LAW ON MUNICIPAL CORPORATION CASE DIGESTS FROM 20122016

Submitted to: Atty. Pablito Sanidad Jr.

Submitted by:
Arzadon, Balantac, Bandao, Banganan, Cawilan, Closa, Colobong, Cuti,
Dally, Dominguez, Gittabao, Huliganga, Langpawan, Nicolas, Sirot, Tan
Manuel-Bahul, Manzano, Evangelio, Ramirez, Maslag, Dunuan, Cammas,
Quintos, Mangiwet, Aswigue, Ngalob, Ngipol, Patacsil, Danasen,
Cayatoc.

CASE DIGESTS ON PUBLIC CORPORATION

Group 1 Members: Arzadon, Balantac, Bandao, Banganan, Cawilan,
Closa, Colobong, Cuti, Dally, Dominguez, Gittabao, Huliganga,
Langpawan, Nicolas, Sirot, Tan
I.
II.

GENERAL PRINCIPLES
THE LOCAL GOVERNMENT CODE OF 1991: SALIENT
FEATURES

G.R. NO. 195770

PIMENTEL V. EXECUTIVE SECRETARY
JULY 17, 2012
Doctrine: An intervention program formulated by the national
government itself but implemented in partnership with the local
government units to achieve the common national goal development and
social progress can by no means be an encroachment upon the autonomy
of local governments.
Facts:
The petioner assets the validity of certain provisions of Republic
Act No. 10147 or the General Appropriations Act (GAA) of 20111
which provides a P21 Billion budget allocation for the Conditional
Cash Transfer Program (CCTP) headed by the Department of Social
Welfare & Development (DSWD). Petitioners seek to enjoin
respondents Executive Secretary Paquito N. Ochoa and DSWD
Secretary Corazon Juliano-Soliman from implementing the said
program on the ground that it amounts to a "recentralization" of
government functions that have already been devolved from the
national government to the local government units.
Petitioners admit that the wisdom of adopting the CCTP as a
poverty reduction strategy for the Philippines is with the
legislature. They take exception, however, to the manner by which
it is being implemented, that is, primarily through a national
agency like DSWD instead of the LGUs to which the responsibility
and functions of delivering social welfare, agriculture and health
care services have been devolved pursuant to Section 17 of
Republic Act No. 7160, also known as the Local Government Code
of 1991, in relation to Section 25, Article II & Section 3, Article X of
the 1987 Constitution.
Petitioners assert that giving the DSWD full control over the
identification of beneficiaries and the manner by which services are
to be delivered or conditionalities are to be complied with, instead
of allocating the P21 Billion CCTP Budget directly to the LGUs that
would have enhanced its delivery of basic services, results in the
"recentralization" of basic government functions, which is contrary
to the precepts of local autonomy and the avowed policy of
decentralization.
Issue: Whether or not the 21 billion budget allocation of Conditional
Cash Transfer violates Article 2, Section 2 of Article 10, section 6 of the

1987 Philippine constitution in relation of section 17 of the Local

Government Code of 1991?
Held:
Petition is dismissed. Under the Philippine concept of local
autonomy, the national government has not completely
relinquished all its powers over local governments, including
autonomous regions. Only administrative powers over local affairs
are delegated to political subdivisions. The purpose of the
delegation is to make governance more directly responsive and
effective at the local levels. In turn, economic, political and social
development at the smaller political units are expected to propel
social and economic growth and development. But to enable the
country to develop as a whole, the programs and policies effected
locally must be integrated and coordinated towards a common
national goal. Thus, policy-setting for the entire country still lies in
the President and Congress.
Every law has in its favor the presumption of constitutionality, and
to justify its nullification, there must be a clear and unequivocal
breach of the Constitution, not a doubtful and argumentative
one.23 Petitioners have failed to discharge the burden of proving
the invalidity of the provisions under the GAA of 2011. The
allocation of a P21 billion budget for an intervention program
formulated by the national government itself but implemented in
partnership with the local government units to achieve the common
national goal development and social progress can by no means be
an encroachment upon the autonomy of local governments.

G.R. NO. 187378

RAMONITO O. ACAAC, PETAL FOUNDATION, INC., APOLINARIO
M. ELORDE, HECTOR ACAAC, AND ROMEO BULAWIN V.
MELQUIADES D. AZCUNA, JR., IN HIS CAPACITY AS MAYOR, AND
MARIETES B. BONALOS, IN HER CAPACITY AS MUNICIPAL
ENGINEER AND BUILDING OFFICIAL-DESIGNATE, BOTH OF
LOPEZ JAENA MUNICIPALITY, MISAMIS OCCIDENTAL
SEPTEMBER 30, 2013
Doctrine: The presumption of validity in favor of an ordinance, its
constitutionality or legality should be upheld in the absence of any
controverting evidence that the procedure prescribed by law was not
observed in its enactment such that those assailing its validity has the
burden of proof to prove so.
FACTS:
PETAL Foundation is a non-governmental organization, which is
engaged in the protection and conservation of ecology, tourism,
and livelihood projects within Misamis Occidental. PETAL built
some cottages on Capayas Island which it rented out to the public

and became the source of livelihood of its beneficiaries, among

whom are petitioners Hector Acaac and Romeo Bulawin.
Respondents Mayor Azcuna and Building Official Bonalos issued
Notices of Illegal Construction against PETAL for its failure to
apply for a building permit prior to the construction of its buildings
in violation of the Building Code ordering it to stop all illegal
building activities on Capayas Island. On July 8, 2002 the
Sangguniang Bayan of Jaena Lopez adopted a Municipal Ordinance
which prohibited, among others: (a) the entry of any entity,
association, corporation or organization inside the sanctuaries; and
(b) the construction of any structures, permanent or temporary, on
the premises, except if authorized by the local government.
On July 12, 2002, Azcuna approved the subject ordinance; hence,
the same was submitted to the Sangguniang Panlalawigan of
Misamis Occidental (SP), which in turn, conducted a joint hearing
on the matter. Thereafter, notices were posted at the designated
areas, including Capayas Island, declaring the premises as
government property and prohibiting ingress and egress thereto.
A Notice of Voluntary Demolition was served upon PETAL directing
it to remove the structures it built on Capayas Island.
Petitioners filed an action praying for the issuance of a TRO,
injunction and damages against respondents alleging that they
have prior vested rights to occupy and utilize Capayas Island.
Moreover, PETAL assailed the validity of the subject ordinance on
the following grounds: (a) it was adopted without public
consultation; (b) it was not published in a newspaper of general
circulation in the province as required by the Local Government
Code (LGC); and (c) it was not approved by the SP. Therefore, its
implementation should be enjoined.
Respondents averred that petitioners have no cause of action
against them since they are not the lawful owners or lessees of
Capayas Island, which was classified as timberland and property
belonging to the public domain.
The RTC declared the ordinance as invalid/void.
On appeal, the CA held that the subject ordinance was deemed
approved upon failure of the SP to declare the same invalid within
30 days after its submission in accordance with Section 56 of the
LGC. Having enacted the subject ordinance within its powers as a
municipality and in accordance with the procedure prescribed by
law, the CA pronounced that the subject ordinance is valid.

ISSUE: Whether or not the subject ordinance is valid and enforceable

against
petitioners.
HELD:
Yes, the decision of the Court of Appeals is sustained.
Presumption of validity:

o Section 56 (d) of the LGC provides: If no action has been

taken by the Sangguniang Panlalawigan within thirty (30)
days after submission of such an ordinance or resolution,
the same shall be presumed consistent with law and
therefore valid.
It is noteworthy that petitioner's own evidence reveals that a
public hearing was conducted prior to the promulgation of the
subject ordinance. Moreover, other than their bare allegations,
petitioners failed to present any evidence to show that no
publication or posting of the subject ordinance was made.
While it is true that he likewise failed to submit any other
evidence thereon, still, in accordance with the presumption of
validity in favor of an ordinance, its constitutionality or legality
should be upheld in the absence of any controverting evidence
that the procedure prescribed by law was not observed in its
enactment. Likewise, petitioners had the burden of proving their
own allegation, which they, however, failed to do.
In the similar case of Figuerres v. CA, 364 Phil. 683(1999) citing
United States v. Cristobal, 34 Phil. 825 (1916), the Court upheld
the presumptive validity of the ordinance therein despite the
lack of controverting evidence on the part of the local
government to show that public hearings were conducted in
light of : (a) the oppositors equal lack of controverting evidence
to demonstrate the local governments non-compliance with the
said public hearing; and (b) the fact that the local governments
non-compliance was a negative allegation essential to the
oppositors cause of action. Hence, as petitioner is the party
asserting it, she has the burden of proof. Since petitioner failed
to rebut the presumption of validity in favor of the subject
ordinances and to discharge the burden of proving that no
public hearings were conducted prior to the enactment thereof,
we are constrained to uphold their constitutionality or legality.

III.
IV.

INTERGOVERNMENTAL RELATIONS
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs

AND

GR. NO. 189041

CIVIL SERVICE COMMISSION VS YU
JULY 31, 2012
Doctrine: Personnel of national agencies or offices shall be absorbed by
the LGUs to which they belong or in whose areas they are assigned to
the extent that it is administratively viable determined by the oversight

committee: Provided, that the rights accorded to such personnel

pursuant to civil service law, rules and regulations shall not be impaired:
Facts:
A devolution program was implemented by the national
government pursuant to R.A. No. 7160 devolving to the local
government units the responsibility for the provision of basic
services and facilities.
Prior to the devolution, the position of Provincial Health Officer II
of the DOH Regional Office No. IX in Zamboanga City was held by
Dr. Fortunato Castillo as well as being the head of the Basilan
Health Hospital and Public Health Services. Dr. Agnes Ouida Yu, on
the other hand is PHO I.
After the devolution, the Governor of Basilan, Governor Gerry
Salapuddin, refused to accept Dr. Castillo as the incumbent PHO II,
so she was retained by DOH until her retirement in 1996. In 1994,
Dr. Yu was appointed by the Governor as PHO II.
In 1998, by virtue of R.A. No. 8543, the Basilan Provincial Hospital
was converted to a tertiary hospital, and the hospital positions
previously devolved to the LGU of Basilan were re-nationalized and
reverted to the DOH. The position of PHO II was reclassified to
Chief of Hospital II.
While Dr. Yu is among the reverted personnel, she was made to
retain her original item of PHO II and the Secretary of DOH
appointed Dr. Domingo Dayrit to the position of CHO II. Dr. Yu filed
a letter of protest before the Civil Service Commission.
The Civil Service Commission issued a resolution granting the
protest, revoking the appointment of Dr. Dayrit and directing the
DOH Secretary to appoint Dr. Yu. On motion for reconsideration,
however, the CSC reversed its resolution, contending that PHO was
never devolved as it was retained by the DOH, that the PHO II
position of Dr. Yu was newly-created and therefore she did not have
a vested right to the CHO II position. The motion for
reconsideration being dismissed, she filed a petition of review to
the CA to which the CA reversed and set aside the resolution of
CSC.
The CSC now files this petition for review on certiorari under Rule
45 of the Rules of Court.
Issue:
Whether or not acceptance of personnel devolved form the agencies is
mandatory.
Whether or not there was abandonment of office when Dr. Castillo failed
to assert her rights.
Held:
Yes. Devolution is an act by which the national government confers
power and authority upon the various local government units to
perform specific functions and responsibilities. Section 17(i) of the
Local Government Code prescribes the manner of devolution, as
follows:

o (i) The devolution contemplated in this Code shall include the

transfer to LGUs of the records, equipment, and other assets
and personnel of the national agencies and offices
corresponding to the devolved powers, functions and
responsibilities.
Personnel of said national agencies or offices shall be absorbed by
the LGUs to which they belong or in whose areas they are assigned
to the extent that it is administratively viable as determined by the
said oversight committee: Provided, that the rights accorded to
such personnel pursuant to civil service law, rules and regulations
shall not be impaired: Provided further, that the regional directors
who are career executive service officers and other officers of
similar rank in the said regional offices who cannot be absorbed by
the LGU shall be retained by the National Government, without any
diminution of rank, salary or tenure.
E.O. No. 503 is the Implementing Rules and Regulations of the said
section. Section 2 thereof states:
o Section 2. Principles and Policies Governing Transfer of
Personnel.
o a. Coverage, Tenure, Compensation and Career Development.
xxx
o 2. The absorption of the National Government Agency
Personnel by the LGU shall be mandatory, in which case, the
LGUs shall create the equivalent positions of the affected
personnel except when it is not administratively viable.
o 3. Absorption is not administratively viable when there is a
duplication of functions unless the LGU opts to absorb the
personnel concerned.
o 4. The national personnel who are not absorbed by the LGUs
under no. 3 above, shall be retained by the NGA concerned,
subject to civil service law, rules and regulations.Xxx
o 12. Except as herein otherwise provided, devolved permanent
personnel shall be automatically reappointed by the LCE
concerned immediately upon their transfer which shall not go
beyond June 30, 1992.
Hence, as stated in E.O. 503, the absorption of Dr. Castillo by the
LGU is mandatory. The Governors refusal, without showing that it
is not administratively viable, is invalid and whimsical.
No. Abandonment of office is the voluntary relinquishment of an
office by the holder with the intention of terminating his possession
and control thereof. In order to constitute abandonment of office, it
must be total and under such circumstance as clearly to indicate
absolute relinquishment. There must be a complete abandonment
of duties of such continuance that the law will infer a
relinquishment. Abandonment of duties is a voluntary act; it
springs form and is accompanied by deliberation and freedom of
choice. The two essential elements of abandonment are: (1) an

intention to abandon; (2) an overt or external act by which the

intention is carried into effect (Canonizado vs Aguirre).
In the case at bar, there is no voluntary abandonment because of
the refusal of the governor to accept the devolved NGA personnel.
The fact that Dr. Castillo did not question the refusal which is
seemingly a lackadaisical attitude towards protecting her rights is
not tantamount to abandonment. This is because, according to the
Supreme Court, the risk of incurring the ire of a powerful
politician effectively tied her hands and it has become quite
understandable that she could not don her gloves and fight even if
she wants to.
In the concurring opinion of Justice Leonardo-De Castro, it was
however contended that there was an abandonment since there
was an acquiescence of the officer in her wrongful removal or
discharge, coupled with her acceptance of he re-absorption by the
DOH.

V.

POWERS OF LOCAL GOVERNMENT

G.R. 161107
FERNANDO V. ST. SCHOLASTICA COLLEGE
MARCH 12, 2013
Doctrine: For an ordinance to be valid, it must not only be within the
corporate powers of the local government unit to enact and pass
according to the procedure prescribed by law, it must also conform to
the following substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive; (3)
must not be partial or discriminatory; (4) must not prohibit but may
regulate trade; (5) must be general and consistent with public policy;
and (6) must not be unreasonable.
FACTS:
Respondent is an educational institution organized under laws of
the Republic of the Philippines having offices in Malate Manila and
West Drive Marikina Heights.
Respondent owning 4 parcels of land enclosed by a tall concrete
perimeter built 30 years ago.
Petitioners are officials of the City Government of Marikina and on
Sept 30, 1994, the Sangguniang Panlungsod of Marikina enacted
Ordinance No. 192 Regulating the Construction of Fences and
Walls in the Municipality of Marikina.
It requires among others:

o Prohibition of walls created in front of commercial and

industrial establishment to retain space for parking space
o That fences shall be no more than 1 meter in height and
fences in excess of 1 meter shall be an open fence type at
least 80% see-thru
In April 2, 2000, the City Government of Marikina sent a letter to
respondents ordering them to demolish hand replace the fence of
their Marikina property to make it 80% see-thru and to also move it
to provide parking space.
Respondents requested for extension to comply
Petitioners through then City Mayor, Fernando, insisted on the
enforcement of the ordinance
Respondents filed a petition for prohibition with application of writ
of preliminary injunction and temporary restraining order before
the Regional Trial Court
Respondents argued that petitioners are acting in excess of
jurisdiction in enforcing said Ordinance asserting that it
contravenes the Constitution Sec 1, Article III as it would result to
great loss of property and destruction of property tantamount to
appropriation of property without due process.
Petitioners argue that said ordinance is a valid exercise of Police
power to restrain property rights for the protection of public safety,
health, morals, or the promotion of public convenience and general
prosperity.
RTC decided:
o Ordered a writ of prohibition from implementing the
Ordinance
o Agreeing with respondents, said ordinance should be
performed through appropriation only exercised by eminent
domain and that the petitioners cannot take respondents
property under the guise of police power to evade payment of
just compensation.
o Also the 80% see-thru fence would counter respondents right
to privacy
CA decided:
o Objectives of the ordinance did not justify the exercise of
police power as it involved of taking without due process of
law.
o Petitioners failed to comply with substantive due process in
the creation of the ordinance
ISSUE: WON the ordinance is a valid exercise of police power by the
LGU
HELD:
No. Citing White Light Corporation v. City of Manila:
o The test of a valid ordinance is well established. A long line of
decisions including City of Manila has held that for an
ordinance to be valid, it must not only be within the corporate

powers of the local government unit to enact and pass

according to the procedure prescribed by law, it must also
conform to the following substantive requirements: (1) must
not contravene the Constitution or any statute; (2) must not
be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate trade;
(5) must be general and consistent with public policy; and (6)
must not be unreasonable.
Police power defined:
o Police power is the plenary power vested in the legislature
to make statutes and ordinances to promote the health,
morals, peace, education, good order or safety and general
welfare of the people.21 The State, through the legislature,
has delegated the exercise of police power to local
government units, as agencies of the State. This delegation of
police power is embodied in Section 1622 of the Local
Government Code of 1991 (R.A. No. 7160), known as the
General Welfare Clause,23 which has two branches. The
first, known as the general legislative power, authorizes the
municipal council to enact ordinances and make regulations
not repugnant to law, as may be necessary to carry into effect
and discharge the powers and duties conferred upon the
municipal council by law. The second, known as the police
power proper, authorizes the municipality to enact ordinances
as may be necessary and proper for the health and safety,
prosperity, morals, peace, good order, comfort, and
convenience of the municipality and its inhabitants, and for
the protection of their property.
Ordinance failed the rational relationship test and the strict
scrutiny test, although courts only used rational basis test
It failed the rational basis test for it is not reasonably necessary to
accomplish the Citys purpose as it is oppressive or private rights
Citing SJS v. Atienza on ratio0nal relationship test:
o the following requisites are met: (1) the interests of the
public generally, as distinguished from those of a particular
class, require its exercise and (2) the means employed are
reasonably necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals. In short, there
must be a concurrence of a lawful subject and lawful method.
o Lacking a concurrence of these two requisites, the police
power measure shall be struck down as an arbitrary intrusion
into private rights and a violation of the due process clause
The fence requirement
o Courts held that petitioner cannot justify the setback by
arguing that the ownership of the property will continue to
remain with respondents. The court held that the setback
requirement would be tantamount to taking 3,762.36 square

10

meters of respondents private property for public use

without just compensation
o The courts held that the 80% see-thru fence failed the
rational relationship test as the petitioners must show the
relation between the purpose of police power measure and
means employed as the purpose was to discourage, suppress
or prevent the concealment of prohibited unlawful acts and
the means employed. The court held that the means employed
was unduly oppressive to private rights
o Petitioners failed to show that 80% see-thru fence would
provide a better protection and higher level of security than a
tall solid concrete wall.
GR. NO. 191667
LAND BANK OF THE PHILIPPINES, VS.
EDUARDO M.
CACAYURAN
APRIL 17, 2013
Doctrine: The Chief Executive: Powers, Duties, Functions and
Compensation. (b) For efficient, effective and economical governance the purpose of
which is the general welfare of the municipality and its inhabitants.
FACTS:
From 2005 to 2006, the Municipalitys Sangguniang Bayan (SB)
passed certain resolutions to implement a multi-phased plan
(Redevelopment Plan) to redevelop the Agoo Public Plaza (Agoo
Plaza) where the Imelda Garden and Jose Rizal Monument were
situated.
The SB initially passed Resolution No. 68-20054 on April 19, 2005,
authorizing then Mayor Eufranio Eriguel (Mayor Eriguel) to obtain
a loan from Land Bank and incidental thereto, mortgage a 2,323.75
square meter lot situated at the southeastern portion of the Agoo
Plaza (Plaza Lot) as collateral. To serve as additional security, it
further authorized the assignment of a portion of its internal
revenue allotment (IRA) and the monthly income from the proposed
project in favor of Land Bank. The foregoing terms were confirmed,
approved and ratified on October 4, 2005 through Resolution No.
139-2005. Consequently, on November 21, 2005, Land Bank
extended a P4,000,000.00 loan in favor of the Municipality (First
Loan), the proceeds of which were used to construct ten (10) kiosks
at the northern and southern portions of the Imelda Garden.
On March 7, 2006, the SB passed Resolution No. 58-2006,
approving the construction of a commercial center on the Plaza Lot
as part of phase II of the Redevelopment Plan. To finance the
project, Mayor Eriguel was again authorized to obtain a loan from
Land Bank, posting as well the same securities as that of the First
Loan. All previous representations and warranties of Mayor Eriguel
related to the negotiation and obtention of the new loan were

11

ratified on September 5, 2006 through Resolution No. 128-2006. In

consequence, Land Bank granted a second loan in favor of the
Municipality on October 20, 2006 in the principal amount of
P28,000,000.00 (Second Loan).
The construction of the commercial center at the Agoo Plaza was
vehemently objected to by some residents of the Municipality. Led
by respondent Eduardo Cacayuran (Cacayuran), these residents
claimed that the conversion of the Agoo Plaza into a commercial
center, as funded by the proceeds from the First and Second Loans
(Subject Loans), were "highly irregular, violative of the law, and
detrimental to public interests, and will result to wanton
desecration of the said historical and public park."
Cacayuran invokes his taxpayer right and files a complaint against
LBP and officers of the municipality. He questioned the validity of
the loan agreements and prays that the redevelopment is enjoined.
The RTC ruled in favor of Cacayuran declaring the nullity of the
subject loans. The CA affirmed the RTCs decision with
modification.
ISSUE: Whether or not the Subject Resolutions were validly passed.
HELD:
Land Bank avers that the Subject Resolutions provided ample
authority for Mayor Eriguel to contract the Subject Loans. It posits
that Section 444(b)(1)(vi) of the LGC merely requires that the
municipal mayor be authorized by the SB concerned and that such
authorization need not be embodied in an ordinance.
A careful perusal of Section 444(b)(1)(vi) of the LGC shows that
while the authorization of the municipal mayor need not be in the
form of an ordinance, the obligation which the said local executive
is authorized to enter into must be made pursuant to a law or
ordinance, viz:
Sec. 444. The Chief Executive: Powers, Duties, Functions and
Compensation.
o (b) For efficient, effective and economical governance the
purpose of which is the general welfare of the municipality
and its inhabitants pursuant to Section 16 of this Code, the
municipal mayor shall:
o (vi) Upon authorization by the sangguniang bayan, represent
the municipality in all its business transactions and sign on its
behalf all bonds, contracts, and obligations, and such other
documents made pursuant to law or ordinance;
o While Mayor Eriguels authorization to contract the Subject
Loans was not contained as it need not be contained in the
form of an ordinance, the said loans and even the
Redevelopment Plan itself were not approved pursuant to any
law or ordinance but through mere resolutions. The
distinction between ordinances and resolutions is wellperceived. While ordinances are laws and possess a general
and permanent character, resolutions are merely declarations

12

of the sentiment or opinion of a lawmaking body on a specific

matter and are temporary in nature. As opposed to
ordinances, "no rights can be conferred by and be inferred
from a resolution." In this accord, it cannot be denied that the
SB violated Section 444(b)(1)(vi) of the LGC altogether.
o Noticeably, the passage of the Subject Resolutions was also
tainted with other irregularities, such as (1) the SBs failure
to submit the Subject Resolutions to the Sangguniang
Panlalawigan of La Union for its review contrary to Section
56 of the LGC; and (2) the lack of publication and posting in
contravention of Section 59 of the LGC.
o In fine, Land Bank cannot rely on the Subject Resolutions as
basis to validate the Subject Loans.
G.R. NO. 188299
HEIRS OF LUIS A. LUNA VS RUBENS. AFABLE
JANUARY 23, 2013
Doctrine: By virtue of a zoning ordinance, the local legislature may
arrange, prescribe, define, and apportion the land within its political
jurisdiction into specific uses based not only on the present, but also on
the
future
projection
of
needs
FACTS:
The heirs of Luis A. Luna and Remegio A. Luna, and Luz LunaSantos are co-owners of a parcel of land located in Oriental
Mindoro which was subjected to compulsory acquisition under the
Comprehensive Agrarian Reform Program (CARP). Respondents
Ruben Afable Et Al, as beneficiaries, (CLOAs) Certificates of land
ownership award were issued to them. so the heirs filed a petition
and prayed before DarAdjudication Board (DARAB) of calapan for
the cancellation of the CLOAs. contending the municipal ordinance
of Calapan City which exclude the land in question from the
coverage of Agrarian Law. DARAB of Calapan ruled in favor of the
heirs. Thereafter, the respondents Afable et al, appealed before
the DARAB central office and ruled in their favour. The heirs
however not satisfied of the result of the DARAB central office and
asked a relief to the office of the President. The case was appealed
by the respondent before the CA and was granted the same.
ISSUE: Whether or Not Municipal Ordinance can classify a land from
agricultural to non - agricultural
HELD:
YES: The Supreme Court said, Local governments have the power
to reclassify agricultural into non-agricultural lands.
The power to establish zones for industrial, commercial and
residential uses is derived from the police power itself and is
exercised for the protection and benefit of the residents of a
locality. The Ordinance of the Sangguniang Bayan of Calapan was
issued pursuant to Section 3 of the Local Autonomy Act of 1959

13

and is, consequently, a valid exercise of police power by the local

government of Calapan.

Sec. 345 of RA No. 2264 (The Local Autonomy Act of 1959)

specifically empowers municipal and/or city councils to adopt
zoning and subdivision ordinances or regulations in consultation
with the National Planning Commission. By virtue of a zoning
ordinance, the local legislature may arrange, prescribe, define, and
apportion the land within its political jurisdiction into specific uses
based not only on the present, but also on the future projection of
needs
The regulation by local legislatures of land use in their respective
territorial jurisdiction through zoning and reclassification is an
exercise of police power. The power to establish zones for
industrial, commercial and residential uses is derived from the
police power itself and is exercised for the protection and benefit of
the residents of a locality.
G.R. No. 196271
DATU MICHAEL ABAS KIDA et. al. vs SENATE OF THE
PHILIPPINES et. al.
FEBRUARY 8, 2012
Doctrine: Autonomous regions are granted political autonomy but, the
framers of the Constitution never equated autonomy with independence.
Section 17, Article X of the Constitution states that autonomy shall be
within the framework of this Constitution and the national sovereignty
as well as the territorial integrity of the Republic of the Philippines.
Facts:
These are consolidated cases filed directly with the Supreme Court
assailing the constitutionality of R.A. No. 10153 (An Act Providing
for the Synchronization of the Elections in the Autonomous Region
of Muslim Mindanao).
Two years after the effectivity of the 1987 Constitution, Congress
passed R.A. No. 6734, the organic act that established ARMM, and
scheduling the first regular elections for the regional officials of
ARMM. R.A. 9054, thereafter amended the organic act, resetting
the regular elections for the ARMM to the second Monday of
September 2001. R.A. No. 9333 moved the date for the regular
elections to August 8, 2011. COMELEC begun its preparations and
had begun accepting certificates of candidacies when R.A. 10153
was enacted, resetting the elections to May 2013 to coincide with
the regional national and local elections of the country.
Subsequently, these consolidated cases were filed. Oral arguments
were held and the parties submitted their respective memoranda.
On September 13, 2011, the Court issued a temporary restraining
order enjoining the implementation of the law.
Issues:

14

1. Whether or not R.A. No. 10153 violates the autonomy granted to

the ARMM.
2. Whether or not the grant of power to the President to appoint OICs
violates Section 18 of Article X of the 1987 Constitution.
Held:
1. No. The argument that while synchronization may be
constitutionally mandated, it cannot be used to defeat or to impede
the autonomy that the Constitution granted to the ARMM is
erroneous. The basic principle in constitutional construction is ut
magis valeat quam pereat: the Constitution is to be interpreted as a
whole, and one mandate should not be given importance over the
other except where the primacy of one over the other is clear.
Hence, conflicting provisions should be reconciled and harmonized
in a manner that may give to all of them full force and effect.
Synchronization is a recognized constitutional mandate under
Section 1, 2 and 5, Article XVIII. Local autonomy, on the other
hand is provided for in Article X, Section 15-21 of the
Constitution. Applying the above constitutional construction,
synchronization and local autonomy must be reconciled and
given effect to, in the way that Congress did in R.A. No.
10153 which provides the measure to transit to synchronized
regional elections with the least disturbance.
Furthermore, while autonomous regions are granted political
autonomy, the framers of the Constitution never equated
autonomy with independence. Section 17, Article X of the
Constitution states that autonomy shall be within the
framework of this Constitution and the national sovereignty
as well as the territorial integrity of the Republic of the
Philippines.
Autonomy granted to the ARMM cannot be invoked to defeat
national policies and concerns. Since the synchronization of
elections is not just a regional concern but a national one, the
ARMM is subject to it; its regional autonomy cannot be used
to exempt it from having to act in accordance with a national
policy mandated by the Constitution.
2. No. Section 16, Article VII of the Constitution, which states:
Section 16. The President shall nominate and, with the
consent of the Commission on Appointments, appoint the
heads of the executive departments, ambassadors, other
public ministers and consuls or officers of the armed forces
from the rank of colonel or naval captain, and other officers
whose appointment are vested in him in this Constitution. He
shall appoint all other officers of the Government whose
appointments are not otherwise provided for by law, and
those whom he may be authorized by law to appoint. The
Congress may, by law, vest the appointment of other officers
lower in rank in the President alone, in the courts, or in the
heads of departments, agencies, commissions, or boards.

15

 The President then, is authorized by the Constitution to

appoint those whom he may be authorized by law to appoint.
As it is, R.A. No. 10153, Sections 3, 4 and 5 authorizes the
President to appoint OICs to govern the ARMM during the
pre-synchronization period until the May 2013 elections.
Section 18, Article X of the Constitution, however, requires
that the ARMM executive and legislative officials to be
elective and representative of the constituent political
units. This requirement is an express limitation, the nonobservance of which nullifies the appointment of OICs
granted to the President.
However, the Supreme Court ruled that the constitutional
infirmity is more apparent than real and becomes real only if
R.A. 10153 were to be mistakenly read as a law that amends
what the organic law of ARMM sets out in terms of structure
of governance. As such, R.A. 10153 is not an amendment of
R.A. 9054 as it provides only for synchronization of elections
and is simply and purely an interim measure responding to
the adjustments that the synchronization requires. What it
does is to appoint officers-in-charge for the Office of the
Regional Governor, Regional Vice Governor and Members of
the Regional Legislative Assembly who shall perform the
functions pertaining to the said offices until the officials duly
elected in the May 2013 elections shall have qualified and
assumed office. This power is far different from appointing
elective ARMM officials for the abbreviated term ending on
the assumption to office of the officials elected in the May
2013 elections. Since the power to appoint is fixed and only
for the interim period, the elective and representative
governance requirement of Section 18, Article X of the
Constitution and of R.A. 9054 will still be in effect, as the
appointment will not systematically touch or affect them at
all.
Furthermore, the situation necessitates the interim measure,
in the manner that interim measures have been adopted and
used in the creation of LGUs, and the adjustment of subprovinces to provinces. These measures are not different from
the exercise by Congress of the inherent police power of the
State as an answer to the national demand for the
synchronization of elections. To allow a vacancy of the 21
months period from the time the incumbent ARMM elective
officials terms expired to the time the new ARMM elective
officials begin their terms in 2013 is to create an anomalous
situation where the constituents are deprived of their right to
representation and governance in their local government.

16

G.R. No. 187604

CITY OF MANILA, V ALEGAR CORPORATION, TEROCEL REALTY
CORPORATION, ET. AL.,
JUNE 25, 2012
Doctrine: Expropriation shall be resorted to only when other modes of
acquisition have been exhausted requirements as a strict limitation on
the local governments exercise of the power of expropriation. They are
the only safeguards of property owners against the exercise of that
power.
FACTS:
On March 1, 2001 the City Council of Manila passed Ordinance
8012 that authorized the City Mayor to acquire certain lots
belonging to respondents Alegar Corporation, Terocel Realty
Corporation, and Filomena Vda. De Legarda, for use in the
socialized housing project of petitioner City of Manila. The City
offered to buy the lots at P1, 500.00 per square meter but the
owners rejected this as too low with the result that on December 2,
2003 the City filed a complaint for expropriation against them
before the Regional Trial Court (RTC) of Manila.
The City alleged in its complaint that it wanted to acquire the lots
for its land-for-the-landless and on-site development programs
involving the residents occupying them. The City offered to acquire
the lots for P1, 500.00 per sq. m. but the owners rejected the offer.
The total aggregate value of the lots for taxation purpose was
P809, 280.00 but the City deposited P1, 500,000.00 with the Land
Bank of the Philippines to enable it to immediately occupy the same
pending hearing of the case.
Both Alegar and Terocel questioned the legitimacy of the Citys
taking of their lots solely for the benefit of a few long-time
occupants. Alegar also pointed out that, while it declined the Citys
initial offer, it did not foreclose the possibility of selling the lots for
the right price. The filing of the suit was premature because the
City made no effort in good faith to negotiate the purchase.
Meantime, on June 9, 2004 the trial court issued a writ of
possession in the Citys favor. On December 19, 2006, upon the
joint motion of the parties, the RTC released the P1, 500,000.00
deposits to the defendant owners.
ISSUE: Whether the City complied with the requirements of Sections 9
and 10 of R.A. 7279 in trying to acquire the subject lots by
expropriation?
HELD:
No, The City failed to comply with the requirements of Section 9 of
R.A. 7279 which lays down the order of priority in the acquisition

17

through expropriation of lands for socialized housing. This section

provides:
o Section 9. Priorities in the acquisition of Land. Lands for
socialized housing shall be acquired in the following order:
(a) Those owned by the Government or any of its
subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their
subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas for Priority
Development, Zonal Improvement Program sites, and
Slum Improvement and Resettlement Program sites
which have not yet been acquired;
(e) Bagong Lipunan Improvement of Sites and Services
or BLISS sites which have not yet been acquired; and
(f) Privately-owned lands.
Where on-site development is found more practicable and
advantageous to the beneficiaries, the priorities mentioned in this
section shall not apply. The local government units shall give
budgetary priority to on-site development of government lands.
Section 10 of R.A. 7279 also prefers the acquisition of private
property by negotiated sale over the filing of an expropriation suit.
It provides that such suit may be resorted to only when the other
modes of acquisitions have been exhausted. Thus:
o Section 10. Modes of Land Acquisition. The modes of
acquiring land for purposes of this Act shall include, among
others, community mortgage, land swapping, land assembly
or consolidation, land banking, donation to the Government,
joint-venture
agreement,
negotiated
purchase,
and
expropriation: Provided, however, That expropriation shall be
resorted to only when other modes of acquisition have been
exhausted; Provided, further, That where expropriation is
resorted to, parcels of land owned by small property owners
shall be exempted for purposes of this Act.
Indeed, the Court has held that when the property owner rejects
the offer but hints for a better price, the government should
renegotiate by calling the property owner to a conference. The
government must exhaust all reasonable efforts to obtain by
agreement the land it desires.
Furthermore, it held in Estate or Heirs of the Late Ex-Justice Jose
B.L. Reyes v. City of Manila, that these requirements are strict
limitations on the local governments exercise of the power of
eminent domain. They are the only safeguards of property owners
against the exercise of that power.

