Pub Cor Cases

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Aquino III vs. COMELEC, G.R. No. 189793, April 7,

2010

Post under case digests, Political Law at Tuesday,January 31, 2012Posted by Schizophrenic Mind

Facts: The said case was filed by the petitioners by wayof a Petition for Certiorari and Prohibition under Rule 65

of the Rules of Court. It was addressed to nullify and

declared as unconstitutional, R.A. 9716 entitled An Act

Reapportioning the Composition of the First (1st) and

Second Legislative Districts (2nd) in the province of

Camarines Sur and Thereby Creating a New Legislative

District from such Reapportionment.

Said Act originated from House Bill No. 4264, and it was

enacted by President Macapagal-Arroyo. Effectuating

the act, it has divided the existing four districts, and

apportioned districts shall form additional district where

the new first district shall be composed of 176,383

population count.

Petitioners contend that the reapportionment runs afoulof the explicit constitutional standard with a minimum

population of 250,000 for the creation of a legislative

district under Section 5 (3), Article VI of the 1987

Constitution. It was emphasized as well by the

petitioners that if population is less than that provided by

the Constitution, it must be stricken-down for non-

compliance with the minimum population requirement,

unless otherwise fixed by law.

Respondents have argued that the petitioners are guilty

of two fatal technical effects: first, error in choosing to

assail R.A. 9716 via the Remedy of Certiorari and

Prohibition under Rule 65 of the Rules of Court. And

second, petitioners have no locus standi to question the

constitutionality of R.A. 9716.

Issue: Whether or not Republic Act No. 9716 is

unconstitutional and therefore null and void, or whether

or not a population of 250,000 is an indispensable

constitutional requirement for the creation of a new

legislative district in a province

Held: It was ruled that the said Act is constitutional. The

plain and clear distinction between a city and a province

was explained under the second sentence of Section 5

(3) of the Constitution. It states that a province is entitled

into a representative, with nothing was mentioned about

a population. While in cities, a minimum population o

250,000 must first be satisfied. In 2007, CamSur had a

population of 1,693,821 making the province entitled to

two additional districts from the present of four. Based

on the formulation of Ordinance, other than population

the results of the apportionment were valid. And lastly

other factors were mentioned during the deliberations of

House Bill No. 4264.

MARIANO V. COMELECFacts:

Two petitions are filed assailing certain provisions of RA

7854, An Act Converting The Municipality of M a k a t i

I n t o a H i g h l y U r b a n i z e d C i t y t o

b e k n o w n a s t h e C i t y o f M a k a t i ,

a s u n c o n s t i t u t i o n a l . Section 52 of RA 7854

is said to be unconstitutional for it increased the legislative

district of Makati onlyby special law in violation of Art. VI,

Sec. 5(4) requiring a general reapportionment law to be passed

by Congresswithin 3 years following the return of every

census. Also, the addition of another legislative district in

Makati isnot in accord with Sec. 5(3), Art. VI of the

Constitution for as of the 1990 census, the population of

Makatistands45 0

, 0

0 .

Issue:

W h e t h e r o r n o t t h e a d d i t i o n o f

a n o t h e r l e g i s l a t i v e d i s t r i c t i n

M a k a t i i s u n c o n s t i t u t i o n a l

Held:

Reapportionment of legislative districts may be made through

a special law, such as in the charter of anew city. The

Constitution clearly provides that Congress shall be composed

of not more than 250 members,unless otherwise fixed by law.
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As thus worded, the Constitution did not preclude Congress

from increasing itsmembership by passing a law, other

than a general reapportionment law. This is exactly

what was do ne by Congress in enacting RA 7854 and

providing for an increase in Makatis legislative district.

Moreover, to holdthat reapportionment can only be made

through a general apportionment law, with a review of all the

legislativedistricts allotted to each local government unitnationwide, would create an inequitable situation where a

newcity or province created by Congress will be denied

legislative representation for an indeterminate period of time.

The intolerable situations will deprive the people of a new city

or province a particle of their sovereignty.Petitioner cannot

insist that the addition of another legislative district in Makati

is not in accord with Sec.5(3), Art. VI of the Constitution for

as of the 1990 census, the population of Makati stands at only

450,000. Saidsection provides that a city with a population of

at least 250,000 shall have at least one representative.

Evengranting that the population of Makati as of the 1990

census stood at 450,000, its legislative district may still

beincreased since it has met the minimum population

requirement of 250,000.

Pelaez vs AuditorGeneralON DECEMBER 18, 2011

Political LawSufficient Standard Test and Completeness Test

From Sept 04 to Oct 29, 1964, the President (Marcos) issued

executive orders creating 33 municipalities this is purportedlyin pursuant to Sec 68 of the Revised Administrative Code

which provides that the President of the Philippines may by

executive order define the boundary, or boundaries, of any

province, sub-province, municipality, [township] municipal

district or other political subdivision, and increase or diminish

the territory comprised therein, may divide any province into

one or more subprovincesThe VP Emmanuel Pelaez and a

taxpayer filed a special civil action to prohibit the auditor

general from disbursing funds to be appropriated for the said

municipalities. Pelaez claims that the EOs are unconstitutional.

He said that Sec 68 of the RAC has been impliedly repealed by

Sec 3 of RA 2370 which provides that barrios may not be

created or their boundaries altered nor their names changed

except by Act of Congress or of the corresponding provincial

board upon petition of a majority of the voters in the areas

affected and the recommendation of the council of the

municipality or municipalities in which the proposed barrio is

situated. Pelaez argues, accordingly: If the President, under

this new law, cannot even create a barrio, can he create a

municipality which is composed of several barrios, since barrios

are units of municipalities? The Auditor General countered

that only barrios are barred from being created by the

President. Municipalities are exempt from the bar and that t a

municipality can be created without creating barrios. Existing

barrios can just be placed into the new municipality. Thistheory overlooks, however, the main import of Pelaez

argument, which is that the statutory denial of the presidentia

authority to create a new barrio implies a negation of the

bigger power to create municipalities, each of which consists o

several barrios.

ISSUE: Whether or not Congress has delegated the power to

create barrios to the President by virtue of Sec 68 of the RAC.

HELD:Although Congress may delegate to another branch o

the government the power to fill in the details in the execution

enforcement or administration of a law, it is essential, to

forestall a violation of the principle of separation of powers,

that said law: (a) be complete in itself it must set forth

therein the policy to be executed, carried out or implemented

by the delegate and (b) fix a standard the limits o

which are sufficiently determinate or determinable to which

the delegate must conform in the performance of his

functions. Indeed, without a statutory declaration of policy

the delegate would, in effect, make or formulate such policy

which is the essence of every law; and, without the

aforementioned standard, there would be no means to

determine, with reasonable certainty, whether the delegate

has acted within or beyond the scope of his authority.

In the case at bar, the power to create municipalities is

eminently legislative in character not administrative.

Solicitor General v Metro Manila Authority

Cruz, 1991

FACTS:


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In Metropolitan Traffic Command, West Traffic District

vs. Hon. Arsenio M. Gonong, the SC ruled that (1) theconfiscation of the license plates of motor vehicles fortraffic violations was not among the sanctions that couldbe imposed by the Metro Manila Commission under PD1605; and, that (2) even the confiscation of driver's

licenses for traffic violations was not directly prescribedby the decree nor was it allowed by the decree to beimposed by the Commission.

Several complaints were filed in the SC against the

confiscation by police authorities of driver's licenses andremoval of license plates for alleged traffic violations.These sanctions were not among those that may beimposed under PD 1605.

The Metropolitan Manila Authority issued Ordinance No.

11, Series of 1991, authorizing itself "to detach the

license plate/tow and impound attended/ unattended/abandoned motor vehicles illegally parked or obstructingthe flow of traffic in Metro Manila." o The MetropolitanManila Authority defended the said ordinance on theground that it was adopted pursuant to the powersconferred upon it by EO 392. There was no conflictbetween the decision and the ordinance because thelatter was meant to supplement and not supplant thelatter. o The Solicitor General expressed the view thatthe ordinance was null and void because it representedan invalid exercise of a delegated legislative power. Itviolated PD 1605 which does not permit, and so

impliedly prohibits, the removal of license plates and theconfiscation of driver's licenses for traffic violations inMetropolitan Manila.

