G.R. No.

110120 March 16, 1994

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS, HON. MANUEL JN. SERAPIO, Presiding Judge RTC,
Branch 127, Caloocan City, HON. MACARIO A. ASISTIO, JR., City Mayor of
Caloocan and/or THE CITY GOVERNMENT OF CALOOCAN, respondents.
Alberto N. Hidalgo and Ma. Teresa T. Oledan for petitioner.
The City Legal Officer & Chief, Law Department for Mayor Macario A. Asistio, Jr.
and the City Government of Caloocan.
ROMERO, J.:
The clash between the responsibility of the City Government of Caloocan to
dispose off the 350 tons of garbage it collects daily and the growing concern and
sensitivity to a pollution-free environment of the residents of Barangay Camarin,
Tala Estate, Caloocan City where these tons of garbage are dumped everyday is
the hub of this controversy elevated by the protagonists to the Laguna Lake
Development Authority (LLDA) for adjudication.
The instant case stemmed from an earlier petition filed with this Court by
Laguna Lake Development Authority (LLDA for short) docketed as G.R.
No. 107542 against the City Government of Caloocan, et al. In the Resolution of
November 10, 1992, this Court referred G.R. No. 107542 to the Court of Appeals
for
appropriate
disposition.
Docketed
therein
as
CA-G.R.
SP
1
No. 29449, the Court of Appeals, in a decision promulgated on January 29,
1993 ruled that the LLDA has no power and authority to issue a cease and desist
order enjoining the dumping of garbage in Barangay Camarin, Tala Estate,
Caloocan City. The LLDA now seeks, in this petition, a review of the decision of
the Court of Appeals.
The facts, as disclosed in the records, are undisputed.
On March 8, 1991, the Task Force Camarin Dumpsite of Our Lady of Lourdes
Parish, Barangay Camarin, Caloocan City, filed a letter-complaint 2 with the
Laguna Lake Development Authority seeking to stop the operation of the 8.6hectare open garbage dumpsite in Tala Estate, Barangay Camarin, Caloocan
City due to its harmful effects on the health of the residents and the possibility of
pollution of the water content of the surrounding area.
On November 15, 1991, the LLDA conducted an on-site investigation, monitoring
and test sampling of the leachate 3 that seeps from said dumpsite to the nearby
creek which is a tributary of the Marilao River. The LLDA Legal and Technical
personnel found that the City Government of Caloocan was maintaining an open
dumpsite at the Camarin area without first securing an Environmental
Compliance Certificate (ECC) from the Environmental Management Bureau
(EMB) of the Department of Environment and Natural Resources, as required
under Presidential Decree No. 1586, 4 and clearance from LLDA as required

under Republic Act No. 4850, 5 as amended by Presidential Decree No. 813 and
Executive Order No. 927, series of 1983. 6
After a public hearing conducted on December 4, 1991, the LLDA, acting on the
complaint of Task Force Camarin Dumpsite, found that the water collected from
the leachate and the receiving streams could considerably affect the quality, in
turn, of the receiving waters since it indicates the presence of bacteria, other than
coliform, which may have contaminated the sample during collection or
handling. 7 On December 5, 1991, the LLDA issued a Cease and Desist
Order 8 ordering the City Government of Caloocan, Metropolitan Manila Authority,
their contractors, and other entities, to completely halt, stop and desist from
dumping any form or kind of garbage and other waste matter at the Camarin
dumpsite.
The dumping operation was forthwith stopped by the City Government of
Caloocan. However, sometime in August 1992 the dumping operation was
resumed after a meeting held in July 1992 among the City Government of
Caloocan, the representatives of Task Force Camarin Dumpsite and LLDA at the
Office of Environmental Management Bureau Director Rodrigo U. Fuentes failed
to settle the problem.
After an investigation by its team of legal and technical personnel on August 14,
1992, the LLDA issued another order reiterating the December 5, 1991, order
and issued an Alias Cease and Desist Order enjoining the City Government of
Caloocan from continuing its dumping operations at the Camarin area. On
September 25, 1992, the LLDA, with the assistance of the Philippine National
Police, enforced its Alias Cease and Desist Order by prohibiting the entry of all
garbage dump trucks into the Tala Estate, Camarin area being utilized as a
dumpsite.
Pending resolution of its motion for reconsideration earlier filed on September 17,
1992 with the LLDA, the City Government of Caloocan filed with the Regional
Trial Court of Caloocan City an action for the declaration of nullity of the cease
and desist order with prayer for the issuance of writ of injunction, docketed as
Civil Case No. C-15598. In its complaint, the City Government of Caloocan
sought to be declared as the sole authority empowered to promote the health
and safety and enhance the right of the people in Caloocan City to a balanced
ecology within its territorial jurisdiction. 9
On September 25, 1992, the Executive Judge of the Regional Trial Court of
Caloocan City issued a temporary restraining order enjoining the LLDA from
enforcing its cease and desist order. Subsequently, the case was raffled to the
Regional Trial Court, Branch 126 of Caloocan which, at the time, was presided
over by Judge Manuel Jn. Serapio of the Regional Trial Court, Branch 127, the
pairing judge of the recently-retired presiding judge.

The LLDA, for its part, filed on October 2, 1992 a motion to dismiss on the
ground, among others, that under Republic Act No. 3931, as amended by
Presidential Decree No. 984, otherwise known as the Pollution Control Law, the
cease and desist order issued by it which is the subject matter of the complaint is
reviewable both upon the law and the facts of the case by the Court of Appeals
and not by the Regional Trial Court. 10
On October 12, 1992 Judge Manuel Jn. Serapio issued an order consolidating
Civil Case No. C-15598 with Civil Case No. C-15580, an earlier case filed by the
Task Force Camarin Dumpsite entitled "Fr. John Moran, et al. vs. Hon. Macario
Asistio." The LLDA, however, maintained during the trial that the foregoing cases,
being independent of each other, should have been treated separately.
On October 16, 1992, Judge Manuel Jn. Serapio, after hearing the motion to
dismiss, issued in the consolidated cases an order 11 denying LLDA's motion to
dismiss and granting the issuance of a writ of preliminary injunction enjoining the
LLDA, its agent and all persons acting for and on its behalf, from enforcing or
implementing its cease and desist order which prevents plaintiff City of Caloocan
from dumping garbage at the Camarin dumpsite during the pendency of this case
and/or until further orders of the court.
On November 5, 1992, the LLDA filed a petition for certiorari, prohibition and
injunction with prayer for restraining order with the Supreme Court, docketed as
G.R. No. 107542, seeking to nullify the aforesaid order dated October 16, 1992
issued by the Regional Trial Court, Branch 127 of Caloocan City denying its
motion to dismiss.
The Court, acting on the petition, issued a Resolution 12 on November 10, 1992
referring the case to the Court of Appeals for proper disposition and at the same
time, without giving due course to the petition, required the respondents to
comment on the petition and file the same with the Court of Appeals within ten
(10) days from notice. In the meantime, the Court issued a temporary restraining
order, effective immediately and continuing until further orders from it, ordering
the respondents: (1) Judge Manuel Jn. Serapio, Presiding Judge, Regional Trial
Court, Branch 127, Caloocan City to cease and desist from exercising jurisdiction
over the case for declaration of nullity of the cease and desist order issued by the
Laguna Lake Development Authority (LLDA); and (2) City Mayor of Caloocan
and/or the City Government of Caloocan to cease and desist from dumping its
garbage at the Tala Estate, Barangay Camarin, Caloocan City.
Respondents City Government of Caloocan and Mayor Macario A. Asistio, Jr.
filed on November 12, 1992 a motion for reconsideration and/or to quash/recall
the temporary restraining order and an urgent motion for reconsideration alleging
that ". . . in view of the calamitous situation that would arise if the respondent city
government fails to collect 350 tons of garbage daily for lack of dumpsite (i)t is
therefore, imperative that the issue be resolved with dispatch or with sufficient

leeway to allow the respondents to find alternative solutions to this garbage

problem."
On November 17, 1992, the Court issued a Resolution 13 directing the Court of
Appeals to immediately set the case for hearing for the purpose of determining
whether or not the temporary restraining order issued by the Court should be
lifted and what conditions, if any, may be required if it is to be so lifted or whether
the restraining order should be maintained or converted into a preliminary
injunction.
The Court of Appeals set the case for hearing on November 27, 1992, at 10:00 in
the morning at the Hearing Room, 3rd Floor, New Building, Court of
Appeals. 14 After the oral argument, a conference was set on December 8, 1992
at 10:00 o'clock in the morning where the Mayor of Caloocan City, the General
Manager of LLDA, the Secretary of DENR or his duly authorized representative
and the Secretary of DILG or his duly authorized representative were required to
appear.
It was agreed at the conference that the LLDA had until December 15, 1992 to
finish its study and review of respondent's technical plan with respect to the
dumping of its garbage and in the event of a rejection of respondent's technical
plan or a failure of settlement, the parties will submit within 10 days from notice
their respective memoranda on the merits of the case, after which the petition
shall be deemed submitted for resolution. 15 Notwithstanding such efforts, the
parties failed to settle the dispute.
On April 30, 1993, the Court of Appeals promulgated its decision holding that: (1)
the Regional Trial Court has no jurisdiction on appeal to try, hear and decide the
action for annulment of LLDA's cease and desist order, including the issuance of
a temporary restraining order and preliminary injunction in relation thereto, since
appeal therefrom is within the exclusive and appellate jurisdiction of the Court of
Appeals under Section 9, par. (3), of Batas Pambansa Blg. 129; and (2) the
Laguna Lake Development Authority has no power and authority to issue a
cease and desist order under its enabling law, Republic Act No. 4850, as
amended by P.D. No. 813 and Executive Order No. 927, series of 1983.
The Court of Appeals thus dismissed Civil Case No. 15598 and the preliminary
injunction issued in the said case was set aside; the cease and desist order of
LLDA was likewise set aside and the temporary restraining order enjoining the
City Mayor of Caloocan and/or the City Government of Caloocan to cease and
desist from dumping its garbage at the Tala Estate, Barangay Camarin,
Caloocan City was lifted, subject, however, to the condition that any future
dumping of garbage in said area, shall be in conformity with the procedure and
protective works contained in the proposal attached to the records of this case
and found on pages 152-160 of the Rollo, which was thereby adopted by
reference and made an integral part of the decision, until the corresponding

