Powers of Local Government
, it provides that officers cannot refuse to perform their
A. Governmental Powers of LGU’s 1. General Welfare (Sec. 16, LGC –
Police Power)
a. SJS v. Atienza, 545 SCRA 92 SOCIAL JUSTICE SOCIETY (SJS ) et
al. vs.HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of
ManilaG.R. No. 156052 March 7, 2007
FactsOrdinance No. 8027 enacted by the Sangguniang Panglungsod of
Manila reclassified the area from industrial to commercial and directed the
owners and operators of businesses disallowed to cease and desist from
operating their businesses within six months from the date of effectivity of the
ordinance. Among the businesses situated in the area are the so-called
“Pandacan Terminals” of the oil companies Caltex (Philippines), Inc., Petron
Corporation and Pilipinas Shell Petroleum Corporation.
However, the City of Manila and the Department of Energy (DOE) entered into
a memorandum of understanding (MOU) with the oil companies in which they
agreed that “the scaling down of the Pandacan Terminals [was] the most
viable and practicable option.” In the MOU, the oil companies were required to
remove 28 tanks starting with the LPG spheres and to commence work for the
creation of safety buffer and green zones surrounding the Pandacan
Terminals. In exchange, the City Mayor and the DOE will enable the oil
companies to continuously operate within the limited area resulting from joint
operations and the scale down program. The Sangguniang Panlungosod
ratified the MOU in Resolution No. 97.
Petitioners pray for a mandamus to be issued against Mayor Atienza to
enforce Ordinance No. 8027 and order the immediate removal of the terminals
of the oil companies.
IssueWhether respondent has the mandatory legal duty to enforce Ordinance
No. 8027 and order the removal of the Pandacan Terminals.
RulingYes. The mayor has the mandatory legal duty to enforce Ordinance No.
8027 because the Local Government Code imposes upon respondent the
duty, as city mayor, to “enforce all laws and ordinances relative to the
governance of the city.” One of these is Ordinance No. 8027. As the chief
executive of the city, he has the duty to enforce Ordinance No. 8027 as long
as it has not been repealed by the Sanggunian or annulled by the courts. He
has no other choice. It is his ministerial duty to do so.
In Dimaporo v. Mitra, Jr.
duty on the ground of an alleged invalidity of the statute imposing the duty. It
might seriously hinder the transaction of public business if these officers were
to be permitted in all cases to question the constitutionality of statutes and
ordinances imposing duties upon them and which have not judicially been
declared unconstitutional.
b. Parayno v. Jovellanos, 495 SCRA 85
FACTS: Respondent Parayno was an owner of a gasoline filling station in
Calasiao, Pangasinan. In 1989, some residents of Calasiao petitioned the
Sangguniang Bayan (SB) of said municipality for the closure or transfer of the
station to another location. The matter was referred to the Municipal Engineer,
Chief of Police, Municipal Health Officer and the Bureau of Fire Protection for
investigation. Upon their advice, the Sangguniang Bayan recommended to the
Mayor the closure or transfer of location of petitioner's gasoline station.
Resolution 50 stipulated the alleged violations of the gasoline station in
question. Petitioner sought for reconsideration, which was then denied. She
then filed a special civil action for prohibition and mandamus in the RTC,
contending that her gasoline station was not covered by Section 44 of the
Official Zoning Code of Calasiao, which prohibits gasoline service stations
which are within 100meters away from any public or private school, public
library, playground, church, and hospital based on the straight line method
measured from the nearest side of the building nearest the lot if there are no
intervening buildings to the nearest pump of the gasoline station. Petitioner
contended that hers was not a "gasoline service station" but a "gasoline filling
station" governed by Section 21 thereof. Moreover, the decision of the
Housing and Land Use Regulatory Board (HLURB) in a previous case filed by
the same respondent Jovellanos against her predecessor (Dennis Parayno)
should bar the grounds invoked by respondent municipality in Resolution No.
50. The RTC ruled against petitioner by applying the virtue of ejusdem
generis, saying that a “gasoline filling station” fell within the ambit of Section
44. Petitioner moved for reconsideration but was, again, only denied by the
RTC. The same fate was met by the petition in the CA. Hence this appeal.
ISSUE:Whether or not the petitioner’s gasoline filling station could be likened
to that of a gasoline service station as provided for in Section 44 of the Official
zoning Code by virtue of Ejusdem Generis.
HELD:Court held that the zoning ordinance of respondent municipality made a
clear distinction between a gasoline service station and a gasoline filling
station as found in Section 21 and Section 42 of the said ordinance. It was
made clear that the two terms were intended to be distinguished from the
other, which the respondent further admitted. Respondent municipality cannot
invoke the principle of Ejusdem generis which means "of the same kind, class
or nature” but rather should apply the legal maxim expressio unius est
exclusio alterius which means that the express mention of one thing implies
the exclusion of others.
With the distinction clearly provided, respondents could not insist that
"gasoline service station" under Section 44 necessarily included "gasoline
filling station" under Section 21.
The Court also held that the HLURB decision in the previous case filed
against her predecessor (Dennis Parayno) by respondent Jovellanos had
effectively barred the issues in Resolution No. 50 based on the principle of res
judicata or the rule that a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies
in all later suits on all points and matters determined in the former suit. With
the similarity of the identity of interest of the case at bar and that of the
previous case already decided by HLURB, the litigation should already end
since the concerns had already been resolved. The Court stated that an
individual should not be vexed twice for the same cause.
c. Magtajas v. Pryce Properties, GR No. 111097, 20 July 1994
Facts:PAGCOR decided to expand its operations to Cagayan de Oro City. It
leased a portion of a building belonging to Pryce Properties Corporations, Inc.,
renovated & equipped the same, and prepared to inaugurate its casino during
the Christmas season.
Civil organizations angrily denounced the project. Petitioners opposed the
casino’s opening and enacted Ordinance No. 3353, prohibiting the issuance of
business permit and canceling existing business permit to the establishment
for the operation of the casino, and Ordinance No. 3375-93, prohibiting the
operation of the casino and providing a penalty for its violation.
Respondents assailed the validity of the ordinances on the ground that they
both violated Presidential Decree No. 1869. Petitioners contend that, pursuant
to the Local Government Code, they have the police power authority to
prohibit the operation of casino for the general welfare.
Issue:
Whether the Ordinances are valid.
Ruling:
No. Cagayan de Oro City, like other local political subdivisions, is empowered
to enact ordinances for the purposes indicated in the Local Government Code.
It is expressly vested with the police power under what is known as the
General Welfare Clause now embodied in Section 16 as follows: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.
Local Government Code, local government units are authorized to prevent or
suppress, among others, "gambling and other prohibited games of chance."
Obviously, this provision excludes games of chance which are not prohibited
but are in fact permitted by law.
The tests of a valid ordinance are well established. A long line of decisions has
held that to be valid, an ordinance must conform to the following substantive
requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
The rationale of the requirement that the ordinances should not contravene a
statute is obvious.Casino gambling is authorized by P.D. 1869. This decree
has the status of a statute that cannot be amended or nullified by a mere
ordinance. Local councils exercise only delegated legislative powers conferred
on them by Congress as the national lawmaking body. The delegate cannot
be superior to the principal or exercise powers higher than those of the latter.
It is a heresy to suggest that the local government units can undo the acts of
Congress, from which they have derived their power in the first place, and
negate by mere ordinance the mandate of the statute.Hence, it was not
competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact
Ordinance No. 3353 prohibiting the use of buildings for the operation of a
casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all
their praiseworthy motives, these ordinances are contrary to P.D. 1869 and
the public policy announced therein and are therefore ultra vires and
void.Wherefore, the petition is denied.
d. City of Manila v. Laguio, 455 SCRA 308
FACTS:On 30 Mar 1993, Mayor Lim signed into law Ord 7783 entitled AN
ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF
BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT,
ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE
AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR
OTHER PURPOSES. It basically prohibited establishments such as bars,
karaoke bars, motels and hotels from operating in the Malate District which
was notoriously viewed as a red light district harboring thrill seekers. Malate
Tourist Development Corporation avers that the ordinance is invalid as it
includes hotels and motels in the enumeration of places offering amusement
or entertainment. MTDC reiterates that they do not market such nor do they
use women as tools for entertainment. MTDC also avers that under the LGC,
LGUs can only regulate motels but cannot prohibit their operation. The City
reiterates that the Ordinance is a valid exercise of Police Power as provided
as well in the LGC. The City likewise emphasized that the purpose of the law
is to promote morality in the City.
ISSUE: Whether or not Ordinance 7783 is valid.
HELD: The SC ruled that the said Ordinance is null and void. The SC noted
that for an ordinance to be valid, it must not only be within the corporate
powers of the local government unit to enact and must be passed according to
the procedure prescribed by law, it must also conform to the following
substantive requirements:
(1) must not contravene the Constitution or any statute;
(2) must not be unfair or oppressive;
(3) must not be partial or discriminatory;
(4) must not prohibit but may regulate trade;
(5) must be general and consistent with public policy; and
(6) must not be unreasonable.
The police power of the City Council, however broad and far-reaching, is
subordinate to the constitutional limitations thereon; and is subject to the
limitation that its exercise must be reasonable and for the public good. In the
case at bar, the enactment of the Ordinance was an invalid exercise of
delegated power as it is unconstitutional and repugnant to general laws.
e. Binay v. Domingo, 201 SCRA 508
Facts: Petitioner Municipality of Makati, through its Council, approved
Resolution No. 60 which extends P500 burial assistance to bereaved families
whose gross family income does not exceed P2,000.00 a month. The funds
are to be taken out of the unappropriated available funds in the municipal
treasury. The Metro Manila Commission approved the resolution. Thereafter,
the municipal secretary certified a disbursement of P400,000.00 for the
implementation of the program. However, the Commission on Audit
disapproved said resolution and the disbursement of funds for the
implementation thereof for the following reasons: (1) the resolution has no
connection to alleged public safety, general welfare, safety, etc. of the
inhabitants of Makati; (2) government funds must be disbursed for public
purposes only; and, (3) it violates the equal protection clause since it will only
benefit a few individuals.
Issues:
1. Whether Resolution No. 60 is a valid exercise of the police power under the
general welfare clause
2. Whether the questioned resolution is for a public purpose
3. Whether the resolution violates the equal protection clause
Held:
1. The police power is a governmental function, an inherent attribute of
sovereignty, which was born with civilized government. It is founded largely on
the maxims, "Sic utere tuo et ahenum non laedas and "Salus populi est
suprema lex. Its fundamental purpose is securing the general welfare, comfort
and convenience of the people.

Police power is inherent in the state but not in municipal corporations. Before
a municipal corporation may exercise such power, there must be a valid
delegation of such power by the legislature which is the repository of the
inherent powers of the State.
Municipal governments exercise this power under the general welfare clause.
Pursuant thereto they are clothed with authority to "enact such ordinances and
issue such regulations as may be necessary to carry out and discharge the
responsibilities conferred upon it by law, and such as shall be necessary and
proper to provide for the health, safety, comfort and convenience, maintain
peace and order, improve public morals, promote the prosperity and general
welfare of the municipality and the inhabitants thereof, and insure the
protection of property therein.
2. Police power is not capable of an exact definition but has been, purposely,
veiled in general terms to underscore its all comprehensiveness. Its scope,
over-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and
flexible response to conditions and circumstances thus assuring the greatest
benefits.