18

GR. NO. 202690

HENRY L. SY VS. LOCAL GOVERNMENT OF QUEZON CITY
JUNE 5, 2013
Doctrine: A previous law only requires a resolution for expropriation of
land for public use, but the discussion now reiterated that a new law
requires an ordinance for expropriation of land for public use.
FACTS:
On November 7, 1996, the City, through then Mayor Ismael
Mathay, Jr., filed a complaint for expropriation with the RTC in
order to acquire a 1,000 sq. m. parcel of land, owned and
registered under the name of Henry L. Sy, which was intended to
be used as a site for a multipurpose barangay hall, day-care center,
playground and community activity center for the benefit of the
residents of Barangay Balingasa, Balintawak, Quezon City. The
requisite ordinance to undertake the aforesaid expropriation
namely, Ordinance No. Sp-181, s-94, was enacted on April 12,
1994.
On March 18, 1997, pursuant to Section 198 of Republic Act No.
7160 (RA 7160), otherwise known as the Local Government Code
of 1991, the City deposited the amount of P241,090.00 with the
Office of the Clerk of Court, representing 15% of the fair market
value of the subject property based on its tax declaration.
During the preliminary conference on November 8, 2006, Sy did
not question the Citys right to expropriate the subject property.
Thus, only the amount of just compensation remained at issue.
On July 6, 2006, the RTC appointed Edgardo Ostaco (Commissioner
Ostaco), Engr. Victor Salinas (Commissioner Salinas) and Atty.
Carlo Alcantara (Commissioner Alcantara) as commissioners to
determine the proper amount of just compensation to be paid by
the City for the subject property. Subsequently, Commissioners
Ostaco and Alcantara, in a Report dated February 11, 2008,
recommended the payment of P5, 500.00 per sq. m., to be
computed from the date of the filing of the expropriation complaint,
or on November 7, 1996. On the other hand, Commissioner Salinas
filed a separate Report dated March 7, 2008, recommending the
higher amount of P13, 500.00 per sq. m. as just compensation.
ISSUE: Whether the taking of the private property was expropriated
with just compensation?
HELD:
NO. The Court cannot sustain the amount of P5, 500.00/sq. m. as
just compensation which was set by the RTC and upheld by the CA.
The said valuation was actually arrived at after considering: (a) the
September 4, 1996 recommendation of the City Appraisal
Committee; (b) several sworn statements made by Sy himself; and
(c) Sys own tax declaration for 1996.48 It is well-settled that the
amount of just compensation is to be ascertained as of the time of

19

the taking. However, the above-stated documents do not reflect the

value of the subject property at the time of its taking in 1986 but
rather, its valuation in 1996. Consequently, the case must be
remanded to the RTC in order to properly determine the amount of
just compensation during such time the subject property was
actually taken.
Batas Pambansa Bilang 337 was the law applicable at the time of
the subject propertys taking in 1986 as RA 7160 took effect only in
January 1, 1992. Under Section 9, Book 1, Title 1, Chapter 2 of the
former law, a resolution was the proper authorization to institute
condemnation proceedings, thus:
SEC. 9. Eminent Domain. A local government unit may, through
its head and acting pursuant to a resolution of its head and acting
pursuant to a resolution of its Sanggunian, exercise the right of
eminent domain and institute condemnation proceedings for public
use or purpose.
Meanwhile, under Section 19 of RA 7160, an ordinance is required:
SEC. 19. Eminent Domain. - A local government unit may, through
its chief executive and acting pursuant to an ordinance, exercise
the power of eminent domain for public use, or purpose or welfare
for the benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and
pertinent laws.

G.R. NO. 196870

BORACAY FOUNDATION, INC., VS THE PROVINCE OF AKLAN
JUNE 26, 2012
Doctrine: Two requisites must be met before a national project that
affects the environmental and ecological balance of local communities
can be implemented: prior consultation with the affected local
communities,
and
prior approval of
the
project
by
the
appropriate sanggunian.
Absent
either
of
these
mandatory
requirements, the projects implementation is illegal.
FACTS:
Boracay Island (Boracay), located in the Western Visayas region of
the Philippines, was declared a tourist zone and marine reserve in
1973 under PD No. 1801. The island comprises the barangays of
Manoc-manoc, Balabag, and Yapak, all within the municipality of
Malay, in the province of Aklan.
Respondent Province built the Caticlan Jetty Port and Passenger
Terminal at Barangay Caticlan to be the main gateway to
Boracay. It also built the corresponding Cagban Jetty Port and
Passenger Terminal. Respondent Province operates both ports.
In 2005, Boracay 2010 Summit was held. Respondent Province
claimed that tourist arrivals to Boracay was expected to reach a
record of 1 million tourist arrivals in the years to come. Thus,

20

respondent Province conceptualized the expansion of the port

facilities at Barangay Caticlan.
Respondent Province included the proposed expansion of the port
facilities at Barangay Caticlan in its 2009 Annual Investment
Plan, envisioned as its project site the area adjacent to the existing
jetty port, and identified additional areas along the coastline of
Barangay Caticlan as the site for future project expansion.
Governor Marquez, representative of the respondent Province, sent
a letter to respondent PRA on March 12, 2009 expressing the
interest of respondent Province to reclaim about 2.64 hectares of
land along the foreshores of Barangay Caticlan, Municipality of
Malay, Province of Aklan.
On May 17, 2010, respondent Province entered into a MOA with
respondent PRA .It was at this point that respondent Province
deemed it necessary to conduct a series of what it calls
information-education campaigns, which provided the venue for
interaction
and
dialogue
with
the
public,
particularly
the Barangay and Municipal officials of the Municipality of Malay,
the residents of Barangay Caticlan and Boracay, the stakeholders,
and the non-governmental organizations (NGOs).
ISSUE: Whether there was a valid compliance with Sec. 26 and 27 of the
Local Government Code for prior public consultation by the respondents.
HELD:
No. The Local Government Code establishes the duties
of national government agencies in the maintenance of ecological
balance, and requires them to secure prior public consultation and
approval of local government units for the projects described
therein.
This project can be classified as a national project that affects the
environmental and ecological balance of local communities, and is
covered by the requirements found in the Local Government Code
provisions that are quoted below:
o Section 26. Duty of National Government Agencies in the
Maintenance of Ecological Balance. - It shall be the duty of
every national agency or government-owned or controlled
corporation authorizing or involved in the planning and
implementation of any project or program that may cause
pollution, climatic change, depletion of non-renewable
resources, loss of crop land, rangeland, or forest cover, and
extinction of animal or plant species, to consult with the local
government units, nongovernmental organizations, and other
sectors concerned and explain the goals and objectives of the
project or program, its impact upon the people and the
community in terms of environmental or ecological balance,
and the measures that will be undertaken to prevent or
minimize the adverse effects thereof.
o Section 27. Prior Consultations Required. - No project or
program shall be implemented by government authorities

21

unless the consultations mentioned in Sections 2 (c) and 26

hereof are complied with, and prior approval of the
sanggunian concerned is obtained: Provided, That occupants
in areas where such projects are to be implemented shall not
be evicted unless appropriate relocation sites have been
provided, in accordance with the provisions of the
Constitution.
During the oral arguments held on September 13, 2011, it was
established that this project as described above falls under Section
26 because the commercial establishments to be built on phase 1,
as described in the EPRMP quoted above, could cause pollution as
it could generate garbage, sewage, and possible toxic fuel
discharge.
Under the Local Government Code, two requisites must be met
before a national project that affects the environmental and
ecological balance of local communities can be implemented:
prior consultation with the affected local communities, and
prior approval of the project by the appropriate sanggunian.
Absent either of these mandatory requirements, the projects
implementation is illegal.
Based
on
the
above,
therefore, prior consultations
and prior approval are required by law to have been conducted and
secured by the respondent Province. Accordingly, the information
dissemination conducted months after the ECC had already been
issued was insufficient to comply with this requirement under the
Local Government Code. Had they been conducted properly, the
prior public consultation should have considered the ecological or
environmental concerns of the stakeholders and studied measures
alternative to the project, to avoid or minimize adverse
environmental impact or damage
The claim of respondent DENR-EMB RVI is that no permits and/or
clearances from National Government Agencies (NGAs) and LGUs
are required pursuant to the DENR Memorandum Circular No.
2007-08. However, we still find that the LGC requirements of
consultation and approval apply in this case. This is because a
Memorandum Circular cannot prevail over the Local Government
Code, which is a statute and which enjoys greater weight under our
hierarchy of laws.
Subsequent to the information campaign of respondent Province,
the Municipality of Malay and the Liga ng mga Barangay-Malay
Chapter still opposed the project. Thus, when respondent Province
commenced the implementation project, it violated Section 27 of
the LGC, which clearly enunciates that [no] project or program
shall be implemented by government authorities unless the
consultations mentioned in Sections 2(c) and 26 hereof are
complied with, and prior approval of the sanggunian concerned is
obtained.

22

 The lack of prior public consultation and approval is not corrected

by the subsequent endorsement of the reclamation project by
the Sangguniang Barangay of Caticlan onFebruary 13, 2012, and
the Sangguniang Bayan of the Municipality of Malay on February
28, 2012, which were both undoubtedly achieved at the urging and
insistence of respondent Province. As we have established above,
the respective resolutions issued by the LGUs concerned did not
render this petition moot and academic

G.R. NO. 191109

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE
PHILIPPINE RECLAMATION AUTHORITY (PRA) VS. CITY OF
PARANAQUE
JULY 18, 2012
Doctrine: Real property owned by the Republic of the Philippines is
exempt from real property tax unless the beneficial use thereof has been
granted to a taxable person.
Facts:
This is a petition for review on certiorari assailing the Order of the
Regional Trial Court, Branch 195, Paranaque City (RTC), which
ruled that petitioner Philippine Reclamation Authority (PRA) is
a government-owned and controlled corporation (GOCC), a taxable
entity, and, therefore, not exempt from payment of real property
taxes.
The Public Estates Authority (PEA) is a government corporation
created by virtue of P.D. No. 1084 to provide a coordinated,
economical and efficient reclamation of lands, and the
administration and operation of lands belonging to, managed
and/or operated by, the government with the object of maximizing
their utilization and hastening their development consistent with
public interest.
On October 26, 2004, then President Gloria Macapagal-Arroyo
issued E.O. No. 380 transforming PEA into PRA, which shall
perform all the powers and functions of the PEA relating to
reclamation activities.
By virtue of its mandate, PRA reclaimed several portions of the
foreshore and offshore areas of Manila Bay, including those located
in Paraaque City. Paraaque City Treasurer issued Warrants of
Levy on PRAs reclaimed properties based on the assessment for
delinquent real property for tax years 2001 and 2002.
PRA claimed that it is not a GOCC under the Administrative Code,
nor is it a GOCC under Section 16, Article XII of the
1987Constitution because it is not required to meet the test of
economic viability.
It is a government instrumentality vested with corporate powers
and performing an essential public service. It insists that it may not

23

be classified as a non-stock corporation because it has no members

and it is not organized for charitable, religious, educational,
professional, cultural, recreational, fraternal, literary, scientific,
social, civil service, or similar purposes, like trade, industry,
agriculture and like chambers as provided in Section 88 of the
Corporation Code.
Thus, PRA insists that, as an incorporated instrumentality of the
National Government, it is exempt from payment of real property
tax except when the beneficial use of the real property is granted
to a taxable person. PRA claims that based on Section 133(o) of the
LGC, local governments cannot tax the national government which
delegate to local governments the power to tax.
Issue: Whether or not Philippine Reclamation Authority (PRA) is an
incorporated instrumentality of the national government and is,
therefore, exempt from payment of real property tax under sections
234(a) and 133(o) of Republic Act 7160?
Held:
Yes, it is a Government Instrumentality. In the case at bench, PRA
is not a GOCC because it is neither a stock nor a non-stock
corporation. It cannot be considered as a stock corporation
because although it has a capital stock divided into no par value
shares as provided in Section 7 of P.D. No. 1084, it is not
authorized to distribute dividends, surplus allotments or profits to
stockholders. PRA is a government instrumentality vested with
corporate powers and performing an essential public service
pursuant to Section 2(10) of the Introductory Provisions of the
Administrative Code. Being an incorporated government
instrumentality, it is exempt from payment of real property tax.
Many government instrumentalities are vested with corporate
powers but they do not become stock or non-stock corporations,
which is a necessary condition before an agency or instrumentality
is deemed a GOCC. The fundamental provision above authorizes
Congress to create GOCCs through special charters on two
conditions: 1) the GOCC must be established for the common good;
and 2) the GOCC must meet the test of economic viability. In this
case, PRA may have passed the first condition of common good but
failed the second one - economic viability. Undoubtedly, the
purpose behind the creation of PRA was not for economic or
commercial activities.
Clearly, respondent has no valid or legal basis in taxing the subject
reclaimed lands managed by PRA. On the other hand, Section
234(a) of the LGC, in relation to its Section 133(o), exempts PRA
from paying realty taxes and protects it from the taxing powers of
local government units.
Section 234(a) of the Local Government Code states that real
property owned by the Republic of the Philippines (the Republic) is
exempt from real property tax unless the beneficial use thereof has
been granted to a taxable person.

24

 Section 133 of the Local Government Code states that "unless

otherwise provided" in the Code, local governments cannot tax
national government instrumentalities.
In this case, there is no proof that PRA granted the beneficial use
of the subject reclaimed lands to a taxable entity. There is no
showing on record either that PRA leased the subject reclaimed
properties to a private taxable entity.

G.R. NO. 198860

ABRAHAM RIMANDO
CENTER, INC.,
JULY 23, 2012

V.

NAGUILIAN

EMISSION

TESTING

Doctrine: A mayors discretionary duty to issue business permits

Facts:
Naguilian Emission Testing Center, Inc., represented by its
President, Rosemarie Llarenas (respondent) filed a petition of
mandamus against Abraham P. Rimando (petitioner), Mayor of
Naguilian, La Union at the time that the case was filed. The
petition of mandamus was filed to compel the Rimando to issue a
business permit in favor of Naguilian Emission Testing Center, Inc.
The respondent claimed that its business is being conducted on a
parcel of land which formerly belonged to the national government
but later on certified by the Department of Environment and
Natural Resources (DENR) as an alienable and disposable land of
the public domain. The respondent had operated its business of
emission testing on the land from 2005 to 2007. On January 18,
2008, the respondent filed an application for the renewal of its
business permit and paid the corresponding fees therefor.
The petitioner, however, refused to issue a business permit unless
and until the respondent executes a contract of lease with the
Municipality of Naguilian. The parties did not reach an agreement
as regards the stipulations in the proposed agreement, hence the
petition for mandamus.
On May 26, 2009, the RTC denied the petition 3 for lack of merit
based on the ratiocinations that: (a) the Municipality of Naguilian is
the declared owner of the subject parcel of land by virtue of Tax
Declaration No. 002-01197; (b) under Section 6A.01 of the Revenue
Code of the Municipality of Naguilian, the municipality has the
right to require the petitioner to sign a contract of lease because
its business operation is being conducted on a real property owned
by the municipality; and (c) a mayors duty to issue business
permits is discretionary in nature which may not be enforced by a
mandamus writ.
On appeal, the CA held that the appeal was dismissible on the
ground of mootness considering that the period for which the

25

business period was being sought had already lapsed. Nonetheless,

the CA proceeded to resolve the issues involved in the appeal for
academic purposes.
The CA disagreed with the RTC and found that the factual milieu of
the case justifies the issuance of a writ of mandamus. The CA
reasoned that the tax declaration in the name of the municipality
was insufficient basis to require the execution of a contract of lease
as a condition sine qua non for the renewal of a business permit.
The CA further observed that Sangguniang Bayan Resolution No.
2007-81, upon which the municipality anchored its imposition of
rental fees, was void because it failed to comply with the
requirements of the Local Government Code and its Implementing
Rules and Regulations.
The CA held that the petitioner may not be held liable for damages
since his action or inaction, for that matter, was done in the
performance of official duties that are legally protected by the
presumption of good faith. The CA likewise stressed that the civil
action filed against the petitioner had already become moot and
academic upon the expiration of his term as the mayor of
Naguilian, La Union.
Despite the case being moot, the CA rendered judgment reversing
the decision of the RTC.
ISSUE: Whether or not Rimando, as his capacity as mayor, may be
compelled by mandamus to release a business permit in favor of
petitioners.
HELD:
We agree with the CA that the petition for mandamus has already
become moot and academic owing to the expiration of the period
intended to be covered by the business permit.
An issue or a case becomes moot and academic when it ceases to
present a justiciable controversy so that a determination thereof
would be without practical use and value or in the nature of things,
cannot be enforced. In such cases, there is no actual substantial
relief to which the applicant would be entitled to and which would
be negated by the dismissal of the petition. As a rule, courts
decline jurisdiction over such case, or dismiss it on ground of
mootness.
The objective of the petition for mandamus to compel the petitioner
to grant a business permit in favor of respondent corporation for
the period 2008 to 2009 has already been superseded by the
passage of time and the expiration of the petitioners term as
mayor. Verily then, the issue as to whether or not the petitioner, in
his capacity as mayor, may be compelled by a writ of mandamus to
release the respondents business permit ceased to present a
justiciable controversy such that any ruling thereon would serve no
practical value. Should the writ be issued, the petitioner can no

26

longer abide thereby; also, the effectivity date of the business

permit no longer subsists.
While the CA is not precluded from proceeding to resolve the
otherwise moot appeal of the respondent, we find that the decretal
portion of its decision was erroneously couched.
The CAs conclusions on the issue of ownership over the subject
land and the invalidity of Sangguniang Bayan Resolution No. 200781, aside from being unsubstantiated by convincing evidence, can
no longer be practically utilized in favor of the petitioner. Thus, the
overriding and decisive factor in the final disposition of the appeal
was its mootness and the CA should have dismissed the same along
with the petition for mandamus that spawned it.
More importantly, a mayor cannot be compelled by mandamus to
issue a business permit since the exercise of the same is a
delegated police power hence, discretionary in nature.
This was the pronouncement of this Court in Roble Arrastre, Inc. v.
Hon. Villaflor 13 where a determination was made on the nature of
the power of a mayor to grant business permits under the Local
Government Code, 14 viz:
o Central to the resolution of the case at bar is a reading of
Section 444(b)(3)(iv) of the Local Government Code of 1991,
which provides, thus:
o SEC. 444. The Chief Executive: Powers, Duties, Functions and
Compensation.
o (b) For efficient, effective and economical governance the
purpose of which is the Code, general the welfare municipal
of the mayor municipality shall: and its inhabitants pursuant
to Section 16 of this
o 3) Initiate and maximize the generation of resources and
revenues, and apply the same to the implementation of
development plans, program objectives and priorities as
provided for under Section 18 of this Code, particularly those
resources and revenues programmed for agro-industrial
development and country-wide growth and progress, and
relative thereto, shall:
o (iv) Issue licenses and permits and suspend or revoke the
same for any violation of the conditions upon which said
licenses or permits had been issued, pursuant to law or
ordinance.
Indeed, as correctly ruled by the RTC, the petition for mandamus
filed by the respondent is incompetent to compel the exercise of a
mayors discretionary duty to issue business permits.

G.R. NO. 188500,

PROVINCE OF CAGAYAN, REPRESENTED BY HON. ALVARO T.
ANTONIO, GOVERNOR, AND ROBERT ADAP, ENVIRONMENTAL
AND NATURAL RESOURCES OFFICER V. JOSEPH LASAM LARA

27

JULY 24, 2013

Doctrine: In order for an entity to legally undertake a quarrying
business, he must first comply with all the requirements imposed not
only by the national government, but also by the local government unit
where his business is situated
Facts:
On September 14, 2007, Lara obtained an Industrial Sand and
Gravel Permit3 (ISAG Permit) from the Mines and Geosciences
Bureau (MGB) of the Department of Environment and Natural
Resources (DENR), authorizing him to conduct quarrying
operations in a twenty-hectare area situated in Barangay Centro,
Muncipality of Peablanca (Peablanca), Cagayan (Permit Area)
and extract and dispose of sand, gravel, and other unconsolidated
materials from the Permit Area. For the same purpose, Lara
obtained an Environmental Compliance Certificate4 (ECC) from the
DENR Environmental Management Bureau (EMB).
Lara received a Stoppage Order9 dated March 13, 2008 (Stoppage
Order) this time from Cagayan Governor Alvaro T. Antonio (Gov.
Antonio), directing him to stop his quarrying operations for the
following reasons: (a) the ISAG Permit was not in accordance with
Republic Act No. (RA) 7942,10 otherwise known as the Philippine
Mining Act of 1995, and its implementing rules and regulations;
(b) Laras failure to pay sand and gravel fee under Provincial
Ordinance No. 2005-07; and (c) [Laras] failure to secure all
necessary permits or clearances from the local government unit
concerned as required by the [ECC].11 Hence, Lara filed the
present action for injunction and damages with an urgent and exparte motion for the issuance of a temporary restraining order
and/or preliminary injunction before the RTC, docketed as Civil
Case No. 707.
Lara maintains that the MGB and DENR-EMB had already
authorized him to extract sand and gravel from the Permit Area, as
evidenced by the ISAG Permit and ECC, thereby dispensing with
the need to secure any permit from the local government. In any
case, he contends that the only reason why he failed to secure such
permits was because the local government officials deliberately
refused to process his applications without any legitimate reason
whatsoever.
Issue: WON there is need to secure a permit from the LGU?
Held:
In order for an entity to legally undertake a quarrying business, he
must first comply with all the requirements imposed not only by the
national government, but also by the local government unit where
his business is situated. Particularly, Section 138(2) of RA 716026
requires that such entity must first secure a governors permit
prior to the start of his quarrying operations,
SECTION 138. Tax on Sand, Gravel and Other Quarry Resources.
x x x.

28

 The permit to extract sand, gravel and other quarry resources shall
be issued exclusively by the provincial governor, pursuant to the
ordinance of the sangguniang panlalawigan
In connection thereto, the Sangguniang Panlalawigan of Cagayan
promulgated Provincial Ordinance No. 2005-07, Article H, Section
2H.04 of which provides:
o SECTION 2H.04. Permit for Gravel and Sand Extraction and
Quarrying. No person shall extract ordinary stones, gravel,
earth, boulders and quarry resources from public lands or
from the beds of seas, rivers, streams, creeks or other public
waters unless a permit has been issued by the Governor (or
his deputy as provided herein) x x x.
A plain reading of the afore-cited provisions clearly shows that a
governors permit is a pre-requisite before one can engage in a
quarrying business in Cagayan. Records, however, reveal that Lara
admittedly failed to secure the same; hence, he has no right to
conduct his quarrying operations within the Permit Area.
GR NO. 181277
SWEDISH MATCH PHILIPPINES INC. VS. THE TREASURER OF
THE CITY OF MANILA
JULY 3, 2013
Doctrine: Business entities cannot be compelled to pay 2 similar taxes
because of an ordinance as it is enough to pay one.
FACTS:
This is a Petition for Refund of Taxes with the RTC of Manila in
accordance with Section 196 of the Local Government Code (LGC)
of 1991. The petitioner says that it had been religiously paying its
taxes based on Section 14 of Ordinance No. 7794 or the Manila
Revenue Code (as amended by Ordinance Nos. 7988 and 8011).
However, it was still taxed based on Section 21 of the same code.
RTC denied the petition because of the failure of the petitioner to
plead the latters capacity to sue and to state the authority of Ms.
Beleno, who had executed the Verification and Certification of NonForum Shopping. It also denied it on the ground that Section 14
and 21 pertained to taxes of a different nature and, thus the
elements of double taxation were wanting in this case. CTA
affirmed the decision. Petitioner points out that Section 21 is not in
itself invalid, but the enforcement of this provision would constitute
double taxation if business taxes have already been paid under
Section 14 of the same revenue code. Petitioner further argues that
since Ordinance Nos. 7988 and 8011 have already been declared
null and void in Coca-Cola Bottlers Philippines, Inc. v. City of
Manila, all taxes collected and paid on the basis of these
ordinances should be refunded. The respondent also argues that
Sections 14 and 21 pertain to two different objects of tax; thus,
they are not of the same kind and character so as to constitute

29

double taxation. Section 14 is a tax on manufacturers, assemblers

and other processors, while Section 21 applies to business subject
to excise, value-added, or percentage tax. Respondent posits that
under Section 21, petitioner is merely a withholding tax agent of
the City of Manila.
ISSUE: Whether or not the imposition of tax under Section 21 of the
Manila Revenue Code constitutes double taxation in view of the tax
collected and paid under Section 14 of the same code?
HELD:
Yes, it constitutes double taxation. The Supreme Court held in its
ruling used the holding in The City of Manila v. Coca-Cola Bottlers
Philippines, Inc. to justify that taxation under Sections 14 and 21
would result to double taxation. Here, it was elaborated that
Section 143(a) of the LGC: said municipality or city may no longer
subject the same manufacturers, to a business tax under Section
143(h) of the same Code. SECTION 143(h) may be imposed only on
businesses that are subject to excise tax, VAT or percentage tax
under the NIRC, and that are not otherwise specified in preceding
paragraphs. In the same way, businesses such as respondents,
already subject to a local business Tax under Section 14 of Tax
Ordinance No. 7794 which is based on Section 143(a) of the LGC,
can no longer be made liable for local business tax under Section
21 of the same Tax Ordinance which is based on Section 143(h) of
the LGC.
Thus, since petitioner has already been paying under Section 14, it
should not be subjected to the payment of taxes under Section 21.
Further, the Court agreed with petitioner that Ordinance Nos. 7988
and 8011 cannot be the basis for the collection of business taxes
because Coca-Cola already ruled that these ordinances were null
and void. Hence, payments made under Section 21 must be
refunded in favor of petitioner.
G.R. NO. 183137
PELIZLOY REALITY CORPORATION VS. THE PROVINCE OF
BENGUET
APRIL 10, 2013
Doctrine: A municipal corporation, unlike a sovereign state is clothed
with no inherent power of taxation. The charter or statute must plainly
show an intent to confer that power or the municipality, cannot assume
it. And the power when granted is to be construed in strictissimi juris.
Any doubt or ambiguity arising out of the term used in granting that
power must be resolved against the municipality.
FACTS:
Petitioner Pelizloy Reality Corporation owns Palm Grove Resort,
which is designed for recreation and which has facilities like
swimming pools, a spa and function halls. It is located at Asin,
Angalisan, Municipality of Tuba, and Province of Benguet.

30

 On December 08,2005, the Provincial Board of the Province of

Benguet approved Provincial Tax Ordinance no. 05-107, otherwise
known as the Benguet Revenue Code of 2005(Tax Ordinance).
Section 59, Article X of the Tax Ordinance Levied a ten percent
(10%) amusement tax on gross receipts from admissions to resorts,
swimming pools, bath houses, hot springs and tourists spots. It was
Pelizloys position that the Tax Ordinances imposition of a 10%
amusement tax on gross receipts from admission fees for resorts,
swimming pools, bath houses, hot springs, and tourists spots is an
ultra vires act on the part of the Province of Benguet. Thus, it filed
an appeal/ petition before the Secretary of Justice on January 27,
2006.
Pelizloy argued that Section 59, Article X of the Tax Ordinance
imposed a percentage tax in violation of the limitation on the taxing
powers of Local Government Units (LGUs) under Section 133(i) of
the LGC. Thus, it was null and void ab initio.The Province of
Benguet assailed the Petition for Declaratory Relief and Injunction
as an improper remedy. It alleged that once a tax liability has
attached, the only remedy of a tax payer is to pay the tax and to
sue for recovery after exhausting administrative remedies. On
substantive grounds, the Province of Benguet argued that the
phrase other places of amusement in Section 140(9) of the LGC
encompasses resorts, swimming pools, bath houses, hot springs,
and tourists spots since Article 220(b)of the LGC defines
amusement as pleasurable diversion and entertainment,
synonymous to relaxation, avocation, pastime or fun. However the
Province of Benguet erroneously cited Section 220(b) of the LGC.
On December 10, 2007, the RTC rendered the assailed decision
dismissing the petition for Declaratory Relief and Injunction for
lack of merit.
On May 21, 2008, the RTC denied Pelizloys Motion for
Reconsideration. Aggrieved Pelizloy filed the present petition on
June 10, 2008 on pure questions of law. It assailed the legality of
Section 59, Article X of the Tax Ordinance as being a (supposedly)
prohibited tax per section 133(i) of the LGC.
In its comment, the Province of Benguet, erroneously citing Section
40 of the LGC, argued that Section 59, Article X of the Tax
Ordinances does not levy a percentage tax, because the imposition
is not based on the total gross receipts of services of the petitioner
but solely and actually limited on the gross receipts of the
admission fees collected. It argued that provinces can validly
impose amusement taxes on resorts, swimming pools, and bath
houses, hot springs, and tourists spots, these being amusement
places.
ISSUE: Whether or not Provinces are authorized to impose amusement
taxes on admission fees to resorts, swimming pools, bath houses, hot
springs and tourists spots for being amusement places under the Local
Government Code.

31

HELD:
The rule governing the taxing power of provinces, cities,
municipalities and barangays is summarized in Icard v. City Council
of Baguio. It is settled that a municipal corporation unlike a
sovereign state is clothed with no inherent power of taxation. The
charter or statute must plainly show an intent to confer that power
or the municipality, cannot assume it. And the power when granted
is to be construed in strictissimi juris. Any doubt or ambiguity
arising out of the term used in granting that power must be
resolved against the municipality. Inferences, implications,
deductions all these have no place in the interpretation of the
taxing power of a municipal corporation.
In this case, the definition of' amusement places' in Section 131 (c)
of the LGC is a clear basis for determining what constitutes the
'other places of amusement' which may properly be subject to
amusement tax impositions by provinces. There is no reason for
going beyond such basis. To do otherwise would be to countenance
an arbitrary interpretation/application of a tax law and to inflict an
injustice on unassuming taxpayers.
The previous pronouncements notwithstanding, it will be noted
that it is only the second paragraph of Section 59, Article X of the
Tax Ordinance which imposes amusement taxes on "resorts,
swimming pools, bath houses, hot springs, and tourist spots". The
first paragraph of Section 59, Article X of the Tax Ordinance refers
to "theaters, cinemas, concert halls, circuses, cockpits, dancing
halls, dancing schools, night or day clubs, and other places of
amusement". In any case, the issues raised by Pelizloy are
pertinent only with respect to the second paragraph of Section 59,
Article X of the Tax Ordinance. Thus, there is no reason to
invalidate the first paragraph of Section 59, Article X of the Tax
Ordinance. Any declaration as to the Province of Benguet's lack of
authority to levy amusement taxes must be limited to admission
fees to resorts, swimming pools, bath houses, hot springs and
tourist spots. Moreover, the second paragraph of Section 59,
Article X of the Tax Ordinance is not limited to resorts, swimming
pools, bath houses, hot springs, and tourist spots but also covers
admission fees for boxing. As Section 140 of the LGC allows for the
imposition of amusement taxes on gross receipts from admission
fees to boxing stadia, Section 59, Article X of the Tax Ordinance
must be sustained with respect to admission fees from boxing
stadia.
VI. MUNICIPAL LIABILITY
VII. LOCAL OFFICIALS
GR NO. 201716

32

MAYOR ABELARDO ABUNDO SR. VS. COMELEC ET AL.

JANUARY 8 2013
Doctrine: A two-year period during which another was serving as Mayor
should be considered as an interruption to the 3 consecutive term
requirement of the Constitution
FACTS:
In this Petition for Certiorari under Rule 65, petitioner Abelardo
Abundo, assails and seeks to nullify the February 8,2012 Resolution
of the Second Division, Commission on Elections (COMELEC), in
EAC No. A-25-2010 and the May 10, 2012 resolution of the
COMELEC en banc affirming that divisions disposition. The
assailed issuances, in turn, affirmed the decision of the Regional
Trial Court (RTC) of Virac, Catanduanes, Branch 43, dated August
9, 2010, in Election Case No. 55declaring Abundo as ineligible,
under the three-term limit rule, to run in the 2010 elections for the
position of, and necessarily to sit as, Mayor of Viga, Catanduanes.
For four successive regular elections, both national and local
elections, petitioner Abundo viewed for the position of municipal
mayor. In both the 2001 and 2007 runs, he emerged and "as
proclaimed as the winning mayoralty candidate and accordingly
served the corresponding terms as mayor. In the 2004 electoral
derby, however, the Viga municipal board of canvassers initially
proclaimed as winner Jose Torres, who, in due time, performed the
functions of the office of mayor. Abundo protested Torres election
and proclamation. Abundo was eventually declared the winner of
the 2004 mayoralty electoral contest, paving the way for his
assumption of office for a period of a little over one year and one
month. Then came the May 10, 2010 elections where Abundo and
Torres again opposed each other. When Abundo filed his certificate
of candidacy for the mayoralty seat, Torres lost no time in seeking
the formers disqualification to run, the corresponding petition
predicated on the three-consecutive term limit rule. On June 16,
2010, the COMELEC First Division issued a resolution finding for
Abundo, who in the meantime bested Torres by 219 votes and was
accordingly proclaimed 2010 mayor-elect of Viga, Catanduanes.
ISSUE: Whether or not Abundo is deemed to have served three
consecutive terms?
HELD:
No, he has not served for three consecutive terms. The Supreme
Court held in its ruling that the consecutiveness of Abundos three
successive, continuous mayorship was effectively broken during the
2004-2007 term when he was initially deprived of title to, and was
veritably disallowed to serve and occupy, an office to which he,
after due proceedings, was eventually declared to have been the
rightful choice of the electorate. The Court finds and declares that
the two-year period during which his opponent Torres was serving
should be considered as an interruption. Moreover, the same Court

33

states in its ruling that as clearly provided in Sec. 8, Art. X of the

Constitution as well as in Sec. 43 (b) of the LGC, voluntary
renunciation of the office by the incumbent elective local official for
any length of time shall NOT, in determining service for three
consecutive terms, be considered an interruption in the continuity
of service for the full term for which the elective official concerned
was elected. Thus, the petition is GRANTED.

G.R. NO. 169253

PACIFICO C. VELASCO VS. THE HON. SANDIGANBAYAN (FIFTH
DIVISION) AND THE PEOPLE OF THE PHILIPPINES
FEBRUARY 20, 2013
Doctrine: When the governor, city or municipal Mayor, or punong
barangay is temporarily incapacitated to perform his duties for physical
or legal reasons such as, but not limited to, leave of absence, travel
abroad, and suspension from office, the vice-governor, city or municipal
vice-mayor, or the highest ranking sangguniang barangay member shall
automatically exercise the powers and perform the duties and functions
of the local chief executive concerned, except the power to appoint,
suspend, or dismiss employees
Facts:
Philip Corpus Velasco then Mayor of the municipality of Bacarra in
Ilocos Norte filed a complaint against his predecessor regarding
the purchase of a road grader. The purchase is alleged to be
anomalous.
Then on December 11 2002 the Deputy Ombudsman for Luzon
issued a resolution dismissing the complaint for lack of probable
cause. Then Acting Mayor Nicomedes Dela Cruz moved for
reconsideration on 2003.
The case was reviewed and the Office of Legal Affairs of the
Ombudsman recommended the filing of technical malversation
against the petitioner.
The petitioner asserts that the acting mayor has no legal
capacity(standing) to file a Motion for reconsideration pertaining to
an earlier resolution dismissing the complaint against him.
Issue: WON the acting mayor has the legal capacity to continue the
action of the mayor?
Held:
Yes, the acting mayor has the legal capacity to file a Motion for
reconsideration on behalf of the local government. Under Section
46 of the Local Government Code, the vice-mayor automatically
assumes the powers and duties of the mayor in case of the latters
temporary absence, thus:
SEC. 46. Temporary Vacancy in the Office of the Local Chief
Executive. - (a) When the governor, city or municipal Mayor, or
punong barangay is temporarily incapacitated to perform his duties

34

for physical or legal reasons such as, but not limited to, leave of
absence, travel abroad, and suspension from office, the vicegovernor, city or municipal vice-mayor, or the highest ranking
sangguniang barangay member shall automatically exercise the
powers and perform the duties and functions of the local chief
executive concerned, except the power to appoint, suspend, or
dismiss employees which can only be exercised if the period of
temporary incapacity exceeds thirty (30) working days.
In fact, Acting Mayor Dela Cruz explained that at that time he filed
the motion, Mayor Philip Velasco was "on official vacation leave
and out of the country."
It is likewise incontrovertible that Mayor Philip Velasco instituted
the complaint in his capacity as then Mayor of Bacarra, Ilocos
Norte. Petitioner premises his challenge on legal standing on the
mere failure of the complainant to state in his complaint that he
was suing on behalf of the municipality. His argument is specious.
As correctly asserted by Mayor Philip Velasco in his
Comment/Opposition to the Motion to Strike, the property sought
to be recovered in the complaint will revert to the municipality and
not to him

GR. NO. 191970

ROMMEL APOLINARIO JALOSJOS vs THE COMMISSION ON
ELECTIONS and DAN ERASMO, SR.,
April 24, 2012
Doctrine: The Court will respect the decision of the people of that
province and resolve all doubts regarding his qualification in his favor to
breathe life to their manifest will.
FACTS:
Petitioner Rommel Jalosjos was born in Quezon City on 1973. He
migrated to Australia in 1981 and there acquired Australian
citizenship. On November 2008, at age 35, he returned to the
Philippines. He lived with his brother, Romeo, Jr., in Barangay
Veterans Village, Ipil, Zamboanga Sibugay. Upon his return, he
took an oath of allegiance to the Republic of the Philippines; he was
then issued a Certificate of Reacquisition of Philippine Citizenship
by the Bureau of Immigration. On September 1, 2009 he renounced
his Australian citizenship.
From the time of his return, Jalosjos acquired a residential property
in Veteran Village where he lived where he also applied for
registration as a voter in the Municipality of Ipil but respondent
Dan Erasmo, Sr., the Barangay Captain of Barangay Veterans
Village, opposed the same. The Election Registration Board
approved the application however and included Jalosjos name in
the Commission on Elections (COMELECs) voters list.

