MAYOR MAGTAJAS & CITY OF CAGAYAN v. PRYCE PROPERTIES & PAGCOR

Facts:PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a

building belonging to Pryce Properties Corporation, Inc., renovated and equipped the same, and prepared to inaugurate its casino there during the Christmas season.

. Civic organizations angrily denounced the project. The religious elements echoed the objection and so did the women's groups and the youth. Demonstrations were led by the mayor and the city legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the city.

The contention of the petitioners is that it is violative of the Sangguniang Panlungsod of Cagayan de Oro City Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos.

On the other hand, the respondents invoke P.D. 1869 which created PAGCOR to help centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines.

The Court of Appeals ruled in favor of the respondents. Hence, the petition for review.

Issue: Whether or not the Ordinance No. 3353 and Ordinance No. 3375-93 are valid

Held: No

Ratio:

Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare Clause now embodied in Section 16 as follows:

***Sec. 16. — General Welfare. — Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

There is a requirement that the ordinances should not contravene a statute. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute.

Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance.

Therefore, the petition is DENIED and the challenged decision of the Court of Appeals is AFFIRMED.

Tatel v. Municipality of ViracFacts: Based on complaints received by the residents of barrio Sta. Elena against the disturbance caused by the operation of the abaca bailing machine inside Tatel’s warehouse, Resolution 291 was enacted by the Municipal Council of Virac declaring Tatel’s warehouse a public nuisance within the purview of Article 694 of the Civil Code and directing the petitioner to remove and transfer said warehouse to a more suitable place within two months from receipt of the said resolution. The municipal officials contend that petitioner's warehouse was constructed in violation of Ordinance 13, prohibiting the construction of warehouses near a block of houses either in the poblacion or barrios without maintaining the necessary distance of 200 meters from said block of houses to avoid loss of lives and properties by accidental fire. Tatel contends that said ordinance is unconstitutional, contrary to the due process and equal protection clause of the Constitution and null and void for not having been passed in accordance with law.

Issue: 1. WON Ordinance No. 13 is unconstitutional. NO Ordinance 13, was passed by the Municipal Council of Virac in the exercise of its police power. It

is a settled principle of law that municipal corporations are agencies of the State for the promotion and maintenance of local self-government and as such are endowed with the police powers in order to effectively accomplish and carry out the declared objects of their creation.

Its authority emanates from the general welfare clause under the Administrative Code, which reads: The municipal council shall enact such ordinances and make such regulations, not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred upon it by law and such as shall seem necessary and proper to provide for the health and safety, promote the prosperity, improve the morals, peace, good order, comfort and convenience of the municipality and the inhabitants thereof, and for the protection of property therein.

For an ordinance to be valid, it must not only be within the corporate powers of the municipality to enact but must also be passed according to the procedure prescribed by law.

These principles require that a municipal ordinance (1) must not contravene the Constitution or any statute(2) must not be unfair or oppressive (3) must not be partial or discriminatory (4) must not prohibit but may regulate trade

(5) must be general and consistent with public policy, and (6) must not be unreasonable. Ordinance 13 meets these criteria.

In spite of its fractured syntax, what is regulated by the ordinance is the construction of warehouses wherein inflammable materials are stored where such warehouses are located at a distance of 200 meters from a block of houses and not the construction per se of a warehouse. The purpose is to avoid the loss of life and property in case of fire which is one of the primordial obligation of the government.

The objections interposed by the petitioner to the validity of the ordinance have not been substantiated. Its purpose is well within the objectives of sound government. No undue restraint is placed upon the petitioner or for anybody to engage in trade but merely a prohibition from storing inflammable products in the warehouse because of the danger of fire to the lives and properties of the people residing in the vicinity. As far as public policy is concerned, there can be no better policy than what has been conceived by the municipal government.

Tano v. SocratesFacts: Sangguniang Panlungsod ng Puerto Princesa City enacted Ordinance No. 15-92 which banned the shimpment of live fisha and lobster outside Puerto Princesa City from 01 Jan 1993-1998. While the Sangguniang Panlalawigan, Provincial Government of Palawan enacted Resolution No. 33 which prohibited the catching, gathering, possessing, buying, selling, and shipment of love marine coral dwelling aquatic organisms for a period of 5 years in and coming from Palawan waters. Ordinance No. 2 Ordinance Prohibiting the catching, gathering,

possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms was also enacted. The respondents implemented the said ordinances, depriving all the fishermen of the whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and the petitioners Airline Shippers Association of Palawan and other marine merchants from performing their lawful occupation and trade. Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, and Felipe Ongonion, Jr. were charged criminally on the basis of the ordinances.The petitioners filed this action claiming that first, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice of their trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution. Second, Office Order No. 23 contained no regulation nor condition under which the Mayor’s permit could be granted or denied; in other words, the Mayor had the absolute authority to determine whether or not to issue permit. Third, as the Ordinance No. 2 altogether prohibited the catching, gathering, possession, buying, selling and shipping of live marine coral dwelling organisms, without any distinction whether it was caught or gathered through lawful fishing method, the Ordinance took away the right of petitioners-fishermen to earn their livelihood in lawful ways. Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal cases based thereon against petitioners Tano and the others have to be dismissed.Governor Socrates and Members of the Sangguniang Panlalawigan of Palawan defended the validity of Ordinance No.2 as a valid exercise of the Provincial Government power under the general welfare clause (Section 16 of the LGC of 1991 [hereafter, LGC]), and its specific power to protect the environment and impose appropriate penalties for acts which endanger the environment, such as dynamite fishing and other forms of destructive fishing under Section 447 (a) (1) (vi), Section 458 (a) (1) (vi), and Section 468 (a) (1) (vi), of the LGC. They claimed that in the exercise of such powers, the Province of Palawan had the right and responsibilty to insure that the remaining coral reefs, where fish dwells [sic], within its territory remain healthy for the future generation. The Ordinance, they further asserted, covered only live marine coral dwelling aquatic organisms which were enumerated in the ordinance and excluded other kinds of live marine aquatic organisms not dwelling in coral reefs; besides the prohibition was for only five (5) years to protect and preserve the pristine coral and allow those damaged to regenerate.

They likewise maintained that there was no violation of due process and equal protection clauses of the Constitution. As to the former, public hearings were conducted before the enactment of the Ordinance which, undoubtedly, had a lawful purpose and employed reasonable means; while as to the latter, a substantial distinction existed between a fisherman who catches live fish with the intention of selling it live, and a fisherman who catches live fish with no intention at all of selling it live, i.e., the former uses sodium cyanide while the latter does not. Further, the Ordinance applied equally to all those belonging to one class.

There are actually two sets of petitioners in this case. The primary interest of the first set of petitioners is to prevent the prosecution, trial and determination of the criminal cases until the constitutionality or legality of the Ordinances they allegedly violated shall have been resolved. The second set of petitioners merely claim that they being fishermen or marine merchants, they would be adversely affected by the ordinances. The petitioners claim that as subsistence or marginal fishermen, they are entitled to the protection of the State as enshrined in Section 2 of Article XII of the Constitution.

Issue:1. Whether petitioners are subsistence or marginal fishermen? NO.

Since the Constitution does not specifically provide a definition of the terms "subsistence" or "marginal" fishermen, they should be construed in their general and ordinary sense. A marginal fisherman is an individual engaged in fishing whose margin of return or reward in his harvest of fish as measured by existing price levels is barely sufficient to yield a profit or cover the cost of gathering the fish, while a subsistence fisherman is one whose catch yields but the irreducible minimum for his livelihood. Section 131(p) of the LGC (R.A. No. 7160) defines a marginal farmer or fisherman as "an individual engaged in subsistence farming or fishing which shall be limited to the sale, barter or exchange of agricultural or marine products produced by himself and his immediate family." It bears repeating that nothing in the record supports a finding that any petitioner falls within these definitions.

Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on the duty of the State to protect the nation's marine wealth. What the provision merely

recognizes is that the State may allow, by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays and lagoons.

Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but of their protection, development and conservation. As hereafter shown, the ordinances in question are meant precisely to protect and conserve our marine resources to the end that their enjoyment may be guaranteed not only for the present generation, but also for the generations to come.

The so-called "preferential right" of subsistence or marginal fishermen to the use of marine resources is not at all absolute. In accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the first paragraph of Section 2, Article XII of the Constitution, their "exploration, development and utilization . . . shall be under the full control and supervision of the State."

2. Whether the ordinances in question are unconstitutional? NO. Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC "shall

be liberally interpreted to give more powers to the LGUs in accelerating economic development and upgrading the quality of life for the people of the community."

The LGC vests municipalities with the power to grant fishery privileges in municipal waters and impose rentals, fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of applicable fishery laws. Further, the sangguniang bayan, the sangguniang panlungsod and the sangguniang panlalawigan are directed to enact ordinances for the general welfare of the municipality and its inhabitants, which shall include, inter alia, ordinances that "[p]rotect the environment and impose appropriate penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing . . . and such other activities which result in pollution, acceleration of eutrophication of rivers and lakes, or of ecological imbalance."

Finally, the centerpiece of LGC is the system of decentralization as expressly mandated by the Constitution.. Indispensable to decentralization is devolution and the LGC expressly provides that "[a]ny provision on a power of a LGU shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower LGU. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the LGU concerned." Devolution refers to the act by which the National Government confers power and authority upon the various LGUs to perform specific functions and responsibilities.

In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted therein to LGUs under Section 16 (the General Welfare Clause), and under Sections 149, 447(a) (1) (vi), 458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of the questioned Ordinances cannot be doubted.

Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611, otherwise known as the Strategic Environmental Plan (SEP) for Palawan Act, approved on 19 June 1992. This statute adopts a "comprehensive framework for the sustainable development of Palawan compatible with protecting and enhancing the natural resources and endangered environment of the province".

It is clear to the Court that the Ordinances have two principal objectives or purposes: (1) to establish a "closed season" for the species of fish or aquatic animals covered therein for a period of five years; and (2) to protect the coral in the marine waters of the City of Puerto Princesa and the Province of Palawan from further destruction due to illegal fishing activities.

The accomplishment of the first objective is well within the devolved power to enforce fishery laws in municipal waters, such as P.D. No. 1015, which allows the establishment of "closed seasons." The devolution of such power has been expressly confirmed in the Memorandum of Agreement of 5 April 1994 between the Department of Agriculture and the Department of Interior and Local Government.

The realization of the second objective clearly falls within both the general welfare clause of the LGC and the express mandate to cities and provinces to protect the environment and impose appropriate penalties for acts which endanger the environment.

Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is invalid or unenforceable because it was not approved by the Secretary of the DENR. If at all, the approval that should be sought would be that of the Secretary of the Department of Agriculture. However, the requirement of approval by the Secretary of the Department of Agriculture (not DENR) of municipal

ordinances affecting fishing and fisheries in municipal waters has been dispensed with in view of the following reason: (1) As discussed earlier, under the general welfare clause of the LGC, LGUs have the power, inter alia, to enact ordinances to enhance the right of the people to a balanced ecology. It likewise specifically vests municipalities with the power to grant fishery privileges in municipal waters, and impose rentals, fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of applicable fishery laws. Finally, it imposes upon the sangguniang bayan, the sangguniang panlungsod, and the sangguniang panlalawigan the duty to enact ordinances to "[p]rotect the environment and impose appropriate penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing . . . and such other activities which result in pollution, acceleration of eutrophication of rivers and lakes or of ecological imbalance.

G.R. No. 115044 January 27, 1995

HON. ALFREDO S. LIM, in his capacity as Mayor of Manila, and the City of Manila, petitioners, vs.HON. FELIPE G. PACQUING, as Judge, branch 40, Regional Trial Court of Manila and ASSOCIATED CORPORATION, respondents.

Facts:

The petition was dismissed by the First Division of this Court on 01 September 1994 based on a finding that there was "no abuse of discretion, much less lack of or excess of jurisdiction, on the part of respondent judge [Pacquing]", in issuing the questioned orders. Judge Pacquing had earlier issued in Civil Case No. 88-45660, RTC of Manila, Branch 40, the following orders which were assailed by the Mayor of the City of Manila, Hon. Alfredo S. Lim:

(1) order directing Manila mayor Alfredo S. Lim to issue the permit/license to operate the jai-alai in favor of Associated Development Corporation (ADC).

(2) order directing mayor Lim to explain why he should not be cited for contempt for non-compliance with the order dated 28 March 1994.

(3) order dated 20 April 1994 reiterating the previous order directing Mayor Lim to immediately issue the permit/license to Associated Development Corporation (ADC).

The order dated 28 march 1994 was in turn issued upon motion by ADC for execution of a final judgment rendered on 9 September 1988 which ordered the Manila Mayor to immediately issue to ADC the permit/license to operate the jai-alai in Manila, under Manila Ordinance No. 7065.

Subsequently, also in G.R. No. 115044, the Republic of the Philippines, through the Games and Amusements Board, filed a "Motion for Intervention; for Leave to File a Motion for reconsideration in Intervention; and to Refer the case to the Court En Banc" and later a "Motion for Leave to File Supplemental Motion for Reconsideration-in-Intervention and to Admit Attached Supplemental Motion for Reconsideration-in-Intervention".

ISSUE:

Whether or not the Associated Development Corporation has a valid and subsisting franchise to maintain and operate the jai-alai;

HELD:

No.

It is clear from the foregoing that Congress did not delegate to the City of Manila the power "to franchise" wagers or betting, including the jai-alai, but retained for itself such power "to franchise". What Congress delegated to the City of Manila in Rep. Act No. 409, with respect to wagers or betting, was the power to "license, permit, or regulate" which therefore means that a license or permit issued by the City of Manila to operate a wager or betting activity, such as the jai-alai where bets are accepted, would not amount to something meaningful UNLESS the holder of the permit or license was also FRANCHISED by the national government to so operate. Moreover, even this power to license, permit, or regulate wagers or betting on jai-alai was removed from local governments, including the City of Manila, and transferred to the GAB on 1 January 1951 by Executive Order No. 392. The net result is that the authority to grant franchises for the operation of jai-alai frontons is in Congress, while the regulatory function is vested in the GAB.

Therefore, to the facts of this case, since ADC has no franchise from Congress to operate the jai-alai, it may not so operate even if its has a license or permit from the City Mayor to operate the jai-alai in the City of Manila.

WHEREFORE, for the foregoing reasons, judgment is hereby rendered:1. allowing the Republic of the Philippines to intervene in G.R. No. 115044.2. declaring Presidential Decree No. 771 valid and constitutional.3. declaring that respondent Associated Development corporation (ADC) does not possess the required congressional franchise to operate and conduct the jai-alai under Republic Act No. 954 and Presidential Decree No. 771.4. setting aside the writs of preliminary injunction and preliminary mandatory injunction issued by respondent Judge Vetino Reyes in civil Case No. 94-71656.

G.R. No. 118533 October 4, 1995

MAYOR PABLO R. OLIVAREZ, petitioner, vs.HON. SANDIGANBAYAN (Second Division) and the HON. OMBUDSMAN, Special Prosecutor ANIANO DESIERTO and Deputy Special Prosecutor JOSE DE G. FERRER, respondents.

 

REGALADO, J.:

In this original action for certiorari and prohibition, petitioner Mayor Pablo R. Olivarez seeks to annul the following:

1. Resolution dated February 9, 1994 issued by Special Prosecutor (SP) Aniano Desierto and approved by Ombudsman Conrado M. Vasquez on February 15, 1994 reversing Special Prosecution Officer (SPO) I Cornelio Somido's recommendation to dismiss the case against petitioner; 1

2. Resolution dated December 9, 1994 issued by Deputy Special Prosecutor (DSP) Jose De G. Ferrer and approved by Ombudsman Conrado Vasquez on December 23, 1994 reversing SPO III Angel Mayoralgo's recommendation to withdraw the case against petitioner for insufficiency of evidence; 2 and

3. Resolution dated January 16, 1995 issued by the Sandiganbayan denying petitioner's Motion to Strike Out and/or Review Result of Reinvestigation conducted by the Office of the Ombudsman. 3

The facts are succinctly summarized in the Comment 4 of the Solicitor General as follows:

1. On December 15, 1992, Baclaran Credit Cooperative, Inc. (BCCI), through its board member Roger de Leon, charged petitioner Parañaque Mayor Dr. Pablo R. Olivarez with Violation of the Anti-Graft and Corrupt Practices Act for unreasonably refusing to issue a mayor's permit despite request and follow-ups to implement Parañaque Sangguniang Bayan Resolution No. 744, Series of 1992 which petitioner himself approved on October 6, 1992. Resolution No. 744 authorized BCCI to set up a night manufacturer's fair during the Christmas fiesta celebration of and at Baclaran for 60 days from November 11, 1992 to February 15, 1993 for which they will use a portion of the service road of Roxas Boulevard from the corner of Opena to Rivera Streets (Annex "D", Petition). Attached to the affidavit-complaint were: (i) a letter dated October 29, 1992 of Councilor Winnie Esplana to Arch. Vita of Parañaque Engineering Department;(ii) four letters all dated November 13, 1992 of BCCI General Manager Mr. Steve Espina to petitioner, Arch. Vita, Municipal Health OfficerDr. Oscar de Leon and Municipal Treasurer Silvestre de Leon requesting assistance for the issuance of a mayor's permit; (iii) Letter dated November 24, 1992 of BCCI counsel Atty. Renato Dilag to petitioner formally demanding implementation of Res. 744 (Annex "H"); (iv) petitioner's reply letter dated November 27, 1992 to Atty. Dilag stating among others that the non-implementation of Res. 744 was due to BCCI's failure to apply for appropriate permit and license to operate the Night Manufacturer's Fair which was one of the conditions in the authorization (Annex "I").

2. On March 12, 1993, petitioner filed his counter-affidavit stating that the charge of violation of Sec. 3(f) of RA 3019 has no legal and factual basis because (a) HCCI, which actually started operation, never applied for a mayor's permit as evidenced by his letter reply toAtty. Dilag and the affidavit dated March 11, 1993 of Business Permit and License Office Officer-In-Charge Mrs. Elenita T. Paracale (Annex "J"). Moreover, the four letters of Mr. Steve Espina requesting assistance in the issuance of mayor's permit were not filed with the municipal office concerned.

3. In his Reply Affidavit dated April 1, 1993, complainant BCCI denied conducting actual operations but only commenced soliciting participants and would-be sponsors to the fair. Allegedly, BCCI exerted all possible efforts to secure the necessary permit but petitioner simply refused to issue the same unless it gives money to petitioner. Attached to the Reply-Affidavit was a copy of Executive Order dated Nov. 23, 1992 issued by petitioner granting a group of Baclaran-based organizations/associations of vendors the holding of "Christmas Agro-Industrial Fair sa Baclaran" from November 28, 1992 to February 28, 1993 using certain portions of the National and Local Government Roads/Streets in Baclaran for fund raising (Annex "L").

4. Graft Investigation Officer (GIO) III Rogelio A. Ringpis conducted a preliminary investigation and issued on September 22, 1993 a resolution recommending the prosecution of petitioner for violation of Sec. 3(f) of R.A. No. 3019 as amended. The recommendation was approved by EPIB Head Raul Arnau and endorsed by Assistant Ombudsman Abelardo L. Aportadera to Special Prosecutor (SP) Aniano Desierto for review and possible preparation of criminal information. The endorsement was duly noted by Over-all Deputy Ombudsman Francisco A. Villa.

5. On December 22, 1993, Special Prosecutor (SP) II Luz L. Quinones-Marcos, upon review of the Ringpis resolution, recommended the filing of information against petitioner for violation of Sec. 3(e) instead of Sec. 3(f) of R.A. 3019. The recommendation was approved byDeputy Special Prosecutor (DSP) Jose De G. Ferrer and SP Desierto. On January 11, 1994, Ombudsman Conrado Vasquez approved the report and recommendation and directed the government prosecutors to file the necessary information against petitioner with the Sandiganbayan.

6. The Information for Violation of Sec. 3(e) of R.A. 3019 filed on February 16, 1994 and docketed as Criminal Case No. 20226, reads as follows:

That in or about the month of November, 1992 or for sometime prior thereto, in the Municipality of Parañaque, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a public officer being then the duly elected Municipal Mayor of Parañaque, Metro Manila, with manifest partiality and evident bad faith in the exercise of his administrative and official functions, did then and there wilfully, unlawfully and criminally, without valid reason, refuse to issue a mayor's permit and/or refuse to act favorably on the application of the Baclaran Credit Cooperative, Inc. (BCCI) to operate a "night fair" along the service road of Roxas Boulevard (Baclaran) for a period of sixty (60) days in accordance with Resolution No. 744 series of 1992 of the Municipal Council of Parañaque, and that instead the accused issued and signed an executive order on November 23, 1992 granting an unknown or unidentified group of Baclaran-based organizations/associations of vendors the privilege to operate a "night fair" at certain portions of the national and local roads/streets in Baclaran, thus, causing undue injury to the Baclaran Credit Cooperative, Inc.

CONTRARY TO LAW.

(Annex "P").

7. On January 17, 1994, petitioner filed a Motion for Reconsideration and/or Reinvestigation allegedly to rectify error of law and on ground of newly discovered evidence (Annex "O"). Although opposed by the prosecution on January 24, 1994, the same was granted.

8. On February 7, 1994, Special Prosecu(tion) Officer (SPO) I Cornelio Somido to whorn the reinvestigation was assigned, issued an order recommending the withdrawal of the information against petitioner for insufficiency of evidence. This recommendation approved by DSP de G. Ferrer was however disapproved by SP Desierto noting that:

Respondent does not refute the allegation and evidence that complainant and representative approached him and he refused to issue the permit despite follow up. Neither does respondent claim that in refusing to issue the permit, he advised complainant and representatives that they had failed to comply with requirements. Bad faith is, therefore, evident in the respondent's persistent refusal to issue permit.

