Nursery Care Corporation vs. Acevedo.................................................

2
Sta. Lucia Realty v. City of Pasig...........................................................3
Quezon City v. ABS-CBN...................................................................... 4
Yamane v. B.A. Lepanto Condominium Corporation.......................... 6
Ferrer v. Mayor Herbert M. Bautista.................................................... 7
Secretary of Finance v. lIarde............................................................... 8
Smart Communications, Inc. v. Davao City......................................... 9
Legaspi vs. City of Cebu...................................................................... 10
Land Bank of the Philippines v. Cacayuran........................................ 12
Vergara v. Ombudsman.......................................................................13
Redulla v. Sandiganbayan................................................................... 15
Spouses Yusay v. City of Mandaluyong...............................................16
 Nursery Care Corporation vs. Acevedo
G.R. No. 180651 | July 30, 2014 | J. Bersamin
Test of double taxation: the two taxes be imposed on the same subject
matter, for the same purpose, by the same taxing authority, within the
same jurisdiction, during the same taxing period; and the taxes must be
of the same kind or character .
FACTS:
➔ The City of Manila assessed and collected taxes from the individual
petitioners pursuant to Section 15 (Tax on Wholesalers, Distributors, or
Dealers) and Section 17 (Tax on Retailers) of the Revenue Code of Manila.
◆ The City of Manila imposed additional taxes upon the petitioners
pursuant to Sec. 21 of the same Code, as a condition for the
renewal of their respective business licenses for the year 1999.
➔ Petitioners paid under protest the following amounts corresponding to the
first quarter of 1999. Later, however, the City Treasurer denied their
request for the tax credit or refund of the local business taxes paid under
protest.
➔ The RTC held that there was no instance of the constitutionally proscribed
double taxation, since the tax imposed under Sections 15 and 17, as against
that imposed under Section 21, are levied against different tax objects or
subject matter.
◆ While Sec. 15 and 17 is a tax on the business, Sec.21 is not a tax
against the business of the petitioners but is rather a tax against
consumers or end-users of the articles sold by petitioners.
➔ The CA affirmed. Hence, the assignment.
ISSUE: W/N the collection of taxes under Sec. 21 of Ordinance No.
7794, as amended, constitutes double taxation? YES.
➔ In resolving the issue of double taxation involving Sec. 21, the SC cited the
ruling in City of Manila v. Coca-Cola Bottlers Philippines, Inc., which has
been reiterated in Swedish Match Philippines, Inc. v. The Treasurer of the
City of Manila.
◆ In Swedish, the SC ruled that there is double taxation if the
respondent is subjected to the taxes under both Sections 14 and 21
of Tax Ordinance No. 7794.
◆ The SC revisited Sec. 143, LGC, where it is apparent from a perusal
thereof that when a municipality or city has already imposed a
business tax on manufacturers of distilled spirits, wines, etc.,
pursuant to Sec. 143(a), LGC, said municipality or city may no
longer subject the same manufacturers,etc. to a business tax under
Sec. 143(h).
◆ In the same way, businesses already subject to a local business tax
under Sec. 14 of Tax Ordinance 7794 can no longer be made liable
for local business tax under Sec. 21 of the same Tax Ordinance.
➔ Test of double taxation:
(a) Imposed on the same subject matter;
(b) For the same purpose;
(c) By the same taxing authority;
(d) Within the same jurisdiction;
(e) During the same taxing period;
(f) Taxes must be of the same kind or character.
➔ In this case, all the elements of double taxation concurred upon the City of
Manila's assessment on and collection from the petitioners of taxes for the
1st quarter of 1999.
◆ Firstly, all the taxes under Sec. 15, 17, and 21 – being imposed on
the privilege of doing business in the City of Manila in order to
make the taxpayers contribute to the city's revenues – were
imposed on the same subject matter and for the same purpose.
◆ Secondly, the taxes were imposed by the same taxing authority
(the City of Manila) and within the same jurisdiction in the same
taxing period (i.e., per calendar year).
◆ Thirdly, the taxes were all in the nature of local business taxes.
RULING: WHEREFORE, the Court GRANTS the petition for review on certiorari;
REVERSES and SETS ASIDE the resolutions promulgated on June 18, 2007 and November
14, 2007 in CA-G.R. SP No. 72191; and DIRECTS the City of Manila to refund the payments
made by the petitioners of the taxes assessed and collected for the first quarter of 1999
pursuant to Section 21 of the Revenue Code of Manila.
No pronouncement on costs of suit. SO ORDERED.
 Sta. Lucia Realty v. City of Pasig
G.R. No. | Date | Ponente
While a local government unit is authorized under several laws to
collect real estate tax on properties falling under its territorial
jurisdiction, it is imperative to first show that these properties are
unquestionably within its geographical boundaries.
FACTS:
➔ Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the
registered owner of several parcels of land with Transfer Certificates of
Title (TCT), all of which indicated that the lots were located in Municipality
of Pasig (Pasig).
➔ The parcel of land covered by TCT No. 39112 was consolidated with that
covered by TCT No. 518403, which was situated in Barrio Tatlong
Kawayan, Municipality of Cainta, Province of Rizal (Cainta).
➔ Upon Pasig's petition to correct the location stated in TCTs, the Land
Registration Court ordered the amendment of the TCTs to read that the
lots with respect to TCT No. 39112 were located in Barrio Tatlong
Kawayan, Pasig City.
➔ On January 31, 1994, Cainta filed a petition for the settlement of its land
boundary dispute with Pasig before the RTC, Branch 74 of Antipolo City
(Antipolo RTC). This case, docketed as Civil Case No. 94-3006, is still
pending up to this date.
➔ Pasig filed a complaint against Sta. Lucia for the collection of real estate
taxes.
➔ Sta. Lucia, in its Answer, alleged that it had been religiously paying its real
estate taxes to Cainta, just like what its predecessors-in-interest did, by
virtue of the demands and assessments made and the Tax Declarations
issued by Cainta on the claim that the subject properties were within its
territorial jurisdiction.
ISSUE: W/N the boundary dispute presents a prejudicial question to
the payment of real property taxes- YES
➔ The City of Pasig argues that there is no prejudicial question since the
same contemplates a civil and criminal action and does not come into play
where both cases are civil, as in the instant case. While this may be the
general rule, this Court has held inVidad v. RTC of Negros Oriental, Br. 42,
that, in the interest of good order, we can very well suspend action on one
case pending the final outcome of another case closely interrelated or
linked to the first.
➔ The court in which an action is pending may, in the exercise of a sound
discretion, upon proper application for a stay of that action, hold the action
in abeyance to abide the outcome of another pending in another court,
especially where the parties and the issues are the same, for there is power
inherent in every court to control the disposition of causes on its dockets
with economy of time and effort for itself, for counsel, and for litigants.
➔ We hold that the Pasig RTC should have held in abeyance the proceedings
