Powers of Local Government Units
represented by Hon. Alvin Garcia, its City Mayor, the
General Welfare Clause
Tano v. Socrates
FACTS:
In 1992, the Sangguniang Panglungsod ng Puerto Princesa
enacted an ordinance banning the shipment of all live fish and
lobster outside Puerto Princesa from 1993 to 1998.
Subsequently the Sangguniang Panlalawigan, Provincial
Government of Palawan enacted a resolution prohibiting the
catching , gathering, possessing, buying, selling, and shipment
of a several species of live marine coral dwelling aquatic
organisms for 5 years, in and coming from Palawan waters.
Petitioners filed a special civil action for certiorari and prohibition,
praying that the court declare the said ordinances and
resolutions as unconstitutional on the ground that the said
ordinances deprived them of the due process of law, their
livelihood, and unduly restricted them from the practice of their
trade, in violation of Section 2, Article XII and Sections 2 and 7
of Article XIII of the 1987 Constitution.
ISSUE: Are the challenged ordinances unconstitutional?
HELD:
No. The Supreme Court found the petitioners contentions
baseless and held that the challenged ordinances did not suffer
from any infirmity, both under the Constitution and applicable
laws. There is absolutely no showing that any of the petitioners
qualifies as a subsistence or marginal fisherman. Besides,
Section 2 of Article XII aims primarily not to bestow any right to
subsistence fishermen, but to lay stress on the duty of the State
to protect the nation’s marine wealth. The so-called “preferential
right” of subsistence or marginal fishermen to the use of marine
resources is not at all absolute.
In accordance with the Regalian Doctrine, marine resources
belong to the state and pursuant to the first paragraph of Section
2, Article XII of the Constitution, their “exploration, development
and utilization...shall be under the full control and supervision of
the State.
In addition, one of the devolved powers of the LCG on
devolution is the enforcement of fishery laws in municipal waters
including the conservation of mangroves. This necessarily
includes the enactment of ordinances to effectively carry out
such fishery laws within the municipal waters. In light of the
principles of decentralization and devolution enshrined in the
LGC and the powers granted therein to LGUs which
unquestionably involve the exercise of police power, the validity
of the questioned ordinances cannot be doubted.
Legaspi v. City of Cebu
FACTS:
On January 27, 1997 the Sangguniang Panlungsod of the City of
Cebu enacted Ordinance No. 1664 to authorize the traffic
enforcers of Cebu City to immobilize any motor vehicle violating
the parking restrictions and prohibitions defined in the Traffic
Code of Cebu City.
On July 29, 1997, Atty. Bienvenido Jaban (Jaban,Sr.) and his
son Atty. Bienvenido Douglas Luke Bradbury Jaban (Jaban,Jr.)
brought suit in the RTC against the City of Cebu, then
Sangguniang Panlungsod of Cebu City and its Presiding Officer,
Hon. Renato V. Osme, and the chairman and operatives or
officers of the City Traffic Operations Management
(CITOM),seeking the declaration of Ordinance No. 1644 as
unconstitutional for being in violation of due process and for
being contrary to law, and damages.
Their complaint alleged that on June 23, 1997, Jaban Sr. had
properly parked his car in a paying parking area on Manalili
Street, Cebu City to get certain records and documents from his
office and after less than 10 minutes, he had found his car being
immobilized by a steel clamp. His car was impounded for three
days, and was informed at the office of the CITOM that he had
first to pay P4,200.00 as a fine to the City Treasurer of Cebu City
for the release of his car but such imposition the fine was without
any court hearing and without due process of law. He was also
compelled to payP1,500.00 (itemized as P500.00 for the
clamping andP1,000.00 for the violation) without any court
hearing and final judgment;
That on May 19, 1997, Jaban, Jr. parked his car in a very
secluded place where there was no sign prohibiting parking; that
his car was immobilized by CITOM operative and that he was
compelled to pay the total sum ofP1,400.00 for the release of his
car without a court hearing and a final judgment rendered by a
court of justice.
On August 11, 1997, Valentino Legaspi (Legaspi) likewise sued
in the RTC the City of Cebu, demanded the delivery of personal
property, declaration of nullity of theTraffic Code of Cebu City,
and damages.
He averred that on the morning of July 29, 1997, he 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
theanayexterminator, upon returning outside, his car was towed
by the group even if it was not obstructing the flow of traffic.
The cases were consolidated. The RTC rendered its decision
declaring Ordinance No. 1664 as null and void.
The City of Cebu and its co-defendants appealed to the CA. The
CA reversed the decision of the RTC declaring the Ordinance
No. 1664 valid.
Upon the denial of their respective motions for reconsideration
the Jabans and Legaspi came to the Court via separate petitions
for review on certiorari. The appeals were consolidated.
ISSUE: Whether or not Ordinance No. 1664 is valid and
constitutional.
HELD:
The Court of Appeals decision is sustained.
In City of Manila v. Laguio, Jr., G.R. No. 118127, April 12, 2005
the Court restates the tests of a valid ordinance thusly:
The tests of a valid ordinance are well established. A long line of
decisions 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 must be passed according to the procedure
prescribed by law, it must also conform to the following
substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive;
(3) must not be partial or discriminatory; (4) must not prohibit but
may regulate trade; (5) must be general and consistent with
public policy; and (6) must not be unreasonable.
As jurisprudence indicates, the tests are divided into the formal
(i.e., whether the ordinance was enacted within the corporate
powers of the LGU, and whether it was passed in accordance
with the procedure prescribed by law), and the substantive (i.e.,
involving inherent merit, like the conformity of the ordinance with
the limitations under the Constitution and the statutes, as well as
with the requirements of fairness and reason, and its
consistency with public policy).
In Metropolitan Manila Development Authorityv. Bel-Air Village
Association,Inc., G.R. No. 135962, March 27, 2000the Court
cogently observed that police power is lodged primarily in the
National Legislature. It cannot be exercised by any group or
body of individuals not possessing legislative power. The
National Legislature, however, may delegate this power to the
President and administrative boards as well as the lawmaking
bodies of municipal corporations or local government units.
Once delegated, the agents can exercise only such legislative
powers as are conferred on them by the national lawmaking
body.
In the present case, delegated police power was exercised by
the LGU of the City of Cebu.
The CA opined, and correctly so, that vesting cities like the City
of Cebu with the legislative power to enact traffic rules and
regulations was expressly done through Section 458 of the LGC,
and also generally by virtue of the General Welfare Clause
embodied in Section 16 of the LGC.
The police power granted to local government units must always
be exercised with utmost observance of the rights of the people
to due process and equal protection of the law. Such power
cannot be exercised whimsically, arbitrarily or despotically as its
exercise is subject to a qualification, limitation or restriction
demanded by the respect and regard due to the prescription of
the fundamental law, particularly those forming part of the Bill of
Rights. Individual rights, it bears emphasis, may be adversely
affected only to the extent that may fairly be required by the
legitimate demands of public interest or public welfare. Due
process requires the intrinsic validity of the law in interfering with
the rights of the person to his life, liberty and property.
Judged according to the foregoing enunciation of the guaranty of
due process of law, the contentions of the petitioners cannot be
sustained. Even under strict scrutiny review, Ordinance No.
1664 met the substantive tests of validity and constitutionality by
its conformity with the limitations under the Constitution and the
statutes, as well as with the requirements of fairness and
reason, and its consistency with public policy.
The subject of Ordinance No. 1664 is to ensure "a smooth flow
of vehicular traffic in all the streets in the City of Cebu at all
times".
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. DENIED.