restraining and/or injunctive relief is granted by the proper Court upon LLDA's
institution of the necessary legal proceedings.
Hence, the Laguna Lake Development Authority filed the instant petition for
review on certiorari, now docketed as G.R. No. 110120, with prayer that the
temporary restraining order lifted by the Court of Appeals be re-issued until after
final determination by this Court of the issue on the proper interpretation of the
powers and authority of the LLDA under its enabling law.
On July, 19, 1993, the Court issued a temporary restraining order 16 enjoining the
City Mayor of Caloocan and/or the City Government of Caloocan to cease and
desist from dumping its garbage at the Tala Estate, Barangay Camarin,
Caloocan City, effective as of this date and containing until otherwise ordered by
the Court.
It is significant to note that while both parties in this case agree on the need to
protect the environment and to maintain the ecological balance of the
surrounding areas of the Camarin open dumpsite, the question as to which
agency can lawfully exercise jurisdiction over the matter remains highly open to
question.
The City Government of Caloocan claims that it is within its power, as a local
government unit, pursuant to the general welfare provision of the Local
Government Code, 17 to determine the effects of the operation of the dumpsite on
the ecological balance and to see that such balance is maintained. On the basis
of said contention, it questioned, from the inception of the dispute before the
Regional Trial Court of Caloocan City, the power and authority of the LLDA to
issue a cease and desist order enjoining the dumping of garbage in the Barangay
Camarin over which the City Government of Caloocan has territorial jurisdiction.
The Court of Appeals sustained the position of the City of Caloocan on the theory
that Section 7 of Presidential Decree No. 984, otherwise known as the Pollution
Control law, authorizing the defunct National Pollution Control Commission to
issue an ex-parte cease and desist order was not incorporated in Presidential
Decree No. 813 nor in Executive Order No. 927, series of
1983. The Court of Appeals ruled that under Section 4, par. (d), of Republic Act
No. 4850, as amended, the LLDA is instead required "to institute the necessary
legal proceeding against any person who shall commence to implement or
continue implementation of any project, plan or program within the Laguna de
Bay region without previous clearance from the Authority."
The LLDA now assails, in this partition for review, the abovementioned ruling of
the Court of Appeals, contending that, as an administrative agency which was
granted regulatory and adjudicatory powers and functions by Republic Act No.
4850 and its amendatory laws, Presidential Decree No. 813 and Executive Order
No. 927, series of 1983, it is invested with the power and authority to issue a

cease and desist order pursuant to Section 4 par. (c), (d), (e), (f) and (g) of
Executive Order No. 927 series of 1983 which provides, thus:
Sec. 4. Additional Powers and Functions. The authority shall have
the following powers and functions:
xxx xxx xxx
(c) Issue orders or decisions to compel compliance with the
provisions of this Executive Order and its implementing rules and
regulations only after proper notice and hearing.
(d) Make, alter or modify orders requiring the discontinuance of
pollution specifying the conditions and the time within which such
discontinuance must be accomplished.
(e) Issue, renew, or deny permits, under such conditions as it may
determine to be reasonable, for the prevention and abatement of
pollution, for the discharge of sewage, industrial waste, or for the
installation or operation of sewage works and industrial disposal
system or parts thereof.
(f) After due notice and hearing, the Authority may also revoke,
suspend or modify any permit issued under this Order whenever
the same is necessary to prevent or abate pollution.
(g) Deputize in writing or request assistance of appropriate
government agencies or instrumentalities for the purpose of
enforcing this Executive Order and its implementing rules and
regulations and the orders and decisions of the Authority.
The LLDA claims that the appellate court deliberately suppressed and totally
disregarded the above provisions of Executive Order No. 927, series of 1983,
which granted administrative quasi-judicial functions to LLDA on pollution
abatement cases.
In light of the relevant environmental protection laws cited which are applicable in
this case, and the corresponding overlapping jurisdiction of government agencies
implementing these laws, the resolution of the issue of whether or not the LLDA
has the authority and power to issue an order which, in its nature and effect was
injunctive, necessarily requires a determination of the threshold question: Does
the Laguna Lake Development Authority, under its Charter and its amendatory
laws, have the authority to entertain the complaint against the dumping of
garbage in the open dumpsite in Barangay Camarin authorized by the City
Government of Caloocan which is allegedly endangering the health, safety, and
welfare of the residents therein and the sanitation and quality of the water in the
area brought about by exposure to pollution caused by such open garbage
dumpsite?
The matter of determining whether there is such pollution of the environment that
requires control, if not prohibition, of the operation of a business establishment is
essentially addressed to the Environmental Management Bureau (EMB) of the
DENR which, by virtue of Section 16 of Executive Order No. 192, series of
1987, 18 has assumed the powers and functions of the defunct National Pollution

Control Commission created under Republic Act No. 3931. Under said Executive
Order, a Pollution Adjudication Board (PAB) under the Office of the DENR
Secretary now assumes the powers and functions of the National Pollution
Control Commission with respect to adjudication of pollution cases. 19
As a general rule, the adjudication of pollution cases generally pertains to the
Pollution Adjudication Board (PAB), except in cases where the special law
provides for another forum. It must be recognized in this regard that the LLDA, as
a specialized administrative agency, is specifically mandated under Republic Act
No. 4850 and its amendatory laws to carry out and make effective the declared
national policy 20 of promoting and accelerating the development and balanced
growth of the Laguna Lake area and the surrounding provinces of Rizal and
Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan 21 with
due regard and adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution. Under
such a broad grant and power and authority, the LLDA, by virtue of its special
charter, obviously has the responsibility to protect the inhabitants of the Laguna
Lake region from the deleterious effects of pollutants emanating from the
discharge of wastes from the surrounding areas. In carrying out the
aforementioned declared policy, the LLDA is mandated, among others, to pass
upon and approve or disapprove all plans, programs, and projects proposed by
local government offices/agencies within the region, public corporations, and
private persons or enterprises where such plans, programs and/or projects are
related to those of the LLDA for the development of the region. 22
In the instant case, when the complainant Task Force Camarin Dumpsite of Our
Lady of Lourdes Parish, Barangay Camarin, Caloocan City, filed its lettercomplaint before the LLDA, the latter's jurisdiction under its charter was validly
invoked by complainant on the basis of its allegation that the open dumpsite
project of the City Government of Caloocan in Barangay Camarin was
undertaken without a clearance from the LLDA, as required under Section 4, par.
(d), of Republic Act. No. 4850, as amended by P.D. No. 813 and Executive Order
No. 927. While there is also an allegation that the said project was without an
Environmental Compliance Certificate from the Environmental Management
Bureau (EMB) of the DENR, the primary jurisdiction of the LLDA over this case
was recognized by the Environmental Management Bureau of the DENR when
the latter acted as intermediary at the meeting among the representatives of
the City Government of Caloocan, Task Force Camarin Dumpsite and LLDA
sometime in July 1992 to discuss the possibility of re-opening the open
dumpsite.
Having thus resolved the threshold question, the inquiry then narrows down to
the following issue: Does the LLDA have the power and authority to issue a
"cease and desist" order under Republic Act No. 4850 and its amendatory laws,

