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Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 104732 June 22, 1993


ROBERTO A. FLORES, DANIEL Y. FIGUEROA, ROGELIO T. PALO, DOMINGO A. JADLOC, CARLITO T. CRUZ
and MANUEL P. REYES, petitioner,
vs.
HON. FRANKLIN M. DRILON, Executive Secretary, and RICHARD J. GORDON, respondents.
Isagani M. Jungco, Valeriano S. Peralta, Miguel Famularcano, Jr. and Virgilio E. Acierto for petitioners.

election, (1) any head, official or appointing officer of a government office, agency or
instrumentality, whether national or local, including government-owned or controlled
corporations, who appoints or hires any new employee, whether provisional, temporary or
casual, or creates and fills any new position, except upon prior authority of the Commission. The
Commission shall not grant the authority sought unless it is satisfied that the position to be filled
is essential to the proper functioning of the office or agency concerned, and that the position
shall not be filled in a manner that may influence the election. As an exception to the foregoing
provisions, a new employee may be appointed in case of urgent need:Provided, however, That
notice of the appointment shall be given to the Commission within three days from the date of
the appointment. Any appointment or hiring in violation of this provision shall be null and void. (2)
Any government official who promotes, or gives any increase of salary or remuneration or
privilege to any government official or employee, including those in government-owned or
controlled corporations . . . .
for the reason that the appointment of respondent Gordon to the subject posts made by respondent Executive
Secretary on 3 April 1992 was within the prohibited 45-day period prior to the 11 May 1992 Elections.
The principal question is whether the proviso in Sec. 13, par. (d), of R.A. 7227 which states, "Provided, however,That
for the first year of its operations from the effectivity of this Act, the mayor of the City of Olongapo shall be appointed
as the chairman and chief executive officer of the Subic Authority," violates the constitutional proscription against
appointment or designation of elective officials to other government posts.

BELLOSILLO, J.:
In full, Sec. 7 of Art. IX-B of the Constitution provides:
The constitutionality of Sec. 13, par. (d), of R.A. 7227, 1 otherwise known as the "Bases Conversion and
Development Act of 1992," under which respondent Mayor Richard J. Gordon of Olongapo City was appointed
Chairman and Chief Executive Officer of the Subic Bay Metropolitan Authority (SBMA), is challenged in this original
petition with prayer for prohibition, preliminary injunction and temporary restraining order "to prevent useless and
unnecessary expenditures of public funds by way of salaries and other operational expenses attached to the office . .
. ." 2 Paragraph (d) reads
(d) Chairman administrator The President shall appoint a professional manager as
administrator of the Subic Authority with a compensation to be determined by the Board subject
to the approval of the Secretary of Budget, who shall be the ex oficio chairman of the Board and
who shall serve as the chief executive officer of the Subic Authority: Provided, however, That for
the first year of its operations from the effectivity of this Act, the mayor of the City of Olongapo
shall be appointed as the chairman and chief executive officer of the Subic Authority (emphasis
supplied).
Petitioners, who claim to be taxpayers, employees of the U.S. Facility at the Subic, Zambales, and officers and
members of the Filipino Civilian Employees Association in U.S. Facilities in the Philippines, maintain that theproviso
in par. (d) of Sec. 13 herein-above quoted in italics infringes on the following constitutional and statutory provisions:
(a) Sec. 7, first par., Art. IX-B, of the Constitution, which states that "[n]o elective official shall be eligible for
appointment or designation in any capacity to any public officer or position during his tenure," 3 because the City
Mayor of Olongapo City is an elective official and the subject posts are public offices; (b) Sec. 16, Art. VII, of the
Constitution, which provides that "[t]he President shall . . . . appoint all other officers of the Government whose
appointments are not otherwise provided for by law, and those whom he may be authorized by law to
appoint", 4 since it was Congress through the questioned proviso and not the President who appointed the Mayor to
the subject posts; 5 and, (c) Sec. 261, par. (g), of the Omnibus Election Code, which says:
Sec. 261. Prohibited Acts. The following shall be guilty of an election offense: . . . (g)
Appointment of new employees, creation of new position, promotion, or giving salary increases.
During the period of forty-five days before a regular election and thirty days before a special

No elective official shall be eligible for appointment or designation in any capacity to any public
office or position during his tenure.
Unless otherwise allowed by law or by the primary functions of his position, no appointive official
shall hold any other office or employment in the Government or any subdivision, agency or
instrumentality thereof, including government-owned or controlled corporations or their
subsidiaries.
The section expresses the policy against the concentration of several public positions in one person, so that a public
officer or employee may serve full-time with dedication and thus be efficient in the delivery of public services. It is an
affirmation that a public office is a full-time job. Hence, a public officer or employee, like the head of an executive
department described in Civil Liberties Union v. Executive Secretary, G.R. No. 83896, and Anti-Graft League of the
Philippines, Inc. v. Philip Ella C. Juico, as Secretary of Agrarian Reform, G.R. No. 83815, 6 ". . . . should be allowed
to attend to his duties and responsibilities without the distraction of other governmental duties or employment. He
should be precluded from dissipating his efforts, attention and energy among too many positions of responsibility,
which may result in haphazardness and inefficiency . . . ."
Particularly as regards the first paragraph of Sec. 7, "(t)he basic idea really is to prevent a situation where a local
elective official will work for his appointment in an executive position in government, and thus neglect his constituents
. . . ." 7
In the case before us, the subject proviso directs the President to appoint an elective official, i.e., the Mayor of
Olongapo City, to other government posts (as Chairman of the Board and Chief Executive Officer of SBMA). Since
this is precisely what the constitutional proscription seeks to prevent, it needs no stretching of the imagination to
conclude that the proviso contravenes Sec. 7, first par., Art. IX-B, of the Constitution. Here, the fact that the expertise
of an elective official may be most beneficial to the higher interest of the body politic is of no moment.

It is argued that Sec. 94 of the Local Government Code (LGC) permits the appointment of a local elective official to
another post if so allowed by law or by the primary functions of his office. 8 But, the contention is fallacious. Section
94 of the LGC is not determinative of the constitutionality of Sec. 13, par. (d), of R.A. 7227, for no legislative act can
prevail over the fundamental law of the land. Moreover, since the constitutionality of Sec. 94 of LGC is not the issue
here nor is that section sought to be declared unconstitutional, we need not rule on its validity. Neither can we invoke
a practice otherwise unconstitutional as authority for its validity.
In any case, the view that an elective official may be appointed to another post if allowed by law or by the primary
functions of his office, ignores the clear-cut difference in the wording of the two (2) paragraphs of Sec. 7, Art.
IX-B, of the Constitution. While the second paragraph authorizes holding of multiple offices by an appointiveofficial
when allowed by law or by the primary functions of his position, the first paragraph appears to be more stringent by
not providing any exception to the rule against appointment or designation of an elective official to the government
post, except as are particularly recognized in the Constitution itself, e.g., the President as head of the economic and
planning agency; 9 the Vice-President, who may be appointed Member of the Cabinet; 10 and, a member of
Congress who may be designated ex officio member of the Judicial and Bar Council. 11
The distinction between the first and second paragraphs of Sec. 7, Art. IX-B, was not accidental when drawn, and not
without reason. It was purposely sought by the drafters of the Constitution as shown in their deliberation, thus
MR. MONSOD. In other words, what then Commissioner is saying, Mr. Presiding Officer, is that
the prohibition is more strict with respect to elective officials, because in the case of appointive
officials, there may be a law that will allow them to hold other positions.
MR. FOZ. Yes, I suggest we make that difference, because in the case of appointive officials,
there will be certain situations where the law should allow them to hold some other positions. 12
The distinction being clear, the exemption allowed to appointive officials in the second paragraph cannot be extended
to elective officials who are governed by the first paragraph.
It is further argued that the SBMA posts are merely ex officio to the position of Mayor of Olongapo City, hence, an
excepted circumstance, citing Civil Liberties Union v. Executive Secretary, 13 where we stated that the prohibition
against the holding of any other office or employment by the President, Vice-President, Members of the Cabinet, and
their deputies or assistants during their tenure, as provided in Sec. 13, Art. VII, of the Constitution, does not
comprehend additional duties and functions required by the primary functions of the officials concerned, who are to
perform them in an ex officio capacity as provided by law, without receiving any additional compensation therefor.
This argument is apparently based on a wrong premise. Congress did not contemplate making the subject SBMA
posts as ex officio or automatically attached to the Office of the Mayor of Olongapo City without need of appointment.
The phrase "shall be appointed" unquestionably shows the intent to make the SBMA posts appointive and not merely
adjunct to the post of Mayor of Olongapo City. Had it been the legislative intent to make the subject positions ex
officio, Congress would have, at least, avoided the word "appointed" and, instead, "ex officio" would have been
used. 14
Even in the Senate deliberations, the Senators were fully aware that subject proviso may contravene Sec. 7, first
par., Art. IX-B, but they nevertheless passed the bill and decided to have the controversy resolved by the courts.
Indeed, the Senators would not have been concerned with the effects of Sec. 7, first par., had they considered the
SBMA posts as ex officio.
Cognizant of the complication that may arise from the way the subject proviso was stated, Senator Rene Saguisag
remarked that "if the Conference Committee just said "the Mayor shall be the Chairman" then that should foreclose
the issue. It is a legislative choice." 15 The Senator took a view that the constitutional proscription against

appointment of elective officials may have been sidestepped if Congress attached the SBMA posts to the Mayor of
Olongapo City instead of directing the President to appoint him to the post. Without passing upon this view of
Senator Saguisag, it suffices to state that Congress intended the posts to be appointive, thus nibbling in the bud the
argument that they are ex officio.
The analogy with the position of Chairman of the Metro Manila Authority made by respondents cannot be applied to
uphold the constitutionality of the challenged proviso since it is not put in issue in the present case. In the same vein,
the argument that if no elective official may be appointed or designated to another post then Sec. 8, Art. IX-B, of the
Constitution allowing him to receive double compensation 16 would be useless, is non sequitur since Sec. 8 does not
affect the constitutionality of the subject proviso. In any case, the Vice-President for example, an elective official who
may be appointed to a cabinet post under Sec. 3, Art. VII, may receive the compensation attached to the cabinet
position if specifically authorized by law.
Petitioners also assail the legislative encroachment on the appointing authority of the President. Section 13, par. (d),
itself vests in the President the power to appoint the Chairman of the Board and the Chief Executive Officer of
SBMA, although he really has no choice under the law but to appoint the Mayor of Olongapo City.
As may be defined, an "appointment" is "[t]he designation of a person, by the person or persons having authority
therefor, to discharge the duties of some office or trust," 17 or "[t]he selection or designation of a person, by the
person or persons having authority therefor, to fill an office or public function and discharge the duties of the
same. 18 In his treatise, Philippine Political
Law, 19 Senior Associate Justice Isagani A. Cruz defines appointment as "the selection, by the authority vested with
the power, of an individual who is to exercise the functions of a given office."
Considering that appointment calls for a selection, the appointing power necessarily exercises a discretion.
According to Woodbury, J., 20 "the choice of a person to fill an office constitutes the essence of his
appointment," 21 and Mr. Justice Malcolm adds that an "[a]ppointment to office is intrinsically an executive act
involving the exercise of discretion." 22 In Pamantasan ng Lungsod ng Maynila v. Intermediate Appellate
Court 23 we held:
The power to appoint is, in essence, discretionary. The appointing power has the right of choice
which he may exercise freely according to his judgment, deciding for himself who is best
qualified among those who have the necessary qualifications and eligibilities. It is a prerogative
of the appointing power . . . .
Indeed, the power of choice is the heart of the power to appoint. Appointment involves an exercise of discretion of
whom to appoint; it is not a ministerial act of issuing appointment papers to the appointee. In other words, the choice
of the appointee is a fundamental component of the appointing power.
Hence, when Congress clothes the President with the power to appoint an officer, it (Congress) cannot at the same
time limit the choice of the President to only one candidate. Once the power of appointment is conferred on the
President, such conferment necessarily carries the discretion of whom to appoint. Even on the pretext of prescribing
the qualifications of the officer, Congress may not abuse such power as to divest the appointing authority, directly or
indirectly, of his discretion to pick his own choice. Consequently, when the qualifications prescribed by Congress can
only be met by one individual, such enactment effectively eliminates the discretion of the appointing power to choose
and constitutes an irregular restriction on the power of appointment. 24
In the case at bar, while Congress willed that the subject posts be filled with a presidential appointee for the first year
of its operations from the effectivity of R.A. 7227, the proviso nevertheless limits the appointing authority to only one
eligible, i.e., the incumbent Mayor of Olongapo City. Since only one can qualify for the posts in question, the
President is precluded from exercising his discretion to choose whom to appoint. Such supposed power of

appointment, sans the essential element of choice, is no power at all and goes against the very nature itself of
appointment.
While it may be viewed that the proviso merely sets the qualifications of the officer during the first year of operations
of SBMA, i.e., he must be the Mayor of Olongapo City, it is manifestly an abuse of congressional authority to
prescribe qualifications where only one, and no other, can qualify. Accordingly, while the conferment of the appointing
power on the President is a perfectly valid legislative act, the proviso limiting his choice to one is certainly an
encroachment on his prerogative.
Since the ineligibility of an elective official for appointment remains all throughout his tenure or during his
incumbency, he may however resign first from his elective post to cast off the constitutionally-attached
disqualification before he may be considered fit for appointment. The deliberation in the Constitutional Commission is
enlightening:
MR. DAVIDE. On Section 4, page 3, line 8, I propose the substitution of the word "term" with
TENURE.
MR. FOZ. The effect of the proposed amendment is to make possible for one to resign from his
position.
MR. DAVIDE. Yes, we should allow that prerogative.

As incumbent elective official, respondent Gordon is ineligible for appointment to the position of Chairman of the
Board and Chief Executive of SBMA; hence, his appointment thereto pursuant to a legislative act that contravenes
the Constitution cannot be sustained. He however remains Mayor of Olongapo City, and his acts as SBMA official are
not necessarily null and void; he may be considered a de facto officer, "one whose acts, though not those of a lawful
officer, the law, upon principles of policy and justice, will hold valid so far as they involve the interest of the public and
third persons, where the duties of the office were exercised . . . . under color of a known election or appointment,
void because the officer was not eligible, or because there was a want of power in the electing or appointing body, or
by reason of some defect or irregularity in its exercise, such ineligibility, want of power or defect being unknown to
the public . . . . [or] under color of an election, or appointment, by or pursuant to a public unconstitutional law, before
the same is adjudged to be such (State vs. Carroll, 38 Conn., 499; Wilcox vs. Smith, 5 Wendell [N.Y.], 231; 21 Am.
Dec., 213; Sheehan's Case, 122 Mass, 445, 23 Am. Rep., 323)." 28
Conformably with our ruling in Civil Liberties Union, any and all per diems, allowances and other emoluments which
may have been received by respondent Gordon pursuant to his appointment may be retained by him.
The illegality of his appointment to the SBMA posts being now evident, other matters affecting the legality of the
questioned proviso as well as the appointment of said respondent made pursuant thereto need no longer be
discussed.
In thus concluding as we do, we can only share the lament of Sen. Sotero Laurel which he expressed in the floor
deliberations of S.B. 1648, precursor of R.A. 7227, when he articulated
. . . . (much) as we would like to have the present Mayor of Olongapo City as the Chief
Executive of this Authority that we are creating; (much) as I, myself, would like to because I
know the capacity, integrity, industry and dedication of Mayor Gordon; (much) as we would like
to give him this terrific, burdensome and heavy responsibility, we cannot do it because of the
constitutional prohibition which is very clear. It says: "No elective official shall be appointed or
designated to another position in any capacity." 29

MR. FOZ. Resign from his position to accept an executive position.


MR. DAVIDE. Besides, it may turn out in a given case that because of, say, incapacity, he may
leave the service, but if he is prohibited from being appointed within the term for which he was
elected, we may be depriving the government of the needed expertise of an individual. 25
Consequently, as long as he is an incumbent, an elective official remains ineligible for appointment to another public
office.
Where, as in the case of respondent Gordon, an incumbent elective official was, notwithstanding his ineligibility,
appointed to other government posts, he does not automatically forfeit his elective office nor remove his ineligibility
imposed by the Constitution. On the contrary, since an incumbent elective official is not eligible to the appointive
position, his appointment or designation thereto cannot be valid in view of his disqualification or lack of eligibility. This
provision should not be confused with Sec. 13, Art. VI, of the Constitution where "(n)o Senator or Member of the
House of Representatives may hold any other office or employment in the Government . . . during his term without
forfeiting his seat . . . ." The difference between the two provisions is significant in the sense that incumbent national
legislators lose their elective posts only after they have been appointed to another government office, while other
incumbent elective officials must first resign their posts before they can be appointed, thus running the risk of losing
the elective post as well as not being appointed to the other post. It is therefore clear that ineligibility is not directly
related with forfeiture of office. ". . . . The effect is quite different where it is expressly provided by law that a person
holding one office shall be ineligible to another. Such a provision is held to incapacitate the incumbent of an office
from accepting or holding a second office (State ex rel. Van Antwerp v Hogan, 283 Ala. 445, 218 So 2d 258;
McWilliams v Neal, 130 Ga 733, 61 SE 721) and to render his election or appointment to the latter office void (State
ex rel. Childs v Sutton, 63 Minn 147, 65 NW 262. Annotation: 40 ALR 945) or voidable (Baskin v State, 107 Okla 272,
232 p 388, 40 ALR 941)." 26 "Where the constitution, or statutes declare that persons holding one office shall be
ineligible for election or appointment to another office, either generally or of a certain kind, the prohibition has been
held to incapacitate the incumbent of the first office to hold the second so that any attempt to hold the second is void
(Ala. State ex rel. Van Antwerp v. Hogan, 218 So 2d 258, 283 Ala 445)." 27

For, indeed, "a Constitution must be firm and immovable, like a mountain amidst the strife of storms or a rock in the
ocean amidst the raging of the waves." 30 One of the characteristics of the Constitution is permanence, i.e., "its
capacity to resist capricious or whimsical change dictated not by legitimate needs but only by passing fancies,
temporary passions or occasional infatuations of the people with ideas or personalities . . . . Such a Constitution is
not likely to be easily tampered with to suit political expediency, personal ambitions or ill-advised agitation for
change." 31
Ergo, under the Constitution, Mayor Gordon has a choice. We have no choice.
WHEREFORE, the proviso in par. (d), Sec. 13, of R.A. 7227, which states: ". . . Provided, however, That for the first
year of its operations from the effectivity of this Act, the Mayor of the City of Olongapo shall be appointed as the
chairman and chief executive officer of the Subic Authority," is declared unconstitutional; consequently, the
appointment pursuant thereto of the Mayor of Olongapo City, respondent Richard J. Gordon, is INVALID, hence
NULL and VOID.
However, all per diems, allowances and other emoluments received by respondent Gordon, if any, as such Chairman
and Chief Executive Officer may be retained by him, and all acts otherwise legitimate done by him in the exercise of
his authority as officer de facto of SBMA are hereby UPHELD.
SO ORDERED.

Narvasa, C.J., Cruz, Feliciano, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo and Quiason, JJ.,
concur.

1. Section 2 of R.A. No. 7854 did not properly identify the land area or territorial jurisdiction of
Makati by metes and bounds, with technical descriptions, in violation of Section 10, Article X of
the Constitution, in relation to Sections 7 and 450 of the Local Government Code;

Padilla, J., is on leave.


2. Section 51 of R.A. No. 7854 attempts to alter or restart the "three consecutive term" limit for
local elective officials, in violation of Section 8, Article X and Section 7, Article VI of the
Constitution.
3. Section 52 of R.A. No. 7854 is unconstitutional for:
(a) it increased the legislative district of Makati only by special law (the
Charter in violation of the constitutional provision requiring a general
reapportionment law to be passed by Congress within three (3) years
following the return of every census;

Republic of the Philippines


SUPREME COURT
Manila

(b) the increase in legislative district was not expressed in the title of the bill;
and

EN BANC

(c) the addition of another legislative district in Makati is not in accord with
Section 5 (3), Article VI of the Constitution for as of the latest survey (1990
census), the population of Makati stands at only 450,000.

G.R. No. 118577 March 7, 1995


JUANITO MARIANO, JR. et al., petitioners,
vs.
THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY, THE
MUNICIPAL TREASURER, AND SANGGUNIANG BAYAN OF MAKATI, respondents.
G.R. No. 118627 March 7, 1995
JOHN R. OSMEA, petitioner,
vs.
THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY, MUNICIPAL
TREASURER, AND SANGGUNIANG BAYAN OF MAKATI, respondents.

