of the case:

The City Council of Cebu, in 1968, considered as an abandoned road, the terminal portion of one
of its streets. Later it authorized the sale through public bidding of the property. The Cebu Oxygen and
Acetylene Co. was able to purchase the same. It then petitioned the RTC of Cebu for the registration of
the land. The petition was opposed by the Provincial Fiscal (Prosecutor) who argued that the lot is still
part of the public domain, and cannot therefore be registered.

Issue:

May the lot be registered in the name of the buyer?

Ratio Decidendi:

Authority of the city council to close city streets and to vacate or withdraw the same for public
use is discretionary.

Ruling:

Yes, the land can be registered in the name of the buyer, because the street in question has
already been withdrawn from public use, and accordingly has become patrimonial property. The sale of
the lot was therefore valid.

Furthermore, the city council is the authority competent to determine whether or not a certain
property is till necessary for public use. Such power is to vacate a street or alley is discretionary. And the
discretion will not ordinarily be controlled or interfered with by the court, absent a plain case of abuse
or fraud or collusion.
Case no. 79

Favis vs. City of Baguio

29 SCRA 456

Digested by: Arthur Kenneth M. Lavapiz

Principle: Police Power (Closure and Opening of Roads)

Facts of the case:

Antonio Favis owned a lot. His means of egress and ingress from his residence to a public street
was donated by Assumption Convent Inc to the City of Baguio for road purposes. Adjacent there to is lot
25 which is leased to Shell where a service station is constructed. By virtue of a City Resolution, Lot “B”
consisting of 100sqm was also leased to Shell, whereby a bigger gasoline station be constructed by the
latter. Petitioner contested such lease made in favor of shell claiming that it would diminish the width of
Lapu-Lapu street to five meters only from the original 8 meters. Moreover, he asserts that municipal
bodies do not have the power to close city streets or no inherent power to vacate or withdraw a street
from public use. The lower court ruled in the negative.

Issue:

WON the closing of the street without an ordinance is valid

WON the City of Baguio may close down a street

Ratio Decidendi:

Even where the statute or municipal charter requires the municipality to act by ordinance, if a
resolution is passed in the manner and with the statutory formality required in the enactment of an
ordinance, it will be binding and effective as an ordinance. Such resolution may operate regardless of
the name by which it was called.

Ruling:

1. Yes. It has been held that "even where the statute or municipal charter requires the
municipality to act by ordinance, if a resolution is passed in the manner and with the statutory formality
required in the enactment of an ordinance, it will be binding and effective as an ordinance." Such
resolution may operate regardless of the name by which it is called. Resolutions No. 132 and 215, Series
of 1961, were unanimously approved with all the councilors present and voting, carried the seal of the
city council, were signed by the City Vice-Mayor, the Presiding Officer, approved by the City Mayor, and
attested by the City Secretary. With the presumption of validity of the resolution and the other
presumption that official duty has been regularly performed, the embattled resolutions are just as good
as ordinances and have the same force.

2. Yes. In subsection (L) of Section 2558 of the Review Administrative Code (Baguio
Charter) it states that:

“(L) To provide for laying out, opening, extending, widening, straightening, closing up,
constructing, or regulating, in whole or in part, any public plaza, square, street, sidewalk, trail, park,
waterworks, or water remains, or any cemetery, sewer, sewer connection or connections, either on, in,
or upon public or private property;”

Hence, the City is explicity allowed by its own charter to close up streets. The Court held that the
City in closing up a portion of the Lapu-Lapu street is well within the powers granted to it. Such power to
vacate a street or alley is discretionary and the discretion will not ordinarily be controlled or interfered
with by the courts, absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust will
be presumed. So the fact that some private interests may be served incidentally will not invalidate the
vacation ordinance.
Case no. 80

Cruz vs. Court of Appeals

153 SCRA 142

Digested by: Arthur Kenneth M. Lavapiz

Principle: Police Power (Closure and Opening of Roads)

Facts of the case:

The private respondents instituted a class suit before the then Court of First Instance of Manila,
Branch VIII in behalf of the vendors and regular stall holders in Padre Rada Market for annulment with
preliminary injunction against the then Manila Mayor Antonio J. Villegas, petitioner Cruz, and other
persons whose names were unknown to them after the decision of the City Mayor to withdraw Padre
Rada Market as a public market.

Issue:

WON the Mayor of Manila can withdraw Padre Rada Market from government supervision

Ratio Decidendi:

Mayor of Manila himself, cannot provide for the opening, operations and closure of a public
market, joint action of the board and the Mayor is necessary.

Ruling:

NO

By the very nature of a market, its location, opening, operations, and closure must be regulated
by government. It is not a question of the petitioner's right to run his market as he pleases but what
agency or office should supervise its operations.

We agree with the Court of Appeals that the Mayor had no legal authority to, by himself, allow
the petitioner to withdraw the major portion of Padre Rada Market from its use as a public market,
thereby also withdrawing it from the city's constant supervision.

The establishment and maintenance of public markets is by law among the legislative powers of
the City of Manila. Since the operation of Padre Rada Market was authorized by a municipal board
resolution and approved by the City Mayor, as provided by law, it follows that a withdrawal of the whole
or any portion from use as a public market must be subject to the same joint action of the Board and the
Mayor. The Mayor of Manila, by himself, cannot provide for the opening, operations, and closure of a
public market.

There is no question that the Padre Rada Market is a public market as it was authorized to
operate and it operates as such.

