Case 4-Province - of - Negros - Occidental - v. - Commission20231007-11-1werasx 2

EN BANC
[G.R. No. 182574. September 28, 2010.]
THE PROVINCE OF NEGROS OCCIDENTAL, represented by its

Governor ISIDRO P. ZAYCO , petitioner, vs. THE
COMMISSIONERS, COMMISSION ON AUDIT; THE DIRECTOR,
CLUSTER IV-VISAYAS; THE REGIONAL CLUSTER DIRECTORS;
and THE PROVINCIAL AUDITOR, NEGROS OCCIDENTAL ,
respondents.
DECISION
CARPIO, J : p
The Case
Before the Court is a petition for certiorari 1 assailing Decision No.
2006-044 2 dated 14 July 2006 and Decision No. 2008-010 3 dated 30 January
2008 of the Commission on Audit (COA) disallowing premium payment for
the hospitalization and health care insurance benefits of 1,949 officials and
employees of the Province of Negros Occidental.
The Facts
On 21 December 1994, the Sangguniang Panlalawigan of Negros
Occidental passed Resolution No. 720-A 4 allocating P4,000,000 of its
retained earnings for the hospitalization and health care insurance benefits
of 1,949 officials and employees of the province. After a public bidding, the
Committee on Awards granted the insurance coverage to Philam Care Health
System Incorporated (Philam Care).
Petitioner Province of Negros Occidental, represented by its then
Governor Rafael L. Coscolluela, and Philam Care entered into a Group Health
Care Agreement involving a total payment of P3,760,000 representing the
insurance premiums of its officials and employees. The total premium
amount was paid on 25 January 1996.
On 23 January 1997, after a post-audit investigation, the Provincial
Auditor issued Notice of Suspension No. 97-001-101 5 suspending the
premium payment because of lack of approval from the Office of the
President (OP) as provided under Administrative Order No. 103 6 (AO 103)
dated 14 January 1994. The Provincial Auditor explained that the premium
payment for health care benefits violated Republic Act No. 6758 (RA 6758), 7
otherwise known as the Salary Standardization Law. cTECIA
Petitioner complied with the directive post-facto and sent a letter-

request dated 12 January 1999 to the OP. In a Memorandum dated 26
January 1999, 8 then President Joseph E. Estrada directed the COA to lift the
suspension but only in the amount of P100,000. The Provincial Auditor
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ignored the directive of the President and instead issued Notice of
Disallowance No. 99-005-101(96) 9 dated 10 September 1999 stating similar
grounds as mentioned in Notice of Suspension No. 97-001-101.
Petitioner appealed the disallowance to the COA. In a Decision dated
14 July 2006, the COA affirmed the Provincial Auditor's Notice of
Disallowance dated 10 September 1999. 10 The COA ruled that under AO
103, no government entity, including a local government unit, is exempt
from securing prior approval from the President granting additional benefits
to its personnel. This is in conformity with the policy of standardization of
compensation laid down in RA 6758. The COA added that Section 468 (a) (1)
(viii) 11 of Republic Act No. 7160 (RA 7160) or the Local Government Code of
1991 relied upon by petitioner does not stand on its own but has to be
harmonized with Section 12 12 of RA 6758.
Further, the COA stated that the insurance benefits from Philam Care, a
private insurance company, was a duplication of the benefits provided to
employees under the Medicare program which is mandated by law. Being
merely a creation of a local legislative body, the provincial health care
program should not contravene but instead be consistent with national laws
enacted by Congress from where local legislative bodies draw their authority.
The COA held the following persons liable: (1) all the 1,949 officials and
employees of the province who benefited from the hospitalization and health
care insurance benefits with regard to their proportionate shares; (2) former
Governor Rafael L. Coscolluela, being the person who signed the contract on
behalf of petitioner as well as the person who approved the disbursement
voucher; and (3) the Sangguniang Panlalawigan members who passed
Resolution No. 720-A. The COA did not hold Philam Care and Provincial
Accountant Merly P. Fortu liable for the disallowed disbursement. The COA
explained that it was unjust to require Philam Care to refund the amount
received for services it had duly rendered since insurance law prohibits the
refund of premiums after risks had already attached to the policy contract.
As for the Provincial Accountant, the COA declared that the Sangguniang
Panlalawigan resolution was sufficient basis for the accountant to sign the
disbursement voucher since there were adequate funds available for the
purpose. However, being one of the officials who benefited from the subject
disallowance, the inclusion of the accountant's name in the persons liable
was proper with regard to her proportionate share of the premium.
The dispositive portion of the COA's 14 July 2006 decision states:
WHEREFORE, premises considered, and finding no substantial
ground or cogent reason to disturb the subject disallowance, the
instant appeal is hereby denied for lack of merit. Accordingly, Notice of
Disallowance No. 99-005-101(96) dated 10 September 1999 in the total
amount of P3,760,000.00 representing the hospitalization and
insurance benefits of the officials and employees of the Province of
Negros Occidental is hereby AFFIRMED and the refund thereof is
hereby ordered. IcTCHD
The Cluster Director, Cluster IV-Visayas, COA Regional Office No.

VII, Cebu City shall ensure the proper implementation of this decision.
13
Petitioner filed a Motion for Reconsideration dated 23 October 2006

which the COA denied in a Resolution dated 30 January 2008.
Hence, the instant petition.
The Issue
The main issue is whether COA committed grave abuse of discretion in
affirming the disallowance of P3,760,000 for premium paid for the
hospitalization and health care insurance benefits granted by the Province of
Negros Occidental to its 1,949 officials and employees.
The Court's Ruling
Petitioner insists that the payment of the insurance premium for the
health benefits of its officers and employees was not unlawful and improper
since it was paid from an allocation of its retained earnings pursuant to a
valid appropriation ordinance. Petitioner states that such enactment was a
clear exercise of its express powers under the principle of local fiscal
autonomy which includes the power of Local Government Units (LGUs) to
allocate their resources in accordance with their own priorities. Petitioner
adds that while it is true that LGUs are only agents of the national
government and local autonomy simply means decentralization, it is equally
true that an LGU has fiscal control over its own revenues derived solely from
its own tax base.
Respondents, on the other hand, maintain that although LGUs are
afforded local fiscal autonomy, LGUs are still bound by RA 6758 and their
actions are subject to the scrutiny of the Department of Budget and
Management (DBM) and applicable auditing rules and regulations enforced
by the COA. Respondents add that the grant of additional compensation, like
the hospitalization and health care insurance benefits in the present case,
must have prior Presidential approval to conform with the state policy on
salary standardization for government workers.
AO 103 took effect on 14 January 1994 or eleven months before the
Sangguniang Panlalawigan of the Province of Negros Occidental passed
Resolution No. 720-A. The main purpose of AO 103 is to prevent
discontentment, dissatisfaction and demoralization among government
personnel, national or local, who do not receive, or who receive less,
productivity incentive benefits or other forms of allowances or benefits. This
is clear in the Whereas Clauses of AO 103 which state:
WHEREAS, the faithful implementation of statutes, including the
Administrative Code of 1987 and all laws governing all forms of
additional compensation and personnel benefits is a Constitutional
prerogative vested in the President of the Philippines under Section 17,
Article VII of the 1987 Constitution;
WHEREAS, the Constitutional prerogative includes the

determination of the rates, the timing and schedule of payment, and
final authority to commit limited resources of government for the
payment of personal incentives, cash awards, productivity bonus, and
other forms of additional compensation and fringe benefits; aCSTDc
WHEREAS, the unilateral and uncoordinated grant of

productivity incentive benefits in the past gave rise to
discontentment, dissatisfaction and demoralization among
government personnel who have received less or have not
received at all such benefits;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic

of the Philippines, by virtue of the powers vested in me by law and in
order to forestall further demoralization of government
personnel do hereby direct: . . . (Emphasis supplied)
Sections 1 and 2 of AO 103 state:

SECTION 1. All agencies of the National Government
including government-owned and/or -controlled corporations
and government financial institutions, and local government
units, are hereby authorized to grant productivity incentive benefit in
the maximum amount of TWO THOUSAND PESOS (P2,000.00) each to
their permanent and full-time temporary and casual employees,
including contractual personnel with employment in the nature of a
regular employee, who have rendered at least one (1) year of service
in the Government as of December 31, 1993.
SECTION 2. All heads of government offices/agencies,

including government owned and/or controlled corporations, as
well as their respective governing boards are hereby enjoined
and prohibited from authorizing/granting Productivity Incentive
Benefits or any and all forms of allowances/benefits without prior
approval and authorization via Administrative Order by the Office of
the President. Henceforth, anyone found violating any of the mandates
in this Order, including all officials/agency found to have taken part
thereof, shall be accordingly and severely dealt with in accordance
with the applicable provisions of existing administrative and penal
laws.
Consequently, all administrative authorizations to grant any form

of allowances/benefits and all forms of additional compensation usually
paid outside of the prescribed basic salary under R.A. 6758, the Salary
Standardization Law, that are inconsistent with the legislated policy on
the matter or are not covered by any legislative action are hereby
revoked. (Emphasis supplied)
It is clear from Section 1 of AO 103 that the President authorized all

agencies of the national government as well as LGUs to grant the maximum
amount of P2,000 productivity incentive benefit to each employee who has
rendered at least one year of service as of 31 December 1993. In Section 2,
the President enjoined all heads of government offices and agencies from
granting productivity incentive benefits or any and all similar forms of
allowances and benefits without the President's prior approval.
In the present case, petitioner, through an approved Sangguniang
Panlalawigan resolution, granted and released the disbursement for the
hospitalization and health care insurance benefits of the province's officials
and employees without any prior approval from the President. The COA
disallowed the premium payment for such benefits since petitioner
disregarded AO 103 and RA 6758.
We disagree with the COA. From a close reading of the provisions of AO
103, petitioner did not violate the rule of prior approval from the President
since Section 2 states that the prohibition applies only to "government
offices/agencies, including government-owned and/or controlled
corporations, as well as their respective governing boards." Nowhere is it
indicated in Section 2 that the prohibition also applies to LGUs. The
requirement then of prior approval from the President under AO 103 is
applicable only to departments, bureaus, offices and government-owned and
controlled corporations under the Executive branch. In other words, AO 103
must be observed by government offices under the President's control as
mandated by Section 17, Article VII of the Constitution which states: DSAacC
Section 17. The President shall have control of all executive

departments, bureaus and offices. He shall ensure that the laws be
faithfully executed. (Emphasis supplied)
Being an LGU, petitioner is merely under the President's general

supervision pursuant to Section 4, Article X of the Constitution:
Sec. 4. The President of the Philippines shall exercise
general supervision over local governments. Provinces with
respect to component cities and municipalities, and cities and
municipalities with respect to component barangays shall ensure that
the acts of their component units are within the scope of their
prescribed powers and functions. (Emphasis supplied)
The President's power of general supervision means the power of a

superior officer to see to it that subordinates perform their functions
according to law. 14 This is distinguished from the President's power of
control which is the power to alter or modify or set aside what a subordinate
officer had done in the performance of his duties and to substitute the
judgment of the President over that of the subordinate officer. 15 The power
of control gives the President the power to revise or reverse the acts or
decisions of a subordinate officer involving the exercise of discretion. 16
Since LGUs are subject only to the power of general supervision of the
President, the President's authority is limited to seeing to it that rules are
followed and laws are faithfully executed. The President may only point out
that rules have not been followed but the President cannot lay down the
rules, neither does he have the discretion to modify or replace the rules.
Thus, the grant of additional compensation like hospitalization and health
care insurance benefits in the present case does not need the approval of
the President to be valid.
Also, while it is true that LGUs are still bound by RA 6758, the COA did
not clearly establish that the medical care benefits given by the government
at the time under Presidential Decree No. 1519 17 were sufficient to cover
the needs of government employees especially those employed by LGUs.
Petitioner correctly relied on the Civil Service Commission's (CSC)
Memorandum Circular No. 33 (CSC MC No. 33), series of 1997, issued on 22
December 1997 which provided the policy framework for working conditions
at the workplace. In this circular, the CSC pursuant to CSC Resolution No. 97-
4684 dated 18 December 1997 took note of the inadequate policy on basic
health and safety conditions of work experienced by government personnel.
Thus, under CSC MC No. 33, all government offices including LGUs were
directed to provide a health program for government employees which
included hospitalization services and annual mental, medical-physical
examinations.
Later, CSC MC No. 33 was further reiterated in Administrative Order
No. 402 18 (AO 402) which took effect on 2 June 1998. Sections 1, 2, and 4 of
AO 402 state:
Section 1. Establishment of the Annual Medical Check-up
Program. — An annual medical check-up for government of officials
and employees is hereby authorized to be established starting this
year, in the meantime that this benefit is not yet integrated under the
National Health Insurance Program being administered by the
Philippine Health Insurance Corporation (PHIC).
EIASDT
Section 2. Coverage. — . . . Local Government Units are also

encouraged to establish a similar program for their personnel.
Section 4. Funding. — . . . Local Government Units, which may

establish a similar medical program for their personnel, shall utilize
local funds for the purpose. (Emphasis supplied)
The CSC, through CSC MC No. 33, as well as the President, through AO
402, recognized the deficiency of the state of health care and medical
services implemented at the time. Republic Act No. 7875 19 or the National
Health Insurance Act of 1995 instituting a National Health Insurance Program
(NHIP) for all Filipinos was only approved on 14 February 1995 or about two
months after petitioner's Sangguniang Panlalawigan passed Resolution No.
720-A. Even with the establishment of the NHIP, AO 402 was still issued
three years later addressing a primary concern that basic health services
under the NHIP either are still inadequate or have not reached geographic
areas like that of petitioner.
Thus, consistent with the state policy of local autonomy as guaranteed
by the 1987 Constitution, under Section 25, Article II 20 and Section 2, Article
X, 21 and the Local Government Code of 1991, 22 we declare that the grant
and release of the hospitalization and health care insurance benefits given to
petitioner's officials and employees were validly enacted through an
ordinance passed by petitioner's Sangguniang Panlalawigan.
In sum, since petitioner's grant and release of the questioned
disbursement without the President's approval did not violate the President's
directive in AO 103, the COA then gravely abused its discretion in applying
AO 103 to disallow the premium payment for the hospitalization and health
care insurance benefits of petitioner's officials and employees.
WHEREFORE, we GRANT the petition. We REVERSE AND SET ASIDE
Decision No. 2006-044 dated 14 July 2006 and Decision No. 2008-010 dated
30 January 2008 of the Commission on Audit.
SO ORDERED.
Corona, C.J., Carpio Morales, Velasco, Jr., Nachura, Leonardo-de Castro,
Brion, Peralta, Bersamin, Del Castillo, Abad, Villarama, Jr., Perez, Mendoza
and Sereno, JJ., concur.
Footnotes
1. Under Rule 65 of the 1997 Revised Rules of Civil Procedure.
2. Rollo, pp. 24-31. Penned by Chairman Guillermo N. Carague with Commissioners

Reynaldo A. Villar and Juanito G. Espino, Jr., concurring.
3. Id. at 32-38.
4. Id. at 49-50.
5. Id. at 39.
6. Authorizing the Grant of CY 1993 Productivity Incentive Benefits to Government

Personnel and Prohibiting Payments of Similar Benefits in Future Years
Unless Duly Authorized by the President.
7. An Act Prescribing a Revised Compensation and Position Classification System in

the Government and for Other Purposes. This Act took effect on 1 July 1989.
8. Rollo, p. 67.
9. Id. at 68.
10. Id. at 24-31. Decided by Chairman Guillermo N. Carague, Commissioner

Reynaldo A. Villar and Commissioner Juanito G. Espino, Jr.
11. SECTION 468. Powers, Duties, Functions and Compensation. — (a) The
sangguniang panlalawigan, as the legislative body of the province, shall
enact ordinances, approve resolutions and appropriate funds for the general
welfare of the province and its inhabitants pursuant to Section 16 of this
Code and in the proper exercise of the corporate powers of the province as
provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and
effective provincial government and, in this connection, shall:
xxx xxx xxx
(viii) Determine the positions and salaries, wages, allowances and other
emoluments and benefits of officials and employees paid wholly or mainly
from provincial funds and provide for expenditures necessary for the proper
conduct of programs, projects, services, and activities of the provincial
government . . . .
12. Section 12. Consolidation of Allowances and Compensation. — All allowances,

except for representation and transportation allowances; clothing and
laundry allowances; subsistence allowance of marine officers and crew on
board government vessels and hospital personnel; hazard pay; allowances of
foreign service personnel stationed abroad; and such other additional
compensation not otherwise specified herein as may be determined by the
DBM, shall be deemed included in the standardized salary rates herein
prescribed. Such other additional compensation, whether in cash or in kind,
being received by incumbents only as of July 1, 1989 not integrated into the
standardized salary rates shall continue to be authorized.
Existing additional compensation of any national government official or

employee paid from local funds of a local government unit shall be absorbed
into the basic salary of said official or employee and shall be paid by the
National Government.
13. Rollo, p. 31.
14. De Villa v. City of Bacolod, G.R. No. 80744, 20 September 1990, 189 SCRA 736.
15. Bito-Onon v. Judge Yap Fernandez, 403 Phil. 693 (2001).
16. Rufino v. Endriga, G.R. No. 139554, 21 July 2006, 496 SCRA 13, citing Mondano
v. Silvosa, 97 Phil. 143 (1955).
17. Revised Philippine Medical Care Act which was approved on 11 June 1978. This
Act revised Republic Act No. 6111 or the Philippine Medical Care Act of 1969
which took effect on 4 August 1969.
18. Establishment of a Medical Check-up Program for Government Personnel.
19. An Act Instituting a National Health Insurance Program for All Filipinos and
Establishing the Philippine Health Insurance Corporation for the Purpose.
20. Section 25. The State shall ensure the autonomy of local governments.
21. Section 2. The territorial and political subdivisions shall enjoy local autonomy.
22. Supra note 11.

FIRST DIVISION
[G.R. No. 131481. March 16, 2011.]
BUKLOD NANG MAGBUBUKID SA LUPAING RAMOS, INC. ,

petitioner, vs. E. M. RAMOS and SONS, INC., respondent.
[G.R. No. 131624. March 16, 2011.]
DEPARTMENT OF AGRARIAN REFORM , petitioner, vs. E. M.

RAMOS and SONS, INC., respondent.
DECISION
LEONARDO-DE CASTRO, J : p
Before the Court are consolidated Petitions for Review on Certiorari,

under Rule 45 of the 1997 Rules of Civil Procedure, filed by the Buklod nang
Magbubukid sa Lupaing Ramos, Inc. (Buklod) and the Department of
Agrarian Reform (DAR), assailing the Decision 1 dated March 26, 1997 and
the Resolution 2 dated November 24, 1997 of the Court of Appeals in CA-G.R.
SP No. 40950.
The Court of Appeals declared the parcels of land owned by E.M.
Ramos and Sons, Inc. (EMRASON), located in Barangay Langkaan,
Dasmariñas, Cavite (subject property), exempt from the coverage of the
Comprehensive Agrarian Reform Program (CARP), thus, nullifying and setting
aside the Decision 3 dated February 7, 1996 and Resolution 4 dated May 14,
1996 of the Office of the President (OP) in O.P. Case No. 5461.
Quoted hereunder are the facts of the case as found by the Court of
Appeals:
At the core of the controversy are several parcels of unirrigated
land (303.38545 hectares) which form part of a larger expanse with
an area of 372 hectares situated at Barangay Langkaan, Dasmariñas,
Cavite. Originally owned by the Manila Golf and Country Club, the
property was acquired by the [herein respondent EMRASON] in 1965
for the purpose of developing the same into a residential subdivision
known as "Traveller's Life Homes".
Sometime in 1971, the Municipal Council of Dasmariñas, Cavite,
acting pursuant to Republic Act (R.A.) No. 2264, otherwise known as
the "Local Autonomy Act", enacted Municipal Ordinance No. 1,
hereinafter referred to as Ordinance No. 1, entitled "An Ordinance
Providing Subdivision Regulation and Providing Penalties for Violation
Thereof".
In May, 1972, [respondent] E.M. Ramos and Sons, Inc.,
applied for an authority to convert and develop its aforementioned
372-hectare property into a residential subdivision, attaching to the
application detailed development plans and development proposals
from Bancom Development Corporation and San Miguel Corporation.
Acting thereon, the Municipal Council of Dasmariñas, Cavite passed
on July 9, 1972 Municipal Ordinance No. 29-A (Ordinance No. 29-A, for
brevity), approving [EMRASON's] application. Ordinance No. 29-A
pertinently reads:
"Resolved, as it is hereby resolved, to approve the
application for subdivision containing an area of Three Hundred
Seventy-Two (372) Hectares situated in Barrios Bocal and
Langkaan, named as Traveller's Life Homes. EHSAaD
Resolved that the Municipal Ordinance regarding

subdivision regulations existing in this municipality shall be
strictly followed by the subdivision".
Subsequently, [EMRASON] paid the fees, dues and licenses
needed to proceed with property development.
It appears, however, that the actual implementation of the
subdivision project suffered delay owing to the confluence of events.
Among these was the fact that the property in question was then
mortgaged to, and the titles thereto were in the possession of, the
Overseas Bank of Manila, which during the period material was under
liquidation.
On June 15, 1988, Republic Act No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law or CARL, took effect,
ushering in a new process of land classification, acquisition and
distribution.
On September 23, 1988, the Municipal Mayor of Dasmariñas,
Cavite addressed a letter to [EMRASON], stating in part, as follows:
"In reply to your letter of June 2, 1988, we wish to clarify
that the Municipality of Dasmariñas, Cavite, has approved the
development of your property situated in Barrios Bukal and
Langkaan, Dasmariñas, Cavite, with a total area of 372
hectares, more or less, into residential, industrial, commercial
and golf course project.
This conversion conforms with the approved
Development Plan of the Municipality of Dasmariñas Cavite".
Then came the Aquino government's plan to convert the
tenanted neighboring property of the National Development Company
(NDC) into an industrial estate to be managed through a joint venture
scheme by NDC and the Marubeni Corporation. Part of the overall
conversion package called for providing the tenant-farmers, opting to
remain at the NDC property, with three (3) hectares each. However,
the size of the NDC property turned out to be insufficient for both the
demands of the proposed industrial project as well as the
government's commitment to the tenant-farmers. To address this
commitment, the Department of Agrarian Reform (DAR) was thus
tasked with acquiring additional lands from the nearby areas. The
DAR earmarked for this purpose the subject property of [EMRASON].
On August 29, 1990, then DAR Secretary Benjamin Leong sent
out the first of four batches of notices of acquisition, each of which
drew protest from [EMRASON]. All told, these notices covered
303.38545 hectares of land situated at Barangay Langkaan,
Dasmariñas, Cavite owned by [EMRASON].
In the meantime, [EMRASON] filed with the Department of
Agrarian Reform Adjudication Board (DARAB), Region IV, Pasig, Metro
Manila, separate petitions to nullify the first three sets of the above
notices. Collectively docketed as DARAB Case No. IV-Ca-0084-92,
these petitions were subsequently referred to the Office of the
Regional Director, Region IV, which had jurisdiction thereon. In his
referral action, the Provincial Agrarian Adjudicator directed the DAR
Region IV, through its Operations Division, to conduct a hearing
and/or investigation to determine whether or not the subject property
is covered by the Comprehensive Agrarian Reform Program (CARP)
and, if not, to cancel the notices of acquisition.
Forthwith, the DAR regional office conducted an on-site
inspection of the subject property.
In the course of the hearing, during which [EMRASON] offered
Exhibits "A" to "UU-2" as documentary evidence, [EMRASON]
received another set of notices of acquisition. As to be expected,
[EMRASON] again protested.
On August 28, 1992, the Legal Division of DAR, Region IV,
through Hearing Officer Victor Baguilat, rendered a decision declaring
as null and void all the notices of acquisitions, observing that the
property covered thereby is, pursuant to Department of Justice (DOJ)
Opinion No. 44, series of 1990, exempt from CARP. The dispositive
portion of the decision reads, as follows:
"WHEREFORE, in the light of the foregoing . . .,
considering that the notices of acquisition dated August 29,
1990 relative to the 39 hectares partly covered by Transfer
Certificate of Title No. T-19298; notices of acquisition all dated
April 3, 1991 relative to the 131.41975 hectares partly covered
by Transfer Certificates of Title Nos. . . .; notices of acquisition
all dated August 28, 1991 relative to the 56.9201 hectares
covered by Transfer Certificates of Title Nos. . . .; and notices of
acquisition all dated May 15, 1992 relative to the 76.0456
covered by Transfer Certificates of Title Nos. . . ., all located at
Barangay Langkaan, Dasmariñas, Cavite and owned by
petitioner E.M. RAMOS and SONS, INC. are null and void on the
ground that the subject properties are exempted from CARP
coverage pursuant to DOJ Opinion No. 44, Series of 1990,
therefore, the aforesaid notices of acquisition be cancelled and
revoked."
The DOJ Opinion adverted to, rendered by then Justice
Secretary Franklin Drilon, clarified that lands already converted to
non-agricultural uses before June 15, 1988 were no longer covered by
CARP.
On September 3, 1992, the Region IV DAR Regional Director
motu propio elevated the case to the Office of the Agrarian Reform
Secretary, it being his view that Hearing Officer Baguilat's decision
ran contrary to the department's official position "to pursue the
coverage of the same properties and its eventual distribution to
qualified beneficiaries particularly the Langkaan farmers in fulfillment
of the commitment of the government to deliver to them the balance
of thirty-nine hectares . . .".
On January 6, 1993, the herein respondent DAR Secretary
Ernesto Garilao [(DAR Secretary Garilao)] issued an order, the
decretal portion of which partly reads: SEHaTC
"WHEREFORE, in the interest of law and justice, an order

is hereby rendered:
1. Affirming the Notices of Acquisition dated
August 29, 1990, April 3, 1991, August 28, 1991 and May
15, 1992 covering 303.38545 hectares of the property
owned by the E.M. RAMOS & SONS, INC., located at
Barangay Langkaan, Dasmariñas, Cavite . . .;
xxx xxx xxx
3. Directing the DAR field officials concerned to

pursue the coverage under RA 6657 of the properties of
E.M. Ramos & Sons, Inc. for which subject Notices of
Acquisition had been issued.
SO ORDERED".
Its motion for reconsideration of the aforesaid order having
been denied by the [DAR Secretary Garilao] in his subsequent order
of January 6, 1993, [EMRASON] appealed to the Office of the
President where the recourse was docketed as O.P. Case No.
5461.
On February 7, 1996, the Office of the President, through
herein respondent Deputy Executive Secretary Renato C.
Corona [(Deputy Executive Secretary Corona)], rendered the herein
assailed decision . . ., dismissing [EMRASON's] appeal on the strength
of the following observation:
"To recapitulate, this Office holds that [EMRASON's]
property has remained AGRICULTURAL in classification and
therefore falls within the coverage of the CARP, on the basis of
the following:
1. [EMRASON] failed to comply with the
mandatory requirements and conditions of Municipal
Ordinance Nos. 1 and 29-A, specifically, among others,
the need for approval of the National Planning
Commission through the Highway District Engineer, and
the Bureau of Lands before final submission to the
Municipal Council and Municipal Mayor;
2. [EMRASON] failed to comply with
Administrative Order No. 152, dated December 16, 1968;
and
3. The certification of the Human Settlements
Regulatory Commission (HSRC) in 1981 and the Housing
and Land Use Regulatory Board (HLURB) in 1992 that the
property of [EMRASON] is agricultural".
Undaunted, [EMRASON] interposed a motion for
reconsideration, followed later by another motion whereunder it
invited attention to legal doctrines involving land conversion recently
enunciated by no less than the Office of the President itself.
On May 14, 1996, the [Deputy Executive Secretary Corona]
came out with his second challenged issuance denying [EMRASON's]
aforementioned motion for reconsideration . . . . 5
From the denial of its Motion for Reconsideration by the OP, EMRASON
filed a Petition for Review with the Court of Appeals, which was docketed as
CA-G.R. SP No. 40950. ADScCE
On July 3, 1996, the Court of Appeals issued a Temporary Restraining

Order (TRO), 6 which enjoined then DAR Secretary Ernesto Garilao and
Deputy Executive Secretary Renato C. Corona 7 from implementing the OP
Decision of February 7, 1996 and Resolution of May 14, 1996 until further
orders from the court. On September 17, 1996, the appellate court issued a
Resolution 8 granting the prayer of EMRASON for the issuance of a writ of
preliminary injunction. The writ of preliminary injunction 9 was actually
issued on September 30, 1996 after EMRASON posted the required bond of
P500,000.00.
The DAR Secretary filed a Motion for Reconsideration of the Resolution
dated September 17, 1996 of the Court of Appeals, with the prayer that the
writ of preliminary injunction already issued be lifted, recalled and/or
dissolved.
At this juncture, the DAR had already prepared Certificates of Land
Ownership Award (CLOAs) to distribute the subject property to farmer-
beneficiaries. However, the writ of preliminary injunction issued by the Court
of Appeals enjoined the release of the CLOAs. Buklod, on behalf of the
alleged 300 farmer-beneficiaries of the subject property, filed a
Manifestation and Omnibus Motion, wherein it moved that it be allowed to
intervene as an indispensable party in CA-G.R. SP No. 40950; that the writ of
preliminary injunction be immediately dissolved, having been issued in
violation of Section 55 of the CARL; and that the Petition for Review of
EMRASON be dismissed since the appropriate remedy should have been a
petition for certiorari before the Supreme Court.
On March 26, 1997, the Court of Appeals promulgated its assailed
Decision.
The Court of Appeals allowed the intervention of Buklod because the
latter's participation was "not being in any way prejudicial to the interest of
the original parties, nor will such intervention change the factual legal
complexion of the case." 10 The appellate court, however, affirmed the
propriety of the remedy availed by EMRASON given that under Section 5 of
Supreme Court Revised Administrative Circular No. 1-95 dated May 16, 1995,
appeals from judgments or final orders of the OP or the DAR under the CARL
shall be taken to the Court of Appeals, through a verified petition for review;
and that under Section 3 of the same Administrative Circular, such a petition
for review may raise questions of facts, law, or mixed questions of facts and
law.
Ultimately, the Court of Appeals ruled in favor of EMRASON because
the subject property was already converted/classified as residential by the
Municipality of Dasmariñas prior to the effectivity of the CARL. The appellate
court reasoned:
For one, whether or not the Municipality of Dasmariñas, Cavite
had in place in the early seventies a general subdivision plan is to us
of no moment. The absence of such general plan at that time cannot
be taken, for the nonce, against the [herein respondent EMRASON].
To our mind, the more weighty consideration is the accomplished fact
that the municipality, conformably with its statutory-conferred local
autonomy, had passed a subdivision measure, i.e., Ordinance No. 1,
and had approved in line thereto, through the medium of Ordinance
No. 29-A, [EMRASON's] application for subdivision, or with like effect
approved the conversion/classification of the lands in dispute as
residential. Significantly, the Municipal Mayor of Dasmariñas, Cavite,
in his letter of September 23, 1988 to [EMRASON], clarified that such
conversion conforms with the approved development plan of the
municipality. EDCIcH
For another, the requirement prescribed by the cited Section

16[a] of Ordinance No. 1 relates to the approval in the first instance
by the National Planning Commission of the final plat of the scheme
of the subdivision, not the conversion from agricultural to residential
itself. As [EMRASON] aptly puts it:
". . . the final plat or final plan, map or chart of the
subdivision is not a condition sine qua non for the conversion . .
. as the conversion was already done by the Municipal Council
of Dasmariñas, Cavite. Municipal Ordinance No. 29-A merely
required that the final plat, or final plan . . . of the subdivision
be done in conformity with Municipal Ordinance No. 1, the
same to be followed by the subdivision itself. [EMRASON]
therefore did not have to undertake the immediate actual
development of the subject parcel of lands as the same had
already been converted and declared residential by law. . . ."
(Petition, pp. 17 and 18).
[EMRASON's] pose has the merit of logic. As may be noted,
Ordinance No. 29-A contained two (2) resolutory portions, each inter-
related to, but nonetheless independent of, the other. The first
resolution, reading —
"Resolved, as it is hereby resolved, to approve the
application for subdivision containing an area of Three Hundred
Seventy-Two (372) Hectares situated in Barrios Bocal and
Langkaan, named as Travellers Life Homes"
approved the application for subdivision or the conversion of
the 372-hectare area into residential, while the second, reading —
"Resolved that the Municipal Ordinance regarding
subdivision regulations existing in this municipality shall be
strictly followed by the subdivision"
provides that the subdivision owner/developer shall follow
subdivision regulations. It will be noted further that the second
resolution already referred to the [EMRASON's] property as
"subdivision", suggesting that the Municipal Council already
considered as of that moment [EMRASON's] area to be for residential
use.
Another requirement which [EMRASON] allegedly failed to
comply with is found in Administrative Order (A.O.) No. 152, series of
1968, which pertinently provides —
"1. All Municipal Boards or City Councils, and all
Municipal Councils in cities and municipalities in which a
subdivision ordinance is in force, shall submit three copies of
every proposed subdivision plan for which approval is sought
together with the subdivision ordinance, to the National
Planning Commission for comment and recommendation".
This Court is at a loss to understand how [EMRASON] could be
expected to heed a directive addressed to local government
legislative bodies. From a perusal of the title of A.O. No. 152, it is at
once obvious from whom it exacts compliance with its command,
thus: "REQUIRING THE MUNICIPAL BOARDS OR CITY COUNCILS AND
MUNICIPAL COUNCILS TO SUBMIT PROPOSED ORDINANCES AND
SUBDIVISION PLANS TO THE NATIONAL PLANNING COMMISSION FOR
COMMENT AND RECOMMENDATION, BEFORE TAKING ACTION ON THE
SAME, AND TO FORWARD A COPY OF THEIR APPROVED SUBDIVISION
ORDINANCES TO THE SAID COMMISSION".
To be sure, [EMRASON] cannot be made to bear the
consequences for the non-compliance, if this be the case, by the
Municipal Council of Dasmariñas, Cavite with what A.O. 152 required.
A converse proposition would be antithetical to the sporting idea of
fair play. 11 aHTDAc
As for the other requirements which EMRASON purportedly failed to

comply with, the Court of Appeals held that these became obligatory only
after the subject property was already converted to non-agricultural, to wit:
Foregoing considered, this Court holds that everything needed
to validly effect the conversion of the disputed area to residential had
been accomplished. The only conceivable step yet to be taken relates
to the obtention of a conversion order from the DAR, or its
predecessor, the Ministry of Agrarian Reform (MAR) under its rather
intricate procedure established under Memorandum Circular No. 11-
79. But then, this omission can hardly prejudice the [herein
respondent EMRASON] for the DAR/MAR guidelines were promulgated
only in 1979, at which time the conversion of [EMRASON's] property
was already a fait accompli.
Like the conversion procedure set up under Memorandum
Circular No. 11-79, the revised methodology under the CARL cannot
also be made to apply retroactively to lands duly converted/classified
as residential under the aegis of the Local Autonomy Act. For, as a
rule, a statute is not intended to affect transactions which occurred
before it becomes operational (Tolentino, COMMENTARIES AND
JURISPRUDENCE ON THE CIVIL CODE, Vol. I, 1983 ed., p. 23). And
as the landmark case of Natalia Realty, Inc. vs. Department of
Agrarian Reform, 225 SCRA 278, teaches:
"Indeed, lands not devoted to agricultural activity are
outside the coverage of CARL. These include lands previously
converted to non-agricultural uses prior to the effectivity of
CARL by government agencies other than respondent DAR . . . .
xxx xxx xxx
Since the NATALIA lands were converted prior to 15 June

1988, respondent DAR is bound by such conversion. It was
therefore error to include the underdeveloped portions . . .
within the coverage of CARL".
cHSIDa
It may be so, as the assailed decision stated, that in Natalia

the lands therein involved received a locational clearance from the
Housing and Land Use Regulatory Board (HLRB, formerly the Human
Settlement Regulatory Commission [HSRC], as residential or
commercial, a factor [EMRASON] cannot assert in its favor. This
dissimilarity, however, hardly provides a compelling justification not
to apply the lessons of Natalia. This is because the property involved
in this case, unlike that in Natalia, underwent
classification/conversion before the creation on May 13, 1976 of the
HSRC, then known as the Human Settlements Regulatory Commission
(P.D. No. 933). Furthermore, what is recognized as the HSRC's
authority to classify and to approve subdivisions and comprehensive
land use development plans of local governments devolved on that
agency only upon its reorganization on February 7, 1981, with the
issuance of Executive Order No. 648 known as the Charter of the
Human Settlements Regulatory Commission. Section 5 of the
same executive order invested the HSRC with the above classifying
and approving authority. In fine, the property of [EMRASON] went into
the process of conversion at the time when the intervention thereon
of the HSRC, which was even then non-existent, was unnecessary.
Shortly before the creation of the HSRC, it would appear that to
provincial, city, or municipal councils/boards, as the case may be,
belong the prerogative, albeit perhaps not exclusive, to classify
private lands within their respective territorial jurisdiction and
approve their conversion from agricultural to residential or other non-
agricultural uses. To paraphrase the holding in Patalinghug vs.
Court of Appeals, 229 SCRA 554, once a local government has,
pursuant to its police power, reclassified an area as residential, that
determination ought to prevail and must be respected. 12
The Court of Appeals further observed that the subject property has
never been devoted to any agricultural activity and is, in fact, more suitable
for non-agricultural purposes, thus:
It is worthy to note that the CARL defines "agricultural lands" as
"lands devoted to agricultural activity . . . and not classified
as mineral, forest, residential, commercial or industrial lands"
(Sec. 3[c]). Guided by this definition, it is clear that [herein
respondent EMRASON's] area does not fall under the category of
agricultural lands. For, let alone the reality that the property is not
devoted to some agricultural activity, being in fact unirrigated, and,
as implied in the decision of the DAR Hearing Officer Victor Baguilat,
without duly instituted tenants, the same had been effectively
classified as residential. The bare circumstance of its not being
actually developed as subdivision or that it is underdeveloped would
not alter the conclusion. For, according to Natalia, what actually
determines the applicability of the CARL to a given piece of land is its
previous classification and not its current use or stages of
development as non-agricultural property.
As a pragmatic consideration, the disputed area, in terms of its
location in relation to existing commercial/industrial sites and its
major economic use, is more suitable for purposes other than
agriculture. In this connection, this Court notes that the property is
situated at the heart of the CALABARZON, and, as Annex "C" of the
petition demonstrates, lies adjacent to huge industrial/commercial
complexes. The San Miguel-Monterey meat plant, the NDC-Marubeni
complex and the Reynolds Aluminum plant may be mentioned. For
sure, the Sangguniang Panlalawigan of Cavite, obviously cognizant of
the economic potential of certain areas in the Municipality of
Dasmariñas has, by Resolution No. 105, series of 1988, declared
defined tracts of lands in the Municipality of Dasmariñas as
"industrial-residential-institutional mix." 13
As a last point, the Court of Appeals justified its issuance of a writ of
preliminary injunction enjoining the implementation of the OP Decision dated
February 7, 1996 and Resolution dated May 14, 1996, viz.: SCcHIE
As a final consideration, we will address the [herein petitioners]