on the basis of the facts presented in this case, enjoining the dumping of garbage
in Tala Estate, Barangay Camarin, Caloocan City.
The irresistible answer is in the affirmative.
The cease and desist order issued by the LLDA requiring the City Government of
Caloocan to stop dumping its garbage in the Camarin open dumpsite found by
the LLDA to have been done in violation of Republic Act No. 4850, as amended,
and other relevant environment laws, 23 cannot be stamped as an unauthorized
exercise by the LLDA of injunctive powers. By its express terms, Republic Act
No. 4850, as amended by P.D. No. 813 and Executive Order No. 927, series of
1983, authorizes the LLDA to "make, alter or modify order requiring the
discontinuance or pollution." 24(Emphasis supplied) Section 4, par. (d) explicitly
authorizes the LLDA to make whatever order may be necessary in the exercise
of its jurisdiction.
To be sure, the LLDA was not expressly conferred the power "to issue and exparte cease and desist order" in a language, as suggested by the City
Government of Caloocan, similar to the express grant to the defunct National
Pollution Control Commission under Section 7 of P.D. No. 984 which, admittedly
was not reproduced in P.D. No. 813 and E.O. No. 927, series of 1983. However,
it would be a mistake to draw therefrom the conclusion that there is a denial of
the power to issue the order in question when the power "to make, alter or modify
orders requiring the discontinuance of pollution" is expressly and clearly
bestowed upon the LLDA by Executive Order No. 927, series of 1983.
Assuming arguendo that the authority to issue a "cease and desist order" were
not expressly conferred by law, there is jurisprudence enough to the effect that
the rule granting such authority need not necessarily be express. 25 While it is a
fundamental rule that an administrative agency has only such powers as are
expressly granted to it by law, it is likewise a settled rule that an administrative
agency has also such powers as are necessarily implied in the exercise of its
express powers. 26 In the exercise, therefore, of its express powers under its
charter as a regulatory and quasi-judicial body with respect to pollution cases in
the Laguna Lake region, the authority of the LLDA to issue a "cease and desist
order" is, perforce, implied. Otherwise, it may well be reduced to a "toothless"
paper agency.
In this connection, it must be noted that in Pollution Adjudication Board v. Court
of Appeals, et al., 27 the Court ruled that the Pollution Adjudication Board (PAB)
has the power to issue an ex-parte cease and desist order when there is prima
facie evidence of an establishment exceeding the allowable standards set by the
anti-pollution laws of the country. Theponente, Associate Justice Florentino P.
Feliciano, declared:
Ex parte cease and desist orders are permitted by law and
regulations in situations like that here presented precisely because

stopping the continuous discharge of pollutive and untreated

effluents into the rivers and other inland waters of the Philippines
cannot be made to wait until protracted litigation over the ultimate
correctness or propriety of such orders has run its full course,
including multiple and sequential appeals such as those which
Solar has taken, which of course may take several years. The
relevant pollution control statute and implementing regulations were
enacted and promulgated in the exercise of that pervasive,
sovereign power to protect the safety, health, and general welfare
and comfort of the public, as well as the protection of plant and
animal life, commonly designated as the police power. It is a
constitutional commonplace that the ordinary requirements of
procedural due process yield to the necessities of protecting vital
public interests like those here involved, through the exercise of
police power. . . .
The immediate response to the demands of "the necessities of protecting vital
public interests" gives vitality to the statement on ecology embodied in the
Declaration of Principles and State Policies or the 1987 Constitution. Article II,
Section 16 which provides:
The State shall protect and advance the right of the people to a
balanced and healthful ecology in accord with the rhythm and
harmony of nature.
As a constitutionally guaranteed right of every person, it carries the correlative
duty of non-impairment. This is but in consonance with the declared policy of the
state "to protect and promote the right to health of the people and instill health
consciousness among them." 28 It is to be borne in mind that the Philippines is
party to the Universal Declaration of Human Rights and the Alma Conference
Declaration of 1978 which recognize health as a fundamental human right. 29
The issuance, therefore, of the cease and desist order by the LLDA, as a
practical matter of procedure under the circumstances of the case, is a proper
exercise of its power and authority under its charter and its amendatory laws.
Had the cease and desist order issued by the LLDA been complied with by the
City Government of Caloocan as it did in the first instance, no further legal steps
would have been necessary.
The charter of LLDA, Republic Act No. 4850, as amended, instead of conferring
upon the LLDA the means of directly enforcing such orders, has provided under
its Section 4 (d) the power to institute "necessary legal proceeding against any
person who shall commence to implement or continue implementation of any
project, plan or program within the Laguna de Bay region without previous
clearance from the LLDA."
Clearly, said provision was designed to invest the LLDA with sufficiently broad
powers in the regulation of all projects initiated in the Laguna Lake region,
whether by the government or the private sector, insofar as the implementation of
these projects is concerned. It was meant to deal with cases which might

possibly arise where decisions or orders issued pursuant to the exercise of such
broad powers may not be obeyed, resulting in the thwarting of its laudabe
objective. To meet such contingencies, then the writs of mandamus and
injunction which are beyond the power of the LLDA to issue, may be sought from
the proper courts.
Insofar as the implementation of relevant anti-pollution laws in the Laguna Lake
region and its surrounding provinces, cities and towns are concerned, the Court
will not dwell further on the related issues raised which are more appropriately
addressed to an administrative agency with the special knowledge and expertise
of the LLDA.
WHEREFORE, the petition is GRANTED. The temporary restraining order issued
by the Court on July 19, 1993 enjoining the City Mayor of Caloocan and/or the
City Government of Caloocan from dumping their garbage at the Tala Estate,
Barangay Camarin, Caloocan City is hereby made permanent.
SO ORDERED.
Feliciano, Bidin, Melo and Vitug, JJ., concur.

DIGEST
Laguna Lake Development Authority v CA (Environmental Law)
Laguna Lake Development Authority v CA
GR No. 110120
March 16, 1994
FACTS:
The LLDA Legal and Technical personnel found that the City Government of
Caloocan was maintaining an open dumpsite at the Camarin area without first
securing an Environmental Compliance Certificate (ECC) from the
Environmental Management Bureau (EMB) of the Department of Environment
and Natural Resources, as required under Presidential Decree N o. 1586, and
clearance from LLDA as required under Republic Act N o. 4850 and issued a CEASE
and DESIST ORDER (CDO) for the City Government of Caloocan to stop the use of the
dumpsite.
ISSUES:
1. Does the LLDA and its amendatory laws, have the authority to entertain the
complaint against the dumping of garbage in the open dumpsite in Barangay
Camarin authorized by the City Government of Caloocan?
2. Does the LLDA have the power and authority to issue a "cease and desist" order?
APPLICABLE LAWS:
Executive Order N o. 927 series of 1983 which provides, thus: Sec. 4. Additional
Powers and Functions. The authority shall have the following powers and functions:
(d) Make, alter or modify orders requiring the discontinuance of pollution
specifying the conditions and the time within which such discontinuance must be
accomplished
As a general rule, the adjudication of pollution cases generally pertains to the
Pollution Adjudication Board (PAB), except in cases w here the special law
provides for another forum
RULING:
1. YES, LLDA has authority. It must be recognized in this regard that the LLDA,
as a specialized administrative agency, is specifically mandated under Republic
Act No. 4850 and its amendatory law s to carry out and make effective the
declared national policy of promoting and accelerating the development and
balanced growth of the Laguna Lake area and the surrounding provinces of
Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan
with due regard and adequate provisions for environmental management and

control, preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution. Under
such a broad grant and power and authority, the LLDA, by virtue of its special
charter, obviously has the responsibility to protect the inhabitants of the Laguna
Lake region from the deleterious effects of pollutants emanating from the
discharge of wastes from the surrounding areas.
2. YES, pursuant to EO 927 Section 4. While it is a fundamental rule that an
administrative agency has only such powers as are expressly granted to it by law ,
it is likewise a settled rule that an administrative agency has also such powers as
are necessarily implied in the exercise of its ex press powers. In the exercise,
therefore, of its express powers under its charter as a regulatory and quasijudicial body with respect to pollution cases in the Laguna Lake region, the
authority of the LLDA to issue a "cease and desist order" is, perforce, implied.
NOTE: HOWEVER, writs of mandamus and injunction are beyond the power of
the LLDA to issue.

PUBLIC CORPORATION
INTRODUCTION
Political Law branch of public law which deals with the organization and operations of the governmental
organs of theState and defines the relations of the State with the inhabitants of its territory.
DIVISIONS OF POLITICAL LAW:
(a) Constitutional Law branch of public law which deals with the maintenance of the proper balance between
authority as represented by three inherent powers of the State and liberty as guaranteed by the Bill of Rights.
(b) Administrative law branch of public law which fixes the organization of government, determines
competence of administrative authorities who execute the law and indicates to the individual remedies for
violation of his rights.
(c) Law on Municipal Corporations
(d) Law of Public Officers
(e) Election Laws
(f) Public International Law
GENERAL PRINCIPLES
CORPORATION Defined: An artificial being created by operation of law having the right of succession and
powers, attributes and properties expressly authorized by law or incident to its existence.
CLASSIFICATION OF CORPORATIONS:
(i)Public organized for the government of a portion of the State;
(ii)Private formed for some private purpose, benefit, aim or end
iii)Quasi-public private corporation that renders public service or supplies public wants.
NOTE: Criterion to determine whether a corporation is public The relationship of the corporation to the Sate,
that is, if created by the State as its own agency to help the State in carrying out its governmental functions then
it is public, otherwise, it is private.
CLASSES OF PUBLIC CORPORATIONS:
(i)Quasi-corporation created by the State for a narrow/limited purpose (PCSO, etc.);
(ii)Municipal Corporations body politic and corporate constituted by the incorporation of the inhabitants for
the purpose of local government.
ELEMENTS OF MUNICIPAL CORPORATIONS:

1.Legal creation or incorporation there must be a law creating/authorizing the creation or incorporation of a
municipal corporation];
2.Corporate name name by which the corporation isknown;
3.Inhabitants people residing in the territory of thecorporation;
4.Territory land mass where the inhabitants reside together with internal and external waters and airspace
above the land and waters.