ISSUE & HELD: WON Ordinance No. 11 is valid (NO)

RATIO:

The problem before the Court is not the validity of the

delegation of legislative power. The question the SCmust resolve is the validity of the exercise of suchdelegated power. o A municipal ordinance, to be valid: 1)must not contravene the Constitution or any statute; 2)must not be unfair or oppressive; 3) must not be partialor discriminatory; 4) must not prohibit but may regulatetrade; 5) must not be unreasonable; and 6) must begeneral and consistent with public policy.

TATEL VS. MUNICIPALITY OF VIRAC [207 SCRA 157;G.R. No. 40243; 11 Mar 1992]

Friday, January 30, 2009 Posted by Coffeeholic Writes

Labels: Case Digests, Political Law

Facts: Petitioner Celestino Tatel owns a warehouse inbarrio Sta. Elena, Municipality of Virac. Complaints werereceived by the municipality concerning the disturbancecaused by the operation of the abaca bailing machineinside petitioners warehouse. A committee was then

appointed by the municipal council, and it noted from itsinvestigation on the matter that an accidental fire within

the warehouse of the petitioner created a danger to thelives and properties of the people in the neighborhoodResolution No. 29 was then passed by the Municipacouncil declaring said warehouse as a public nuisancewithin a purview of Article 694 of the New Civil CodeAccording to respondent municipal officials, petitioners

warehouse was constructed in violation of OrdinanceNo. 13, series of 1952, prohibiting the construction owarehouses near a block of houses either in thepoblacion or barrios without maintaining the necessarydistance of 200 meters from said block of houses toavoid loss of lives and properties by accidental fire. On

the other hand, petitioner contends that Ordinance No13 is unconstitutional.

Issues:

(1) Whether or not petitioners warehouse is a nuisancewithin the meaning Article 694 of the Civil Code

(2) Whether or not Ordinance No. 13, series of 1952 ofthe Municipality of Virac is unconstitutional and void.


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Held: The storage of abaca and copra in petitioners

warehouse is a nuisance under the provisions of Article694 of the Civil Code. At the same time, Ordinance No.13 was passed by the Municipal Council of Virac in theexercise of its police power. It is valid because it meetsthe criteria for a valid municipal ordinance: 1) must not

contravene the Constitution or any statute, 2) must notbe unfair or oppressive, 3) must not be partial ordiscriminatory, 4) must not prohibit but may regulatetrade, 5) must be general and consistent with publicpolicy, and 6) must not be unreasonable. The purpose ofthe said ordinance is to avoid the loss of property andlife in case of fire which is one of the primordialobligation of government. The lower court did not err inits decision.

MAGTAJAS v. PRYCE PROPERTIESG.R. No. 111097July 20, 1994FACTS:Mayor Pablo Magtajas and the city legislatorsdenounced the establishment of PAGCOR withintheir city through an ordinance prohibiting theissuance of bus inesspermit and cancel l inge x i s t i n g b u s i n e s s p e r m i t t o a n yes ta bl is hm en t f or us in g an d allowing to be usedin its premises or portion thereof for the operation ofcasinos. Also,an ordinance was passed prohibiting theoperation of casinos and providing penalty foritsviolation. PAGCOR is a corporation createddirectly by P.D. 1869 to help centralizea n d

r e g u l a t e a l l g a m e s o f c h a n c e ,i n c l u d i n g c a s i n o s o n l a n d a n d s e awith in theter r i tor ia l jur isd ic t ion of thePhilippines and is the third highest revenue-earner in thegovernment.I S S U E : W h e t h e r o r n o tt h e o r d i n a n c e s a r e v a l i da s e n a c t e d b y t h e SangguniangPanlungsod of Cagayan de OroCityH E L D : N O.Petition is denied and the decision of the Court ofAppeals is affirmed. TEST OF A VALID ORDINANCE:

Must not contravene the Constitution or any statuteMust not be unfair or oppressiveMust not be partial or discriminatoryMust not prohibit but may regulate tradeMust not be unreasonableMust be general and consistent with public policy T hea p p a r e n t f l a w i n t h e o r d i n a n c e s i n

q u e s t i o n i s t h a t t h e y c o n t r a v e n e P . D . 1 8 6 9and the public policy embodied therein insofaras they prevent PAGCOR fromexercising the poweconferred on it to operate a casino in Cagayan de OroCity.Although LGC is permissible to modify P.D. 1869there is no sufficient indicationof an implied repeal by thefo rmer .LGUs may prevent and suppress a l l

k i n d s o f g a m b l i n g w i t h i n t h e i rterritoriesexcept only those allowed by statutes likeP.D. 1869. This decree has the statutes of a statute thacannot be amended or nullified bya mere ordinance.

PD 1605 does not allow either the removal of license

plates or the confiscation of driver's licenses for trafficviolations committed in Metropolitan Manila. There isnothing in the decree authorizing the Metropolitan ManilaCommission, now the Metropolitan Manila Authority, toimpose such sanctions.

Local political subdivisions are able to legislate only byvirtue of a valid delegation of legislative power from thenational legislature (except only that the power to createtheir own sources of revenue and to levy taxes isconferred by the Constitution itself). They are mereagents vested with what is called the power ofsubordinate legislation. As delegates of the Congressthe local government unit cannot contravene but musobey at all times the will of their principal. Here, theenactments in question, which are merely local in origincannot prevail against the decree, which has the force

and effect of a statute.The measures in question do not merely add to therequirement of PD 1605 but, worse, impose sanctionsthe decree does not allow and in fact actually prohibits.

There is no statutory authority for and indeed there isa statutory prohibition against the imposition of suchpenalties in the Metropolitan Manila area. Henceregardless of their merits, they cannot be imposed by thechallenged enactments by virtue only of the delegatedlegislative powers.

NOTE: SC emphasized that the ruling in the Gonongcase that PD 1605 applies only to the MetropolitanManila area. It is an exception to the general authorityconferred by RA 413 on the Commissioner of LandTransportation to punish violations of traffic ruleselsewhere in the country with the sanction thereinprescribed, including those here questioned.

Tayaban vs People


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ON JUNE 23, 2011

Municipal Corporation Police Power of LGUs

In 1988, Tayaban was the mayor of Tinoc, Ifugao. He

intimated a project proposal with the Governor for a

public market to be erected. The same was approved

and it was funded by the Cordillera Executive Board.

The project bidding was subsequently won by Lopez

Pugong. Pugong began erecting the market but in 1989,

Tayaban and Tinocs councilors enforced a resolution to

demolish the structure being built on the ground that the

structure is not being erected in the proper area as

specified by Tayaban and that the structure is a public

nuisance and by virtue of police power to protect general

welfare.

Tayaban and some councilors then went to the site and

demolished the structure. Pugong sued Tayaban et al for

violation of Section 3 (e) of Republic Act No. 3019 (Anti

Graft Act). Pugong also averred that the resolution

reviewing the said local public development project

(market) that the council passed in 1989 was not posted

in a conspicuous place as required by Sections 56 and

59(a) of the 1991 LGC (R.A. No. 7160). Tayaban lost

and he appealed contending that he demolished the

structure by virtue of PD 1096 (National BuildingCode) and LOI 19 (removal of illegal structures).

ISSUE: Whether or not Tayabans demolition of the

structure is a valid exercise of police power by a LGU

officer.

HELD: No. The SC is not impressed with Tayabans

contention that the subject demolition is a valid exercise

of police power. The exercise of police power by the

local government is valid unless it contravenes thefundamental law of the land, or an act of the legislature,

or unless it is against public policy, or is unreasonable,

oppressive, partial, discriminating, or in derogation of a

common right. In the present case, the acts of Tayaban

have been established as a violation of law, particularly

of the provisions of Section 3(e) of R.A. No. 3019.

On the other hand though, as held by the OSG, Sec 56

and 59 of the LGC of 1991 is not applicable as said law

was not yet passed in 1989 hence there was no need for

Tayaban to post the 89 resolution in a conspicuous

place. Also, Tayabans defense that he acted by virtue of

LOI 19 and PD 1096 is a mere afterthought, nowhere in

the resolution was it said that they are going to demolish

because of these two laws but rather only on the ground

that the market being built is in the wrong place. Further

Tayaban actually never specified as to where he

intended the market to be built.