PUNO, J.:
At bench are two (2) petitions assailing certain provisions of Republic Act No. 7854 as unconstitutional. R.A. No.
7854 as unconstitutional. R.A. No. 7854 is entitled, "An Act Converting the Municipality of Makati Into a Highly
Urbanized City to be known as the City of Makati." 1
G.R. No. 118577 involves a petition for prohibition and declaratory relief. It was filed by petitioners Juanito Mariano,
Jr., Ligaya S. Bautista, Teresita Tibay, Camilo Santos, Frankie Cruz, Ricardo Pascual, Teresita Abang, Valentina
Pitalvero, Rufino Caldoza, Florante Alba, and Perfecto Alba. Of the petitioners, only Mariano, Jr., is a resident of
Makati. The others are residents of Ibayo Ususan, Taguig, Metro Manila. Suing as taxpayers, they assail as
unconstitutional sections 2, 51, and 52 of R.A. No. 7854 on the following grounds:

G.R. No. 118627 was filed by the petitioner John H. Osmea as senator, taxpayer, and concerned citizen. Petitioner
assails section 52 of R.A. No. 7854 as unconstitutional on the same grounds as aforestated.
We find no merit in the petitions.
I
Section 2, Article I of R.A. No. 7854 delineated the land areas of the proposed city of Makati, thus:
Sec. 2. The City of Makati. The Municipality of Makati shall be converted into a highly
urbanized city to be known as the City of Makati, hereinafter referred to as the City, which shall
comprise the present territory of the Municipality of Makati in Metropolitan Manila Area over
which it has jurisdiction bounded on the northeast by Pasig River and beyond by the City of
Mandaluyong and the Municipality of Pasig; on the southeast by the municipalities of Pateros
and Taguig; on the southwest by the City of Pasay and the Municipality of Taguig; and, on the
northwest, by the City of Manila.
The foregoing provision shall be without prejudice to the resolution by the appropriate agency or
forum of existing boundary disputes or cases involving questions of territorial jurisdiction
between the City of Makati and the adjoining local government units. (Emphasis supplied)
In G.R. No. 118577, petitioners claim that this delineation violates sections 7 and 450 of the Local Government Code
which require that the area of a local government unit should be made by metes and bounds with technical
descriptions. 2
The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot be
overemphasized. The boundaries must be clear for they define the limits of the territorial jurisdiction of a local

government unit. It can legitimately exercise powers of government only within the limits, its acts are ultra vires.
Needless to state, any uncertainty in the boundaries of local government units will sow costly conflicts in the exercise
of governmental powers which ultimately will prejudice the people's welfare. This is the evil sought to avoided by the
Local Government Code in requiring that the land area of a local government unit must be spelled out in metes and
bounds, with technical descriptions.
Given the facts of the cases at bench, we cannot perceive how this evil can be brought about by the description
made in section 2 of R.A. No. 7854, Petitioners have not demonstrated that the delineation of the land area of the
proposed City of Makati will cause confusion as to its boundaries. We note that said delineation did not change even
by an inch the land area previously covered by Makati as a municipality. Section 2 did not add, subtract, divide, or
multiply the established land area of Makati. In language that cannot be any clearer, section 2 stated that, the city's
land area "shall comprise the present territory of the municipality."
The deliberations of Congress will reveal that there is a legitimate reason why the land area of the proposed City of
Makati was not defined by metes and bounds, with technical descriptions. At the time of the consideration of R.A. No.
7854, the territorial dispute between the municipalities of Makati and Taguig over Fort Bonifacio was under court
litigation. Out of a becoming sense of respect to co-equal department of government, legislators felt that the dispute
should be left to the courts to decide. They did not want to foreclose the dispute by making a legislative finding of fact
which could decide the issue. This would have ensued if they defined the land area of the proposed city by its exact
metes and bounds, with technical descriptions. 3 We take judicial notice of the fact that Congress has also refrained
from using the metes and bounds description of land areas of other local government units with unsettled boundary
disputes. 4
We hold that the existence of a boundary dispute does not per se present an insurmountable difficulty which will
prevent Congress from defining with reasonable certitude the territorial jurisdiction of a local government unit. In the
cases at bench, Congress maintained the existing boundaries of the proposed City of Makati but as an act of
fairness, made them subject to the ultimate resolution by the courts. Considering these peculiar circumstances, we
are not prepared to hold that section 2 of R.A. No. 7854 is unconstitutional. We sustain the submission of the
Solicitor General in this regard, viz.:
Going now to Sections 7 and 450 of the Local Government Code, it is beyond cavil that the
requirement stated therein, viz.: "the territorial jurisdiction of newly created or converted cities
should be described by meted and bounds, with technical descriptions" was made in order to
provide a means by which the area of said cities may be reasonably ascertained. In other words,
the requirement on metes and bounds was meant merely as tool in the establishment of local
government units. It is not an end in itself. Ergo, so long as the territorial jurisdiction of a city may
be reasonably ascertained, i.e., by referring to common boundaries with neighboring
municipalities, as in this case, then, it may be concluded that the legislative intent behind the law
has been sufficiently served.
Certainly, Congress did not intends that laws creating new cities must contain therein detailed
technical descriptions similar to those appearing in Torrens titles, as petitioners seem to imply.
To require such description in the law as a condition sine qua non for its validity would be to
defeat the very purpose which the Local Government Code to seeks to serve. The manifest
intent of the Code is to empower local government units and to give them their rightful due. It
seeks to make local governments more responsive to the needs of their constituents while at the
same time serving as a vital cog in national development. To invalidate R.A. No. 7854 on the
mere ground that no cadastral type of description was used in the law would serve the letter but
defeat the spirit of the Code. It then becomes a case of the master serving the slave, instead of
the other way around. This could not be the intendment of the law.

Too well settled is the rule that laws must be enforced when ascertained, although it may not be
consistent with the strict letter of the statute. Courts will not follow the letter of the statute when
to do so would depart from the true intent of the legislature or would otherwise yield conclusions
inconsistent with the general purpose of the act. (Torres v. Limjap, 56 Phil., 141; Taada v.
Cuenco, 103 Phil. 1051; Hidalgo v. Hidalgo, 33 SCRA 1105). Legislation is an active instrument
of government, which, for purposes of interpretation, means that laws have ends to achieve, and
statutes should be so construed as not to defeat but to carry out such ends and purposes
(Bocolbo v. Estanislao, 72 SCRA 520). The same rule must indubitably apply to the case at bar.
II
Petitioners in G.R. No. 118577 also assail the constitutionality of section 51, Article X of R.A. No. 7854. Section 51
states:
Sec. 51. Officials of the City of Makati. The represent elective officials of the Municipality of
Makati shall continue as the officials of the City of Makati and shall exercise their powers and
functions until such time that a new election is held and the duly elected officials shall have
already qualified and assume their offices: Provided, The new city will acquire a new corporate
existence. The appointive officials and employees of the City shall likewise continues exercising
their functions and duties and they shall be automatically absorbed by the city government of the
City of Makati.
They contend that this section collides with section 8, Article X and section 7, Article VI of the Constitution which
provide:
Sec. 8. The term of office of elective local officials, except barangay officials, which shall be
determined by law, shall be three years and no such official shall serve for more than three
consecutive terms. Voluntary renunciation of the office for any length of time shall not be
considered as an interruption in the continuity of his service for the full term for which he was
elected.
xxx xxx xxx
Sec. 7. The Members of the House of Representatives shall be elected for a term of three years
which shall begin, unless otherwise provided by law, at noon on the thirtieth day of June next
following their election.
No Member of the House of Representatives shall serve for more than three consecutive terms.
Voluntary renunciation of the office for any length of time shall not be considered as an
interruption in the continuity of his service for the full term for which he was elected.
Petitioners stress that under these provisions, elective local officials, including Members of the House of
Representative, have a term of three (3) years and are prohibited from serving for more than three (3)consecutive
terms. They argue that by providing that the new city shall acquire a new corporate existence, section 51 of R.A. No.
7854 restarts the term of the present municipal elective officials of Makati and disregards the terms previously served
by them. In particular, petitioners point that section 51 favors the incumbent Makati Mayor, respondent Jejomar
Binay, who has already served for two (2) consecutive terms. They further argue that should Mayor Binay decide to
run and eventually win as city mayor in the coming elections, he can still run for the same position in 1998 and seek
another three-year consecutive term since his previous three-year consecutive term asmunicipal mayor would not be
counted. Thus, petitioners conclude that said section 51 has been conveniently crafted to suit the political ambitions
of respondent Mayor Binay.

We cannot entertain this challenge to the constitutionality of section 51. The requirements before a litigant can
challenge the constitutionality of a law are well delineated. They are: 1) there must be an actual case or controversy;
(2) the question of constitutionality must be raised by the proper party; (3) the constitutional question must be raised
at the earliest possible opportunity; and (4) the decision on the constitutional question must be necessary to the
determination of the case itself. 5
Petitioners have far from complied with these requirements. The petition is premised on the occurrence of many
contingent events, i.e., that Mayor Binay will run again in this coming mayoralty elections; that he would be reelected in said elections; and that he would seek re-election for the same position in the 1998 elections. Considering
that these contingencies may or may not happen, petitioners merely pose a hypothetical issue which has yet to ripen
to an actual case or controversy. Petitioners who are residents of Taguig (except Mariano) are not also the proper
parties to raise this abstract issue. Worse, they hoist this futuristic issue in a petition for declaratory relief over which
this Court has no jurisdiction.
III
Finally, petitioners in the two (2) cases at bench assail the constitutionality of section 52, Article X of R.A. No. 7854.
Section 52 of the Charter provides:
Sec. 52. Legislative Districts. Upon its conversion into a highly-urbanized city, Makati shall
thereafter have at least two (2) legislative districts that shall initially correspond to the two (2)
existing districts created under Section 3(a) of Republic Act. No. 7166 as implemented by the
Commission on Elections to commence at the next national elections to be held after the
effectivity of this Act. Henceforth, barangays Magallanes, Dasmarias and Forbes shall be with
the first district, in lieu of Barangay Guadalupe-Viejo which shall form part of the second district.
(emphasis supplied)
They contend. that the addition of another legislative district in Makati is unconstitutional for: (1)
reapportionment6 cannot made by a special law, (2) the addition of a legislative district is not expressed in the title of
the bill 7 and (3) Makati's population, as per the 1990 census, stands at only four hundred fifty thousand (450,000).
These issues have been laid to rest in the recent case of Tobias v. Abalos. 8 In said case, we ruled that
reapportionment of legislative districts may be made through a special law, such as in the charter of a new city. The
Constitution 9 clearly provides that Congress shall be composed of not more than two hundred fifty (250)
members, unless otherwise fixed by law. As thus worded, the Constitution did not preclude Congress from increasing
its membership by passing a law, other than a general reapportionment of the law. This is its exactly what was done
by Congress in enacting R.A. No. 7854 and providing for an increase in Makati's legislative district. Moreover, to hold
that reapportionment can only be made through a general apportionment law, with a review of all the legislative
districts allotted to each local government unit nationwide, would create an inequitable situation where a new city or
province created by Congress will be denied legislative representation for an indeterminate period of time. 10 The
intolerable situations will deprive the people of a new city or province a particle of their sovereignty. 11 Sovereignty
cannot admit of any kind of subtraction. It is indivisible. It must be forever whole or it is not sovereignty.
Petitioners cannot insist that the addition of another legislative district in Makati is not in accord with section 5(3),
Article VI 12 of the Constitution for as of the latest survey (1990 census), the population of Makati stands at only four
hundred fifty thousand (450,000). 13 Said section provides, inter alia, that a city with a population of at least two
hundred fifty thousand (250,000) shall have at least one representative. Even granting that the population of Makati
as of the 1990 census stood at four hundred fifty thousand (450,000), its legislative district may still be increased
since it has met the minimum population requirement of two hundred fifty thousand (250,000). In fact, section 3 of
the Ordinance appended to the Constitution provides that a city whose population has increased to more than two
hundred fifty thousand (250,000) shall be entitled to at least one congressional representative. 14

Finally, we do not find merit in petitioners' contention that the creation of an additional legislative district in Makati
should have been expressly stated in the title of the bill. In the same case of Tobias v. Abalos, op cit., we reiterated
the policy of the Court favoring a liberal construction of the "one title-one subject" rule so as not to impede legislation.
To be sure, with Constitution does not command that the title of a law should exactly mirror, fully index, or completely
catalogue all its details. Hence, we ruled that "it should be sufficient compliance if the title expresses the general
subject and all the provisions are germane to such general subject."
WHEREFORE, the petitions are hereby DISMISSED for lack of merit No costs.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason, Vitug, Kapunan, Mendoza and
Francisco, JJ., concur.

xxx xxx xxx


(e) Fugitive from justice in criminal or non-political cases here or abroad(.)
Bienvenido Marquez, a defeated candidate for the elective position for the elective position in the Province of
Quezon in the 11th May 1992 elections filed this petition for certiorari praying for the reversal of the resolution of the
Commission on Elections ("COMELEC") which dismissed his petition for quo warranto against the winning
candidate, herein private respondent Eduardo Rodriguez, for being allegedly a fugitive from justice.
It is averred that at the time private respondent filed his certificate of candidacy, a criminal charge against him for ten
(10) counts of insurance fraud or grand theft of personal property was still pending before the Municipal Court of Los
Angeles Judicial District, County of Los Angeles, State of California, U.S.A. A warrant issued by said court for his
arrest, it is claimed, has yet to be served on private respondent on account of his alleged "flight" from that country.
Before the 11th May 1992 elections, a petition for cancellation (SPA 92-065) of respondent's certificate of candidacy,
on the ground of the candidate's disqualification under Section 40(e) of the Local Government Code, was filed by
petitioner with the COMELEC. On 08 May 1992, the COMELEC dismissed the petition.
Petitioner's subsequent recourse to this Court (in G.R. No. 105310) from the 08th May 1992 resolution of COMELEC
was dismissed without prejudice, however, to the filing in due time of a possible post-election quo
warranto proceeding against private respondent. The Court, in its resolution of 02 June 1992, held:

Republic of the Philippines


SUPREME COURT
Manila
EN BANC

G.R. No. 112889 April 18, 1995

Evidently, the matter elevated to this Court was a pre-proclamation controversy. Since the
private respondent had already been proclaimed as the duly elected Governor of the Province of
Quezon, the petition below for disqualification has ceased to be a pre-proclamation controversy.
In Casimiro vs. Commission on Elections, G.R. Nos. 84462-63 and Antonio vs. Commission on
Elections, G.R. Nos. 84678-79, jointly decided on 29 March 1989, 171 SCRA 468, this court held
that a pre-proclamation controversy is no longer viable at this point of time and should be
dismissed. The proper remedy of the petitioner is to pursue the disqualification suit in a separate
proceeding.
ACCORDINGLY, the Court Resolved to DISMISS the petition, without prejudice to the filing of
the appropriate proceedings in the proper forum, if so desired, within ten (10) days from notice. 1

BIENVENIDO O. MARQUEZ, JR., petitioner,


vs.
COMMISSION ON ELECTIONS and EDUARDO T. RODRIGUEZ, respondents.

Private respondent was proclaimed Governor-elect of Quezon on 29 May 1992. Forthwith, petitioner institutedquo
warranto proceedings (EPC 92-28) against private respondent before the COMELEC. In its 02 February 1993
resolution, the COMELEC (Second Division) dismissed the petition. The COMELEC En Banc, on 02 December
1993, denied a reconsideration of the resolution.

VITUG, J.:

Hence, this petition for certiorari, the core issue of which, such as to be expected, focuses on whether private
respondent who, at the time of the filing of his certificate of candidacy (and to date), is said to be facing a criminal
charge before a foreign court and evading a warrant for his arrest comes within the term "fugitive from justice"
contemplated by Section 40(e) of the Local Government Code and, therefore, disqualified from being a candidate for,
and thereby ineligible from holding on to, an elective local office.

The Court is called upon, in this petition for certiorari, to resolve the conflicting claims of the parties on the meaning
of the term "fugitive from justice as that phrase is so used under the provisions of Section 40(e) of the Local
Government Code (Republic Act No. 7160). That law states:
Sec. 40. Disqualifications. The following persons are disqualified from running for any elective
local position:

Petitioner's position is perspicuous and to the point. The law, he asseverates, needs no further interpretation and
construction. Section 40(e) of Republic Act No. 7160, is rather clear, he submits, and it disqualifies "fugitive from
justice" includes not only those who flee after conviction to avoid punishment but likewise those who, after being
charged flee to avoid prosecution. This definition truly finds support from jurisprudence (Philippine Law Dictionary,
Third Edition, p. 399, by F.B. Moreno; Black's Law Dictionary, Sixth Edition, p. 671; King vs. Noe, 244 S.C. 344, 137

S.E. 2d 102, 103; Hughes vs. PFlanz, 138 Federal Reporter 980; Tobin vs. Casaus, 275 Pacific Reporter, 2d., p.
792), and it may be so conceded as expressing the general and ordinary connotation of the term.
In turn, private respondent would have the Court respect the conclusions of the Oversight Committee which,
conformably with Section 533 2 of R.A. 7160, was convened by the President to "formulate and issue the appropriate
rules and regulations necessary for the efficient and effective implementation of any and all provisions of the Code to
ensure compliance with the principles of Local Autonomy.
Here are some excerpts from the committee's deliberations:
CHAIRMAN MERCADO. Session is resumed.
So, we are in agreement to retain Line 12, Page 36, as is. So next, Page
39.
CHAIRMAN DE PEDRO. Kay Benny Marquez.

MS. DOCTOR. Let's move to. . .


THE CHAIRMAN. Wait, wait, wait. Can we just agree on the wording, this is
very important. Manny, can you come up?
MR. REYES. Let's use the word conviction by final judgment.
THE CHAIRMAN. Fugitive means somebody who is convicted by final
judgment. Okay,. Fugitive means somebody who is convicted by final
judgment. Insert that on Line 43 after the semi-colon. Is that approved? No
objection, approved (TSN, Oversight Committee, 07 May 1991).
xxx xxx xxx
THE CHAIRMAN. Andy, saan ba naman itong amendment on page 2? Sino
ba ang gumawa nito? Okay, on page 2, lines 43 and 44, "fugitive from
justice". What "fugitive"? Sino ba ang gumawa nito, ha?

REP. CUENCO: What does he want?


CHAIRMAN DE PEDRO. Kung puwede i-retain lang iyan. Bahala na kung
kuwestiyunin ang constitutionality nito before the Supreme Court later on.

MR. SANCHEZ. Yes, I think, well, last time, Mr. Chairman, we agree to
clarify the word "fugitive".
THE CHAIRMAN. "Fugitive from justice means a person" ba ito, ha?

REP. CUENCO. Anong nakalagay diyan?


MR. SANCHEZ. Means a person...
CHAIRMAN DE PEDRO. Iyong disqualification to run for public office.
THE CHAIRMAN. Ha?
Any person who is a fugitive from justice in criminal or nonpolitical cases
here or abroad.
Mabigat yung abroad. One who is facing criminal charges with the warrant
of arrest pending, unserved. . .
HONORABLE SAGUISAG. I think that is even a good point, ano what is
a fugitive? It is not defined. We have loose understanding. . .
CHAIRMAN DE PEDRO. So isingit na rin sa definition of terms iyong
fugitive.

HON. REYES. A person who has been convicted.


THE CHAIRMAN; Yes, fugitive from justice, oo. Fugitive from justice shall
mean or means one who has been convicted by final judgment. It means
one who has been convicted by final judgment.
HON. DE PEDRO. Kulang pa rin ang ibig sabihin niyan.
THE CHAIRMAN. Ano? Sige, tingnan natin.
HON. DE PEDRO. Kung nasa loob ng presuhan, fugitive pa rin siya?

Si Benny umalis na, with the understanding na okay na sa atin ito.


THE CHAIRMAN. Whether we have this rule or not she can run. She is not
a fugitive from justice. Mrs. Marcos can run at this point and I have held that
for a long time ago. So can. . .
MS. DOCTOR. Mr. Chairman. . .
THE CHAIRMAN. Yes.