The Padre Rada Market is, therefore, a public market which happens to be privately-owned and
privately operated. The Padre Rada Market is a public market and as such should be subject to the local
government's supervision and control. Its conversion into a private market or its closure must follow the
procedures laid down by law.
Case no. 208

City of Manila vs. Judge Colet

G.R. No. 120051

Digested by: Arthur Kenneth M. Lavapiz

Principle: Power to Tax

Facts of the case:

The case involves 10 consolidated petitions involving several corporations operating as

“transportation contractors, persons who transport passenger or freight for hire, and common carriers
by land, air or water” with principal offices in Metro Manila, and City of Manila’s Ordinance No. 7807
which amended Sec. 21 (B) of the Manila Revenue Code. Sec.21 (B) imposed business tax on
“transportation contractors, persons who transport passenger or freight for hire, and common carriers
by land, air or water”; while the subject ordinance amended such by lowering the tax rate from 3% per
annum to .5% per annum. The City of Manila, through its City Treasurer, began imposing and collecting
the business tax under Section 21(B) of the Manila Revenue Code, as amended, beginning January 1994.

Because they were assessed and/or compelled to pay business taxes pursuant to Section 21(B)
of the Manila Revenue Code before they were issued their business permits for 1994, several
corporations questioned the constitutionality of Sec. 21 (B) for being contrary to the Constitution and
the Local Government Code, and asked for the refund of what they had paid as business tax.

The City of Manila, argued that it was constitutional and valid; and such position was adopted by
the RTC and the CA when the case reached the respective fora. The City argued that the enactment of
Sec. 21 (B) is based on the exempting clause found at the beginning of Sec. 133, in conjunction with
Section 143(h), of the LGC.

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:

xxxx

(j) Taxes on the gross receipts of transportation contractors and persons engaged in the
transportation of passengers or freight by hire and common carriers by air, land or
water, except as provided in this Code;

SEC. 143. Tax on Business. – The municipality may impose taxes on the following
businesses:

xxxx

(h) On any business, not otherwise specified in the preceding paragraphs, which the
sanggunian concerned may deem proper to tax: Provided, That on any business subject
to the excise, value-added or percentage tax under the National Internal Revenue Code,
 as amended, the rate of tax shall not exceed two percent (2%) of gross sales or receipts
of the preceding calendar year.

The sanggunian concerned may prescribe a schedule of graduated tax rates but in no case to
exceed the rates prescribed herein. (Emphases supplied by the Supreme Court)

Issue:

Is Sec. 21 (B) of the Manila Revenue Code, as amended, unconstitutional?

Ratio Decidendi:

It is already well-setteled that although the power to tax is inherent in the state, the same is not
true for the Local Government Units to whom the power must be delegated by the Congress and must
be exercised within the guidelines and limitations that Congress may provide.

Ruling:

Yes.

The power to tax is not inherent in LGUs to whom the power must be delegated by Congress
and must be exercised within the guidelines and limitations that Congress may provide.

Sec. 5 of Article X of the Constitution granted LGUs 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...” In conformity with said constitutional provision, the Local Gov’t Code was enacted by
Congress.

Sec. 130 of the LGC provides for the fundamental principles governing the taxing powers of
LGUs. Sec. 133 provides for the common limitations on the taxing powers of LGUs. Among the common
limitations on the taxing power of LGUs is Section 133(j) of the LGC, which states that “unless otherwise
provided herein,” the taxing power of LGUs shall not extend to “taxes on the gross receipts of
transportation contractors and persons engaged in the transportation of passengers or freight by hire
and common carriers by air, land or water, except as provided in this Code.”

Section 133(j) of the LGC clearly and unambiguously proscribes LGUs from imposing any tax on
the gross receipts of transportation contractors, persons engaged in the transportation of passengers or
freight by hire, and common carriers by air, land, or water. Yet, confusion arose from the phrase “unless
otherwise provided herein,” found at the beginning of the said provision, and the City of Manila anchors
the validity of Sec. 21 (B) on said phrase.

However, the Court is not convinced with the City’s contention. Sec. 133(j) of the LGC prevails
over Sec. 143(h) of the same Code, and Sec. 21(B) of the Manila Revenue Code, as amended, was
manifestly in contravention of the former.

Sec. 133(j) of the LGC is a specific provision that explicitly withholds from any LGU the power to
tax the gross receipts of transportation contractors, common carriers, persons engaged in the
transportation of passengers or freight by hire, and common carriers by air, land, or water. In contrast,
Sec. 143 of the LGC defines the general power of the municipality (as well as the city, if read in relation
to Section 151 of the same Code) to tax businesses within its jurisdiction.

The succeeding proviso of Section 143(h) of the LGC, viz., “Provided, That on any business
subject to the excise, value-added or percentage tax under the National Internal Revenue Code, as
amended, the rate of tax shall not exceed two percent (2%) of gross sales or receipts of the preceding
calendar year,” is not a specific grant of power to the municipality or city to impose business tax on the
gross sales or receipts of such a business. Rather, the proviso only fixes a maximum rate of imposable
business tax in case the business taxed under Section 143(h) of the LGC happens to be subject to excise,
value added, or percentage tax under the NIRC.

The omnibus grant of power to municipalities and cities under Section 143(h) of the LGC cannot
overcome the specific exception/exemption in Section 133(j) of the same Code.

In the case at bar, the sanggunian of the municipality or city cannot enact an ordinance
imposing business tax on the gross receipts of transportation contractors, persons engaged in the
transportation of passengers or freight by hire, and common carriers by air, land, or water, when said
sanggunian was already specifically prohibited from doing so.

Such construction gives effect to both Sections 133(j) and 143(h) of the LGC. Also, Sec. 5(b) of
the LGC itself, on Rules of Interpretation, provides that in case of doubt, any tax ordinance shall be
construed strictly against the LGU enacting it, and liberally in favor of the taxpayer. Furthermore, such a
construction is pursuant to the legislative intent to exclude from the taxing power of the LGU the
imposition of business tax against common carriers to prevent a duplication of the so-called “common
carrier’s tax.”