DAR Secretary's and Buklod's joint concern regarding the
propriety of the preliminary injunction issued in this case. They
alleged that the issuance is violative of Section 55 of the CARL which
reads:
"SEC. 55. No Restraining Order or Preliminary
Injunction. — No Court in the Philippines shall have jurisdiction
to issue any restraining order or writ of preliminary injunction
against the PARC or any of its duly authorized or designated
agencies in any case, dispute, controversy arising from,
necessary to, or in connection with the application,
implementation, enforcement, or interpretation of this Act and
other pertinent laws on agrarian reform". (Underscoring
added.)
As will be noted, the aforequoted section specifically mentions
the Presidential Agrarian Reform Council (PARC) of which the DAR
Secretary is the Vice Chairman, or any of its duly designated agencies
as protected from an injunctive action of any court. These agencies
include the PARC Executive Committee, the PARC Secretariat, which
the DAR Secretary heads, and, on the local level, the different
Agrarian Reform Action Committees (Secs. 41 to 45, R.A. No. 6657).
From the records, there is no indication that the [petitioner]
Agrarian Reform Secretary acted vis-à-vis the present controversy
for, or as an agency of, the PARC. Hence, he cannot rightfully invoke
Section 55 of the CARL and avail himself of the protective mantle
afforded by that provision. The PARC, it bears to stress, is a policy-
formulating and coordinating body (Sec. 18, E.O. 229, July 22, 1987)
without express adjudicatory mandate, unlike the DAR Secretary who,
as department head, is "vested with primary jurisdiction to determine
and adjudicate agrarian reform matters and shall have exclusive
jurisdiction over all matters involving the implementation of agrarian
reform" (Sec. 50, R.A. 6657). Thus, it is easy to accept the proposition
that the [petitioner] Agrarian Reform Secretary issued his
challenged orders in the exercise of his quasi-judicial power as
department head. 14
In the end, the Court of Appeals decreed:
WHEREFORE, the instant petition for review is hereby
GRANTED. Accordingly, the challenged decision dated February 7,
1996 and the resolution of May 14, 1996 of the Office of the President
in O.P. Case No. 5461 are hereby NULLIFIED, VACATED and SET
ASIDE, and the notices of acquisition issued by the Department of
Agrarian Reform covering the 372-hectare property of the [herein
respondent EMRASON] at Barangay Langkaan, Dasmariñas, Cavite
declared VOID.
The writ of preliminary injunction issued by this Court on
September 30, 1996 is hereby made permanent. 15
Buklod and DAR filed their respective Motions for Reconsideration of
the foregoing Decision but both Motions were denied by the Court of Appeals
in a Resolution dated November 24, 1997.
Aggrieved, Buklod and DAR filed the instant Petitions, which were
consolidated by this Court in a Resolution 16 dated August 19, 1998.
In G.R. No. 131481, Buklod raises the following arguments:
1] THE MUNICIPAL ORDINANCE INVOKED BY [EMRASON] AS
CONVERSION OF THE PROPERTY IN QUESTION ENACTED ON JULY 9,
1972 BY THE MUNICIPAL COUNCIL OF DASMARIÑAS, CAVITE IS
IMPOTENT BECAUSE THE MUNICIPAL ORDINANCE IMPOSED
CONDITIONS WHICH [EMRASON] NEVER COMPLIED. NO COMPLIANCE
NO CONVERSION.
2] AT THE TIME THE ALLEGED ORDINANCE WAS ENACTED, A
LAND REFORM LAW WAS ALREADY IN EFFECT GRANTING SECURITY
OF TENURE TO THE FARMERS SO THAT A LANDOWNER CANNOT
ARBITRARILY CONVERT AN AGRICULTURAL LAND INTO A DIFFERENT
CLASSIFICATION WITHOUT COMPLYING WITH LEGAL REQUIREMENTS
(R.A. 3844). aATHES
3] A MERE MUNICIPAL ORDINANCE CANNOT NEGATE LAND

REFORM RIGHTS GRANTED TO THE FARMERS BY LEGISLATIVE
ENACTMENT UNDER R.A. 3844 AND SUBSEQUENT LAWS. LAND
REFORM LAW BEING A SOCIAL LEGISLATION IS PARAMOUNT.
4] LAND REFORM IS A CONSTITUTIONAL MANDATE FOR THE
BENEFIT OF THE LANDLESS FARMERS SO THAT THE LAND REFORM
LAW SHOULD BE CONSTRUED AND APPLIED IN ORDER TO ATTAIN THE
LEGISLATIVE INTENT OF RELIEVING THE FARMERS FROM THEIR
POVERTY AND BONDAGE. THE COURT OF APPEALS IGNORED THIS
CONSTITUTIONAL MANDATE TO FAVOR THE LANDLORD [EMRASON].
5] THE COURT OF APPEALS ISSUED A RESTRAINING
ORDER/INJUNCTION AGAINST THE CLEAR PROHIBITION IN THE CARL
(SEC. 55 RA 6657) AND SO FAR DEPARTED FROM THE USUAL COURSE
OF BY REFUSING TO GRANT THE PETITIONER FARMERS A HEARING
INSPITE OF THE PROCEDURE PRESCRIBED BY RA 7902 (SEC. 1). 17
In G.R. No. 131624, the DAR ascribes the following errors on the part
of the Court of Appeals:
I.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT

THE MUNICIPALITY OF DASMARIÑAS, CAVITE, WAS AUTHORIZED,
UNDER THE LOCAL AUTONOMY ACT, TO CLASSIFY AND/OR RECLASSIFY
LANDS CONSIDERING THAT WHAT WAS CONFERRED THEREUNDER
WAS ONLY ZONING AUTHORITY, THUS, RENDER THE EXERCISE
THEREOF BY THE MUNICIPAL COUNCIL OF DASMARIÑAS, CAVITE,
ULTRA VIRES;
II.
EVEN ASSUMING, IN GRATIA ARGUMENTI, THAT THE AUTHORITY TO

CLASSIFY AND RECLASSIFY LANDS IS POSSESSED BY MUNICIPAL
CORPORATIONS, STILL THE HONORABLE COURT OF APPEALS ERRED
WHEN IT CONSIDERED THE ALLEGED PASSAGE OF ORDINANCE NO. 29-
A OF THE MUNICIPAL COUNCIL OF DASMARIÑAS, CAVITE, AS A VALID
MEASURE RECLASSIFYING SUBJECT AGRICULTURAL LAND TO NON-
AGRICULTURAL USE CONSIDERING THAT THE SAID APPROVAL OF THE
SUBDIVISION, PER LETTER OF THE MUNICIPAL MAYOR, FAILED TO
COMPLY WITH EXISTING RULES AND REGULATIONS ON THE MATTER
AND, THEREFORE, NONCOMPLYING AND INEFFECTUAL; AND
III.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE
RULING OF THE HONORABLE COURT IN THE NATALIA REALTY CASE DUE
TO SUBSTANTIAL DISSIMILARITY IN FACTUAL SETTING AND MILIEU. 18
At the crux of the present controversy is the question of whether the

subject property could be placed under the CARP.
DAR asserts that the subject property could be compulsorily acquired
by the State from EMRASON and distributed to qualified farmer-beneficiaries
under the CARP since it was still agricultural land when the CARL became
effective on June 15, 1988. Ordinance Nos. 1 and 29-A, approved by the
Municipality of Dasmariñas on July 13, 1971 and July 9, 1972, respectively,
did not reclassify the subject property from agricultural to non-agricultural.
The power to reclassify lands is an inherent power of the National
Legislature under Section 9 of Commonwealth Act No. 141, otherwise known
as the Public Land Act, as amended, which, absent a specific delegation,
could not be exercised by any local government unit (LGU). The Local
Autonomy Act of 1959 — in effect when the Municipality of Dasmariñas
approved Ordinance Nos. 1 and 29-A — merely delegated to cities and
municipalities zoning authority, to be understood as the regulation of the
uses of property in accordance with the existing character of the land and
structures. It was only Section 20 of Republic Act No. 7160, otherwise known
as the Local Government Code of 1991, which extended to cities and
municipalities limited authority to reclassify agricultural lands. DHIETc
DAR also argues that even conceding that cities and municipalities
were already authorized in 1972 to issue an ordinance reclassifying lands
from agricultural to non-agricultural, Ordinance No. 29-A of the Municipality
of Dasmariñas was not valid since it failed to comply with Section 3 of the
Local Autonomy Act of 1959, Section 16 (a) of Ordinance No. 1 of the
Municipality of Dasmariñas, and Administrative Order No. 152 dated
December 16, 1968, which all required review and approval of such an
ordinance by the National Planning Commission (NPC). Subsequent
developments further necessitated review and approval of Ordinance No. 29-
A by the Human Settlements Regulatory Commission (HSRC), which later
became the Housing and Land Use Regulatory Board (HLURB).
DAR further avers that the reliance by the Court of Appeals on Natalia
Realty, Inc. v. Department of Agrarian Reform 19 (Natalia Realty case) is
misplaced because the lands involved therein were converted from
agricultural to residential use by Presidential Proclamation No. 1637, issued
pursuant to the authority delegated to the President under Section 71, et
seq., of the Public Land Act. 20
Buklod adopts the foregoing arguments of DAR. In addition, it submits
that prior to Ordinance Nos. 1 and 29-A, there were already laws
implementing agrarian reform, particularly: (1) Republic Act No. 3844,
otherwise known as the Agricultural Land Reform Code, in effect since
August 8, 1963, and subsequently amended by Republic Act No. 6389 on
September 10, 1971, after which it became known as the Code of Agrarian
Reforms; and (2) Presidential Decree No. 27, otherwise known as the
Tenants Emancipation Decree, which took effect on November 19, 1972.
Agricultural land could not be converted for the purpose of evading land
reform for there were already laws granting farmer-tenants security of
tenure, protection from ejectment without just cause, and vested rights to
the land they work on.
Buklod contends that EMRASON failed to comply with Section 36 of the
Code of Agrarian Reforms, which provided that the conversion of land should
be implemented within one year, otherwise, the conversion is deemed in bad
faith. Given the failure of EMRASON to comply with many other requirements
for a valid conversion, the subject property has remained agricultural. Simply
put, no compliance means no conversion. In fact, Buklod points out, the
subject property is still declared as "agricultural" for real estate tax
purposes. Consequently, EMRASON is now estopped from insisting that the
subject property is actually "residential."
Furthermore, Buklod posits that land reform is a constitutional
mandate which should be given paramount consideration. Pursuant to said
constitutional mandate, the Legislature enacted the CARL. It is a basic legal
principle that a legislative statute prevails over a mere municipal ordinance.
Finally, Buklod questions the issuance by the Court of Appeals of a writ
of preliminary injunction enjoining the distribution of the subject property to
the farmer-beneficiaries in violation of Section 55 of the CARL; as well as the
refusal of the appellate court to hold a hearing despite Section 1 of Republic
Act No. 7902, 21 prescribing the procedure for reception of evidence before
the Court of Appeals. At such a hearing, Buklod intended to present evidence
that the subject property is actually agricultural and that Buklod members
have been working on said property for decades, qualifying them as farmer-
beneficiaries.
EMRASON, on the other hand, echoes the ruling of the Court of Appeals
that the subject property is exempt from CARP because it had already been
reclassified as residential with the approval of Ordinance No. 29-A by the
Municipality of Dasmariñas on July 9, 1972. EMRASON cites Ortigas & Co.,
Ltd. Partnership v. Feati Bank and Trust Co. 22 (Ortigas case) where this
Court ruled that a municipal council is empowered to adopt zoning and
subdivision ordinances or regulations under Section 3 of the Local Autonomy
Act of 1959. TaISEH
Still relying on the Ortigas case, EMRASON avows that the Municipality
of Dasmariñas, taking into account the conditions prevailing in the area,
could validly zone and reclassify the subject property in the exercise of its
police power in order to safeguard the health, safety, peace, good order, and
general welfare of the people in the locality. EMRASON describes the whole
area surrounding the subject property as residential subdivisions (i.e., Don
Gregorio, Metro Gate, Vine Village, and Cityland Greenbreeze 1 and 2
Subdivisions) and industrial estates (i.e., Reynolds Aluminum Philippines, Inc.
factory; NDC-Marubeni industrial complex, San Miguel Corporation-Monterey
cattle and piggery farm and slaughterhouse), traversed by national highways
(i.e., Emilio Aguinaldo National Highway, Trece Martirez, Puerto Azul Road,
and Governor's Drive). EMRASON mentions that on March 25, 1988, the
Sangguniang Panlalawigan of the Province of Cavite passed Resolution No.
105 which declared the area where subject property is located as "industrial-
residential-institutional mix."
EMRASON further maintains that Ordinance No. 29-A of the
Municipality of Dasmariñas is valid. Ordinance No. 29-A is complete in itself,
and there is no more need to comply with the alleged requisites which DAR
and Buklod are insisting upon. EMRASON quotes from Patalinghug v. Court of
Appeals 23 (Patalinghug case) that "once a local government has reclassified
an area as commercial, that determination for zoning purposes must
prevail."
EMRASON points out that Ordinance No. 29-A, reclassifying the subject
property, was approved by the Municipality of Dasmariñas on July 9, 1972.
Executive Order No. 648, otherwise known as the Charter of the Human
Settlements Regulatory Commission (HSRC Charter) — which conferred upon
the HSRC the power and duty to review, evaluate, and approve or
disapprove comprehensive land use and development plans and zoning
ordinances of LGUs — was issued only on February 7, 1981. The exercise by
HSRC of such power could not be applied retroactively to this case without
impairing vested rights of EMRASON. EMRASON disputes as well the absolute
necessity of submitting Ordinance No. 29-A to the NPC for approval. Based
on the language of Section 3 of the Local Autonomy Act of 1959, which used
the word "may," review by the NPC of the local planning and zoning
ordinances was merely permissive. EMRASON additionally posits that
Ordinance No. 1 of the Municipality of Dasmariñas simply required approval
by the NPC of the final plat or plan, map, or chart of the subdivision, and not
of the reclassification and/or conversion by the Municipality of the subject
property from agricultural to residential. As for Administrative Order No. 152
dated December 16, 1968, it was directed to and should have been complied
with by the city and municipal boards and councils. Thus, EMRASON should
not be made to suffer for the non-compliance by the Municipal Council of
Dasmariñas with said administrative order.
EMRASON likewise reasons that since the subject property was already
reclassified as residential with the mere approval of Ordinance No. 29-A by
the Municipality of Dasmariñas, then EMRASON did not have to immediately
undertake actual development of the subject property. Reclassification
and/or conversion of a parcel of land are different from the implementation
of the conversion.
EMRASON is resolute in its stance that the Court of Appeals correctly
applied the Natalia Realty case to the present case since both have similar
facts; the only difference being that the former involves a presidential fiat
while the latter concerns a legislative fiat.
EMRASON denies that the Buklod members are farmer-tenants of the
subject property. The subject property has no farmer-tenants because, as
the Court of Appeals observed, the property is unirrigated and not devoted
to any agricultural activity. The subject property was placed under the CARP
only to accommodate the farmer-tenants of the NDC property who were
displaced by the NDC-Marubeni Industrial Project. Moreover, the Buklod
members are still undergoing a screening process before the DAR-Region IV,
and are yet to be declared as qualified farmer-beneficiaries of the subject
property. Hence, Buklod members failed to establish they already have
vested right over the subject property.
EMRASON urges the Court not to consider issues belatedly raised by
Buklod. It may be recalled that Buklod intervened in CA-G.R. SP No. 40950
just before the Court of Appeals rendered judgment in said case. When the
appellate court promulgated its Decision on March 26, 1997 favoring
EMRASON, Buklod filed a Motion for Reconsideration of said judgment, to
which EMRASON, in turn, filed a Comment and Opposition. In its Reply to the
aforementioned Comment and Opposition of EMRASON, Buklod raised new
factual matters, specifically, that: (1) EMRASON has not even subdivided the
title to the subject property 27 years after its purported
reclassification/conversion; (2) EMRASON never obtained a development
permit nor mayor's permit to operate a business in Dasmariñas; and (3) the
farmer-tenants represented by Buklod have continuously cultivated the
subject property. There was no cogent or valid reason for the Court of
Appeals to allow Buklod to present evidence to substantiate the foregoing
allegations. The DAR Region IV Hearing Officer already conducted extensive
hearings during which the farmers were duly represented. Likewise, Buklod
raises for the first time in its Petition before this Court the argument that the
Tenants Emancipation Decree prescribes a procedure for conversion which
EMRASON failed to comply with. DECSIT
Lastly, EMRASON defends the issuance by the Court of Appeals of a

writ of preliminary injunction in CA-G.R. SP No. 40950. Section 55 of the
CARL is inapplicable to the case at bar because said provision only prohibits
the issuance by a court of a TRO or writ of preliminary injunction "against
the PARC or any of its duly authorized or designated agencies." As the Court
of Appeals declared, the PARC is a policy-formulating and coordinating body.
There is no indication whatsoever that the DAR Secretary was acting herein
as an agent of the PARC. The DAR Secretary issued the orders of acquisition
for the subject property in the exercise of his quasi-judicial powers as
department head.
The Court, after consideration of the issues and arguments in the
Petitions at bar, affirms the Court of Appeals and rules in favor of EMRASON.
CARP coverage limited to
agricultural land
Section 4, Chapter II of the CARL, as amended, 24 particularly defines
the coverage of the CARP, to wit:
SEC. 4. Scope. — The Comprehensive Agrarian Reform Law
of 1988 shall cover, regardless of tenurial arrangement and
commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 and Executive Order No. 229,
including other lands of the public domain suitable for agriculture:
Provided, That landholdings of landowners with a total area of five (5)
hectares and below shall not be covered for acquisition and
distribution to qualified beneficiaries.
More specifically, the following lands are covered by the CARP:
(a) All alienable and disposable lands of the public
domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands
shall be undertaken after the approval of this Act until
Congress, taking into account ecological, developmental and
equity considerations, shall have determined by law, the
specific limits of the public domain;
(b) All lands of the public domain in excess of the
specific limits as determined by Congress in the preceding
paragraph;
(c) All other lands owned by the Government devoted
to or suitable for agriculture; and
(d) All private lands devoted to or suitable for
agriculture regardless of the agricultural products
raised or that can be raised thereon.
A comprehensive inventory system in consonance with the
national land use plan shall be instituted by the Department of
Agrarian Reform (DAR), in accordance with the Local Government
Code, for the purpose of properly identifying and classifying
farmlands within one (1) year from effectivity of this Act, without
prejudice to the implementation of the land acquisition and
distribution." (Emphases supplied.)
Section 3 (c), Chapter I of the CARL further narrows down the definition
o f agricultural land that is subject to CARP to "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land."
The CARL took effect on June 15, 1988. To be exempt from the CARP,
the subject property should have already been reclassified as residential
prior to said date. HSDaTC
The Local Autonomy Act of 1959

The Local Autonomy Act of 1959, precursor of the Local Government
Code of 1991, provided:
SEC. 3. Additional powers of provincial boards, municipal
boards or city councils and municipal and regularly organized
municipal district councils. — . . .
xxx xxx xxx
Power to adopt zoning and planning ordinances. — Any

provision of law to the contrary notwithstanding, Municipal Boards or
City Councils in cities, and Municipal Councils in municipalities are
hereby authorized to adopt zoning and subdivision ordinances
or regulations for their respective cities and municipalities subject
to the approval of the City Mayor or Municipal Mayor, as the case may
be. Cities and municipalities may, however, consult the National
Planning Commission on matters pertaining to planning and
zoning. (Emphases supplied.)
Pursuant to the foregoing provision, the Municipal Council of
Dasmariñas approved Ordinance No. 1 on July 13, 1971, which laid down
the general subdivision regulations for the municipality; and Resolution No.
29-A on July 9, 1972, which approved the application for subdivision of the
subject property.
The Court observes that the OP, the Court of Appeals, and even the
parties themselves referred to Resolution No. 29-A as an ordinance.
Although it may not be its official designation, calling Resolution No. 29-A as
Ordinance No. 29-A is not completely inaccurate. In the Ortigas & Co. case,
the Court found it immaterial that the then Municipal Council of
Mandaluyong declared certain lots as part of the commercial and industrial
zone through a resolution, rather than an ordinance, because:
Section 3 of R.A. No. 2264, otherwise known as the Local
Autonomy Act, empowers a Municipal Council "to adopt zoning and
subdivision ordinances or regulations" for the municipality. Clearly,
the law does not restrict the exercise of the power through
an ordinance. Therefore, granting that Resolution No. 27 is not an
ordinance, it certainly is a regulatory measure within the
intendment or ambit of the word "regulation" under the
provision. As a matter of fact the same section declares that the
power exists "(A)ny provision of law to the contrary notwithstanding .
. . ." 25 (Emphases supplied.)
Zoning and reclassification
Section 3 (c), Chapter I of the CARL provides that a parcel of land
reclassified for non-agricultural uses prior to June 15, 1988 shall no longer
be considered agricultural land subject to CARP. The Court is now faced with
the question of whether Resolution No. 29-A of the Municipality of
Dasmariñas dated July 9, 1972, which approved the subdivision of the
subject property for residential purposes, had also reclassified the same
from agricultural to residential.
Zoning classification is an exercise by the local government of police
power, not the power of eminent domain. A zoning ordinance is defined as a
local city or municipal legislation which logically arranges, prescribes,
defines, and apportions a given political subdivision into specific land uses as
present and future projection of needs. 26
The Court gave a more extensive explanation of zoning in Pampanga
Bus Company, Inc. v. Municipality of Tarlac, 27 thus:
The appellant argues that Ordinance No. 1 is a zoning
ordinance which the Municipal Council is authorized to adopt.
McQuillin in his treaties on Municipal Corporations (Volume 8, 3rd ed.)
says: DEaCSA
Zoning is governmental regulation of the uses of land and

buildings according to districts or zones. It is comprehensive
where it is governed by a single plan for the entire municipality
and prevails throughout the municipality in accordance with
that plan. It is partial or limited where it is applicable only to a
certain part of the municipality or to certain uses. Fire limits,
height districts and building regulations are forms of partial or
limited zoning or use regulation that are antecedents of modern
comprehensive zoning. (pp. 11-12.)
The term "zoning," ordinarily used with the connotation of
comprehensive or general zoning, refers to governmental
regulation of the uses of land and buildings according to
districts or zones. This regulation must and does utilize
classification of uses within districts as well as classification of
districts, inasmuch as it manifestly is impossible to deal
specifically with each of the innumerable uses made of land and
buildings. Accordingly, (zoning has been defined as the
confining of certain classes of buildings and uses to certain
localities, areas, districts or zones.) It has been stated that
zoning is the regulation by districts of building development
and uses of property, and that the term "zoning" is not only
capable of this definition but has acquired a technical and
artificial meaning in accordance therewith. (Zoning is the
separation of the municipality into districts and the regulation
of buildings and structures within the districts so created, in
accordance with their construction, and nature and extent of
their use. It is a dedication of districts delimited to particular
uses designed to subserve the general welfare.) Numerous
other definitions of zoning more or less in accordance with
these have been given in the cases. (pp. 27-28.) 28
According to Section 1 (b) of Ordinance No. 1, "[s]ubdivision means the
division of a tract or parcel of land into two or more lots, sites or other
divisions for the purpose, whether immediate or future, o[f] a sale or building
development. It includes resubdivision, and when appropriate to the context,
relates to the process of subdividing as to the land of territory subdivided."
Subdivision ordinances or regulations such as Resolution No. 29-A, in relation
to Ordinance No. 1, constitute partial or limited zoning, for they are
applicable to a specific property in the city or municipality to be devoted for
a certain use.
Section 9 of the Public Land Act — cited by the DAR and Buklod as the
purported delegation by the National Legislature of the power to reclassify —
is immaterial to the instant cases. Said provision reads:
SEC. 9. For the purpose of their administration and
disposition, the lands of the public domain alienable or open to
disposition shall be classified, according to the use or purposes to
which such lands are destined, as follows:
(a) Agricultural;
(b) Residential, commercial, industrial, or for similar
productive purposes;
(c) Educational, charitable, or other similar purposes;
and
(d) Reservations for townsites and for public and
quasi-public uses.
The President, upon recommendation by the Secretary of
Agriculture and Natural Resources, shall from time to time make the
classifications provided for in this section, and may, at any time and
in a similar manner, transfer lands from one class to another.
(Emphasis supplied.) TCHcAE
The power delegated to the President under the aforequoted provision

of the Public Land Act is limited to the classification of lands of the public
domain that are alienable or open to disposition. It finds no application
in the present cases for the simple reason that the subject property involved
herein is no longer part of the public domain. The subject property is already
privately owned and accordingly covered by certificates of title.
The concept that concerns this Court in the instant cases is the
reclassification of agricultural lands. In Alarcon v. Court of Appeals, 29 the
Court had the occasion to define and distinguish reclassification from
conversion as follows:
Conversion is the act of changing the current use of a piece of
agricultural land into some other use as approved by the Department
of Agrarian Reform. Reclassification , on the other hand, is the act of
specifying how agricultural lands shall be utilized for non-agricultural
uses such as residential, industrial, commercial, as embodied in the
land use plan, subject to the requirements and procedure for land use
conversion. . . . . 30 (Italics supplied.)
Reclassification also includes the reversion of non-agricultural lands to
agricultural use. 31
Under the present Local Government Code, it is clear that the authority
to reclassify agricultural lands primarily resides in the sanggunian of the city
or municipality. Said provision reads in full:
Sec. 20. Reclassification of Lands. — (a) A city or
municipality may, through an ordinance passed by the
sanggunian after conducting public hearing 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 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) When 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. DASCIc
(e) Nothing in this Section shall be construed as

repealing, amending, or modifying in any manner the
provisions of R.A. No. 6657. (Emphases supplied.)
Prior to the Local Government Code of 1991, the Local Autonomy Act of
1959 was silent on the authority to reclassify agricultural lands. What the
earlier statute expressly granted to city and municipal boards and councils,
under Section 3 thereof, was the power to adopt zoning and subdivision
ordinances, and regulations.
DAR and Buklod insist that zoning is merely the regulation of land use
based on the existing character of the property and the structures
thereon; and that zoning is a lesser power compared to reclassification so
that the delegation of the former to the local government should not be
deemed to include the latter.
Such arguments are easily refuted by reference to the definitions of
zoning and reclassification earlier presented herein, which support a more
extensive concept of zoning than that which DAR and BUKLOD assert.
By virtue of a zoning ordinance, the local legislature may arrange,
prescribe, define, and apportion the land within its political jurisdiction into
specific uses based not only on the present, but also on the future
projection of needs. To limit zoning to the existing character of the property
and the structures thereon would completely negate the power of the local
legislature to plan land use in its city or municipality. Under such
circumstance, zoning would involve no planning at all, only the rubber-
stamping by the local legislature of the current use of the land.
Moreover, according to the definition of reclassification, the specified
non-agricultural use of the land must be embodied in a land use plan, and
the land use plan is enacted through a zoning ordinance. Thus, zoning and
planning ordinances take precedence over reclassification. The
reclassification of land use is dependent on the zoning and land use plan, not
the other way around.
It may, therefore, be reasonably presumed that when city and
municipal boards and councils approved an ordinance delineating an area or
district in their cities or municipalities as residential, commercial, or
industrial zone, pursuant to the power granted to them under Section 3 of
the Local Autonomy Act of 1959, they were, at the same time, reclassifying
any agricultural lands within the zone for non-agricultural use; hence,
ensuring the implementation of and compliance with their zoning
ordinances. The logic and practicality behind such a presumption is more
evident when considering the approval by local legislative bodies of
subdivision ordinances and regulations. The approval by city and municipal
boards and councils of an application for subdivision through an ordinance
should already be understood to include approval of the reclassification of
the land, covered by said application, from agricultural to the intended non-
agricultural use. Otherwise, the approval of the subdivision application would
serve no practical effect; for as long as the property covered by the
application remains classified as agricultural, it could not be subdivided and
developed for non-agricultural use.
A liberal interpretation of the zoning power of city and municipal
boards and councils, as to include the power to accordingly reclassify the
lands within the zones, would be in accord with the avowed legislative intent
behind the Local Autonomy Act of 1959, which was to increase the autonomy
of local governments. Section 12 of the Local Autonomy Act of 1959 itself
laid down rules for interpretation of the said statute:
SEC. 12. Rules for the interpretation of the Local Autonomy
Act. —
1. Implied power of a province, a city or municipality shall
be liberally construed in its favor. Any fair and reasonable doubt as
to the existence of the power should be interpreted in favor of the
local government and it shall be presumed to exist. DaTISc
2. T h e general welfare clause shall be liberally

interpreted in case of doubt so as to give more power to local
governments in promoting the economic condition, social welfare and
material progress of the people in the community.
3. Vested rights existing at the time of the promulgation of
this law arising out of a contract between a province, city or
municipality on one hand and a third party on the other, should be
governed by the original terms and provisions of the same, and in no
case would this act infringe existing rights.
Moreover, the regulation by local legislatures of land use in their
respective territorial jurisdiction through zoning and reclassification is an
exercise of police power. In Binay v. Domingo, 32 the Court recognized that
police power need not always be expressly delegated, it may also be
inferred:
The police power is a governmental function, an inherent
attribute of sovereignty, which was born with civilized government. It
is founded largely on the maxims, "Sic utere tuo et alienum non
laedas" and "Salus populi est suprema lex." Its fundamental purpose
is securing the general welfare, comfort and convenience of the
people.
Police power is inherent in the state but not in municipal
corporations (Balacuit v. CFI of Agusan del Norte, 163 SCRA 182).
Before a municipal corporation may exercise such power, there must
be a valid delegation of such power by the legislature which is the
repository of the inherent powers of the State. A valid delegation of
police power may arise from express delegation, or be
inferred from the mere fact of the creation of the municipal
corporation; and as a general rule, municipal corporations
may exercise police powers within the fair intent and purpose
of their creation which are reasonably proper to give effect to
the powers expressly granted, and statutes conferring
powers on public corporations have been construed as
empowering them to do the things essential to the enjoyment
of life and desirable for the safety of the people. (62 C.J.S., p.
277). The so-called inferred police powers of such corporations are as
much delegated powers as are those conferred in express terms, the
inference of their delegation growing out of the fact of the creation of
the municipal corporation and the additional fact that the corporation
can only fully accomplish the objects of its creation by exercising
such powers. (Crawfordsville vs. Braden, 28 N.E. 849). Furthermore,
municipal corporations, as governmental agencies, must have
such measures of the power as are necessary to enable them
to perform their governmental functions. The power is a
continuing one, founded on public necessity. (62 C.J.S. p. 273) Thus,
not only does the State effectuate its purposes through the exercise
of the police power but the municipality does also. (U.S. v. Salaveria ,
39 Phil. 102).
Municipal governments exercise this power under the general
welfare clause: pursuant thereto they are clothed with authority to
"enact such ordinances and issue such regulations as may be
necessary to carry out and discharge the responsibilities conferred
upon it by law, and such as shall be necessary and proper to provide
for the health, safety, comfort and convenience, maintain peace and
order, improve public morals, promote the prosperity and general
welfare of the municipality and the inhabitants thereof, and insure the
protection of property therein." (Sections 91, 149, 177 and 208, BP
337). And under Section 7 of BP 337, "every local government unit
shall exercise the powers expressly granted, those necessarily
implied therefrom, as well as powers necessary and proper for
governance such as to promote health and safety, enhance
prosperity, improve morals, and maintain peace and order in the local
government unit, and preserve the comfort and convenience of the
inhabitants therein."
Police power is the power to prescribe regulations to promote
the health, morals, peace, education, good order or safety and
general welfare of the people. It is the most essential, insistent, and
illimitable of powers. In a sense it is the greatest and most powerful
attribute of the government. It is elastic and must be responsive to
various social conditions. (Sangalang, et al. vs. IAC, 176 SCRA 719).
On it depends the security of social order, the life and health of the
citizen, the comfort of an existence in a thickly populated community,
the enjoyment of private and social life, and the beneficial use of
property, and it has been said to be the very foundation on which our
social system rests. (16 C.J.S., p. 896) However, it is not confined
within narrow circumstances of precedents resting on past
conditions; it must follow the legal progress of a democratic way of
life. (Sangalang, et al. vs. IAC, supra).
xxx xxx xxx
In the case of Sangalang vs. IAC, supra, We ruled that police

power is not capable of an exact definition but has been, purposely,
veiled in general terms to underscore its all-comprehensiveness. Its
scope, over-expanding to meet the exigencies of the times, even to
anticipate the future where it could be done, provides enough room
for an efficient and flexible response to conditions and circumstances
thus assuring the greatest benefits. HDCAaS
The police power of a municipal corporation is broad, and has

been said to be commensurate with, but not to exceed, the duty to
provide for the real needs of the people in their health, safety,
comfort, and convenience as consistently as may be with private
rights. It extends to all the great public needs, and, in a broad sense
includes all legislation and almost every function of the municipal
government. It covers a wide scope of subjects, and, while it is
especially occupied with whatever affects the peace, security, health,
morals, and general welfare of the community, it is not limited
thereto, but is broadened to deal with conditions which exists so as to
bring out of them the greatest welfare of the people by promoting
public convenience or general prosperity, and to everything
worthwhile for the preservation of comfort of the inhabitants of the
corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to
attempt to frame any definition which shall absolutely indicate the
limits of police power. 33 (Emphases supplied.)
Based on the preceding discussion, it cannot be said that the power to
reclassify agricultural land was first delegated to the city and municipal
legislative bodies under Section 26 of the Local Government Code of 1991.
Said provision only articulates a power of local legislatures, which,
previously, had only been implied or inferred.
Compliance with other requirements
or conditions
Resolution No. 29-A is a valid ordinance, which, upon its approval on
July 9, 1972, immediately effected the zoning and reclassifying of the subject
property for residential use. It need not comply with any of the requirements
or conditions which DAR and Buklod are insisting upon.
DAR and Buklod aver that Resolution No. 29-A was not reviewed and
approved by the NPC, in violation of the line in Section 3 of the Local
Autonomy Act of 1959, stating that "[c]ities and municipalities may,
however, consult the National Planning Commission on matters pertaining to
planning and zoning." Consideration must be given, however, to the use of
the word "may" in the said sentence. Where the provision reads "may," this
word shows that it is not mandatory but discretionary. It is an auxiliary verb
indicating liberty, opportunity, permission and possibility. 34 The use of the
word "may" in a statute denotes that it is directory in nature and generally
permissive only. The "plain meaning rule" or verba legis in statutory
construction is thus applicable in this case. Where the words of a statute are
clear, plain, and free from ambiguity, it must be given its literal meaning and
applied without attempted interpretation. 35 Since consultation with the NPC
was merely discretionary, then there were only two mandatory requirements
for a valid zoning or subdivision ordinance or regulation under Section 3 of
the Local Autonomy Act of 1959, namely, that (1) the ordinance or
regulation be adopted by the city or municipal board or council; and (2) it be
approved by the city or municipal mayor, both of which were complied with
by Resolution No. 29-A.
Section 16 (a) of Ordinance No. 1 of the Municipality of Dasmariñas
likewise mentions the NPC, to wit:

a. Final plat of subdivision. — As essential requirements
before a subdivision is accepted for verification by the Bureau of
Lands, the final plat of the scheme of the subdivision must comply
with the provision of this ordinance. Application for plat approval
shall be submitted to the Municipal Mayor and shall be
forwarded to the National Planning Commission thru the
Highway District Engineer for comment and/or
recommendations, before action is taken by the Municipal
Council. The final approval of the plat shall be made by the Municipal
Mayor upon recommendation of the Municipal Council by means of a
resolution. (Emphasis supplied.)
The aforementioned provision of Ordinance No. 1 refers to the final
plat of the subdivision. The term plat includes "plat, plan, plot or replot." 36
It must be distinguished from the application for subdivision.
The Court concurs with the analysis of the Court of Appeals that
Resolution No. 29-A actually contains two resolutions. The first reads:
Resolved, as it is hereby Resolved to approve the application
for subdivision containing an area of Three Hundred Seventy-Two
Hectares (372) situated in barrio Bocal and Langkaan, named as
Travellers Life Homes. 37 (Emphasis supplied.)
It is manifest, even from just a plain reading of said resolution, that the
application for subdivision covering the subject property was categorically
and unconditionally approved by the Municipality of Dasmariñas. As a
consequence of such approval, the subject property is immediately deemed
zoned and reclassified as residential. SHAcID
Meanwhile, the second resolution in Resolution No. 29-A states:

Resolved, that this municipal ordinance regarding
subdivision regulations existing in this municipality shall be strictly
followed by the subdivision. 38 (Emphases supplied.)
Significantly, this second resolution already refers to a "subdivision,"
supporting the immediately executory nature of the first resolution. The
municipal ordinance which the subdivision must follow is Ordinance No. 1,
the general subdivision regulations of the Municipality of Dasmariñas. Most
provisions of Ordinance No. 1 laid down the minimum standards for the
streets, roadways, sidewalks, intersections, lots and blocks, and other
improvements in the subdivision, with which the final plat must comply or
conform. Irrefragably, the review of the final plat of the subdivision calls for a
certain level of technical expertise; hence, the directive to the Municipal
Mayor to refer the final plat to the NPC, through the Highway District
Engineer, for comments and recommendation, before the same is approved
by the Municipal Council, then the Mayor.
In relation to the preceding paragraph, Administrative Order No. 152
dated December 16, 1968 required city and municipal boards and councils to
submit proposed subdivision ordinances and plans or forward approved
subdivision ordinances to the NPC. The OP imposed such a requirement
because "it has come to the attention of [the] Office that the minimum
standards of such ordinances regarding design, servicing and streets, and
open spaces for parks and other recreational purposes are not being
complied with[.]" 39 Review by the NPC of the proposed subdivision plan was
for the purpose of determining "if it conforms with the subdivision
ordinance." 40 ACSaHc
It is apparent that Section 16 (a) of Ordinance No. 1 and Administrative

Ordinance No. 152 contained the same directive: that the final plat of the
subdivision be reviewed by the NPC to determine its conformity with the
minimum standards set in the subdivision ordinance of the municipality. A
closer scrutiny will reveal that Section 16 (a) of Ordinance No. 1 and
Administrative Order No. 152 related to the duties and responsibilities of
local government and NPC officials as regards the final plat of the
subdivision. There is no evidence to establish that the concerned public
officers herein did not follow the review process for the final plat as provided
in Section 16 (a) of Ordinance No. 1 and Administrative Order No. 152 before
approving the same. Under Section 3 (m), Rule 131 of the Rules of Court,
there is a presumption that official duty has been regularly performed. Thus,
in the absence of evidence to the contrary, there is a presumption that
public officers performed their official duties regularly and legally and in
compliance with applicable laws, in good faith, and in the exercise of sound
judgment. 41 And — just as the Court of Appeals observed — even if it is
established that the accountable public officials failed to comply with their
duties and responsibilities under Section 16 (a) of Ordinance No. 1 and
Administrative Order No. 152, it would be contrary to the fundamental
precepts of fair play to make EMRASON bear the consequences of such non-
compliance.
Although the two resolutions in Resolution No. 29-A may be related to
the same subdivision, they are independent and separate. Non-compliance
with the second resolution may result in the delay or discontinuance of
subdivision development, or even the imposition of the penalties 42 provided
in Ordinance No. 1, but not the annulment or reversal of the first resolution
and its consequences.
The Court again agrees with the Court of Appeals that Resolution No.
29-A need not be subjected to review and approval by the HSRC/HLURB.
Resolution No. 29-A was approved by the Municipality of Dasmariñas on July
9, 1972, at which time, there was even no HSRC/HLURB to speak of.
The earliest predecessor of the HSRC, the Task Force on Human
Settlements, was created through Executive Order No. 419 more than a year
later on September 19, 1973. And even then, the Task Force had no power
to review and approve zoning and subdivision ordinances and regulations.
It was only on August 9, 1978, with the issuance of Letter of
Instructions No. 729, that local governments were required to submit their
existing land use plans, zoning ordinances, enforcement systems, and
procedures to the Ministry of Human Settlements for review and ratification.
The HSRC was eventually established on February 7, 1981. Section 5
(b) of the HSRC Charter 43 contained the explicit mandate for the HSRC to:
b. Review, evaluate and approve or disapprove
comprehensive land use development plans and zoning
ordinances of local government; and the zoning component of
civil works and infrastructure projects of national, regional and local
governments; subdivisions, condominiums or estate development
projects including industrial estates, of both the public and private
sectors and urban renewal plans, programs and projects: Provided,
that the land use Development Plans and Zoning Ordinances of Local
Governments herein subject to review, evaluation and approval of the
commission shall respect the classification of public lands for forest
purposes as certified by the Ministry of Natural Resources: Provided,
further, that the classification of specific alienable and disposable
lands by the Bureau of Lands shall be in accordance with the relevant
zoning ordinance of Local government where it exists; and provided,
finally, that in cities and municipalities where there are as yet no
zoning ordinances, the Bureau of Lands may dispose of specific
alienable and disposable lands in accordance with its own
classification scheme subject to the condition that the classification of
these lands may be subsequently change by the local governments in
accordance with their particular zoning ordinances which may be
promulgated later. (Emphases supplied.) ASEIDH
Neither the Ministry of Human Settlements nor the HSRC, however,

could have exercised its power of review retroactively absent an express
provision to that effect in Letter of Instructions No. 729 or the HSRC Charter,
respectively. A sound canon of statutory construction is that a statute
operates prospectively only and never retroactively, unless the legislative
intent to the contrary is made manifest either by the express terms of the
statute or by necessary implication. Article 4 of the Civil Code provides that:
"Laws shall have no retroactive effect, unless the contrary is provided."
Hence, in order that a law may have retroactive effect, it is necessary that
an express provision to this effect be made in the law, otherwise nothing
should be understood which is not embodied in the law. Furthermore, it must
be borne in mind that a law is a rule established to guide our actions without
no binding effect until it is enacted, wherefore, it has no application to past
times but only to future time, and that is why it is said that the law looks to
the future only and has no retroactive effect unless the legislator may have
formally given that effect to some legal provisions. 44
Subsequent zoning ordinances
Still by the authority vested upon it by Section 3 of the Local Autonomy
Act, the Sangguniang Bayan of Dasmariñas subsequently enacted a
Comprehensive Zoning Ordinance, ratified by the HLURB under Board
Resolution No. 42-A-3 dated February 11, 1981 (1981 Comprehensive
Zoning Ordinance of Dasmariñas). Upon the request of the DAR, Engr.
Alfredo Gil M. Tan, HLURB Regional Technical Coordinator, issued a
certification 45 dated September 10, 1992 stating that per the 1981
Comprehensive Zoning Ordinance of Dasmariñas, the subject property was
within the agricultural zone. Does this mean that the subject property
reverted from residential to agricultural classification?
The Court answers in the negative. While the subject property may be
physically located within an agricultural zone under the 1981 Comprehensive
Zoning Ordinance of Dasmariñas, said property retained its residential
classification.
According to Section 17, the Repealing Clause, of the 1981
Comprehensive Zoning Ordinance of Dasmariñas: "All other ordinances, rules
or regulations in conflict with the provision of this Ordinance are hereby
repealed: Provided, that rights that have vested before the effectivity
of this Ordinance shall not be impaired."
In Ayog v. Cusi, Jr. , 46 the Court expounded on vested right and its
protection:
That vested right has to be respected. It could not be abrogated
by the new Constitution. Section 2, Article XIII of the 1935
Constitution allows private corporations to purchase public
agricultural lands not exceeding one thousand and twenty-four
hectares. Petitioners' prohibition action is barred by the doctrine of
vested rights in constitutional law.
"A right is vested when the right to enjoyment has
become the property of some particular person or persons as a
present interest" (16 C.J.S. 1173). It is "the privilege to enjoy
property legally vested, to enforce contracts, and enjoy the
rights of property conferred by the existing law" (12 C.J.S. 955,
Note 46, No. 6) or "some right or interest in property which has
become fixed and established and is no longer open to doubt or
controversy" (Downs vs. Blount, 170 Fed. 15, 20, cited in
Balboa vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested
rights. "A state may not impair vested rights by legislative
enactment, by the enactment or by the subsequent repeal of
a municipal ordinance, or by a change in the constitution of
the State, except in a legitimate exercise of the police power"
(16 C.J.S. 1177-78). AcTDaH
It has been observed that, generally, the term "vested right"

expresses the concept of present fixed interest, which in right reason
and natural justice should be protected against arbitrary State action,
or an innately just and imperative right which an enlightened free
society, sensitive to inherent and irrefragable individual rights, cannot
deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound
Lines, Inc. vs. Rosenthal, 192 Atl. 2nd 587). 47 (Emphasis supplied.)
It is true that protection of vested rights is not absolute and must yield
to the exercise of police power:
A law enacted in the exercise of police power to regulate or
govern certain activities or transactions could be given retroactive
effect and may reasonably impair vested rights or contracts. Police
power legislation is applicable not only to future contracts, but
equally to those already in existence. Non-impairment of contracts or
vested rights clauses will have to yield to the superior and legitimate
exercise by the State of police power to promote the health, morals,
peace, education, good order, safety, and general welfare of the
people. . . . . 48