35

 On November 28, 2009 Jalosjos filed his Certificate of Candidacy

(COC) for Governor of Zamboanga Sibugay Province for the May
10, 2010 elections. Erasmo filed a petition to deny due course or to
cancel Jalosjos COC on the ground that the latter made material
misrepresentation in the same since he failed to comply with the
requirements of R.A. 9225 and the one-year residency requirement
of the Local Government Code.
COMELEC ruled that Jalosjos failed to prove the residency
requirement for a gubernatorial candidate. He also failed to
present ample proof of a bona fide intention to establish his
domicile
in
Ipil,
Zamboanga
Sibugay.
On
motion
for
reconsideration, the COMELEC En Banc affirmed the Second
Divisions decision.
ISSUE: Whether or not the Jalosjos failed to present ample proof of a
bona fide intention to establish his domicile in Ipil, Zamboanga Sibugay.
HELD:
The Local Government Code requires a candidate seeking the
position of provincial governor to be a resident of the province for
at least one year before the election. For purposes of the election
laws, the requirement of residence is synonymous with domicile,
meaning that a person must not only intend to reside in a
particular place but must also have personal presence in such
place coupled with conduct indicative of such intention.
The question of residence is a question of intention. Jurisprudence
has laid down the following guidelines: (a) every person has a
domicile or residence somewhere; (b) where once established, that
domicile remains until he acquires a new one; and (c) a person can
have but one domicile at a time.
It is inevitable under these guidelines and the precedents applying
them that Jalosjos has met the residency requirement for provincial
governor of Zamboanga Sibugay.
Quezon City was Jalosjos domicile of origin, the place of his birth.
It may be taken for granted that he effectively changed his domicile
from Quezon City to Australia when he migrated there at the age of
eight, acquired Australian citizenship, and lived in that country for
26 years. Australia became his domicile by operation of law and by
choice.
When he came to the Philippines in November 2008 to live with his
brother in Zamboanga Sibugay, it is evident that Jalosjos did so
with intent to change his domicile for good. He left Australia, gave
up his Australian citizenship, and renounced his allegiance to that
country. In addition, he reacquired his old citizenship by taking an
oath of allegiance to the Republic of the Philippines, resulting in his
being issued a Certificate of Reacquisition of Philippine Citizenship
by the Bureau of Immigration. By his acts, Jalosjos forfeited his
legal right to live in Australia, clearly proving that he gave up his
domicile there. And he has since lived nowhere else except in Ipil,
Zamboanga Sibugay.

36

 To hold that Jalosjos has not establish a new domicile in

Zamboanga Sibugay despite the loss of his domicile of origin
(Quezon City) and his domicile of choice and by operation of law
(Australia) would violate the settled maxim that a man must have a
domicile or residence somewhere.
The COMELEC concluded that Jalosjos has not come to settle his
domicile in Ipil since he has merely been staying at his brothers
house. But this circumstance alone cannot support such conclusion.
Indeed, the Court has repeatedly held that a candidate is not
required to have a house in a community to establish his residence
or domicile in a particular place. It is sufficient that he should live
there even if it be in a rented house or in the house of a friend or
relative. To insist that the candidate own the house where he lives
would make property a qualification for public office. What matters
is that Jalosjos has proved two things: actual physical presence in
Ipil and an intention of making it his domicile.
Further, it is not disputed that Jalosjos bought a residential lot in
the same village where he lived and a fish pond in San Isidro,
Naga, Zamboanga Sibugay. He showed correspondences with
political leaders, including local and national party-mates, from
where he lived. Moreover, Jalosjos is a registered voter of Ipil by
final judgment of the Regional Trial Court of Zamboanga Sibugay.
While the Court ordinarily respects the factual findings of
administrative bodies like the COMELEC, this does not prevent it
from exercising its review powers to correct palpable
misappreciation
of
evidence
or
wrong
or
irrelevant
considerations.16 The evidence Jalosjos presented is sufficient to
establish Ipil, Zamboanga Sibugay, as his domicile. The COMELEC
gravely abused its discretion in holding otherwise.
Jalosjos won and was proclaimed winner in the 2010 gubernatorial
race for Zamboanga Sibugay. The Court will respect the decision of
the people of that province and resolve all doubts regarding his
qualification in his favor to breathe life to their manifest will.

G.R. NO. 193261

MEYNARDO SABILI VS. COMMISSION ON ELECTIONS AND
FLORENCIO LIBREA
APRIL 24, 2012
Doctrine: The rationale for the residency requirement in our elections
laws, to wit:
The Constitution and the law requires residence as a qualification for
seeking and holding elective public office, in order to give candidates,

37

the opportunity to be familiar with the needs, difficulties, aspirations,

potentials for growth and all matters vital to the welfare of their
constituencies; likewise, it enables the electorate to evaluate the office
seekers qualifications and fitness for the job they aspire for
FACTS:
COMELEC denied Sabilis Certificate of Candidacy for mayor of
Lipa due to failure to comply with the one-year residency
requirement. When petitioner filed his COC for mayor of Lipa City
for the 2010 elections, he stated that he had been a resident of the
city for two (2) years and eight (8) months. However, it is
undisputed that when petitioner filed his COC during the 2007
elections, he and his family were then staying at his ancestral home
in Barangay (Brgy.) Sico, San Juan, Batangas. Respondent
Florencio Librea (private respondent) filed a petition to deny due
course, cancel Certificate of Candidacy and to disqualify a
Candidate for possessing some grounds for disqualification.
Allegedly, petitioner falsely declared under oath in his COC that he
had already been a resident of Lipa City for two years and eight
months prior to the scheduled May 2010 local elections. In its
Resolution dated January 26, 2010, the COMELEC Second Division
granted the Petition of private respondent, declared petitioner as
disqualified from seeking the mayoralty post in Lipa City, and
canceled his Certificate of Candidacy for his not being a resident of
Lipa City and for his failure to meet the statutory one-year
residency requirement under the law. Petitioner moved for
reconsideration of the 26 January 2010 Resolution of the
COMELEC, during the pendency of which the 10 May 2010 local
elections were held. The next day, he was proclaimed the duly
elected mayor of Lipa City after garnering the highest number of
votes cast for the said position. He accordingly filed a
Manifestation with the COMELEC to reflect this fact. In its
Resolution dated 17 August 2010, the COMELEC denied the
Motion for Reconsideration of petitioner.
Hence, petitioner filed with this Court a Petition (Petition for
Certiorari with Extremely Urgent Application for the Issuance of a
Status Quo Order and for the Conduct of a Special Raffle of this
Case) under Rule 64 in relation to Rule 65 of the Rules of Court,
seeking the annulment of the 26 January 2010 and 17 August2010
Resolutions of the COMELEC.
Issues: Whether or not the COMELEC committed grave abuse of
discretion in holding that Sabili failed to prove compliance with the oneyear residency requirement for local elective officials?
HELD:
As a general rule, the Court does not ordinarily review the
COMELECs appreciation and evaluation of evidence. However,

38

exceptions thereto have been established, including when the

COMELEC's appreciation and evaluation of evidence become so
grossly unreasonable as to turn into an error of jurisdiction. In
these instances, the Court is compelled by its constitutional duty to
intervene and correct the COMELEC's error. As a concept, "grave
abuse of discretion" defies exact definition; generally, it refers to
"capricious or whimsical exercise of judgment as is equivalent to
lack of jurisdiction;" the abuse of discretion must be patent and
gross as to amount to an evasion of a positive duty. Mere abuse of
discretion is not enough; it must be grave. It was held, too, that the
use of wrong or irrelevant considerations in deciding an issue is
sufficient to taint a decision-maker's action with grave abuse of
discretion. Closely related with the limited focus of the present
petition is the condition, under Section 5, Rule 64 of the Rules of
Court, that findings of fact of the COMELEC, supported by
substantial evidence, shall be final and non-reviewable.
In light of limited authority to review findings of fact, the court
does not ordinarily review in a certiorari case the COMELEC's
appreciation and evaluation of evidence. Any misstep by the
COMELEC in this regard generally involves an error of judgment,
not of jurisdiction.
In exceptional cases, however, when the COMELEC's action on the
appreciation and evaluation of evidence oversteps the limits of its
discretion to the point of being grossly unreasonable, the Court is
not only obliged, but has the constitutional duty to intervene. When
grave abuse of discretion is present, resulting errors arising from
the grave abuse mutate from error of judgment to one of
jurisdiction

VIII. HUMAN RESOURCES AND DEVELOPMENT

G.R. NO. 181367
LA CARLOTA CITY V. ROJO
APRIL 24, 2012
Doctrine: Appointment requirements for LGUs are: (a) publication; (b)
Personnel Selection Board deliberation; and (c) certification from the
appropriate offices that appropriations or funds are available for the position.
The Facts:
On March 10, 2004, Rojo, a member of the Sanggunian Panlungsod
(SP) of La Carlota City, applied for the vacant position of SP
Secretary. On the March 17, 2004 session of the SP, Rojo tendered
his irrevocable resignation as SP Member. At that time, Vice-Mayor
Rex Jalandoon (Jalandoon), as presiding officer, and six members of
a twelve-member sanggunian were present.
On March 18, 2004, Jalandoon appointed Rojo as SP Secretary and
the latter immediately took his oath of office. On March 26, 2004,

39

the appointment ban for the May 2004 elections took effect. On
April 27, 2004, the Civil Service Commission (CSC) Field-Office
disapproved Rojos appointment due to incomplete requirements.
Jalandoon appealed the disapproval to the CSC Regional Office.
The 2004 elections resulted in changes in the La Carlota local
government. The newly elected Mayor and Vice-Mayor of La
Carlota City sought to affirm the disapproval of Rojos appointment,
alleging that there had been no quorum when Rojo tendered his
resignation before the SP. Since Rojos resignation could not have
been validly accepted for lack of quorum, it was argued that Rojo
continued to be an elective official who was ineligible for
appointment to a public office under the Constitution.
ISSUE: Whether the appointment of respondent as sangguniang
panlungsod secretary violated the constitutional proscription against
eligibility of an elective official for appointment during his tenure.
HELD:
No, The appointment of Rojo as SP secretary is valid. The
resolution of this case requires the application and interpretation
of certain provisions of Republic Act No. 7160 (RA 7160), otherwise
known as the Local Government Code of 1991. Records show that
the position to which Atty. Rojo was appointed was published on
January 6, 2004. The qualifications of Atty. Rojo were deliberated
upon by the Personnel Selection Board on March 5, 2004, attended
by Vice Mayor Jalandoon as Chairman and Jose Leofric F. De Paola,
SP member and Sonia P. Delgado, Records Officer, as members.
Records likewise show that a certification was issued by Vice
Mayor Jalandoon, as appointing authority, that the appointment
was issued in accordance with the limitations provided for under
Section 325 of RA 7160 and the said appointment was reviewed
and found in order pursuant to Section 5, Rule V of the Omnibus
Rules Implementing Executive Order No. 292. Further,
certifications were issued by the City Budget Officer, Acting City
Accountant, City Treasurer and City Vice Mayor that
appropriations or funds are available for said position. Apparently,
all the requirements prescribed in Section 1, Rule VIII in CSC
Memorandum Circular No. 15, series of 1999, were complied with.
Clearly, the appointment of respondent on 18 March 2004 was
validly issued considering that: (1) he was considered resigned as
Sangguniang Panlungsod member effective 17 March 2004; (2) he
was fully qualified for the position of Sanggunian Secretary; and (3)
there was substantial compliance with the appointment
requirements.

IX.

LOCAL INITIATIVE AND REFERENDUM

40

G.R. No. 191336

MIGUEL v MONTANEZ
JANUARY 25, 2012
Doctrine: LGUs can provide remedies for certain cases, but noncompliance of such is not a cause of action to be filed.
Facts:
Respondent secured a load for 143,864 payable in 1 year from
petitioner
Respondent failed to pay the loan and through Lupong
Tagapamayapa of San Jose, Rizal, parties entered into a
Kasunduang Pag-aayos wherein the respondent agreed to pay in
installments of P2,000 per month
Respondent still failed to pay and Lupong Tagapamayapa issued a
certification to file action in court.
Petitioners filed in MeTC of Makati City but respondents raised
improper venue, but MeTC ruled in favor of petitioners
Respondents appealed to RTC of Makati City but was dismissed
and so they appealed to the CA
CA ruled that Lupon ng Barangay through Kasunduang Pagaayos
had the force and effect of a court judgment and may be enforced
by execution. And that herein petitioners should have filed for the
execution of the Kasunduang Pag-aayos instead for collection of
sum of money in courts.
Issues:
WON petitioners filed the right case proceeding a Kasunduang Pagaayos
Held:
Yes
Since the cause of action arose from respondents breach of the
original load agreement and not the Kasunduang Pag-aayos, the
case is binding between contracting parties.
The remedy of Kasunduang Pag-aayos is under the Implementing
Rules and Regulations of the Local Government Code saying that
the Punong Barangay is called upon during the hearing to
determine sole the fact of non-complience of the terms of the
settlement and to give the defaulting party another chance at
voluntarily complying with his obligation.
Upon appeal to the courts, it is then covered by the Rules of Court.
Revised Katarungang Pambarangay Law provides for a two-tiered
mode of enforcement of an amicable settlement, to wit: (a) by
execution by the Punong Barangay which is quasi-judicial and
summary in nature on mere motion of the party entitled thereto;
and (b) an action in regular form, which remedy is judicial.
Thus, although the "Kasunduan" executed by petitioner and
respondent before the Office of the Barangay Captain had the force
and effect of a final judgment of a court, petitioner's noncompliance paved the way for the application of Art. 2041 under

41

which respondent may either enforce the compromise, following

the procedure laid out in theRevised Katarungang Pambarangay
Law, or regard it as rescinded and insist upon his original demand.
In the instant case, the respondent did not comply with the terms
and conditions of the Kasunduang Pag-aayos. Such non-compliance
may be construed as repudiation because it denotes that the
respondent did not intend to be bound by the terms thereof,
thereby negating the very purpose for which it was executed.
Perforce, the petitioner has the option either to enforce
the Kasunduang Pag-aayos, or to regard it as rescinded and insist
upon his original demand, in accordance with the provision of
Article 2041 of the Civil Code.
Kasunduang Pag-aayos is not the proper remedy. The fact that the
petitioner opted to rescind the Kasunduang Pag-aayos means that
she is insisting upon the undertaking of the respondent under the
original loan contract.
G.R. NO. 183623
LETICIA B. AGBAYANI VS CA
JUNE 25, 2012
Doctrine: Mandatory Barangay Conciliation is a pre-condition for filing
a complaint in court. Where the complaint (a) did not state that it is one
of the excepted cases, or (b) it did not allege prior availment of said
conciliation process, or (c) did not have a certification that no
conciliation or settlement had been reached by the parties, the case
should be dismissed
FACTS:
Agbayani and Genabe were both employees of the Regional Trial
Court (RTC), Branch 275 of Las Pias City, working as Court
Stenographer and Legal Researcher II, respectively. On December
29, 2006, Agbayani filed a criminal complaint for grave oral
defamation against Genabe for allegedly uttering against her, in the
presence of their fellow court employees and while she was going
about her usual duties at work, the following statements, to wit:
o ANG GALING MO LETY, SINABI MO NA TINAPOS MO
YUNG MARVILLA CASE, ANG GALING MO. FEELING
LAWYER KA KASI, BAKIT DI KA MAGDUTY NA LANG,
STENOGRAPHER KA MAGSTENO KA NA LANG, ANG
GALING MO, FEELING LAWYER KA TALAGA. NAGBEBENTA
KA NG KASO, TIRADOR KA NG JUDGE. SIGE HIGH BLOOD
DIN KA, MAMATAY KA SANA SA HIGH BLOOD MO.
The City Prosecutor found probable cause for the filing of the
Information for grave oral defamation against Genabe.
However, upon a petition for review filed by Genabe, the DOJ found
that the subject utterances of respondent constitute only slight oral
defamation.

42

 Notwithstanding the foregoing, DOJ believe that the instant case

should nonetheless be dismissed for non-compliance with the
provisions of Book III, Title I, Chapter 7 (Katarungang
Pambarangay), of Republic Act No. 7160 (The Local Government
Code of 1991). As shown by the records, the parties herein are
residents of Las Pias City; the complaint-affidavit failed to show
that the instant case was previously referred to the barangay for
conciliation in compliance with Sections 408 and 409, paragraph
(d), of the Local Government Code; the records of the case likewise
show that the instant case is not one of the exceptions enumerated
under Section 408 of the Local Government Code; it is well-noted
that the Supreme Court held that where the case is covered by P.D.
1508 (Katarungang Pambarangay Law), the compulsory process of
arbitration required therein is a pre-condition for filing a complaint
in court. Where the complaint (a) did not state that it is one of the
excepted cases, or (b) it did not allege prior availment of said
conciliation process, or (c) did not have a certification that no
conciliation or settlement had been reached by the parties, the
case should be dismissed. While the foregoing doctrine is handed
down in civil cases, it is submitted that the same should apply to
criminal cases covered by, but filed without complying with, the
provisions of P.D. 1508.
ISSUE: WON the DOJ's is correct in dismissing the complaint due to
non-compliance with the provisions of the local government code of
1991.
HELD:
YES, Undeniably, both petitioner Agbayani and respondent Genabe
are residents of Las Pias City and both work at the RTC, and the
incident which is the subject matter of the case happened in their
workplace. Agbayanis complaint should have undergone the
mandatory barangay conciliation for possible amicable settlement
with respondent Genabe, pursuant to Sections 408 and 409 of
Republic Act No. 7160 or the Local Government Code of 1991
which provide:
o Sec. 408. Subject Matter for Amicable Settlement; Exception
thereto. The lupon of each barangay shall have authority to
bring together the parties actually residing in the same city
or municipality for amicable settlement of all disputes,
except: x x x
o Sec. 409. Venue. x x x (d) Those arising at the workplace
where the contending parties are employed or x x x shall be
brought in the barangay where such workplace or institution
is located.
o Administrative Circular No. 14-93 states that:

43

 I. All disputes are subject to Barangay conciliation

pursuant to the Revised Katarungang Pambarangay Law
[formerly P.D. 1508, repealed and now replaced by Secs.
399-422, Chapter VII, Title I, Book III, and Sec. 515,
Title I, Book IV, R.A. 7160, otherwise known as the
Local Government Code of 1991], and prior recourse
thereto is a pre-condition before filing a complaint in
court or any government offices
The compulsory process of arbitration is a pre-condition for the
filing of the complaint in court. Where the complaint (a) did not
state that it is one of excepted cases, or (b) it did not allege prior
availment of said conciliation process, or (c) did not have a
certification that no conciliation had been reached by the parties,
the case should be dismissed.
Here, petitioner Agbayani failed to show that the instant case is not
one of the exceptions enumerated above. Neither has she shown
that the oral defamation caused on her was so grave as to merit a
penalty of more than one year. Oral defamation under Article 358
of the Revised Penal Code, as amended.
GR. NO. 182069
ARNOLD D. VICENCIO VS. HON. REYNALOO A. VILLAR AND HON.
JUANITO G. ESPINO, .JR. ET AL.
JULY 3, 2012
Doctrine: Generally, only the Mayor is allowed to enter into contracts in
behalf of the local government unit, as it is only the Mayor is allowed
through law. As such, an ordinance allowing the Vice Mayor to enter into
contracts in behalf of the local government unit is void.
FACTS:
On 30 October 2003, the City Council or the Sangguniang
Panglungsod ng Malabon (SPM), presided over by Hon. Benjamin
Galauran, then acting Vice-Mayor, adopted and approved City
Ordinance No. 15-2003, entitled An Ordinance Granting Authority
to the City Vice Mayor, Hon. Jay Jay Yambao, to Negotiate and
Enter into Contract for Consultancy Services for Consultants in the
Sanggunian Secretariat Tasked to Function in their Respective
Areas of Concern.
Subsequently, during the May 2004 elections, petitioner was
elected City Vice-Mayor of Malabon. By virtue of this office, he
also became the Presiding Officer of the SPM and, at the same
time, the head of the Sanggunian Secretariat.
To complement the manpower requirements of the existing
Sanggunian Secretariat, petitioner deemed it necessary to hire the
services of consultants with the end view of augmenting and
upgrading its performance capability for the effective operation of
the legislative machinery of the city.

44

 Petitioner thus wrote a letter dated 19 July 2004 to Atty. Danilo T.

Diaz , the City Legal Officer of Malabon, inquiring as to whether it
was still necessary for the SPM to ratify a newly entered contract
of consultancy services between it and the candidate for the
consultancy position.
Atty. Diaz then responded to the said inquiry through a letter dated
26 July 2004, which categorically stated that ratification was no
longer necessary, provided that the services to be contracted were
those stipulated in the ordinance.
On 21 January 2005, the SPM adopted City Ordinance No. 01-2005
entitled An Ordinance Appropriating Funds to Cover the Various
Expenditures and Activities of the Local Government of Malabon
City for the Period from January 01, 2005 to December 31, 2005.
The total amount of funds appropriated was 511,070,019 for the
spending of the entire city government. Out of this amount,
792,000 was earmarked for consultancy services under the
Legislative Secretariat.
On 19 December 2005, Audit Observation Memorandum (AOM)
No. 2005-12-01911 was issued by Ms. Atenie F. Padilla, Supervising
Auditor of the City Auditors Office, Malabon City, disallowing the
amount of three hundred eighty-four thousand nine hundred eighty
pesos (384,980) for being an improper disbursement. The AOM
disclosed the following pertinent findings:
City Ordinance No. 15-2003 dated October 30, 2003 was used as
basis of authority in hiring consultants. Analysis of the said City
Ordinance revealed that it specifically authorized the former ViceMayor, Hon. Mark Allan Jay G. Yambao to enter into a contract for
consultancy services in the Sangguniang Secretariat covering the
period June to December 2003 only. Said ordinance does not give
authority to the incumbent City Vice-Mayor Arnold D. Vicencio to
hire consultants for CY 2005.
On 1 February 2005, petitioner, representing the City Government
of Malabon City, entered into Contracts for Consultancy Services
with Ms. Jennifer S. Catindig and Atty. Rodolfo C. delos Santos.
On 11 February 2005, another Contract for Consultancy Services
was entered into between Mr. Marvin T. Amiana and the city
government. After the signing of their respective contracts, the
three consultants rendered consultancy services to the SPM.
Thereafter, they were correspondingly paid for their services
pursuant to the contracts therefor.
ISSUE: Whether the city vice-mayor is authorized to enter into contracts
on behalf of the local government unit?
HELD:
NO. City Ordinance No. 15-2003 An Ordinance Granting Authority
to the City Vice Mayor, Hon. Jay Jay G. Yambao, to Negotiate, and
Enter
into
a
Contract
for
Consultancy
Services
22 R.A. 7160, Sec. 456 (b)(1)(vi) provides: (b) For efficient,
effective and economical governance the purpose of which is the

45

general welfare of the city and its inhabitants pursuant to Section

16 of this Code, the city mayor shall: (vi) Represent the city in all
its business transactions and sign in its behalf all bonds, contracts,
and obligations, and such other documents upon authority of the
sangguniang panlungsod or pursuant to law or ordinance;
Ordinance No. 15-2003 specifically authorized Vice-Mayor Yambao
to enter into contracts for consultancy services. As this is not a
power or duty given under the law to the Office of the Vice-Mayor,
Ordinance No. 15-2003 cannot be construed as a continuing
authority for any person who enters the Office of the Vice- Mayor
to enter into subsequent, albeit similar, contracts.
Section 103 of P.O. 1445 declares that expenditures of government
funds or uses of government property in violation of law or
regulations shall be a personal liability of the of1icial or employee
found to be directly responsible therefor. The public official's
personal liability arises only if the expenditure of government funds
was made in violation of law. In this case, petitioner's act of
entering into a contract on behalf of the local government unit
without the requisite authority therefor was in violation of the
Local Government Code.

G.R. NOS. 186739-960

RUZOL V. SANDIGANBAYAN
APRIL 17, 2013
Doctrine: The LGU also has, under the LGC of 1991, ample authority to
promulgate rules, regulations and ordinances to monitor and regulate
salvaged forest products, provided that the parameters set forth by law
for their enactment have been faithfully complied with.
FACTS:
Leovegildo R. Ruzol was the mayor of General Nakar, Quezon from
2001 to 2004. Earlier in his term, he organized a Multi-Sectoral
Consultative Assembly composed of civil society groups, public
officials and concerned stakeholders with the end in view of
regulating and monitoring the transportation of salvaged forest
products within the vicinity of General Nakar.
At the organizational meeting for the assembly, the participants
agreed that to regulate the salvaged forests products, the Office of
the Mayor, through Ruzol, shall issue a permit to transport after
payment of the corresponding fees to the municipal treasurer.
From 2001 to 2004, two hundred twenty-one (221) permits to
transport salvaged forest products were issued to various
recipients, of which forty-three (43) bore the signature of Ruzol
while the remaining one hundred seventy-eight (178) were signed
by his co-accused Guillermo T. Sabiduria (Sabiduria), then
municipal administrator of General Nakar.

46

 221 Informations for violation of Art. 177 of the RPC or for

Usurpation of Authority or Official Functions were filed against
Ruzol and Sabiduria.
Ruzols defense, as Chief Executive of the municipality of General
Nakar, Quezon, he is authorized to issue permits to transport forest
products pursuant to RA 7160 which give the LGU not only express
powers but also those powers that are necessarily implied from the
powers expressly granted as well as those that are necessary,
appropriate or incidental to the LGUs efficient and effective
governance.
RA 7160 has devolved certain functions and
responsibilities of the DENR to the LGU. And the permits to
transport were issued pursuant to the devolved function to manage
and control communal forests with an area not exceeding fifty (50)
square kilometers.
Under (a) Section 5, Article X of the Constitution, (b) Section 129,
Chapter I, Title One Book II of R.A. 7160, and (c) Section 186,
Article Five, Chapter 5, Tile One, Book II of R.A. 7160, the
municipality is granted the power to create its own sources of
revenue and to levy fees in accordance therewith.
The only kind of document the DENR issues relating to log, timber
or lumber is denominated Certificate of Timber Origin or CTO for
logs and Certificate of Lumber Origin or CLO for lumber. The
DENR directly sanctioned and expressly authorized the issuance of
the 221 Transport permits through the Provincial Environment and
natural Resources officer Rogelio Delgado Sr., in a Multi-Sectoral
Consultative Assembly.
Sandiganbayan acquitted Sabiduria but found Ruzol guilty as
charged.
ISSUES: WON the authority to monitor and regulate the transportation
of salvaged forest product is solely with the DENR, and no one else.
HELD:
The LGU also has, under the LGC of 1991, ample authority to
promulgate rules, regulations and ordinances to monitor and
regulate salvaged forest products, provided that the parameters set
forth by law for their enactment have been faithfully complied with.
While the DENR is, indeed, the primary government
instrumentality charged with the mandate of promulgating rules
and regulations for the protection of the environment and
conservation of natural resources, it is not the only government
instrumentality clothed with such authority.
While the law has designated DENR as the primary agency tasked
to protect the environment, it was not the intention of the law to
arrogate unto the DENR the exclusive prerogative of exercising
this function. Whether in ordinary or in legal parlance, the word
primary can never be taken to be synonymous with sole or
exclusive.
The General Welfare Clause of the LGC states:

47

o 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.
o Pursuant to the
aforequoted provision, municipal
governments 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
them 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 its
inhabitants, and ensure the protection of property in the
municipality.
o There is a clear merit to the view that the monitoring and
regulation of salvaged forest products through the issuance
of appropriate permits is a shared responsibility which may
be done either by DENR or by the LGUs or by both.
o DAO 1992-30 states that LGUs shall share with the
national government,
particularly
the DENR,
the
responsibility
in
the sustainable management and
development of the environment and natural resources within
their territorial jurisdiction.
o The Permits to Transport issued by Ruzol are invalid for his
failure to comply with the procedural requirements set forth
by law for its enforcement. Ruzol insists that the permits
partake of the nature of transport fees levied by the
municipality for the use of public roads. Ruzol is correct to a
point.
o Nevertheless, we find that an enabling ordinance is necessary
to confer the subject permits with validity.
o As correctly held by the Sandiganbayan, the power to levy
fees or charges under the LGC is exercised by the
Sangguniang Bayan through the enactment of an appropriate
ordinance wherein the terms, conditions and rates of the fees
are prescribed.
o Although we recognize the LGUs authority in the
management and control of communal forests within its

48

territorial jurisdiction, We reiterate that this authority should

be exercised and enforced in accordance with the procedural
parameters established by law for its effective and efficient
execution.
o LGC provides that the LGUs authority to manage and control
communal forests should be pursuant to national policies
and is subject to supervision, control and review of DENR.
o Before an area may be considered a communal forest, the
following requirements must be accomplished: (1) an
identification of potential communal forest areas within the
geographic jurisdiction of the concerned city/municipality; (2)
a forest land use plan which shall indicate, among other
things, the site and location of the communal forests; (3) a
request to the DENR Secretary through a resolution passed
by the Sangguniang Bayan concerned; and (4) an
administrative order issued by DENR Secretary declaring the
identified area as a communal forest.
o In the present case, the records are bereft of any showing
that these requirements were complied with.

G.R. NO. 193237

DOMINADOR G. JALOSJOS, JR VS. COMELEC
OCTOBER 9, 2012
Doctrine: A sentence of prisin mayor by final judgment is a ground for
disqualification under Section 40 of the Local Government Code and
under Section 12 of the Omnibus Election Code.
FACTS:
Both Jalosjos and Cardino were candidates for Mayor of Dapitan
City, Zamboanga del Norte in the May 2010 elections. Jalosjos was
running for his third term. Cardino filed a petition under Section 78
of the Omnibus Election Code to deny due course and to cancel the
certificate of candidacy of Jalosjos. Cardino asserted that Jalosjos
made a false material representation in his certificate of candidacy
when he declared under oath that he was eligible for the Office of
Mayor.
Cardino claimed that long before Jalosjos filed his certificate of
candidacy, Jalosjos had already been convicted by final judgment
for robbery and sentenced to prisin mayor. Cardino asserted that
Jalosjos has not yet served his sentence. Jalosjos admitted his
conviction but stated that he had already been granted probation.
Cardino countered that the RTC revoked Jalosjos probation.
Jalosjos refuted Cardino and stated that the RTC issued an Order
declaring that Jalosjos had duly complied with the order of

49

probation. Jalosjos further stated that during the 2004 elections the
COMELEC denied a petition for disqualification filed against him
on the same grounds.
On 10 May 2010, the COMELEC cancelled Jalosjos certificate of
candidacy. The COMELEC concluded that "Jalosjos has indeed
committed material misrepresentation in his certificate of
candidacy when he declared, under oath, that he is eligible for the
office he seeks to be elected to when in fact he is not by reason of a
final judgment in a criminal case, the sentence of which he has not
yet served." The COMELEC found that Jalosjos certificate of
compliance of probation was fraudulently issued; thus, Jalosjos has
not yet served his sentence. The penalty imposed on Jalosjos was
the indeterminate sentence of one year, eight months and twenty
days of prisin correccional as minimum, to four years, two months
and one day of prisin mayor as maximum. The COMELEC ruled
that Jalosjos "is not eligible by reason of his disqualification as
provided for in Section 40(a) of Republic Act No. 7160.
The COMELEC added to the dispositive portion of its 11 August
2010 Resolution that the provisions of the Local Government Code
on succession should apply.
ISSUE: WON Jalosjos is disqualified
RULING:
YES, The perpetual special disqualification against Jalosjos arising
from his criminal conviction by final judgment is a material fact
involving eligibility which is a proper ground for a petition under
Section 78 of the Omnibus Election Code. Jalosjos certificate of
candidacy was void from the start since he was not eligible to run
for any public office at the time he filed his certificate of candidacy.
Jalosjos was never a candidate at any time, and all votes for
Jalosjos were stray votes. As a result of Jalosjos certificate of
candidacy being void ab initio, Cardino, as the only qualified
candidate, actually garnered the highest number of votes for the
position of Mayor.
The dissenting opinions of the COMELEC erroneously limit the
remedy against Jalosjos to disqualification under Section 68 of the
Omnibus Election Code and apply the rule on succession under the
Local Government Code.
A sentence of prisin mayor by final judgment is a ground for
disqualification under Section 40 of the Local Government Code
and under Section 12 of the Omnibus Election Code. It is also a
material fact involving the eligibility of a candidate under Sections
74 and 78 of the Omnibus Election Code. Thus, a person can file a
petition under Section 40 of the Local Government Code or under
either Section 12 or Section 78 of the Omnibus Election Code. The
pertinent provisions read:
o Local Government Code: Sec. 40. Disqualifications. - The
following persons are disqualified from running for any
elective local position:

50

 (a) Those sentenced by final judgment for an offense

involving moral turpitude or for an offense punishable
by one (1) year or more of imprisonment, within two (2)
years after serving sentence;
(b) Those removed from office as a result of an
administrative case;
(c) Those convicted by final judgment for violating the
oath of allegiance to the Republic;
(d) Those with dual citizenship;
(e) Fugitives from justice in criminal or non-political
cases here or abroad;
(f) Permanent residents in a foreign country or those
who have acquired the right to reside abroad and
continue to avail of the same right after the effectivity
of this Code; and
(g) The insane or feeble-minded.
Section 12, Omnibus Election Code:
o Sec. 12. Disqualifications. Any person who has been
declared by competent authority insane or incompetent, or
has been sentenced by final judgment for subversion,
insurrection, rebellion or for any offense for which he was
sentenced to a penalty of more than eighteen months or for a
crime involving moral turpitude, shall be disqualified to be a
candidate and to hold any office, unless he has been given
plenary pardon or granted amnesty.
The disqualifications to be a candidate herein provided shall be
deemed removed upon the declaration by competent authority that
said insanity or incompetence had been removed or after the
expiration of a period of five years from his service of sentence,
unless within the same period he again becomes disqualified.
Omnibus Election Code: Sec. 68. Disqualifications. Any
candidate who, in an action or protest in which he is a party is
declared by final decision by a competent court guilty of, or found
by the Commission of having (a) given money or other material
consideration to influence, induce or corrupt the voters or public
officials performing electoral functions; (b) committed acts of
terrorism to enhance his candidacy; (c) spent in his election
campaign an amount in excess of that allowed by this Code; (d)
solicited, received or made any contribution prohibited under
Sections 89, 95, 96, 97 and 104; or (e) violated any of Sections 80,
83, 85, 86 and 261, paragraphs d, e, k, v, and cc, sub-paragraph 6,
shall be disqualified from continuing as a candidate, or if he has
been elected, from holding the office. Any person who is a
permanent resident of or an immigrant to a foreign country shall
not be qualified to run for any elective office under this Code,
unless said person has waived his status as permanent resident or
immigrant of a foreign country in accordance with the residence
requirement provided for in the election laws.

51

G.R. NO. 195229,

EFREN RACEL ARATEA VS. COMMISSION ON ELECTIONS AND
ESTELA D. ANTLPOLO
OCTOBER 9, 2012
Doctrine: Final judgments with the penalty of prision mayor disqualifies
perpetually from holding any public office, or from being elected to any
public office.
FACTS:
Lonzanida and Antipolo ran for Mayor of San Antonio, Zambales in
2010. Rodolfo filed a petition under Section 78 of the Omnibus
Election Code (OEC) to disqualify Lonzanida and to deny due
course or to cancel Lonzanidas certificate of candidacy on the
ground that Lonzanida was elected, and had served, as mayor of
San Antonio, Zambales for four (4) consecutive terms.
The COMELEC Second Division cancelled Lonzanidas certificate of
candidacy. Lonzanidas motion for reconsideration before the
COMELEC En Banc remained pending during said elections.
Lonzanida and Aratea garnered the highest number of votes and
were proclaimed Mayor and Vice-Mayor, respectively. Vice-Mayor
elect Aratea took his oath of office as Acting Mayor.
Subsequently, the COMELEC En Banc disqualified Lonzanida from
running for Mayor based on two grounds: (1) Lonzanida had served
as Mayor for more than three consecutive terms without
interruption; and (2) Lonzanida had been convicted by final
judgment of ten counts of falsification under the Revised Penal
Code (RPC).
Second-placer Antipolo intervened and claimed her right to be
proclaimed as Mayor because Lonzanida ceased to be a candidate
when the COMELEC Division ordered the cancellation of his
certificate of candidacy and the striking out of his name from the
list of official candidates.
Aratea asserted that Antipolo could not be proclaimed as the
winning candidate. He reasoned that since Lonzanidas
disqualification was not yet final during Election Day, the votes cast
in his favor could not be declared stray.
Lonzanidas subsequent disqualification resulted in a permanent
vacancy in the Office of Mayor, and Aratea, as the duly-elected
Vice-Mayor was mandated to succeed as Mayor.