in Civil Case No. 65420, in view of the fact that the outcome of the
boundary dispute case before the Antipolo RTC will undeniably affect both
Pasig's and Cainta's rights. In fact, the only reason Pasig had to file a tax
collection case against Sta. Lucia was not that Sta. Lucia refused to pay, but
that Sta. Lucia had already paid, albeit to another local government unit.
Evidently, had the territorial boundaries of the contending local
government units herein been delineated with accuracy, then there would
be no controversy at all.
➔ In the meantime, to avoid further animosity, Sta. Lucia is directed to
deposit the succeeding real property taxes due on the subject properties, in
an escrow account with the Land Bank of the Philippines.
Issue 2: W/N the LGU is entitled to collect real property taxes? YES
➔ Under the Local Government Code, the authority to collect real property
taxes is vested in the locality where the property is situated.
➔ The only import of these provisions is that, while a local government
unit is authorized under several laws to collect real estate tax on
properties falling under its territorial jurisdiction, it is
imperative to first show that these properties are
unquestionably within its geographical boundaries.
➔ Accentuating on the importance of delineating territorial boundaries, this
Court, in Mariano, Jr. v. Commission on Elections said:
◆ The importance of drawing with precise strokes the territorial
boundaries of a local unit of government cannot be
overemphasized. The boundaries must be clear for they
define the limits of the territorial jurisdiction of a local
government unit. It can legitimately exercise powers of
government only within the limits of its territorial
jurisdiction. Beyond these limits, its acts are ultra vires
➔ Clearly therefore, the local government unit entitled to collect real property
taxes from Sta. Lucia must undoubtedly show that the subject properties
are situated within its territorial jurisdiction; otherwise, it would be acting
beyond the powers vested to it by law.
RULING:
WHEREFORE, the instant petition is GRANTED. The June 30, 2004
Decision and the January 27, 2005 Resolution of the Court of Appeals
in CA- G.R. CV No. 69603 are SET ASIDE. The City of Pasig and the
Municipality of Cainta are both directed to await the judgment in their
boundary dispute case (Civil Case No. 94-3006), pending before Branch
74 of the Regional Trial Court in Antipolo City, to determine which local
government unit is entitled to exercise its powers, including the
collection of real property taxes, on the properties subject of the
dispute. In the meantime, Sta. Lucia Realty and Development, Inc. is
directed to deposit the succeeding real property taxes due on the lots
and improvements covered by TCT Nos. 532250, 598424, 599131,
92869, 92870 and 38457 in an escrow account with the Land Bank of
the Philippines.
SO ORDERED.
 Quezon City v. ABS-CBN
G.R. No. 166408 | Oct. 6, 2008 | Reyes, R.T, J.
blurb
FACTS:
The case involves a dispute between the City Government of Quezon City and
ABS-CBN regarding the payment of local franchise taxes.
➔ The City government of QC organized under R.A. 537 (Congress), imposes
a franchise tax on businesses operating within its jurisdiction, as outlined
in the Quezon City Revenue Code of 1993.
➔ ABS-CBN, granted a franchise under R.A. 7966, paid the local franchise tax
but later claimed it was not liable due to the "it shall pay a franchise tax.. in
lieu of all taxes" provision imposed by QC.
◆ Sec. 8, RA 7966: “the grantee…..shall pay a franchise tax
equivalent to three percent (3%) of all gross receipts of the
radio/television business transacted under this franchise by the
grantee, its successors or assigns, and the said percentage tax
shall be in lieu of all taxes on this franchise or earnings
thereof;”
➔ ABS-CBN filed for a refund of the taxes paid (Php 14, 233, 582.29), before
the RTC in QC for failure to obtain a response from the QC Treasurer.
◆ ABS sought for the nullity of the imposition of the local franchise
tax by City Govt QC for being unconstitutional & refund of taxes
paid
➔ QC argued that:
◆ the provision (R.A. No. 7966) (the “in lieu of all taxes”)
could not have been intended to prevail over a
constitutional mandate supporting local government
viability & self-sufficiency of the LGUS
◆ And, taxes collectible & payable to the LocGov were distinct taxes
from those collectible & payable to the National Govt. Since, the
Constitution specifically declared that the taxes imposed by LGUs
“shall accrue exclusively to the LGUs”
◆ Further, ABS-CBN's exemption under R.A. No. 7966 was
revoked/withdrawn by Congress when the LGC was
passed, which withdrew tax exemption privileges.
◆ Also, QC maintained that ABS-CBN's claim for a refund lacked a
prior written claim, challenging the validity of ABS-CBN's refund
request.
RTC:
➔ Declared the tax imposition of the local franchise tax on ABS-CBN invalid.
Since, they are exempted due to the “in lieu of all taxes” provision and from
the absence of any qualification except Income taxes. Had Congress
intended to exclude taxes imposed from the exemption, it would have
expressly mentioned so in a fashion similar to the proviso on income taxes.
➔ Legislative franchise of ABS-CBN was granted years after the LGC. Thus, it
can be presumed that Sec. 8 of RA 7966 was an exception since it was
enacted wt the awareness of the LGC (Sec. 137).
➔ Further, the imposition was an impairment of ABS-CBN’s contract with the
govt.
➔ Moreover, the Court held that a written claim for refund was not necessary
before filing a case.
CA: CA dismissed QC’s petition. Grounds: issues raised were purely legal questions
(SC).
QC filed for MR. Denied.
ISSUES:
➔ Whether Congress can grant exemptions from local taxes imposed by local
government units.
➔ Whether the “in lieu of all taxes” provision exempt ABS -CBN from
payment of local franchise tax
1ST ISSUE RULING: Yes. The grant of taxing powers to local government units
under the Constitution and the Local Government Code does not affect the
inherent power of Congress to grant exemptions.
➔ The dispute revolves around the inherent taxing power of Congress versus
the delegated authority to tax of local governments under the 1987
Constitution and the Local Government Code of 1991.
➔ The power of QC to impose franchise tax is derived from Section 151 in
conjunction with Section 137 of the LGC, allowing for a tax on businesses
with a franchise. However, this taxing power of LGUs is limited, as
Congress can enact legislation granting exemptions.
◆ The power to tax is primarily vested in Congress, but
local legislative bodies can also exercise this power under
direct authority conferred by the Constitution.
➔ In this case, the franchise granted by Congress under R.A. No. 7966
included a 3% franchise tax, with the provision that this payment would be
"in lieu of all taxes" on the franchise. While Congress holds the power
to tax and grant exemptions, Quezon City's taxing authority is
constrained by the LGC.
➔ Basically, Congress has the power to grant exemptions over the
power of local government units to impose taxes.
2ND ISSUE RULING: The "in lieu of all taxes" provision in ABS-CBN's franchise
does not exempt it from payment of local franchise tax.
➔ Statutes granting tax exemptions are strictly construed against the
taxpayer and liberally in favor of the taxing authority.
➔ Here, the law failed to specify the taxing authority from whose jurisdiction
the taxing power is withheld.
➔ In this case, ABS-CBN failed to justify its claim for exemption, by a grant
“too plain to be mistaken”. Its claim for exemption from the local franchise
tax must fail.

