SECTION 22.

CORPORATE POWERS
SECTION 22. CORPORATE POWERS
1. To have continuous succession in its
corporate name

2. To sue and be sued

Commenced by the local executive,
upon authority of the Sanggunian
Exception – bring action to prevent
unlawful disbursement of City funds
SECTION 22. CORPORATE POWERS
2. To sue and be sued
City Council of Cebu vs Cuizon
Facts:
•Respondents Mayor Cuizon and Tropical Commercial Co. entered into a
contract involving the purchase of road construction equipment for
$520,912.00 cash from Tropical.
•The City Council of Cebu filed with the CFI a complaint to nullify said
contract as having been executed without prior authority from it.
Complaint was dismissed for lack of legal capacity.
•The lower court held that there is no provision of law authorizing the
city council to sue in behalf of the city and that the authorized
representative under the LGC is the city mayor for that purpose.
•Hence the appeal.
SECTION 22. CORPORATE POWERS
2. To sue and be sued
City Council of Cebu vs Cuizon
Issue: Whether or not the city councilors
have the legal capacity to question the validity
of the contract entered into by the mayor.
Held: Yes. Generally, suit is commenced by the
local executive, i.e. the mayor, upon authority of
the Sanggunian, except where the city councilors
themselves and as representatives in behalf of the
city, bring the action to prevent unlawful
disbursement of public funds.
SECTION 22. CORPORATE POWERS
2. To sue and be sued
Cannot be represented by a private
attorney; only the Provincial Fiscal or
Municipal attorney can represent
If Provincial Fiscal is disqualified –
must appear on record
SECTION 22. CORPORATE POWERS
3. To have and use a corporate seal
any change shall be registered with
the DILG
4. To acquire and convey real or personal
property
in any manner allowed by law e.g. sale, donation,

may alienate only patrimonial property

SECTION 22. CORPORATE POWERS
4. To acquire and convey real or personal property
City of Naga vs CA
Facts:
•Resolution was passed authorizing Provincial Governor Trivino to
execute a deed of sale without consideration in favor of the City of
Naga of two parcels of land with improvements, belonging to the
province. Two deeds of sale were executed.
•The conveyances of the said properties in favor of the City of Naga are
alleged to be — Null and Void ab initio for they are against the law and
public policy, since as the properties of the Province of Camarines Sur
devoted to public use, they cannot be the subject matter of contracts
for they are outside the commerce of man, and as donations of real
properties they have not been accepted in public documents by the
defendant, City of Naga."
SECTION 22. CORPORATE POWERS
4. To acquire and convey real or personal property
City of Naga vs CA

Issue: Whether CA erred in nullifying the two

conveyances of land in favor of petitioner.

Held: NO. Without the needed Presidential

approval, it is evident that the conveyances
were void.
SECTION 22. CORPORATE POWERS
4. To acquire and convey real or personal
property
in the absence of proof that the property was
acquired through corporate or private funds, the
presumption is that it came from the State upon
the creation of the municipality and, thus, is
governmental or public property
procurement of supplies is made through
competitive public bidding [PD526], except when
the amount is minimal or in case of emergency
purchases
SECTION 22. CORPORATE POWERS
5. Power to enter into contracts
Requisites of a valid municipal contract:

i.) The local government unit has the express, implied

or inherent power to enter into the particular contract.
ii.) The contract is entered into by the proper
department, board, committee, officer, or agent.
Unless otherwise provided by the Code, no contract
may be entered into by the local chief executive on
behalf of the local government unit without prior
authorization by the Sanggunian concerned.
SECTION 22. CORPORATE POWERS
5. Power to enter into contracts
Requisites of a valid municipal contract:

iii.) The contract must comply with certain substantive

requirements, i.e., when expenditure of public fund is
to be made, there must be an actual appropriation and
a certificate of availability of funds

iv.) The contract must comply with the formal

requirements of written contracts,e.g. the Statute
of Frauds
SECTION 22. CORPORATE POWERS
5. Power to enter into contracts
City of Manila vs IAC
Facts:
Deceased husband of plaintiff died and was buried in Lot No. 159,
Block No. 194 of the North Cemetery which lot was leased by the City
to Irene Sto. Domingo for the period from June 6, 1971 to June 6, 2021
per Official Receipt No. 61307 dated June 6, 1971 with an expiry date of
June 6, 2021
Administrative Order No. 5, Series of 1975, dated March 6, 1975, of the
City Mayor of Manila was issued. (after 5-yr lease, for exhumation)
The authorities of the North Cemetery authorized the exhumation
and removal from subject burial lot the remains of plaintiff’s husband,
placed the bones and skull in a bag or sack and kept the same in the
depository or bodega of the cemetery. Subsequently, the same lot in
SECTION 22. CORPORATE POWERS
5.Power to enter into contracts
City of Manila vs IAC
Issue: IAC ERRED IN HOLDING PETITIONERS HEREIN RESPONSIBLE
FOR THE ALLEGED TORTS OF THEIR SUBORDINATE OFFICIALS AND
EMPLOYEES, INSPITE OF THE PROVISIONS OF SECTION 4 OF THE
REPUBLIC ACT NO. 409 (REVISED CHARTER OF MANILA) AND OTHER
APPLICABLE JURISPRUDENCE ON THE SUBJECT EXEMPTING THE
PETITIONERS FROM DAMAGES FROM THE MALFEASANCE OR
MISFEASANCE OF THEIR OFFICIALS AND EMPLOYEES, IF THERE BE ANY IN
THIS CASE.

Held: NO. Under the doctrine of respondent superior, (Torio v.

Fontanilla, supra), petitioner City of Manila is liable for the
tortious act committed by its agents who failed to verify and
check the duration of the contract of lease. Administrative Order
No. 5, series of 1975 dated March 6, 1975 covers new leases
SECTION 22. CORPORATE POWERS
5. Power to enter into contracts
Ultra Vires Contracts

• When a contract is entered into without

compliance with the first and requisites,
the same is ultra vires and is null and void
•Cannot be ratified or validated.

•Ratification of municipal contracts is possible only

when there is non-compliance with the second
and/or the fourth requisites. Ratification may be
express or implied
SECTION 22. CORPORATE POWERS
6. To exercise such other powers as are
granted to corporations, subject to the
limitations provided in the Code and
other laws
End of Presentation