On February 9, 1994, Ombudsman Vasquez concurred with Special Prosecutor Desierto and disapproved the recommendation (Annex "A").

9. On February 18, 1994, petitioner voluntarily surrendered and posted a cash bail bond with the Sandiganbayan for his temporary release.

10. On February 21, 1994, petitioner filed an Omnibus Motion for a re-examination and re-assessment of the prosecution's report and documentary evidence with a view to set aside the determination of the existence of probable cause and ultimately the dismissal of the case (Annex "Q").

11. On March 3, 1994, the Sandiganbayan, after finding that sufficient probable cause exist(s) against petitioner, denied for lack of merit petitioner's Omnibus Motion in open court and proceeded to arraign him as scheduled that day. But in view of petitioner's refusal to enter any plea, the court ordered a plea of "not guilty" entered into his record.

12. On March 8, 1994, the prosecution filed a Motion to suspend Accused Pendente Lite.

13. On March 9, 14 and 15, 1994, petitioner filed a Motion to Set Aside Plea and To Reduce Denial Order Into Writing (With Entry of Appearance) (Annex "R"), Supplemental Motion to Set Aside Plea and Opposition to Motion to Suspend Accused and Supplemental Pleading with Additional Opposition to Motion to Suspend Accused (Annex "S"), respectively. Petitioner sought the following relief, to wit:

a) to set aside plea of "not guilty" entered for him by the court during the arraignment on March 3, 1994;

b) to dismiss the case after a re-study of probable cause;

c) to order preliminary investigation for violation of Section 3(e) of R.A. 3019;.

d) to deny the motion for suspension.

14. On March 23, 1994, the prosecution opposed the supplemental motions and prayed that the denial of petitioner's Omnibus Motion be maintained.

15. On April 4, 1994, the Sandiganbayan denied petitioner's motion but in the interest of justice and to avoid further delay in the prompt adjudication of the case due to technicalities, it set aside the proceedings conducted on March 3, 1994 including petitioner's arraignment thus revoking the plea of "not guilty" entered in his record. The arraignment was set to April 7, 1994 but further action on the prosecution's motion to suspend petitioner pendente lite was deferred, without prejudice to the reiteration or revival thereof at the proper time and upon notice (Annex "T").

16. On April 20, 1994, petitioner filed a motion for reconsideration which was granted on May 15, 1994 (Annex "V"). Consequently, the case was remanded to the Office of the Ombudsman for another reinvestigation to be terminated within 30 days from notice. Petitioner's arraignment was again reset to July 13, 1994 in the event of adverse resolution on the re-investigation.

17. During this reinvestigation, petitioner filed a Memorandum with Additional Evidence to SP(O) III Berbano to whom the case was assigned (Annex "W"). Meantime, several scheduled arraignments were deferred on the ground that the reinvestigation has not been terminated and, later, the recommendation has yet to be acted upon by superior officers.

18. On September 23, 1994, SPO III Roger Berbano, Sr. issued a memorandum recommending the withdrawal of the Information on the ground that no probable cause exist(s) to indict petitioner for violation of Section 3(e) of R.A. (3019). He alleged that to grant an exclusive mayor's permit demanded by BCCI will subject petitioner to liability for violation of R.A. 3019 for giving unwarranted benefit to BCCI. Moreover, BCCI failed to show compliance with the requirements of Res. 744, hence petitioner had all the reasons to refuse issuance of mayor's permit. Also,the issuance of Executive Order dated November 23, 1992 allowing Baclaran-based vendors associations to hold a night fair did not in any manner cause injury to BCCI as the authority given to them under Res. 744 was not exclusive. Petitioner merely considered the best interest of the municipality.

19. On October 3, 1994, complainant Manuel A. Vizcarra, formally requested the Ombudsman to disqualify SP(O) Berbano on the ground of lack of confidence, bias and undue delay in the reinvestigation of the case.

20. The reinvestigation was reassigned to SPO III Angel C. Mayoralgo who on November 3, 1994 recommended the dismissal of the case stating that petitioner "cannot be held liable for violation of either Section 3(f), the original charge, or Section 3(e), R.A. 3019, the pending charge against Mayor Olivarez, because he neither neglect[ed]/refuse[d] to act without sufficient justification on the letter request addressed to him, nor acted through manifest partiality, evident bad faith or gross inexcusable negligence causing undue injury to BCCI. If ever the latter sustained injury for the non-implementation of Council Resolution No. 744, S-92, the same is due to the fault and indiscretion of its officers."

21. On December 9, 1994, DSP de G. Ferrer reversed the recommendation with the following observation:

Even discounting evident bad faith on the part of respondent for the sake of argument, he is liable under Sec. 3(e) of R.A. 3019 by giving unwarranted benefit THRU MANIFEST PARTIALITY, to another group on the flimsy reason that complainant failed to apply for a business permit.

The merits of respondent's justification (insufficient as it is) should be passed upon by the court.

(Annex "B")

The reversal was concurred (in) by SP Desierto and approved by Ombudsman Vasquez, who on December 27, 1994, directed the prosecution to proceed under the existing information.

22. On January 13, 1995, petitioner filed a Motion for Issuance of Subpoena Duces Tecum and Ad Testificandum to DSP Jose de G. Ferrer, SPO III Roger Berbano, Sr., and SPO III Angel Mayoralgo, Jr.

23. On January 16, 1995, petitioner filed a Motion to Strike Out and/or Review Result of Reinvestigation praying that:

(a) the Ombudsman's Resolution of January 9, 1995 sustaining his original finding that probable cause (exists) against petitioner be stricken off the record;

(b) the information be dismissed

(c) or in the alternative, for the court to review Ombudsman's finding of probable cause against him" (Annex "X").

24. On January 16, 1995, the motion was denied by respondent Sandiganbayan. . . . (Corrections in parentheses supplied.)

Hence, this petition.

Petitioner assails the discretionary power of the Ombudsman to review the recommendations of the government prosecutors and to approve or disapprove the same through a mere marginal note, without conducting another preliminary investigation. Similarly, petitioners fault respondent Sandiganbayan for, allegedly in grave abuse of discretion, refusing to review the finding of the Ombudsman that there exists probable cause to hold petitioner liable for violation of Republic Act No. 3019, considering that the Ombudsman did not comply with the guidelines set forth by respondent court in the conduct of the reinvestigation.

We shall first deal with the propriety or impropriety of the questioned marginal notes, dated February 9, 1994 and December 9, 1994, issued by then Special Prosecutor Aniano Desierto (now Ombudsman) and Deputy Special Prosecutor Jose de G. Ferrer, respectively. Petitioner contends that these marginal notes are null and void on the ground that the same were issued without the benefit of a new preliminary investigation and that the findings therein were not based on the facts and the evidence presented. It is likewise averred that the above-named government prosecutors were engaging in a fishing expedition when they changed theories, that is, from "evident bad faith" to "manifest partiality," but only after the Sandiganbayan had issued a Resolution declaring that the original finding of bad faith was unwarranted.

After a careful scrutiny of the issues raised in the petition for certiorari, the arguments in support thereof, as well as the comments of the public respondents thereon, we are not convinced that herein public respondents acted with grave abuse of discretion or without or in excess of jurisdiction.

The mere fact that the order to file the information against petitioner was contained in a marginal note is not sufficient to impute arbitrariness or caprice on the part of respondent special prosecutors, absent a clear showing that they gravely abused their discretion in disapproving the recommendation of the investigating prosecutors to dismiss or withdraw the case against petitioner. Neither are these marginal notes tainted with or indicative of vindictiveness or arbitrariness as imputed by petitioner. Public respondents disapproved the recommendation of the investigating prosecutors because they sincerely believed that there is sufficient evidence to indict the accused.

The Ombudsman's conformity thereto is but an exercise of his powers based upon constitutional mandate and the courts should not interfere in such exercise. The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman but upon practicality as well. Otherwise, the functions of the courts will be grievously hampered by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it, in much the same way that the courts would be extremely swamped if they could be compelled to review the exercise of discretion on the part of the fiscals or prosecuting attorneys each time they decide to file an information in court or dismiss a complaint by a private complainant. 5

It may be true that, on the face thereof, the marginal notes seem to lack any factual or evidentiary basis for failure to specifically spell out the same. However, that is not all there is to it. What is actually involved here is a situation wherein, on the bases of the same findings of fact of the investigating prosecutors, respondent special prosecutors were of the opinion that, contrary to the former's recommendation, petitioner is probably guilty of the offense charged. Obviously, therefore, since it is merely a review of the

conclusions arrived at by the investigating prosecutor, another or a new preliminary investigation is no longer necessary.

The case of Cruz, Jr. vs. People, et al., 6 which involves substantially the same issues, has ruled on the matter in this wise:

It may seem that the ratio decidendi for the Ombudsman's order may be wanting but this is not a case of a total absence of factual and legal bases nor a failure to appreciate the evidence presented. What is actually involved here is merely a review of the conclusion arrived at by the investigating prosecutor as a result of his study and analysis of the complaint, counter-affidavits, and the evidence submitted by the parties during the preliminary investigation. The Ombudsman here is not conducting anew another investigation but is merely determining the propriety and correctness of the recommendation given by the investigating prosecutor, that is, whether probable cause actually exists or not, on the basis of the findings of the latter. Verily, it is discretionary upon the Ombudsman if he will rely mainly on the findings of fact of the investigating prosecutor in making a review of the latter's report and recommendation, as the Ombudsman can very well make his own findings of fact. There is nothing to prevent him from acting one way or the other. As a matter of fact, Section 4, Rule 112 of the Rules of Court provides that "where the investigating assistant fiscal recommends the dismissal of the case but his findings are reversed by the provincial or city fiscal or the chief state prosecutor on the ground that a probable cause exists, the latter may, by himself, file the corresponding information against the respondent or direct any other assistant fiscal or state prosecutor to do so, without conducting another preliminary investigation."

With more reason may the Ombudsman not be faulted in arriving at a conclusion different from that of the investigating prosecutor on the basis of the same set of facts. It cannot be said that the Ombudsman committed a grave abuse of discretion simply because he opines contrarily to the prosecutor that, under the facts obtaining in the case, there is probable cause to believe that herein petitioner is guilty of the offense charged.

. . . (f)rom the tenor of respondent Ombudsman's statement, it is clear that he agreed with thefindings of facts of the investigating prosecutor but disagreed with the latter's conclusion on theimport and significance of said findings. On the basis of the findings of fact of the investigating prosecutor, which were not disputed by petitioner, respondent Ombudsman believed that there was sufficient ground to engender a well-founded belief that a crime had been committed and that petitioner is probably guilty thereof. (Italics in the original text.)

The alleged shift in theory from "evident bad faith" to "manifest partiality" fails to present a sufficient indicium that respondent prosecutors gravely abused their discretion. Manifest partiality, evident bad faith and gross inexcusable negligence are but elements of the offense defined in and punishable under Section 3(e) of Republic Act No. 3019 for which petitioner stands charged. The presence or absence of the elements of the crime are evidentiary in nature and are matters of defense, the truth of which can be best passed upon after a full-blown trial on the merits. Thus, the issue of whether there was bad faith or manifest partiality on the part of petitioner should best be determined, not in the preliminary investigation, but during the trial proper. 7

It must here be stressed that a preliminary investigation is essentially inquisitorial, and it is often the only means of discovering the persons who may be seasonably charged with a crime, to enable the prosecutor to prepare his complaint or information It is not a trial of the case on the merits and has no purpose except that of determining whether a crime has been committed and whether there is probable cause to believe that the accused is guilty thereof, and it does not place the persons against whom it is taken in jeopardy. It is not the occasion for the full and exhaustive display of the parties' evidence; it is for the

presentation of such evidence only as may engender a well-grounded belief that an offense has been committed and that the accused is probably guilty thereof. 8

Consequently, petitioner's asseveration that the reinvestigation is null and void because the respondent prosecutors failed to consider all the evidence presented in his defense has no leg to stand on. A perusal of the records will show that all the documentary evidence, as well as the additional documents submitted by petitioner during the reinvestigation, were thoroughly examined and fully evaluated in the determination of probable cause.

Probable cause, as explained in the aforecited case of Pilapil, is —

. . . a reasonable ground of presumption that a matter is, or may be, well founded, such a state of facts in the mind of the prosecutor as would lead a person of ordinary caution and prudence to believe, or entertain an honest or strong suspicion, that a thing is so. The term does not mean "actual and positive cause" nor does it import absolute certainty. It is merely based on opinion and reasonable belief. Thus, a finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge.

Whether an act was done causing undue injury to the government and whether the same was done with manifest partiality or evident bad faith can only be made out by proper and sufficient testimony. Necessarily, a conclusion can be arrived at when the case has already proceeded on sufficient proof.

. . . the court should not be guided by the rule that accused must be shown to be guilty beyond a reasonable doubt, but rather whether there is sufficient evidence which inclines the mind to believe, without necessarily leaving room for doubt, that accused is guilty thereof. 9

We have meticulously analyzed the arguments raised by the parties in the various pleadings and motions, together with their documentary evidence, which all formed the basis for the issuance of the questioned resolutions, and we are convinced that there exists probable cause as to warrant the filing of charges against herein petitioner for a violation of Section 3(e) of Republic ActNo. 3019.

Petitioner's main defense is that BCCI was not issued a mayor's permit by reason of its failure to apply therefor and to comply with the conditions set forth in Sangguniang Bayan Resolution No. 744. There are several flaws to this argument.

First. The purported absence of an application for the issuance of a permit is actually more apparent than real. Initially, petitioner claims that he could not grant a permit to BCCI, which was allegedly demanding an exclusive authority to operate, on the pretext that he can be held liable for a violation of Republic Act No. 3019 for giving unwarranted benefits to BCCI to the detriment of other Baclaran-based vendors' associations. Subsequently, but in the same vein, petitioner tries to justify the issuance of an executive order granting a permit to the unidentified Baclaran-based vendors' associations, in that the same did not cause injury to BCCI since the authority to operate given to the latter is not exclusive.

It would appear, therefore, that petitioner had taken it upon himself to categorize and determine the exclusivity or non-exclusivity of the authority to operate granted to BCCI, depending on whether or not it would suit his purpose or predilection. The inconsistent stand taken by petitioner with regard to the true character of BCCI's authority to operate is indeed quite perplexing and suffices to cast sufficient doubt on the real motive behind the non-issuance of the required permit.

Second. It is asserted that the executive order granting a permit to the Baclaran-based vendors' associations was issued by petitioner supposedly in the best interest of the municipality as evidenced by its earnings from the night fair in the total amount of P13,512,948.00. While the avowed purpose may prove noble, still it miserably pales in contrast to what appears to be bad faith or manifest partiality on the part of petitioner in refusing to grant a permit to BCCI. Petitioner could not plausibly demonstrate how the issuance of a permit to BCCI would so adversely affect public interest as to warrant its denial. On the contrary, the Sangguniang Bayan of Parañaque had even passed a resolution, which notably was approved by herein petitioner, expressly allowing BCCI to hold the night fair. This is concrete proof that the grant of authority to operate in favor of BCCI was not at all contrary to law and public policy, nor was it prejudicial to public interest.

Petitioner's suspected partiality may be gleaned from the fact that he issued a permit in favor of the unidentified Baclaran-based vendors' associations by the mere expedient of an executive order, whereas so many requirements were imposed on BCCI before it could be granted the same permit. Worse, petitioner failed to show, in apparent disregard of BCCI's right to equal protection, that BCCI and the unidentified Baclaran-based vendors' associations were not similarly situated as to give at least a semblance of legality to the apparent haste with which said executive order was issued. It would seem that if there was any interest served by such executive order, it was that of herein petitioner.

Petitioner likewise submits that no permit could be issued because BCCI never filed an application therefor with the proper office, that is, the Business Permit and Licensing Office. This is actually begging the question. It is not denied that on November 13, 1992, BCCI, through its general manager, wrote petitioner requesting for a permit to operate, but this was rejected outright by him on the theory that the application should be made with the proper municipal official. The indifference shown by petitioner to BCCI's application taints his actuations with dubiety.

As the mayor of the municipality, the officials referred to were definitely under his authority and he was not without recourse to take appropriate action on the letter-application of BCCI although the same was not strictly in accordance with normal procedure. There was nothing to prevent him from referring said letter-application to the licensing department, but which paradoxically he refused to do. Whether petitioner was impelled by any material interest or ulterior motive may be beyond us for the moment since this is a matter of evidence, but the environmental facts and circumstances are sufficient to create a belief in the mind of a reasonable man that this would not be completely improbable, absent countervailing clarification.

Lastly, it may not be amiss to add that petitioner, as a municipal mayor, is expressly authorized and has the power to issue permits and licenses for the holding of activities for any charitable or welfare purpose, pursuant to Section 444 (b) (3) (iv and v) of the Local Government Code of 1991 (Republic Act No. 7160). Hence, he cannot really feign total lack of authority to act on the letter-application of BCCI..

On the basis of the foregoing, we are reasonably convinced that there is enough evidence to warrant the filing of a formal charge in court against herein petitioner for a violation of Section 3(e) of Republic Act No. 3019.

Considering that the findings of fact by the Office of the Ombudsman are supported by substantial evidence, the same should be considered conclusive. Furthermore, the Ombudsman's findings are essentially factual in nature. Accordingly, in assailing said findings on the contention that the Ombudsman committed a grave abuse of discretion in holding that petitioner is liable for the offense charged, the petition at bar clearly raises questions of fact. The arguments therein are anchored on the propriety of or error in the Ombudsman's appreciation of the facts of the case.

Petitioner cannot be unaware of our oft-repeated injunction that this Court is not a trier of facts, more so in an application for the extraordinary writ of certiorari where neither questions of fact nor even of law are entertained, since only questions of lack or excess of jurisdiction or grave abuse of discretion are

authorized. 10 On this issue, therefore, we find that no grave abuse of discretion has been committed by respondents which would warrant the granting of the writ of certiorari, especially where the circumstances attending the recourse therefor are strongly suggestive of dilatory purposes.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Laguna Lake Development Authority vs. Court of Appeals

(December 7, 1995)

Ponentia: Hermosisima, Jr., J.

Facts:

1. Republic Act No. 4850 created the “Laguna Lake Development Authority” (Authority) – a Government Agency that works toward environmental protection and ecology, navigational safety, and sustainable development. This agency is responsible for the development of the Laguna Lake area and the surrounding provinces, cities and towns in view of the national and regional plans.

2. President Ferdinand E. Marcos then passed Presidential Decree No. 813 amending certain sections of R.A. No. 4850 as response to the deteriorating environmental condition of the Metropolitan Manila area and the surrounding areas of the Laguna de Bay. Problems include the environmental impact of development of water quality, inflow of polluted water, increasing urbanization and floods in Metropolitan Manila.

3. Sec. 1 of P.D. 813 established a policy of development with environmental management and control, among others for the Laguna Lake Development Authority. Special powers, pertinent to this case, were also granted under Sec. 3. which include the exclusive jurisdiction of the Authority to issue new permit for the use of the lake waters for any projects or activities in or affecting the said lake including navigation, construction, and

4. operation of fishpens, fish enclosures, fish corrals and the like. The Authority also has the power to collect fees for these activities and projects which may be shared with other governmental agencies and political sub-divisions.

5. The Authority was further empowered by Executive Order No. 927 which enlarged its functions and powers. Said Order also named and enumerated towns, cities and provinces encompassed by the term “Laguna de Bay Region.” The Chief Executive based this Order on an assessment that the land and waters of the Laguna Lake Region are limited natural resources requiring judicious management.

6. Under Sec. 2 of E.O. 927, the Authority shall have exclusive jurisdiction to issue permit for the use of all surface water for any projects or activities in or affecting the said region. Coverage for “Laguna de Bay Region” included several provinces, cities and towns around the Laguna Lake. Under Sec. 3, the collection of fees for the use of the lake water and its tributaries were enforced by the Authority.

7. Then, Republic Act No. 7160, the Local Government Code of 1991 was enforced. Municipalities around the Laguna Lake Region interpreted this law as delegating the exclusive jurisdiction to issue fishing privileges within their municipal waters.

8. Municipal governments started issuing fishing privileges and fishing permits to big fishpen operators. These unregulated issuances of Mayor’s permits to construct fishpens were clear violations of the policies implemented by the Authority.

9. To solve the problem, the Authority issues a notice to the general public declaring as illegal all fishpens, fishcages and other aqua-culture structures in the Bay Region that were not registered with the Authority. The notice includes a threat of penalty of

demolition and imprisonment and/or fine. After a month, the Authority sent notices to the concerned owners stating that demolition shall be effected within 10 days.

10. Affected fishpen owners filed seven injunction cases against the Authority in various trial courts. Authority filed a motion to dismiss the cases on jurisdictional grounds which was denied by the lower court. Temporary restraining order/writs of preliminary injunction was issued enjoining the Authority from demolishing the structures in question. Authority appealed the case to the Court of Appeals but the Court dismissed the consolidated petitions of the Authority. CA established that LLDA is not a quasi-judicial agency of the government and it cannot exercise quasi-judicial functions as far as fishpens are concerned. CA the Local Government Code of 1991 repealed the provisions of the LLDA Charter thereby devolving the power to grant permits to the local government units concerned. Authority appealed to the Supreme Court with petitions for prohibition, certiorari and injunction against the respondents.

Issue: WON the Laguna Lake Development Authority should exercise jurisdiction over the Laguna Lake insofar as the issuance of permits for fisheries privileges is concerned.

Held: Yes. The LLDA should exercise jurisdiction over the Laguna Lake insofar as the issuance of permits for fisheries is concerned.

Petitions for prohibition, certiorari and injunction are hereby granted, insofar as they related to the authority of the LLDA to grant fishing privileges within the Laguna Lake Region.

Restraining orders and/or writs of injunction issued against the LLDA are declared null and void and ordered set aside for having been issued with grave abuse of discretion.

Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to construct and operate fishpens, fishcages and other aqua-culture structures within the Laguna Lake Region. Previous issuances are null and void.