52

ISSUE:
Whether Lonzanida was disqualified under Section 68 of the OEC,
or made a false material representation under Section 78 of the
OEC that resulted in his certificate of candidacy being void ab
initio.
Whether the second-placer or the Vice-Mayor elect should succeed
as Mayor in this case.
HELD:
The Court ruled that Lonzanida was disqualified under Sec. 78 of
the OEC. It also held that Antipolo, the "second placer," should be
proclaimed Mayor because Lonzanidas certificate of candidacy
was void ab initio. In short, Lonzanida was never a candidate at all.
All votes for Lonzanida were stray votes. Thus, Antipolo actually
garnered the highest number of votes for the position.
The qualifications and disqualifications are laid by Sections 39 and
40 of the Local Government Code. Section 40 expressly provides,
among others:
Sec. 40. Disqualifications. - The following persons are disqualified
from running for any elective local position: (a) Those sentenced by
final judgment for an offense involving moral turpitude or for an
offense punishable by one (1) year or more of imprisonment, within
two (2) years after serving sentence;
Omnibus Election Code provides: Sec. 12. Disqualification Any
person who has been declared by competent authority insane or
incompetent, or has been sentenced by final judgment for
subversion, insurrection, rebellion or for any offense for which he
was sentenced to a penalty of more than eighteen months or for a
crime involving moral turpitude, shall be disqualified to be a
candidate and to hold any office, unless he has been given plenary
pardon or granted amnesty.
False Material Representation Section 78 of the OEC states that a
certificate of candidacy may be denied or cancelled when there
is false material representation of the contents of the certificate of
candidacy. Section 74 of the OEC details the contents of the
certificate of candidacy. This included among others a statement
that the person filing it is eligible for said office.
The conviction of Lonzanida by final judgment, with the penalty of
prision mayor, disqualifies him perpetually from holding any public
office, or from being elected to any public office. This perpetual
disqualification took effect upon the finality of the judgment of
conviction, before Lonzanida filed his certificate of candidacy. The
penalty of prision mayor automatically carries with it, by operation
of law, the accessory penalties of temporary absolute
disqualification and perpetual special disqualification.
Under Article 30 of the RPC, temporary absolute disqualification
produces the effect of "deprivation of the right to vote in any
election for any popular elective office or to be elected to such

53

office. The duration of temporary absolute disqualification is the

same as that of the principal penalty of prision mayor.
On the other hand, under Article 32 of the RPC, perpetual special
disqualification means that "the offender shall not be permitted to
hold
any
public
office
during
the
period
of
his
disqualification, which is perpetually. Both temporary absolute
disqualification and perpetual special disqualification constitute
ineligibilities to hold elective public office.
A person suffering from these ineligibilities is ineligible to run for
elective public office, and commits a false material representation
if he states in his certificate of candidacy that he is eligible to so
run. Lonzanida became ineligible perpetually to hold, or to run for,
any elective public office from the time the judgment of conviction
against him became final. The judgment of conviction was
promulgated on 20 July 2009 and became final on 23 October 2009,
before Lonzanida filed his certificate of candidacy on 1 December
2009.
Perpetual special disqualification is a ground for a petition under
Section 78 of the OEC because this accessory penalty is
an ineligibility, which means that the convict is not eligible to run
for public office, contrary to the statement that Section 74 requires
him to state under oath in his certificate of candidacy.
As this Court held in Fermin v. Commission on Elections, the false
material representation may refer to "qualifications or eligibility.
One who suffers from perpetual special disqualification is ineligible
to run for public office. If a person suffering from perpetual special
disqualification files a certificate of candidacy stating under oath
that "he is eligible to run for (public) office," as expressly required
under Section 74, then he clearly makes a false material
representation that is a ground for a petition under Section 78.
The dissenting opinions place the violation of the three-term limit
rule as a disqualification under Section 68 as the violation allegedly
is "a status, circumstance or condition which bars him from
running for public office despite the possession of all the
qualifications under Section 39 of the LGC." In so holding the
dissenting opinions write in the law what is not found in the law.
Legal Duty of COMELEC to Enforce Perpetual Special
Disqualification Even without a petition, the COMELEC is under a
legal duty to cancel the certificate of candidacy of anyone suffering
from perpetual special disqualification to run for public office by
virtue of a final judgment of conviction.
The final judgment of conviction is judicial notice to the COMELEC
of the disqualification of the convict from running for public office.
Effect of a Void Certificate of Candidacy A cancelled certificate of
candidacy void ab initio cannot give rise to a valid candidacy, and
much less to valid votes.
Lonzanidas disqualification is two-pronged: first, he violated the
constitutional fiat on the three-term limit; and second, he is known

54

to have been convicted by final judgment for ten (10) counts of

Falsification. In other words, on election day, respondent
Lonzanidas disqualification is notoriously known in fact and in
law.
Ergo, since respondent Lonzanida was never a candidate for the
position, the votes cast for him should be considered stray votes.
Consequently, Intervenor Antipolo should now be proclaimed as the
duly elected Mayor.

GR. NO. 196804

MAYOR BARBARA RUBY C. TALAGA VS COMMISSION ON
ELECTIONS AND RODERICK A. ALCALA
OCTOBER 9, 2012
Doctrine: A permanent vacancy in the office of Mayor and such vacancy
should be filled pursuant to the law on succession defined in Section 44
of the LGC: Section 44. Permanent Vacancies in the Offices of the
Governor, Vice-Governor, Mayor, and Vice-Mayor. If a permanent
vacancy occurs in the office of the governor or mayor, the vice-governor
or vice-mayor concerned shall become the governor or mayor.
FACTS:
On November 26, 2009 and December 1, 2009, Ramon Talaga
(Ramon) and Philip M. Castillo (Castillo) respectively filed their
certificates of candidacy (CoCs) for the position of Mayor of Lucena
City to be contested in the scheduled May 10, 2010 national and
local elections.
Ramon declared in his CoC that he was eligible for the office he
was seeking to be elected to.
On December 5, 2009, Castillo filed with the COMELEC a petition
to cancel the Certificate of Candidacy of Ramon Y. Talaga, Jr. as
Mayor for having already served three (3) consecutive terms as a
City Mayor of Lucena.
Ramon countered that that the Sandiganbayan had preventively
suspended him from office during his second and third terms; and
that the three-term limit rule did not then apply to him pursuant to
the prevailing jurisprudence to the effect that an involuntary
separation from office amounted to an interruption of continuity of
service for purposes of the application of the three-term limit rule.
On December 23, 2009,however, the Court promulgated the ruling
in Aldovino, Jr. v. Commission on Elections, holding that preventive
suspension, being a mere temporary incapacity, was not a valid
ground for avoiding the effect of the three-term limit rule.
Therefore in his manifestation with Motion to resolve, Ramon
acknowledges his disqualification to run as Mayor of Lucena City in
the May 10, 2010 national and local elections, however he did not
withdraw his CoC.

55

 On April 19, 2010, the COMELEC declared Ramon DISQUALIFIED

to run for Mayor of Lucena City for the 10 May 2010 National and
Local Elections. On May 4, 2010 Barbara Ruby filed her own CoC
for Mayor in Substitution or Ramon.
On the day of the election the name of Ramon remained printed on
the ballots but the votes cast in his favor were counted in favor of
Barbara Ruby resulting in Barbara Ruby being ultimately credited
with 44,099 votes as against Castillos 39,615 votes.
Castillo promptly filed a petition in the City Board of Canvassers
(CBOC) seeking the suspension of Barbara Rubys proclamation.
The CBOC however proclaimed Barbara Ruby as the newly-elected
Mayor of Lucena City.
On May 20, 2010, Castillo filed a Petition for Annulment of
Proclamation with the COMELEC. He alleged that Barbara Ruby
could not substitute Ramon because his CoC had been cancelled
and denied due course; and Barbara Ruby could not be considered
a candidate because the COMELEC En Banc had approved her
substitution three days after the elections; hence, the votes cast for
Ramon should be considered stray.
On July 26, 2010, Roderick Alcala (Alcala), the duly-elected Vice
Mayor of Lucena City, sought to intervene, positing that he should
assume the post of Mayor because Barbara Rubys substitution had
been invalid and Castillo had clearly lost the elections.
ISSUE: Who among the contending parties should assume the contested
elective position.
HELD:
The cause of Ramons ineligibility (i.e., the three-term limit) is
enforced both by the Constitution and statutory law. Article X,
Section 8 of the 1987 Constitution provides:
Section 8. The term of office of elective local officials, except
barangay officials, which shall be determined by law, shall be three
years and no such official shall serve for more than three
consecutive terms. Voluntary renunciation of the office for any
length of time shall not be considered as an interruption in the
continuity of his service for the full term for which he was elected.
Local Government Code reiterates the constitutional three-term
limit for all elective local officials Section 43. Term of Office.
o (b) No local elective official shall serve for more than three
(3) consecutive terms in the same position. Voluntary
renunciation of the office for any length of time shall not be
considered as an interruption in the continuity of service for
the full term for which the elective official concerned was
elected.
Castillo could not assume the office for he was only a second
placer. In Labo, Jr., the Court emphasized that the candidate
obtaining the second highest number of votes for the contested
office could not assume the office despite the disqualification of the

56

first placer because the second placer was "not the choice of the
sovereign will.
The only time that a second placer is allowed to take the place of a
disqualified winning candidate is when two requisites concur,
namely: (a) the candidate who obtained the highest number of
votes is disqualified; and (b) the electorate was fully aware in fact
and in law of that candidates disqualification as to bring such
awareness within the realm of notoriety but the electorate still cast
the plurality of the votes in favor of the ineligible candidate.
However this exception did not apply in favor of Castillo simply
because the second element was absent. The electorate of Lucena
City were not the least aware of the fact of Barbara Rubys
ineligibility as the substitute. In fact, the COMELEC En Banc
issued the Resolution finding her substitution invalid only on May
20, 2011, or a full year after the decisions.
On the other hand, the COMELEC En Banc properly disqualified
Barbara Ruby from assuming the position of Mayor of Lucena City.
To begin with, there was no valid candidate for her to substitute
due to Ramons ineligibility. Lastly, she was not an additional
candidate for the position of Mayor of Lucena City because her
filing of her CoC on May 4, 2010 was beyond the period fixed by
law. Indeed, she was not, in law and in fact, a candidate.
A permanent vacancy in the office of Mayor of Lucena City thus
resulted, and such vacancy should be filled pursuant to the law on
succession defined in Section 44 of the LGC, to wit: Section 44.
Permanent Vacancies in the Offices of the Governor, Vice-Governor,
Mayor, and Vice-Mayor. If a permanent vacancy occurs in the
office of the governor or mayor, the vice-governor or vice-mayor
concerned shall become the governor or mayor. x x x
Therefore the incumbent Vice-Mayor should serve as Mayor.

GR. NO. 192330

ARNOLD JAMES M. YSIDORO vs. PEOPLE OF THE PHILIPPINES
NOVEMBER 14, 2012
Doctrine: By requiring an ordinance, the law gives the Sanggunian the
power to determine whether savings have accrued and to authorize the
augmentation of other items on the budget with those savings.
FACTS:
Municipal Social Welfare and Development Office (MSWDO) of
Leyte, Leyte, operated a Core Shelter Assistance Program (CSAP)
that provided construction materials to indigent calamity victims
with which to rebuild their homes. The beneficiaries provided the
labor needed for construction.

57

 On June 15, 2001 when construction for calamity victims in Sitio

Luy-a, Barangay Tinugtogan, was 70% done, the beneficiaries
stopped reporting for work for the reason that they had to find food
for their families. This worried Lolita Garcia (Garcia), the CSAP
Officer-in-Charge, for such construction stoppage could result in
the loss of construction materials particularly the cement. Thus,
she sought the help of Cristina Polinio, an officer of the MSWDO in
charge of the municipalitys Supplemental Feeding Program (SFP)
that rationed food to malnourished children. Polinio told Garcia
that the SFP still had sacks of rice and boxes of sardines in its
storeroom. And since she had already distributed food to the
mother volunteers, what remained could be given to the CSAP
beneficiaries.
Garcia and Polinio went to petitioner Arnold James M. Ysidoro, the
Leyte Municipal Mayor, to seek his approval. After explaining the
situation to him, Ysidoro approved the release and signed the
withdrawal slip for four sacks of rice and two boxes of sardines
worth P3, 396.00 to CSAP. Mayor Ysidoro instructed Garcia and
Polinio, however, to consult the accounting department regarding
the matter. On being consulted, Eldelissa Elises, the supervising
clerk of the Municipal Accountants Office, signed the withdrawal
slip based on her view that it was an emergency situation justifying
the release of the goods. Subsequently, CSAP delivered those
goods to its beneficiaries. Afterwards, Garcia reported the matter
to the MSWDO and to the municipal auditor as per auditing rules.
On August 27, 2001 Alfredo Doller, former member of the
Sangguniang Bayan of Leyte, filed the present complaint against
Ysidoro. Nierna Doller, Alfredo's wife and former MSWDO head,
testified that the subject SFP goods were intended for its target
beneficiaries, Leytes malnourished children.
In his defense,
Ysidoro claims that the diversion of the subject goods to a project
also meant for the poor of the municipality was valid since they
came from the savings of the SFP and the Calamity Fund.
ISSUE: Whether or not the goods he approved for diversion were in the
nature of savings that could be used to augment the other authorized
expenditures of the municipality?
HELD:
NO. The subject goods could not be regarded as savings. The SFP
is a continuing program that ran throughout the year.
Consequently, no one could say in mid-June 2001 that SFP had
already finished its project, leaving funds or goods that it no longer
needed. The fact that Polinio had already distributed the food
items needed by the SFP beneficiaries for the second quarter of
2001 does not mean that the remaining food items in its storeroom
constituted unneeded savings. Since the requirements of hungry
mouths are hard to predict to the last sack of rice or can of
sardines, the view that the subject goods were no longer needed
for the remainder of the year was quite premature.

58

In any case, the Local Government Code provides that an

ordinance has to be enacted to validly apply funds, already
appropriated for a determined public purpose, to some other
purpose.
SEC. 336. Use of Appropriated Funds and Savings. Funds shall
be available exclusively for the specific purpose for which they
have been appropriated. No ordinance shall be passed authorizing
any transfer of appropriations from one item to another. However,
the local chief executive or the presiding officer of the Sanggunian
concerned may, by ordinance, be authorized to augment any item
in the approved annual budget for their respective offices from
savings in other items within the same expense class of their
respective appropriations.
The power of the purse is vested in the local legislative body. By
requiring an ordinance, the law gives the Sanggunian the power to
determine whether savings have accrued and to authorize the
augmentation of other items on the budget with those savings.

G.R. NO. 191761

CAGAYAN ELECTRIC POWER AND LIGHT CO., INC., VS CITY OF
CAGAYAN DE ORO
NOV. 14, 2012
Doctrine: Each local government unit shall have the power to create its
own sources of revenues and to levy taxes, fees, and charges subject to
such guidelines and limitations as the Congress may provide, consistent
with the basic policy of local autonomy.
FACTS:
On January 10, 2005, the Sangguniang Panlungsod of Cagayan de
Oro (City Council) passed Ordinance No. 9503-2005 imposing a tax
on the lease or rental of electric and/or telecommunication posts,
poles or towers by pole owners to other pole users at ten percent
(10%) of the annual rental income derived from such lease or
rental.
The City Council, in a letter dated 15 March 2005, informed
appellant Cagayan Electric Power and Light Company, Inc.
(CEPALCO), through its President and Chief Operation Manager,
Ms. Consuelo G. Tion, of the passage of the subject ordinance.
On September 30, 2005, appellant CEPALCO, purportedly on pure
question of law, filed a petition for declaratory relief assailing the
validity of Ordinance No. 9503-2005 before the Regional Trial
Court of Cagayan de Oro City, Branch 18, on the ground that the
tax imposed by the disputed ordinance is in reality a tax on income
which appellee City of Cagayan de Oro may not impose, the same
being expressly prohibited by Section 133(a) of Republic Act No.
7160 (R.A. 7160) otherwise known as the Local Government Code
(LGC) of 1991. CEPALCO argues that, assuming the City Council

59

can enact the assailed ordinance, it is nevertheless exempt from

the imposition by virtue of Republic Act No. 9284 (R.A. 9284)
providing for its franchise.
ISSUE: Whether the City Ordinance was passed in violation or in excess
of the citys delegated power to tax.
HELD:
No. Section 5, Article X of the 1987 Constitution provides that
Each local government unit shall have the power to create its own
sources of revenues and to levy taxes, fees, and charges subject to
such guidelines and limitations as the Congress may provide,
consistent with the basic policy of local autonomy. Such taxes, fees,
and charges shall accrue exclusively to the local government. The
Local Government Code supplements the Constitution with
Sections 151 and 186:
SEC. 151. Scope of Taxing Powers. Except as otherwise provided
in this Code, the city may levy the taxes, fees and charges which
the province or municipality may impose: Provided, however, That
the taxes, fees and charges levied and collected by highly
urbanized and independent component cities shall accrue to them
and distributed in accordance with the provisions of this Code.
The rates of taxes that the city may levy may exceed the maximum
rates allowed for the province or municipality by not more than
fifty percent (50%) except the rates of professional and amusement
taxes.
SEC. 186. Power to Levy Other Taxes, Fees or Charges. Local
government units may exercise the power to levy taxes, fees or
charges on any base or subject not otherwise specifically
enumerated herein or taxed under the provisions of the National
Internal Revenue Code, as amended, or other applicable laws:
Provided, That the taxes, fees, or charges shall not be unjust,
excessive, oppressive, confiscatory or contrary to declared national
policy: Provided, further, That the ordinance levying such taxes,
fees, or charges shall not be enacted without any prior public
hearing conducted for the purpose.
Ordinance No. 9503-2005 is a tax on business. CEPALCOs act of
leasing for a consideration the use of its posts, poles or towers to
other pole users falls under the Local Government Codes definition
of business. Business is defined by Section 131(d) of the Local
Government Code as trade or commercial activity regularly
engaged in as a means of livelihood or with a view to profit. In
relation to Section 131(d), Section 143(h) of the Local Government
Code provides that the city may impose taxes, fees, and charges on
any business which is not specified in Section 143(a) to (g) and
which the sanggunian concerned may deem proper to tax.
However, Sec. 105, R.A. No. 8424 stats that any person, who in
the course of trade or business x x x leases goods or properties x x
x shall be subject to the value-added tax, the imposable tax rate
should not exceed two percent of gross receipts of the lease of

60

poles of the preceding calendar year. Section 143(h) states that on

any business subject to x x x value-added x x x tax under the
National Internal Revenue Code, as amended, the rate of tax shall
not exceed two percent (2%) of gross sales or receipts of the
preceding calendar year from the lease of goods or properties.
Hence, the 10% tax rate imposed by Ordinance No. 9503-2005
clearly violates Section 143(h) of the Local Government Code.
Finally, in view of the lack of a separability clause, we declare void
the entirety of Ordinance No. 9503-2005.

61

CASE DIGESTS ON PUBLIC CORPORATION

Group 2 Members: Manuel-Bahul, Josephine; Manzano, Alma Laarni;

Evangelio, Lady Jhane; Ramirez, Shiela; Maslag, Phemy Amor; Dunuan,
Nathalie Kayte; Cammas, Fherlyn; Quintos, Brenden; Mangiwet, Keenan;
Aswigue, Lloyd; Ngalob, Rocky; Ngipol, Martin Jr.; Patacsil, Anselmo III;
Danasen, Leonard; Cayatoc, Ryan.

II.

I.
GENERAL PRINCIPLES
THE LOCAL GOVERNMENT CODE OF 1991: SALIENT
FEATURES

GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS JR. JOSE L.

GONZALEZ REUBEN M. ABANTE and QUINTIN PAREDES SAN DIEGO,
Petitioners,
vs.HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA JR.
SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B. ABAD,
NATIONAL TREASURER ROSALIA V. DE LEON SENATE OF THE
PHILIPPINES represented by FRANKLIN M. DRILON m his capacity as
SENATE PRESIDENT and HOUSE OF REPRESENTATIVES represented
by FELICIANO S. BELMONTE, JR. in his capacity as SPEAKER OF THE
HOUSE, Respondents. G.R. No. 208566; November 19, 2013
Doctrine: The State shall ensure the autonomy of local governments.
Facts: These are consolidated petitions taken under Rule 65 of the Rules
of Court, all of which assail the constitutionality of the Pork Barrel
System.
The NBI Investigation was spawned by sworn affidavits of six (6) whistleblowers who declared that JLN Corporation (Janet Lim Napoles) had
swindled billions of pesos from the public coffers for "ghost projects"
using dummy NGOs. Thus, Criminal complaints were filed before the
Office of the Ombudsman, charging five (5) lawmakers for Plunder, and
three (3) other lawmakers for Malversation, Direct Bribery, and Violation
of the Anti-Graft and Corrupt Practices Act. Also recommended to be
charged in the complaints are some of the lawmakers chiefs -of-staff or
representatives, the heads and other officials of three (3) implementing
agencies, and the several presidents of the NGOs set up by Napoles.
Whistle-blowers alleged that" at least P900 Million from royalties in the
operation of the Malampaya gas project off Palawan province intended
for agrarian reform beneficiaries has gone into a dummy NGO. Several
petitions were lodged before the Court similarly seeking that the "Pork
Barrel System" be declared unconstitutional.
Issues: Whether or not the 2013 PDAF Article and all other
Congressional Pork Barrel Laws violate the principles of/constitutional
provisions on local autonomy.
Ruling: Yes.

62

The Congressional Pork Barrel violates constitutional principles on local

autonomy. It goes against the constitutional principles on local autonomy
since it allows district representatives, who are national officers, to
substitute their judgments in utilizing public funds for local
development. The gauge of PDAF and CDF allocation/division is based
solely on the fact of office, without taking into account the specific
interests and peculiarities of the district the legislator represents. The
allocation/division limits are clearly not based on genuine parameters of
equality, wherein economic or geographic indicators have been taken
into consideration.
This concept of legislator control underlying the CDF and PDAF conflicts
with the functions of the various Local Development Councils (LDCs)
which are already legally mandated toassist the corresponding
Sanggunian in setting the direction of economic and social development,
and coordinating development efforts within its territorial jurisdiction.
Considering that LDCs are instrumentalities whose functions are
essentially geared towards managing local affairs, their programs,
policies and resolutions should not be overridden nor duplicated by
individual legislators, who are national officers that have no law-making
authority except only when acting as a body.
GOV. LUIS RAYMUND F. VILLAFUERTE , JR., and the PROVINCE OF
CAMARINES SUR, petitioners, vs. HON. JESSE M. ROBREDO, in his
capacity as Secretary of the Department of the Interior and Local
Government, respondent. G.R. No. 195390, December 10, 2014
Doctrine: Local Autonomy means a more responsive and accountable
local government structure instituted through a system of
decentralization. To safeguard the state policy on local autonomy, the
Constitution confines the power of the President over LGUs to mere
supervision. The President exercises general supervision over them but
only to ensure that local affairs are administered according to law. LGUs
are still under the supervision of the President and maybe held
accountable for malfeasance or violations of existing laws.
Facts: In 1995, the Commission on Audit conducted an examination and
audit on the utilization of the LGUs of their Internal Revenue Allotment
for the years 1993 to 1994. The report showed that a substantial portion
of the 20% development fund of some LGUs was not utilized for
development projects but was diverted to expenses properly chargeable
against Maintenance and Other Operating Expenses in violation of
Section 287 of the Local Government Code. On December 14, 1995, the
DILG issued MC No. 95-216 enumerating the policies and guidelines on
the utilization of the development fund component of the IRA. It also
reminded the LGUs of the strict mandate to ensure that public funds, like
the 20% development fund, shall be spent judiciously and only for the
very purpose or purposes for which such funds are intended.

63

On September 20, 2005 then DILG Secretary Angelo T. Reyes and

DBM Secretary Romulo L. Neri issued Joint MC No.1 Series of 2005
pertaining to the guidelines on the appropriation and utilization of the
20% of the the IRA for development projects. The said memorandum
circular underscored that the 20% development fund should be utilized
for social development, economic development and environmental
management.
On August 31, 2010, Jesse Robredo, respondent, in his capacity as
DILG Secretary, issued MC No. 2010-03 entitled Full Disclosure of Local
Budget and Finances, and Bids and Public Offerings. It restated Section
352 of the Local Government Code of 1991 requiring the posting a
summary of all revenues collected and funds received including the
appropriations and disbursements of such funds during the preceding
fiscal year. The memorandum circular also directed the posting in
conspicuous places within public buildings, or in print media or
community or general circulation and in their websites the reports on
the annual budget, financial statements, contracts, loans, and
procurement plans.
On December 2, 2010, the respondent issued MC No. 2010-138
reiterating the use of the 20% of the IRA, enumerating the expenses for
which the fund must not be utilized.
On January 13, 2011, the respondent issued MC No. 2011-08
directing for the strict adherence to Section 90 of RA No. 10147 or the
General Appropriations Act of 2011 pertaining to the use and
disbursement of IRA of LGUs. It also reiterated that noncompliance will
be dealt with, referring to Section 60 of the Local Government Code
which contains the grounds for disciplinary action.
On February 21, 2011, petitioner Villafuerte, then Governor of
Camarines Sur, joined by the Provincial Government of Camarines Sur,
filed an instant petition for certiorari, seeking to nullify the assailed
issuances of the respondent for being unconstitutional and having been
issued with grave abuse of discretion. Respondent filed his comment on
the petition. Petitioners filed their Reply with Urgent Prayer for the
Issuance of a Writ of Preliminary Injunction and/or Temporary
Restraining Order. The Court gave due course to the petition and
directed the parties to file their respective memorandum.
Issue: Whether or not Memorandum Circular Nos. 2010-083, 2010-138
and 2011-08 violate the principles of local autonomy and fiscal
autonomy?
Ruling: No, the assailed memorandum circulars do not transgress the
local and fiscal autonomy granted to the LGUs. A reading of MC No.
2010-138 shows that it is a mere reiteration of an existing provision in
the LGC. It was plainly intended to remind LGUs to faithfully observe the
directive stated in Section 287 of the LGC to utilize the 20% portion of
the IRA for development projects. It was, at best, an advisory to LGUs to

64

examine themselves if they have been complying with the law. It must be
recalled that the assailed circular was issued in response to the report of
the COA that a substantial portion of the 20% development fund of some
LGUs was not actually utilized for development projects but was diverted
to expenses more properly categorized as MOOE, in violation of Section
287 of the LGC.

JAMES M. IMBONG and LOVELY-ANN C. IMBONG, for themselves and

in behalf of their minor children, LUCIA CARLOS IMBONG and
BERNADETTE CARLOS IMBONG and MAGNIFICAT CHILD
DEVELOPMENT CENTER, INC., Petitioners, vs. HON. PAQUITO N.
OCHOA, JR., Executive Secretary, HON. FLORENCIO B. ABAD,
Secretary, Department of Budget and Management, HON. ENRIQUE T.
ONA, Secretary, Department of Health, HON. ARMIN A. LUISTRO,
Secretary, Department of Education, Culture and Sports and HON.
MANUELA. ROXAS II, Secretary, Department of Interior and Local
Government, Respondents. G.R. No. 204819, April 8, 2014
Doctrine: 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.
Facts: Republic Act No. 10354 otherwise known as Reproductive Health
Act of 2012 was enacted by Congress on December 21, 2012
Shortly after the President placed his imprimatur on the said 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- inintervention.
Issue: Whether the RH law violates the principle of Autonomy of Local
Government Unit and the Autonomous Region of Muslim Mindanao
Whether 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
Ruling: The court held that the reading of the RH law clearly shows that
whether it pertains to the establishment of health care facilities, the
hiring of skilled health professionals, or the training of barangay health
workers, 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

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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.
The fact that the RH Law does not intrude in the autonomy of local
governments can be equally applied to the ARMM. The RH Law does not
infringe upon its autonomy. Moreover, Article III, Sections 6, 10 and 11
of R.A. No. 9054, or the organic act of the ARMM, alluded to by
petitioner Tillah to justify the exemption of the operation of the RH Law
in the autonomous region, refer to the policy statements for the guidance
of the regional government. These provisions relied upon by the
petitioners simply delineate the powers that may be exercised by the
regional government, which can, in no manner, be characterized as an
abdication by the State of its power to enact legislation that would
benefit the general welfare. After all, despite the veritable autonomy
granted the ARMM, the Constitution and the supporting jurisprudence,
as they now stand, reject the notion of imperium et imperio in the
relationship between the national and the regional governments. Except
for the express and implied limitations imposed on it by the Constitution,
Congress cannot be restricted to exercise its inherent and plenary power
to legislate on all subjects which extends to all matters of general
concern or common interest.
THE OFFICE OF THE SOLICITOR GENERAL (OSG), Petitioner, vs. THE
HONORABLE COURT OF APPEALS and THE MUNICIPAL
GOVERNMENT OF SAGUIRAN, LANAO DEL SUR, Respondents. G.R.
No. 199027, June 9, 2014
Doctrine: All local government units, in the performance of its political
functions, is an agency of the Republic and acts for the latters benefit.
Facts: The Municipality of Saguiran was named a respondent in a
petition for mandamus filed with the Regional Trial Court (RTC) of Lanao
del Sur by the former members of the Sangguniang Bayan of Saguiran,
namely, Macmod P. Masorong, Amrosi MacoteSamporna, Alanie L.
Dalama, Hassan P. Amai-Kurot and Cadalay S. Rataban. Therein
petitioners sought to compel the Municipality of Saguiran to pay them
the aggregate amount of 726,000.00, representing their unpaid terminal
leave benefits under Section 5 of the Civil Service Commission
Memorandum Circular Nos. 41, Series of 1998 and 14, Series of
1999. The Municipality of Saguiran sought the trial courts dismissal of
the petition through its Verified Answer with Affirmative Defenses and

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Counterclaim which was signed by Municipal Mayor Hadjah Rasmia B.

Macabago and Municipal Treasurer Hadji Mautinter Dimacaling.
On January 6, 2009, the RTC issued an Order dismissing the petition on
the ground that the act being sought by therein petitioners was not a
ministerial duty. The RTC explained that the payment of terminal leave
benefits had to undergo the ordinary process of verification, approval or
disapproval by municipal officials. It, nonetheless, directed the
Municipality of Saguiran to include in its general or special budget for
the year 2009 the subject claims for terminal leave benefits. Dissatisfied
with the RTCs directive for the inclusion of the subject claims in the
municipalitys budget, the Municipality of Saguiran partially appealed
the order of the RTC to the CA. On December 14, 2009, the appellate
court issued a notice requiring the OSG to file a memorandum for the
Municipality of Saguiran within a non-extendible period of 30 days. The
OSG initially moved for a suspension of the period to file the required
memorandum, explaining that it had not received any document or
pleading in connection with the case. It asked for a period of 30 days
from receipt of such documents within which to file the required
memorandum. On April 23, 2010, the OSGs motion was denied by the
CA on the ground that the relief sought was not among the remedies
allowed under the Rules of Court. The OSG was instead given a nonextendible period of 90 days from notice within which to file the
memorandum. On August 5, 2010, the OSG filed a Manifestation and
Motion requesting to be excused from filing the memorandum on the
ground of lack of legal authority to represent the Municipality of
Saguiran. It reasoned that the Municipality of Saguiran had to be
represented by its legal officer, pursuant to Article XI(3)(i) of Republic
Act No. 7160, otherwise known as the Local Government Code of 1991
(LGC). On October 18, 2010, the CA issued the assailed
Resolution denying the OSGs motion on the following basis:
"The Office of the Solicitor General (OSG), to this Honorable Court,
respectfully manifests that it has no legal authority to represent any of
the respondent-appellants in the above-captioned case as its mandate is
limited to the representation of the Government of the Philippines, its
agencies and instrumentalities and its officials and agents in any
litigation, proceeding, investigation or matter requiring the services of
lawyer."
We are at a loss as to how the OSG views a local government unit then if
it does not consider the same part of the Government of the Philippines
or an agency or instrumentality thereof; but to enlighten the said Office,
the Supreme Court in Province of Camarines Sur vs. Court of Appeals,
Et. Al. held that a local government unit, in the performance of its
political functions, is an agency of the Republic and acts for the latters
benefit.

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The OSG moved to reconsider, but this was denied by the CA via the
Resolution dated August 25, 2011.
Issue: Whether or not the Court of appeals committed grave abuse of
discretion amounting to lack or excess of jurisdiction in compelling the
Office of the Solicitor General to represent the Municipality of Saguiran,
Lanao del Sur in its lawsuit.
Held: The court ruled that the petition is meritorious on the ground that
the OSGs powers and functions are defined in the Administrative Code
of 1987 (Administrative Code), particularly in Section 35, Book IV, Title
III, Chapter 12 thereof, which reads:
Sec. 35. Powers and Functions. The Office of the Solicitor General shall
represent the Government of the Philippines, its agencies and
instrumentalities and its officials and agents in any litigation,
proceeding, investigation or matter requiring the services of a lawyer.
When authorized by the President or head of the office concerned, it
shall also represent government-owned or controlled corporations. The
Office of the Solicitor General shall constitute the law office of the
Government and, as such, shall discharge duties requiring the services of
a lawyer. It shall have the following specific powers and functions:
(1) Represent the Government in the Supreme Court and the Court of
Appeals in all criminal proceedings; represent the Government and its
officers in the Supreme Court, the Court of Appeals, and all other courts
or tribunals in all civil actions and special proceedings in which the
Government or any officer thereof in his official capacity is a party
It bears mentioning that notwithstanding the broad language of the
Administrative Code on the OSG's functions, the LGC is not the only
qualification to its scope. Jurisprudence also provides limits to its
authority. In Urbano v. Chavez, for example, the Court ruled that the
OSG could not represent at any stage a public official who was accused
in a criminal case. This was necessary to prevent a clear conflict of
interest in the event that the OSG would become the appellate counsel of
the People of the Philippines once a judgment of the public official's
conviction was brought on appeal.
WHEREFORE, the petition is GRANTED. The Resolutions dated October
18, 2010 and August 25, 2011 of the Court of Appeals in CA-G.R. SP No.
02816-MIN are ANNULLED and SET ASIDE. The Legal Officer of the
Municipal Government of Saguiran, Lanao del Sur, or if there is none,
the Provincial Attorney of the Province of Lanao del Sur, and not the
Office of the Solicitor General, has the duty to represent the local
government unit as counsel in CA-G.R. SP No. 02816-MIN.

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IV.

III. INTERGOVERNMENTAL RELATIONS

CREATION, CONVERSION, DIVISION, MERGER AND
CONSOLIDATION, AND ABOLITION OF LGUs

MARC DOUGLAS IV C. CAGAS, Petitioner, vs. COMMISSION ON

ELECTIONS represented by its CHAIRMAN ATTY. SIXTO BRILLANTES
JR. and the PROVINCIAL ELECTION OFFICER OF DAVAO DEL SUR,
represented by ATTY. MA. FEBES BARLAAN, Respondents. G.R. No.
209185; October 25, 2013
Doctrine: The Constitution grants the COMELEC the power to "enforce
and administer all laws and regulations relative to the conduct of an
election, plebiscite, initiative, referendum and recall.
Facts: Cagas, while he was representative of the first legislative district
of Davao del Sur, filed with Hon. Franklin Bautista, then representative
of the second legislative district of the same province, House Bill No.
4451 (H.B. No. 4451), a bill creating the province of Davao Occidental.
H.B. No. 4451 was signed into law as Republic Act No. 10360 (R.A. No.
10360), the Charter of the Province of Davao Occidental.
Section 46 of R.A. No. 10360 provides for the date of the holding of a
plebiscite to be conducted and supervised by the Commission on
Elections (COMELEC) within sixty (60) days from the date of the
effectivity of the Charter.
President Benigno S. Aquino III approved R.A. No. 10360 on 14 January
2013and was published in the Philippine Star and the Manila Bulletin
only on 21 January 2013. Considering that R.A. No. 10360 shall take
effect 15 days after its publication in at least two newspapers of general
and local circulation, COMELEC, therefore, only had until 6 April 2013 to
conduct the plebiscite.
Prior to the effectivity of R.A. No. 10360, the COMELEC suspended the
conduct of all plebiscites as a matter of policy and in view of the
preparations for the 13 May 2013 National and Local Elections. During a
meeting held on 31 July 2013, the COMELEC decided to hold the
plebiscite for the creation of Davao Occidental simultaneously with the
28 October 2013 Barangay Elections to save on expenses. The
COMELEC, in Minute Resolution No. 13-0926, approved the conduct of
the Concept of Execution for the conduct of the plebiscite on 6 August
2013.
On 9 October 2013, Cagas filed the present petition for prohibition.
Cagas argues that COMELEC is without authority or legal basis to hold a
plebiscite on October 28, 2013 for the creation of the Province of Davao
Occidental because Section 46 of Republic Act No. 10360 has already
lapsed. The respondents, through the Office of the Solicitor General

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replied saying that the 1987 Constitution does not fix the period to hold a
plebiscite for the creation of a local government unit.
Issue: Whether or not COMELEC is authorized to set the date of holding
a plebiscite for the creation of a local government unit.
Ruling: The COMELECs power to administer elections includes the
power to conduct a plebiscite beyond the schedule prescribed by law.
The conduct of a plebiscite is necessary for the creation of a province.
Sections 10 and 11 of Article X of the Constitution provide that:
Sec. 10. No province, city, municipality, or barangay may be created,
divided, merged, abolished, or its boundary substantially altered, except
in accordance with the criteria established in the local government code
and subject to approval by a majority of the votes cast in a plebiscite in
the political units directly affected.
Sec. 11. The Congress may, by law, create special metropolitan political
subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The
component cities and municipalities shall retain their basic autonomy
and shall be entitled to their own local executive and legislative
assemblies. The jurisdiction of the metropolitan authority that will
thereby be created shall be limited to basic services requiring
coordination.
Section 10, Article X of the Constitution emphasizes the direct exercise
by the people of their sovereignty. After the legislative branchs
enactment of a law to create, divide, merge or alter the boundaries of a
local government unit or units, the people in the local government unit
or units directly affected vote in a plebiscite to register their approval or
disapproval of the change. The Constitution does not specify a date as to
when plebiscites should be held.
AURELIO M. UMALI, Petitioner, vs. COMMISSION ON ELECTIONS,
JULIUS CESAR V. VERGARA, and THE CITY GOVERNMENT OF
CABANATUAN, Respondents. G.R. No. 203974, April 22, 2014
Doctrine: In the creation of a highly urbanized city, the Executive body
is duty bound for the determination and creation of such local
government unit.
Facts: On July 11, 2011, the Sangguniang Panglungsod of Cabanatuan
City passed Resolution No. 183-2011, requesting the President to declare
the conversion of Cabanatuan City from a component city of the province
of Nueva Ecija into a highly urbanized city (HUC). Acceding to the
request, the President issued Presidential Proclamation No. 418, Series
of 2012, proclaiming the City of Cabanatuan as an HUC subject to
"ratification in a plebiscite by the qualified voters therein, as provided
for in Section 453 of the Local Government Code of 1991."