The police power of a municipal corporation is broad, and has been said to be
commensurate with, but not to exceed, the duty to provide for the real needs
of the people in their health, safety, comfort, and convenience as consistently
as may be with private rights. It extends to all the great public needs, and, in a
broad sense includes all legislation and almost every function of the municipal
government. It covers a wide scope of subjects, and, while it is especially
occupied with whatever affects the peace, security, health, morals, and
general welfare of the community, it is not limited thereto, but is broadened to
deal with conditions which exists so as to bring out of them the greatest
welfare of the people by promoting public convenience or general prosperity,
and to everything worthwhile for the preservation of comfort of the inhabitants
of the corporation. Thus, it is deemed inadvisable to attempt to frame any
definition which shall absolutely indicate the limits of police power.
Public purpose is not unconstitutional merely because it incidentally benefits a
limited number of persons. As correctly pointed out by the Office of the
Solicitor General, "the drift is towards social welfare legislation geared towards
state policies to provide adequate social services, the promotion of the
general welfare, social justice as well as human dignity and respect for human
rights." The care for the poor is generally recognized as a public duty. The
support for the poor has long been an accepted exercise of police power in
the promotion of the common good.
3. There is no violation of the equal protection clause. Paupers may be
reasonably classified. Different groups may receive varying treatment.
Precious to the hearts of our legislators, down to our local councilors, is the
welfare of the paupers. Thus, statutes have been passed giving rights and
benefits to the disabled, emancipating the tenant-farmer from the bondage of
the soil, housing the urban poor, etc. Resolution No. 60, re-enacted under
Resolution No. 243, of the Municipality of Makati is a paragon of the
continuing program of our government towards social justice. The Burial
Assistance Program is a relief of pauperism, though not complete. The loss of
a member of a family is a painful experience, and it is more painful for the
poor to be financially burdened by such death. Resolution No. 60 vivifies the
very words of the late President Ramon Magsaysay 'those who have less in
life, should have more in law." This decision, however must not be taken as a
precedent, or as an official go-signal for municipal governments to embark on
a philanthropic orgy of inordinate dole-outs for motives political or otherwise.
f. Magtajas v. Pryce Properties Corp., 234 SCRA 255 SAME AS CASE
LETTTER C
g. Ortigas & CO v. Feati Bank, 94 SCRA 533
Facts:On March 4, 1952, Ortigas sold Lot 5 and 6, Block 31 of the Highway
Hills Subdivision at Mandaluyong to Augusto Padilla y Angeles and Natividad
Angeles. The latter transferred their rights in favour of Emma Chavez, upon
completion of payment a deed was executed with stipulations, one of which is
that the use of the lots are to be exclusive for residential purposes only. This
was annotated in the Transfer Certificate of Titles No. 101509 and 101511.
Feati then acquired Lot 5 directly from Emma Chavez and Lot 6 from Republic
Flour Mills. On May 5, 1963, Feati started construction of a building on both
lots to be devoted for banking purposes but could also be for residential use.
Ortigas sent a written demand to stop construction but Feati continued
contending that the building was being constructed according to the zoning
regulations as stated in Municipal Resolution 27 declaring the area along the
West part of EDSA to be a commercial and industrial zone. Civil case No.
7706 was made and decided in favour of Feati.
Issue:Whether or not Resolution number 27 declaring Lot 5 and 6 to be part of
an industrial and commercial zone is valid considering the contract stipulation
in the Transfer Certificate of Titles.
Held:Resolution No. 27 prevails over the contract stipulations. Section 3 of RA
2264 of the Local Autonomy Act empowers a Municipal Council to adopt
zoning and subdivision ordinances or regulations for the Municipality. Section
12 or RA 2264 states that implied power of the municipality should be “liberally
construed in it’s favour”, “to give more power to the local government in
promoting economic conditions, social welfare, and material progress in the
community”. This is found in the General Welfare Clause of the said act.
Although non-impairment of contracts is constitutionally guaranteed, it is not
absolute since it has to be reconciled with the legitimate exercise of police
power, e.g. the power to promote health, morals, peace, education, good
order or safety and general welfare of the people. Resolution No. 27 was
obviously passed in exercise of police power to safeguard health, safety,
peace and order and the general welfare of the people in the locality as it
would not be a conducive residential area considering the amount of traffic,
pollution, and noise which results in the surrounding industrial and commercial
establishments.
Decision dismissing the complaint of Ortigas is AFFIRMED.
h. United BF Homeowners’ Association, Inc v. The City Mayor of
Paranaque City, 515 SCRA 1
i. LTO v. City of Butuan, 332 SCRA 805
Facts: 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, its view, the
corresponding issuance of all kinds of licenses or permits for the driving of
tricycles. Relying on the provisions of the local government code, the
sangguniang panlungsod of Butuan, on August 16, 1992 passed SP
Ordinance no. 916-42 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 tricyles-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 but not, it asseverates, the
authority of LTO to register all motor vehicles and to issue qualified persons of
licenses to drive such vehicles.
Issue: Whether or not respondent city of Butuan may issue license and permit
and collect fees for the operation of tricycle.
Held: No. 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
made; to direct by rule or restriction; or to subject to governing principles of
law. 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. On the other hand, to register
means to record formally and exactly, to enroll, or to enter precisely in a list or
the like, and a driver’s license is the certificate or license issued by the
government which authorizes a person to operate a motor vehicle. 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 in on case 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 the 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.
The reliance made by the 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 or 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 on 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 respecting concepts, character, scopes, and limitations. To
construe the tax provisions of section 133 (1) indistinctively would result in the
repeal to that extent of LTOs 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 LTFRBs power on franchising of tricycles has been
provided. Repeal by implication is not favored. 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 government’s exclusionary clause contained in the tax provisions
of section 133 (1) of the local government code must be held to have had the
effect of withdrawing the express powers of LTO to cause the registration of all
motor vehicles and the issuance of license 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 RA 4136. Not insignificant is the rule that
a statute must not be construed in isolation but must be taken in harmony with
the extent body of laws.
j. Balacuit v. CFI of Agusan del Norte, 163 SCRA 182
Facts:Petitioners, theater owners, assailed the constitutionality of Ordinance
No. 640 passed by the Municipal Board of the City of Butuan on April 21,
1969. This called for a reduction to ½ of the ticket price given to minors from
7-12 years old. There was a fine from 200-600 pesos or a 2-6 month
imprisonment
The complaint was issued in the trial court. A TRO was then issued to prevent
the law from being enforced. The respondent court entered its decision
declaring the law valid.
Petitioners attack the validity and constitutionality of Ordinance No. 640 on the
grounds that it is ultra vires and an invalid exercise of police power. Petitioners
contend that Ordinance No. 640 is not within the power of' the
Municipal Board to enact as provided for in Section 15(n) of Republic Act No.
523 where it states that the Muncipal board can only fix license fees for
theaters and not admission rates.
The respondent attempts to justify the enactment of the ordinance by invoking
the general welfare clause embodied in Section 15 (nn) of the cited law.
Issue:
Does this power to regulate include the authority to interfere in the fixing of
prices of admission to these places of exhibition and amusement whether
under its general grant of power or under the general welfare clause as
invoked by the City?
Held: The ordinance is under neither and thus unconstitutional. Petition
granted.
Ratio:
1. Kwong Sing v. City of Manila- the word "regulate" was interpreted to include
the power to control, to govern and to restrain, it would seem that under its
power to regulate places of exhibitions and amusement, the
Municipal Board of the City of Butuan could make proper police regulations as
to the mode in which the business shall be exercised.
In this jurisdiction, it is already settled that the operation of theaters,
cinematographs and other places of public exhibition are subject to regulation
by the municipal council in the exercise of delegated police power by the local
government.
People v. Chan- an ordinance of the City of Manila prohibiting first run
cinematographs from selling tickets beyond their seating capacity was upheld
as constitutional for being a valid exercise of police power.
The City of Butuan, apparently realizing that it has no authority to enact the
ordinance in question under its power to regulate embodied in Section 15(n),
now invokes the police power as delegated to it under the general welfare
clause to justify the enactment of said ordinance
To invoke the exercise of police power, not only must it appear that the interest
of the public generally requires an interference with private rights, but the
means adopted must be reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals.
The legislature may not, under the guise of protecting the public interest,
arbitrarily interfere with private business, or impose unusual and unnecessary
restrictions upon lawful occupations. In other words, the determination as to
what is a proper exercise of its police power is not final or conclusive, but is
subject to the supervision of the courts.
Petitioners maintain that Ordinance No. 640 violates the due process clause
of the Constitution for being oppressive, unfair, unjust, confiscatory, and an
undue restraint of trade, and violative of the right of persons to enter into
contracts, considering that the theater owners are bound under a contract with
the film owners for just admission prices for general admission, balcony and
lodge.
Homeowners Association- the exercise of police power is necessarily subject
to a qualification, limitation or restriction demanded by the regard, the respect
and the obedience due to the prescriptions of the fundamental law
The court agreed with petitioners that the ordinance is not justified by any
necessity for the public interest. The police power legislation must be firmly
grounded on public interest and welfare, and a reasonable relation must exist
between purposes and means.
The evident purpose of the ordinance is to help ease the burden of cost on the
part of parents who have to shell out the same amount of money for
the admission of their children, as they would for themselves. A reduction in
the price of admission would mean corresponding savings for the parents;
however, the petitioners are the ones made to bear the cost of these savings.
The ordinance does not only make the petitioners suffer the loss of earnings
but it likewise penalizes them for failure to comply with it. Furthermore, as
petitioners point out, there will be difficulty in its implementation because as
already experienced by petitioners since the effectivity of the ordinance,
children over 12 years of age tried to pass off their age as below 12 years in
order to avail of the benefit of the ordinance. The ordinance does not provide
a safeguard against this undesirable practice and as such, the respondent
City of Butuan now suggests that birth certificates be exhibited by movie
house patrons to prove the age of children. This is, however, not at all
practicable. We can see that the ordinance is clearly unreasonable if not
unduly oppressive upon the business of petitioners. Moreover, there is no
discernible relation between the ordinance and the promotion of public health,
safety, morals and the general welfare.
Respondent further alleges that by charging the full price, the children are
being exploited by movie house operators. We fail to see how the children are
exploited if they pay the full price of admission. They are treated with the
same quality of entertainment as the adults.
Moreover, as a logical consequence of the ordinance, movie house and
theater operators will be discouraged from exhibiting wholesome movies for
general patronage, much less children's pictures if only to avoid compliance
with the ordinance and still earn profits for themselves.
A theater ticket has been described to be either a mere license, revocable at
the will of the proprietor of the theater or it may be evidence of a contract
whereby, for a valuable consideration, the purchaser has acquired the right to
enter the theater and observe the performance on condition that he behaves
properly. Such ticket, therefore, represents a right, Positive or conditional, as
the case may be, according to the terms of the original contract of sale. This
right is clearly a right of property. The ticket which represents that right is also,
necessarily, a species of property. As such, the owner thereof, in the absence
of any condition to the contrary in the contract by which he obtained it, has
the clear right to dispose of it, to sell it to whom he pleases and at such
price as he can obtain.
In no sense could theaters be considered public utilities. The State has not
found it appropriate as a national policy to interfere with the admission prices
to these performances. This does not mean however, that theaters and
exhibitions are not affected with public interest even to a certain degree.
Motion pictures have been considered important both as a medium for the
communication of Ideas and expression of the artistic impulse. Their effects
on the perceptions by our people of issues and public officials or public figures
as well as the prevailing cultural traits are considerable.