The fishpens, fishcages and other aqua-culture structures put by operators by virtue of permits issued by Municipal Mayors within the Laguna Lake Region are hereby declared illegal structures subject to demolition by the LLDA.

Ratio:

(1) Provisions of the Local Government Code of 1991 (RA No. 7160) do not repeal the laws creating the LLDA. Therefore, LLDA maintains its exclusive authority over issuances of permits.

- The charter of the LLDA is a SPECIAL LAW while the Local Government Code of 1991 is a GENERAL LAW. A basic rule of statutory construction is that the enactment of a later legislation which is a general law cannot be construed to have repealed a special law.

- When there is conflict between a general law and a special law, the special law will prevail since it evinces the legislative intent more clearly than the general statute.

- A special law cannot be repealed, amended or altered by a subsequent law by mere implications.

- In Manila Railroad Company v. Rafferty, this basic rule is upheld with an exception when the subsequent general law has a manifest intent to repeal or alter the special law. In this case, such intent is not proven in this case.

(2) Legislative intent is for the Authority to proceed with its mission of environmental protection, navigational safety, and sustainable development for the Laguna Lake Region.

- The power of the local government units, exercised through fragmented management policies, is interested in fishing privileges for REVENUE PURPOSES. In contrast, the power of the Authority is aimed at effectively regulating and monitoring activities in the Laguna de Bay Region for QUALITY CONTROL and MANAGEMENT. Thus, the Authority is in a better position to manage the issuance of permits.

(3) Charter of the Authority prevails because it is a valid exercise of POLICE POWER of the State.

(4) Although the LLDA is not co-equal to the RTCs, LLDA is still a quasi-judicial body with respect to pollution cases that can issue ‘cease and desist order’ (Laguna Lake Development Authority v. CA).

Padilla, J. (Concurring Opinion):

I fully concur. But I just want to say guys that the LGUs can still impose on those who apply for permit with an additional local permit or license for revenue purposes. This would harmonize RA No. 4850 with RA No. 7160 (LGC 1991).

BINAY VS DOMINGO

FACTS: On September 27, 1988,Petitioner Makati, through its Council, approved Resolution No. 60.

The resolution provided for a burial assistance program where qualified beneficiaries (to be given P500.00) are bereaved families whose gross monthly income does not exceed 2 thousand per month. It will be funded by the unappropriated available funds in the municipal treasury.

Metro Manila Commission approved the resolution. The municipal secretary certified a disbursement fund of P400,000.00 for the implementation of the program. When it was referred to the COA it disapproved Resolution 60 and disallowed in audit the disbursement of funds. COA denied the petitioners’ reconsideration as Resolution 60 has no connection or relation between the objective sought to be attained and the alleged public safety, general welfare of the inhabitant of Makati. Also, the Resolution will only benefit a few individuals. Moreover, it is not for a public purpose. It only seeks to benefit a few individuals.

The Municipal Council passed Resolution No. 243 which reaffirmed Res. No. 60. However, the program has been stayed by COA Decision No. 1159.

ISSUE: WON Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a valid exercise of police power under the general welfare clause

HELD: YES.

RATIONALE: The police power is a governmental function, an inherent attribute of sovereignty, which was born with civilized government. It is founded largely on the maxims, "Sic utere tuo et ahenum non laedas and "Salus populi est suprema lex Its fundamental purpose is securing the general welfare, comfort and convenience of the people. Police power is inherent in the state but not in municipal corporations). Before a municipal corporation may exercise such power, there must be a valid delegation of such power by the legislature which is the repository of the inherent powers of the State. A valid delegation of police power may arise from express delegation, or be inferred from the mere fact of the creation of the municipal corporation; and as a general rule, municipal corporations may exercise police powers within the fair intent and purpose of their creation which are reasonably proper to give effect to the powers expressly granted, and statutes conferring powers on public corporations have been construed as empowering them to do the things essential to the enjoyment of life and desirable for the safety of the people. Municipal governments exercise this power under the general welfare clause: pursuant thereto they are clothed with authority to "enact such ordinances and issue such regulations as may be necessary to carry out and discharge the responsibilities conferred upon it by law, and such as shall be necessary and proper to provide for the health, safety, comfort and convenience, maintain peace and order, improve public morals, promote the prosperity and general welfare of the municipality and the inhabitants thereof, and insure the protection of property therein."

And under Section 7 of BP 337, "every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary and proper for governance such as to promote health and safety, enhance prosperity, improve morals, and maintain peace and order in the local government unit, and preserve the comfort and convenience of the inhabitants therein. "Police power is the power to prescribe regulations to promote the health, morals, peace, education, good order or safety and general welfare of the people. It is the most essential, insistent, and illimitable of powers. In a sense it is the greatest and most powerful attribute of the government. The police power of a municipal corporation is broad, and has been said to be commensurate with, but not to exceed, the duty to provide for the real needs of the people in their health, safety, comfort, and convenience as consistently as may be with private rights. It extends to all the great public needs, and, in a broad sense includes all legislation and almost every function of the municipal government. It covers a wide scope of subjects, and, while it is especially occupied with whatever affects the peace, security, health, morals, and general welfare of the community, it is not limited thereto, but is broadened to deal with conditions which exists so as to bring out of them the greatest welfare of the people by promoting public convenience or general prosperity, and to

everything worthwhile for the preservation of comfort of the inhabitants of the corporation. Thus, it is deemed inadvisable to attempt to frame any definition which shall absolutely indicate the limits of police power. COA is not attuned to the changing of the times. Public purpose is not unconstitutional merely because it incidentally benefits a limited number of persons. As correctly pointed out by the Office of the Solicitor General, "the drift is towards social welfare legislation geared towards state policies to provide adequate social services, the promotion of the general welfare social justice (Section 10, Ibid) as well as human dignity and respect for human rights. The care for the poor is generally recognized as a public duty. The support for the poor has long been an accepted exercise of police power in the promotion of the common good. There is no violation of the equal protection clause in classifying paupers as subject of legislation. Paupers may be reasonably classified. Different groups may receive varying treatment. Precious to the hearts of our legislators, down to our local councilors, is the welfare of the paupers. Thus, statutes have been passed giving rights and benefits to the disabled, emancipating the tenant-farmer from the bondage of the soil, housing the urban poor, etc. Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a paragon of the continuing program of our government towards social justice. The Burial Assistance Program is a relief of pauperism, though not complete. The loss of a member of a family is a painful experience, and it is more painful for the poor to be financially burdened by such death. Resolution No. 60 vivifies the very words of the late President Ramon Magsaysay 'those who have less in life, should have more in law." This decision, however must not be taken as a precedent, or as an official go-signal for municipal governments to embark on a philanthropic orgy of inordinate dole-outs for motives political or otherwise.

VILLACORTA v. BERNARDOGR L-31249 AUGUST 19, 1986

FACTS:

A petition for certiorari was raised against a decision of the Court of First Instance of Pangasinan annulling an ordinance adopted by the municipal board of Dagupan City.

Ordinance 22, that sought to regulate subdivision plans in Dagupan City, ordained that every proposed subdivision plan over any lot in the City of Dagupan, shall before the same is submitted for approval and/or verification by the Bureau of Lands and/or the Land Registration Commission, be previously submitted to the City Engineer of the City who shall see to it that no encroachment is made on any portion of the public domain, that the zoning ordinance and all other pertinent rules and regulations are observed, and that subsequent fees be imposed thereafter.

ISSUE: WON Ordinance 22 is a valid exercise of police power.

HELD : NO

In declaring the said ordinance null and void, the court a quo, and affirmed by the Supreme Court, declared:

From the above-recited requirements, there is no showing that would justify the enactment of the questioned ordinance. Section 1 of said ordinance clearly conflicts with Section 44 of Act 496, because the latter law does not require subdivision plans to be submitted to the City Engineer before the same is submitted for approval to and verification by the General Land Registration Office or by the Director of Lands as provided for in Section 58 of said Act. Section 2 of the same ordinance also contravenes the provisions of Section 44 of Act 496, the latter being silent on a service fee of PO.03 per square meter of every lot subject of such subdivision application; Section 3 of the ordinance in question also conflicts with Section 44 of Act 496, because the latter law does not mention of a certification to be made by the City Engineer before the Register of Deeds allows registration of the subdivision plan; and the last section of said ordinance imposes a penalty for its violation, which Section 44 of Act 496 does not impose. In other words, Ordinance 22 of the City of Dagupan imposes upon a subdivision owner additional conditions.

The Court takes note of the laudable purpose of the ordinance in bringing to a halt the surreptitious registration of lands belonging to the government. But as already intimidated above, the powers of the board in enacting such a laudable ordinance cannot be held valid when it shall impede the exercise of rights granted in a general law and/or make a general law subordinated to a local ordinance.

To sustain the ordinance would be to open the floodgates to other ordinances amending and so violating national laws in the guise of implementing them. Thus, ordinances could be passed imposing additional requirements for the issuance of marriage licenses, to prevent bigamy; the registration of vehicles, to minimize carnaping; the execution of contracts, to forestall fraud; the validation of passports, to deter imposture; the exercise of freedom of speech, to reduce disorder; and so on. The list is endless, but the means, even if the end be valid, would be ultra vires.

We therefore urge that proper care attend the exercise of the police power lest it deteriorate into an unreasonable intrusion into the purely private affairs of the individual. The so-called "general welfare" is too amorphous and convenient an excuse for official arbitrariness.

Let it always be remembered that in the truly democratic state, protecting the rights of the individual is as important as, if not more so than, protecting the rights of the public.

This advice is especially addressed to the local governments which exercise the police power only by virtue of a valid delegation from the national legislature under the general welfare clause. In the instant case, Ordinance No. 22 suffers from the additional defect of violating this authority for legislation in contravention of the national law by adding to its requirements.

Matalin Coconut Co. Inc vs Municipal Council of Malabang Lanao Del Sur 1986

Ordinance on police inspection fee

The grant of power to tax under the provision of the Local Autonomy Act, which a liberal rule has been followed in construing municipal ordinances, is sufficiently plenary to cover everything excepting those which are mentioned therein subject only to the limitation that the tax so levied is for public purposes just and uniform.

The ordinance in question partakes of the nature of a tax although denominated as police inspection fee since its undeniable purpose is to raise revenue. We cannot agree with the RTC that the tax imposed is a percentage

tax on sales which is beyong the scope of the municipalitie’s authority to levy under Section 2 of the LAA. Municipalities, and municipal districts are prohibited from imposing any percentage tax on sales or other taxes in any form based thereon. The tax imposed in the ordinance in question is not a percentage tax. It is a fixed tax of P.30 per bag of cassava starch or flour shipped out of the municipality. It is not based on sales.

The tax levied must be for public purpose, just and uniform. Police inspection fee is unjust and unreasonable.

Villanueva vs City of Iloilo 1968

A municipal license tax means an imposition or exaction on the right to use or dispose of property, to pursue a business, occupation or calling or to exercise a privilege.

Double taxation: when permissible and when prohibited: Equality and uniformity of taxation: In order to constitute double taxation in the objectionable or prohibited sense the same property must be taxed twice when it should be taxed but once; both taxes must be imposed on the same property or subject matter, for the same purpose, by the same State, Government, or taxing authority, within the same jurisdiction or taxing districts during the same taxing period, and they must be the same kind or character of tax. It has been shown that a real estate tax and the tenement tax imposed by the ordinance, although imposed by the same taxing authority, are not of the same kind of character.

Taxes are uniform and equal when imposed upon all property of the same class or character within the taxing authority. The fact that the owners of other classes of buildings in the City do not pay the taxes imposed by the ordinance in question is no argument at all against uniformity and equality of the tax imposition.

PHYSICAL THERAPY ORGANIZATION OF THE PHILIPPINES, INC vs. THE MUNICIPAL BOARD OF THE CITY OF MANILA

FACTS:Petitioner-appellant is an association of registered massagists and licensed operators of massage clinics in the City of Manila and other parts of the country. They filed an action in the Court of First Instance of Manila questioning the validity of the Municipal Ordinance No. 3659 which regulates the operation of massage clinics in the City of Manila and providing penalties for its violations. They also protested that the license fee of P100 is unreasonable. The trial court dismissed their petition. Hence, they appealed to the Supreme Court. On its appeal, the petitioner contends that the City of Manila is without authority to regulate the operation of massagists and the operation of massage clinics within its jurisdiction.

ISSUE:Whether Municipal Ordinance No. 3659 is valid and whether the imposition of the P100 permit fee is reasonable?

HELD:The purpose of the Ordinance is not to regulate the practice of massage, much less to restrict the practice of licensed and qualified massagists of therapeutic massage in the Philippines. Rather, the end sought to be attained in the Ordinance is to prevent the commission of immorality and the practice of prostitution in an establishment masquerading as a massage clinic.

As to the authority of the City Board to enact the Ordinance in question, General Welfare Clause, is a delegation in statutory form of the police power, under which municipal corporations, are authorized to enact ordinances to provide for the health and safety, and promote the morality, peace and general welfare of its inhabitants.

Therefore, the Court recognizes Municipal Ordinance No. 3659 as valid.

The amount of the fee or charge is properly considered in determining whether it is a tax or an exercise of the police power. There is a marked distinction between license fees imposed upon useful and beneficial occupations which the sovereign wishes to regulate but not restrict, and those which are inimical and dangerous to public health, morals or safety. In the latter case the fee may be very large without necessarily being a tax.

Manila Municipal Board considered the practice of hygienic and aesthetic massage not as a useful and beneficial occupation which will promote and is conducive to public morals, and consequently, imposed the said permit fee for its regulation.

G.R. No. L-41053 February 27, 1976

FELICISIMA DE LA CRUZ, ET AL., petitioners,vs.HON. EDGARDO L. PARAS, as Judge, CFI of Bulacan, Branch VII, and PABLO SAN MIGUEL, respondents.

Victoriano R. Aldava for petitioners.

Manuel P. Pun for respondents.

 

MARTIN, J.:

The prime issue presented to Us in this special civil action for certiorari and/or mandamus, which was certified by the Court of Appeals on July 15, 1975, involves the rule in determining whether an order is final and appealable or is merely interlocutory. Sometime in 1962, Pedro San Miguel, 1 the predecessor-in-interest of the herein petitioners, commenced a “Complaint for Partition of Real Estate” before the Court of First Instance of Bulacan against private respondent Pablo San Miguel. The complaint, docketed as Civil Case No. 2624, sought the partition of Lot No. 4543 of the Lolomboy Estate, which is a portion of original Lot No. 3237 and covered by Transfer Certificate of Title No. T-15369 of the Registry of Deeds of Bulacan.

Traversing the complaint, respondent Pablo San Miguel disclaimed co-ownership and asserted exclusive ownership of Lot No. 4543.

Subsequently, on March 19, 1964, the then trial judge, Ricardo C. Puno, ordered the dismissal of the case pursuant to Section 3, Rule 17 of the Revised Rules of Court for “apparent lack of interest in the prosecution of the respective claims of the litigants.”

Eleven years thereafter, another complaint for partition, docketed as Civil Case No. 4300-M of the Court of First Instance of Bulacan, was instituted by the same Pedro San Miguel against private respondent Pablo San Miguel. This time, the complaint prayed for the partition of Lot No. 4543 (covered by TCT No. T-15369, Bulacan) and Lot No. 3269 (covered by TCT No. T-15370, Bulacan). In due time, Pablo San Miguel filed his answer, pleading therein the defense of res judicata. For him, the same subject matter and cause of action

had already been litigate . d upon and resolved in the previous Civil Case No. 2624. After preliminary hearing, the respondent Judge issued an order on December 10, 1973, dismissing Civil Case No. 4300-M “insofar as Lot 4543 is concerned” in view of the principle of res judicata.

The case was ordered to proceed as regards Lot No. 3269, and on July 31, 1974, respondent Judge rendered a decision ordering the parties “as CO-OWNERS to present to this Court within ten (10) days from receipt hereof, a PROJECT OF PARTITION, dividing Lot No. 3269 (Transfer Certificate of Title No. T-15370, Bulacan) into two equal parts.” Petitioners received a copy of this decision on August 13,1974.

On September 12, 1974, petitioners interposed their appeal from this judgment of the trial court. On said date, their notice of appeal, appeal bond and record on appeal were filed.

On December 9, 1974, respondent Judge approved petitioners’ corrected record on appeal but “insofar only as Lot No. 3269 is concerned … because the case with respect to Lot 4543 has long became (sic) FINAL, cannot be appealed anymore, and therefore any record on appeal thereon will be useless, moot and academic …

After the denial of their motion for reconsideration, petitioners filed a “Petition for certiorari And/Or Mandamus” before the Court of Appeals on February 5, 1975, but the latter court elevated the petition to Us upon discovering that only questions of law are raised.

It is readily discernible that the decisive question in this case is whether or not the order of the respondent Judge, dated December 10, 1973, dismissing Civil Case No. 4300-M as regards Lot No. 4543, is final and appealable.

Section 2, Rule 41 of the Revised Rules of Court provides that “(o)nly final judgments or orders shall be subject to appeal.” Interlocutory or incidental judgments or orders do not stay the progress of an action nor are they subject of appeal “until final judgment or order is rendered for one party or the other.” The test to determine whether an order or judgment is interlocutory or final is this: “Does it leave something to be done in the trial court with respect to the mertis of the case? If it does, it is interlocutory; if it does not, if is final.” 2 A court order is final character if it puts an end to the particular matter resolved or settles definitely the matter threin disposed of, 3 such that no further questions can come before the court except the execution of the order. 4 The term “final” judgment or order signifies a judgment or an order which disposes of the cause as to all the parties, reserving no further questions or direction for future determination. 5 The order or judgment may validly refer to the entire controversy or to some definite and separate branch threof. “In the absence of a statutory definition, a final judgment, order decree has been held to be … one that finally disposes of, adjudicates, or determines the rights, or some right or rights of the parties, either on the entire controversy or on some definite and separate branch thereof, and which concludes them until it is reversed or set aside. 6 The central point to consider is, therefore, the effects of the order on the rights of the parties. A court order, on the other hand, is merely interlocutory in character if it is provisional and leaves substantial proceeding to be had in connection with its subject. 7 The word “interlocutory” refers to “something intervening between the commencement and the end of a suit which decides some point or matter but is not a final decision of the whole controversy.” 8

1. We find that the order of dismissal entered by respondent Judge in Civil Case No. 4300-M on December 10, 1973, is a clear final and appealable order. The said order is a final disposition of the whole controversy between the parties with respect to the ownership of Lot No. 4543. It is absolute and conclusive on all questions in regard thereto. 9 The trial court’s order is not a mere narrow acceptance of private respondent’s plea of res judicata. It has more the far-ranging effect of confirming private respondent’s claim of exclusive

ownership of Lot No. 4543, as previously adjudicated in the prior Civil Case No. 2624. It imports that private respondent is the sole owner of this specific lot; as a result of which, the deceased Pedro San Miguel or his succssors-in-interest for that matter stand to suffer the loss of what they claim is their rightful share thereto. 10 After the issuance of this order, nothing more was left for the trial court to try or decide, as the conflicting claims of the parties over the subject lot have already been resolved. As a matter of fact, the final order of dismissal cannot even be assailed by certiorari. The remedy is appeal, which petitioners herein have failed to undertake. 11 The fact that the other lot, Lot No. 3269, remained under litigation and the respective claims of the parties thereto yet to be settled by the trial court would not affect the final nature of the subject order, because a decree, is nonetheless final although some independent branch of the case is reserved for future consideration . 12

2. Reason lies in the order of the respondent Judge, dated December 10, 1973, foreclosing the relitigation of Lot No. 4543 because of the March 19, 1964 order of the then trial Judge, Ricardo C. Puno, in Civil Case No. 2624, which involves the same lot, dismissing the case for lack of interest to prosecute. This dismissal order of the said trial Judge has the effect and consequences of a dismissal on the merits under Section 3, Rule 17 of the Revised Rules of Court since it was neither without prejudice nor based upon lack of jurisdiction. 13 It is worthy to note that the deceased Pedro San Miguel interposed no appeal therefrom. Instead, he attempted to revive the subject matter of that Civil Case No. 2624 (Lot No. 4543) eleven years thereafter, when he commenced Civil Case No. 4300-M, praying for the partition of Lot No. 3629 and Lot No. 4543. This, the deceased Pedro San Miguel could not do so. Litigation on this particular Lot No. 4543 must reach a terminal point. The principle of estoppel by judgment, on of the aspects of the doctrine of res judicata, precludes the re-litigation in another action of a specific question actually litigated and determined in a former one. 14 The second case, Civil Case No. 4300-M, is barred by the prior judgment in the first case, Civil Case No. 2624, insofar as it relates to Lot No. 4543. For, there is Identity of parties, subject matter and cause of action between the first case where the judgment was rendered and the second case which is sought to be barred as far as Lot No. 4543 is concerned. Likewise, the judgment in the first case is a final one rendered by a court of competent jurisdiction upon the merits. 15

3. There is no doubt that access to the courts is a constitutional guarantee. This is, however, subject to limitation s. Once the rights of a party-litigant have been adjudicated in a valid final judgment of a competent court, the party-litigant can no longer litigate the same again. 16 A right, question or fact distinctly placed in issue and directly determined by a court of competent jurisdiction, cannot be disputed in a subsequent suit between the same parties or their privies; and even if the second suit is for a different cause of action, the right, question or fact once so determined must, as between the same parties or privies, be taken as conclusively established, so long as the judgment in the firs suit remains unmodified. 17 Public policy and sound practice demand that “at the risk of occasional errors, judgments of courts should become final at some definite date fixed by law.” 18 Reipublicae ut sit finis litium.

It results, thjrefore, that respondent Judge did not abusde his discetion when he issued the order of December 9, 1974, approving petitioners’ corrected record on appeal “insofar only as Lot 3269 is concerned … because the case with respect to Lot 4543 has long became (sic) FINAL … .”