Posted inDigest: PubCor,Lawschool Taggeddigest,law school,pubcorLeave a comment

Parayno vs JovellanosG.R. No. 148408

Subject: Public Corporation

Doctrine: Police power

Facts:Petitioner was the owner of a gasoline filling station inCalasiao, Pangasinan. In 1989, some residents ofCalasiao petitioned the Sangguniang Bayan (SB) of saidmunicipality for the closure or transfer of the station toanother location. The matter was referred to theMunicipal Engineer, Chief of Police, Municipal HealthOfficer and the Bureau of Fire Protection forinvestigation. Upon their advise, the Sangguniang Bayanrecommended to the Mayor the closure or transfer oflocation of petitioners gasoline station. In Resolution No

50, it declared that the existing gasoline station is ablatant violation and disregard of existing law.According to the Resolution, 1) the gasoline fil ling stationis in violation of The Official Zoning Code of Calasiao,Art. 6, Section 44, the nearest school building which isSan Miguel Elementary School and church, thedistances are less than 100 meters. (No neighbors werecalled as witnesses when actual measurements weredone by HLURB Staff, Baguio City dated 22 June 1989);2) it remains in thickly populated area withcommercial/residential buildings, houses closed (sic) toeach other which still endangers the lives and safety ofthe people in case of fire; 3) residents of our barangay

always complain of the irritating smell of gasoline mostof the time especially during gas filling which tend toexpose residents to illness, and 4) It hampers the flow oftraffic.Petitioner moved for the reconsideration of the resolutionbut was denied by the SB. Hence she filed a case beforethe RTC claiming that the gasoline filling station was notcovered under Sec 44 of the mentioned law but is underSec 21. Case was denied by the court and by the CA.Hence this appeal.
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ISSUE: Whether or not the closure/transfer of hergasoline filling station by respondent municipality was aninvalid exercise of the latters police powers

HELD:The respondent is barred from denying their previousclaim that the gasoline filling station is not under Sec 44.The Counsel in fact admitted that : That the business ofthe petitioner [was] one of a gasoline filling station asdefined in Article III, Section 21 of the zoning code andnot as a service station as differently defined underArticle 42 of the said official zoning code;The foregoing were judicial admissions which wereconclusive on the municipality, the party making them.hence, because of the distinct and definite meaningsalluded to the two terms by the zoning ordinance,respondents could not insist that gasoline servicestation under Section 44 necessarily included gasolinefilling station under Section 21. Indeed, the activitiesundertaken in a gas service station did not

automatically embrace those in a gas filling station. As for the main issue, the court held that the respondentmunicipality invalidly used its police powers in orderingthe closure/transfer of petitioners gasoline station. Whileit had, under RA 7160, the power to take actions andenact measures to promote the health and generalwelfare of its constituents, it should have given duedeference to the law and the rights of petitioner.A local government is considered to have properlyexercised its police powers only when the followingrequisites are met: (1) the interests of the publicgenerally, as distinguished from those of a particularclass, require the interference of the State and (2) the

means employed are reasonably necessary for theattainment of the object sought to be accomplished andnot unduly oppressive. The first requirement refers to theequal protection clause and the second, to the dueprocess clause of the Constitution.Respondent municipality failed to comply with the dueprocess clause when it passed Resolution No. 50. Whileit maintained that the gasoline filling station of petitionerwas less than 100 meters from the nearest public schooland church, the records do not show that it evenattempted to measure the distance, notwithstanding thatsuch distance was crucial in determining whether therewas an actual violation of Section 44. The different localoffices that respondent municipality tapped to conductan investigation never conducted such measurementeither.Moreover, petitioners business could not be considereda nuisance which respondent municipality couldsummarily abate in the guise of exercising its policepowers. The abatement of a nuisance without judicialproceedings is possible only if it is a nuisance per se. Agas station is not a nuisance per se or one affecting theimmediate safety of persons and property, hence, itcannot be closed down or transferred summarily toanother location.On the alleged hazardous effects of the gasoline station

to the lives and properties of the people of Calasiao, weagain note: Hence, the Board is inclined to believe thatthe project being hazardous to life and property is moreperceived than factual. For, after all, even the FireStation Commander.. recommended to build suchbuildings after conform (sic) all the requirements of PP1185. It is further alleged by the complainants that the

proposed location is in the heart of the thickly populatedresidential area of Calasiao. Again, findings of the[HLURB] staff negate the allegations as the same iswithin a designated Business/Commercial Zone per theZoning Ordinance.WHEREFORE, the petition is hereby GRANTED. Theassailed resolution of the Court of the Appeals isREVERSED and SET ASIDE. Respondent Municipalityof Calasiao is hereby directed to cease and desist fromenforcing Resolution No. 50 against petitioner insofar asit seeks to close down or transfer her gasoline station toanother location.

[G.R. No. 150763. July 2, 2004]

RURAL BANK OF MAKATI, INC., ESTEBAN S. SILVAand MAGDALENA V. LANDICHO,petitioners, vs.MUNICIPALITY OF MAKATI and ATTY. VICTOR A. L.VALERO, respondents.

D E C I S I O N

QUISUMBING, J.:

In its decision1 dated July 17, 2001, in CA-G.R. CV No.

58214, the Court of Appeals affirmed the decision2dated October 22, 1996 of the Regional Trial Court ofMakati City, Branch 134, in Civil Case No. 91-2866dismissing petitioners complaint for recovery of a sum ofmoney and damages. Petitioners now assail said CAdecision as well as the Resolution3 dated November 9,2001, which denied their Motion for Reconsideration.

The facts are as follows:


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Sometime in August 1990, Atty. Victor A.L. Valero, thenthe municipal attorney of the Municipality of Makati, uponrequest of the municipal treasurer, went to the RuralBank of Makati to inquire about the banks payments oftaxes and fees to the municipality. He was informed,however, by petitioner Magdalena V. Landicho,corporate secretary of the bank, that the bank was

exempt from paying taxes under Republic Act No. 720,as amended.4

On November 19, 1990, the municipality lodged acomplaint with the Prosecutors Office, chargingpetitioners Esteban S. Silva, president and generalmanager of the bank and Magdalena V. Landicho forviolation of Section 21(a), Chapter II, Article 3 in relationto Sections 105 and 169 of the Metropolitan Tax Code.

On April 5, 1991, an Information docketed as CriminalCase No. 140208, for violation of Municipal OrdinanceNos. 122 and 39 for non-payment of the mayors permit

fee, was filed with the Metropolitan Trial Court (MeTC) ofMakati against petitioners. Another Information,docketed as Criminal Case No. 140209, for non-payment of annual business tax, in violation of MetroManila Commission Ordinance No. 82-03, Section 21(a),Chapter II, Article 3, was likewise filed with the MeTC.

While said cases were pending with the municipal court,respondent municipality ordered the closure of the bank.This prompted petitioners to pay, under protest, themayors permit fee and the annual fixed tax in theamount of P82,408.66.

On October 18, 1991, petitioners filed with the RTC ofMakati a Complaint for Sum of Money and Damages,docketed as Civil Case No. 91-2866. Petitioners allegedthat they were constrained to pay the amount ofP82,408.66 because of the closure order, issued despitethe pendency of Criminal Cases Nos. 140208-09 and thelack of any notice or assessment of the fees to be paid.They averred that the collection of the taxes/fees wasoppressive, arbitrary, unjust and illegal. Additionally,they alleged that respondent Atty. Valero had no powerto enforce laws and ordinances, thus his action inenforcing the collection of the permit fees and businesstaxes was ultra vires. Petitioners claimed that the bank

lost expected earnings in the amount of P19,778.Petitioners then assailed the municipal ordinances ofMakati as invalid for want of the requisite publication.

In its Answer, respondent municipality asserted thatpetitioners payment ofP82,408.66 was for a legalobligation because the payment of the mayors permit

fee as well as the municipal business license wasrequired of all business concerns. According torespondent, said requirement was in furtherance of thepolice power of the municipality to regulate businesses.

For his part, Atty. Valero filed an Answer claiming thatthere was no coercion committed by the municipality,

that payment was a legal obligation of the bank, and thatits claim of exemption had no legal basis. He furtheralleged that petitioners action was clearly intended toharass and humiliate him and as counterclaim, he askedfor moral and other damages.

On October 22, 1996, the RTC decided Civil Case No.91-2866 as follows:

WHEREFORE, in view of all the foregoing, judgment ishereby rendered dismissing the complaint.

On the counterclaim, the plaintiffs are hereby ordered

jointly and severally to pay to defendant Victor Valerothe sum of P200,000.00 as moral damages and theamount of P50,000.00 as attorneys fees.

The counterclaim of defendant Municipality is dismissed.

Cost against the plaintiffs.