Pertinent provisions:
❖ Section 137. Franchise Tax. — Notwithstanding any exemption granted by
any law or other special law, the province may impose a tax on businesses
enjoying a franchise, at the rate not exceeding fifty percent (50%) of one
percent (1%) of the gross annual receipts for the preceding calendar year based
on the incoming receipt, or realized within its territorial jurisdiction. . . .
❖ Section 151. Scope of Taxing Powers. — Except as otherwise provided in this
Code, the city may levy the taxes, fees and charges which the province or
municipality may impose: Provided, however, That the taxes, fees and charges
levied and collected by highly urbanized and component cities shall accrue to
them and distributed in accordance with the provisions of this Code.
 Yamane v. B.A. Lepanto Condominium Corporation amounts collected are not intended for the incurrence of profit by the
G.R. No. 154993 | October 25, 2005 | Ponente Corporation or its members, but to shoulder the multitude of necessary
expenses that arise from the maintenance of the Condominium Project.

Although an LGU can generally impose local taxes, such a power comes
with limitations, one of which is for condominiums.
The collection of assessments for the operating expenses and capital
expenditures on the common areas are activities that are not for profit.
FACTS:
➔ BA-Lepanto Condominium was authorized by its by-laws to collect
assessments from its members for operating expenses, capital
expenditures on the common areas.
➔ However, the conflict here is that BA-Lepanto received a notice of
assessment from the City Treasurer of Makati City for its liability to
business tax but the former protested.
◆ Lepanto argues that “business” is for trade or commercial activity
for profit but their collection of assessments from its members for
operating expenses, capital expenditures on the common areas is
not for profit.
➔ Since their protest was denied, BA-Lepanto filed an appeal with the RTC,
but was denied. CA reversed.
RULING: WHEREFORE, the petition is DENIED. No costs.
Side Issue: Whether the RTC, in deciding an appeal taken from a denial
of a protest by a local treasurer under Section 195 of the Local
Government Code, exercises “original jurisdiction” or “appellate
jurisdiction.”
❖ The review taken by the RTC over the denial of the protest by the local
treasurer would fall within that court’s original jurisdiction. The review is the
initial judicial cognizance of the matter. Moreover, labeling the said review as
an exercise of appellate jurisdiction is inappropriate, since the denial of the
protest is not the judgment or order of a lower court, but of a local government
official.
❖ Republic Act No. 9282 definitively proves that the CTA exercises exclusive
appellate jurisdiction to review on appeal decisions, orders or resolutions of
the Regional Trial Courts in local tax cases original decided or resolved by
them in the exercise of their originally or appellate jurisdiction. Moreover, the
provision also states that the review is triggered “by filing a petition for review
under a procedure analogous to that provided for under Rule 42 of the 1997
Rules of Civil Procedure.” Republic Act No. 9282, however, would not apply to
this case simply because it arose prior to the effectivity of that law.