Nonetheless, the Sangguniang Bayan of Dasmariñas in this case, in its
exercise of police power through the enactment of the 1981 Comprehensive
Zoning Ordinance, itself abided by the general rule and included in the very
same ordinance an express commitment to honor rights that had already
vested under previous ordinances, rules, and regulations. EMRASON
acquired the vested right to use and develop the subject property as a
residential subdivision on July 9, 1972 with the approval of Resolution No.
29-A by the Municipality of Dasmariñas. Such right cannot be impaired by
the subsequent enactment of the 1981 Comprehensive Zoning Ordinance of
Dasmariñas, in which the subject property was included in an agricultural
zone. Hence, the Municipal Mayor of Dasmariñas had been continuously and
consistently recognizing the subject property as a residential subdivision. 49
Incidentally, EMRASON mentions Resolution No. 105, Defining and
Declaring the Boundaries of Industrial and Residential Land Use Plan in the
Municipalities of Imus and Parts of Dasmariñas, Carmona, Gen. Mariano
Alvarez, Gen. Trias, Silang, Tanza, Naic, Rosario, and Trece Martires City,
Province of Cavite, approved by the Sangguniang Panlalawigan of Cavite on
March 25, 1988. The Sangguniang Panlalawigan determined that "the lands
extending from the said designated industrial areas would have greater
economic value for residential and institutional uses, and would serve the
interest and welfare for the greatest good of the greatest number of people."
50 Resolution No. 105, approved by the HLURB in 1990, partly reads:
Tracts of land in the Municipality of Carmona from the People's

Technology Complex to parts of the Municipality of Silang, parts of
the Municipalities of Dasmariñas, General Trias, Trece Martires
City, Municipalities of Tanza and Naic forming the strip of land
traversed by the Puerto Azul Road extending two kilometers more or
less from each side of the road which are hereby declared as
industrial-residential-institutional mix. 51 (Emphases supplied.)
There is no question that the subject property is located within the
afore-described area. And even though Resolution No. 105 has no direct
bearing on the classification of the subject property prior to the CARL — it
taking effect only in 1990 after being approved by the HLURB — it is a
confirmation that at present, the subject property and its surrounding areas
are deemed by the Province of Cavite better suited and prioritized for
industrial and residential development, than agricultural purposes.
CARP exemption
The Court reiterates that since July 9, 1972, upon approval of
Resolution No. 29-A by the Municipality of Dasmariñas, the subject property
had been reclassified from agricultural to residential. The tax declarations
covering the subject property, classifying the same as agricultural, cannot
prevail over Resolution No. 29-A. The following pronouncements of the Court
in the Patalinghug case are of particular relevance herein:
The reversal by the Court of Appeals of the trial court's decision
was based on Tepoot's building being declared for taxation purposes
as residential. It is our considered view, however, that a tax
declaration is not conclusive of the nature of the property for
zoning purposes. A property may have been declared by its owner
as residential for real estate taxation purposes but it may well be
within a commercial zone. A discrepancy may thus exist in the
determination of the nature of property for real estate taxation
purposes vis-à-vis the determination of a property for zoning
purposes.
xxx xxx xxx
The trial court's determination that Mr. Tepoot's building is

commercial and, therefore, Sec. 8 is inapplicable, is strengthened by
the fact that the Sangguniang Panlungsod has declared the
questioned area as commercial or C-2. Consequently, even if Tepoot's
building was declared for taxation purposes as residential, once a
local government has reclassified an area as commercial, that
determination for zoning purposes must prevail. While the
commercial character of the questioned vicinity has been declared
thru the ordinance, private respondents have failed to present
convincing arguments to substantiate their claim that Cabaguio
Avenue, where the funeral parlor was constructed, was still a
residential zone. Unquestionably, the operation of a funeral parlor
constitutes a "commercial purpose," as gleaned from Ordinance No.
363. 52 (Emphases supplied.) aECSHI
Since the subject property had been reclassified as residential land by

virtue of Resolution No. 29-A dated July 9, 1972, it is no longer agricultural
land by the time the CARL took effect on June 15, 1988 and is, therefore,
exempt from the CARP.
This is not the first time that the Court made such a ruling.
In the Natalia Realty case, Presidential Proclamation No. 1637 dated
April 18, 1979 set aside land in the Municipalities of Antipolo, San Mateo,
and Montalban, Province of Rizal, as townsite areas. The properties owned
by Natalia Realty, Inc. (Natalia properties) were situated within the areas
proclaimed as townsite reservation. The developer of the Natalia properties
was granted the necessary clearances and permits by the HSRC for the
development of a subdivision in the area. Thus, the Natalia properties later
became the Antipolo Hills Subdivision. Following the effectivity of the CARL
on June 15, 1988, the DAR placed the undeveloped portions of the Antipolo
Hills Subdivision under the CARP. For having done so, the Court found that
the DAR committed grave abuse of discretion, thus:
Section 4 of R.A. 6657 provides that the CARL shall "cover,
regardless of tenurial arrangement and commodity produced, all
public and private agricultural lands." As to what constitutes
"agricultural land," it is referred to as "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land." The deliberations of the
Constitutional Commission confirm this limitation. "Agricultural lands"
are only those lands which are "arable and suitable agricultural lands"
and "do not include commercial, industrial and residential lands."
Based on the foregoing, it is clear that the undeveloped
portions of the Antipolo Hills Subdivision cannot in any language be
considered as "agricultural lands." These lots were intended for
residential use. They ceased to be agricultural lands upon
approval of their inclusion in the Lungsod Silangan
Reservation. Even today, the areas in question continue to be
developed as a low-cost housing subdivision, albeit at a snail's pace. .
. . The enormity of the resources needed for developing a
subdivision may have delayed its completion but this does
not detract from the fact that these lands are still residential
lands and outside the ambit of the CARL.
Indeed, lands not devoted to agricultural activity are
outside the coverage of CARL. These include lands previously
converted to non-agricultural uses prior to the effectivity of
CARL by government agencies other than respondent DAR. In
its Revised Rules and Regulations Governing Conversion of Private
Agricultural Lands to Non-Agricultural Uses, DAR itself defined
"agricultural land" thus —
". . . Agricultural land refers to those devoted to
agricultural activity as defined in R.A. 6657 and not classified as
mineral or forest by the Department of Environment and
Natural Resources (DENR) and its predecessor agencies, and
not classified in town plans and zoning ordinances as approved
by the Housing and Land Use Regulatory Board (HLURB) and its
preceding competent authorities prior to 15 June 1988 for
residential, commercial or industrial use."
Since the NATALIA lands were converted prior to 15 June 1988,
respondent DAR is bound by such conversion. It was therefore error to
include the undeveloped portions of the Antipolo Hills Subdivision
within, the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a
query by the Secretary of Agrarian Reform, noted in an Opinion that
lands covered by Presidential Proclamation No. 1637, inter alia, of
which the NATALIA lands are part, having been reserved for townsite
purposes "to be developed as human settlements by the proper land
and housing agency," are "not deemed 'agricultural lands' within the
meaning and intent of Section 3 (c) of R.A. No. 6657." Not being
deemed "agricultural lands," they are outside the coverage of CARL.
53 (Emphases supplied.)
That the land in the Natalia Realty case was reclassified as residential
by a presidential proclamation, while the subject property herein was
reclassified as residential by a local ordinance, will not preclude the
application of the ruling of this Court in the former to the latter. The
operative fact that places a parcel of land beyond the ambit of the CARL is
its valid reclassification from agricultural to non-agricultural prior to the
effectivity of the CARL on June 15, 1988, not by how or whose authority it
was reclassified.
In Pasong Bayabas Farmers Association, Inc. v. Court of Appeals 54
(Pasong Bayabas case), the Court made the following findings: CaAcSE
Under Section 3(c) of Rep. Act No. 6657, agricultural lands refer
to lands devoted to agriculture as conferred in the said law and not
classified as industrial land. Agricultural lands are only those lands
which are arable or suitable lands that do not include commercial,
industrial and residential lands. Section 4(e) of the law provides that
it covers all private lands devoted to or suitable for agriculture
regardless of the agricultural products raised or that can be raised
thereon. Rep. Act No. 6657 took effect only on June 15, 1988. But
long before the law tools effect, the property subject of the
suit had already been reclassified and converted from
agricultural to non-agricultural or residential land by the
following administrative agencies: (a) the Bureau of Lands, when
it approved the subdivision plan of the property consisting of 728
subdivision lots; (b) the National Planning Commission which
approved the subdivision plan subdivided by the LDC/CAI for the
development of the property into a low-cost housing project; (c) the
Municipal Council of Carmona, Cavite, when it approved
Kapasiyahang Blg. 30 on May 30, 1976; (d) Agrarian Reform
Minister Conrado F. Estrella, on July 3, 1979, when he granted the
application of the respondent for the development of the Hakone
Housing Project with an area of 35.80 hectares upon the
recommendation of the Agrarian Reform Team, Regional Director of
Region IV, which found, after verification and investigation, that the
property was not covered by P.D. No. 27, it being untenanted and not
devoted to the production of palay/or corn and that the property was
suitable for conversion to residential subdivision; (e) by the Ministry of
Local Government and Community Development; (f) the Human
Settlements Regulatory Commission which issued a location
clearance, development permit, Certificate of Inspection and License
to Sell to the LDC/private respondent; and, (g) the Housing and Land
Use Regulatory Board which also issued to the respondent CAI/LDC a
license to sell the subdivision lots. 55 (Emphases supplied.)
Noticeably, there were several government agencies which reclassified
and converted the property from agricultural to non-agricultural in the
Pasong Bayabas case . The CARL though does not specify which specific
government agency should have done the reclassification. To be exempt
from CARP, all that is needed is one valid reclassification of the land from
agricultural to non-agricultural by a duly authorized government agency
before June 15, 1988, when the CARL took effect. All similar actions as
regards the land subsequently rendered by other government agencies shall
merely serve as confirmation of the reclassification. The Court actually
recognized in the Pasong Bayabas case the power of the local government to
convert or reclassify lands through a zoning ordinance:
Section 3 of Rep. Act No. 2264, amending the Local
Government Code, specifically empowers municipal and/or
city councils to adopt zoning and subdivision ordinances or
regulations in consultation with the National Planning
Commission. A zoning ordinance prescribes, defines, and apportions
a given political subdivision into specific land uses as present and
future projection of needs. The power of the local government to
convert or reclassify lands to residential lands to non-
agricultural lands reclassified is not subject to the approval of
the Department of Agrarian Reform. Section 65 of Rep. Act No.
6657 relied upon by the petitioner applies only to applications by the
landlord or the beneficiary for the conversion of lands previously
placed under the agrarian reform law after the lapse of five years
from its award. It does not apply to agricultural lands already
converted as residential lands prior to the passage of Rep. Act No.
6657. 56 (Emphases supplied.)
At the very beginning of Junio v. Garilao , 57 the Court already declared
that:
Lands already classified and identified as commercial, industrial
or residential before June 15, 1988 — the date of effectivity of the
Comprehensive Agrarian Reform Law (CARL) — are outside the
coverage of this law. Therefore, they no longer need any conversion
clearance from the Department of Agrarian Reform (DAR). 58
The Court then proceeded to uphold the authority of the City Council of
Bacolod to reclassify as residential a parcel of land through Resolution No.
5153-A, series of 1976. The reclassification was later affirmed by the HSRC.
Resultantly, the Court sustained the DAR Order dated September 13, 1994,
exempting the same parcel of land from CARP Coverage.
The writ of preliminary injunction
Any objection of Buklod against the issuance by the Court of Appeals of
a writ of preliminary injunction, enjoining then DAR Secretary Garilao and
Deputy Executive Secretary Corona from implementing the OP Decision of
February 7, 1996 and Resolution of May 14, 1996 during the pendency of
CA-G.R. SP No. 40950, had been rendered moot and academic when the
appellate court already promulgated its Decision in said case on March 26,
1997 which made the injunction permanent. As the Court held in Kho v.
Court of Appeals: 59
We cannot likewise overlook the decision of the trial court in
the case for final injunction and damages. The dispositive portion of
said decision held that the petitioner does not have trademark rights
on the name and container of the beauty cream product. The said
decision on the merits of the trial court rendered the issuance of the
writ of a preliminary injunction moot and academic notwithstanding
the fact that the same has been appealed in the Court of Appeals.
This is supported by our ruling in La Vista Association, Inc. v.
Court of Appeals, to wit:
Considering that preliminary injunction is a provisional
remedy which may be granted at any time after the
commencement of the action and before judgment when it is
established that the plaintiff is entitled to the relief demanded
and only when his complaint shows facts entitling such reliefs . .
. and it appearing that the trial court had already granted the
issuance of a final injunction in favor of petitioner in its decision
rendered after trial on the merits . . . the Court resolved to
Dismiss the instant petition having been rendered moot and
academic. An injunction issued by the trial court after it has
already made a clear pronouncement as to the plaintiff's right
thereto, that is, after the same issue has been decided on the
merits, the trial court having appreciated the evidence
presented, is proper, notwithstanding the fact that the decision
rendered is not yet final . . . . Being an ancillary remedy, the
proceedings for preliminary injunction cannot stand separately
or proceed independently of the decision rendered on the merit
of the main case for injunction. The merit of the main case
having been already determined in favor of the applicant, the
preliminary determination of its non-existence ceases to have
any force and effect. (italics supplied)
La Vista categorically pronounced that the issuance of a final
injunction renders any question on the preliminary injunctive order
moot and academic despite the fact that the decision granting a final
injunction is pending appeal. Conversely, a decision denying the
applicant-plaintiff's right to a final injunction, although appealed,
renders moot and academic any objection to the prior dissolution of a
writ of preliminary injunction. 60 HTAEIS
Issues belatedly raised

Buklod sought to intervene in CA-G.R. SP No. 40950, then pending
before the Court of Appeals, by filing a Manifestation and Omnibus Motion in
which it argued only two points: (1) the writ of preliminary injunction be
immediately dissolved for having been issued in violation of Section 55 of
the CARL; and (2) that the Petition for Review of EMRASON be dismissed for
being the wrong remedy.
It was only after the Court of Appeals rendered its Decision dated
March 26, 1997 unfavorable to both DAR and Buklod did Buklod raise in its
Motion for Reconsideration several other issues, both factual and legal, 61
directly assailing the exemption of the subject property from the CARP. The
Court of Appeals refused to consider said issues because they were raised by
Buklod for the first time in its Motion for Reconsideration.
Buklod persistently raises the same issues before this Court, and the
Court, once more, refuses to take cognizance of the same.
As a rule, no issue may be raised on appeal unless it has been brought
before the lower tribunal for its consideration. Higher courts are precluded
from entertaining matters neither alleged in the pleadings nor raised during
the proceedings below, but ventilated for the first time only in a motion for
reconsideration or on appeal. 62 The issues were first raised only in the
Motion for Reconsideration of the Decision of the Court of Appeals, thus, it is
as if they were never duly raised in that court at all. Hence, this Court cannot
now, for the first time on appeal, entertain these issues, for to do so would
plainly violate the basic rule of fair play, justice and due process. The Court
reiterates and emphasizes the well-settled rule that an issue raised for the
first time on appeal and not raised timely in the proceedings in the lower
court is barred by estoppel. 63
Indeed, there are exceptions to the aforecited rule that no question
may be raised for the first time on appeal. Though not raised below, the
issue of lack of jurisdiction over the subject matter may be considered by the
reviewing court, as it may be raised at any stage. The said court may also
consider an issue not properly raised during trial when there is plain error.
Likewise, it may entertain such arguments when there are jurisprudential
developments affecting the issues, or when the issues raised present a
matter of public policy. 64 Buklod, however, did not allege, much less argue,
that its case falls under any of these exceptions.
Nonetheless, even when duly considered by this Court, the issues
belatedly raised by Buklod are without merit.
Contrary to the contention of Buklod, there is no necessity to carry out
the conversion of the subject property to a subdivision within one year, at
the risk of said property reverting to agricultural classification.
Section 36 (1) of the Agricultural Land Reform Code, in effect since
August 8, 1963, provided:
SEC. 36. Possession of Landholding; Exceptions. —
Notwithstanding any agreement as to the period or future surrender,
of the land, an agricultural lessee shall continue in the enjoyment and
possession of his landholding except when his dispossession has been
authorized by the Court in a judgment that is final and executory if
after due hearing it is shown that:
(1) The agricultural lessor-owner or a member of his
immediate family will personally cultivate the landholding or will
convert the landholding, if suitably located, into residential,
factory, hospital or school site or other useful non-agricultural
purposes: Provided, That the agricultural lessee shall be
entitled to disturbance compensation equivalent to five years
rental on his landholding in addition to his rights under Sections
twenty-five and thirty-four, except when the land owned and
leased by the agricultural lessor is not more than five hectares,
in which case instead of disturbance compensation the lessee
may be entitled to an advanced notice of at least one
agricultural year before ejectment proceedings are filed against
h i m : Provided, further, That should the landholder not
cultivate the land himself for three years or fail to
substantially carry out such conversion within one year
after the dispossession of the tenant, it shall be
presumed that he acted in bad faith and the tenant shall
have the right to demand possession of the land and
recover damages for any loss incurred by him because of
said dispossessions; . . . . (Emphasis supplied.) cDCSET
O n September 10, 1971, the Agricultural Land Reform Code was

amended and it came to be known as the Code of Agrarian Reforms. After its
amendment, Section 36 (1) stated:
(1) The landholding is declared by the department head
upon recommendation of the National Planning Commission to be
suited for residential, commercial, industrial or some other urban
purposes: Provided, That the agricultural lessee shall be entitled to
disturbance compensation equivalent to five times the average of the
gross harvests on his landholding during the last five preceding
calendar years.
At the time Resolution No. 29-A was enacted by the Municipality of
Dasmariñas on July 9, 1972, the Code of Agrarian Reforms was already in
effect. The amended Section 36 (1) thereof no longer contained the one-year
time frame within which conversion should be carried out.
More importantly, Section 36 (1) of the Code of Agrarian Reforms would
apply only if the land in question was subject of an agricultural leasehold, a
fact that was not established in the proceedings below. It may do well for the
Buklod members to remember that they filed their present Petition to seek
award of ownership over portions of the subject property as qualified farmer-
beneficiaries under the CARP; and not payment of disturbance compensation
as agricultural lessees under the Code of Agrarian Reforms. The insistence
by Buklod on the requisites under Section 36 (1) of the Agricultural Land
Reform Code/Code of Agrarian Reforms only serves to muddle the issues
rather than support its cause.
Buklod likewise invokes the vested rights of its members under the
Agricultural Land Reform Code/Code of Agrarian Reforms and the Tenants
Emancipation Decree, which preceded the CARP. Yet, for the Buklod
members to be entitled to any of the rights and benefits under the said laws,
it is incumbent upon them to prove first that they qualify as agricultural
lessees or farm workers of the subject property, as defined in Section 166
(2) 65 and (15) 66 of the Code of Agrarian Reforms; and/or they are tenant-
farmers of private agricultural lands primarily devoted to rice and corn,
under a system of share-crop or lease tenancy, and are members of a duly
recognized farmer's cooperative, as required by the Tenants Emancipation
Decree. None of these determinative facts were established by Buklod.
Buklod counters that it precisely moved for a hearing before the Court
of Appeals so that it could present evidence to prove such facts, but the
appellate court erroneously denied its motion.
The Court finds that the Court of Appeals did not err on this matter.
In the recent case of Office of the Ombudsman v. Sison, 67 the Court
expounded on the rules on intervention:
It is fundamental that the allowance or disallowance of a Motion
to Intervene is addressed to the sound discretion of the court. The
permissive tenor of the rules shows the intention to give to the court
the full measure of discretion in permitting or disallowing the
intervention, thus:
SECTION 1. Who may intervene. — A person who has
a legal interest in the matter in litigation, or in the success of
either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other
disposition of property in the custody of the court or of an
officer thereof may, with leave of court, be allowed to intervene
in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of
the rights of the original parties, and whether or not the
intervenor's rights may be fully protected in a separate
proceeding.
SECTION 2. Time to intervene. — The motion to
intervene may be filed at any time before rendition of
judgment by the trial court. A copy of the pleading-in-
intervention shall be attached to the motion and served on the
original parties. (Emphasis supplied.)
Simply, intervention is a procedure by which third persons, not
originally parties to the suit but claiming an interest in the subject
matter, come into the case in order to protect their right or interpose
their claim. Its main purpose is to settle in one action and by a single
judgment all conflicting claims of, or the whole controversy among,
the persons involved.
To warrant intervention under Rule 19 of the Rules of Court, two
requisites must concur: (1) the movant has a legal interest in the
matter in litigation; and (2) intervention must not unduly delay or
prejudice the adjudication of the rights of the parties, nor should the
claim of the intervenor be capable of being properly decided in a
separate proceeding. The interest, which entitles one to intervene,
must involve the matter in litigation and of such direct and immediate
character that the intervenor will either gain or lose by the direct
legal operation and effect of the judgment. 68 ITDHSE
To apply the rules strictly, the motion of Buklod to intervene was filed
too late. According to Section 2, Rule 19 of the Rules of Civil Procedure, "a
motion to intervene may be filed at any time before rendition of judgment
by the trial court." Judgment was already rendered in DARAB Case No. IV-Ca-
0084-92 (the petition of EMRASON to nullify the notices of acquisition over
the subject property), not only by the DAR Hearing Officer , who originally
heard the case, but also the DAR Secretary, and then the OP, on appeal.
Buklod only sought to intervene when the case was already before the
Court of Appeals. The appellate court, in the exercise of its discretion, still
allowed the intervention of Buklod in CA-G.R. SP No. 40950 only because it
was "not being in any way prejudicial to the interest of the original parties,
nor will such intervention change the factual legal complexion of
the case." 69 The intervention of Buklod challenged only the remedy
availed by EMRASON and the propriety of the preliminary injunction issued
by the Court of Appeals, which were directly and adequately addressed by
the appellate court in its Decision dated March 26, 1997.
The factual matters raised by Buklod in its Motion for Reconsideration
of the March 26, 1997 Decision of the Court of Appeals, and which it sought
to prove by evidence, inevitably changes "the factual legal complexion of
the case." The allegations of Buklod that its members are tenant-farmers of
the subject property who acquired vested rights under previous agrarian
reform laws, go against the findings of the DAR Region IV Hearing Officer,
adopted by the DAR Secretary, the OP, and Court of Appeals, that the subject
property was being acquired under the CARP for distribution to the tenant-
farmers of the neighboring NDC property, after a determination that the
latter property was insufficient for the needs of both the NDC-Marubeni
industrial estate and the tenant-farmers.
Furthermore, these new claims of Buklod are beyond the appellate
jurisdiction of the Court of Appeals, being within the primary jurisdiction of
the DAR. As Section 50 of the CARL, as amended, reads:
SEC. 50. Quasi-Judicial Powers of the DAR. — The DAR is
hereby vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive original jurisdiction
over all matters involving the implementation of agrarian reform,
except those falling under the exclusive jurisdiction of the
Department of Agriculture (DA) and the Department of Environment
and Natural Resources (DENR).
In fact, records reveal that Buklod already sought remedy from the
DARAB. DARAB Case No. IV-CA-0261, entitled Buklod nang Magbubukid sa
Lupaing Ramos, rep. by Edgardo Mendoza, et al. v. E.M. Ramos and Sons,
Inc., et al., was pending at about the same time as DARAB Case No. IV-Ca-
0084-92, the petition of EMRASON for nullification of the notices of
acquisition covering the subject property. These two cases were initially
consolidated before the DARAB Region IV. The DARAB Region IV eventually
dismissed DARAB Case No. IV-Ca-0084-92 and referred the same to the DAR
Region IV Office, which had jurisdiction over the case. Records failed to
reveal the outcome of DARAB Case No. IV-CA-0261.
On a final note, this Court has stressed more than once that social
justice — or any justice for that matter — is for the deserving, whether he be
a millionaire in his mansion or a pauper in his hovel. It is true that, in case of
reasonable doubt, the Court is called upon to tilt the balance in favor of the
poor to whom the Constitution fittingly extends its sympathy and
compassion. But never is it justified to give preference to the poor simply
because they are poor, or to reject the rich simply because they are rich, for
justice must always be served for poor and rich alike, according to the
mandate of the law. 70 Vigilance over the rights of the landowners is equally
important because social justice cannot be invoked to trample on the rights
of property owners, who under our Constitution and laws are also entitled to
protection. 71 DTAcIa
WHEREFORE, the Petitions for Review filed by the Buklod Nang

Magbubukid Sa Lupaing Ramos, Inc. in G.R. No. 131481 and the Department
of Agrarian Reform in G.R. No. 131624 are hereby DENIED. The Decision
dated March 26, 1997 and the Resolution dated November 24, 1997 of the
Court of Appeals in CA-G.R. SP No. 40950 are hereby AFFIRMED.
SO ORDERED.
Velasco, Jr., Del Castillo, Perez and Mendoza, * JJ., concur.
Footnotes
*Per Raffle dated July 19, 2010.
1.Rollo (G.R. No. 131481), pp. 22-41; penned by Associate Justice Cancio C. Garcia
with Associate Justices Eugenio S. Labitoria and Oswaldo D. Agcaoili,
concurring.
2.Id. at 54-59.
3.Rollo (G.R. No. 131624), pp. 89-109; penned by Deputy Executive Secretary
Renato C. Corona (now Chief Justice of this Court).
4.Id. at 110-113.
5.Rollo (G.R. No. 131481), pp. 22-27.
6.CA rollo, p. 96; penned by Associate Justice Cancio C. Garcia with Associate
Justices Romeo J. Callejo and Artemio G. Tuquero, concurring.
7.Now Chief Justice of the Supreme Court.
8.CA rollo, pp. 107-109.
9.Id. at 164-165.
10.Rollo (G.R. No. 131481), p. 29.

11.Id. at 34-36.
12.Id. at 36-37.
13.Id. at 38.
14.Id. at 40.
15.Id. at 41.
16.Id. at 103.
17.Id. at 13-14.
18.Rollo (G.R. No. 131624), pp. 16-17.

19.G.R. No. 103302, August 12, 1993, 225 SCRA 278.
20.Section 72 of the Public Land Act, in particular, reads:
SEC. 72. The Secretary of Agriculture and Natural Resources, if he approves

the recommendations of the Director of Lands, shall submit the matter to the
President of the end that the latter may issue a proclamation reserving the
land surveyed, or such part thereof as he may deem proper, as a town site,
and a certified copy of such proclamation shall be sent to the Director of
Lands and another to the Register of Deeds of the province in which the
surveyed land lies.
21.An Act Expanding the Jurisdiction of the Court of Appeals, Amending for the
Purpose Section Nine of Batas Pambansa Blg. 129, as Amended, Known as
the Judiciary Reorganization Act of 1980.
22.183 Phil. 176 (1979).
23.G.R. No. 104786, January 27, 1994, 229 SCRA 554, 559.
24.The latest amendment to the CARL is Republic Act No. 9700, entitled "An Act
Strengthening the Comprehensive Agrarian Reform Program (CARP),
Extending the Acquisition and Distribution of All Agricultural Lands, Instituting
Necessary Reforms, Amending for the Purpose Certain Provisions of Republic
Act No. 6657, Otherwise Known as the Comprehensive Agrarian Reform Law
of 1988, as Amended, and Appropriating Funds Therefor[,]" or more
commonly known as the CARPER Law, which took effect on July 1, 2009 and
extended CARP implementation for another five years, or until June 30, 2014.
25.Ortigas & Co., Ltd. Partnership v. Feati Bank and Trust Co., supra note 22 at
186-187.
26.Sta. Rosa Realty Development Corporation v. Court of Appeals, 419 Phil. 457,
476 (2001).
27.113 Phil. 789 (1961).
28.Id. at 800-801.
29.453 Phil. 373 (2003).
30.Id. at 382-383.
31.DAR Administrative Order No. 1, series of 1999.
32.G.R. No. 92389, September 11, 1991, 201 SCRA 508.
33.Id. at 513-515.
34.Caltex (Philippines), Inc. v. Court of Appeals , G.R. No. 97753, August 10, 1992,
212 SCRA 448, 463.
35.National Federation of Labor v. National Labor Relations Commission, 383 Phil.

910, 917-918 (2000).
36.Section 1 (d) of Ordinance No. 1.

37.Exhibit "G," Exhibits Folder, p. 42.
38.Id.
39.Office of the President Administrative Order No. 152, dated December 16, 1968.
40.Id.
41.United BF Homeowners' Association, Inc. v. The (Municipal) City Mayor,
Parañaque City, G.R. No. 141010, February 7, 2007, 515 SCRA 1, 12.
42.PENALTY. Violation of any provision or provisions of this ordinance shall upon
conviction, be penalized by a fine of not more than TWO HUNDRED PESOS
(P200.00) or by imprisonment of not more than SIX MONTHS (6) or by both
fine and imprisonment in the discretion of the court. Each day that the
violation of this ordinance continues shall be deemed a separate offense,
after the date of the court decision is rendered.
If the violation is committed by a firm, a corporation, partnership or any

other juridical person, the manager managing partners of the person
changed with the management, of such firm, corporation, partnership or
juridical person shall be criminally reasonable.
43.Executive Order No. 648.
44.Lepanto Consolidated Mining Co. v. WMC Resources Int'l. Pty. Ltd., G.R. No.
162331, November 20, 2006, 507 SCRA 315, 328.
45.DAR records, p. 273.

46.204 Phil. 126 (1982).
47.Id. at 135.
48.Ortigas & Co., Ltd. v. Court of Appeals, 400 Phil. 615, 622-623 (2000).
49.See the List of Subdivisions within the Jurisdiction of Dasmariñas, Cavite

(Exhibits Folder, Exhibit "QQ," pp. 195-200) and Certification dated
September 23, 1988 (Exhibits Folder, Exhibit "S", p. 116).
50.Resolution No. 105, Office of Sangguniang Panlalawigan, Province of Cavite.
51.Id.
52.Patalinghug v. Court of Appeals, supra note 23 at 558-559.

53.Natalia Realty, Inc. v. Department of Agrarian Reform, supra note 19 at 282-
284.
54.473 Phil. 64 (2004).
55.Id. at 92-93.
56.Id. at 94-95.
57.503 Phil. 154 (2005).
58.Id. at 157.
59.429 Phil. 140 (2002).

60.Id. at 151-152.
61.1) UNDER THE LAW APPLICABLE AT THE TIME OF THE ALLEGED CONVERSION,
[EMRASON] HAD ONE (1) YEAR WITHIN WHICH TO IMPLEMENT THE
CONVERSION; OTHERWISE, THE CONVERSION IS DEEMED TO BE IN BAD
FAITH (Sec. 36 Agricultural Land Reform Code, R.A. 3844);
2) BY VIRTUE OF THE AGRICULTURAL LAND REFORM CODE (R.A. 3844)
WHICH TOOK EFFECT ON AUGUST 8, 1963, THE FARMERS CULTIVATING THE
PROPERTY WERE GRANTED A LEGISLATIVE SECURITY OF TENURE AS
AGRICULTURAL LESSEE (Sec. 7) WHICH CANNOT BE NEGATED BY A MERE
MUNICIPAL ORDINANCE;
3) SINCE 1972 TO THE PRESENT, [EMRASON] DID NOT PERFORM ANY ACT TO
IMPLEMENT THE ALLEGED CONVERSION OF THE PROPERTY INTO A
RESIDENTIAL SUBDIVISION SUCH AS SUBDIVIDING THE TITLES IN
ACCORDANCE WITH A SUBDIVISION PLAN; DECLARING THE PROPERTY AS
RESIDENTIAL LOTS AND OBTAINING THE PROPER DOCUMENTATION FROM
GOVERNMENT OFFICES;
4) [EMRASON] IS ESTOPPED FROM INVOKING THE ALLEGED CONVERSION IN

1972 BECAUSE IT CONTINUED TO USE THE FOR AGRICULTURAL ACTIVITY BY
LEASING THE SAME FOR AGRICULTURAL PURPOSES AND PAYING REAL
ESTATE TAX THEREON UNDER "AGRICULTURAL PROPERTY;"
5) THE LEASEHOLD TENANCY UNDER R.A. 3844 IS MANDATORY SO THAT THE

FARMERS REPRESENTED BY HEREIN INTERVENOR HAVE A VESTED RIGHT
OVER THE PROPERTY (Sec. 4);
6) GIVEN THE MANDATE OF THE 1987 CONSTITUTION FOR A MEANINGFUL
LAND REFORM, IT IS INEVITABLE THAT THE PROPERTY IN QUESTION IS
SUBJECT TO LAND REFORM;
7) FINDINGS OF FACT BY THE DAR IS CONCLUSIVE WHICH SHOULD NOT BE

IGNORED IN THE ABSENCE OF COMPELLING REASONS, THE PRESENCE OF
MORE THAN 300 FARMERS WITHIN THE PROPERTY IN QUESTION WHO HAVE
CULTIVATED THE LAND FOR DECADES CLEARLY SHOWS THE IMPERATIVE
NECESSITY OF GRANTING THE FARMERS THE SALUTARY EFFECTS OF LAND
REFORM. (CA rollo, pp. 281-282).
62.Prudential Bank v. Lim, G.R. No. 136371, November 11, 2005, 474 SCRA 485,
498.
63.Sanchez v. Court of Appeals, 345 Phil. 155, 185-186 (1997).
64.Del Rosario v. Bonga , 402 Phil. 949, 960 (2001).
65.SEC. 166. Definition of Terms. — As used in Chapter I of this Code:
xxx xxx xxx

(2) "Agricultural lessee" means a person who, by himself and with the aid
available from within his immediate farm household, cultivates the land
belonging to, or possessed by, another with the latter's consent for purposes
of production, for a price certain in money or in produce or both. It is
distinguished from civil law lessee as understood in the Civil Code of the
Philippines.
66.SEC. 166. Definition of Terms. — As used in Chapter I of this Code:
xxx xxx xxx
(15) "Farm worker" includes any agricultural wage, salary or piece worker but
is not limited to a farm worker of a particular farm employer unless this Code
explicitly states otherwise and any individual whose work has ceased as
consequence of, or in connection with, a current agrarian dispute or an unfair
labor practice and who has not obtained a substantially equivalent and
regular employment.
67.G.R. No. 185954, February 16, 2010, 612 SCRA 702.

68.Id. at 712-713.
69.Rollo (G.R. No. 131481), p. 29.
70.Gelos v. Court of Appeals, G.R. No. 86186, May 8, 1992, 208 SCRA 608, 616.
71.Land Bank of the Philippines v. Court of Appeals, 319 Phil. 246, 262 (1995).