While it is true that a business may be regulated, it is equally true that such
regulation must be within the bounds of reason, that is, the regulatory
ordinance must be reasonable, and its provisions cannot be oppressive
amounting to an arbitrary interference with the business or calling subject of
regulation. A lawful business or calling may not, under the guise of regulation,
be unreasonably interfered with even by the exercise of police power.
A police measure for the regulation of the conduct, control and operation of a
business should not encroach upon the legitimate and lawful exercise by the
citizens of their property rights. 34 The right of the owner to fix a price at which
his property shall be sold or used is an inherent attribute of the property itself
and, as such, within the protection of the due process clause.
Although the presumption is always in favor of the validity or reasonableness
of the ordinance, such presumption must nevertheless be set aside when the
invalidity or unreasonableness appears on the face of the ordinance itself or is
established by proper evidence
k. Tano v. Socrates, 278 SCRA 144
FACTS:
On Dec 15, 1992, the Sangguniang Panglungsod ng Puerto Princesa enacted
an ordinance banning the shipment of all live fish and lobster outside Puerto
Princesa City from January 1, 1993 to January 1, 1998. Subsequently the
Sangguniang Panlalawigan, Provincial Government of Palawan enacted a
resolution prohibiting the catching , gathering, possessing, buying, selling, and
shipment of a several species of live marine coral dwelling aquatic organisms
for 5 years, in and coming from Palawan waters.
Petitioners filed a special civil action for certiorari and prohibition, praying that
the court declare the said ordinances and resolutions as unconstitutional on
the ground that the said ordinances deprived them of the due process of law,
their livelihood, and unduly restricted them from the practice of their trade, in
violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the
1987 Constitution.
ISSUE:
Are the challenged ordinances unconstitutional?
HELD:
No. The Supreme Court found the petitioners contentions baseless and held
that the challenged ordinances did not suffer from any infirmity, both under the
Constitution and applicable laws. There is absolutely no showing that any of
the petitioners qualifies as a subsistence or marginal fisherman. Besides,
Section 2 of Article XII aims primarily not to bestow any right to subsistence
fishermen, but to lay stress on the duty of the State to protect the nation’s
marine wealth. The so-called “preferential right” of subsistence or marginal
fishermen to the use of marine resources is not at all absolute.
In accordance with the Regalian Doctrine, marine resources belong to the
state and pursuant to the first paragraph of Section 2, Article XII of the
Constitution, their “exploration, development and utilization...shall be under
the full control and supervision of the State.
In addition, one of the devolved powers of the LCG on devolution is the
enforcement of fishery laws in municipal waters including the conservation of
mangroves. This necessarily includes the enactment of ordinances to
effectively carry out such fishery laws within the municipal waters. In light of
the principles of decentralization and devolution enshrined in the LGC and the
powers granted therein to LGUs which unquestionably involve the exercise of
police power, the validity of the questioned ordinances cannot be doubted.
l. Acebedo Optical Co. Inc. v. The Hon. Court of Appeals, GR No. 100152,
31 March 2000
Facts: Petitioner applied with the Office of the City Mayor of Iligan for a
business permit. After consideration of petitioner's application and the
opposition interposed thereto by local optometrists, respondent City Mayor
issued Business Permit No. 5342 subject to the following conditions: (1) Since
it is a corporation, Acebedo cannot put up an optical clinic but only a
commercial store; (2) It cannot examine and/or prescribe reading and similar
optical glasses for patients, because these are functions of optical clinics; (3)
It cannot sell reading and similar eyeglasses without a prescription having first
been made by an independent optometrist or independent optical clinic.
Acebedo can only sell directly to the public, without need of a prescription,
Ray-Ban and similar eyeglasses; (4) It cannot advertise optical lenses and
eyeglasses, but can advertise Ray-Ban and similar glasses and frames; (5) It
is allowed to grind lenses but only upon the prescription of an independent
optometrist.
On December 5, 1988, private respondent Samahan ng Optometrist Sa
Pilipinas (SOPI lodged a complaint against the petitioner alleging that
Acebedo had violated the conditions set forth in its business permit and
requesting the cancellation and/or revocation of such permit. On July 19,
1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of
Business Permit effective as of said date and giving petitioner three (3)
months to wind up its affairs.
Issue: Whether the City Mayor has the authority to impose special conditions,
as a valid exercise of police power, in the grant of business permits
Ratio: Police power as an inherent attribute of sovereignty is the power to
prescribe regulations to promote the health, morals, peace, education, good
order or safety and general welfare of the people. It is essentially regulatory in
nature and the power to issue licenses or grant business permits, if exercised
for a regulatory and not revenue-raising purpose, is within the ambit of this
power. The authority of city mayors to issue or grant licenses and business
permits is beyond cavil. However, the power to grant or issue licenses or
business permits must always be exercised in accordance with law, with
utmost observance of the rights of all concerned to due process and equal
protection of the law.
In the case under consideration, the business permit granted by respondent
City Mayor to petitioner was burdened with several conditions. Petitioner
agrees with the holding by the Court of Appeals that respondent City Mayor
acted beyond his authority in imposing such special conditions in its permit as
the same have no basis in the law or ordinance. Public respondents and
private respondent SOPI are one in saying that the imposition of said special
conditions is well within the authority of the City Mayor as a valid exercise of
police power.
The issuance of business licenses and permits by a municipality or city is
essentially regulatory in nature. The authority, which devolved upon local
government units to issue or grant such licenses or permits, is essentially in
the exercise of the police power of the State within the contemplation of the
general welfare clause of the Local Government Code.
What is sought by petitioner from respondent City Mayor is a permit to engage
in the business of running an optical shop. It does not purport to seek a
license to engage in the practice of optometry. The objective of the imposition
of subject conditions on petitioner's business permit could be attained by
requiring the optometrists in petitioner's employ to produce a valid certificate
of registration as optometrist, from the Board of Examiners in Optometry. A
business permit is issued primarily to regulate the conduct of business and the
City Mayor cannot, through the issuance of such permit, regulate the practice
of a profession. Such a function is within the exclusive domain of the
administrative agency specifically empowered by law to supervise the
profession, in this case the Professional Regulations Commission and the
Board of Examiners in Optometry.
Ruling: WHEREFORE, the petition is GRANTED; the Decision of the Court of
Appeals in CA-GR SP No. 22995 REVERSED: and the respondent City Mayor
is hereby ordered to reissue petitioner's business permit in accordance with
law and with this disposition. No pronouncement as to costs.
Doctrine: The scope of police power has been held to be so comprehensive
as to encompass almost all matters affecting the health, safety, peace, order,
morals, comfort and convenience of the community. Police power is
essentially regulatory in nature and the power to issue licenses or grant
business permits, if exercised for a regulatory and not revenue-raising
purpose, is within the ambit of this power.
Requisites
1 - LAWFUL SUBJECT: The interests of the public generally, as
distinguished from those of a particular class, require the exercise of the
police power
2 - LAWFUL MEANS: The means employed are reasonably necessary for
the accomplishment of the purpose and not unduly oppressive upon
individuals
m. Rural Bank of Makati v. Municipality of Makati, 443 SCRA 602
Facts:
Upon the request of the municipal treasurer, in August 1990, Atty. Victor A.L.
Valero, then the municipal attorney of the Municipality of Makati, went to the
Rural Bank of Makati to inquire about the bank’s payments of taxes and fees
to the municipality. Petitioner Magdalena V. Landicho, corporate secretary of
the bank, said that the bank was exempt from paying taxes under Republic
Act No. 720, as amended.
On November 19, 1990, the municipality filed complaint with the Prosecutor’s
Office, charging petitioners Esteban S. Silva, president and general manager
of the bank and Magdalena V. Landicho for violation of Section 21(a), Chapter
II, Article 3 in relation to Sections 105 and 169 of the Metropolitan Tax Code.
On April 5, 1991, the municipality submitted two (2) Information with the MTC
against the respondent bank: 1) for non-payment of the mayor’s permit fee
and 2) for non-payment of annual business tax. While said cases were
pending with the municipal court, respondent municipality ordered the closure
of the bank. This prompted petitioners to pay, under protest, the mayor’s
permit fee and the annual fixed tax in the amount of P82,408.66.
On October 18, 1991, petitioners filed with the RTC a Complaint for Sum of
Money and Damages. Petitioners alleged that they were constrained to pay
the amount of P82,408.66 because of the closure order, issued despite the
pendency of the criminal cases and the lack of any notice or assessment of
the fees to be paid. They averred that the collection of the taxes/fees was
oppressive, arbitrary, unjust and illegal. Additionally, they alleged that
respondent Atty. Valero had no power to enforce laws and ordinances, thus
his action in enforcing the collection of the permit fees and business taxes was
ultra vires.
Respondent municipality asserted that petitioners’ payment of P82,408.66
was for a legal obligation because the payment of the mayor’s permit fee as
well as the municipal business license was required of all business concerns.
According to respondent, said requirement was in furtherance of the police
power of the municipality to regulate businesses.
RTC rules in favor of the municipal of Makati. According to the trial court, the
bank was engaged in business as a rural bank. Hence, it should secure the
necessary permit and business license, as well as pay the corresponding
charges and fees. It found that the municipality had authority to impose
licenses and permit fees on persons engaging in business, under its police
power embodied under the general welfare clause. Also, the RTC declared
unmeritorious petitioners’ claim for exemption under Rep. Act No. 720 since
said exemption had been withdrawn by Executive Order No. 93 and the Rural
Bank Act of 1992. These statutes no longer exempted rural banks from paying
corporate income taxes and local taxes, fees and charges.
The CA affirmed RTC’s decision in toto. CA also brushed aside petitioners’
claim that the general welfare clause is limited only to legislative action. It
declared that the exercise of police power by the municipality was mandated
by the general welfare clause, which authorizes the local government units to
enact ordinances, not only to carry into effect and discharge such duties as
are conferred upon them by law, but also those for the good of the municipality
and its inhabitants. This mandate includes the regulation of useful occupations
and enterprises. Hence the present complaint.
Petitioner bank claims that the closure of the bank was an improper exercise
of police power because a municipal corporation has no inherent but only
delegated police power, which must be exercised not by the municipal mayor
but by the municipal council through the enactment of ordinances. It also
assailed the Court of Appeals for invoking the General Welfare Clause
embodied in Section 16 of the Local Government Code of 1991, which took
effect in 1992, when the closure of the bank was actually done on July 31,
1991.
ISSUE: Whether or not the municipality’s police power covers the power to tax
and the power to order the respondent’s bank closure.
HELD:
Rep. Act No. 720, as amended by Republic Act No. 4106, approved on July
19, 1964, had exempted rural banks with net assets not exceeding one million
pesos (P1,000,000) from the payment of all taxes, charges and fees. The
records show that as of December 29, 1986, petitioner bank’s net assets
amounted only to P745,432.29. Hence, petitioner bank could claim to be
exempt from payment of all taxes, charges and fees under the aforementioned
provision. However, EO 93 was issued by then President Aquino, withdrawing
all tax and duty incentives with certain exceptions. Notably, not included
among the exceptions were those granted to rural banks under Rep. Act No.
720. With the passage of said law, petitioner could no longer claim any
exemption from payment of business taxes and permit fees.
Indeed the Local Government Code of 1991 was not yet in effect when the
municipality ordered petitioner bank’s closure on July 31, 1991. However, the
general welfare clause invoked by the Court of Appeals is not found on the
provisions of said law alone. Even under the old Local Government Code
(Batas Pambansa Blg. 337) which was then in effect, a general welfare clause
was provided for in Section 7 thereof.