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Respondent COMELEC, acting on the proclamation, issued the assailed

Minute Resolution No. 12-0797 which reads:
WHEREFORE, the Commission RESOLVED, as it hereby RESOLVES, that
for purposes of the plebiscite for the conversion of Cabanatuan City from
component city to highly-urbanized city, only those registered residents
of Cabanatuan City should participate in the said plebiscite. The
COMELEC based this resolution on Sec. 453 of the Local Government
Code of 1991 (LGC), citing conversion cases involving Puerto Princesa
City in Palawan, Tacloban City in Southern Leyte, and Lapu-Lapu City in
Cebu, where only the residents of the city proposed to be converted were
allowed to vote in the corresponding plebiscite.
In due time, petitioner Aurelio M. Umali, Governor of Nueva Ecija, filed a
Verified Motion for Reconsideration, maintaining that the proposed
conversion in question will necessarily and directly affect the mother
province of Nueva Ecija. His main argument is that Section 453 of the
LGC should be interpreted in conjunction with Sec. 10, Art. X of the
Constitution. He argues that while the conversion in question does not
involve the creation of a new or the dissolution of an existing city, the
spirit of the Constitutional provision calls for the people of the local
government unit (LGU) directly affected to vote in a plebiscite whenever
there is a material change in their rights and responsibilities. The phrase
"qualified voters therein" used in Sec. 453 of the LGC should then be
interpreted to refer to the qualified voters of the units directly affected
by the conversion and not just those in the component city proposed to
be upgraded. Petitioner Umali justified his position by enumerating the
various adverse effects of the Cabanatuan Citys conversion and how it
will cause material change not only in the political and economic rights
of the city and its residents but also of the province as a whole.
To the Verified Motion for Reconsideration, private respondent Julius
Cesar Vergara, city mayor of Cabanatuan, interposed an opposition on
the ground that Sec. 10, Art. X does not apply to conversions, which is
the meat of the matter. He likewise argues that a specific provision of the
LGC, Sec. 453, as couched, allows only the qualified voters of
Cabanatuan City to vote in the plebiscite. Lastly, private respondent
pointed out that when Santiago City was converted in 1994 from a
municipality to an independent component city pursuant to Republic Act
No. (RA) 7720, the plebiscite held was limited to the registered voters of
the then municipality of Santiago.
After the conclusion of the 2013 elections, public respondent issued
Resolution No. 1353 scheduling the plebiscite to January 25, 2014.
However, a TRO was issued by this Court on January 15, 2014 in G.R. No.
203974 to suspend the conduct of the plebiscite for Cabanatuan Citys
conversion. Given the intertwining factual milieu of the two petitions
before the Court, both cases were consolidated on March 18, 2014.

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Issue: Whether the qualified registered voters of the entire province of

Nueva Ecija or only those in Cabanatuan City can participate in the
plebiscite called for the conversion of Cabanatuan City from a
component city into an HUC.
Ruling: Sec. 453 of the LGC should be interpreted in accordance with
Sec. 10, Art. X of the Constitution. It asseverates that Sec. 10; Art. X of
the Constitution should be the basis for determining the qualified voters
who will participate in the plebiscite to resolve the issue. Sec. 10, Art. X
reads:
Section 10, Article X. No province, city, municipality, or barangay may
be created, divided, merged, abolished, or its boundary substantially
altered, except in accordance with the criteria established in the local
government code and subject to approval by a majority of the votes cast
in a plebiscite in the political units directly affected.
Section 453. Duty to Declare Highly Urbanized Status. It shall be the
duty of the President to declare a city as highly urbanized within thirty
(30) days after it shall have met the minimum requirements prescribed in
the immediately preceding Section, upon proper application therefor and
ratification in a plebiscite by the qualified voters therein.

V.

POWERS OF LOCAL GOVERNMENT

SOCIAL JUSTICE SOCIETY (SJS) OFFICERS NAMELY, SAMSON S.

ALCANTARA, and VLADIMIR ALARIQUE T. CABIGAO, Petitioners vs.
ALFREDO D. LIM, in his capacity as mayor of the City of Manila,
Respondent.
Doctrine: There are two requisites to a valid enforcement of the states
police power: a lawful subject and a lawful method. There is a lawful
subject if the activity or property sought to be regulated affects the
public welfare. It requires the primacy of the welfare of the many over
the interests of the few. And the method is lawful if both the end and the
means are legitimate.
Facts: On October 12, 2001, a Memorandum of Agreement (MOA) was
entered into by oil companies (Chevron, Petron and Shell) and the
Department of Energy (DOE) to create a Master Plan addressing and
minimizing the potential risks and hazards to the communities without
affecting the supply of petroleum products. This leads to the enactment
of Ordinance No. 8027 by the Sangguniang Panlungsod (SP) which
reclassifies Pandacan, Sta. Ana from Industrial II to Commercial I. the oil
companies filed an action to annul the said ordinance which favors
Chevron and Shell and Petron obtained a status quo on August 4, 2004.

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On June 16, 2006, Respondent Alfredo S. Lim approved Ordinance No.

8119 Adopting the Manila Comprehensive Land Use Plan and Zoning
Regulations of 2006 which designates Pandacan oil depot area as a
Planned Unit Development/ Overlay Zone.
On May 14, 2009, the SP enacted Ordinance No. 8187 which the
Industrial Zone was limited to Light Industrial Zone and appeared to the
list a Medium and Heavy Industrial Zone where petroleum refineries and
oil depots are expressly allowed.
SJS, et.al, the petitioners filed a petition assailing the validity of
Ordinance No. 8187 alleging that it is invalid exercise of the police
power because it does not promote the general welfare of the people.
Meanwhile, the respondents and the oil companies contend that there is
a valid exercise of police power.
Issue: Whether Ordinance No. 8187 is unconstitutional in relation to
Pandacan Terminals.
Ruling: Yes, Ordinance No. 8187 is unconstitutional.
The Supreme Court followed its decision on March 2007 which states
that Ordinance No. 8027 was enacted for the purpose of promoting a
sound urban planning, ensuring health, public safety and general welfare
of the residents of Manila. The SP was impelled to take measures to
protect the residents of Manila from catastrophic devastation in case of a
terrorist attack on the Pandacan Terminals wherein the SP declassified
the area defined in the Ordinance from Industrial to Commercial. The
said ordinance was intended to safeguard the rights to life, security and
safety of all the inhabitants of Manila and not just for a particular class.
Both law and jurisprudence support the constitutionality and validity of
Ordinance No. 8027 and there are no impediments to its enforcement
and implementation. Any delay is unfair to the inhabitants of the City of
Manila and its leaders who have categorically expressed their desire for
the relocation of the terminals. Their power to chart and control their
own destiny and preserve their lives and safety should not be curtailed
by the intervenors warnings of doomsday scenarios and threats of
economic disorder of the ordinance id enforced.
The Pandacan oil depot remains a terrorist target even if the contents
have lessened. Therefore, the Supreme Court held that Ordinance No.
8187 in relation to the Pandacan Terminals is invalid and
unconstitutional for there is absence of any convincing reason to
persuade that the life, security and safety of the inhabitants of all the
inhabitants of Manila are no longer put at risk by the presence of the oil
depots.

LUCENA D. DEMAALA, Petitioner, v. COMMISSION ON AUDIT,

REPRESENTED BY ITS CHAIRPERSON COMMISSIONER MA. GRACIA
M. PULIDO TAN, Respondent. G.R. No. 199752, February 17, 2015

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Doctrine: Where a law is capable of two interpretations, one in favor of

centralized power in Malacaang and the other beneficial to local
autonomy, the scales must be weighed in favor of autonomy.
FACTS: The Sangguniang Panlalawigan of Palawan enacted Provincial
Ordinance No. 332-A, Series of 1995, entitled An Ordinance Approving
and Adopting the Code Governing the Revision of Assessments,
Classification and Valuation of Real Properties in the Province of
Palawan (Ordinance). The Ordinance provided for an additional levy on
real property tax for the special education fund (SEF) at the rate of onehalf percent or 0.5%.
To conform with the Ordinance, the Municipality of Narra, Palawan,
(Municipality) with Demaala as mayor, collected from owners of real
properties located within its territory an annual tax as SEF at the rate of
0.5% of the assessed value of the property subject to tax. This collection
was effected through the municipal treasurer.
Audit Team Leader Juanito A. Nostratis issued Audit Observation
Memorandum (AOM) No. 03-005 dated August 7, 2003 in which he noted
supposed deficiencies in the SEF collected by the Municipality. He
questioned the levy of the SEF at the rate of only 0.5% rather than at
1%, the rate stated in Sec. 235 of the Local Government Code. He held
Demaala, the municipal treasurer of Narra, and all special education
fund payers liable for the deficiency in the SEF collections. The
Municipality, through Demaala, stressed that the collection of the special
education fund at the rate of 0.5% was merely in accordance with the
Ordinance.
Issue: Whether or not a Local Government Unit has discretion to impose
a rate for the collection of a tax contrary to the rate prescribed under
Sec. 235 of the Local Government Code.
Ruling: Yes. Moreover, there is no limiting qualifier to the articulated
rate of 1% which unequivocally indicates that any and all special
education fund collections must be at such rate. At most, there is a
seeming ambiguity in Section 235.
Consistent with the 1987 Constitutions declared preference, the taxing
powers of local government units must be resolved in favor of their local
fiscal autonomy. Under Article X, Section 5 of the Constitution Each
Local Government unit shall have the power to create its own sources of
revenue and to levy taxes, fees and charges subject to such guidelines
and limitations as the Congress may provide, consistent with the basic
policy of local autonomy. Such taxes, fees and charges shall accrue
exclusively to the Local Governments. Henceforth, in interpreting
statutory provisions on municipal fiscal powers, doubts will have to be
resolved in favor of municipal corporations.

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Accordingly, it was well within the power of the Sangguniang

Panlalawigan of Palawan to enact an ordinance providing for additional
levy on real property tax for the special education fund at the rate of
0.5% rather than at 1%.
The mayors actions were done pursuant to an ordinance which, at the
time of the collection, was yet to be invalidated.

SMART COMMUNICATIONS INC., petitioner vs. MUNICIPALITY OF

MALVAR, BATANGAS GR No. 204429; February 18, 2014
Doctrine: The Local Government Code grants local government units
wide latitude in imposing fees.
Facts: Petitioner Smart Communications constructed a
telecommunications tower in the Municipality of Malvar. On July 30,
2003, the Municipality passed Ordinance No 18 S. 2003 regulating the
establishment of Special Projects. On August 24, 2004 received from the
Permit and Licensing Division of the Office of the Mayor, an assessment
letter with a schedule of payment for the total amount of P389,950.00.
Due to the alleged arrears in the payment of the assessment, the
Municipality also caused the posting of a closure notice on the
telecommunications tower. On September 9, 2004, Smart filed a protest,
claiming lack of due process in the issuance of the assessment and
closure notice and challenging the validty of Ordinance No. 18 which the
assessment was based. The Municipality denied Smarts protest. The
RTC partly granted Smarts appeal/petition. The court held the
assessment void but did not rule on the legality of the ordinance. The
Motion for reconsideration was denied. The CTA denied the petition for
review.
Smart argues that the Municipality exceeded its power to impose taxes
and fees. Smart maintains that the Mayors permit fees in the ordinance
are not among those expressly enumerated in the LGC.
Issues:
I.
II.

Whether the imposition of the fees in Ordinance No. 18 is Ultra

Vires
Whether Ordinance No. 18 is valid and constitutional

Ruling: No, the fees in the ordinance are not taxes. Even if the feed do
not appear in Section 143, the Municipality is empowered to impose
taxes, fees, and charges, not specifically enumerated in the LGC or taxed
under the Tax Code.
Section 186 of the LGC, granting local government units wide
latitude in imposing fees, expressly provides:

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Section 186. Power To Levy Other Taxes, Fees or Charges. Local

government units may exercise the power to levy taxes, fees or
charges on any base or subject not otherwise specifically
enumerated herein or taxed under the provisions of the National
Internal Revenue Code, as amended, or other applicable laws:
Provided, That the taxes, fees, or charges shall not be unjust,
excessive, oppressive, confiscatory or contrary to declared national
policy: Provided, further, That the ordinance levying such taxes,
fees or charges shall not be enacted without any prior public
hearing conducted for the purpose.
An ordinance carries with it the presumption of validity. Plaintiff has not
sufficiently proven that the license taxes are unreasonable. On the
constitutionality, an ordinance is presumed valid, to strike down a law as
unconstitutional, Smart had the burden to prove a clear and unequivocal
breach of the constitution, which Smart miserably failed to do.
Ordinance no. 18 is valid and constitutional.

SPS SILVESTRE PLAZA and ELENA Y. PLAZA vs. GUILLERMO LUSTIVA

ETC. GR No. 172909; March 5, 2014
Doctrine: In case there is no bidder for the real property advertised for
sale as provided herein, or if the highest bid is for an amount insufficient
to pay the taxes, fees, or charges, related surcharges, interests, penalties
and costs, the local treasurer conducting the sale shall purchase the
property in behalf of the local government unit concerned to satisfy the
claim and within two (2) days thereafter shall make a report of his
proceedings which shall be reflected upon the records of his office.
Facts: On August 28, 1997 CA ruled that the Plaza siblings were the
owner of the subject agricultural land. On September 14, 1999,
Petitionerss , Vidals son and daughter in law filed a complaint for
injunction against the respondents and the City government of Butuan.
They prayed that the respondents be enjoined from unlawfully and
illegally threatening to take possession of the subject property.
According to the petitioners, they acquired the land from Virginia Tuazon
in 1997. Tuazon was the sole bidder and winner in a tax delinquency sale
conducted by the City of Butuan on December 27, 2996.
The respondents in their answer pointed out that they were never
delinquent in paying the land taxes and were not aware that their
property had been offered for public acution. Moreover, Tuazon being a
government employee she was disqualified to bid.
The RTC reconsidered its earlier order, denied the prayer for a Writ of
Preliminary Injunction and ordered that the possession and occupation of

76

the land be returned to the respondents. The CA affirmed the RTCs

ruling. The CA concluded that for being disqualified to bid under Section
89 of the Local Government Code of 1991, Tuazon never obtained
ownership over the property; much less transmit any propriety rights to
the petitioners.
The petitioners maintain that they did not falsify the tax declaration in
acquiring the auctioned property. They claim that even if Tuazon was
disqualified from participating in the public auction. Section 181 of the
Local Government Code finds no application. Applying the law, it is as if
there was no bidder, for which the City Government of Butuan was to be
considered the purchaser of the land in auction. Therefore, when the
petitioners bought the land, they bought it directly from the purchaser City Government of Butuan - and not from Tuazon, as redeemers.
Issue: Whether Sections 181 and 267 of the Local Government Code of
1991 are inapplicable
Ruling: The court held that sections 181 and 267 of the LGC are
inapplicable; these provisions do not apply to the present case.
The petitioners may not invoke Section 181 of the Local Government
Code of 1991 to validate their alleged title. The law authorizes the local
government unit to purchase the auctioned property only in instances
where "there is no bidder" or "the highest bid is xxx insufficient." A
disqualified bidder is not among the authorized grounds. The local
government also never undertook steps to purchase the property under
Section 181 of the Local Government Code of 1991, presumably because
it knew the invoked provision does not apply.
Neither can the Court agree with the petitioners stance that the
respondents defense the petitioners defective title must fail for
want of deposit to the court the amount required by Section 267 of the
Local Government Code. The provision states:
Section 267. Action Assailing Validity of Tax Sale. - No court shall
entertain any action assailing the validity or any sale at public auction of
real property or rights therein under this Title until the taxpayer shall
have deposited with the court the amount for which the real property
was sold, together with interest of two percent (2%) per month from the
date of sale to the time of the institution of the action. The amount so
deposited shall be paid to the purchaser at the auction sale if the deed is
declared invalid but it shall be returned to the depositor if the action
fails.
Neither shall any court declare a sale at public auction invalid by reason
or irregularities or informalities in the proceedings unless the
substantive rights of the delinquent owner of the real property or the
person having legal interest therein have been impaired

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A simple reading of the title readily reveals that the provision relates to
actions for annulment of tax sales. The section likewise makes use of
terms "entertain" and "institution" to mean that the deposit requirement
applies only to initiatory actions assailing the validity of tax sales. The
intent of the provision to limit the deposit requirement to actions for
annulment of tax sales led to the Courts ruling in National Housing
Authority v. Iloilo City, et al. that the deposit requirement is jurisdictional
a condition necessary for the court to entertain the action:
As is apparent from a reading of the foregoing provision, a deposit
equivalent to the amount of the sale at public auction plus two percent
(2%) interest per month from the date of the sale to the time the court
action is instituted is a condition a "prerequisite," to borrow the term
used by the acknowledged father of the Local Government Code which
must be satisfied before the court can entertain any action assailing the
validity of the public auction sale. The law, in plain and unequivocal
language, prevents the court from entertaining a suit unless a deposit is
made. xxx. Otherwise stated, the deposit is a jurisdictional requirement
the nonpayment of which warrants the failure of the action

COCA-COLA BOTTLERS PHILIPPINES, INC.,Petitioner vs. CITY OF

MANILA; LIBERTY M. TOLEDO, in her capacity as Officer-in-Charge
(OIC), Treasurer of the City of Manila; JOSEPH SANTIAGO, in his
capacity as OIC, Chief License Division of the City of Manila; REYNALDO
MONTALBO, in his capacity as City Auditor of the City of Manila,
Respondents. GR No. 197561 April 7, 2014
Doctrine: In the event that the protest is finally decided in favor of the
taxpayer, the amount or portion of the tax protested shall be refunded to
the protestant, or applied as tax credit against his existing or future tax
liability."
Facts: RTC Manila granted Coca-Colas petition request for tax refund or
credit assessed under Section 21 of the Revenue Code of Manila upon
finding that there was double taxation in the imposition of local business
taxes on September 28, 2001.
The judgment ordered defendants to either refund or credit the tax
assessed under Section 21of the Revenue Code of Manila and paid for by
plaintiff on the first quarter of year 2000 in the amount of P3,036,887.33.
On appeal, the Court of Appeals issued a Resolution dismissing
respondents appeal. On February 10, 2010, the Supreme Court denied
the petition for review.
On June 3, 2010 petitioner filed with the RTC-Manila a Motion for
Execution for the enforcement of the Decision September 28, 2001 and
the issuance of the corresponding writ of execution.

78

Finding merit therein, on June 11, 2010, the RTC-Manila issued an

Order granting petitioners Motion for Execution and directed the
Branch Clerk of Court to issue the corresponding writ of execution to
satisfy the judgment.
On June 15, 2010, the Branch Clerk of Court, Branch 21 of the RTC
Manila issued a Writ of Execution directing the Sheriff to cause the
execution of the Decision dated September 28, 2001
Aggrieved, respondents filed a Motion to Quash Writ of Execution. In
response, petitioner filed its Opposition thereto on December 12, 2010.
On December 22, 2010, the RTC-Manila issued an Order granting the
Motion to Quash Writ of Execution.
Herein petitioner filed a Motion for Reconsideration, but the same was
denied by the RTC-Manila in its Order dated June 21, 2011, reasoning
that both tax refund and tax credit involve public funds. Thus, pursuant
to SC Administrative Circular No. 10-2000,the enforcement or
satisfaction of the assailed decision may still be pursued in accordance
with the rules and procedures laid down in Presidential Decree (P.D.) No.
1445, otherwise known as the Government Auditing Code of the
Philippines
Issue: Whether the issuance of the writ of execution of the judgment
ordering respondents either to refund or credit tax assessed under
Section 21 of the Revenue Code of Manila
Ruling: No, the court found the issuance of the Writ of Execution
superfluous, given the clear directive of the RTC-Manila in its Decision
dated September 28, 2001.
In its Decision dated September 28,2001, the RTC-Manila directs
respondents to either refund or credit the tax under Section 21 of the
Revenue Code of Manila, which was improperly assessed but
nevertheless paid for by petitioner on the first quarter of year 2000 in
the amount of P3,036,887.33. The judgment does not actually involve a
monetary award or a settlement of claim against the government.
Under the first option, any tax on income that is paid in excess of the
amount due the government may be refunded, provided that a taxpayer
properly applies for the refund. On the other hand, the second option
works by applying the refundable amount against the tax liabilities of the
petitioner in the succeeding taxable years.
Hence, instead of moving for the issuance of a writ of execution relative
to the aforesaid Decision, petitioner should have merely requested for
the approval of the City of Manila in implementing the tax refund or tax
credit, whichever is appropriate. In other words, no writ was necessary
to cause the execution thereof, since the implementation of the tax

79

refund will effectively be a return of funds by the City of Manila in favor

of petitioner while a tax credit will merely serve as a deduction of
petitioners tax liabilities in the future.
In fact, Section 252 (c) of the Local Government Code of the Philippines
is very clear that "[i]n the event that the protest is finally decided in
favor of the taxpayer, the amount or portion of the tax protested shall be
refunded to the protestant, or applied as tax credit against his existing or
future tax liability." It was not necessary for petitioner to move for the
issuance of the writ of execution because the remedy has already been
provided by law.

NOEL L. ONG, OMAR ANTHONY L. ONG, and NORMAN L.

ONG, Petitioners,
vs. NICOLASA O. IMPERIAL, DARIO R. ECHALUCE, ROEL I. RO BELO,
SERAFIN R. ROBELO, EFREN R. ROBELO, RONILO S. AGNO, LORENA
ROBELO, ROMEO O. IMPERIAL, NANILON IMPERIAL CORTEZ, JOVEN
IMPERIAL CORTEZ, and RODELIO O. IMPERIAL, Respondents. G.R. No.
197127, July 15, 2015
Doctrine: Pursuant to RA 2264, amending the Local Government Code,
the Local Government Units were given authority to reclassify lands.
Facts: Petitioners are registered owners of a parcel of land with an area
of Four Hundred Five Thousand Six Hundred Forty-Five (405,645)
square meters described under Transfer Certificate of Title (TCT) No. T-1
7045 located in Barangay Dogongan, Daet, Camarines Norte (subject
property).
The Municipal Agrarian Reform Officer (MARO) of Daet issued a Notice
of Coverage to petitioners on August 14, 1994. Petitioners wrote a letter
dated April 26, 1995 "vehemently protesting/objecting" to the coverage
of the subject property under compulsory acquisition under
Comprehensive Agrarian Reform Law (CARL). In reply, MARO denied the
protest and consequently issued a Notice of Acquisition over the subject
property.
Petitioners then filed an application for exemption clearance with the
Department of Agrarian Reform (DAR), claiming that the said property
had already been reclassified as residential built-up area pursuant to
Town Plan and Zoning Ordinance of Daet dated September 21, 1978 and
Zoning Ordinance series of 1980.
DAR, Regional Office denied the application of the petitioners on the
ground that the subject property has been placed under compulsory
coverage and Notice of Acquisition was already issued by the MARO of
Daet. This was upheld by the then DAR secretary.

80

Petitioner filed for Motion for Reconsideration, which the DAR Secretary
denied stating that the opinion of the Deputized Zoning Administrator
had insufficient basis and could not prevail over the clear findings of the
DAR Regional Director.
Consequently when the case was elevated to the Office of the President
it reversed and set aside the DAR decision.
Unsatisfied, respondents filed a petition for review with the CA, which
again reversed and set aside the decision issued by the Office of the
President.
Issue: Whether or not the classification of the subject property is
rightfully vested in the local government unit concerned or with the
DAR.
Held: The power to reclassify land is granted by law to the local
government, which was validly exercised in this case. The subject
property having already been validly reclassified to residential land by
the municipality of Daet prior to June 15, 1988, when the CARL took
effect, then it is exempt from the coverage of CARP.
Supreme Court have unequivocally held that "to be exempt from CARP,
all that is needed is one valid reclassification of the land from
agricultural to non- agricultural by a duly authorized government agency
before June 15, 1988, when the CARL took effect."
As to what is a "duly authorized government agency," the DAR Handbook
for CARP Implementors recognizes and discusses the LGUs authority to
reclassify lands under Republic Act No. 7160 or the Local Government
Code.
Pursuant to Sec. 3 of Republic Act No. (RA) 2264, amending the Local
Government Code, municipal and/or city councils are empowered to
"adopt zoning and subdivision ordinances or regulations in consultation
with the National Planning Commission." It was also emphasized
therein that the power of the local government to convert or
reclassify lands from agricultural to non-agricultural lands prior
to the passage of RA 6657 is not subject to the approval of the
DAR."
Indeed, lands not devoted to agricultural activity are outside the
coverage of CARL. These include lands previously converted to nonagricultural uses prior to the effectivity of CARL by government agencies
other than respondent DAR.
JUAN P. CABRERA, Petitioner, vs. HENRY YSAAC, Respondent. G.R. No.
166790 November 19, 2014

81

Doctrine: The local government becomes an innocent purchaser for

value when it followed the rules on double sales, it had a preferential
right when the sale it entered into was in a public instrument.
Facts: The heirs of Luis and Matilde Ysaac co-owned a 5,517 squaremeter parcel of land located in Sabang, Naga City, covered by Original
Certificate of Title. One of the co-owners is respondent Henry Ysaac.
Respondent leased out portions of the property to several lessees. Juan
Cabrera, one of the lessees, leased a 95-sqaure-meter portion of the land
beginning in 1986.
On May 1990, Henry Ysaac needed money and offered to sell the 95
sqaure-meter piece of land to Juan Cabrera. He told Henry Ysaac that
the land was too small for his needs because there was no parking space
for his vehicle. In order to address Juan Cabreras concerns, Henry Ysaac
expanded his offer to include the two adjoining lands that Henry Ysaac
was leasing to the Borbe family and Espiritu family. Those three parcels
of land have combined area of 439 sqaure-meters. However, Henry Ysaac
warned Juan Cabrera that the sale for those two parcels could only
proceed if the two families agree to it.
Juan Cabrera accepted the new offer. Henry Ysaac and Juan Cabrera
settled on the price of P250.00 per square meter, but Juan Cabrera
stated that he could only pay in full after his retirement on June 15,
1992. Henry Ysaac agreed but demanded for initial payment of P1500.00
which Cabrera paid.
According to Cabrera, Ysaac informed him that the two families were no
longer purchasing the propertirs they were leasing. Since, Espiritu
family initially considered purchasing the property and he had made an
initial deposit for it, Cabrera agreed to reimburse the earlier payment.
On June 15, 1992, Juan Cabrera tried to pay the balance of purchase
price to Henry Ysaac. However, at that time, Henry Ysaac was in the
United States. The only person in Henry Ysaacs residence was his wife
but his wife refused to accept Juan Cabreras payment.
Sometime in September 1993, Juan Cabrera alleged that Henry Ysaac
approached him, requesting to reduce the area of the land subject of
their transaction. Part of the 439-square-meter land was going to be
made into a barangay walkway, and another part was being occupied by
a family that was difficult to eject.13 Juan Cabrera agreed to the
proposal. The land was surveyed again. According to Juan Cabrera,
Henry Ysaac agreed to shoulder the costs of the resurvey, which Juan
Cabrera advanced in the amount of P3,000.00.
The resurvey shows that the area now covered by the transaction was
321 square meters.14 Juan Cabrera intended to show the sketch plan
and pay the amount due for the payment of the lot. However, on that day,

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Henry Ysaac was in Manila. Once more, Henry Ysaacs wife refused to
receive the payment because of lack of authority from her husband.
On September 21, 1994, Henry Ysaacs counsel, Juan Cabreras counsel
that his client is formally rescinding the contract of sale because Juan
Cabrera failed to pay the balance of the purchase price of the land
between May 1990 and May 1992. The letter also stated that Juan
Cabreras initial payment of P1,500.00 and the subsequent payment of
P6,100.00 were going to be applied as payment for overdue rent of the
parcel of land Juan Cabrera was leasing from Henry Ysaac. The letter
also denied the allegation of Juan Cabrera that Henry Ysaac agreed to
shoulder the costs of the resurveying of the property.
Juan Cabrera, together with his uncle, Delfin Cabrera, went to Henry
Ysaacs house on September 16, 1995 to settle the matter. Henry Ysaac
told Juan Cabrera that he could no longer sell the property because the
new administrator of the property was his brother, Franklin Ysaac. Due
to Juan Cabreras inability to enforce the contract of sale between him
and Henry Ysaac, he decided to file a civil case for specific performance
on September 20, 1995. Juan Cabrera prayed for the execution of a
formal deed of sale and for the transfer of the title of the property in his
name. He tendered the sum of P69,650.00 to the clerk of court as
payment of the remaining balance of the original sale price. On
September 22, 1995, a notice of lis pendens was annotated on OCT No.
560. In his answer with counterclaim, Henry Ysaac prayed for the
dismissal of Juan Cabreras complaint. He also prayed for compensation
in the form of moral damages, attorneys fees, and incidental litigation
expenses.
Before the Regional Trial Court decided the case, the heirs of Luis and
Matilde Ysaac, under the administration of Franklin Ysaac, sold their
property to the local government of Naga City on February 12, 1997. The
property was turned into a project for the urban poor of the city. During
the trial, Corazon Borbe Combe of the Borbe family testified that
contrary to what Juan Cabrera claimed, her family never agreed to sell
the land they were formerly leasing from Henry Ysaac in favor of Juan
Cabrera.The Borbe family bought the property from Naga Citys urban
poor program after the sale between the Ysaacs and the local
government of Naga City.
On September 22, 1999, the Regional Trial Court of Naga City ruled that
the contract of sale between Juan Cabrera and Henry Ysaac was duly
rescinded when the former failed to pay the balance of the purchase
price in the period agreed upon.The Regional Trial Court found that
there was an agreement between Juan Cabrera and Henry Ysaac as to
the sale of land and the corresponding unit price. However, aside from
the receipts turned over by Mamerta Espiritu of the Espiritu family to
Juan Cabrera, there was no "evidence that the other adjoining lot
occupants agreed to sell their respective landholdings" to Juan Cabrera.

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The Regional Trial Court also doubted that Juan Cabrera was willing and
able to pay Henry Ysaac on June 15, 1992.
Issue: Whether or not the Court of appeals in holding that the relief of
specific performance is not available to petitioner supposedly because of
the supervening sale of the property to the City Government.
Held: The local government of Naga City was an innocent purchaser for
value, and following the rules on double sales, it had a preferential right
since the sale it entered into was in a public instrument, while the one
with Juan Cabrera was only made orally. The only recourse the Court of
Appeals could do is to order Henry Ysaac to return the initial payment of
the purchase price of P10,600.00 (P1,500.00 and P6,100.00 as evidenced
by the receipts issued by Henry Ysaac to Juan Cabrera, and P3,000.00
for the surveying expenses) as payment of actual damages. The Court of
Appeals likewise awarded attorneys fees and litigation costs.

JOSE J. FERRER, JR. Petitioner v. CITY MAYOR HERBERT BAUTISTA,

CITYCOUNCIL OF QUEZON CITY, CITY TREASURER OF QUEZON CITY,
AND CITYASSESSOR OF QUEZON CITY Respondents. G.R. No.
210551, June 30, 2015
Doctrine: Subject to the provisions of the LGC and consistent with the
basic policy of local autonomy, every LGU is now empowered and
authorized to create its own sources of revenue and to levy taxes, fees,
and charges which shall accrue exclusively to the local government unit
as well as to apply its resources and assets for productive,
developmental, or welfare purposes, in the exercise or furtherance of
their governmental or proprietary powers and functions.
Facts: On October 17, 2011, respondent Quezon City Council
enacted Ordinance No. SP-2095, S-2011, or the Socialized Housing Tax
of Quezon City, Section 3 of which provides:
SECTION 3. IMPOSITION. A special assessment equivalent to one-half
percent (0.5%) on the assessed value of land in excess of One Hundred
Thousand Pesos (Php100,000.00) shall be collected by the City Treasurer
which shall accrue to the Socialized Housing Programs of the Quezon
City Government. The special assessment shall accrue to the General
Fund under a special account to be established for the purpose.
On the other hand, Ordinance No. SP-2235, S-2013 was enacted on
December 16, 2013 and took effect ten days after when it was approved
by respondent City Mayor. The proceeds collected from the garbage fees
on residential properties shall be deposited solely and exclusively in an

84

earmarked special account under the general fund to be utilized for

garbage collections. Section 1 of the Ordinance set forth the schedule
and manner for the collection of garbage fees
Petitioner further contends that respondents characterization of the
SHT as nothing more than an advance payment on the real property
tax has no statutory basis. Allegedly, property tax cannot be collected
before it is due because, under the LGC, chartered cities are authorized
to impose property tax based on the assessed value and the general
revision of assessment that is made every three (3) years.
Issue: Whether or not the ordinance is valid.
Ruling: Clearly, the SHT charged by the Quezon City Government is a
tax which is within its power to impose. Aside from the specific authority
vested by Section 43 of the UDHA, cities are allowed to 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 which include, among
others, programs and projects for low-cost housing and other mass
dwellings.108 The collections made accrue to its socialized housing
programs and projects. The tax is not a pure exercise of taxing power or
merely to raise revenue; it is levied with a regulatory purpose.
The levy is primarily in the exercise of the police power for the general
welfare of the entire city. It is greatly imbued with public interest.
Removing slum areas in Quezon City is not only beneficial to the
underprivileged and homeless constituents but advantageous to the real
property owners as well. The situation will improve the value of the their
property investments, fully enjoying the same in view of an orderly,
secure, and safe community, and will enhance the quality of life of the
poor, making them law-abiding constituents and better consumers of
business products.

CHINA BANKING CORPORATION, Petitioner, vs. CITY TREASURER OF

MANILA, Respondent. G.R. No. 204117; July 1, 2015
Doctrine: Under the current state of law, there can be no doubt that the
law does not prescribe any formal requirement to constitute a valid
protest. To constitute a valid protest, it is sufficient if what has been filed
contains the spontaneous declaration made to acquire or keep some
right or to prevent an impending damage. Accordingly, a protest is valid
so long as it states the taxpayers objection to the assessment and the
reasons therefor.