THE CHAIRMAN. O, tama na yan, fugitive from justice. He has been


convicted by final judgment, meaning that if he is simply in jail and because
he put up, post bail, but the case is still being reviewed, that is not yet
conviction by final judgment. 3
The Oversight Committee evidently entertained serious apprehensions on the possible constitutional infirmity of
Section 40(e) of Republic Act No. 7160 if the disqualification therein meant were to be so taken as to embrace those
who merely were facing criminal charges. A similar concern was expressed by Senator R. A. V. Saguisag who, during
the bicameral conference committee of the Senate and the House of Representatives, made this reservation:

. . . de ipa-refine lang natin 'yung language especially 'yung, the scope of fugitive. Medyo bothered ako doon, a. 4
The Oversight Committee finally came out with Article 73 of the Rules and Regulations Implementing the Local
Government Code of 1991. It provided:
Art. 73. Disqualifications. The following persons shall be disqualified from running for any
elective local position:
(a) . . .
(e) Fugitives from justice in criminal or non-political cases here or abroad. Fugitive from justice
refers to a person who has been convicted by final judgment. 5 (Emphasis supplied)
Private respondent reminds us that the construction placed upon law by the officials in charge of its enforcement
deserves great and considerable weight (Atlas Consolidated Mining and Development Corp. vs. CA, 182 SCRA 166,
181). The Court certainly agrees; however, when there clearly is no obscurity and ambiguity in an enabling law, it
must merely be made to apply as it is so written. An administrative rule or regulation can neither expand nor constrict
the law but must remain congruent to it. The Court believes and thus holds, albeit with some personal reservations of
the ponente (expressed during the Court's en banc deliberations), that Article 73 of the Rules and Regulations
Implementing the Local Government Code of 1991, to the extent that it confines the term "fugitive from justice" to
refer only to a person (the fugitive) "who has been convicted by final judgment." is an inordinate and undue
circumscription of the law.
Unfortunately, the COMELEC did not make any definite finding on whether or not, in fact, private respondent is a
"fugitive from justice" as such term must be interpreted and applied in the light of the Court's opinion. The omission is
understandable since the COMELEC dismissed outrightly the petition for quo warranto on the basis instead of Rule
73 of the Rules and Regulations promulgated by the Oversight Committee. The Court itself, not being a trier of facts,
is thus constrained to remand the case to the COMELEC for a determination of this unresolved factual matter.
WHEREFORE, the questioned resolutions of the Commission on Elections are REVERSED and SET ASIDE, and
the case is hereby REMANDED to the Commission which is DIRECTED to proceed and resolve the case with
dispatch conformably with the foregoing opinion. No special pronouncement on costs.
SO ORDERED.
Feliciano, Padilla, Melo, Quiason, Puno, Kapunan and Francisco, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila

each local government unit shall submit its resolution of concurrence to join the Subic Special
Economic Zone to the Office of the President. Thereafter, the President of the Philippines shall
issue a proclamation defining the metes and bounds of the zone as provided herein." (Emphasis
supplied)

EN BANC
RA 7227 likewise created petitioner to implement the declared national policy of converting the Subic
military reservation into alternative productive uses. 2 Petitioner was organized with an authorized capital
stock of P20 billion which was fully subscribed and fully paid up by the Republic of the Philippines with,
among other assets, "(a)ll lands embraced, covered and defined in Section 12 hereof, as well as
permanent improvements and fixtures upon proper inventory not otherwise alienated, conveyed, or
transferred to another government agency". 3

G.R. No. 125416 September 26, 1996


SUBIC BAY METROPOLITAN AUTHORITY, petitioner,
vs.
COMMISSION ON ELECTIONS, ENRIQUE T. GARCIA and CATALINO A. CALIMBAS, respondents.

PANGANIBAN, J.:
The 1987 Constitution is unique in many ways. For one thing, it institutionalized people power in lawmaking. Learning from the bitter lesson of completely surrending to Congress the sole authority to make,
amend or repeal laws, the present Constitution concurrently vested such prerogatives in the electorate by
expressly recognizing their residual and sovereign authority to ordain legislation directly through the
concepts and processes of initiative and of referendum.
In this Decision, this Court distinguishes referendum from initiative and discusses the practical and legal
implications of such differences. It also sets down some guidelines in the conduct and implementation of
these two novel and vital features of popular democracy, as well as settles some relevant questions on
jurisdiction all with the purpose of nurturing, protecting and promoting the people's exercise of direct
democracy.
In this action for certiorari and prohibition, petitioner seeks to nullify the respondent Commission on
Elections' Ruling dated April 17, 1996 and Resolution No. 2848 promulgated on June 27, 1996 1 denying
petitioner's plea to stop the holding of a local initiative and referendum on the proposition to recall
Pambayang Kapasyahan Blg. 10, Serye 1993, of the Sangguniang Bayan of Morong, Bataan.
The Facts
On March 13, 1992, Congress enacted Republic Act No. 7227 (The Bases Conversion and Development
Act of 1992), which among others, provided for the creation of the Subic Economic Zone, thus:
Sec. 12. Subic Special Economic Zone. Subject to the concurrence by resolution of the
Sangguniang Panlugnsod of the City of Olongapo and the Sangguniang Bayan of the
Municipalities of Subic. Morong and Hermosa, there is hereby created a Special Economic and
Free-port Zone consisting of the City of Olongapo and the Municipality of Subic, Province of
Zambales, the lands occupied by the Subic Naval Base and its contiguous extensions as
embraced, covered and defined by the 1947 Military Bases Agreement between the Philippines
and the United States of America as amended, and within the territorial jurisdiction of the
Municipalities of Morong and Hermosa, Province of Bataan, hereinafter referred to as the Subic
Special Economic Zone whose metes and bounds shall be delineated in a proclamation to be
issued by the President of the Philippines. Within thirty (30) days after the approval of this Act,

On November 24, 1992, the American navy turned over the Subic military reservation to the Philippines
government. Immediately, petitioner commenced the implementation of its task, particularly the
preservation of the sea-ports, airport, buildings, houses and other installations left by the American navy.
In April 1993, the Sangguniang Bayan of Morong, Bataan passed Pambayang Kapasyahan Bilang 10,
Serye 1993, expressing therein its absolute concurrence, as required by said Sec. 12 of RA 7227, to join
the Subic Special Economic Zone. On September 5, 1993, the Sangguniang Bayan of Morong
submittedPambayang Kapasyahan Bilang 10, Serye 1993 to the Office of the President.
On May 24, 1993, respondents Garcia, Calimbas and their companions filed a petition with the
Sangguniang Bayan of Morong to annul Pambayang Kapasyahan Blg. 10, Serye 1993. The petition
prayed for the following:
I. Bawiin, nulipikahin at pawalang-bisa and Pambayang Kapasyahang Blg. 10, Serye 1993 ng
Sangguniang Bayan para sa pag-anib ng Morong sa SSEFZ na walang kundisyon.
II. Palitan ito ng isang Pambayang kapasyahan na aanib lamang ang Morong sa SSEFZ kung
ang mga sumusunod na kondisyones ay ipagkakaloob, ipatutupad at isasagawa para sa
kapakanan at interest ng Morong at Bataan:
(A) Ibalik sa Bataan ang "Virgin Forests" isang bundok na hindi
nagagalaw at punong-puno ng malalaking punong-kahoy at iba't-ibang
halaman.
(B) Ihiwalay ang Grande Island sa SSEFZ at ibalik ito sa Bataan.
(K) Isama ang mga lupain ng Bataan na nakapaloob sa SBMA sa
pagkukuenta ng salaping ipinagkaloob ng pamahalaang national o "Internal
Revenue Allotment" (IRA) sa Morong, Hermosa at sa Lalawigan.
(D) Payagang magtatag rin ng sariling "special economic zones" and bawat
bayan ng Morong, Hermosa at Dinalupihan.
(E) Ibase sa laki ng kanya-kanyang lupa ang pamamahagi ng kikitain ng
SBMA.
(G) Ibase rin ang alokasyon ng pagbibigay ng trabaho sa laki ng nasabing
mga lupa.

(H) Pabayaang bukas ang pinto ng SBMA na nasa Morong ng 24 na oras at


bukod dito sa magbukas pa ng pinto sa hangganan naman ng Morong at
Hermosa upang magkaroon ng pagkakataong umunlad rin ang mga
nasabing bayan, pati na rin ng iba pang bayan ng Bataan.
(I) Tapusin ang pagkokonkreto ng mga daang Morong-Tala-Orani at
Morong-Tasig-Dinalupihan para sa kabutihan ng mga taga-Bataan at tuloy
makatulong sa pangangalaga ng mga kabundukan.
(J) Magkakaroon ng sapat na representasyon sa pamunuan ng SBMA ang
Morong, Hermosa at Bataan.
The Sangguniang Bayan ng Morong acted upon the petition of respondents Garcia, Calimbas, et al. by
promulgating Pambayang Kapasyahan Blg. 18, Serye 1993, requesting Congress of the Philippines so
amend certain provisions of RA 7227, particularly those concerning the matters cited in items (A), (B), (K),
(E), and (G) of private respondent's petition. The Sangguniang Bayan of Morong also informed
respondents that items (D) and (H) had already been referred to and favorably acted upon by the
government agencies concerned, such as the Bases Conversion Development Authority and the Office of
the President.
Not satisfied, and within 30 days from submission of their petition, herein respondents resorted to their
power initiative under the Local Government Code of 1991, 4 Sec. 122 paragraph (b) of which provides as
follows:
Sec. 122. Procedure in Local Initiative.

SSEZ all the lands within the former Subic Naval Base, including Grande Island and that portion of the
former naval base within the territorial jurisdiction of the Municipality of Morong.
On June 18, 19956, respondent Comelec issued Resolution No. 2845, adopting therein a "Calendar of
Activities for local referendum on certain municipal ordinance passed by the Sangguniang Bayan of
Morong, Bataan", and which indicated, among others, the scheduled Referendum Day (July 27, 1996,
Saturday). On June 27, 1996, the Comelec promulgated the assailed Resolution No. 2848 providing for
"the rules and guidelines to govern the conduct of the referendum proposing to annul or
repealKapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of Morong, Bataan".
On July 10, 1996, petitioner instituted the present petition for certiorari and prohibition contesting the
validity of Resolution No. 2848 and alleging, inter alia, that public respondent "is intent on proceeding with
a local initiative that proposes an amendment of a national law. . . .
The Issues
The petition 6 presents the following "argument":
Respondent Commission on Elections committed a grave abuse of discretion amounting to lack
of jurisdiction in scheduling a local initiative which seeks the amendment of a national law.
In his Comment, private respondent Garcia claims that (1) petitioner has failed to show the existence of an
actual case of controversy: (2) . . . petitioner seeks to overturn a decision/judgment which has long
become final and executory; (3) . . . public respondent has not abused its discretion and has in fact acted
within its jurisdiction; (and) (4) . . . the concurrence of local government units is required for the
establishment of the Subic Special Economic Zone."

xxx xxx xxx


(b) If no favorable action thereon is taken by the sanggunian concerned, the proponents,
through their duly authorized and registered representatives, may invoke their power of initiative,
giving notice thereof to the sangguniang concerned.
xxx xxx xxx
On July 6, 1993, respondent Commission En Banc in Comelec Resolution No. 93-1623 denied the petition
for local initiative by herein private respondents on the ground that the subject thereof was merely a
resolution (pambayang kapasyahan) and not an ordinance. On July 13, 1993, public respondent
ComelecEn Banc (thru Comelec Resolution no. 93-1676) further directed its Provincial Election Supervisor
to hold action on the authentication of signatures being solicited by private respondents.
On August 15, 1993, private respondents instituted a petition for certiorari and mandamus 5 before this
Court against the Commission on Elections and the Sangguniang Bayan of Morong, Bataan, to set aside
Comelec Resolution No. 93-1623 insofar as it disallowed the conduct of a local initiative to annul
Pambayang Kapasyahan Bilang 10, Serye 1993, and Comelec Resolution No. 93-1676 insofar as it
prevented the Provincial Election Supervisor of Bataan from proceeding with the authentication of the
required number of signatures in support of the initiative and the gathering of signatures.
On February 1, 1995, pursuant to Sec. 12 of RA 7227, the President of the Philippines issued
Proclamation No. 532 defining the metes and bounds of the SSEZ. Said proclamation included in the

Private respondent Calimbas, now the incumbent Mayor of Morong, in his Reply (should be Comment)
joined petitioner's cause because "(a)fter several meetings with petitioner's Chairman and staff and after
consultation with legal counsel, respondent Calimbas discovered that the demands in the petition for a
local initiative/referendum were not legally feasible." 7
The Solicitor General, as counsel for public respondent, identified two issues, as follows:
1. Whether or not the Comelec can be enjoined from scheduling/conducting the local initiative
proposing to annul Pambayang Kapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of
Morong, Bataan.
2. Whether or not the Comelec committed grave abuse of discretion in denying the request of
petitioner SBMA to stop the local initiative.
On July 23, 1996, the Court heard oral argument by the parties, after which, it issued the following
Resolution:
The Court Resolved to: (1) GRANT the Motion to Admit the Attachment Comment filed by
counsel for private respondent Enrique T. Garcia, dated July 22, 1996 and (2) NOTE the: (a)
Reply (should be comment) to the petition for certiorari and prohibition with prayer for temporary
restraining order and/or writ of preliminary injunction, filed by counsel for respondent Catalino
Calimbas, date July 22, 1996; (b) Separate Comments on the petition, filed by: (b-1) the Solicitor
General for respondent Commission on Elections dated July 19, 1996 and (b-2) counsel for

private respondent Enrique T. Garcia, dated July 22, 1996, all filed in compliance with the
resolution of July 16, 1996 and (c) Manifestation filed by counsel for petitioner, dated July 22,
1996.
At the hearing of this case this morning, Atty. Rodolfo O. Reyes appeared and argued for
petitioner Subic Bay Metropolitan Authority (SBMA) while Atty. Sixto Brillantes for private
respondent Enrique T. Garcia, and Atty. Oscar L. Karaan for respondent Catalino Calimbas.
Solicitor General Raul Goco, Assistant Solicitor General Cecilio O. Estoesta and Solicitor
Zenaida Hernandez-Perez appeared for respondent Commission on Elections with Solicitor
General Goco arguing.
Before the Court adjourned, the Court directed the counsel for both parties to INFORM this
Court by Friday, July 26, 1996, whether or not Commission on Elections would push through
with the initiative/referendum this Saturday, July 27, 1996.
Thereafter, the case shall be considered SUBMITTED for resolution.
At 2:50 p.m., July 23, 1996, the Court received by facsimile transmission an Order dated also on
July 23, 1996 from the respondent Commission on Elections En Banc inter alia "to hold in
abeyance the scheduled referendum (initiative) on July 27, 1996 pending resolution of G.R. No.
125416." In view of this Order, the petitioner's application for a temporary restraining order
and/or writ of preliminary injunction has become moot and academic and will thus not be passed
upon by this Court at this time. Puno, J., no part due to relationship. Bellosillo, J., is on leave.
After careful study of and judicious deliberation on the submissions and arguments of the parties, the
Court believes that the issues may be restated as follows:

In light of this legal backdrop, the essential issue to be resolved in the case at bench is whether
Pambayang Kapasyahan Blg. 10, serye 1993 of the Sangguniang Bayan of Morong, Bataan is
the proper subject of an initiative. Respondents take the negative stance as they contend that
under the Local Government Code of 1991 only an ordinance can be the subject of initiative.
They rely on Section 120, Chapter 2, Title XI, Book I of the Local Government Code of 1991
which provides: "Local Initiative
Defined. Local initiative is the legal process whereby the registered voters of a local
government until may directly propose, enact, or amend any ordinance."
We reject respondents' narrow and literal reading of the above provision for it will collide with the
Constitution and will subvert the intent of the lawmakers in enacting the provisions of the Local
Government of 1991 on initiative and referendum.
The Constitution clearly includes not only ordinance but resolutions as appropriate subjects of a
local initiative. Section 32 of Article VI provides in luminous language: "The Congress shall, as
early as possible, provide for a system of initiative and referendum, and the exceptions
therefrom, whereby the people can directly propose and enact laws or approve or reject any act
or law or part thereof passed by the Congress, or local legislative body . . .". An act includes a
resolution. Black defines an act as "an expression of will or purpose . . . it may denote something
done . . . as a legislature, including not merely physical acts, but also decrees, edicts, laws,
judgments, resolves, awards, and determinations . . .". It is basic that a law should be construed
in harmony with and not in violation of the Constitution. In line with this postulate, we held in In
Re Guarina that "if there is doubt or uncertainty as to the meaning of the legislative, if the words
or provisions are obscure, or if the enactment is fairly susceptible of two or more constructions,
that interpretation will be adopted which will avoid the effect of unconstitutionality, even though it
may be necessary, for this purpose, to disregard the more usual or apparent import of the
language used."

(1) Whether this petition "seeks to overturn a decision/judgment which has long become final
and executory"; namely, G.R. No. 111230, Enrique Garcia, et al. vs. Commission on Elections, et
al.;

Moreover, we reviewed our rollo in said G.R. No. 111230 and we found that the sole issue presented by
the pleadings was the question of "whether or not a Sangguniang Bayan Resolution can be the subject of
a valid initiative or referendum". 10

(2) Whether the respondent Comelec committed grave abuse of discretion in promulgating and
implementing its Resolution No. 2848 which "govern(s) the conduct of the referendum proposing
to annul or repeal Pambayang Kapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of
Morong, Bataan;" and

In the present case, petitioner is not contesting the propriety of a municipal resolution as the form by which
these two new constitutional prerogatives of the people may be validly exercised. What is at issue here is
whether Pambayang Kapasyahan Blg. 10, Serye 1993, as worded, is sufficient in form and substance for
submission to the people for their approval; in fine, whether the Comelec acted properly and juridically in
promulgating and implementing Resolution No. 2848.

(3) Whether the questioned local initiative covers a subject within the powers of the people of
Morong to enact; i.e., whether such initiative "seeks the amendment of a national law."
First Issue: Bar by Final Judgment
Respondent Garcia contends that this Court had already ruled with finality in Enrique T. Garcia, et
al. vs.Commission on Elections, et al. 8 on "the very issue raised in (the) petition: whether or not there can
be an initiative by the people of Morong, Bataan on the subject proposition the very same proposition, it
bears emphasizing, the submission of which to the people of Morong, Bataan is now sought to be enjoined
by petitioner . . .".
We disagree. The only issue resolved in the earlier Garcia case is whether a municipal resolution as
contra-distinguished from an ordinance may be the proper subject of an initiative and/or referendum. We
quote from our said Decision: 9

Second Issue: Sufficiency of Comelec Resolution No. 2848


The main issue in this case may be re-stated thus: Did respondent Comelec commit grave abuse of
discretion in promulgating and implementing Resolution No. 2848?
We answer the question in the affirmative.
To begin with, the process started by private respondents was an INITIATIVE but respondent Comelec
made preparations for a REFERENDUM only. In fact, in the body of the Resolution 11 as reproduced in
the footnote below, the word "referendum" is repeated at least 27 times, but "initiative" is not mentioned at
all. The Comelec labeled the exercise as a "Referendum"; the counting of votes was entrusted to a
"Referendum Committee"; the documents were called "referendum returns"; the canvassers, "Referendum
Board of Canvassers" and the ballots themselves bore the description "referendum". To repeat, not once

was the word "initiative" used in said body of Resolution No. 2848. And yet, this exercise is unquestionably
an INITIATIVE.
There are statutory and conceptual demarcations between a referendum and an initiative. In enacting the
"Initiative and Referendum Act, 12 Congress differentiated one term from the other, thus:
(a) "Initiative" is the power of the people to propose amendments to the Constitution or to
propose and enact legislations through an election called for the purpose.

Sec. 126. Local Referendum Defined. Local referendum is the legal process whereby the
registered voters of the local government units may approve, amend or reject any ordinance
enacted by the sanggunian.
The local referendum shall be held under the control and direction of the Comelec within sixty
(60) days in case of provinces and cities, forty-five (45) days in case of municipalities and thirty
(30) days in case of baranggays.
The Comelec shall certify and proclaim the results of the said referendum.

There are three (3) systems of initiative, namely:


a.1. Initiative on the Constitution which refers to a
petition proposing amendments to the Constitution;
a.2. Initiative on statutes which refers to a petition
proposing to enact a national legislation; and
a.3. Initiative on local legislation which refers to a
petition proposing to enact a regional, provincial, city,
municipal, or barangay law, resolution or ordinance.
(b) "Indirect initiative" is exercise of initiative by the people through a proposition sent to
Congress or the local legislative body for action.
(c) "Referendum" is the power of the electorate to approve or reject a legislation through an
election called for the purpose. It may be of two classes, namely:
c.1. Referendum on statutes which refers to a petition
to approve or reject an act or law, or part thereof,
passed by Congress; and
c.2 Referendum on local law which refers to a petition
to approve or reject a law, resolution or ordinance
enacted by regional assemblies and local legislative
bodies.
Along these statutory definitions, Justice Isagani A. Cruz 13 defines initiative as the "power of the people to
propose bills and laws, and to enact or reject them at the polls independent of the legislative assembly."
On the other hand, he explains that referendum "is the right reserved to the people to adopt or reject any
act or measure which has been passed by a legislative body and which in most cases would without action
on the part of electors become a law." The foregoing definitions, which are based on Black's 14 and other
leading American authorities, are echoed in the Local Government Code (RA 7160) substantially as
follows:
Sec. 120. Local Initiative Defined. Local initiative is the legal process whereby the registered
voters of local government unit may directly propose, enact, or amend any ordinance.