Municipal corporations are agencies of the State for the promotion and
maintenance of local self-government and as such are endowed with police
powers in order to effectively accomplish and carry out the declared objects of
their creation. The authority of a local government unit to exercise police
power under a general welfare clause is not a recent development. This was
already provided for as early as the Administrative Code of 1917. Thus, the
closure of the bank was a valid exercise of police power pursuant to the
general welfare clause contained in and restated by B.P. Blg. 337, which was
then the law governing local government units. No reversible error arises in
this instance insofar as the validity of respondent municipality’s exercise of
police power for the general welfare is concerned.
The general welfare clause has two branches. The first, known as the general
legislative power, authorizes the municipal council to enact ordinances and
make regulations not repugnant to law, as may be necessary to carry into
effect and discharge the powers and duties conferred upon the municipal
council by law. The second, known as the police power proper, authorizes the
municipality to enact ordinances as may be necessary and proper for the
health and safety, prosperity, morals, peace, good order, comfort, and
 convenience of the municipality and its inhabitants, and for the protection of
their property.
In the present case, the ordinances imposing licenses and requiring permits
for any business establishment, for purposes of regulation enacted by the
municipal council of Makati, fall within the purview of the first branch of the
general welfare clause. Moreover, the ordinance of the municipality imposing
the annual business tax is part of the power of taxation vested upon local
governments as provided for under Section 8 of B.P. Blg. 337.
Consequently, the municipal mayor, as chief executive, was clothed with
authority to create a Special Task Force headed by respondent Atty. Victor
A.L. Valero to enforce and implement said ordinances and resolutions and to
file appropriate charges and prosecute violators. Respondent Valero could
hardly be faulted for performing his official duties under the cited
circumstances.
On the issue of the closure of the bank, we find that the bank was not
engaged in any illegal or immoral activities to warrant its outright closure. The
appropriate remedies to enforce payment of delinquent taxes or fees are
provided for in Section 62 of the Local Tax Code. Said Section 62 did not
provide for closure. Moreover, the order of closure violated petitioner’s right to
due process, considering that the records show that the bank exercised good
faith and presented what it thought was a valid and legal justification for not
paying the required taxes and fees. The violation of a municipal ordinance
does not empower a municipal mayor to avail of extrajudicial remedies. It
should have observed due process before ordering the bank’s closure.
WHEREFORE, the assailed Decision dated July 17, 2001, of the Court of
Appeals in CA-G.R. CV No. 58214 is AFFIRMED with MODIFICATIONS, so
that (1) the order denying any claim for refunds and fees allegedly overpaid by
the bank, as well as the denial of any award for damages and unrealized
profits, is hereby SUSTAINED; (2) the order decreeing the closure of petitioner
bank is SET ASIDE; and (3) the award of moral damages and attorney’s fees
to Atty. Victor A.L. Valero is DELETED. No pronouncement as to costs.
n. Lim v. CA, 387 SCRA 149
o. Dela Cruz v. Paras, 123 SCRA 569
Facts:
1. Assailed was the validity of an ordinance which prohibit the operation of night
clubs. Petitioners contended that the ordinance is invalid, tainted with nullity,
the municipality being devoid of power to prohibit a lawful business,
occupation or calling. Petitioners at the same time alleging that their rights to
due process and equal protection of the laws were violated as the licenses
previously given to them was in effect withdrawn without judicial hearing.
2. RA 938, as amended, was originally enacted on June 20, 1953. It is entitled:
"An Act Granting Municipal or City Boards and Councils the Power to
Regulate the Establishments, Maintenance and Operation of Certain Places of
Amusement within Their Respective Territorial Jurisdictions.'
The first section reads, "The municipal or city board or council of each
chartered city shall have the power to regulate by ordinance the
establishment, maintenance and operation of night clubs, cabarets, dancing
schools, pavilions, cockpits, bars, saloons, bowling alleys, billiard pools, and
other similar places of amusement within its territorial jurisdiction:
On May 21, 1954, the first section was amended to include not merely "the
power to regulate, but likewise "Prohibit ... " The title, however, remained the
same. It is worded exactly as RA 938.
3. As thus amended, if only the said portion of the Act was considered, a
municipal council may go as far as to prohibit the operation of night clubs. The
title was not in any way altered. It was not changed one bit. The exact wording
was followed. The power granted remains that of regulation, not prohibition.
4. Petitioners contended that RA 938 which prohibits the operation of night clubs
would give rise to a constitutional question. The lower court upheld the
constitutionality and validity of Ordinance No. 84 and dismissed the cases.
Hence this petition for certiorari by way of appeal.
ISSUE: Whether or not the ordinance is valid
NO. It is unconstitutional. It undoubtly involves a measure not embraced
within the regulatory power but an exercise of an assumed power to prohibit.
1. The Constitution mandates: "Every bill shall embrace only one subject which
shall be expressed in the title thereof. "Since there is no dispute as the title
limits the power to regulating, not prohibiting, it would result in the statute
being invalid if, as was done by the Municipality of Bocaue, the operation of a
night club was prohibited. There is a wide gap between the exercise of a
regulatory power "to provide for the health and safety, promote the prosperity,
and improve the morals, in the language of the Administrative Code, such
competence extending to all "the great public needs.
2. In accordance with the well-settled principle of constitutional construction that
between two possible interpretations by one of which it will be free from
constitutional infirmity and by the other tainted by such grave defect, the
former is to be preferred. A construction that would save rather than one that
would affix the seal of doom certainly commends itself.
3. Under the Local Govt Code, it is clear that municipal corporations cannot
prohibit the operation of night clubs. They may be regulated, but not prevented
 from carrying on their business. It would be, therefore, an exercise in futility if
the decision under review were sustained. All that petitioners would have to do
is to apply once more for licenses to operate night clubs. A refusal to grant
licenses, because no such businesses could legally open, would be subject to
judicial correction. That is to comply with the legislative will to allow the
operation and continued existence of night clubs subject to appropriate
regulations. In the meanwhile, to compel petitioners to close their
establishments, the necessary result of an affirmance, would amount to no
more than a temporary termination of their business.
4. Herein what was involved is a measure not embraced within the regulatory
power but an exercise of an assumed power to prohibit.
p. Robles Arrastre, Inc. v. Villaflor, 499 SCRA 434
Issues:
The crux of the instant controversy is whether respondent mayor can be
compelled by a writ of mandamus to grant petitioner's application for a
renewal of a business permit to operate an arrastre service at the Municipal
Port of Hilongos in Leyte.
Ruling:
Court of Appeals
Lastly, it would seem that the main prayer of the complaint, that is, to compel
the respondent mayor to issue a business license for the year 1994, by the
passage of time during which this case pends, had already become moot and
academic. A new application is... necessary for the year 1995 and the year
1996 which is about to end. And in the grant or denial of such application for
business permits or licenses, the respondent mayor must examine closely the
circumstances prevailing and again use her discretion in the exercise of her...
official function. Accordingly, the issue at hand is already academic and it is
well established that courts will not adjudicate moot cases nor hear a case
when the object sought is not attainable (State vs. Lambert, 52 W. Va. 248, 43
S. E. 176) and it will decline jurisdiction... over moot cases which must involve
only actual interests. (In re: Estate of Caballos, 12 Phil. 271; Beech vs.
Crossfield, 12 Phil. 555).
Principles:
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.
[36] 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.
q. Javellana v. Kintanar, 119 SCRA 627
r. Velasco v. Villegas, 120 SCRA 968
POLICE POWER OF THE STATE; CONSTITUTIONALITY OF ORDINANCES
BASED ON THE GENERAL WELFARE CLAUSE SUSTAINED BY THE
COURTS; ATTACK AGAINST THE VALIDITY OF ORDINANCE 4964
CANNOT SUCCEED. — The objectives behind the enactment of Ordinance
4964 are:" (1) To be able to impose payment of the license fee for engaging in
the business of massage clinic under Ordinance No. 3659 as amended by
Ordinance 4767, an entirely different measure than the ordinance regulating
the business of barbershops and, (2) in order to forestall possible immorality
which might grow out of the construction of separate rooms for massage of
customers." This Court has been most liberal in sustaining ordinances based
on the general welfare clause. As far back as U.S. v. Salaveria, 39 Phil. 102, a
1918 decision, this Court through Justice Malcolm made clear the significance
and scope of such a clause, which "delegates in statutory form the police
power to a municipality. This clause has been given wide application by
municipal authorities and has in its relation to the particular circumstances of
the case been liberally construed by the courts. Such, it is well to recall, is the
progressive view of the Philippine Jurisprudence." As it was then, so it has
continued to be. There is no showing, therefore, of the unconstitutionality of
such ordinance.
s. Batangas CATV v. CA, 439 SCRA 326
The general welfare clause is the delegation in statutory form of the
police power of the State to LGUs.28 Through this, LGUs may prescribe
regulations to protect the lives, health, and property of their constituents and
maintain peace and order within their respective territorial jurisdictions.
Accordingly, we have upheld enactments providing, for instance, the
regulation of gambling,29 the occupation of rig drivers,30 the installation and
operation of pinball machines,31 the maintenance and operation of
cockpits,32 the exhumation and transfer of corpses from public burial
grounds,33 and the operation of hotels, motels, and lodging houses 34 as valid
exercises by local legislatures of the police power under the general welfare
clause.
Like any other enterprise, CATV operation maybe regulated by LGUs under
the general welfare clause. This is primarily because the CATV system
commits the indiscretion of crossing public properties. (It uses public
properties in order to reach subscribers.) The physical realities of constructing
CATV system - the use of public streets, rights of ways, the founding of
structures, and the parceling of large regions - allow an LGU a certain degree
of regulation over CATV operators.35 This is the same regulation that it
exercises over all private enterprises within its territory.
But, while we recognize the LGUs' power under the general welfare clause,
we cannot sustain Resolution No. 210. We are convinced that respondents
strayed from the well recognized limits of its power. The flaws in Resolution
No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the
State's deregulation policy over the CATV industry.
