PUBCORP MIDTERM REVIEWER  Municipal Corporation – A body politic and corporate

constituted by the incorporation of the inhabitants for the

1. General Principles
B.) Principle of Local Autonomy
A.) Corporation
Corporation- an artificial being created by operation of law,
having the right of succession and the powers, attributes and
properties expressly authorized by law or incident to its
existence.
Classification
 Public - Organized for the government of a portion of the
state
 Private - Formed for some private purpose
 Quasi Public - A private corpotation that renders public
service or supplies public wants
 make the LG sovereign within the state or an imperium in
Criterion to determine whether corporation is public
 The relationship of the corporation to the State; if created
by the State as its own agency to help the State in
carrying out its governmental functions, then it is public;
otherwise it is private
Classes of Public Corporation
 Quasi public – Created by the state for a narrow or limited
purpose
purpose of local government.
Principles of Local Authority
Sec. 25, Art. II: The State shall ensure the autonomy of local
governments
Sec. 2, Art. X: The territorial and political subdivisions shall
enjoy local autonomy
Case Doctrines:
Basco vs Pagcor – The principle of local autonomy under the
1987 Constitution simple means “decentralization”; it does not
imperio
Limbonas vs Pangelin – Autonomy is either decentralization
of administration or decentralization of power.
 Decentralization of Administration - delegation of
administrative powers to broaden the base of
governmental power

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  Decentralization of Power – abdication by the national
government of political power in favor of the local
government.
Lina vs Pano – The power to create still includes the power
to destroy. The power to grant still includes the power
to recall.
Batangas CATV vs CA - But, while we recognize the LGUs’
power under the general welfare clause, we cannot
sustain Resolution No. 210. We are convinced that
respondents strayed from the well recognized limits of
its power. The flaws in Resolution No. 210 are: (1) it
violates the mandate of existing laws and (2) it violates
the State’s deregulation policy over the CATV industry.
LGUs must recognize that technical matters
concerning CATV operation are within the exclusive
regulatory power of the NTC.
Powers of the President over LGU’s
Case Doctrines:
Judge Dadole vs COA –
 The exercise of local autonomy remains subject to the
power of control by Congress, and tha power of
general supervision by the President
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 The Pres can only interfere in the affairs and activities
of a lgu if he or she finds that the latter had acted
contrary to law (Scope of Supervisory Powers of the
President)
 Any directive, therefore, by the President or any of his
alter egos seeking to alter the wisdom of a law
conforming judgment of a lgu is a patent nullity
because it violates the principle of local autonomy, as
well as the doctrine of separation of powers.
Pimentel vs Aguirre - Section 4 of AO 372 cannot be upheld.
A basic feature of local fiscal autonomy is the
automatic release of the shares of LGUs in the national
internal revenue. This is mandated by no less than the
Constitution. The Local Government Code specifies
further that the release shall be made directly to the
LGU concerned within five (5) days after every quarter
of the year and "shall not be subject to any lien or
holdback that may be imposed by the national
government for whatever purpose." As a rule, the term
"shall" is a word of command that must be given a
compulsory meaning. The provision is, therefore,
imperative.
Municipal Corporations
Elements:
  Legal Creation Authority to create – A lgu may be created, divided, merged,
 Corporate name abolished, or its boundaries substantially altered either
 Inhabitants by law enacted by Congress (Sec. 6, RA 7160)
 Territory
Case Doctrines:
Dual Nature and functions – Every lgu created or organized is
a body politic and corporate endowed with powers to Sema vs COMELEC – There is no provision in the
be exercised by it in conformity with law Constitution that conflicts with the delegation to
regional legislative bodies of the power to create
 Public – Acts as an agent of the state municipalities and barangays provided in Sec. 10, Art.
 Private – Agent of the community X of the Constitution. However, the creation of
provinces and cities is another matter.
Municipal Corporations (Sec. 1, Art. X)
 Province A province cannot be created without creating a
legislative district; nor can a city with a population of
250,000 or more be created without a legislative district
 City
League of Cities vs COMELEC -
 Municipality
The Cityhood Laws violate Sections 6 and 10, Article X of the
 Barangay Constitution, and are thus unconstitutional.
 ARMM and in the Cordilleras First, applying the P100 million income requirement in RA
9009 to the present case is a prospective, not a
 Special metropolitan political subdivisions retroactive application, because RA 9009 took effect in
2001 while the cityhood bills became law more than
Creation and dissolution of municipal corporations five years later.

