Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 91649 May 14, 1991ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND LORENZO SANCHEZ,petitionervs.PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR),respondent.H.B. Basco & Associates for petitioners.Valmonte Law Offices collaborating counsel for petitioners.Aguirre, Laborte and Capule for respondent PAGCOR.PARAS,J.:pA TV ad proudly announces:"The new PAGCOR responding through responsible gaming."But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter PD 1869, because it is allegedly contrary to morals, public policy and order, and because A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law. It waived the Manila City government's right to impose taxes and license fees, which is recognized by law;B. For the same reason stated in the immediately preceding paragraph, the law has intruded into the local government's right to impose local taxes and license fees. This, in contravention of the constitutionally enshrined principle of local autonomy;C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR conducted gambling, while most other forms of gambling are outlawed, together with prostitution, drug trafficking and other vices;D. It violates the avowed trend of the Cory government away from monopolistic and crony economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p. 7,Rollo)In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared national policy of the "new restored democracy" and the people's will as expressed in the 1987 Constitution. The decree is said to have a "gambling objective" and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended Petition; p. 21,Rollo).The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco being also the Chairman of the Committee on Laws of the City Council of Manila), can question and seek the annulment of PD 1869 on the alleged grounds mentioned above.The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January 1, 1977 "to establish, operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines." Its operation was originally conducted in the well known floating casino "Philippine Tourist." The operation was considered a success for it proved to be a potential source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to fully attain this objective.Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government to regulate and centralize all games of chance authorized by existing franchise or permitted by law, under the following declared policy Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to centralize and integrate all games of chance not heretofore authorized by existing franchises or permitted by law in order to attain the following objectives:(a) To centralize and integrate the right and authority to operate and conduct games of chance into one corporate entity to be controlled, administered and supervised by the Government.(b) To establish and operate clubs and casinos, for amusement and recreation, including sports gaming pools, (basketball, football, lotteries, etc.) and such other forms of amusement and recreation including games of chance, which may be allowed by law within the territorial jurisdiction of the Philippines and which will: (1) generate sources of additional revenue to fund infrastructure and socio-civic projects, such as flood control programs, beautification, sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs, Population Control and such other essential public services; (2) create recreation and integrated facilities which will expand and improve the country's existing tourist attractions; and (3) minimize, if not totally eradicate, all the evils, malpractices and corruptions that are normally prevalent on the conduct and operation of gambling clubs and casinos without direct government involvement. (Section 1, P.D. 1869)To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent therewith, are accordingly repealed, amended or modified.It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and directly remitted to the National Government a total of P2.5 Billion in form of franchise tax, government's income share, the President's Social Fund and Host Cities' share. In addition, PAGCOR sponsored other socio-cultural and charitable projects on its own or in cooperation with various governmental agencies, and other private associations and organizations. In its 3 1/2 years of operation under the present administration, PAGCOR remitted to the government a total of P6.2 Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9) casinos nationwide, directly supporting the livelihood of Four Thousand Four Hundred Ninety-Four (4,494) families.But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null and void" for being "contrary to morals, public policy and public order," monopolistic and tends toward "crony economy", and is violative of the equal protection clause and local autonomy as well as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution.This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most deliberate consideration by the Court, involving as it does the exercise of what has been described as "the highest and most delicate function which belongs to the judicial department of the government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).As We enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of the government We need not be reminded of the time-honored principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor of its constitutionality. This is not to say that We approach Our task with diffidence or timidity. Where it is clear that the legislature or the executive for that matter, has over-stepped the limits of its authority under the constitution, We should not hesitate to wield the axe and let it fall heavily, as fall it must, on the offending statute (Lozano v. Martinez,supra).InVictoriano v.Elizalde Rope Workers' Union,et al, 59 SCRA 54, the Court thru Mr. Justice Zaldivar underscored the . . . thoroughly established principle which must be followed in all cases where questions of constitutionality as obtain in the instant cases are involved. All presumptions are indulged in favor of constitutionality; one who attacks a statute alleging unconstitutionality must prove its invalidity beyond a reasonable doubt; that a law may work hardship does not render it unconstitutional; that if any reasonable basis may be conceived which supports the statute, it will be upheld and the challenger must negate all possible basis; that the courts are not concerned with the wisdom, justice, policy or expediency of a statute and that a liberal interpretation of the constitution in favor of the constitutionality of legislation should be adopted. (Danner v. Hass, 194 N.W.2nd534, 539; Spurbeck v. Statton, 106 N.W.2nd660, 663; 59 SCRA 66;seealsoe.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes, 125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521, 540)Of course, there is first, the procedural issue. The respondents are questioning the legal personality of petitioners to file the instant petition.Considering however the importance to the public of the case at bar, and in keeping with the Court's duty, under the 1987 Constitution, to determine whether or not the other branches of government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, the Court has brushed aside technicalities of procedure and has taken cognizance of this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA 371)With particular regard to the requirement of proper party as applied in the cases before us, We hold that the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of. And even if, strictly speaking they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised.In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they were involving only an indirect and general interest shared in common with the public. The Court dismissed the objection that they were not proper parties and ruled that "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must technicalities of procedure." We have since then applied the exception in many other cases. (Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).Having disposed of the procedural issue, We will now discuss the substantive issues raised.Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of gambling does not mean that the Government cannot regulate it in the exercise of its police power.The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition or restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact definition but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace. (Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuming the greatest benefits. (Edu v. Ericta,supra)It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most vital functions of governance. Marshall, to whom the expression has been credited, refers to it succinctly as the plenary power of the state "to govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The police power of the State is a power co-extensive with self-protection and is most aptly termed the "law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 708) It is "the most essential, insistent, and illimitable of powers." (Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables the state to meet the agencies of the winds of change.What was the reason behind the enactment of P.D. 1869?P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling operations in one corporate entity the PAGCOR, was beneficial not just to the Government but to society in general. It is a reliable source of much needed revenue for the cash strapped Government. It provided funds for social impact projects and subjected gambling to "close scrutiny, regulation, supervision and control of the Government" (4th Whereas Clause, PD 1869). With the creation of PAGCOR and the direct intervention of the Government, the evil practices and corruptions that go with gambling will be minimized if not totally eradicated. Public welfare, then, lies at the bottom of the enactment of PD 1896.Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local autonomy. They must be referring to Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any "tax of any kind or form, income or otherwise, as well as fees, charges or levies of whatever nature, whether National or Local."(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form, income or otherwise as well as fees, charges or levies of whatever nature, whether National or Local, shall be assessed and collected under this franchise from the Corporation; nor shall any form or tax or charge attach in any way to the earnings of the Corporation, except a franchise tax of five (5%) percent of the gross revenues or earnings derived by the Corporation from its operations under this franchise. Such tax shall be due and payable quarterly to the National Government and shall be in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or description, levied, established or collected by any municipal, provincial or national government authority (Section 13 [2]).Their contention stated hereinabove is without merit for the following reasons:(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or statute must plainly show an intent to confer that power or the municipality cannot assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to tax" therefore must always yield to a legislative act which is superior having been passed upon by the state itself which has the "inherent power to tax" (Bernas, the Revised [1973] Philippine Constitution, Vol. 1, 1983 ed. p. 445).(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that "municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909, January 18, 1957) which has the power to "create and abolish municipal corporations" due to its "general legislative powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has the power of control over Local governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And if Congress can grant the City of Manila the power to tax certain matters, it can also provide for exemptions or even take back the power.(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early as 1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National Government, thus:Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered cities and other local governments to issue license, permit or other form of franchise to operate, maintain and establish horse and dog race tracks, jai-alai and other forms of gambling is hereby revoked.Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and dog race tracks, jai-alai and other forms of gambling shall be issued by the national government upon proper application and verification of the qualification of the applicant . . .Therefore, only the National Government has the power to issue "licenses or permits" for the operation of gambling. Necessarily, the power to demand or collect license fees which is a consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila.(d) Local governments have no power to tax instrumentalities of the National Government. PAGCOR is a government owned or controlled corporation with an original charter, PD 1869. All of its shares of stocks are owned by the National Government. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it also exercises regulatory powers thus:Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the affiliated entities, and shall exercise all the powers, authority and the responsibilities vested in the Securities and Exchange Commission over such affiliating entities mentioned under the preceding section, including, but not limited to amendments of Articles of Incorporation and By-Laws, changes in corporate term, structure, capitalization and other matters concerning the operation of the affiliated entities, the provisions of the Corporation Code of the Philippines to the contrary notwithstanding, except only with respect to original incorporation.PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is governmental, which places it in the category of an agency or instrumentality of the Government. Being an instrumentality of the Government, PAGCOR should be and actually is exempt from local taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a mere Local government.The states have no power by taxation or otherwise, to retard, impede, burden or in any manner control the operation of constitutional laws enacted by Congress to carry into execution the powers vested in the federal government. (MC Culloch v. Marland, 4 Wheat 316, 4 L Ed. 579)This doctrine emanates from the "supremacy" of the National Government over local governments.Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of power on the part of the States to touch, in that way (taxation) at least, the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be agreed thatno state or political subdivision can regulate a federal instrumentality in such a way as to prevent it from consummating its federal responsibilities,or even to seriously burden it in the accomplishment of them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied)Otherwise, mere creatures of the State can defeat National policies thru extermination of what local authorities may perceive to be undesirable activities or enterprise using the power to tax as "a tool for regulation" (U.S. v. Sanchez, 340 US 42).The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v. Maryland,supra) cannot be allowed to defeat an instrumentality or creation of the very entity which has the inherent power to wield it.(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides:Sec. 5. Each local government unit shall have the power to create its own source of revenue and to levy taxes, fees, and other chargessubject to such guidelines and limitation as the congress may provide, consistent with the basic policy on local autonomy. Such taxes, fees and charges shall accrue exclusively to the local government. (emphasis supplied)The power of local government to "impose taxes and fees" is always subject to "limitations" which Congress may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception to the exercise of the power of local governments to impose taxes and fees. It cannot therefore be violative but rather is consistent with the principle of local autonomy.Besides, the principle of local autonomy under the 1987 Constitution simply means "decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does not make local governments sovereign within the state or an "imperium in imperio."Local Government has been described as a political subdivision of a nation or state which is constituted by law and has substantial control of local affairs. In a unitary system of government, such as the government under the Philippine Constitution, local governments can only be anintra sovereign subdivision of one sovereign nation, it cannot be animperiuminimperio. Local government in such a system can only mean a measure of decentralization of the function of government. (emphasis supplied)As to what state powers should be "decentralized" and what may be delegated to local government units remains a matter of policy, which concerns wisdom. It is therefore a political question. (Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State concern and hence, it is the sole prerogative of the State to retain it or delegate it to local governments.Asgamblingis usually anoffense against the State,legislative grant or express charter power is generally necessary to empower the local corporation to deal with the subject. . . . In the absence of express grant of power to enact,ordinance provisions on this subject which are inconsistent with the state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3Ibid, p. 548, emphasis supplied)Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution, because "it legalized PAGCOR conducted gambling, while most gambling are outlawed together with prostitution, drug trafficking and other vices" (p. 82,Rollo).We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the well-accepted meaning of the clause "equal protection of the laws." The clause does not preclude classification of individuals who may be accorded different treatment under the law as long as the classification is not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal force on all persons or things to be conformable to Article III, Section 1 of the Constitution (DECS v. San Diego, G.R. No. 89572, December 21, 1989).The "equal protection clause" does not prohibit the Legislature from establishing classes of individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). The Constitution does not require situations which are different in fact or opinion to be treated in law as though they were the same (Gomez v. Palomar, 25 SCRA 827).Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal protection is not clearly explained in the petition. The mere fact that some gambling activities like cockfighting (P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are legalized under certain conditions, while others are prohibited, does not render the applicable laws, P.D. 1869 for one, unconstitutional.If the law presumably hits the evil where it is most felt, it is not to be overthrown because there are other instances to which it might have been applied. (Gomez v. Palomar, 25 SCRA 827)The equal protection clause of the 14thAmendment does not mean that all occupations called by the same name must be treated the same way; the state may do what it can to prevent which is deemed as evil and stop short of those cases in which harm to the few concerned is not less than the harm to the public that would insure if the rule laid down were made mathematically exact. (Dominican Hotel v. Arizona, 249 US 2651).Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government away from monopolies and crony economy and toward free enterprise and privatization" suffice it to state that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the government's policies then it is for the Executive Department to recommend to Congress its repeal or amendment.The judiciary does not settle policy issues. The Court can only declare what the law is and not what the law should be. Under our system of government, policy issues are within the domain of the political branches of government and of the people themselves as the repository of all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).On the issue of "monopoly," however, the Constitution provides that:Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. (Art. XII, National Economy and Patrimony)It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by the Constitution. The state must still decide whether public interest demands that monopolies be regulated or prohibited. Again, this is a matter of policy for the Legislature to decide.On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely statements of principles and, policies. As such, they are basically not self-executing, meaning a law should be passed by Congress to clearly define and effectuate such principles.In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for enforcement through the courts. They were rather directives addressed to the executive and the legislature. If the executive and the legislature failed to heed the directives of the articles the available remedy was not judicial or political. The electorate could express their displeasure with the failure of the executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2)Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution, not merely a doubtful and equivocal one. In other words, the grounds for nullity must be clear and beyond reasonable doubt. (Peralta v. Comelec,supra) Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the basis for such a declaration. Otherwise, their petition must fail. Based on the grounds raised by petitioners to challenge the constitutionality of P.D. 1869, the Court finds that petitioners have failed to overcome the presumption. The dismissal of this petition is therefore, inevitable. But as to whether P.D. 1869 remains a wise legislation considering the issues of "morality, monopoly, trend to free enterprise, privatization as well as the state principles on social justice, role of youth and educational values" being raised, is up for Congress to determine.As this Court held inCitizens' Alliance for Consumer Protection v.Energy Regulatory Board, 162 SCRA 521 Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in its favor the presumption of validity and constitutionality which petitioners Valmonte and the KMU have not overturned. Petitioners have not undertaken to identify the provisions in the Constitution which they claim to have been violated by that statute. This Court, however, is not compelled to speculate and to imagine how the assailed legislation may possibly offend some provision of the Constitution. The Court notes, further, in this respect that petitioners have in the main put in question the wisdom, justice and expediency of the establishment of the OPSF, issues which are not properly addressed to this Court and which this Court may not constitutionally pass upon. Those issues should be addressed rather to the political departments of government: the President and the Congress.Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when the gambling resorted to is excessive. This excessiveness necessarily depends not only on the financial resources of the gambler and his family but also on his mental, social, and spiritual outlook on life. However, the mere fact that some persons may have lost their material fortunes, mental control, physical health, or even their lives does not necessarily mean that the same are directly attributable to gambling.Gambling may have been the antecedent,but certainly not necessarily the cause. For the same consequences could have been preceded by an overdose of food, drink, exercise, work, and even sex.WHEREFORE, the petition is DISMISSED for lack of merit.SO ORDERED.Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.Separate OpinionsPADILLA,J.,concurring:I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such policy.The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted by the political departments of government in areas which fall within their authority, except only when such policies pose a clear and present danger to the life, liberty or property of the individual. This case does not involve such a factual situation.However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human personality, destroys self-confidence and eviscerates one's self-respect, which in the long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and homes; it is an antithesis to individual reliance and reliability as well as personal industry which are the touchstones of real economic progress and national development.Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the government out of "legalized" gambling will, in the long run, be more than offset and negated by the irreparable damage to the people's moral values.Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed and becomes untenable when it itself engages in the very activity it seeks to eradicate.One can go through the Court's decision today and mentally replace the activity referred to therein asgambling, which is legal only because it is authorized by law and run by the government, with the activity known asprostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised, and "regulated" by the government, in return for the substantial revenues it would yield the government to carry out its laudable projects, such as infrastructure and social amelioration? The question, I believe, answers itself. I submit that the sooner the legislative department outlaws all forms of gambling,as a fundamental state policy, and the sooner the executive implements such policy, the better it will be for the nation.Melencio-Herrera, J., concur.Separate OpinionsPADILLA,J.,concurring:I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such policy.The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted by the political departments of government in areas which fall within their authority, except only when such policies pose a clear and present danger to the life, liberty or property of the individual. This case does not involve such a factual situation.However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human personality, destroys self-confidence and eviscerates one's self-respect, which in the long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and homes; it is an antithesis to individual reliance and reliability as well as personal industry which are the touchstones of real economic progress and national development.Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the government out of "legalized" gambling will, in the long run, be more than offset and negated by the irreparable damage to the people's moral values.Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed and becomes untenable when it itself engages in the very activity it seeks to eradicate.One can go through the Court's decision today and mentally replace the activity referred to therein asgambling, which is legal only because it is authorized by law and run by the government, with the activity known asprostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised, and "regulated" by the government, in return for the substantial revenues it would yield the government to carry out its laudable projects, such as infrastructure and social amelioration? The question, I believe, answers itself. I submit that the sooner the legislative department outlaws all forms of gambling,as a fundamental state policy, and the sooner the executive implements such policy, the better it will be for the nation.Melencio-Herrera, J., concurs.The Lawphil Project - Arellano Law FoundationRepublic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 93252 August 5, 1991RODOLFO T. GANZON,petitioner,vs.THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS,respondents.G.R. No. 93746 August 5,1991MARY ANN RIVERA ARTIEDA,petitioner,vs.HON. LUIS SANTOS, in his capacity as Secretary of the Department of Local Government, NICANOR M. PATRICIO, in his capacity as Chief, Legal Service of the Department of Local Government and SALVADOR CABALUNA JR.,respondents.G.R. No. 95245 August 5,1991RODOLFO T. GANZON,petitioner,vs.THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, in his capacity as the Secretary of the Department of Local Government, respondents.Nicolas P. Sonalan for petitioner in 93252.Romeo A. Gerochi for petitioner in 93746.Eugenio Original for petitioner in 95245.SARMIENTO,J.:pThe petitioners take common issue on the power of the President (acting through the Secretary of Local Government), to suspend and/or remove local officials.The petitioners are the Mayor of Iloilo City (G.R. Nos. 93252 and 95245) and a member of the Sangguniang Panglunsod thereof (G.R. No. 93746), respectively.The petitions of Mayor Ganzon originated from a series of administrative complaints, ten in number, filed against him by various city officials sometime in 1988, on various charges, among them, abuse of authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable violation of the Constitution, and arbitrary detention.1The personalities involved are Joceleehn Cabaluna, a clerk at the city health office; Salvador Cabaluna, her husband; Dr. Felicidad Ortigoza, Assistant City Health Officer; Mansueto Malabor, Vice-Mayor; Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong, and Eduardo Pefia Redondo members of the Sangguniang Panglunsod; and Pancho Erbite, a barangay tanod. The complaints against the Mayor are set forth in the opinion of the respondent Court of Appeals.2We quote:xxx xxx xxxIn her verified complaint (Annex A), Mrs. Cabaluna, a clerk assigned to the City Health, Office of Iloilo City charged that due to political reasons, having supported the rival candidate, Mrs. Rosa 0. Caram, the petitioner City Mayor, using