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171. City of General Santos vs.

Commission on Audit
GR No. 199439

PRINCIPLE: Designing and implementing a local government unit’s own


organizational structure and staffing pattern also implies the power to revise and
reorganize. Without such power, local governments will lose the ability to adjust to
the needs of its constituents. Effective and efficient governmental services especially
at the local government level require rational and deliberate changes planned and
executed in good faith from time to time.

FACTS: Gensan passed an Ordinance to entice those employees who were


unproductive due to health reasons to avail of the incentives being offered therein
by way of early retirement package. COA assailed the ordinance and argued that in
order for it to be valid there must be a law authorizing the same and also an early
retirement program should be by virtue of a valid reorganization pursuant to law
validating it. It added that nowhere in Local Govt Code provide a specific power for
LGU to establish an early retirement program.

Petitioner contended and cite Sections 16 and 76 of the Local Government Code as
its authority to reorganize. It argues that these provisions necessarily imply the
authority of petitioner city to provide retirement benefits, separation pay, and other
incentives to those affected by the reorganization.

ISSUE: Can an LGU validly reorganize its structure without a law authorizing the
same

RATIO: Local autonomy also grants local governments the power to streamline and
reorganize. This power is inferred from Section 76 of the Local Government Code on
organizational structure and staffing pattern, and Section 16 otherwise known as the
general welfare clause:

Section 76. Organizational Structure and Staffing Pattern. - Every local government
unit shall design and implement its own organizational structure and staffing pattern
taking into consideration its service requirements and financial capability, subject to
the minimum standards and guidelines prescribed by the Civil Service Commission.

Section 16. General Welfare. - Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which
are essential to the promotion of the general welfare. Within their respective
territorial jurisdictions, local government units shall ensure and support, among
other things, the preservation and enrichment of culture, promote health and safety,
enhance the right of the people to a balanced ecology, encourage and support the
development of appropriate and self-reliant scientific and technological capabilities,
improve public morals, enhance economic prosperity and social justice, promote full
employment among their residents, maintain peace and order, and preserve the
comfort and convenience of their inhabitants.
Section 5, paragraph (a) of the Local Government Code states that "any provision on
a power of a local government unit shall be liberally interpreted in its favor, and in
case of doubt, any question thereon shall be resolved in favor or devolution of
powers x x x."

Section 5, paragraph (c) also provides that "the general welfare provisions in this
Code shall be liberally interpreted to give more powers to local government units in
accelerating economic development and upgrading the quality of life for the people
in the community." These rules of interpretation emphasize the policy of local
autonomy and the devolution of powers to the local government units.

Designing and implementing a local government unit’s own "organizational structure


and staffing pattern" also implies the power to revise and reorganize. Without such
power, local governments will lose the ability to adjust to the needs of its
constituents. Effective and efficient governmental services especially at the local
government level require rational and deliberate changes planned and executed in
good faith from time to time.

In Betoy v. The Board of Directors, NAPOCOR,61 this court explained that a


streamlining of organization for a more efficient system must pass the test of good
faith in order to be valid:

A reorganization involves the reduction of personnel, consolidation of offices, or


abolition thereof by reason of economy or redundancy of functions.62 It could result
in the loss of one's position through removal or abolition of an office. However, for a
reorganization for the purpose of economy or to make the bureaucracy more
efficient to be valid, it must pass the test of good faith; otherwise, it is void ab
initio.63 (Emphasis supplied)

There are indicia of bad faith, none of which are present in this case.

RULING: YES. Designing and implementing a local government unit’s own


"organizational structure and staffing pattern" also implies the power to revise and
reorganize. Without such power, local governments will lose the ability to adjust to
the needs of its constituents.

WHEREFORE, The assailed Commission on Audit decision are AFFIRMED with


MODIFICATION insofar as Section 6 of Ordinance No. 08, series of 2009, as amended
by Ordinance No. 11, series of 2009, is declared as VALID.
SO ORDERED.

172. Betoy vs Board of Directors, National Power Corp


GR Nos. 156556-57

PRINCIPLE: The prohibition against holding dual or multiple offices or employment


under Section 13, Article VII of the Constitution must not, however, be construed as
applying to posts occupied by the Executive officials specified therein without
additional compensation in an ex-officio capacity as provided by law and as required
by the primary functions of said officials' office. The reason is that these posts do not
comprise "any other office" within the contemplation of the constitutional prohibition
but are properly an imposition of additional duties and functions on said officials.

FACTS: Petitioner filed a special civil action for certiorari and supplemental petition
for mandamus, specifically assailing National Power Board Resolutions No. 2002-124
and No. 2002-125, as well as Sections 11, 34, 38, 48, 52 and 63 of Republic Act (R.A.)
No. 9136, otherwise known as the Electric Power Industry Reform Act of
2001 (EPIRA). Also assailed is Rule 33 of the Implementing Rules and Regulations (IRR)
of the EPIRA.