ISSUE: W/N Makati City may collect business taxes on condominium

corporations - NO.
➔ Section 143 of the Code specifically enumerates several types of business
on which municipalities and cities may impose taxes.
➔ However, the Corporation does not fall under such law. Moreover,
nowhere in the Makati Revenue Code that would serve as the legal
authority for the collection of business taxes from condominiums in
Makati.
➔ We can elicit from the Condominium Act that a condominium corporation
is precluded by statute from engaging in corporate activities other than the
holding of the common areas, the administration of the condominium
project, and other acts necessary, incidental or convenient to the
accomplishment of such purposes. Neither the maintenance of livelihood,
nor the procurement of profit, fall within the scope of permissible
corporate purposes of a condominium corporation under the
Condominium Act.
➔ None of these stated corporate purposes are geared towards maintaining a
livelihood or the obtention of profit. Even though the Corporation is
empowered to levy assessments or dues from the unit owners, these
 Ferrer v. Mayor Herbert M. Bautista
G.R. No. | Date | Ponente

blurb

FACTS:
➔

ISSUE: W/N
➔

RULING:

Pertinent provisions:
❖
 Secretary of Finance v. lIarde ISSUE: W/N the Secretary of Finance can legally promulgate
G.R. No. 121782 | May 9, 2005 | Chico-Nazario, J. regulations prescribing a rate of penalty on delinquent taxes other than
that provided for under the Real Property Tax Code? NO.
The Secretary of Finance can only promulgate Resolutions on the
imposition of delinquency taxes on properties under the LGC only from RULING:
January 1, 1992 when the LGC took effect.
Main difference between the Regulations by the Secretary of Finance and RPT
Delinquencies prior to the effectivity of the LGC must conform to P.D. Code:
464 (Real Property Tax Code) at 2% per month on the amount of Regulations RPT Code
delinquency but in no way should the same exceed more than 24% of
the total delinquencies. the penalty of two percent (2%) per penalty of two per centum on the
month of delinquency or twenty-four amount of the delinquent tax for each
FACTS: percent (24%) per annum as the case month of delinquency or fraction
➔ Private respondent Cipriano Cabaluna Jr was a Regional Director of the may be, shall continue to be thereof, until the delinquent tax shall
Department of Finance in Iloilo City. imposed on the unpaid tax from the be fully paid: Provided, That in no
➔ Cipriano co-owned with his wife several properties in Jaro, Iloilo. He failed time the delinquency was incurred up case shall the total penalty
to pay the land taxes on 4 lots. to the time that the delinquency exceed twenty-four per centum
◆ On the breakdown of the computation of delinquent taxes and is paid for in full of the delinquent tax.
penalties, it was shown that more than 24% of the delinquent taxes
were charged and collected from Cipriano by way of penalties. no limit as to the penalty - 24% total penalty is limited only to 24%
➔ Cipriano eventually paid his land taxes and the receipts were issued with continuously imposed until paid in full
the note: “paid under protest”.
➔ Cipriano then filed a formal letter of protest with the City Treasurer of
Iloilo wherein he contends that the computation of penalties was The SC then ruled that the subject regulations must be struck down for being in
erroneous since the rate of penalty exceeded 24% in contravention of Sec. conflict with Sec. 66 of PD 464 or the Real Property Tax Code.
66 of PD 464 (Real Property Tax Code)
◆ The City Treasurer responded, however, by turning down this The law applicable for purposes of computation of the real property taxes due is
protest and citing regulations of the Department of Finance (Sec. still Sec. 66 of the Real Property Tax Code of 1974 or PD 464.
4(c) of Joint Assessment Regulations No. 1-85 and Local Treasury
Regulations No. 2-85) which states that the penalty of 2% per However, from 01 January 1992 onwards, the proper basis for the computation of
month of delinquency or 24% per annum shall continue to be the real property tax payable, including penalties or interests, if applicable, must be
imposed on the unpaid tax. Rep. Act No. 7160, known as the Local Government Code, inasmuch as Section
➔ Cipriano then filed a Petition for Declaratory Relief with Damages assailing 53424 thereof had expressly repealed P.D. No. 464 or the Real Property Tax Code.
that the Regulations by the Secretary of Finance go against the Real
property Tax Code.
In case Atty. asks about the penalty as per the LGC:
RTC ruling: ❖ SECTION 255. Interests on Unpaid Real Property Tax. - In case of failure
● declared null and void the Regulations; to pay the basic real property tax or any other tax levied under this Title
● declared that the penalty that should be imposed for delinquency should be upon the expiration of the periods as provided in Section 250, or when
2% per month of delinquency until paid but in no case shall the total due, as the case may be, shall subject the taxpayer to the payment of
penalty exceed 24% of the delinquent tax; interest at the rate of two percent (2%) per month on the unpaid amount
● ordered the City Treasurer to refund/reimburse Cipriano the amounts paid or a fraction thereof, until the delinquent tax shall have been fully paid:
by him in excess of the 24% thereof; Provided, however, That in no case shall the total interest on the unpaid
tax or portion thereof exceed thirty-six (36) months.
 Smart Communications, Inc. v. Davao City
G.R. No. 155491|July 21, 2009 | Nachura
The power to tax by local government units emanates from Section 5,
Article X of the Constitution which empowers them to create their own
sources of revenues and to levy taxes, fees and charges subject to such
guidelines and limitations as the Congress may provide.
FACTS:
➔ Smart filed a special civil action for declaratory relief for the ascertainment
of its rights and obligations under the Tax Code of the City of Davao.
◆ The said tax code imposed a franchise tax on businesses enjoying a
franchise within the territorial jurisdiction of Davao.
➔ Smart argued that its telecenter in Davao is exempt from payment of
franchise tax to the City.
➔ RTC and CA denied SMART’s petition. Hence, the instant MR.
➔ Smart claimed that they are exempted based on the following grounds:
1. “in lieu of all taxes” clause in the Smart’s franchise (RA 7294) also
covers local taxes and not just national taxes.
2. The said clause was rendered ineffective by the Expanded VAT
Law.
3. Tax exemption under the Public Telecommunications Policy Act
(RA 7925);
4. The imposition of a local franchise tax on Smart would violate the
constitutional prohibition against impairment of the obligation of
contracts. (pls see more pertinent provisions)
ISSUE:W/N the phrase “in lieu of all taxes” covers local taxes? No,
because extending the phrase to local taxes will go against the concept of local
autonomy.
➔ Applying the rule of strict construction of laws granting tax exemptions
and the rule that doubts are resolved in favor of municipal corporations in
interpreting statutory provisions on municipal taxing powers, the Court
held that Section 23 of RA 7925 could not be considered as having
amended petitioner's franchise so as to entitle it to exemption from the
imposition of local franchise taxes.
◆ Section 23 of RA No. 7925, Congress did not intend it to
operate as a blanket tax exemption to all
telecommunications entities.
➔ In sum, the aforecited jurisprudence suggests that aside from the national
franchise tax, the franchisee is still liable to pay the local franchise tax,
unless it is expressly and unequivocally exempted from the payment
thereof under its legislative franchise.
➔ The "in lieu of all taxes" clause in a legislative franchise should
categorically state that the exemption applies to both local and
national taxes; otherwise, the exemption claimed should be
strictly construed against the taxpayer and liberally in favor of
the taxing authority.
➔ The "Expanded VAT Law," did not remove or abolish the payment of local
franchise tax. It merely replaced the national franchise tax that was
previously paid by telecommunications franchise holders and in its stead
imposed 10% VAT in accordance with Section 108 of the Tax Code.
◆ VAT replaced the national franchise tax, but it did not prohibit nor
abolish the imposition of local franchise tax by cities or
municipalities.
➔ The power to tax by local government units emanates from
Section 5, Article X of the Constitution which empowers them to
create their own sources of revenues and to levy taxes, fees and
charges subject to such guidelines and limitations as the
Congress may provide.
➔ The imposition of local franchise tax is not inconsistent with the advent of
the VAT, which renders functus officio the franchise tax paid to the
national government. VAT inures to the benefit of the national
government, while a local franchise tax is a revenue of the local
government unit.
RULING: WHEREFORE, the motion for reconsideration is DENIED, and this
denial is final.
SO ORDERED
Pertinent provisions:
❖ RA 7924, Section 9. Tax provisions. — In addition thereto, the grantee, its
successors or assigns shall pay a franchise tax equivalent to three percent (3%)
of all gross receipts of the business transacted under this franchise by the
grantee, its successors or assigns and the said percentage shall be in lieu of
all taxes on this franchise or earnings thereof.
❖ SEC. 23. Equality of Treatment in the Telecommunications Industry
— Any advantage, favor, privilege, exemption, or immunity granted under
existing franchises, or may hereafter be granted, shall ipso facto become part of
previously granted telecommunications franchises and shall be accorded
immediately and unconditionally to the grantees of such franchises: Provided,
however, That the foregoing shall neither apply to nor affect provisions of
telecommunications franchises concerning territory covered by the franchise,
the life span of the franchise, or the type of the service authorized by the
franchise.
 Legaspi vs. City of Cebu
G.R. No. 159110 | December 10, 2013 | Bersamin, J.
An Ordinance must comply with both formal and substantive
requirements to be valid
FACTS:
➔ The Sangguniang Panlungsod of the City of Cebu enacted Ordinance No.
1664 to authorize the traffic enforcers of Cebu City to
immobilize any motor vehicle violating the parking restrictions
and prohibitions defined in Ordinance No. 801 (Traffic Code of
Cebu City)
➔ Petitioners Atty. Bienvenido Jaban and his son, Bienvenido Jr., sued Cebu
City, seeking the declaration of Ordinance No. 1644 as unconstitutional for
being in violation of due process and for being contrary to law
◆ Jaban Sr. had allegedly properly parked his car in a paying parking
area in Cebu City to get certain records and documents from his
office, but upon his return after less than 10 minutes, he had found
his car being immobilized by a steel clamp and he was unable to
meet an important client
◆ His car was impounded for three days, and he was
informed that he had to pay a fine, which was imposed
without any court hearing and without due process
➔ Petitioner Atty. Valentino Legaspi likewise sued Cebu City, demanding the
declaration of nullity of the Traffic Code of Cebu City, and damages
◆ He had left his car occupying a portion of the sidewalk and the
street outside the gate of his house to make way for the vehicle of
the anay exterminator who had asked to be allowed to unload his
materials and equipment from the front of the residence
◆ After a short while, he found out that unknown persons
had clamped the front wheel of his car, with a traffic
citation stating that his car had been clamped by City
Traffic Operations Management (CITOM)
representatives with a warning that the unauthorized
removal of the clamp would subject the remover to
criminal charges
➔ The RTC declared the Ordinance null and void, finding that it violated
procedural due process due to lack of hearing
➔ The CA overturned the RTC, holding that it has become necessary to resort
to the Ordinance’s measures because of the traffic congestion caused by
illegal parking and the inability of existing penalties to curb it
ISSUE: W/N Ordinance 1664 was unconstitutional? NO
➔ For an ordinance to be valid, it must not only be within the corporate
powers of the local government unit to enact and must be passed according
to the procedure prescribed by law, it must also conform to the following
substantive requirements: (1) must not contravene the Constitution or any
statute; (2) must not be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate trade; (5) must be
general and consistent with public policy; and (6) must not be