DUAL NATURE & FUNCTIONS OF MUNICIPAL CORPORATIONS:

Every local government unit created/organized under the Local Government Code is a BODY POLITIC and
CORPORATE endowed with powers to be exercised by it in conformity with law. As such it shall exercise powers
as a political subdivision of the National Government and as a corporate entity representing the inhabitants of
the territory (Section 15, RA7160). Accordingly, it has dual functions
(i)public or governmental acts as an agent of the State for the government of the territory and the inhabitants;
and
(ii)private or proprietary acts as an agent of the community in the administration of local affairs, as such, acts
as a separate entity for its own purposes and not as a subdivision of the State. BASIC PRINCIPLES
Sec. 1 Act shall be known as the Local Government Code of 1991
.Under the 1987 Constitution, declared policy: The State shall ensure the autonomy of local governments (Art. II,
Sec. 25)
To highlight this policy, note, an entire Article (X) with fourteen sections is devoted to Local Governments.
Section
(3)thereof mandates:
Congress
SHALL
enact a local
government
code (a) to provide a more responsive and
accountable local
government structure initiated through a system of DECENTRALIZATION with effective mechanisms of recall,
initiative and referendum, (a) allocate among different local government units their powers, responsibilities and
resources, (c) provide for qualifications, elections appointment and removal, term, salaries, powers and function
and duties of local officials and (d) other matters relating to the organization and operation of local units.
Autonomy is either decentralization of administration(deconcentration) or decentralization of power
(devolution).
Decentralization of administration delegation by the central government of administrative powers to
local subdivisions in order to broaden the base of governmental power making such local governments more
responsive and accountable and insuring their fullest development as self-reliant communities and effective
partners in the pursuit of national development and progress (declared policy of LGC); relieves central
government
of the
burden
of
managing
local
affairs,
enabling
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 (Presidents mandate to ensure faithful execution of the laws) but he
has no control over their acts (he cannot substitute their judgment with his own).
Decentralization of power abdication of political power in favor of local government units declared to be
autonomous; the autonomous government is free to chart its own destiny and shape its future with minimum
intervention from central authorities; amount to self-immolation since the autonomous government becomes
accountable not to the central authority but to its constituency.
NOTE: Constitutional guarantee of Local Autonomy refers to ADMINISTRATIVE AUTONOMY
government units (or decentralization of government authority).
Case: PROVINCE OF BATANGAS vs. ALBERTO G. ROMULO, G.R. No.152774, 5/27/2004.

of local

FACTS: Province of Batangas filed a petition for certiorari to declare unconstitutional and void certain provisos
contained in the General Appropriations Acts (GAA) of 1999, 2000 and 2001earmarking for said years 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 such as modifying the allocation
scheme for such allotment as prescribed under the Local Government Code and securing approval for local
projects from the Oversight Committee on Devolution.
RULING: In Section 25, Article II of the Constitution, the State has expressly adopted as a policy tha, The State
shall ensure the autonomy of local governments. The State policy on local autonomy is amplified in Section 2
thereof, 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 selfreliant communities and make them more effective partners in the attainment of national goals x x x .
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. "Automatic" means "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. 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. The "just share" of the LGUs is incorporated as the IRA in the appropriations law
or GAA enacted by Congress annually.
The entire process involving the LGSEFs distribution and release is constitutionally impermissible. The LGSEF is
part of the IRA or just share of the LGUs in the national taxes. Submitting its distribution and release to the
vagaries of the implementing rules including the guidelines and mechanisms unilaterally prescribed by
the Oversight Committee from time to time as sanctioned by the challenged laws and OCD resolutions, makes
the release not automatic a flagrant violation of the constitutional and statutory mandate that LGUs just share
shall be automatically released to them.
Meaning of Administrative Regions are mere grouping of contiguous provinces for administrative purposes,
not for political representation. The division of the country into regions is intended to facilitate not only the
administration of
local
governments which the law requires to have regional offices.
Creation of administrative regions for purpose of expediting the delivery of services is nothing new. The
Integrated Reorganization plan of 1972, which was made part of the law of the land by virtue
of Presidential Decree No.
1, established
11 regions,
later
became 12. With definite
regional centers and required departments and agencies of the Executive Branch of the National Government
to set up field offices therein (DTI VII, DOLEVII, DPWH Regional Office). The functions of the regional offices is
to be established pursuant the reorganization plan are: (a)implement laws, policies, plans, programs, rules and
regulation of the department or agency in the regional area; (2) provide economical, efficient and effective
services to the people in thearea; (3) to coordinate with regional offices of other departments, bureaus and
agencies in the area; and (3) perform such other functions as may be provided by law.
Meaning of Autonomous Regions creation of autonomous regions in Muslim Mindanao and the Cordilleras,
which is unique to the 1987 Constitution, contemplates grant of political autonomy and not just administrative
autonomy to those regions. Thus, Art. X, Section 18 of Constitution mandates for Congress to enact an organic act
for
the
autonomous
regions
(with
assistance
and participation of consultative commission composed of representatives appointed by the President from list
of nominees of multisectoral bodies) to provide for an autonomous regional government with a basic
structure consisting of an executive department and a legislative assembly and special courts with
personal, family and property law jurisdiction in each of the autonomous regions.
Case: DISOMANGCOP vs. DPWH SECRETARY, G.R. No. 149848,11/25/2004.
FACTS:
Pursuant to Sec. 15, Art. X of the Constitution (for the creation of autonomous regions in Muslim Mindanao
and the Cordilleras), RA 6734 (An Act Providing for An Organic Act for the Autonomous Region in

Muslim Mindanao) was enacted. Subsequently, the four provinces of Lanao del Sur, Maguindanao, Sulu
and Tawi-Tawi, voting in favor of autonomy, became the Autonomous Region in Muslim Mindanao (provinces of
Basilan, Cotabato, Davao del Sur, Lanao del Norte, Palawan, South Cotabato, Sultan Kudarat, Zamboanga del
Norte, and Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General Santos, Iligan, Marawi,
Pagadian, Puerto Princesa and Zamboanga said no in the plebiscite) (later virtue of RA9054, the provinces of
Basilan and Marawi City joined). In accordance with RA6734,EO426 was issued placing the control and
supervision of the
offices of the
DPWH within
the
autonomous
region
in
Muslim
Mindanao under the Autonomous
Regional
Government.
Petitioners
Arsadi
M. Disomangcop and
Ramir M. Dimalotang(Dimalotang), in their capacity as Officer-in-Charge and District Engineer/Engineer
II, respectively, of the 1st
Engineering District of DPWH-ARMM in Lanao del Sur petitioned to nullify Dept. Order119 and RA8999
(creating the Marawi Sub-District Engineering Office and vesting it with jurisdiction over all national
infrastructure projects and
facilities under the DPWH within
Marawi City
and Lanao del Sur. Petitioners contend that the challenged measures violate ARMMs constitutional autonomy
considering that the functions of the Marawi Sub-District Engineering Office have already been devolved to the
DPWH-ARMM 1st Engineering District in Lanao del Sur.
RULING:
Petition GRANTED. DO119 is violative of the provisions of EO426 (issued pursuant to RA6734). The 1987
Constitution mandates regional autonomy to give a bold and unequivocal answer to the cry for a meaningful,
effective and forceful autonomy. Autonomy, as a national policy, recognizes the wholeness of the Philippine
society in its ethnolinguistic, cultural and even religious diversities. It strives to free Philippine society of the
strain and wastage caused by the assimilationist approach. Policies emanating from the legislature are
invariably assimilationist in character despite channels being open for minority representation.
A necessary prerequisite of
autonomy is
decentralization.
Decentralization is a decision by the
central government authorizing its subordinates, whether geographically or functionally defined, to exercise
authority in certain areas. It involves decision-making by subnational units. It is typically
adelegated power, wherein a larger government chooses to delegate certain authority to more local
governments. Federalism implies some measure of decentralization, but unitary systems may also decentralize.
Decentralization differs intrinsically from federalism in that the sub-units that have been authorized to act(by
delegation) do not possess any claim of right against the central government.
Decentralization comes in two forms deconcentration and devolution. Deconcentration (administrative
decentralization) I s administrative in nature; it involves the transfer of functions or the delegation of
authority and responsibility from the national office to the regional and local offices. Devolution, on the othe
rhand, connotes political decentralization, or the transfer of powers, responsibilities, and resources for the
performance of certain functions from the central government to local government units.
By regional autonomy, the framers intended it to mean "meaningful and authentic regional autonomy (that
is, a kind of local self-government which allows the people of the region or area the power to determine what is
best for their growth and development without undue interference or dictation from the central government).
To this end, Section 16, Article X limits the power of the President over autonomous regions. In essence, the
provision also curtails the power of Congress over autonomous regions. Consequently, Congress will have to reexamine national laws and make sure that they reflect the Constitution's adherence to local autonomy. And in
case of conflicts, the underlying spirit which should guide its resolution is the Constitution's desire for genuine
local autonomy.
E.O. 426 officially devolved the powers and functions of the DPWH in ARMM to the Autonomous Regional
Government (ARG).More importantly, Congress itself through R.A. 9054 transferred and devolved the
administrative and fiscal management of public works and funds for public works to the ARG. The aim of the
Constitution is to extend to the autonomous peoples, the people of Muslim Mindanao in this case, the right to
self-determination a right to choose their own path of development; the right to determine the political,
cultural and economic content of their development path within the framework of the sovereignty and
territorial integrity of the Philippine Republic. Self-determination refers to the need for a political structure that
will respect the autonomous peoples' uniqueness and grant them sufficient room for self-expression and selfconstruction.
With R.A. 8999, however, this freedom is taken away, and the National Government takes control again. The
hands, once more, of the autonomous peoples are reined in and tied up. The challenged law creates an office