On June 8, 2001, the EPIRA was enacted by Congress with the goal of restructuring
the electric power industry and privatization of the assets of the National Power
Corporation (NPC).

On November 18, 2002, pursuant to Section 63 of the EPIRA and Rule 33 of the IRR,
the NPB passed NPB Resolution No. 2002-124 which, among others, resolved that all
NPC personnel shall be legally terminated on January 31, 2003and shall be entitled
to separation benefits.

As a result of the foregoing NPB Resolutions, petitioner Enrique U. Betoy, together


with thousands of his co-employees from the NPC were terminated.
However, amongst the petitions raised – it is noteworthy that petitioners argued
that Section 11, Section 48 and Section 52 of RA 9136 (EPIRA) for being violative of
Section 13, Article VII of the 1987 Constitution and, therefore, unconstitutional.

ISSUE: Is the designation of secretaries as board of directors of National Power


Corporation valid.

RATIO: The delegation of the said official to the respective Board of Directors were
designation by Congress of additional functions and duties to the officials
concerned, i.e., they were designated as members of the Board of Directors.

Designation connotes an imposition of additional duties, usually by law, upon a


person already in the public service by virtue of an earlier appointment. Designation
does not entail payment of additional benefits or grant upon the person so
designated the right to claim the salary attached to the position. Without an
appointment, a designation does not entitle the officer to receive the salary of the
position. The legal basis of an employee’s right to claim the salary attached thereto is
a duly issued and approved appointment to the position, and not a mere
designation.

Section 13, Article VII of the 1987 Constitution provides:

Sec. 13. The President, Vice-President, the Members of the Cabinet, and their
deputies or assistants shall not, unless otherwise provided in this Constitution, hold
any other office or employment during their tenure. They shall not, during said
tenure, directly or indirectly practice any other profession, participate in any
business, or be financially interested in any contract with, or in any franchise, or
special privilege granted by the Government or any subdivision, agency, or
instrumentality thereof, including government-owned or controlled corporations or
their subsidiaries. They shall strictly avoid conflict of interest in the conduct of their
office.

x x x x.

In Civil Liberties Union v. Executive Secretary,31 this Court explained that the
prohibition contained in Section 13, Article VII of the 1987 Constitution does not
apply to posts occupied by the Executive officials specified therein without additional
compensation in an ex-officio capacity as provided by law and as required by the
primary function of said official's office, to wit:

The prohibition against holding dual or multiple offices or employment under


Section 13, Article VII of the Constitution must not, however, be construed as
applying to posts occupied by the Executive officials specified therein without
additional compensation in an ex-officio capacity as provided by law and as required
by the primary functions of said officials' office. The reason is that these posts do not
comprise "any other office" within the contemplation of the constitutional
prohibition but are properly an imposition of additional duties and functions on said
officials. To characterize these posts otherwise would lead to absurd consequences,
among which are: The President of the Philippines cannot chair the National Security
Council reorganized under Executive Order No. 115 (December 24, 1986). Neither
can the Vice-President, the Executive Secretary, and the Secretaries of National
Defence, Justice, Labor and Employment and Local Government sit in this Council,
which would then have no reason to exist for lack of a chairperson and members.
The respective undersecretaries and assistant secretaries, would also be prohibited.

RULING: YES. The prohibition against holding dual or multiple offices or employment
under Section 13, Article VII of the Constitution must not, however, be construed as
applying to posts occupied by the Executive officials specified therein without
additional compensation in an ex-officio capacity as provided by law and as required
by the primary functions of said officials' office.

WHEREFORE, premises considered and subject to the above disquisitions, the


Petition for Certiorari and the Supplemental Petition for Mandamus are Dismissed
for lack of merit.

SO ORDERED.
173. Imbong vs. Ochoa
GR No. 204819

PRINCIPLE: Local autonomy is not absolute. The national government still has the say
when it comes to national priority programs which the local government is called
upon to implement like the RH Law.

FACTS: Shortly after the President placed his imprimatur on Republic Act (R.A.) No.
10354, otherwise known as the Responsible Parenthood and Reproductive Health
Act of 2012 (RH Law), challengers from various sectors of society came knocking on
the doors of the Court, beckoning it to wield the sword that strikes down
constitutional disobedience. Aware of the profound and lasting impact that its
decision may produce, the Court now faces the controversy, as presented in
fourteen (14) petitions and two (2) petitions-in-intervention.