SO ORDERED.5

In finding for respondents, the RTC ruled that the bankwas engaged in business as a rural bank. Hence, it

should secure the necessary permit and businesslicense, as well as pay the corresponding charges andfees. It found that the municipality had authority toimpose licenses and permit fees on persons engaging inbusiness, under its police power embodied under thegeneral welfare clause. Also, the RTC declaredunmeritorious petitioners claim for exemption underRep. Act No. 720 since said exemption had beenwithdrawn by Executive Order No. 936 and the RuralBank Act of 1992.7 These statutes no longer exemptedrural banks from paying corporate income taxes andlocal taxes, fees and charges. It also found petitioners


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claim of lack of publication of MMC Ordinance Nos. 82-03 and Municipal Ordinance No. 122 to be mereallegations unsupported by clear and convincingevidence.

In awarding damages to Atty. Valero, the RTC found thathe had been maliciously impleaded as defendant. It

noted that Atty. Valero, as a municipal legal officer, wastasked to enforce municipal ordinances. In short, he wasmerely an agent of the local chief executive and shouldnot be faulted for performing his assigned task.

Petitioners seasonably moved for reconsideration, butthis was denied by the RTC in its Order dated January10, 1997.8

Petitioners appealed to the Court of Appeals in CA-G.R.CV No. 58214. The appellate court sustained the lowercourt in this wise:

WHEREFORE, premises considered, the appealeddecision is hereby AFFIRMED in toto.

SO ORDERED.9

The Court of Appeals found the order of closure of thebank valid and justified since the bank was operatingwithout any permit and without having paid the requisitepermit fee. Thus, declared the Court of Appeals, it is notmerely a matter of enforcement and collection of fees, asthe appellants would have it, but a violation of themunicipalitys authority to regulate the businessesoperating within its territory.10

The appellate court also brushed aside petitioners claimthat the general welfare clause is limited only tolegislative action. It declared that the exercise of policepower by the municipality was mandated by the generalwelfare clause, which authorizes the local governmentunits to enact ordinances, not only to carry into effectand discharge such duties as are conferred upon themby law, but also those for the good of the municipalityand its inhabitants. This mandate includes theregulation of useful occupations and enterprises.

Petitioner moved for reconsideration, but the appellatecourt in its Resolution11 of November 9, 2001 deniedthe same.

Hence, this instant petition alleging that the HonorableCourt of Appeals seriously erred in:

1) .HOLDING THAT THE CLOSURE BY THEAPPELLEE, VICTOR VALERO, OF THEAPPELLANT BANK WAS A LEGITIMATEEXERCISE OF POLICE POWER BY THEMUNICIPALITY OF MAKATI;

2) .NOT CONSIDERING THE FACT THATMAKATI ORDINANCE 122 REQUIRINGMAYORS PERMIT FOR OPERATION OF ANESTABLISHMENT AND MMC ORDINANCENO. 82-03 WERE ADMITTED AS NOTPUBLISHED AS REQUIRED IN TAADA, ETAL., vs. TUVERA, NO. L-63915, DECEMBER

29, 1986 AND THAT NO TAX ASSESSMENTWAS PRESENTED TO THE BANK;

3) .AWARDING MORAL DAMAGES TOAPPELLEE VICTOR VALERO IN THEAMOUNT OF P200,000.00 ANDATTORNEYS FEES IN THE SUM OFP50,000.00;

4) .NOT AWARDING TO THE APPELLANTBANK, THE AMOUNT OF P57,854.00REPRESENTING THE AMOUNT UNJUSTLYAND ILLEGALLY COLLECTED FROM THE

APPELLANT BANK;

5) .NOT AWARDING THE AMOUNT OFP10,413.75 YEARLY REPRESENTING THEUNREALIZED PROFIT WHICH THEAPPELLANT BANK IS BEING DEPRIVED OFIN THE USE OF THE AFORESAID AMOUNTPLUS LEGAL INTEREST ALLOWED INJUDGMENT FROM THE TIME OF THEEXTRAJUDICIAL DEMAND. (DEMANDLETTER, DATED OCTOBER 4, 1991,EXHIBIT O FOR THE APPELLANTS);

6) .NOT GRANTING TO APPELLANTSESTEBAN S. SILVA AND MAGDALENALANDICHO MORAL DAMAGES IN THEAMOUNT OF P15,000.00;


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7) .NOT AWARDING TO APPELLANTS,P1,000,000.00 EXEMPLARY DAMAGES;25% OF THE APPELLANTS CLAIM AS ANDFOR ATTORNEYS FEE AND COSTS OFSUIT.12

Essentially, the following are the relevant issues for our

resolution:

1. Whether or not petitioner bank is liable to paythe business taxes and mayors permit fees imposed byrespondent;

2. Whether or not the closure of petitioner bank isvalid;

3. Whether or not petitioners are entitled to anaward of unrealized profit and damages;

4. Whether or not respondent Atty. Victor Valero isentitled to damages.

On the first issue, petitioner bank claims that of theP82,408.66 it paid under protest, it is actually liable onlyfor the amount of P24,154, representing taxes, fees andcharges due beginning 1987, or after the issuance ofE.O. No. 93. Prior to said year, it was exempt frompaying any taxes, fees, and charges by virtue of Rep.Act No. 720.

We find the banks claim for refund untenable now.

Section 14 of Rep. Act No. 720, as amended byRepublic Act No. 4106,13 approved on July 19, 1964,had exempted rural banks with net assets not exceedingone million pesos (P1,000,000) from the payment of alltaxes, charges and fees. The records show that as ofDecember 29, 1986, petitioner banks net assetsamounted only to P745,432.2914 or below the onemillion ceiling provided for in Section 14 of the old RuralBanking Act. Hence, under Rep. Act No. 720, petitionerbank could claim to be exempt from payment of alltaxes, charges and fees under the aforementionedprovision.

However, on December 17, 1986, Executive Order No.93 was issued by then President Corazon Aquino,withdrawing all tax and duty incentives with certainexceptions. Notably, not included among the exceptionswere those granted to rural banks under Rep. Act No.720. With the passage of said law, petitioner could nolonger claim any exemption from payment of business

taxes and permit fees.

Now, as to the refund of P57,854 claimed by petitionersallegedly because of overpayment of taxes and fees, wenote that petitioners have not adequately substantiatedtheir claim. As found by the Court of Appeals:

As to the computation of the payable fees, the plaintiffs-appellants claim an overpayment and pray for a refund.It is not clearly shown from their argument that suchoverpayment exists. And from their initial complaint,they even asked for the refund of the whole P82,408.66paid, which complaint was instituted in 1991. They

claim having paid the fees and charges due since 1991,which is irrelevant, since the P82,408.66 was paid forthe period before 1991, and thus no deduction can bemade for payments after that period. It is not clearwhere their computation of P57,854.00 owed them camefrom, and lacking solid support, their prayer for a partialrefund must fail. Plaintiffs-appellants have failed to showthat the payment of fees and charges even covered theperiod before their exemption was withdrawn.15

Factual findings of the Court of Appeals, which aresupported on record, are binding and conclusive uponthis Court. As repeatedly held, such findings will not be

disturbed unless they are palpably unsupported by theevidence on record or unless the judgment itself isbased on misapprehension of facts.16 Moreover, in apetition for review, only questions of law are properlyraised. On this score, the refund sought by petitionerscould not be entertained much less granted.

Anent the second issue, petitioner bank claims that theclosure of respondent bank was an improper exercise ofpolice power because a municipal corporation has noinherent but only delegated police power, which must beexercised not by the municipal mayor but by themunicipal council through the enactment of ordinances.

It also assailed the Court of Appeals for invoking theGeneral Welfare Clause embodied in Section 1617 of


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the Local Government Code of 1991, which took effect in1992,18 when the closure of the bank was actually doneon July 31, 1991.

Indeed the Local Government Code of 1991 was not yetin effect when the municipality ordered petitioner banksclosure on July 31, 1991. However, the general welfare

clause invoked by the Court of Appeals is not found onthe provisions of said law alone. Even under the oldLocal Government Code (Batas Pambansa Blg. 337)19which was then in effect, a general welfare clause wasprovided for in Section 7 thereof. Municipal corporationsare agencies of the State for the promotion andmaintenance of local self-government and as such areendowed with police powers in order to effectivelyaccomplish and carry out the declared objects of theircreation.20 The authority of a local government unit toexercise police power under a general welfare clause isnot a recent development. This was already provided foras early as the Administrative Code of 1917.21 Since

then it has been reenacted and implemented by newstatutes on the matter. Thus, the closure of the bankwas a valid exercise of police power pursuant to thegeneral welfare clause contained in and restated by B.P.Blg. 337, which was then the law governing localgovernment units. No reversible error arises in thisinstance insofar as the validity of respondentmunicipalitys exercise of police power for the generalwelfare is concerned.