Social Justice Society v. Atienza
Facts:
Ordinance No. 8027 enacted by the Sangguniang Panglungsod
of Manila reclassified the area from industrial to commercial and
directed the owners and operators of businesses disallowed to
cease and desist from operating their businesses within six
months from the date of effectivity of the ordinance. Among the
businesses situated in the area are the so-called “Pandacan
Terminals” of the oil companies Caltex (Philippines), Inc., Petron
Corporation and Pilipinas Shell Petroleum Corporation.
However, the City of Manila and the Department of Energy
(DOE) entered into a memorandum of understanding (MOU)
with the oil companies in which they agreed that “the scaling
down of the Pandacan Terminals [was] the most viable and
practicable option.” In the MOU, the oil companies were required
to remove 28 tanks starting with the LPG spheres and to
commence work for the creation of safety buffer and green
zones surrounding the Pandacan Terminals. In exchange, the
City Mayor and the DOE will enable the oil companies to
continuously operate within the limited area resulting from joint
operations and the scale down program. The Sangguniang
Panlungosod ratified the MOU in Resolution No. 97.
Petitioners pray for a mandamus to be issued against Mayor
Atienza to enforce Ordinance No. 8027 and order the immediate
removal of the terminals of the oil companies.
Issue: Whether respondent has the mandatory legal duty to
enforce Ordinance No. 8027 and order the removal of the
Pandacan Terminals.
Ruling:
Yes. The mayor has the mandatory legal duty to enforce
Ordinance No. 8027 because the Local Government Code
imposes upon respondent the duty, as city mayor, to “enforce all
laws and ordinances relative to the governance of the city.” One
of these is Ordinance No. 8027. As the chief executive of the
city, he has the duty to enforce Ordinance No. 8027 as long as it
has not been repealed by the Sanggunian or annulled by the
courts. He has no other choice. It is his ministerial duty to do so.
In Dimaporo v. Mitra, Jr., it provides that officers cannot refuse to
perform their duty on the ground of an alleged invalidity of the
statute imposing the duty. It might seriously hinder the
transaction of public business if these officers were to be
permitted in all cases to question the constitutionality of statutes
and ordinances imposing duties upon them and which have not
judicially been declared unconstitutional.
Social Justice Society v. Atienza
FACTS:
The City Council of Manila enacted Ordinance No. 8027 which
reclassified the Pandacan Area from industrial to commercial,
and directed the owners and operators of businesses disallowed
under the reclassification to cease and desist from operating
their businesses within six months from effectivity date of the
ordinance. Most affected are the oil companies composed of
Shell, Chevron (Caltex) and Petron whose oil depots are located
therein.
Despite the ordinance, the Sanggunian adopted Resolution No.
13 extending the agreement of scaling down of the Pandacan
depots up to April 2003 and authorized the mayor of Manila to
issue special business permits to the oil companies.
Nevertheless, the petitioners filed a petition for mandamus,
sought to compel the Mayor to enforce Ordinance No. 8027. The
oil companies questioned the constitutionality of the ordinance.
ISSUE: Whether or not Ordinance No. 8027 is constitutional and
valid.

HELD:
The Court ruled in favor of the petitioners. In the present case,
Ordinance No. 8027 was enacted for the purpose of promoting
sound urban planning, ensuring health, public safety and general
welfare of the residents of Manila. The Sanggunian was impelled
to take measures to protect its residents from catastrophic
devastation in case of a terrorist attack on the Pandacan depots.
Further, the zoning ordinance which reclassified the area is
reasonable and not arbitrary enactment to the oil companies
because they were not prevented nor prohibited from doing
business in the city other than the now reclassified location of
the depot where such operations are no longer permitted. 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.
Averring that they shall not be compensated, the Court ruled that
property condemned under the exercise of police power is not
compensable. The restriction imposed to protect lives, public
health and safety from danger is not a taking.
Social Justice Society v. Lim
FACTS:
These petitions are a sequel to the case of Social Justice
Society v. Mayor Atienza, Jr. (G.R. No. 156052), where the
Court declared that the subject City of Manila Ordinance No.
8027, enacted during the term of Mayor Atienza, ordering the
relocation and transfer of the Pandacan oil terminals is
constitutional.
On 14 May 2009, during the incumbency of former Mayor Lim,
who succeeded Mayor Atienza, the Sangguniang Panlungsod
enacted Ordinance No. 8187.
The new Ordinance repealed, amended, rescinded or otherwise
modified Ordinance No. 8027, Section 23 of Ordinance No.
8119, and all other Ordinances or provisions inconsistent
therewith thereby allowing, once again, the operation of
petroleum refineries and oil depots in the Pandacan area.
The petitioners argue that the enactment of the assailed
Ordinance is not a valid exercise of police power because the
measures provided therein do not promote the general welfare
of the people. They further argue that Ordinance No. 8187 is
violative of Sections 15 and 16, Article II of the Constitution of
the Philippines on the duty of the State “to protect and promote
the right to health of the people” and “protect and advance the
right of the people to a balanced and healthful ecology.”
Moreover, they argue that despite the finality of the Decision in
G.R. No. 156052, and notwithstanding that the conditions and
circumstances warranting the validity of Ordinance No. 8027
remain the same, the Manila City Council passed a contrary
Ordinance, thereby refusing to recognize that “judicial decisions
applying or interpreting the laws or the Constitution form part of
the legal system of the Philippines.” Petitioners likewise claim
that the Ordinance is in violation of health and environment-
related municipal laws, and international conventions and
treaties to which the Philippines is a state party.
Respondents aver that petitions are based on unfounded fears;
that the assailed ordinance is a valid exercise of police power;
that it is consistent with the general welfare clause and public
policy, and is not unreasonable; that it does not run contrary to
the Constitution, municipal laws, and international conventions;
and that the petitioners failed to overcome the presumption of
validity of the assailed ordinance.
ISSUE: WON the enactment of the assailed Ordinance No. 8187
allowing the continued stay of the oil companies in the depots is,
indeed, invalid and unconstitutional.
HELD:
YES, the Court saw no reason why Ordinance No. 8187 should
not be stricken down insofar as the presence of the oil depots in
Pandacan is concerned.
The Local Government Code of 1991 expressly provides that the
Sangguniang Panlungsod is vested with the power to “reclassify
land within the jurisdiction of the city” subject to the pertinent
provisions of the Code. It is also settled that an ordinance may
be modified or repealed by another ordinance.” These have
been properly applied in G.R. No. 156052, where the Court
upheld the position of the Sangguniang Panlungsod to reclassify
the land subject of the Ordinance, and declared that the mayor
has the duty to enforce Ordinance No. 8027, provided that it has
not been repealed by the Sangguniang Panlungsod or otherwise
annulled by the courts. In the same case, the Court also used
the principle that the Sangguniang Panlungsod is in the best
position to determine the needs of its constituents — that the
removal of the oil depots from the Pandacan area is necessary
“to protect the residents of Manila from catastrophic devastation
in case of a terrorist attack on the Pandacan Terminals.”
We summarize the position of the Sangguniang Panlungsod on
the matter subject of these petitions. In 2001, the Sanggunian
found the relocation of the Pandacan oil depots necessary.
Hence, the enactment of Ordinance No. 8027. In 2009, when the
composition of the Sanggunian had already changed, Ordinance
No. 8187 was passed in favor of the retention of the oil depots.
In 2012, again when some of the previous members were no
longer re-elected, but with the Vice-Mayor still holding the same
seat, and pending the resolution of these petitions, Ordinance
No. 8283 was enacted to give the oil depots until the end of
January 2016 within which to transfer to another site. Former
Mayor Lim stood his ground and vetoed the last ordinance.