Second, the Constitution requires that Congress shall

prescribe all the criteria for the creation of a city in the
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 Local Government Code and not in any other law,
including the Cityhood Laws.
Third, the Cityhood Laws violate Section 6, Article X of the
Constitution because they prevent a fair and just
distribution of the national taxes to local government
units.
Fourth, the criteria prescribed in Section 450 of the Local
Government Code, as amended by RA 9009, for
converting a municipality into a city are clear, plain and
unambiguous, needing no resort to any statutory
construction.
Fifth, the intent of members of the 11th Congress to exempt
certain municipalities from the coverage of RA 9009
remained an intent and was never written into Section
450 of the Local Government Code.
Sixth, the deliberations of the 11th or 12th Congress on
unapproved bills or resolutions are not extrinsic aids in
interpreting a law passed in the 13th Congress.
Seventh, even if the exemption in the Cityhood Laws were
written in Section 450 of the Local Government Code,
the exemption would still be unconstitutional for
violation of the equal protection clause.
Navarro vs COMELEC - The land area, while considered as
an indicator of viability of a local government unit, is not
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conclusive in showing that Dinagat cannot become a
province, taking into account its average annual
income of P82,696,433.23 at the time of its creation, as
certified by the Bureau of Local Government Finance,
which is four times more than the minimum
requirement of P20,000,000.00 for the creation of a
province. The delivery of basic services to its
constituents has been proven possible and
sustainable. Rather than looking at the results of the
plebiscite and the May 10, 2010 elections as mere fait
accompli circumstances which cannot operate in favor
of Dinagat’s existence as a province, they must be
seen from the perspective that Dinagat is ready and
capable of becoming a province. This Court should not
be instrumental in stunting such capacity.
Ratio legis est anima. The spirit rather than the letter of the
law. A statute must be read according to its spirit or
intent, for what is within the spirit is within the statute
although it is not within its letter, and that which is
within the letter but not within the spirit is not within the
statute. Put a bit differently, that which is within the
intent of the lawmaker is as much within the statute as
if within the letter, and that which is within the letter of
the statute is not within the statute unless within the
intent of the lawmakers. Withal, courts ought not to
interpret and should not accept an interpretation that
would defeat the intent of the law and its legislators.
Miranda vs Aguirre - R.A. No. 8528 is unconstitutional. The
conversion of the city of Santiago from an independent
component city to a component city should be
submitted to its people in a proper plebiscite. Section
10, Article X of the 1987 Constitution provides "No
province, city, municipality, or barangay may be
created, or 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." A close
analysis of the said constitutional provision will reveal
that the creation, division, merger, abolition or
substantial alteration of boundaries of local government
units involve a common denominator — material
change in the political and economic rights of the local
government units directly affected as well as the
people therein. It is precisely for this reason that the
Constitution requires the approval of the people "in the
political units directly affected." Section 10, Article X
addressed the undesirable practice in the past whereby
local government units were created, abolished,
merged or divided on the basis of the vagaries of
politics and not of the welfare of the people. Thus, the
consent of the people of the local government unit
directly affected was required to serve as a checking
mechanism to any exercise of legislative power
creating, dividing, abolishing, merging or altering the
boundaries of local government units|||
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Aquino vs COMELEC - Section 5. (1) The House of
Representatives shall be composed of not more than
two hundred and fifty members, unless otherwise fixed
by law, who shall be elected from legislative districts
apportioned among the provinces, cities, and the
Metropolitan Manila area in accordance with the
number of their respective inhabitants, and on the
basis of a uniform and progressive ratio, and those
who, as provided by law, shall be elected through a
party-list system of registered national, regional, and
sectoral parties or organizations.
(3) Each legislative district shall comprise, as far as
practicable, contiguous, compact, and adjacent
territory. Each city with a population of at least two
hundred fifty thousand, or each province, shall have at
least one representative.