t. Baguio Citizens Action, Inc. v. City Council, 121 SCRA 368
In this petition for declaratory relief originally filed in the Court of First Instance
of Baguio, Branch II, what is involved is the validity of Ordinance 386 passed
by the City Council of Baguio City which took effect on February 23, 1967,
quoted together with the explanatory note, as follows:
ORDINANCE 386
AN ORDINANCE CONSIDERING ALL SQUATTERS OF PUBLIC LAND,
OTHER THAN THOSE EARMARKED FOR PUBLIC USE IN THE CITY OF
BAGUIO WHO ARE DULY REGISTERED AS SUCH AT THE TIME OF THE
PROMULGATION OF THIS ORDINANCE AS BONAFIDE OCCUPANTS OF
THEIR RESPECTIVE LOTS AND WHICH SHALL HEREAFTER BE
EMBRACED AS A CITY GOVERNMENT HOUSING PROJECT AND
PROVIDING FOR OTHER PURPOSES.Upon strong recommendation of the
Vice-Mayor and Presiding Officer, on Motion of all the Councilors, seconded
by the same, be it ordained by the City Council assembled:
Section l.—All public lands within Baguio townsite which are occupied by
squatters who are duly registered as such at the time of the promulgation of
this Ordinance such public lands not designated by city and national
authorities for public use, shall be considered as embraced and comprising a
City Government Housing Project; PROVIDED, HOWEVER, That areas
covered by Executive Orders or Presidential Proclamations but the city had
made official representation for the lifting of such orders or proclamation shall
be deemed to be part of the Baguio Townsite for the purposes of this
ordinance;
Section 2.—Building permits shall have been deemed issued to all squatters
as contemplated by this Ordinance, giving such squatters five years from the
approval of this Ordinance to satisfactorily comply with city building
specifications and payment of the corresponding city building permit fees;
Section 3.—All cases pending in court against squatters be dropped without
prejudice to the full prosecution of all subsequent violations in relation to the
provisions of existing city ordinances and/or resolutions;
Section 4.—All squatters be given all the necessary and needed protection of
the City Government against the stringent provisions of the Public Land Act,
particularly on public bidding, in that the lots occupied by said squatters be
awarded to them by direct sale through Presidential Proclamation;
Section 5.—The City Government shall not be interested in making financial
profit out of the project and that the appraisal and evaluation of the said lots
shall be made at minimum cost per square meters, the total cost of the lots
made payable within the period of ten years;
Section 6.—The minimum lot area requirements shall be disregarded in cases
where it could not be implemented due to existing congestion of houses, and
that, if necessary, areas applied for under this ordinance shall be reduced to
that which is practical under the circumstances; PROVIDED, HOWEVER,
That squatters in congested areas shall be given preference in the transfer to
resettlement areas or government housing projects earmarked as such under
the provisions of this ordinance, if and when it becomes necessary to ease
congestion or when their lots shall be traversed by the laying of roads or are
needed for public use;
Section 7.—The amount of P20,000.00 or so much as is necessary, for the lot
survey of each squatter's lot be appropriated, such survey of which shall be
conducted by licensed private surveyors through public biddings; PROVIDED,
That, said expenses for survey shall be included in the overall cost of each lot;
Section 8.—The three-man control committed for the Quirino-Magsaysay
housing project which was previously created under City Ordinance No. 344,
shall exercise administration and supervision of the city government housing
projects created under this Ordinance shall, furthermore, be entrusted with the
duty of: (1) Consolidating a list of all city squatters who shall be benefitted in
contemplation and under the provisions of this Ordinance; (2) To assist and
help the squatters in the preparation of all the necessary and required paper
work and relative items in connection with their application over their
respective lots; (3) To seek and locate other areas within the Baguio Townsite
conveniently situated and which will be earmarked as subsequently housing
projects of the city for landless bonafide city residents; and (4) To carry out
and implement the provisions of this Ordinance without the least possible
delay.
EXPLANATORY NOTE
This ordinance is primarily designed to extend a helping hand to the numerous
landless city residents and the called 'Squatters' within the Baguio Townsite in
their desire to acquire residential lots which they may rightly call their own.
The reported people who have violated the City's building ordinances were not
so guarded by any criminal perversity, but where given to it more by
circumstances of necessity and that they are, therefore, entitled to a more
human treatment, more of understanding and more of pity rather than be
herded before the courts, likened to hardened criminals and deliberate
violators of our laws and ordinances.
The petition for declaratory relief filed with the Court of First Instance of
Baguio, Branch II, prays for a judgment declaring the Ordinance as invalid and
illegal ab initio. The respondents-appellees, the City Council and the City
Mayor, filed motions to dismiss the petition which were denied. Nonetheless,
in the decision thereafter rendered, the petition was dismissed on the grounds
that: 1) another court, the Court of First Instance of Baguio, Branch I, had
declared the Ordinance valid in a criminal case filed against the squatters for
illegal construction, and the Branch II of the same court cannot, in a
declaratory proceeding, review and determine the validity of said judgment
pursuant to the policy of judicial respect and stability; 2) those who come
within the protection of the ordinance have not been made parties to the suit in
accordance with Section 2 of Rule 64 and it has been held that the non-joinder
of such parties is a jurisdictional defect; and 3) the court is clothed with
discretion to refuse to make any declaration where the declaration is not
necessary and proper at the time under all circumstances, e.g. where the
declaration would be of no practical help in ending the controversy or would
not stabilize the disputed legal relation, citing Section 5 of Rule 64; ICJS 1033-
1034; 16 AM. JUR 287-289; Hoskyns vs. National City Bank of New York, 85
Phil. 201.
Hence, the instant appeal which was perfected in accordance with the
provisions of Rule 42, before the approval of Republic Act No. 5440 on
September 9, 1968.
1. The case before the Court of First Instance of Baguio, Branch 1, dealt with
the criminal liability of the accused for constructing their houses without
obtaining building permits, contrary to Section 47 in relation to Section 52 of
the Revised Ordinances of Baguio, which act the said court considered as
pardoned by Section 2 of Ordinance 386. The court in said case upheld the
power of the Municipal Council to legalize the acts punished by the aforesaid
provisions of the Revised Ordinances of Baguio, stating that the Municipal
Council is the policy determining body of Baguio City and therefore it can
amend, repeal, alter or modify its own laws as it did when it enacted
Ordinance 386. In deciding the case, the first branch of the court a quo did not
declare the whole Ordinance valid. This is clear when it stated that "had the
issue been the legalization of illegal occupation of public land, covered by
Republic Act No. 947, ... the Ordinance in question should have been ultra
vires and unconstitutional." 1 Said court merely confined itself to Sections 2
and 3 of Ordinance 386. It did not make any definite pronouncement whether
or not the City Council has the power to legalize the illegal occupation of
public land which is the issue in the instant case. It is noteworthy that the
court, in passing upon the validity of the aforesaid sections, was apparently
guided by the rule that where part of a statute is void as repugnant to the
organic law, while another part is valid, the valid portion, if separable from the
invalid may stand and be enforced. Contrary to what was said in the decision
under review, the second branch of the court a quo was not called upon to
determine the validity of the judgment of the first branch.
2. The non-inclusion of the squatters mentioned in the Ordinance in question
as party defendants in this case cannot defeat the jurisdiction of the Court of
First Instance of Baguio. There is nothing in Section 2 of Rule 64 of the Rules
of Court which says that the non-joinder of persons who have or claim any
interest which would be affected by the declaration is a jurisdictional defect.
Said section merely states that "All persons shall be made parties who have
or claim any interest which would be affected by the declaration; and no
declaration shall, except or otherwise provided in these rules, prejudice the
rights of persons not parties to the action." This section contemplates a
situation where there are other persons who would be affected by the
declaration, but were not impleaded as necessary parties, in which case the
declaration shall not prejudice them. If at all, the case may be dismissed not
on the ground of lack of jurisdiction but for the reason stated in Section 5 of
the same Rule stating that "the Court may refuse to exercise the power to
declare rights and to construe instruments in any case where a decision would
not terminate the uncertainty or controversy which gave rise to the action, or
any case where the declaration or construction is not necessary and proper at
the time under all circumstances."
It must be noted that the reason for the law requiring the joinder of all
necessary parties is that failure to do so would deprive the declaration of the
final and pacifying function the action for declaratory relief is calculated to
subserve, as they would not be bound by the declaration and may raise the
Identical issue.2 In the case at bar, although it is true that any declaration by
the court would affect the squatters, the latter are not necessary parties
because the question involved is the power of the Municipal Council to enact
the Ordinances in question. Whether or not they are impleaded, any
determination of the controversy would be binding upon the squatters.
A different situation obtains in the case of Degala v. Reyes 3 cited in the
decision under review. The Degala case involves the validity of the trust
created in the will of the testator. In the said case, the Roman Catholic Church
which was a necessary party, being the one which would be most vitally
affected by the declaration of the nullity of the will was not brought in as party.
The Court therefore, refused to make any declaratory judgment on ground of
jurisdictional defect, for there can be no final judgment that could be rendered
and the Roman Catholic not being bound by such judgment might raise the
Identical issue, making therefore the declaration a mere exercise in futility.
This is not true in the instant case. A declaration on the nullity of the
ordinance, would give the squatters no right which they are entitled to protect.
The party most interested to sustain and defend the legality of the Ordinance
is the body that passed it, the City Council, and together with the City Mayor,
is already a party in these proceedings.
3. The Ordinance in question is a patent nullity. It considered all squatters of
public land in the City of Baguio as bona-fide occupants of their respective
lots. As we have stated in City of Manila v. Garcia, 4 et al.:
Squatting is unlawful and no amount of acquiescence on the part of the city
officials will elevate it into a lawful act. In principle, a compound of illegal entry
and official permit to stay is obnoxious to our concept of proper official norm of
conduct. Because, such permit does not serve social justice; it fosters moral
decadence. It does not promote public welfare; it abets disrespect for the law.
It has its roots in vice; so it is an infected bargain. Official approval of squatting
should not, therefore, be permitted to obtain in this country where there is an
orderly form of government.
In the same case, squatting was characterized as a widespread vice and a
blight Thus:
Since the last global war, squatting on another's property in this country has
become a widespread vice. It was and is a blight Squatter's areas pose
problems of health, sanitation. They are breeding places for crime. They
constitute proof that respect for the law and the rights of others, even those of
the government are being flouted. Knowingly, squatters have embarked on the
pernicious act of occupying property whenever and wherever convenient to
their interests without as much as leave, and even against the will, of the
owner. They are emboldened seemingly because of their belief that they could
violate the law with impunity. The pugnaciousness of some of them has tied
up the hands of legitimate owners. The latter are thus prevented from
recovering possession by peaceful means. Government lands have not been
spared by them. They know, of course, that instrusion into property,
government or private, is wrong. But, then the wheels of justice grind slow,
mainly because of lawyers who, by means, fair or foul, are quite often
successful in procuring delay of the day of reckoning. Rampancy of forcible
entry into government lands particularly, is abetted by the apathy of some
public officials to enforce the government's rights. Obstinacy of these
squatters is difficult to explain unless it is spawned by official tolerance, if not
outright encouragement or protection. Said squatters have become insensible
to the difference between right and wrong. To them, violation of law means
nothing. With the result that squatters still exists, much to the detriment of
public interest. It is high time that, in this aspect, sanity and the rule of law be
restored. It is in this environment that we look into the validity of the permits
granted defendants herein.
In the above cited case, the land occupied by the squatters belongs to the City
of Manila. In the instant case, the land occupied by the squatters are portions
of water sheds, reservations, scattered portions of the public domain within
the Baguio townsite. Certainly, there is more reason then to void the actions
taken by the City of Baguio through the questioned ordinance.
Being unquestionably a public land, no disposition thereof could be made by
the City of Baguio without prior legislative authority. It is the fundamental
principle that the state possesses plenary power in law to determine who shall
be favored recipients of public domain, as well as under what terms such
privilege may be granted not excluding the placing of obstacles in the way of
exercising what otherwise would be ordinary acts of ownership. And the law
has laid in the Director of Lands the power of exclusive control,
administrations, disposition and alienation of public land that includes the
survey, classification, lease, sale or any other form of concessions or
disposition and management of the lands of public domains. 5
Nor could the enactment of Ordinance 386 be justified by stating that "this
Ordinance is primarily designed to extend a helping hand to the numerous
landless city residents and the so called squatters within the Baguio townsite
in their desire to acquire residential lots which they may rightly call their own
and that the reported people who have violated the City's building ordinances
were not so guided by any criminal perversity, but were given to it more by
circumstances of necessity and that they are, therefore, entitled to a more
human treatment, more understanding and more of pity rather than be herded
before the courts, likened to hardened criminals and deliberate violators of our
laws and ordinances."6
Our pronouncement in Astudillo vs. Board of Directors of PHHC 7 is relevant to
this case. Thus—
In carrying out its social re-adjustment policies, the government could not
simply lay aside moral standards, and aim to favor usurpers, squatters, and
intruders, unmindful of the lawful and unlawful origin and character of their
occupancy. Such a policy would perpetuate conflicts instead of attaining their
just solution. (Bernardo vs. Bernardo, 96 Phil. 202, 206.)