In its Comment, the 7th Council (2007-2010) alleged that the
assailed Ordinance was enacted to alleviate the economic
condition of its constituents. Expressing the same position,
former Mayor Lim even went to the extent of detailing the steps
he took prior to the signing of the Ordinance, if only to show his
honest intention to make the right decision.
The fact remains, however, that notwithstanding that the
conditions with respect to the operations of the oil depots
existing prior to the enactment of Ordinance No. 8027 do not
substantially differ to this day, as would later be discussed, the
position of the Sangguniang Panlungsod on the matter has
thrice changed, largely depending on the new composition of the
council and/or political affiliations. The foregoing, thus, shows
that its determination of the “general welfare” of the city does not
after all gear towards the protection of the people in its true
sense and meaning, but is, one way or another, dependent on
the personal preference of the members who sit in the council as
to which particular sector among its constituents it wishes to
favor.
Now that the City of Manila, through the mayor and the city
councilors, has changed its view on the matter, favoring the
city’s economic-related benefits, through the continued stay of
the oil terminals, over the protection of the very lives and safety
of its constituents, it is imperative for this Court to make a final
determination on the basis of the facts on the table as to which
specific right of the inhabitants of Manila should prevail. For, in
this present controversy, history reveals that there is truly no
such thing as “the will of Manila” insofar as the general welfare
of the people is concerned.
If in sacrilege, in free translation of Angara by Justice Laurel, we
say when the judiciary mediates we do not in reality nullify or
invalidate an act of the Manila Sangguniang Panlungsod, but
only asserts the solemn and sacred obligation assigned to the
Court by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in
an actual controversy the rights which that instrument secures
and guarantees to them.
The issue of whether or not the Pandacan Terminal is not a
likely target of terrorist attacks has already been passed upon in
G.R. No. 156052. Based on the assessment of the Committee
on Housing, Resettlement and Urban Development of the City of
Manila and the then position of the Sangguniang Panlungsod,
the Court was convinced that the threat of terrorism is imminent.
It remains so convinced.
It is the removal of the danger to life not the mere subdual of risk
of catastrophe, that we saw in and made us favor Ordinance No.
8027. That reason, unaffected by Ordinance No. 8187, compels
the affirmance of our Decision in G.R. No. 156052.
In striking down the contrary provisions of the assailed
Ordinance relative to the continued stay of the oil depots, we
follow the same line of reasoning used in G.R. No. 156052. The
same best interest of the public guides the present decision. The
Pandacan oil depot remains a terrorist target even if the contents
have been lessened. In the absence of any convincing reason to
persuade this Court that the life, security and safety of the
inhabitants of Manila are no longer put at risk by the presence of
the oil depots, we hold that Ordinance No. 8187 in relation to the
Pandacan Terminals is invalid and unconstitutional.
White Light Corporation v. City of Manila
Facts:
On December 3, 1992, City Mayor Alfredo S. Lim signed into law
Manila City Ordinance No. 7774 entitled “An Ordinance
Prohibiting Short-Time Admission, Short-Time Admission Rates,
and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging
Houses, Pension Houses, and Similar Establishments in the City
of Manila” (the Ordinance).” The ordinance sanctions any person
or corporation who will allow the admission and charging of room
rates for less than 12 hours or the renting of rooms more than
twice a day.
The petitioners White Light Corporation (WLC), Titanium
Corporation (TC), and Sta. Mesa Tourist and Development
Corporation (STDC), who own and operate several hotels and
motels in Metro Manila, filed a motion to intervene and to admit
attached complaint-in-intervention on the ground that the
ordinance will affect their business interests as operators. The
respondents, in turn, alleged that the ordinance is a legitimate
exercise of police power.
RTC declared Ordinance No. 7774 null and void as it “strikes at
the personal liberty of the individual guaranteed and jealously
guarded by the Constitution.” Reference was made to the
provisions of the Constitution encouraging private enterprises
and the incentive to needed investment, as well as the right to
operate economic enterprises. Finally, from the observation that
the illicit relationships the Ordinance sought to dissuade could
nonetheless be consummated by simply paying for a 12-hour
stay,
When elevated to CA, the respondents asserted that the
ordinance is a valid exercise of police power pursuant to Section
458 (4)(iv) of the Local Government Code which confers on
cities the power to regulate the establishment, operation and
maintenance of cafes, restaurants, beerhouses, hotels, motels,
inns, pension houses, lodging houses and other similar
establishments, including tourist guides and transports. Also,
they contended that under Art III Sec 18 of Revised Manila
Charter, they have the power to enact all ordinances it may
deem necessary and proper for the sanitation and safety, the
furtherance of the prosperity and the promotion of the morality,
peace, good order, comfort, convenience and general welfare of
the city and its inhabitants and to fix penalties for the violation of
ordinances.
Petitioners argued that the ordinance is unconstitutional and void
since it violates the right to privacy and freedom of movement; it
is an invalid exercise of police power; and it is unreasonable and
oppressive interference in their business.
CA, in turn, reversed the decision of RTC and affirmed the
constitutionality of the ordinance. First, it held that the ordinance
did not violate the right to privacy or the freedom of movement,
as it only penalizes the owners or operators of establishments
that admit individuals for short time stays. Second, the virtually
limitless reach of police power is only constrained by having a
lawful object obtained through a lawful method. The lawful
objective of the ordinance is satisfied since it aims to curb
immoral activities. There is a lawful method since the
establishments are still allowed to operate. Third, the adverse
effect on the establishments is justified by the well-being of its
constituents in general.
Hence, the petitioners appeared before the SC.
Issue: Whether Ordinance No. 7774 is a valid exercise of police
power of the State.
Held:
No. Ordinance No. 7774 cannot be considered as a valid
exercise of police power, and as such, it is unconstitutional.
The facts of this case will recall to mind not only the recent City
of Manila v Laguio Jr ruling, but the 1967 decision in Ermita-
Malate Hotel and Motel Operations Association, Inc., v. Hon.
City Mayor of Manila. The common thread that runs through
those decisions and the case at bar goes beyond the singularity
of the localities covered under the respective ordinances. All
three ordinances were enacted with a view of regulating public
morals including particular illicit activity in transient lodging
establishments. This could be described as the middle case,
wherein there is no wholesale ban on motels and hotels but the
services offered by these establishments have been severely
restricted. At its core, this is another case about the extent to
which the State can intrude into and regulate the lives of its
citizens
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.
The ordinance in this case prohibits two specific and distinct
business practices, namely wash rate admissions and renting
out a room more than twice a day. The ban is evidently sought to
be rooted in the police power as conferred on local government
units by the Local Government Code through such implements
as the general welfare clause.
Police power is based upon the concept of necessity of the State
and its corresponding right to protect itself and its people. Police
power has been used as justification for numerous and varied
actions by the State.
The apparent goal of the ordinance is to minimize if not eliminate
the use of the covered establishments for illicit sex, prostitution,
drug use and alike. These goals, by themselves, are
unimpeachable and certainly fall within the ambit of the police
power of the State. Yet the desirability of these ends do not
sanctify any and all means for their achievement. Those means
must align with the Constitution.
SC contended that if they were to take the myopic view that an
ordinance should be analyzed strictly as to its effect only on the
petitioners at bar, then it would seem that the only restraint
imposed by the law that they were capacitated to act upon is the
injury to property sustained by the petitioners. Yet, they also
recognized the capacity of the petitioners to invoke as well the
constitutional rights of their patrons – those persons who would
be deprived of availing short time access or wash-up rates to the
lodging establishments in question. The rights at stake herein fell
within the same fundamental rights to liberty. Liberty as
guaranteed by the Constitution was defined by Justice Malcolm
to include “the right to exist and the right to be free from arbitrary
restraint or servitude. The term cannot be dwarfed into mere
freedom from physical restraint of the person of the citizen, but is
deemed to embrace the right of man to enjoy the facilities with
which he has been endowed by his Creator, subject only to such
restraint as are necessary for the common welfare,
Indeed, the right to privacy as a constitutional right must be
recognized and the invasion of it should be justified by a
compelling state interest. Jurisprudence accorded recognition to
the right to privacy independently of its identification with liberty;
in itself it is fully deserving of constitutional protection.