FIRST DIVISION
[G.R. No. 200454. October 22, 2014.]
HOLY TRINITY REALTY & DEVELOPMENT CORPORATION ,

petitioner, vs. VICTORIO DELA CRUZ, LORENZO
MANALAYSAY, RICARDO MARCELO, JR. and LEONCIO DE
GUZMAN, respondents.
DECISION
BERSAMIN, J : p
Land on which no agricultural activity is being conducted is not subject

to the coverage of either Presidential Decree No. 27 or Republic Act No.
6657 (Comprehensive Agrarian Reform Law).
The Case
The petitioner appeals the decision promulgated on July 27, 2011, 1
whereby the Court of Appeals (CA) reversed the decision issued by the Office
of the President (OP) on March 1, 2010, 2 and reinstated the order of the OIC-
Regional Director of the Department of Agrarian Reform in Regional Office III
rendered on August 18, 2006. 3
Antecedents
Subject of the controversy is a parcel of land located in Brgy. Dakila,
Malolos, Bulacan (Dakila property) registered in the name of Freddie
Santiago under Transfer Certificate of Title (TCT) No. T-103698 of the
Registry of Deeds of Bulacan with an area of 212,500 square meters. The
Dakila property used to be tenanted by Susana Surio, Cipriano Surio, Alfonso
Espiritu, Agustin Surio, Aurelio Surio, Pacifico Eugenio, Godofredo Alcoriza,
Lorenza Angeles, Ramon Manalad, Toribio Hernandez, Emerciana
Montealegre, Pedro Manalad, Celerino Ramos and Cecilia L. Martin, 4 but in
August 1991, these tenants freely and voluntarily relinquished their tenancy
rights in favor of Santiago through their respective sinumpaang pahayag 5 in
exchange for some financial assistance and individual homelots titled and
distributed in their names, as follows: 6
Name of
TCT No. Area
Tenant/Successor
(sq.m.)
T-73006 Susana Surio 186
T-73007 Cipriano Surio 150
T-73008 Alfonso Espiritu 300

T-73009 Agustin Surio 300
T-73010 Aurelio Surio 264
T-73011 Pacifico Eugenio 300
T-73012 Godofredo Alcoriza 300
T-73013 Lorenza Angeles 300
T-73014 Ramon Manalad 300

Toribio M. Hernandez 300
Emerciana Montealegre 300
Pedro Manalad 300
T-73015 Celerino Ramos 300
T-73016 Cecilia L. Martin 300
T-73017 Pablo dela Cruz 300
T-73018 Aurelio dela Cruz 300
T-73019 Julita Leoncio 300

Anicia L. de Guzman
T-73020 Ramon Centeno 300
T-73021 Miguel Centeno 300

––––––
TOTAL 4,500
=====
On September 17, 1992, the petitioner purchased the remaining
208,050 square meters of the Dakila property from Santiago, 7 and later
caused the transfer of the title to its name as well as subdivided the Dakila
property into six lots, 8 to wit:
TCT No. Area
(sq.m.)
81618 50,000
81619 50,000
81620 50,000
81621 54,810
73022 2,401
73023 839
––––––––
TOTAL 208,050
=======
The petitioner then developed the property by dumping filling
materials on the topsoil, and by erecting a perimeter fence and steel gate. It
established its field office on the property. 9 SIacTE

On March 4, 1998, the Sangguniang Bayan ng Malolos passed
Municipal Resolution No. 16-98 reclassifying four of the six subdivided lots
belonging to the petitioner, to wit:
MUNICIPAL RESOLUTION NO. 16-98
A RESOLUTION RE-CLASSIFYING AS RESIDENTIAL LOTS THE FOUR

(4) PARCELS OF LAND SEPARATELY COVERED BY TCT NO. 81618, TCT
NO. 81619, TCT NO. 81620 AND TCT NO. 81621 CONTAINING AN AREA
OF 50,000 SQ MTS, 50,000 SQ. MTS, 50,000 SQ M (sic) AND 54,810 SQ
M (sic) RESPECTIVELY ALL LOCATED AT DAKILA, MALOLOS, BULACAN
REGISTERED IN THE NAME OF THE HOLY TRINITY REALTY AND
DEVELOPMENT CORPORATION.
WHEREAS, Ms. Jennifer M. Romero, Auditor Representative of

Holy Trinity Realty and Development Corporation in [her] letter to the
Sangguniang Bayan made a request for re-classification of four
parcel(s) of land registered in the name of Holy Trinity and
Development Corporation under TCT NO. 81618, TCT NO. 81619, TCT
NO. 81620 AND TCT NO. 81621 with an area of 50,000 sq.m., 50,000
sq.m., 50,000 sq.m. AND 54,810 sq.m. respectively all located at
Dakila, Malolos, Bulacan.
WHEREAS, after an ocular inspection of the subject lots and

matured deliberation, the Sangguniang Bayan found merit in the
request for the following reasons, thus:
1. The Properties are untenanted;
2. That they are not fitted (sic) for agricultural use for lack
of sufficient irrigation;
3. There are improvements already introduce[d] on the

property by its owner like construction of subdivision roads;
4. Lack of oppositor to the intend[ed] subdivision project on

the properties by its owner;
5. That they are more suitable for residential use

considering their location vi[s]-à-vi[s] with (sic) the residential
lots in the area.
NOW THEREFORE, on motion of Hon. Romeo L. Maclang as

seconded by all Sangguniang Bayan members present.
RESOLVED, as is hereby resolved to re-classify into residential

properties four (4) parcels of land separately covered by TCT NO.
81618, TCT NO. 81619, TCT NO. 81620 AND TCT NO. 81621 of the
Registry of Deeds of Bulacan, containing an area of 50,000 sq.m.
respectively, registered in ownership of Holy Trinity and Development
Corporation located and adjacent to one another in Barangay Dakila of
this Municipality pursuant to the power vested to this Sangguniang
[sic] by the Local Government Code of the Philippines.
RESOLVED further that the owner and/or developer of the said
property shall provide adequate [illegible] to protect the adjacent lots
and its owners from any inconvenience and prejudice caused by the
development of the above mentioned property.
APPROVED. 10
Consequently, the Municipal Planning and Development Office (MPDO)

of Malolos, Bulacan issued a Certificate of Eligibility for Conversion
(Certificate of Zoning Conformance), 11 as well as a Preliminary Approval and
Locational Clearance in favor of the petitioner for its residential subdivision
project on the Dakila property. 12
On August 23, 1999, the petitioner purchased from Santiago another
parcel of land with an area of 25,611 located in Barangay Sumapang
Matanda, Malolos, Bulacan (Sumapang Matanda property) and covered by
TCT No. T-103697 of the Registry of Deeds of Bulacan. 13
In April 2006, a certain Silvino Manalad and the alleged heirs of Felix
Surio wrote to the Provincial Agrarian Reform Officer (PARO) of Bulacan to
request an investigation of the sale of the Dakila property. 14 This was
followed by the letter request of Sumapang Matanda Barangay Agrarian
Reform Council (BARC) Chairman Numeriano L. Enriquez to place the Dakila
property within the coverage of Operation Land Transfer (OLT) pursuant to
Presidential Decree No. 27, which was docketed as A-0302-0608-06, A.R.
Case No. LSD-0324'06. 15
Several days later, the DAR Provincial Office of Bulacan filed a petition
to annul the sale of the Dakila property with the Provincial Agrarian Reform
Adjudicator (PARAD) of Bulacan, docketed as DARAB Case No. R-03-02-
2873'06.
Ruling of the DAR Regional Office
On August 18, 2006, the OIC-Regional Director in San Fernando,
Pampanga issued an order granting the letter request of BARC Chairman
Enriquez in A-0302-0608-06, A.R. Case No. LSD-0324'06, 16 viz.: ADHCSE
WHEREFORE, in the light of the foregoing premises and for the

reason indicated therein, this Office resolves to give due course to this
instant request. Accordingly, the MARO and PARO concerned are
hereby DIRECTED to place within the ambit of PD 27/RA 6657 the
following titles TCT Nos. T-81618, T-81619, T-81620, T-81621, T-81622
and T-73023, all situated at Sumapang Matanda, Malolos City, Bulacan,
registered in the name of Holy Trinity Realty and Development
Corporation for distribution to qualified farmer beneficiary (sic).
Finally, the DAR reserves the right to cancel or withdraw this

Order in case of misrepresentation of facts material to its issuance and
for violation of pertinent agrarian laws including applicable
implementing guidelines or rules and regulations.
SO ORDERED. 17
The OIC-Regional Director opined that the sale of the Dakila property
was a prohibited transaction under Presidential Decree No. 27, Section 6 of
Republic Act No. 6657 18 and DAR Administrative Order No. 1, Series of
1989; and that the petitioner was disqualified from acquiring land under
Republic Act No. 6657 because it was a corporation. 19
Aggrieved, the petitioner assailed the order through its Motion to
Withdraw/Quash/Set Aside, 20 citing lack of jurisdiction and denial of due
process. It argued that the letter request was in the nature of a collateral
attack on its title.
Pending resolution of the Motion to Withdraw/Quash/Set Aside, the
Register of Deeds issued emancipation patents (EPs) pursuant to the order of
the OIC-Regional Director. The petitioner's titles were canceled and EPs were
issued to the respondents as follows: 21
TCT No. Emancipation Beneficiary/ies Area
Patent No. (sq.m.)
Victorio dela
T-2007-EP 22 00783329 50,000
Cruz
Lorenzo
T-2008-EP 23 00783330 50,000
Manalaysay
Ricardo
T-2009-EP 24 00783331 50,000
Marcelo, Jr.
Leoncio de
T-2010-EP 25 00783332 54,810
Guzman
T-2011-EP 26 00783334 Gonzalo Caspe 2,401
T-2012-EP 27 00783333 839

Almost two months after the EPs were issued, the OIC-Regional
Director denied the petitioner's motion for reconsideration. 28
Ruling of the DAR Secretary
The petitioner appealed to the DAR Secretary, submitting that: (1) the
letter request for coverage under Presidential Decree No. 27 and the
subsequent filing of the petition for annulment of sale in the DARAB
constituted forum shopping; and (2) the EPs were prematurely issued.
On November 22, 2007, DAR Secretary Nasser C. Pangandaman issued
an order denying the appeal, 29 and holding that forum shopping was not
committed because the causes of action in the letter request and the action
for cancellation of the deed of sale before the DARAB were distinct and
separate; that the EPs were regularly issued; and that the resolution of the
DARAB would not in any manner affect the validity of the EPs.
Ruling on the petitioner's motion for reconsideration, the DAR
Secretary said that the Dakila property was not exempt from the coverage of
Presidential Decree No. 27 and Republic Act No. 6657 because Municipal
Resolution No. 16-98 did not change or reclassify but merely re-zoned the
Dakila property. 30
Ruling of the Office of the President
On March 1, 2010, the Office of the President (OP) reversed the ruling
of DAR Secretary Pangandaman upon its finding that the Dakila property had
ceased to be suitable for agriculture, and had been reclassified as residential
land pursuant to Municipal Resolution No. 16-98, thus: 31
We find merit in the appeal.
Under Section 3 (c) of RA 6657, agricultural lands refer to lands

devoted to agriculture as conferred in the said law and not classified as
industrial land. Agricultural lands are only those lands which are arable
or suitable lands that do not include commercial, industrial and
residential lands.
In this case, the subject landholdings are not agricultural lands

but rather residential lands. The lands are located in a residential area.
Likewise, there are agricultural activities within or near the area. Even
today, the areas in question continued (sic) to be developed as a
residential community, albeit at a snail's pace. This can be readily
gleaned from the fact that both the City Assessor of Malolos and the
Provincial Assessor of Bulacan have considered these lands as
residential for taxation purposes.SIHCDA
Based on the foregoing, it is clear that appellant's landholding

cannot in any language be considered as "agricultural lands." These
lots were intended for residential use. They ceased to be agricultural
lands upon approval of Municipal Resolution No. 16-98. The authority of
the municipality (now City) of Malolos to issue zoning classification is
an exercise of its police power, not the power of eminent domain.
Section 20, Chapter 2, Title I of RA 7160 specifically empowers
municipal and/or city councils to adopt zoning and subdivision
ordinances or regulations within its territorial jurisdiction. A zoning
ordinance/resolution prescribes, defines, and apportions a given
political subdivision into specific land uses as present and future
projection of needs. The power of the local government to convert or
reclassify agricultural lands to non-agricultural lands is not subject to
the approval of the Department of Agrarian Reform.
It bears stressing that in his Decision dated April 30, 2002, as

affirmed by the Department of Agrarian Reform Adjudication Board
(DARAB) in its Resolution dated March 17, 2006, Bulacan Provincial
Adjudicator Toribio Ilao, Jr., declared that the properties were not
tenanted and/or agricultural and that the alleged farmers-occupants
are mere squatters thereto. These decision and resolution were not
appealed by the farmers-occupants and, as such, it became final and
executory. By declaring, in its assailed Order of November 22, 2007,
that the properties subject of the suit, were agricultural lands, the DAR
Secretary thereby reversed the said DARAB rulings, issued more than a
year before, and nullified Resolution No. 16-98 of the Municipal Council
of Malolos, approved nine (9) years earlier, on March 4, 1998. Thus, the
DAR Secretary acted with grave abuse of discretion amounting to
excess or lack of jurisdiction.
IN VIEW OF THE FOREGOING, the appeal is hereby GRANTED.

Accordingly, the November 22, 2007 Order and February 22, 2008
Resolution of the Department of Agrarian Reform are hereby
REVERSED and SET ASIDE.
SO ORDERED. 32
The respondents moved to reconsider, but the OP denied their motion

for reconsideration. Hence, they appealed to the CA by petition for review. 33
Ruling of the CA
In the now assailed decision promulgated on July 27, 2011, 34 the CA
reversed and set aside the decision of the OP. It declared that prior to the
effectivity of Republic Act No. 6657 on June 15, 1988 and even after the
passage of Municipal Resolution No. 16-98 on March 4, 1998, the Dakila
property was an agricultural land; that there was no valid reclassification
because Section 20 of Republic Act No. 7160 (The Local Government Code)
and Memorandum Circular No. 54 required an ordinance, not a resolution;
and that findings of the DAR on the Dakila property being an agricultural
land should be respected, 35 subject to the clarification to the effect that its
determination was only limited to the issue of whether the Dakila property
was an agricultural land covered by Republic Act No. 6657. IEDaAc
The petitioner sought reconsideration but its motion for that purpose
was denied. 36
Hence, this appeal by petition for review on certiorari.
Issues
The petitioner presents the following issues for our consideration:
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS

ERRONEOUSLY OMITTED TO RULE UPON, ALBEIT WITHOUT CITING ANY
VALID REASONS, THE VARIOUS INTERRELATED ISSUES PROFFERED IN
PETITIONER'S COMMENT RELATIVE TO DAR'S INCLUSION OF THE
SUBJECT DAKILA PROPERTY UNDER THE COVERAGE OF THE AGR ARIAN
REFORM LAW, TO WIT: A.) RESPONDENT-GRANTEES OF EMANCIPATION
PATENTS FROM DAR ARE NOT LEGITIMATE TENANTS OF THE DAKILA
PROPERTY; B.) THE SALE AND TRANSFER OF TITLES IN THE NAME OF
PETITIONER HAVE NOT HERETOFORE BEEN NULLIFIED EITHER BY THE
DARAB CENTRAL OFFICE OR THE REGULAR COURTS; C.) THE BONAFIDE
TENANTS OF THE DAKILA PROPERTY HAVE VALIDLY SURRENDERED
THEIR TENANCY RIGHTS IN FAVOR OF PETITIONER'S PREDECESSOR-IN-
INTEREST; D.) THE DAKILA PROPERTY WAS NO LONGER TENANTED
AND, FURTHER, WAS NO LONGER SUITABLE TO AGRICULTURE, AT THE
TIME OF ITS COVERAGE UNDER AGRARIAN REFORM, ITS ACTUAL USE
BEING ALREADY RESIDENTIAL
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS LIKEWISE

ERRED IN FAILING TO RULE ON THE ILLEGALITY OF THE MANNER BY
WHICH THE DAR CAUSED THE SUMMARY COVERAGE OF THE DAKILA
PROPERTY UNDER THE CARP, ITS EXTRA-JUDICIAL CANCELLATION OF
PETITIONER'S TITLES WITHOUT DUE PROCESS OF LAW, AND ITS
PREMATURE ISSUANCE OF EMANCIPATION PATENTS IN FAVOR OF
RESPONDENTS
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS

ERRONEOUSLY APPLIED THE PROVISIONS OF R A 6657 IN RESOLVING
THE SUBJECT PETITION, EVEN THOUGH THE DAR PLACED THE SUBJECT
DAKILA PROPERTY UNDER THE COVERAGE OF PRESIDE NTIAL DECREE
NO. 27
IV
WHETHER OR NOT HEREIN RESPONDENT'S PETITION FOR REVIEW A

QUO OUGHT TO HAVE BEEN DISMISSED OUTRIGHT BY THE
HONORABLE COURT OF APPEALS FOR FAILURE TO COMPLY WITH
SECTION 4, RULE 7 OF THE 1997 REVISED RULES OF CIVIL
PROCEDURE. 37
The petitioner argues that the CA ignored issues vital to the complete
determination of the parties' respective rights over the Dakila property.
Firstly, the CA should have ruled on the propriety of issuing the EPs. In
view of the pending petition before the DARAB, the DAR should have
withheld the issuance of the EPs. Even granting that a final decision had
already been rendered by the DARAB, the issuance of the EPs remained
premature inasmuch as the DAR had not yet commenced any court
proceedings for the cancellation of the petitioner's title. Accordingly, the
petitioner's title remained indefeasible and could not be disturbed by the
collateral orders by the OIC-Regional Director and the DAR Secretary.
Secondly, the petitioner was deprived of due process because the
requirements of notice and the conduct of a public hearing and a field
investigation were not strictly complied with by the DAR pursuant to Republic
Act No. 6657 and DAR Administrative Order No. 12, Series of 1998.
Thirdly, the CA erred in placing the Dakila property under the coverage
of Republic Act No. 6657 when the order of the OIC-Regional Director applied
the provisions of Presidential Decree No. 27. The two laws should be
differentiated from each other; on one hand, Presidential Decree No. 27
required the beneficiary to be a tenant-farmer of an agricultural land
devoted to rice or corn, while on the other Republic Act No. 6657 was
relatively broader and covered all public and private agricultural lands
regardless of the tenurial arrangement and the commodity produced.
Lastly, the CA should have dismissed the respondents' petition for
review due to its defective certification, pointing to the verification having
been executed by the respondents despite the letter request having been
signed by BARC Chairman Enriquez; and assailing the verification for
containing the statement that the allegations therein were based on their
"knowledge and belief" instead of their "personal knowledge and authentic
records" as required by the Rules of Court. caITAC
The respondents countered that: (1) the CA correctly set aside the
issue of whether or not they were qualified beneficiaries, because that was
not the issue raised in the letter request; (2) the CA could not have ruled on
the validity of the sale of the Dakila property in light of the pending action in
the DARAB; (3) it was within the jurisdiction of the DAR to determine whether
or not the respondents were qualified beneficiaries; (4) the waivers by the
tenants were illegal; and (5) the issuance of the EPs was a necessary
consequence of placing the Dakila property under the coverage of
Presidential Decree No. 27.
In view of the foregoing, the Court needs to consider and resolve the
following:
1. Did the CA gravely err in limiting its decision to the issue of

whether or not the Dakila property was subject to the
coverage of Republic Act No. 6657?
2. Was the Dakila property agricultural land within the coverage of

Republic Act No. 6657 or Presidential Decree No. 27?
3. Was the issuance of the EPs pursuant to the August 16, 2006
order of the DAR Regional Office proper?
Ruling
We reverse the CA, and reinstate the decision of the OP.
I.
Procedural Issue
We first resolve the issue of the supposedly defective verification.
The verification of a petition is intended to secure an assurance that
the allegations contained in the petition have been made in good faith, are
true and correct and not merely speculative. 38 This requirement affects the
form of the pleading, and its non-compliance will not render the pleading
defective. It is a formal, not a jurisdictional requisite. 39 The courts may order
the correction of the pleading if the verification is lacking, and may even act
on an unverified pleading if doing so will serve the ends of justice. 40
Under the foregoing, the CA rightly allowed the petition for review of
the respondents despite the statement that the allegations therein were
based on their "knowledge and belief." We underscore that the defect was
even lifted upon the voluntary submission by the respondents themselves of
their corrected verification in order to comply with the Rules of Court. DCASIT
We cannot also subscribe to the argument that the respondents were

not appropriate parties to sign the verification. They were, considering that
when the DAR issued the EPs, they became the real parties in interest in the
proceedings, giving them the requisite personality to sign the verification.
Moreover, there is no question that the party himself need not sign the
verification, for it was enough that the party's representative, lawyer, or any
person who personally knew the truth of the facts alleged in the pleadings
could sign the verification. 41 In any event, the respondents, as the identified
beneficiaries, had legal standing and interest to intervene to protect their
rights or interests under Republic Act No. 6657. This is clear from Section 19
of Republic Act No. 9700, 42 which amended Republic Act No. 6657 by
adding Section 50-A, to wit:
Section 19. Section 50 of Republic Act No. 6657, as amended, is
hereby further amended by adding Section 50-A to read as follows:
Section 50-A. Exclusive Jurisdiction on Agrarian Dispute. —

...
In cases where regular courts or quasi-judicial bodies have

competent jurisdiction, agrarian reform beneficiaries or identified
beneficiaries and/or their associations shall have legal standing
and interest to intervene concerning their individual or collective
rights and/or interests under the CARP.
xxx xxx xxx
II.
Courts can pass upon matters
related to the issues raised by the parties
As a general rule, appellate courts are precluded from discussing and
delving into issues that are not raised by the parties. The pertinent rule is
Section 8, Rule 51 of the Rules of Court, to wit:
Section 8. Questions that may be decided. — No error which does
not affect the jurisdiction over the subject matter or the validity of the
judgment appealed from or the proceedings therein will be considered
unless stated in the assignment of errors, or closely related to or
dependent on an assigned error and properly argued in the brief, save
as the court may pass upon plain errors and clerical errors. ETIDaH
In Philippine National Bank v. Rabat, 43 the Court explained how this

rule operates, thus:
In his book, Mr. Justice Florenz D. Regalado commented on this
section, thus:
1. Sec. 8, which is an amendment of the former Sec. 7 of this

Rule, now includes some substantial changes in the rules on
assignment of errors. The basic procedural rule is that only errors
claimed and assigned by a party will be considered by the court,
except errors affecting its jurisdiction over the subject matter. To this
exception has now been added errors affecting the validity of
the judgment appealed from or the proceedings therein.
Also, even if the error complained of by a party is not

expressly stated in his assignment of errors but the same is
closely related to or dependent on an assigned error and
properly argued in his brief, such error may now be considered
by the court. These changes are of jurisprudential origin.
2. The procedure in the Supreme Court being generally the same

as that in the Court of Appeals, unless otherwise indicated (see Secs. 2
and 4, Rule 56), it has been held that the latter is clothed with ample
authority to review matters, even if they are not assigned as errors on
appeal, if it finds that their consideration is necessary in arriving at a
just decision of the case. Also, an unassigned error closely related to an
error properly assigned (PCIB vs. CA, et al., L-34931, Mar. 18, 1988), or
upon which the determination of the question raised by error properly
assigned is dependent, will be considered by the appellate court
notwithstanding the failure to assign it as error (Ortigas, Jr. vs.
Lufthansa German Airlines, L-28773, June 30, 1975; Soco vs. Militante,
et al., G.R. No. 58961, June 28, 1983).
It may also be observed that under Sec. 8 of this Rule, the
appellate court is authorized to consider a plain error, although it was
not specifically assigned by the appellant (Dilag vs. Heirs of
Resurreccion, 76 Phil. 649), otherwise it would be sacrificing substance
for technicalities. 44 (Emphasis supplied)
Conformably with the foregoing, the CA is vested with sufficient

authority and discretion to review matters, not assigned as errors on appeal,
if it finds that consideration thereof is necessary in arriving at a complete
and just resolution of the case or to serve the interests of justice or to avoid
dispensing piecemeal justice. 45 In fact, the CA is possessed with inherent
authority to review unassigned errors that are closely related to an error
properly raised, or upon which the determination of the error properly
assigned is dependent, or where it finds that consideration thereof is
necessary in arriving at a just decision of the case. 46
It cannot be gainsaid that the validity of the EPs was closely
intertwined with the issue of whether the Dakila property was covered by the
agrarian reform laws. When the CA declared that the Dakila property came
within the coverage of Republic Act No. 6657, the CA barely scraped the
surface and left more questions unresolved rather than writing finis on the
matter. To recall, this case originated from the letter of BARC Chairman
Enriquez requesting that the Dakila property be placed under the OLT
pursuant to Presidential Decree No. 27. But, as the petitioner correctly
argues, the two laws, although similarly seeking to alleviate the plight of
landless farmers or farmworkers from the bondage of tilling the soil, are
distinct from each other. Republic Act No. 6657 is broader in scope than
Presidential Decree No. 27, for the former applies to all agricultural lands in
which agricultural activities are conducted, while the latter requires that the
covered agricultural land be tenanted and primarily devoted to rice or corn
cultivation.
In Sigre v. Court of Appeals, 47 the Court also stated:
[T]he Court need not belabor the fact that R.A. 6657 or the CARP
Law operates distinctly from P.D. 27. R.A. 6657 covers all public and
private agricultural land including other lands of the public domain
suitable for agriculture as provided for in Proclamation No. 131 and
Executive Order No. 229; while, P. D. 27 covers rice and corn lands. On
this score, E.O. 229, which provides for the mechanism of the
Comprehensive Agrarian Reform Program, specifically states: "
(P)residential Decree No. 27, as amended, shall continue to operate
with respect to rice and corn lands, covered thereunder. . . ." It cannot
be gainsaid, therefore, that R.A. 6657 did not repeal or supersede, in
any way, P.D. 27. And whatever provisions of P.D. 27 that are not
inconsistent with R.A. 6657 shall be suppletory to the latter, and all
rights acquired by the tenant-farmer under P.D. 27 are retained even
with the passage of R.A. 6657. 48
In addition, the tenurial instruments issued to agrarian reform

beneficiaries differ under these laws. Ownership of the beneficiary under
Presidential Decree No. 27 is evidenced by an EP while a certificate of land
ownership award (CLOA) is issued under Republic Act No. 6657. For this
reason, the CA could not have simply set aside the issue of whether the EPs
issued to the respondents were validly made by the DAR considering its
declaration that the Dakila property was subject to Republic Act No. 6657.
III.
The Dakila property was not an agricultural land
within the coverage of R.A. No. 6657 or P.D. No. 27
The CA declared that the Dakila property as an agricultural land; and
that there was no valid reclassification under Municipal Resolution No. 16-98
because the law required an ordinance, not a resolution. SIcEHC
We agree in part with the CA.

Under Republic Act No. 7160, local government units, such as the
Municipality of Malolos, Bulacan, are vested with the power to reclassify
lands. However, Section 20, Chapter II, Title I of Republic Act No. 7160
ordains:
Section 20. Reclassification of Lands. — (a) A city or municipality
m a y , 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: . . . . (Emphasis supplied)
Clearly, an ordinance is required in order to reclassify agricultural

lands, and such may only be passed after the conduct of public hearings.
The petitioner claims the reclassification on the basis of Municipal
Resolution No. 16-98. Given the foregoing clarifications, however, the
resolution was ineffectual for that purpose. A resolution was a mere
declaration of the sentiment or opinion of the lawmaking body on a specific
matter that was temporary in nature, and differed from an ordinance in that
the latter was a law by itself and possessed a general and permanent
character. 49 We also note that the petitioner did not show if the requisite
public hearings were conducted at all. In the absence of any valid and
complete reclassification, therefore, the Dakila property remained under the
category of an agricultural land.
Nonetheless, the Dakila property was not an agricultural land subject
to the coverage of Republic Act No. 6657 or Presidential Decree No. 27.
Verily, the basic condition for land to be placed under the coverage of
Republic Act No. 6657 is that it must either be primarily devoted to or be
suitable for agriculture. 50 Perforce, land that is not devoted to agricultural
activity is outside the coverage of Republic Act No. 6657. 51 An agricultural
land, according to Republic Act No. 6657, is one that is devoted to
agricultural activity and not classified as mineral, forest, residential,
commercial or industrial land. 52 Agricultural activity includes the "cultivation
of the soil, planting of crops, growing of fruit trees, raising livestock, poultry
or fish, including the harvesting of such farm products; and other farm
activities and practices performed by a farmer in conjunction with such
farming operations done by persons whether natural or juridical." 53
Consequently, before land may be placed under the coverage of
Republic Act No. 6657, two requisites must be met, namely: (1) that the land
must be devoted to agricultural activity; and (2) that the land must not be
classified as mineral, forest, residential, commercial or industrial land.
Considering that the Dakila property has not been classified as mineral,
forest, residential, commercial or industrial, the second requisite is satisfied.
For the first requisite to be met, however, there must be a showing that
agricultural activity is undertaken on the property.
It is not difficult to see why Republic Act No. 6657 requires agricultural
activity in order to classify land as agricultural. The spirit of agrarian reform
laws is not to distribute lands per se, but to enable the landless to own land
for cultivation. This is why the basic qualification laid down for the intended
beneficiary is to show the willingness, aptitude and ability to cultivate and
make the land as productive as possible. 54 This requirement conforms with
the policy direction set in the 1987 Constitution to the effect that agrarian
reform laws shall be founded on the right of the landless farmers and
farmworkers to own, directly or collectively, the lands they till. 55 In Luz
Farms v. Secretary of the Department of Agrarian Reform , 56 we even said
that the framers of the Constitution limited agricultural lands to the "arable
and suitable agricultural lands."
Here, no evidence was submitted to show that any agricultural activity
— like cultivation of the land, planting of crops, growing of fruit trees, raising
of livestock, or poultry or fish, including the harvesting of such farm
products, and other farm activities and practices — were being performed on
the Dakila property in order to subject it to the coverage of Republic Act No.
6657. We take particular note that the previous tenants had themselves
declared that they were voluntarily surrendering their tenancy rights
because the land was not conducive to farming by reason of its elevation,
among others. 57 Also notable is the second Whereas Clause of Municipal
Resolution No. 16-98, which mentioned that the Dakila property was not fit
for agricultural use due to lack of sufficient irrigation and that it was more
suitable for residential use, thus:
WHEREAS, after an ocular inspection of the subject lots and
matured deliberation, the Sangguniang Bayan found merit in the
request for the following reasons, thus:
1. The properties are untenanted;

2. That they are not fitted [sic] for agricultural use
for lack of sufficient irrigation;
3. There are improvements already introduce[d] on the
property by its owner like construction of subdivision roads; AIECSD
4. Lack of oppositor to the intend[ed] subdivision project on

the properties by its owner;
5. That they are more suitable for residential use

considering their location viz-a-viz (sic) with (sic) the residential
lots in the area. 58 (Emphasis supplied)
The terse statement by the OIC-Regional Director that the Dakila

property would still be subject to Republic Act No. 6657 should Presidential
Decree No. 27 be inapplicable 59 did not meet the requirements under
Republic Act No. 6657. Section 7 of Republic Act No. 6657 identified rice and
corn lands subject to Presidential Decree No. 27 for priority distribution in
the first phase and implementation of the CARP. Insofar as the interplay of
these two laws was concerned, the Court has said that during the effectivity
of the Republic Act No. 6657 and in the event of incomplete acquisition
under Presidential Decree No. 27, the former should apply, with the
provisions of the latter and Executive Order No. 228 60 having only
suppletory effect. 61
Even if we supplemented the provisions of Presidential Decree No. 27,
the outcome is still the same, because the Dakila property was still not
within the scope of the law. For land to be covered under Presidential Decree
No. 27, it must be devoted to rice or corn crops, and there must be a system
of share-crop or lease-tenancy obtaining therein. If either requisite is absent,
the land must be excluded. Hence, exemption from coverage followed when
the land was not devoted to rice or corn even if it was tenanted; or the land
was untenanted even though it was devoted to rice or corn. 62 Based on
these conditions, the DAR Regional Office erred in subjecting the Dakila
property under the OLT.
The first requirement, that the land be devoted to rice or corn
cultivation, was not sufficiently established. In this regard, the OIC-Regional
Director inaccurately based his holding on the report submitted by the Legal
Services Division that —
[P]ortion of the property embraced under TCT No. 103697 with
an area of 2.5611 hectares more or less, was placed under PD [No.]
27 and subsequently an approved survey plan (Psd-03-020270) has
been prepared which was then the basis of the issuance of titles in
favor of Felix Surio and Silvino Manalad under EP Nos. 345262 and
342561. On the other hand, the land subject of this controversy was,
likewise, subdivided and now covered by an approved plan ASP No.
Psd-031410-066532. 63

What can be gathered from the report of the Legal Services Division
was that the land owned by the petitioner and covered by Presidential
Decree No. 27 was the Sumapang Matanda property under TCT No. 103697.
As to the Dakila property, we can only infer from the report that it was
merely subdivided. The report did not mention whatsoever the agricultural
activities performed in the Dakila property. Nor was there a finding that the
Dakila property was devoted to either rice or corn cultivation as to justify its
coverage under Presidential Decree No. 27. Such a finding was necessary,
for the Court has observed in Solmayor v. Arroyo: 64
Although this Court will not disregard the evidence presented by
petitioners that the land is devoted to rice and corn crops in 1993,
when the ocular inspection by the DAR personnel was conducted, it
must be noted that around the time of the passage of Presidential
Decree No. 27 up to 1978, when the subject property was placed under
the coverage of Operation Land Transfer, the available evidence issued
and certified by the different government agencies, closer in time to
the mentioned time frame will show that respondent's property has,
indeed, been classified as within the residential and commercial zones
of Davao City. It cannot escape the notice of this Court that more than
a decade before the issuance of the said ocular investigation report
stating that the land is devoted to agricultural production, government
agencies equipped with the technical expertise to determine the
proper classification of the subject land have already determined that
the land is part of the residential and commercial zones of Davao City
making it suitable for other urban use. Therefore, it is only reasonable
to conclude, based on the certification of various executive agencies
issued when this controversy arose, that at the time of the passage of
Presidential Decree No. 27, respondent's property was not agricultural.
65
For land to come within the coverage of the OLT, indeed, there must be
a showing that it is devoted to the cultivation of rice or corn, and there must
be a system of share-crop or lease tenancy obtaining on October 21, 1972,
the time when Presidential Decree No. 27 took effect. 66 Unfortunately, no
such evidence was presented, nor was there any field investigation
conducted to verify whether or not the landholding was primarily devoted to
the cultivation of rice or corn. Accordingly, the Dakila property should be
excluded from the OLT.
The DAR Secretary affirmed the validity of the EPs in favor of the
respondents only "pursuant to the Order of the Regional Director." 67 We
note, however, that the evidence to establish in the proceedings below that
they or their predecessors had been tenants of the petitioner's predecessor-
in-interest to make them the rightful beneficiaries of the Dakila property was
severely wanting. For tenancy to exist, there must be proof that: (1) the
parties are the landholder and the tenant; (2) the subject is agricultural land;
(3) there is consent; (4) the purpose is agricultural production; (5) there is
consideration; 68 and (6) there is a sharing of the harvests. All these
requisites are necessary to create a tenancy relationship, and the absence of
one or more of them will not make the alleged tenant a de facto tenant. 69
Unless a person has established his status as a de jure tenant, he is not
entitled to security of tenure; nor is he covered by the land reform program
of the Government under the existing tenancy laws. 70 Here, the consent to
establish a tenant-landlord relationship was manifestly absent. In view of the
petitioner's repeated denial of the tenancy, the respondents ought then to
establish the tenancy relationship, but did not do so. Tenancy could not be
presumed, but must be established by evidence; its mere allegation is
neither evidence nor equivalent to proof of its existence. 71
There was also no showing that the respondents were engaged in any
agricultural activities, or agreed with Santiago or the petitioner on the
sharing of harvests. The OIC-Regional Director obviously disregarded the
affidavit of Barangay Captain Felino M. Teodoro of Dakila, Malolos, Bulacan
stating that the respondents were never the actual farmers on the Dakila
property. 72
IV.
The petitioner was deprived of due process
The petitioner posits that it was denied due process by the failure of
the OIC-Regional Director to see to the compliance with the procedures
outlined by Republic Act No. 6657 and Presidential Decree No. 27. It claims
that the OIC-Regional Director resorted to "procedural shortcuts" and
irregularities 73 in issuing the EPs to the respondents.
We agree with the petitioner's position.
In Reyes v. Barrios , 74 we identified the procedural requirements that
must be followed prior to the issuance of an EP, viz.:
The Primer on Agrarian Reform enumerates the steps in
transferring the land to the tenant-tiller, thus:
a. First step: the identification of tenants, landowners, and
the land covered by OLT.
b. Second step: land survey and sketching of the actual
cultivation of the tenant to determine parcel size, boundaries,
and possible land use;
c. Third step: the issuance of the Certificate of Land
Transfer (CLT). To ensure accuracy and safeguard against
falsification, these certificates are processed at the National
Computer Center (NCC) at Camp Aguinaldo;
d. Fourth step: valuation of the land covered for

amortization computation;
e. Fifth step: amortization payments of tenant-tillers over

fifteen (15) year period; and
f. Sixth step: the issuance of the Emancipation Patent.
Thus, there are several steps to be undertaken before an

Emancipation Patent can be issued. . . . .
xxx xxx xxx

Furthermore, there are several supporting documents which a
tenant-farmer must submit before he can receive the Emancipation
Patent, such as:
a. Application for issuance of Emancipation Patent;
b. Applicant's (owner's) copy of Certificate of Land Transfer.

c. Certification of the landowner and the Land Bank of the
Philippines that the applicant has tendered full payment of the
parcel of land as described in the application and as actually
tilled by him;
d. Certification by the President of the Samahang Nayon or

by the head of farmers' cooperative duly confirmed by the
municipal district officer (MDO) of the Ministry of Local
Government and Community Development (MLGCD) that the
applicant is a full-fledged member of a duly registered farmers'
cooperative or a certification to these effect; EcICSA
e. Copy of the technical (graphical) description of the land

parcel applied for prepared by the Bureau of Land Sketching
Team (BLST) and approved by the regional director of the Bureau
of Lands;
f. Clearance from the MAR field team (MARFT) or the MAR
District Office (MARDO) legal officer or trial attorney; or in their
absence, a clearance by the MARFT leader to the effect that the
land parcel applied for is not subject of adverse claim, duly
confirmed by the legal officer or trial attorney of the MAR
Regional Office or, in their absence, by the regional director;
g. Xerox copy of Official Receipts or certification by the
municipal treasurer showing that the applicant has fully paid or
has effected up-to-date payment of the realty taxes due on the
land parcel applied for; and
h. Certification by the MARFT leader whether applicant has

acquired farm machineries from the MAR and/or from other
government agencies.
Majority of these supporting documents are lacking in this case.