ACCORDINGLY, the order of December 9, 1974, subject matter of this petition, issued by respondent Judge in his Civil Case No. 4300-M, approving petitioners corrected record on appeal with respect only to Lot 2369, is hereby affirmed. Costs against petitioners.

SO ORDERED.

City Government of Quezon City vs ErictaDate: June 24, 1983Petitioners: City Government of Quezon City and City Council of Quezon CityRespondents: Hon. Judge Vicente Ericta and Himlayang Pilipino Inc

Ponente: Gutierrez Jr

Facts: Section 9 of Ordinance No 6118 requires that at least 6% of the total area of a memorial park cemetery shall be set aside for charity burial. For several years, the section of the Ordinance was not enforced by city authorities but seven years after the enactment of the ordinance, the Quezon City Council passed the a resolution directing the City Engineer to stop selling memorial park lots where the owners thereof have failed to donate the required 6% space for pauper burial.

Respondent reacted by filing with the CFI a petition for declaratory relief, prohibition and mandamus with preliminary injunction seeking to annul Section 9 of the Ordinance in question The respondent alleged that the same is contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and the Revised Administrative Code. The Court declared the Section 9 null and void.

Petitioners argue that the taking of the respondent's property is a valid and reasonable exercise of police power and that the land is taken for a public use as it is intended for the burial ground of paupers. They further argue that the Quezon City Council is authorized under its charter, in the exercise of local police power. On the other hand, respondent contends that the taking or confiscation of property is obvious because the ordinance permanently restricts the use of the property such that it cannot be used for any reasonable purpose and deprives the owner of all beneficial use of his property.

Issue: WON Section 9 of the ordinance in question a valid exercise of the police power

Held: No

Ratio: An examination of the Charter of Quezon City does not reveal any provision that would justify the ordinance in question except the provision granting police power to the City. The power to regulate does not include the power to prohibit (. A fortiori, the power to regulate does not include the power to confiscate. The ordinance in question not only confiscates but also prohibits the operation of a memorial park cemetery.

There are three inherent powers of government by which the state interferes with the property rights, namely-. (1) police power, (2) eminent domain, (3) taxation. These are said to exist independently of the Constitution as necessary attributes of sovereignty.

Police power is defined by Freund as 'the power of promoting the public welfare by restraining and regulating the use of liberty and property'. It is usually exerted in order to merely regulate the use and enjoyment of property of the owner. If he is deprived of his property outright, it is not taken for public use but rather to destroy in order to promote the general welfare. In police power, the owner does not recover from the government for injury sustained in consequence thereof. The police power being the most active power of the government and the due process clause being the broadest station on governmental power, the conflict between this power of government and the due process clause of the Constitution is oftentimes inevitable.

It will be seen from the foregoing authorities that police power is usually exercised in the form of mere regulation or restriction in the use of liberty or property for the promotion of the general welfare. It does not involve the taking or confiscation of property with the exception of a few cases where there is a necessity to confiscate private property in order to destroy it for the purpose of protecting the peace and order and of promoting the general welfare as for instance, the confiscation of an illegally possessed article, such as opium and firearms.

It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of Quezon City is not a mere police regulation but an outright confiscation. It deprives a person of his private property without due process of law, nay, even without compensation.

There is no reasonable relation between the setting aside of at least six (6) percent of the total area of an private cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking without compensation of a certain area from a private cemetery to benefit paupers who are charges of the

municipal corporation. Instead of building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries.

The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of the Revised Charter of Quezon City which empowers the city council to prohibit the burial of the dead within the center of population of the city and to provide for their burial in a proper place subject to the provisions of general law regulating burial grounds and cemeteries. When the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang panlungsod may "provide for the burial of the dead in such place and in such manner as prescribed by law or ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate private properties to construct public cemeteries. This has been the law and practise in the past. It continues to the present. Expropriation, however, requires payment of just compensation. The questioned ordinance is different from laws and regulations requiring owners of subdivisions to set aside certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to buyers of subdivision lots. The necessities of public safety, health, and convenience are very clear from said requirements which are intended to insure the development of communities with salubrious and wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the subdivision developer when individual lots are sold to home-owners.

As a matter of fact, the petitioners rely solely on the general welfare clause or on implied powers of the municipal corporation, not on any express provision of law as statutory basis of their exercise of power. The clause has always received broad and liberal interpretation but we cannot stretch it to cover this particular taking. Moreover, the questioned ordinance was passed after Himlayang Pilipino, Inc. had incorporated. received necessary licenses and permits and commenced operating. The sequestration of six percent of the cemetery cannot even be considered as having been impliedly acknowledged by the private respondent when it accepted the permits to commence operations.

G.R. No. L-24153 February 14, 1983

TOMAS VELASCO, LOURDES RAMIREZ, SY PIN, EDMUNDO UNSON, APOLONIA RAMIREZ and LOURDES LOMIBAO, as component members of the STA. CRUZ BARBERSHOP ASSOCIATION, in their own behalf and in representation of the other owners of barbershops in the City of Manila, petitioners-appellants, vs.HON. ANTONIO J. VILLEGAS, City Mayor of Manila, HON. HERMINIO A. ASTORGA, Vice-Mayor and Presiding Officer of the Municipal Board in relation to Republic Act 4065, THE MUNICIPAL BOARD OF THE CITY OF MANILA and EDUARDO QUINTOS SR., Chief of Police of the City of Manila, respondents-appellees.

Leonardo L. Arguelles for respondent-appellant.

 

FERNANDO, C.J.:

This is an appeal from an order of the lower court dismissing a suit for declaratory relief challenging the constitutionality based on Ordinance No. 4964 of the City of Manila, the contention being that it amounts to a deprivation of property of petitioners-appellants of their means of livelihood without due process of law. The assailed ordinance is worded thus: "It shall be prohibited for any operator of any barber shop to conduct the business of massaging customers or other persons in any adjacent room or rooms of said barber shop, or in any room or rooms within the same building where the barber shop is located as long as the operator of the barber shop and the room where massaging is conducted is the same person." 1 As noted in the appealed order, petitioners-appellants admitted that criminal cases for the violation of this ordinance had been previously filed and decided. The lower court, therefore, held that a petition for declaratory relief did not lie, its availability being dependent on there being as yet no case involving such issue having been filed. 2

Even if such were not the case, the attack against the validity cannot succeed. As pointed out in the brief of respondents-appellees, it is a police power measure. The objectives behind its enactment are: "(1) To be able to impose payment of the license fee for engaging in the business of massage clinic under Ordinance No. 3659 as amended by Ordinance 4767, an entirely different measure than the ordinance regulating the business of barbershops and, (2) in order to forestall possible immorality which might grow out of the construction of separate rooms for massage of customers." 3 This Court has been most liberal in sustaining ordinances based on the general welfare clause. As far back as U.S. v. Salaveria, 4 a 1918 decision, this Court through Justice Malcolm made clear the significance and scope of such a clause, which "delegates in statutory form the police power to a municipality. As above stated, this clause has been given wide application by municipal authorities and has in its relation to the particular circumstances of the case been liberally construed by the courts. Such, it is well to really is the progressive view of Philippine jurisprudence." 5 As it was then, so it has continued to be. 6 There is no showing, therefore, of the unconstitutionality of such ordinance.

WHEREFORE, the appealed order of the lower court is affirmed. No costs.

ORTIGAS VS. FEATI BANK

[94 SCRA 533; NO.L-24670; 14 DEC 1979]

Facts:

Plaintiff is engaged in real estate business, developing and selling lots to the public, particularly the Highway Hills Subdivision along EDSA. On March 4, 1952, plaintiff, as vendor, and Augusto Padilla and Natividad Angeles, as vendees, entered into separate agreements of sale on installments over two parcels of land of the Subdivision. On July 19, 1962, the said vendees transferred their rights and interests over the aforesaid lots in favor of one Emma Chavez. Upon completion of payment of the purchase price, the plaintiff executed the corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on installment) and the deeds of sale contained the stipulations or restrictions that:

1. The parcel of land shall be used exclusively for residential purposes, and she shall not be entitled to take or remove soil, stones or gravel from it or any other lots belonging to the Seller.

2. All buildings and other improvements (except the fence) which may be constructed at any time in said lot must be, (a) of strong materials and properly painted, (b) provided with modern sanitary installations connected either to the public sewer or to an approved septic tank, and (c) shall not be at a distance of less than two (2) meters from its boundary lines.

Eventually said lots were bought by defendant. Lot 5 directly from Chavez and Lot 6 from Republic Flour Mills by deed of exchange, with same restrictions. Plaintiff claims that restriction is for the beautification of the subdivision. Defendant claimed of the commercialization of western part of EDSA. Defendant began constructing a commercial bank building. Plaintiff demand to stop it, which forced him to file a case, which was later dismissed, upholding police power. Motion for recon was denied, hence the appeal.

Issue:

Whether or Not non-impairment clause violated.

Held:

No. Resolution is a valid exercise of police power. EDSA, a main traffic artery which runs through several cities and municipalities in the Metro Manila area, supports an endless stream of traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or welfare of the residents in its route. Health, safety, peace, good order and general welfare of the people in the locality are justifications for this. It should be stressed, that while non-impairment of contracts is constitutionally guaranteed, the rule is not absolute, since it has to be reconciled with the legitimate exercise of police power.

Phil Petroleum Corp vs Mun of Pililia 1991

Facts: Petitioner is a business enterprise engaged in the manufacture of lubricated oil basestock which is a petroleum product, with its refinery plant situated at Malaya, Pililla, Rizal. PPC owns and maintains an oil refinery including 49 storage tanks for its petroleum products in Malaya, Pililla, Rizal. Under Section 142 of the NIRC of 1939, manufactured oils and other fuels are subject to specific tax.

On June 28, 1973, PD 231 (Local Tax Code) was issued enacted. Sections 19 and 19 (a) provide that the municipality may impose taxes on business, except on those for which fixed taxes are provided on manufacturers, importers or producers of any article of commerce of whatever kind or nature, including brewers, distillers, rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in accordance with the schedule listed therein.

The Secretary of Finance issued Provincial Circular No. 26-73 (December 27, 1973) directed to all provincial, city and municipal treasurers to refrain from collecting any local tax imposed in old or new tax ordinances in the business of manufacturing, wholesaling, retailing, or dealing in petroleum products subject to the specific tax under the NIRC. Provincial Circular No. 26 A-73 (January 9, 1973)was also issued instructing all City Treasurers to refrain from collecting any local tax imposed in tax ordinances enacted before or after the effectivity of the Local Tax Code, on the businesses of manufacturing, wholesaling, retailing, or dealing in, petroleum products subject to the specific tax under the NIRC.

Respondent enacted Municipal Tax Ordinance No. 1, S-1974 otherwise known as "The Pililla Tax Code of 1974" which took effect on July 1, 1974. Sections 9 and 10 of the said ordinance imposed a tax on business, except for those for which fixed taxes are provided in the Local Tax Code on manufacturers, importers, or producers of any article of commerce of whatever kind or nature, including brewers, distillers, rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in accordance with the schedule found in the Local Tax Code, as well as mayor's permit, sanitary inspection fee and storage permit fee for flammable, combustible or explosive substances, while Section 139 of the disputed ordinance imposed surcharges and interests on unpaid taxes, fees or charges .

On April 13, 1974, P.D. 436 was promulgated increasing the specific tax on lubricating oils, gasoline, bunker fuel oil, diesel fuel oil and other similar petroleum products levied under Sections 142, 144 and 145 of the NIRC, and granting provinces, cities and municipalities certain shares in the specific tax on such products in lieu of local taxes imposed on petroleum products. The questioned Municipal Tax Ordinance No. 1 was

reviewed and approved by the Provincial Treasurer of Rizal, but was not implemented and/or enforced by the Municipality of Pililla because of its having been suspended up to now in view of Provincial Circular Nos. 26-73 and 26 A-73.

On June 3, 1977, P.D. 1158 otherwise known as the National Internal Revenue Code of 1977 was enacted, Section 153 of which specifically imposes specific tax on refined and manufactured mineral oils and motor fuels.

Enforcing the provisions of the ordinance, the respondent filed a complaint against PPC for the collection of the business tax from 1979 to 1986; storage permit fees from 1975 to 1986; mayor's permit and sanitary inspection fees from 1975 to 1984. PPC, however, have already paid the last-named fees starting 1985. The RTC rendered a decision against petitioner.

Issue: WON PPC whose oil products are subject to specific tax under the NIRC, is still liable to pay (a) tax on business and (b) storage fees, considering Provincial Circular No. 6-77; and mayor's permit and sanitary inspection fee unto the respondent Municipality of Pililla, Rizal, based on Municipal Ordinance No. 1

Held: Yes

Ratio: PPC contends that: (a) Provincial Circular No. 2673 declared as contrary to national economic policy the imposition of local taxes on the manufacture of petroleum products as they are already subject to specific tax under the National Internal Revenue Code; (b) the above declaration covers not only old tax ordinances but new ones, as well as those which may be enacted in the future; (c) both Provincial Circulars (PC) 26-73 and 26 A-73 are still effective, hence, unless and until revoked, any effort on the part of the respondent to collect the suspended tax on business from the petitioner would be illegal and unauthorized; and (d) Section 2 of P.D. 436 prohibits the imposition of local taxes on petroleum products.

PC No. 26-73 and PC No. 26 A-73 suspended the effectivity of local tax ordinances imposing a tax on business under Section 19 (a) of the Local Tax Code, with regard to manufacturers, retailers, wholesalers or dealers in petroleum products subject to the specific tax under the NIRC, in view of Section 22 (b) of the Code regarding non-imposition by municipalities of taxes on articles, subject to specific tax under the provisions of the NIRC.

There is no question that Pililla's Municipal Tax Ordinance No. 1 imposing the assailed taxes, fees and charges is valid especially Section 9 (A) which according to the trial court "was lifted in toto and/or is a literal reproduction of Section 19 (a) of the Local Tax Code as amended by P.D. No. 426." It conforms with the mandate of said law.

But P.D. No. 426 amending the Local Tax Code is deemed to have repealed Provincial Circular Nos. 26-73 and 26 A-73 issued by the Secretary of Finance when Sections 19 and 19 (a), were carried over into P.D. No. 426 and no exemptions were given to manufacturers, wholesalers, retailers, or dealers in petroleum products.

Well-settled is the rule that administrative regulations must be in harmony with the provisions of the law. In case of discrepancy between the basic law and an implementing rule or regulation, the former prevails. Furthermore, while Section 2 of P.D. 436 prohibits the imposition of local taxes on petroleum products, said decree did not amend Sections 19 and 19 (a) of P.D. 231 as amended by P.D. 426, wherein the municipality is granted the right to levy taxes on business of manufacturers, importers, producers of any article of commerce of whatever kind or nature. A tax on business is distinct from a tax on the article itself. Thus, if the imposition

of tax on business of manufacturers, etc. in petroleum products contravenes a declared national policy, it should have been expressly stated in P.D. No. 436.

The exercise by local governments of the power to tax is ordained by the present Constitution. To allow the continuous effectivity of the prohibition set forth in PC No. 26-73 (1) would be tantamount to restricting their power to tax by mere administrative issuances. Under Section 5, Article X of the 1987 Constitution, only guidelines and limitations that may be established by Congress can define and limit such power of local governments.

Provincial Circular No. 6-77 enjoining all city and municipal treasurers to refrain from collecting the so-called storage fee on flammable or combustible materials imposed in the local tax ordinance of their respective locality frees petitioner PPC from the payment of storage permit fee.

The storage permit fee being imposed by Pililla's tax ordinance is a fee for the installation and keeping in storage of any flammable, combustible or explosive substances. Inasmuch as said storage makes use of tanks owned not by the municipality of Pililla, but by petitioner PPC, same is obviously not a charge for any service rendered by the municipality as what is envisioned in Section 37 of the same Code.

Section 10 (z) (13) of Pililla's Municipal Tax Ordinance No. 1 prescribing a permit fee is a permit fee allowed under Section 36 of the amended Code.

As to the authority of the mayor to waive payment of the mayor's permit and sanitary inspection fees, the trial court did not err in holding that "since the power to tax includes the power to exempt thereof which is essentially a legislative prerogative, it follows that a municipal mayor who is an executive officer may not unilaterally withdraw such an expression of a policy thru the enactment of a tax." The waiver partakes of the nature of an exemption. It is an ancient rule that exemptions from taxation are construed in strictissimi juris against the taxpayer and liberally in favor of the taxing authority. Tax exemptions are looked upon with disfavor. Thus, in the absence of a clear and express exemption from the payment of said fees, the waiver cannot be recognized. As already stated, it is the law-making body, and not an executive like the mayor, who can make an exemption. Under Section 36 of the Code, a permit fee like the mayor's permit, shall be required before any individual or juridical entity shall engage in any business or occupation under the provisions of the Code.

However, since the Local Tax Code does not provide the prescriptive period for collection of local taxes, Article 1143 of the Civil Code applies. Said law provides that an action upon an obligation created by law prescribes within ten (10) years from the time the right of action accrues. The Municipality of Pililla can therefore enforce the collection of the tax on business of petitioner PPC due from 1976 to 1986, and NOT the tax that had accrued prior to 1976.

1. Power to Create Sources of FundsSection 129, LGC

ESTANISLAO vs. HONORABLE AMADO COSTALES

FACTS:

Ordinance was passed by the Sangguniang Panglungsod of Zamboanga City on February 1982. The Sanggunian sent a copy of the Ordinance to the then Minister of Finance by registered mail for his review pursuant to P.D. No. 231, otherwise known as the Local Tax Code.

On December 1982, the Minister of Finance through Deputy Minister Roman, Jr., sent the letter addressed to the Sanggunian, suspending the effectivity of Ordinance No. 44 on the ground that it contravenes Section 19(a) of the Local Tax Code.

On January 1983, the City Mayor of Zamboanga appealed the said decision of the Minister of Finance to the RTC of Zamboanga.

RTC: Although the tax levied under said Ordinance is not among those that the Sanggunian may impose under the Local Tax Code, it upheld its validity because the Minister of Finance did not take appropriate action on the matter within the prescribed period of 120 days after receipt of a copy thereof.

This petition for review on certiorari was filed by the incumbent Secretary of Finance alleging that the trial court erred when it held that the failure of the Minister of Finance to suspend the effectivity of Ordinance No. 44 within 120 days from receipt of a copy thereof rendered said Ordinance valid.

ISSUE:

Whether or not Ordinance No. 44 of Zamboanga City imposing P0.01 tax per liter of softdrinks produced, manufactured, and/or bottled within the territorial jurisdiction of the City is valid?

HELD:

NO. It is null and void. Any taxes paid under protest should be accordingly refunded to the taxpayers.

RATIO:

Section 19(a) and section 23 of the Local Tax Code allows for the municipalities to impose tax on businesses.

It is clear that a city, like Zamboanga, may impose, in lieu of the graduated fixed tax prescribed under Section 19 of the Local Tax Code, a percentage tax on the gross sales for the preceding calendar year of non-essential commodities at the rate of not exceeding two per cent and on the gross sales of essential commodities at the rate of not exceeding one per cent.

Ordinance No. 44 of the respondent Zamboanga City imposes P0.01 per liter of softdrinks produced, manufactured, and/or bottled within the territorial jurisdiction of the City of Zamboanga.

o Ordinance is ultra vires as it is not within the authority of the City to impose said tax.o The authority of the City is limited to the imposition of a percentage tax on the gross sales or

receipts of said product which shall be at the rate of not exceeding 2% of the gross sales or receipts of the soft drinks for the preceding calendar year.

The tax being imposed under said Ordinance is based on the output or production and not on the gross sales or receipts as authorized under the Local Tax Code.

Mactan Cebu International Airport Authority vs Marcos Date: September 11, 1996 Petitioner: Mactan Cebu International Airport Authority Respondents: Hon. Ferdinand Marcos, City of Cebu, et al Ponente: Davide Jr Facts: Petitioner was created by virtue of RA6958, mandated to "principally undertake the

economical, efficient and effective control, management and supervision of the Mactan International Airport in the Province of Cebu and the Lahug Airport in Cebu City. Under Section 1: The authority shall be exempt from realty taxes imposed by the National Government or any of its political subdivisions, agencies and instrumentalities.

However, the Officer of the Treasurer of Cebu City demanded payment for realty taxes on parcels of land belonging to petitioner. Petitioner objected invoking its tax exemption. It also asserted that it is an instrumentality of the government performing governmental functions, citing section 133 of the LGC which puts limitations on the taxing powers of LGUs. The city refused

insisting that petitioner is a GOCC performing proprietary functions whose tax exemption was withdrawn by Sections 193 and 234 of the LGC.

Petitioner filed a declaratory relief before the RTC. The trial court dismissed the petitioner ruling that the LGC withdrew the tax exemption granted the GOCCs.

Issue: WON the City of Cebu has the power to impose taxes on petitioner Held: Yes Ratio: As a general rule, the power to tax is an incident of sovereignty and is unlimited in its

range, acknowledging in its very nature no limits, so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency who are to pay it. Since taxes are what we pay for civilized society, or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayers and liberally in favor of the taxing authority. A claim of exemption from tax payment must be clearly shown and based on language in the law too plain to be mistaken.

There can be no question that under Section 14 RA 6958 the petitioner is exempt from the payment of realty taxes imposed by the National Government or any of its political subdivisions, agencies, and instrumentalities. Nevertheless, since taxation is the rule and exemption is the exception, the exemption may thus be withdrawn at the pleasure of the taxing authority.