Governmental powers should stop short of certain intrusions into
the personal life of the citizen.
An ordinance which prevents the lawful uses of a wash rate
depriving patrons of a product and the petitioners of lucrative
business ties in with another constitutional requisite for the
legitimacy of the ordinance as a police power measure. It must
appear that the interests of the public generally, as distinguished
from those of a particular class, require an interference with
private rights and the means must be reasonably necessary for
the accomplishment of the purpose and not unduly oppressive of
private rights. It must also be evident that no other alternative for
the accomplishment of the purpose less intrusive of private
rights can work. More importantly, a reasonable relation must
exist between the purposes of the measure and the means
employed for its accomplishment, for even under the guise of
protecting the public interest, personal rights and those
pertaining to private property will not be permitted to be
arbitrarily invaded.
Lacking a concurrence of these requisites, the police measure
shall be struck down as an arbitrary intrusion into private rights.
The behavior which the ordinance seeks to curtail is in fact
already prohibited and could in fact be diminished simply by
applying existing laws. Less intrusive measures such as curbing
the proliferation of prostitutes and drug dealers through active
police work would be more effective in easing the situation. So
would the strict enforcement of existing laws and regulations
penalizing prostitution and drug use. These measures would
have minimal intrusion on the businesses of the petitioners and
other legitimate merchants. Further, it is apparent that the
ordinance can easily be circumvented by merely paying the
whole day rate without any hindrance to those engaged in illicit
activities. Moreover, drug dealers and prostitutes can in fact
collect “wash rates” from their clientele by charging their
customers a portion of the rent for motel rooms and even
apartments.
SC reiterated 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. The State is a
leviathan that must be restrained from needlessly intruding into
the lives of its citizens. However well¬-intentioned the ordinance
may be, it is in effect an arbitrary and whimsical intrusion into the
rights of the establishments as well as their patrons. The
ordinance needlessly restrains the operation of the businesses
of the petitioners as well as restricting the rights of their patrons
without sufficient justification. The ordinance rashly equates
wash rates and renting out a room more than twice a day with
immorality without accommodating innocuous intentions.
WHEREFORE, the Petition is GRANTED. The Decision of the
Court of Appeals is REVERSED, and the Decision of the
Regional Trial Court of Manila, Branch 9, is REINSTATED.
Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL.
No pronouncement as to costs.
Fernando v. St. Scholastica’s College
Facts:
Respondent SSC is the owner of four (4) parcels of land
measuring a total of 56,306.80 square meters, located in
Marikina Heights and covered by Transfer Certificate Title (TCT)
No. 91537. Located within the property are SSA-Marikina, the
residence of the sisters of the Benedictine Order, the formation
house of the novices, and the retirement house for the elderly
sisters. The property is enclosed by a tall concrete perimeter
fence built some thirty (30) years ago. Abutting the fence along
the West Drive are buildings, facilities, and other
improvements.3
The petitioners are the officials of the City Government of
Marikina. On September 30, 1994, the Sangguniang Panlungsod
of Marikina City enacted Ordinance No. 192,4 entitled
“Regulating the Construction of Fences and Walls in the
Municipality of Marikina.
On April 2, 2000, the City Government of Marikina sent a letter
to the respondents ordering them to demolish and replace the
fence of their Marikina property to make it 80% see-thru, and, at
the same time, to move it back about six (6) meters to provide
parking space for vehicles to park
The respondents asserted that the implementation of the
ordinance on their property would be tantamount to an
appropriation of property without due process of law; and that
the petitioners could only appropriate a portion of their property
through eminent domain.
The RTC rendered a Decision,15 dated October 2, 2002,
granting the petition and ordering the issuance of a writ of
prohibition commanding the petitioners to permanently desist
from enforcing or implementing Ordinance No. 192 on the
respondents’ property.

In its December 1, 2003 Decision, the CA dismissed the
petitioners’ appeal and affirmed the RTC decision. The CA
reasoned out that the objectives stated in Ordinance No. 192 did
not justify the exercise of police power, as it did not only seek to
regulate, but also involved the taking of the respondents’
property without due process of law
Issue: Whether Sections 3.1 and 5 of Ordinance No. 192 are
valid exercises of police power by the City Government of
Marikina.
Held:
No, because the enforcement of Sect.3.1 and 5 would result in
an undue interference with the respondents’ right to property and
privacy.
Ordinance No. 192 was passed by the City Council of Marikina
in the apparent exercise of its police power. “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.” 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 16 of the
Local Government Code of 1991 (R.A. No. 7160), known as the
General Welfare Clause.
Hence, Secs. 3.1 and 5 of Ordinance No. 192 are not valid
exercise of police power.
Gancayco v. City Government of Quezon City
FACTS:
In the early 1950s, retired Justice Emilio A. Gancayco bought a
parcel of land located at 746 Epifanio de los Santos Avenue
(EDSA). The Quezon City Council issued Ordinance No. 2904,
entitled "An Ordinance Requiring the Construction of Arcades,
for Commercial Buildings to be Constructed in Zones
Designated as Business Zones in the Zoning Plan of Quezon
City, and Providing Penalties in Violation Thereof." An arcade is
defined as any portion of a building above the first floor
projecting over the sidewalk beyond the first story wall used as
protection for pedestrians against rain or sun.
When the ordinance was passed by the city council, there was
yet no building code passed by the national legislature. Thus,
the regulation of the construction of buildings was left to the
discretion of local government units. Under this particular
ordinance, the city council required that the arcade is to be
created by constructing the wall of the ground floor facing the
sidewalk a few meters away from the property line. Thus, the
building owner is not allowed to construct his wall up to the edge
of the property line, thereby creating a space or shelter under
the first floor. In effect, property owners relinquish the use of the
space for use as an arcade for pedestrians, instead of using it
for their own purposes.
The ordinance covered the property of Justice Gancayco. He
sought the exemption of a two-storey building being constructed
on his property from the application of Ordinance No. 2904 that
he be exempted from constructing an arcadeon his property.
The City Council acted favorably on Justice Gancayco’s request
but the Metropolitan Manila Development Authority (MMDA)
conducted operations to clear obstructions along the sidewalk of
EDSA in Quezon City pursuant to Metro ManilaCouncil’s (MMC)
Resolution No. 02-28, Series of 2002. The resolution authorized
the MMDA and local government units to "clear the sidewalks,
streets, avenues, alleys, bridges, parks and other public places
in Metro Manila of all illegal structures and obstructions." The
MMDA sent a notice of demolition to Justice Gancayco alleging
that a portion of his building violated the National Building Code
of the Philippines (Building Code). Justice Gancayco did not
comply with the notice. Soon after the lapse of the fifteen (15)
days, the MMDA proceeded to demolish the party wall, or what
was referred to as the "wing walls," of the ground floor structure.
ISSUE: WON a Ordinance No. 2904 is constitutional and the
demolition of the property was lawful and valid.
HELD:
YES. The Supreme Court held that zoning and the regulation of
the construction of buildings are valid exercises of police power.