Prescinding from these definitions, we gather that initiative is resorted to (or initiated) by the people directly
either because the law-making body fails or refuses to enact the law, ordinance, resolution or act that they
desire or because they want to amend or modify one already existing. Under Sec. 13 of R.A. 6735, the
local legislative body is given the opportunity to enact the proposal. If it refuses/neglects to do so within
thirty (30) days from its presentation, the proponents through their duly-authorized and registered
representatives may invoke their power of initiative, giving notice thereof to the local legislative body
concerned. Should the proponents be able to collect the number of signed conformities within the period
granted by said statute, the Commission on Elections "shall then set a date for the initiative (not
referendum) at which the proposition shall be submitted to the registered voters in the local government
unit concerned . . .".
On the other hand, in a local referendum, the law-making body submits to the registered voters of its
territorial jurisdiction, for approval or rejection, any ordinance or resolution which is duly enacted or
approved by such law-making authority. Said referendum shall be conducted also under the control and
direction of the Commission on Elections. 15
In other words, while initiative is entirely the work of the electorate, referendum is begun and consented to
by the law-making body. Initiative is a process of law-making by the people themselves without the
participation and against the wishes of their elected representatives, while referendum consists merely of
the electorate approving or rejecting what has been drawn up or enacted by a legislative body. Hence, the
process and the voting in an initiative are understandably more complex than in a referendum where
expectedly the voters will simply write either "Yes" of "No" in the ballot.
[Note: While the above quoted laws variously refer to initiative and referendum as "powers" or "legal
processes", these can be also be "rights", as Justice Cruz terms them, or "concepts", or "the proposal"
itself (in the case of initiative) being referred to in this Decision.]
From the above differentiation, it follows that there is need for the Comelec to supervise an initiative more
closely, its authority thereon extending not only to the counting and canvassing of votes but also to seeing
to it that the matter or act submitted to the people is in the proper form and language so it may be easily
understood and voted upon by the electorate. This is especially true where the proposed legislation is
lengthy and complicated, and should thus be broken down into several autonomous parts, each such part
to be voted upon separately. Care must also be exercised that "(n)o petition embracing more than one
subject shall be submitted to the electorate," 16 although "two or more propositions may be submitted in
an initiative". 17
It should be noted that under Sec. 13 (c) of RA 6735, the "Secretary of Local Government or his
designated representative shall extend assistance in the formulation of the proposition."
In initiative and referendum, the Comelec exercises administration and supervision of the process itself,
akin to its powers over the conduct of elections. These law-making powers belong to the people, hence the

respondent Commission cannot control or change the substance or the content of legislation. In the
exercise of its authority, it may (in fact it should have done so already) issue relevant and adequate
guidelines and rules for the orderly exercise of these "people-power" features of our Constitution.
Third Issue: Withdrawal of Adherence and
Imposition of Conditionalities Ultra Vires?
Petitioner maintains that the proposition sought to be submitted in the plebiscite, namely, Pambayang
Kapasyahan Blg. 10, Serye 1993, is ultra vires or beyond the powers of the Sangguniang Bayan to
enact,18 stressing that under Sec. 124 (b) of RA 7160 (the Local Government Code), "local initiative shall
cover only such subjects or matters as are within the legal powers of the sangguniang to enact." Elsewise
stated, a local initiative may enact only such ordinances or resolutions as the municipal council itself could,
if it decided to so enact. 19 After the Sangguniang Bayan of Morong and the other municipalities
concerned (Olongapo, Subic and Hermosa) gave their resolutions of concurrence, and by reason of which
the SSEZ had been created, whose metes and bounds had already been delineated by Proclamation No.
532 issued on February 1, 1995 in accordance with Section 12 of R.A. No. 7227, the power to withdraw
such concurrence and/or to substitute therefor a conditional concurrence is no longer within the authority
and competence of the Municipal Council of Morong to legislate. Furthermore, petitioner adds, the specific
conditionalities included in the questioned municipal resolution are beyond the powers of the Council to
impose. Hence, such withdrawal can no longer be enacted or conditionalities imposed by initiative. In other
words, petitioner insists, the creation of SSEZ is now a faith accompli for the benefit of the entire nation.
Thus, Morong cannot unilaterally withdraw its concurrence or impose new conditions for such concurrence
as this would effectively render nugatory the creation by (national) law of the SSEZ and would deprive the
entire nation of the benefits to be derived therefrom. Once created. SSEZ has ceased to be a local
concern. It has become a national project.
On the other hand, private respondent Garcia counters that such argument is premature and conjectural
because at this point, the resolution is just a proposal. If the people should reject it during the referendum,
then there is nothing to declare as illegal.
Deliberating on this issue, the Court agrees with private respondent Garcia that indeed, the municipal
resolution is still in the proposal stage. It is not yet an approved law. Should the people reject it, then there
would be nothing to contest and to adjudicate. It is only when the people have voted for it and it has
become an approved ordinance or resolution that rights and obligations can be enforced or implemented
thereunder. At this point, it is merely a proposal and the writ or prohibition cannot issue upon a mere
conjecture or possibility. Constitutionally speaking, courts may decide only actual controversies, not
hypothetical questions or cases. 20
We also note that the Initiative and Referendum Act itself provides 21 that "(n)othing in this Act shall
prevent or preclude the proper courts from declaring null and void any proposition approved pursuant to
this Act . . . ."
So too, the Supreme Court is basically a review court. 22 It passes upon errors of law (and sometimes of
fact, as in the case of mandatory appeals of capital offenses) of lower courts as well as determines
whether there had been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any "branch or instrumentality" of government. In the present case, it is quite clear that the Court has
authority to review Comelec Resolution No. 2848 to determine the commission of grave abuse of
discretion. However, it does not have the same authority in regard to the proposed initiative since it has not
been promulgated or approved, or passed upon by any "branch or instrumentality" or lower court, for that
matter. The Commission on Elections itself has made no reviewable pronouncements about the issues
brought by the pleadings. The Comelec simply included verbatim the proposal in its questioned Resolution

No. 2848. Hence, there is really no decision or action made by a branch, instrumentality or court which this
Court could take cognizance of and acquire jurisdiction over, in the exercise of its review powers.
Having said that, we are in no wise suggesting that the Commelec itself has no power to pass
uponproposed resolutions in an initiative. Quite the contrary, we are ruling that these matters are in fact
within the initiatory jurisdiction of the Commission to which then the herein basic questions ought to
have been addressed, and by which the same should have been decided in the first instance. In other
words, while regular courts may take jurisdiction over "approved propositions" per said Sec. 18 of R.A.
6735, the Comelec in the exercise of its quasi-judicial and administrative powers may adjudicate and pass
upon such proposals insofar as their form and language are concerned, as discussed earlier; and it may
be added, even as to content, where the proposals or parts thereof are patently and clearly outside the
"capacity of the local legislative body to enact." 23 Accordingly, the question of whether the subject of this
initiative is within the capacity of the Municipal Council of Morong to enact may be ruled upon by the
Comelec upon remand and after hearing the parties thereon.
While on the subject of capacity of the local lawmaking body, it would be fruitful for the parties and the
Comelec to plead and adjudicate, respectively, the question of whether Grande Island and the "virgin
forest" mentioned in the proposed initiative belong to the national government and thus cannot be
segregated from the Zone and "returned to Bataan" by the simple expedient of passing a municipal
resolution. We note that Sec. 13 (e) of R.A. 7227 speaks of the full subscription and payment of the P20
billion authorized capital stock of the Subic Authority by the Republic, with, aside from cash and other
assets, the ". . . lands embraced, covered and defined in Section 12 hereof, . . ." which includes said island
and forests. The ownership of said lands is question of fact that may be taken up in the proper forum
the Commission on Elections.
Another question which the parties may wish to submit to the Comelec upon remand of the initiative is
whether the proposal, assuming it is within the capacity of the Municipal Council to enact, may be divided
into several parts for purposes of voting. Item "I" is a proposal to recall, nullify and render without effect
(bawiin, nulipikahin at pawalangbisa) Municipal Resolution No. 10, Series of 1993. On the other hand, Item
"II" proposes to change or replace (palitan) said resolution with another municipal resolution of
concurrenceprovided certain conditions enumerated thereunder would be granted, obeyed and
implemented (ipagkakaloob, ipatutupad at isasagawa) for the benefit and interest of Morong and Bataan. A
voter may favor Item I i.e., he may want a total dismemberment of Morong from the Authority but
may not agree with any of the conditions set forth in Item II. Should the proposal then be divided and be
voted upon separately and independently?
All told, we shall not pass upon the third issue of ultra vires on the ground of prematurity.
Epilogue
In sum, we hold that (i) our decision in the earlier Garcia case is not a bar to the present controversy as
the issue raised and decided therein is different from the questions involved here; (iii) the respondent
Commission should be given an opportunity to review and correct its errors in promulgating its Resolution
No. 2848 and in preparing if necessary for the plebiscite; and (iii) that the said Commission has
administrative and initiatory quasi-judicial jurisdiction to pass upon the question of whether the proposal is
sufficient in form and language and whether such proposal or part or parts thereof are clearly and patently
outside the powers of the municipal council of Morong to enact, and therefore violative of law.
In deciding this case, the Court realizes that initiative and referendum, as concepts and processes, are
new in our country. We are remanding the matter to the Comelec so that proper corrective measures, as
above discussed, may be undertaken, with a view to helping fulfill our people's aspirations for the
actualization of effective direct sovereignty. Indeed we recognize that "(p)rovisions for initiative and

referendum are liberally construed to effectuate their purposes, to facilitate and not to hamper the exercise
by the voters of the rights granted thereby." 24 In his authoritative treatise on the Constitution, Fr. Joaquin
G. Bernas, S. J. treasures these "instruments which can be used should the legislature show itself
indifferent to the needs of the people." 25Impelled by a sense or urgency, Congress enacted Republic Act
No. 6735 to give life and form to the constitutional mandate. Congress also interphased initiative and
referendum into the workings of local governments by including a chapter on this subject in the Local
Government Code of 1991. 26 And the Commission on Elections can do no less by seasonably and
judiciously promulgating guidelines and rules, for both national and local use, in implementation of these
laws. For its part, this Court early on expressly recognized the revolutionary import of reserving people
power in the process of law-making. 27
Like elections, initiative and referendum are powerful and valuable modes of expressing popular
sovereignty. And this Court as a matter of policy and doctrine will exert every effort to nurture, protect and
promote their legitimate exercise. For it is but sound public policy to enable the electorate to express their
free and untrammeled will, not only in the election of their anointed lawmakers and executives, but also in
the formulation of the very rules and laws by which our society shall be governed and managed.
WHEREFORE the petition is GRANTED. Resolution No. 2848 is ANNULLED and SET ASIDE. The
initiative on Pambayang Kapasyahan Blg. 10, Serye 1993 is REMANDED to the Commission on Elections
for further proceeding consistent with the foregoing discussion. No costs.
IT IS SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

Statement of the Case


These principles are applied by this Court in resolving this petition for review on certiorari of the July 22, 1996
Decision 1 of the Court of Appeals 2 in CA GR CV No. 48048, which affirmed in toto 3 the Regional Trial Court's
August 9, 1994 Resolution. 4 The trial court dismissed the expropriation suit as follows:
The right of the plaintiff to exercise the power of eminent domain is not disputed. However, such
right may be exercised only pursuant to an Ordinance (Sec. 19, R.A No. 7160). In the instant
case, there is no such ordinance passed by the Municipal Council of Paraaque enabling the
Municipality, thru its Chief Executive, to exercise the power of eminent domain. The complaint,
therefore, states no cause of action.
Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On
September 29, 1987, the plaintiff filed a complaint for expropriation involving the same parcels of
land which was docketed as Civil Case No. 17939 of this Court (page 26, record). Said case
was dismissed with prejudice on May 18, 1988 (page 39, record). The order of dismissal was not
appealed, hence, the same became final. The plaintiff can not be allowed to pursue the present
action without violating the principle of [r]es [j]udicata. While defendant in Civil Case No. 17939
was Limpan Investment Corporation, the doctrine of res judicata still applies because the
judgment in said case (C.C. No. 17939) is conclusive between the parties and their successorsin-interest (Vda. de Buncio vs. Estate of the late Anita de Leon). The herein defendant is the
successor-in-interest of Limpan Investment Corporation as shown by the "Deed of Assignment
Exchange" executed on June 13, 1990.
WHEREFORE, defendant's motion for reconsideration is hereby granted. The order dated
February 4, 1994 is vacated and set aside.
This case is hereby dismissed. No pronouncement as to costs.
SO ORDERED. 5

G.R. No. 127820 July 20, 1998


MUNICIPALITY OF PARAAQUE, petitioner,
vs.
V.M. REALTY CORPORATION, respondent.

PANGANIBAN, J.:
A local government unit (LGU), like the Municipality of Paraaque, cannot authorize an expropriation of private
property through a mere resolution of its lawmaking body. The Local Government Code expressly and clearly
requires an ordinance or a local law for the purpose. A resolution that merely expresses the sentiment or opinion of
the Municipal Council will not suffice. On the other hand, the principle of res judicata does not bar subsequent
proceedings for the expropriation of the same property when all the legal requirements for its valid exercise are
complied with.

Factual Antecedents
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, 6 the Municipality of Paraaque filed on
September 20, 1993, a Complaint for expropriation 7 against Private Respondent V.M. Realty Corporation over two
parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a combined area of about 10,000 square
meters, located at Wakas, San Dionisio, Paraaque, Metro Manila, and covered by Torrens Certificate of Title No.
48700. 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." 8 Parenthetically, it was also for this stated
purpose that petitioner, pursuant to its Sangguniang Bayan Resolution No. 577, Series of 1991, 9 previously made
an offer to enter into a negotiated sale of the property with private respondent, which the latter did not accept. 10
Finding the Complaint sufficient in form and substance, the Regional Trial Court of Makati, Branch 134, issued an
Order dated January 10, 1994, 11 giving it due course. Acting on petitioner's motion, said court issued an Order
dated February 4, 1994, 12 authorizing petitioner to take possession of the subject property upon deposit with its
clerk of court of an amount equivalent to 15 percent of its fair market value based on its current tax declaration.
On February 21, 1994, private respondent filed its Answer containing affirmative defenses and a
counterclaim, 13alleging in the main 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 (the Local Government Code); 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. 14 On March 24, 1991, 15 petitioner filed its opposition, stressing that the trial
court's Order dated February 4, 1994 was in accord with Section 19 of RA 7160, and that the principle of res
judicata was not applicable.
Thereafter, the trial court issued its August 9, 1994 Resolution 16 nullifying its February 4, 1994 Order and
dismissing the case. Petitioner's motions for reconsideration and transfer of venue were denied by the trial court in a
Resolution dated December 2, 1994. 17 Petitioner then appealed to Respondent Court, raising the following issues:
1. Whether or not the Resolution of the Paraaque Municipal Council No.
93-95, Series of 1993 is a substantial compliance of the statutory
requirement of Section 19, R.A. 7180 [sic] in the exercise of the power of
eminent domain by the plaintiff-appellant.
2. Whether or not the complaint in this case states no cause of action.
3. Whether or not the strict adherence to the literal observance to the rule of
procedure resulted in technicality standing in the way of substantial justice.
4. Whether or not the principle of res judicata is applicable to the present
case. 18
As previously mentioned, the Court of Appeals affirmed in toto the trial court's Decision. Respondent Court, in its
assailed Resolution promulgated on January 8, 1997, 19 denied petitioner's Motion for Reconsideration for lack of
merit.

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." 23 Petitioner seeks to
bolster this contention by citing Article 36, Rule VI of the Rules and Regulations Implementing 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." 24 (Emphasis supplied.)
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. 25 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." 26 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. It
provides as follows:
Sec. 19. Eminent Domain. A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or
welfare for the benefit of the poor and the landless, upon payment of just compensation,
pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the
power of eminent domain may not be exercised unless a valid and definite offer has been
previously made to the owner, and such offer was not accepted: Provided, further, That the local
government unit may immediately take possession of the property upon the filing of the
expropriation proceedings and upon making a deposit with the proper court of at least fifteen
percent (15%) of the fair market value of the property based on the current tax declaration of the
property to be expropriated: Provided,finally, That, the amount to be paid for the expropriated
property shall be determined by the proper court, based on the fair market value at the time of
the taking of the property. (Emphasis supplied)
Thus, the following essential requisites must concur before an LGU can exercise the power of eminent domain:

Hence, this appeal. 20


The Issues

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.

Before this Court, petitioner posits two issues, viz.:


1. A resolution duly approved by the municipal council has the same force and effect of an
ordinance and will not deprive an expropriation case of a valid cause of action.
2. The principle of res judicata as a ground for dismissal of case is not applicable when public
interest is primarily involved. 21
The Court's Ruling
The petition is not meritorious.
First Issue:
Resolution Different from an Ordinance
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" 22 because the terms "ordinance" and "resolution" are

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. 27
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. Court of Appeals 28 to show that a resolution may suffice to support
the exercise of eminent domain by an LGU. 29 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, 31 the present Local Government Code which was
already in force when the Complaint for expropriation was filed, 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. 32 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 Sanggunianmembers. 33
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 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 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." 36
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. 37 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 act pursuant to
an ordinance.
In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of the Constitution, which
provides that "territorial and political subdivisions shall enjoy local autonomy." It merely upholds the law as worded in
RA 7160. We stress that an LGU is created by law and all its powers and rights are sourced therefrom. It has
therefore no power to amend or act beyond the authority given and the limitations imposed on it by law. Strictly
speaking, the power of eminent domain delegated to an LGU is in reality not eminent but "inferior" domain, since it
must conform to the limits imposed by the delegation, and thus partakes only of a share in eminent
domain. 38Indeed, "the national legislature is still the principal of the local government units, which cannot defy its
will or modify or violate it." 39
Complaint Does Not
State a Cause of Action
In its Brief filed before Respondent Court, petitioner argues that its Sangguniang Bayan passed an ordinance on
October 11, 1994 which reiterated its Resolution No. 93-35, Series of 1993, and ratified all the acts of its mayor
regarding the subject expropriation. 40
This argument is bereft of merit. 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. 41 In any event, this allegation does not

cure the inherent defect of petitioner's Complaint for expropriation filed on September 23, 1993. It is hornbook
doctrine that
. . . in a motion to dismiss based on the ground that the complaint fails to state a cause of action,
the question submitted before the court for determination is the sufficiency of the allegations in
the complaint itself. Whether those allegations are true or not is beside the point, for their truth is
hypothetically admitted by the motion. The issue rather is: admitting them to be true, may the
court render a valid judgment in accordance with the prayer of the complaint? 42
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.
Second Issue:
Eminent Domain Not Barred by Res Judicata
As correctly found by the Court of Appeals 43 and the trial court, 44 all the requisites for the application of res
judicataare 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, 45 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." 46 "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." 47 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. 48 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, 49 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.
WHEREFORE, the petition is hereby DENIED without prejudice to petitioner's proper exercise of its power of
eminent domain over subject property. Costs against petitioner.

SO ORDERED.

David D. Advincula, Jr. for petitioner.

Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.

Juan P. Banaga for private respondents.

GRIO-AQUINO, J.:
May public streets or thoroughfares be leased or licensed to market stallholders by virtue of a city ordinance or
resolution of the Metro Manila Commission? This issue is posed by the petitioner, an aggrieved Caloocan City
resident who filed a special civil action of mandamus against the incumbent city mayor and city engineer, to compel
these city officials to remove the market stalls from certain city streets which the aforementioned city officials have
designated as flea markets, and the private respondents (stallholders) to vacate the streets.
On January 5, 1979, MMC Ordinance No. 79-02 was enacted by the Metropolitan Manila Commission, designating
certain city and municipal streets, roads and open spaces as sites for flea markets. Pursuant, thereto, the Caloocan
City mayor opened up seven (7) flea markets in that city. One of those streets was the "Heroes del '96" where the
petitioner lives. Upon application of vendors Rodolfo Teope, Mila Pastrana, Carmen Barbosa, Merle Castillo,
Bienvenido Menes, Nancy Bugarin, Jose Manuel, Crisaldo Paguirigan, Alejandro Castron, Ruben Araneta, Juanita
and Rafael Malibaran, and others, the respondents city mayor and city engineer, issued them licenses to conduct
vending activities on said street.
In 1987, Antonio Martinez, as OIC city mayor of Caloocan City, caused the demolition of the market stalls on Heroes
del '96, V. Gozon and Gonzales streets. To stop Mayor Martinez' efforts to clear the city streets, Rodolfo Teope, Mila
Pastrana and other stallowners filed an action for prohibition against the City of Caloocan, the OIC City Mayor and
the City Engineer and/or their deputies (Civil Case No. C-12921) in the Regional Trial Court of Caloocan City, Branch
122, praying the court to issue a writ of preliminary injunction ordering these city officials to discontinue the
demolition of their stalls during the pendency of the action.
The court issued the writ prayed for. However, on December 20, 1987, it dismissed the petition and lifted the writ of
preliminary injunction which it had earlier issued. The trial court observed that:
A perusal of Ordinance 2, series of 1979 of the Metropolitan Manila Commission will show on
the title itself that it is an ordinance
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

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, subject to the
approval of the Metropolitan Manila Commission, and for other purposes
which is further amplified in Section 2 of the said ordinance, quoted hereunder:

G.R. No. 93654 May 6, 1992


FRANCISCO U. DACANAY, petitioner,
vs.
MAYOR MACARIO ASISTIO, JR., CITY ENGR. LUCIANO SARNE, JR. of Kalookan City, Metro Manila, MILA
PASTRANA AND/OR RODOLFO TEOFE, STALLHOLDERS AND REPRESENTING COSTALLHOLDERS,respondents.

Sec. 2. The streets, roads and open spaces to be used as sites for flea markets (tiangge) or
vending areas; the design, measurement or specification of the structures, equipment and
apparatuses to be used or put up; the allowable distances; the days and time allowed for the
conduct of the businesses and/or activities herein authorized; the rates or fees or charges to be
imposed, levied and collected; the kinds of merchandise, goods and commodities sold and
services rendered; and other matters and activities related to the establishment, maintenance
and management and operation of flea markets and vending areas, shall be determined and
prescribed by the mayors of the cities and municipalities in the Metropolitan Manila where the

same are located, subject to the approval of the Metropolitan Manila Commission and consistent
with the guidelines hereby prescribed.

the squatters, and that the permits granted are


therefore considered null and void.