The Local Government Code
Effectivity – January 1, 1992
Rules on Interpretation –
 Any provision on a power of a lgu shall be liberally
interpreted in its favor, and in case of doubt, any
question thereon shall be resolved of devolution of
powers and of the lgu
  Any tax ordinance or revenue measure shall be
construed strictly against the lgu enacting it and
liberally in favore of the taxpayer. Any tax exemption
shall be construed strictly against the person claiming it
 The general welfare provisions shall be liberally
interpreted to give more powers to lgu
 Rights and obligations existing on the date of the
effectivity of this code and arising out of contracts
involving a lgu shall be governed by the original terms
of said contracts
 In the reso of controversies arising under the code
where no legal provision or jurisprudence applies,
resort may be had to the customs and traditions in the
place where controversies take place
2. General powers and attributes of LGU
Sources:
 Sec 25, Art II ; Secs. 5, 6, and 7, Art. X
 Statutes (RA 7160)
 Charter
 Doctrine of the right of self-government
Governmental Powers
 General Welfare
Case Doctrines:
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Dela Cruz vs Paras — Police power is granted to municipal
corporations in general terms as follows: General power of council
to enact ordinances and make regulations.— The municipal council
shall enact such ordinances and make such regulations, not
repugnant to law, as may be necessary to carry into effect and
discharge the powers and duties conferred upon it by law and such
as shall seem necessary and proper to provide for the health and
safety, promote the prosperity, improve the morals, peace, good
order, comfort, and convenience of the municipality and the
inhabitants thereof, and for the protection of property therein."
(Sec. 2238, Revised Administrative Code of the Philippines, (1917).
2. ID ; ID.; ID.; WHEN ORDINANCES MAY BE PRONOUNCED
INVALID. — An ordinance enacted by virtue thereof, according to
Justice Moreland, speaking for the Court in the leading case of
United States v Phil. 165 (1913 ) "is valid, unless contravenes the
fundamental law of the Philippine Island, or an Act of the
Philippines Legislature, or unless it is against public policy, or is
unreasonable, oppressive, partial, discriminating, or in derogation
of common right. Where the power to legislate upon a given
subject, and the mode of its exercise and the details of such
legislation are not prescribed, the ordinance passed pursuant
thereto must be a reasonable exercise of the power, or it will be
pronounced invalid."
3. ID.; ID.; ID.; LEGISLATION BY VIRTUE OF THE GENERAL
WELFARE CLAUSE. — The general welfare clause authorizes such
ordinances "as shall seem necessary and proper to provide for the
health and safety, promote the prosperity, improve the morals,
peace, good order, comfort, and convenience of the municipality
and the inhabitants thereof, and for the protection of property
therein. "It is a general rule that ordinances passed by virtue of the
implied power found in the general welfare clause must be
reasonable, consonant with the general powers and purposes of
the corporation, and not inconsistent with the laws or policy of the
State.
Binay vs Domingo – The power of municipal corporations is broad
and has been said to commensurate with but not exceed the duty
to provide for the real needs of the people in their health, safety,
comfort and convenience and consistently as may be with private
rights.
Tano vs Socrates – Banning of shipment of all live fish and lobster
outside Puerto Princesa is a valid exercise of Police Power.
White light Corp vs City of Manila - The SC ruled that the said
ordinance is null and void as it indeed infringes upon individual
liberty. It also violates the due process clause which serves as a
guaranty for protection against arbitrary regulation or seizure. The
said ordinance invades private rights. Note that not all who goes
into motels and hotels for wash up rate are really there for obscene
purposes only. Some are tourists who needed rest or to “wash up”
or to freshen up. Hence, the infidelity sought to be avoided by the
said ordinance is more or less subjected only to a limited group of
people. The SC reiterates that individual rights may be adversely
affected only to the extent that may fairly be required by the
legitimate demands of public interest or public welfare.
SJS vs Atienza/Lim – SC declared Ord. 8187 unconstitutional.
Using the same “best interest of the public” as guide; Suffice it to
state that the objective adopted by the Sangguniang Panlungsod
to promote the constituents’ general welfare in terms of economic
benefits cannot override the very basic rights to life, security and
safety of the people.
 Taxing Power
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.
Section 6. Local government units shall have a just share, as
determined by law, in the national taxes which shall be
automatically released to them.

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Section 7. Local governments shall be entitled to an equitable share
in the proceeds of the utilization and development of the national
wealth within their respective areas, in the manner provided by law,
including sharing the same with the inhabitants by way of direct
benefits.
Case Doctrines:
MIAA vs CA - that property of public dominion, being outside the
commerce of man, cannot be the subject of an auction sale.
Properties of public dominion, being for public use, are not subject
to levy, encumbrance or disposition through public or private sale.
Any encumbrance, levy on execution or auction sale of any
property of public dominion is void for being contrary to public
policy. Essential public services will stop if properties of public
dominion are subject to encumbrances, foreclosures and auction
sale. This will happen if the City of Parañaque can foreclose and
compel the auction sale of the 600-hectare runway of the MIAA for
non-payment of real estate tax.