To resolve the issue on the constitutionality of the ordinance, we
must first determine whether there was a valid delegation of
police power. Then we can determine whether the City
Government of Quezon City acted within the limits of the
delegation. Specifically, on the powers of the city government to
regulate the construction of buildings, the Charter also expressly
provided that the city government had the power to regulate the
kinds of buildings and structures that may be erected within fire
limits and the manner of constructing and repairing them.
In the exercise of police power, property rights of individuals may
be subjected to restraints and burdens in order to fulfill the
objectives of the government. Otherwise stated, the government
may enact legislation that may interfere with personal liberty,
property, lawful businesses and occupations to promote the
general welfare. However, the interference must be reasonable
and not arbitrary. And to forestall arbitrariness, the methods or
means used to protect public health, morals, safety or welfare
must have a reasonable relation to the end in view. In the case
at bar, it is clear that the primary objectives of the city council of
Quezon City when it issued the questioned ordinance ordering
the construction of arcades were the health and safety of the
city.
Parayno v. Jovellanos
FACTS:
In 1989, Jovellanos and the residents of Calasiao, Pangasinan,
requested the Sangguniang Bayan (SB) to close or transfer a
gasoline filling station.
The SB then passed Resolution no. 50 recommending to the
mayor the closure or transfer of said gasoline filling station.
Resolution no. 50 provided that the gasoline filling station should
be closed or transferred because it violated the Art. 6, Section
44 of the Official Zoning Code of Calasiao because there was a
school and church within 100 meters, it is in a thickly populated
area, residents complained of the smell, violates the Building
and Fire Safety Code, hampers the flow of traffic due to small
entrance.
Petitioner Parayno, the owner of said gasoline filling station,
opposed the resolution. She filed a motion for reconsideration
with the SB; but it was denied. On appeal to the RTC of
Dagupan City, Pangasinan, she alleged that her gasoline station
was not covered by Section 44 of the Official Zoning Code
because the Code distinguishes between “gasoline filling station”
and “gasoline service station” and that the case was res judicata
because the issue was already settled in an HLURB Case.
The RTC ruled that Resolution 50 was valid because of the
principle of Ejusdem Generis or same kind, class, or nature.
Thus, according to the RTC the “gasoline filling station” falls
within the ambit of Section 44 of the Official Zoning Code of
Calasiao.
ISSUE: Whether or not the closure/transfer of the gasoline filling
station by respondent municipality was an invalid exercise of
police power.
HELD:
No. Respondent municipality invalidly used its police powers in
ordering the closure/transfer of petitioner's gasoline station.
While it had, under RA 7160,14 the power to take actions and
enact measures to promote the health and general welfare of its
constituents, it should have given due deference to the law and
the rights of petitioner.
local government is considered to have properly exercised its
police powers only when the following requisites are met: (1) the
interests of the public generally, as distinguished from those of a
particular class, require the interference of the State and (2) the
means employed are reasonably necessary for the attainment of
the object sought to be accomplished and not unduly
oppressive.
Respondent municipality failed to comply with the due process
clause when it passed Resolution No. 50. While it maintained
that the gasoline filling station of petitioner was less than 100
meters from the nearest public school and church, the records
do not show that it even attempted to measure the distance,
notwithstanding that such distance was crucial in determining
whether there was an actual violation of Section 44. The
different local offices that respondent municipality tapped to
conduct an investigation never conducted such measurement
either.
Rural Bank of Makati v. Municipality of Makati
Facts:
Upon the request of the municipal treasurer, in August 1990,
Atty. Victor A.L. Valero, then the municipal attorney of the
Municipality of Makati, went to the Rural Bank of Makati to
inquire about the bank’s payments of taxes and fees to the
municipality. Petitioner Magdalena V. Landicho, corporate
secretary of the bank, said that the bank was exempt from
paying taxes under Republic Act No. 720, as amended.
On November 19, 1990, the municipality filed complaint with the
Prosecutor’s Office, charging petitioners Esteban S. Silva,
president and general manager of the bank and Magdalena V.
Landicho for violation of Section 21(a), Chapter II, Article 3 in
relation to Sections 105 and 169 of the Metropolitan Tax Code.
On April 5, 1991, the municipality submitted two (2) Information
with the MTC against the respondent bank: 1) for non-payment
of the mayor’s permit fee and 2) for non-payment of annual
business tax. While said cases were pending with the municipal
court, respondent municipality ordered the closure of the bank.
This prompted petitioners to pay, under protest, the mayor’s
permit fee and the annual fixed tax in the amount of P82,408.66.
On October 18, 1991, petitioners filed with the RTC a Complaint
for Sum of Money and Damages. Petitioners alleged that they
were constrained to pay the amount of P82,408.66 because of
the closure order, issued despite the pendency of the criminal
cases and the lack of any notice or assessment of the fees to be
paid. They averred that the collection of the taxes/fees was
oppressive, arbitrary, unjust and illegal. Additionally, they alleged
that respondent Atty. Valero had no power to enforce laws and
ordinances, thus his action in enforcing the collection of the
permit fees and business taxes was ultra vires.
Respondent municipality asserted that petitioners’ payment of
P82,408.66 was for a legal obligation because the payment of
the mayor’s permit fee as well as the municipal business license
was required of all business concerns. According to respondent,
said requirement was in furtherance of the police power of the
municipality to regulate businesses.
RTC rules in favor of the municipal of Makati. According to the
trial court, the bank was engaged in business as a rural bank.
Hence, it should secure the necessary permit and business
license, as well as pay the corresponding charges and fees. It
found that the municipality had authority to impose licenses and
permit fees on persons engaging in business, under its police
power embodied under the general welfare clause. Also, the
RTC declared unmeritorious petitioners’ claim for exemption
under Rep. Act No. 720 since said exemption had been
withdrawn by Executive Order No. 93 and the Rural Bank Act of
1992. These statutes no longer exempted rural banks from
paying corporate income taxes and local taxes, fees and
charges.
The CA affirmed RTC’s decision in toto. CA also brushed aside
petitioners’ claim that the general welfare clause is limited only
to legislative action. It declared that the exercise of police power
by the municipality was mandated by the general welfare clause,
which authorizes the local government units to enact ordinances,
not only to carry into effect and discharge such duties as are
conferred upon them by law, but also those for the good of the
municipality and its inhabitants. This mandate includes the
regulation of useful occupations and enterprises. Hence the
present complaint.
Petitioner bank claims that the closure of the bank was an
improper exercise of police power because a municipal
corporation has no inherent but only delegated police power,
which must be exercised not by the municipal mayor but by the
municipal council through the enactment of ordinances. It also
assailed the Court of Appeals for invoking the General Welfare
Clause embodied in Section 16 of the Local Government Code
of 1991, which took effect in 1992, when the closure of the bank
was actually done on July 31, 1991.
ISSUE: Whether or not the municipality’s police power covers
the power to tax and the power to order the respondent’s bank
closure.
HELD:
Rep. Act No. 720, as amended by Republic Act No. 4106,
approved on July 19, 1964, had exempted rural banks with net
assets not exceeding one million pesos (P1,000,000) from the
payment of all taxes, charges and fees. The records show that
as of December 29, 1986, petitioner bank’s net assets amounted
only to P745,432.29. Hence, petitioner bank could claim to be
exempt from payment of all taxes, charges and fees under the
aforementioned provision. However, EO 93 was issued by then
President Aquino, withdrawing all tax and duty incentives with
certain exceptions. Notably, not included among the exceptions
were those granted to rural banks under Rep. Act No. 720. With
the passage of said law, petitioner could no longer claim any
exemption from payment of business taxes and permit fees.