Further, it is so provided in the guidelines under the said Ordinance No. 2 of the MMC that

This doctrine was reiterated in the case of Baguio


Citizens Action Inc. vs. The City Council, 121 SCRA
368, where it was held that:

Sec. 6. In the establishment, operation, maintenance and management of flea markets and
vending areas, the following guidelines, among others, shall be observed:
xxx xxx xxx
(m) That the permittee shall remove the equipment, facilities and other appurtenances used by
him in the conduct of his business after the close or termination of business hours. (Emphasis
ours; pp. 15-16, Rollo.)
The trial court found that Heroes del '96, Gozon and Gonzales streets are of public dominion, hence, outside the
commerce of man:
The Heroes del '96 street, V. Gozon street and Gonzales street, being of public dominion must,
therefore, be outside of the commerce of man. Considering the nature of the subject premises,
the following jurisprudence co/principles are applicable on the matter:
1) They cannot be alienated or leased or otherwise be the subject matter of
contracts. (Municipality of Cavite vs. Rojas, 30 Phil. 602);
2) They cannot be acquired by prescription against the state (Insular
Government vs. Aldecoa, 19 Phil. 505). Even municipalities can not acquire
them for use as communal lands against the state (City of Manila vs. Insular
Government, 10 Phil. 327);
3) They are not subject to attachment and execution (Tan Toco vs. Municipal
Council of Iloilo, 49 Phil. 52);
4) They cannot be burdened by any voluntary easement (2-II Colin &
Capitant 520) (Tolentino, Civil Code of the Phils., Vol. II, 1983 Ed. pp. 2930).
In the aforecited case of Municipality of Cavite vs. Rojas, it was held
that properties for public use may not be leased to private individuals. Such
a lease is null and void for the reason that a municipal council cannot
withdraw part of the plaza from public use. If possession has already been
given, the lessee must restore possession by vacating it and the
municipality must thereupon restore to him any sums it may have collected
as rent.
In the case of City of Manila vs. Gerardo Garcia, 19 SCRA 413, the
Supreme Court held:
The property being a public one, the Manila Mayors did
not have the authority to give permits, written or oral, to

An ordinance legalizing the occupancy by squatters of


public land is null and void.
The authority of respondent Municipality of Makati to demolish the shanties
of the petitioner's members is mandated by
P.D. 772, and Sec. 1 of Letter of Instruction No. 19 orders certain public
officials, one of whom is the Municipal Mayor to remove all illegal
constructions including buildings on and along esteros and river banks,
those along railroad tracks and those built without permits on public or
private property (Zansibarian Residents Association vs. Mun. of Makati, 135
SCRA 235). The City Engineer is also among those required to comply with
said Letter of Instruction.
The occupation and use of private individuals of sidewalks and other public
places devoted for public use constitute both public and private nuisances
and nuisance per se, and this applies to even case involving the use or
lease of public places under permits and licenses issued by competent
authority, upon the theory that such holders could not take advantage of
their unlawful permits and license and claim that the land in question is a
part of a public street or a public place devoted to public use, hence,
beyond the commerce of man. (Padilla, Civil Code Annotated, Vol. II, p. 59,
6th Ed., citing Umali vs. Aquino, IC. A. Rep. 339.)
From the aforequoted jurisprudence/principles, the Court opines that defendants have the right
to demolish the subject stalls of the plaintiffs, more so when Section 185, par. 4 of Batas
Pambansa Blg. 337, otherwise known as the Local Government Code provides that the City
Engineer shall:
(4) . . .
(c) Prevent the encroachment of private buildings and
fences on the streets and public places;
xxx xxx xxx
(j) Inspect and supervise the construction, repair,
removal and safety of private buildings;
xxx xxx xxx
(k) With the previous approval of the City Mayor in each
case, order the removal of materials employed in the
construction or repair of any building or structures made

in violation of law or ordinance, and cause buildings


and structures dangerous to the public to made secure
or torn down;
xxx xxx xxx
Further, the Charter of the City of Caloocan, Republic Act No. 5502, Art. VII, Sec. 27, par. g, 1
and m, grants the City Engineer similar powers. (Emphasis supplied; pp. 17-20, Rollo.)

respondents. The City Legal Officer alleged that the vending area was transferred to Heroes del '96 Street to
decongest Malonzo Street, which is comparatively a busier thoroughfare; that the transfer was made by virtue of
Barangay Resolution No. 30 s'78 dated January 15, 1978; that while the resolution was awaiting approval by the
Metropolitan Manila Commission, the latter passed Ordinance No. 79-2, authorizing the use of certain streets and
open spaces as sites for flea markets and/or vending areas; that pursuant thereto, Acting MMC Mayor Virgilio P.
Robles issued Executive Order No. 135 dated January 10, 1979, ordering the establishment and operation of flea
markets in specified areas and created the Caloocan City Flea Market Authority as a regulatory body; and that
among the sites chosen and approved by the Metro Manila Commission, Heroes del '96 Street has considered "most
viable and progressive, lessening unemployment in the city and servicing the residents with affordable basic
necessities."

However, shortly after the decision came out, the city administration in Caloocan City changed hands. City Mayor
Macario Asistio, Jr., as successor of Mayor Martinez, did not pursue the latter's policy of clearing and cleaning up the
city streets.

The petition for mandamus is meritorious.

Invoking the trial court's decision in Civil Case No. C-12921, Francisco U. Dacanay, a concerned citizen, taxpayer
and registered voter of Barangay 74, Zone 7, District II of Caloocan City, who resides on Heroes del '96 Street, one
of the affected streets, wrote a letter dated March 7, 1988 to Mayor Asistio, Jr., calling his attention to the illegallyconstructed stalls on Heroes del '96 Street and asked for their demolition.

There is no doubt that the disputed areas from which the private respondents' market stalls are sought to be evicted
are public streets, as found by the trial court in Civil Case No. C-12921. A public street is property for public use
hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be
the subject of lease or other contract (Villanueva et al. vs. Castaeda and Macalino, 15 SCRA 142, citing the
Municipality of Cavite vs. Rojas, 30 SCRA 602; Espiritu vs. Municipal Council of Pozorrubio, 102 Phil. 869; and
Muyot vs. De la Fuente, 48 O.G. 4860).

Dacanay followed up that letter with another one dated April 7, 1988 addressed to the mayor and the city engineer,
Luciano Sarne, Jr. (who replaced Engineer Arturo Samonte), inviting their attention to the Regional Trial Court's
decision in Civil Case No. 12921. There was still no response.
Dacanay sought President Corazon C. Aquino's intervention by writing her a letter on the matter. His letter was
referred to the city mayor for appropriate action. The acting Caloocan City secretary, Asuncion Manalo, in a letter
dated August 1, 1988, informed the Presidential Staff Director that the city officials were still studying the issue of
whether or not to proceed with the demolition of the market stalls.
Dacanay filed a complaint against Mayor Asistio and Engineer Sarne (OMB-0-89-0146) in the Office of the
OMBUDSMAN. In their letter-comment dated April 3, 1989, said city officials explained that in view of the huge
number of stallholders involved, not to mention their dependents, it would be harsh and inhuman to eject them from
the area in question, for their relocation would not be an easy task.
In reply, Dacanay maintained that respondents have been derelict in the performance of their duties and through
manifest partiality constituting a violation of Section 3(e) of R.A. 3019, have caused undue injury to the Government
and given unwarranted benefits to the stallholders.
After conducting a preliminary investigation, the OMBUDSMAN rendered a final evaluation and report on August 28,
1989, finding that the respondents' inaction is purely motivated by their perceived moral and social responsibility
toward their constituents, but "the fact remains that there is an omission of an act which ought to be performed, in
clear violation of Sections 3(e) and (f) of Republic Act 3019." (pp. 83-84, Rollo.) The OMBUDSMAN recommended
the filing of the corresponding information in court.

As the stallholders pay fees to the City Government for the right to occupy portions of the public street, the City
Government, contrary to law, has been leasing portions of the streets to them. Such leases or licenses are null and
void for being contrary to law. The right of the public to use the city streets may not be bargained away through
contract. The interests of a few should not prevail over the good of the greater number in the community whose
health, peace, safety, good order and general welfare, the respondent city officials are under legal obligation to
protect.
The Executive Order issued by Acting Mayor Robles authorizing the use of Heroes del '96 Street as a vending area
for stallholders who were granted licenses by the city government contravenes the general law that reserves city
streets and roads for public use. Mayor Robles' Executive Order may not infringe upon the vested right of the public
to use city streets for the purpose they were intended to serve: i.e., as arteries of travel for vehicles and pedestrians.
As early as 1989, the public respondents bad started to look for feasible alternative sites for flea markets. They have
had more than ample time to relocate the street vendors.
WHEREFORE, it having been established that the petitioner and the general public have a legal right to the relief
demanded and that the public respondents have the corresponding duty, arising from public office, to clear the city
streets and restore them to their specific public purpose (Enriquez vs. Bidin, 47 SCRA 183; City of Manila vs. Garcia
et al., 19 SCRA, 413 citing Unson vs. Lacson, 100 Phil. 695), the respondents City Mayor and City Engineer of
Caloocan City or their successors in office are hereby ordered to immediately enforce and implement the decision in
Civil Case No. C-1292 declaring that Heroes del '96, V. Gozon, and Gonzales Streets are public streets for public
use, and they are ordered to remove or demolish, or cause to be removed or demolished, the market stalls
occupying said city streets with utmost dispatch within thirty (30)days from notice of this decision. This decision is
immediately executory.

As the stallholders continued to occupy Heroes del '96 Street, through the tolerance of the public respondents, and in
clear violation of the decision it Civil Case No. C-12921, Dacanay filed the present petition for mandamuson June 19,
1990, praying that the public respondents be ordered to enforce the final decision in Civil Case No. C-12921 which
upheld the city mayor's authority to order the demolition of market stalls on V. Gozon, Gonzales and Heroes del '96
Streets and to enforce P.D. No. 772 and other pertinent laws.

SO ORDERED.

On August 16, 1990, the public respondents, through the City Legal Officer, filed their Comment' on the petition. The
Office of the Solicitor General asked to be excused from filing a separate Comment in behalf of the public

Bellosillo, J., took no part.

Narvasa, C.J., Melecio-Herrera, Gutierrez, Jr. Cruz, Paras, Feliciano, Padilla, Bidin, Medialdea, Regalado, Davide,
Jr., Romero and Nocon, JJ., concur.

G.R. No. L-23052

January 29, 1968

CITY OF MANILA, petitioner,


vs.
GENARO N. TEOTICO and COURT OF APPEALS, respondents.
City Fiscal Manuel T. Reyes for petitioner.
Sevilla, Daza and Associates for respondents.
CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta and P. Burgos
Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take him down town. After waiting for
about five minutes, he managed to hail a jeepney that came along to a stop. As he stepped down from the curb to
board the jeepney, and took a few steps, he fell inside an uncovered and unlighted catch basin or manhole on P.
Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses and causing broken
pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing his vision, several persons came to his
assistance and pulled him out of the manhole. One of them brought Teotico to the Philippine General Hospital, where
his injuries were treated, after which he was taken home. In addition to the lacerated wound in his left upper eyelid,
Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip apart from an abrasion
on the right infra-patella region. These injuries and the allergic eruption caused by anti-tetanus injections
administered to him in the hospital, required further medical treatment by a private practitioner who charged therefor
P1,400.00.
As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of Manila, a complaint
which was, subsequently, amended for damages against the City of Manila, its mayor, city engineer, city health
officer, city treasurer and chief of police. As stated in the decision of the trial court, and quoted with approval by the
Court of Appeals,
At the time of the incident, plaintiff was a practicing public accountant, a businessman and a professor at
the University of the East. He held responsible positions in various business firms like the Philippine
Merchandising Co., the A.U. Valencia and Co., the Silver Swan Manufacturing Company and the Sincere
Packing Corporation. He was also associated with several civic organizations such as the Wack Wack Golf
Club, the Chamber of Commerce of the Philippines, Y's Men Club of Manila and the Knights of Rizal. As a
result of the incident, plaintiff was prevented from engaging in his customary occupation for twenty days.
Plaintiff has lost a daily income of about P50.00 during his incapacity to work. Because of the incident, he
was subjected to humiliation and ridicule by his business associates and friends. During the period of his
treatment, plaintiff was under constant fear and anxiety for the welfare of his minor children since he was
their only support. Due to the filing of this case, plaintiff has obligated himself to pay his counsel the sum of
P2,000.00.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC

On the other hand, the defense presented evidence, oral and documentary, to prove that the Storm Drain
Section, Office of the City Engineer of Manila, received a report of the uncovered condition of a catchbasin
at the corner of P. Burgos and Old Luneta Streets, Manila, on January 24, 1958, but the same was covered
on the same day (Exhibit 4); that again the iron cover of the same catch basin was reported missing on
January 30, 1958, but the said cover was replaced the next day (Exhibit 5); that the Office of the City
Engineer never received any report to the effect that the catchbasin in question was not covered between
January 25 and 29, 1968; that it has always been a policy of the said office, which is charged with the duty
of installation, repair and care of storm drains in the City of Manila, that whenever a report is received from

whatever source of the loss of a catchbasin cover, the matter is immediately attended to, either by
immediately replacing the missing cover or covering the catchbasin with steel matting that because of the
lucrative scrap iron business then prevailing, stealing of iron catchbasin covers was rampant; that the
Office of the City Engineer has filed complaints in court resulting from theft of said iron covers; that in order
to prevent such thefts, the city government has changed the position and layout of catchbasins in the City
by constructing them under the sidewalks with concrete cement covers and openings on the side of the
gutter; and that these changes had been undertaken by the city from time to time whenever funds were
available.
After appropriate proceedings the Court of First Instance of Manila rendered the aforementioned decision sustaining
the theory of the defendants and dismissing the amended complaint, without costs.
On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as the City of Manila
is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00. 1 Hence, this appeal by the
City of Manila.
The first issue raised by the latter is whether the present case is governed by Section 4 of Republic Act No. 409
(Charter of the City of Manila) reading:
The city shall not be liable or held for damages or injuries to persons or property arising from the failure of
the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any
other law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing
or attempting to enforce said provisions.
or by Article 2189 of the Civil Code of the Philippines which provides:
Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any
person by reason of defective conditions of road, streets, bridges, public buildings, and other public works
under their control or supervision.
Manila maintains that the former provision should prevail over the latter, because Republic Act 409, is a special law,
intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire
Philippines.
The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its territorial
application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation; but, as
regards the subject-matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule
regulating the liability of the City of Manila for: "damages or injury to persons or property arising from the failure of"
city officers "to enforce the provisions of" said Act "or any other law or ordinance, or from negligence" of the city
"Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other
hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and
municipalities . . . liable for damages for the death of, or injury suffered by any person by reason" specifically
"of the defective condition of roads, streets, bridges, public buildings, and other-public works under their control or
supervision." In other words, said section 4 refers to liability arising from negligence, in general, regardless of the
object thereof, whereas Article 2189 governs liability due to "defective streets," in particular. Since the present action
is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.
It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident involving him
took place in a national highway; and 2) because the City of Manila has not been negligent in connection therewith.

As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of the City.
Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that his injuries were due to the
defective condition of a street which is "under the supervision and control" of the City. In its answer to the amended
complaint, the City, in turn, alleged that "the streets aforementioned were and have been constantly kept in good
condition and regularly inspected and the storm drains and manholes thereof covered by the defendant City and the
officers concerned" who "have been ever vigilant and zealous in the performance of their respective functions and
duties as imposed upon them by law." Thus, the City had, in effect, admitted that P. Burgos Avenue was and
is under its control and supervision.
Moreover, the assertion to the effect that said Avenue is a national highway was made, for the first time, in its motion
for reconsideration of the decision of the Court of Appeals. Such assertion raised, therefore, a question of fact, which
had not been put in issue in the trial court, and cannot be set up, for the first time, on appeal, much less after the
rendition of the decision of the appellate court, in a motion for the reconsideration thereof.
At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that
the defective roads or streets belong to the province, city or municipality from which responsibility is exacted. What
said article requires is that the province, city or municipality have either "control or supervision" over said street or
road. Even if P. Burgos Avenue were, therefore, a national highway, this circumstance would not necessarily detract
from its "control or supervision" by the City of Manila, under Republic Act 409. In fact Section 18(x) thereof provides:
Sec. 18. Legislative powers. The Municipal Board shall have the following legislative powers:
xxx

xxx

xxx

(x) Subject to the provisions of existing law to provide for the laying out, construction and improvement,
and to regulate the use of streets, avenues, alleys, sidewalks, wharves, piers, parks, cemeteries, and other
public places; to provide for lighting, cleaning, and sprinkling of streets and public places; . . . to provide for
the inspection of, fix the license fees for and regulate the openings in the same for the laying of gas, water,
sewer and other pipes, the building and repair of tunnels, sewers, and drains, and all structures in and
under the same and the erecting of poles and the stringing of wires therein; to provide for and regulate
cross-works, curbs, and gutters therein, . . . to regulate traffic and sales upon the streets and other public
places; to provide for the abatement of nuisances in the same and punish the authors or owners thereof; to
provide for the construction and maintenance, and regulate the use, of bridges, viaducts and culverts; to
prohibit and regulate ball playing, kite-flying, hoop rolling, and other amusements which may annoy
persons using the streets and public places, or frighten horses or other animals; to regulate the speed of
horses and other animals, motor and other vehicles, cars, and locomotives within the limits of the city;
to regulate the lights used on all vehicles, cars, and locomotives; . . . to provide for and change the
location, grade, and crossing of railroads, and compel any such railroad to raise or lower its tracks to
conform to such provisions or changes; and to require railroad companies to fence their property, or any
part thereof, to provide suitable protection against injury to persons or property, and to construct and
repair ditches, drains, sewers, and culverts along and under their tracks, so that the natural drainage of the
streets and adjacent property shall not be obstructed.
This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No. 113, dated
May 2, 1955, upon which the City relies. Said Act governs the disposition or appropriation of the highway funds and
the giving of aid to provinces, chartered cities and municipalities in the construction of roads and streets within their
respective boundaries, and Executive Order No. 113 merely implements the provisions of said Republic Act No. 917,
concerning the disposition and appropriation of the highway funds. Moreover, it provides that "the
construction, maintenance and improvement of national primary, national secondary and national aid provincial and
city roads shall be accomplished by the Highway District Engineers and Highway City Engineers under the
supervision of the Commissioner of Public Highways and shall be financed from such appropriations as may be
authorized by the Republic of the Philippines in annual or special appropriation Acts."

Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of
Manila and whether the latter is guilty of negligence, in connection with the maintenance of said road, which were
decided by the Court of Appeals in the affirmative, is one of fact, and the findings of said Court thereon are not
subject to our review.

Republic of the Philippines


SUPREME COURT
Manila

WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the City of Manila. It
is so ordered.1wph1.t
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.

EN BANC
G.R. No. 203974

April 22, 2014

AURELIO M. UMALI, Petitioner,


vs.
COMMISSION ON ELECTIONS, JULIUS CESAR V. VERGARA, and THE CITY GOVERNMENT OF
CABANATUAN, Respondents.
x-----------------------x
G.R. No. 204371
J.V. BAUTISTA, Petitioner,
vs.
COMMISSION ON ELECTIONS, Respondent.
DECISION
VELASCO, JR., J.:
Before the Court is the consolidated case for Petition for Certiorari and Prohibition with prayer for injunctive relief,
docket as G.R. No. 203974, assailing Minute Resolution No. 12-07971 and Minute Resolution No. 12-09252 dated
September 11, 2012 and October 16, 2012, respectively, both promulgated by public respondent Commission on
Elections (COMELEC), and Petition for Mandamus, docketed G.R. No. 204371, seeking to compel public respondent
to implement the same.
The Facts
On July 11, 2011, the Sangguniang Panglungsod of Cabanatuan City passed Resolution No. 183-2011, requesting
the President to declare the conversion of Cabanatuan City from a component city of the province of Nueva Ecija
into a highly urbanized city (HUC). Acceding to the request, the President issued Presidential Proclamation No. 418,
Series of 2012, proclaiming the City of Cabanatuan as an HUC subject to "ratification in a plebiscite by the qualified
voters therein, as provided for in Section 453 of the Local Government Code of 1991."
Respondent COMELEC, acting on the proclamation, issued the assailed Minute Resolution No. 12-0797 which
reads:
WHEREFORE, the Commission RESOLVED, as it hereby RESOLVES, that for purposes of the plebiscite for the
conversion of Cabanatuan City from component city to highly-urbanized city, only those registered residents of
Cabanatuan City should participate in the said plebiscite.