The general welfare clause has two branches. The first,known as the general legislative power, authorizes themunicipal council to enact ordinances and make

regulations not repugnant to law, as may be necessaryto carry into effect and discharge the powers and dutiesconferred upon the municipal council by law. Thesecond, known as thepolice power proper, authorizesthe municipality to enact ordinances as may be

necessary and proper for the health and safety,prosperity, morals, peace, good order, comfort, andconvenience of the municipality and its inhabitants, andfor the protection of their property.22

In the present case, the ordinances imposing licensesand requiring permits for any business establishment, for

purposes of regulation enacted by the municipal councilof Makati, fall within the purview of the first branch of thegeneral welfare clause. Moreover, the ordinance of themunicipality imposing the annual business tax is part ofthe power of taxation vested upon local governments asprovided for under Section 8 of B.P. Blg. 337,23 to wit:

Sec. 8. Authority to Create Sources of Revenue. (1)Each local government unit shall have the power tocreate its own sources of revenue and to levy taxes,subject to such limitations as may be provided by law.

. . .

Implementation of these ordinances is vested in themunicipal mayor, who is the chief executive of themunicipality as provided for under the Local GovernmentCode, to wit:

Sec. 141. Powers and Duties.

(1) The mayor shall be the chief executive of themunicipal government and shall exercise such powers,duties and functions as provided in this Code and otherlaws.

(2) He shall:

. . .

(k) Grant licenses and permits in accordance withexisting laws or municipal ordinances and revoke themfor violation of the conditions upon which they have beengranted;

. . .

(o) Enforce laws, municipal ordinances and

resolutions and issue necessary orders for their faithfuland proper enforcement and execution;


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(p) Ensure that all taxes and other revenues ofthe municipality are collected, and that municipalfunds are spent in accordance with law, ordinances andregulations;

. . .

(t) Cause to be instituted judicial proceedings inconnection with the violation of ordinances, for thecollection of taxes, fees and charges, and for therecovery of property and funds of the municipality, andotherwise to protect the interest of the municipality; 24(Emphasis supplied)

. . .

Consequently, the municipal mayor, as chief executive,was clothed with authority to create a Special TaskForce headed by respondent Atty. Victor A.L. Valero toenforce and implement said ordinances and resolutions

and to file appropriate charges and prosecuteviolators.25 Respondent Valero could hardly be faultedfor performing his official duties under the citedcircumstances.

Petitioners contend that MMC Ordinance No. 82-03 andMunicipal Ordinance No. 122 are void for lack ofpublication. This again raises a factual issue, which thisCourt may not look into. As repeatedly held, this Courtis not a trier of facts.26 Besides, both the Court ofAppeals and the trial court found lack of sufficientevidence on this point to support petitioners claim, thus:

And finally the matter of the lack of publication is onceagain alleged by the plaintiffs-appellants, claiming thatthe matter was skirted by the trial court. This argumentmust fail, in the light of the trial courts squarely findinglack of evidence to support the allegation of the plaintiffs-appellants. We quote from the trial courts decision:

The contention that MMC Ordinance No. 82-03 andMunicipal Ordinance No. 122 of Makati are void as theywere not publishced (sic) is untenable. The mereallegation of the plaintiff is not sufficient to declare said

ordinances void. The plaintiffs failed to adduce clear,convincing and competent evidence to prove saidOrdinances void. Moreover, in this jurisdiction, anordinance is presumed to be valid unless declaredotherwise by a Court in an appropriate proceeding wherethe validity of the ordinance is directly put in issue.27

On the issue of the closure of the bank, we find that thebank was not engaged in any illegal or immoral activitiesto warrant its outright closure. The appropriate remediesto enforce payment of delinquent taxes or fees areprovided for in Section 62 of the Local Tax Code, to wit:

SEC. 62. Civil Remedies. The civil remedies availableto enforce payment of delinquent taxes shall be bydistraint of personal property, and by legal action. Eitherof these remedies or both simultaneously may bepursued at the discretion of the proper authority.

The payment of other revenues accruing to local

governments shall be enforced by legal action.28

Said Section 62 did not provide for closure. Moreover,the order of closure violated petitioners right to dueprocess, considering that the records show that the bankexercised good faith and presented what it thought wasa valid and legal justification for not paying the requiredtaxes and fees. The violation of a municipal ordinancedoes not empower a municipal mayor to avail ofextrajudicial remedies.29 It should have observed dueprocess before ordering the banks closure.

Finally, on the issue of damages, we agree with both the

trial and the appellate courts that the bank is not entitledto any damages. The award of moral damages cannotbe granted to a corporation, it being an artificial personthat exists only in legal contemplation and cannot,therefore, experience physical suffering and mentalanguish, which can be experienced only by one having anervous system.30 There is also no sufficient basis for


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the award of exemplary damages. There being no moraldamages, exemplary damages could not be awardedalso. As to attorneys fees, aside from lack of adequatesupport and proof on the matter, these fees are notrecoverable as a matter of right but depend on the sounddiscretion of the courts.31

Under the circumstances of this case, the award ofdamages to Atty. Valero is also baseless. We cannotascribe any illegal motive or malice to the bank forimpleading Atty. Valero as an officer of respondentmunicipality. The bank filed the case against respondentmunicipality in the honest belief that it is exempt frompaying taxes and fees. Since Atty. Valero was theofficial charged with the implementation of theordinances of respondent municipality, he was rightlyimpleaded as a necessary party in the case.

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) theorder denying any claim for refunds and fees allegedlyoverpaid by the bank, as well as the denial of any awardfor damages and unrealized profits, is herebySUSTAINED; (2) the order decreeing the closure ofpetitioner bank is SET ASIDE; and (3) the award ofmoral damages and attorneys fees to Atty. Victor A.L.Valero is DELETED. No pronouncement as to costs.

SO ORDERED.

Batangas Power Corporation vs. Batangas City, G.R. No.

152675, April 28, 2004

Facts:-12 hours daily and power

generation was badly needed. Thegovernment, through the National Power

Corporation (NPC), sought to attract investors in power plant operations

byproviding them with incentives, one of which was through the

in the BuildOperate and Transfer (BOT) Agreement.On June 29, 1992,

Enron Power Development Corporation (Enron) and petitioner NPC

entered into a Fast Track BOTProject. Enron agreed to supply a power

station to NPC and transfer its plant to the latter after ten (10) years of

operation.Section 11.02 of the BOT Agreement provided that

NPC shall be responsible for the payment of all taxes that may

beimposed on the power station, except income taxes and permit fees

. Subsequently, Enronassigned its obligationunder the BOT Agreement to petitioner

Batangas Power Corporation (BPC).On September 23, 1992, the BOI issued a certificate of registration to

BPC as a pioneer enterprise entitled to a taxholiday for a period of six

(6) years

. On October 12, 1998, Batangas City sent a letter to BPC demanding

payment of business taxes and penalties, commencing from the year 1994,

BPC refused to pay, citing its tax-exempt status as apioneer enterprise for six

(6) years under Section 133 (g) of the Local Government Code (LGC). The

from BPC only for the years 1998-1999.

BPC still refused to paythe tax. Itinsisted that its 6-year tax holiday commenced from the date of its

commercial operation on July 16,1993

, not from the date of its BOI registration in September 1992.In the

alternative,

BPC asserted that the city should collect the tax from the NPCas the latter assumed responsibilityfor its payment

under their BOT Agreement

. On August 26, 1999, the NPC intervened. While admitting assumption

of

under their BOT Agreement,

NPC refused to payedly constituted anindirect tax

on

NPC which is a tax-exempt corporation under its Charter.BPC filed a petition for declaratory relief12 with the Makati RTC against

Batangas City and NPC. It alleged that under theBOT Agreement,

NPC is responsible for the payment of such taxes but as NPC is exempt

from taxes, both the BPCand NPC are not liable for its payment.Makati RTC dismissed the petition and held that: (1) BPC is liable to pay

business taxes to the city; (2)

was withdrawn with the passage of R.A. No.