Hence, it was improper for the DARAB to order the issuance of the
Emancipation Patent in favor of respondent without the required
supporting documents and without following the requisite procedure
before an Emancipation Patent may be validly issued. 75
Furthermore, Section 16 of Republic Act No. 6657 outlines the

procedure in acquiring private lands subject to its coverage, viz.:
Section 16. Procedure for Acquisition of Private Lands. — For
purposes of acquisition of private lands, the following procedures shall
be followed:
(a) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to the
owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay
hall of the place where the property is located. Said notice shall contain
the offer of the DAR to pay a corresponding value in accordance with
the valuation set forth in Sections 17, 18 and other pertinent provisions
hereof.
(b) Within thirty (30) days from the date of receipt of written
notice by personal delivery or registered mail, the landowners, his
administrator or representative shall inform the DAR of his acceptance
or rejection of the former.
(c) If the landowner accepts the offer of the DAR, the Land Bank
of the Philippines shall pay the landowner the purchase price of the
land within thirty (30) days after he executes and delivers a deed of
transfer in favor of the Government and surrenders the Certificate of
Title and other muniments of title.
(d) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation
for the land by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of notice. After the expiration
of the above period, the matter is deemed submitted for decision. The
DAR shall decide the case within thirty (30) days after it is submitted
for decision.
(e) Upon receipt by the landowner of the corresponding payment

or in case of rejection or no response from the landowner, upon the
deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the
DAR shall take immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in
the name of the Republic of the Philippines. The DAR shall thereafter
proceed with the redistribution of the land to the qualified
beneficiaries.
(f) Any party who disagrees with the decision may bring the
matter to the court of proper jurisdiction for final determination of just
compensation.
Under Republic Act No. 6657 and DAR A.O. No. 12, Series of 1989, two
notices should be sent to the landowner — the first, the notice of coverage;
and the other, the notice of acquisition.
The Court cannot consider and declare the proceedings conducted by
the OIC-Regional Director as a substantial compliance with the notice
requirements. Compliance with such requirements, being necessary to
render the implementation of the CARP valid, was mandatory. As the Court
observed in Roxas & Co., Inc. v. Court of Appeals: 76
For a valid implementation of the CAR Program, two notices are
required: (1) the Notice of Coverage and letter of invitation to a
preliminary conference sent to the landowner, the
representatives of the BARC, LBP, farmer beneficiaries and
other interested parties pursuant to DAR A.O. No. 12, Series of
1989; and (2) the Notice of Acquisition sent to the landowner
under Section 16 of the CARL. EAHDac
The importance of the first notice, i.e., the Notice of

Coverage and the letter of invitation to the conference, and its
actual conduct cannot be understated. They are steps
designed to comply with the requirements of administrative
due process. The implementation of the CARL is an exercise of
the State's police power and the power of eminent domain. To
the extent that the CARL prescribes retention limits to the
landowners, there is an exercise of police power for the
regulation of private property in accordance with the
Constitution. But where, to carry out such regulation, the
owners are deprived of lands they own in excess of the
maximum area allowed, there is also a taking under the power
of eminent domain. The taking contemplated is not a mere
limitation of the use of the land. What is required is the
surrender of the title to and physical possession of the said
excess and all beneficial rights accruing to the owner in favor
of the farmer beneficiary. The Bill of Rights provides that "[n]o
person shall be deprived of life, liberty or property without due
process of law." The CARL was not intended to take away
property without due process of law. The exercise of the power
of eminent domain requires that due process be observed in
the taking of private property.
xxx xxx xxx
Clearly then, the notice requirements under the CARL are not
confined to the Notice of Acquisition set forth in Section 16 of the law.
They also include the Notice of Coverage first laid down in DAR A. O.
No. 12, Series of 1989 and subsequently amended in DAR A. O. No. 9,
Series of 1990 and DAR A. O. No. 1, Series of 1993. This Notice of
Coverage does not merely notify the landowner that his property shall
be placed under CARP and that he is entitled to exercise his retention
right; it also notifies him, pursuant to DAR A. O. No. 9, Series of 1990,
that a public hearing shall be conducted where he and representatives
of the concerned sectors of society may attend to discuss the results of
the field investigation, the land valuation and other pertinent matters.
Under DAR A. O. No. 1, Series of 1993, the Notice of Coverage also
informs the landowner that a field investigation of his landholding shall
be conducted where he and the other representatives may be present.
77 (Emphasis supplied)
The procedures provided by Section 16 of Republic Act No. 6657 and

its relevant DAR administrative issuances are to ensure the compliance with
the due process requirements of the law. The result of their non-compliance
is to deprive the landowner of its constitutional right to due process.
The Court has carefully explained in Roxas & Co., Inc. v. Court of
Appeals that the taking under the CARL is an exercise of police power as well
as of eminent domain. The taking of the landholding by the State effectively
results in the surrender by the landowner of its title and physical possession
to the beneficiaries. Hence, compensation should be given to the landowner
prior to the taking. This is the clear-cut directive of Section 16 (e) of Republic
Act No. 6657 which mandates the DAR to take immediate possession of the
land only after full payment and to thereafter request the Register of Deeds
to transfer title in the name of the Republic of the Philippines, and later on to
the intended beneficiaries.
However, there was no evidence of payment prior to the cancellation of
the petitioner's TCTs submitted here. The requirement of prior payment was
found in Republic Act No. 6657 and Presidential Decree No. 27, under which
full payment by the intended beneficiary was a condition prior to the award
of an EP. We have explicitly pronounced in Coruña v. Cinamin 78 that the
emancipation of tenants does not come free. The transfer of lands under
Presidential Decree No. 27 remained subject to the terms and conditions
provided in said law. In Paris v. Alfeche, 79 we said:
. . . . Section 2 of PD 266 states:
"After the tenant-farmer shall have fully complied with the
requirements for a grant of title under Presidential Decree No.
27, an Emancipation Patent and/or Grant shall be issued by the
Department of Agrarian Reform on the basis of a duly approved
survey plan."
On the other hand, paragraphs 8 and 9 of PD 27 reads as follows:

"For the purpose of determining the cost of the land to be
transferred to the tenant-farmer pursuant to this Decree, the
value of the land shall be equivalent to two and one-half (2 1/2)
times the average harvest of three normal crop years
immediately preceding the promulgation of this Decree;
"The total cost of the land, including interest at the rate of
six (6) per centum per annum, shall be paid by the tenant in
fifteen (15) years of fifteen (15) equal annual amortizations[.]"
Although, under the law, tenant farmers are already
deemed owners of the land they till, they are still required to
pay the cost of the land, including interest, within fifteen years
before the title is transferred to them. 80 (Emphasis supplied) DcCIAa
The unquestioned non-compliance with the procedures set by Republic

Act No. 6657 and its relevant rules and regulations further denied to the
petitioner the exercise of its right of retention. 81 In doing so, the OIC-
Regional Director disregarded this constitutionally guaranteed right. We
cannot understate the value of the right of retention as the means to
mitigate the effects of compulsory land acquisition by balancing the rights of
the landowner and the tenant and by implementing the doctrine that social
justice is not meant to perpetrate an injustice against the landowner. 82
We also consider the manner by which the Dakila property was
apportioned to the respondents highly suspect. It appears from the face of
the EPs that the individual lots were allocated based on how the landholding
was subdivided by the petitioner. Moreover, all the respondents were
awarded lots exceeding three hectares in violation of Section 23 of Republic
Act No. 6657, which provides that "[n]o qualified beneficiary may own more
than three (3) hectares of agricultural land."
In fine, the order of the OIC-Regional Director was patently null and
void. The denial of due process to the petitioner sufficed to cast the impress
of nullity on the official act thereby taken. A decision rendered without due
process is void ab initio and may be attacked directly or collaterally. 83 All
the resulting acts were also null and void. Consequently, the EPs awarded to
the respondents should be nullified.
WHEREFORE, the Court GRANTS the petition for review on certiorari;
REVERSES and SETS ASIDE the decision promulgated on July 27, 2011 by
the Court of Appeals; REINSTATES the assailed decision of the Office of the
President issued on March 1, 2010; D I R E C T S the cancellation of
Emancipation Patents No. 00783329, No. 00783330, No. 0078331, No.
0078332, No. 0078333, and No. 0078334 issued to the respondents for
being NULL and VOID; and ORDERS the respondents to pay the costs of
suit.
SO ORDERED.
Sereno, C.J., Leonardo-de Castro, Perez and Perlas-Bernabe, JJ., concur.
Footnotes
1. Rollo, pp. 68-85; penned by Associate Justice Apolinario D. Bruselas, Jr., with
Associate Justice Francisco Y. Acosta and Associate Justice Manuel M. Barrios
concurring.
2. Id. at 239-243.
3. Id. at 157-161.
4. Id. at 16-18.
5. Id. at 107-135.
6. Id. at 18-19.
7. Id. at 19.
8. Id. at 136, 138, 140, 142, 144 and 146.
9. Id. at 20.
10. Id. at 153-154.
11. Id. at 155.

12. Id. at 156.
13. Id. at 17.
14. Id. at 69.

15. Entitled Re: Letter-Request of Numeriano Enriquez for Distribution of Lands
Covered Under OLT which were Allegedly Transferred Illegally in the Name of
Holy Trinity Realty and Development Corporation, Located in Dakila, Malolos
City, Bulacan.
16. Rollo, pp. 157-161.
17. Id. at 161.
18. Section 6. Retention Limits. — . . .
Upon the effectivity of this Act, any sale, disposition, lease, management, contract
or transfer of possession of private lands executed by the original landowner
in violation of the Act shall be null and void; provided, however, that those
executed prior to this Act shall be valid only when registered with the
Register of Deeds within a period of three (3) months after the effectivity of
this Act. Thereafter, all Registers of Deeds shall inform the Department of
Agrarian Reform (DAR) within thirty (30) days of any transaction involving
agricultural lands in excess of five (5) hectares.
19. Rollo, pp. 159-160.

20. Id. at 162-175.
21. Id. at 183-194.
22. Transferred from TCT No. T-81618.


28. Rollo, pp. 201-203.
29. Id. at 204-210.
30. Id. at 214-217.
31. Id. at 239-243.

32. Id. at 242-243.
33. Id. at 244-264.
34. Supra, note 1.
35. Rollo, pp. 81-84.

36. Id. at p. 87.
37. Id. at 28-29.
38. Yujuico v. Atienza, Jr., G.R. No. 164282, October 12, 2005, 472 SCRA 463, 478;
Chua v. Torres, G.R. No. 151900, August 30, 2005, 468 SCRA 358, 365;
Shipside Incorporated v. Court of Appeals, G.R. No. 143377, February 20,
2001, 352 SCRA 334, 346.
39. Estares v. Court of Appeals, G.R. No. 144755, June 8, 2005, 459 SCRA 604, 616;
Torres v. Specialized Packaging Development Corporation, G.R. No. 149634,
July 6, 2004, 433 SCRA 455, 465.
40. Bank of the Philippine Islands v. Court of Appeals, G.R. No. 170625, October 17,
2008, 569 SCRA 510, 523; Pfizer, Inc. v. Galan , G.R. No. 143389, May 25,
2001, 358 SCRA 240, 247; Hontiveros v. Regional Trial Court, Br. 25, Iloilo
City, G.R. No. 125465, June 29, 1999, 309 SCRA 340, 352.
41. Hutama-RSEA/Supermax Phils., J.V. v. KCD Builders Corporation, G.R. No.
173181, March 3, 2010, 614 SCRA 153, 161-162; Pajuyo v. Court of Appeals,
G.R. No. 146364, June 3, 2004, 430 SCRA 492, 509.
42. An Act Strengthening the Comprehensive Agrarian Reform Program (CARP),

Extending the Acquisition and Distribution of All Agricultural Lands, Instituting
Necessary Reforms, Amending for the Purpose Certain Provisions of Republic
Act No. 6657, Otherwise Known as the Comprehensive Agrarian Reform Law
of 1988, as Amended, and Appropriating Funds Therefor.
43. G.R. No. 134406, November 15, 2000, 344 SCRA 706.
44. Id. at 715.
45. Carbonilla v. Board of Airlines Representatives, G.R. No. 193247, September

14, 2011, 657 SCRA 775, 798; St. Michael's Institute v. Santos, G.R. No.
145280, December 4, 2001, 371 SCRA 383, 394; Heirs of Ramon Durano, Sr.
v. Uy, G.R. No. 136456, October 24, 2000, 344 SCRA 238, 257.
46. Dumo v. Espinas, G.R. No. 141962, January 25, 2006, 480 SCRA 53, 69;
Sesbreño v. Central Board of Assessment Appeals, G.R. No. 106588, March
24, 1997, 270 SCRA 360, 370; Servicewide Specialists, Inc. v. Court of
Appeals, G.R. No. 117728, June 26, 1996, 257 SCRA 643, 653.
47. G.R. No. 109568, August 8, 2002, 387 SCRA 15.
48. Id. at 29.
49. Antonio v. Geronimo, G.R. No. 124779, November 29, 2005, 476 SCRA 340,
352; Municipality of Parañaque v. V.M. Realty Corporation, G.R. No. 127820,
July 20, 1998, 292 SCRA 678, 689.
50. Section 4 (d), Republic Act No. 6657.
51. Natalia Realty, Inc. v. Department of Agrarian Reform , G.R. No. 103302, August
12, 1993, 225 SCRA 278, 283.
52. Section 3 (c), Republic Act No. 6657.

53. Section 3 (b), Republic Act No. 6657.
54. Section 22, Republic Act No. 6657.
55. Section 4, Article III, 1987 Constitution.
56. G.R. No. 86889, December 4, 1990, 192 SCRA 51, 57.
57. Rollo, pp. 107, 109, 111, 113, 115, 117, 119, 121, 123, 125, 127, 129, 131,
133, 135.
58. Id. at 153-154.

59. Id. at 159.
60. Declaring Full Land Ownership to Qualified Farmer Beneficiaries Covered by
Presidential Decree No. 27; Determining the Value of Remaining Unvalued
Rice and Corn Lands Subject to P.D. No. 27; and Providing for the Manner of
Payment by the Farmer Beneficiary and Mode of Compensation to the
Landowner.
61. Land Bank of the Philippines v. Dumlao, G.R. No. 167809, November 27, 2008,
572 SCRA 108, 121; Land Bank of the Philippines v. Natividad, G.R. No.
127198, May 16, 2005, 458 SCRA 441, 452; Paris v. Alfeche , G.R. No.
139083, August 30, 2001, 364 SCRA 110, 122.
62. Daez v. Court of Appeals, G.R. No. 133507, February 17, 2000, 325 SCRA 856,
862.
63. Rollo, p. 158.
64. G.R. No. 153817, March 31, 2006, 486 SCRA 326.
65. Id. at 346.
66. Aniano v. Asturias Chemical Industries, Inc., G.R. No. 160420, July 28, 2005,
464 SCRA 526, 539.
67. Rollo, p. 209.
68. Ludo & Luym Development Corporation v. Barreto, G.R. No. 147266,
September 30, 2005, 471 SCRA 391, 403-404.
69. Heirs of Rafael Magpily v. De Jesus, G.R. No. 167748, November 8, 2005, 474
SCRA 366, 374.
70. The Heirs of Jose Juanite v. Court of Appeals, G.R. No. 138016, January 30,
2002, 375 SCRA 273, 276-277.
71. Dalwampo v. Quinocol Farmers, Farm Workers and Settlers' Association, G.R.
No. 160614, April 25, 2006, 488 SCRA 208, 219.
72. Rollo, p. 212.
73. Rollo, p. 43.
74. G.R. No. 172841, December 15, 2010, 638 SCRA 541.
75. Id. at 553-555.

76. G.R. No. 127876, December 17, 1999, 321 SCRA 106.
77. Id. at 133-142.
78. G.R. No. 154286, February 28, 2006, 483 SCRA 507, 519-520.
79. G.R. No. 139083, August 30, 2001, 364 SCRA 110.
80. Id. at 120-121.
81. Section 6, Republic Act No. 6657.
82. Danan v. Court of Appeals, G.R. No. 132759, October 25, 2005, 474 SCRA 113,
128.
83. People v. Duca , G.R. No. 171175, October 9, 2009, 603 SCRA 159, 169; Rubio,
Jr. v. Paras, G.R. No. 156047, April 12, 2005, 455 SCRA 697, 712; Uy v. Court
of Appeals, G.R. No. 109557, November 29, 2000, 346 SCRA 246, 254-255.

EN BANC
[G.R. No. 187298. July 3, 2012.]
JAMAR M. KULAYAN, TEMOGEN S. TULAWIE, HJI. MOH.

YUSOP ISMI, JULHAJAN AWADI, and SPO1 SATTAL H.
JADJULI, petitioners, vs. GOV. ABDUSAKUR M. TAN, in his
capacity as Governor of Sulu; GEN. JUANCHO SABAN, COL.
EUGENIO CLEMEN PN, P/SUPT. JULASIRIM KASIM and
P/SUPT. BIENVENIDO G. LATAG, in their capacity as officers
of the Phil. Marines and Phil. National Police,
respectively,respondents.
DECISION
SERENO, J : p
On 15 January 2009, three members from the International Committee

of the Red Cross (ICRC) were kidnapped in the vicinity of the Provincial
Capitol in Patikul, Sulu. 1 Andreas Notter, a Swiss national and head of the
ICRC in Zamboanga City, Eugenio Vagni, an Italian national and ICRC
delegate, and Marie Jean Lacaba, a Filipino engineer, were purportedly
inspecting a water and sanitation project for the Sulu Provincial Jail when
inspecting a water and sanitation project for the Sulu Provincial Jail when
they were seized by three armed men who were later confirmed to be
members of the Abu Sayyaf Group (ASG). 2 The leader of the alleged
kidnappers was identified as Raden Abu, a former guard at the Sulu
Provincial Jail. News reports linked Abu to Albader Parad, one of the known
leaders of the Abu Sayyaf.
On 21 January 2009, a task force was created by the ICRC and the
Philippine National Police (PNP), which then organized a parallel local group
known as the Local Crisis Committee. 3 The local group, later renamed Sulu
Crisis Management Committee, convened under the leadership of
respondent Abdusakur Mahail Tan, the Provincial Governor of Sulu. Its armed
forces component was headed by respondents General Juancho Saban, and
his deputy, Colonel Eugenio Clemen. The PNP component was headed by
respondent Police Superintendent Bienvenido G. Latag, the Police Deputy
Director for Operations of the Autonomous Region of Muslim Mindanao
(ARMM). 4
Governor Tan organized the Civilian Emergency Force (CEF), a group of
armed male civilians coming from different municipalities, who were
redeployed to surrounding areas of Patikul. 5 The organization of the CEF
was embodied in a "Memorandum of Understanding" 6 entered into between
three parties: the provincial government of Sulu, represented by Governor
Tan; the Armed Forces of the Philippines, represented by Gen. Saban; and
the Philippine National Police, represented by P/SUPT. Latag. The Whereas
clauses of the Memorandum alluded to the extraordinary situation in Sulu,
and the willingness of civilian supporters of the municipal mayors to offer
their services in order that "the early and safe rescue of the hostages may
be achieved." 7 CIScaA
This Memorandum, which was labeled 'secret' on its all pages, also
outlined the responsibilities of each of the party signatories, as follows:
Responsibilities of the Provincial Government:
1) The Provincial Government shall source the funds
and logistics needed for the activation of the CEF;
2) The Provincial Government shall identify the Local
Government Units which shall participate in the operations and
to propose them for the approval of the parties to this
agreement;
3) The Provincial Government shall ensure that there
will be no unilateral action(s) by the CEF without the knowledge
and approval by both parties.
Responsibilities of AFP/PNP/TF ICRC (Task Force ICRC):
1) The AFP/PNP shall remain the authority as
prescribed by law in military operations and law enforcement;
2) The AFP/PNP shall ensure the orderly deployment
of the CEF in the performance of their assigned task(s);
3) The AFP/PNP shall ensure the safe movements of
the CEF in identified areas of operation(s);
4) The AFP/PNP shall provide the necessary support
and/or assistance as called for in the course of
operation(s)/movements of the CEF. 8
Meanwhile, Ronaldo Puno, then Secretary of the Department of the
Interior and Local Government, announced to the media that government
troops had cornered some one hundred and twenty (120) Abu Sayyaf
members along with the three (3) hostages. 9 However, the ASG made
contact with the authorities and demanded that the military pull its troops
back from the jungle area. 10 The government troops yielded and went back
to their barracks; the Philippine Marines withdrew to their camp, while police
and civilian forces pulled back from the terrorists' stronghold by ten (10) to
fifteen (15) kilometers. Threatening that one of the hostages will be
beheaded, the ASG further demanded the evacuation of the military camps
and bases in the different barangays in Jolo. 11 The authorities were given no
later than 2:00 o'clock in the afternoon of 31 March 2009 to comply. 12 CSTEHI
On 31 March 2009, Governor Tan issued Proclamation No. 1, Series of

2009 (Proclamation 1-09), declaring a state of emergency in the province of
Sulu. 13 It cited the kidnapping incident as a ground for the said declaration,
describing it as a terrorist act pursuant to the Human Security Act (R.A.
9372). It also invoked Section 465 of the Local Government Code of 1991
(R.A. 7160), which bestows on the Provincial Governor the power to carry out
emergency measures during man-made and natural disasters and
calamities, and to call upon the appropriate national law enforcement
agencies to suppress disorder and lawless violence.
In the same Proclamation, respondent Tan called upon the PNP and the
CEF to set up checkpoints and chokepoints, conduct general search and
seizures including arrests, and other actions necessary to ensure public
safety. The pertinent portion of the proclamation states:
NOW, THEREFORE, BY VIRTUE OF THE POWERS VESTED IN ME
BY LAW, I, ABDUSAKUR MAHAIL TAN, GOVERNOR OF THE PROVINCE
OF SULU, DO HEREBY DECLARE A STATE OF EMERGENCY IN THE
PROVINCE OF SULU, AND CALL ON THE PHILIPPINE NATIONAL POLICE
WITH THE ASSISTANCE OF THE ARMED FORCES OF THE PHILIPPINES
AND THE CIVILIAN EMERGENCY FORCE TO IMPLEMENT THE
FOLLOWING:
1. The setting-up of checkpoints and chokepoints in the
province;
2. The imposition of curfew for the entire province subject to
such Guidelines as may be issued by proper authorities;
3. The conduct of General Search and Seizure including
arrests in the pursuit of the kidnappers and their supporters; and
4. To conduct such other actions or police operations as
may be necessary to ensure public safety.
DONE AT THE PROVINCIAL CAPITOL, PROVINCE OF SULU THIS
31ST DAY OF MARCH 2009.
Sgd. Abdusakur M. Tan
Governor. 14
On 1 April 2009, SPO1 Sattal Jadjuli was instructed by his superior to
report to respondent P/SUPT. Julasirim Kasim. 15 Upon arriving at the police
station, he was booked, and interviewed about his relationship to Musin,
Jaiton, and Julamin, who were all his deceased relatives. Upon admitting that
he was indeed related to the three, he was detained. After a few hours,
former Punong Barangay Juljahan Awadi, Hadji Hadjirul Bambra, Abdugajir
Hadjirul, as well as PO2 Marcial Hajan, SPO3 Muhilmi Ismula, Punong
Barangay Alano Mohammad and jeepney driver Abduhadi Sabdani, were also
arrested. 16 The affidavit 17 of the apprehending officer alleged that they
were suspected ASG supporters and were being arrested under Proclamation
1-09. The following day, 2 April 2009, the hostage Mary Jane Lacaba was
released by the ASG. ATESCc
On 4 April 2009, the office of Governor Tan distributed to civic

organizations, copies of the "Guidelines for the Implementation of
Proclamation No. 1, Series of 2009 Declaring a State of Emergency in the
Province of Sulu." 18 These Guidelines suspended all Permits to Carry
Firearms Outside of Residence (PTCFORs) issued by the Chief of the PNP, and
allowed civilians to seek exemption from the gun ban only by applying to the
Office of the Governor and obtaining the appropriate identification cards. The
said guidelines also allowed general searches and seizures in designated
checkpoints and chokepoints.
On 16 April 2009, Jamar M. Kulayan, Temogen S. Tulawie, Hadji
Mohammad Yusop Ismi, Ahajan Awadi, and SPO1 Sattal H. Jadjuli, residents
of Patikul, Sulu, filed the present Petition for Certiorari and Prohibition, 19
claiming that Proclamation 1-09 was issued with grave abuse of discretion
amounting to lack or excess of jurisdiction, as it threatened fundamental
freedoms guaranteed under Article III of the 1987 Constitution.
Petitioners contend that Proclamation No. 1 and its Implementing
Guidelines were issued ultra vires, and thus null and void, for violating
Sections 1 and 18, Article VII of the Constitution, which grants the President
sole authority to exercise emergency powers and calling-out powers as the
chief executive of the Republic and commander-in-chief of the armed forces.
20 Additionally, petitioners claim that the Provincial Governor is not
authorized by any law to create civilian armed forces under his command,
nor regulate and limit the issuances of PTCFORs to his own private army.
In his Comment, Governor Tan contended that petitioners violated the
doctrine on hierarchy of courts when they filed the instant petition directly in
the court of last resort, even if both the Court of Appeals (CA) and the
Regional Trial Courts (RTC) possessed concurrent jurisdiction with the
Supreme Court under Rule 65. 21 This is the only procedural defense raised
by respondent Tan. Respondents Gen. Juancho Saban, Col. Eugenio Clemen,
P/SUPT. Julasirim Kasim, and P/SUPT. Bienvenido Latag did not file their
respective Comments.
On the substantive issues, respondents deny that Proclamation 1-09
was issued ultra vires, as Governor Tan allegedly acted pursuant to Sections
16 and 465 of the Local Government Code, which empowers the Provincial
Governor to carry out emergency measures during calamities and disasters,
and to call upon the appropriate national law enforcement agencies to
suppress disorder, riot, lawless violence, rebellion or sedition. 22
Furthermore, the Sangguniang Panlalawigan of Sulu authorized the
declaration of a state of emergency as evidenced by Resolution No. 4, Series
of 2009 issued on 31 March 2009 during its regular session. 23
The threshold issue in the present case is whether or not Section 465,
in relation to Section 16, of the Local Government Code authorizes the
respondent governor to declare a state of emergency, and exercise the
powers enumerated under Proclamation 1-09, specifically the conduct of
general searches and seizures. Subsumed herein is the secondary question
of whether or not the provincial governor is similarly clothed with authority
to convene the CEF under the said provisions. SETAcC
We grant the petition.

I. Transcendental public
importance warrants a relaxation of
the Doctrine of Hierarchy of Courts
We first dispose of respondents' invocation of the doctrine of hierarchy
of courts which allegedly prevents judicial review by this Court in the present
case, citing for this specific purpose, Montes v. Court of Appeals and Purok
Bagong Silang Association, Inc. v. Yuipco . 24 Simply put, the doctrine
provides that where the issuance of an extraordinary writ is also within the
competence of the CA or the RTC, it is in either of these courts and not in the
Supreme Court, that the specific action for the issuance of such writ must be
sought unless special and important laws are clearly and specifically set forth
in the petition. The reason for this is that this Court is a court of last resort
and must so remain if it is to perform the functions assigned to it by the
Constitution and immemorial tradition. It cannot be burdened with deciding
cases in the first instance. 25
The said rule, however, is not without exception. In Chavez v. PEA-
Amari, 26 the Court stated:
PEA and AMARI claim petitioner ignored the judicial hierarchy
by seeking relief directly from the Court. The principle of hierarchy of
courts applies generally to cases involving factual questions. As it is
not a trier of facts, the Court cannot entertain cases involving factual
issues. The instant case, however, raises constitutional questions of
transcendental importance to the public. The Court can resolve this
case without determining any factual issue related to the case. Also,
the instant case is a petition for mandamus which falls under the
original jurisdiction of the Court under Section 5, Article VIII of the
Constitution. We resolve to exercise primary jurisdiction over the
instant case. 27
The instant case stems from a petition for certiorari and prohibition,
over which the Supreme Court possesses original jurisdiction. 28 More
crucially, this case involves acts of a public official which pertain to
restrictive custody, and is thus impressed with transcendental public
importance that would warrant the relaxation of the general rule. The Court
would be remiss in its constitutional duties were it to dismiss the present
petition solely due to claims of judicial hierarchy. IHCDAS
I n David v. Macapagal-Arroyo, 29 the Court highlighted the

transcendental public importance involved in cases that concern restrictive
custody, because judicial review in these cases serves as "a manifestation of
the crucial defense of civilians 'in police power' cases due to the diminution
of their basic liberties under the guise of a state of emergency." 30
Otherwise, the importance of the high tribunal as the court of last resort
would be put to naught, considering the nature of "emergency" cases,
wherein the proclamations and issuances are inherently short-lived. In finally
disposing of the claim that the issue had become moot and academic, the
Court also cited transcendental public importance as an exception, stating:
Sa kabila ng pagiging akademiko na lamang ng mga isyu
tungkol sa mahigpit na pangangalaga (restrictive custody) at
pagmonitor ng galaw (monitoring of movements) ng nagpepetisyon,
dedesisyunan namin ito (a) dahil sa nangingibabaw na interes ng
madla na nakapaloob dito, (b) dahil sa posibilidad na maaaring maulit
ang pangyayari at (c) dahil kailangang maturuan ang kapulisan
tungkol dito.
The moot and academic principle is not a magical formula that
can automatically dissuade the courts in resolving a case. Courts will
decide cases, otherwise moot and academic, if: first, there is a grave
violation of the Constitution; second, the exceptional character of the
situation and the paramount public interest is involved; third, when
[the] constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar, and the public; and fourth, the
case is capable of repetition yet evading review.
. . . There is no question that the issues being raised
affect the public interest, involving as they do the people's
basic rights to freedom of expression, of assembly and of the
press. Moreover, the Court has the duty to formulate guiding
and controlling constitutional precepts, doctrines or rules. It
has the symbolic function of educating the bench and the bar,
and in the present petitions, the military and the police, on
the extent of the protection given by constitutional
guarantees. And lastly, respondents contested actions are
capable of repetition. Certainly, the petitions are subject to
judicial review.
Evidently, the triple reasons We advanced at the start of
Our ruling are justified under the foregoing exceptions. Every
bad, unusual incident where police officers figure in
generates public interest and people watch what will be done
or not done to them. Lack of disciplinary steps taken against
them erode public confidence in the police institution. As
petitioners themselves assert, the restrictive custody of
policemen under investigation is an existing practice, hence,
the issue is bound to crop up every now and then. The matter
is capable of repetition or susceptible of recurrence. It better
be resolved now for the education and guidance of all
concerned. 31 (Emphasis supplied) aESIDH
Hence, the instant petition is given due course, impressed as it is with

transcendental public importance.
II. Only the President is vested
with calling-out powers, as the
commander-in-chief of the Republic
i. One executive, one
commander-in-chief
As early as Villena v. Secretary of Interior, 32 it has already been
established that there is one repository of executive powers, and that is the
President of the Republic. This means that when Section 1, Article VII of the
Constitution speaks of executive power, it is granted to the President and no
one else. 33 As emphasized by Justice Jose P. Laurel, in his ponencia in
Villena:
With reference to the Executive Department of the government,
there is one purpose which is crystal-clear and is readily visible
without the projection of judicial searchlight, and that is the
establishment of a single, not plural, Executive. The first section of
Article VII of the Constitution, dealing with the Executive Department,
begins with the enunciation of the principle that "The executive
power shall be vested in a President of the Philippines." This means
that the President of the Philippines is the Executive of the
Government of the Philippines, and no other. 34
Corollarily, it is only the President, as Executive, who is authorized to

exercise emergency powers as provided under Section 23, Article VI, of the
Constitution, as well as what became known as the calling-out powers under
Section 7, Article VII thereof.
ii. The exceptional
characterof
Commander-in-Chief
powers dictate that they
are exercised by one
president
Springing from the well-entrenched constitutional precept of One
President is the notion that there are certain acts which, by their very
nature, may only be performed by the president as the Head of the State.
One of these acts or prerogatives is the bundle of Commander-in-Chief
powers to which the "calling-out" powers constitutes a portion. The
President's Emergency Powers, on the other hand, is balanced only by the
legislative act of Congress, as embodied in the second paragraph of Section
23, Article 6 of the Constitution: aIETCA
Article 6, Sec. 23(2).In times of war or other national

emergency, the Congress may, by law, authorize the President, for a
limited period and subject to such restrictions as it may prescribe, to
exercise powers necessary and proper to carry out a declared
national policy. Unless sooner withdrawn by resolution of the
Congress, such powers shall cease upon the next adjournment
thereof. 35
Article 7, Sec 18.The President shall be the Commander-in-Chief
of all armed forces of the Philippines and whenever it becomes
necessary, he may call out such armed forces to prevent or suppress
lawless violence, invasion or rebellion. In case of invasion or rebellion,
when the public safety requires it, he may, for a period not exceeding
sixty days, suspend the privilege of the writ of habeas corpus or place
the Philippines or any part thereof under martial law. Within forty-
eight hours from the proclamation of martial law or the suspension of
the privilege of the writ of habeas corpus, the President shall submit a
report in person or in writing to the Congress. The Congress, voting
jointly, by a vote of at least a majority of all its Members in regular or
special session, may revoke such proclamation or suspension, which
revocation shall not be set aside by the President. Upon the initiative
of the President, the Congress may, in the same manner, extend such
proclamation or suspension for a period to be determined by the
Congress, if the invasion or rebellion shall persist and public safety
requires it.
The Congress, if not in session, shall, within twenty-four hours
following such proclamation or suspension, convene in accordance
with its rules without need of a call. 36
The power to declare a state of martial law is subject to the Supreme
Court's authority to review the factual basis thereof. 37 By constitutional fiat,
the calling-out powers, which is of lesser gravity than the power to declare
martial law, is bestowed upon the President alone. As noted in Villena, "
(t)here are certain constitutional powers and prerogatives of the Chief
Executive of the Nation which must be exercised by him in person and no
amount of approval or ratification will validate the exercise of any of those
powers by any other person. Such, for instance, is his power to suspend the
writ of habeas corpus and proclaim martial law . . . .38
Indeed, while the President is still a civilian, Article II, Section 3 39 of
the Constitution mandates that civilian authority is, at all times, supreme
over the military, making the civilian president the nation's supreme military
leader. The net effect of Article II, Section 3, when read with Article VII,
Section 18, is that a civilian President is the ceremonial, legal and
administrative head of the armed forces. The Constitution does not require
that the President must be possessed of military training and talents, but as
Commander-in-Chief, he has the power to direct military operations and to
determine military strategy. Normally, he would be expected to delegate the
actual command of the armed forces to military experts; but the ultimate
power is his. 40 As Commander-in-Chief, he is authorized to direct the
movements of the naval and military forces placed by law at his command,
and to employ them in the manner he may deem most effectual. 41 caSEAH
In the case of Integrated Bar of the Philippines v. Zamora, 42 the Court

had occasion to rule that the calling-out powers belong solely to the
President as commander-in-chief:
When the President calls the armed forces to prevent or
suppress lawless violence, invasion or rebellion, he
necessarily exercises a discretionary power solely vested in
his wisdom. This is clear from the intent of the framers and from the
text of the Constitution itself. The Court, thus, cannot be called upon
to overrule the President's wisdom or substitute its own. However,
this does not prevent an examination of whether such power was
exercised within permissible constitutional limits or whether it was
exercised in a manner constituting grave abuse of discretion. In view
of the constitutional intent to give the President full discretionary
power to determine the necessity of calling out the armed forces, it is
incumbent upon the petitioner to show that the President's decision is
totally bereft of factual basis.
There is a clear textual commitment under the
Constitution to bestow on the President full discretionary
power to call out the armed forces and to determine the
necessity for the exercise of such power. 43 (Emphasis supplied)
Under the foregoing provisions, Congress may revoke such
proclamation or suspension and the Court may review the sufficiency of the
factual basis thereof. However, there is no such equivalent provision dealing
with the revocation or review of the President's action to call out the armed
forces. The distinction places the calling out power in a different category
from the power to declare martial law and the power to suspend the
privilege of the writ of habeas corpus, otherwise, the framers of the
Constitution would have simply lumped together the three powers and
provided for their revocation and review without any qualification. 44
That the power to call upon the armed forces is discretionary on the
president is clear from the deliberation of the Constitutional Commission:
FR. BERNAS.
It will not make any difference. I may add that there is a

graduated power of the President as Commander-in-
Chief. First, he can call out such Armed Forces as may be
necessary to suppress lawless violence; then he can
suspend the privilege of the writ of habeas corpus , then
he can impose martial law. This is a graduated sequence.
When he judges that it is necessary to impose martial law or

suspend the privilege of the writ of habeas corpus, his judgment
is subject to review. We are making it subject to review by the
Supreme Court and subject to concurrence by the National
Assembly. But when he exercises this lesser power of calling on
the Armed Forces, when he says it is necessary, it is my opinion
that his judgment cannot be reviewed by anybody. IDAESH
xxx xxx xxx
MR. REGALADO.
That does not require any concurrence by the legislature nor is it

subject to judicial review.
The reason for the difference in the treatment of the

aforementioned powers highlights the intent to grant the
President the widest leeway and broadest discretion in using the
power to call out because it is considered as the lesser and more
benign power compared to the power to suspend the privilege of
the writ of habeas corpus and the power to impose martial law,
both of which involve the curtailment and suppression of certain
basic civil rights and individual freedoms, and thus necessitating
safeguards by Congress and review by this Court.
. . . Thus, it is the unclouded intent of the Constitution to

vest upon the President, as Commander-in-Chief of the
Armed Forces, full discretion to call forth the military
when in his judgment it is necessary to do so in order to
prevent or suppress lawless violence, invasion or
rebellion. 45 (Emphasis Supplied)
In the more recent case of Constantino, Jr. v. Cuisia , 46 the Court

characterized these powers as exclusive to the President, precisely because
they are of exceptional import:
These distinctions hold true to this day as they remain
embodied in our fundamental law. There are certain presidential
powers which arise out of exceptional circumstances, and if
exercised, would involve the suspension of fundamental freedoms, or
at least call for the supersedence of executive prerogatives over
those exercised by co-equal branches of government. The declaration
of martial law, the suspension of the writ of habeas corpus, and the
exercise of the pardoning power, notwithstanding the judicial
determination of guilt of the accused, all fall within this special class
that demands the exclusive exercise by the President of the
constitutionally vested power. The list is by no means exclusive, but
there must be a showing that the executive power in question is of
similar gravitas and exceptional import. 47
In addition to being the commander-in-chief of the armed forces, the
President also acts as the leader of the country's police forces, under the
mandate of Section 17, Article VII of the Constitution, which provides that,
"The President shall have control of all the executive departments, bureaus,
and offices. He shall ensure that the laws be faithfully executed." During the
deliberations of the Constitutional Commission on the framing of this
provision, Fr. Bernas defended the retention of the word "control,"
employing the same rationale of singularity of the office of the president, as
the only Executive under the presidential form of government. 48 IDSaTE
Regarding the country's police force, Section 6, Article XVI of the

Constitution states that: "The State shall establish and maintain one police
force, which shall be national in scope and civilian in character, to be
administered and controlled by a national police commission. The authority
of local executives over the police units in their jurisdiction shall be provided
by law." 49
A local chief executive, such as the provincial governor, exercises
operational supervision over the police, 50 and may exercise control only in
day-to-day operations, viz.:
Mr. Natividad:
By experience, it is not advisable to provide either in our

Constitution or by law full control of the police by the
local chief executive and local executives, the mayors. By
our experience, this has spawned warlordism, bossism
and sanctuaries for vices and abuses. If the national
government does not have a mechanism to supervise these
1,500 legally, technically separate police forces, plus 61 city
police forces, fragmented police system, we will have a lot of
difficulty in presenting a modern professional police force. So
that a certain amount of supervision and control will have
to be exercised by the national government.
For example, if a local government, a town cannot handle

its peace and order problems or police problems, such as
riots, conflagrations or organized crime, the national
government may come in, especially if requested by the
local executives. Under that situation, if they come in
under such an extraordinary situation, they will be in
control. But if the day-to-day business of police investigation of
crime, crime prevention, activities, traffic control, is all lodged in
the mayors, and if they are in complete operational control of the
day-to-day business of police service, what the national
government would control would be the administrative aspect.

xxx xxx xxx
Mr. de los Reyes:
so the operational control on a day-to-day basis, meaning, the

usual duties being performed by the ordinary policemen, will be
under the supervision of the local executives?
Mr. Natividad:
Yes, Madam President. CSIcHA
xxx xxx xxx
Mr. de los Reyes:
But in exceptional cases, even the operational control can

be taken over by the National Police Commission?
Mr. Natividad:
If the situation is beyond the capacity of the local

governments. 51 (Emphases supplied)
Furthermore according to the framers, it is still the President who is

authorized to exercise supervision and control over the police, through the
National Police Commission:
Mr. Rodrigo:
Just a few questions. The President of the Philippines is the

Commander-in-Chief of all the armed forces.
Mr. Natividad:
Yes, Madam President.

Mr. Rodrigo:
Since the national police is not integrated with the armed forces,
I do not suppose they come under the Commander-in-Chief
powers of the President of the Philippines.
Mr. Natividad:
They do, Madam President. By law, they are under the

supervision and control of the President of the Philippines.
Mr. Rodrigo:
Yes, but the President is not the Commander-in-Chief of the

national police.
Mr. Natividad:
He is the President.
Mr. Rodrigo:
Yes, the Executive. But they do not come under that specific
provision that the President is the Commander-in-Chief of all the
armed forces.
Mr. Natividad:
No, not under the Commander-in-Chief provision.

Mr. Rodrigo:
There are two other powers of the President. The President has
control over ministries, bureaus and offices, and supervision over
local governments. Under which does the police fall, under
control or under supervision?
Mr. Natividad:
Both, Madam President. IcTCHD
Mr. Rodrigo:
Control and supervision.

