MAGDALERA, Hezekiah Anthony Bon

EH 405
PUBLIC CORPORATION LAW
Online Activity No. 4A
Reclassification Of Lands; Opening And Closure Of Roads; Corporate Powers

I.

Which of the following is/are valid?

A. A resolution reclassifying residential lands in the municipality to

commercial lands.

B. An ordinance that converts an agricultural land to non-agricultural

for purposes of expropriation without prior permission from the
Department of Agrarian Reform.

C. An ordinance temporarily closing a national road.

D. None of the above

Explain your choice/s. Explain why the other choices are not valid.

- Choice A is an invalid statement. Under Section 20 of the Local Government

Code of 1991, it is through the passing of an ordinance that such reclassification
is properly done.

- Choice B is a valid statement. The Supreme Court has decided in the case of
Province of Camarines Sur, et al. vs. Court of Appeals wherein it was held that
the DAR’s approval or permission need not be obtained in the conversion or
reclassification of lands from agricultural to non-agricultural use.

- Choice C is a valid statement. Under Section 21(a) of the Local Government Code
of 1991, “A local government unit may, pursuant to an ordinance, permanently or
temporarily close or open any local road, alley, park, or square falling within its
jurisdiction: Provided, however, That in case of permanent closure, such
ordinance must be approved by at least two-thirds (2/3) of all the members of the
sanggunian, and when necessary, an adequate substitute for the public facility
that is subject to closure is provided.”

II.
Which of the following local government’s acts is/are valid?

A. Entering into a contract of sale involving a foreshore land within its

territory that will be reclaimed next year.

B. Purchase of ink printers for Cebu City Hall’s use without prior
authorization of the Sanggunian.

C. Implementation of a project described in the 2020 General

Appropriation Ordinance of Cebu City as “road widening of
Magallanes Street: P300M for expropriation, P100M for labor and
materials to be supplied by DBL Construction, P 10M for use of heavy
equipment to be supplied by Ironman Builders Corporation, P1M for
legal costs and P2M for miscellaneous expenses” but without a prior
Resolution issued by the Sanggunian.

D. Entering into an Agreement granting X a “road right of way of 120

meters” in Plaza Independencia.

Explain your choice/s. Explain why the other choices are not valid.

- Choice A is not a valid government act. Applicable is the case of Chaves vs. PEA
and Amari Coastal Bay Development Corporation. In such case, it was held that
the submerged lands still belong to the National Government. These lands still
form part of the public properties of the State and have yet to be reclaimed. They
still belong to the inalienable natural resources of State. It is only upon the
moment they are reclaimed in accordance with law that they now form part of the
patrimonial property of the State, thus alienable and may be subject to a contract
of sale.

- Choice B is not a valid government act. There are requisites that are to be fulfilled
in order for a local executive may enter into a contract in behalf of a government
unit. The requisites are: a) the local government unit must have the power to enter
into the particular contract; b) prior authorization by the Sanggunian; c) actual
appropriation and a certificate of availability of funds by the treasurer of the local
government unit, when the contract involves the expenditure of public funds
(Secs. 46 & 47, Chapter 8, Subtitle B, Book V of the 1987 Administrative Code);
d) the contract conforms to the formal requisites of written contracts prescribed by
law. When requisites a) & c) are absent, the contract is ultra vires, it is null &
void, and such contract cannot be ratified or validated.

- Choice C is a valid government act. In the landmark case of Hon. Quisumbing vs.
Governor Gwendolyn Garcia, the sufficiency of the a general appropriation
ordinance in the absence of a specific resolution authorizing the Governor to enter
into certain contracts covering monetary obligations. The Supreme Court held that
should the appropriation ordinance already contain in sufficient detail the project
 and cost of a capital outlay such that all that the local chief executive needs to do
after undergoing the requisite public bidding is to execute the contract, no further
authorization is required, the appropriation ordinance already being sufficient.

- Choice D is a valid government act. Plaza Independencia is under the

classification of a property for public use, beyond the commerce of man. Being
classified as such, it cannot be subject to a voluntary easement, but only to legal
easements. A legal easement is one mandated by law, constituted for public use or
for private interest and becomes a continuing property right. It is inseparable from
the estate to which it belongs.

III.

The City of Cebu entered into a contract for services with Basura
Corporation under which the latter will provide machineries, equipment, and
facilities for the dumping of garbage in a dumpsite. The contract is for a term of 5
years at a rate of P1.5M per month.

After two years, the City of Cebu, which was already under a new
administration, stopped paying the monthly fees to Basura Corporation on the
ground that the contract was not authorized by the Sangguniang Panlungsod and
not covered by actual appropriation for the full amount of the contract.

A. If Basura Corporation decides to file a collection suit against the City

of Cebu, can the City of Cebu properly invoke immunity from suit?
Why or why not?

The City of Cebu cannot invoke immunity from suit against Basura Corporation.
Under Section 22 (a) of the Local Government Code of 1991, there is an express
provision stating that there is an express consent on the part of Congress that local
government units have the power to sue and be sued. Being a local government unit, the
City of Cebu has the capacity to sue as well as be validly sued. It cannot avail itself of the
defense of immunity from suit.

B. Can the City of Cebu be held liable to Basura Corporation for the full
contract price? Why or why not?

Yes, the City of Cebu can still be held liable for the full contract price.
Under the Local Government Code of 1991, Sec 22(c) is clear in its requirement
that the city’s transactions must be upon authority of the Sangguinian. Such authorization
may be made in different forms, such as a resolution, or an appropriation ordinance that
contains sufficient details about such project, or describes the project in generic terms.
 The contract was indeed lacking a prior authority given by its council, thus
defective. However, the acts of the City, which include the payments to Basura for the
garbage collection for 2 years, constitute an implied ratification and approval of the
contract. Such ratification also means a waiver of the right to question the enforceability
of the contract. Thus, the City cannot escape liability on the partially executed contract
and must be held liable to the terms of the contract.

C. Will your answer above (B) be the same if it can be established that
the contract was awarded to Basura Corporation without the
required proper public bidding? Why or why not?

My answer would still be the same regarding the City of Cebu’s liability, despite
the lack of public bidding, applying the doctrine of implied municipal liability. The case
of Province of Cebu vs. IAC is instructive on this point. In that case, the Province could
not set up the defense of the ultra vires contract entered into to escape liability as benefits
were already reaped. Thus, the Province of Cebu was considered estopped from
questioning the validity of the contract to deny its own answerability.