Indeed, the government has enunciated a militant policy against squatters.
Thus, Letter of Instruction No. 19 dated October 2, 1972 orders city and
district engineers 'to remove all illegal constructions including buildings ... and
those built without permits on public or private property' and providing for the
relocation of squatters (68 O.G. 7962. See Letter of Instruction No. 19-A). As
noted by Justice Sanchez, since the last global war, squatting on another's
property in this country has become a widespread vice. (City of Manila vs..
Garcia, L-26053, Feb. 21, 1967, 19 SCRA 413, 418).
WHEREFORE, in view of the foregoing, Ordinance 386 is hereby rendered
nullified and without force and effect.
u. City Government of Quezon City v. Ericta, 122 SCRA 759
Facts: Section 9 of Ordinance No. 6118, S-64, entitled "Ordinance Regulating
The Establishment, Maintenance And Operation Of Private Memorial
Type Cemetery Or Burial Ground Within The Jurisdiction Of Quezon City And
Providing Penalties For The Violation Thereof" provides:
Sec. 9. At least six (6) percent of the total area of the memorial
parkcemetery shall be set aside for charity burial of deceased persons who
are paupers and have been residents of Quezon City for at least 5 years prior
to their death, to be determined by competent City Authorities. The area so
designated shall immediately be developed and should be open for operation
not later than six months from the date of approval of the application.
For several years, the aforequoted section of the Ordinance was not enforced
but seven years after the enactment of the ordinance, the Quezon City
Council passed a resolution to request the City Engineer, Quezon City, to stop
any further selling and/or transaction of memorial park lots in Quezon City
where the owners thereof have failed to donate the required 6% space
intended for paupers burial.
The Quezon City Engineer then notified respondent Himlayang Pilipino, Inc. in
writing that Section 9 of the ordinance would be enforced.
Respondent Himlayang Pilipino reacted by filing a petition for declaratory
relief, prohibition and mandamus with preliminary injunction seeking to annul
Section 9 of the Ordinance in question. Respondent alleged that the same is
contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act,
and the Revised Administrative Code.
Issue: Whether or Not Section 9 of the ordinance in question is a valid
exercise of police power.
Held: Section 9 of the City ordinance in question is not a valid exercise of
police power. Section 9 cannot be justified under the power granted to Quezon
City to tax, fix the license fee, and regulate such other business, trades, and
occupation as may be established or practiced in the City.
Bill of rights states that 'no person shall be deprived of life, liberty or property
without due process of law' (Art. Ill, Section 1 subparagraph 1, Constitution).
On the other hand, there are three inherent powers of government by which
the state interferes with the property rights, namely-. (1) police power, (2)
eminent domain, (3) taxation.
The police power of Quezon City is defined in sub-section 00, Sec. 12,
Rep. Act 537 that reads as follows:
“To make such further ordinance and regulations not repugnant to law as may
be necessary to carry into effect and discharge the powers and duties
conferred by this act and such as it shall deem necessary and proper to
provide for the health and safety, …, and for the protection of property therein;
and enforce obedience thereto with such lawful fines or penalties as the City
Council may prescribe under the provisions of subsection (jj) of this section.”
The power to regulate does not include the power to prohibit. The power to
regulate does not include the power to confiscate. The ordinance in question
not only confiscates but also prohibits the operation of a memorial
park cemetery, because under Section 13 of said ordinance, 'Violation of the
provision thereof is punishable with a fine and/or imprisonment and that
upon conviction thereof the permit to operate and maintain a
private cemetery shall be revoked or cancelled’. The confiscatory clause and
the penal provision in effect deter one from operating a memorial
park cemetery.
Moreover, police power is defined by Freund as 'the power of promoting the
public welfare by restraining and regulating the use of liberty and property'. It
is usually exerted in order to merely regulate the use and enjoyment of
property of the owner. If he is deprived of his property outright, it is not taken
for public use but rather to destroy in order to promote the general welfare.
It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of
Quezon City is not a mere police regulation but an outright confiscation. It
deprives a person of his private property without due process of law, nay, even
without compensation.
v. Ericta, 122 SCRA 759 v. Tan v. Perena, 452 SCRA 53
Facts:
Section 9 of Ordinance No. 6118, S-64 provides that at least 6% of the total
area of the memorial park cemetery shall be set aside for the charity burial of
deceased persons who are paupers and have been residents of Quezon City
for at least 5 years prior to their death. As such, the Quezon City engineer
required the respondent, Himlayang Pilipino Inc, to stop any further selling
and/or transaction of memorial park lots in Quezon City where the owners
thereof have failed to donate the required 6% space intended for paupers
burial.
The then Court of First Instance and its judge, Hon. Ericta, declared Section 9
of Ordinance No. 6118, S-64 null and void.
Petitioners argued that the taking of the respondent’s property is a valid and
reasonable exercise of police power and that the land is taken for a public use
as it is intended for the burial ground of paupers. They further argued that the
Quezon City Council is authorized under its charter, in the exercise of local
police power, ” to make such further ordinances and resolutions not repugnant
to law as may be necessary to carry into effect and discharge the powers and
duties conferred by this Act and such as it shall deem necessary and proper to
provide for the health and safety, promote the prosperity, improve the morals,
peace, good order, comfort and convenience of the city and the inhabitants
thereof, and for the protection of property therein.”
On the otherhand, respondent Himlayang Pilipino, Inc. contended that the
taking or confiscation of property was obvious because the questioned
ordinance permanently restricts the use of the property such that it cannot be
used for any reasonable purpose and deprives the owner of all beneficial use
of his property.
Issue:
Is Section 9 of the ordinance in question a valid exercise of the police power?
Held:
No. The Sec. 9 of the ordinance is not a valid exercise of the police power.
Occupying the forefront in the bill of rights is the provision which states that
‘no person shall be deprived of life, liberty or property without due process of
law’ (Art. Ill, Section 1 subparagraph 1, Constitution). On the other hand, there
are three inherent powers of government by which the state interferes with the
property rights, namely-. (1) police power, (2) eminent domain, (3) taxation.
These are said to exist independently of the Constitution as necessary
attributes of sovereignty.
An examination of the Charter of Quezon City (Rep. Act No. 537), does not
reveal any provision that would justify the ordinance in question except the
provision granting police power to the City. Section 9 cannot be justified under
the power granted to Quezon City to tax, fix the license fee, and regulate such
other business, trades, and occupation as may be established or practised in
the City. The power to regulate does not include the power to prohibit or
confiscate. The ordinance in question not only confiscates but also prohibits
the operation of a memorial park cemetery.
Police power is defined by Freund as ‘the power of promoting the public
welfare by restraining and regulating the use of liberty and property’. It is
usually exerted in order to merely regulate the use and enjoyment of property
of the owner. If he is deprived of his property outright, it is not taken for public
use but rather to destroy in order to promote the general welfare. In police
power, the owner does not recover from the government for injury sustained in
consequence thereof.
Under the provisions of municipal charters which are known as the general
welfare clauses, a city, by virtue of its police power, may adopt ordinances to
the peace, safety, health, morals and the best and highest interests of the
municipality. It is a well-settled principle, growing out of the nature of well-
ordered and society, that every holder of property, however absolute and may
be his title, holds it under the implied liability that his use of it shall not be
injurious to the equal enjoyment of others having an equal right to the
enjoyment of their property, nor injurious to the rights of the community. A
property in the state is held subject to its general regulations, which are
necessary to the common good and general welfare. Rights of property, like
all other social and conventional rights, are subject to such reasonable
limitations in their enjoyment as shall prevent them from being injurious, and
to such reasonable restraints and regulations, established by law, as the
legislature, under the governing and controlling power vested in them by the
constitution, may think necessary and expedient. The state, under the police
power, is possessed with plenary power to deal with all matters relating to the
general health, morals, and safety of the people, so long as it does not
contravene any positive inhibition of the organic law and providing that such
power is not exercised in such a manner as to justify the interference of the
courts to prevent positive wrong and oppression.
However, in the case at hand, there is no reasonable relation between the
setting aside of at least six (6) percent of the total area of an private
cemeteries for charity burial grounds of deceased paupers and the promotion
of health, morals, good order, safety, or the general welfare of the people. The
ordinance is actually a taking without compensation of a certain area from a
private cemetery to benefit paupers who are charges of the municipal
corporation. Instead of building or maintaining a public cemetery for this
purpose, the city passes the burden to private cemeteries.
The expropriation without compensation of a portion of private cemeteries is
not covered by Section 12(t) of Republic Act 537, the Revised Charter of
Quezon City which empowers the city council to prohibit the burial of the dead
within the center of population of the city and to provide for their burial in a
proper place subject to the provisions of general law regulating burial grounds
and cemeteries. When the Local Government Code, Batas Pambansa Blg.
337 provides in Section 177 (q) that a Sangguniang panlungsod may “provide
for the burial of the dead in such place and in such manner as prescribed by
law or ordinance” it simply authorizes the city to provide its own city owned
land or to buy or expropriate private properties to construct public cemeteries.
This has been the law and practise in the past. It continues to the present.
Expropriation, however, requires payment of just compensation. The
questioned ordinance is different from laws and regulations requiring owners
of subdivisions to set aside certain areas for streets, parks, playgrounds, and
other public facilities from the land they sell to buyers of subdivision lots. The
necessities of public safety, health, and convenience are very clear from said
requirements which are intended to insure the development of communities
with salubrious and wholesome environments. The beneficiaries of the
regulation, in turn, are made to pay by the subdivision developer when
individual lots are sold to home-owners.
WHEREFORE, the petition for review is hereby DISMISSED. The decision of
the respondent court is affirmed.
w. Lucero v. City Government of Pasig, 508 SCRA 23
In this petition for review on certiorari, petitioners seek the review and reversal
of the Court of Appeals (CA) decision1 and resolution2 in CA-G.R. SP. No.
42131.
Petitioners were granted lease contracts to occupy and operate stalls 3 in the
public market of Pasig by virtue of Municipal Ordinance No. 25, series of
1983.
Sometime in 1993, the municipal government of Pasig renovated the market
facilities and constructed annex buildings to the old public market.
The Sangguniang Bayan of Pasig then enacted Municipal Ordinance No. 56,
series of 1993, entitled "An Ordinance Prescribing the Rules and Regulations
in Occupying and Using Market Stalls and Providing Penalties for Violations
Thereof." The ordinance took effect 30 days after its enactment on October
20, 1993.
Pursuant to the new ordinance, municipal officials urged all stall occupants to
fill up and submit the necessary application forms. The application form
contained the terms and conditions for the occupation and operation of the
stalls. If approved, the application would serve as the lease contract.
Petitioners, however, refused to apply for a new lease on their market stalls.
They were given a deadline to comply with the new ordinance but petitioners
were adamant.
On November 14, 1995, the city government of Pasig 4 filed a complaint for
ejectment against petitioners in the Metropolitan Trial Court (MTC), Branch 68,
Pasig City. The case was docketed as Civil Case No. 5043.
In its complaint, the city government alleged that petitioners failed to pay the
required ₱10,000 performance bond and their rental fees since January 1994
as required by the municipal ordinance.
In their answer, petitioners claimed that they had faithfully complied with their
obligations as set forth in their 1983 lease contracts. They alleged that it was
the city government which refused to accept their rental payments from
January 1994 onwards because of petitioners’ failure to submit new
applications to lease their market stalls. They did not pay the performance
bond because, as previous stall occupants, they were not required to do so.