Mr. Natividad:
Yes, in fact, the National Police Commission is under the Office of

the President. 52
In the discussions of the Constitutional Commission regarding

the above provision it is clear that the framers never intended for
local chief executives to exercise unbridled control over the police
in emergency situations. This is without prejudice to their authority over
police units in their jurisdiction as provided by law, and their prerogative to
seek assistance from the police in day to day situations, as contemplated by
the Constitutional Commission. But as a civilian agency of the government,
the police, through the NAPOLCOM, properly comes within, and is subject to,
the exercise by the President of the power of executive control. 53
iii. The provincial governor
does not possess the
same calling-out powers
as the President
Given the foregoing, respondent provincial governor is not
endowed with the power to call upon the armed forces at his own
bidding. In issuing the assailed proclamation, Governor Tan
exceeded his authority when he declared a state of emergency and
called upon the Armed Forces, the police, and his own Civilian
Emergency Force. The calling-out powers contemplated under the
Constitution is exclusive to the President. An exercise by another
official, even if he is the local chief executive, is ultra vires, and may not be
justified by the invocation of Section 465 of the Local Government Code, as
will be discussed subsequently.
Respondents, however, justify this stance by stating that nowhere in
the seminal case of David v. Arroyo, which dealt squarely with the issue of
the declaration of a state of emergency, does it limit the said authority to
the President alone. Respondents contend that the ruling in David expressly
limits the authority to declare a national emergency, a condition which
covers the entire country, and does not include emergency situations in local
government units. 54 This claim is belied by the clear intent of the framers
that in all situations involving threats to security, such as lawless violence,
invasion or rebellion, even in localized areas, it is still the President who
possesses the sole authority to exercise calling-out powers. As reflected in
the Journal of the Constitutional Commission: aIDHET
Thereafter, Mr. Padilla proposed on line 29 to insert the phrase

OR PUBLIC DISORDER in lieu of "invasion or rebellion." Mr. Sumulong
stated that the committee could not accept the amendment because
under the first section of Section 15, the President may call out and
make use of the armed forces to prevent or suppress not only lawless
violence but even invasion or rebellion without declaring martial law.
He observed that by deleting "invasion or rebellion" and substituting
PUBLIC DISORDER, the President would have to declare martial law
before he can make use of the armed forces to prevent or suppress
lawless invasion or rebellion.
Mr. Padilla, in reply thereto, stated that the first
sentence contemplates a lighter situation where there is
some lawless violence in a small portion of the country or
public disorder in another at which times, the armed forces
can be called to prevent or suppress these incidents. He
noted that the Commander-in-Chief can do so in a minor
degree but he can also exercise such powers should the
situation worsen. The words "invasion or rebellion" to be eliminated
on line 14 are covered by the following sentence which provides for
"invasion or rebellion." He maintained that the proposed amendment
does not mean that under such circumstances, the President cannot
call on the armed forces to prevent or suppress the same. 55
(Emphasis supplied)
III. Section 465 of the Local
Government Code cannot be invoked
to justify the powers enumerated
under Proclamation 1-09
Respondent governor characterized the kidnapping of the three ICRC
workers as a terroristic act, and used this incident to justify the exercise of
the powers enumerated under Proclamation 1-09. 56 He invokes Section 465,
in relation to Section 16, of the Local Government Code, which purportedly
allows the governor to carry out emergency measures and call upon the
appropriate national law enforcement agencies for assistance. But a closer
look at the said proclamation shows that there is no provision in the Local
Government Code nor in any law on which the broad and unwarranted
powers granted to the Governor may be based.
Petitioners cite the implementation of "General Search and Seizure
including arrests in the pursuit of the kidnappers and their supporters," 57 as
being violative of the constitutional proscription on general search warrants
and general seizures. Petitioners rightly assert that this alone would be
sufficient to render the proclamation void, as general searches and seizures
are proscribed, for being violative of the rights enshrined in the Bill of Rights,
particularly: cIEHAC
The right of the people to be secure in their persons, houses,

papers, and effects against unreasonable searches and seizures of
whatever nature and for any purpose shall be inviolable, and no
search warrant or warrant of arrest shall issue except upon probable
cause to be determined personally by the judge after examination
under oath or affirmation of the complainant and the witnesses he
may produce, and particularly describing the place to be searched
and the persons or things to be seized. 58
In fact, respondent governor has arrogated unto himself powers
exceeding even the martial law powers of the President, because as the
Constitution itself declares, "A state of martial law does not suspend the
operation of the Constitution, nor supplant the functioning of the civil courts
or legislative assemblies, nor authorize the conferment of the jurisdiction on
military courts and agencies over civilians where civil courts are able to
function, nor automatically suspend the privilege of the writ." 59
We find, and so hold, that there is nothing in the Local Government
Code which justifies the acts sanctioned under the said Proclamation. Not
even Section 465 of the said Code, in relation to Section 16, which states:
Section 465. The Chief Executive: Powers, Duties,
Functions, and Compensation. —
xxx xxx xxx
(b) For efficient, effective and economical governance the

purpose of which is the general welfare of the province and its
inhabitants pursuant to Section 16 of this Code, the provincial
governor shall:
(1) Exercise general supervision and control over all
programs, projects, services, and activities of the provincial
government, and in this connection, shall:
xxx xxx xxx
(vii) Carry out such emergency measures as

may be necessary during and in the aftermath of
man-made and natural disasters and calamities; DAHaTc
(2) Enforce all laws and ordinances relative to the

governance of the province and the exercise of the appropriate
corporate powers provided for under Section 22 of this Code,
implement all approved policies, programs, projects, services and
activities of the province and, in addition to the foregoing, shall:
xxx xxx xxx

(vi) Call upon the appropriate national law
enforcement agencies to suppress disorder, riot,
lawless violence, rebellion or sedition or to
apprehend violators of the law when public interest
so requires and the police forces of the component
city or municipality where the disorder or violation is
happening are inadequate to cope with the situation
or the violators.
Section 16. General Welfare . — Every local government

unit shall exercise the powers expressly granted, those necessarily
implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which
are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure
and support, among other things, the preservation and enrichment of
culture, promote health and safety, enhance the right of the people to
a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities,
improve public morals, enhance economic prosperity and social
justice, promote full employment among their residents, maintain
peace and order, and preserve the comfort and convenience of their
inhabitants. (Emphases supplied)
Respondents cannot rely on paragraph 1, subparagraph (vii) of Article
465 above, as the said provision expressly refers to calamities and disasters,
whether man-made or natural. The governor, as local chief executive of the
province, is certainly empowered to enact and implement emergency
measures during these occurrences. But the kidnapping incident in the case
at bar cannot be considered as a calamity or a disaster. Respondents cannot
find any legal mooring under this provision to justify their actions.
Paragraph 2, subparagraph (vi) of the same provision is equally
inapplicable for two reasons. First, the Armed Forces of the Philippines does
not fall under the category of a "national law enforcement agency," to which
the National Police Commission (NAPOLCOM) and its departments belong. Its
mandate is to uphold the sovereignty of the Philippines, support the
Constitution, and defend the Republic against all enemies, foreign and
domestic. Its aim is also to secure the integrity of the national territory. 60
Second, there was no evidence or even an allegation on record that the local
police forces were inadequate to cope with the situation or apprehend the
violators. If they were inadequate, the recourse of the provincial governor
was to ask the assistance of the Secretary of Interior and Local Government,
or such other authorized officials, for the assistance of national law
enforcement agencies. ADEaHT
The Local Government Code does not involve the diminution of central
powers inherently vested in the National Government, especially not the
prerogatives solely granted by the Constitution to the President in matters of
security and defense.
The intent behind the powers granted to local government units is
fiscal, economic, and administrative in nature. The Code is concerned only
with powers that would make the delivery of basic services more effective to
the constituents, 61 and should not be unduly stretched to confer calling-out
powers on local executives.
In the sponsorship remarks for Republic Act 7160, it was stated that
the devolution of powers is a step towards the autonomy of local
government units (LGUs), and is actually an experiment whose success
heavily relies on the power of taxation of the LGUs. The underpinnings of the
Code can be found in Section 5, Article II of the 1973 Constitution, which
allowed LGUs to create their own sources of revenue. 62 During the
interpellation made by Mr. Tirol addressed to Mr. de Pedro, the latter
emphasized that "Decentralization is an administrative concept and the
process of shifting and delegating power from a central point to subordinate
levels to promote independence, responsibility, and quicker decision-making.
. . . (I)t does not involve any transfer of final authority from the
national to field levels, nor diminution of central office powers and
responsibilities. Certain government agencies, including the police
force, are exempted from the decentralization process because
their functions are not inherent in local government units." 63
IV. Provincial governor is not
authorized to convene CEF
Pursuant to the national policy to establish one police force, the
organization of private citizen armies is proscribed. Section 24 of Article XVIII
of the Constitution mandates that:
Private armies and other armed groups not recognized by duly
constituted authority shall be dismantled. All paramilitary forces
including Civilian Home Defense Forces (CHDF) not consistent with
the citizen armed force established in this Constitution, shall be
dissolved or, where appropriate, converted into the regular force.
Additionally, Section 21 of Article XI states that, "The preservation of
peace and order within the regions shall be the responsibility of the local
police agencies which shall be organized, maintained, supervised, and
utilized in accordance with applicable laws. The defense and security of the
regions shall be the responsibility of the National Government."
Taken in conjunction with each other, it becomes clear that the
Constitution does not authorize the organization of private armed groups
similar to the CEF convened by the respondent Governor. The framers of the
Constitution were themselves wary of armed citizens' groups, as shown in
the following proceedings: SaAcHE
MR. GARCIA:
I think it is very clear that the problem we have here is a

paramilitary force operating under the cloak, under the
mantle of legality is creating a lot of problems precisely
by being able to operate as an independent private army
for many regional warlords. And at the same time, this I
think has been the thrust, the intent of many of the
discussions and objections to the paramilitary units and
the armed groups.
MR. PADILLA:
My proposal covers two parts: the private armies of political

warlords and other armed forces not recognized by constituted
authority which shall be dismantled and dissolved. In my trips to
the provinces, I heard of many abuses committed by the CHDF
(Civilian Home Defense Forces), specially in Escalante, Negros
Occidental. But I do not know whether a particular CHDF is
approved or authorized by competent authority. If it is not
authorized, then the CHDF will have to be dismantled. If some
CHDFs, say in other provinces, are authorized by constituted
authority, by the Armed Forces of the Philippines, through the
Chief of Staff or the Minister of National Defense, if they are
recognized and authorized, then they will not be dismantled. But
I cannot give a categorical answer to any specific CHDF unit, only
the principle that if they are armed forces which are not
authorized, then they should be dismantled. 64 (Emphasis
supplied)
Thus, with the discussions in the Constitutional Commission as guide,

the creation of the Civilian Emergency Force (CEF) in the present case, is
also invalid.
WHEREFORE, the instant petition is GRANTED. Judgment is rendered
commanding respondents to desist from further proceedings in
implementing Proclamation No. 1 n, Series of 2009, and its Implementing
Guidelines. The said proclamation and guidelines are hereby declared NULL
and VOID for having been issued in grave abuse of discretion, amounting to
lack or excess of jurisdiction.
SO ORDERED.
Carpio, Velasco, Jr., Leonardo-de Castro, Brion, Peralta, Del Castillo,
Villarama, Jr., Perez, Mendoza, Reyes and Perlas-Bernabe, JJ., concur.
Bersamin and Abad, JJ., are on leave.
Footnotes
1.Petition for Certiorari and Prohibition, rollo, p. 8.

2."Red cross won't return to Sulu yet," 27 October 2010, 5:44:00, by Jerome Aning,
at http://www.inquirer.net/specialfeatures/redcrossabduction/view.php?
db=1&article=20101027-299979. Last visited 11 September 2011.
3.Supra note 1.
4.Rollo, p. 9.
5."State of emergency in Sulu; attack looms," The Philippine Star, updated 1 April
2009, 12:00, by Roel Pareño and James Mananghaya, at
http://www.philstar.com/Article.aspx?articleid=454055. Last visited 11
September 2011.
6.Rollo, pp. 242-244.

7.Id. at 242.
8.Memorandum of Understanding, p. 2 of 3; rollo, p. 243.
9.Supra note 5.
10.Petition for Certiorari and Prohibition, rollo, p. 9.
11.Supra note 5.
12.Supra note 10.
13.Petition for Certiorari and Prohibition, rollo, pp. 9-10.

14.Id.
15.Id. at 8-9.
16.Id. at 9.
17.Affidavit of the Apprehending Officer, attached as Annex B to respondents'

Comment, id. at 245.
18.Attached as Annex B to Petition, id. at 69-73.
19.Id. at 3-66.
20.Id. at 14.
21.Id. at 118.
22.Comment, pp. 7-10; id. at 123-126.
23.Attached as Annex A to the Comment, id. at 247-249.

24.Respectively, G.R. No. 143797, 4 May 2006, 489 SCRA 432, and G.R. No.
135092, 4 May 2006, 489 SCRA 382.
25.Montes v. CA, supra note 24.
26.433 Phil. 506 (2002).

27.Id. at 524.
28.In relation to Sections 1 and 2, Rule 65 of the Revised Rules of Court, par. 2,
Sec. 4 thereof states: "The petition shall be filed in the Supreme Court or, if it
relates to the acts or omissions of a lower court or of a corporation, board,
officer or person, in the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed in the
Court of Appeals whether or not the same is in aid of its appellate
jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction.
If it involves the acts or omissions of a quasi-judicial agency, and unless
otherwise provided by law or these rules, the petition shall be filed in and
cognizable only by the Court of Appeals."
29.G.R. Nos. 171396, 171409, 171485, 171483, 171400, 171489 & 171424, 3 May
2006, 489 SCRA 160.
30.Id. at 214.
31.As cited and applied in Manalo v. Calderon , G.R. No. 178920, 15 October 2007,
536 SCRA 290, 304.
32.67 Phil. 451 (1939).
33.Fr. Joaquin Bernas, S.J., The 1987 Philippine Constitution A Comprehensive
Reviewer, (2006), p. 290.
34.Supra note 32, at 464.
35.1987 CONSTITUTION.
36.Id.
37.1987 CONSTITUTION, Art. VII, Sec. 18 (2).
38.Supra note 32.

39.The provisions reads: "Civilian authority is, at all times, supreme over the
military. The Armed Forces of the Philippines is the protector of the people
and the State. Its goal is to secure the sovereignty of the State and the
integrity of the national territory."
40.Supra note 33, at 314.

41.Id., citing Fleming v. Page, 9 How 603, 615 U.S. (1850).
42.392 Phil. 618.

43.Id. at 640.
44.Supra note 33, at 314-315.

45.Record of the Constitutional Commission, 29 July 1986, Tuesday, Vol. 2, p. 409.
46.G.R. No. 106064, 13 October 2005, 472 SCRA 505.

47.Id. at 534.
48.Journal of the Constitutional Commission, 29 July 1986, Tuesday, Vol. 1, p. 488.

49.1987 CONSTITUTION, Art. VXI, Sec. 6.
50.Carpio v. Executive Secretary, G.R. No. 96409, 14 February 1992, 206 SCRA
290.
51.Record of the Constitutional Commission, 1 October 1986, Wednesday, pp. 293-
294.
52.Id. at 296.
53.Supra note 50.

54.Comment, rollo, p. 128.
55.Journal of the Constitutional Commission, 30 July 1986, Wednesday, Vol. 1, p.

513.
56.Proclamation No. 01, Series of 2009, attached to the Comment as Annex A,

rollo, p. 67.
57.Id. at 68.
58.1987 CONSTITUTION, Art. III, Sec. 2.

59.1987 CONSTITUTION, Art. XVII, Sec. 18 (4).
60.1987 Constitution, Art. II, Sec. 3.
61.Journal and Record of the House of Representatives Proceedings and Debates,

Fourth Regular Session 1990-1991, Vol. 1 (July 23-September 3, 1990),
prepared by the Publication and Editorial Division under the supervision of
Hon. Quirino D. Abad Santos, Jr., Secretary, House of Representatives,
Proceedings of 14 August, 1990, Tuesday.
62.Id., Proceedings of 25 July 1990, Wednesday.
63.Id.
64.Supra note 45, p. 386.
n Note from the Publisher: Written as “Proclamation No. I” in the original

document.

EN BANC
[G.R. No. 195770. July 17, 2012.]
AQUILINO Q. PIMENTEL, JR., SERGIO TADEO and NELSON

ALCANTARA, petitioners, vs. EXECUTIVE SECRETARY PAQUITO
N. OCHOA and SECRETARY CORAZON JULIANO-SOLIMAN OF
THE DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT
(DSWD), respondents.
DECISION
PERLAS-BERNABE, J : p
The Case
For the Court's consideration in this Petition for Certiorari and
Prohibition is the constitutionality of certain provisions of Republic Act No.
10147 or the General Appropriations Act [GAA] of 2011 1 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.
The Facts
In 2007, the DSWD embarked on a poverty reduction strategy with the
poorest of the poor as target beneficiaries. 2 Dubbed "Ahon Pamilyang
Pilipino," it was pre-pilot tested in the municipalities of Sibagat and
Esperanza in Agusan del Sur; the municipalities of Lopez Jaena and Bonifacio
in Misamis Occidental, the Caraga Region; and the cities of Pasay and
Caloocan 3 upon the release of the amount of P50 Million Pesos under a
Special Allotment Release Order (SARO) issued by the Department of Budget
and Management. 4
On July 16, 2008, the DSWD issued Administrative Order No. 16, series
of 2008 (A.O. No. 16, s. 2008), 5 setting the implementing guidelines for the
project renamed "Pantawid Pamilyang Pilipino Program" (4Ps), upon the
following stated objectives, to wit:
1. To improve preventive health care of pregnant women and
young children
2. To increase enrollment/attendance of children at elementary
level
3. To reduce incidence of child labor
4. To raise consumption of poor households on nutrient dense foods
5. To encourage parents to invest in their children's (and their own)

future cAIDEa
6. To encourage parent's participation in the growth and

development of young children, as well as involvement in the
community. 6
This government intervention scheme, also conveniently referred to as

CCTP, "provides cash grant to extreme poor households to allow the
members of the families to meet certain human development goals." 7
Eligible households that are selected from priority target areas consisting of
the poorest provinces classified by the National Statistical Coordination
Board (NCSB) 8 are granted a health assistance of P500.00/month, or
P6,000.00/year, and an educational assistance of P300.00/month for 10
months, or a total of P3,000.00/year, for each child but up to a maximum of
three children per family. 9 Thus, after an assessment on the appropriate
assistance package, a household beneficiary could receive from the
government an annual subsidy for its basic needs up to an amount of
P15,000.00, under the following conditionalities:
a) Pregnant women must get pre natal care starting from the
1st trimester, child birth is attended by skilled/trained professional, get
post natal care thereafter
b) Parents/guardians must attend family planning

sessions/mother's class, Parent Effectiveness Service and others
c) Children 0-5 years of age get regular preventive health

check-ups and vaccines
d) Children 3-5 years old must attend day care program/pre-

school
e) Children 6-14 years of age are enrolled in schools and

attend at least 85% of the time 10 EICScD
Under A.O. No. 16, s. 2008, the DSWD also institutionalized a

coordinated inter-agency network among the Department of Education
(DepEd), Department of Health (DOH), Department of Interior and Local
Government (DILG), the National Anti-Poverty Commission (NAPC) and the
local government units (LGUs), identifying specific roles and functions in
order to ensure effective and efficient implementation of the CCTP. As the
DSWD takes on the role of lead implementing agency that must "oversee
and coordinate the implementation, monitoring and evaluation of the
program," the concerned LGU as partner agency is particularly tasked to —
a. Ensure availability of the supply side on health and
education in the target areas.
b. Provide necessary technical assistance for Program

implementation
c. Coordinate the implementation/operationalization of

sectoral activities at the City/Municipal level to better execute Program
objectives and functions
d. Coordinate with various concerned government agencies

at the local level, sectoral representatives and NGO to ensure effective
Program implementation
e. Prepare reports on issues and concerns regarding Program

implementation and submit to the Regional Advisory Committee, and
f. Hold monthly committee meetings 11
A Memorandum of Agreement (MOA) 12 executed by the DSWD with

each participating LGU outlines in detail the obligation of both parties during
the intended five-year implementation of the CCTP.
Congress, for its part, sought to ensure the success of the CCTP by
providing it with funding under the GAA of 2008 in the amount of Two
Hundred Ninety-Eight Million Five Hundred Fifty Thousand Pesos
(P298,550,000.00). This budget allocation increased tremendously to P5
Billion Pesos in 2009, with the amount doubling to P10 Billion Pesos in 2010.
But the biggest allotment given to the CCTP was in the GAA of 2011 at
Twenty One Billion One Hundred Ninety-Four Million One Hundred Seventeen
Thousand Pesos (P21,194,117,000.00). 13 cDEHIC
Petitioner Aquilino Pimentel, Jr., a former Senator, joined by Sergio

Tadeo, incumbent President of the Association of Barangay Captains of
Cabanatuan City, Nueva Ecija, and Nelson Alcantara, incumbent Barangay
Captain of Barangay Sta. Monica, Quezon City, challenges before the Court
the disbursement of public funds and the implementation of the CCTP which
are alleged to have encroached into the local autonomy of the LGUs.
The Issue
THE P21 BILLION CCTP BUDGET ALLOCATION UNDER THE
DSWD IN THE GAA FY 2011 VIOLATES ART. II, SEC. 25 & ART. X,
SEC. 3 OF THE 1987 CONSTITUTION IN RELATION TO SEC. 17 OF
THE LOCAL GOVERNMENT CODE OF 1991 BY PROVIDING FOR
THE RECENTRALIZATION OF THE NATIONAL GOVERNMENT IN
THE DELIVERY OF BASIC SERVICES ALREADY DEVOLVED TO THE
LGUS.
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.
Our Ruling
The Constitution declares it a policy of the State to ensure the
autonomy of local governments 14 and even devotes a full article on the
subject of local governance 15 which includes the following pertinent
provisions:
Section 3. The Congress shall enact a local government code
which shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization
with effective mechanisms of recall, initiative, and referendum, allocate
among the different local government units their powers,
responsibilities, and resources, and provide for the qualifications,
election, appointment and removal, term, salaries, powers and
functions and duties of local officials, and all other matters relating to
the organization and operation of the local units. ASETHC
xxx xxx xxx
Section 14. The President shall provide for regional

development councils or other similar bodies composed of local
government officials, regional heads of departments and other
government offices, and representatives from non-governmental
organizations within the regions for purposes of administrative
decentralization to strengthen the autonomy of the units therein and to
accelerate the economic and social growth and development of the
units in the region. (Underscoring supplied)
In order to fully secure to the LGUs the genuine and meaningful

autonomy that would develop them into self-reliant communities and
effective partners in the attainment of national goals, 16 Section 17 of the
Local Government Code vested upon the LGUs the duties and functions
pertaining to the delivery of basic services and facilities, as follows:
SECTION 17. Basic Services and Facilities. —
(a) Local government units shall endeavor to be self-reliant
and shall continue exercising the powers and discharging the duties
and functions currently vested upon them. They shall also discharge
the functions and responsibilities of national agencies and offices
devolved to them pursuant to this Code. Local government units shall
likewise exercise such other powers and discharge such other functions
and responsibilities as are necessary, appropriate, or incidental to
efficient and effective provision of the basic services and facilities
enumerated herein.
(b) Such basic services and facilities include, but are not
limited to, . . . .
While the aforementioned provision charges the LGUs to take on the

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

public works and infrastructure projects and other facilities, programs
and services funded by the National Government under the annual
General Appropriations Act, other special laws, pertinent executive
orders, and those wholly or partially funded from foreign sources, are
not covered under this Section, except in those cases where the local
government unit concerned is duly designated as the implementing
agency for such projects, facilities, programs and services.
(Underscoring supplied)
The essence of this express reservation of power by the national

government is that, unless an LGU is particularly designated as the
implementing agency, it has no power over a program for which funding has
been provided by the national government under the annual general
appropriations act, even if the program involves the delivery of basic
services within the jurisdiction of the LGU.
The Court held in Ganzon v. Court of Appeals 17 that while it is through
a system of decentralization that the State shall promote a more responsive
and accountable local government structure, the concept of local autonomy
does not imply the conversion of local government units into "mini-states." 18
We explained that, with local autonomy, the Constitution did nothing more
than "to break up the monopoly of the national government over the affairs
of the local government" and, thus, did not intend to sever "the relation of
partnership and interdependence between the central administration and
local government units." 19 In Pimentel v. Aguirre, 20 the Court defined the
extent of the local government's autonomy in terms of its partnership with
the national government in the pursuit of common national goals, referring
to such key concepts as integration and coordination. Thus: DaHISE
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.
Certainly, to yield unreserved power of governance to the local

government unit as to preclude any and all involvement by the national
government in programs implemented in the local level would be to shift the
tide of monopolistic power to the other extreme, which would amount to a
decentralization of power explicated in Limbona v. Mangelin 21 as beyond
our constitutional concept of autonomy, thus:
Now, autonomy is either decentralization of administration or
decentralization of power. There is decentralization of administration
when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government
power and in the process to make local governments 'more responsive
and accountable' and 'ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of
national development and social progress.' At the same time, it
relieves the central government of the burden of managing local affairs
and enables it to concentrate on national concerns. The President
exercises 'general supervision' over them, but only to 'ensure that local
affairs are administered according to law.' He has no control over their
acts in the sense that he can substitute their judgments with his own.
Decentralization of power, on the other hand, involves an

abdication of political power in the [sic] favor of local governments [sic]
units declared to be autonomous. In that case, the autonomous
government is free to chart its own destiny and shape its future with
minimum intervention from central authorities. According to a
constitutional author, decentralization of power amounts to 'self-
immolation,' since in that event, the autonomous government
becomes accountable not to the central authorities but to its
constituency. 22
Indeed, a complete relinquishment of central government powers on

the matter of providing basic facilities and services cannot be implied as the
Local Government Code itself weighs against it. The national government is,
thus, not precluded from taking a direct hand in the formulation and
implementation of national development programs especially where it is
implemented locally in coordination with the LGUs concerned.
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.
WHEREFORE, premises considered, the petition is hereby
DISMISSED. HDATSI
SO ORDERED.
Carpio, Velasco, Jr., Leonardo-de Castro, Peralta, Bersamin, Del
Castillo, Abad, Villarama, Jr., Perez, Mendoza, Sereno and Reyes, JJ., concur.
Brion, J., is on sick leave.
Footnotes
1.Annex "A", Petition, rollo, pp. 30-36.
2.Annex "4", Comment, rollo, p. 107.
3.Id. at 108.
4.Annexes "5" and "6", Comment, pp. 114 and 115.
5.Annex "B", Petition, rollo, pp. 37-51.
6.Item 3, Goal and Objectives, A.O. No. 16, s. 2008, rollo, p. 39.
7.Id.
8.Item 4, Implementing Procedures, id. at 41.
9.Id. at 44.
10.Id. at 43.
11.Item V, Institutional Arrangements, id. at 50.
12.Annex "C", Petition, rollo, pp. 52-54.
13.Annex "A", id. at 30-36.
14.Section 25, Article II, 1987 Philippine Constitution.
15.Article X, id.
16.Section 2, The Local Government Code of 1991.
17.G.R. Nos. 93252 and 95245, August 5, 1991, 200 SCRA 271.
18.Id. at 281.
19.Id. at 286.
20.G.R. No. 132988, July 19, 2000, 336 SCRA 201, 217.
21.G.R. No. 80391, February 28, 1989, 170 SCRA 786.
22.Id. at 794-795.
23.Lacson v. Executive Secretary, G.R. No. 128096, January 20, 1999, 301 SCRA
298, 311.

EN BANC
[G.R. No. 152774. May 27, 2004.]
THE PROVINCE OF BATANGAS, represented by its Governor,

HERMILANDO I. MANDANAS, petitioner, vs. HON. ALBERTO G.
ROMULO, Executive Secretary and Chairman of the
Oversight Committee on Devolution; HON. EMILIA
BONCODIN, Secretary, Department of Budget and
Management; HON. JOSE D. LINA, JR., Secretary,
Department of the Interior and Local Government,
respondents.
DECISION
CALLEJO, SR., J : p
The Province of Batangas, represented by its Governor, Hermilando I.

Mandanas, filed the present petition for certiorari, prohibition and mandamus
under Rule 65 of the Rules of Court, as amended, to declare as
unconstitutional and void certain provisos contained in the General
Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they uniformly
earmarked for each corresponding year the amount of five billion pesos
(P5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local
Government Service Equalization Fund (LGSEF) and imposed conditions for
the release thereof.
Named as respondents are Executive Secretary Alberto G. Romulo, in
his capacity as Chairman of the Oversight Committee on Devolution,
Secretary Emilia Boncodin of the Department of Budget and Management
(DBM) and Secretary Jose Lina of the Department of the Interior and Local
Government (DILG).
Background
On December 7, 1998, then President Joseph Ejercito Estrada issued
Executive Order (E.O.) No. 48 entitled "ESTABLISHING A PROGRAM FOR
DEVOLUTION ADJUSTMENT AND EQUALIZATION." The program was
established to "facilitate the process of enhancing the capacities of Local
Government Units (LGUs) in the discharge of the functions and services
devolved to them by the National Government Agencies concerned pursuant
to the Local Government Code." 1 The Oversight Committee (referred to as
the Devolution Committee in E.O. No. 48) constituted under Section 533(b)
of Republic Act No. 7160 (The Local Government Code of 1991) has been
tasked to formulate and issue the appropriate rules and regulations
necessary for its effective implementation. 2 Further, to address the funding
shortfalls of functions and services devolved to the LGUs and other funding
requirements of the program, the "Devolution Adjustment and Equalization
Fund" was created. 3 For 1998, the DBM was directed to set aside an amount
to be determined by the Oversight Committee based on the devolution
status appraisal surveys undertaken by the DILG. 4 The initial fund was to be
sourced from the available savings of the national government for CY 1998. 5
For 1999 and the succeeding years, the corresponding amount required to
sustain the program was to be incorporated in the annual GAA. 6 The
Oversight Committee has been authorized to issue the implementing rules
and regulations governing the equitable allocation and distribution of said
fund to the LGUs. 7
The LGSEF in the GAA of 1999
I n Republic Act No. 8745, otherwise known as the GAA of 1999, the
program was renamed as the LOCAL GOVERNMENT SERVICE EQUALIZATION
FUND (LGSEF). Under said appropriations law, the amount of
P96,780,000,000 was allotted as the share of the LGUs in the internal
revenue taxes. Item No. 1, Special Provisions, Title XXXVI — A. Internal
Revenue Allotment of Rep. Act No. 8745 contained the following proviso:
. . . PROVIDED, That the amount of FIVE BILLION PESOS
(P5,000,000,000) shall be earmarked for the Local Government Service
Equalization Fund for the funding requirements of projects and
activities arising from the full and efficient implementation of devolved
functions and services of local government units pursuant to R.A. No.
7160, otherwise known as the Local Government Code of 1991:
PROVIDED, FURTHER, That such amount shall be released to the local
government units subject to the implementing rules and regulations,
including such mechanisms and guidelines for the equitable allocations
and distribution of said fund among local government units subject to
the guidelines that may be prescribed by the Oversight Committee on
Devolution as constituted pursuant to Book IV, Title III, Section 533(b)
of R.A. No. 7160. The Internal Revenue Allotment shall be released
directly by the Department of Budget and Management to the Local
Government Units concerned.
On July 28, 1999, the Oversight Committee (with then Executive

Secretary Ronaldo B. Zamora as Chairman) passed Resolution Nos. OCD-99-
003, OCD-99-005 and OCD-99-006 entitled as follows:
OCD-99-005
RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP5
BILLION CY 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND
(LGSEF) AND REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH
EJERCITO ESTRADA TO APPROVE SAID ALLOCATION SCHEME.
OCD-99-006
RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP4.0
BILLION OF THE 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION
FUND AND ITS CONCOMITANT GENERAL FRAMEWORK, IMPLEMENTING
GUIDELINES AND MECHANICS FOR ITS IMPLEMENTATION AND RELEASE,
AS PROMULGATED BY THE OVERSIGHT COMMITTEE ON DEVOLUTION.
OCD-99-003
RESOLUTION REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH
EJERCITO ESTRADA TO APPROVE THE REQUEST OF THE OVERSIGHT
COMMITTEE ON DEVOLUTION TO SET ASIDE TWENTY PERCENT (20%)
OF THE LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF)
FOR LOCAL AFFIRMATIVE ACTION PROJECTS AND OTHER PRIORITY
INITIATIVES FOR LGUs INSTITUTIONAL AND CAPABILITY BUILDING IN
ACCORDANCE WITH THE IMPLEMENTING GUIDELINES AND MECHANICS
AS PROMULGATED BY THE COMMITTEE.
These OCD resolutions were approved by then President Estrada on

October 6, 1999.
Under the allocation scheme adopted pursuant to Resolution No. OCD-
99-005, the five billion pesos LGSEF was to be allocated as follows: EDcICT
1. The PhP4 Billion of the LGSEF shall be allocated in accordance

with the allocation scheme and implementing guidelines and
mechanics promulgated and adopted by the OCD. To wit:
a. The first PhP2 Billion of the LGSEF shall be allocated in
accordance with the codal formula sharing scheme as
prescribed under the 1991 Local Government Code;
b. The second PhP2 Billion of the LGSEF shall be allocated in
accordance with a modified 1992 cost of devolution fund
(CODEF) sharing scheme, as recommended by the
respective leagues of provinces, cities and municipalities to
the OCD. The modified CODEF sharing formula is as
follows:
Province : 40%
Cities : 20%
Municipalities : 40%
This is applied to the P2 Billion after the approved amounts

granted to individual provinces, cities and municipalities as
assistance to cover decrease in 1999 IRA share due to
reduction in land area have been taken out.
2. The remaining PhP1 Billion of the LGSEF shall be earmarked to

support local affirmative action projects and other priority
initiatives submitted by LGUs to the Oversight Committee on
Devolution for approval in accordance with its prescribed
guidelines as promulgated and adopted by the OCD.
In Resolution No. OCD-99-003, the Oversight Committee set aside the
one billion pesos or 20% of the LGSEF to support Local Affirmative Action
Projects (LAAPs) of LGUs. This remaining amount was intended to "respond
to the urgent need for additional funds assistance, otherwise not available
within the parameters of other existing fund sources." For LGUs to be eligible
for funding under the one-billion-peso portion of the LGSEF, the OCD
promulgated the following:
III. CRITERIA FOR ELIGIBILITY:
1. LGUs (province, city, municipality, or barangay), individually or

by group or multi-LGUs or leagues of LGUs, especially those
belonging to the 5th and 6th class, may access the fund to
support any projects or activities that satisfy any of the aforecited
purposes. A barangay may also access this fund directly or
through their respective municipality or city.
2. The proposed project/activity should be need-based, a local
priority, with high development impact and are congruent with
the socio-cultural, economic and development agenda of the
Estrada Administration, such as food security, poverty alleviation,
electrification, and peace and order, among others.
3. Eligible for funding under this fund are projects arising from, but
not limited to, the following areas of concern:
a. delivery of local health and sanitation services, hospital
services and other tertiary services;
b. delivery of social welfare services;
c. provision of socio-cultural services and facilities for youth
and community development;
d. provision of agricultural and on-site related research;
e. improvement of community-based forestry projects and
other local projects on environment and natural resources
protection and conservation;
f. improvement of tourism facilities and promotion of tourism;
g. peace and order and public safety;
h. construction, repair and maintenance of public works and
infrastructure, including public buildings and facilities for
public use, especially those destroyed or damaged by man-
made or natural calamities and disaster as well as facilities
for water supply, flood control and river dikes;
i. provision of local electrification facilities;
j. livelihood and food production services, facilities and
equipment;
k. other projects that may be authorized by the OCD
consistent with the aforementioned objectives and
guidelines;
4. Except on extremely meritorious cases, as may be determined
by the Oversight Committee on Devolution, this portion of the
LGSEF shall not be used in expenditures for personal costs or
benefits under existing laws applicable to governments.
Generally, this fund shall cover the following objects of
expenditures for programs, projects and activities arising from
the implementation of devolved and regular functions and
services:
a. acquisition/procurement of supplies and materials critical
to the full and effective implementation of devolved
programs, projects and activities;
b. repair and/or improvement of facilities;
c. repair and/or upgrading of equipment;
d. acquisition of basic equipment;
e. construction of additional or new facilities;
f. counterpart contribution to joint arrangements or collective
projects among groups of municipalities, cities and/or
provinces related to devolution and delivery of basic
services.
5. To be eligible for funding, an LGU or group of LGU shall submit to
the Oversight Committee on Devolution through the Department
of the Interior and Local Governments, within the prescribed
schedule and timeframe, a Letter Request for Funding Support
from the Affirmative Action Program under the LGSEF, duly
signed by the concerned LGU(s) and endorsed by cooperators
and/or beneficiaries, as well as the duly signed Resolution of
Endorsement by the respective Sanggunian(s) of the LGUs
concerned. The LGU-proponent shall also be required to submit
the Project Request (PR), using OCD Project Request Form No.
99-02, that details the following:
(a) general description or brief of the project;
(b) objectives and justifications for undertaking the project,
which should highlight the benefits to the locality and the
expected impact to the local program/project arising from
the full and efficient implementation of social services and
facilities, at the local levels;
(c) target outputs or key result areas;
(d) schedule of activities and details of requirements;
(e) total cost requirement of the project;
(f) proponent's counterpart funding share, if any, and
identified source(s) of counterpart funds for the full
implementation of the project;
(g) requested amount of project cost to be covered by the
LGSEF.
Further, under the guidelines formulated by the Oversight Committee
as contained in Attachment — Resolution No. OCD-99-003, the LGUs were
required to identify the projects eligible for funding under the one-billion-
peso portion of the LGSEF and submit the project proposals thereof and
other documentary requirements to the DILG for appraisal. The project
proposals that passed the DILG's appraisal would then be submitted to the
Oversight Committee for review, evaluation and approval. Upon its approval,
the Oversight Committee would then serve notice to the DBM for the
preparation of the Special Allotment Release Order (SARO) and Notice of
Cash Allocation (NCA) to effect the release of funds to the said LGUs.
Under Rep. Act No. 8760, otherwise known as the GAA of 2000, the
amount of P111,778,000,000 was allotted as the share of the LGUs in the
internal revenue taxes. As in the GAA of 1999, the GAA of 2000 contained a
proviso earmarking five billion pesos of the IRA for the LGSEF. This proviso,
found in Item No. 1, Special Provisions, Title XXXVII — A. Internal Revenue
Allotment, was similarly worded as that contained in the GAA of 1999. CaSAcH
The Oversight Committee, in its Resolution No. OCD-2000-023 dated

June 22, 2000, adopted the following allocation scheme governing the five
billion pesos LGSEF for 2000:
1. The PhP3.5 Billion of the CY 2000 LGSEF shall be allocated to and
shared by the four levels of LGUs, i.e., provinces, cities,
municipalities, and barangays, using the following percentage-
sharing formula agreed upon and jointly endorsed by the various
Leagues of LGUs:
For Provinces 26% or P910,000,000
For Cities 23% or 805,000,000
For Municipalities 35% or 1,225,000,000
For Barangays 16% or 560,000,000
Provided that the respective Leagues representing the provinces,

cities, municipalities and barangays shall draw up and adopt the
horizontal distribution/sharing schemes among the member LGUs
whereby the Leagues concerned may opt to adopt direct financial
assistance or project-based arrangement, such that the LGSEF
allocation for individual LGU shall be released directly to the LGU
concerned;
Provided further that the individual LGSEF shares to LGUs are

used in accordance with the general purposes and guidelines
promulgated by the OCD for the implementation of the LGSEF at
the local levels pursuant to Res. No. OCD-99-006 dated October
7, 1999 and pursuant to the Leagues' guidelines and mechanism
as approved by the OCD;
Provided further that each of the Leagues shall submit to the

OCD for its approval their respective allocation scheme, the list
of LGUs with the corresponding LGSEF shares and the
corresponding project categories if project-based;
Provided further that upon approval by the OCD, the lists of LGUs
shall be endorsed to the DBM as the basis for the preparation of
the corresponding NCAs, SAROs, and related budget/release
documents.
2. The remaining P1,500,000,000 of the CY 2000 LGSEF shall be

earmarked to support the following initiatives and local
affirmative action projects, to be endorsed to and approved by
the Oversight Committee on Devolution in accordance with the
OCD agreements, guidelines, procedures and documentary
requirements:
On July 5, 2000, then President Estrada issued a Memorandum
authorizing then Executive Secretary Zamora and the DBM to implement and
release the 2.5 billion pesos LGSEF for 2000 in accordance with Resolution
No. OCD-2000-023.
Thereafter, the Oversight Committee, now under the administration of
President Gloria Macapagal-Arroyo, promulgated Resolution No. OCD-2001-
29 entitled "ADOPTING RESOLUTION NO. OCD-2000-023 IN THE
ALLOCATION, IMPLEMENTATION AND RELEASE OF THE REMAINING P2.5
BILLION LGSEF FOR CY 2000." Under this resolution, the amount of one
billion pesos of the LGSEF was to be released in accordance with paragraph
1 of Resolution No. OCD-2000-23, to complete the 3.5 billion pesos allocated
to the LGUs, while the amount of 1.5 billion pesos was allocated for the
LAAP. However, out of the latter amount, P400,000,000 was to be allocated
and released as follows: P50,000,000 as financial assistance to the LAAPs of
LGUs; P275,360,227 as financial assistance to cover the decrease in the IRA
of LGUs concerned due to reduction in land area; and P74,639,773 for the
LGSEF Capability-Building Fund.
In view of the failure of Congress to enact the general appropriations
law for 2001, the GAA of 2000 was deemed re-enacted, together with the
IRA of the LGUs therein and the proviso earmarking five billion pesos thereof
for the LGSEF.
On January 9, 2002, the Oversight Committee adopted Resolution No.
OCD-2002-001 allocating the five billion pesos LGSEF for 2001 as follows:
Modified Codal Formula P3.000
billion
Priority Projects 1.900 billion
Capability Building Fund .100 billion
——————
P5.000
billion
RESOLVED FURTHER, that the P3.0 B of the CY 2001 LGSEF which

is to be allocated according to the modified codal formula shall be
released to the four levels of LGUs, i.e., provinces, cities, municipalities
and barangays, as follows:
LGUs Percentage Amount

Provinces 25 P0.750 billion
Cities 25 0.750
Municipalities 35 1.050
Barangays 15 0.450
—– ——–
100 P3.000 billion
RESOLVED FURTHER, that the P1.9 B earmarked for priority

projects shall be distributed according to the following criteria:
1.0 For projects of the 4th, 5th and 6th class LGUs; or
2.0 Projects in consonance with the President's State of the
Nation Address (SONA)/summit commitments.
RESOLVED FURTHER, that the remaining P100 million LGSEF

capability building fund shall be distributed in accordance with the
recommendation of the Leagues of Provinces, Cities, Municipalities and
Barangays, and approved by the OCD.
Upon receipt of a copy of the above resolution, Gov. Mandanas wrote to

the individual members of the Oversight Committee seeking the
reconsideration of Resolution No. OCD-2002-001. He also wrote to Pres.
Macapagal-Arroyo urging her to disapprove said resolution as it violates the
Constitution and the Local Government Code of 1991.
On January 25, 2002, Pres. Macapagal-Arroyo approved Resolution No. OCD-