The COMELEC based this resolution on Sec. 453 of the Local Government Code of 1991 (LGC), citing conversion
cases involving Puerto Princesa City in Palawan, Tacloban City in Southern Leyte, and Lapu-Lapu City in Cebu,
where only the residents of the city proposed to be converted were allowed to vote in the corresponding plebiscite.
In due time, petitioner Aurelio M. Umali, Governor of Nueva Ecija, filed a Verified Motion for Reconsideration,
maintaining that the proposed conversion in question will necessarily and directly affect the mother province of
Nueva Ecija. His main argument is that Section 453 of the LGC should be interpreted in conjunction with Sec. 10,
Art. X of the Constitution. He argues that while the conversion in question does not involve the creation of a new or
the dissolution of an existing city, the spirit of the Constitutional provision calls for the people of the local government
unit (LGU) directly affected to vote in a plebiscite whenever there is a material change in their rights and
responsibilities. The phrase "qualified voters therein" used in Sec. 453 of the LGC should then be interpreted to refer
to the qualified voters of the units directly affected by the conversion and not just those in the component city
proposed to be upgraded. Petitioner Umali justified his position by enumerating the various adverse effects of the
Cabanatuan Citys conversion and how it will cause material change not only in the political and economic rights of
the city and its residents but also of the province as a whole.
To the Verified Motion for Reconsideration, private respondent Julius Cesar Vergara, city mayor of Cabanatuan,
interposed an opposition on the ground that Sec. 10, Art. X does not apply to conversions, which is the meat of the
matter. He likewise argues that a specific provision of the LGC, Sec. 453, as couched, allows only the qualified
voters of Cabanatuan City to vote in the plebiscite. Lastly, private respondent pointed out that when Santiago City
was converted in 1994 from a municipality to an independent component city pursuant to Republic Act No. (RA)
7720, the plebiscite held was limited to the registered voters of the then municipality of Santiago.
Following a hearing conducted on October 4, 2012,3 the COMELEC En Banc on October 16, 2012, in E.M No. 12045 (PLEB), by a vote of 5-24 ruled in favor of respondent Vergara through the assailed Minute Resolution 12-0925.
The dispositive portion reads:
The Commission, taking into consideration the arguments of counsels including the Reply-memorandum of
Oppositor, after due deliberation, RESOLVED, as it hereby RESOLVES, as follows:

Meanwhile, on October 25, 2012, respondent COMELEC promulgated Resolution No. 9543, which adopted a
calendar of activities and periods of prohibited acts in connection with the conversion of Cabanatuan City into an
HUC. The Resolution set the conduct of the plebiscite on December 1, 2012. Thereafter, a certain Dr. Rodolfo B.
Punzalan filed a Petition for Declaratory Relief which was raffled to the Regional Trial Court (RTC), Branch 40 in
Palayan City. In the said case, Punzalan prayed that Minute Resolution No. 12-0797 be declared unconstitutional,
that the trial court decree that all qualified voters of the province of Nueva Ecija be included in the plebiscite, and that
a Temporary Restraining Order (TRO) be issued enjoining public respondent from implementing the questioned
resolution. On October 19, 2012, the RTC granted the prayer for a TRO.
On November 6, 2012, public respondent through Minute Resolution No. 12-0989 suspended the preparations for
the event in view of the TRO issued by the RTC. On November 27, 2012, the plebiscite was once again rescheduled
to give way to the May 13, 2013 national, local and ARMM regional elections as per Resolution No. 9563.
After this development, petitioner J.V. Bautista, on December 3, 2012, filed a case before this Court for Mandamus,
docketed as G.R. No. 204371, praying that public respondent be ordered to schedule the plebiscite either on
December 15 or 22, 2012. Petitioner Bautista argued that since the TRO issued by the RTC has already expired, the
duty of the public respondent to hold the plebiscite has become mandatory and ministerial. Petitioner Bautista also
alleged that the delay in holding the plebiscite is inexcusable given the requirement that it should be held within a
period of 120 days form the date of the Presidents declaration.
In its Comment to the Bautista petition, public respondent justified its position by arguing that mandamus will not
issue to enforce a right which is in substantial dispute. With all the legal conflicts surrounding the case, it cannot be
said that there is a clear showing of petitioner Bautistas entitlement to the relief sought. Respondent COMELEC
likewise relied on Sec. 5 of the Omnibus Election Code to justify the postponements, citing incidents of violence that
ensued in the locality during the plebiscite period.
After the conclusion of the 2013 elections, public respondent issued Resolution No. 1353 scheduling the plebiscite to
January 25, 2014. However, a TRO was issued by this Court on January 15, 2014 in G.R. No. 203974 to suspend
the conduct of the plebiscite for Cabanatuan Citys conversion. Given the intertwining factual milieu of the two
petitions before the Court, both cases were consolidated on March 18, 2014.

1) To DENY the Motion for Reconsideration of oppositor Governor Aurelio M. Umali; and
The Issue
2) To SCHEDULE the conduct of Plebiscite for the conversion of Cabanatuan City from component city
into highly-urbanized city with registered residents only of Cabanatuan City to participate in said plebiscite.
Let the Deputy Executive Director for Operations implement this resolution.
SO ORDERED.
Hence, the Petition for Certiorari with prayer for injunctive relief, docketed as G.R. No. 203974, on substantially the
same arguments earlier taken by petitioner Umali before the poll body. On the other hand, public respondent
COMELEC, through the Office of the Solicitor General, maintained in its Comment that Cabanatuan City is merely
being converted from a component city into an HUC and that the political unit directly affected by the conversion will
only be the city itself. It argues that in this instance, no political unit will be created, merged with another, or will be
removed from another LGU, and that no boundaries will be altered. The conversion would merely reinforce the
powers and prerogatives already being exercised by the city, with the political units probable elevation to that of an
HUC as demanded by its compliance with the criteria established under the LGC. Thus, the participation of the
voters of the entire province in the plebiscite will not be necessary.
Private respondent will later manifest that it is adopting the Comment of the COMELEC.

The bone of contention in the present controversy boils down to whether the qualified registered voters of the entire
province of Nueva Ecija or only those in Cabanatuan City can participate in the plebiscite called for the conversion of
Cabanatuan City from a component city into an HUC.
Resolving the Petition for Certiorari either way will necessarily render the Petition for Mandamus moot and academic
for ultimately, the public respondent will be ordered to hold the plebiscite. The only variation will be as regards its
participants.
The Courts Ruling
The Petition for Certiorari is meritorious.
Sec. 453 of the LGC should be interpreted in accordance with Sec. 10, Art. X of the Constitution
Petitioner Umali asseverates that Sec. 10, Art. X of the Constitution should be the basis for determining the qualified
voters who will participate in the plebiscite to resolve the issue. Sec. 10, Art. X reads:
Section 10, Article X. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its
boundary substantially altered, except in accordance with the criteria established in the local government code and

subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected. (emphasis
supplied)
Petitioner Umali elucidates that the phrase "political units directly affected" necessarily encompasses not only
Cabanatuan City but the entire province of Nueva Ecija. Hence, all the registered voters in the province are qualified
to cast their votes in resolving the proposed conversion of Cabanatuan City.

Section 10. Plebiscite Requirement. No creation, division, merger, abolition, or substantial alteration of boundaries
of local government units shall take effect unless approved by a majority of the votes cast in a plebiscite called for
the purpose in the political unit or units directly affected." (emphasis supplied)
With the twin criteria of standard and plebiscite satisfied, the delegation to LGUs of the power to create, divide,
merge, abolish or substantially alter boundaries has become a recognized exception to the doctrine of nondelegation of legislative powers.

On the other hand, respondents invoke Sec. 453 of the LGC to support their claim that only the City of Cabanatuan
should be allowed to take part in the voting. Sec. 453 states:

Likewise, legislative power was delegated to the President under Sec. 453 of the LGC quoted earlier, which states:

Section 453. Duty to Declare Highly Urbanized Status. It shall be the duty of the President to declare a city as
highly urbanized within thirty (30) days after it shall have met the minimum requirements prescribed in the
immediately preceding Section, upon proper application therefor and ratification in a plebiscite by the qualified voters
therein. (emphasis supplied)

Section 453. Duty to Declare Highly Urbanized Status. It shall be the duty of the President to declare a city as
highly urbanized within thirty (30) days after it shall have met the minimum requirements prescribed in the
immediately preceding Section, upon proper application therefor and ratification in a plebiscite by the qualified voters
therein.

Respondents take the phrase "registered voters therein" in Sec. 453 as referring only to the registered voters in the
city being converted, excluding in the process the voters in the remaining towns and cities of Nueva Ecija.

In this case, the provision merely authorized the President to make a determination on whether or not the
requirements under Sec. 45210 of the LGC are complied with. The provision makes it ministerial for the President,
upon proper application, to declare a component city as highly urbanized once the minimum requirements, which are
based on certifiable and measurable indices under Sec. 452, are satisfied. The mandatory language "shall" used in
the provision leaves the President with no room for discretion.

Before proceeding to unravel the seeming conflict between the two provisions, it is but proper that we ascertain first
the relationship between Sec. 10, Art. X of the Constitution and Sec. 453 of the LGC.
First of all, we have to restate the general principle that legislative power cannot be delegated. Nonetheless, the
general rule barring delegation is subject to certain exceptions allowed in the Constitution, namely:
(1) Delegation by Congress to the President of the power to fix "tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts within the framework of the national development
program of the Government" under Section 28(2) of Article VI of the Constitution; and
(2) Delegation of emergency powers by Congress to the President "to exercise powers necessary and
proper to carry out a declared national policy" in times of war and other national emergency under Section
23(2) of Article VI of the Constitution.
The power to create, divide, merge, abolish or substantially alter boundaries of provinces, cities, municipalities or
barangays, which is pertinent in the case at bar, is essentially legislative in nature.5 The framers of the Constitution
have, however, allowed for the delegation of such power in Sec. 10, Art. X of the Constitution as long as (1) the
criteria prescribed in the LGC is met and (2) the creation, division, merger, abolition or the substantial alteration of
the boundaries is subject to the approval by a majority vote in a plebiscite.
True enough, Congress delegated such power to the Sangguniang Panlalawigan or Sangguniang Panlungsod to
create barangays pursuant to Sec. 6 of the LGC, which provides:
Section 6. Authority to Create Local Government Units. - A local government unit may be created, divided, merged,
abolished, or its boundaries substantially altered either by law enacted by Congress in the case of a province, city,
municipality, or any other political subdivision, or by ordinance passed by the sangguniang panlalawigan or
sangguniang panlungsod concerned in the case of a barangay located within its territorial jurisdiction, subject to such
limitations and requirements prescribed in this Code." (emphasis supplied)
The guidelines for the exercise of this authority have sufficiently been outlined by the various LGC provisions
detailing the requirements for the creation of barangays6, municipalities7, cities8, and provinces9. Moreover,
compliance with the plebiscite requirement under the Constitution has also been directed by the LGC under its Sec.
10, which reads:

In so doing, Sec. 453, in effect, automatically calls for the conduct of a plebiscite for purposes of conversions once
the requirements are met. No further legislation is necessary before the city proposed to be converted becomes
eligible to become an HUC through ratification, as the basis for the delegation of the legislative authority is the very
LGC.
In view of the foregoing considerations, the Court concludes that the source of the delegation of power to the LGUs
under Sec. 6 of the LGC and to the President under Sec. 453 of the same code is none other than Sec. 10, Art. X of
the Constitution.
Respondents, however, posit that Sec. 453 of the LGC is actually outside the ambit of Sec. 10, Art. X of the
Constitution, considering that the conversion of a component city to an HUC is not "creation, division, merge,
abolition or substantial alternation of boundaries" encompassed by the said constitutional provision.
This proposition is bereft of merit.
First, the Courts pronouncement in Miranda vs. Aguirre11 is apropos and may be applied by analogy. While Miranda
involves the downgrading, instead of upgrading, as here, of an independent component city into a component city, its
application to the case at bar is nonetheless material in ascertaining the proper treatment of conversions. In that
seminal case, the Court held that the downgrading of an independent component city into a component city comes
within the purview of Sec. 10, Art. X of the Constitution.
In Miranda, the rationale behind the afore-quoted constitutional provision and its application to cases of conversion
were discussed thusly:
A close analysis of the said constitutional provision will reveal that the creation, division, merger, abolition or
substantial alteration of boundaries of local government units involve a common denominator - - - material change in
the political and economic rights of the local government units directly affected as well as the people therein. It is
precisely for this reason that the Constitution requires the approval of the people "in the political units directly
affected." It is not difficult to appreciate the rationale of this constitutional requirement. The 1987 Constitution, more
than any of our previous Constitutions, gave more reality to the sovereignty of our people for it was borne out of the
people power in the 1986 EDSA revolution. Its Section 10, Article X addressed the undesirable practice in the past

whereby local government units were created, abolished, merged or divided on the basis of the vagaries of politics
and not of the welfare of the people. Thus, the consent of the people of the local government unit directly affected
was required to serve as a checking mechanism to any exercise of legislative power creating, dividing, abolishing,
merging or altering the boundaries of local government units. It is one instance where the people in their sovereign
capacity decide on a matter that affects them - - - direct democracy of the people as opposed to democracy thru
peoples representatives. This plebiscite requirement is also in accord with the philosophy of the Constitution
granting more autonomy to local government units.12
It was determined in the case that the changes that will result from the conversion are too substantial that there is a
necessity for the plurality of those that will be affected to approve it. Similar to the enumerated acts in the
constitutional provision, conversions were found to result in material changes in the economic and political rights of
the people and LGUs affected. Given the far-reaching ramifications of converting the status of a city, we held that the
plebiscite requirement under the constitutional provision should equally apply to conversions as well. Thus, RA
852813 was declared unconstitutional in Miranda on the ground that the law downgraded Santiago City in Isabela
without submitting it for ratification in a plebiscite, in contravention of Sec. 10, Art. X of the Constitution.
Second, while conversion to an HUC is not explicitly provided in Sec. 10, Art. X of the Constitution we nevertheless
observe that the conversion of a component city into an HUC is substantial alteration of boundaries.
As the phrase implies, "substantial alteration of boundaries" involves and necessarily entails a change in the
geographical configuration of a local government unit or units. However, the phrase "boundaries" should not be
limited to the mere physical one, referring to the metes and bounds of the LGU, but also to its political boundaries. It
also connotes a modification of the demarcation lines between political subdivisions, where the LGUs exercise of
corporate power ends and that of the other begins. And as a qualifier, the alteration must be "substantial" for it to be
within the ambit of the constitutional provision.
Pertinent is Art. 12(c) of the LGCs Implementing Rules and Regulations, which reads:
Art. 12. Conversion of a Component City into a Highly Urbanized City.
xxxx
(c) Effect of Conversion The conversion of a component city into a highly-urbanized city shall make it independent
of the province where it is geographically located. (emphasis added)
Verily, the upward conversion of a component city, in this case Cabanatuan City, into an HUC will come at a steep
price. It can be gleaned from the above-cited rule that the province will inevitably suffer a corresponding decrease in
territory brought about by Cabanatuan Citys gain of independence. With the citys newfound autonomy, it will be free
from the oversight powers of the province, which, in effect, reduces the territorial jurisdiction of the latter. What once
formed part of Nueva Ecija will no longer be subject to supervision by the province. In more concrete terms, Nueva
Ecija stands to lose 282.75 sq. km. of its territorial jurisdiction with Cabanatuan Citys severance from its mother
province. This is equivalent to carving out almost 5% of Nueva Ecijas 5,751.3 sq. km. area. This sufficiently satisfies
the requirement that the alteration be "substantial."
Needless to stress, the alteration of boundaries would necessarily follow Cabanatuan Citys conversion in the same
way that creations, divisions, mergers, and abolitions generally cannot take place without entailing the alteration. The
enumerated acts, after all, are not mutually exclusive, and more often than not, a combination of these acts attends
the reconfiguration of LGUs.
In light of the foregoing disquisitions, the Court rules that conversion to an HUC is substantial alternation of
boundaries governed by Sec. 10, Art. X and resultantly, said provision applies, governs and prevails over Sec. 453 of
the LGC.

Moreover, the rules of statutory construction dictate that a particular provision should be interpreted with the other
relevant provisions in the law The Court finds that it is actually Sec. 10 of the LGC which is undeniably the applicable
provision on the conduct of plebiscites. The title of the provision itself, "Plebiscite Requirement", makes this obvious.
It requires a majority of the votes cast in a plebiscite called for the purpose in the political unit or units directly
affected. On the other hand, Sec. 453 of the LGC, entitled "Duty to Declare Highly Urbanized Status", is only on the
duty to declare a city as highly urbanized. It mandates the Office of the President to make the declaration after the
city has met the requirements under Sec. 452, and upon proper application and ratification in a plebiscite. The
conduct of a plebiscite is then a requirement before a declaration can be made. Thus, the Court finds that Sec. 10 of
the LGC prevails over Sec. 453 of the LGC on the plebiscite requirement.
We now take the bull by the horns and resolve the issue whether Sec. 453 of the LGC trenches on Sec. 10, Art. X of
the Constitution.
Hornbook doctrine is that neither the legislative, the executive, nor the judiciary has the power to act beyond the
Constitutions mandate. The Constitution is supreme; any exercise of power beyond what is circumscribed by the
Constitution is ultra vires and a nullity. As elucidated by former Chief Justice Enrique Fernando in Fernandez v.
Cuerva:14
Where the assailed legislative or executive act is found by the judiciary to be contrary to the Constitution, it is null
and void. As the new Civil Code puts it: "When the courts declare a law to be inconsistent with the Constitution, the
former shall be void and the latter shall govern." Administrative or executive acts, orders and regulations shall be
valid only when they are not contrary to the laws or the Constitution. The above provision of the civil Code reflects
the orthodox view that an unconstitutional act, whether legislative or executive, is not a law, confers no rights,
imposes no duties, and affords no protection. x x x
Applying this orthodox view, a law should be construed in harmony with and not in violation of the Constitution.15In a
long line of cases, the cardinal principle of construction established is that a statute should be interpreted to assure
its being in consonance with, rather than repugnant to, any constitutional command or prescription.16 If there is
doubt or uncertainty as to the meaning of the legislative, if the words or provisions are obscure or if the enactment is
fairly susceptible of two or more constitution, that interpretation which will avoid the effect of unconstitutionality will be
adopted, even though it may be necessary, for this purpose, to disregard the more usual or apparent import of the
language used.17
Pursuant to established jurisprudence, the phrase "by the qualified voters therein" in Sec. 453 should be construed in
a manner that will avoid conflict with the Constitution. If one takes the plain meaning of the phrase in relation to the
declaration by the President that a city is an HUC, then, Sec. 453 of the LGC will clash with the explicit provision
under Sec. 10, Art. X that the voters in the "political units directly affected" shall participate in the plebiscite. Such
construction should be avoided in view of the supremacy of the Constitution. Thus, the Court treats the phrase "by
the qualified voters therein" in Sec. 453 to mean the qualified voters not only in the city proposed to be converted to
an HUC but also the voters of the political units directly affected by such conversion in order to harmonize Sec. 453
with Sec. 10, Art. X of the Constitution.
The Court finds that respondents are mistaken in construing Sec. 453 in a vacuum. Their interpretation of Sec. 453
of the LGC runs afoul of Sec. 10, Art. X of the Constitution which explicitly requires that all residents in the "political
units directly affected" should be made to vote.
Respondents make much of the plebiscites conducted in connection with the conversion of Puerto Princesa City,
Tacloban City and Lapu-Lapu City where the ratification was made by the registered voters in said cities alone. It is
clear, however, that the issue of who are entitled to vote in said plebiscites was not properly raised or brought up in
an actual controversy. The issue on who will vote in a plebiscite involving a conversion into an HUC is a novel issue,
and this is the first time that the Court is asked to resolve the question. As such, the past plebiscites in the
aforementioned cities have no materiality or relevance to the instant petition. Suffice it to say that conversion of said
cities prior to this judicial declaration will not be affected or prejudiced in any manner following the operative fact
doctrinethat the actual existence of a statute prior to such a determination is an operative fact and may have
consequences which cannot always be erased by a new judicial declaration.18

The entire province of Nueva Ecija will be directly


affected by Cabanatuan Citys conversion

However, I do not know the implication of the use of these words. Maybe there will be no substantial difference, but I
just want to inform the Committee about this.

After the Court has resolved the seeming irreconcilability of Sec. 10, Art. X of the Constitution and Sec. 453 of the
LGC, it is now time to elucidate the meaning of the phrase "political units directly affected" under Sec. 10, Art. X.