Mactan Cebu International Airport Authority v. Marcos – The
City of Cebu, as a lgu, has the power to collect real property taxes
from MCIAA. There can be no question that under Section 14 of
R.A. No. 6958 the petitioner is exempt from the payment of realty
taxes imposed by the National Government or any of its political
subdivisions, agencies, and instrumentalities. Nevertheless, since
taxation is the rule and... exemption therefrom the exception, the
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exemption may thus be withdrawn at the pleasure of the taxing
authority. The only exception to this rule is where the exemption
was granted to private parties based on material consideration of a
mutual nature, which then becomes... contractual and is thus
covered by the non-impairment clause of the Constitution.
City of Lapu-Lapu vs PEZA - , real properties owned by the
Republic of the Philippines are exempt from real property taxes.
Properties owned by the state are either property of public
dominion or patrimonial property as per Art. 420.
In this case, the properties sought to be taxed are located in
publicly owned economic zones. These economic zones are
property of public dominion – sites which were reserved by
President Marcos under Proclamation No. 1811, Series of 1979
(Mactan).
Eminent Domain
SECTION 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: Provided, however, That the power of eminent
domain may not be exercised unless a valid and definite offer has
been previously made to the owner, and such offer was not accepted:
Provided, further, That the local government unit may immediately
take possession of the property upon the filing of the expropriation
proceedings and upon making a deposit with the proper court of at
least fifteen percent (15%) of the fair market value of the property
based on the current tax declaration of the property to be
expropriated: Provided, finally, That, the amount to be paid for the
expropriated property shall be determined by the proper court, based
on the fair market value at the time of the taking of the property.
City Gov’t of Quezon vs Judge Ericta - the ordinance made by
Quezon City is not a valid way of taking private property. The
ordinace is actually a taking without compensation of a certain
area from a private cemetery to benefit paupers who are charges
of the municipal corporation. Instead of building or maintaing a
public cemeteries. State's exercise of the power of expropriation
requires payment of just compensation. Passing the ordinance
without benefiting the owner of the property with just
compensation or due process, would amount to unjust taking of a
real property. Since the property that is needed to be taken will be
used for the public's benefit, then the power of the state to
expropriate will come forward and not the police power of the
state.
City of Cebu vs Sps. Dedamo - just compensation shall be
determined as of the time of actual taking
We explicitly stated that although the general rule in determining
just compensation in eminent domain is the value of the property
as of the date of the filing of the complaint, the rule "admits of an
exception: where this Court fixed the value of the property as of
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the date it was taken and not at the date of the commencement of
the expropriation proceedings."
Republic vs CA – The grant of the Power of ED to LGU under RA
7160 cannot be understood as equal to the pervasive and all-
encompassing power vested in the legislative branch of govt. The
power of eminent domain must, by enabling law, be delegated to
lg by the natl legislature, and thus, can only be as broad or
confined as the real authority would want it to be
Reclassification of lands
SECTION 20. Reclassification of Lands. – (a) A city or municipality
may, through an ordinance passed by the sanggunian after
conducting public hearings for the purpose, authorize the
reclassification of agricultural lands and provide for the manner of
their utilization or disposition in the following cases: (1) when the
land ceases to be economically feasible and sound for agricultural
purposes as determined by the Department of Agriculture or (2)
where the land shall have substantially greater economic value for
residential, commercial, or industrial purposes, as determined by the
sanggunian concerned: Provided, That such reclassification shall be
limited to the following percentage of the total agricultural land area
at the time of the passage of the ordinance:
(1) For highly urbanized and independent component cities, fifteen
percent (15%);
(2) For component cities and first to the third class municipalities, ten
percent (10%); and
(3) For fourth to sixth class municipalities, five percent (5%):
Provided, further, That agricultural lands distributed to agrarian
reform beneficiaries pursuant to Republic Act Numbered Sixty-six
hundred fifty-seven (R.A. No. 6657). otherwise known as “The
Comprehensive Agrarian Reform Law”, shall not be affected by the
said reclassification and the conversion of such lands into other
purposes shall be governed by Section 65 of said Act.
(b) The President may, when public interest so requires and upon
recommendation of the National Economic and Development
Authority, authorize a city or municipality to reclassify lands in excess
of the limits set in the next preceding paragraph.
(c) The local government units shall, in conformity with existing laws,
continue to prepare their respective comprehensive land use plans
enacted through zoning ordinances which shall be the primary and
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dominant bases for the future use of land resources: Provided, That
the requirements for food production, human settlements, and
industrial expansion shall be taken into consideration in the
preparation of such plans.