2002-001.
The Petitioner's Case

The petitioner now comes to this Court assailing as unconstitutional
and void the provisos in the GAAs of 1999, 2000 and 2001, relating to the
LGSEF. Similarly assailed are the Oversight Committee's Resolutions Nos.
OCD-99-003, OCD-99-005, OCD-99-006, OCD-2000-023, OCD-2001-029 and
OCD-2002-001 issued pursuant thereto. The petitioner submits that the
assailed provisos in the GAAs and the OCD resolutions, insofar as they
earmarked the amount of five billion pesos of the IRA of the LGUs for 1999,
2000 and 2001 for the LGSEF and imposed conditions for the release thereof,
violate the Constitution and the Local Government Code of 1991.
Section 6, Article X of the Constitution is invoked as it mandates that
the "just share" of the LGUs shall be automatically released to them.
Sections 18 and 286 of the Local Government Code of 1991, which enjoin
that the "just share" of the LGUs shall be "automatically and directly"
released to them "without need of further action" are, likewise, cited.
The petitioner posits that to subject the distribution and release of the
five-billion-peso portion of the IRA, classified as the LGSEF, to compliance by
the LGUs with the implementing rules and regulations, including the
mechanisms and guidelines prescribed by the Oversight Committee,
contravenes the explicit directive of the Constitution that the LGUs' share in
the national taxes "shall be automatically released to them." The petitioner
maintains that the use of the word "shall" must be given a compulsory
meaning.
To further buttress this argument, the petitioner contends that to vest
the Oversight Committee with the authority to determine the distribution and
release of the LGSEF, which is a part of the IRA of the LGUs, is an anathema
to the principle of local autonomy as embodied in the Constitution and the
Local Government Code of 1991. The petitioner cites as an example the
experience in 2001 when the release of the LGSEF was long delayed because
the Oversight Committee was not able to convene that year and no
guidelines were issued therefor. Further, the possible disapproval by the
Oversight Committee of the project proposals of the LGUs would result in the
diminution of the latter's share in the IRA. HCETDS
Another infringement alleged to be occasioned by the assailed OCD

resolutions is the improper amendment to Section 285 of the Local
Government Code of 1991 on the percentage sharing of the IRA among the
LGUs. Said provision allocates the IRA as follows: Provinces — 23%; Cities —
23%; Municipalities — 34%; and Barangays — 20%. 8 This formula has been
improperly amended or modified, with respect to the five-billion-peso portion
of the IRA allotted for the LGSEF, by the assailed OCD resolutions as they
invariably provided for a different sharing scheme.
The modifications allegedly constitute an illegal amendment by the
executive branch of a substantive law. Moreover, the petitioner mentions
that in the Letter dated December 5, 2001 of respondent Executive
Secretary Romulo addressed to respondent Secretary Boncodin, the former
endorsed to the latter the release of funds to certain LGUs from the LGSEF in
accordance with the handwritten instructions of President Arroyo. Thus, the
LGUs are at a loss as to how a portion of the LGSEF is actually allocated.
Further, there are still portions of the LGSEF that, to date, have not been
received by the petitioner; hence, resulting in damage and injury to the
petitioner.
The petitioner prays that the Court declare as unconstitutional and void
the assailed provisos relating to the LGSEF in the GAAs of 1999, 2000 and
2001 and the assailed OCD resolutions (Resolutions Nos. OCD-99-003, OCD-
99-005, OCD-99-006, OCD-2000-023, OCD-2001-029 and OCD-2002-001)
issued by the Oversight Committee pursuant thereto. The petitioner,
likewise, prays that the Court direct the respondents to rectify the unlawful
and illegal distribution and releases of the LGSEF for the aforementioned
years and release the same in accordance with the sharing formula under
Section 285 of the Local Government Code of 1991. Finally, the petitioner
urges the Court to declare that the entire IRA should be released
automatically without further action by the LGUs as required by the
The Respondents' Arguments
The respondents, through the Office of the Solicitor General, urge the
Court to dismiss the petition on procedural and substantive grounds. On the
latter, the respondents contend that the assailed provisos in the GAAs of
1999, 2000 and 2001 and the assailed resolutions issued by the Oversight
Committee are not constitutionally infirm. The respondents advance the
view that Section 6, Article X of the Constitution does not specify that the
"just share" of the LGUs shall be determined solely by the Local Government
Code of 1991. Moreover, the phrase "as determined by law" in the same
constitutional provision means that there exists no limitation on the power of
Congress to determine what is the "just share" of the LGUs in the national
taxes. In other words, Congress is the arbiter of what should be the "just
share" of the LGUs in the national taxes.
The respondents further theorize that Section 285 of the Local
Government Code of 1991, which provides for the percentage sharing of the
IRA among the LGUs, was not intended to be a fixed determination of their
"just share" in the national taxes. Congress may enact other laws, including
appropriations laws such as the GAAs of 1999, 2000 and 2001, providing for
a different sharing formula. Section 285 of the Local Government Code of
1991 was merely intended to be the "default share" of the LGUs to do away
with the need to determine annually by law their "just share." However, the
LGUs have no vested right in a permanent or fixed percentage as Congress
may increase or decrease the "just share" of the LGUs in accordance with
what it believes is appropriate for their operation. There is nothing in the
Constitution which prohibits Congress from making such determination
through the appropriations laws. If the provisions of a particular statute, the
GAA in this case, are within the constitutional power of the legislature to
enact, they should be sustained whether the courts agree or not in the
wisdom of their enactment.
On procedural grounds, the respondents urge the Court to dismiss the
petition outright as the same is defective. The petition allegedly raises
factual issues which should be properly threshed out in the lower courts, not
this Court, not being a trier of facts. Specifically, the petitioner's allegation
that there are portions of the LGSEF that it has not, to date, received,
thereby causing it (the petitioner) injury and damage, is subject to proof and
must be substantiated in the proper venue, i.e., the lower courts.
Further, according to the respondents, the petition has already been
rendered moot and academic as it no longer presents a justiciable
controversy. The IRAs for the years 1999, 2000 and 2001, have already been
released and the government is now operating under the 2003 budget. In
support of this, the respondents submitted certifications issued by officers of
the DBM attesting to the release of the allocation or shares of the petitioner
in the LGSEF for 1999, 2000 and 2001. There is, therefore, nothing more to
prohibit.
Finally, the petitioner allegedly has no legal standing to bring the suit
because it has not suffered any injury. In fact, the petitioner's "just share"
has even increased. Pursuant to Section 285 of the Local Government Code
of 1991, the share of the provinces is 23%. OCD Nos. 99-005, 99-006 and 99-
003 gave the provinces 40% of P2 billion of the LGSEF. OCD Nos. 2000-023
and 2001-029 apportioned 26% of P3.5 billion to the provinces. On the other
hand, OCD No. 2001-001 allocated 25% of P3 billion to the provinces. Thus,
the petitioner has not suffered any injury in the implementation of the
assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD
resolutions.
The Ruling of the Court
Procedural Issues
Before resolving the petition on its merits, the Court shall first rule on
the following procedural issues raised by the respondents: (1) whether the
petitioner has legal standing or locus standi to file the present suit; (2)
whether the petition involves factual questions that are properly cognizable
by the lower courts; and (3) whether the issue had been rendered moot and
academic.
The petitioner has locus standi
to maintain the present suit
The gist of the question of standing is whether a party has "alleged
such a personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon which
the court so largely depends for illumination of difficult constitutional
questions." 9 Accordingly, it has been held that the interest of a party
assailing the constitutionality of a statute must be direct and personal. Such
party must be able to show, not only that the law or any government act is
invalid, but also that he has sustained or is in imminent danger of sustaining
some direct injury as a result of its enforcement, and not merely that he
suffers thereby in some indefinite way. It must appear that the person
complaining has been or is about to be denied some right or privilege to
which he is lawfully entitled or that he is about to be subjected to some
burdens or penalties by reason of the statute or act complained of. 10
The Court holds that the petitioner possesses the requisite standing to
maintain the present suit. The petitioner, a local government unit, seeks
relief in order to protect or vindicate an interest of its own, and of the other
LGUs. This interest pertains to the LGUs' share in the national taxes or the
IRA. The petitioner's constitutional claim is, in substance, that the assailed
provisos in the GAAs of 1999, 2000 and 2001, and the OCD resolutions
contravene Section 6, Article X of the Constitution, mandating the
"automatic release" to the LGUs of their share in the national taxes. Further,
the injury that the petitioner claims to suffer is the diminution of its share in
the IRA, as provided under Section 285 of the Local Government Code of
1991, occasioned by the implementation of the assailed measures. These
allegations are sufficient to grant the petitioner standing to question the
validity of the assailed provisos in the GAAs of 1999, 2000 and 2001, and the
OCD resolutions as the petitioner clearly has "a plain, direct and adequate
interest" in the manner and distribution of the IRA among the LGUs.
The petition involves a significant
legal issue
The crux of the instant controversy is whether the assailed provisos
contained in the GAAs of 1999, 2000 and 2001, and the OCD resolutions
infringe the Constitution and the Local Government Code of 1991. This is
undoubtedly a legal question. On the other hand, the following facts are not
disputed:
1. The earmarking of five billion pesos of the IRA for the LGSEF in
the assailed provisos in the GAAs of 1999, 2000 and re-enacted
budget for 2001;
2. The promulgation of the assailed OCD resolutions providing for
the allocation schemes covering the said five billion pesos and
the implementing rules and regulations therefor; and
3. The release of the LGSEF to the LGUs only upon their compliance
with the implementing rules and regulations, including the
guidelines and mechanisms, prescribed by the Oversight
Committee.
Considering that these facts, which are necessary to resolve the legal
question now before this Court, are no longer in issue, the same need not be
determined by a trial court. 11 In any case, the rule on hierarchy of courts will
not prevent this Court from assuming jurisdiction over the petition. The said
rule may be relaxed when the redress desired cannot be obtained in the
appropriate courts or where exceptional and compelling circumstances
justify availment of a remedy within and calling for the exercise of this
Court's primary jurisdiction. 12
The crucial legal issue submitted for resolution of this Court entails the
proper legal interpretation of constitutional and statutory provisions.
Moreover, the "transcendental importance" of the case, as it necessarily
involves the application of the constitutional principle on local autonomy,
cannot be gainsaid. The nature of the present controversy, therefore,
warrants the relaxation by this Court of procedural rules in order to resolve
the case forthwith.
The substantive issue needs to be resolved
notwithstanding the supervening events
Granting arguendo that, as contended by the respondents, the
resolution of the case had already been overtaken by supervening events as
the IRA, including the LGSEF, for 1999, 2000 and 2001, had already been
released and the government is now operating under a new appropriations
law, still, there is compelling reason for this Court to resolve the substantive
issue raised by the instant petition. Supervening events, whether intended
or accidental, cannot prevent the Court from rendering a decision if there is
a grave violation of the Constitution. 13 Even in cases where supervening
events had made the cases moot, the Court did not hesitate to resolve the
legal or constitutional issues raised to formulate controlling principles to
guide the bench, bar and public. 14
Another reason justifying the resolution by this Court of the substantive
issue now before it is the rule that courts will decide a question otherwise
moot and academic if it is "capable of repetition, yet evading review." 15 For
the GAAs in the coming years may contain provisos similar to those now
being sought to be invalidated, and yet, the question may not be decided
before another GAA is enacted. It, thus, behooves this Court to make a
categorical ruling on the substantive issue now.
Substantive Issue
As earlier intimated, the resolution of the substantive legal issue in this
case calls for the application of a most important constitutional policy and
principle, that of local autonomy. 16 In Article II of the Constitution, the State
has expressly adopted as a policy that:
Section 25. The State shall ensure the autonomy of local
governments. aTIEcA
An entire article (Article X) of the Constitution has been devoted to

guaranteeing and promoting the autonomy of LGUs. Section 2 thereof
reiterates the State policy in this wise:
Section 2. The territorial and political subdivisions shall enjoy
local autonomy.
Consistent with the principle of local autonomy, the Constitution

confines the President's power over the LGUs to one of general supervision.
17 This provision has been interpreted to exclude the power of control. The
distinction between the two powers was enunciated in Drilon v. Lim: 18

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 doing the act. He has no
judgment on this matter except to see to it that the rules are followed.
19
The Local Government Code of 1991 20 was enacted to flesh out the
mandate of the Constitution. 21 The State policy on local autonomy is
amplified in Section 2 thereof:
Sec. 2. Declaration of Policy . — (a) It is hereby declared the
policy of the State that the territorial and political subdivisions of the
State shall enjoy genuine and meaningful local autonomy to enable
them to attain their fullest development as self-reliant communities
and make them more effective partners in the attainment of national
goals. Toward this end, the State shall provide for a more responsive
and accountable local government structure instituted through a
system of decentralization whereby local government units shall be
given more powers, authority, responsibilities, and resources. The
process of decentralization shall proceed from the National
Government to the local government units.
Guided by these precepts, the Court shall now determine whether the
assailed provisos in the GAAs of 1999, 2000 and 2001, earmarking for each
corresponding year the amount of five billion pesos of the IRA for the LGSEF
and the OCD resolutions promulgated pursuant thereto, transgress the
The assailed provisos in the GAAs of 1999, 2000
and 2001 and the OCD resolutions violate the
constitutional precept on local autonomy
Section 6, Article X of the Constitution reads:
Sec. 6. Local government units shall have a just share, as
determined by law, in the national taxes which shall be automatically
released to them.
When parsed, it would be readily seen that this provision mandates

that (1) the LGUs shall have a "just share" in the national taxes; (2) the "just
share" shall be determined by law; and (3) the "just share" shall be
automatically released to the LGUs.
The Local Government Code of 1991, among its salient provisions,
underscores the automatic release of the LGUs' "just share" in this wise:
Sec. 18. Power to Generate and Apply Resources . — Local
government units shall have the power and authority to establish an
organization that shall be responsible for the efficient and effective
implementation of their development plans, program objectives and
priorities; to create their own sources of revenue and to levy taxes,
fees, and charges which shall accrue exclusively for their use and
disposition and which shall be retained by them; to have a just share in
national taxes which shall be automatically and directly released to
them without need of further action;
xxx xxx xxx
Sec. 286. Automatic Release of Shares. — (a) The share of

each local government unit shall be released, without need of any
further action, directly to the provincial, city, municipal or barangay
treasurer, as the case may be, on a quarterly basis within five (5) days
after the end of each quarter, and which shall not be subject to any lien
or holdback that may be imposed by the national government for
whatever purpose.
(b) Nothing in this Chapter shall be understood to diminish
the share of local government units under existing laws.
Webster's Third New International Dictionary defines "automatic" as

"involuntary either wholly or to a major extent so that any activity of the will
is largely negligible; of a reflex nature; without volition; mechanical; like or
suggestive of an automaton." Further, the word "automatically" is defined as
"in an automatic manner: without thought or conscious intention." Being
"automatic," thus, connotes something mechanical, spontaneous and
perfunctory. As such, the LGUs are not required to perform any act to
receive the "just share" accruing to them from the national coffers. As
emphasized by the Local Government Code of 1991, the "just share" of the
LGUs shall be released to them "without need of further action." Construing
Section 286 of the LGC, we held in Pimentel, Jr. v. Aguirre, 22 viz:
Section 4 of AO 372 cannot, however, 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.
Section 4 of AO 372, however, orders the withholding, effective

January 1, 1998, of 10 percent of the LGUs' IRA "pending the
assessment and evaluation by the Development Budget Coordinating
Committee of the emerging fiscal situation" in the country. Such
withholding clearly contravenes the Constitution and the law. Although
temporary, it is equivalent to a holdback, which means "something
held back or withheld, often temporarily." Hence, the "temporary"
nature of the retention by the national government does not matter.
Any retention is prohibited.
In sum, while Section 1 of AO 372 may be upheld as an advisory
effected in times of national crisis, Section 4 thereof has no color of
validity at all. The latter provision effectively encroaches on the fiscal
autonomy of local governments. Concededly, the President was well-
intentioned in issuing his Order to withhold the LGUs' IRA, but the rule
of law requires that even the best intentions must be carried out within
the parameters of the Constitution and the law. Verily, laudable
purposes must be carried out by legal methods. 23
The "just share" of the LGUs is incorporated as the IRA in the

appropriations law or GAA enacted by Congress annually. Under the assailed
provisos in the GAAs of 1999, 2000 and 2001, a portion of the IRA in the
amount of five billion pesos was earmarked for the LGSEF, and these
provisos imposed the condition that "such amount shall be released to the
local government units subject to the implementing rules and regulations,
including such mechanisms and guidelines for the equitable allocations and
distribution of said fund among local government units subject to the
guidelines that may be prescribed by the Oversight Committee on
Devolution." Pursuant thereto, the Oversight Committee, through the
assailed OCD resolutions, apportioned the five billion pesos LGSEF such that:
For 1999
P2 billion — allocated according to Sec. 285 LGC
P2 billion — Modified Sharing Formula (Provinces — 40%;

Cities — 20%; Municipalities — 40%)
P1 billion — projects (LAAP) approved by OCD. 24
For 2000
P3.5 billion — Modified Sharing Formula (Provinces — 26%;
Cities — 23%; Municipalities — 35%; Barangays —
16%);
P1.5 billion — projects (LAAP) approved by the OCD. 25

For 2001
P3 billion — Modified Sharing Formula (Provinces — 25%;

Cities — 25%; Municipalities — 35%; Barangays —
15%)
P1.9 billion — priority projects

P100 million — capability building fund. 26
Significantly, the LGSEF could not be released to the LGUs without the
Oversight Committee's prior approval. Further, with respect to the portion of
the LGSEF allocated for various projects of the LGUs (P1 billion for 1999; P1.5
billion for 2000 and P2 billion for 2001), the Oversight Committee, through
the assailed OCD resolutions, laid down guidelines and mechanisms that the
LGUs had to comply with before they could avail of funds from this portion of
the LGSEF. The guidelines required (a) the LGUs to identify the projects
eligible for funding based on the criteria laid down by the Oversight
Committee; (b) the LGUs to submit their project proposals to the DILG for
appraisal; (c) the project proposals that passed the appraisal of the DILG to
be submitted to the Oversight Committee for review, evaluation and
approval. It was only upon approval thereof that the Oversight Committee
would direct the DBM to release the funds for the projects.TEDaAc
To the Court's mind, the entire process involving the distribution and
release of the LGSEF is constitutionally impermissible. The LGSEF is part of
the IRA or "just share" of the LGUs in the national taxes. To subject its
distribution and release to the vagaries of the implementing rules and
regulations, including the guidelines and mechanisms unilaterally prescribed
by the Oversight Committee from time to time, as sanctioned by the assailed
provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions,
makes the release not automatic, a flagrant violation of the constitutional
and statutory mandate that the "just share" of the LGUs "shall be
automatically released to them." The LGUs are, thus, placed at the mercy of
the Oversight Committee.
Where the law, the Constitution in this case, is clear and unambiguous,
it must be taken to mean exactly what it says, and courts have no choice but
to see to it that the mandate is obeyed. 27 Moreover, as correctly posited by
the petitioner, the use of the word "shall" connotes a mandatory order. Its
use in a statute denotes an imperative obligation and is inconsistent with the
idea of discretion. 28
Indeed, the Oversight Committee exercising discretion, even control,
over the distribution and release of a portion of the IRA, the LGSEF, is an
anathema to and subversive of the principle of local autonomy as embodied
in the Constitution. Moreover, it finds no statutory basis at all as the
Oversight Committee was created merely to formulate the rules and
regulations for the efficient and effective implementation of the Local
Government Code of 1991 to ensure "compliance with the principles of local
autonomy as defined under the Constitution." 29 In fact, its creation was
placed under the title of "Transitory Provisions," signifying its ad hoc
character. According to Senator Aquilino Q. Pimentel, the principal author
and sponsor of the bill that eventually became Rep. Act No. 7160, the
Committee's work was supposed to be done a year from the approval of the
Code, or on October 10, 1992. 30 The Oversight Committee's authority is
undoubtedly limited to the implementation of the Local Government Code of
1991, not to supplant or subvert the same. Neither can it exercise control
over the IRA, or even a portion thereof, of the LGUs.
That the automatic release of the IRA was precisely intended to
guarantee and promote local autonomy can be gleaned from the discussion
below between Messrs. Jose N. Nolledo and Regalado M. Maambong, then
members of the 1986 Constitutional Commission, to wit:
MR. MAAMBONG. Unfortunately, under Section 198 of the
Local Government Code, the existence of subprovinces is still
acknowledged by the law, but the statement of the Gentleman on this
point will have to be taken up probably by the Committee on
Legislation. A second point, Mr. Presiding Officer, is that under Article
2, Section 10 of the 1973 Constitution, we have a provision which
states:
The State shall guarantee and promote the autonomy of local
government units, especially the barrio, to insure their fullest
development as self-reliant communities.
This provision no longer appears in the present configuration;
does this mean that the concept of giving local autonomy to local
governments is no longer adopted as far as this Article is concerned?
MR. NOLLEDO. No. In the report of the Committee on
Preamble, National Territory, and Declaration of Principles, that
concept is included and widened upon the initiative of Commissioner
Bennagen.
MR. MAAMBONG. Thank you for that.

With regard to Section 6, sources of revenue, the creation of
sources as provided by previous law was "subject to limitations as may
be provided by law," but now, we are using the term "subject to such
guidelines as may be fixed by law." In Section 7, mention is made
about the "unique, distinct and exclusive charges and contributions,"
and in Section 8, we talk about "exclusivity of local taxes and the share
in the national wealth." Incidentally, I was one of the authors of this
provision, and I am very thankful. Does this indicate local autonomy, or
was the wording of the law changed to give more autonomy to the local
government units? 31
MR. NOLLEDO. Yes. In effect, those words indicate also
"decentralization" because local political units can collect taxes, fees
and charges subject merely to guidelines, as recommended by the
league of governors and city mayors, with whom I had a dialogue for
almost two hours. They told me that limitations may be questionable in
the sense that Congress may limit and in effect deny the right later on.
MR. MAAMBONG. Also, this provision on "automatic release

of national tax share" points to more local autonomy. Is this the
intention?
MR. NOLLEDO. Yes, the Commissioner is perfectly right. 32
The concept of local autonomy was explained in Ganzon v. Court of

Appeals 33 in this wise:
As the Constitution itself declares, local autonomy 'means a more
responsive and accountable local government structure instituted
through a system of decentralization.' The Constitution, as we
observed, does nothing more than to break up the monopoly of the
national government over the affairs of local governments and as put
by political adherents, to "liberate the local governments from the
imperialism of Manila." Autonomy, however, is not meant to end the
relation of partnership and interdependence between the central
administration and local government units, or otherwise, to usher in a
regime of federalism. The Charter has not taken such a radical step.
Local governments, under the Constitution, are subject to regulation,
however limited, and for no other purpose than precisely, albeit
paradoxically, to enhance self-government.
As we observed in one case, decentralization means devolution
of national administration — but not power — to the local levels. Thus:
Now, autonomy is either decentralization of administration or
decentralization of power. There is decentralization of administration
when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government
power and in the process to make local governments 'more responsive
and accountable' and 'ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of
national development and social progress.' At the same time, it
relieves the central government of the burden of managing local affairs
and enables it to concentrate on national concerns. The President
exercises 'general supervision' over them, but only to 'ensure that local
affairs are administered according to law.' He has no control over their
acts in the sense that he can substitute their judgments with his own.
Decentralization of power, on the other hand, involves an
abdication of political power in the [sic] favor of local governments [sic]
units declared to be autonomous. In that case, the autonomous
government is free to chart its own destiny and shape its future with
minimum intervention from central authorities. According to a
constitutional author, decentralization of power amounts to 'self-
immolation,' since in that event, the autonomous government
becomes accountable not to the central authorities but to its
constituency. 34
Local autonomy includes both administrative and fiscal autonomy. The

fairly recent case of Pimentel v. Aguirre 35 is particularly instructive. The
Court declared therein that local fiscal autonomy includes the power of the
LGUs to, inter alia, allocate their resources in accordance with their own
priorities:
Under existing law, local government units, in addition to having
administrative autonomy in the exercise of their functions, enjoy fiscal
autonomy as well. Fiscal autonomy means that local governments have
the power to create their own sources of revenue in addition to their
equitable share in the national taxes released by the national
government, as well as the power to allocate their resources in
accordance with their own priorities. It extends to the preparation of
their budgets, and local officials in turn have to work within the
constraints thereof. They are not formulated at the national level and
imposed on local governments, whether they are relevant to local
needs and resources or not . . . 36
Further, a basic feature of local fiscal autonomy is the constitutionally
mandated automatic release of the shares of LGUs in the national internal
revenue. 37
Following this ratiocination, the Court in Pimentel struck down as
unconstitutional Section 4 of Administrative Order (A.O.) No. 372 which
ordered the withholding, effective January 1, 1998, of ten percent of the
LGUs' IRA "pending the assessment and evaluation by the Development
Budget Coordinating Committee of the emerging fiscal situation."
In like manner, the assailed provisos in the GAAs of 1999, 2000 and
2001, and the OCD resolutions constitute a "withholding" of a portion of the
IRA. They put on hold the distribution and release of the five billion pesos
LGSEF and subject the same to the implementing rules and regulations,
including the guidelines and mechanisms prescribed by the Oversight
Committee from time to time. Like Section 4 of A.O. 372, the assailed
provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions
effectively encroach on the fiscal autonomy enjoyed by the LGUs and must
be struck down. They cannot, therefore, be upheld. ASDCaI
The assailed provisos in the GAAs of 1999, 2000

and 2001 and the OCD resolutions cannot amend
Section 285 of the Local Government Code of 1991
Section 284 38 of the Local Government Code provides that, beginning
the third year of its effectivity, the LGUs' share in the national internal
revenue taxes shall be 40%. This percentage is fixed and may not be
reduced except "in the event the national government incurs an
unmanageable public sector deficit" and only upon compliance with stringent
requirements set forth in the same section:
Sec. 284. ...
Provided, That in the event that the national government incurs

an unmanageable public sector deficit, the President of the Philippines
is hereby authorized, upon recommendation of Secretary of Finance,
Secretary of Interior and Local Government and Secretary of Budget
and Management, and subject to consultation with the presiding
officers of both Houses of Congress and the presidents of the liga, to
make the necessary adjustments in the internal revenue allotment of
local government units but in no case shall the allotment be less than
thirty percent (30%) of the collection of the national internal revenue
taxes of the third fiscal year preceding the current fiscal year;
Provided, further That in the first year of the effectivity of this Code, the
local government units shall, in addition to the thirty percent (30%)
internal revenue allotment which shall include the cost of devolved
functions for essential public services, be entitled to receive the
amount equivalent to the cost of devolved personnel services.
Thus, from the above provision, the only possible exception to the
mandatory automatic release of the LGUs' IRA is if the national internal
revenue collections for the current fiscal year is less than 40 percent of the
collections of the preceding third fiscal year, in which case what should be
automatically released shall be a proportionate amount of the collections for
the current fiscal year. The adjustment may even be made on a quarterly
basis depending on the actual collections of national internal revenue taxes
for the quarter of the current fiscal year. In the instant case, however, there
is no allegation that the national internal revenue tax collections for the
fiscal years 1999, 2000 and 2001 have fallen compared to the preceding
three fiscal years.
Section 285 then specifies how the IRA shall be allocated among the
LGUs:
Sec. 285. Allocation to Local Government Units. — The share
of local government units in the internal revenue allotment shall be
allocated in the following manner:
(a) Provinces — Twenty-three (23%)

(b) Cities — Twenty-three percent (23%);
(c) Municipalities — Thirty-four (34%); and

(d) Barangays — Twenty percent (20%).
However, this percentage sharing is not followed with respect to the

five billion pesos LGSEF as the assailed OCD resolutions, implementing the
assailed provisos in the GAAs of 1999, 2000 and 2001, provided for a
different sharing scheme. For example, for 1999, P2 billion of the LGSEF was
allocated as follows: Provinces — 40%; Cities — 20%; Municipalities — 40%.
39 For 2000, P3.5 billion of the LGSEF was allocated in this manner: Provinces
— 26%; Cities — 23%; Municipalities — 35%; Barangays — 26%. 40 For 2001,

P3 billion of the LGSEF was allocated, thus: Provinces — 25%; Cities — 25%;
Municipalities — 35%; Barangays — 15%. 41
The respondents argue that this modification is allowed since the
Constitution does not specify that the "just share" of the LGUs shall only be
determined by the Local Government Code of 1991. That it is within the
power of Congress to enact other laws, including the GAAs, to increase or
decrease the "just share" of the LGUs. This contention is untenable. The
Local Government Code of 1991 is a substantive law. And while it is
conceded that Congress may amend any of the provisions therein, it may not
do so through appropriations laws or GAAs. Any amendment to the Local
Government Code of 1991 should be done in a separate law, not in the
appropriations law, because Congress cannot include in a general
appropriation bill matters that should be more properly enacted in a
separate legislation. 42
A general appropriations bill is a special type of legislation, whose
content is limited to specified sums of money dedicated to a specific purpose
or a separate fiscal unit. 43 Any provision therein which is intended to amend
another law is considered an "inappropriate provision." The category of
"inappropriate provisions" includes unconstitutional provisions and
provisions which are intended to amend other laws, because clearly these
kinds of laws have no place in an appropriations bill. 44
Increasing or decreasing the IRA of the LGUs or modifying their
percentage sharing therein, which are fixed in the Local Government Code of
1991, are matters of general and substantive law. To permit Congress to
undertake these amendments through the GAAs, as the respondents
contend, would be to give Congress the unbridled authority to unduly
infringe the fiscal autonomy of the LGUs, and thus put the same in jeopardy
every year. This, the Court cannot sanction.
It is relevant to point out at this juncture that, unlike those of 1999,
2000 and 2001, the GAAs of 2002 and 2003 do not contain provisos similar
to the herein assailed provisos. In other words, the GAAs of 2002 and 2003
have not earmarked any amount of the IRA for the LGSEF. Congress had
perhaps seen fit to discontinue the practice as it recognizes its infirmity.
Nonetheless, as earlier mentioned, this Court has deemed it necessary to
make a definitive ruling on the matter in order to prevent its recurrence in
future appropriations laws and that the principles enunciated herein would
serve to guide the bench, bar and public.
Conclusion
In closing, it is well to note that the principle of local autonomy, while
concededly expounded in greater detail in the present Constitution, dates
back to the turn of the century when President William McKinley, in his
Instructions to the Second Philippine Commission dated April 7, 1900,
ordered the new Government "to devote their attention in the first instance
to the establishment of municipal governments in which the natives of the
Islands, both in the cities and in the rural communities, shall be afforded the
opportunity to manage their own affairs to the fullest extent of which they
are capable, and subject to the least degree of supervision and control in
which a careful study of their capacities and observation of the workings of
native control show to be consistent with the maintenance of law, order and
loyalty." 45 While the 1935 Constitution had no specific article on local
autonomy, nonetheless, it limited the executive power over local
governments to "general supervision . . . as may be provided by law." 46
Subsequently, the 1973 Constitution explicitly stated that "[t]he State shall
guarantee and promote the autonomy of local government units, especially
the barangay to ensure their fullest development as self-reliant
communities." 47 An entire article on Local Government was incorporated
therein. The present Constitution, as earlier opined, has broadened the
principle of local autonomy. The 14 sections in Article X thereof markedly
increased the powers of the local governments in order to accomplish the
goal of a more meaningful local autonomy.
Indeed, the value of local governments as institutions of democracy is
measured by the degree of autonomy that they enjoy. 48 As eloquently put
by M. De Tocqueville, a distinguished French political writer, "[l]ocal
assemblies of citizens constitute the strength of free nations. Township
meetings are to liberty what primary schools are to science; they bring it
within the people's reach; they teach men how to use and enjoy it. A nation
may establish a system of free governments but without the spirit of
municipal institutions, it cannot have the spirit of liberty." 49
Our national officials should not only comply with the constitutional
provisions on local autonomy but should also appreciate the spirit and liberty
upon which these provisions are based. 50
WHEREFORE, the petition is GRANTED. The assailed provisos in the
General Appropriations Acts of 1999, 2000 and 2001, and the assailed OCD
Resolutions, are declared UNCONSTITUTIONAL.
SO ORDERED.
Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio, Austria-Martinez, Corona, Carpio Morales, Azcuna and Tinga, JJ .,
concur.
Davide, Jr., C .J . and Puno, J ., are on official leave.
Footnotes
1. Section 1, E.O. No. 48.
2. Section 2, id.
3. Section 4, id.
4. Ibid.
5. Id.
6. Id.
7. Id.
8. Infra.
9. Baker v.. Carr, 369 U.S. 186, 7 L.Ed. 2d 633 cited in, among others, Agan, Jr.
v. PIATCO, G.R. Nos. 155001, 155547 and 155661, May 5, 2003 and Fariñas
v. Executive Secretary, G.R. Nos. 147387 and 152161, December 10, 2003.
10. Agan, Jr. v. PIATCO, supra.
11. Ibid.
12. Id.
13. Chavez v. Public Estates Authority , 384 SCRA 152 (2002).
14. Ibid, citing, among others, Salonga v. Paño, 134 SCRA 438 (1995).
15. Southern Pac. Terminal Co. v. ICC, 219 U.S. 498, 55 L.Ed. 310 (1911) cited
in, among others, Viola v. Alunan III, 277 SCRA 409 (1997); Acop v.
Guingona, Jr., 383 SCRA 577 (2002).
16. San Juan v. Civil Service Commission, 196 SCRA 69 (1991).
17. Section 4, Article X.
18. 235 SCRA 135 (1994).
19. Id. at 142.
20. Rep. Act No. 7160 was signed into law by then President Corazon C. Aquino
on October 10, 1991. It took effect on January 1, 1992.
21. Section 3, Article X reads:
Sec. 3. The Congress shall enact a local government code which shall
provide for a more responsive and accountable local government structure
instituted through a system of decentralization with effective mechanisms of
recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide
for the qualifications, election, appointment and removal, terms, salaries,
powers and functions and duties of local officials, and all other matters
relating to the organization and operation of local government units.
22. 336 SCRA 201 (2000).
23. Id. at 220–221. (Emphasis supplied.)
24. Per OCD-99-005, 99-006, 99-003.
25. Per OCD-2000-023 and 2001-029.
26. Per OCD-2002-001.
27. Quisumbing v. Manila Electric Co., 380 SCRA 195 (2002).
28. Codoy v. Calugay, 312 SCRA 333 (1999).
29. Section 533 of Rep. Act 7160 reads in part:
Sec. 533. Formulation of Implementing Rules and Regulations. — (a)

Within one (1) month after the approval of this Code, the President shall
convene the Oversight Committee as herein provided for. The said
Committee shall formulate and issue the appropriate rules and regulations
necessary for the efficient and effective implementation of any and all
provisions of this Code, thereby ensuring compliance with the principles of
local autonomy as defined under the Constitution.
xxx xxx xxx
(c) The Committee shall submit its report and recommendation to the
President within two (2) months after its organization. If the President fails to
act within thirty (30) days from receipt thereof, the recommendation of the
Oversight Committee shall be deemed approved. Thereafter, the Committee
shall supervise the transfer of such powers and functions mandated under
this Code to the local government units, together with the corresponding
personnel, properties, assets and liabilities of the offices or agencies
concerned, with the least possible disruptions to existing programs and
projects. The Committee shall, likewise, recommend the corresponding
appropriations necessary to effect the said transfer.
30. Pimentel, The Local Government Code of 1991: The Key to National
Development, p. 576.
31. The Committee Report No. 21 submitted by the Committee on Local
Governments of the Constitutional Commission, headed by Commissioner
Jose N. Nolledo, proposed to incorporate the following provisions:
SEC. 6. Each government unit shall have the power to create its own
sources of revenue and to levy taxes, fees and charges subject to such
guidelines as may be fixed by law.
SEC. 7. Local governments shall have the power to levy and collect
charges or contributions unique, distinct and exclusive to them.
SEC. 8. Local taxes shall belong exclusively to local governments and
they shall, likewise, be entitled to share in the proceeds of the exploitation
and development of the national wealth within their respective areas. The
share of local governments in the national taxes shall be released to them
automatically.
32. 3 RECORD OF THE CONSTITUTIONAL COMMISSION 231.
33. 200 SCRA 271 (1991).
34. Id. at 286–287. (Citations omitted.)
35. Supra at note 22.
36. Id. at 218.
37. Id. at 220.
38. The provision reads in part:
Sec. 284. Allotment of Internal Revenue Taxes. — Local government
units shall have a share in the national internal revenue taxes based on the
collection of the third fiscal year preceding the current fiscal year as follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%);
(b) On the second year, thirty-five percent (35%); and
(c) On the third year and, thereafter, forty percent (40%).
39. Per OCD Res.-99-005, 99-006, 99-003.
40. Per OCD-2000-023 and 2001-029.
41. Per OCD-2002-001.
42. Philippine Constitutional Association v. Enriquez, 235 SCRA 506 (1994).
43. Ibid, citing Beckman, The Item Veto Power of the Executive, 31 Temple Law
Quarterly 27 (1957).
44. Id.
45. Mendoza, From McKinley's Instructions to the New Constitution: Documents
on the Philippine Constitutional System, pp. 67–68.
46. Paragraph (1), Section 11, Article VII of the 1935 Constitution reads:
Sec. 11(1). The President shall have control of all the executive
departments, bureaus or offices, exercise general supervision over all local
governments as may be provided by law, and take care that the laws be
faithfully executed.
47. Section 10, Article II thereof.
48. Sinco, Philippine Political Law, 10th ed., pp. 681–682.
49. Ibid.
50. San Juan v. Civil Service Commission, supra.