With due notice to the city treasurer, petitioners deposited their payments in a
bank when their offer to pay was not acted upon.
Finding the ejectment suit to be without merit, the MTC ruled in favor of
petitioners and dismissed the complaint.5
Dissatisfied with the lower court’s decision, the city government appealed to
the Regional Trial Court (RTC), Branch 162, Pasig City.6 The RTC reversed
the MTC decision and decided in favor of the city government.
WHEREFORE, PREMISES CONSIDERED, this Court hereby renders
judgment in this case in favor of [the City Government of Pasig] and against
[petitioners] by:
(1) Reversing, amending and/or modifying the decision of the trial court dated
March 29, 1996 subject of this appeal, and entering a new judgment directing
the herein [petitioners] and all persons claiming right under them to vacate the
Market Stalls Nos. 28 and 29, Commercial Section, and Stall [Nos.] 456 and
457, Grocery Section, and to restore possession thereof to [the city
government];
(2) Ordering the [petitioners] to pay the rent for the use and occupancy of the
subject stalls, as follows:
(a) Ruperto Lucero – the amount of ₱49,980.00 representing arrearages for
the whole year of [January 1994 up to September 1995]; and the further sum
in the same amount representing rents for the inclusive period of [October
1995 up to and until September 1996];
(b) Pablo Lucero – the amount of ₱20,050.00 representing arrearages from
[February 1995 up to September 1995]; and the further sum in the same
amount representing rents for the duration of October 1995 to September
1996;
(c) Antonio Tenorio – the amount of ₱38,587.50 representing arrearages from
January 1994 to September 1995; and the further sum in the same amount
representing rents for the inclusive period [of] October 1995 to September
1996.
(3) Ordering [petitioners] to pay jointly and severally the amount of ₱15,000.00
for and as attorney’s fees.
With costs against [petitioners].
SO ORDERED.7Petitioners appealed the RTC decision to the CA. The appeal
was, however, dismissed for lack of merit.8 Their motion for reconsideration
was similarly denied;9 hence, this petition.
Petitioners mainly assail the non-renewal of their lease contracts on stalls in
the public market when they did not comply with the requirements of Municipal
Ordinance No. 56, series of 1993.10 They claim to have a vested right to the
possession, use and enjoyment of the market stalls based on their 1983 lease
contracts. This, they assert, could not be impaired by the enactment of
Municipal Ordinance No. 56 in 1993.
The only issue for our resolution is: can petitioners claim a vested right to the
market stalls they were occupying by virtue of their lease contracts under
Municipal Ordinance No. 25, series of 1983? They cannot.
"A right is vested when the right to enjoyment has become the property of
some particular person or persons as a present interest." 11 It is unalterable,
absolute, complete and unconditional.12 This right is perfect in itself; it is not
dependent upon a contingency.13 The concept of "vested right" expresses a
"present fixed interest which in right reason and natural justice is protected
against arbitrary state action."14 It includes not only legal and equitable title to
the enforcement of a demand but also exemptions from new obligations
created after the right has become vested.15
Contrary to petitioners’ contention that they were no longer covered by the
1993 ordinance requiring payment of a performance bond and submission of
new application forms, their 1983 lease contracts did not grant them
irrefutable rights to the market stalls. They were mere grantees of a privilege
to occupy and operate such booths.
What petitioners had was a license to occupy and operate particular stalls
over a period of time. Their possession and use of these facilities could not be
characterized as fixed and absolute. Indeed, petitioners did not have any
vested right to the stalls.
It was within the ambit of the Sanggunian’s authority in the exercise of police
power to regulate the enjoyment of the privilege to lease the market stalls. The
enactment of the Municipal Ordinance No. 56, series of 1993 repealing
Municipal Ordinance No. 25, series of 1983 (the basis of petitioners’ lease)
was a valid exercise of such governmental authority to
regulate the possession and use of the public market and its facilities. 16
The lease (and occupation) of a stall in a public market is not a right but a
purely statutory privilege governed by laws and ordinances. 17 The operation of
a market stall by virtue of a license is always subject to the police power of the
city government.18 An application for this privilege may be granted or refused
for reasons of public policy and sound public administration. 19 The city
government, through its market administrator, is not duty-bound to grant lease
privileges to any applicant, least of all those who refuse to obey the new
ordinance prescribing the rules and regulations for the market stalls.
Moreover, a public market is one dedicated to the service of the general public
and operated under government control and supervision as a public
utility.20 Hence, the operation of a public market and its facilities is imbued with
public interest. Petitioners’ 1983 lease contracts contained an implied
reservation of the police power as a postulate of the existing legal order. 21 This
power could be exercised any time to change the provisions of the contracts
or even abrogate them entirely, for the protection of the general
welfare.22 Such an act did not violate the non-impairment clause which is
anyway subject to and limited by the paramount police power.WHEREFORE,
the petition is hereby DENIED.
x. Lucena Grand Terminal v. JAL, 452 SCRA 174
Two ordinances were enacted by the Sangguniang Panlungsod of Lucena
with the objective of alleviating the traffic congestion said to have
been caused by the existence of various bus and jeepney terminals within the
city. City Ordinance 1631 grants franchise to the Lucena Grand Central
Terminal, Inc. to construct, finance, establish, operate and maintain common
bus- jeepney terminal facility in the City of Lucena. City Ordinance 1778, on
the other hand, strips out all the temporary terminals in the City of Lucena the
right to operate which as a result favors only the Lucena Grand Central
Terminal, Inc. The Regional Trial Court of Lucena declared City Ordinance
1631 as a valid excercise of police power while declaring City Ordinance 1778
as null and void for being invalid. Petitioner Lucena Grand Central Terminal,
Inc. filed its Motion for Reconsideration which was denied. Lucena then
elevated it via petition for review under Rule 45 before the Court. The Court
referred the petition to the Court of Appeals (CA) with which it
has concurrent jurisdiction. The CA dismissed the petition and affirmed
the challenged orders of the trial court. Its motion for reconsideration having
been denied by the CA, Lucena now comes to the Court via petition for review
to assail the Decision and Resolution of the CA.
ISSUE:Whether or not the means employed by the Lucena Sannguniang
Panlungsod to attain its professed objective were reasonably necessary and
not duly oppressive upon individuals.
HELD:With the aim of localizing the source of traffic congestion in the city to a
single location, the subject ordinances prohibit the operation of all bus and
jeepney terminals within Lucena, including those already existing, and allow
the operation of only one common terminal located outside the city proper, the
franchise for which was granted to Lucena. The common carriers plying routes
to and from Lucena City are thus compelled to close down their existing
terminals and use the facilities of Lucena. The true role of Constitutional Law
is to effect an equilibrium between authority and liberty so that rights are
exercised within the framework of the law and the laws are enacted with due
deference to rights. A due deference to the rights of the individual thus
requires a more careful formulation of solutions to societal problems. From the
memorandum filed before the Court by Lucena, it is gathered that the
Sangguniang Panlungsod had identified the cause of traffic congestion to be
the indiscriminate loading and unloading of passengers by buses on the
streets of the city proper, hence, the conclusion that the terminals contributed
to the proliferation of buses obstructing traffic on the city streets. Bus
terminals per se do not, however, impede or help impede the flow of traffic.
How the outright proscription against the existence of all terminals, apart from
that franchised to Lucena, can be considered as reasonably necessary to
solve the traffic problem, the Court has not been enlightened. If terminals lack
adequate space such that bus drivers are compelled to load and unload
passengers on the streets instead of inside the terminals, then reasonable
specifications for the size of terminals could be instituted, with permits to
operate the same denied those which are unable to meet the specifications. In
the subject ordinances, however, the scope of the proscription against the
maintenance of terminals is so broad that even entities which might be able to
provide facilities better than the franchised terminal are barred from operating
at all. The Court is not unaware of the resolutions of various barangays in
Lucena City supporting the establishment of a common terminal, and similar
expressions of support from the private sector, copies of which were submitted
to this Court by Lucena Grand Central Terminal, Inc. The weight of popular
opinion, however, must be balanced with that of an individual‘s rights.
y. AC Enterprises, Inc. v. Frabelle Corp., 506 SCRA 625 (scribd)
z. Parayno v. Jovellanos, 495 SCRA 85 same as letter B
aa. LBP v. Cacayuran et al., G.R. No. 191667 [April 2013]
Assailed in this Petition for Review on Certiorari1 is the March 26, 2010
Decision2 of the Court of Appeals (CA) in CA-G.R. CV. No. 89732 which
affirmed with modification the April 10, 2007 Decision3 of the Regional Trial
Court (RTC) of Agoo, La Union, Branch 31, declaring inter alia the nullity of
the loan agreements entered into by petitioner Land Bank of the Philippines
(Land Bank) and the Municipality of Agoo, La Union (Municipality).
The Facts
From 2005 to 2006, the Municipality’s Sangguniang Bayan (SB) passed
certain resolutions to implement a multi-phased plan (Redevelopment Plan) to
redevelop the Agoo Public Plaza (Agoo Plaza) where the Imelda Garden and
Jose Rizal Monument were situated.
To finance phase 1 of the said plan, the SB initially passed Resolution No. 68-
20054 on April 19, 2005, authorizing then Mayor Eufranio Eriguel (Mayor
Eriguel) to obtain a loan from Land Bank and incidental thereto, mortgage a
2,323.75 square meter lot situated at the southeastern portion of the Agoo
Plaza (Plaza Lot) as collateral. To serve as additional security, it further
authorized the assignment of a portion of its internal revenue allotment (IRA)
and the monthly income from the proposed project in favor of Land Bank. 5 The
foregoing terms were confirmed, approved and ratified on October 4, 2005
through Resolution No. 139-2005.6 Consequently, on November 21, 2005,
Land Bank extended a ₱4,000,000.00 loan in favor of the Municipality (First
Loan),7 the proceeds of which were used to construct ten (10) kiosks at the
northern and southern portions of the Imelda Garden. After completion, these
kiosks were rented out.8
On March 7, 2006, the SB passed Resolution No. 58-2006, 9 approving the
construction of a commercial center on the Plaza Lot as part of phase II of the
Redevelopment Plan. To finance the project, Mayor Eriguel was again
authorized to obtain a loan from Land Bank, posting as well the same
securities as that of the First Loan. All previous representations and warranties
of Mayor Eriguel related to the negotiation and obtention of the new
loan10 were ratified on September 5, 2006 through Resolution No. 128-
2006.11 In consequence, Land Bank granted a second loan in favor of the
Municipality on October 20, 2006 in the principal amount of ₱28,000,000.00
(Second Loan).12
Unlike phase 1 of the Redevelopment Plan, the construction of the
commercial center at the Agoo Plaza was vehemently objected to by some
residents of the Municipality. Led by respondent Eduardo Cacayuran
(Cacayuran), these residents claimed that the conversion of the Agoo Plaza
into a commercial center, as funded by the proceeds from the First and
Second Loans (Subject Loans), were "highly irregular, violative of the law, and
detrimental to public interests, and will result to wanton desecration of the said
historical and public park."13 The foregoing was embodied in a
Manifesto,14 launched through a signature campaign conducted by the
residents and Cacayuran.