7160 (The Local Government Code); and, (3) the 6-year taxholiday granted to pioneer business enterprises starts

on the date of registration with the BOI as provided in Section 133(g) of R.A

No. 7160, and not on the date of its actual business operations.

Issue:

withdrawn by Section 193 of the LocalGovernment Code (LGC).

Held:

Yes.

The effect of the LGC on the tax exemption privileges of the NPC has

already been extensively discussed andsettled in the recent case of

National Power Corporation v. City of Cabanatuan.In said case, this Court recognized

the

removal of the blanket exclusion of government instrumentalities from

local taxation

as

one of themost significant provisions of the 1991 LGC.Specifically, we stressed that

Section 193 of the LGC,an express andgeneral repeal of all statutes granting exemptions from local

taxes,

withdrew the sweeping tax privileges previouslyenjoyed by the NPC

under its Charter.The power to tax is no longer vested exclusively on Congress; local

legislative bodies are now given direct authority tolevy taxes, fees and other

charges pursuant to Article X, section 5 of the 1987 Constitution. The LGC

is considered as themost revolutionary piece of legislation on local


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autonomy, the LGC effectively deals with the fiscal constraints faced

byLGUs. It widens the tax base of LGUs to include taxes which were

prohibited by previous laws.Neither can the NPC successfully rely on the

Basco caseas this was

decided prior to the effectivity of the LGC, whenthere was still no law empowering local government units to tax

instrumentalities of the national government.

Thus, while BPC remains to be the entity doing business in said city,

it is the NPC that is ultimately liableto pay saidtaxes under the provisions of both the 1992 BOT Agreement

and the 1991 Local Government Code.

Other Issue:-year tax holiday commenced on the date of its BOI

registration as a pioneer enterprise oron the date of its actual commercial

operation as certified by the BOI.

Sec. 133 (g) of the LGC, which proscribes local government units (LGUs)

from levying taxes on BOI-certified pioneer enterprises for a period of

six years from the date of r egistrat ion, applies specif ical ly to

taxes imposed by the local government, li ke the business tax

imposed by Batangas City on BPC in the case at bar.

The 6-year tax exemption of BPC should thus commence from the date of

stration with the BOI.

TANO v. SOCRATESFacts:The petitioners filed a petition for certiorari and prohibition

assailing the constitutionality of:(1) Ordinance No. 15-92

entitled:

"

AN ORDINANCE BANNING THE SHIPMENT OF ALL

LIVEFISH AND LOBSTER OUTSIDE PUERTO

PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY

1,1998 AND PROVIDING EXEMPTIONS, PENALTIES AND FOROTHER PURPOSES THEREOF"(2) Of fice Or der No. 23 ,

requiring any person engaged or intending to engage

in any business,trade, occupation, calling or profession or

having in his possession any of the articles for which a permit

isrequired to be had, to obtain first a Mayors and authorizing

and directing to check or conduct necessaryinspections on

cargoes containing live fish and lobster being shipped out

from Puerto Princesa and,( 3 ) R e s o l u t i o n N o . 3 3 ,

O r d i n a n c e N o . 2 e n t i t l e d : " A

R E S O L U T I O N P R O H I B I T I N G

T H E CATCHING, GATHERING, POSSESSING,

BUYING, SELLING AND SHIPMENT OF LIVE

MARINECORAL DWELLING AQUATIC ORGANISMST h ep e t i t i o n e r s c o n t e n d t h a t t h e s a i d O r d i n a n c e s

d e p r i v e d t h e m o f d u e p r o c e s s o f l a w ,

t h e i r livelihood, and unduly restricted them from the

practice of their trade, in violation of Section 2, Article XIIand

Sections 2 and 7 of Article XIII of the 1987 Constitution and

that the Mayor had the absolute authorityto determine whether

or not to issue the permit.They also claim that it took away

their right to earn their livelihood in lawful ways; and insofar

asthe Airline Shippers Association are concerned, they were

unduly prevented from pursuing their vocationand entering

"into contracts which are proper, necessary, and

essential to carry out their businessendeavors to a

successful conclusionPubl ic res pon den ts Go ver nor

Socrates and Members of the Sangguniang

Panlal awig an of Palawan defended the validity of

Ordinance No. 2, Series of 1993, as a valid exercise of the

ProvincialGovernment's power under the general

welfare clause; they likewise maintained that there

was noviolation of the due process and equal protection

clauses of the Constitution.Issue:Whether or not the Ordinances in question are unconstitutional

Held: NORatio:In light then of the principles of decentralization and

devolution enshrined in the LGC and thepowers granted

therein to local government units under Section 16 (the

General Welfare Clause), andunder Sections 149, 447(a) (1)

(vi), 458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably

involve theexercise of police power, the validity of the

questioned Ordinances cannot be doubted.***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 itsefficient

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, amongother 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-reliantscientific and technological capabilities, improve

public morals, enhance economic prosperity and social justice,

promote full employment among their residents, maintain

peace and order, and preserve thecomfort and convenience of

their inhabitants. (emphasis supplied).It is clear to the Court

that both Ordinances have two principal objectives orpurposes: (1) toestablish a "closed season" for the species of

fish or aquatic animals covered therein for a period of

fiveyears; and (2) to protect the coral in the marine waters of

the City of Puerto Princesa and the Province of Palawan from

further destruction due to illegal fishing activities.

It imposes upon the sangguniang bayan, the

sangguniang panlungsod, and the

sangguniangpanlalawigan the duty to enact ordinances to

"[p]rotect the environment and impose appropriate

penaltiesf o r a c t s wh i c h e n d a n g e r t h e

e n v i r o n m e n t s u c h a s d y n a m i t e f i s h i n g a n d

ot he r f or ms o f de st r uc t i ve fishing . . . and such other

activities which result in pollution, acceleration ofeutrophication of rivers andlakes or of ecological imbalance."

The petition is dismissed.

G.R. No. 115044 January 27, 1995

HON. ALFREDO S. LIM, in his capacity as Mayor of Manila, and the

City of Manila,petitioners,vs.

HON. FELIPE G. PACQUING, as Judge, branch 40, Regional Trial

Court of Manilaand ASSOCIATED CORPORATION,respondents.


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Facts:The petition was dismissed by the First Division of this Court on 01

September 1994based on a finding that there was "no abuse of discretion,

muchless lack of or excessof jurisdiction, on the part of respondent

judge [Pacquing]", in issuing the questionedorders. Judge Pacquinghad

earlier issued in Civil Case No. 88-45660, RTC of Manila,Branch40,the

following orders whichwere assailed by theMayor of the City of

Manila,Hon. Alfredo S. Lim:(1) order directing Manila mayor Alfredo S.Lim to issue thepermit/licenseto operateth

e jai-alai in favor of Associated Development Corporation (ADC).(2) order

directing mayor Lim to explain whyhe should not be cited for contempt

for non-compliance withthe order dated 28 March1994.(3)order dated 20

April 1994 reiterating the previous order directing Mayor Lim

toimmediately issue thepermit/licenseto Associated Development

Corporation (ADC).

The order dated 28 march1994 was in turn issued upon motion by ADC for

execution of a final judgment rendered on 9 September 1988 whichordered

th

e Manila Mayor toimmediately issue to ADC thepermit/licenseto

operate the jai-alai in Manila, under Manila Ordinance No.

7065.Subsequently, also in G.R. No. 115044, the Republic of

thePhilippines, throughtheGames and Amusements Board, filed a

"Motion for Intervention; forLeave to File aMotion for reconsideration in

Intervention; and to Refer the case to the CourtEn Banc "and later a

"Motion for Leave to File Supplemental Motion for Reconsideration-in-

Intervention and to Admit Attached Supplemental Motion for

Reconsideration-in-Intervention".

ISSUE:Whether or not the Associated Development Corporationhas

avalid and subsistingfranchise to maintain and operate the jai-alai;

HELD:

No.