The LGC, enacted pursuant to Section 3, Article X of the constitution provides for the exercise by LGUs of their power to tax, the scope thereof or its limitations, and the exemption from taxation. Section 133 of the LGC prescribes the common limitations on the taxing powers of LGUs: (o) Taxes, fees or charges of any kind on the national government, its agencies and instrumentalities and LGUs. Among the "taxes" enumerated in the LGC is real property tax. Section 234 of LGC provides for the exemptions from payment of GOCCs, except as provided therein. On the other hand, the LGC authorizes LGUs to grant tax exemption privileges. Reading together Section 133, 232 and 234 of the LGC, we conclude that as a general rule, as laid down in Secs 133 the taxing powers of LGUs cannot extend to the levy of inter alia, "taxes, fees, and charges of any kind of the National Government, its agencies and instrumentalties, and LGUs"; however, pursuant to Sec 232, provinces, cities, municipalities in the Metropolitan Manila Area may impose the real property tax except on, inter alia, "real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial used thereof has been granted to a taxable person."

As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons, including government-owned and controlled corporations, Section 193 of the LGC prescribes the general rule, viz., they are withdrawn upon the effectivity of the LGC, except upon the effectivity of the LGC, except those granted to local water districts, cooperatives duly registered under R.A. No. 6938, non stock and non-profit hospitals and educational institutions, and unless otherwise provided in the LGC. The latter proviso could refer to Section 234, which enumerates the properties exempt from real property tax. But the last paragraph of Section 234 further qualifies the retention of the exemption in so far as the real property taxes are concerned by limiting the retention only to those enumerated there-in; all others not included in the enumeration lost the privilege upon the effectivity of the LGC. Moreover, even as the real property is owned by the Republic of the Philippines, or any of its political subdivisions covered by item (a) of the first paragraph of Section 234, the exemption is withdrawn if the beneficial use of such property has been granted to taxable person for consideration or otherwise.

Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from real property taxes granted to natural or juridical persons, including GOCCs, except as provided in the said section, and the petitioner is, undoubtedly, a government-owned corporation, it necessarily follows that its exemption from such tax granted it in Section 14 of its charter, R.A. No. 6958, has been withdrawn. Any claim to the contrary can only be justified if the petitioner can seek refuge under any of the exceptions provided in Section 234, but not under Section 133, as it now asserts, since, as shown above, the said section is qualified by Section 232 and 234. In short, the petitioner can no longer invoke the general rule in Section 133.

It must show that the parcels of land in question, which are real property, are any one of those enumerated in Section 234, either by virtue of ownership, character, or use of the property. Most likely, it could only be the first, but not under any explicit provision of the said section, for one exists. In light of the petitioner's theory that it is an "instrumentality of the Government", it could only be within be first item of the first paragraph of the section by expanding the scope of the terms Republic of the Philippines" to embrace ."instrumentalities" and "agencies."

This view does not persuade us. In the first place, the petitioner's claim that it is an instrumentality of the Government is based on Section 133(o), which expressly mentions the word "instrumentalities"; and in the second place it fails to consider the fact that the legislature used the phrase "National Government, its agencies and instrumentalities" "in Section 133(o),but only the phrase "Republic of the Philippines or any of its political subdivision "in Section 234(a).

The terms "Republic of the Philippines" and "National Government" are not interchangeable. The former is boarder and synonymous with "Government of the Republic of the Philippines" which the Administrative Code of the 1987 defines as the "corporate governmental entity though which the functions of the government are exercised through at the Philippines, including, saves as the contrary appears from the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the autonomous reason, the provincial, city, municipal or barangay subdivision or other forms of local government." These autonomous regions, provincial, city, municipal or barangay subdivisions" are the political subdivision. On the other hand, "National Government" refers "to the entire machinery of the central government, as distinguished from the different forms of local Governments." The National Government then is composed of the three great departments the executive, the legislative and the judicial. An "agency" of the Government refers to "any of the various units of the Government, including a department, bureau, office instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein;" while an "instrumentality" refers to "any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy; usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned and controlled corporations".

If Section 234(a) intended to extend the exception therein to the withdrawal of the exemption from payment of real property taxes under the last sentence of the said section to the agencies and instrumentalities of the National Government mentioned in Section 133(o), then it should have restated the wording of the latter. Yet, it did not Moreover, that Congress did not wish to expand the scope of the exemption in Section 234(a) to include real property owned by other instrumentalities or agencies of the government including government-owned and controlled corporations is further borne out by the fact that the source of this exemption is Section 40(a) of P.D. No. 646, otherwise known as the Real Property Tax Code.

Note that as a reproduced in Section 234(a), the phrase "and any government-owned or controlled corporation so exempt by its charter" was excluded. The justification for this restricted exemption in Section 234(a) seems obvious: to limit further tax exemption privileges, specially in light of the general provision on withdrawal of exemption from payment of real property taxes in the last paragraph of property taxes in the last paragraph of Section 234. These policy considerations are consistent with the State policy to ensure autonomy to local governments 33 and the objective of the LGC that they enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them effective partners in the attainment of national goals. 34 The power to tax is the most effective instrument to raise needed revenues to finance and support myriad activities of local government units for the delivery of basic services essential to the promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people. It may also be relevant to recall that the original reasons for the withdrawal of tax exemption privileges granted to government-owned and controlled corporations and all other units of government were that such privilege resulted in serious tax base erosion and distortions in the tax treatment of similarly situated enterprises, and there was a need for this entities to share in the requirements of the development, fiscal or otherwise, by paying the taxes and other charges due from them.

The crucial issues then to be addressed are: (a) whether the parcels of land in question belong to the Republic of the Philippines whose beneficial use has been granted to the petitioner, and (b) whether the petitioner is a "taxable person". It may be reasonable to assume that the term "lands" refer to "lands" in Cebu City then administered by the Lahug Air Port and includes the parcels of land the respondent City of Cebu seeks to levy on for real property taxes. This section involves a "transfer" of the "lands" among other things, to the petitioner and not just the transfer of the beneficial use thereof, with the ownership being retained by the Republic of the Philippines.

This "transfer" is actually an absolute conveyance of the ownership thereof because the petitioner's authorized capital stock consists of "the value of such real estate owned and/or administered by the airports." Hence, the petitioner is now the owner of the land in question and the exception in Sec 234(c) of the LGC is inapplicable. Petitioner cannot claim that it was never a "taxable person" under its Charter. It was only exempted from the payment of real property taxes. The grant of the privilege only in respect of this tax is conclusive proof of the legislative intent to make it a taxable person subject to all taxes, except real property tax.

Finally, even if the petitioner was originally not a taxable person for purposes of real property tax, in light of the forgoing disquisitions, it had already become even if it be conceded to be an "agency" or "instrumentality" of the Government, a taxable person for such purpose in view of the withdrawal in the last paragraph of Section 234 of exemptions from the payment of real property taxes, which, as earlier adverted to, applies to the petitioner. Accordingly, the position taken by the petitioner is untenable. Reliance on Basco vs. Pagcor is unavailing since it was decided before the effectivity of the LGC. Besides, nothing can prevent Congress from decreeing that even instrumentalities or agencies of the government performing governmental functions may be subject to tax. Where it is done precisely to fulfill a constitutional mandate and national policy, no one can doubt its wisdom.

Mactan Cebu International Airport Authority vs MarcosDate: September 11, 1996Petitioner: Mactan Cebu International Airport AuthorityRespondents: Hon. Ferdinand Marcos, City of Cebu, et al

Ponente: Davide Jr

Facts: Petitioner was created by virtue of RA6958, mandated to "principally undertake the economical, efficient and effective control, management and supervision of the Mactan International Airport in the Province of Cebu and the Lahug Airport in Cebu City. Under Section 1: The authority shall be exempt from realty taxes imposed by the National Government or any of its political subdivisions, agencies and instrumentalities.

However, the Officer of the Treasurer of Cebu City demanded payment for realty taxes on parcels of land belonging to petitioner. Petitioner objected invoking its tax exemption. It also asserted that it is an instrumentality of the government performing governmental functions, citing section 133 of the LGC which puts limitations on the taxing powers of LGUs. The city refused insisting that petitioner is a GOCC performing proprietary functions whose tax exemption was withdrawn by Sections 193 and 234 of the LGC.

Petitioner filed a declaratory relief before the RTC. The trial court dismissed the petitioner ruling that the LGC withdrew the tax exemption granted the GOCCs.

Issue: WON the City of Cebu has the power to impose taxes on petitioner

Held: Yes

Ratio: As a general rule, the power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its very nature no limits, so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency who are to pay it. Since taxes

are what we pay for civilized society, or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayers and liberally in favor of the taxing authority. A claim of exemption from tax payment must be clearly shown and based on language in the law too plain to be mistaken.

There can be no question that under Section 14 RA 6958 the petitioner is exempt from the payment of realty taxes imposed by the National Government or any of its political subdivisions, agencies, and instrumentalities. Nevertheless, since taxation is the rule and exemption is the exception, the exemption may thus be withdrawn at the pleasure of the taxing authority.

The LGC, enacted pursuant to Section 3, Article X of the constitution provides for the exercise by LGUs of their power to tax, the scope thereof or its limitations, and the exemption from taxation. Section 133 of the LGC prescribes the common limitations on the taxing powers of LGUs: (o) Taxes, fees or charges of any kind on the national government, its agencies and instrumentalities and LGUs. Among the "taxes" enumerated in the LGC is real property tax. Section 234 of LGC provides for the exemptions from payment of GOCCs, except as provided therein. On the other hand, the LGC authorizes LGUs to grant tax exemption privileges. Reading together Section 133, 232 and 234 of the LGC, we conclude that as a general rule, as laid down in Secs 133 the taxing powers of LGUs cannot extend to the levy of inter alia, "taxes, fees, and charges of any kind of the National Government, its agencies and instrumentalties, and LGUs"; however, pursuant to Sec 232, provinces, cities, municipalities in the Metropolitan Manila Area may impose the real property tax except on, inter alia, "real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial used thereof has been granted to a taxable person."

As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons, including government-owned and controlled corporations, Section 193 of the LGC prescribes the general rule, viz., they are withdrawn upon the effectivity of the LGC, except upon the effectivity of the LGC, except those granted to local water districts, cooperatives duly registered under R.A. No. 6938, non stock and non-profit hospitals and educational institutions, and unless otherwise provided in the LGC. The latter proviso could refer to Section 234, which enumerates the properties exempt from real property tax. But the last paragraph of Section 234 further qualifies the retention of the exemption in so far as the real property taxes are concerned by limiting the retention only to those enumerated there-in; all others not included in the enumeration lost the privilege upon the effectivity of the LGC. Moreover, even as the real property is owned by the Republic of the Philippines, or any of its political subdivisions covered by item (a) of the first paragraph of Section 234, the exemption is withdrawn if the beneficial use of such property has been granted to taxable person for consideration or otherwise.

Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from real property taxes granted to natural or juridical persons, including GOCCs, except as provided in the said section, and the petitioner is, undoubtedly, a government-owned corporation, it necessarily follows that its exemption from such tax granted it in Section 14 of its charter, R.A. No. 6958, has been withdrawn. Any claim to the contrary can only be justified if the petitioner can seek refuge under any of the exceptions provided in Section 234, but not under Section 133, as it now asserts, since, as shown above, the said section is qualified by Section 232 and 234. In short, the petitioner can no longer invoke the general rule in Section 133.

It must show that the parcels of land in question, which are real property, are any one of those enumerated in Section 234, either by virtue of ownership, character, or use of the property. Most likely, it could only be the first, but not under any explicit provision of the said section, for one exists. In light of the petitioner's theory that it is an "instrumentality of the Government", it could only be within be first item of the first paragraph of the section by expanding the scope of the terms Republic of the Philippines" to embrace ."instrumentalities" and "agencies."

This view does not persuade us. In the first place, the petitioner's claim that it is an instrumentality of the Government is based on Section 133(o), which expressly mentions the word "instrumentalities"; and in the second place it fails to consider the fact that the legislature used the phrase "National Government, its agencies and instrumentalities" "in Section 133(o),but only the phrase "Republic of the Philippines or any of its political subdivision "in Section 234(a).

The terms "Republic of the Philippines" and "National Government" are not interchangeable. The former is boarder and synonymous with "Government of the Republic of the Philippines" which the Administrative Code of the 1987 defines as the "corporate governmental entity though which the functions of the government are exercised through at the Philippines, including, saves as the contrary appears from

the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the autonomous reason, the provincial, city, municipal or barangay subdivision or other forms of local government." These autonomous regions, provincial, city, municipal or barangay subdivisions" are the political subdivision. On the other hand, "National Government" refers "to the entire machinery of the central government, as distinguished from the different forms of local Governments." The National Government then is composed of the three great departments the executive, the legislative and the judicial. An "agency" of the Government refers to "any of the various units of the Government, including a department, bureau, office instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein;" while an "instrumentality" refers to "any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy; usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned and controlled corporations".

If Section 234(a) intended to extend the exception therein to the withdrawal of the exemption from payment of real property taxes under the last sentence of the said section to the agencies and instrumentalities of the National Government mentioned in Section 133(o), then it should have restated the wording of the latter. Yet, it did not Moreover, that Congress did not wish to expand the scope of the exemption in Section 234(a) to include real property owned by other instrumentalities or agencies of the government including government-owned and controlled corporations is further borne out by the fact that the source of this exemption is Section 40(a) of P.D. No. 646, otherwise known as the Real Property Tax Code.

Note that as a reproduced in Section 234(a), the phrase "and any government-owned or controlled corporation so exempt by its charter" was excluded. The justification for this restricted exemption in Section 234(a) seems obvious: to limit further tax exemption privileges, specially in light of the general provision on withdrawal of exemption from payment of real property taxes in the last paragraph of property taxes in the last paragraph of Section 234. These policy considerations are consistent with the State policy to ensure autonomy to local governments 33 and the objective of the LGC that they enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them effective partners in the attainment of national goals. 34 The power to tax is the most effective instrument to raise needed revenues to finance and support myriad activities of local government units for the delivery of basic services essential to the promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people. It may also be relevant to recall that the original reasons for the withdrawal of tax exemption privileges granted to government-owned and controlled corporations and all other units of government were that such privilege resulted in serious tax base erosion and distortions in the tax treatment of similarly situated enterprises, and there was a need for this entities to share in the requirements of the development, fiscal or otherwise, by paying the taxes and other charges due from them.

The crucial issues then to be addressed are: (a) whether the parcels of land in question belong to the Republic of the Philippines whose beneficial use has been granted to the petitioner, and (b) whether the petitioner is a "taxable person". It may be reasonable to assume that the term "lands" refer to "lands" in Cebu City then administered by the Lahug Air Port and includes the parcels of land the respondent City of Cebu seeks to levy on for real property taxes. This section involves a "transfer" of the "lands" among other things, to the petitioner and not just the transfer of the beneficial use thereof, with the ownership being retained by the Republic of the Philippines.

This "transfer" is actually an absolute conveyance of the ownership thereof because the petitioner's authorized capital stock consists of "the value of such real estate owned and/or administered by the airports." Hence, the petitioner is now the owner of the land in question and the exception in Sec 234(c) of the LGC is inapplicable. Petitioner cannot claim that it was never a "taxable person" under its Charter. It was only exempted from the payment of real property taxes. The grant of the privilege only in respect of this tax is conclusive proof of the legislative intent to make it a taxable person subject to all taxes, except real property tax.

Finally, even if the petitioner was originally not a taxable person for purposes of real property tax, in light of the forgoing disquisitions, it had already become even if it be conceded to be an "agency" or "instrumentality" of the Government, a taxable person for such purpose in view of the withdrawal in the last paragraph of Section 234 of exemptions from the payment of real property taxes, which, as earlier

adverted to, applies to the petitioner. Accordingly, the position taken by the petitioner is untenable. Reliance on Basco vs. Pagcor is unavailing since it was decided before the effectivity of the LGC. Besides, nothing can prevent Congress from decreeing that even instrumentalities or agencies of the government performing governmental functions may be subject to tax. Where it is done precisely to fulfill a constitutional mandate and national policy, no one can doubt its wisdom.

Moday vs CADate: February 20, 1997Petitioners: Percival Moday, Zotico Moday and Leonora ModayRespondents: CA, Judge Evangelista Yuipco, and Municipality of Bunawan

Ponente: Romero

Facts: The Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed Resolution No. 43-89, "Authorizing the Municipal Mayor to Initiate the Petition for Expropriation of a One (1) Hectare Portion of Lot No. 6138-Pls-4 Along the National Highway Owned by Percival Moday for the Site of Bunawan Farmers Center and Other Government Sports Facilities." The Resolution was approved by Mayor Anuncio Bustillo and was transmitted to the Sangguniang Panlalawigan for its approval.

The Sangguniang Panlalawigan disapproved said Resolution and returned it with the comment that "expropriation is unnecessary considering that there are still available lots in Bunawan for the establishment of the government center."

The municipality filed a petition for eminent domain against Percival Moday before the RTC. The municipality then filed a motion to take or enter upon the possession of the land upon deposit with the municipal treasurer of the required amount. The RTC granted the motion. It ruled that the Sangguniang Panlalawigan's failure to declare the resolution invalid leaves it effective. It added that the duty of the Sangguniang Panlalawigan is merely to review the ordinances and resolutions passed by the Sangguniang Bayan under Section 208 (1) of B.P. Blg. 337, old Local Government Code and that the exercise of eminent domain is not one of the acts enumerated in Section 19 requiring the approval of the Sangguniang Panlalawigan.

Petitioners elevated the case in a petition for certiorari before the CA. The CA held that the public purpose for the expropriation is clear from Resolution No. 43-89 and that since the Sangguniang Panlalawigan of Agusan del Sur did not declare Resolution No. 43-89 invalid, expropriation of petitioners' property could proceed. Meanwhile, the Municipality had erected three buildings on the subject property: the Association of Barangay Councils (ABC) Hall, the Municipal Motorpool, both wooden structures, and the Bunawan Municipal Gymnasium, which is made of concrete.

In the instant petition for review, petitioner seeks the reversal of the decision and resolution of the CA and a declaration that Resolution No. 43-89 of the Municipality of Bunawan is null and void.

Issue: WON a municipality may expropriate private property by virtue of a municipal resolution which was disapproved by the Sangguniang Panlalawigan.

Held: Yes

Ratio: Eminent domain, the power which the Municipality of Bunawan exercised in the instant case, is a fundamental State power that is inseparable from sovereignty. It is government's right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose. Inherently possessed by the national legislature, the power of eminent domain may be validly delegated to local governments, other public entities and public utilities. For the taking of private property by the government to be valid, the taking must be for public use and there must be just compensation.

The Municipality's power to exercise the right of eminent domain is not disputed as it is expressly provided for BP 337, the local Government Code in force at the time expropriation proceedings were initiated. What petitioners question is the lack of authority of the municipality to exercise this right since the Sangguniang Panlalawigan disapproved Resolution No. 43-89.

The Sangguniang Panlalawigan's disapproval of Resolution No. 43-89 is an infirm action which does not render said resolution null and void. The law, Section 153 of B.P. Blg. 337, grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue.

Velazco v. Blas: The only ground upon which a provincial board may declare any municipal resolution, ordinance, or order invalid is when such resolution, ordinance, or order is "beyond the powers conferred upon the council or president making the same." Absolutely no other ground is recognized by the law. A strictly legal question is before the provincial board in its consideration of a municipal resolution, ordinance, or order. The provincial disapproval of any resolution, ordinance, or order must be premised specifically upon the fact that such resolution, ordinance, or order is outside the scope of the legal powers conferred by law. If a provincial board passes these limits, it usurps the legislative function of the municipal council or president. Such has been the consistent course of executive authority.

Thus, the Sangguniang Panlalawigan was without the authority to disapprove Municipal Resolution No. 43-89 for the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and its Sangguniang Bayan the capacity to promulgate said resolution, pursuant to the earlier-quoted Section 9 of B.P. Blg. 337. Perforce, it follows that Resolution No. 43-89 is valid and binding and could be used as lawful authority to petition for the condemnation of petitioners' property.

As regards the accusation of political oppression, it is alleged that Moday incurred the ire of then Mayor Bustillo when he refused to support the latter's candidacy for mayor in previous elections. Petitioners claim that then incumbent Mayor Bustillo used the expropriation to retaliate by expropriating their land even if there were other properties belonging to the municipality and available for the purpose. Specifically, they allege that the municipality owns a vacant seven-hectare property adjacent to petitioners' land, evidenced by a sketch plan.

The limitations on the power of eminent domain are that the use must be public, compensation must be made and due process of law must be observed. The Supreme Court, taking cognizance of such issues as the adequacy of compensation, necessity of the taking and the public use character or the purpose of the taking, has ruled that the necessity of exercising eminent domain must be genuine and of a public character. Government may not capriciously choose what private property should be taken.

Municipality of Paranaque vs VM RealtyDate: July 20, 1998Petitioner: Municipality of ParanaqueRespondent: VM Realty Corporation

Ponente: Panganiban

Facts: Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, the Municipality of Parañaque filed a Complaint for expropriation against V.M. Realty Corporation, over two parcels of land. Allegedly, the complaint was filed "for the purpose of alleviating the living conditions of the underprivileged by providing homes for the homeless through a socialized housing project." Petitioner, pursuant to its Sangguniang Bayan Resolution No. 577, Series of 1991, previously made an offer to enter into a negotiated sale of the property with private respondent, which the latter did not accept.

The RTC authorized petition to take possession of the subject property upon its deposit with the clerk of court of an amount equivalent to 15% of its fair market value.

Private Respondent filed an answer alleging that (a) the complaint failed to state a cause of action because it was filed pursuant to a resolution and not to an ordinance as required by RA 7160; and (b) the cause of action, if any, was barred by a prior judgment or res judicata. On private respondent's motion, its Answer was treated as a motion to dismiss. The trial court dismissed the complaint.