Indeed the Local Government Code of 1991 was not yet in effect
when the municipality ordered petitioner bank’s closure on July
31, 1991. However, the general welfare clause invoked by the
Court of Appeals is not found on the provisions of said law
alone. Even under the old Local Government Code (Batas
Pambansa Blg. 337) which was then in effect, a general welfare
clause was provided for in Section 7 thereof.
Municipal corporations are agencies of the State for the
promotion and maintenance of local self-government and as
such are endowed with police powers in order to effectively
accomplish and carry out the declared objects of their creation.
The authority of a local government unit to exercise police power
under a general welfare clause is not a recent development. This
was already provided for as early as the Administrative Code of
1917. Thus, the closure of the bank was a valid exercise of
police power pursuant to the general welfare clause contained in
and restated by B.P. Blg. 337, which was then the law governing
local government units. No reversible error arises in this instance
insofar as the validity of respondent municipality’s exercise of
police power for the general welfare is concerned.
The general welfare clause has two branches. The first, known
as the general legislative power, authorizes the municipal
council to enact ordinances and make regulations not repugnant
to law, as may be necessary to carry into effect and discharge
the powers and duties conferred upon the municipal council by
law. The second, known as the police power proper, authorizes
the municipality to enact ordinances as may be necessary and
proper for the health and safety, prosperity, morals, peace, good
order, comfort, and convenience of the municipality and its
inhabitants, and for the protection of their property.
In the present case, the ordinances imposing licenses and
requiring permits for any business establishment, for purposes of
regulation enacted by the municipal council of Makati, fall within
the purview of the first branch of the general welfare clause.
Moreover, the ordinance of the municipality imposing the annual
business tax is part of the power of taxation vested upon local
governments as provided for under Section 8 of B.P. Blg. 337.
Consequently, the municipal mayor, as chief executive, was
clothed with authority to create a Special Task Force headed by
respondent Atty. Victor A.L. Valero to enforce and implement
said ordinances and resolutions and to file appropriate charges
and prosecute violators. Respondent Valero could hardly be
faulted for performing his official duties under the cited
circumstances.
On the issue of the closure of the bank, we find that the bank
was not engaged in any illegal or immoral activities to warrant its
outright closure. The appropriate remedies to enforce payment
of delinquent taxes or fees are provided for in Section 62 of the
Local Tax Code. Said Section 62 did not provide for closure.
Moreover, the order of closure violated petitioner’s right to due
process, considering that the records show that the bank
exercised good faith and presented what it thought was a valid
and legal justification for not paying the required taxes and fees.
The violation of a municipal ordinance does not empower a
municipal mayor to avail of extrajudicial remedies. It should have
observed due process before ordering the bank’s closure.
WHEREFORE, the assailed Decision dated July 17, 2001, of the
Court of Appeals in CA-G.R. CV No. 58214 is AFFIRMED with
MODIFICATIONS, so that (1) the order denying any claim for
refunds and fees allegedly overpaid by the bank, as well as the
denial of any award for damages and unrealized profits, is
hereby SUSTAINED; (2) the order decreeing the closure of
petitioner bank is SET ASIDE; and (3) the award of moral
damages and attorney’s fees to Atty. Victor A.L. Valero is
DELETED. No pronouncement as to costs.
Batangas CATV v. Court of Appeals
FACTS:
Respondent Sangguniang Panlungsod enacted Resolution No.
210 granting petitioner a permit to construct, install, and operate
a Community Antenna TV (CATV) system in Batangas City.
Section 8 of the Resolution provides that petitioner is authorized
to charge its subscribers the maximum rates specified therein,
provided that any increase of rates shall be subject to the
approval of the Sangguniang Panlungsod.
Sometime in November 1993, petitioner increased its subscriber
rates from ₱88.00 to ₱180.00 per month. As a result, respondent
Mayor wrote petitioner a letter threatening to cancel its permit
unless it secures the approval of respondent Sangguniang
Panlungsod, pursuant to Resolution No. 210. Petitioner then
filed with the RTC, a petition for injunction. The RTC held that
the enactment of Resolution No. 210 by respondent violates the
State’s deregulation policy as set forth by then NTC
Commissioner Alcuaz in his Memorandum dated August 25,
1989. Also, it pointed out that the sole agency of the government
which can regulate CATV operation is the NTC, and that the
Local Government Units (LGUs) cannot exercise regulatory
power over it without appropriate legislation.
On February 12, 1999, the Court of Appeals reversed and set
aside the trial court’s Decision. Hence, this present petition.
ISSUE: Whether or not the General Welfare Clause of the Local
Government Code authorizes respondent Sangguniang
Panlungsod to exercise the regulatory function solely lodged
with the NTC under E.O. No. 205, including the authority to fix
and/or approve the service rates of CATV operators.
HELD:
YES. The general welfare clause is the delegation in statutory
form of the police power of the State to LGUs. Through this,
LGUs may prescribe regulations to protect the lives, health, and
property of their constituents and maintain peace and order
within their respective territorial jurisdictions. Included are
enactments providing, for instance, the regulation of gambling,
the occupation of rig drivers, the installation and operation of
pinball machines, the maintenance and operation of cockpits,
the exhumation and transfer of corpses from public burial
grounds, and the operation of hotels, motels, and lodging
houses as valid exercises by local legislatures of the police
power under the general welfare clause.
Like any other enterprise, CATV operation maybe regulated by
LGUs under the general welfare clause. This is primarily
because the CATV system commits the indiscretion of crossing
public properties. (It uses public properties in order to reach
subscribers.) The physical realities of constructing CATV system
– the use of public streets, rights of ways, the founding of
structures, and the parceling of large regions – allow an LGU a
certain degree of regulation over CATV operators.
City of General Santos v. Commission on Audit
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."
In a letter dated February 10, 2010, the city’s audit team leader,
through its supervising auditor, sent a query on the legality of the
ordinance to respondent Commission on Audit’s director for
Regional Office No. XII, Cotabato City. Respondent
Commission’s 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 Commission’s 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: WON 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:
NO. We agree with respondent Commission on Audit but only
insofar as Section 5 of the ordinance is concerned. We declare
Section 6 on post-retirement incentives as valid.
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 employee’s latest basic salary for
every year of service in the City Government.
The assailed decision by respondent Commission on Audit was
anchored on Section 28, paragraph (b) of Commonwealth Act
No. 186, otherwise known as the Government Service Insurance
Act,67 as amended by Republic Act No. 4968.68 This proscribes
all supplementary retirement or pension plans for government
employees.
Section 5 refers to an "early retirement incentive," the amount of
which is pegged on the beneficiary’s 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 v.
Commission on Audit, it is a form of reward for an employee’s
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 inequitous proliferation of such plans. x x
x. 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.
Basic Services and Facilities
Albon v. Fernando
FACTS:
In May 1999, the City of Marikina undertook a public works
project to widen, clear and repair the existing sidewalks of
Marikina Greenheights Subdivision. It was undertaken by the city
government pursuant to Ordinance No. 59, s. 19933 like other
infrastructure projects relating to roads, streets and sidewalks
previously undertaken by the city. Petitioner claimed that it was
unconstitutional and unlawful for respondents to use government
equipment and property, and to disburse public funds, of the City
of Marikina for the grading, widening, clearing, repair and
maintenance of the existing sidewalks of Marikina Greenheights
Subdivision. He alleged that the sidewalks were private property
because Marikina Greenheights Subdivision was owned by V.V.
Soliven, Inc. Hence, the city government could not use public
resources on them. In undertaking the project, therefore,
respondents allegedly violated the constitutional proscription
against the use of public funds for private purposes4 as well as
Sections 335 and 336 of RA 71605 and the Anti-Graft and
Corrupt Practices Act. Petitioner further alleged that there was
no appropriation for the project.