unreasonable
◆ The tests are divided into the formal (i.e., whether the
ordinance was enacted within the corporate powers of
the LGU, and whether it was passed in accordance with
the procedure prescribed by law), and the substantive
(i.e., involving inherent merit, like the conformity of the
ordinance with the limitations under the Constitution
and the statutes, as well as with the requirements of
fairness and reason, and its consistency with public
policy)
The enactment of the ordinance was within the corporate powers of
the City of Cebu (formal requirement)
➔ Vesting cities like the City of Cebu with the legislative power to enact traffic
rules and regulations was expressly done by Congress through Section 458
of the LGC, and also generally by virtue of the General Welfare Clause
embodied in Section 16 of the LGC (see pertinent provisions)
Cebu observed due process (substantive requirement)
➔ Procedural due process refers to the procedures that the government
must follow before it deprives a person of life, liberty, or property
➔ Substantive due process asks whether the government has an adequate
reason for taking away a person’s life, liberty, or property. In other words,
substantive due process looks to whether there is sufficient justification for
the government’s action
➔ The terms “encroachment” and “obstacles” used in Section 458
of the LGC were broad enough to include illegally parked
vehicles or whatever else obstructed the streets, alleys and
sidewalks, which were precisely the subject of Ordinance No.
1664 in aiming to ensure "a smooth flow of vehicular traffic in
all the streets in the City of Cebu at all times," as seen in its
Whereas Clauses
◆ Considering that traffic congestions affected the growth and
progress in the population and economic centers of the country,
the plain objective of Ordinance No. 1664 was to serve the public
interest and advance the general welfare in the City of Cebu
➔ There was no vagueness/ambiguity in the provisions of the
Ordinance; there could be no confusion on the meaning and
coverage of the ordinance
 ◆ But should there be any vagueness and ambiguity in the
provisions, there was nothing that a proper application of the basic
rules of statutory construction could not justly rectify
➔ Further, the Ordinance was not oppressive nor arbitrary since
affected motorists were accorded the opportunity to protest the
clamping, towing, and impounding of their vehicles
◆ The Ordinance provided a procedure of protest directly made to
certain government officials named in the ordinance itself
◆ Secondly, the immobilization of a vehicle by clamping pursuant to
the ordinance was not necessary if the driver or vehicle owner was
around at the time of the apprehension for illegal parking or
obstruction; the enforcer would simply either require the driver to
move the vehicle or issue a traffic citation should the latter persist
in his violation
◆ Lastly, the towing away of the immobilized vehicle was not
equivalent to a summary impounding, but designed to prevent the
immobilized vehicle from obstructing traffic in the vicinity of the
apprehension and thereby ensure the smooth flow of traffic
➔ Regarding procedural due process, notice and hearing are the essential
requirements; yet, there are many instances where the absence of
one or both of such requirements is not necessarily a denial or
deprivation of due process
◆ The clamping of the petitioners’ vehicles is considered an
exception dispensing with notice and hearing because the
transgressors were not around at the time of
apprehension
◆ Nor should the lack of a trial-type hearing prior to the clamping
constitute a breach of procedural due process, for giving the
transgressors the chance to reverse the apprehensions
through a timely protest could equally satisfy the need
for a hearing
(SIDE) Legaspi points out a similar case (Astillero case), in which the
RTC declared the Ordinance unconstitutional
➔ The SC found that the RTC improperly acted in deciding the Astillero case
despite the appeals in these cases being already pending in the CA
➔ Being the same court in the three cases, the RTC should have anticipated
that in the regular course of proceedings the outcome of the appeal in these
cases then pending before the CA would ultimately be elevated to and
determined by no less than the Court itself
SO ORDERED.
Pertinent provisions:
❖ LGC Section 458. Powers, Duties, Functions and Composition. – (a) The sangguniang
panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16
of this Code and in the proper exercise of the corporate powers of the city as provided for
under Section 22 of this Code, and shall:
xxxx
(5) Approve ordinances which shall ensure the efficient and effective delivery of the basic
services and facilities as provided for under Section 17 of this Code, and in addition to said
services and facilities, shall:
xxxx
(v) Regulate the use of streets, avenues, alleys, sidewalks, bridges, parks and
other public places and approve the construction, improvement repair and maintenance of
the same; establish bus and vehicle stops and terminals or regulate the use of the same by
privately-owned vehicles which serve the public; regulate garages and operation of
conveyances for hire;designate stands to be occupied by public vehicles when not in use;
regulate the putting up of signs, signposts, awnings and awning posts on the streets; and
provide for the lighting, cleaning and sprinkling of streets and public places;(vi) Regulate
traffic on all streets and bridges; prohibit encroachments or obstacles thereon and, when
necessary in the interest of public welfare, authorize the removal of encroachments and illegal
constructions in public places;(emphasis supplied)The foregoing delegation reflected the
desire of Congress to leave to the cities themselves the task of confronting the problem of
traffic congestions associated with development and progress because they were directly
familiar with the situations in their respective jurisdictions. Indeed, the LGUs would be in the
best position to craft their traffic codes because of their familiarity with the conditions
peculiar to their communities. With the broad latitude in this regard allowed to the LGUs of
the cities ,their traffic regulations must be held valid and effective unless they infringed the
constitutional limitations and statutory safeguards.