as an excuse the exigency of the service and the interest of the public, pulled her out from rightful office where her qualifications are best suited and assigned her to a work that should be the function of a non-career service employee. To make matters worse, a utility worker in the office of the Public Services, whose duties are alien to the complainant's duties and functions, has been detailed to take her place. The petitioner's act are pure harassments aimed at luring her away from her permanent position or force her to resign.In the case of Dra. Felicidad Ortigoza, she claims that the petitioner handpicked her to perform task not befitting her position as Assistant City Health Officer of Iloilo City; that her office was padlocked without any explanation or justification; that her salary was withheld without cause since April 1, 1988; that when she filed her vacation leave, she was given the run-around treatment in the approval of her leave in connivance with Dr. Rodolfo Villegas and that she was the object of a well-engineered trumped-up charge in an administrative complaint filed by Dr. Rodolfo Villegas (Annex B).On the other hand, Mansuelo Malabor is the duly elected Vice-Mayor of Iloilo City and complainants Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong and Eduardo Pefia Pedondo are members of the Sangguniang Panglunsod of the City of Iloilo. Their complaint arose out from the case where Councilor Larry Ong, whose key to his office was unceremoniously and without previous notice, taken by petitioner. Without an office, Councilor Ong had to hold office at Plaza Libertad, The Vice-Mayor and the other complainants sympathized with him and decided to do the same. However, the petitioner, together with its fully-armed security men, forcefully drove them away from Plaza Libertad. Councilor Ong denounced the petitioner's actuations the following day in the radio station and decided to hold office at the Freedom Grandstand at Iloilo City and there were so many people who gathered to witness the incident. However, before the group could reach the area, the petitioner, together with his security men, led the firemen using a firetruck in dozing water to the people and the bystanders.Another administrative case was filed by Pancho Erbite, a barangay tanod, appointed by former mayor Rosa O. Caram. On March 13, 1988, without the benefit of charges filed against him and no warrant of arrest was issued, Erbite was arrested and detained at the City Jail of Iloilo City upon orders of petitioner. In jail, he was allegedly mauled by other detainees thereby causing injuries He was released only the following day.3The Mayor thereafter answered4and the cases were shortly set for hearing. The opinion of the Court of Appeals also set forth the succeeding events:xxx xxx xxxThe initial hearing in the Cabaluna and Ortigoza cases were set for hearing on June 20-21, 1988 at the Regional Office of the Department of Local Government in Iloilo City. Notices, through telegrams, were sent to the parties (Annex L) and the parties received them, including the petitioner. The petitioner asked for a postponement before the scheduled date of hearing and was represented by counsel, Atty. Samuel Castro. The hearing officers, Atty. Salvador Quebral and Atty. Marino Bermudez had to come all the way from Manila for the two-day hearings but was actually held only on June 20,1988 in view of the inability and unpreparedness of petitioner's counsel.The next hearings were re-set to July 25, 26, 27,1988 in the same venue-Iloilo City. Again, the petitioner attempted to delay the proceedings and moved for a postponement under the excuse that he had just hired his counsel. Nonetheless, the hearing officers denied the motion to postpone, in view of the fact that the parties were notified by telegrams of the scheduled hearings (Annex M).In the said hearings, petitioner's counsel cross-examined the complainants and their witnesses.Finding probable grounds and reasons, the respondent issued a preventive suspension order on August 11, 1988 to last until October 11,1988 for a period of sixty (60) days.Then the next investigation was set on September 21, 1988 and the petitioner again asked for a postponement to September 26,1988. On September 26, 1988, the complainants and petitioner were present, together with their respective counsel. The petitioner sought for a postponement which was denied. In these hearings which were held in Mala the petitioner testified in Adm. Case No. C-10298 and 10299.The investigation was continued regarding the Malabor case and the complainants testified including their witnesses.On October 10, 1988, petitioner's counsel, Atty. Original moved for a postponement of the October 24, 1988 hearing to November 7 to 11, 1988 which was granted. However, the motion for change of venue as denied due to lack of funds. At the hearing on November 7, 1988, the parties and counsel were present. Petitioner reiterated his motion to change venue and moved for postponement anew. The counsel discussed a proposal to take the deposition of witnesses in Iloilo City so the hearing was indefinitely postponed. However, the parties failed to come to terms and after the parties were notified of the hearing, the investigation was set to December 13 to 15, 1988.The petitioner sought for another postponement on the ground that his witnesses were sick or cannot attend the investigation due to lack of transportation. The motion was denied and the petitioner was given up to December 14, 1988 to present his evidence.On December 14,1988, petitioner's counsel insisted on his motion for postponement and the hearing officers gave petitioner up to December 15, 1988 to present his evidence. On December 15, 1988, the petitioner failed to present evidence and the cases were considered submitted for resolution.In the meantime, a prima facie evidence was found to exist in the arbitrary detention case filed by Pancho Erbite so the respondent ordered the petitioner's second preventive suspension dated October 11, 1988 for another sixty (60) days. The petitioner was able to obtain a restraining order and a writ of preliminary injunction in the Regional Trial Court, Branch 33 of Iloilo City. The second preventive suspension was not enforced.5Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition against the respondent Secretary of Local Government (now, Interior) in the Regional Trial Court, Iloilo City, where he succeeded in obtaining a writ of preliminary injunction. Presently, he instituted CA-G.R. SP No. 16417, an action for prohibition, in the respondent Court of Appeals.Meanwhile, on May 3, 1990, the respondent Secretary issued another order, preventively suspending Mayor Ganzon for another sixty days, the third time in twenty months, and designating meantime Vice-Mayor Mansueto Malabor as acting mayor. Undaunted, Mayor Ganzon commenced CA-G.R. SP No. 20736 of the Court of Appeals, a petition for prohibition,6(Malabor it is to be noted, is one of the complainants, and hence, he is interested in seeing Mayor Ganzon ousted.)On September 7, 1989, the Court of Appeals rendered judgment, dismissing CA-G.R. SP No. 16417. On July 5, 1990, it likewise promulgated a decision, dismissing CA-G.R. SP No. 20736. In a Resolution dated January 24, 1990, it issued a Resolution certifying the petition of Mary Ann Artieda, who had been similary charged by the respondent Secretary, to this Court.On June 26,1990, we issued a Temporary Restraining Order, barring the respondent Secretary from implementing the suspension orders, and restraining the enforcement of the Court of Appeals' two decisions.In our Resolution of November 29, 1990, we consolidated all three cases. In our Resolutions of January 15, 1991, we gave due course thereto.Mayor Ganzon claims as a preliminary (GR No. 93252), that the Department of Local Government in hearing the ten cases against him, had denied him due process of law and that the respondent Secretary had been "biased, prejudicial and hostile" towards him7arising from his (Mayor Ganzon's) alleged refusal to join the Laban ng Demokratikong Pilipino party8and the running political rivalry they maintained in the last congressional and local elections;9and his alleged refusal to operate a lottery in Iloilo City.10He also alleges that he requested the Secretary to lift his suspension since it had come ninety days prior to an election (the barangay elections of November 14, 1988),11notwithstanding which, the latter proceeded with the hearing and meted out two more suspension orders of the aforementioned cases.12He likewise contends that he sought to bring the cases to Iloilo City (they were held in Manila) in order to reduce the costs of proceeding, but the Secretary rejected his request.13He states that he asked for postponement on "valid and justifiable"14grounds, among them, that he was suffering from a heart ailment which required confinement; that his "vital"15witness was also hospitalized16but that the latter unduly denied his request.17Mayor Ganzon's primary argument (G.R. Nos. 93252 and 95245) is that the Secretary of Local Government is devoid, in any event, of any authority to suspend and remove local officials, an argument reiterated by the petitioner Mary Ann Rivera Artieda (G.R. No. 93746).As to Mayor Ganzon's charges of denial of due process, the records do not show very clearly in what manner the Mayor might have been deprived of his rights by the respondent Secretary. His claims that he and Secretary Luis-Santos were (are) political rivals and that his "persecution" was politically motivated are pure speculation and although the latter does not appear to have denied these contentions (as he, Mayor Ganzon, claims), we can not take his word for it the way we would have under less political circumstances, considering furthermore that "political feud" has often been a good excuse in contesting complaints.The Mayor has failed furthermore to substantiate his say-so's that Secretary Santos had attempted