Mr. Nolledo: Can we not adhere to the original "unit or units"? Will there be no objection on the part of the two
Gentlemen from the floor?

a. "Political units directly affected" defined

Mr. Davide: I would object. I precisely asked for the deletion of the words "unit or" because in the plebiscite to be
conducted, it must involve all the units affected. If it is the creation of a barangay plebiscite because it is affected. It
would mean a loss of a territory. (emphasis added)

In identifying the LGU or LGUs that should be allowed to take part in the plebiscite, what should primarily be
determined is whether or not the unit or units that desire to participate will be "directly affected" by the change. To
interpret the phrase, Tan v. COMELEC19 and Padilla v. COMELEC20 are worth revisiting.
We have ruled in Tan, involving the division of Negros Occidental for the creation of the new province of Negros del
Norte, that the LGUs whose boundaries are to be altered and whose economy would be affected are entitled to
participate in the plebiscite. As held:
It can be plainly seen that the aforecited constitutional provision makes it imperative that there be first obtained "the
approval of a majority of votes in the plebiscite in the unit or units affected" whenever a province is created, divided
or merged and there is substantial alteration of the boundaries. It is thus inescapable to conclude that the boundaries
of the existing province of Negros Occidental would necessarily be substantially altered by the division of its existing
boundaries in order that there can be created the proposed new province of Negros del Norte. Plain and simple logic
will demonstrate than that two political units would be affected.
The first would be the parent province of Negros Occidental because its boundaries would be substantially altered.
The other affected entity would be composed of those in the area subtracted from the mother province to constitute
the proposed province of Negros del Norte.21
xxxx
To form the new province of Negros del Norte no less than three cities and eight municipalities will be subtracted
from the parent province of Negros Occidental. This will result in the removal of approximately 2,768.4 square
kilometers from the land area of an existing province whose boundaries will be consequently substantially altered. It
becomes easy to realize that the consequent effects of the division of the parent province necessarily will affect all
the people living in the separate areas of Negros Occidental and the proposed province of Negros del Norte. The
economy of the parent province as well as that of the new province will be inevitably affected, either for the better or
for the worse. Whatever be the case, either or both of these political groups will be affected and they are, therefore,
the unit or units referred to in Section 3 of Article XI of the Constitution which must be included in the plebiscite
contemplated therein.22 (emphasis added)

The same sentiment was shared by the Senate during its deliberations on Senate Bill No. 155the predecessor of
the LGCthus:
Senator Guingona. Can we make that clearer by example? Let us assume that a province has municipalities and
there is a merger of two municipalities. Would this therefore mean that the plebiscite will be conducted within the two
merged municipalities and not in the eight other municipalities?
Senator Pimentel. The whole province, Mr. President, will be affected, and that is the reason we probably have to
involve the entire province.
Senator Guingona. So the plebiscite will not be held only in the two municipalities which are being merged, but the
entire province will now have to undergo.
Senator Pimentel. I suppose that was the ruling in the Negros del Norte case.
Senator Guingona. Supposing it refers to barangays, will the entire municipality have to vote? There are two
barangays being merged, say, out of 100 barangays. Would the entire municipality have to participate in the
plebiscite?
Senator Pimentel. Yes, Mr. President, because the municipality is affected directly by the merger of two of its
barangay.
Senator Guingona. And, if, out of 100 barangay, 51 are being merged, abolished, whatever, would the rest of the
municipality not participate in the plebiscite?
Senator Pimentel. Do all the 51 barangay that the Gentleman mentioned, Mr. President, belong to one municipality?

Sec. 3, Art. XI of the 1973 Constitution, as invoked in Tan, states:

Senator Guingona. Yes.

SEC. 3. No province, city, municipality or barrio may be created, divided, merged abolished, or its boundary
substantially altered, except in accordance with the criteria established in the local government code, and subject to
the approval by a majority of the votes in a plebiscite in the unit or units affected. (emphasis added)

Senator Pimentel. Then it will only involve the municipality where the 51 barangays belong.

Despite the change in phraseology compared to what is now Sec. 10, Art. X, we affirmed our ruling in Tan in the latter
case of Padilla. As held, the removal of the phrase "unit or" only served to sustain the earlier finding that what is
contemplated by the phase "political units directly affected" is the plurality of political units which would participate in
the plebiscite. As reflected in the journal of the Constitutional Commission:23

Senator Pimentel. That is correct, Mr. President.

Mr. Maambong: While we have already approved the deletion of "unit or," I would like to inform the Committee that
under the formulation in the present Local Government Code, the words used are actually "political unit or units."

Senator Guingona. Yes. So, the entire municipality will now have to undergo a plebiscite.

Senator Guingona. In the earlier example, if it is only a merger of two municipalities, let us say, in a province with 10
municipalities the entire province will the other municipalities although not affected also have to participate in the
plebiscite?

Senator Pimentel. Yes. The reason is that the municipalities are within the territorial boundaries of the province itself,
it will have to be altered as a result of the two municipalities that the Gentleman mentioned.24

City

In the more recent case of Miranda, the interpretation in Tan and Padilla was modified to include not only changes in
economic but also political rights in the criteria for determining whether or not an LGU shall be considered "directly
affected." Nevertheless, the requirement that the plebiscite be participated in by the plurality of political units directly
affected remained.
b. Impact on Economic Rights
To recall, it was held in Miranda that the changes that will result in the downgrading of an LGU from an independent
component city to a component city cannot be categorized as insubstantial, thereby necessitating the conduct of a
plebiscite for its ratification. In a similar fashion, herein petitioner Umali itemized the adverse effects of Cabanatuan
Citys conversion to the province of Nueva Ecija to justify the provinces participation in the plebiscite to be
conducted.
Often raised is that Cabanatuan Citys conversion into an HUC and its severance from Nueva Ecija will result in the
reduction of the Internal Revenue Allotment (IRA) to the province based on Sec. 285 of the LGC. The law states:
Section 285. Allocation to Local Government Units. - The share of local government units in the internal revenue
allotment shall be collected in the following manner:
(a) Provinces - Twenty-three percent (23%);

259,267

Land Area
(sq. km.)

5,751.33

282.75

5,468.58

IRA Share of
Nueva Ecija

Actual IRA
Share

Estimated IRA
share excluding
Cabanatuan
City

Reduction

Based on
Population

P800,772,618.45

P688,174,751.66

P112,597,866.79

Based on Land
Area

P263,470,472.62

P250,517,594.56

P 12,952,878.06

Total

P125,550,744.85

Moreover, his claim that the province will lose shares in provincial taxes imposed in Cabanatuan City is well-founded.
This is based on Sec. 151 of the LGC, which states:

(c) Municipalities - Thirty-four percent (34%); and


(d) Barangays - Twenty percent (20%)
Provided, however, That the share of each province, city, and municipality shall be determined on the basis of the
following formula:
(a) Population - Fifty percent (50%);

SECTION 151. Scope of Taxing Powers. Except as otherwise provided in this Code, the city, may levy the taxes,
fees, and charges which the province or municipality may impose: Provided, however, That the taxes, fees and
charges levied and collected by highly urbanized and independent component cities shall accrue to them and
distributed in accordance with the provisions of this Code. (emphasis added)
Once converted, the taxes imposed by the HUC will accrue to itself. Prior to this, the province enjoys the prerogative
to impose and collect taxes such as those on sand, gravel and other quarry resources,26 professional taxes,27 and
amusement taxes28 over the component city. While, it may be argued that this is not a derogation of the provinces
taxing power because it is in no way deprived of its right to collect the mentioned taxes from the rest of its territory,
the conversion will still reduce the provinces taxing jurisdiction, and corollary to this, it will experience a
corresponding decrease in shares in local tax collections. This reduction in both taxing jurisdiction and shares poses
a material and substantial change to the provinces economic rights, warranting its participation in the plebiscite.

(b) Land Area - Twenty-five percent (25%); and


(c) Equal sharing - Twenty-five percent (25%)
In our earlier disquisitions, we have explained that the conversion into an HUC carries the accessory of substantial
alteration of boundaries and that the province of Nueva Ecija will, without a doubt, suffer a reduction in territory
because of the severance of Cabanatuan City. The residents of the city will cease to be political constituencies of the
province, effectively reducing the latters population. Taking this decrease in territory and population in connection
with the above formula, it is conceded that Nueva Ecija will indeed suffer a reduction in IRA given the decrease of its
multipliers values. As assessed by the Regional Director of the Department of Budget and Management (DBM) for
Region III:25
Province of
Nueva Ecija

259,267

Clear as crystal is that the province of Nueva Ecija will suffer a substantial reduction of its share in IRA once
Cabanatuan City attains autonomy. In view of the economic impact of Cabanatuan Citys conversion, petitioner
Umalis contention, that its effect on the province is not only direct but also adverse, deserves merit.

(b) Cities - Twenty-three percent (23%);

Basis for IRA


Computation

1,843,853
No. of Population
CY 2007 Census

Cabanatuan
City

Province of
Nueva Ecija Net
of Cabanatuan

To further exemplify the impact of these changes, a perusal of Secs. 452(a) and 461(a) of the LGC is in order, viz:
Section 452. Highly Urbanized Cities.
(a) Cities with a minimum population of two hundred thousand (200,000) inhabitants as certified by the
National Statistics Office, and within the latest annual income of at least Fifty Million Pesos
(P50,000,000.00) based on 1991 constant prices, as certified by the city treasurer, shall be classified as
highly urbanized cities.

Section 461. Requisites for Creation.


(a) A province may be created if it has an average annual income, as certified by the Department of Finance, of not
less than Twenty million pesos (P20,000,000.00) based on 1991 constant prices and either of the following
requisites:
(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the Lands
Management Bureau; or
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as certified by the
National Statistics Office:
Provided, That, the creation thereof shall not reduce the land area, population, and income of the original unit or
units at the time of said creation to less than the minimum requirements prescribed herein.
A component citys conversion into an HUC and its resultant autonomy from the province is a threat to the latters
economic viability. Noteworthy is that the income criterion for a component city to be converted into an HUC is higher
than the income requirement for the creation of a province. The ensuing reduction in income upon separation would
clearly leave a crippling effect on the provinces operations as there would be less funding to finance infrastructure
projects and to defray overhead costs. Moreover, the quality of services being offered by the province may suffer
because of looming austerity measures. These are but a few of the social costs of the decline in the provinces
economic performance, which Nueva Ecija is bound to experience once its most progressive city of Cabanatuan
attains independence.
c. Impact on Political Rights
Aside from the alteration of economic rights, the political rights of Nueva Ecija and those of its residents will also be
affected by Cabanatuans conversion into an HUC. Notably, the administrative supervision of the province over the
city will effectively be revoked upon conversion. Secs. 4 and 12, Art. X of the Constitution read:
Sec. 4. The President of the Philippines shall exercise general supervision over local governments. Provinces with
respect to component cities and municipalities, and cities and municipalities with respect to component barangays
shall ensure that the acts of their component units are within the scope of their prescribed powers and functions.
Sec 12. Cities that are highly urbanized, as determined by law, and component cities whose charters prohibit their
voters from voting for provincial elective officials, shall be independent of the province. The voters of component
cities within a province, whose charters contain no such prohibition, shall not be deprived of their right to vote for
elective provincial officials.
Duties, privileges and obligations appertaining to HUCs will attach to Cabanatuan City if it is converted into an HUC.
This includes the right to be outside the general supervision of the province and be under the direct supervision of
the President. An HUC is not subject to provincial oversight because the complex and varied problems in an HUC
due to a bigger population and greater economic activity require greater autonomy.29 The provincial government
stands to lose the power to ensure that the local government officials of Cabanatuan City act within the scope of its
prescribed powers and functions,30 to review executive orders issued by the city mayor, and to approve resolutions
and ordinances enacted by the city council.31 The province will also be divested of jurisdiction over disciplinary
cases concerning the elected city officials of the new HUC, and the appeal process for administrative case decisions
against barangay officials of the city will also be modified accordingly.32 Likewise, the registered voters of the city will
no longer be entitled to vote for and be voted upon as provincial officials.33
In cutting the umbilical cord between Cabanatuan City and the province of Nueva Ecija, the city will be separated
from the territorial jurisdiction of the province, as earlier explained. The provincial government will no longer be

responsible for delivering basic services for the city residents benefit. Ordinances and resolutions passed by the
provincial council will no longer cover the city. Projects queued by the provincial government to be executed in the
city will also be suspended if not scrapped to prevent the LGU from performing functions outside the bounds of its
territorial jurisdiction, and from expending its limited resources for ventures that do not cater to its
constituents.1wphi1
In view of these changes in the economic and political rights of the province of Nueva Ecija and its residents, the
entire province certainly stands to be directly affected by the conversion of Cabanatuan City into an HUC. Following
the doctrines in Tan and Padilla, all the qualified registered voters of Nueva Ecija should then be allowed to
participate in the plebiscite called for that purpose.
Respondents apprehension that requiring the entire province to participate in the plebiscite will set a dangerous
precedent leading to the failure of cities to convert is unfounded. Their fear that provinces will always be expected to
oppose the conversion in order to retain the citys dependence is speculative at best. In any event, any vote of
disapproval cast by those directly affected by the conversion is a valid exercise of their right to suffrage, and our
democratic processes are designed to uphold the decision of the majority, regardless of the motive behind the vote. It
is unfathomable how the province can be deprived of the opportunity to exercise the right of suffrage in a matter that
is potentially deleterious to its economic viability and could diminish the rights of its constituents. To limit the
plebiscite to only the voters of the areas to be partitioned and seceded from the province is as absurd and illogical as
allowing only the secessionists to vote for the secession that they demanded against the wishes of the majority and
to nullify the basic principle of majority rule.34
WHEREFORE, premises considered, the Petition for Certiorari, docketed as G.R. No. 203974, is hereby GRANTED.
COMELEC Minute Resolution No. 12-0797 dated September 11, 2012 and Minute Resolution No. 12-0925 dated
October 16, 2012 are hereby declared NULL and VOID. Public respondent COMELEC is hereby enjoined from
implementing the said Resolutions. Additionally, COMELEC is hereby ordered to conduct a plebiscite for the purpose
of converting Cabanatuan City into a Highly Urbanized City to be participated in by the qualified registered voters of
Nueva Ecij a within 120 days from the finality of this Decision. The Petition for Mandamus, docketed as G.R. No.
204371, is hereby DISMISSED.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 189793

April 7, 2010

SENATOR BENIGNO SIMEON C. AQUINO III and MAYOR JESSE ROBREDO, Petitioners,
vs.
COMMISSION ON ELECTIONS represented by its Chairman JOSE A.R. MELO and its Commissioners, RENE
V. SARMIENTO, NICODEMO T. FERRER, LUCENITO N. TAGLE, ARMANDO VELASCO, ELIAS R. YUSOPH AND
GREGORIO LARRAZABAL, Respondents.
DECISION
PEREZ, J.:
This case comes before this Court by way of a Petition for Certiorari and Prohibition under Rule 65 of the Rules of
Court. In this original action, petitioners Senator Benigno Simeon C. Aquino III and Mayor Jesse Robredo, as public
officers, taxpayers and citizens, seek the nullification as unconstitutional of Republic Act No. 9716, entitled "An Act
Reapportioning the Composition of the First (1st) and Second (2nd) Legislative Districts in the Province of
Camarines Sur and Thereby Creating a New Legislative District From Such Reapportionment." Petitioners
consequently pray that the respondent Commission on Elections be restrained from making any issuances and from
taking any steps relative to the implementation of Republic Act No. 9716.
Republic Act No. 9716 originated from House Bill No. 4264, and was signed into law by President Gloria Macapagal
Arroyo on 12 October 2009. It took effect on 31 October 2009, or fifteen (15) days following its publication in the
Manila Standard, a newspaper of general circulation.1 In substance, the said law created an additional legislative
district for the Province of Camarines Sur by reconfiguring the existing first and second legislative districts of the
province.
Prior to Republic Act No. 9716, the Province of Camarines Sur was estimated to have a population of
1,693,821,2distributed among four (4) legislative districts in this wise:
District
1st District

2nd District

Municipalities/Cities
Del Gallego
Ragay
Lupi
Sipocot
Cabusao

Libmanan
Minalabac
Pamplona
Pasacao
San Fernando

Gainza
Milaor
Naga
Pili

Canaman
Camaligan
Magarao
Bombon

Population

417,304

474,899

3rd District

4th District

Ocampo

Calabanga

Caramoan
Garchitorena
Goa
Lagonoy
Presentacion

Sangay
San Jose
Tigaon
Tinamba
Siruma

Iriga
Baao
Balatan
Bato

Buhi
Bula
Nabua

372,548

429,070

Following the enactment of Republic Act No. 9716, the first and second districts of Camarines Sur were reconfigured
in order to create an additional legislative district for the province. Hence, the first district municipalities of Libmanan,
Minalabac, Pamplona, Pasacao, and San Fernando were combined with the second district municipalities of Milaor
and Gainza to form a new second legislative district. The following table3 illustrates the reapportionment made by
Republic Act No. 9716:
District
1st District

2nd District

Municipalities/Cities
Del Gallego
Ragay
Lupi
Sipocot
Cabusao

Population

176,383

Petitioners contend that the reapportionment introduced by Republic Act No. 9716, runs afoul of the explicit
constitutional standard that requires a minimum population of two hundred fifty thousand (250,000) for the creation of
a legislative district.5 The petitioners claim that the reconfiguration by Republic Act No. 9716 of the first and second
districts of Camarines Sur is unconstitutional, because the proposed first district will end up with a population of less
than 250,000 or only 176,383.
Petitioners rely on Section 5(3), Article VI of the 1987 Constitution as basis for the cited 250,000 minimum population
standard.6 The provision reads:
Article VI
Section 5. (1) x x x x
(2) x x x x
(3) Each legislative district shall comprise, as far as practicable, contiguous, compact, and adjacent
territory. Each city with a population of at least two hundred fifty thousand, or each province, shall have at
least one representative.
(4) x x x x (Emphasis supplied).

Libmanan
Minalabac
Pamplona
Pasacao

San Fernando
Gainza
Milaor

3rd District (formerly 2nd District)

Naga
Pili
Ocampo
Canaman

Camaligan
Magarao
Bombon
Calabanga

439,043

4th District (formerly 3rd District)

Caramoan
Garchitorena
Goa
Lagonoy
Presentacion

Sangay
San Jose
Tigaon
Tinamba
Siruma

372,548

Iriga
Baao
Balatan
Bato

Buhi
Bula
Nabua

429,070

5th District (formerly 4th District)

Petitioner Aquino III was one of two senators who voted against the approval of the Bill by the Senate. His copetitioner, Robredo, is the Mayor of Naga City, which was a part of the former second district from which the
municipalities of Gainza and Milaor were taken for inclusion in the new second district. No other local executive
joined the two; neither did the representatives of the former third and fourth districts of the province.

276,777

Republic Act No. 9716 is a well-milled legislation. The factual recitals by both parties of the origins of the bill that
became the law show that, from the filing of House Bill No. 4264 until its approval by the Senate on a vote of thirteen
(13) in favor and two (2) against, the process progressed step by step, marked by public hearings on the sentiments
and position of the local officials of Camarines Sur on the creation of a new congressional district, as well as
argumentation and debate on the issue, now before us, concerning the stand of the oppositors of the bill that a
population of at least 250,000 is required by the Constitution for such new district.4

The petitioners posit that the 250,000 figure appearing in the above-cited provision is the minimum population
requirement for the creation of a legislative district.7 The petitioners theorize that, save in the case of a newly
created province, each legislative district created by Congress must be supported by a minimum population of at
least 250,000 in order to be valid.8 Under this view, existing legislative districts may be reapportioned and severed to
form new districts, provided each resulting district will represent a population of at least 250,000. On the other hand,
if the reapportionment would result in the creation of a legislative seat representing a populace of less than 250,000
inhabitants, the reapportionment must be stricken down as invalid for non-compliance with the minimum population
requirement.
In support of their theory, the petitioners point to what they claim is the intent of the framers of the 1987 Constitution
to adopt a population minimum of 250,000 in the creation of additional legislative seats.9 The petitioners argue that
when the Constitutional Commission fixed the original number of district seats in the House of Representatives to
two hundred (200), they took into account the projected national population of fifty five million (55,000,000) for the
year 1986.10 According to the petitioners, 55 million people represented by 200 district representatives translates to
roughly 250,000 people for every one (1) representative.11 Thus, the 250,000 population requirement found in
Section 5(3), Article VI of the 1987 Constitution is actually based on the population constant used by the
Constitutional Commission in distributing the initial 200 legislative seats.
Thus did the petitioners claim that in reapportioning legislative districts independently from the creation of a province,
Congress is bound to observe a 250,000 population threshold, in the same manner that the Constitutional
Commission did in the original apportionment.
Verbatim, the submission is that:
1. Republic Act 9716 is unconstitutional because the newly apportioned first district of Camarines Sur
failed to meet the population requirement for the creation of the legislative district as explicitly provided in

Article VI, Section 5, Paragraphs (1) and (3) of the Constitution and Section 3 of the Ordinance appended
thereto; and
2. Republic Act 9716 violates the principle of proportional representation as provided in Article VI, Section
5 paragraphs (1), (3) and (4) of the Constitution.12

2. The remedy of Certiorari and Prohibition must be directed against a tribunal, board, officer or person,
whether exercising judicial, quasi-judicial, or ministerial functions. Respondents maintain that in
implementing Republic Act No. 9716, they were not acting as a judicial or quasi-judicial body, nor were
they engaging in the performance of a ministerial act.
3. The petitioners could have availed themselves of another plain, speedy and adequate remedy in the
ordinary course of law. Considering that the main thrust of the instant petition is the declaration of
unconstitutionality of Republic Act No. 9716, the same could have been ventilated through a petition for
declaratory relief, over which the Supreme Court has only appellate, not original jurisdiction.