with functions and powers which, by virtue of E.O. 426, have been previously devolved to the DPWH-ARMM,
First Engineering District in Lanao del Sur.
Section
2,
LGCDeclaration
of
Policy LGU
to
enjoy
genuine
and
meaningful autonomy to enable them to attain their fullest development as self-reliant communities and make
them effective partners in attainment of national goals thru decentralization. National agencies and offices to
conduct periodic consultations with appropriate lgu, ngo and po, before any project or program is implemented
in their jurisdiction. The declaration of policy as stated in Section 2 of LGC reinforces declared State policy (Art.
II, Sec. 25 of Constitution) ensuring autonomy to local government units.
Case: LINA VS. PANO 364 SCRA 76
FACTS: Respondent Tony Calvento was appointed PSCO agent to install and operate a lotto terminal. Mayor of
San Pedro Laguna denied his application for a business permit citing an ordinance (Kapasyahan Blg. 508,
taong 1995) passed by the Provincial Board of Laguna, objecting/opposing any form of gambling
including lotto in Laguna. Calvento arguing that KB508 is curtailment of State power since in this case
the national legislature itself already declared lotto as legal and permitted its operation around the country, filed
for declaratory relief before the RTC, to annul KB 508 and compel the the local mayor to issue a business permit
for the operation of a lotto outlet. Suit decided in Calventos favor. MR by Respondent denied. Petition with SC.
RULING: Game of lotto is a game of chance duly authorized by the national government through an Act of
Congress (RA1169), as amended by BP42, the law granting a franchise to the PCSO and allows it to operate
lotteries. This statute remains valid today. While lotto is a game of chance, the national government deems it
wise and proper to permit it. Hence, the Provincial Board of Laguna, as a LGU, cannot issue a resolution or an
ordinance that would seek to prohibit permits. What the national legislature allows by law, such as lotto, a
provincial board may not disallow by ordinance or resolution.
Ours is till a unitary government, not a federal state. Being so, any form of autonomy granted to LGs
will necessarily be limited and confined within the extent allowed by the central government. Besides, the
principle of local autonomy under the1987 Constitution simply means decentralization. It does not
make local governments sovereign within the state or an imperium in imperio.
Municipal governments are only agents of the national
government. Local councils exercise
only delegated legislative powers conferred upon them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is heresy to
suggest that the LGUs can undo the acts and negate by mere ordinance the mandate of the statute.
Section 2(c) requiring consultations should be read together with Section 26, 27, LGC (prior consultation by
national agencies with lgus involving projects that may cause pollution, climatic change, depletion of nonrenewable resources, loss of crop land, range-land or forest cover and extinction of animal or plant
species). Thus, Section 2(c) does not apply to lotto, the latter being neither a program nor project of the national
government, but of a charitable institution, the PCSO. Also, the argument is an afterthought, Mayor denied
application for business permit solely on ground of KB508.
Section 3, LGC Operative Principles of Decentralization policies and measures on local autonomy to be guided
by these:
(a) effective allocation among the different LGUs of the irrespective powers, functions and responsibilities [is
provided for by LGC],
(b) establishment in every LGU of an accountable, efficient and dynamic organizational structure and operating
mechanism that will meet priority needs and service requirements of its communities,
(c) local officials and employees, subject to civil service law, rules and regulation, to be appointed or removed,
according to merit and fitness, by the appropriate appointing authority,
(d) vesting of duty, responsibility and accountability in LGUS shall be accompanied with provision
for reasonably adequate resources to discharge their powers and effectively carry out their function they shall
have the power to create and broaden their own sources of revenue and the right to a just share in the
national taxes and an equitable share in proceeds of the utilization and development of the national wealth
within their respective areas

(e) provinces to component cities and municipalities; cites and municipalities to component barangays to
ensure that acts of component units are within scope of prescribe powers and functions (supervisorial powers)
(f) LGUs may group themselves, consolidate their efforts, services and resources for purposes commonly
beneficial to them thus, MMDA;
NOTE: Autonomy denotes state of independence (referred
previously to states)
community autonomy, that is, local autonomy. In the LGC, local autonomy does not mean total independence of
LGUS from the central or national government. It only means decentralization of powers from
national to local government. When exercising governmental powers and performing duties, LGU is an
agency of the national government.
Section
4,
LGC

Scope
of
Application
scope
means
areas
of coverage, that is, to provinces, cities, municipalities and barangays and other political subdivisions as may be
created bylaw and to the extent herein provided to officials, offices or agencies of the National Government.
Section 5, LGC Rules of Interpretation
(a) provision on power of LG shall be liberally interpreted in its favor; in case of doubt, any question shall be
resolved in favor of devolution of powers and of the lower LGU. Any fair and reasonable doubt as to existence of
power, interpreted in favor of LGU concerned
(b) doubt as to any tax ordinance or revenue measure, strictly construed against LGU, liberally in favor of
taxpayer (deprivation of property). Tax exemption, incentive r relief granted any LGU, construed strictly against
person claiming it (loss of income on part of LGU).
(c) liberal interpretation of general welfare provisions in order to give more power to LGU in accelerating
economic development and upgrading quality of life for the people.
Note: Basic precept in statutory construction that legislative intent is the controlling factor in the interpretation
of statute. Power to declare what the law shall be is a legislative power, power to declare what the law is or has
been is judicial. When law is unambiguous and unequivocal, application and not interpretation thereof is
IMPERATIVE.
When is statute AMBIGIOUS? If capable of being understood by reasonably well-informed persons in either of
two or more senses.
Power of judicial review can be exercised by courts to invalidate constitutionally infirm acts. Ergo,
courts are not bound by legislative interpretation of their own acts.
When is statute AMBIGIOUS? If capable of being understood by reasonably well-informed persons in either of
two or more senses.
Power of judicial review can be exercised by courts to invalidate constitutionally infirm acts. Ergo,
courts are not bound by legislative interpretation of their own acts.
De Facto Municipal Corporations requisites: Valid law authorizing incorporation; attempt in good faith to
organize under it; colorable compliance with law, assumption of corporate powers.
MUNICIPAL CORPORATIONS
Elements:
(a) legal
creation/incorporation
there must
creating/authorizing creation or incorporation of a municipal corporation;

be a law

(b) corporate name- name by which the corporation shall be known;

(c) inhabitants people residing in the territory of the corporation; and
(d) territory land mass where inhabitants reside together with internal and external waters and airspace
above land and waters.

Section 6 Authority to Create LGU (created, divided, merged ,abolished or borders substantially altered)
either by LAW enacted by Congress in the case of province, city, municipality or any other political
subdivision, or ORDINANCE by sangguniang panlalawigan/panglungosd in the case of a barangay located within
its territorial jurisdiction, subject to limitations prescribed in this Code.
Section 7 Creation/Conversion of LGU generally, creation of LGU or its conversion from
one level to another, subject to verifiable indicators of viability and projected capacity to provide services:
INCOME, POPULATION and LAND AREA, compliance with which to be attested to by the Dept. of Finance, NSO
and Land Management Bureau of DENR.
Income must be sufficient, based on acceptable standards to provide all essential government facilities and
services and special functions commensurate with the size of its populations, as expected of the
LGU concerned.
Population total number of inhabitants within the territorial jurisdiction of the LGU concerned.
Land Area must be contiguous, unless it comprises two (2) or more islands or is separated by a LGU
independent of the others properly identified by metes and bounds with technical descriptions and sufficient to
provide for such basic services and facilities to meet the requirements of its populace.
(READ GRINO VS. COMELEC 213 SCRA 672)
Section 8 Division/Merger of existing LGUs to comply with same requisites for creation under Section 7. No
reduction in income, population or land area; no reduction in current income classification.
Section 9 Abolition LGU may be abolished when its income, population or land area has been irreversibly
reduced to less than the minimum standards prescribed for its creation (as certified by DOF, NSO and LMB);
law/ordinance abolishing an LGU to specify province, city, municipality or barangay to which the LGU to be
abolished will be incorporated or merged.
Section 10 Plebiscite requirement pre-condition to creation, abolition, merger, division or substantial
alteration of boundaries of LGUs; requires majority of the votes cast in plebiscite called for the purpose in the
political unit/s directly affected; plebiscite to be conducted by COMELEC within 120 days from date of
effectivity of law/ordinance effecting such action, unless said law/ordinance fixes another date.
Section 11- Seat of Government - considerations of GEOGRAPHICAL CENTRALITY, ACCESSIBILITY,
AVAILABILITY OF TRANSPORATION AND COMMUNICATION FACILITIES, DRAINAGE AND SANITATION
DEVELOPMENT, ECONOMIC PROGRESS and OTHER RELEVANT CONSIDERATIONS; transfer of seat when
conditions and development in LGU concerned has subsequently changed significantly, requires 2/3 vote
of members of sanggunian, after public hearing; transfer site shall not be outside the territorial boundaries
o f the LGU; old site together with improvements thereon may be disposed of by sale or lease or converted to
such other use as the sanggunian concerned may deem beneficial to the LGU and its inhabitants.
Section 12 Government Centers Provinces, cities and municipalities shall endeavor to establish a government
center where offices, agencies or branches of the National Government, lgu or government-owned or controlled
corporations may, as far as practicable, be located. In designating such a center, the lgus concerned shall take
into account the existing facilities of the national and local agencies and offices which may serve as the
government center as contemplated under this Section. The National Government, the lgu or gocc shall bear the
expenses for the construction of its buildings and facilities in the government center.
Section 13 Name of LGU and Public Places, Streets and Structures always in consultation with Philippine
Historical Commission; prohibition against naming after living persons, change of name not oftener than
once every 10 years unless for justifiable reason; change requires prior plebiscite; change
of name involving a lgu, public place, street or structure with historical, cultural or ethnic significance can be
done only by a UNANIMOUS VOTE of the sanggunian concerned and in consultation with the PHC.
Section 14 Beginning of Corporate Existence When a new LGUis created, its corporate existence shall
commence upon election and qualification of its chief executive and majority of members of sanggunian.
MEJIA vs. BALOLING 81 PHIL 486 Since a city is a public corporation or juridical entity, and as such cannot
operate or transact business by itself but through agents and officials, it is necessary that officials thereof
be appointed or elected in order that it may transact business as such public corporation or city.