Issue: WON the resolution is different from the ordinance

Held: Yes

Ratio: Petitioner contends that a resolution approved by the municipal council for the purpose of initiating an expropriation case "substantially complies with the requirements of the law" because the terms "ordinance" and "resolution" are synonymous for "the purpose of bestowing authority [on] the local government unit through its chief executive to initiate the expropriation proceedings in court in the exercise of the power of eminent domain." Petitioner seeks to bolster this contention by citing Article 36, Rule VI of the IRR of the Local Government Code, which provides: "If the LGU fails to acquire a private property for public use, purpose, or welfare through purchase, the LGU may expropriate said property through a resolution of the Sanggunian authorizing its chief executive to initiate expropriation proceedings."

The Court disagrees. The power of eminent domain is lodged in the legislative branch of government, which may delegate the exercise thereof to LGUs, other public entities and public utilities. An LGU may therefore exercise the power to expropriate private property only when authorized by Congress and subject to the latter's control and restraints imposed "through the law conferring the power or in other legislations." In this case, Section 19 of RA 7160, which delegates to LGUs the power of eminent domain,

also lays down the parameters for its exercise. Thus, the following essential requisites must concur before an LGU can exercise the power of eminent domain:1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property. 2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless.3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws.4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted.

In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to a resolution of the municipal council. Thus, there was no compliance with the first requisite that the mayor be authorized through an ordinance. Petitioner cites Camarines Sur vs. CA to show that a resolution may suffice to support the exercise of eminent domain by an LGU. This case, however, is not in point because the applicable law at that time was BP 337, 30 the previous Local Government Code, which had provided that a mere resolution would enable an LGU to exercise eminent domain. In contrast, RA 7160 explicitly required an ordinance for this purpose.

We are not convinced by petitioner's insistence that the terms "resolution" and "ordinance" are synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. An ordinance possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the two are enacted differently - a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of all the Sanggunian members.

If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would have simply adopted the language of the previous Local Government Code. But Congress did not. In a clear divergence from the previous Local Government Code, Section 19 of RA 7160 categorically requires that the local chief executive act pursuant to an ordinance. Indeed, "[l]egislative intent is determined principally from the language of a statute. Where the language of a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation would be resorted to only where a literal interpretation would be either impossible or absurd or would lead to an injustice." 34 In the instant case, there is no reason to depart from this rule, since the law requiring an ordinance is not at all impossible, absurd, or unjust.

Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private right of the people. 35 Accordingly, the manifest change in the legislative language - from "resolution" under the BP 337 to "ordinance" under RA 7160 - demands a strict construction. "No species of property is held by individuals with greater tenacity, and is guarded by the Constitution and laws more sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right and, for greater public purposes, appropriates the land of an individual without his consent, the plain meaning of the law should not be enlarged by doubtful interpretation."

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to authorize an LGU to exercise eminent domain. This is clearly misplaced, because Section 19 of RA 7160, the law itself, surely prevails over said rule which merely seeks to implement it. It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its implementation. Besides, what the discrepancy seems to indicate is a mere oversight in the wording of the implementing rules, since Article 32, Rule VI thereof, also requires that, in exercising the power of eminent domain, the chief executive of the LGU must act pursuant to an ordinance.

Issue: WON the complaint states a cause of action

Held: No

Ratio: In the first place, petitioner merely alleged the existence of such an ordinance, but it did not present any certified true copy thereof. In the second place, petitioner did not raise this point before this Court. In

fact, it was mentioned by private respondent, and only in passing. In any event, this allegation does not cure the inherent defect of petitioner's Complaint for expropriation filed on September 23, 1993.

The fact that there is no cause of action is evident from the face of the Complaint for expropriation which was based on a mere resolution. The absence of an ordinance authorizing the same is equivalent to lack of cause of action. Consequently, the Court of Appeals committed no reversible error in affirming the trial court's Decision which dismissed the expropriation suit.

Issue: WON the action is bared by res juridicata

Held: No

Ratio: All the requisites for the application of res judicata are present in this case. There is a previous final judgment on the merits in a prior expropriation case involving identical interests, subject matter and cause of action, which has been rendered by a court having jurisdiction over it.

Be that as it may, the Court holds that the principle of res judicata, which finds application in generally all cases and proceedings, cannot bar the right of the State or its agent to expropriate private property. The very nature of eminent domain, as an inherent power of the State, dictates that the right to exercise the power be absolute and unfettered even by a prior judgment or res judicata. The scope of eminent domain is plenary and, like police power, can "reach every form of property which the State might need for public use." "All separate interests of individuals in property are held of the government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of property, remains in the government, or in the aggregate body of the people in their sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires it." Thus, the State or its authorized agent cannot be forever barred from exercising said right by reason alone of previous non-compliance with any legal requirement.

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it does apply to specific issues decided in a previous case. For example, a final judgment dismissing an expropriation suit on the ground that there was no prior offer precludes another suit raising the same issue; it cannot, however, bar the State or its agent from thereafter complying with this requirement, as prescribed by law, and subsequently exercising its power of eminent domain over the same property. By the same token, our ruling that petitioner cannot exercise its delegated power of eminent domain through a mere resolution will not bar it from reinstituting similar proceedings, once the said legal requirement and, for that matter, all others are properly complied with. Parenthetically and by parity of reasoning, the same is also true of the principle of "law of the case." In Republic vs De Knecht, the Court ruled that the power of the State or its agent to exercise eminent domain is not diminished by the mere fact that a prior final judgment over the property to be expropriated has become the law of the case as to the parties. The State or its authorized agent may still subsequently exercise its right to expropriate the same property, once all legal requirements are complied with. To rule otherwise will not only improperly diminish the power of eminent domain, but also clearly defeat social justice.

Filstream vs CADate: January 23, 1998Petitioner: Filstream International IncorporatedRespondent: CA, Judge Felipe Tongco and City of Manila

Ponente: Francisco

Facts: Petitioner is the registered owner of the properties subject of this dispute consisting of adjacent parcels of land situated in Antonio Rivera Street, Tondo II, Manila. Petitioner filed an ejectment suit before the MTC against the occupants of the parcels of land (private respondents) on the grounds of termination of the lease contract and non-payment of rentals. Judgment was rendered by the MTC ordering private respondents to vacate the premises and pay back rentals to petitioner. The RTC and CA affirmed.

However, it appeared that during the pendency of the ejectment proceedings private respondents, a complaint for Annulment of Deed of Exchange against petitioner which was filed before the RTC. The City of Manila then approved Ordinance No. 7813, authorizing Mayor Lim to initiate the

acquisition by negotiation, expropriation, purchase, or other legal means certain parcels of land which formed part of the properties of petitioner then occupied by private respondents. The City approved Ordinance No. 7855 declaring the expropriation of certain parcels of land situated along Antonio Rivera and Fernando Ma. Guerero streets in Tondo, Manila which were owned by Mr. Enrique Quijano Gutierez, petitioner’s predecessor-in-interest. The said properties were to be sold and distributed to qualified tenants of the area pursuant to the Land Use Development Program of the City of Manila.

The City of Manila filed a complaint for eminent domain. The trial court issued a Writ of Possession in favor of the city which ordered the transfer of possession over the disputed premises to the City of Manila. Petitioner filed a motion to dismiss but the court denied th emotion.

Concerning the first case, the trial court issued an order commanding the demolition of the structure erected on the disputed premises. To avert the demolition, private respondents filed before the RTC of Manila, Branch 14, a Petition for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order and preliminary injunction. The TRO was granted which was later lifted. The court the dismissed the case on the ground of forum shopping. On appeal, the CA found merit in private respondents’ allegations in support of their application of the issuance of the writ and granted the same.

The issue raised in G.R. No. 125218 is purely procedural and technical matter. Petitioner takes exception to the resolutions of the CA which ordered the dismissal of its Petition for Certiorari for non-compliance with Sec. 2(a) of Rule 6 of the Revised Internal Rules of the Court of Appeals by failing to attach to its petition other pertinent documents and papers and for attaching copies of pleadings which are blurred and unreadable. Petitioner argues that respondent appellate court seriously erred in giving more premium to form rather than the substance.

We agree with the petitioner. A strict adherence to the technical and procedural rules in this case would defeat rather than meet the ends of justice as it would result in the violation of the substantial rights of petitioner. At stake in the appeal filed by petitioner before the CA is the exercise of their property rights over the disputed premises which have been expropriated and have in fact been ordered condemned in favor of the City of Manila. In effect, the dismissal of their appeal in the expropriation proceedings based on the aforementioned grounds is tantamount to a deprivation of property without due process of law as it would automatically validate the expropriation proceedings based on the aforementioned grounds is tantamount to a deprivation of property without due process of law as it would automatically validate the expropriation proceedings which the petitioner is still disputing. It must be emphasized that where substantial rights are affected, as in this case, the stringent application of procedural rules may be relaxed if only to meet the ends of substantial justice.

With regard to the other petition, G.R. No. 128077, petitioner Filstream objects to the issuance by respondent CA of the restraining order and the preliminary injunction enjoining the execution of the writ of demolition issued in the ejectment suit as an incident to private respondents’ pending petition assailing the dismissal by the RTC of Manila, Branch 33, of the consolidated petitions for certiorari filed by private respondents and the City of Manila on the ground of forum shopping.

The propriety of the issuance of the restraining order and the writ of preliminary injunction is but a mere incient to the actual controversy which is rooted in the assertion of the conflicting rights of the parties in this case over the disputed premises. In order to determine whether private respondents are entitled to the injunctive reliefs granted by respondent CA, we deemed it proper to extract the source of discord.

Petitioner anchors its claim by virtue of its ownership over the properties and the existence of a final and executory judgment against private respondents ordering the latter’s ejectment from the premises. Private respondents’ claim on the other hand hinges on an alleged supervening event which has rendered the enforcement of petitioner’s rights moot, that is, the expropriation proceedings undertaken by the City of Manila over the disputed premises for the benefit of herein private respondents. For its part, the City is merely exercising its power of eminent domain within its jurisdiction by expropriating petitioner’s properties for public use.

There is no dispute as to the existence of a final and executory judgment in favor of petitioner ordering the ejectment of private respondents from the properties subject of this dispute. The judgment in the ejectment suit became final after private respondents failed to interpose any appeal from the adverse decision of CA. Petitioner has every right to assert the execution of this decision as it had already became final and executory.

However, it must also be conceded that the City of Manila has an undeniable right to exercise its power of eminent domain within its jurisdiction. The right to expropriate private property for public use is expressly granted to it under Section 19 of the 1991 Local Government Code. More specifically, the City of Manila has the power to expropriate private property in the pursuit of its urban land reform and housing program as explicitly laid out in the Revised Charter of the City of Manila (R.A. No. 409).

In fact, the City of Manila’s right to exercise these prerogatives notwithstanding the existence of a final and executory judgment over the property to be expropriated has been upheld by this Court in the case of Philippine Columbian Association vs. Panis.

Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts of land and landed estate. It is therefore of no moment that the land sought to be expropriated in this case is less than the half a hectare only.

Through the years, the public use requirement in eminent domain has evolved into a flexible concept, influenced by changing conditions. Public use now includes the broader notion of indirect public benefit or advantage, including a particular, urban land reform and housing.”

We take judicial notice of the fact that urban land reform has become a paramount task in view of the acute shortage of decent housing in urban areas. Nevertheless, despite the existence of a serious dilemma, local government units are not given an unbridled authority when exercising their power of eminent domain in pursuit of solutions to these problems. The basic rules still have to be followed, which are as follows: “no person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws; private property shall not be taken for public use without just compensation”. Thus the exercise by local government units of the power of eminent domain is not without limitations.

Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities mentioned in this section shall not apply. The local government units shall give budgetary priority to on-site development of government lands.

Very clear from the provisions are the limitations with respect to the order of priority in acquiring private lands and in resorting to expropriation proceedings as means to acquire the same. Private lands rank last in the order of priority for purposes of socialized housing. In the same vein, expropriation proceedings are to be resorted to only when the other modes of acquisition have been exhausted. Compliance with these conditions must be deemed mandatory because these are the only safeguards in securing the right of owners of private property to due process when their property is expropriated for public use.

Proceeding from the parameters laid out in the above disquisitions, we now pose the crucial question: Did the city of Manila comply with the abovementioned conditions when it expropriated petitioner’s properties? We have carefully scrutinized the records of this case and found nothing that would indicate the respondent City of Manila complied with Sec. 9 and Sec. 10 of R.A. 7279. Petitioners’ properties were expropriated and ordered condemned in favor of the City of Manila sans any showing that resort to the acquisition of other lands listed under Sec. 9 of RA 7279 have proved futile. Evidently, there was a violation of petitioner Filstream’s right to due process which must accordingly be rectified.

Indeed, it must be emphasized that the State has a paramount interest in exercising its power of eminent domain for the general good considering that the right of the State to expropriate private property as long as it is for public use always takes precedence over the interest of private property owners. However we must not lose sight of the fact that the individual rights affected by the exercise of such right are also entitled to protection, bearing in mind that the exercise of this superior right cannot override the guarantee of due process extended by the law to owners of the property to be expropriated. In this regard, vigilance over compliance with the due process requirements is in order.

CITY OF MANDALUYONG, petitioner, vs. ANTONIO N., FRANCISCO N., THELMA N., EUSEBIO N., RODOLFO N., all surnamed AGUILAR,respondents.

D E C I S I O N

PUNO, J.:

This is a petition for review under Rule 45 of the Rules of Court of the Orders dated September 17, 1998 and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City[1] dismissing the petitioner’s Amended Complaint in SCA No. 1427 for expropriation of two (2) parcels of land in Mandaluyong City.

The antecedent facts are as follows:

On August 4, 1997, petitioner filed with the Regional Trial Court, Branch 168, Pasig City a complaint for expropriation entitled “City of Mandaluyong, plaintiff v. Antonio N., Francisco N., Thelma N., Eusebio N., Rodolfo N., all surnamed Aguilar, defendants.” Petitioner sought to expropriate three (3) adjoining parcels of land with an aggregate area of 1,847 square meters registered under Transfer Certificates of Title Nos. 59780, 63766 and 63767 in the names of the defendants, herein respondents, located at 9 de Febrero Street, Barangay Mauwag, City of Mandaluyong; on a portion of the 3 lots, respondents constructed residential houses several decades ago which they had since leased out to tenants until the present; on the vacant portion of the lots, other families constructed residential structures which they likewise occupied; in 1983, the lots were classified by Resolution No. 125 of the Board of the Housing and Urban Development Coordinating Council as an Area for Priority Development for urban land reform under Proclamation Nos. 1967 and 2284 of then President Marcos; as a result of this classification, the tenants and occupants of the lots offered to purchase the land from respondents, but the latter refused to sell; on November 7, 1996, the Sangguniang Panlungsod of petitioner, upon petition of the Kapitbisig, an association of tenants and occupants of the subject land, adopted Resolution No. 516, Series of 1996 authorizing Mayor Benjamin Abalos of the City of Mandaluyong to initiate action for the expropriation of the subject lots and construction of a medium-rise condominium for qualified occupants of the land; on January 10, 1996, Mayor Abalos sent a letter to respondents offering to purchase the said property at P3,000.00 per square meter; respondents did not answer the letter.  Petitioner thus prayed for the expropriation of the said lots and the fixing of just compensation at the fair market value of P3,000.00 per square meter.[2]

In their answer, respondents, except Eusebio N. Aguilar who died in 1995, denied having received a copy of  Mayor Abalos’ offer to purchase their lots.  They alleged that the expropriation of their land is arbitrary and capricious, and is not for a public purpose; the subject lots are their only real property and are too small for expropriation, while petitioner has several properties inventoried for socialized housing; the fair market value of P3,000.00 per square meter is arbitrary because the zonal valuation set by the Bureau of Internal Revenue is P7,000.00 per square meter.  As counterclaim, respondents prayed for damages of P21 million.[3]

Respondents filed a “Motion for Preliminary Hearing” claiming that the defenses alleged in their Answer are valid grounds for dismissal of the complaint for lack of jurisdiction over the person of the defendants and lack of cause of action.  Respondents prayed that the affirmative defenses be set for preliminary hearing and that the complaint be dismissed.[4] Petitioner replied.

On November 5, 1997, petitioner filed an Amended Complaint and named as an additional defendant Virginia N. Aguilar and, at the same time, substituted Eusebio Aguilar with his heirs.  Petitioner also excluded from expropriation TCT No. 59870 and thereby reduced the area sought to be expropriated from three (3) parcels of land to two (2) parcels totalling 1,636 square meters under TCT Nos. 63766 and 63767.[5]

The Amended Complaint was admitted by the trial court on December 18, 1997.  Respondents, who, with the exception of Virginia Aguilar and the Heirs of Eusebio Aguilar had yet to be served with summons and copies of the Amended Complaint, filed a “Manifestation and Motion” adopting their “Answer with Counterclaim” and “Motion for Preliminary Hearing” as their answer to the Amended Complaint.[6]

The motion was granted.  At the hearing of February 25, 1998, respondents presented Antonio Aguilar who testified and identified several documentary evidence.  Petitioner did not present any evidence.  Thereafter, both parties filed their respective memoranda.[7]

On September 17, 1998, the trial court issued an order dismissing the Amended Complaint after declaring respondents as “small property owners” whose land is exempt from expropriation under Republic Act No. 7279.  The court also found that the expropriation was not for a public purpose for petitioner’s failure to present any evidence that the intended beneficiaries of the expropriation are landless and homeless residents of Mandaluyong.  The court thus disposed of as follows:

“WHEREFORE, the Amended Complaint is hereby ordered dismissed without pronouncement as to cost.

SO ORDERED.”[8]

Petitioner moved for reconsideration.  On December 29, 1998, the court denied the motion.  Hence this petition.

Petitioner claims that the trial court erred

“IN UPHOLDING RESPONDENT’S CONTENTION THAT THEY QUALIFY AS SMALL PROPERTY OWNERS AND ARE THUS EXEMPT FROM EXPROPRIATION.”[9]

Petitioner mainly claims that the size of the lots in litigation does not exempt the same from expropriation in view of the fact that the said lots have been declared to be within the Area for Priority Development (APD) No. 5 of Mandaluyong by virtue of Proclamation No. 1967, as amended by Proclamation No. 2284 in relation to Presidential Decree No. 1517.[10] This declaration allegedly authorizes petitioner to expropriate the property, ipso facto, regardless of the area of the land.

Presidential Decree (P.D.) No. 1517, the Urban Land Reform Act, was issued by then President Marcos in 1978.  The decree adopted as a State policy the liberation of human communities from blight, congestion and hazard, and promotion of their development and modernization, the optimum use of land as a national resource for public welfare.[11] Pursuant to this law, Proclamation No. 1893 was issued in 1979 declaring the entire Metro Manila as Urban Land Reform Zone for purposes of urban land reform.  This was amended in 1980 by Proclamation No. 1967 and in 1983 by Proclamation No. 2284 which identified and specified 245 sites in Metro Manila as Areas for Priority Development and Urban Land Reform Zones.

In 1992, the Congress of the Philippines passed Republic Act No. 7279, the “Urban Development and Housing Act of 1992.” The law lays down as a policy that the state,  in cooperation with the private sector, undertake a comprehensive and continuing Urban Development and Housing Program; uplift the conditions of the underprivileged and homeless citizens in urban areas and resettlement areas by making available to them decent housing at affordable cost, basic services and employment opportunities and provide for the rational use and development of urban land to bring about, among others, equitable utilization of residential lands; encourage more effective people's participation in the urban development process and improve the capability of local government units in undertaking urban development and housing programs and projects.[12] Towards this end, all city and municipal governments are mandated to conduct an inventory of all lands and improvements within their respective localities, and in coordination with the National Housing Authority, the Housing and Land Use Regulatory Board, the National Mapping Resource Information Authority, and the Land Management Bureau, identify lands for socialized housing and resettlement areas for the immediate and future needs of the underprivileged and homeless in the urban areas, acquire the lands, and dispose of said lands to the beneficiaries of the program.[13]

The acquisition of lands for socialized housing is governed by several provisions in the law.  Section 9 of R.A. 7279 provides:

“Sec. 9.  Priorities in the Acquisition of Land.—Lands for socialized housing shall be acquired in the following order:

(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas for Priority Development, Zonal Improvement Program sites, and Slum Improvement and Resettlement Program sites which have not yet been acquired;

(e) Bagong Lipunan Improvement of Sites and Services or BLISS Sites which have not yet been acquired;

(f)  Privately-owned lands.

Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities mentioned in this section shall not apply.  The local government units shall give budgetary priority to on-site development of government lands.”

Lands for socialized housing are to be acquired in the following order:  (1) government lands; (2) alienable lands of the public domain; (3) unregistered or abandoned or idle lands; (4) lands within the declared Areas for Priority Development (APD), Zonal Improvement Program (ZIP) sites, Slum Improvement and Resettlement (SIR) sites which have not yet been acquired; (5) BLISS sites which have not yet been acquired; and (6) privately-owned lands.

There is no dispute that the two lots in litigation are privately-owned and therefore last in the order of priority acquisition.  However, the law also provides that lands within the declared APD’s which have not yet been acquired by the government are fourth in the order of priority.  According to petitioner, since the subject lots lie within the declared APD, this fact mandates that the lots be given priority in acquisition.[14]

Section 9, however, is not a single provision that can be read separate from the other provisions of the law.  It must be read together with Section 10 of R.A. 7279 which also provides:

“Section 10. Modes of Land Acquisition.—The modes of acquiring lands for purposes of this Act shall include, among others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, joint-venture agreement, negotiated purchase, and expropriation:  Provided, however, That expropriation shall be resorted to only when other modes of acquisition have been exhausted:  Provided, further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.[15]

For the purposes of socialized housing, government-owned and foreclosed properties shall be acquired by the local government units, or by the National Housing Authority primarily through negotiated purchase:  Provided, That qualified beneficiaries who are actual occupants of the land shall be given the right of first refusal.”

Lands for socialized housing under R.A. 7279 are to be acquired in several modes.  Among these modes are the following: (1) community mortgage; (2) land swapping, (3) land assembly or consolidation; (4) land banking; (5) donation to the government; (6) joint venture agreement; (7) negotiated purchase; and (8) expropriation.  The mode of expropriation is subject to two conditions: (a) it shall be resorted to only when the other modes of acquisition have been exhausted; and (b) parcels of land owned by small property owners are exempt from such acquisition.