In addition, Cacayuran wrote a letter15 dated December 8, 2006 addressed to
Mayor Eriguel, Vice Mayor Antonio Eslao (Vice Mayor Eslao), and the
members of the SB namely, Violeta Laroya-Balbin, Jaime Boado, Jr., Rogelio
De Vera, James Dy, Crisogono Colubong, Ricardo Fronda, Josephus Komiya,
Erwina Eriguel, Felizardo Villanueva, and Gerard Mamuyac (Implicated
Officers), expressing the growing public clamor against the conversion of the
Agoo Plaza into a commercial center. He then requested the foregoing officers
to furnish him certified copies of various documents related to the
aforementioned conversion including, among others, the resolutions approving
the Redevelopment Plan as well as the loan agreements for the sake of public
information and transparency.
Unable to get any response, Cacayuran, invoking his right as a taxpayer, filed
a Complaint16 against the Implicated Officers and Land Bank, assailing,
among others, the validity of the Subject Loans on the ground that the Plaza
Lot used as collateral thereof is property of public dominion and therefore,
beyond the commerce of man.17
Upon denial of the Motion to Dismiss dated December 27, 2006, 18 the
Implicated Officers and Land Bank filed their respective Answers.
For its part, Land Bank claimed that it is not privy to the Implicated Officers’
acts of destroying the Agoo Plaza. It further asserted that Cacayuran did not
have a cause of action against it since he was not privy to any of the Subject
Loans.19
During the pendency of the proceedings, the construction of the commercial
center was completed and the said structure later became known as the
Agoo’s People Center (APC).
On May 8, 2007, the SB passed Municipal Ordinance No. 02-2007, 20 declaring
the area where the APC stood as patrimonial property of the Municipality.
The Ruling of the RTC
In its Decision dated April 10, 2007,21 the RTC ruled in favor of Cacayuran,
declaring the nullity of the Subject Loans.22 It found that the resolutions
approving the said loans were passed in a highly irregular manner and thus,
ultra vires; as such, the Municipality is not bound by the same. 23 Moreover, it
found that the Plaza Lot is proscribed from collateralization given its nature as
property for public use.24
Aggrieved, Land Bank filed its Notice of Appeal on April 23, 2007. 25 On the
other hand, the Implicated Officers’ appeal was deemed abandoned and
dismissed for their failure to file an appellants’ brief despite due notice. 26 In this
regard, only Land Bank’s appeal was given due course by the CA.
Ruling of the CA
In its Decision dated March 26, 2010,27 the CA affirmed with modification the
RTC’s ruling, excluding Vice Mayor Eslao from any personal liability arising
from the Subject Loans.28
It held, among others, that: (1) Cacayuran had locus standi to file his
complaint, considering that (a) he was born, raised and a bona fide resident of
the Municipality; and (b) the issue at hand involved public interest of
transcendental importance;29 (2) Resolution Nos. 68-2005, 139-2005, 58-
2006, 128-2006 and all other related resolutions (Subject Resolutions) were
invalidly passed due to the SB’s non-compliance with certain sections of
Republic Act No. 7160, otherwise known as the "Local Government Code of
1991" (LGC); (3) the Plaza Lot, which served as collateral for the Subject
Loans, is property of public dominion and thus, cannot be appropriated either
by the State or by private persons;30 and (4) the Subject Loans are ultra vires
because they were transacted without proper authority and their
collateralization constituted improper disbursement of public funds.
Dissatisfied, Land Bank filed the instant petition.
Issues Before the Court
The following issues have been raised for the Court’s resolution: (1) whether
Cacayuran has standing to sue; (2) whether the Subject Resolutions were
validly passed; and (3) whether the Subject Loans are ultra vires.
 The Court’s Ruling
The petition lacks merit.
A. Cacayuran’s standing to sue
Land Bank claims that Cacayuran did not have any standing to contest the
construction of the APC as it was funded through the proceeds coming from
the Subject Loans and not from public funds. Besides, Cacayuran was not
even a party to any of the Subject Loans and is thus, precluded from
questioning the same.
The argument is untenable.
It is hornbook principle that a taxpayer is allowed to sue where there is a claim
that public funds are illegally disbursed, or that public money is being deflected to
any improper purpose, or that there is wastage of public funds through the
enforcement of an invalid or unconstitutional law. A person suing as a taxpayer,
however, must show that the act complained of directly involves the illegal
disbursement of public funds derived from taxation. In other words, for a
taxpayer’s suit to prosper, two requisites must be met namely, (1) public funds
derived from taxation are disbursed by a political subdivision or instrumentality
and in doing so, a law is violated or some irregularity is committed; and (2) the
petitioner is directly affected by the alleged act.31Records reveal that the
foregoing requisites are present in the instant case.First, although the
construction of the APC would be primarily sourced from the proceeds of the
Subject Loans, which Land Bank insists are not taxpayer’s money, there is no
denying that public funds derived from taxation are bound to be expended as the
Municipality assigned a portion of its IRA as a security for the foregoing loans.
Needless to state, the Municipality’s IRA, which serves as the local government
unit’s just share in the national taxes,32 is in the nature of public funds derived
from taxation. The Court believes, however, that although these funds may be
posted as a security, its collateralization should only be deemed effective during
the incumbency of the public officers who approved the same, else those who
succeed them be effectively deprived of its use.
In any event, it is observed that the proceeds from the Subject Loans had
already been converted into public funds by the Municipality’s receipt thereof.
Funds coming from private sources become impressed with the
characteristics of public funds when they are under official custody. 33
Accordingly, the first requisite has been clearly met.
Second, as a resident-taxpayer of the Municipality, Cacayuran is directly
affected by the conversion of the Agoo Plaza which was funded by the
proceeds of the Subject Loans. It is well-settled that public plazas are
properties for public use34 and therefore, belongs to the public dominion.35 As
such, it can be used by anybody and no one can exercise over it the rights of
a private owner.36 In this light, Cacayuran had a direct interest in ensuring that
the Agoo Plaza would not be exploited for commercial purposes through the
APC’s construction. Moreover, Cacayuran need not be privy to the Subject
Loans in order to proffer his objections thereto. In Mamba v. Lara, it has been
held that a taxpayer need not be a party to the contract to challenge its
validity; as long as taxes are involved, people have a right to question
contracts entered into by the government.37
Therefore, as the above-stated requisites obtain in this case, Cacayuran has
standing to file the instant suit.
B. Validity of the Subject Resolutions
Land Bank avers that the Subject Resolutions provided ample authority for
Mayor Eriguel to contract the Subject Loans. It posits that Section 444(b)(1)
(vi) of the LGC merely requires that the municipal mayor be authorized by the
SB concerned and that such authorization need not be embodied in an
ordinance.38
A careful perusal of Section 444(b)(1)(vi) of the LGC shows that while the
authorization of the municipal mayor need not be in the form of an ordinance,
the obligation which the said local executive is authorized to enter into must
be made pursuant to a law or ordinance, viz:
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:
(vi) Upon authorization by the sangguniang bayan, represent the municipality
in all its business transactions and sign on its behalf all bonds, contracts, and
obligations, and such other documents made pursuant to law or ordinance;
(Emphasis and underscoring supplied)
In the present case, while Mayor Eriguel’s authorization to contract the
Subject Loans was not contained – as it need not be contained – in the form
of an ordinance, the said loans and even the Redevelopment Plan itself were
not approved pursuant to any law or ordinance but through mere resolutions.
The distinction between ordinances and resolutions is well-perceived. While
ordinances are laws and possess a general and permanent character,
resolutions are merely declarations of the sentiment or opinion of a lawmaking
body on a specific matter and are temporary in nature. 39 As opposed to
ordinances, "no rights can be conferred by and be inferred from a
resolution."40 In this accord, it cannot be denied that the SB violated Section
444(b)(1)(vi) of the LGC altogether.
Noticeably, the passage of the Subject Resolutions was also tainted with other
irregularities, such as (1) the SB’s failure to submit the Subject Resolutions to
the Sangguniang Panlalawigan of La Union for its review contrary to Section
56 of the LGC;41 and (2) the lack of publication and posting in contravention of
Section 59 of the LGC.42
In fine, Land Bank cannot rely on the Subject Resolutions as basis to validate
the Subject Loans.
C. Ultra vires nature of the Subject
LoansNeither can Land Bank claim that the Subject Loans do not constitute
ultra vires acts of the officers who approved the same.Generally, an ultra vires
act is one committed outside the object for which a corporation is created as
defined by the law of its organization and therefore beyond the powers
conferred upon it by law.43 There are two (2) types of ultra vires acts. As held
in Middletown Policemen's Benevolent Association v. Township of
Middletown:44
There is a distinction between an act utterly beyond the jurisdiction of a
municipal corporation and the irregular exercise of a basic power under the
legislative grant in matters not in themselves jurisdictional. The former are
ultra vires in the primary sense and void; the latter, ultra vires only in a
secondary sense which does not preclude ratification or the application of the
doctrine of estoppel in the interest of equity and essential justice. (Emphasis
and underscoring supplied)
In other words, an act which is outside of the municipality’s jurisdiction is
considered as a void ultra vires act, while an act attended only by an
irregularity but remains within the municipality’s power is considered as an
ultra vires act subject to ratification and/or validation. To the former belongs
municipal contracts which (a) are entered into beyond the express, implied or
inherent powers of the local government unit; and (b) do not comply with the
substantive requirements of law e.g., when expenditure of public funds is to be
made, there must be an actual appropriation and certificate of availability of
funds; while to the latter belongs those which (a) are entered into by the
improper department, board, officer of agent; and (b)do not comply with the
formal requirements of a written contract e.g., the Statute of Frauds. 45
Applying these principles to the case at bar, it is clear that the Subject Loans
belong to the first class of ultra vires acts deemed as void.
Records disclose that the said loans were executed by the Municipality for the
purpose of funding the conversion of the Agoo Plaza into a commercial center
pursuant to the Redevelopment Plan. However, the conversion of the said
plaza is beyond the Municipality’s jurisdiction considering the property’s nature
as one for public use and thereby, forming part of the public dominion.
Accordingly, it cannot be the object of appropriation either by the State or by
private persons.46 Nor can it be the subject of lease or any other contractual
undertaking.47 In Villanueva v. Castañeda, Jr.,48 citing Espiritu v. Municipal
Council of Pozorrubio,49 the Court pronounced that:
x x x Town plazas are properties of public dominion, to be devoted to public
use and to be made available to the public in general. They are outside the
commerce of man and cannot be disposed of or even leased by the
municipality to private parties.1âwphi1
In this relation, Article 1409(1) of the Civil Code provides that a contract whose
purpose is contrary to law, morals, good customs, public order or public policy
is considered void50 and as such, creates no rights or obligations or any
juridical relations.51 Consequently, given the unlawful purpose behind the
Subject Loans which is to fund the commercialization of the Agoo Plaza
pursuant to the Redevelopment Plan, they are considered as ultra vires in the
primary sense thus, rendering them void and in effect, non-binding on the
Municipality.
At this juncture, it is equally observed that the land on which the Agoo Plaza is
situated cannot be converted into patrimonial property – as the SB tried to
when it passed Municipal Ordinance No. 02-200752 – absent any express
grant by the national government.53 As public land used for public use, the
foregoing lot rightfully belongs to and is subject to the administration and
control of the Republic of the Philippines.54 Hence, without the said grant, the
Municipality has no right to claim it as patrimonial property.
Nevertheless, while the Subject Loans cannot bind the Municipality for being
ultra vires, the officers who authorized the passage of the Subject Resolutions
are personally liable. Case law states that public officials can be held
personally accountable for acts claimed to have been performed in connection
with official duties where they have acted ultra vires, 55 as in this case.
WHEREFORE, the petition is DENIED. Accordingly, the March 26, 2010
Decision of the Court of Appeals in CA-G.R. CV. No. 89732 is hereby
AFFIRMED.