ISSUE: Whether or not the ordinance is unconstitutional.
HELD:
No. Like all Local Government Units, the City of Marikina is
empowered to enact ordinances for the purposes set forth in the
Local Government Code. It is expressly vested with police
powers delegated to LGUs under the general welfare clause of
RA 7160. However, Section 335 of RA 7160 is clear and specific
that no public money or property shall be appropriated or applied
for private purposes. This is in consonance with the fundamental
principle in local fiscal administration that local government
funds and monies shall be spent solely for public purposes. In
Pascual v. Secretary of Public Works, the Court laid down the
test of validity of a public expenditure: it is the essential
character of the direct object of the expenditure which must
determine its validity and not the magnitude of the interests to be
affected nor the degree to which the general advantage of the
community, and thus the public welfare, may be ultimately
benefited by their promotion. Incidental advantage to the public
or to the State resulting from the promotion of private interests
and the prosperity of private enterprises or business does not
justify their aid by the use of public money. Therefore, the use of
LGU funds for the widening and improvement of privately-owned
sidewalks is unlawful as it directly contravenes Section 335 of
RA 7160. Clearly, the question of ownership of the open spaces
(including the sidewalks) in Marikina Greenheights Subdivision is
material to the determination of the validity of the challenged
appropriation and disbursement made by the City of Marikina.
Similarly significant is the character of the direct object of the
expenditure, that is, the sidewalks. Whether V.V. Soliven, Inc.
has retained ownership of the open spaces and sidewalks or has
already donated them to the City of Marikina, and whether the
public has full and unimpeded access to the roads and
sidewalks of Marikina Greenheights Subdivision, are factual
matters. There is a need for the prior resolution of these issues
before the validity of the challenged appropriation and
expenditure can be determined.
Pimentel, Jr. v. Executive Secretary
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.
Civil Service Commission v. Dr. Agnes Quida Yu
FACTS:
Dr. Fortunata Castillo was the Provincial Health Officer II (PHO
II) of DOH Zamboanga and was the head of the Basilan
Provincial Health Hospital. Dr. Agnes Yu, respondent, was
Provincial Health Officer I (PHO I) of the same province and was
assigned at Isabela, Basilan.
In 1992, the national government implemented a devolution
program pursuant to Republic Act (R.A.) No. 7160, otherwise
known as the "The Local Government Code of 1991." Pursuant
to the devolution program, the personnel covered, including
those in the DOH, would be placed under the LGU of Basilan.
Basilan Governor Gerry Salapudin refused to accept Dr. Castillo
as incumbent PHO II, which was now under the LGU of Basilan.
As a consequence, Dr. Castillo was retained by the DOH until
she retired in 1996. However, although she retained by the DOH
she was receiving salary from the LGU as a detailed employee.
In 1994, Gov. Salapuddin, appointed Dr. Yu to the PHO II
position. In 1998, RA 8543 was passed, which re-nationalized or
returned the hospital positions previously devolved to the local
government unit of Basilan to the DOH. The said law also
reclassified the position of PHO II into Chief of Hospital II (CH II).
ISSUE: WON the position of PHO II a devolved position.
HELD:
Yes. “Devolution" is the 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: “Devolution *xxx+ shall include
the transfer to local government units of the records, equipment,
and other assets and personnel of national agencies and offices
corresponding to the devolved powers, functions and
responsibilities.”
“Personnel of said national agencies or offices shall be absorbed
by the local government units 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,
further, That 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 local government unit
shall be retained by the national government, without any
diminution of rank, salary or tenure.” The only exception is if it is
not administratively viable. In the absence of the recognized
exception, devolved permanent personnel shall be automatically
reappointed [Section 2(a)(12)] by the local chief executive
concerned immediately upon their transfer which shall not go
beyond June 30, 1992.
In this case, it was not shown, that the absorption of Dr. Castillo
was not administratively viable. The devolution of Dr. Castillo
which, together with that of the PHO II position, took effect by
operation of law. The fact that Dr. Castillo was placed on detail
and was receiving salary from the LGU does not change the fact
that the position was devolved to the LGU. Therefore, Dr. Yu
was validly appointed to the position of PHO II in 1994 and,
consequently, acquired a vested right to its re-classified
designation – Chief of Hospital II.
City of Manila v. Colet
FACTS:
The case involves 10 consolidated petitions involving several
corporations with principal offices in Metro Manila, and City of
Manila’s Ordinance No. 7807 which amended Sec. 21 (B) of the
Manila Revenue Code. Sec. 21 (B) imposed business tax on the
said corporations, while the subject ordinance amended such by
lowering the tax rate from 3% per annum to .5% per annum. The
City of Manila, through its City Treasurer, began imposing and
collecting the business tax under Section 21(B) of the Manila
Revenue Code. Because they were assessed and/or compelled
to pay business taxes pursuant to Section 21(B) of the Manila
Revenue Code before they were issued their business permits
for 1994, several corporations questioned the constitutionality of
Sec. 21 (B) for being contrary to the Constitution and the Local
Government Code, and asked for the refund of what they had
paid as business tax.
ISSUE: WON Sec. 21 (B) of the Manila Revenue Code is
unconstitutional.
HELD:
YES. The power to tax is not inherent in LGUs to whom the
power must be delegated by Congress and must be exercised
within the guidelines and limitations that Congress may provide.
Sec. 5 of Article X of the Constitution granted LGUs 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...” In conformity with said constitutional
provision, the Local Government Code was enacted by
Congress. The omnibus grant of power to municipalities and
cities under Section 143(h) of the LGC cannot overcome the
specific exception/exemption in Section 133(j) of the same
Code. In the case at bar, the Sanggunian of the municipality or
city cannot enact an ordinance imposing business 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, when said Sanggunian was
already specifically prohibited from doing so.
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. Section 133 (j) of the LGC is a specific provision
that explicitly withholds from any LGU, i.e., whether the province,
city, municipality, or barangay, the power to tax 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 while Section 143 of the LGC
defines the general power of the municipality 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/exemption in Section
133 (j) of the same Code. This is in accord with the rule on
statutory construction that specific provisions must prevail over
general ones.
Demaala v. Commission on Audit
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). Chapter 5, Section 48 of
the Ordinance provides for an additional levy on real property tax
for the special education fund at the rate of one half percent or
0.5%. In conformity with Section 48 of the Ordinance, the
Municipality of Narra, Palawan, with Demaala as mayor,
collected from owners of real properties located within its
territory an annual tax as special education fund at the rate of
0.5% of the assessed value of the property subject to tax. This
collection was effected through the municipal treasurer. On post-
audit, 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 special
education fund collected by the Municipality of Narra. He
questioned the levy of the special education fund at the rate of
only 0.5% rather than at 1%, the rate stated in Section 235 of
Republic Act No. 7160, otherwise known as the Local
Government Code of 1991 (Local Government Code). After
evaluating AOM No. 03-005, Regional Cluster Director Sy issued
NC No. 2004-04-101 dated August 30, 2004 in the amount of
P1,125,416.56. He held Demaala, the municipal treasurer of
Narra, and all special education fund payors liable for the
deficiency in special education fund collections.
The Municipality of Narra, through Demaala, filed the Motion for
Reconsideration dated December 2, 2004. It stressed that
thecollection of the special education fund at the rate of 0.5%
was merely in accordance with the Ordinance. On March 9,
2005, Regional Cluster Director Sy issued an Indorsement
denying this Motion for Reconsideration. Following this, the
Municipality of Narra, through Demaala, filed an appeal with the
Commission on Audit’s Legal and Adjudication Office.