Section 9 of R.A. 7279 speaks of priorities in the acquisition of lands.  It enumerates the type of lands to be acquired and the heirarchy in their acquisition.  Section 10 deals with the modes of land acquisition or the process of acquiring lands for socialized housing.  These are two different things.  They mean that the type of lands that may be acquired in the order of priority in Section 9 are to be acquired only in the modes authorized under Section 10.  The acquisition of the lands in the priority list must be made subject to the modes and conditions set forth in the next provision.  In other words, land that lies within the APD, such as in the instant case, may be acquired only in the modes under, and subject to the conditions of, Section 10.

Petitioner claims that it had faithfully observed the different modes of land acquisition for socialized housing under R.A. 7279 and adhered to the priorities in the acquisition for socialized housing under said law.[16] It, however, did not state with particularity whether it exhausted the other modes of acquisition in Section 9 of the law before it decided to expropriate the subject lots.  The law states “expropriation shall be resorted to when other modes of acquisition have been exhausted.” Petitioner alleged only one mode of acquisition, i.e., by negotiated purchase.  Petitioner, through the City Mayor, tried to purchase the lots from respondents but the latter refused to sell.[17] As to the other modes of acquisition, no mention has been made.  Not even Resolution No. 516, Series of 1996 of the Sangguniang Panlungsod authorizing the Mayor of Mandaluyong to effect the expropriation of the subject property states whether the city government tried to acquire the same by community mortgage, land swapping, land assembly or consolidation, land banking, donation to the government, or  joint venture agreement under Section 9 of the law.

Section 9 also exempts from expropriation parcels of land owned by small property owners.[18] Petitioner argues that the exercise of the power of eminent domain is not anymore conditioned on the size of the land sought to be expropriated.[19] By the expanded notion of  public use, present jurisprudence has established the concept that expropriation is not anymore  confined to the vast tracts of land and landed estates, but also covers small parcels of  land.[20] That only a few could actually benefit from the expropriation of the property does not diminish its public use character.[21] It simply is not possible to provide, in one instance, land and shelter for all who need them.[22]

While we adhere to the expanded notion of public use, the passage of R.A. No. 7279, the “Urban Development and Housing Act of 1992” introduced a limitation on the size of the land sought to be expropriated for socialized housing.  The law expressly exempted “small property owners” from expropriation of their land for urban land reform.  R.A. No. 7279 originated as Senate Bill No. 234 authored by Senator Joey Lina[23] and House Bill No. 34310.  Senate Bill No. 234 then provided that one of those lands not covered by the urban land reform and housing program was “land actually used by small property owners within the just and equitable retention limit as provided under this Act.”[24] “Small property owners” were defined in Senate Bill No. 234 as:

“4. Small Property Owners—are those whose rights are protected under Section 9, Article XIII of the Constitution of the Philippines, who own small parcels of land within the fair and just retention limit provided under this Act and which are adequate to meet the reasonable needs of the small property owner’s family and their means of livelihood.”[25]

The exemption from expropriation of lands of small-property owners was never questioned on the Senate floor.[26] This exemption, although with a modified definition, was actually retained in the consolidation of Senate Bill No. 234 and House Bill No. 34310 which became R.A. No. 7279.[27]

The question now is whether respondents qualify as “small property owners” as defined in Section 3 (q) of R.A. 7279.  Section 3 (q) provides:

“Section 3 x x x (q). “Small property owners” refers to those whose only real property consists of residential lands not exceeding three hundred square meters (300 sq.m.) in highly urbanized cities and eight hundred square meters (800 sq.m.) in other urban areas.”

“Small-property owners” are defined by two elements: (1) those owners of real property whose property consists of residential lands with an area of not more than 300 square meters in highly urbanized cities and 800 square meters in other urban areas; and (2) that they do not own real property other than the same.

The case at bar involves two (2) residential lots in Mandaluyong City, a highly urbanized city.  The lot under TCT No. 63766 is 687 square meters in area and the second under TCT No. 63767 is 949 square meters, both totalling 1,636 square meters in area.  TCT No. 63766 was issued in the names of herein five (5) respondents, viz:

“FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; all of legal age, Filipinos.”[28]

TCT No. 63767 was issued in the names of the five (5) respondents plus Virginia Aguilar, thus:

“FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; and VIRGINIA N. AGUILAR, single, all of legal age, Filipinos.”[29]

Respondent Antonio Aguilar testified that he and the other registered owners are all siblings who inherited the subject property by intestate succession from their parents.[30] Their father died in 1945 and their mother in 1976.[31] Both TCT’s were issued in the siblings’ names on September 2, 1987.[32] In 1986, however, the siblings agreed to extrajudicially partition the lots among themselves, but no action was taken by them to this end.  It was only eleven (11) years later, on November 28, 1997 that a survey of the two lots was made[33] and on February 10, 1998, a consolidation subdivision plan was approved by the Lands Management Service of the Department of Environment

and Natural Resources.[34] The co-owners signed a Partition Agreement on February 24, 1998[35] and on May 21, 1998, TCT Nos. 63766 and 63767 were cancelled and new titles issued in the names of the individual owners pursuant to the Partition Agreement.

Petitioner argues that the consolidation of the subject lots and their partition was made more than six (6) months after the complaint for expropriation was filed on August 4, 1997, hence, the partition was made in bad faith, for the purpose of circumventing the provisions of R.A. 7279.[36]

At the time of filing of the complaint for expropriation, the lots subject of this case were owned in common by respondents.  Under a co-ownership, the ownership of an undivided thing or right belongs to different persons.[37] During the existence of the co-ownership, no individual can claim title to any definite portion of the community property until the partition thereof; and prior to the partition, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire land or thing.[38] Article 493 of the Civil Code however provides that:

“Art. 493.  Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved.  But the effect of the alienation or the mortgage, with respect to the co-owners shall be limited to the portion which may be allotted to him in the division upon termination of the co-ownership.”[39]

Before partition in a co-ownership, every co-owner has the absolute ownership of his undivided interest in the common property.  The co-owner is free to alienate, assign or mortgage his interest, except as to purely personal rights.[40] He may also validly lease his undivided interest to a third party independently of the other co-owners.[41] The effect of any such transfer is limited to the portion which may be awarded to him upon the partition of the property.[42]

Article 493 therefore gives the owner of an undivided interest in the property the right to freely sell and dispose of his undivided interest.[43] The co-owner, however, has no right to sell or alienate a concrete specific or determinate part of the thing owned in common, because his right over the thing is represented by a quota or ideal portion without any physical adjudication.[44] If the co-owner sells a concrete portion, this, nonetheless, does not render the sale void.  Such a sale affects only his own share, subject to the results of the partition but not those of the other co-owners who did not consent to the sale.[45]

In the instant case, the titles to the subject lots were issued in respondents’ names as co-owners in 1987—ten (10) years before the expropriation case was filed in 1997.  As co-owners, all that the respondents had was an ideal or abstract quota or proportionate share in the lots.  This, however, did not mean that they could not separately exercise any rights over the lots.  Each respondent had the full ownership of his undivided interest in the property.  He could freely sell or dispose of his interest independently of the other co-owners.  And this interest could have even been attached by his creditors.[46]The partition in 1998, six (6) months after the filing of the expropriation case, terminated the co-ownership by converting into certain and definite parts the respective undivided shares of the co-owners.[47] The subject property is not a thing essentially indivisible.  The rights of the co-owners to have the property partitioned and their share in the same delivered to them cannot be questioned for "[n]o co-owner shall be obliged to remain in the co-ownership."[48] The partition was merely a necessary incident of the co-ownership;[49] and absent any evidence to the contrary, this partition is presumed to have been done in good faith.

Upon partition, four (4) co-owners, namely, Francisco, Thelma, Rodolfo and Antonio Aguilar each had a share of 300 square meters under TCT Nos. 13849, 13852, 13850, 13851.[50] Eusebio Aguilar’s share was 347 square meters under TCT No. 13853[51] while Virginia Aguilar’s was 89 square meters under TCT No. 13854.[52]

It is noted that Virginia Aguilar, although granted 89 square meters only of the subject lots, is, at the same time, the sole registered owner of TCT No. 59780, one of the three (3) titles initially sought to be expropriated in the original complaint.  TCT No. 59780, with a land area of 211 square meters, was dropped in the amended complaint.  Eusebio Aguilar was granted 347 square meters, which is 47 square meters more than the maximum of 300 square meters set by R.A. 7279 for small property owners.  In TCT No. 13853, Eusebio’s title, however, appears the following annotation:

“… subject to x x x, and to the prov. of Sec. 4 Rule 74 of the Rules of Court with respect to the inheritance left by the deceased Eusebio N. Aguilar.”[53]

Eusebio died on March 23, 1995,[54] and, according to Antonio’s testimony, the former was survived by five (5) children.[55] Where there are several co-owners, and some of them die, the heirs of those who die, with respect to that part belonging to the deceased, become also co-owners of the property together with those who survive.[56] After Eusebio died, his five heirs became co-owners of his 347 square-meter portion.  Dividing the 347 square meters among the five entitled each heir to 69.4 square meters of the land subject of litigation.

Consequently, the share of each co-owner did not exceed the 300 square meter limit set in R.A. 7279.  The second question, however, is whether the subject property is the only real property of respondents for them to comply with the second requisite for small property owners.

Antonio Aguilar testified that he and most of the original co-owners do not reside on the subject property but in their ancestral home in Paco, Manila.[57] Respondents therefore appear to own real property other than the lots in litigation.  Nonetheless, the records do not show that the ancestral home in Paco, Manila and the land on which it stands are owned by respondents or any one of them. Petitioner did not present any title or proof of this fact despite Antonio Aguilar’s testimony.

On the other hand, respondents claim that the subject lots are their only real  property[58] and  that  they, particularly two of the five heirs of Eusebio Aguilar, are merely  renting their houses and therefore do not own any other real property in Metro Manila.[59] To prove this, they submitted certifications from the offices of the City and Municipal Assessors in Metro Manila attesting to the fact that they have no registered real property declared for taxation purposes in the respective cities.  Respondents were certified by the City Assessor of Manila;[60] Quezon City;[61] Makati City;[62] Pasay City;[63] Paranaque;[64]Caloocan City;[65] Pasig City;[66] Muntinlupa;[67] Marikina;[68] and the then municipality of Las Piñas[69] and the municipality of San Juan del Monte[70] as having no real property registered for taxation in their individual names.

Finally, this court notes that the subject lots are now in the possession of respondents.  Antonio Aguilar testified that he and the other co-owners filed ejectment cases against the occupants of the land before the Metropolitan Trial Court, Mandaluyong, Branches 59 and 60.  Orders of eviction were issued and executed on September 17, 1997 which resulted in the eviction of the tenants and other occupants from the land in question.[71]

IN VIEW WHEREOF, the petition is DENIED and the orders dated September 17, 1998 and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City in SCA No. 1427 are AFFIRMED.

SO ORDERED.

G.R. No. 104786 January 27, 1994Alfredo Patalinghug vs CA, Ricardo Cribillo, Martin Arapol, Corazon Alcasid, Primitiva Sedo

TOPIC: General Powers of Local Government UnitsFACTS:

On November 17, 1982, the Sangguniang Panglungsod of Davao city enacted Ordinance No. 363 or otherwise known as the "Expanded Zoning Ordinance of Davao City." Section 8 of said ordinance states that:

Sec. 8. USE REGULATIONS IN C-2 DISTRICTS (Shaded light red in the Expanded Zoning Map) — AC-2 District shall be dominantly for commercial and compatible industrial uses as provided hereunder:xxx xxx xxxxxx xxx xxx3.1 Funeral Parlors/Memorial Homes with adequate off street parking space (see parking standards of P.D. 1096) and provided that they shall be established not less

than 50 meters from any residential structures, churches and other institutional buildings. (Emphasis provided)

Upon the approval of his certification of compliance of said zoning ordinance and building permit, petitioner commenced in constructing his funeral home, Metropolitan Funeral Parlor, at Cabaguio Avenue, Agdao, Davao city.

Several residents then filed a complaint regarding such construction stating that petitioner violated Ordinance No. 363 since the said funeral parlor was located within a 50-meter radius from the Iglesia ni Kristo chapel and several resident structures. The Sangguniang Panlungsod conducted an investigation based on the complaint and found that a residential structure owned by Mr. Wilfred Tepoot was only 8 inches to the south of the funeral parlor. Nevertheless, petitioner still continued with the construction and was finished by November of 1987.

Private respondents herein filed on September 6, 1988 a case for the declaration of nullity of the building permit with preliminary prohibitory and mandatory injunction and/or restraining order with the trial court. The trial court rendered its decision, dismissing the said complaint. The trial court based such dismissal according to their own ocular inspection, stating that Iglesia Ni Cristo chapel and a building owned by Cribillo was more than 50 meters away from the funeral parlor. Furthermore, the residential building owned by Mr. Teepot, although only inches away from the said structure, was being rented by a certain Mr. Asiaten, who actually uses such for his laundry business. Such building was considered an industrial one. Respondent’s suit was also considered premature as they failed to exhaust all the administrative remedies provided by the Ordinance. Respondents appealed the said decision to the Court of Appeals, which reversed the decision of the lower court stating that although the buildings owned by Iglesia and Cribillo were beyond the 50 meter radius, still, the said structure was constructed within the 50 meter radius measured from Teepot’s building. The CA still considered Teepot’s building as a residential building evidenced by the tax declarations submitted.

ISSUE: Whether or not Mr. Patalinghug's operation of a funeral home constitutes permissible

use within a particular district or zone in Davao City.

RULING:

Petitioner did not violate Section 8 of Ordinance No. 363. The question on whether or not Mr. Teepot’s building is residential or not was already resolved by the lower court and said resolution is considered binding. Examining the testimony of Councilor Vergara, it shows that the said building was used for dual purpose, both as a dwelling place and as a laundry shop. Its use as a residence however was not fully substantiated.

Furthermore, a tax declaration is not conclusive of the nature of the property for zoning purposes; “A property may have been declared by its owner as residential for real estate taxation purposes but it may well be within a commercial zone.” The evidentiary value of a tax declaration under the Real Property Tax Code states that “a tax declaration only enables the assessor to identify the same for assessment levels.” Said tax declaration

does not bind assessors since appraisal and assessment are based on the actual use of the said property.

Once the government has reclassified an area as commercial, as what Ordinance 363 was implemented for, the determination for zoning purposes must prevail. The declaration of the said area as a commercial zone is in accordance with the exercise of police power by the Sangguniang Panglungsod to promote the good order and general welfare of its constituents.

FORTICH vs. CORONA298 SCRA 678

Facts:

This pertains to the two (2) separate motions for reconsiderationfiled by herein respondent and the applicants for intervention,seeking a reversal of our April 24, 1998 Decision nullfying theso-called "win-win" Resolution dated November 7, 1997, issued by theOffice of the President in O.P. Case No. 96-C-6424, and denying theapplicants Motion For Leave To Intervene.

The issue in this case stems from a proposed agro-economicdevelopment of the disputed land which the province of Bukidnon andthe municipality of Sumilao, Bukidnon intend to undertake. Expressingfull support for the proposed project, the Sangguniang Bayan ofSumilao, Bukidnon on March 4, 1193 enacted Ordinance No. 24 convertingor reclassifying the subject 144-hectare land from agricultural toindustrial/institutional use. It was intended to provide anopportunity to attract investors, who can inject new economicvitality, provide more jobs and raise the income of its people.Bukidnon Provincial Board also supported the said project.

Issue: Whether or not the power of the local government units toreclassify lands is subject to the approval of the Department ofAgrarian Reform (DAR)

Held:

Local Government Units need not obtain the approval of the DAR toconvert or reclassify lands from agricultural to non-agricultural use.It should be stressed that when the March 29, 1996 OP Decision wasdeclared final and executory, vested rights were acquired by theherein petitioners, namely, the province of Bukidnon, the municipalityof Sumilao, Bukidnon, and the NQSR Management and DevelopmentCorporations, and all others who should be benefited by the saiddecision. The issue here is not a question of technicality but that ofsubstance and merit. Whether the Sangguniang Bayan of Sumilao has thelegal authority to reclassify the land into industrial/institutionaluse, the March 29, 1996 OP Decision has thoroughly and properlydisposed the issue. Converting the land in question from agriculturalto agro-industrial would open great opportunities for employment andbring about real development in the area towards a sustained economic

growth of the municipality.

Procedural lapses in the manner of identifying/reclassifying thesubject property for agro-industrial purposes cannot be allowed todefeat the very purpose of the law granting autonomy to localgovernment units in the management of their local affairs. Stated moresimply, the language of Section 20 of R.A. No. 7160 is clear andaffords no room for any other interpretation. By unequivocal legalmandate, it grants local governments units autonomy in their localaffairs including the power to convert portions of their agriculturallands and provide for the manner of their utilization and dispositionto enable them to attain their fullest development as self-reliantcommunities.

Macasiano v. Diokno

Facts:

On 13 June 1990, the Municipality of Paranaque passed Ordinance 86, s. 1990 which authorized the closure of J. Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at Baclaran, Parañaque, Metro Manila and the establishment of a flea market thereon. The said ordinance was approved by the municipal council pursuant to MCC Ordinance 2, s. 1979, authorizing and regulating the use of certain city and/or municipal streets, roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and conditions. On 20 July 1990, the Metropolitan Manila Authority approved Ordinance 86, s. 1990 of the municipal council subject to conditions. On 20 June 1990, the municipal council issued a resolution authorizing the Parañaque Mayor to enter into contract with any service cooperative for the establishment, operation, maintenance and management of flea markets and/or vending areas. On 8 August 1990, the municipality and Palanyag, a service cooperative, entered into an agreement whereby the latter shall operate, maintain and manage the flea market with the obligation to remit dues to the treasury of the municipal government of Parañaque. Consequently, market stalls were put up by Palanyag on the said streets. On 13 September 1990 Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. Gabrielle St. in Baclaran. These stalls were later returned to Palanyag. On 16 October 1990, Macasiano wrote a letter to Palanyag giving the latter 10 days to discontinue the flea market; otherwise, the market stalls shall be dismantled.

On 23 October 1990, the municipality and Palanyag filed with the trial court a joint petition for prohibition and mandamus with damages and prayer for preliminary injunction. On 17 December 1990, the trial court issued an order upholding the validity of Ordinance 86 s. 1990 of the Municipality of Parañaque and enjoining Macasiano from enforcing his letter-order against Palanyag. Hence, a petition for certiorari under Rule 65 was filed by Macasiano thru the OSG.

Issue:

Whether or not an ordinance or resolution issued by the municipal council of Parañaque authorizing the lease and use of public streets or thoroughfares as sites for flea markets is valid?

Held:

The property of provinces, cities and municipalities is divided into property for public use and patrimonial property (Art. 423, Civil Code). As to property for public use, Article 424 of Civil Code provides that "property for public use, in the provinces, cities and municipalities, consists of the provincial roads, city streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities or municipalities. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws." In the present case, thus, J. Gabrielle G.G. Cruz, Bayanihan, Lt. Gacia Extension and Opena streets are local roads used for public service and are therefore considered public properties of the municipality. Properties of the local government which are devoted to public service are deemed public and are under the absolute control of Congress. Hence, local government have no authority whatsoever to control or regulate the use of public properties unless specific authority is vested upon them by Congress.

G.R. No. L40474 August 29, 1975

CEBU OXYGEN & ACETYLENE CO., INC., petitioner, vs.HON. PASCUAL A. BERCILLES Presiding Judge, Branch XV, 14th Judicial District, and JOSE L. ESPELETA, Assistant Provincial Fiscal, Province of Cebu, representing the Solicitor General's Office and the Bureau of Lands, respondents.

Jose Antonio R Conde for petitioner.

Office of the Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Octavio R. Ramirez and Trial Attorney David R. Hilario for respondents. .

 

CONCEPCION, Jr., J.:

This is a petition for the review of the order of the Court of First Instance of Cebu dismissing petitioner's application for registration of title over a parcel of land situated in the City of Cebu.

The parcel of land sought to be registered was only a portion of M. Borces Street, Mabolo, Cebu City. On September 23, 1968, the City Council of Cebu, through Resolution No. 2193, approved on October 3, 1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu City, as an abandoned road, the same not being included in the City Development Plan. 1 Subsequently, on December 19, 1968, the City Council of Cebu passed Resolution No. 2755, authorizing the Acting City Mayor to sell the land through a public bidding. 2 Pursuant thereto, the lot was awarded to the herein petitioner being the highest bidder and on March 3, 1969, the City of Cebu, through the Acting City Mayor, executed a deed of absolute sale to the herein petitioner for a total consideration of P10,800.00. 3 By virtue of the aforesaid deed of absolute sale, the petitioner filed an application with the Court of First instance of Cebu to have its title to the land registered. 4

On June 26, 1974, the Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application on the ground that the property sought to be registered being a public road intended for public use is considered part of the public domain and therefore outside the commerce of man. Consequently, it cannot be subject to registration by any private individual. 5

After hearing the parties, on October 11, 1974 the trial court issued an order dismissing the petitioner's application for registration of title. 6 Hence, the instant petition for review.

For the resolution of this case, the petitioner poses the following questions:

(1) Does the City Charter of Cebu City (Republic Act No. 3857) under Section 31, paragraph 34, give the City of Cebu the valid right to declare a road as abandoned? and

(2) Does the declaration of the road, as abandoned, make it the patrimonial property of the City of Cebu which may be the object of a common contract?

(1) The pertinent portions of the Revised Charter of Cebu City provides:

Section 31. Legislative Powers. Any provision of law and executive order to the contrary notwithstanding, the City Council shall have the following legislative powers:

xxx xxx xxx

(34) ...; to close any city road, street or alley, boulevard, avenue, park or square. Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed.