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Facts: On January 2007, on the basis of the reported income of

respondent CBC's Sto. Cristo Branch, Binondo, Manila, amounting
to P34,310,777.34 for the year ending December 31, 2006, respondent
CBC was assessed the amount of P267,128.70 by petitioner City
Treasurer of Manila, consisting of local business tax, business permits,
and other fees for taxable year 2007.
On January 15, 2007, respondent CBC paid the amount of P267,128.70
and protested, thru a Letter dated January 12, 2007, the imposition of
business tax under Section 21 of the Manila Revenue Code in the amount
ofP154,398.50, on the ground that it is not liable of said additional
business tax and the same constitutes double taxation.
On February 8, 2007, petitioner acknowledged receipt of respondent
CBC 's payment under protest of the assessed amount and further
informed respondent that she will await for respondents formal protest.
On March 27, 2007, respondent CBC wrote a letter-reply to
[respondent's] petitioners Letter dated February 8, 2007, reiterating
that respondent already protested the additional assessment under
Section 21 of the Manila Revenue Code in its Letter dated January 12,
2007. In the same Letter, respondent averred that pursuant to Section
195 of the Local Government Code ("LGC ''), petitioner had until March
16, 2007 within which to decide the protest, and considering that
respondent received the Letter dated February 8, 2007, four days after
the deadline to decide and petitioner did not even resolve the protest,
respondent formally demanded the refund of the amount of P154,398.50,
representing the business tax collected under Section 21 of the Manila
Revenue Code.
On April 17, 2007, respondent CBC filed a Petition for Review with the
RTC of Manila, Branch 173, entitled "China Banking Corporation vs.
Hon. Liberty M. Toledo in her capacity as City Treasurer of Manila,"
docketed as Civil Case No. 07-117075, raising the sole issue of whether
or not respondent is subject to the local business tax imposed under
Section 21 of the Manila Revenue Code.
Issue: Whether or not the City Treasurer of Manila is correct in their
assessment.
Ruling: In this case, the Court finds that the City Treasurers contention
that CBC was not able to properly protest the assessment to be without
merit. The Court is of the view that CBC was able to properly file its
protest against the assessment of the City Treasurer when it filed its
letter on January 15, 2007, questioning the imposition while paying the

86

assessed amount. In the said letter, the petitioner was unequivocal in its
objection, stating that it took exception to the assessment made by the
City Treasurer under Section 21 of the citys revenue code, arguing that
it was not liable to pay the additional tax imposed under the subject
ordinance and that the imposition "constitute[d] double taxation" and,
for said reason, invalid. Despite its objection, it remitted the total
amount ofP267,128.70 under protest "to avoid penalties/surcharges and
any threat of closure.
The Court, however, is of the view that the period within which the City
Treasurer must act on the protest, and the consequent period to appeal a
"denial due to inaction," should be reckoned from January 15, 2007, the
date CBC filed its protest, and not March 27, 2007. Consequently, the
Court finds that the CTA En Banc did not err in ruling that CBC had lost
its right to challenge the City Treasurers "denial due to inaction." On
this matter, Section 195 of the LGC is clear.
SECTION 195. Protest of Assessment. -When the local treasurer or his
duly authorized representative finds that correct taxes, fees, or charges
have not been paid, he shall issue a notice of assessment stating the
nature of the tax, fee or charge, the amount of deficiency, the
surcharges, interests and penalties. Within sixty (60) days from the
receipt of the notice of assessment, the taxpayer may file a written
protest with the local treasurer contesting the assessment; otherwise,
the assessment shall become final and executory. The local treasurer
shall decide the protest within sixty (60) days from the time of its filing.
If the local treasurer finds the protest to be wholly or partly meritorious,
he shall issue a notice canceling wholly or partially the assessment.
However, if the local treasurer finds the assessment to be wholly or
partly correct, he shall deny the protest wholly or partly with notice to
the taxpayer. The taxpayer shall have thirty (30) days from the receipt of
the denial of the protest or from the lapse of the sixty (60)-day period
prescribed herein within which to appeal with the court of competent
jurisdiction otherwise the assessment becomes conclusive and unappealable.

NATIONAL POWER CORPORATION, Petitioner, vs. MUNICIPAL

GOVERNMENT OF NAVOTAS, SANGGUNIANG BAYAN OF NAVOTAS
AND MANUEL T. ENRIQUEZ, in his capacity as Municipal Treasurer of
Navotas, Respondents. G.R. No. 192300 November 24, 2014
Doctrine: Real property taxes are not always being treated by our laws
separately from local taxes. Local taxes should be considered in its
general and comprehensive sense which embraces real property tax

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assessments in line with what is general spoken shall be generally

understood.
Facts: Petitioner National Power Corporation (NPC) is a government
owned and controlled corporation organized and existing under and by
virtue of Republic Act No. 6395, as amended, with principal office
address at NPC Office Building Complex, comer Quezon A venue and BIR
Road, East Triangle, Diliman, Quezon City.
Respondent Municipal Government of Navotas, is a local government
unit, hosting petitioners Navotas Power Stations I and II located in the
Municipality of Navotas. It may be served with summons and court
processes through the Municipal Mayor, at the Municipal Hall Building,
Navotas, Metro Manila. Respondent Sangguniang Bayan of Navotas is a
legislative body being sued for the purpose of enjoining it from
performing any and all acts geared toward [the] collection of the assailed
taxes and/or sale of petitioners properties during the pendency of the
instant petition. It may be served with summons and other court
processes through the Vice Mayor, as the presiding officer, at the
Municipal Hall Building, Navotas, Metro Manila.
On the respective dates of November 16, 1988 and June 29, 1992,
petitioner entered into a Build-Operateand- Transfer Project Agreements
(BOTs) with Mirant Navotas I Corporation (MNC-I), formerly known as
Hopewell Energy Philippines Corporation, and Mirant Navotas II
Corporation (MNC-II), formerly known as Hopewell Tileman (Philippines)
Corporation. The BOTs are for the construction, operation and eventual
transfer to petitioner of MNC-Is 200-MW and MNC-IIs 100-MW gas
turbine power stations. During the period of the agreement, the
operation of the power stations shall be under the actual and direct
control and supervision of petitioner. Consequently, petitioner has the
obligation to pay for all taxes, except business taxes, relative to the
implementation of the agreements.
For the 1st quarter of 2003, petitioner paid respondent Municipality, real
property for the MNC-I and MNC-II power stations, respectively. After
the said quarter, petitioner stopped paying the real property taxes,
claiming exemption from payment thereon pursuant to Section 234(c) of
the Local Government Code (LGC) of 1991. In a letter dated March 30,
2004, petitioner informed the Municipal Assessor of Navotas (Municipal
Assessor) of their position on the exemption from real property tax of the
subject properties, pertaining to machineries and equipment which are
in the name of Hopewell Tileman (Phils.) Corporation.
Pursuant to the BOTs, MNC-I and MNC-II eventually transferred to
petitioner all their rights, title and interests in and to the fixtures,
fittings, plant and equipment, and improvements comprising the power
stations on March 24, 2003 and August 1, 2005, respectively. On May 25,
2005, MNC-II received four notices from respondent Municipal

88

Treasurer informing MNC-I and MNC-II of their real property tax

delinquencies for the 2nd, 3rd, and 4th quarters of calendar year 2003
and for the calendar years 2004 and 2005.
On November 21, 2005, a Warrant of Levy was received from respondent
Municipal Treasurer. MNC-II also received two Notices of Sale of
Delinquent Real Property, scheduling the public auction of the subject
properties on December 21, 2005.
On December 16, 2005, petitioner filed before the Regional Trial Court
(RTC) of Malabon City, a Petition for Declaratory Relief, Annulment of
Notice of Delinquency, Warrant of Levy, and Notice of Sale with prayer
for the issuance of a Writ of Preliminary Injunction and Temporary
Restraining Order (TRO). Petitioners application for the issuance of a
TRO was denied by the RTC. Respondents proceeded with the scheduled
public auction. Considering that there were no bidders for the purchase
of the subject properties, the same were forfeited in favor of respondent
Municipality. Petitioner filed an amended petition before the RTC seeking
to declare as null and void the public auction and the forfeiture of the
subject properties in favor of respondent Municipality on the ground that
these actions are patently illegal because the subject properties are
exempt from real property tax.
Issue: Whether or not the machines and equipment are actually, directly
and exclusively used by petitioner with the purview of Section 234 of the
LGC which exempts it from payment of real property taxes.
Held: It is worthy to note that in its Decision dated March 23, 2007, the
RTC already declared that petitioner is exempt from payment of real
property taxes on its machineries located at MNC-I & MNC-II.
As can be gleaned from the issue is clearly legal given that it involves an
interpretation of the contract between the parties vis--vis the applicable
laws, which entity actually, directly and exclusively uses the subject
machineries and equipment. The answer to such question would then
determine whether petitioner is indeed exempt from payment of real
property taxes. Since the issue is a question of law, the jurisdiction was
correctly lodged with the RTC.
There is no dispute that Section 234 of the Local Government Code
exempts petitioner from payment of real property tax due on its
machineries located at MNC-1 and MNC-2 power stations However,
instead of sustaining the requirement of payment under protest under
Section 25223 of the LGC, the CTA En Banc found the payment of protest
no longer necessary given the availing circumstances of the case. If
indeed the Court a quofinds the present case to fall under the
jurisdiction of the LBAA, and then the CBAA on appeal, the dispensation
with the requirement of payment under protest would be devoid of merit
and contrary to law and jurisprudence.

89

THE CITY OF DAVAO v. THE INTESTATE ESTATE OF AMADO S.

DALISAY, G.R. No. 207791. July 15, 2015
Doctrine: The policy of enabling local governments to fully utilize the
income potentialities of the real property tax would be put at a losing
end if tax delinquent could be recovered by the sheer expediency of a
document erroneously or, perhaps fraudulently, issued by its officers.
This would place at naught, the essence of redemption as a statutory
privilege; for then, the statutory period of its exercise maybe extended
by the indiscretion of scrupulous officers. In other words, the period
would become flexible because extensions of the period would depend,
not just on the sound discretion of the City Treasurer but on his attitude,
work ethics and worse, temperament.
Facts: A petition was instituted by the city of Davao assailing the
decision of the CA affirming the RTC decision ordering it to pay the
redemption price of the forfeited properties of the Intestate Estate of
Amado Dalisay.
The said properties were advertised for sale at a public auction for the
satisfaction of deiquent taxes, however, no bidders appeared, thus, the
aforesaid properties were acquired by the city government of Davao
pursuant to section 263 of the LGC. More than a year later, the
Declarations of Forfeiture were issued by the City Treasurer. Thereafter,
for the refusal of the City to accept, the Estate file the Notice of Deposit
with the Clerk of Court as payment for the redemption price of the
properties.
Issue: Whether or not the City of Davao validly forfeited the Estate of
Amado Dalisay and subsequently acquired it?
Ruling: Yes. The period to redeem the subject properties had long
expired, and since then, the forfeiture of the properties had become
absolute. The failure of the estate to validly exercise its right of
redemption within the statutory period had resulted in the consolidation
of ownership over the properties by the city.
To require a declaration of forfeiture places the local government in a
vacuum from the time of the auction up to the time it issues the
document. It causes the absurd situation, where the local governments
forfeiture of the property for want of a bidder becomes an empty and
meaningless exercise merely because the issuance of the declaration of
forfeiture came at a much subsequent time. The effect would be
stripping off the local government of the protection given by law to a
purchaser during and after a public auction. This goes against the
safeguards to which a purchaser is entitled until a valid redemption of
the property ensues because then, it is burdened with yet another
positive act of issuing a document in order to gain rights. This is not the
intention of section 263 of the LGC. The local government has the power
to acquire tax delinquent properties.

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CITY OF LAPU-LAPU, Petitioner vs. PHILIPPINE ECONOMIC ZONE

AUTHORITY, Respondent. G.R. No. 184203; November 26, 2014
Doctrine: The reason for the test of economic viability is really when the
government creates a corporation, there is a sense in which this
corporation become exempt from the test of economic performance. If a
government corporation loses, then it makes its claim upon the
taxpayers' money through the new equity infusions from the government
and what is invoked is the common good. The economic viability does not
apply to government entities vested with corporate powers and
performing essential public services.
Facts: President Ferdinand E. Marcos issued Presidential Decree No. 66
in 1972, declaring as government policy the establishment of export
processing zones in strategic locations in the Philippines. Thereafter,
Philippine Economic Zone Authority (PEZA) was created to operate,
administer, and manage the export processing zones established in the
Port of Mariveles, Bataan. Since PEZA was declared as non-profit
organization then it was exempt from all taxes that may be due.
Petitioner City of Lapu-lapu through the Office of the Treasurer,
demanded from the PEZA 32,912,350.08 in real property taxes for the
period from 1992 to 1998 on its properties located in Mactan Economic
Zone. Petitioner reiterated its demand letter citing Sections 193 and 234
of the Local Government Code that withdrew the real property tax
exemptions previously granted to or presently enjoyed by all persons.
The City pointed out that no provision in the Special Economic Zone Act
of 1995 specifically exempted the PEZA from payment of real property
taxes, unlike Section 21 of the Presidential Decree No. 66 that provided
for PEZAs exemption. In its last reminder, the City assessed the PEZA
86,843,503.48 as real property taxes for the period from 1992 to 2002.
The trial court ruled that under Section 24 of the Special Economic Zone
Act of 1995, PEZA is exempt from payment of real property taxes.
Section 24. Exemption from National and Local Taxes. - Except for real
property taxes on land owned by developers, no taxes, local and national,
shall be imposed on business establishments operating within the
ECOZONE. Characterizing the PEZA as an agency of the National
Government, the trial court ruled that the City has no authority to tax
PEZA under Sections 133 and 234 of the Local Government Code.
Issue: Whether the Philippine Economic Zone Authority (PEZA) is
exempt from payment of real property taxes.
Ruling: Yes, the PEZA is exempt from payment of real property taxes.
The General rule id that real properties are subject to real property
taxes. This is true especially since the Local Government Code has
withdrawn exemptions from real property taxes of all persons, whether

91

natural or judicial. Section 234 enumerates the exemptions. The

exceptions to the rule are provided in the Local Government Code
specifically under Section 133 which states that Local Government Units
(LGUs) have no power to levy taxes of any kind on the national
government, its agencies and instrumentalities and local government
units. Being an instrumentality of the government, the PEZA cannot be
taxed by LGUs.
Real properties under the PEZAs title are owned by the Republic of the
Philippines. Under Section 234 of the Local Government Code, real
properties owned by the Republic are exempt from real property taxes.
Section 234. Exemptions from Real Property Tax. The following are
exempted from payment of real property tax:
a. Real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof had
been granted , for consideration or otherwise, to a taxable person.
The exemption under Section 234 should be read in relation with Section
133 of the Local Government Code. Therefore, PEZA is exempt from
payment of real property taxes.

NATIVIDAD C. CRUZ AND BENJAMIN DELA CRUZ, petitioners, vs.

PANDACAN HIKER'S CLUB, INC., REPRESENTED BY ITS PRESIDENT,
PRISCILA ILAO, respondent. G.R. No. 188213, January 11, 2016
Doctrine: Police power under the general welfare clause is a power
exercised by the government mainly through its legislative, and not the
executive branch.
Facts: Natividad Cruz(Cruz) was the Punong Barangay of Barangay 848,
Zone 92, City of Manila. She allegedly confronted persons playing
basketball with the following statements:
Bakit nakabukas ang (basketball) court? Wala kayong karapatang
maglaro sa court na 'to, barangay namin ito! Wala kayong magagawa.
Ako ang chairman dito. Mga walang hiya kayo, patay gutom! Hindi ako
natatakot! Kaya kong panagutan lahat!
Then, she allegedly gave an order to the other petitioner, Barangay
Tanod Benjamin dela Cruz (Dela Cruz), to destroy the basketball ring by
cutting it up with a hacksaw which Dela Cruz promptly complied with,
thus, rendering the said basketball court unusable.
Pandacan Hiker's Club, Inc. (PHC) who claims to be the basketball
courts owner, represented by their president Priscila Ilao(Ilao), filed a
complaint before the Prosecutors Office and the Office of Ombudsman..
In an answer to the complaint, Cruz alleged that the basketball court
affected the peace in the barangay. She further claims that the court
blocks the jeepneys from passing through and basketball games causes

92

rampant bettings, fights which resulted to armed confrontation, and

disturbance to residents. She maintained that they once padlocked the
ring, however it was just removed. When Cruz asked for the PHC to
return the steel bar and padlock, the request was ignored.
Ombudsman dismissed the complaint and ruled that the act of destroying
the basketball ring was done by the barangay officials within their lawful
duties.
The Court of Appeals reversed the decision. It held Cruz to be without
the power to declare a thing a nuisance unless it is a nuisance per se. It
declared the subject basketball ring as not such a nuisance and, thus, not
subject to summary abatement. The court added that even if the same
was to be considered a nuisance per accidens, the only way to establish
it as such is after a hearing conducted for that purpose.
Issue: Whether or not the petitioners acted in their official capacities in
the exercise of their powers under the general welfare clause of the
Local Government Code.
Ruling: No. Petitioners were required to justify their abatement via such
an ordinance because the power they claim to have exercised - the police
power under the general welfare clause - is a power exercised by the
government mainly through its legislative, and not the executive, branch.
The prevailing jurisprudence is that local government units such as the
provinces, cities, municipalities and barangays exercise police power
through their respective legislative bodies.
Jurisprudence defines police power as the plenary power vested in the
legislature to make statutes and ordinances to promote the health,
morals, peace, education, good order or safety and general welfare of the
people.
Their good intentions do not justify the destruction of private property
without a legal warrant, because the promotion of the general welfare is
not antithetical to the preservation of the rule of law.
ALTA VISTA GOLF AND COUNTRY CLUB, petitioner, VS. THE CITY OF
CEBU, HON. MAYOR TOMAS R. OSMEA, IN HIS CAPACITY AS MAYOR
OF CEBU, AND TERESITA C. CAMARILLO, IN HER CAPACITY AS THE
CITY TREASURER, respondents. G.R. No. 180235, January 20, 2016
Doctrine: A local government unit may exercise its residual power to tax
when there is neither a grant nor a prohibition by statute.
Facts: Alta Vista Golf and Country Club(Alta Vista) is a non-stock and
non-profit corporation operating golf course in Cebu City.
On, June 21, 1993, the Sangguniang Panlungsod of Cebu City enacted
City Tax Ordinance No. LXIX, otherwise known as the "Revised Omnibus
Tax Ordinance of the City of Cebu"

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Section 42 of the said tax ordinance provides that There shall be paid to
the Office of the City Treasurer by the proprietors, lessees or operators
of theaters, cinemas, concert halls, circuses and other similar places of
entertainment, an amusement tax at the rate of thirty percent (30%), golf
courses and polo grounds at the rate of twenty percent (20%), of their
gross receipts on entrance, playing green, and/or admission fees
On August 6, 1998, Cebu City Assessor Sandra I. Po assessed deficiency
business taxes, fees, and other charges for the year 1998, in the total
amount of P3,820,095.68, which included amusement tax on its golf
course amounting to P2,612,961.24 based on gross receipts of
P13,064,806.20.
Through the succeeding years, respondent Cebu City repeatedly
attempted to collect from petitioner its deficiency business taxes, fees,
and charges for 1998, however Alta Vista steadfastly refused to pay the
amusement tax arguing that the imposition of said tax by Section 42 of
the Revised Omnibus Tax Ordinance, as amended, was irregular,
improper, and illegal.
Petitioner reasoned that under the Local Government Code, amusement
tax can only be imposed on operators of theaters, cinemas, concert halls,
or places where one seeks to entertain himself by seeing or viewing a
show or performance.
Issue: Whether or not Sec. 42 of the Revised Omnibus Tax Ordinance of
the City of Cebu, imposing amusement tax on golf courses is null and
void.
Ruling: Yes. Respondents cannot claim that Section 42 of the Revised
Omnibus Tax Ordinance, as amended, imposing amusement tax on golf
courses, was enacted pursuant to the residual power to tax of
respondent Cebu City. A local government unit may exercise its residual
power to tax when there is neither a grant nor a prohibition by statute;
or when such taxes, fees, or charges are not otherwise specifically
enumerated in the Local Government Code, National Internal Revenue
Code, as amended, or other applicable laws. In the present case, Section
140, in relation to Section 131(c), of the Local Government Code already
explicitly and clearly cover amusement tax and respondent Cebu City
must exercise its authority to impose amusement tax within the
limitations and guidelines as set forth in said statutory provisions.
In light of Pelizloy Realty, a golf course cannot be considered a place of
amusement. There is no basis for singling out golf courses for
amusement tax purposes from other places where people go to play
sports. This is in contravention of one of the fundamental principles of
local taxation: that the "taxation shall be uniform in each local
government unit."
CAPITOL WIRELESS, INC., petitioner, VS. THE PROVINCIAL
TREASURER OF BATANGAS, THE PROVINCIAL ASSESSOR OF

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BATANGAS, THE MUNICIPAL TREASURER AND ASSESSOR OF

NASUGBU, BATANGAS, respondents. G.R. No. 180110, May 30, 2016
Doctrine: Local government units power to levy real property taxation
extends to all properties within its territorial jurisdiction, unless there is
express grant such as domestic enactment or even contract, or an
international agreement or treaty exempting the same from real property
taxation.
Facts: Capitol Wireless Inc. (Capwire) is a Philippine corporation in the
business of providing international telecommunications services.
Capwire claims that it is co-owner only of the so-called "Wet Segment" of
the Asia Pacific Cable Network System (APCN), while the landing
stations or terminals and Segment E of APCN located in Nasugbu,
Batangas are allegedly owned by the Philippine Long Distance Telephone
Corporation (PLDT). Moreover, it alleges that the Wet Segment is laid in
international, and not Philippine, waters.
On May 15, 2000, however, for loan restructuring purposes, Capwire
claims that "it was required to register the value of its right," hence, it
engaged an appraiser to "assess the market value of the international
submarine cable system and the cost to Capwire."
The Provincial Assessor had determined that the submarine cable
systems described in Capwire's Sworn Statement of True Value of Real
Properties are taxable real property, a determination that was contested
by Capwire in an exchange of letters between the company and the
public respondent. The reason cited by Capwire is that the cable system
lies outside of Philippine territory.
On February 7, 2003 and March 4, 2003, Capwire received a Warrant of
Levy and a Notice of Auction Sale, respectively, from the respondent
Provincial Treasurer of Batangas.
Issue: Whether or not Capwires cables are exempted from real property
taxes.
Ruling: No. Absent any showing from Capwire of any express grant of
an exemption for its lines and cables from real property taxation, then
Capwire's submarine cable may be held subject to real property tax.
Furthermore, a factual finding shows that some of Capwires properties
are within the municipal waters of Batangas.
Capwire's legislative franchise, RA 4387, which amended RA 2037,
where it may be derived that there was a grant of real property tax
exemption for properties that are part of its franchise, or directly meet
the needs of its business, such had been expressly withdrawn by the
Local Government Code, which took effect on January 1, 1992, Sections
193 and 234.
Such express withdrawal had been previously held effective upon
exemptions bestowed by legislative franchises granted prior to the
effectivity of the Local Government Code. Capwire fails to allege or

95

provide any other privilege or exemption that were granted to it by the

legislature after the enactment of the Local Government Code.
Therefore, the presumption stays that it enjoys no such privilege or
exemption. Tax exemptions are strictly construed against the taxpayer
because taxes are considered the lifeblood of the nation.
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY
(MCIAA), Petitioner, v. CITY OF LAPU-LAPU AND ELENA T.
PACALDO, Respondents, G.R. No. 181756, June 15, 2015
Facts: Petitioner, Mactan-Cebu International Airport Authority (MCIAA)
was created by Congress under Republic Act No. 6958. Upon its
creation, petitioner enjoyed exemption from realty taxes imposed by the
National Government or any of its political subdivision. However, upon
the effectivity of the LGC the Supreme Court rendered a decision that
the petitioner is no longer exempt from realty estate taxes.
Respondent City issued to petitioner a Statement of Real Estate Tax
assessing the lots comprising the Mactan International Airport which
included the airfield, runway, taxi way and the lots on which these are
built. Petitioner contends that these lots, and the lots to which they are
built, are utilized solely and exclusively for public purposes and are
exempt from real property tax. Petitioner based its claim for exemption
on DOJ Opinion No. 50.
Respondent issued notices of levy on 18 sets of real properties of
petitioners. Petitioner filed a petition for Prohibition, TRO, and a writ of
preliminary injunction with RTC Lapulapu which sought to enjoin
respondent City from issuing the warrant of levy against petitioners
properties from selling them at public auction for delinquency in realty
tax obligations.
Petitioner claimed before the RTC that it had discovered that respondent
City did not pass any ordinance authorizing the collection of real
property tax, a tax for the special education fund (SEF), and a penalty
interest for its nonpayment. Petitioner argued that without the
corresponding tax ordinances, respondent City could not impose and
collect real property tax, an additional tax for the SEF, and penalty
interest from petitioner.
Issue: Whether or not the petitioners contention is tenable.
Ruling: Court of Appeals held that petitioners airport terminal building,
airfield, runway, taxiway, and the lots on which they are situated are not
exempt from real estate tax reasoning as follows: Under the Local
Government Code (LGC for brevity), enacted pursuant to the
constitutional mandate of local autonomy, all natural and juridical

96

persons, including government-owned or controlled corporations

(GOCCs), instrumentalities and agencies, are no longer exempt from
local taxes even if previously granted an exemption. The only exemptions
from local taxes are those specifically provided under the Code itself, or
those enacted through subsequent legislation.
WHEREFORE, in view of the foregoing, judgment is hereby rendered by
us as follows:
a. We DECLARE the airport terminal building, the airfield, runway,
taxiway and the lots on which they are situatedNOT EXEMPT from
the real estate tax imposed by the respondent City of Lapu-Lapu;
b. We DECLARE the imposition and collection of the real estate tax,
the additional levy for the Special Education Fund and the penalty
interest as VALID and LEGAL. However, pursuant to Section 255 of
the Local Government Code, respondent city can only collect an
interest of 2% per month on the unpaid tax which total interest
shall, in no case, exceed thirty-six (36) months;
We DECLARE the sale in public auction of the aforesaid properties and
the eventual forfeiture and purchase of the subject property by the
respondent City of Lapu-Lapu asNULL and VOID. However, petitioner
MCIAAs property is encumbered only by a limited lien possessed by the
respondent City of Lapu-Lapu in accord with Section 257 of the Local
Government Code.

FILM DEVELOPMENT COUNCIL OF THE

PHILIPPINES, Petitioner, v. COLON HERITAGE REALTY
CORPORATION, OPERATOR OF ORIENTE GROUP THEATERS,
REPRESENTED BY ISIDORO A. CANIZARES, Respondent. G.R. No.
203754, June 16, 2015
Doctrine: Municipal corporations only possess delegated, not inherent,
powers of taxation and the power to tax is still primarily vested in
congress.
Facts: Sometime in 1993, respondent City of Cebu, in its exercise of its
power to impose amusement taxes under Section 140 of the Local
Government Code2 (LGC)anchored on the constitutional policy on local
autonomy,3 passed City Ordinance No. LXIX otherwise known as the
Revised Omnibus Tax Ordinance of the City of Cebu (tax ordinance).
Central to the case at bar are Sections 42 and 43, Chapter XI thereof
which require proprietors, lessees or operators of theatres, cinemas,
concert halls, circuses, boxing stadia, and other places of amusement, to
pay an amusement tax equivalent to thirty percent (30%) of the gross
receipts of admission fees to the Office of the City Treasurer of Cebu City

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Almost a decade later, or on June 7, 2002, Congress passed RA

9167,5 creating the Film Development Council of the Philippines (FDCP)
and abolishing the Film Development Foundation of the Philippines, Inc.
and the Film Rating Board. Secs. 13 and 14 of RA 9167 provided for the
tax treatment of certain graded films as
follows:chanRoblesvirtualLawlibrary
Section 13. Privileges of Graded Films. Films which have obtained an
A or B grading from the Council pursuant to Sections 11 and 12 of
this Act shall be entitled to the following privileges:
a. incentive equivalent to the amusement tax imposed and collected
on the graded films by cities and municipalities in Metro Manila
and other highly urbanized and independent component cities in
the Philippines pursuant to Sections 140 to 151 of Republic Act No.
7160 at the following rates:
1. For grade A films 100% of the amusement tax collected on
such film; and
2. For grade B films 65% of the amusement tax collected on
such films. The remaining thirty-five (35%) shall accrue to the
funds of the Council.
According to petitioner, from the time RA 9167 took effect up to the
present, all the cities and municipalities in Metro Manila, as well as
urbanized and independent component cities, with the sole exception of
Cebu City, have complied with the mandate of said law.
Section 14. Amusement Tax Deduction and Remittance. - All revenue
from the amusement tax on the graded film which may otherwise
accrue to the cities and municipalities in Metropolitan Manila and
highly urbanized and independent component cities in the
Philippines pursuant to Section 140 of Republic Act. No.
7160 during the period the graded film is exhibited, shall be deducted
and withheld by the proprietors, operators or lessees of theaters
or cinemas and remittedwithin thirty (30) days from the termination of
the exhibition to the Council which shall reward the corresponding
amusement tax to the producers of the graded film within fifteen
(15) days from receipt thereof.
Proprietors, operators and lessees of theaters or cinemas who fail to
remit the amusement tax proceeds within the prescribed period shall be
liable to a surcharge equivalent to five percent (5%) of the amount due
for each month of delinquency which shall be paid to the Council.
(emphasis added)

98

Issue: Whether not municipal corporations only possess delegated, not

inherent, powers of taxation and that the power to tax is still primarily
vested in the Congress.
Whether or not RA 9167 is unconstitutional.
Ruling: From the above, the difference between Sec. 133 and the
questioned amendment of Sec. 140 of the LGC by RA 9167 is readily
revealed. In Sec. 133, what Congress did was to prohibit the levy by
LGUs of the enumerated taxes. For RA 9167, however, the covered LGUs
were deprived of the income which they will otherwise be collecting
should they impose amusement taxes, or, in petitioners own words,
Section 14 of [RA 9167] can be viewed as an express and real intention
on the part of Congress to remove from the LGUs delegated taxing
power, all revenues from the amusement taxes on graded
films which would otherwise accrue to [them] pursuant to Section 140 of
the [LGC].3
In other words, per RA 9167, covered LGUs still have the power to levy
amusement taxes, albeit at the end of the day,they will derive no revenue
therefrom. The same, however, cannot be said for FDCP and the
producers of graded films since the amounts thus levied by the LGUs
which should rightfully accrue to them, they being the taxing authority
will be going to their coffers. As a matter of fact, it is only through the
exercise by the LGU of said power that the funds to be used for
the amusement tax reward can be raised. Without said imposition,
the producers of graded films will receive nothing from the owners,
proprietors and lessees of cinemas operating within the territory
Taking the resulting scheme into consideration, it is apparent that what
Congress did in this instance was not to exclude the authority to levy
amusement taxes from the taxing power of the covered LGUs, but to
earmark, if not altogether confiscate, the income to be received by the
LGU from the taxpayers in favor of and for transmittal to FDCP, instead
of the taxing authority. This, to Our mind, is in clear contravention of the
constitutional command that taxes levied by LGUs shall accrue
exclusively to said LGU and is repugnant to the power of LGU.
It is a basic precept that the inherent legislative powers of Congress,
broad as they may be, are limited and confined within the four walls of
the Constitution.37 Accordingly, whenever the legislature exercises its
power to enact, amend, and repeal laws, it should do so without going
beyond the parameters wrought by the organic law.
Declaration by the RTC, Branch 5 of the entire RA 9167 as
unconstitutional
Noticeably, the RTC, Branch 5, in its September 25, 2012 Decision
in Colon Heritage v. FDCP, ruled against the constitutionality of the

99

entire law, not just the assailed Sec. 14. The fallo of the judgment reads
WHEREFORE, in view of all the foregoing, Judgment is hereby rendered
in favor of petitioner, as follows
(1) Declaring Republic Act No. 9167 as invalid and unconstitutional;
(2) The obligation to remit amusement taxes for the graded films to
respondent is ordered extinguished;
(3) Directing respondent to refund all the amounts paid by petitioner, by
way of amusement tax, plus the legal rate of interest thereof, until
the whole amount is paid in full.
In this regard, it is well to emphasize that if it appears that the rest of
the law is free from the taint of unconstitutionality, then it should remain
in force and effect if said law contains a separability clause. A
separability clause is a legislative expression of intent that the nullity of
one provision shall not invalidate the other provisions of the act. Such a
clause is not, however, controlling and the courts, in spite of it,may
invalidate the whole statute where what is left, after the void part, is not
complete and workable.40chanrobleslaw
In this case, not only does RA 9167 have a separability clause, contained
in Section 23 thereof which reads
Section 23. Separability Clause. - If, for any reason, any provision of this
Act, or any part thereof, is declared invalid or unconstitutional, all other
sections or provisions not affected thereby shall remain in force and
effect.
It is also true that the constitutionality of the entire law was not put in
question in any of the said cases. Moreover, a perusal of RA 9167 easily
reveals that even with the removal of Secs. 13 and 14 of the law, the
remaining provisions can survive as they mandate other matters like a
cinema evaluation system, an incentive and reward system, and local and
international film festivals and activities that will promote the growth
and development of the local film industry and promote its participation
in both domestic and foreign markets.
Where a part of a statute is void as repugnant to the Constitution, while
another part is valid, the valid portion, if separable from the invalid, may
stand and be enforced. The exception to this is when the parts of a
statute are so mutually dependent and connected, as conditions,
considerations, inducements, or compensations for each other, as to
warrant a belief that the legislature intended them as a whole, in which
case, the nullity of one part will vitiate the rest.
Here, the constitutionality of the rest of the provisions of RA 9167 was
never put in question. Too, nowhere in the assailed judgment of the RTC
was it explicated why the entire law was being declared as
unconstitutional.

100

It is a basic tenet that courts cannot go beyond the issues in a

case,43 which the RTC, Branch 5 did when it declared RA 9167
unconstitutional. This being the case, and in view of the elementary rule
that every statute is presumed valid,44 the declaration by the RTC,
Branch 5 of the entirety of RA 9167 as unconstitutional, is improper.

CLARK INVESTORS AND LOCAATORS ASSOCIATION, INC, Petitioner,

vs. SECRETARY OF FINANCE AND COMMISSIONER OF INTERNAL
REVENUE, Respondents. G.R. No. 200670, July 06, 2015
Doctrine: When the government entity is performing its legislative or
quasi-legislative function, the petition for certiorari does lie.
Facts: petitioner, which represents the businesses and enterprises
within the Clark Freeport Zone, filed the petition for certiorari
alleging that respondents acted with grave abuse of discretion in issuing
Revenue Regulation (RR) 2-2012. It argues that by imposing the VAT and
excise tax on the importation of petroleum and petroleum products from
abroad and into the Freeport or Economic Zones, RR 2-2012 unilaterally
revoked the tax exemption granted by RA No. 7227 and RA No. 9400 to
the businesses and enterprises operating within the Subic Special
Economic Zone and Clark Freeport Zone.
Respondents, through the Office of the Solicitor General (OSG), contend
that the petition must be denied outright because the special civil action
for certiorari cannot be used to assail RR 2-2012 which was issued by the
respondents in the exercise of their quasi-legislative or rule-making
powers. According to the OSG, certiorari can only be used against a
public officer exercising judicial or quasi-judicial powers.
Issue: Whether or not respondents issued RR 2-2012 in their legislative
or judicial powers.
Held: The court finds the questioned revenue regulation to be legislative
in nature.
RR 2-2012 was issued by the Secretary of Finance based on Section 244
of the NIRC. Section 1 of RR 2-2012 provides:
SECTION 1. SCOPE Pursuant to Section 244, in relation to Section
245, of the National Internal Revenue Code (NIRC) of 1997, as amended,
these Regulations are hereby promulgated in order to prescribe: 1) the
tax administration treatment of all petroleum and petroleum products
imported into the Philippines, including those coming in through
Freeport zones or Economic Zones; and 2) the refund of Value-Added Tax
(VAT) and Excise taxes paid for transactions statutorily zero-rated or
exempt therefrom; and to provide administrative guidelines on the
operation and maintenance of storage tanks, facilities, depots or
terminals where commodities for commercial use can be stored.

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Relevantly, Section 244 of the NIRC provides:

SEC. 244. Authority of Secretary of Finance to Promulgate Rules and
Regulations. The Secretary of Finance, upon recommendation of the
Commissioner, shall promulgate all needful rules and regulations for the
effective enforcement of the provisions of this Code.
Since RR 2-2012 was issued by the Secretary of Finance based on
Section 244 of the NIRC, such administrative issuance is therefore quasilegislative in nature which is outside the scope of a petition for
certiorari.
BATANGAS CITY, petitioner vs. PILIPINAS SHELL PETROLUEM
CORPORATION, respondent. G.R. No. 189669, February 16, 2015
Doctrine: Each local government unit shall have the power to create its
own sources of revenues and to levy taxes, fees, and charges subject to
such guidelines and limitations as the Congress may provide, consistent
with the basic policy of local autonomy. However, there are two kinds of
taxes which cannot be imposed by the LGUs: (1) excise taxes on articles
enumerated under the NIRC, as amended; and (2) taxes, fees or charges
on petroleum products.
Facts: Petitioner in this case Batangas City is a local government unit
while respondent is Pilipinas Shell Petroleum Corporation (Shell for
brevity).
In 2002, respondent was only paying the amount of P98, 964.71 for fees
and other charges which include the amount of P1, 180.34 as Mayor's
Permit. However, on February 20, 2001, petitioner Batangas City, sent a
notice of assessment to Shell demanding the payment of P92,373,720.50
and P312,656,253.04 as business taxes for its manufacture and
distribution of petroleum products and P4,299,851.00 as Mayor's Permit
Fee.
Shell filed a protest on April 17, 2002 contending among others that it is
not liable for the payment of the local business tax either as a
manufacturer or distributor of petroleum products. It further argued that
the Mayor's Permit Fees are exorbitant, confiscatory, arbitrary,
unreasonable and not commensurable with the cost of issuing a license.
On May 13, 2002, petitioners denied respondent's protest and declared
that under Section 14 of the Batangas City Tax Code of 2002, they are
empowered to withhold the issuance of the Mayor's Permit for failure of
respondent to pay the business taxes on its manufacture and distribution
of petroleum products.
Shell filed for a Petition for review, which was also denied by the LGU of
Batangas.