NOTE: De Facto Municipal Corporations requisites: Valid law authorizing incorporation; attempt in good faith to
organize under it; colorable compliance with law, assumption of corporate powers.
Case: EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L-23825, 1/24/1965
FACTS: President of the Philippines, purporting to act pursuant to Sec. 68 of Revised Administrative Code
(presidential
authority
to
define the boundary, or boundaries, of any province, sub-province,
municipality, [township] municipal district or other political subdivision, and increase or diminish the
territory comprised therein, may divide any province into one or more subprovinces, separate any
political division other than a province, into such portions as may be required, merge any
of such subdivisions or portions with another, name any new subdivision so created, and may change the seat of
government within any subdivision to such place therein as the public welfare may require), issued several
executive orders creating 33 municipalities. Petitioner (as Vice-President and as taxpayer),instituted a special
civil action seeking to enjoin Auditor General from passing in audit any expenditure of public funds in
implementation of said certain executive orders and/or disbursement by said municipalities.
DECISION: PETITION GRANTED. Since January 1, 1960, when Republic Act No. 2370 became effective, barrios
may "not be created or their boundaries altered nor their names changed "except by Act of Congress or of the
corresponding provincial board "upon petition of a majority of the voters in the are as
affected" and the "recommendation of the council of the municipality or municipalities in which the proposed
barrio is situated." This statutory denial of the presidential authority to create a new barrio implies a negation of
the bigger power to create municipalities, each of which consists of several barrios.
Whereas the power to fix a common boundary, in order to avoid or settle conflicts of jurisdiction between
adjoining municipalities, may partake of an administrative nature involving, as it does, the adoption of means
and ways to carry into effect the law creating said municipalities - the authority to create municipal corporations
is essentially legislative in nature.

Case: MALABANG vs. BENITO, 27 SCRA 533

FACTS: Petitioner Balindong (municipal mayor of Malabang, Lanaodel Sur), Respondents (Mayor Benito and
councilors of Municipality of Balabagan of the same province). Balabagan, (formerly part of Malabang) was
created on March 15, 1960, by Executive Order 386 of the then President Carlos P. Garcia, out of barrios and
sitios of the Malabang.
Citing Pelaez ruling (that Republic Act 2370 [Barrio Charter Act, approved January 1, 1960], vested power to
create barrios in the provincial board, and Section 68 of the Administrative Code, in sofar as it gives
the President the power to create municipalities, is unconstitutional (a) because it constitutes an undue
delegation of legislative power and (b) because it offends against Section 10 (1) of Article VII of the Constitution,
which limits the President's power over local governments to mere supervision), Petitioner sought to nullify
E.O. 386 and restrain respondents from performing their official functions.
Respondents argued that Pelaez ruling did not apply because, unlike the municipalities involved therein,
the municipality of Balabagan is at least a de facto corporation, having been
organized under color of a statute before this was declared unconstitutional (by Pelaez ruling), its officers
having been either elected or appointed, and the municipality itself having discharged its corporate functions
for the past five years preceding the institution of this action. That as a de facto corporation, its existence
cannot be collaterally attacked, although it may be inquired into directly in an action for quo warranto at the
instance of the State and not of an individual like the petitioner Balindong.
DECISION: Petition granted, Executive Order 386 declared void. Generally, the inquiry into the legal existence of
a municipality is reserved to the State in a proceeding for quo warranto or other direct proceeding,
and that only in a few exceptions may a private person exercise this function of government. But the ruled is
allowing collateral attacks applies only where the municipal corporation is at least a de facto corporation. For
where it is neither a corporation de jure nor de facto, but a nullity, the rule is that its existence may be
questioned collaterally or directly in any action or proceeding by any one whose rights or interests are

affected thereby, including the citizens of the territory incorporated unless they are estopped by their conduct
from doing so.
A de facto municipal corporation is recognized as such despite the fact that the statute creating it was later
invalidated, rests upon the consideration that there was some other valid law giving corporate validity to the
organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a time when the statute
had
not
been
invalidated
cannot
conceivably
make
it
a
de
facto corporation, as, independently of Section 68 of the Administrative Code, there is no other valid statute to
give color of authority to its creation. Thus, Executive Order 386 creating the municipality in question is a nullity
pursuant to the ruling in Pelaez ruling. This is not to say, however, that the acts done by the municipality of
Balabagan in the exercise of its corporate powers are a nullity because the executive order "is, in legal
contemplation, as inoperative as though it had never been passed." Note, the existence of Executive Order 386
is "an
operative fact which cannot justly be ignored." The actual
existence
of a statute, prior to such a determination, in an operative fact and may have consequences which cannot justly
be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling
as to invalidity may have to be considered in various aspects with respect to
particular relations, individual and corporate, and particular conduct, private and official.
Case: MUN. OF JIMENEZ, vs. HON. VICENTE T. BAZ. JR., G.R. No.105746. 12/2/1996
FACTS: In 1949, Pres. Elpidio Quirino (pursuant to Sec. 68 of Revised Admin Code) issued EO258 creating the
Municipality of Sinacaban consisting Petitioners southern portion. In 1988, the Municipality of
Sinacaban filed with the Provincial Board of
Misamis
Occiental a claim against Petitioner over
portions
affecting certain barrios based on the technical description in E.O.No. 258. Petitioner conceded that, under
EO258 the disputed areais part of Sinacaban, but nonetheless asserted jurisdiction on the basis of an agreement
it had with the Municipality of Sinacaban and approved by provincial board resolution in 1950. The board
declared
the
disputed
area
to
be
part
of
Sinacaban
ruling
that
the
previous resolution approving the agreement between the municipalities was void because the Board had no
power to alter the boundaries of Sinacaban as fixed in E.O. No. 258, that power being vested in Congress
pursuant to the Constitution and the LGC of 1983 (B.P. Blg. 337). Before the SC, Petitioner challenges
the trial courts decision affirming the legal existence of Sinacaban and ordering the relocation of its boundary
for the purpose of determining whether certain areas claimed by it belonged to it.
DECISION: The principal basis for the view that Sinacaban was not validly created as a municipal corporation is
the Pelaez ruling that the creation of municipal corporations is essentially a legislative matter and therefore the
President was without power to create by executive order Sinacaban. The ruling in this case has been reiterated
in a number of cases later decided. However, we have since held that where a municipality created as such by
executive order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be
questioned. Sinacaban is at least a de facto municipal corporation in the sense that its legal
existence has been recognized and acquiesced publicly and officially. Sinacaban had been in existence for
sixteen years when the Pelaez ruling yet the validity of E.O. No. 258 creating it had never been
questioned. The State and even the Municipality of Jimenez itself have recognized Sinacaban's corporate
existence entering in 1950 into an agreement with it regarding their common boundary. Also, it has attained de
jure
status,
442(d)
of
the LGC,
must
be deemed
to have cured any defect in the creation of Sinacaban.(Municipalities existing as of the date of the effectivity of
this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to
presidential issuances or executive orders and which have their respective set of elective municipal officials
holding office at the time of the effectivity of the Code shall henceforth be considered as regular municipalities).
GENERAL POWERS & ATTRIBUTES OF LGUs
Sources of Powers Article II, Section 25 and Article X of the Constitution; statutes (eg. RA7160), charter.
Section 15 Political and Corporate Nature of LGUs every LGU is a body politic and corporate endowed
with powers to be exercised by it in conformity with law. Dual Functions of LGU (1) public/governmental
acts as an agent of State for the government of the territory and its inhabitants; (2) proprietary/private
acts as an agent of the community in the administration of local affairs, and as such, it acts as a separate entity
for its own purposes and not as a subdivision of the State.
Municipal Corporation in the Philippines:

(1)Province (Sec. 459, LGC) cluster of municipalities or municipalities and component cities, as a political and
corporate unit of government which serves as a dynamic mechanism for developmental processes and effective
governance of LGUs within its territorial jurisdiction.
(2)City (Sec. 448) composed of more more urbanized and developed barangays, serves as a general purpose
government for coordination and delivery of basic, regular and direct services and effective governance of the
inhabitants within its jurisdiction;
(3)Municipality (Sec. 440, LGC) groups of barangays, serves primarily as a general purpose government for
coordination and delivery of basic, regular and direct services and effective governance of inhabitants within its
jurisdiction;
(4)Barangay (Sec. 384, LGC) basic political unit, serves as the primary planning and implementing unit of
government policies, plans, programs, projects and activities in the community and as a forum where in
collective views of people may be expressed, crystallized and considered where disputes are also amicably
settled;
(5)Autonomous Regions refer to Article 10 of the Constitution.
Note: Metropolitan Manila Development Authority is not a local government unit. The power delegated to
MMDA is that given to the Metro Manila Council to promulgate administrative rules and regulations in the
Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000
FACTS:
Petitioner
is
a
government
agency
tasked
with
delivery
of basic services in Metro Manila. Respondent Bel-Air Village Association, Inc. is a non-stock, non-profit
corporation composed of homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent had
sought to enjoin Petitioners plan to demolition the perimeter fence and open to public access Neptune Street,
a road (beside) privately/legally owned by the subdivision. The Court of Appeals, in reversing the dismissal
of Respondents complaint, ruled that Petitioner did not have the authority to order the opening of the street in
issue. Before the SC, Petitioner asserted that, there was no need for an ordinance from the City of Manila to open
Neptune Street to public because, as an agent of the State, it was endowed with police power in the
delivery of basic services in Metro Manila including traffic management (involving regulation of the use of
thoroughfares to insure the safety, convenience and welfare of the general public).
DECISION: Petition DENIED. It is beyond doubt that MMDA is not a local government unit or a public
corporation endowed with legislative power. It is not even a special metropolitan political subdivision as
contemplated in Sec. 11, Art. X of the Constitution. MMDAs powers are limited to formulation, coordination,
regulation, implementation, preparation , management, monitoring, policy-setting, installation of a system and
administration. There is no syllabus in RA7924 that grants MMDA police power, let alone legislative power.
Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No. 7924. Unlike the
MMC, the MMDA has no power to enact ordinances for the welfare of the community. Itis the local government
units, acting through their respective legislative councils, that possess legislative power and policepower. In the
case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the
opening of Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the respondent Court
of Appeals did not err in so ruling. We desist from ruling on the other issues as they are unnecessary.
Points of Discussion Police power is inherent in the State, exercised by the Legislature, but may be validly
delegated.
Upon
valid delegation, the exercise
thereof
by the delegate being
limited
only to such powers as conferred by the legislature. Legislature has delegated police power to LGUs (Sec. 15,
LGC)through their respective legislative bodies, under the General Welfare Clause (Sec. 16, LGC).
NOTE: RA 7924 declared Metropolitan or Metro Manila (bodycomposed of several LGUs, i.e., twelve (12) cities of
Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pias, Marikina, Paraaque and
Valenzuela, and the five (5)municipalities of Malabon, Navotas, Pateros, San Juan and Taguig)as a "special
development and administrative region" with the administration of "metro-wide" basic services affecting the
region placed under "a development authority" referred to as the MMDA(governed by the Metro Manila
Council composed of the mayors of the component 12 cities and 5 municipalities, the president of the Metro
Manila Vice-Mayors' League and the president of the Metro Manila Councilors' League) headed by the Chairman.

NOTE: When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative
region" and the MMDA a "special development authority" whose functions were "without prejudice to the
autonomy of the affected local government units." The character of the MMDA was clearly defined in the
legislative debates enacting its charter. MMDA nota special metropolitan political subdivision, because the
latters creation requires the approval by a majority of the votes cast in a plebiscite in the political units directly
affected. 56 R.A. No. 7924was not submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of
the MMDA is not an official elected by the people, but appointed by the President with the rank and privileges
of a cabinet member. In fact, part of his function is to perform such other duties as may be assigned to him by the
President,
57
whereas
in
local
government
units,
the
President
merely exercises supervisory authority. This emphasizes the administrative character of the MMDA.
Section 16 General Welfare Clause LGUs shall exercise powers expressly granted, those necessarily implied
therefrom,
as
well
ast
hose necessary, appropriate or incidental for efficient and
effective governance (i.e. promote health, safety, enhance prosperity, improve morals of inhabitants) is the
statutory
grant
of police power to LGUs
through
their
respective
legislative
bodies
empowering them to enact ordinances and approve resolutions and appropriate functions for the general
welfare of the LGU.
Note: Police power is an inherent attribute of sovereignty vested in Congress to make, ordain
and establish all manners of wholesome and reasonable laws for the common good; it is plenary and its
scope is vast and pervasive. However, by virtue of valid delegation, it may be exercised by LGUs. The latter
being only agents can only exercise such powers as are conferred upon them by Congress. Limits on LGUs police
Power -(1) Exercisable only within territorial limits of LGU(2) Equal Protection Clause ( interest of public vs.
those of a particular class requires exercise of such power)(3) Due Process Clause (reasonable means employed
and
not
unduly oppressive case of Villavicencio vs. Lukban, GR No.14639,
March
25,
1919)(4)
Not contrary to the Constitution and the laws (It cannot legalize prohibited act under the guise of regulation.
Likewise, it cannot prohibit legal activities but only regulate)Note: Under Section 16, LGU to ensure and support
preservation and enrichment of culture, promote health and safety, enhance peoples right to balance and
healthful ecology, improve public morals, enhance economic prosperity and social justice, maintenance of peace
and order.
Case: REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622,9/12/2002
PD 1596 (The Environmental Impact Statement System) ensures environmental protection and
regulates certain government activities affecting the environment. Related to PD 1151 (Philippine
Environment Policy), requires an environmental impact statement from all agencies and instrumentalities of the
national
government, including
government-owned or controlled
corporations, as well as private corporations, firms and entities, for every proposed project and undertaking
which significantly affect the quality of the environment.
Davao City in 2000, applied for a certificate of non-coverage(CNC) for its proposed Davao City Artica Sports
Dome project from the required Environmental Compliance Certificate (having been certified that its project is
not located in an environmentally critical area (ECA). Application denied for the reason that Davao City must
undergo the environmental impact assessment (EIA)process to secure an Environmental Compliance Certificate
(ECC),before it can proceed with the construction of its project.
Denial of application lead to complaint for injunction against DENR filed by Davao City. RTC ruled in latters
favor reasoning that the laws do not require local government units (LGUs) to comply with the EIS law. Only
agencies and instrumentalities of the national government, including government owned orc ontrolled
corporations, as well as private corporations, firms and entities are mandated to go through the EIA process for
their proposed projects which have significant effect on the quality of the environment. A local government unit,
not being an agency or instrumentality of the National Government, is deemed excluded under the principle of
expressio unius est exclusio alterius.
Petition for certiorari filed by Republic from RTC decision. Case moot and academic when subsequent change in
administration
of Davao
City
which
filed
manifestation
expressing
that
it
needs
to
secure an ECC for its proposed project. But Court, for the guidance of the implementors of the EIS law and
pursuant to our symbolic function to educate the bench and bar, addressed the issue.
Decision: Sec. 15, LGC (a local government unit is body politic and corporate endowed with powers
to be exercised by it inconformity with law). As such, it performs dual functions,
governmental

and proprietary. In exercise of governmental powers and performing governmental duties, an LGU is an agency
of the national government.
Sec. 16, LGC - duty of the LGUs to promote the people's right to a balanced ecology. Pursuant to this, an LGU, like
the City of Davao, can not claim exemption from the coverage of PD 1586. As a body politic endowed with
governmental functions, an LGU has the duty to ensure the quality of the environment, which is the very same
objective of PD 1586.
Section 4 of PD 1586 clearly states that "no person, partnership or corporation shall undertake or operate any
such declared environmentally critical project or area without first securing an Environmental Compliance
Certificate issued by the President or his duly authorized representative." 13 The Civil Code defines a person as
either natural or juridical. The state and its political subdivisions, i.e., the local government units 14 are juridical
persons. 15 Undoubtedly therefore, local government units are not excluded from the coverage of PD 1586.
Note: Based on DENR-Community Environment and Natural
Resources Office (CENROWest) certification, project area not environmentally critical area. SC is not trier of facts. Proclamation No.
2146 issued on December 14, 1981, lists areas and types of projects as ECA and within EIS system under
PD1586, eg., heavy industries, iron and steel mills, smelting plants, major mining and quarrying projects, etc.)
Case: RURAL BANK OF MAKATI, INC. vs. MUNICIPALITY OF MAKATI,G.R. No. 150763, 7/2/2004
FACTS: For non-payment of mayors permit fee and annual
business taxes, criminal charges against certain officers of Petitioner. Pending these charges, Respondent ordere
d the closure of the bank, prompting the latter to pay, under protestP82,408.66 as mayors permit fee and
annual business taxes. Petitioner filed a civil complaint for sum of money and damages
against Respondent with RTC alleging that the collection of subject fees and closure order were oppressive and
arbitrary which resulted loss of expected earnings. RTC dismissed the complaint, which decision was sustained
by the CA holding that the closure order was a legitimate exercise of police power by Respondent. Hence,
petition with SC.
DECISION: Assailed decision AFFIRMED with modification deleting closure order. RE (imposition of fees) Municipal corporations are agencies of the State for the promotion and maintenance of locals elf-government
and as such are endowed with police powers in order to effectively accomplish and carry out the declared
objects of their creation. 20 The authority of a local government unit to exercise police power under a general
welfare clause is not a recent development. Thus, the closure of the bank was a valid exercise of police power
pursuant to the general welfare clause contained in and restated by B.P. Blg. 337, which was then the law
governing local government units.
The general welfare clause has two branches. The first, known as the general legislative power, authorizes the
municipal council to enact ordinances and make regulations not repugnant to law, as may be necessary to carry
into effect and discharge the powers and duties conferred upon the municipal council by law. The
second, known as the police power proper, authorizes the municipality to enact ordinances as may be necessary
and proper for the health and safety, prosperity, morals, peace, good order, comfort, and convenience of the
municipality and its inhabitants, and for the protection of their property.
In the present case, the ordinances imposing licenses and requiring permits for any business establishment, for
purposes of regulation enacted by the municipal council of Makati, fall with in the purview of the first branch of
the general welfare clause. Moreover, the ordinance of the municipality imposing the annual business tax is part
of the power of taxation vested upon local governments.
RE (closure order) - The bank was not engaged in any illegal or immoral activities to warrant its outright
closure. The appropriate remedies to enforce payment of delinquent taxes or fees are provided for in Section 62
of the Local Tax Code, (by distraint of personal property, and by legal action). The law did not provide for
closure which furthermore violated petitioner's right to due process.
Case: TANO vs. HON. GOV. SALVADOR P. SOCRATES, G.R. No.110249, 8/21/ 1997
FACTS: City Council of Puerto Princesa, Palawan, to effectively free city seawaters from cyanide and other
obnoxious substances, passed Ordinance No. 15-92 (effective January 1, 1993) banning the shipment of all live
fish and lobster outside Puerto Princesa from January 1, 1993 to January 1, 1998. To implement said city
ordinance, the acting city mayor issued Office Order No. 23,authorizing local law enforcers to to check or