to seduce him to join the administration party and to operate a lottery in Iloilo City. Again, although the Secretary failed to rebut his allegations, we can not accept them, at face value, much more, as judicial admissions as he would have us accept them18for the same reasons above-stated and furthermore, because his say so's were never corroborated by independent testimonies. As a responsible public official, Secretary Santos, in pursuing an official function, is presumed to be performing his duties regularly and in the absence of contrary evidence, no ill motive can be ascribed to him.As to Mayor Ganzon's contention that he had requested the respondent Secretary to defer the hearing on account of the ninety-day ban prescribed by Section 62 of Batas Blg. 337, the Court finds the question to be moot and academic since we have in fact restrained the Secretary from further hearing the complaints against the petitioners.19As to his request, finally, for postponements, the Court is afraid that he has not given any compelling reason why we should overturn the Court of Appeals, which found no convincing reason to overrule Secretary Santos in denying his requests. Besides, postponements are a matter of discretion on the part of the hearing officer, and based on Mayor Ganzon's above story, we are not convinced that the Secretary has been guilty of a grave abuse of discretion.The Court can not say, under these circumstances, that Secretary Santos' actuations deprived Mayor Ganzon of due process of law.We come to the core question: Whether or not the Secretary of Local Government, as the President's alter ego, can suspend and/or remove local officials.It is the petitioners' argument that the 1987 Constitution20no longer allows the President, as the 1935 and 1973 Constitutions did, to exercise the power of suspension and/or removal over local officials. According to both petitioners, the Constitution is meant, first, to strengthen self-rule by local government units and second, by deleting the phrase21as may be provided by law to strip the President of the power of control over local governments. It is a view, so they contend, that finds support in the debates of the Constitutional Commission. The provision in question reads as follows:Sec. 4. The President of the Philippines shall exercise general supervision over local governments. Provinces with respect to component cities and municipalities, and cities and municipalities with respect to component barangays shall ensure that the acts of their component units are within the scope of their prescribed powers and functions.22It modifies a counterpart provision appearing in the 1935 Constitution, which we quote:Sec. 10. The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all Local governments as may be provided by law, and take care that the laws be faithfully executed.23The petitioners submit that the deletion (of "as may be provided by law") is significant, as their argument goes, since: (1) the power of the President is "provided by law" and (2) hence, no law may provide for it any longer.It is to be noted that in meting out the suspensions under question, the Secretary of Local Government acted in consonance with the specific legal provisions of Batas Blg. 337, the Local Government Code, we quote:Sec. 62.Notice of Hearing. Within seven days after the complaint is filed, the Minister of local Government, or the sanggunian concerned, as the case may be, shall require the respondent to submit his verified answer within seven days from receipt of said complaint, and commence the hearing and investigation of the case within ten days after receipt of such answer of the respondent. No investigation shall be held within ninety days immediately prior to an election, and no preventive suspension shall be imposed with the said period. If preventive suspension has been imposed prior to the aforesaid period, the preventive suspension shall be lifted.24Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by the Minister of Local Government if the respondent is a provincial or city official, by the provincial governor if the respondent is an elective municipal official, or by the city or municipal mayor if the respondent is an elective barangay official.(2) Preventive suspension may be imposed at any time after the issues are joined, when there is reasonable ground to believe that the respondent has committed the act or acts complained of, when the evidence of culpability is strong, when the gravity of the offense so warrants, or when the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. In all cases, preventive suspension shall not extend beyond sixty days after the start of said suspension.(3) At the expiration of sixty days, the suspended official shall be deemed reinstated in office without prejudice to the continuation of the proceedings against him until its termination. However ' if the delay in the proceedings of the case is due to his fault, neglect or request, the time of the delay shall not be counted in computing the time of suspension.25The issue, as the Court understands it, consists of three questions: (1) Did the 1987 Constitution, in deleting the phrase "as may be provided by law" intend to divest the President of the power to investigate, suspend, discipline, and/or remove local officials? (2) Has the Constitution repealed Sections 62 and 63 of the Local Government Code? (3) What is the significance of the change in the constitutional language?It is the considered opinion of the Court that notwithstanding the change in the constitutional language, the charter did not intend to divest the legislature of its right or the President of her prerogative as conferred by existing legislation to provide administrative sanctions against local officials. It is our opinion that the omission (of "as may be provided by law") signifies nothing more than to underscore local governments' autonomy from congress and to break Congress' "control" over local government affairs. The Constitution did not, however, intend, for the sake of local autonomy, to deprive the legislature of all authority over municipal corporations, in particular, concerning discipline.Autonomy does not, after all, contemplate making mini-states out of local government units, as in the federal governments of the United States of America (or Brazil or Germany), although Jefferson is said to have compared municipal corporations euphemistically to "small republics."26Autonomy, in the constitutional sense, is subject to the guiding star, though not control, of the legislature, albeit the legislative responsibility under the Constitution and as the "supervision clause" itself suggest-is to wean local government units from over-dependence on the central government.It is noteworthy that under the Charter, "local autonomy" is not instantly self-executing, but subject to, among other things, the passage of a local government code,27a local tax law,28income distribution legislation,29and a national representation law,30and measures31designed to realize autonomy at the local level. It is also noteworthy that in spite of autonomy, the Constitution places the local government under the general supervision of the Executive. It is noteworthy finally, that the Charter allows Congress to include in the local government code provisions for removal of local officials, which suggest that Congress may exercise removal powers, and as the existing Local Government Code has done, delegate its exercise to the President. Thus:Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units.32As hereinabove indicated, the deletion of "as may be provided by law" was meant to stress,sub silencio, the objective of the framers to strengthen local autonomy by severing congressional control of its affairs, as observed by the Court of Appeals, like the power of local legislation.33The Constitution did nothing more, however, and insofar as existing legislation authorizes the President (through the Secretary of Local Government) to proceed against local officials administratively, the Constitution contains no prohibition.The petitioners are under the impression that the Constitution has left the President mere supervisory powers, which supposedly excludes the power of investigation, and denied her control, which allegedly embraces disciplinary authority. It is a mistaken impression because legally, "supervision" is not incompatible with disciplinary authority as this Court has held,34thus:xxx xxx xxxIt is true that in the case of Mondano vs. Silvosa, 51 Off. Gaz., No. 6 p. 2884, this Court had occasion to discuss the scope and extent of the power of supervision by the President over local government officials in contrast to the power of control given to him over executive officials of our government wherein it was emphasized that the two terms, control and supervision, are two different things which differ one from the other in meaning and extent. Thus in that case the Court has made the following digression: "In administration law supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them the former may take such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify of set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for that of the latter." But from this pronouncement it cannot be reasonably inferred that the power of supervision of the President over local government officials does not include the power of investigation when in his opinion the good of the public service so requires, as postulated in Section 64(c) of the Revised Administrative Code. ...35xxx xxx xxx"Control" has been defined as "the power of an officer to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for test of the latter."36"Supervision" on the other hand means "overseeing or the power or authority of an officer to see that subordinate officers perform their duties.37As we held,38however, "investigating" is not inconsistent with "overseeing", although it is a lesser power than "altering". The impression is apparently