It is contended that the RH Law, providing for reproductive health measures at the
local government level and the ARMM, infringes upon the powers devolved to LGUs
and the ARMM under the Local Government Code and R.A . No. 9054

The petitioners are one in praying that the entire RH Law be declared
unconstitutional.

ISSUES: Is RH Law unconstitutional in view of Autonomy of Local Government.

RATIO: As for the autonomy of local governments, the petitioners’ claim that the RH
Law infringes upon the powers devolved to local government units (LGUs) under
Section 17 of the Local Government Code. Said Section 17 vested upon the LGUs the
duties and functions pertaining to the delivery of basic services and facilities, as
follows:

SECTION 17. Basic Services and Facilities. –

(a) Local government units shall endeavor to be self-reliant and shall continue
exercising the powers and discharging the duties and functions currently
vested upon them. They shall also discharge the functions and responsibilities
of national agencies and offices devolved to them pursuant to this Code.
Local government units shall likewise exercise such other powers and
discharge such other functions and responsibilities as are necessary,
appropriate, or incidental to efficient and effective provision of the basic
services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, x x x.

While the aforementioned provision charges the LGUs to take on the


functions and responsibilities that have already been devolved upon them
from the national agencies on the aspect of providing for basic services and
facilities in their respective jurisdictions, paragraph (c) of the same provision
provides a categorical exception of cases involving nationally-funded projects,
facilities, programs and services.268 Thus:

(c) Notwithstanding the provisions of subsection (b) hereof, public works and
infrastructure projects and other facilities, programs and services funded by
the National Government under the annual General Appropriations Act,
other special laws, pertinent executive orders, and those wholly or partially
funded from foreign sources, are not covered under this Section, except in
those cases where the local government unit concerned is duly designated as
the implementing agency for such projects, facilities, programs and services.
[Emphases supplied]

The essence of this express reservation of power by the national government is that,
unless an LGU is particularly designated as the implementing agency, it has no power
over a program for which funding has been provided by the national government
under the annual general appropriations act, even if the program involves the
delivery of basic services within the jurisdiction of the LGU.269 A complete
relinquishment of central government powers on the matter of providing basic
facilities and services cannot be implied as the Local Government Code itself weighs
against it.270

In this case, a reading of the RH Law clearly shows that whether it pertains to the
establishment of health care facilities,271 the hiring of skilled health
professionals,272 or the training of barangay health workers,273 it will be the national
government that will provide for the funding of its implementation. Local autonomy
is not absolute. The national government still has the say when it comes to national
priority programs which the local government is called upon to implement like the
RH Law.

Moreover, from the use of the word "endeavor," the LG Us are merely encouraged
to provide these services. There is nothing in the wording of the law which can be
construed as making the availability of these services mandatory for the LGUs. For
said reason, it cannot be said that the RH Law amounts to an undue encroachment
by the national government upon the autonomy enjoyed by the local governments.

RULING: NO, there is nothing in the wording of the law which can be construed as
making the availability of these services mandatory for the LGUs. For said reason, it
cannot be said that the RH Law amounts to an undue encroachment by the national
government upon the autonomy enjoyed by the local governments.

WHEREFORE, the petitions are PARTIALLY GRANTED. Accordingly, the Court declares
R.A. No. 10354 as NOT UNCONSTITUTIONAL
174. Judge Dadole vs. Commission on Audit,

GR no. 125350

PRINCIPLE: In administrative law, supervision means overseeing or the power or


authority of an officer to see that subordinate officers perform their duties. If the
latter fail or neglect to fulfill them, the former may take such action or step as
prescribed by law to make them perform their duties. Control, on the other hand,
means the power of an officer to alter or modify or nullify or set aside what a
subordinate officer ha[s] done in the performance of his duties and to substitute the
judgment of the former for that of the latter.

FACTS: Acting on the DBM's Local Budget Circular No. 55, the Mandaue City Auditor
issued notices of disallowances to RTC and MTC Judges, in excess of the amount
(maximum of P1000 and P700 in provinces and cities and municipalities, respectively)
authorized by said circular. The additional monthly allowances of the judges shall be
reduced to P1000 each. They were also asked to reimbursed the amount they
received in excess of P1000 from the last six months.