Laguna Lake Development Authority vs CADate: December

7, 1995Petitioner: Laguna Lake Development

AuthorityRespondents: CA, Hon. Judge Herculano Tech, Fleet

Development Inc and Carlito ArroyoPonente: Hermosisima

JrFacts: RA 4850 was enacted creating the "Laguna Lake

Development Authority." This agency wassupposed to

accelerate the development and balanced growth of the

Laguna Lake area and thesurrounding provinces, cities and

towns, in the act, within the context of the national and

regional plansand policies for social and economic

development.PD 813 amended certain sections RA 4850

because of the concern for the rapid expansion of Metropolitan

Manila, the suburbs and the lakeshore towns of Laguna de

Bay, combined with current andprospective uses of the lake

for municipal-industrial water supply, irrigation, fisheries, and

the like. To effectively perform the role of the Authority under

RA 4850, the Chief Executive issued EO 927further definedand enlarged the functions and powers of the Authority and

named and enumerated thetowns, cities and provinces

encompassed by the term "Laguna de Bay Region". Also,

pertinent to theissues in this case are the following provisions

of EO 927 which include in particular the sharing of fees:

Sec 2: xxx the Authority shall have exclusive jurisdiction to

issue permit for the use of all surface water for any projects or

activities in or affecting thesaid region including navigation,

construction, and operation of fishpens, fish enclosures, fish

corrals and the like.SEC. 3. Collection of Fees. The Authority

is hereby empowered to collect fees for the use of the lake

water and its tributaries for all beneficial purposesincluding

but not limited to fisheries, recreation, municipal, industrial,

agricultural, navigation, irrigation, and waste disposal

purpose; Provided, that therates of the fees to be collected, and

the sharing with other government agencies and political

subdivisions, if necessary, shall be subject to the approvalof

the President of the Philippines upon recommendation of the

Authority's Board, except fishpen fee, which will be shared in

the following manner: 20percent of the fee shall go to thelakeshore local governments, 5 percent shall go to the Project

Development Fund which shall be administered by aCouncil

and the remaining 75 percent shall constitute the share of

LLDA. However, after the implementation within the three-

year period of the LagunaLake Fishery Zoning and

Management Plan the sharing will be modified as follows: 35

percent of the fishpen fee goes to the lakeshore

local governments, 5 percent goes to the Project Development

Fund and the remaining 60 percent shall be retained by

LLDA; Provided, however, that theshare of LLDA shall form

part of its corporate funds and shall not be remitted to the

National Treasury as an exception to the provisions of

PresidentialDecree No. 1234.

Then came Republic Act No. 7160. The municipalities in the

Laguna Lake Region interpreted theprovisions of this law to

mean that the newly passed law gave municipal governments

the exclusive jurisdiction to issue fishing privileges within

their municipal waters because R.A. 7160 provides:

"Sec. 149. Fishery Rentals; Fees and Charges (a)

Municipalities shall have the exclusive authority to grant

fishery privileges in the municipal waters andimpose rental

fees or charges therefor in accordance with the provisions of

this Section.

Municipal governments thereupon assumed the authority to

issue fishing privileges and fishpenpermits. Big fishpen

operators took advantage of the occasion to establish fishpens

and fishcages to theconsternation of the Authority.Unregulated fishpens and fishcages occupied almost one-third

the entirelake water surface area, increasing the occupation

drastically from 7,000 ha in 1990 to almost 21,000 hain 1995.

The Mayor's permit to construct fishpens and fishcages were

all undertaken in violation of thepolicies adopted by the

Authority on fishpen zoning and the Laguna Lake carrying

capacity. In view of theforegoing circumstances, the Authority

served notice to the general public that:

1. All fishpens, fishcages and other aqua-culture structures in

the Laguna de Bay Region, which were not registered or to

which no application forregistration and/or permit has been

filed with Laguna Lake Development Authority as of March

31, 1993 are hereby declared outrightly as illegal.2. Allfishpens; fishcages and other aqua-culture structures so

declared as illegal shall be subject to demolition which shall

be undertaken by thePresidential Task Force for illegal

Fishpen and Illegal Fishing.3. Owners of fishpens, fishcages

and other aqua-culture structures declared as illegal shall,

without prejudice to demolition of their structures

becriminally charged in accordance with Section 39-A of

Republic Act 4850 as amended by P.D. 813 for violation of

the same laws. Violations of these lawscarries a penalty of

imprisonment of not exceeding 3 years or a fine not exceeding

Five Thousand Pesos or both at the discretion of the court.All

operators of fishpens, fishcages and other aqua-culture


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structures declared as illegal in accordance with the foregoing

Notice shall have one (1)month on or before 27 October 1993

to show cause before the LLDA why their said fishpens,

fishcages and other aqua-culture structures should not

bedemolished/dismantled."

One month, thereafter, the Authority sent notices to the

concerned owners of the illegallyconstructed fishpens,

fishcages and other aqua-culture structures advising them todismantle theirrespective structures within 10 days from

receipt thereof, otherwise, demolition shall be effected. The

fishpen owners filed injunction cases against the LLDA. The

LLDA filed motions to dismiss thecases against it on

jurisdictional grounds. The motions to dismiss were denied.

Meanwhile, TRO/writs of preliminary mandatory injunction

were issued enjoining the LLDA from demolishing the

fishpens andsimilar structures in question. Hence, the present

petition for certiorari, prohibition and injunction. The

CAdismissed the LLDAs consolidated petitions. It ruled that

(A) LLDA is not among those quasi-judicialagencies of

government appealable only to the Court of Appeals; (B) the

LLDA charter does vest LLDA withquasi-judicial functions

insofar as fishpens are concerned; (C) the provisions of the

LLDA charter insofar asfishing privileges in Laguna de Bay

are concerned had been repealed by the Local Government

Code of 1991; (D) in view of the aforesaid repeal, the power

to grant permits devolved to respective localgovernment units

concerned.Issue:Which agency of the Government - the

LLDA or the towns and municipalities comprising the region-

should exercise jurisdiction over the Laguna Lake and its

environs insofar as the issuance of permits forfishery

privileges is concerned?

H e l d : L L D A Ratio: Section 4 (k) of RA 4850,

the provisions of PD 813, and Section 2 of EO 927,specifically provide thatthe LLDA shall have exclusive

jurisdiction to issue permits for the use or all surface water for

any projectsor activities in or affecting the said region,

including navigation, construction, and operation of

fishpens,fish enclosures, fish corrals and the like. On the other

hand, RA 7160 has granted to the municipalities theexclusive

authority to grant fishery privileges in municipal waters. The

Sangguniang Bayan may grantfishery privileges to erect fish

corrals, oyster, mussels or other aquatic beds or bangus fry

area within adefinite zone of the municipal waters. The

provisions of RA7160 do not necessarily repeal the laws

creating the LLDA and granting thelatter water rights

authority over Laguna de Bay and the lake region. The LocalGovernment Code of 1991 does not contain any express

provision which categoricallyexpressly repeal the charter of

the Authority. It has to be conceded that there was no intent on

the part of the legislature to repeal Republic Act No. 4850 and

its amendments. The repeal of laws should be madeclear and

expressed.It has to be conceded that the charter of the LLDA

constitutes a special law. RA 7160 is a generallaw. It is basic

is basic in statutory construction that the enactment of a later

legislation which is a generallaw cannot be construed to have

repealed a special law. It is a well-settled rule in this

jurisdiction that "aspecial statute, provided for a particular

case or class of cases, is not repealed by a subsequent

statute,general in its terms, provisions and application, unless

the intent to repeal or alter is manifest, althoughthe terms of

the general law are broad enough to include the cases

embraced in the special law." Wherethere is a conflict between

a general law and a special statute, the special statute should

prevail since itevinces the legislative intent more clearly that

the general statute. The special law is to be taken as

anexception to the general law in the absence of specialcircumstances forcing a contrary conclusion. This isbecause

implied repeals are not favored and as much as possible, given

to all enactments of thelegislature. A special law cannot be repealed,

amended or altered by a subsequent general law by

mereimplication.Considering the reasons behind the

establishment of the Authority, which are

enviromentalprotection, navigational safety, and sustainable

development, there is every indication that the legislativeintent

is for the Authority to proceed with its mission.We are on all

fours with the manifestation of LLDA that "Laguna de Bay,

like any other single bodyof water has its own unique natural

ecosystem. The 900 km lake surface water, the 8 major

rivertributaries and several other smaller rivers that drain into

the lake, the 2,920 km2 basin or watershedtranscending the

boundaries of Laguna and Rizal provinces, constitute one

integrated delicate naturalecosystem that needs to be protected

with uniform set of policies; if we are to be serious in our aims

of attaining sustainable development. This is an exhaustible natural

resource-a very limited one-whichrequires judicious management

and optimal utilization to ensure renewability and preserve its

ecologicalintegrity and balance. Managing the lake resources

would mean the implementation of a national policygeared

towards the protection, conservation, balanced growth and

sustainable development of the regionwith due regard to the

inter-generational use of its resources by the inhabitants in this

part of the earth. The authors of Republic Act 4850 have

foreseen this need when they passed this LLDA law-thespecial lawdesigned to govern the management of our Laguna

de Bay lake resources. Laguna de Bay thereforecannot be

subjected to fragmented concepts of management policies

where lakeshore local governmentunits exercise exclusive

dominion over specific portions of the lake water. The

implementation of acohesive and integrated lake water

resource management policy, therefore, is necessary to

conserve,protect and sustainably develop Laguna de

Bay." The power of the LGUs to issue fishing privileges was

clearly granted for revenue purposes. This isevident from the

fact that Section 149 of the New Local Government Code

empowering local governmentsto issue fishing permits is

embodied in Chapter 2, Book II, of Republic Act No. 7160under the heading,"Specific Provisions On The Taxing And

Other Revenue Raising Power of LGUs.On the other hand,

the power of the Authority to grant permits for fishpens,

fishcages and otheraqua-culture structures is for the purpose of

effectively regulating and monitoring activities in the

Lagunade Bay region and for lake quality control and

management. 6 It does partake of the nature of policepower

which is the most pervasive, the least limitable and the most

demanding of all State powersincluding the power of taxation.