exacerbated by the Court's pronouncements in at least three cases,Lacson v. Roque,39Hebron v. Reyes,40andMondano v. Silvosa,41and possibly, a fourth one, Pelaez v. Auditor General.42InLacson, this Court said that the President enjoyed no control powers but only supervision "as may be provided by law,"43a rule we reiterated inHebron, andMondano. InPelaez, we stated that the President "may not . . . suspend an elective official of a regular municipality or take any disciplinary action against him, except on appeal from a decision of the corresponding provincial board."44However, neitherLacsonnorHebronnorMondanocategorically banned the Chief Executive from exercising acts of disciplinary authority because she did not exercise control powers, but because no law allowed her to exercise disciplinary authority. Thus, according toLacson:The contention that the President has inherent power to remove or suspend municipal officers is without doubt not well taken. Removal and suspension of public officers are always controlled by the particular law applicable and its proper construction subject to constitutional limitations.45InHebronwe stated:Accordingly, when the procedure for the suspension of an officer is specified by law, the same must be deemed mandatory and adhered to strictly, in the absence of express or clear provision to the contrary-which does not et with respect to municipal officers ...46InMondano, the Court held:... The Congress has expressly and specifically lodged the provincial supervision over municipal officials in the provincial governor who is authorized to "receive and investigate complaints made under oath against municipal officers for neglect of duty, oppression, corruption or other form of maladministration of office, and conviction by final judgment of any crime involving moral turpitude." And if the charges are serious, "he shall submit written charges touching the matter to the provincial board, furnishing a copy of such charges to the accused either personally or by registered mail, and he may in such case suspend the officer (not being the municipal treasurer) pending action by the board, if in his opinion the charge by one affecting the official integrity of the officer in question." Section 86 of the Revised Administration Code adds nothing to the power of supervision to be exercised by the Department Head over the administration of ... municipalities ... . If it be construed that it does and such additional power is the same authority as that vested in the Department Head by section 79(c) of the Revised Administrative Code, then such additional power must be deemed to have been abrogated by Section 110(l), Article VII of the Constitution.47xxx xxx xxxInPelaez, we stated that the President can not impose disciplinary measures on local officials except on appeal from the provincial board pursuant to the Administrative Code.48Thus, in those case that this Court denied the President the power (to suspend/remove) it was not because we did not think that the President can not exercise it on account of his limited power, but because the law lodged the power elsewhere. But in those cases ii which the law gave him the power, the Court, as inGanzon v. Kayanan, found little difficulty in sustaining him.49The Court does not believe that the petitioners can rightfully point to the debates of the Constitutional Commission to defeat the President's powers. The Court believes that the deliberations are by themselves inconclusive, because although Commissioner Jose Nolledo would exclude the power of removal from the President,50Commissioner Blas Ople would not.51The Court is consequently reluctant to say that the new Constitution has repealed the Local Government Code, Batas Blg. 37. As we said, "supervision" and "removal" are not incompatible terms and one may stand with the other notwithstanding the stronger expression of local autonomy under the new Charter. We have indeed held that in spite of the approval of the Charter, Batas Blg. 337 is still in force and effect.52As the Constitution itself declares, local autonomy means "a more responsive and accountable local government structure instituted through a system of decentralization."53The Constitution as we observed, does nothing more than to break up the monopoly of the national government over the affairs of local governments and as put by political adherents, to "liberate the local governments from the imperialism of Manila." Autonomy, however, is not meant to end the relation of partnership and inter-dependence between the central administration and local government units, or otherwise, to user in a regime of federalism. The Charter has not taken such a radical step. Local governments, under the Constitution, are subject to regulation, however limited, and for no other purpose than precisely, albeit paradoxically, to enhance self- government.As we observed in one case,54decentralization means devolution of national administration but not power to the local levels. Thus:Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of administration when the central government delegates administrative powers to political subdivisions in order to broaden the base of government power and in the process to make local governments "more responsive and accountable," and "ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress." At the same time, it relieves the central government of the burden of managing local affairs and enables it to concentrate on national concerns. The President exercises "general supervision" over them, but only to "ensure that local affairs are administered according to law." He has no control over their acts in the sense that he can substitute their judgments with his own.Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments units declared to be autonomous, In that case, the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central authorities. According to a constitutional author, decentralization of power amounts to "self-immolation," since in that event, the autonomous government becomes accountable not to the central authorities but to its constituency.55The successive sixty-day suspensions imposed on Mayor Rodolfo Ganzon is albeit another matter. What bothers the Court, and what indeed looms very large, is the fact that since the Mayor is facing ten administrative charges, the Mayor is in fact facing the possibility of 600 days of suspension, in the event that all ten cases yieldprima faciefindings. The Court is not of course tolerating misfeasance in public office (assuming that Mayor Ganzon is guilty of misfeasance) but it is certainly another question to make him serve 600 days of suspension, which is effectively, to suspend him out of office. As we held:562. Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His term of office does not expire until 1986. Were it not for this information and the suspension decreed by the Sandiganbayan according to the Anti-Graft and Corrupt Practices Act, he would have been all this while in the full discharge of his functions as such municipal mayor. He was elected precisely to do so. As of October 26, 1983, he has been unable to. it is a basic assumption of the electoral process implicit in the right of suffrage that the people are entitled to the services of elective officials of their choice. For misfeasance or malfeasance, any of them could, of course, be proceeded against administratively or, as in this instance, criminally. In either case, Ms culpability must be established. Moreover, if there be a criminal action, he is entitled to the constitutional presumption of innocence. A preventive suspension may be justified. Its continuance, however, for an unreasonable length of time raises a due process question. For even if thereafter he were acquitted, in the meanwhile his right to hold office had been nullified. Clearly, there would be in such a case an injustice suffered by him. Nor is he the only victim. There is injustice inflicted likewise on the people of Lianga They were deprived of the services of the man they had elected to serve as mayor. In that sense, to paraphrase Justice Cardozo, the protracted continuance of this preventive suspension had outrun the bounds of reason and resulted in sheer oppression. A denial of due process is thus quite manifest. It is to avoid such an unconstitutional application that the order of suspension should be lifted.57The plain truth is that this Court has been ill at ease with suspensions, for the above reasons,58and so also, because it is out of the ordinary to have a vacancy in local government. The sole objective of a suspension, as we have held,59is simply "to prevent the accused from hampering the normal cause of the investigation with his influence and authority over possible witnesses"60or to keep him off "the records and other evidence.61It is a means, and no more, to assist prosecutors in firming up a case, if any, against an erring local official. Under the Local Government Code, it can not exceed sixty days,62which is to say that it need not be exactly sixty days long if a shorter period is otherwise sufficient, and which is also to say that it ought to be lifted if prosecutors have achieved their purpose in a shorter span.Suspension is not a penalty and is not unlike preventive imprisonment in which the accused is held to insure his presence at the trial. In both cases, the accused (the respondent) enjoys a presumption of innocence unless and until found guilty.Suspension finally is temporary and as the Local Government Code provides, it may be imposed for no more than sixty days. As we held,63a longer suspension is unjust and unreasonable, and we might add, nothing less than tyranny.As we observed earlier, imposing 600 days of suspension which is not a remote possibility Mayor Ganzon is to all intents and purposes, to make him spend the rest of his term in inactivity. It is also to make, to all intents and purposes, his suspension permanent.It is