(d) Where approval by a national agency is required for
reclassification, such approval shall not be unreasonably withheld.
Failure to act on a proper and complete application for
reclassification within three (3) months from receipt of the same shall
be deemed as approval thereof.
(e) Nothing in this Section shall be construed as repealing, amending,
or modifying in any manner the provisions of R.A. No. 6657.
DAR vs Saranggani Agri – DAR is required to use the
comprehensive land use plans and accompanying ordinances of
the local sanggunian as primary reference in evaluating
applications for land use conversion filed by individual land owners
Conversion - act of changing the current use of a piece of agri land
into some other use approved by DAR
Reclassification – act of specifying how agri land shall be utilized
for non agri uses.
Closure and Opening of Roads
SECTION 21. Closure and Opening of Roads. – (a) A local government
unit may, pursuant to an ordinance, permanently or temporarily
close or open any local road, alley, park, or square falling within its
jurisdiction: Provided, however, That in case of permanent closure,
such ordinance must be approved by at least two-thirds (2/3) of all
the members of the sanggunian, and when necessary, an adequate
substitute for the public facility that is subject to closure is provided.
(b) No such way or place or any part thereof shall be permanently
closed without making provisions for the maintenance of public
safety therein. A property thus permanently withdrawn from public
use may be used or conveyed for any purpose for which other real
property belonging to the local government unit concerned may be
lawfully used or conveyed: Provided, however, That no freedom park
shall be closed permanently without provision for its transfer or
relocation to a new site.
(c) Any national or local road, alley, park, or square may be
temporarily closed during an actual emergency, or fiesta
celebrations, public rallies, agricultural or industrial fairs, or an
undertaking of public works and highways, telecommunications, and
waterworks projects, the duration of which shall be specified by the
local chief executive concerned in a written order: Provided, however,
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That no national or local road, alley, park, or square shall be
temporarily closed for athletic, cultural, or civic activities not officially
sponsored, recognized, or approved by the local government unit
concerned.
(d) Any city, municipality, or barangay may, by a duly enacted
ordinance, temporarily close and regulate the use of any local street,
road, thoroughfare, or any other public place where shopping malls,
Sunday, flea or night markets, or shopping areas may be established
and where goods, merchandise, foodstuffs, commodities, or articles
of commerce may be sold and dispensed to the general public.
Local Legislative Power
Requisites - City of Manila v. Laguio, Jr.,the Court restates the
tests of a valid ordinance thusly:
(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.
Corporate powers
SECTION 22. Corporate Powers.
(a) Every local government unit, as a corporation, shall have the
following powers:
(1) To have continuous succession in its corporate name;
(2) To sue and be sued;
(3) To have and use a corporate seal;
(4) To acquire and convey real or personal property;
(5) To enter into contracts; and
(6) To exercise such other powers as are granted to corporations,
subject to the limitations provided in this Code and other laws
(b) Local government units may continue using, modify, or change
their existing corporate seals: Provided, That newly established local
government units or those without corporate seals may create their
own corporate seals which shall be registered with the Department of
the Interior and Local Government: Provided, further, That any
change of corporate seal shall also be registered as provided herein.
(c) Unless otherwise provided in this Code, contract may be entered
into by the local chief executive in behalf of the local government unit
without prior authorization by the Sanggunian concerned. A legible
copy of such contract shall be posted at a conspicuous place in the
provincial capitol or the city, municipal or Barangay hall.
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(d) Local government units shall enjoy full autonomy in the exercise
of their proprietary functions and in the management of their
economic enterprises, subject to the limitations provided in this Code
and other applicable laws.
Requisites of a valid municipal contract
 The LGU has the express, implied or inherent power to enter
into a particular contract
 The contract is entered into by the proper dept., board,
committee, officer or agent. Unless otherwise provided by the
code, no contract may be entered into by the local chief
executive on behalf of the LGU without prior authorization by
the sanggunian concerned.
 The municipal mayor is required to secure the prior
authorization of the Sangguniang Bayan before entering into
a contract on behalf of the municipality
 No inherent authority on the part of the city vice mayor to
enter into contracts
 The contract must comply with certain substantive
requirements
 Must comply with formal requirements of written contracts
Ultra vires contracts – When a contract is entered into without
compliance with the 1st and 3rd reqs, the same is ultravires and is
null and void. Such contract cannot be ratified or validated.
Ratification of contracts is possible only when there is non-
compliance with the 2nd and/or the 4th reqs. Ratification may
either be express or implied.

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