RULING:
WHEREFORE, the Court DENIES the pet1t10ns for review on certiorari
for their lack of merit; AFFIRMS the decision promulgated on June 16,
2003 by the Court of Appeals; and ORDERS the petitioners to pay the
costs of suit.
 Land Bank of the Philippines v. Cacayuran
G.R. No. | Date | Ponente
While the subject loans cannot bind the Municipality for being ultra
vires, the officers who authorized the passage of the subject resolutions
are personally liable. Jurisprudence provides that public officials can
be held personally liable for acts claimed to have been performed in
connection with official duties where they have acted ultra vires.
FACTS:
➔ The Sangguniang Bayan (SB) of the Municipality of Agoo, La Union
(Municipality) passed certain resolutions to implement a Redevelopment
Plan for the Agoo Plaza where the Imelda Garden and Jose Rizal
Monument were situated
➔ In order to finance the said plan, the Municipal Mayor was authorized by a
resolution to obtain a loan from Land Bank and to use a portion of the
Agoo Plaza as collateral as well as portion of its IRA and monthly income
from the proposed project in favor or Land Bank
◆ With this, the Land Bank extended a 4m loan in favor of the
Municipality, the proceeds of which were used to construct kiosks
in the portions of the Imelda Garden (first loan)
➔ The SB passed another resolution approving the construction of a
commercial center on the Agoo Plaza.
◆ The Municipal Mayor was authorized again to obtain a loan from
Land Bank using the same collaterals from the first loan
◆ With this, the Land Bank granted a second loan amounting to 28m
(second loan)
➔ Respondent Cacayuran, together with other residents, opposed the
conversion of the Agoo Plaza into a commercial center
◆ Cacayuran wrote a letter addressed to the members of the SB,
expressing their opposition to the project
➔ When Cacayuran failed to receive any response, he filed a complaint as a
taxpayer against the officers of the SB and Land Bank before the RTC
➔ The RTC ruled in favor of Cacayuran
◆ Held that the resolutions approving the said loans were ultra vires
and does not bound the Municipality
➔ Land Bank filed an appeal before the CA and the CA affirmed the RTC
ruling
ISSUE: Whether the subject loans are ultra vires – YES
➔ The Court held that an ultra vires act is one committed outside the object
for which a corporation is created as defined by the law of its organization
and therefore beyond the powers conferred upon it by law
◆ There are 2 types
i. an act utterly beyond the jurisdiction of a municipal
corporation
ii. irregular exercise of basic power under the legislative
grant in matters not in themselves jurisdictional
◆ The first type (i) is ultra vires in the primary sense and is void. The
second type (ii) is ultra vires in a secondary sense which may be
ratified/validated.
➔ In this case, the Court held that the subject loans belong to the first type of
ultra vires and is deemed void
◆ The loans were executed by the Municipality for the purpose of
funding the redevelopment plan. However, the conversion of
the Agoo Plaza was beyond the jurisdiction of the
Municipality considering that the Plaza is part of the
public dominion
◆ As such, it cannot be the object of appropriation either by the State
or by private persons
➔ The Court added that while the Subject Loans cannot bind the Municipality
for being ultra vires, the officers who authorized the passage of the Subject
Resolutions are personally liable. Jurisprudence provides that public
officials can be held personally liable for acts claimed to have been
performed in connection with official duties where they have acted ultra
vires.
RULING: WHEREFORE, the petition is DENIED. Accordingly, the March 26,
2010 Decision of the Court of Appeals in CA-G.R. CV. No. 89732 is hereby
AFFIRMED.
[WITH REGARD TO THE VALIDITY OF THE RESOLUTIONS
AUTHORIZING THE LOANS AND THE REDEVELOPMENT PLAN]
1. The Court held that Section 444(b)(vi) of the LGC provides that while the
authorization of the municipal mayor need not be in the form of an
ordinance, the obligation which the said local executive is authorized to
enter into must be made pursuant to a law or ordinance
2. In this case, while the Mayor’s authorization to contract the subject loans
was not contained – as it need not be contained – in the form of an
ordinance, the said loans and even the Redevelopment Plan itself were not
approved pursuant to any law or ordinance but through mere resolutions.
a. There is a distinction between ordinances and resolutions. While
ordinances are laws and possess a general and permanent
character, resolutions are merely declarations of the sentiment or
opinion of a lawmaking body on a specific matter and are
temporary in nature. As opposed to ordinances, "no rights can be
conferred by and be inferred from a resolution."
b. Therefore, the SB violated Section 444(b)(vi) of the LGC