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After trial, RTC sustained the imposition of business taxes but withheld
the imposition of Mayors permit. Shell filed for Motion for partial
reconsideration which was likewise denied.
The case was elevated to the CTA, second division. In its decision, CTA
held that respondent is not subject to business taxes. City of Batangas
filed motion for reconsideration which was denied by the CTA.
CTA en banc promulgated a decision affirming in toto the decision of
CTA, second division.
Issue: Whether or not a LGU is empowered under the Local Government
Code to impose taxes on persons or entities engaged in the business of
manufacturing and distribution of petroleum products.
Held: NO. Although the power to tax is inherent in the State, the same
is not true for LGUs because although the mandate to impose taxes
granted to LGUs is categorical and long established in the 1987
Philippine Constitution, the same is not all encompassing as it is subject
to limitations as explicitly stated in Section 5, Article X of the 1987
Constitution.
SECTION 5. Each local government unit shall have the power to create
its own sources of revenues and to levy taxes, fees, and charges subject
to such guidelines and limitations as the Congress may provide,
consistent with the basic policy of local autonomy. Such taxes, fees, and
charges shall accrue exclusively to the local governments.
In conformity with Section 3, Article X of the 1987 Constitution,
Congress enacted Republic Act No. 7160, otherwise known as the local
Government Code of 1991. Book II of the LGC governs local taxation and
fiscal matters. Relevant provisions of Book II of the LGC establish the
parameters of the taxing powers of LGUs found below.
Section 130 provides for the following fundamental principles governing
the taxing powers of LGUs:
1. Taxation shall be uniform in each LGU.
2. Taxes, fees, charges and other impositions shall:
a. be equitable and based as far as practicable on the taxpayer's
ability to pay;
b. be levied and collected only for public purposes;
c. not be unjust, excessive, oppressive or confiscatory;
d. not be contrary to law, public policy, national economic
policy, or in the restraint of trade.
3. The collection of local taxes, fees, charges and other impositions
shall in no case be left to any private person.
4. The revenue collected pursuant to the provisions of the LGC shall
inure solely to the benefit of, and be subject to the disposition by,
the LGU levying the tax, fee, charge or other imposition unless
otherwise specifically provided by the LGC.

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5. Each LGU shall, as far as practicable, evolve a progressive system

of taxation.
Indisputably, the power of LGUs to impose business taxes derives from
Section 143 of the LGC is subject to the explicit statutory impediment
provided for under Section 133(h) which clearly specifies the two kinds
of taxes which cannot be imposed by LGUs: (1) excise taxes on articles
enumerated under the NIRC, as amended; and (2) taxes, fees or charges
on petroleum products.
Thus, the omnibus grant of power to LGUs under Section 143(h) of the
LGC cannot overcome the specific exception or exemption in Section
133(h) of the same Code. This is in accord with the rule on statutory
construction that specific provisions must prevail over general ones. A
special and specific provision prevails over a general provision
irrespective of their relative positions in the statute.
Moreover, Article 232(h) of the Implementing Rules and Regulations
(IRR) of the LGC of 1991 states: ARTICLE 232. Tax on Business. - The
Municipality may impose taxes on the following x x x x
(h) On any business not otherwise specified in the preceding
paragraphs which the sanggunian concerned may deem proper to
tax provided that that on any business subject to the excise tax.
VAT or percentage tax under the NIRC, as amended, the rate of
tax shall not exceed two percent (2%) of gross sales or receipts of
the preceding calendar year and provided further, that in line
with existing national policy, any business engaged in the
production, manufacture, refining, distribution or sale of
oil, gasoline, and other petroleum products shall not be
subject to any local tax imposed in this Article.

CITY OF GENERAL SANTOS, represented by its Mayor, HON. DARLENE

MAGNOLIA R. ANTONINO-CUSTODIO Petitioner, vs. COMMISSION ON
AUDIT, Respondent. G.R. No. 199439, April 22, 2014
Doctrine: In the creation and implementation of such ordinances, the
local government is granted such power by the Government to
reorganize but must still under the ambit of the Constitution.
Facts: Ordinance No. 08, series of 2009, was passed together with its
implementing rules and regulations, designed 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.
This contextual background in the passing of Ordinance No. 08, series of
2009, was not contested by respondent Commission on Audit.

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In response to the endorsement of the city audit team leader, respondent

Commissions regional director agreed that the grant lacked legal basis
and was contrary to the Government Service Insurance System (GSIS)
Act. He forwarded the matter to respondent Commissions Office of
General Counsel, Legal Services Sector.
The Office of General Counsel issued COA-LSS Opinion No. 2010-021.
Respondent Commission on Audit observed that GenSan SERVES was
not based on a law passed by Congress but on ordinances and
resolutions passed and approved by the Sangguniang Panlungsod and
Executive Orders by the city mayor. Moreover, nowhere in Section 76 of
Republic Act No. 7160, otherwise known as the Local Government Code,
does it provide a specific power for local government units to establish
an early retirement program.
Issue: Whether respondent Commission on Audit committed grave
abuse of discretion when it considered Ordinance No. 08, series of 2009,
in the nature of an early retirement program requiring a law authorizing
it for its validity.
Held: The Court agree with respondent Commission on Audit but only
insofar as the invalidity of Section 5 of the ordinance is concerned.
Section 5. GenSan SERVES Program Incentives On Top of Government
Service Insurance System (GSIS) and PAG-IBIG Benefits Any personnel
qualified and approved to receive the incentives of this program shall be
entitled to whatever retirement benefits the GSIS or PAG-IBIG is
granting to a retiring government employee.
Moreover, an eligible employee shall receive an early retirement
incentive provided under this program at the rate of one and one-half (1
1/2) months of the employees latest basic salary for every year of
service in the City Government.
Section 5 refers to an "early retirement incentive," the amount of which
is pegged on the beneficiarys years of service in the city government.
The ordinance provides that only those who have rendered service to the
city government for at least 15 years may apply. Consequently, this
provision falls under the definition of a retirement benefit. Applying the
definition in Conte, it is a form of reward for an employees loyalty and
service to the city government, and it is intended to help the employee
enjoy the remaining years of his or her life by lessening his or her
financial worries.
Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the
creation of any insurance or retirement plan other than the GSIS for
government officers and employees, in order to prevent the undue and
iniquitous proliferation of such plans. To ignore this and rule otherwise
would be tantamount to permitting every other government office or
agency to put up its own supplementary retirement benefit plan under
the guise of such financial assistance.
The Court declares Section 6 on post-retirement incentives as valid.

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WHEREFORE, the petition is partially granted. The assailed Commission

on Audit decision dated January 20, 2011 and resolution dated October
17, 2011 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.
CITY OF GENERAL SANTOS, represented by its Mayor, HON. DARLENE
MAGNOLIA R. ANTONINO-CUSTODIO Petitioner, vs. COMMISSION ON
AUDIT, Respondent. G.R. No. 199439, April 22, 2014
Doctrine: In the creation and implementation of such ordinances, the
local government is granted such power by the Government to
reorganize but must still under the ambit of the Constitution.
Facts: Ordinance No. 08, series of 2009, was passed together with its
implementing rules and regulations, designed 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.
This contextual background in the passing of Ordinance No. 08, series of
2009, was not contested by respondent Commission on Audit.
In response to the endorsement of the city audit team leader, respondent
Commissions regional director agreed that the grant lacked legal basis
and was contrary to the Government Service Insurance System (GSIS)
Act. He forwarded the matter to respondent Commissions Office of
General Counsel, Legal Services Sector.
The Office of General Counsel issued COA-LSS Opinion No. 2010-021.
Respondent Commission on Audit observed that GenSan SERVES was
not based on a law passed by Congress but on ordinances and
resolutions passed and approved by the Sangguniang Panlungsod and
Executive Orders by the city mayor. Moreover, nowhere in Section 76 of
Republic Act No. 7160, otherwise known as the Local Government Code,
does it provide a specific power for local government units to establish
an early retirement program.
Issue: Whether respondent Commission on Audit committed grave
abuse of discretion when it considered Ordinance No. 08, series of 2009,
in the nature of an early retirement program requiring a law authorizing
it for its validity.
Held: The Court agree with respondent Commission on Audit but only
insofar as the invalidity of Section 5 of the ordinance is concerned.
Section 5. GenSan SERVES Program Incentives On Top of Government
Service Insurance System (GSIS) and PAG-IBIG Benefits Any personnel
qualified and approved to receive the incentives of this program shall be
entitled to whatever retirement benefits the GSIS or PAG-IBIG is
granting to a retiring government employee.

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Moreover, an eligible employee shall receive an early retirement

incentive provided under this program at the rate of one and one-half (1
1/2) months of the employees latest basic salary for every year of
service in the City Government.
Section 5 refers to an "early retirement incentive," the amount of which
is pegged on the beneficiarys years of service in the city government.
The ordinance provides that only those who have rendered service to the
city government for at least 15 years may apply. Consequently, this
provision falls under the definition of a retirement benefit. Applying the
definition in Conte, it is a form of reward for an employees loyalty and
service to the city government, and it is intended to help the employee
enjoy the remaining years of his or her life by lessening his or her
financial worries.
Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the
creation of any insurance or retirement plan other than the GSIS for
government officers and employees, in order to prevent the undue and
iniquitous proliferation of such plans. To ignore this and rule otherwise
would be tantamount to permitting every other government office or
agency to put up its own supplementary retirement benefit plan under
the guise of such financial assistance.
The Court declares Section 6 on post-retirement incentives as valid.
WHEREFORE, the petition is partially granted. The assailed Commission
on Audit decision dated January 20, 2011 and resolution dated October
17, 2011 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.

VALENTINO L. LEGASPI, petitioner v. CITY OF CEBU, T.C. (TITO)

SAYSON AND RICARDO HAPITAN, respondents. G.R. No. 159110;
December 10, 2013
Doctrine: The Local Government Code (LGC) has expressly empowered
the Local Government Units (LGUs) to enact and adopt ordinances to
regulate vehicular traffic and to prohibit illegal parking within their
jurisdictions. Every LGU 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 general welfare.
Facts: Valentino L. Legaspi, petitioner filed a case against the City of
Cebu, T.C. (Tito) Sayson, Ricardo Hapitan and other John Does to
demand delivery of personal property and declare the nullity of
Ordinance No. 1664 which was enacted by the Sangguniang Panlungsod
to authorize traffic enforcers of Cebu City to immobilize any motor
vehicle violating the parking restrictions and prohibitions defined in

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Ordinance No. 801 or the Traffic Code of Cebu City. Vehicle immobilizers
shall not be removed or released until the owner or driver of the vehicle
pays all the accumulated penalties for all prior traffic law violations that
remain unpaid or unsettled plus the administrative penalty of Five
Hundred Pesos (P500.00) for the immobilization of their vehicle at the
City Treasurer of Cebu. All receipts of such payments shall be presented
to the concerned personnel of the Bureau responsible for the release of
the immobilized vehicle, unless otherwise released by the Chairman of
CITOM, Chairman of the Committee on Police, Fire and Penology, or the
Assistant City Fiscal.
Petitioner had left his car occupying a portion of the sidewalk and the
street outside the gate of his house to make way for the vehicle of
the anay exterminator who had asked to be allowed to unload his
materials and equipment from the front of the residence inasmuch as his
daughters car had been parked in the carport, with the assurance that
the unloading would not take too long; that while waiting for
the anay exterminator to finish unloading, the phone in his office inside
the house had rung, impelling him to go into the house to answer the
call; that after a short while, his son-in-law informed him that unknown
persons had clamped the front wheel of his car; that he rushed outside
and found a traffic citation stating that his car had been clamped by
CITOM representatives with a warning that the unauthorized removal of
the clamp would subject the remover to criminal charges; and that in the
late afternoon a group headed by Ricardo Hapitan towed the car even if
it was not obstructing the flow of traffic.
Issue: Whether Ordinance No. 1664 was enacted within the ambit of the
legislative powers of the City of Cebu.
Ruling: The Supreme Court answered in the affirmative. It held that
with no issues being hereby raised against the formalities attendant to
the enactment of Ordinance No. 1664, it is presumed that it fully
complied with the test of a valid ordinance. Congress enacted the LGC as
the implementing law for the delegation to the various LGUs of the
States great powers, namely: the police power, the power of eminent
domain, and the power of taxation. The LGC was fashioned to delineate
the specific parameters and limitations to be complied with by each LGU
in the exercise of these delegated powers with the view of making each
LGU a fully functioning subdivision of the State subject to the
constitutional and statutory limitations.
In particular, police power is regarded as "the most essential, insistent
and the least limitable of powers, extending as it does to all the great
public needs." It is unquestionably "the power vested in the legislature
by the Constitution, to make, ordain and establish all manner of
wholesome and reasonable laws, statutes and ordinances, either with
penalties or without, not repugnant to the Constitution, as they shall
judge to be for the good and welfare of the commonwealth, and of the

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subject of the same." According to Cooley: "[The police power] embraces

the whole system of internal regulation by which the state seeks not only
to preserve the public order and to prevent offences against itself, but
also to establish for the intercourse of citizens with citizens, those rules
of good manners and good neighborhood which are calculated to prevent
the conflict of rights and to insure to each the uninterrupted enjoyment
of his own, so far as it is reasonably consistent with the right enjoyment
of rights by others."
The immobilization of illegally parked vehicles by clamping the tires was
necessary because the transgressors were not around at the time of
apprehension. Under such circumstance, notice and hearing would be
superfluous. Nor should the lack of a trial-type hearing prior to the
clamping constitute a breach of procedural due process, forgiving the
transgressors the chance to reverse the apprehensions through a timely
protest could equally satisfy the need for a hearing. In other words, the
prior intervention of a court of law was not indispensable to ensure a
compliance with the guaranty of due process.
To reiterate, the clamping of the illegally parked vehicles was a fair and
reasonable way to enforce the ordinance against its transgressors;
otherwise, the transgressors would evade liability by simply driving
away.
Finally, Legaspis position, that the final decision of the RTC rendered in
the Astillero case declaring Ordinance No. 1664 unconstitutional bound
the City of Cebu, thereby precluding these consolidated appeals from
being decided differently, is utterly untenable. For one, Legaspi
undeservedly extends too much importance to an irrelevant decision of
the RTCirrelevant, because the connection between that case to these
cases was not at all shown. For another, he ignores that it should be the
RTC that had improperly acted for so deciding the Astillero case despite
the appeals in these cases being already pending in the CA. Being the
same court in the three cases, the RTC should have anticipated that in
the regular course of proceedings the outcome of the appeal in these
cases then pending before the CA would ultimately be elevated to and
determined by no less than the Court itself. Such anticipation should
have made it refrain from declaring Ordinance No. 1664
unconstitutional, for a lower court like itself, appreciating its position in
the "interrelation and operation of the integrated judicial system of the
nation," should have exercised a "becoming modesty" on the issue of the
constitutionality of the same ordinance that the Constitution required the
majority vote of the Members of the Court sitting en bane to
determine. Such "becoming modesty" also forewarned that any
declaration of unconstitutionality by an inferior court was binding only

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on the parties, but that a declaration of unconstitutionality by the Court

would be a precedent binding on all.
WHEREFORE, the Court DENIES the petitions for review
on certiorari for their lack of merit; AFFIRMS the decision promulgated
on June 16, 2003 by the Court of Appeals; and ORDERS the petitioners to
pay the costs of suit. SO ORDERED.

CAMP JOHN HAY DEVELOPMENT CORPORATION, Petitioner, vs.

CENTRAL BOARD OF ASSESSMENT APPEALS, REPRESENTED BY ITS
CHAIRMAN HON. CESAR S. GUTIERREZ, ADELINA A. TABANGIN, IN
HER CAPACITY AS CHAIRMAN OF THE BOARD OF TAX
(ASSESSMENT) APPEALS OF BAGUIO CITY, AND HON. ESTRELLA B.
TANO, IN HER CAPACITY AS THE CITY ASSESSOR OF THE CITY OF
BAGUIO, Respondents. G.R. No. 169234; October 2, 2013
Doctrine: The taxpayer or real property owner questioning the
assessment should first pay the tax due before his protests can be
entertained. In no case is the local treasurer obliged to entertain the
protest unless the tax due has been paid.
Facts: The City Assessor of Baguio City notified the Camp John Hay
Development Corporation (CJHDC) of the issuance of 36 Owners Copy of
Assessment of Real Property (ARP) covering the buildings and parcels of
land owned by the Bases Conversion Development Authority (BCDA) in
the John Hay Special Economic Zone (JHSEZ) which were leased out to
CJHDC. CJHDC filed with the Board of Tax Assessment Appeals (BTAA)
an appeal questioning validity of the assessment. CJHDC posits that it is
tax exempt pursuant to RA 7227.
The BTAA enjoined CJHDC to pay under protest of the subject real
property before the hearing of its appeal. The CJHDC did not pay under
protest, rather appealed the BTAA resolution before the Central Board of
Assessment Appeals (CBAA). The CBAA denied CJHDCs appeal for the
CBAA has yet to acquire jurisdiction since the issue has not been
resolved yet by the BTAA. CJHDC filed a petition for review before the
Court of Tax Appeals en banc. The CTA found that CJHDC failed to
comply with Sec. 252 of RA 7610 or the Local Government Code, thus
dismissing the petition and affirming the resolutions.
Issue: Whether or not petitioners tax protest should be entertained by
the city treasurer.
Ruling: No. Section 252 of RA No. 7160, also known as the LGC of 1991
categorically provides:

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SEC. 252. Payment Under Protest. (a) No protest shall be entertained

unless the taxpayer first pays the tax. There shall be annotated on the
tax receipts the words "paid under protest." The protest in writing must
be filed within thirty (30) days from payment of the tax to the provincial,
city treasurer or municipal treasurer, in the case of a municipality within
Metropolitan Manila Area, who shall decide the protest within sixty (60)
days from receipt.
(b) The tax or a portion thereof paid under protest, shall be held in
trust by the treasurer concerned.
(c) In the event that the protest is finally decided in favor of the
taxpayer, the amount or portion of the tax protested shall be
refunded to the protestant, or applied as tax credit against his
existing or future tax liability.
(d) In the event that the protest is denied or upon the lapse of the
sixty-day period prescribed in subparagraph (a), the tax payer may
avail of the remedies as provided for in Chapter 3, Title Two, Book
II of this Code.
Section 252 emphatically directs that the taxpayer/real property owner
questioning the assessment should first pay the tax due before his
protest can be entertained. As a matter of fact, the words "paid under
protest" shall be annotated on the tax receipts. Consequently, only after
such payment has been made by the taxpayer may he file a protest in
writing (within thirty (30) days from said payment of tax) to the
provincial, city, or municipal treasurer, who shall decide the protest
within sixty (60) days from its receipt. In no case is the local treasurer
obliged to entertain the protest unless the tax due has been paid.

CITY OF MANILA, HON. ALFREDO S. LIM, as Mayor of the City of

Manila, and ANTHONY Y. ACEVEDO, City Treasurer, petitioners, vs.
HON. ANGEL VALERA COLET, as Presiding Judge, Regional Trial Court
of Manila (Br. 43) and MALAYSIAN AIRLINE SYSTEM, respondents. G.R.
No. 120051. December 10, 2014
Doctrine: The power to tax is inherent in the State, but the same is not
true for the Local Government Units to whom the power must be
delegated by Congress and must be exercised within the guidelines and
limitations that Congress may provide. Section 133(j) of the Local
Government Code, which states that unless otherwise provided herein,
the taxing power of LGUs shall not extend to taxes on the gross receipts
of transportation contractors and persons engaged in the transportation
of passengers or freight by hire and common carriers by air, land or
water, except as provided in this Code.

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Facts: The Manila Revenue Code was enacted on June 22, 1993 by the
City Council of Manila and approved on June 29, 1993 by then Manila
Mayor Alfredo S. Lim. Section 21 of the revenue code included in the
enumeration of businesses subject to tax under the National Internal
Revenue Code the gross receipts of keepers of garages, cars for rent or
hire driven by the lessee, transportation contractors, persons who
transport passenger or freight for hire, and common carriers by land, air
or water, except owners of bancas and owners of animal-drawn twowheel vehicle. The City Council of Manila, through the enactment and
approval of Ordinance No. 7807 amending several provisions of the
Manila Revenue Code including Section 21. The amendment imposed a
tax on the gross receipts of keepers of garages, cars for rent or hire
driven by the lessee, transportation contractors, persons who transport
passenger or freight for hire, and common carriers by land, air or water,
except owners of bancas and owners of animal-drawn two-wheel vehicle.
Collection of the tax began on January 1994.
Malaysian Airline System (MAS), a foreign corporation organized
and existing under the laws of Malaysia, is licensed to engage in
business in the Philippines by the Securities and Exchange Commission
in the airline business which involves the transportation of passengers
and cargo for hire. As its principal office and place of business is located
in Manila, it was assessed the business tax amounting to P1,100,000.00
when it was renewing its business permit for 1994. Respondent MAS
believing it was exempt from the municipal license tax issued a check
only for the Mayors Permit in the amount of P10, 307.50. The City
Treasurer refused to accept the check so MAS instituted Civil Case No.
94-69052 consigning with the trial court the amount of P10, 307.50, and
challenging the assessment of P1,100,000 for municipal license tax or
business tax; and have Section 21(B) of the Manila Revenue Code, as
amended be declared invalid or null and void. The Trial Court rendered a
decision in favor of MAS declaring the consignation valid, ordering the
City Mayor to issue the Mayors Permit, declaring Section 21(B) of the
Manila Revenue Code, as amended, invalid or null and void and
declaring MAS obligation as extinguished without any liability for
surcharges, interests, or any additional amount.
Petitioners Mayor Lim and City Treasurer Anthony Y. Acevedo, filed
a Petition for Review on Certiorari, assailing the decision of the Trial
Court for having erred in declaring the invalidity of Section 21(B) of the
Manila Revenue Code, as amended; and for declaring the validity of the
consignation.
Maersk Filipinas, Inc. (Maersk), American President Lines, Ltd.
(APL), Sea-Land Services, Inc. (Sea-Land), Overseas Freighters Shipping,
Inc. (OFSI), Dongnama Shipping Co., Ltd. (Dongnama), Kyowa Shipping,
Ltd. (Kyowa), Flagship Tankers Corp. (Flagship Tankers), Core Indo
Maritime Corp. (CIMC), Core Maritime Corp. (CMC) and Eastern
Shipping Lines, Inc. (Eastern Shipping) also filed their respective
petitions before the Manila RTC against petitioners because they were

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assessed and/or compelled to pay business taxes pursuant to Section

21(B) of the Manila Revenue Code. These were later consolidated into
one case. Several more corporations with principal offices in Manila and
engaged in the same line of business filed petitions or complaints-inintervention in the pending cases, namely: William Lines, Inc. (William
Lines), Negros Navigation Co., Inc. (Negros Navigation), Lorenzo
Shipping Corp. (Lorenzo Shipping), Carlos A. Gothong Lines, Inc.
(Gothong Lines); Aboitiz Shipping Corp., Aboitiz Air Transport Corp., and
Aboitiz Haulers, Inc. (collectively referred to as Aboitiz Group), Solid
Shipping Lines Corp., (Solid Shipping), and PNOC Shipping & Transport
Corp. (PSTC). Petitioner and intervenor corporations also sought the
declaration of Section 21(B) of the Manila Revenue Code, as amended, as
void or invalid for being contrary to the Constitution and the Local
Government Code of 1991.
The trial court rendered a decision upholding the power of the City
of Manila to levy the business tax under Section 21(B) of the Manila
Revenue Code, as amended, consistent with the basic policy of local
autonomy, thus cancelling temporary restraining orders, recalling all
writs of preliminary injunctions and cancelling all injunction bonds.
Petitioner and the other corporations elevated their case to the
Supreme Court by way of certiorari, assailing the validity of Section
21(B) of the Manila Revenue Code.
Issue: Whether or not Section 21(B) of the Manila Revenue Code, as
amended, is valid and constitutional based on Section 143(h) of the Local
Government Code providing for the taxation of transportation
contractors and persons even when exempted in Section 133(j) of the
Local Government Code from the taxing powers of the city?
Ruling: The Court ruled in favor of MAS declaring Section 21(B) of the
Manila Revenue Code, as amended, null and void for being beyond the
power of the City of Manila and its public officials to enact, approve, and
implement under the LGC.
It is already-well settled that although the power to tax is inherent
in the State, the same is not true for the LGUs to whom the power must
be delegated by Congress and must be exercised within the guidelines
and limitations that Congress may provide. The LGU is not sovereign;
rather, they are mere territorial and political subdivisions of the Republic
of the Philippines. Its power to tax is limited to the extent that such
power is delegated to it either by the Constitution or by statute. The
charter or statute must plainly show intent to confer that power to the
LGU.
Section 133(j) of the LGC prevails over Section 143(h). Section
133(j) of the Local Government Code clearly and unambiguously
proscribes LGUs from imposing any tax on the gross receipts of
transportation contractors, persons engaged in the transportation of
passengers or freight by hire, and common carriers by air, land or water.
Section 133(j) explicitly withholds the taxing power from the LGU. In

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contrast, Section 143 defines the general power of the LGU to tax
businesses within its jurisdiction. The omnibus grant of power to
municipalities and cities under Section 143(h) of the LGC cannot
overcome the specific exception in Section 133(j) of the same Code. This
is in accordance with the rule that specific provisions must prevail over
general ones.
In addition, Section 5(b) of the LGC itself, on Rules of
Interpretation, provides that in case of doubt, any tax ordinance or
revenue measure shall be construed strictly against the local
government unit enacting it, and liberally in favor of the taxpayer; any
tax exemption, incentive or relief granted by any local government unit
pursuant to the provisions of the LGC shall be construed strictly against
the person claiming it. The Court strictly construes Section 21(B) of the
Manila Revenue Code, as amended against the City of Manila and its
public officials and liberally in favor of the transportation contractors
and similar persons. The construction adopted by the Court is in
accordance with the consistent intention of the laws to withhold from the
LGUs the power to tax transportation contractors, persons engaged in
the transportation of passengers or freight by hire and common carriers
by air, land or water. The legislative intent in excluding from the taxing
power of the LGU the imposition of business tax against common
carriers is to prevent a duplication of the so-called common carriers
tax.
FORTUNE LIFE VS COMMISSION ON AUDIT, GR Number 213525,
January 27, 2015
Doctrine: The Local Government Code provides for group insurance or
additional insurance coverage for barangay officials, including members
of barangay tanod brigades and other service units, with public or
private insurance companies, when the finances of the municipal
government allow said coverage.
Facts: Sometime 2012, the local Government of Antique and the
petitioner executed a memorandum of agreement on life insurance
coverage of qualified barangay secretaries, treasurers and tanod. The
LGU of Antique procured P4,393,593.60 for the premium payment, and
subsequently submitted the corresponding disbursement voucher to
COA-Antique for pre-audit. COA-Antique then disallowed the payment for
lack of legal basis under Republic Act No. 7160 (Local Government
Code). The LGU of Antique later appealed but was denied.
Consequently, Fortune Life filed its petition for money claim in the COA.
And on November 15, 2012, COA issued its decision denying the
petition, holding that under Section 447 and Section 458 of the Local
Government Code only municipal or city governments are expressly

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vested with the power to secure group insurance coverage

for barangay workers; and noting the LGUs failure to comply with the
requirement of publication under Section 21 of Republic Act No. 9184
(Government Procurement Reform Act).
Issue: Whether or not COA is correct in citing that under Section 447
and Section 458 of the Local Government Code, only municipal or city
governments are expressly vested with the power to secure group
insurance coverage for barangay workers.
Ruling: YES, enshrined in our Local Government Code under Section
447 and 458 indeed expressly vested the LGUs the sole power to secure
group insurance, to wit; to provide for group insurance or additional
insurance coverage for barangay officials, including members of
barangay tanod brigades and other service units, with public or private
insurance companies, when the finances of the municipal government
allow said coverage. The petition was then dismissed by SC for lack of
merits.
PAJE VS CASINO, GR No. 207257, FEBRUARY 3, 2015
Doctrine: Cities shall be governed by their respective charters and the
municipalities shall operate and function in accordance with
Republic Act No. 7160, otherwise known as the Local
Government Code of 1991.
Facts: In February 2006, Subic Bay Metropolitan Authority (SBMA), a
government agency organized and established under Republic Act No.
(RA) 7227,4 and Taiwan Cogeneration Corporation (TCC) entered into a
Memorandum of Understanding (MOU) expressing their intention to
build a power plant in Subic Bay which would supply reliable and
affordable power to Subic Bay Industrial Park (SBIP).
On July 28, 2006, SBMA and TCC entered into another MOU, whereby
TCC undertook to build and operate a coal-fired power plant. In the said
MOU, TCC identified 20 hectares of land at SitioNaglatore, Mt. Redondo,
Subic Bay Freeport Zone (SBFZ) as the suitable area for the project and
another site of approximately 10 hectares to be used as an ash
pond. TCC intends to lease the property from SBMA for a term of 50
years with rent fixed at $3.50 per square meter, payable in 10 equal 5year installments.
On April 4, 2007, the SBMA Ecology Center issued SBFZ Environmental
Compliance Certificate (ECC) No. EC-SBFZ-ECC-69-21-500 in favor of
Taiwan Cogeneration International Corporation (TCIC), a subsidiary of
TCC, for the construction, installation, and operation of 2x150-MW
Circulating Fluidized Bed (CFB) Coal-Fired Thermal Power Plant

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at Sitio Naglatore.
On June 6, 2008, TCC assigned all its rights and interests under the
MOU dated July 28, 2006 to Redondo Peninsula Energy, Inc. (RP
Energy), a corporation duly organized and existing under the laws of the
Philippines with the primary purpose of building, owning, and operating
power plants in the Philippines, among others. Accordingly, an
Addendum to the said MOU was executed by SBMA and RP Energy.
RP Energy then contracted GHD Pty, Ltd. (GHD) to prepare an
Environmental Impact Statement (EIS) for the proposed coal-fired power
plant and to assist RP Energy in applying for the issuance of an ECC
from the Department of Environment and Natural Resources (DENR).
On August 27, 2008, the Sangguniang Panglungsod of Olongapo City
issued Resolution No. 131, Series of 2008, expressing the city
governments objection to the coal-fired power plant as an energy source
and urging the proponent to consider safer alternative sources of energy
for Subic Bay.
On December 22, 2008, the DENR, through former Secretary Jose L.
Atienza, Jr., issued an ECC for the proposed 2x150-MW coal-fired power
plant.
Sometime thereafter, RP Energy decided to include additional
components in its proposed coal-fired power plant. Due to the changes in
the project design, which involved the inclusion of a barge wharf,
seawater intake breakwater, subsea discharge pipeline, raw water
collection system, drainage channel improvement, and a 230kV doublecircuit transmission line, RP Energy requested the DENR Environmental
Management Bureau (DENR-EMB) to amend its ECC. In support of its
request, RP Energy submitted to the DENR-EMB an Environmental
Performance Report and Management Plan (EPRMP), which was
prepared by GHD.
On June 8, 2010, RP Energy and SBMA entered into a Lease and
Development Agreement (LDA) over a 380,004.456-square meter parcel
of land to be used for building and operating the coal-fired power plant.
On July 8, 2010, the DENR-EMB issued an amended ECC (first
amendment) allowing the inclusion of additional components, among
others.
Several months later, RP Energy again requested the DENR-EMB to
amend the ECC. Instead of constructing a 2x150-MW coal-fired power
plant, as originally planned, it now sought to construct a 1x300-MW coalfired power plant. In support of its request, RP Energy submitted a
Project Description Report (PDR) to the DENR-EMB.

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On May 26, 2011, the DENR-EMB granted the request and further
amended the ECC (second amendment).
On August 1, 2011, the Sangguniang Panglalawigan of Zambales issued
Resolution No. 2011-149, opposing the establishment of a coal-fired
thermal power plant at Sitio Naglatore, Brgy. Cawag, Subic, Zambales.
On August 11, 2011, the Liga ng mga Barangay of Olongapo City issued
Resolution No. 12, Series of 2011, expressing its strong objection to the
coal-fired power plant as an energy source.
On July 20, 2012, Hon. Teodoro A. Casio, Hon. Raymond V. Palatino,
Hon. Rafael V. Mariano, Hon. Emerenciana A. De Jesus, Clemente G.
Bautista, Jr., Hon. Rolen C. Paulino, Hon. Eduardo Piano, Hon. James de
los Reyes, Hon. Aquilino Y. Cortez, Jr., Hon. Sarah Lugerna LipumanoGarcia, Noraida Velarmino, Bianca Christine Gamboa Espinos, Charo
Simons, Gregorio Llorca Magdaraog, Rubelh Peralta, Alex Corpus
Hermoso, Rodolfo Sambajon, Rev. Fr. Gerardo Gregorio P. Jorge, Carlito
A. Baloy, Ofelia D. Pablo, Mario Esquillo, Elle Latinazo, Evangeline Q.
Rodriguez, and John Carlo delos Reyes (Casio Group) filed before this
Court a Petition for Writ of kalikasan against RP Energy, SBMA, and Hon.
Ramon Jesus P. Paje, in his capacity as Secretary of the DENR.
On July 31, 2012, this Court resolved, among others, to: (1) issue a Writ
of kalikasan; and (2) refer the case to the CA for hearing and reception of
evidence and rendition of judgment.
While the case was pending, RP Energy applied for another amendment
to its ECC (third amendment) and submitted another EPRMP to the
DENR-EMB, proposing the construction and operation of a 2x300-MW
coal-fired power plant.
On September 11, 2012, the Petition for Writ of kalikasan was docketed
as CA-G.R. SP No. 00015 and raffled to the Fifteenth Division of the
CA. In the Petition, the Casio Group alleged, among others, that the
power plant project would cause grave environmental damage; that it
would adversely affect the health of the residents of the municipalities of
Subic, Zambales, Morong, Hermosa, and the City of Olongapo; that the
ECC was issued and the LDA entered into without the prior approval of
the concerned sanggunians as required under Sections 26 and 27 of the
Local Government Code (LGC); that the LDA was entered into without
securing a prior certification from the National Commission on
Indigenous Peoples (NCIP) as required under Section 59 of RA 8371 or
the Indigenous Peoples Rights Act of 1997 (IPRA Law); that Section 8.3
of DENR Administrative Order No. 2003-30 (DAO 2003-30) which allows
amendments of ECCs is ultra vires because the DENR has no authority to
decide on requests for amendments of previously issued ECCs in the
absence of a new EIS; and that due to the nullity of Section 8.3 of DAO
2003-30, all amendments to RP Energys ECC are null and void.

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Issue/s:
To Redondo Peninsula Energy (RP): Whether or not the LGUs approval
under Sections 26 and 27 of the Local Government Code is necessary for
the issuance of the DENR ECC and its amendments, and what
constitutes LGU approval.
To DENR Sec Paje: Whether or not the issuance of the DENR ECC and its
amendment in favor of RP Energy requires compliance with Section 59 of
the IPRA Law, as well as Sections 26 and 27 of the Local Government
Code
Ruling: The local government units comprising the Subic Special
Economic Zone shall retain their basic autonomy and identity. The
cities shall be governed by their respective charters and the
municipalities shall operate and function in accordance with Republic
Act No. 7160, otherwise known as the Local Government Code of 1991.
As to the issues the Supreme ruled on the contrary saying that the
power to approve or disapprove projects within the SSEZ is one such
power over which the SBMAs authority prevails over the LGUs
autonomy. Hence, there is no need for the SBMA to secure the approval
of the concerned Sanggunians prior to the implementation of the subject
project.
This interpretation is based on the broad grant of powers to the SBMA
over all administrative matters relating to the SSEZ under Section 13 of
RA 7227, as afore-discussed. Equally important, under Section 14, other
than those involving defense and security, the SBMAs decision prevails
in case of conflict between the SBMA and the LGUs in all matters
concerning the SSEZ, viz.
Sec. 14. Relationship with the Conversion Authority and the
Local Government Units.
(a) The provisions of existing laws, rules and regulations to
the contrary notwithstanding, the Subic Authority shall
exercise administrative powers, rule-making and
disbursement of funds over the Subic Special Economic
Zone in conformity with the oversight function of the
Conversion Authority.
(b) In case of conflict between the Subic Authority and the
local government units concerned on matters affecting the
Subic Special Economic Zone other than defense and
security, the decision of the Subic Authority shall prevail.
(Emphasis supplied)
Clearly, the subject project does not involve defense or security, but
rather business and investment to further the development of the SSEZ.