also, in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not been proven. Worse, any absolution will be for naught because needless to say, the length of his suspension would have, by the time he is reinstated, wiped out his tenure considerably.The Court is not to be mistaken for obstructing the efforts of the respondent Secretary to see that justice is done in Iloilo City, yet it is hardly any argument to inflict on Mayor Ganzon successive suspensions when apparently, the respondent Secretary has had sufficient time to gather the necessary evidence to build a case against the Mayor without suspending him a day longer. What is intriguing is that the respondent Secretary has been cracking down, so to speak, on the Mayor piecemeal apparently, to pin him down ten times the pain, when he, the respondent Secretary, could have pursued a consolidated effort.We reiterate that we are not precluding the President, through the Secretary of Interior from exercising a legal power, yet we are of the opinion that the Secretary of Interior is exercising that power oppressively, and needless to say, with a grave abuse of discretion.The Court is aware that only the third suspension is under questions, and that any talk of future suspensions is in fact premature. The fact remains, however, that Mayor Ganzon has been made to serve a total of 120 days of suspension and the possibility of sixty days more is arguably around the corner (which amounts to a violation of the Local Government Code which brings to light a pattern of suspensions intended to suspend the Mayor the rest of his natural tenure. The Court is simply foreclosing what appears to us as a concerted effort of the State to perpetuate an arbitrary act.As we said, we can not tolerate such a state of affairs.We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third suspension and lifting, for the purpose, the Temporary Restraining Order earlier issued. Insofar as the seven remaining charges are concerned, we are urging the Department of Local Government, upon the finality of this Decision, to undertake steps to expedite the same, subject to Mayor Ganzon's usual remedies of appeal, judicial or administrative, or certiorari, if warranted, and meanwhile, we are precluding the Secretary from meting out further suspensions based on those remaining complaints, notwithstanding findings ofprima facieevidence.In resume the Court is laying down the following rules:1. Local autonomy, under the Constitution, involves a mere decentralization of administration, not of power, in which local officials remain accountable to the central government in the manner the law may provide;2. The new Constitution does not prescribe federalism;3. The change in constitutional language (with respect to the supervision clause) was meant but to deny legislative control over local governments; it did not exempt the latter from legislative regulations provided regulation is consistent with the fundamental premise of autonomy;4. Since local governments remain accountable to the national authority, the latter may, by law, and in the manner set forth therein, impose disciplinary action against local officials;5. "Supervision" and "investigation" are not inconsistent terms; "investigation" does not signify "control" (which the President does not have);6. The petitioner, Mayor Rodolfo Ganzon. may serve the suspension so far ordered, but may no longer be suspended for the offenses he was charged originally; provided:a) that delays in the investigation of those charges "due to his fault, neglect or request, (the time of the delay) shall not be counted in computing the time of suspension. [Supra, sec. 63(3)]b) that if during, or after the expiration of, his preventive suspension, the petitioner commits another or other crimes and abuses for which proper charges are filed against him by the aggrieved party or parties, his previous suspension shall not be a bar to his being preventively suspended again, if warranted under subpar. (2), Section 63 of the Local Government Code.WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary Restraining Order issued is LIFTED. The suspensions of the petitioners are AFFIRMED, provided that the petitioner, Mayor Rodolfo Ganzon, may not be made to serve future suspensions on account of any of the remaining administrative charges pending against him for acts committed prior to August 11, 1988. The Secretary of Interior is ORDERED to consolidate all such administrative cases pending against Mayor Ganzon.The sixty-day suspension against the petitioner, Mary Ann Rivera Artieda, is AFFIRMED. No costs.SO ORDERED.Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ concur.Footnotes1 Rollo, G.R. No. 93252, 76; 77.2 Hon. Bonifacio Cacdac, Jr., J.3 Rollo, Id., 76-77.4 Id., 77.5 Id., 77-78.6 Id., 78. The first suspension was on the Cabaluna and Ortigoza complaints. CA-G.R. No. 16417 was on the Erbite complaint. CA-G.R. No. 20736 was a challenge on the designation of Vice- Mayor Malabor.7Id., 218 Id.9 Id., 27.10 Id., 28.11 Id., 30.12 Id31-32.13 Id., 34-35.14 Id., 36.15 Id.16 Id17 Id., 38.18 Id.19 By virtue of the Temporary Restraining Order the Court issued on June 26,1990.20 CONST., art. X, sec. 4.21 CONST. (1935), art, X, sec. 10(l). The 1973 Constitution contained no similar provision, but see art. VII, sec. 18.22 CONST. (1987),supra.23 CONST. (1935),supra.24 Batas Blg. 337, sec. 62.25 Supra, sec. 63.26 CRUZ, PHILIPPINE POLITICAL LAW 64 (1987 ed.)27 CONST.,supra, art. X, sec. 3.28 Supra, secs. 5,6.29 Supra, sec. 7.30 Supra, sec. 9.31 Seesupra, sec. 14, providing for regional development councils to be organized by the President.32 Supra, sec. 3.33 G.R. No. 95245, Id., 53; see Mendoza, J., Concurring.34 Ganzon v. Kayanan, 104 Phil. 484 (1985). In this concurrence (Id., 48-61), Justice Mendoza cited this case.35 Supra, 489-490.36 Mondano v. Silvosa, 97 Phil. 143,148 (1955).37 Supra, 147.38 Ganzon v. Kayanan,supra.39 92 Phil. 456 (1953).40 104 Phil. 175 (1958).41 Supra.42 No. L-23825, December 24,1965,15 SCRA 569.43 Lacson v. Roque,supra, 463.44 Pelaez v. Auditor General,supra,583.45 Lacson v. Roque,supra,462.46 Hebron v. Reyes,supra,185.47 Mondano v. Silvosa,supra, 148.48 Pelaez v. Auditor General,supra, 583.49 G.R. No. 95245, Id., 50-51; see Mendoza, J., Concurring.50 Id., 23.51 Id., 53.52 Bagabuyo v. Davide, G.R. No. 87233, September 21,1989.53 CONST.,supra,art. X, see. 3.54 Limbona v. Mangelin G.R. No. 80391, February 28,1989,170 SCRA 786.55 Supra, 794-795.56 Layno, Sr. v. Sandiganbayan, No. 65848, May 24, 1985, 136 SCRA 536,57 Supra, 541.58 Seesupra.59 Lacson v. Roque,supra.60 Supra, 469.61 Batas Blg. 337, sec. 63.62 Supra.63 Layno, Sr. v. Sandiganbayan,supra.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-12892 April 30, 1960THE CITY OF CEBU,plaintiff-appellee,vs.THE NATIONAL WATERWORKS and SEWERAGE AUTHORITY,defendant-appellant.Ramon Duterte, Quirico del Mar, and Asst. City Fiscal Rafael Ybaez for appellee.Actg. Solicitor General Guillermo E. Torres and Govt. Corporate Counsel Juan C. Jimenez for appellant.BARRERA,J.:To prevent the National Waterworks and Sewerage Authority (NAWASA), created under Republic Act No. 1383, from taking over the ownership, control, supervision, and jurisdiction over the Osmea Waterworks System, pursuant to the provisions of Section 8 of the said Act, the City of Cebu filed an action for declaratory relief in the Court of First Instance of Cebu, naming the NAWASA as defendant, praying for a clear interpretation of the provisions of said R. A. No. 1383; a declaration of the rights and obligations of the parties thereunder; and a declaration that the statute or any part thereof, in so far as it deprives the plaintiff of its property rights in the Osmea Waterworks System without due process of law and just compensation, is unconstitutional.In its answer, NAWASA contended that as the System had always been under the control and operation of National Government, its transfer to the defendant NAWASA was within the competence of Congress to do; that even assuming that the said System belonged to plaintiff, it was public property and therefore, within the absolute control of Congress; and that granting that it was patrimonial property, there was proper and just compensation provided for in Republic Act No. 1383 for its transfer NAWASA.After due trial, the lower court rendered judgment which was later amended, declaring Republic Act No. 1383 unconstitutional "in so far as it vests in defendant authority (NAWASA) ownership over the Osmea Waterworks System without just compensation as required by the Constitution, without prejudice to granting positive coercive relief upon proper showing that defendant insists upon taking ownership of the Osmea Waterworks System," the same time upholding the defendant's right of control, jurisdiction and supervision over the said System. The question as to what acts of the NAWASA would constitute acts of ownership or dominion and what would be considered as an exercise of jurisdiction, supervision and control was left open for future determination.From this decision the present appeal has been interposed by the defendant NAWASA.The facts as found by the lower court and upon which its decision was based, are as follows:By an Act of 27 December 1910, the now defunct Philippine Legislature authorized the Municipality of Cebu, Province of Cebu, Philippines, to insurance indebtedness of $125,000.00 in money the United States, and to issue bonds covering the amount of said indebtedness in gold coin of the United States, for the purpose of providing funds for the construction of sewer and drainage facilities, to secure a sufficient supply of water and necessary buildings for primary schools, and for other purposes (Act No. 2009). The Act provided that the proceeds of the sale of the bond issue should be placed by the Treasurer of the Philippines to the credit of the municipality, to be drawn therefrom by appropriations by the Municipal Council of Cebu. It exclusively charged the municipality with the obligation