In Local Decision No. 2006-056 dated April 19, 2006, this appeal
was denied. The Municipality of Narra, through Demaala, then
filed a Petition for Review with the Commission on Audit. In
Decision No. 2008-087 dated September 22, 2008, the
Commission on Audit ruled against Demaala.
ISSUE: WON a municipality within the Metropolitan Manila Area,
a city, or a province may have an additional levy onreal property
for the special education fund at the rate of less than 1%.
HELD:
YES. We find it to be in keeping with harmonizing these
considerations to conclude that Section 235’s specified rate of
1% is a maximum rate rather than an immutable edict.
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 limits on the level of
additional levy for the special education fund under Section 235
of the Local Government Code should be read as granting fiscal
flexibility to local government units. Book II of the Local
Government Code governs local taxation and fiscal matters. Title
II of Book II governs real property taxation.
Section 235 of the Local Government Code allows provinces
and cities, as well as municipalities in Metro Manila, to collect,
on top of the basic annual real property tax, an additional levy
which shall exclusively accrue to the special education fund:
Section 235. Additional Levy on Real Property for the Special
Education Fund. - A province or city, or a municipality within the
Metropolitan Manila Area, may levy and collect an annual tax of
one percent (1%) on the assessed value of real property which
shall be in addition to the basic real property tax. The proceeds
thereof shall exclusively accrue to the Special Education Fund
(SEF).
The operative phrase in Section 235’s grant to municipalities in
Metro Manila, cities, and provinces of the power to impose an
additional levy for the special education fund is prefixed with
“may,” thus, “may levy and collect an annual tax of one percent
(1%).” Section 235’s permissive language is unqualified.
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. Fiscal autonomy
entails “the power to create . . . own sources of revenue.” In turn,
this power necessarily entails enabling local government units
with the capacity to create revenue sources in accordance with
the realities and contingencies present in their specific contexts.
The power to create must mean the local government units’
power to create what is most appropriate and optimal for them;
otherwise, they would be mere automatons that are turned on
and off to perform prearranged operations.
Drilon v. Lim
FACTS:
Department of Justice Secretary Drilon set aside the Manila
Revenue Code, for it founded that it did not comply with the
procedural requirement of notice of public hearing. The City of
Manila, filed a petition to the regional trial court for a review of
the decision of the secretary. The regional trial court declared
that the Manila Revenue Code is valid, that there was public
hearing, however it declared unconstitutional Section 187 of the
Local Government Code, on the ground that it empowered the
Secretary of Justice to review tax ordinances and, inferentially,
to annul them.
ISSUE: Whether or not Section 187 is unconstitutional.
HELD:
NO. Section 187 authorizes the Secretary of Justice to review
only the constitutionality or legality of the tax ordinance and, if
warranted, to revoke it on either or both of these grounds. When
he alters or modifies or sets aside a tax ordinance, he is not also
permitted to substitute his own judgment for the judgment of the
local government that enacted the measure. In the case at bar
Secretary Drilon did set aside the Manila Revenue Code, but he
did not replace it with his own version of what the Code should
be. He did not pronounce the ordinance unwise or unreasonable
as a basis for its annulment.
He did not say that in his judgment it was a bad law. What he
found only was that it was illegal. All he did in reviewing the said
measure was determine if the petitioners were performing their
functions in accordance with law, that is, with the prescribed
procedure for the enactment of tax ordinances and the grant of
powers to the city government under the Local Government
Code. As we see it, that was an act not of control but of mere
supervision. An officer in control lays down the rules in the doing
of an act. If they are not followed, he may, in his discretion, order
the act undone or re-done by his subordinate or he may even
decide to do it himself. Supervision does not cover such
authority. The supervisor or superintendent merely sees to it that
the rules are followed, but he himself does not lay down such
rules, nor does he have the discretion to modify or replace them.
If the rules are not observed, he may order the work done or re-
done but only to conform to the prescribed rules. He may not
prescribe his own manner for the doing of the act. He has no
judgment on this matter except to see to it that the rules are
followed. In the opinion of the Court, Secretary Drilon did
precisely this, and no more nor less than this, and so performed
an act not of control but of mere supervision.
Mactan Cebu International Airport Authority v. Marcos
FACTS:
Petitioner Mactan Cebu International Airport Authority (MCIAA)
was created by virtue of Republic Act No. 6958, mandated to
"principally undertake the economical, efficient and effective
control, management and supervision of the Mactan
International Airport in the Province of Cebu and the Lahug
Airport in Cebu City, . . . and such other Airports as may be
established in the Province of Cebu. Since the time of its
creation, petitioner MCIAA enjoyed the privilege of exemption
from payment of realty taxes in accordance with Section 14 of its
Charter. On October 11, 1994, however, Mr. Eustaquio B. Cesa,
Officer-in-Charge, Office of the Treasurer of the City of Cebu,
demanded payment for realty taxes on several parcels of land
belonging to the petitioner in the total amount of P2,229,078.79.
Petitioner objected to such demand for payment as baseless
and unjustified and asserted that it is an instrumentality of the
government performing governmental functions, which puts
limitations on the taxing powers of local government units. The
City refused to cancel and set aside petitioner’s realty tax
account, insisting that the MCIAA is a government-controlled
corporation whose tax exemption privilege has been withdrawn
by virtue of Sections 193 and 234 of the Local Government
Code (LGC), and not an instrumentality of the government but
merely a government owned corporation performing proprietary
functions. MCIAA paid its tax account “under protest” when City
is about to issue a warrant of levy against the MCIAA’s
properties. MCIAA filed a Petition of Declaratory Relief with the
RTC contending that the taxing power of local government units
do not extend to the levy of taxes or fees on an instrumentality of
the national government. It contends that by the nature of its
powers and functions, it has the footing of an agency or
instrumentality of the national government; which claim the City
rejects.
The trial court dismissed the petition, citing that close reading of
the LGC provides the express cancellation and withdrawal of tax
exemptions of Government Owned and Controlled Corporations.
ISSUE: Whether or not the petitioner is liable to pay real
property taxes to the City of Cebu.
HELD:
Yes, under Section 14 of R.A. No. 6958, the petitioner is exempt
from the payment of realty taxes imposed by the National
Government. Nevertheless, since taxation is the rule and
exemption is the exception, the 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.
As a general rule, Section 133 provides that the taxing powers of
local government units cannot extend to the levy of inter alia,
"taxes, fees, and charges of any kind of the National
Government, its agencies and instrumentalities, and local
government units"; however, pursuant to Section 232, provinces,
cities, municipalities in the Metropolitan Manila Area may impose
the real property tax except on, inter alia, "real property owned
by the Republic of the Philippines or any of its political
subdivisions except when the beneficial used thereof has been
granted, for consideration or otherwise, to a taxable person", as
provided in item (a) of the first paragraph of Section 234. As to
tax exemptions or incentives granted to or presently enjoyed by
natural or juridical persons, including government-owned and
controlled corporations, Section 193 of the LGC prescribes the
general rule, viz., they are withdrawn upon the effectivity of the
LGC, except upon the effectivity of the LGC, except those
granted to local water districts, cooperatives duly registered
under R.A. No. 6938, non-stock and non-profit hospitals and
educational institutions, and unless otherwise provided in the
LGC. Section 234 thereof, enumerates the properties exempt
from real property tax.

In its last paragraph, it further qualifies the retention of the

exemption to real property taxes by limiting the retention only to
those enumerated there-in; all others not included in the
enumeration lost the privilege upon the effectivity of the LGC.
Moreover, the exemption is withdrawn if the beneficial use of
such property has been granted to taxable person for
consideration or otherwise. By reason thereof, petitioner’s
exemption from such has now been withdrawn.