Vergara v. Ombudsman
G.R. No. 174567 | March 12, 2009 | Carpio, J.
Ratification by the City Council is not condition sine qua non for a
mayor to enter into contracts, thus the fact of non-ratification is not
sufficient to deem the local government to have received unwarranted
benefits.
FACTS:
➔ On June 25, 2001, the City Council of Calamba issued a Resolution
authorizing Mayor Severino Lajara to negotiate with landowners for a new
city hall site. In a public hearing made in October, the new city hall site was
ruled to be those owned by Pamana, Inc. Shortly thereafter, the City
Council passed Resolution No. 280, which authorized Mayor Lajara to
purchase the lots, and to execute, sign, and deliver the required
documents.
➔ In November, a Memorandum of Agreement was executed among the City
Government, Pamana, and Prudential Bank, to provide the stipulations on
payment. A Deed of Real Estate Mortgage was then executed over the same
properties, and a Deed of Assignment of Internal Revenue Allotment was
assigned by the city government to Pamana and Prudential Bank.
➔ Kagawad Severino Vergara, member of City Council, complained before
the Ombudsman that the documents were executed ultra vires as they
were not ratified by the City Council. He also raised several evidentiary
issues, such as the fact that the properties were overpriced, that the local
government paid a price much lower than agreed, and that the properties
were actually owned by the Philippine Estates Sugar Company. It was
likewise asserted that the property included creek and road easements.
➔ In March of 2004, the Ombudsman issued a Resolution finding no
probable cause to hold the city government, Pamana, or Prudential Bank
viable. It was found that the city government had actually bought the
properties at a preferential price lower than zonal value, and without
interest. More importantly, the Ombudsman ruled that the Mayor was not
acting with unwarranted benefits, manifest partiality, or bad faith. This
was specifically ruled because the two resolutions of the City Council
already served as the required legal authority.
ISSUE: W/N the resolutions required ratification by the City Council
prior to any official act of the Chief Executive, notwithstanding the
existing authority already given? (NO.)
RULING: “WHEREFORE, we DISMISS the petition. We AFFIRM the Resolution
and Order of the Ombudsman in OMB-L-C-02-1205-L dated 17 March 2004 and
22 August 2005, respectively.”
➔ The Office of the Ombudsman is constitutionally empowered to investigate
and prosecute all public officials, elected or appointed. It may do so upon
complaint, or on its own. Consequently, the Supreme Court in judicial
review has generally refused to interfere with the decisions of the
Ombudsman. However, this rule has been relaxed by the Court when the
issue at hand concerns a grave abuse of discretion of the Ombudsman’s
power.
➔ None of the exceptions in the law were found in the given facts. Substantial
evidence had already been satisfactory to show that the price paid by the
local government was significantly lower because it already took account of
the exclusion of creek and road easements. More importantly, the
Ombudsman ruled that the Sangguniang Panlungsod (i.e. City Council)
already gave the necessary authorization under law.
➔ Sec. 22(c) of the Local Government provides that all contracts entered into
by the local chief executive must have the prior authorization of the
sanggunian panlungsod. Moreover, the mayor has the right to enter into
contracts and obligations upon the same authority. Ratification is totally
absent from the law, meaning that not every move made by the mayor had
to be approved by the local lawmakers.
➔ The Resolutions of the local government make clear enough that Mayor
Lajara was authorized to purchase Pamana lots for a lump sum price of
P129,000. The lack of authorization to make documents was deemed not
sine qua non to enter into contracts. Otherwise, the authority would hold
little force. To stand on that leg alone, and on the fact that the ultimate
price paid for the properties was lower than expected, would no be enough
to let any allegation of corruption stand.
Pertinent provisions:
❖ Sec. 22(c), Title I, LGC
❖ Sec. 455, Title III, LGC
❖ Sec. 13, Art. XI, 1987 Constitution
❖ Sec. 1, Article VIII, 1987 Constitution
❖ Sec. 13, R.A. No. 6770 (The Ombudsman Act of 1989)
 Redulla v. Sandiganbayan
G.R. No. 167973 | February 28, 2007 | Carpio-Morales, J
Court’s policy of non-interference in the exercise of the Ombudsman’s constitutionally
mandated powers – the reason for the policy is not only for respect for the investigatory
and prosecutory powers granted to the Office of the Ombudsman, but also for
practicality. The Courts would be extremely flooded by numerous complaints if they were
compelled to review the exercise of discretion of the fiscals or prosecuting attorneys each
time they decide to file an information or dismiss complaints.
Thus, the courts may interfere with the investigatory powers of the Ombudsman —
a) To afford protection to the constitutional rights of the accused;
b) When necessary for the orderly administration of justice or to avoid oppression or
multiplicity of actions;
c) When there is a prejudicial question which is sub judice;
d) When the acts of the officer are without or in excess of authority;
e) Where the prosecution is under an invalid law, ordinance or regulation;
f) When double jeopardy is clearly apparent;
g) Where the court has no jurisdiction over the offense;
h) Where it is a case of persecution rather than prosecution;
i) Where the charges are manifestly false and motivated by the lust for vengeance.
FACTS:
➔ Pursuant to an audit conducted by the Commission on Audit(COA) on
reforestation contracts, five complaints were filed against Petitioner
Redulla with the Office of the Ombudsman(OMB) for the violation of The
Anti Graft and Corrupt Practices Act(RA 3019).
➔ Prosecutor Linco conducted an investigation, the OMB filed three
Informations for the violation of RA 3019 before the Sandiganbayan(SB).
➔ Redulla filed an Expanded Motion for Reinvestigation before the Office of
the Special Prosecutor(OSP), prayed that the findings of Prosec. Linco be
reversed and set aside.
➔ OSP granted the motion and conducted a reinvestigation.
➔ After reinvestigation, Ombudsman Desierto approved the OSP’s finding
that there was no probable cause, and for the withdrawal of the
Information.
➔ A Motion to Withdraw Information was filed by the OMB with the SB.
➔ Ombudsman Marcelo ordered the review of the original complaints against
Redulla.
➔ Prosecutor Coresis found sufficient evidence to conclude that a crime for
violation of RA 3019 had been committed, and Redula is probably guilty.
➔ OMB filed an Information with the SB.
➔ Redulla then filed a Motion for Judicial Determination of Probable Cause
with the SB.
➔ SB denied Redulla’s motion, it cited its policy of according respect for the
investigatory and prosecutory powers granted by the Constitution to the
OMB, and found no irregularities in the finding of probable cause.
➔ Redulla filed a Petition for Certiorari and Prohibition before the SC.
➔ Redulla argues that there already was a finding of no probable cause, and
that the re-review of the recommendation of the filing of a criminal
information was based on a mere verbal order, and hence, the procedure is
not supported by any legal basis. That he was denied due process. And that
he cannot be held as countersigning director as he acted in good faith.
ISSUE: W/N the Sandiganbayan’s denial of Redulla’s Motion for
Judicial Determination of Probable Cause is proper – YES.
➔ The SB’s denial of Redulla’s Motion for Judicial Determination of Probable
Cause is proper. This is pursuant to the Court’s policy of non-interference
in the exercise of the Ombudsman’s constitutionally mandated powers.
➔ The reason for the policy is not only for respect for the investigatory and
prosecutory powers granted to the Office of the Ombudsman, but also for
practicality. The Courts would be extremely flooded by numerous
complaints if they were compelled to review the exercise of discretion of
the fiscals or prosecuting attorneys each time they decide to file an
information or dismiss complaints.
➔ Though there are exceptions to this Court’s policy, this case is not one. SC
held that as long as the Ombudsman’s resolution is supported with
substantial evidence, it will not be overturned.
➔ In this case, the findings of Prosecutor Coresis, which were approved by
the Ombudsman, of the existence of probable cause, were based on an
examination of the audit report and supporting documents prepared by the
COA.
➔ Redulla’s arguments do not substantiate the allegation of a grave abuse of
discretion. There was nothing irregular in Ombudsman Marcelo’s order to
re-review Prosecutor Linco’s memorandum, as the Ombudsman Act of
1989 places the OSP under the control and supervision of the Ombudsman.
➔ As held in the case of Cruz, Jr. v. People, it is discretionary upon the
Ombudsman if he will rely mainly on the findings of fact of the
investigating prosecutor in making a review of the report and
recommendation, as the Ombudsman can very well make his own findings
of fact. There is nothing to prevent him from doing either.
➔ Ombudsman Desierto’s statement that “the documents in the motion for
reinvestigation sufficiently overturned the previous findings of probable
cause” did not preclude Ombudsman Marcelo from ordering a re-review of
the memorandum because an administrative officer may revoke, repeal or
abrogate the acts or previous rulings of his predecessor in office.
➔ Redulla cannot claim that he was denied due process as he was able to file
a counter-affidavit and an expanded motion for reinvestigation.
➔ Redulla’s claim of good faith also cannot be touched upon for this claim is
evidentiary in nature and are matters of defense and best passed upon
after a full-blown trial.
RULING: WHEREFORE, petition is DENIED.
 Spouses Yusay v. City of Mandaluyong
G.R. No. | Date | Ponente

blurb

FACTS:
➔

ISSUE: W/N
➔

RULING:

Pertinent provisions:
❖