ISSUE: Is LBC 55 void for infringing on the local autonomy of Mandaue City by
dictating a uniform amount that a local government unit can disburse as additional
allowances to judges stationed therein

RATIO: We recognize that, although our Constitution[6 guarantees autonomy to


local government units, the exercise of local autonomy remains subject to the power
of control by Congress and the power of supervision by the President. Section 4 of
Article X of the 1987 Philippine Constitution provides that:

Sec. 4. The President of the Philippines shall exercise general supervision over local
governments. x x x

In Pimentel vs. Aguirre, we defined the supervisory power of the President and
distinguished it from the power of control exercised by Congress. Thus:

This provision (Section 4 of Article X of the 1987 Philippine Constitution) has been
interpreted to exclude the power of control. In Mondano v. Silvosa the Court
contrasted the President's power of supervision over local government officials with
that of his power of control over executive officials of the national government. It
was emphasized that the two terms -- supervision and control -- differed in meaning
and extent. The Court distinguished them as follows:

"x x x In administrative law, supervision means overseeing or the power or authority


of an officer to see that subordinate officers perform their duties. If the latter fail or
neglect to fulfill them, the former may take such action or step as prescribed by law
to make them perform their duties. Control, on the other hand, means the power of
an officer to alter or modify or nullify or set aside what a subordinate officer ha[s]
done in the performance of his duties and to substitute the judgment of the former
for that of the latter."

Clearly then, the President can only interfere in the affairs and activities of a local
government unit if he or she finds that the latter has acted contrary to law. This is
the scope of the Presidents supervisory powers over local government units. Hence,
the President or any of his or her alter egos cannot interfere in local affairs as long as
the concerned local government unit acts within the parameters of the law and the
Constitution.

RULING: YES. The President or any of his or her alter egos cannot interfere in local
affairs as long as the concerned local government unit acts within the parameters of
the law and the Constitution.

WHEREFORE, the petition is hereby GRANTED, and the assailed decision and
resolution, dated September 21, 1995 and May 28, 1996, respectively, of the
Commission on Audit are hereby set aside.

188. Municipality of Jimenez vs. Baz


265 SCRA 182

PRINCIPLE: The creation of municipal corporations is essentially a legislative matter.

FACTS: The Municipality of Sinacaban was created by President Elpidio Quirino


through Executive Order No. 258, stated that the mother Municipality of Jimenez
shall have its present territory, minus the portion thereof included in the
Municipality of Sinacaban. The Municipality of Jimenez, while conceding that the
disputed area is part of Sinacaban, nonetheless asserted jurisdiction on the basis of
an agreement it had with the Municipality of Sinacaban. This agreement was
approved by the Provincial Board of Misamis Occidental in its Resolution No. 77,
which fixed the common boundary of Sinacaban and Jimenez.

On March 20, 1990, Jimenez filed a petition for certiorari, prohibition, and
mandamus in the Regional Trial Court of Oroquieta City. The suit was filed against
Sinacaban and other government agencies. Jimenez alleged that, in accordance with
the Pelaez ruling, the power to create municipalities is essentially legislative.
Consequently, Sinacaban, which was created by an executive order, had no legal
personality and no right to assert a territorial claim against Jimenez, of which it
remains part. Jimenez prayed that Sinacaban be enjoined from assuming control and
supervision over the disputed barrios.

ISSUES: Whether the Municipality of Sinacaban is a legal juridical entity, duly created
in accordance with law;
RATIO: The principal basis for the view that Sinacaban was not validly created as a
municipal corporation is the ruling in Pelaez v. Auditor General that the creation of
municipal corporations is essentially a legislative matter. Therefore, the President
was without power to create by executive order the Municipality of Sinacaban.
However, the Supreme Court had since held that where a municipality created as
such by executive order is later impliedly recognized and its acts are accorded legal
validity, its creation can no longer be questioned. In Municipality of San Narciso,
Quezon v. Mendez, Sr., 10 this Court considered the following factors as having
validated the creation of a municipal corporation, which, like the Municipality of
Sinacaban, was created by executive order of the President before the ruling
in Pelaez v. Auditor General: (1) the fact that for nearly 30 years the validity of the
creation of the municipality had never been challenged; (2) the fact that following
the ruling in Pelaez no quo warranto suit was filed to question the validity of the
executive order creating such municipality; and (3) the fact that the municipality was
later classified as a fifth class municipality, organized as part of a municipal circuit
court and considered part of a legislative district in the Constitution apportioning the
seats in the House of Representatives. Above all, it was held that whatever doubt
there might be as to the de jure character of the municipality must be deemed to
have been put to rest by the Local Government Code of 1991 (R.A. No. 7160), §442(d)
of which provides that "municipal districts organized pursuant to presidential
issuances or executive orders and which have their respective sets of elective
officials holding office at the time of the effectivity of this Code shall henceforth be
considered as regular municipalities."

Here, the same factors are present so as to confer on Sinacaban the status of at least
a de facto municipal corporation in the sense that its legal existence has been
recognized and acquiesced publicly and officially.

RULING: YES. Where a municipality created as such by executive order is later


impliedly recognized and its acts are accorded legal validity, its creation can no
longer be questioned.

WHEREFORE, the petition is DENIED and the decision of the Regional Trial Court of
Oroquieta City, Branch 14 is AFFIRMED.

SO ORDERED.