of reimbursing the same from its current revenues. (Sections 4 and 7, Act No. 2009). The bonds which were to mature in 1941 were expressly declared exempt from taxes by the government of the United States or by the government of the Philippine Islands, and its political or municipal subdivisions, or by any state or territory of the United States. (Sec. 1, Act No. 2009).Pursuant to the statute, the Municipality of Cebu floated the bond issue and invested part of the proceeds of the sale thereof in the construction of a waterworks system to supply water to its inhabitants. The system came to be known as the Osmea Waterworks System in honor of the illustrious son of Cebu, former President Sergio Osmea, Sr., who was then the Speaker of the National Assembly that approved Act No. 2009. Since its establishment, the System has been supplying the inhabitants of the municipality of Cebu with water originally taken exclusively from the Buhisan basin, within an area of approximately five hundred hectares, and which is admittedly within a government reservation. The basin catches the rain water run-off from the surrounding hills and impounds it in a reinforced concrete dam. From the dam the water is conveyed in a 14 inch main pipe to the Tisa Filters where it is treated or purified by means of coagulants, rapid sand filtration and chlorination. After the purification process, the water is stored in a four million-gallon clear water reservoir. From the Tisa Filters the water is finally conveyed through a 16-inch conduit to the city for distribution to the paying customers of the system.By statute, the City of Cebu came into existence as a political body corporate on 20 October 1936. (Sec. 2. Commonwealth Act No. 58). The newly created city absorbed the former municipality of Cebu. (Sec. 3, Commonwealth Act No. 58).Among the general powers granted to, and duties imposed upon, the legislative body of the City, known as the Municipal Board, is that of providing for the maintenance of waterworks for the purpose of supplying water to the inhabitants of the city, and the purification of the source of supply and the places through which the same passes, and to regulate the consumption and use of the water; to fix and provide for the collection of rents therefor; and to regulate the construction, repair, and use of hydrants, pumps, cisterns, and reservoirs. Sec. 17-x. Commonwealth Act 58).Pursuant to the aforesaid charter provision, the Municipal Board the City of Cebu has been running and operating the Osmea Waterworks System. Its municipal Board provides for the budgetary expenses of the System and governs the disposition of the System's revenue.On 16 November 1948, the Public Service Commission granted plaintiff City a certificate of public convenience to operate and maintain the Osmea Waterworks System, subject to the terms and conditions imposed therein Exh. E).For the purpose of expanding the service to meet the water needs of its increased population, the City of Cebu, on 11 December 1950 filed with the Department of Agriculture and Natural Resources an application for the use of water emanating from a natural spring in a private land belonging to the late Dr. Pio Valencia, situated in Hagubiao, Consolacion, Cebu. The said application was in due time approved by the department head. Page 5, Exh C).On 17 June 1955, defendant Authority was created as a public corporation. (Sec. 1, Republic Act No. 1383). Pursuant to its charter, defendant shall own and/or have jurisdiction, supervision and control over all territory now embraced by the Metropolitan Water District as well as all areas now served by existing government-owned waterworks and sewerage and drainage systems within the boundaries of cities, municipalities, and municipal districts in the Philippines including those served by the Waterworks and Wells and Drills Sections of the Bureau of Public Works' (Sec. 1). Defendant was also given the power "to acquire, purchase, hold, transfer, sell, lease, rent, mortgage, encumber, and otherwise dispose of real and personal property including rights and franchises within the Philippines, as authorized by the purposes for which the Authority was created and reasonably and necessarily required for the transaction of the lawful business of the same unless otherwise provided in this Act", and to exercise the right of eminent domain for the purpose for which the Authority was created, in the manner provided for by law for condemnation proceedings by the national, provincial, and municipal governments; (Sec. 2, paragraphs [h] and [i]).Lastly, the Act provides that "all existing government-owned waterworks and sewerage systems in cities, municipalities and municipal districts, including springs and other water sources, as well as the water-works and sewerage bonds, sinking funds, and all indebtedness in general of the said Metropolitan Water District, and government-owned waterworks and sewerage systems are transferred to the National Waterworks and Sewerage Authority, and the Board is hereby authorized and directed to receive and assume all such assets and liabilities or on behalf of the said Authority, and in turn to pledge such assets as security for the payment of waterworks and sewerage bonded debt" and that the net book value of the properties and assets of the Metropolitan Water District and of government owned waterworks and sewerage systems in cities, municipalities, or municipal districts, and other government-owned waterworks and sewerage systems shall be received by the Authority in payment for an equal value of the assets of the National Waterworks and Sewerage Authority. (Sec. 8).Appellant, in its appeal, claims that the lower court erred:1. In declaring Republic Act Number 1383 unconstitutional in that it vests in defendant ownership and control of the Osmea Waterworks System without just compensation as required by the Constitution.2. In not holding that under the legitimate exercise of the police power of the State, Congress has the authority to enact a law transferring the Osmea Waterworks System to another agency of the Government such as the defendant National Waterworks and Sewerage Authority in this case.3. In declaring that Republic Act Number 1383 does not provide for just compensation and also in refusing to recognize the right of the National Government to acquire the Osmea Waterworks System by eminent domain.4. In not dismissing the plaintiff's complaint.The issues presented above are basically the same as those raised and determined by this court in the recent case of the City of Baguiovs.The National Waterworks and Sewerage Authority, 106 Phil., 144; 57 Off. Gaz. [9] 1579. In the aforesaid case, passing upon the question of whether Republic Act No. 1383 provides for the automatic expropriation of the waterworks mentioned therein, we held, citing Section 6, Article XIII and Section 1-(2), Article III of our Constitution, this wise:It is clear that the State may, in the interest of national welfare, transfer to public ownership any private enterprise upon payment of just compensation. At the same time, one has to bear in mind that no person can be deprived of his property except for public use and upon payment of just compensation. There is an attempt to observe this requirement in Republic Act No. 1383 when in providing for the transfer of appellee's waterworks system to a national agency it was directed that the transfer be made upon payment of an equivalent value of the property. Has this been implemented? Has appellant actually transferred appellee any asset of the NAWASA that may be considered just compensation for the property expropriated? There is nothing in the record to show that such was done. Neither is there anything to this effect in Office Memorandum No. 7 issued by the NAWASA in implementation of the provision of Republic Act No. 1383. The law speaks of assets of the NAWASA but they are not specified. While the Act empowers the NAWASA to contract indebtedness and issue bonds subject to the approval of the Secretary of Finance when necessary for the transaction of its business (sec. 2, pa (1),sec. 5, Act No. 1383), no such action has been taken to comply with appellant's commitment in so far as payment of compensation of appellee is concerned. As to when such action should be taken no one knows. And unless this aspect of the law is clarified and appellee is given its due compensation, appellee cannot be deprived of its property even if appellant desires to take over its administration in line with the spirit of the law. We are therefore persuaded to conclude that the law, insofar as it expropriates the waterworks in question without providing for an effective payment of just compensation, violates our Constitution.Exactly the same situation obtains in the present case. Section 8 of Republic Act No. 1383 (supra.) provides that "the net book value of the properties and assets of the Metropolitan Water District and of government-owned waterworks and sewerage systems in cities, municipalities of municipal districts, and other government-owned waterworks and sewerage systems shall be received by the Authority in payment for an equal value of the assets of the National Waterworks and Sewerage Authority". In other words, all the properties and assets of the Osmea Waterworks System are transferred to the defendant NAWASA in exchange for an equal value of the latter's assets. But what these assets consist of, nothing concrete presently appears. All that is provided in Section 8 is that NAWASA acquires all the assets and liabilities of all government-owned waterworks and sewerage systems in the country. It is an equal value of these unliquidated assets and liabilities that is supposed to be given to plaintiff-appellee as payment of its System. Such, certainly, is not a compensation that satisfies the Constitutional provisions.Appellant, however, maintains that the waterworks involved herein is not a patrimonial property of the City of Cebu but one for publi