EN BANC
[G.R. No. 130775. September 27, 2004.]
THE NATIONAL LIGA NG MGA BARANGAY, represented by

ALEX L. DAVID in his capacity as National President and for
his own Person, President ALEX L. DAVID, petitioners, vs.
HON. VICTORIA ISABEL A. PAREDES, Presiding Judge,
Regional Trial Court, Branch 124, Caloocan City, and THE
DEPARTMENT OF THE INTERIOR and LOCAL GOVERNMENT,
represented the HON. SECRETARY ROBERT Z. BARBERS and
MANUEL A. RAYOS, respondents.
[G.R. No. 131939. September 27, 2004.]
LEANDRO YANGOT, BONIFACIO LACWASAN and BONY

TACIO, petitioners, vs. DILG Secretary ROBERT Z. BARBERS
and DILG Undersecretary MANUEL SANCHEZ, respondents.
DECISION
TINGA, J : p
At bottom, the present petition inquires into the essential nature of the
Liga ng mga Barangay and questions the extent of the power of Secretary of
the Department of the Interior and Local Government (DILG), as alter ego of
the President. More immediately, the petition disputes the validity of the
appointment of the DILG as the interim caretaker of the Liga ng mga
Barangay.
On 11 June 1997, private respondent Manuel A. Rayos [as petitioner
therein], Punong Barangay of Barangay 52, District II, Zone 5, District II,
Caloocan City, filed a petition for prohibition and mandamus, with prayer for
a writ of preliminary injunction and/or temporary restraining order and
damages before the Regional Trial Court (RTC) of Caloocan, 1 alleging that
respondent therein Alex L. David [now petitioner], Punong Barangay of
Barangay 77, Zone 7, Caloocan City and then president of theLiga Chapter
of Caloocan City and of the Liga ng mga Barangay National Chapter,
committed certain irregularities in the notice, venue and conduct of the
proposed synchronized Liga ng mga Barangay elections in 1997. According
to the petition, the irregularities consisted of the following: (1) the
publication of the notice in the Manila Bulletin but without notifying in writing
the individual punong barangays of Caloocan City; 2 (2) the Notice of Meeting
dated 08 June 1997 for the Liga Chapter of Caloocan City did not specify
whether the meeting scheduled on 14 June 1997 was to be held at 8:00 a.m.
or 8:00 p.m., and worse, the meeting was to be held in Lingayen,
Pangasinan; 3 and (3) the deadline for the filing of the Certificates of
Candidacy having been set at 5:00 p.m. of the third "day prior to the above
election day", or on 11 June 1997, 4 Rayos failed to meet said deadline since
he was not able to obtain a certified true copy of the COMELEC Certificate of
Canvass and Proclamation of Winning Candidate, which were needed to be a
delegate, to vote and be voted for in the Liga election. On 13 June 1997, the
Executive Judge issued a temporary restraining order (TRO), effective for
seventy-two (72) hours, enjoining the holding of the general membership
and election meeting of Liga Chapter of Caloocan City on 14 June 1975. 5
However, the TRO was allegedly not properly served on herein
petitioner David, and so the election for the officers of the Liga-Caloocan was
held as scheduled. 6 Petitioner David was proclaimed President of the Liga-
Caloocan, and thereafter took his oath and assumed the position of ex-officio
member of the Sangguniang Panlungsod of Caloocan. ACIDTE
On 17 July 1997, respondent Rayos filed a second petition, this time for
quo warranto, mandamus and prohibition, with prayer for a writ of
preliminary injunction and/or temporary restraining order and damages,
against David, Nancy Quimpo, Presiding Officer of the Sangguniang
Panlungsod of Caloocan City, and Secretary Barbers. 7 Rayos alleged that he
was elected President of the Liga Caloocan Chapter in the elections held on
14 June 1997 by the members of the Caloocan Chapter pursuant to their
Resolution/Petition No. 001-97. 8 On 18 July 1997, the presiding judge
granted the TRO, enjoining therein respondents David, Quimpo and
Secretary Barbers from proceeding with the synchronized elections for the
Provincial and Metropolitan Chapters of the Liga scheduled on 19 July 1997,
but only for the purpose of maintaining the status quo and effective for a
period not exceeding seventy-two (72) hours. 9
Eventually, on 18 July 1997, at petitioner David's instance, Special Civil
Action (SCA) No. C-512 pending before Branch 126 was consolidated with
SCA No. C-508 pending before Branch 124. 10
Before the consolidation of the cases, on 25 July 1997, the DILG
through respondent Secretary Barbers, filed in SCA No. C-512 an Urgent
Motion, 11 invoking the President's power of general supervision over all local
government units and seeking the following reliefs:
WHEREFORE, in the interest of the much-needed delivery of
basic services to the people, the maintenance of public order and to
further protect the interests of the forty-one thousand barangays all
over the country, herein respondent respectfully prays:
a) That the Department of the Interior and Local Government (DILG),
pursuant to its delegated power of general supervision, be
appointed as the Interim Caretaker to manage and administer
the affairs of the Liga, until such time that the new set of National
Liga Officers shall have been duly elected and assumed office; . .
. 12
The prayer for injunctive reliefs was anchored on the following
grounds: (1) the DILG Secretary exercises the power of general supervision
over all government units by virtue of Administrative Order No. 267 dated 18
February 1992; (2) the Liga ng mga Barangay is a government organization;
(3) undue interference by some local elective officials during the Municipal
and City Chapter elections of the Liga ng mga Barangay; (4) improper
issuance of confirmations of the elected Liga Chapter officers by petitioner
David and the National Liga Board; (5) the need for the DILG to provide
remedies measured in view of the confusion and chaos sweeping the Liga ng
mga Barangay and the incapacity of the National Liga Board to address the
problems properly.
On 31 July 1997, petitioner David opposed the DILG's Urgent Motion,
claiming that the DILG, being a respondent in the case, is not allowed to
seek any sanction against a co-respondent like David, such as by filing a
cross-claim, without first seeking leave of court. 13 He also alleged that the
DILG's request to be appointed interim caretaker constitutes undue
interference in the internal affairs of the Liga, since the Liga is not subject to
DILG control and supervision. 14
Three (3) days after filing its Urgent Motion, on 28 July 1997, and
before it was acted upon by the lower court, the DILG through then
Undersecretary Manuel Sanchez, issued Memorandum Circular No. 97-176.
15 It cited the reported violations of the Liga ng mga Barangay Constitution
and By-Laws by David and "widespread chaos and confusion" among local
government officials as to who were the qualified ex-officio Liga members in
their respective sanggunians. 16 Pending the appointment of the DILG "as the
Interim Caretaker of the Liga ng mga Barangay by the court and until the
officers and board members of the national Liga Chapter have been elected
and have assumed office," the Memorandum Circular directed all provincial
governors, vice governors, city mayors, city vice mayors, members of the
sangguniang panlalawigan and panlungsod, DILG regional directors and
other concerned officers, as follows:
1. All concerned are directed not to recognize and/or honor any
Liga Presidents of the Provincial and Metropolitan Chapters as ex-
officio members of the sanggunian concerned until further notice
from the Courts or this Department;
2. All concerned are directed to disregard any pronouncement
and/or directive issued by Mr. Alex David on any issue or matter
relating to the affairs of the Liga ng mga Barangay until further notice
from the Courts or this Department. 17
On 04 August 1997, public respondent Judge Victoria Isabel A. Paredes
issued the assailed order, 18 the pertinent portions of which read, thus:
The authority of the DILG to exercise general supervisory
jurisdiction over local government units, including the different
leagues created under the Local Government Code of 1991 (RA 7160)
finds basis in Administrative Order No. 267 dated February 18, 1992.
Specifically, Section 1(a) of the said Administrative Order provides a
broad premise for the supervisory power of the DILG.
Administratively, the DILG's supervision has been tacitly recognized
by the local barangays, municipalities, cities and provinces as shown
by the evidences presented by respondent David himself (See
Annexes "A" to "C"). The fact that the DILG has sought to refer the
matters therein to the National Liga Board/Directorate does not ipso
facto mean that it has lost jurisdiction to act directly therein.
Jurisdiction is conferred by law and cannot be claimed or lost through
agreements or inaction by individuals. What respondent David may
term as "interference" should caretakership be allowed, this Court
would rather view as a necessary and desirable corollary to the
exercise of supervision. 19
Political motivations must not preclude, hamper, or obstruct the
delivery of basic services and the perquisites of public service. In this
case, the fact of confusion arising from conflicting appointments, non-
action, and uninformed or wavering decisions of the incumbent
N a t i o n a l Liga Board/Directorate, having been satisfactorily
established, cannot simply be brushed aside as being politically
motivated or arising therefrom. It is incumbent, therefore, that the
DILG exercise a more active role in the supervision of the affairs and
operations of the National Liga Board/Directorate at least until such
time that the regular National Liga Board/Directorate may have been
elected, qualified and assumed office. 20
xxx xxx xxx
WHEREFORE, premises considered, the Urgent Motion of the
DILG for appointment as interim caretaker, until such time that the
regularly elected National Liga Board of Directors shall have qualified
and assumed office, to manage and administer the affairs of the
National Liga Board, is hereby GRANTED. 21
On 11 August 1997, petitioner David filed an urgent motion for the
reconsideration of the assailed order and to declare respondent Secretary
Barbers in contempt of Court. 22 David claimed that the 04 August 1997
order divested the duly elected members of the Board of Directors of the
Liga National Directorate of their positions without due process of law. He
also wanted Secretary Barbers declared in contempt for having issued,
through his Undersecretary, Memorandum Circular No. 97-176, even before
respondent judge issued the questioned order, in mockery of the justice
system. He implied that Secretary Barbers knew about respondent judge's
questioned order even before it was promulgated. 23
On 11 August 1997, the DILG issued Memorandum Circular No. 97-193,
24providing supplemental guidelines for the 1997 synchronized elections of
the provincial and metropolitan chapters and for the election of the national
chapter of the Liga ng mga Barangay. The Memorandum Circular set the
synchronized elections for the provincial and metropolitan chapters on 23
August 1997 and for the national chapter on 06 September 1997. DcCITS
On 12 August 1997, the DILG issued a Certificate of Appointment25 in

favor of respondent Rayos as president of the Liga ng mga Barangay of
Caloocan City. The appointment purportedly served as Rayos's "legal basis
for ex-officio membership in the Sangguniang Panlungsod of Caloocan City"
and "to qualify and participate in the forthcoming National Chapter Election
of the Liga ng mga Barangay." 26
On 23 August 1997, the DILG conducted the synchronized elections of
Provincial and Metropolitan Liga Chapters. Thereafter, on 06 September
1997, the National Liga Chapter held its election of officers and board of
directors, wherein James Marty L. Lim was elected as President of the
National Liga. 27
On 01 October 1997, public respondent judge denied David's motion
for reconsideration, 28 ruling that there was no factual or legal basis to
reconsider the appointment of the DILG as interim caretaker of the National
Liga Board and to cite Secretary Barbers in contempt of court.29
On 10 October 1997, petitioners filed the instant Petition for Certiorari
30 under Rule 65 of the Rules of Court, seeking to annul public respondent
judge's orders of 04 August 1997 and 01 October 1997. They dispute the
latter's opinion on the power of supervision of the President under the
Constitution, through the DILG over local governments, which is the same as
that of the DILG's as shown by its application of the power on the Liga ng
mga Barangay. Specifically, they claim that the public respondent judge's
designation of the DILG as interim caretaker and the acts which the DILG
sought to implement pursuant to its designation as such are beyond the
scope of the Chief Executive's power of supervision.
To support the petition, petitioners argue that under Administrative
Order No. 267, Series of 1992, the power of general supervision of the
President over local government units does not apply to the Liga and its
various chapters precisely because the Liga is not a local government unit,
contrary to the stance of the respondents. 31
Section 507 of the Local Government Code (Republic Act No. 7160)32
provides that the Liga shall be governed by its own Constitution and By-laws.
Petitioners posit that the duly elected officers and directors of the National
Liga elected in 1994 had a vested right to their positions and could only be
removed therefrom for cause by affirmative vote of two-thirds (2/3) of the
entire membership pursuant to the Liga Constitution and By-Laws, and not
by mere issuances of the DILG, even if bolstered by the dubious
authorization of respondent judge. 33 Thus, petitioners claim that the
questioned order divested the then incumbent officers and directors of the
Liga of their right to their respective offices without due process of law.IECAaD
Assuming the Liga could be subsumed under the term "local

governments," over which the President, through the DILG Secretary, has
the power of supervision, 34 petitioners point out that still there is no legal or
constitutional basis for the appointment of the DILG as interim caretaker. 35
They stress that the actions contemplated by the DILG as interim caretaker
go beyond supervision, as what it had sought and obtained was authority to
alter, modify, nullify or set aside the actions of the Liga Board of Directors
and even to substitute its judgment over that of the latter — which are all
clearly one of control. 36 Petitioners question the appointment of Rayos as
Liga-Caloocan President since at that time petitioner David was occupying
that position which was still the subject of the quo warranto proceedings
Rayos himself had instituted. 37 Petitioners likewise claim that DILG
Memorandum Circular No. 97-193, providing supplemental guidelines for the
synchronized elections of the Liga, replaced the implementing rules adopted
by the Liga pursuant to its Constitution and By-laws. 38 In fact, even before
its appointment as interim caretaker, DILG specifically enjoined all heads of
government units from recognizing petitioner David and/or honoring any of
his pronouncements relating to the Liga. 39
Petitioners rely on decision in Taule v. Santos , 40 which, they claim,
already passed upon the "extent of authority of the then Secretary of Local
Government over the katipunan ng mga barangay or the barangay councils,"
as it specifically ruled that the "Secretary [of Local Government] has no
authority to pass upon the validity or regularity of the election of officers of
the katipunan." 41
For his part, respondent Rayos avers that since the Secretary of the
DILG supervises the acts of local officials by ensuring that they act within the
scope of their prescribed powers and functions and since members of the
various leagues, such as the Liga in this case, are themselves officials of
local government units, it follows that the Liga members are subject to the
power of supervision of the DILG. 42 He adds that as the DILG's management
and administration of the Liga affairs was limited only to the conduct of the
elections, its actions were consistent with its rule-making power and power
of supervision under existing laws. 43 He asserts that in assailing the
appointment of the DILG as interim caretaker, petitioners failed to cite any
provision of positive law in support of their stance. Thus, he adds, "if a law is
silent, obscure or insufficient, a judge may apply a rule he sees fit to resolve
the issue, as long as the rule chosen is in harmony with general interest,
order, morals and public policy," 44 in consonance with Article 9 of the Civil
Code. 45
On the other hand, it is quite significant that the Solicitor General has
shared petitioners' position. He states that the DILG's act of managing and
administering the affairs of the National Liga Board are not merely acts of
supervision but plain manifestations of control and direct takeover of the
functions of the National Liga Board, 46 going beyond the limits of the power
of general supervision of the President over local governments. 47 Moreover,
while the Liga may be deemed a government organization, it is not strictly a
local government unit over which the DILG has supervisory power. 48
Meanwhile, on 24 September 1998, James Marty L. Lim, the newly
elected President of the National Liga, filed a Motion for Leave to File
Comment in Intervention, 49 with his Comment in Intervention attached, 50
invoking the validity of the DILG's actions relative to the conduct of the Liga
elections. 51 In addition, he sought the dismissal of the instant petition on
the following grounds: (1) the issue of validity or invalidity of the questioned
order has been rendered moot and academic by the election of Liga officers;
(2) the turn-over of the administration and management of Liga affairs to the
Liga officers; and (3) the recognition and acceptance by the members of the
Liga nationwide. 52
In the interim, another petition, this time for Prohibition with Prayer for
a Temporary Restraining Order , 53 was filed by several presidents of Liga
Chapters, praying that this Court declare the DILG Secretary and
Undersecretary are not vested with any constitutional or legal power to
exercise control or even supervision over the National Liga ng mga
Barangay, nor to take over the functions of its officers or suspend its
constitution; and declare void any and all acts committed by respondents
therein in connection with their caretakership of the Liga. 54 The petition was
consolidated with G.R. No. 130775, but it was eventually dismissed because
the petitioners failed to submit an affidavit of service and proof of service of
the petition. 55
Meanwhile, on 01 December 1998, petitioner David died and was
substituted by his legal representatives. 56
Petitioners have raised a number of issues. 57 Integrated and
simplified, these issues boil down to the question of whether or not
respondent Judge acted with grave abuse of discretion in appointing the
DILG as interim caretaker to administer and manage the affairs of the
National Liga Board, per its order dated 04 August 1997. 58 In turn, the
resolution of the question of grave abuse of discretion entails a couple of
definitive issues, namely: (1) whether the Liga ng mga Barangay is a
government organization that is subject to the DILG Secretary's power of
supervision over local governments as the alter ego of the President, and (2)
whether the respondent Judge's designation of the DILG as interim caretaker
of the Liga has invested the DILG with control over the Liga and whether
DILG Memorandum Circular No. 97-176, issued before it was designated as
such interim caretaker, and DILG Memorandum Circular No. 97-193 and
other acts which the DILG made in its capacity as interim caretaker of the
Liga, involve supervision or control of the Liga.
However, the Court should first address the question of mootness
which intervenor Lim raised because, according to him, during the pendency
of the present petition a general election was held; the new set of officers
and directors had assumed their positions; and that supervening events the
DILG had turned-over the management and administration of the Liga to new
Liga officers and directors. 59 Respondent Rayos has joined him in this
regard. 60 Forthwith, the Court declares that these supervening events have
not rendered the instant petition moot, nor removed it from the jurisdiction
of this Court.
This case transcends the elections ordered and conducted by the DILG
as interim caretaker of the Liga and the Liga officers and directors who were
elected to replace petitioner David and the former officers. At the core of the
petition is the validity of the DILG's "caretakership" of the Liga and the
official acts of the DILG as such caretaker which exceeded the bounds of
supervision and were exercise of control. At stake in this case is the
realization of the constitutionally ensconced principle of local government
autonomy; 61 the statutory objective to enhance the capabilities of
barangays and municipalities "by providing them opportunities to participate
actively in the implementation of national programs and projects;" 62 and the
promotion of the avowed aim to ensure the independence and non-
partisanship of the Liga ng mga Barangay. The mantle of local autonomy
would be eviscerated and remain an empty buzzword if unconstitutional,
illegal and unwarranted intrusions in the affairs of the local governments are
tolerated and left unchecked.
Indeed, it is the declared policy of the State that its territorial and
political subdivisions should enjoy genuine meaningful local autonomy to
enable them to attain their fullest development as self-reliant communities
and make them more effective partners in the attainment of national goals.
63 In the case of De Leon v. Esguerra, 64 the Court ruled that even barangays
are meant to possess genuine and meaningful local autonomy so that they
may develop fully as self-reliant communities. 65
Furthermore, well-entrenched is the rule that courts will decide a
question otherwise moot and academic if it is "capable of repetition, yet
evading review." 66 For the question of whether the DILG may validly be
appointed as interim caretaker, or assume a similar position and perform
acts pursuant thereto, is likely to resurrect again, and yet the question may
not be decided before the actual assumption, or the termination of said
assumption even. DaTISc
So too, dismissing the petition on the ground of mootness could lead to

the wrong impression that the challenged order and issuances are valid.
Verily, that does not appear to be the correct conclusion to make since by
applying opposite precedents to the issues the outcome points to
invalidating the assailed order and memorandum circulars.
The resolution of the issues of whether the Liga ng mga Barangay is
subject to DILG supervision, and whether the questioned "caretakership"
order of the respondent judge and the challenged issuances and acts of the
DILG constitute control in derogation of the Constitution, necessitates a brief
overview of the barangay, as the lowest LGU, and the Liga, as a vehicle of
governance and coordination.
As the basic political unit, the barangay serves as the primary planning
and implementing unit of government policies, plans, programs, projects and
activities in the community, and as a forum wherein the collective views of
the people may be expressed, crystallized and considered, and where
disputes may be amicably settled. 67
On the other hand, the Liga ng mga Barangay 68 is the organization of
a l l barangays, the primary purpose of which is the determination of the
representation of the Liga in the sanggunians, and the ventilation,
articulation, and crystallization of issues affecting barangay government
administration and securing solutions thereto, through proper and legal
means. 69 The Liga ng mga Barangay shall have chapters at the municipal,
city and provincial and metropolitan political subdivision levels. 70 The
municipal and city chapters of the Liga are composed of the barangay
representatives from the municipality or city concerned. The presidents of
the municipal and city chapters of the Liga form the provincial or
metropolitan political subdivision chapters of the Liga. The presidents of the
chapters of the Liga in highly urbanized cities, provinces and the Metro
Manila area and other metropolitan political subdivisions constitute the
National Liga ng mga Barangay. 71
As conceptualized in the Local Government Code, the barangay is
positioned to influence and direct the development of the entire country.
This was heralded by the adoption of the bottom-to-top approach process of
development which requires the development plans of the barangay to be
considered in the development plans of the municipality, city or province, 72
whose plans in turn are to be taken into account by the central government
73 in its plans for the development of the entire country. 74 The Liga is the
vehicle assigned to make this new development approach materialize and
produce results.
The presidents of the Liga at the municipal, city and provincial levels,
automatically become ex-officio members of the Sangguniang Bayan,
Sangguniang Panlungsod and Sangguniang Panlalawigan , respectively. They
shall serve as such only during their term of office as presidents of the Liga
chapters, which in no case shall be beyond the term of office of the
sanggunian concerned. 75
The Liga ng mga Barangay has one principal aim, namely: to promote
the development of barangays and secure the general welfare of their
inhabitants. 76 In line with this, the Liga is granted the following functions
and duties:
a) Give priority to programs designed for the total development of the
barangays and in consonance with the policies, programs and
projects of the national government;
b) Assist in the education of barangay residents for people's
participation in local government administration in order to
promote unitied and concerted action to achieve country-wide
development goals;
c) Supplement the efforts of government in creating gainful
employment within the barangay;
d) Adopt measures to promote the welfare of barangay officials;
e) Serve as forum of the barangays in order to forge linkages with
government and non-governmental organizations and thereby
promote the social, economic and political well-being of the
barangays; and
f) Exercise such other powers and perform such other duties and
functions which will bring about stronger ties between barangays
and promote the welfare of the barangay inhabitants. 77
T h e Ligas are primarily governed by the provisions of the Local
Government Code. However, they are empowered to make their own
constitution and by-laws to govern their operations. Sec. 507 of the Code
provides:
Sec. 507. Constitution and By-Laws of the Liga and the Leagues.
— All other matters not herein otherwise provided for affecting the
internal organization of the leagues of local government units shall be
governed by their respective constitution and by-laws which are
hereby made suppletory to the provision of this Chapter: Provided,
That said Constitution and By-laws shall always conform to the
provision of the Constitution and existing laws.
CTIDcA
Pursuant to the Local Government Code, the Liga ng mga Barangay

adopted its own Constitution and By-Laws. It provides that the corporate
powers of the Liga, expressed or implied, shall be vested in the board of
directors of each level of the Liga which shall:
a) Have jurisdiction over all officers, directors and committees
of the said Liga; including the power of appointment, assignment and
delegation;
b) Have general management of the business, property, and
funds of said Liga;
c) Prepare and approve a budget showing anticipated receipts
and expenditures for the year, including the plans or schemes for
funding purposes; and
d) Have the power to suspend or remove from office any officer
or member of the said board on grounds cited and in the manner
provided in hereinunder provisions. 78
The National Liga Board of Directors promulgated the rules for the
conduct of its Liga's general elections. 79 And, as early as 28 April 1997, the
Liga National Chapter had already scheduled its general elections on 14 June
1997. 80
The controlling provision on the issues at hand is Section 4, Article X of
the Constitution, which reads in part:
Sec. 4. The President of the Philippines shall exercise general
supervision over local governments.
The 1935, 1973 and 1987 Constitutions uniformly differentiate the
President's power of supervision over local governments and his power of
control of the executive departments bureaus and offices. 81 Similar to the
counterpart provisions in the earlier Constitutions, the provision in the 1987
Constitution provision has been interpreted to exclude the power of control.
82
In the early case of Mondano v. Silvosa, et al. , 83 this Court defined

supervision as "overseeing, or the power or authority of an officer to see that
subordinate officers perform their duties, and to take such action as
prescribed by law to compel his subordinates to perform their duties.
Control, on the other hand, means the power of an officer to alter or modify
or nullify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the former for
that of the latter. 84 In Taule v. Santos, 85 the Court held that the Constitution
permits the President to wield no more authority than that of checking
whether a local government or its officers perform their duties as provided
by statutory enactments. 86 Supervisory power, when contrasted with
control, is the power of mere oversight over an inferior body; it does not
include any restraining authority over such body. 87
The case of Drilon v. Lim 88 clearly defined the extent of supervisory
power, thus:
. . . 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 that the rules are followed . . . 89
In Section 4, Article X of the Constitution applicable to the Liga ng mga
Barangay? Otherwise put, is the Liga legally susceptible to DILG suspension?
This question was resolved in Bito-Onon v. Fernandez , 90 where the
Court ruled that the President's power of the general supervision, as
exercised therein by the DILG Secretary as his alter ego, extends to the Liga
ng mga Barangay.
Does the President's power of general supervision extend to the
liga ng mga barangay, which is not a local government unit?
We rule in the affirmative. In Opinion No. 41, Series of 1995,
the Department of Justice ruled that the liga ng mga barangay is a
government organization, being an association, federation, league or
union created by law or by authority of law, whose members are
either appointed or elected government officials. The Local
Government Code defines the liga ng mga barangay as an
organization of all barangays for the primary purpose of determining
the representation of the liga in the sanggunians, and for ventilating,
articulating and crystallizing issues affecting barangay government
administration and securing, through proper and legal means,
solutions thereto. 91
The rationale for making the Liga subject to DILG supervision is quite
evident, whether from the perspectives of logic or of practicality. The Liga is
an aggroupment of barangays which are in turn represented therein by their
respective punong barangays. The representatives of the Liga sit in an ex
officio capacity at the municipal, city and provincial sanggunians. As such,
they enjoy all the powers and discharge all the functions of regular municipal
councilors, city councilors or provincial board members, as the case may be.
Thus, the Liga is the vehicle through which the barangay participates in the
enactment of ordinances and formulation of policies at all the legislative
local levels higher than the sangguniang barangay, at the same time serving
as the mechanism for the bottom-to-top approach of development.
In the case at bar, even before the respondent Judge designated the
DILG as interim caretaker of the Liga, on 28 July 1997, it issued
Memorandum Circular No. 97-176, directing local government officials not to
recognize David as the National Liga President and his pronouncements
relating to the affairs of the Liga. Not only was the action premature, it even
smacked of superciliousness and injudiciousness. The DILG is the topmost
government agency which maintains coordination with, and exercises
supervision over local government units and its multi-level leagues. As such,
it should be forthright, circumspect and supportive in its dealings with the
Ligas especially the Liga ng mga Barangay. The indispensable role played by
the latter in the development of the barangays and the promotion of the
welfare of the inhabitants thereof deserve no less than the full support and
respect of the other agencies of government. As the Court held in the case
o f San Juan v. Civil Service Commission, 92 our national officials should not
only comply with the constitutional provisions on local autonomy but should
also appreciate the spirit of liberty upon which these provisions are based. 93
When the respondent judge eventually appointed the DILG as interim
caretaker to manage and administer the affairs of the Liga, she effectively
removed the management from the National Liga Board and vested control
of the Liga on the DILG. Even a cursory glance at the DILG's prayer for
appointment as interim caretaker of the Liga "to manage and administer the
affairs of the Liga, until such time that the new set of National Liga officers
shall have been duly elected and assumed office" reveals that what the DILG
wanted was to take control over the Liga. Even if said "caretakership" was
contemplated to last for a limited time, or only until a new set of officers
assume office, the fact remains that it was a conferment of control in
derogation of the Constitution. DTISaH
With his Department already appointed as interim caretaker of the

Liga, Secretary Barbers nullified the results of the Liga elections and
promulgated DILG Memorandum Circular No. 97-193 dated 11 August 1997,
where he laid down the supplemental guidelines for the 1997 synchronized
elections of the provincial and metropolitan chapters and for the election of
the national chapter of the Liga ng mga Barangay; scheduled dates for the
new provincial, metropolitan and national chapter elections; and appointed
respondent Rayos as president of Liga-Caloocan Chapter.
These acts of the DILG went beyond the sphere of general supervision
and constituted direct interference with the political affairs, not only of the
Liga, but more importantly, of the barangay as an institution. The election of
Liga officers is part of the Liga's internal organization, for which the latter
has already provided guidelines. In succession, the DILG assumed
stewardship and jurisdiction over the Liga affairs, issued supplemental
guidelines for the election, and nullified the effects of the Liga-conducted
elections. Clearly, what the DILG wielded was the power of control which
even the President does not have.
Furthermore, the DILG assumed control when it appointed respondent
Rayos as president of the Liga-Caloocan Chapter prior to the newly
scheduled general Liga elections, although petitioner David's term had not
yet expired. The DILG substituted its choice, who was Rayos, over the choice
of majority of the punong barangay of Caloocan, who was the incumbent
President, petitioner David. The latter was elected and had in fact been
sitting as an ex-officio member of the sangguniang panlungsod in
accordance with the Liga Constitution and By-Laws. Yet, the DILG extended
the appointment to respondent Rayos although it was aware that the
position was the subject of a quo warranto proceeding instituted by Rayos
himself, thereby preempting the outcome of that case. It was bad enough
that the DILG assumed the power of control, it was worse when it made use
of the power with evident bias and partiality.

As the entity exercising supervision over the Liga ng mga Barangay,
the DILG's authority over the Liga is limited to seeing to it that the rules are
followed, but it cannot lay down such rules itself, nor does it have the
discretion to modify or replace them. In this particular case, the most that
the DILG could do was review the acts of the incumbent officers of the Liga
in the conduct of the elections to determine if they committed any violation
of the Liga's Constitution and By-laws and its implementing rules. If the
National Liga Board and its officers had violated Liga rules, the DILG should
have ordered the Liga to conduct another election in accordance with the
Liga's own rules, but not in obeisance to DILG-dictated guidelines. Neither
had the DILG the authority to remove the incumbent officers of the Liga and
replace them, even temporarily, with unelected Liga officers.
Like the local government units, the Liga ng mga Barangay is not
subject to control by the Chief Executive or his alter ego.
In the Bito-Onon 94 case, this Court held that DILG Memorandum
Circular No. 97-193, insofar as it authorized the filing of a petition for review
of the decision of the Board of Election Supervisors (BES) with the regular
courts in a post-proclamation electoral protest, involved the exercise of
control as it in effect amended the guidelines already promulgated by the
Liga. The decision reads in part:
. . . Officers in control, lay down the rules in the doing of an act.
If they are not followed, it is discretionary on his part to order the act
undone or redone by his subordinate or he may even decide to do it
himself. Supervision does not cover such authority. Supervising
officers merely see 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 to conform for to the prescribed rules. He
cannot prescribe his own manner the doing of the act. cDAEIH
xxx xxx xxx

. . . The amendment of the GUIDELINES is more than an
exercise of the power of supervision but is an exercise of the power of
control, which the President does not have over the LIGA. Although
the DILG is given the power to prescribe rules, regulations and other
issuances, the Administrative Code limits its authority to merely
"monitoring compliance by local government units of such issuances.
To monitor means to "watch, observe or check" and is compatible
with the power of supervision of the DILG Secretary over local
governments, which is limited to checking whether the local
government unit concerned or the officers thereof perform their
duties as per statutory enactments. Besides, any doubt as to the
power of the DILG Secretary to interfere with local affairs should be
resolved in favor of the greater autonomy of the local government. 95
In Taule, 96 the Court ruled that the Secretary of Local Government had
no authority to pass upon the validity or regularity of the election of officers
of katipunan ng mga barangay or barangay councils. In that case, a protest
was lodged before the Secretary of Local Government regarding several
irregularities in, and seeking the nullification of, the election of officers of the
Federation of Associations of Barangay Councils (FABC) of Catanduanes.
Then Local Government Secretary Luis Santos issued a resolution nullifying
the election of officers and ordered a new one to be conducted. The Court
ruled:
Construing the constitutional limitation on the power of general
supervision of the President over local governments, We hold that
respondent Secretary has no authority to pass upon the validity or
regularity of the officers of the katipunan. To allow respondent
Secretary to do so will give him more power than the law or the
Constitution grants. It will in effect give him control over local
government officials for it will permit him to interfere in a purely
democratic and non-partisan activity aimed at strengthening the
barangay as the basic component of local governments so that the
ultimate goal of fullest autonomy may be achieved. In fact, his order
that the new elections to be conducted be presided by the Regional
Director is a clear and direct interference by the Department with the
political affairs of the barangays which is not permitted by the
limitation of presidential power to general supervision over local
governments. 97
All given, the Court is convinced that the assailed order was issued
with grave abuse of discretion while the acts of the respondent Secretary,
including DILG Memorandum Circulars No. 97-176 and No. 97-193, are
unconstitutional and ultra vires, as they all entailed the conferment or
exercise of control — a power which is denied by the Constitution even to
the President.
WHEREFORE, the Petition is GRANTED. The Order of the Regional Trial
Court dated 04 August 1997 is SET ASIDE for having been issued with grave
abuse of discretion amounting to lack or excess of jurisdiction. DILG
Memorandum Circulars No. 97-176 and No. 97-193, are declared VOID for
being unconstitutional and ultra vires.
No pronouncements as to costs.
SO ORDERED.
Davide, Jr., C .J ., Puno, Panganiban, Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio Morales,
Callejo, Sr. and Azcuna, JJ ., concur.
Chico-Nazario, J ., is on leave.
Footnotes
1. Rollo, p. 43. The petition was docketed as Special Civil Action No. C-508, raffled
to Branch 124 of the RTC of Caloocan.
2. Id. at 44.
3. Id. at 45.
4. Ibid.
5. Id. at 50. Both the presiding judge of Branch 124, and pairing judge were on
official leave, thus the Petition was referred to the Executive Judge, Bayani S.
Rivera.
6. Id. at 58.
7. Id. at 52–61, the petition was docketed as Special Civil Action No. C-512 and
raffled to Branch 126 of the RTC-Caloocan presided by Judge Luisito C.
Sardillo.
8. Id. at 71–74.
9. Id. at 106.
10. Id. at 10.

11. Id. at 116–119.
12. Id. at 118.

13. Id. at 123–124.
14. Id. at 125.

15. Id. at 140–140-A.
16. Id. at 140-A.

17. Ibid.
18. Id. at 35–38.

19. Id. at 37.
20. Id. at 37–38.

21. Id. at 38.
22. Id. at 13; RTC Records, pp. 285–297.

23. Id. at 294.
24. Rollo, pp. 134–139.

25. Id. at 133.
26. Ibid. at 133.

27. Id. at 346–347.
28. Id. at 39–42.

29. Id. at 40-A.
30. Id. at 2–33.
31. Id. at 17–18.

32. Sec. 507. Constitution and By-Laws of the Liga and the Leagues. — All other
matters not herein otherwise provided for affecting the internal organization
of the leagues of local government units shall be governed by their
respective constitution and by-laws which are hereby made suppletory to the
provision of this Chapter: Provided, that said Constitution and By-laws shall
always conform to the provisions of the Constitution and existing laws.
33. Rollo, p. 19.
34. Constitution, Art. X, Sec. 4. "The President of the Philippines shall exercise
general supervision over local governments."
35. Rollo, p. 20.
36. Id. at 24.

37. Ibid. at 24.
38. Id. at 25.

39. Ibid.
40. G.R. No. 90336, 12 August 1991, 200 SCRA 512.

41. Rollo, pp. 2–3, citing Taule v. Santos, at pp. 515, 522.
42. Id. at 484–485.

43. Id. at 487.
44. Id. at 488.

45. Art. 9. No judge or court shall decline to render judgment by reason of the
silence, obscurity or insufficiency of the laws.
46. Rollo, p. 253.
47. Id. at 254.

48. Id. at 254.
49. Id. at 336–340.

50. Id. at 341–399.
51. Id. at 359.

52. Id. at 360.
53. Entitled "Leandro Yangot, Bonifacio Lacwasan and Bony Tacio v. DILG Secretary
Robert Barbers and DILG Undersecretary Manuel Sanchez " docketed as G.R.
No. 131939.
54. G.R. No. 131939, Rollo, p. 9.

55. Id. at 315, G.R. No. 130775.
56. Id. at 410.

57. Rollo, pp. 13–14; pp. 513–514.
58. See Rollo, p. 433.

59. Rollo, p. 360.
60. Id. at 496–497.

61. Const., Art. II, Sec. 25.

62. Local Government Code, Sec. 3 (9). Also Secs. 3(h)(k) & (l):
(h) There shall be a continuing mechanism to enhance local autonomy not only by
legislative enabling acts but also by administrative and organizational
reforms;
(k) The realization of local autonomy shall be facilitated through improved

coordination of national government policies and programs and extension of
adequate technical and material assistance to less developed and deserving
local government units;
(l) The participation of the private sector in local governance, particularly in the
delivery of basic services, shall be encouraged to ensure the viability of local
autonomy as an alternative strategy for sustainable development;
63. Section 2, Local Government Code.
64. No. L-78059, 31 August 1987, 153 SCRA 602.

65. Supra note 59 at 606.
66. Alunan III v. Mirasol , G.R. No. 108399, 31 July 1997, 276 SCRA 501, 509-510,
cited in SANLAKAS v. Executive Secretary, et al. G.R. Nos. 159085, 159103,
159185, 159196, 3 February 2004; Viola v. Alunan III, G.R. No. 115844, 15
August 1997, 277 SCRA 409, 416.
68. The forerunner of the liga ng mga barangay is the katipunan ng mga barangay
under Section 108 of B.P. Blg. 337, which was known as the katipunan bayan
in municipalities, katipunang panlungsod in cities, katipunang panlalawigan
in provinces, and katipunang ng mga barangay on the national level. Each
barangay therein was represented by the punong barangay. The katipunang
bayan was also referred to as the Association of Barangay councils or ABC for
short. Pursuant to the first paragraph of Section 146 of B.P. 337, the
president of the said organization was among the members of the
sangguniang bayan — the legislative body of the municipality — subject,
however, to appointment by the President of the Philippines, p. 739, 227
SCRA, as indicated Galarosa v. Valencia , G.R. No. 109455, November 11,
1993, 227 SCRA 728, 729.

71. Ibid.
72. See Sec. 106, Local Government Code.
73. See Sec. 114, Local Government Code.

74. Pimentel, Jr., A.Q., The Barangay and the Local Government Code, p. vi.
75. Section 494 of the Local Government Code.

76. Galarosa v. Valencia , supra note 68; citing Pimentel, Jr., A.Q., The Local
Government Code of 1991, The Key to National Development, p. 552 (1993).
77. Section 495 of the Local Government Code.
78. Rollo, p. 387.
79. Implementing Rules and Guidelines for the 1997 General Elections of the Liga
ng mga Barangay Officers and Directors, Rollo, pp. 101–194.
80. Rollo, p. 101.
81. See 1935 Const., Art. IV, Sec. 10; 1973 Const., Art. VIII, Sec. 10; 1987 Const.,
Art. VII, Sec. 17 and Art. X, Sec. 4.
82. Pimentel, Jr. v. Aguirre, G.R. No. 132988, 19 July 2000, 336 SCRA 201.
83. No. L-7708, 97 Phil. 143, (1995).

84. Id. at 148.
85. G.R. No. 90336, 12 August 1991, 200 SCRA 512.

86. Id. at 522.
87. Id. at 522, citing Hebron v. Reyes , 104 Phil. 175 (1958).
88. G.R. No. 112497, 4 August 1994, 235 SCRA 135, 137.
89. Id. at 142.

90. G.R. No. 139813, 31 January 2001; 350 SCRA 732.
91. Id. at 738.

92. G.R. No. 92299, 19 April 1991, 196 SCRA 69, 80.
93. Ibid.
94. Supra note 86.
95. Id. at 740.

96. Supra note 81.
97. Taule v. Santos, p. 522.

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EN BANC

[G.R. No. 182574. September 28, 2010.]

THE PROVINCE OF NEGROS OCCIDENTAL, represented by its

Petitioner complied with the directive post-facto and sent a letter-

The Cluster Director, Cluster IV-Visayas, COA Regional Oﬃce No.

Petitioner ﬁled a Motion for Reconsideration dated 23 October 2006

WHEREAS, the Constitutional prerogative includes the

WHEREAS, the unilateral and uncoordinated grant of

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic

Sections 1 and 2 of AO 103 state:

SECTION 2. All heads of government oﬃces/agencies,

Consequently, all administrative authorizations to grant any form

It is clear from Section 1 of AO 103 that the President authorized all

Section 17. The President shall have control of all executive

Being an LGU, petitioner is merely under the President's general

The President's power of general supervision means the power of a

Section 2. Coverage. — . . . Local Government Units are also

Section 4. Funding. — . . . Local Government Units, which may

1. Under Rule 65 of the 1997 Revised Rules of Civil Procedure.

2. Rollo, pp. 24-31. Penned by Chairman Guillermo N. Carague with Commissioners

6. Authorizing the Grant of CY 1993 Productivity Incentive Benefits to Government

7. An Act Prescribing a Revised Compensation and Position Classification System in

10. Id. at 24-31. Decided by Chairman Guillermo N. Carague, Commissioner

xxx xxx xxx

12. Section 12. Consolidation of Allowances and Compensation. — All allowances,

Existing additional compensation of any national government official or

13. Rollo, p. 31.

15. Bito-Onon v. Judge Yap Fernandez, 403 Phil. 693 (2001).

18. Establishment of a Medical Check-up Program for Government Personnel.

22. Supra note 11.

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[G.R. No. 131481. March 16, 2011.]

BUKLOD NANG MAGBUBUKID SA LUPAING RAMOS, INC. ,

[G.R. No. 131624. March 16, 2011.]

DEPARTMENT OF AGRARIAN REFORM , petitioner, vs. E. M.

Before the Court are consolidated Petitions for Review on Certiorari,

Resolved that the Municipal Ordinance regarding

"WHEREFORE, in the interest of law and justice, an order

3. Directing the DAR ﬁeld oﬃcials concerned to

On July 3, 1996, the Court of Appeals issued a Temporary Restraining

For another, the requirement prescribed by the cited Section

As for the other requirements which EMRASON purportedly failed to

Since the NATALIA lands were converted prior to 15 June

It may be so, as the assailed decision stated, that in Natalia

As a ﬁnal consideration, we will address the [herein petitioners]

3] A MERE MUNICIPAL ORDINANCE CANNOT NEGATE LAND

THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT

EVEN ASSUMING, IN GRATIA ARGUMENTI, THAT THE AUTHORITY TO

At the crux of the present controversy is the question of whether the

Lastly, EMRASON defends the issuance by the Court of Appeals of a

The Local Autonomy Act of 1959

Power to adopt zoning and planning ordinances. — Any

Zoning is governmental regulation of the uses of land and

The power delegated to the President under the aforequoted provision

(e) Nothing in this Section shall be construed as

2. T h e general welfare clause shall be liberally

In the case of Sangalang vs. IAC, supra, We ruled that police