conduct necessary inspections on cargoes containing live fish and lobster being shipped out from the Puerto
Princesa to ascertain whether the shipper possessed the required Mayor's Permit issued by this Office and the
shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries and Aquatic
Resources and as to compliance with all other existing rules and regulations on the matter. Subsequently, the
Provincial Board of Palawan issued a similar ordinance.
Petitioners, who were charged with violation of certain provisions of the foregoing issuances upon the
latters implementation, sought relief with the SC contending that (a) the challenged ordinances deprived them
of due process of law, their livelihood, and unduly restricted them from the practice of their trade, in
violation of constitutional guarantees, and (b) the challenged office order contained no regulation nor condition
under which the Mayor's permit could be granted or denied, vesting the may or absolute authority to determine
whether or not to issue the permit.
DECISION: PETITION dismissed. It is of course settled that laws(including ordinances enacted by local
government units) enjoy the presumption of constitutionality. To overthrow this presumption, there must be a
clear and unequivocal breach of the Constitution, not merely a doubtful or argumentative contradiction. In short,
the conflict with the Constitution must be shown beyond reasonable doubt. Where doubt exists, even if wellfounded, there can be no finding of unconstitutionality. To doubt is to sustain.
The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing
the environment . . . TheLGC provisions invoked by private respondents merely seek to give flesh and blood to
the right of the people to a balanced and healthful ecology. In fact, the General Welfare Clause, expressly
mentions this right. In light then of the principles of decentralization and devolution enshrined in the LGC and
the powers granted therein to local government units under Section 16 (the General Welfare Clause),and under
Sections 149, 447(a) (1) (vi), 458(a)(1)(vi) and 468(a)(1)(vi), which unquestionably involve the exercise of
police power, the validity of the questioned Ordinances cannot be doubted.
Case: TAN vs. PEREA, G.R. No. 149743, 2/18/2005
FACTS: How many cockpits may be allowed to operate in a city or municipality? Comes into play, the traditional
power of the national government to enact police power measures, on one hand, and the vague principle of
local autonomy now enshrined in the Constitution on the other. PD449 (Cockfighting Law of
1974)provided that only one
cockpit shall be allowed in each
city/municipality
except that
in cities
or municipalities with a population of over 100T, two cockpits may be established ,maintained or operated.
In 1993, the Municipal Council of Daanbantaya, Cebu enacted municipal ordinances which eventually allowed
the operation of not more than three cockpits in the municipality. In 1995, Petitioner (Leonardo Tan) applied
fora license to operate a cockpit. Respondent (Socorro Perena), who was an existing licensee, filed a complaint
with the RTC to enjoin Petitioner from operating his cockpit citing that the challenged ordinance allowing the
operation of not more than three cockpits violated PD449. The trial court dismissed the complaint and upheld
Petitioners franchise reasoning that, while the ordiance may be in conflict with PD449, any doubt in
interpretation should be resolved in favor of the grant of more power to LGUs under the LGCs principle of
devolution. Court of Appeals reversed the trial courts decision. Hence, Petitioners appeal to the SC.
RULING: Petition DENIED. For Petitioner, Section 447(a)(3)(v) of the LGC sufficiently repeals Section 5(b) of the
Cockfighting Law, vesting as it does on LGUs the power and authority to issue
franchises and regulate the operation and establishment of cockpits in their respective municipalities, any law
to the contrary notwithstanding. However, while the Local Government Code expressly repealed several
laws, PD449 was not among them. Section 534(f) of the LGC declares that all general and special laws or decrees
inconsistent with the Code are hereby repealed or modified accordingly, but such clause is not an express
repealing clause because it fails to identify or designate the acts that are intended to be repealed.
While the sanggunian retains the power to authorize and license the establishment, operation, and maintenance
of cockpits, its discretion is limited in that it cannot authorize more than one cockpit per city or municipality,
unless such cities or municipalities have a population of over one hundred thousand, in which case two cockpits
may be established. Cockfighting Law arises from a valid exercise of police power by the national
government. Of course, local governments are similarly empowered under Section 16 of the Local Government
Code. We do not doubt, however, the ability of the national government to implement police power measures
that affect the subjects of municipal government, especially if the subject of regulation is a condition of universal
character irrespective of territorial jurisdictions.

Cockfighting is one such condition. It is a traditionally regulated activity, due to the attendant gambling involved
or maybe even the fact that it essentially consists of two birds killing each other for public amusement. Laws
have been enacted restricting the days when cockfights could be held, and legislation has even been emphatic
that cockfights could not beheld on holidays celebrating national honor such as Independence Day and Rizal
Day.
The obvious thrust of our laws designating when cockfights could be held is to limit cockfighting and imposing
the one-cockpit-per-municipality rule is in line with that aim. Cockfighting is a valid matter of police power
regulation, as it is a form of gambling essentially antagonistic to the aims of enhancing national
productivity and self-reliance. Limitation on the number of cockpits in a given municipality is a reasonably
necessary means for the accomplishment of the purpose of controlling cockfighting, for clearly more cockpits
equals more cockfights.
A municipal ordinance must not contravene the Constitution or any statute, otherwise it is void. Ordinance No. 7
unmistakably contravenes the Cockfighting Law in allowing three cockpits in Daanbantayan.

Surigao Electric Co., Inc.vs. Municipality

of Surigao
Posted on October 23, 2012

No. L-22766 August 30, 1968

FACTS:
On June 18,1960, Congress amended the Public Service Act and introduced doing away with the requirement of a
certificate of public convenience and necessity from the Public Service Commission for public services owned or
operated by government entities or government-owned and controlled corporations (GOCC), but at the same time
affecting its power of regulation which while exempting public services owned or operated by any instrumentality of
the government or any GOCC from its supervision, jurisdiction and control stops short of including the fixing of
rates.
Surigao Electric Co., and Arturo Lumanlan filed a petition for review challenging the validity of the order of respondent
Public Service Commission, dated July 11, 1963, wherein it held that it had no alternative but to approve the tentative
schedule of rates submitted by the applicant, the Municipality of Surigao.
ISSUE:
Whether or not a municipal government can directly maintain & operate an electric plant without obtaining a specific
franchise for the purpose and without a certificate of public convenience and necessity duly issued by the PSC.
HELD:
Yes.
The Municipality of Surigao is not a GOCC. However, it cannot be said that it is not a government entity.
As early as 1916, in Mendoza v. de Leon (33 Phil. 508), the dual character of a municipal corporation has long been
recognized: (1) as Governmental, being a branch of the general administration of the State, and (2) as QuasiPrivate and Corporate.
It is an undeniable fact that legislative and government powers are conferred upon a municipalityto enable it to aid a
state in properly governing that portion of the people residing within its municipality, such powers (being) in their nature
public, xxx (1 Dilon, Commentaries on the Law of Municipal Corporations, 5th ed., p.68 [1911]).
Governmental affairs do not lose their governmental character by being delegated to the municipal governmentsto
preserve the peace, protect the morals and health of the community and so on is to administer government, whether it be
done by the central government itself or is shifted to a local organization. (Mendoza v. de Leon).
A municipal corporation is a government entity and functions as an extension of the national government, and,
therefore, it is an instrumentality of the latter. By express provisions of Sec.14(e) of RA 2677, an instrumentality of the
national government is exempted from the jurisdiction of the PSC except with respect to the fixing of rates.
A legislative franchise cannot override the specific constitutional restriction that no franchise or right shall be
granted to any individual or corporation except under a condition that it shall be subject to amendment,
alteration or repeal by Congress (Art.XIV, Sec.8, Constitution). Such amendment/alteration may be implied from a
latter act of general applicability.
A legislative franchise cannot be availed of to defeat the proper exercise of police power. In the American case of Charles
River Bridge v. Warren Bridge (1837): the continued existence of a government would be of no great value ifit was
disarmed of the powers necessary to accomplish the ends of its creation; and the functions it was designed to perform,
transferred to the hands of privileged corporations. xxx while the rights of private property are sacredly guardedthe
community also have rights, and that the happiness and well-being of every citizen depends on their faithful preservation.