Accordingly the charter of the Authority which embodies a

valid exerciseof police power should prevail over the Local

Government Code of 1991 on matters affecting Laguna


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deBay. There should be no quarrel over permit fees for

fishpens, fishcages and other aqua-culturestructures in the

Laguna de Bay area. Section 3 of Executive Order No. 927

provides for the proper sharingof fees collected.

In respect to the question as to whether the Authority is a

quasi-judicial agency or not, it is ourholding that, considering

the provisions of Section 4 of Republic Act No. 4850 andSection 4 of ExecutiveOrder No. 927, series of 1983, and the

ruling of this Court in Laguna Lake Development Authority

vs. Courtof Appeals, there is no question that the Authority

has express powers as a regulatory a quasi-judicial bodyin

respect to pollution cases with authority to issue a "cease a

desist order" and on matters affecting theconstruction of

illegal fishpens, fishcages and other aqua-culture structures in

Laguna de Bay. TheAuthority's pretense, however, that it is

co-equal to the Regional Trial Courts such that all actions

against itmay only be instituted before the Court of Appeals

cannot be sustained. On actions necessitating theresolution of

legal questions affecting the powers of the Authority as

provided for in its charter, theRegional Trial Courts have

jurisdiction.In view of the foregoing, this Court holds that

Section 149 of RA 7160, otherwise known as the

LocalGovernment Code of 1991, has not repealed the

provisions of the charter of the LLDA, Republic Act No.4850,

as amended. Thus, the Authority has the exclusive jurisdiction

to issue permits for the enjoyment of fishery privileges in

Laguna de Bay to the exclusion of municipalities situated

therein and the authority toexercise such powers as are by its charter

vested on it.

Binay vs Domingo Date: September 11, 1991 Petitioners:

Jejomar Binay and Municipality of Makati Respondents:

Eufemio Domingo and commission on Audit

Ponente: Paras

Facts: On September 27, 1988, petitioner Municipality,

through its Council, approved Resolution No. 60 (A resolution

to confirm and/or ratify the ongoing burial assistance program

extending P500 to a bereaved family, funds to be taken out of

unappropriated available funds existing in the municipal

treasury.) Metro Manila Commission approved Resolution No.

60. Thereafter, the municipal secretary certified a

disbursement fired of P400,000 for the implementation of the

program. However, COA disapproved Resolution 60 and

disallowed in audit the disbursement of funds. COA denied

the petitioners reconsideration as Resolution 60 has no

connection or relation between the objective sought to be

attained and the alleged public safety, general welfare, etc of

the inhabitant of Makati. Also, the Resolution will only benefit

a few individuals. Public funds should only be used for public

purposes.

Issue:WON Resolution No. 60, re-enacted under Resolution

No. 243, of the Municipality of Makati is a valid exercise of

police power under the general welfare clause\

Held:Yes

Ratio: 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 municipalcorporations). 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. A valid delegation of police power may arise

from express delegation, or be inferred from the mere fact of

the creation of the municipal corporation; and as a general

rule, municipal corporations may exercise police powers

within the fair intent and purpose of their creation which are

reasonably proper to give effect to the powers expressly

granted, and statutes conferring powers on public corporations

have been construed as empowering them to do the things

essential to the enjoyment of life and desirable for the safety

of the people. Municipal governments exercise this powerunder 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." And under Section 7

of BP 337, "every local government unit shall exercise the

powers expressly granted, those necessarily implied

therefrom, as well as powers necessary and proper for

governance such as to promote health and safety, enhance

prosperity, improve morals, and maintain peace and order in

the local government unit, and preserve the comfort and

convenience of the inhabitants therein."

Police power 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 the most essential, insistent,

and illimitable of powers. In a sense it is the greatest and most

powerful attribute of the government.

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


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frame any definition which shall absolutely indicate the limits

of police power.

COA is not attuned to the changing of the times. 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 toprovide adequate social services, the promotion of the general

welfare social justice (Section 10, Ibid) 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.

There is no violation of the equal protection clause in

classifying paupers as subject of legislation. 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 thedisabled, 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.

SALVADOR VILLACORTA vs. GREGORIO

BERNARDOFACTS:Ordinance 22 entitled AN ORDINANCE

REGULATING SUBDIVISION PLANS OVER

PARCELS OF LAND IN T HE CITY OFDAGUPAN

was enacted by the municipal board of Dagupan

City. The said ordinance was imposing additional

requirements to that of thenational law Act 496.

Ordinance 22 was annulled by the Court of First Instance ofPangasinan and was affirmed by the Court of Appeals

whosedecision reads as follows:Sec tion 1 of sa id

ordinance clearly conflicts with Section 44 of Act

496, because the latter law does not require

subdivision plans to besubmitted to the City Engineer

before the same is submitted for approval to and verification

by the General Land Registration Office or by theDirector of

Lands as provided for in Section 58 of said Act. Section 2 of

the same ordinance also contravenes the provisions of Section

44 of Act 496, the latter being silent on a service fee of PO.03

per square meter of every lot subject of such subdivision

application; Section 3 of theordinance in question also

conflicts with Section 44 of Act 496, because the latter law

does not mention of a certification to be made by the

CityEngineer before the Register of Deeds allows registration

of the subdivision plan; and the last section of said ordinance

imposes a penalty for its violation, which Section 44 of Act

496 does not impose. In other words, Ordinance 22 of the City

of Dagupan imposes upon a subdivisionowner additional

conditions.ISSUE: Were the decisions of the CFI and CA to annul the said

ordinance was correct?

HELD:Yes. To sustain the ordinance would be to open the floodgates

to other ordinances amending and so violating national laws in

the guiseof implementing them. Thus, ordinances could be

passed imposing additional requirements for the issuance of

marriage licenses, to preventbigamy; the registration of

vehicles, to minimize carnaping; the execution of contracts, to

forestall fraud; the validation of passports, to deter imposture;

the exercise of freedom of speech, to reduce disorder; and so

on.This advice is especially addressed to the local

governments which exercise the police power only

by vi rtue of a va li d de lega ti on fr om the national

legislature under the general welfare clause. In the instant

case, Ordinance No. 22 suffers from the additional defect of

violating thisauthority for legislation in contravention of the

national law by adding to its requirements.

City Government of QC vs Judge Ericta & Himlayang

Pilipino

ON NOVEMBER 23, 2010

Police PowerNot Validly Exercised

Quezon City enacted an ordinance 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. The law basically provides that at least six

(6) percent of the total area of the memorial park

cemetery 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. QC

justified the law by invoking police power.

ISSUE: Whether or not the ordinance is valid.

HELD: The SC held the law as an invalid exercise of

police power. There is no reasonable relation between


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the setting aside of at least six (6) percent of the total

area of all 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 cemeteryto 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.

VELASCO v. VILLEGASFacts:The petitioners filed a declaratory relief challenging the

constitutionality based on Ordinance No.4964 of the City of

Manila, the contention being that it amounts to a deprivationof property of their meansof livelihood without due process of

law.The assailed ordinance is worded thus: "It shall be

prohibited for any operator of any barber shopto conduct the

business of massaging customers or other persons in any

adjacent room or rooms of saidbarber shop, or in any room or

rooms within the same building where the barber shop is

located as longas the opera

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