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Such is in line with the objective of RA 7227 to develop the SSEZ into a
self-sustaining industrial, commercial, financial and investment center.
Hence, the decision of the SBMA would prevail over the apparent
objections of the concerned Sanggunians of the LGUs.
Significantly, the legislative deliberations on RA 7227, likewise, support
and confirm the foregoing interpretation. As earlier noted, Section 13
b(4) of RA 7227 provides:
Sec. 13. The Subic Bay Metropolitan Authority.
(b) Powers and functions of the Subic Bay Metropolitan
Authority - The Subic Bay Metropolitan Authority, otherwise
known as the Subic Authority, shall have the following powers
and function:
(4) To construct, acquire, own, lease, operate and maintain
on its own or through contract, franchise, license permits
bulk purchase from the private sector and build-operate
transfer scheme or joint-venture the required utilities and
infrastructure in coordination with local government units
and appropriate government agencies concerned and in
conformity with existing applicable laws therefor;

MICHAEL SEBASTIAN, Petitioner, v. ANNABEL LAGMAY NG,

REPRESENTED BY HER ATTORNEY-IN-FACT, ANGELITA
LAGMAY, Respondent. G.R. No. 164594, April 22, 2015
Doctrine: A basic principle of interpretation is that words must be given
their literal meaning and applied without attempted interpretation where
the words of a statute are clear, plain and free from ambiguity.

Facts: Sometime in 1997, Angelita Lagmay (Angelita), acting as

representative and attorney-in-fact of her daughter Annabel Lagmay Ng
(Annabel), filed a complaint before the Barangay Justice of Siclong, Laur,
Nueva Ecija. She sought to collect from Michael Sebastian (Michael), a
former sweetheart of Annabel, the sum of P350, 000.00. The money was
sent while Annabel was working in Hong Kong and the former
sweethearts agreed to jointly invest their financial resources to buy a
truck. After their relationship ended Michael refused to return the
money to Annabel.

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On July 9, 1997, the parties entered into an amicable settlement,

evidenced by a document denominated as "kasunduan'' wherein Michael
agreed to pay Annabel the amount of P250,000.00 on specific dates.
The kasunduan was signed by Angelita (on behalf of Annabel), Michael,
and the members of the pangkat ng tagapagkasundo.
Angelita filed for execution of the kasunduan with the Municipal Circuit
Trial Court (MCTC) but Michael claims that since the amount of
P250,000.00 - the subject matter of the kasunduan - is in excess of
MCTC's jurisdictional amount of P200,000.00, the kasunduan is beyond
the MCTC's jurisdiction to hear and to resolve.
Issue: Whether or not the MCTC has jurisdiction to execute the
kasunduan.
Ruling: Yes, the MCTC has jurisdiction.

A simple reading of Section 417 of the Local Government Code readily

discloses the two-tiered mode of enforcement of an amicable settlement.
The provision reads - The amicable settlement or arbitration award may
be enforced by execution by the lupon within six (6) months from the
date of the settlement. After the lapse of such time, the settlement may
be enforced by action in the appropriate city or municipal court.

The law, as written, unequivocally speaks of the "appropriate city or

municipal court" as the forum for the execution of the settlement or
arbitration award issued by the Lupon. Notably, in expressly conferring
authority over these courts, Section 417 made no distinction with respect
to the amount involved or the nature of the issue involved. Thus, there
can be no question that the law's intendment was to grant jurisdiction
over the enforcement of settlement/arbitration awards to the city or
municipal courts regardless of the amount.

VI.

MUNICIPAL LIABILITY

LEONCIO ALANGDEO, vs. THE CITY MAYOR OF BAGUIO, G.R. No.

206423, July 01, 2015
Doctrine: Absent compliance with the laws allowing for summary
eviction, respondents cannot resort to the procedural shortcut of ousting
petitioners by the simple expedient of a summary demolition order from
the Office of the City Mayor. They have to undergo the appropriate

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proceeding as set out in the NBCP and its IRR or avail of the proper
judicial process to recover the subject property from petitioners.
Facts: On November 13, 2003, respondent Ernesto Lardizabal (Ernesto)
filed a complaint for demolition, before the City Engineers Office6 of
Baguio City (City Engineers Office), questioning the ongoing
construction of a residential structure and garage extension by
petitioners on a parcel of land, situated at Barangay Atok Trail, Baguio
City (subject property), allegedly owned by Mariano Pangloy and
Ernestos father, Juanito Lardizabal. Upon investigation, the City
Engineers Office found out that the construction had no building
permit. Consequently, the City Mayor issued, through the Secretary to
the Mayor, Demolition Order No. 05, series of 2005 (DO No. 05)
directing the City Demolition Team to summarily demolish the said
structures.
Aggrieved, petitioners moved for a reconsideration of DO No. 05, but
was denied by the City Mayor. Thus, they were prompted to file a
complaint for injunction and prohibition with the RTC, docketed as Civil
Case No. 6007-R, seeking to enjoin the implementation of said order.
During trial, Verceles testified, among others, that he has a Tax
Declaration and a pending application for Ancestral Land Claim over the
subject property filed before the National Commission on Indigenous
Peoples (NCIP), and that he has been paying taxes therefor and
occupying the same since 1977.
Respondents witnesses, Antonio O. Visperas, Robert Albas Awingan, and
George Addawe, Jr., all testified that the structures of petitioners on the
subject property were not covered by any building permit.
Issue: Whether or not Demolition Order No. 05 issued by the city mayor
is valid.
Ruling: No, it is invalid, when any building or structure is found or
declared to be dangerous or ruinous, the Building Official shall order its
repair, vacation or demolition depending upon the degree of danger to
life, health, or safety. This is without prejudice to further action that may
be taken under the provisions of Articles 482 and 694 to 707 of the Civil
Code of the Philippines.
Provided, the procedures must be followed, there must be a finding or
declaration by the Building Official that the building/structure is a
nuisance, ruinous or dangerous.

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2. Written notice or advice shall be served upon the owner and

occupant/s of such finding or declaration, giving him at least fifteen (15)
days within which to vacate or cause to be vacated, repaired, renovated,
demolished and removed as the case may be, the nuisance, ruinous or
dangerous building/structure or any part or portion thereof.
3. Within the fifteen-day (15) period, the owner may, if he so desires,
appeal to the Secretary the finding or declaration of the Building Official
and ask that a re-inspection or re-investigation of the building/structure
be made.
To this, it bears noting that it is the Building Official, and not the City
Mayor, who has the authority to order the demolition of the structures
under the NBCP. Building Code clearly provides the process by which a
building may be demolished. The authority to order the demolition of any
structure lies with the Building Official.
Besides, it is clear that DO No. 05 was not issued pursuant to Section
455 (b) 3 (vi) of the Local Government Code, but pursuant to Section 3
par. 2.5(a) of the implementing rules and regulations governing summary
eviction jointly issued by the Department of Interior and Local
Government (DILG) and the Housing and Urban Development
Coordinating Council implementing Section 28, Article VII of RA 7279,
the application of which, however, has been herein debunked.
In fine, DO No. 05, which ordered the summary demolition of petitioners
structures, has no legal moorings and perforce was invalidly issued.
VII. LOCAL OFFICIALS
ROGELIO BATIN CABALLERO, petitioner, vs.COMMISSION ON
ELECTIONS AND JONATHAN ENRIQUE V. NANUD, JR., respondents.
G.R. No. 209835, September 22, 2015
Doctrine: A candidates re-acquisition of his Philippine citizenship under
Republic Act No. 9225 had no automatic impact or effect on his
residence/domicile.
Facts: Rogelio Caballero and Jonathan Nanud, Jr. were both candidates
for the mayoralty position of the Municipality of Uyugan, Batanes in the
May 13, 2013 elections.
Nanud, Jr. filed a petition for the cancellation of Caballeros certificate of
candidacy(CoC) on the ground that the latter made a false
representation when he declared in his CoC that he is eligible to run for
Mayor of Uyugan despite being a Canadian citizen and a nonresident
thereof.

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Caballero argued that prior to the filing of his COC on October 3, 2012,
he took an Oath of Allegiance to the Republic of the Philippines before
the Philippine Consul General in Toronto, Canada on September 13, 2012
and became a dual Filipino and Canadian citizen pursuant to RA No.
9225(Citizenship Retention and Reacquisition Act of 2003). Thereafter,
he renounced his Canadian citizenship and executed an Affidavit of
Renunciation before a Notary Public in Batanes on October 1, 2012. He
claimed that he did not lose his domicile of origin in Uyugan, Batanes
despite becoming a Canadian citizen as he merely left Uyugan
temporarily to pursue a brighter future for him and his family.
On May 3 2013, COMELEC issued a resolution canceling Caballeros
CoC. COMELEC found that Caballero failed to comply with the residency
requirement provided for under Sec. 39 of the Local Government Code.
Caballeros naturalization as a Canadian citizen resulted in the
abandonment of his domicile of origin.
On May 13, 2013, election returns showed that Caballero won over
Nanud, Jr.. Caballero was then proclaimed Mayor of Uyugan.
Issue: Whether or not Caballero complied with the residency
requirement under the Local Government Code.
Ruling: No, the Local Government Code requires that the candidate
must be a resident of the place where he seeks to be elected at least one
year immediately preceding the Election Day.
In Coquilla v. COMELEC, the Supreme Court ruled that naturalization in
a foreign country may result in an abandonment of domicile in the
Philippines. This holds true in petitioner's case as permanent resident
status in Canada is required for the acquisition of Canadian citizenship.
Hence, petitioner had effectively abandoned his domicile in the
Philippines and transferred his domicile of choice in Canada. His
frequent visits to Uyugan, Batanes during his vacation from work in
Canada cannot be considered as waiver of such abandonment.
Petitioner's reacquisition of his Philippine citizenship under Republic Act
No. 9225 had no automatic impact or effect on his residence/domicile.
The length of his residence therein shall be determined from the time he
made it his domicile of choice, and it shall not retroact to the time of his
birth.
Hence, petitioner's retention of his Philippine citizenship under RA No.
9225 did not automatically make him regain his residence in Uyugan,
Batanes. He must still prove that after becoming a Philippine citizen on
September 13, 2012, he had reestablished Uyugan, Batanes as his new
domicile of choice which is reckoned from the time he made it as such.
The COMELEC found that petitioner failed to present competent
evidence to prove that he was able to reestablish his residence in
Uyugan within a period of one year immediately preceding the May 13,
2013 elections. It found that it was only after reacquiring his Filipino
citizenship by virtue of RA No. 9225 on September 13, 2012 that

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petitioner can rightfully claim that he re-established his domicile in

Uyugan, Batanes, if such was accompanied by physical presence thereat,
coupled with an actual intent to reestablish his domicile there. However,
the period from September 13, 2012 to May 12, 2013 was even less than
the one year residency required by law.
The Supreme Court affirmed the resolution dated May 3, 2013 of
the COMELEC cancelling petitioners CoC.
RISOS-VIDAL VS COMMISSION ON ELECTIONS, G.R. No. 206666,
January 21, 2015
Doctrine: The pardoning power of the President cannot be limited by
legislative action.
Facts: In September 12, 2007, the Sandiganbayan convicted former
President Estrada for the crime of plunder and was sentenced to suffer
the penalty of Reclusion Perpetua and the accessory penalties of civil
interdiction during the period of sentence and perpetual absolute
disqualification. On October 25, 2007, however, former President Gloria
Macapagal Arroyo extended executive clemency, by way of pardon, to
former President Estrada, explicitly stating that he is restored to his civil
and political rights.
In 2009, Estrada filed a Certificate of Candidacy for the position of
President. None of the disqualification cases against him prospered but
he only placed second in the results.
In 2012, Estrada once more ventured into the political arena, and filed a
Certificate of Candidacy, this time vying for a local elective post, that of
the Mayor of the City of Manila.
Risos-Vidal filed a Petition for Disqualification against Estrada before
the Comelec stating that Estrada is disqualified to run for public office
because of his conviction for plunder sentencing him to suffer the
penalty of reclusion perpetua with perpetual absolute disqualification.
Petitioner relied on Section 40 of the Local Government Code (LGC), in
relation to Section 12 of the Omnibus Election Code (OEC).
The Comelec dismissed the petition for disqualification holding that
President Estradas right to seek public office has been effectively
restored by the pardon vested upon him by former President Gloria M.
Arroyo.
Estrada won the mayoralty race in May 13, 2013 elections. Alfredo Lim,
who garnered the second highest votes, intervened and sought to
disqualify Estrada for the same ground as the contention of Risos-Vidal
and praying that he be proclaimed as Mayor of Manila.

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Issue/s:
Whether or not former President Joseph Estrada can run for public office
herein as Mayor, despite having been convicted of the crime of plunder
which carried an accessory penalty of perpetual disqualification to hold
public office?
Ruling: Yes. Estrada was granted an absolute pardon that fully restored
all his civil and political rights, which naturally includes the right to seek
public elective office, the focal point of this controversy. The wording of
the pardon extended to former President Estrada is complete,
unambiguous, and unqualified. It is likewise unfettered by Articles 36
and 41 of the Revised Penal Code. The only reasonable, objective, and
constitutional interpretation of the language of the pardon is that the
same in fact conforms to Articles 36 and 41 of the Revised Penal Code.
It is insisted that, since a textual examination of the pardon given to and
accepted by former President Estrada does not actually specify which
political right is restored, it could be inferred that former President
Arroyo did not deliberately intend to restore former President Estradas
rights of suffrage and to hold public office, or to otherwise remit the
penalty of perpetual absolute disqualification. Even if her intention was
the contrary, the same cannot be upheld based on the pardons text.
THE PROVINCIAL GOVERNMENT OF AURORA, Petitioner, v. HILARIO
M. MARCO, Respondent. G.R. No. 202331, April 22, 2015
Doctrine: The prohibition on midnight appointments only applies to
presidential appointments. It does not apply to appointments made by
local chief executives.

FACTS: Governor Ramoncita P. Ong (Governor Ong) permanently

appointed Hilario M. Marco (Marco) as Cooperative Development
Specialist II along with 25 others on June 25, 2004, five (5) days before
the end of her term as Governor of the Province of Aurora (The
province). Annexed to Marcos appointment papers was a certification
from the Provincial Budget Officer and Provincial Accountant stating that
funds were available to cover the position.

Subsequently newly elected Governor Bellaflor Angara-Castillo called for

an executive meeting. During such meeting, it was established that the
Province had no funds available to pay for the salaries of Governor Ongs

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26 appointees. She subsequently issued a Letter recalling the previously

issued certification of the availability of funds (Letter).The Province
served Marco a copy of the Letter and was advised to refrain from
reporting for work beginning July 8, 2004, the day he received notice of
the disapproval of his appointment.

Marco appealed before the Civil Service Commission and it ruled that
Marcos appointment was valid since it was accompanied by a
certification of availability of funds and that the Letter withdrawing the
certification did not affect the validity of Marcos appointment because
the Province failed to submit documentary evidence to support its that
no funds were available.

The Province maintains that Marcos appointment was void on the

ground that he was a midnight appointee. Marco was appointed by
Governor Ong five (5) days before the end of her term.

Issue: Whether or not respondent is a midnight appointee, a prohibited

appointment under the Constitution.

Ruling: No. A midnight appointment "refers to those appointments

made within two months immediately prior to the next presidential
election." Midnight appointments are prohibited under Article VII,
Section 15 of the Constitution - Two months immediately before the next
presidential elections and up to the end of his term, a President or Acting
President shall not make appointments, except temporary appointments
to executive positions when continued vacancies therein will prejudice
public service or endanger public safety.

Midnight appointments are prohibited because an outgoing President is

"duty bound to prepare for the orderly transfer of authority to the
incoming President, and he [or she] should not do acts which he [or she]
ought to know, would embarrass or obstruct the policies of his [or her]
successor." An outgoing President should not "deprive the new
administration of an opportunity to make the corresponding
appointments."

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However, the constitutional prohibition on midnight appointments only

applies to presidential appointments. It does not apply to appointments
made by local chief executives.

Marco's appointment was valid. The Civil Service Commission correctly

approved his appointment.

EDELBERT C. UYBOCO, Petitioner, v. PEOPLE OF THE PHILIPPINES,

Respondent. G.R. No. 211703, December 10, 2014
Doctrine: A private person may be charged for violation of the AntiGraft and Corrupt Practices Act, as amended, in relation with the
violation of the requirements of Section 369 of the Local Government
Code on negotiated purchase that there must have been at least two (2)
failed public biddings before a contract for a negotiated purchase maybe
entered into.
Facts: Edelbert Uyboco, petitioner, a private individual and President of
Gaikoku, was found guilty by the Sandiganbayan for violating Section
3(e) of RA No. 3019, or the Anti-Graft and Corrupt Practices Act, as
amended. He was found to have acted in conspiracy with Rodolfo G.
Valencia, a public official. He then filed for a Petition for Review on
Certiorari assailing the decision.
Petitioner asserts that the Sandiganbayan erred in declaring the
existence of a conspiracy and in convicting him in the absence of proof
beyond reasonable doubt of such conspiracy and for denial of his motion
for reconsideration praying for the reopening of the proceedings on the
ground that he was not accorded due process because of the gross
incompetence of his counsel.
Issue: Whether or not the petitioner, a private person, may be charged
by the Sandiganbayan for violation of Section 3(e) of the Anti-Graft and
Corrupt Practices Act, as amended, in relation to the requirements of
Sec. 369 of the LGC on negotiated procurement.
Ruling: The court affirms the factual findings of the Sandiganbayan. A
meticulous scrutiny of the records of the case persuaded the court to
conclude that the Sandiganbayan did not err in its finding that petitioner
is guilty of the crime charged. The accused Valencia was a public officer
at the time the acts in question were committed. Thus, while petitioner
was a private individual, he was found to have been in conspiracy with
accused Valencia. This is in accord with the rule that private persons
may be charged in conspiracy with public officers. It is a settled rule that

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private persons, when acting in conspiracy with public officers, may be

indicted and, if found guilty, held liable for the pertinent offenses under
Section 3 of R.A. 3019, in consonance with the avowed policy of the antigraft law to repress certain acts of public officers and private persons
alike constituting graft or corrupt practices act or which may lead
thereto.
The records show that conspiracy existed by and between accused
Rodolfo Valencia and petitioner considering that the procurement of the
subject dump trucks for an overpriced amount could not have been
possible without each others participation and cooperation. Uyboco
failed to dispute any of the documentary evidence presented by the
prosecution and relied upon by the Sandiganbayan. Also, Valencia
entered into a negotiated contract with Gaikoku, represented by the
petitioner, without authority from the Sangguniang Panlalawigan. The
Sandiganbayan correctly ruled that Valencia failed to comply with the
requirements of Section 369 of the LGC on negotiated purchase. The
defense failed to present any substantial evidence of the two failed
biddings. In fact, it was proved by presented evidence that the alleged
failed biddings were merely simulated. Also it had been proven that an
overpayment was made for the dump trucks, since these were directly
imported by the Provincial Government from the distributor in Japan.
With this direct importation, the Provincial Government should have only
paid the tax-free amount of P4,594,119.85. Instead, accused Valencia had
already authorized and caused the disbursement of P6,994,286, or an
excess of P2,400,166.15, in favor of petitioners company, Gaikoku,
which has clearly caused undue injury to the government.

MAYOR MARCIAL VARGAS and ENGR. RAYMUNDO DEL

ROSARIO, Petitioners,
vs. FORTUNATO CAJUCOM, Respondent. G.R. No. 171095 .June 22,
2015
Doctrine: Whenever a writ of execution is being enforced to compel a
mayor to perform a discretionary duty, it is contrary to law and
applicable decisions of the Supreme Court.
Facts: On August 15, 2000, Fortunato Cajucom (Cajucom) filed with the
Regional Trial Court (RTC) of Cabanatuan City a Complaint for
mandamus and abatement of nuisance against the Municipal Mayor of
Aliaga, Nueva Ecija, in the person of Mayor Marcial Vargas (Mayor
Vargas), the Municipal Engineer of Aliaga, Nueva Ecija, namely, Engr.
Raymundo del Rosario (Engr. del Rosario), and a number of private
persons, namely, Rodel Puno, Vicente Mata, Tony Maderia, Rene
Maderia, and German Maderia (Puna, et al.). 1 The case was docketed as
Civil Case No. 3776 and assigned to the RTC of Cabanatuan City, Branch
86.2

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In the complaint, Cajucom alleged that he had intended to start a

gasoline station business on his lot in Aliaga, Nueva Ecija, but several
illegal structures built on the road shoulder by Puno, et al. were
obstructing access to his site, thus, also frustrating his plan. He claimed
that demand was made for Puno, et al. to remove their structures, but to
no avail. Cajucom then alleged that he tried to enlist the help of Mayor
Vargas and Engr. Del Rosario, but the latter similarly did not act.
Cajucom ultimately prayed for the court to command the said municipal
mayor and engineer to cause the removal of all buildings and structures
built on the concerned road shoulder by Puno, et al.
On February 14, 2001, the court rendered a Decision in favor of
Cajucom.3 It held that as correctly alleged by Cajucom, the mayor and
municipal engineer failed to perform their duties under the Rules and
Regulations Implementing the Local Government Code (Republic Act No.
7160), among which duties is the duty to order the demolition or removal
of illegally constructed houses, buildings or other structures on the road
shoulder.4 Thus, the court held: WHEREFORE, in view of the foregoing
the petition for MANDAMUS is hereby GRANTED and the public
defendants Municipal Mayor Marcial Vargas and Municipal Engineer
Raymundo del Rosario, both of the Municipality of Aliaga, Nueva Ecija,
are hereby ordered to comply with the above-cited provision of law.
The simple matter is that petitioners herein may not do indirectly, by
assailing the writ of execution, what they cannot do directly, which is
attacking the final, immutable and unalterable judgment of the RTC.
They may not raise in their opposition to the writ of execution issues that
they should have raised in the case during the trial proper or against the
judgment via an appeal. They may not object to the execution by raising
new issues of fact or law, except under the following circumstances:
(1) the writ of execution varies the judgment;
(2) there has been a change in the situation of the parties making
execution inequitable or unjust;
(3) execution is sought to be enforced against property exempt
from execution;
(4) it appears that the controversy has been submitted to the
judgment of the court;
(5) the terms of the judgment are not clear enough and there
remains room for interpretation thereof; or
(6) it appears that the writ of execution has been improvidently
issued, or that it is defective in substance, or issued against the
wrong party, or that the judgment debt has been paid or otherwise
satisfied, or the writ was issued without authority. 51

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For the most part, the petition does not clearly state whether the subject
writ of execution falls under any of the above exceptions. It raised two
grounds, i.e., that the writ is incapable of being enforced and that it
varies the judgment, which can be interpreted as falling under the
exceptions above, but these grounds as applied to the case at bar simply
lack merit. Petitioners claim that the writ could not be enforced since
Mayor Vargas had left office after the elections of May 2001 before he
was elected again in May 2004
Issue: Whether or not the petitioners contention is tenable.
Ruling: This argument fails. Even on its face, the statement is untenable
and fails to logically argue that the writ is incapable of enforcement. The
statement, is in fact, an admission that Mayor Vargas could have
implemented the writ during his two incumbencies the one before the
May 2001 elections and the one after the May 2004 elections - as both
times, he was served with the writ well inside his term as mayor. Such
service, as well as Mayor Vargas' two terms, also fell within the five-year
period within which the Decision dated February 14, 2001 could have
been enforced. Yet, the petition admits that it was Mayor Vargas himself
who refused, without any valid or legal reason, to enforce the writ during
his two terms even if it is clear that the judgment is final and there was
no order restraining its enforcement. Mayor Vargas had the time and
opportunity to perform his obligation but he did not. Then, it bears
stressing that the writ was directed at Mayor Vargas not in his personal
capacity, but in his capacity as municipal mayor, so that it is not irregular
whether it was served upon him during his earlier term or in his
subsequent one. His failure to enforce the same on both times suggests
his own disobedience to the court's final judgment, so that it is even
immaterial whether or why the writ was not enforced by the other mayor
who served between his two terms. Thus, it is incorrect to state that the
writ is incapable of enforcement, as it is only the petitioners themselves
who refuse to enforce the same.
Flowing from this, however, is the reality that two of the three
obligations, those which would "require owners of illegally constructed
structures to obtain the necessary permit" and "make necessary changes
in the construction of said structures" are simply not enforceable due to
the inherent illegality of the structures concerned which were all built on
public areas. No amount of permits nor change in construction would
legitimize the illegal structures as they are built on property for public
use, which is the public highway. Such is a factual finding that is binding
on this Court. The court below found that the areas occupied are the
shoulder and drainages which are part of the road's right-of-way and
which, in turn, is considered part of the highway under Presidential
Decree No. 17, as amended, otherwise known as the Revised Philippine
Highway Act of 1972. Puno et al. will never legally acquire the same by
prescription, for prescription does not run against the State or its
subdivisions on any of its non-patrimonial property. The provincial road

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whose shoulder was occupied by these defendants is one such nonpatrimonial property. And as far as the structures obstruct free passage
to the road, they likewise will never attain legality by mere lapse of time.
Therefore, the enforcement of the subject decision through the writ
issued by the trial court is presently limited to just one of the three
alternatives, i.e., a demolition of the structures. The said limitation is not
because the writ "altered" the judgment; it is because the situation of the
parties and the practicalities of such enforcement require it. In addition,
the decision subject of the execution itself noted that it was the "failure
of the public defendants to act on (Cajucom's) letter-complaint to cause
the removal of the structures located on the shoulder of the road" that
"constrained (him) to file the instant case." Removal or demolition of the
structures was likewise what was prayed for by Cajucom in the
complaint.64 Thus, the trial court recognizes that a removal of the
structures is what is called for in this case. Such is expressed in the
decision and the dispositive portion thereof must be understood in this
context. When interpreting the dispositive portion of the judgment, the
findings of the court as found in the whole decision must be considered;
a decision must be considered in its entirety, not just its specific portions,
to grasp its true intent and meaning.
But even if the decision was entirely silent on the matter, this Court has
held that a judgment is not confined to what appears upon the face of the
decision, but extends to those necessarily included therein or necessary
thereto. In the case at bar, the dispositive part of the trial court's
decision did not specify which of the alternative duties the public officers
were to perform, but since the decision itself factually states that the
plaintiff sues for the removal of the subject structures, and that the
structures are built on a public highway, then it follows that only one of
the alternative duties - that of demolition - is capable of enforcement. As
demolition stands as the only and necessary way to effectuate the
judgment, then it is what the execution of the judgment should consist
of. The writ of execution and a companion writ of demolition, if later
prayed for and issued by the trial court, are just a natural consequence
of and a necessary means to enforce the said decision.
WHEREFORE, the petition is DISMISSED for lack of merit. The assailed
Order dated September 15, 2005, of the Regional Trial Court of
Cabanatuan City, Branch 86, is AFFIRMED. The parties and the officers
of the court below are hereby ORDERED to IMPLEMENT the writ of
execution with dispatch.

FAUSTINO SILANEG, ET AL. v. COMMISSION ON AUDIT, G.R. No.

213189. September 8, 2015
Doctrine: The law in clear terms expressly provides that public
employees directly responsible for an illegal expenditure regardless of

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his or her part in authorizing its release, in making the payment, or in

otherwise taking part shall be solidarilly liable for its reimbursement.
Also solidarilly liable are the persons who received payment from an
illegally disbursed public fund.
Facts: Mayor FAUSTINO Silang and the rank-and-file employees of the
LGU of Tayabas filed a petition in court imputing grave abuse of
discretion on the COA en bancs act of affirming the Notices of
Disallowances dis allowing the Collective Negotiation Agreement
Incentives paid to the rank-and-file employees of the LGU of Tayabas ,
Quezon.
Issue: Whether or not the LGU of Tayabas has the authority to grant
cash incentives to its employees under COLLECTIVE NEGOTIATION
AGREEMENT?
Ruling: The Mayor and the Sanggunian exceeded their authority to
grant cash incentives under a CNA as they entered into a CNA with a
union that had not been accredited as the sole and exclusive negotiating
agent of the local government employees of Tayabas, and they had used
savings incurred two months before the CNA was signed which are
violations of the DBM Circular no. 2006-1.
As the approving officers vested with the authority to negotiate and
enter into a CNA, the Mayor and the Sanggunian members are directly
responsible for the negotiation and release of the public funds involved
and are thus solidarily liable for their illegal expenditure of these funds
for noncompliance with the requirements. Their roles in initiating,
negotiating, and approving CNAs vest them with the responsibility to
comply with the DBM Circular; part of this responsibility is to know
these requirements and to act as dictated by these requirements.
The liability of government employees and officials for illegal
expenditures finds support in the LGC, which imputes personal liability
for unlawful expenditures against the official or employee responsible for
it .(see section 351)
AMELIA C. ZOLETA v. THE HONORABLE SANDIGNBAYAN, G.R. No.
185224
July 29, 2015
Doctrine: Local Government officials become accountable public officers
either (1) because of the nature of their functions; or (2) on account of
their participation in the use or application of public funds.
Facts: A complaint was filed against the LGU officials of the Province of
Saranggani charging them with Malversaation of Public Funds by
Falsification of Public Documents, before the Sandiganbayan.
The case stemmed from the irregularities discovered by the Special
Audit Team that a financial assistance had been sought by an association
called Women in Progress, chaired by herein petitioner, when in fact and

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in truth no financial assistance has been requested and received by the

association.
Issue: Whether or not the Sandiganbayan correctly held the petitioners
liable for the misappropriation of public funds?
Ruling: All the accused are all public officers. The funds
misappropriated are public funds in character, as the y were funds
belonging to the Province of Saranggani.
The local government officials become accountable public officers either
because of the nature of their functions or on account of their
participation in the use or application of the public funds. Local
government official accountability for public funds or property is
expounded under section 340 of the LGC.
Moreover, as a standard procedure, any disbursement and release of
public funds require the approval of the Vice Governor and the Provincial
Accountant. Thus, in their capacities as such, they had control and
responsibility over the subject fund.

SANGGUNIANG PANLUNGSOD NG BAGUIO CITY, Petitioner, vs.

JADEWELL PARKING SYSTEMS CORPORATION, Respondent. G.R. No.
160025, April 23, 2014
DOCTRINE: The local government is vested and tasked the power to
legally implement and facilitate all ordinances and rules within its
territory. Furthermore, the LGU are mandatorily required to abide by
order of the court in the exercise of their delegated powers.
FACTS: On February 9, 2005, this Court issued a writ of preliminary
mandatory injunction directing Baguio City Mayor Braulio D. Yaranon,
his agents, representatives and/or any person or persons acting upon his
orders or in his place or stead to immediately reopen the streets
and/or premises operated and/or occupied by Jadewell Parking Systems
Corporation (Jadewell). They were further directed to let the said streets
and premises remain open until further orders of this Court.
However, Jadewell subsequently informed this Court that, contrary to the
representation of Mayor Yaranon and in violation of the writ (of
preliminary mandatory injunction), the parking spaces, roads and streets
operated and/or occupied by Jadewell remained closed. It presented
pictures taken on March 1, 2005 showing the continued closure of the
parking spaces at Burnham Park and the adjoining Abad Santos Drive,
Lake Drive and Harrison Road. It also submitted affidavits of pay parking
customers attesting to the fact that until now, the parking spaces and
streets that Jadewell previously utilized for pay parking has not been
opened. Further, counsel for Jadewell furnished with a copy to the court

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of its February 15, 2005 letter to Mayor Yaranon urging the latter to
comply with the writ.
Faced with the conflicting manifestations of the parties, this Court
directed Judge Iluminada Cabato-Cortes, Executive Judge of the Regional
Trial Court (RTC) of Baguio City, to determine whether or not Mayor
Yaranon in fact complied with the writ of preliminary mandatory
injunction and to submit a report thereon. Investigation of the Judge are
as follows: That on March 21, 2005 at around 2:25 in the afternoon, the
Honorable Executive Judge instructed the undersigned together with
Gilbert Evangelista to go to Jadewell Parking Systems particularly along
Harrison and Ganza Areas to verify whether said premises are already
open for business, but it is still closed with G.I. pipe railings measuring
about 74 feet at the main entrance and exit; April 4, 2005, the
undersigned were again instructed by the Executive Judge to check on
the premises of Jadewell Parking Systems, particularly located at the
aforementioned areas to find out whether there were changes in the
physical set up but there was none; Judge Cabato-Cortes personally
visited the premises on April 4, 2005. She found that the account of
sheriff Bacolod accurately reflected the actual condition in the said
premises. She observed that there were several policemen posted at the
parking area adjacent to Ganza Restaurant. When she interviewed some
of the policemen, they confirmed that the entrance and exit to the
parking area were indeed closed.
Issue: Whether or not the City Mayor of Baguio committed direct and
indirect contempt by disobedience and acting opposition to its authority.
Held: Contempt of court is disobedience to the court by acting in
opposition to its authority, justice and dignity. It signifies not only a
willful disregard or defiance of the court's orders but also such conduct
as tends to bring the authority of the court arid the administration of law
into disrepute or in some manner to impede the due administration of
justice. Under the Rules of Court, contempt is classified into either direct
or indirect contempt. Direct contempt is committed in the presence of or
so near a court or judge. It can be punished summarily without hearing.If
the pleading containing derogatory, offensive or malicious statements is
submitted in the same court where the proceedings are pending, it is
direct contempt. It is equivalent to a misbehavior committed in the
presence of or so near a judge. Contemptuous statements made in the
pleadings filed with the court constitute direct contempt. Similarly, false
or misleading allegations in a pleading or other document filed with the
court having cognizance of the case tending to frustrate the due
dispensation of justice constitute direct contempt. Candidness to the
court is essential for the expeditious administration of justice.
Here, Mayor Yaranon misled this Court into believing that he had already
obeyed the directive contained in the writ. The very caption of his paper

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itself manifested his intention to make believe that the writ had been
fully complied with. It attempted to create the impression that the
premises and streets previously operated by Jadewell were already open
pursuant to this Court's order when in fact they were not. Indubitably, it
constituted fraud on the court punishable as contempt.
His continuing refusal to carry out and implement the writ is a willful
disregard of and disobedience to this Court's lawful orders. His defiance
controvertibly proves his intention to tie the hands of justice and prevent
it from taking its due course. Hence Baguio City Mayor Braulio D.
Yaranon is hereby found GUILTY of (1) direct contempt for the falsehood
he deliberately foisted on this Court and (2) indirect contempt for his
continued disobedience to and defiance of the writ of preliminary
injunction the court had issued.

ALROBEN J. GOH, Petitioner, vs. HON. LUCILO R. BAYRON and

COMMISSION ON ELECTIONS, Respondents G.R. No. 212584;
November 24, 2014
Doctrine: The constitution allowed the enactment af a law authorizing
the transfer of funds for the purpose of augmenting an item from savings
in another item in the appropriation of the government branch or
constitutional concern. The purpose and conditions for which funds may
be transferred were specified.
FACTS: Petitioner Alroben J. Goh filed a recall petition to the
Commission on Elections (COMELEC) due to loss of trust and confidence
against the respondent Hon. Lucilo R. Bayron by violating the provisions
of the Anti-Graft and Corrupt Practices Act, Code of Conduct and Ethical
Standards for Public officials and other related gross negligence of duty,
dishonesty and immaturity as mayor of the Puerto, Princessa City. After
which, the COMELEC promulgated Resolution No. 9864 wherein the said
resolution found the recall petition sufficient in form and substance but
the funds of any recall elections were suspended.
The Office of the Deputy Executive Director (ODEDO) recommends the
COMELEC the issuance of a resolution certifying to the sufficiency of the
petition for recall of the respondent after review of the reports wherein it
was stated in the said resolution that all expenses incidental to recall
elections shall be borne by the COMELEC as stipulated in Section 75 of
the Local Government Code. Section 75. Expenses Incident to Recall
Elections.-All expenses incidental to recall elections shall be borne by the
COMELEC. For this purpose, there shall be included in the annual
General Appropriations Act as contingency fund at the disposal of the
Commission for the conduct of recall elections.
Respondent filed an Omnibus Motion for Reconsideration and
Clarification with the Commission which prayed for the dismissal of the

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recall petition. Thereafter, the petitioner filed a comment which prayed

for the COMELECs denial of the respondents motion wherein
Resolution No. 9882 was promulgated by the Commission which
suspends any proceeding relative to recall process, as stated in the said
resolution, does not have an appropriation in the 2014 General
Appropriations Act (GAA) and it does not provide the COMELEC with
legal authority to commit public funds for the recall process.
Issue: Whether the 2014 General Appropriations Act (GAA) has no
budget for the conduct of recall election therefore said recall cannot be
conducted.
Ruling: No, the 2014 GAA provides the line item appropriation to allow
COMELEC to conduct recall elections.
The Court held that the Commission on Elections (COMELEC) committed
grave abuse of discretion in issuing Resolution Nos. 9864 and 9882. The
2014 GAA provides the line item appropriation to allow the COMELEC to
perform its constitutional mandate of conducting recall elections. There
is no need for supplemental legislation to authorize the COMELEC to
conduct recall elections for 2014. In addition, one of the specific
functions of the Commission is to conduct recall elections. When the
Commission receives a budgetary appropriation for its Current
Operating Expenditures, such appropriation includes expenditures to
carry out its constitutional functions, including the conduct of recall
elections.
The Court set aside Resolution No. 9864 insofar as it directed the
suspension of any and all proceedings in the recall petition. Further, the
court set aside Resolution No. 9882 and direct the COMELEC to
immediately carry out the recall elections of the Respondent in
accordance with the provisions of the Local Government Code.
VIII. HUMAN RESOURCES AND DEVELOPMENT
IX. LOCAL INITIATIVE AND REFERENDUM

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