From the foregoing, it is undoubtedly clear that the City of Cebu is empowered to close a city road or street. In the case of Favis vs. City of Baguio, 7 where the power of the city Council of Baguio City to close city streets and to vacate or withdraw the same from public use was similarly assailed, this court said:

5. So it is, that appellant may not challenge the city council's act of withdrawing a strip of Lapu-Lapu Street at its dead end from public use and converting the remainder thereof into an alley. These are acts well within the ambit of the power to close a city street. The city council, it would seem to us, is the authority competent to determine whether or not a certain property is still necessary for public use.

Such power to vacate a street or alley is discretionary. And the discretion will not ordinarily be controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust will be presumed. So the fact that some private interests may be served incidentally will not invalidate the vacation ordinance.

(2) Since that portion of the city street subject of petitioner's application for registration of title was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract.

Article 422 of the Civil Code expressly provides that "Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State."

Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear and unequivocal terms, states that: "Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed."

Accordingly, the withdrawal of the property in question from public use and its subsequent sale to the petitioner is valid. Hence, the petitioner has a registerable title over the lot in question.

WHEREFORE, the order dated October 11, 1974, rendered by the respondent court in Land Reg. Case No. N-948, LRC Rec. No. N-44531 is hereby set aside, and the respondent court is hereby ordered to proceed with the hearing of the petitioner's application for registration of title.

SO ORDERED.

Favis vs. City of Baguio

Municipal Corporation – Damnum Absque Injuria – Patrimonial Property – Discretionary Power

Favis owns a parcel of land fronting Lapu-Lapu street in Baguio City. There is an 8 meter wide passage

from his property to the street. In 1961, the city authorized a new contract of lease between it and

Shell. The contract stipulated a widened lot for Shell to build its structure and this necessitates the

taking of at least 4 meters from the 8 meter wide passage being used by Favis. Favis assailed this

contract. There was also a law in place that time stating that streets and roads should be not less than

10 meters (but existing roads which are less than 10 meters are retained to avoid massive expenses in

expropriation cases in case the 10 meter is strictly imposed). Said law is argued by Favis to be

violated.

Favis also argues that the city council does not have the power to close city streets like Lapu-Lapu

Street. He asserts that since municipal bodies have no inherent power to vacate or withdraw a street

from public use, there must be a specific grant by the legislative body to the city or municipality

concerned.

ISSUE: Whether or not the City can withdraw parts of a street from public use and use the remainder

as a mere alley.

HELD: Yes. Looking at the city’s charter, the city is empowered to close a city street (Section 2557 of

Revised Administrative Code – Baguio Charter). Considering that “municipal corporations in

the Philippines are mere creatures of Congress; that, as such, saidcorporations possessed, and may

exercise, only such power as Congress may deem fit to grant thereto”,  as what actually happened in

the case at bar, the city was granted such power via its charter. Favis may not challenge the city

council’s act of withdrawing a strip of Lapu-Lapu Street at its dead end from public use and converting

the remainder thereof into an alley. These are acts well within the ambit of the power to close a city

street. The city council is the authority competent to determine whether or not a certain property is

still necessary for public use or public service (patrimonial property).  Such power to vacate a street or

alley is discretionary. And the discretion will not ordinarily be controlled or interfered with by the

courts, absent a plain case of abuse or fraud or collusion. Favis, being a property owner in city,

recognizes when he bought said property that is after such buying of property the city authorities

abandon a portion of the street to which his property is not immediately adjacent, he may suffer loss

because of the inconvenience imposed, but the public treasury cannot be required to recompense him.

Such case is damnum absque injuria.

G.R. No. L-16351             June 30, 1964

CALAPAN LUMBER COMPANY, INC., plaintiff-appellee, vs.COMMUNITY SAWMILL COMPANY, ET AL., defendants-appellants.

Ferdinand E. Marcos for plaintiff-appellee.Salvador H. Laurel and Exequiel S. Consulta for defendants-appellants.

PADILLA, J.:

This is an action for injunction, prohibition against defendant public officers, compensatory, exemplary and nominal damages, attorney's fees and costs.

All the defendants prayed in their respective answers for the dismissal of the second amended complaint, in addition to their counterclaim.

After trial, the Court of First Instance of Oriental Mindoro rendered judgment, the dispositive part of which reads:

WHEREFORE, this Court renders judgment:

1. Finding:

(a) That the road and bridge in question, known as the Biga-Communal-Goob (from Km. 12.38 to 15.88) was constructed during the period from 1950 to 1952 by the plaintiff at its exclusive expense with the knowledge and consent of the Provincial Board of Oriental Mindoro;

(b) That before actual construction of said road and bridge the personnel of the Office of the District Engineer surveyed the lay-out of the road to be constructed, also at the expense of the plaintiff;

(c) That before the actual construction of the road in question the plaintiff secured and used road-right-of-way agreements (Exhs. Y, Y-1 to Y-7 and Z-AA), executed in favor of the plaintiff by the owners of the several portions of land traversed by said road;

(d) That from the completion of the road up to the present the plaintiff has been contributing to the repair and maintenance of the said road such as stones, gravel, sand and lumber at its own expense;

(e) That since the completion of the road in question (to) the same has been used by the public without any restriction with the written consent of the plaintiff as embodied in Resolutions Nos. 222 (Exh. A) and 119 (Exh. B), with the exception of logging and lumber concerns who might use the road with the permission of the plaintiff;

(f) That Lao Kee (alias Lu Pong), Lee Cok Tan Hong, Tan Kian, Co Giac, Tan Hong Chian Hian, Tan Tak Tiao, Kick Chia and the Community Sawmill Company had used the road and bridge in question sometime before April 6, 1953, until the issuance of the writ of preliminary injunction of June 25, 1953, manifest bad faith;

2. Declaring:

(a) That Resolution No. 186, series of 1953, marked Exh. C, is valid insofar as it repealed Resolution No. 222, series of 1953; marked Exh. "A", and Resolution No. 119, series of 1953, marked Exh. B;

(b) That Resolution No. 186, series of 1953, marked Exh. C. insofar as it declared that the road and bridge in question, public is null and void the same being in violation of Sec. 2131 of the Revised Administrative Code;

(c) That the road and bridge in question are of private ownership belonging to the plaintiff;

(d) That the said defendant Lao Kee (alias Lu Pong), Lee Cok, Tan Hong, Tan Kian, Co Giac, Tan Hong, Chia Hian, Tan Tak Tiao, Kiok Chia and Community Sawmill did not have the right to use the road and bridge in question;

3. Ordering:

(a) That the writ of preliminary injunction issued against the Community Sawmill Company be made permanent, perpetually restraining the said defendants Lao Kee (alias Lu Pong), Lee Cok, Tan Hong, Tan Kian, Co Giac, Tan Hong Chia Hian, Tan Tak Tiao, Kiok Chia and Community Sawmill Company, their agents, attorneys, or other persons or entities from acting on their behalf;

(b) The same defendants named in the immediately preceding paragraph to pay jointly and severally to the plaintiff the sum of P10,000.00 as attorney's fees and to pay the costs;

4. Absolving from the third amended complaint the defendants Marciano Roque, Pablo Lorenzo, Isaias Fernando, Francisco Infantado, Bernabe Jamilla and Cenon C. Laurena;

5. Dismissing all the counterclaims filed by the defendants for lack of sufficient merits. (Civil Case No. R-542)

From the judgment thus rendered, the defendants Lao Kee (alias Lu Pong), Lee Cok Tan Hong, Tan Kian, Co Giac, Chia Hian, Tan Tak Tiao, Kiok Chia, all acting under the name and style of Community Sawmill Company, appealed to this Court. They claim that the trial court committed the following errors:

1. The lower court erred in holding that the road in question is a private road and that, therefore, plaintiff could legally deny its use to herein appellants.

2. The lower court erred in ordering herein appellants to pay plaintiff attorney's fees.

3. The lower court erred in holding that plaintiff can recover expenses of litigation under article 2208 of the Civil Code.

4. The lower court erred in not dismissing the complaint and finding for herein appellants on their counterclaim.

At the trial, the parties submitted to the Court a stipulation of facts which reads:

1. That the parties agree to the existence and authenticity of the following resolutions which were passed by the Provincial Board of Oriental Mindoro, as follows:

(a) Resolution No. 222, Series of 1950 (Annex "A" of the Third Amended Complaint), but not its regularity and validity, which must be proven;

(b) Resolution No. 119, Series of 1953 (Annex "B" of the Third Amended Complaint);

(c) Resolution No. 186, Series of 1955, revoking Resolutions Nos. 222, Series of 1950 and 119, Series of 1953, of the Provincial Board, granting the Calapan Lumber Company the exclusive right under certain conditions to use the Biga-Communal-Goob road for a period of twenty (20) years, and declaring said road as a toll road.

2. That the parties agree as to the existence and authenticity of the following official communications, indorsements and letters re the Biga-Communal-Goob road:

(a) letter dated March 20, 1953 addressed to the Hon. Executive Secretary, signed by Rodolfo Naguit and Joe Ong, both representatives of the Community Sawmill Company:

(b) 1st Indorsement of Assistant Executive Secretary Lucas Madamba, dated March 21, 1953 (Annex "C", Third Amended Complaint);

(c) 2nd Indorsement of Governor Infantado dated March 23, 1953;

(d) 3rd Indorsement of District Engineer C. C. Laurena dated March 26, 1953;

(e) 4th Indorsement of Governor Infantado dated March 28, 1953;

(f) Letter of Rodolfo G. Naguit, representative of the Community Sawmill Company, dated May 4, 1953 and addressed to the Assistant Executive Secretary, Office of the President;

(g) Letter of Atty. Ferdinand E. Marcos, counsel for the plaintiff company addressed to Executive Secretary Marciano Roque, dated May 21, 1953 (Annex "F", Third Amended Complaint);

(h) 7th Indorsement of Director of Public Works, Isaias Fernando, dated April 20, 1953 (Annex "D", Third Amended Complaint);

(i) 8th Indorsement of Undersecretary Vicente Orosa, dated April 25, 1953;

(j) 9th Indorsement of Executive Secretary Marciano Roque dated May 11, 1953 (Annex "E", Third Amended Complaint);

(k) 3rd Indorsement of Acting Executive Secretary Marciano Roque, dated July 8, 1953 and the 4th Indorsement of Undersecretary Vicente Orosa, dated July 16, 1953;

(l) 1st Indorsement of Acting Executive Secretary Marciano Roque, dated July 17, 1953.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1äwphï1.ñët

x x x           x x x           x x x

Resolution No. 222, adopted 4 December 1950, reads:

Whereas, there is at present an unfinished provincial road in the barrio of Viga, of the municipality of Calapan, known as the Viga-Communal-Goob Road, the construction of which could not be undertaken by the province due to insufficiency of funds;

Whereas, the Calapan Lumber Co., Inc., through its President, Mr. D. M. Gotauco, in a letter addressed to the Governor of this province has made representations to undertake the construction of said road under certain conditions; and

Whereas, the province is willing to accede to the request of the Calapan Lumber Co., Inc. and to give it the sole right for its use, provided that after a period of twenty (20) years, said company shall donate to the province the road it had constructed, provided further that during the said period of 20 years other concerns dealing in logs and/or lumber may use the same road upon permission granted to them by the said Calapan Lumber Co., Inc.; and provided finally that said road is open to all non-logging concerns or individuals during the said period of 20 years. Now, therefore, be it

RESOLVED, That the Provincial Board of Oriental Mindoro grants, as hereby is granting, the Calapan Lumber Co., Inc. to undertake the construction of the unfinished provincial road in the barrio of Viga,

municipality of Calapan, known as the Viga-Communal-Goob Road, subject to the stipulations stated above; and

RESOLVED FURTHER, That copies of this resolution be furnished the District Engineer and the Calapan Lumber Co., Inc., through its President, Mr. D. M. Gotauco, for their information.

x x x           x x x           x x x

Resolution No. 119, adopted 6 April 1953, reads:

Whereas, under Resolution No. 222, series of 1950, the Provincial Board of Oriental Mindoro under the former administration, granted the Calapan Lumber Co., Inc. the right to undertake the construction of the unfinished Viga-Communal-Goob provincial road the sole right for its use, under the following conditions:

(1) That after a period of twenty (20) years, said company shall donate to the province the road it had constructed;

(2) That during the said period of 20 years other concerns dealing in logs and/or lumber may use the same road upon permission granted to them by the Calapan Lumber Co.; and

(3) That said road is open to all non-logging concerns or individuals during the said period of 20 years.

Whereas, according to the records of the Provincial Board the said resolution has not been amended or modified up to the present, and, therefore, the same is still in force and binding as per agreement stipulated therein;

Whereas, this Board has received reliable information to the effect that another certain lumber company is attempting to use, or has actually used the same road, by allowing to pass thru it its heavy trucks and tractors without securing any permission from the Calapan Lumber Co., Inc., to the detriment and prejudice of the interests of the latter lumber company which shouldered the cost of its completion in accordance with the rights granted to it by the province; and

Whereas, after a careful consideration of the matter this Board is of the opinion that the right of the Calapan Lumber Co., Inc. over the said road as stipulated in the condition set forth in the resolution must be upheld for obvious reasons; Now, therefore, be it

RESOLVED by the Provincial Board of Oriental Mindoro to authorize, as it hereby authorizes, the Calapan Lumber Company, Inc., to prohibit the use of the Viga-Communal-Goob provincial road, from point Km. 12.38 up to Km. 15.88 of said road, by any other concern or company dealing in logs and/or lumber, without the permission or consent of the said Calapan Lumber Co., Inc. in accordance with one of the stipulations or conditions agreed upon in Resolution No. 222, series of 1950, of the Provincial Board; and

RESOLVED, FURTHER, That the District Engineer and the Calapan Lumber Co., Inc. be furnished with copies of this resolution, for their information.

x x x           x x x           x x x

Resolution No. 186, adopted 19 June 1953, reads:

REVOKING RESOLUTIONS NOS. 222, SERIES OF 1950, AND 119, SERIES OF 1953, OF THE PROVINCIAL BOARD, GRANTING THE CALAPAN LUMBER COMPANY THE EXCLUSIVE RIGHT

UNDER CERTAIN CONDITIONS TO USE THE VIGA-COMMUNAL-GOOB PROVINCIAL ROAD FOR A PERIOD OF TWENTY (20) YEARS.

Whereas, under Resolution No. 222, series of 1950, the Provincial Board of Oriental Mindoro, under the former provincial administration, granted the Calapan Lumber Co., Inc. an authority to undertake the construction of the unfinished Viga-Goob provincial road from Point Km. 12.38 to Km. 15.88, and the exclusive right for its use, under certain conditions;

Whereas, on April 6, 1953, this Board passed another resolution (119) maintaining the right of the Calapan Lumber Co., Inc. over the said road under the conditions stipulated in the above-cited resolution No. 222, and forthwith authorized the said company to prohibit the use of the portion of said road constructed at its expense by any other concern or company dealing in logs or lumber without its permission;

Whereas, in a 9th Indorsement dated May 11, 1953, the pertinent parts of which are quoted hereunder, the Honorable, the Executive Secretary to whom the case regarding this matter was appealed for decision, and upon the recommendation of the Director of Public Works and with the concurrence of the Undersecretary of Public Works and Communications, ruled that provincial roads are considered as properties for public use and the Provincial Board may not therefore grant the exclusive use thereof to any private individual or entity which would discriminate against or exclude the general public from a reasonable use thereof, and therefore, the resolution in question should be revoked.

In this connection, it should be stated that Provincial roads are properties for public use and the provincial board may not grant the exclusive use thereof to any private individual or entitle or enter into a contract or agreement which would tend to discriminate against or exclude the general public from a reasonable use thereof. Resolutions Nos. 222, series of 1950, and 119, series of 1953, of the Provincial Board, granting the Calapan Lumber Company an exclusive right to use the said road for a period of twenty (20) year and to prohibit lumber or logging concerns from using the road in question without the company's permission, should therefore be revoked. In consonance with the policy of the law, and as correctly the suggested by the Director of Public Works and the Undersecretary of Public Works and Communications the portion of the Viga-Communal Road from Km. 12.38 to 15.89, having a length of 3.5 kilometers, should be declared a toll road in order to raise funds for its maintenance and with which to reimburse the Calapan Lumber Company for the expenses the latter had incurred in the construction of this portion of the road.

Whereas, in view of the said ruling, this Board has been requested to take immediate action on the matter to declare the above-said portion of the Viga-Communal-Goob provincial road as a toll road; and,

Whereas, according to an estimate made by the office of the District Engineer the Calapan Lumber Company has spent for the construction of the portion of the road in question having a length of 3.5 kilometers, the amount of P25,000.00 more or less; Now, therefore, be it —

RESOLVED, That Resolutions Nos. 222, series of 1950, and 119, series of 1953, of the Provincial Board, which grant the Calapan Lumber Co., Inc., the exclusive right to use the Viga-Communal-Goob provincial road for a period of 20 years, under certain conditions, be, and hereby are, revoked;

RESOLVED, FURTHER, That the portion of said Viga-Communal-Goob provincial road, from Point Km. 12.38 up to Km. 15.88 thereof, be and hereby is, declared PROVINCIAL TOLL ROAD, under the provisions of section 2131 of the Revised Administrative Code;

RESOLVED, FURTHERMORE, That the following toll rates to be paid by any motor vehicle for the use of the provincial road be, and hereby are, fixed, effective today, June 19, 1953, the proceeds from which shall be used for the maintenance of the said road and the balance thereof for the

reimbursement to the said company for the expenses it had incurred in the construction for said portion of the road:

For every truck, one way P1.00 For every weapon carrier, one way .60 For every jeepney .30

PROVIDED, however, that the portion of the road declared herein as provincial toll road shall continue to be so up to and until the amount spent by the Calapan Lumber Company for its construction shall have been covered by reimbursement to said company; and

RESOLVED, FINALLY, That copies of this resolution be forwarded to His Excellency, the President of the Philippines, thru the Director of Public Works and the Honorable, the Secretary of Public Works and Communications, Manila.

x x x           x x x           x x x

Resolution No. 169, adopted 21 April 1956, revoked Resolution No. 186 in so far as it declared Provincial Toll Road that part of the road invoked in this case.

There seems to be no doubt that Resolutions Nos. 222 and 119, adopted by the Provincial Board of Oriental Mindoro quoted above, mere ultra vires, because sections 2067 (f) and (g) on powers of the provinces as political bodies corporate; 2102 (g) on powers of the provincial boards; 2106 (f) on powers of the provincial boards to be exercised with the approval of the Department Head; and 2113 (a) on road and bridge fund, of the Revised Administrative Code, do not authorize the Provincial Board of Oriental Mindoro to pass and adopt said resolutions. The contention that the Provincial Board of Oriental Mindoro under section 2106 (g) invoked by the appellee is authorized to pass those resolutions Nos. 222 and 199 quoted above, is untenable because said paragraph of the section authorizes the Provincial Board "to permit, upon favorable recommendation by the Secretary of Public Works and Communications, and subject to such conditions as may properly protect the public interests, the construction and maintenance, for private use of railways, conduits, and telephone lines across public thoroughfares, streets, roads, or other public property and in the province: Provided, That such construction and private use shall not prevent or obstruct the public use of such thoroughfares, streets, roads or other public property and that the permit granted shall at all times be subject to revocation by the Secretary of the Interior, if, in the judgment of that official, the public interest requires it." Consequently, Resolution No. 186 revoking the two previous resolutions was in order.

The road known as the Viga-Communal-Goob connecting two finished or completed parts of the provincial road, from kilometer 12.38 to 15.88, as laid out by the personnel of the office of the District Engineer was planned or intended to be laid out and constructed by the Provincial Government of Oriental Mindoro to complete said road. The fact that the survey, lay-out and actual construction of the unfinished part of the road were done at the appellee's expense, does not convert said road after construction into a private road, for it does not appear that the parts of the land where the road was laid out and constructed belong to or are owned by the appellee. The evidence shows that the owners of such parts of land ceded their parts of the land owned by them without any consideration because of their desire to have the road completed or to connect the ends of two completed parts of the road. It may be conceded that the appellee built the road in question in good faith; and such being the case, it may be argued that the appellee is entitled to keep or have possession of the road until after it shall have been reimbursed of the expenses it had incurred in constructing and maintaining the road in good condition. The provisions of the Civil Code on the right of a builder in good faith on a private land1 cannot be invoked and applied to the road in question, because public interest is involved and the people living in that part of the province are entitled to use the road.

It is true that that part of the Resolution No. 186 above quoted converting the road in question into toll road contravenes section 2131 of the Revised Administrative Code, because in the case of road the recommendation of the Secretary of Public Works and Communications and the authorization of the president of the Philippines had to be secured and such recommendation and authorization had not been obtained.

Upon the foregoing considerations, this Court is of the opinion, and so holds, that the road involved in this case cannot be declared private property, and for that reason the Provincial Board of Oriental Mindoro may elect between paying the appellee the total cost of the construction of the road together with lawful interest from the date of actual disbursement by the appellee to the date of payment by the Province of Oriental Mindoro within a reasonable period not to exceed one year from the date this judgment shall become final; or upon securing the recommendation of the Secretary of Public Works and Communications and authorization of the President of the Philippines to designate such road an toll road, to raise the necessary fund to reimburse the appellee of the total cost of construction of the road, together with lawful interest from the date of actual disbursement by the appellee to the date of payment by the Province of Oriental Mindoro, and the latter is ordered to refund the amount paid for tolls by, the appellee during the enforcement of Resolution No. 186 which, as above stated, was unauthorized. The judgment appealed from making final the preliminary writ of injunction and ordering the appellants to pay the appellee the sum of P10,000 as attorney's fees, are reversed and set aside. The rest of the judgment appealed from not inconsistent with this opinion is affirmed, without pronouncement as to costs.