The provision subject of this case states:


Article VI
Section 5. (1) The House of Representatives shall be composed of not more than two hundred and fifty members,
unless otherwise fixed by law, who shall be elected from legislative districts apportioned among the provinces, cities
and the Metropolitan Manila area in accordance with the number of their respective inhabitants, and on the basis of a
uniform and progressive ratio, and those who, as provided by law, shall be elected through a party-list system of
registered national, regional and sectoral parties or organizations.

The respondents likewise allege that the petitioners had failed to show that they had sustained, or is in danger of
sustaining any substantial injury as a result of the implementation of Republic Act No. 9716. The respondents,
therefore, conclude that the petitioners lack the required legal standing to question the constitutionality of Republic
Act No. 9716.
This Court has paved the way away from procedural debates when confronted with issues that, by reason of
constitutional importance, need a direct focus of the arguments on their content and substance.

(2) x x x x
(3) Each legislative district shall comprise, as far as practicable, contiguous, compact, and adjacent
territory. Each city with a population of at least two hundred fifty thousand, or each province, shall have at
least one representative.
(4) Within three years following the return of every census, the Congress shall make a reapportionment of
legislative districts based on the standards provided in this section.
On the other hand, the respondents, through the Office of the Solicitor General, seek the dismissal of the present
petition based on procedural and substantive grounds.
On procedural matters, the respondents argue that the petitioners are guilty of two (2) fatal technical defects: first,
petitioners committed an error in choosing to assail the constitutionality of Republic Act No. 9716 via the remedy of
Certiorari and Prohibition under Rule 65 of the Rules of Court; and second, the petitioners have no locus standi to
question the constitutionality of Republic Act No. 9716.
On substantive matters, the respondents call attention to an apparent distinction between cities and provinces drawn
by Section 5(3), Article VI of the 1987 Constitution. The respondents concede the existence of a 250,000 population
condition, but argue that a plain and simple reading of the questioned provision will show that the same has no
application with respect to the creation of legislative districts in provinces.13 Rather, the 250,000 minimum
population is only a requirement for the creation of a legislative district in a city.
In sum, the respondents deny the existence of a fixed population requirement for the reapportionment of districts in
provinces. Therefore, Republic Act No. 9716, which only creates an additional legislative district within the province
of Camarines Sur, should be sustained as a perfectly valid reapportionment law.
We first pass upon the threshold issues.
The respondents assert that by choosing to avail themselves of the remedies of Certiorari and Prohibition, the
petitioners have committed a fatal procedural lapse. The respondents cite the following reasons:
1. The instant petition is bereft of any allegation that the respondents had acted without or in excess of
jurisdiction, or with grave abuse of discretion.1avvphi1

The Supreme Court has, on more than one occasion, tempered the application of procedural rules,14 as well as
relaxed the requirement of locus standi whenever confronted with an important issue of overreaching significance to
society.15
Hence, in Del Mar v. Philippine Amusement and Gaming Corporation (PAGCOR)16 and Jaworski v. PAGCOR,17this
Court sanctioned momentary deviation from the principle of the hierarchy of courts, and took original cognizance of
cases raising issues of paramount public importance. The Jaworski case ratiocinates:
Granting arguendo that the present action cannot be properly treated as a petition for prohibition, the transcendental
importance of the issues involved in this case warrants that we set aside the technical defects and take primary
jurisdiction over the petition at bar. One cannot deny that the issues raised herein have potentially pervasive
influence on the social and moral well being of this nation, specially the youth; hence, their proper and just
determination is an imperative need. This is in accordance with the well-entrenched principle that rules of procedure
are not inflexible tools designed to hinder or delay, but to facilitate and promote the administration of justice. Their
strict and rigid application, which would result in technicalities that tend to frustrate, rather than promote substantial
justice, must always be eschewed. (Emphasis supplied)
Anent the locus standi requirement, this Court has already uniformly ruled in Kilosbayan v. Guingona,18 Tatad v.
Executive Secretary,19 Chavez v. Public Estates Authority20 and Bagong Alyansang Makabayan v. Zamora,21 just
to name a few, that absence of direct injury on the part of the party seeking judicial review may be excused when the
latter is able to craft an issue of transcendental importance. In Lim v. Executive Secretary,22 this Court held that in
cases of transcendental importance, the cases must be settled promptly and definitely, and so, the standing
requirements may be relaxed. This liberal stance has been echoed in the more recent decision on Chavez v.
Gonzales.23
Given the weight of the issue raised in the instant petition, the foregoing principles must apply. The beaten path must
be taken. We go directly to the determination of whether or not a population of 250,000 is an indispensable
constitutional requirement for the creation of a new legislative district in a province.
We deny the petition.
We start with the basics. Any law duly enacted by Congress carries with it the presumption of
constitutionality.24Before a law may be declared unconstitutional by this Court, there must be a clear showing that a
specific provision of the fundamental law has been violated or transgressed. When there is neither a violation of a

specific provision of the Constitution nor any proof showing that there is such a violation, the presumption of
constitutionality will prevail and the law must be upheld. To doubt is to sustain.25
There is no specific provision in the Constitution that fixes a 250,000 minimum population that must compose a
legislative district.
As already mentioned, the petitioners rely on the second sentence of Section 5(3), Article VI of the 1987 Constitution,
coupled with what they perceive to be the intent of the framers of the Constitution to adopt a minimum population of
250,000 for each legislative district.
The second sentence of Section 5(3), Article VI of the Constitution, succinctly provides: "Each city with a population
of at least two hundred fifty thousand, or each province, shall have at least one representative."
The provision draws a plain and clear distinction between the entitlement of a city to a district on one hand, and the
entitlement of a province to a district on the other. For while a province is entitled to at least a representative, with
nothing mentioned about population, a city must first meet a population minimum of 250,000 in order to be similarly
entitled.
The use by the subject provision of a comma to separate the phrase "each city with a population of at least two
hundred fifty thousand" from the phrase "or each province" point to no other conclusion than that the 250,000
minimum population is only required for a city, but not for a province. 26
Plainly read, Section 5(3) of the Constitution requires a 250,000 minimum population only for a city to be entitled to a
representative, but not so for a province.
The 250,000 minimum population requirement for legislative districts in cities was, in turn, the subject of
interpretation by this Court in Mariano, Jr. v. COMELEC.27
In Mariano, the issue presented was the constitutionality of Republic Act No. 7854, which was the law that converted
the Municipality of Makati into a Highly Urbanized City. As it happened, Republic Act No. 7854 created an additional
legislative district for Makati, which at that time was a lone district. The petitioners in that case argued that the
creation of an additional district would violate Section 5(3), Article VI of the Constitution, because the resulting
districts would be supported by a population of less than 250,000, considering that Makati had a total population of
only 450,000. The Supreme Court sustained the constitutionality of the law and the validity of the newly created
district, explaining the operation of the Constitutional phrase "each city with a population of at least two hundred fifty
thousand," to wit:
Petitioners cannot insist that the addition of another legislative district in Makati is not in accord with section 5(3),
Article VI of the Constitution for as of the latest survey (1990 census), the population of Makati stands at only four
hundred fifty thousand (450,000). Said section provides, inter alia, that a city with a population of at least two
hundred fifty thousand (250,000) shall have at least one representative. Even granting that the population of Makati
as of the 1990 census stood at four hundred fifty thousand (450,000), its legislative district may still be increased
since it has met the minimum population requirement of two hundred fifty thousand (250,000). In fact, Section 3 of
the Ordinance appended to the Constitution provides that a city whose population has increased to more than two
hundred fifty thousand (250,000) shall be entitled to at least one congressional representative.28(Emphasis
supplied)
The Mariano case limited the application of the 250,000 minimum population requirement for cities only to its initial
legislative district. In other words, while Section 5(3), Article VI of the Constitution requires a city to have a minimum
population of 250,000 to be entitled to a representative, it does not have to increase its population by another
250,000 to be entitled to an additional district.

There is no reason why the Mariano case, which involves the creation of an additional district within a city, should not
be applied to additional districts in provinces. Indeed, if an additional legislative district created within a city is not
required to represent a population of at least 250,000 in order to be valid, neither should such be needed for an
additional district in a province, considering moreover that a province is entitled to an initial seat by the mere fact of
its creation and regardless of its population.
Apropos for discussion is the provision of the Local Government Code on the creation of a province which, by virtue
of and upon creation, is entitled to at least a legislative district. Thus, Section 461 of the Local Government Code
states:
Requisites for Creation. (a) A province may be created if it has an average annual income, as certified by the
Department of Finance, of not less than Twenty million pesos (P20,000,000.00) based on 1991 constant prices and
either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the Lands
Management Bureau; or
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as certified by the
National Statistics Office.
Notably, the requirement of population is not an indispensable requirement, but is merely an alternative addition to
the indispensable income requirement.
Mariano, it would turn out, is but a reflection of the pertinent ideas that ran through the deliberations on the words
and meaning of Section 5 of Article VI.
The whats, whys, and wherefores of the population requirement of "at least two hundred fifty thousand" may be
gleaned from the records of the Constitutional Commission which, upon framing the provisions of Section 5 of Article
VI, proceeded to form an ordinance that would be appended to the final document. The Ordinance is captioned
"APPORTIONING THE SEATS OF THE HOUSE OF REPRESENTATIVES OF THE CONGRESS OF THE
PHILIPPINES TO THE DIFFERENT LEGISLATIVE DISTRICTS IN PROVINCES AND CITIES AND THE
METROPOLITAN MANILA AREA." Such records would show that the 250,000 population benchmark was used for
the 1986 nationwide apportionment of legislative districts among provinces, cities and Metropolitan Manila. Simply
put, the population figure was used to determine how many districts a province, city, or Metropolitan Manila should
have. Simply discernible too is the fact that, for the purpose, population had to be the determinant. Even then, the
requirement of 250,000 inhabitants was not taken as an absolute minimum for one legislative district. And, closer to
the point herein at issue, in the determination of the precise district within the province to which, through the use of
the population benchmark, so many districts have been apportioned, population as a factor was not the sole, though
it was among, several determinants.
From its journal,29 we can see that the Constitutional Commission originally divided the entire country into two
hundred (200) districts, which corresponded to the original number of district representatives. The 200 seats were
distributed by the Constitutional Commission in this manner: first, one (1) seat each was given to the seventy-three
(73) provinces and the ten (10) cities with a population of at least 250,000;30 second, the remaining seats were then
redistributed among the provinces, cities and the Metropolitan Area "in accordance with the number of their
inhabitants on the basis of a uniform and progressive ratio."31 Commissioner Davide, who later became a Member
and then Chief Justice of the Court, explained this in his sponsorship remark32 for the Ordinance to be appended to
the 1987 Constitution:
Commissioner Davide: The ordinance fixes at 200 the number of legislative seats which are, in turn, apportioned
among provinces and cities with a population of at least 250, 000 and the Metropolitan Area in accordance with the
number of their respective inhabitants on the basis of a uniform and progressive ratio. The population is based on the
1986 projection, with the 1980 official enumeration as the point of reckoning. This projection indicates that our
population is more or less 56 million. Taking into account the mandate that each city with at least 250, 000

inhabitants and each province shall have at least one representative, we first allotted one seat for each of the 73
provinces, and each one for all cities with a population of at least 250, 000, which are the Cities of Manila, Quezon,
Pasay, Caloocan, Cebu, Iloilo, Bacolod, Cagayan de Oro, Davao and Zamboanga. Thereafter, we then proceed[ed]
to increase whenever appropriate the number of seats for the provinces and cities in accordance with the number of
their inhabitants on the basis of a uniform and progressive ratio. (Emphasis supplied).

Mr. Davide accepted Mr. Nolledos proposal to insert Puerto Princesa City before the Municipality of Aborlan.
There being no objection on the part of the Members the same was approved by the Body.
APPROVAL OF THE APPORTIONMENT AND DISTRICTING OF PALAWAN

Thus was the number of seats computed for each province and city. Differentiated from this, the determination of the
districts within the province had to consider "all protests and complaints formally received" which, the records show,
dealt with determinants other than population as already mentioned.
Palawan is a case in point. Journal No. 107 of the Constitutional Commission narrates:

There being no other amendment, on motion of Mr. Davide, there being no objection, the apportionment and
districting for the province of Palawan was approved by the Body.34
The districting of Palawan disregarded the 250,000 population figure. It was decided by the importance of the towns
and the city that eventually composed the districts.

INTERPELLATION OF MR. NOLLEDO:


Benguet and Baguio are another reference point. The Journal further narrates:
Mr. Nolledo inquired on the reason for including Puerto Princesa in the northern towns when it was more affinity with
the southern town of Aborlan, Batarasa, Brookes Point, Narra, Quezon and Marcos. He stated that the First District
has a greater area than the Second District. He then queried whether population was the only factor considered by
the Committee in redistricting.
Replying thereto, Mr. Davide explained that the Committee took into account the standards set in Section 5 of the
Article on the Legislative Department, namely: 1) the legislative seats should be apportioned among the provinces
and cities and the Metropolitan Manila area in accordance with their inhabitants on the basis of a uniform and
progressive ratio; and 2) the legislative district must be compact, adjacent and contiguous.
Mr. Nolledo pointed out that the last factor was not met when Puerto Princesa was included with the northern towns.
He then inquired what is the distance between Puerto Princesa from San Vicente.
xxxx
Thereupon, Mr. Nolledo stated that Puerto Princesa has a population of 75,480 and based on the apportionment, its
inclusion with the northern towns would result in a combined population of 265,000 as against only 186,000 for the
south. He added that Cuyo and Coron are very important towns in the northern part of Palawan and, in fact, Cuyo
was the capital of Palawan before its transfer to Puerto Princesa. He also pointed out that there are more potential
candidates in the north and therefore if Puerto Princesa City and the towns of Cuyo and Coron are lumped together,
there would be less candidates in the south, most of whose inhabitants are not interested in politics. He then
suggested that Puerto Princesa be included in the south or the Second District.
Mr. Davide stated that the proposal would be considered during the period of amendments. He requested that the
COMELEC staff study said proposal.33
"PROPOSED AMENDMENT OF MR. NOLLEDO
On the districting of Palawan, Mr. Nolledo pointed out that it was explained in the interpellations that District I has a
total population of 265,358 including the City of Puerto Princesa, while the Second District has a total population of
186,733. He proposed, however, that Puerto Princesa be included in the Second District in order to satisfy the
contiguity requirement in the Constitution considering that said City is nearer the southern towns comprising the
Second District.
In reply to Mr. Monsods query, Mr. Nolledo explained that with the proposed transfer of Puerto Princesa City to the
Second District, the First District would only have a total population of 190,000 while the Second District would have
262,213, and there would be no substantial changes.

At this juncture, Mr. Davide informed the Body that Mr. Regalado made a reservation with the Committee for the
possible reopening of the approval of Region I with respect to Benguet and Baguio City.
REMARKS OF MR. REGALADO
Mr. Regalado stated that in the formulation of the Committee, Baguio City and Tuba are placed in one district. He
stated that he was toying with the idea that, perhaps as a special consideration for Baguio because it is the summer
capital of the Philippines, Tuba could be divorced from Baguio City so that it could, by itself, have its own
constituency and Tuba could be transferred to the Second District together with Itogon. Mr. Davide, however, pointed
out that the population of Baguio City is only 141,149.
Mr. Regalado admitted that the regular population of Baguio may be lower during certain times of the year, but the
transient population would increase the population substantially and, therefore, for purposes of business and
professional transactions, it is beyond question that population-wise, Baguio would more than qualify, not to speak of
the official business matters, transactions and offices that are also there.
Mr. Davide adverted to Director de Limas statement that unless Tuba and Baguio City are united, Tuba will be
isolated from the rest of Benguet as the place can only be reached by passing through Baguio City. He stated that
the Committee would submit the matter to the Body.
Upon inquiry of the Chair whether he is insisting on his amendment, Mr. Regalado stated that the Body should have
a say on the matter and that the considerations he had given are not on the demographic aspects but on the fact that
Baguio City is the summer capital, the venue and situs of many government offices and functions.
On motion of Mr. Davide, there being no objection, the Body approved the reconsideration of the earlier approval of
the apportionment and districting of Region I, particularly Benguet.
Thereafter, on motion of Mr. Davide, there being no objection, the amendment of Mr. Regalado was put to a vote.
With 14 Members voting in favor and none against, the amendment was approved by the Body.
Mr. Davide informed that in view of the approval of the amendment, Benguet with Baguio City will have two seats.
The First District shall comprise of the municipalities of Mankayan, Buguias, Bakun, Kabayan, Kibungan, Bokod,
Atok, Kapangan, Tublay, La Trinidad, Sablan, Itogon and Tuba. The Second District shall comprise of Baguio City
alone.
There being no objection, the Body approved the apportionment and districting of Region I.35

Quite emphatically, population was explicitly removed as a factor.


It may be additionally mentioned that the province of Cavite was divided into districts based on the distribution of its
three cities, with each district having a city: one district "supposed to be a fishing area; another a vegetable and fruit
area; and the third, a rice growing area," because such consideration "fosters common interests in line with the
standard of compactness."36 In the districting of Maguindanao, among the matters discussed were "political stability
and common interest among the people in the area" and the possibility of "chaos and disunity" considering the
"accepted regional, political, traditional and sectoral leaders."37 For Laguna, it was mentioned that municipalities in
the highland should not be grouped with the towns in the lowland. For Cebu, Commissioner Maambong proposed
that they should "balance the area and population."38
Consistent with Mariano and with the framer deliberations on district apportionment, we stated in Bagabuyo v.
COMELEC39 that:
x x x Undeniably, these figures show a disparity in the population sizes of the districts. The Constitution, however,
does not require mathematical exactitude or rigid equality as a standard in gauging equality of representation. x x x.
To ensure quality representation through commonality of interests and ease of access by the representative to the
constituents, all that the Constitution requires is that every legislative district should comprise, as far as practicable,
contiguous, compact and adjacent territory. (Emphasis supplied).

(c) the natural division separating the municipality subject of the discussion from the
reconfigured District One; and
(d) the balancing of the areas of the three districts resulting from the redistricting of Districts One
and Two.41
Each of such factors and in relation to the others considered together, with the increased population of the erstwhile
Districts One and Two, point to the utter absence of abuse of discretion, much less grave abuse of discretion,42 that
would warrant the invalidation of Republic Act No. 9716.
To be clear about our judgment, we do not say that in the reapportionment of the first and second legislative districts
of Camarines Sur, the number of inhabitants in the resulting additional district should not be considered. Our ruling is
that population is not the only factor but is just one of several other factors in the composition of the additional
district. Such settlement is in accord with both the text of the Constitution and the spirit of the letter, so very clearly
given form in the Constitutional debates on the exact issue presented by this petition.1avvphi1
WHEREFORE, the petition is hereby DISMISSED. Republic Act No. 9716 entitled "An Act Reapportioning the
Composition of the First (1st) and Second (2nd) Legislative Districts in the Province of Camarines Sur and Thereby
Creating a New Legislative District From Such Reapportionment" is a VALID LAW.

This 2008 pronouncement is fresh reasoning against the uncompromising stand of petitioner that an additional
provincial legislative district, which does not have at least a 250,000 population is not allowed by the Constitution.

SO ORDERED.

The foregoing reading and review lead to a clear lesson.

JOSE PORTUGAL PEREZ


Associate Justice

Neither in the text nor in the essence of Section 5, Article VI of the Constitution can, the petition find support. And the
formulation of the Ordinance in the implementation of the provision, nay, even the Ordinance itself, refutes the
contention that a population of 250,000 is a constitutional sine qua non for the formation of an additional legislative
district in a province, whose population growth has increased beyond the 1986 numbers.
Translated in the terms of the present case:
1. The Province of Camarines Sur, with an estimated population of 1,693,821 in 2007 is based on the
formula and constant number of 250,000 used by the Constitutional Commission in nationally apportioning
legislative districts among provinces and cities entitled to two (2) districts in addition to the four (4) that it
was given in the 1986 apportionment. Significantly, petitioner Aquino concedes this point.40 In other
words, Section 5 of Article VI as clearly written allows and does not prohibit an additional district for the
Province of Camarines Sur, such as that provided for in Republic Act No. 9786;
2. Based on the pith and pitch of the exchanges on the Ordinance on the protests and complaints against
strict conformity with the population standard, and more importantly based on the final districting in the
Ordinance on considerations other than population, the reapportionment or the recomposition of the first
and second legislative districts in the Province of Camarines Sur that resulted in the creation of a new
legislative district is valid even if the population of the new district is 176,383 and not 250,000 as insisted
upon by the petitioners.
3. The factors mentioned during the deliberations on House Bill No. 4264, were:
(a) the dialects spoken in the grouped municipalities;
(b) the size of the original groupings compared to that of the regrouped municipalities;

Republic of the Philippines


SUPREME COURT
Manila

2. Opposition [To the "Motion for Reconsideration of the Resolution dated August 24, 2010"].
Meanwhile, respondents also filed on September 20, 2010 a Motion to Set "Motion for Reconsideration of the
Resolution dated August 24, 2010" for Hearing. This motion was, however, already denied by the Court En Banc.

EN BANC
A brief background
G.R. No. 176951

February 15, 2011

LEAGUE OF CITIES OF THE PHILIPPINES (LCP), Represented by LCP National President Jerry P. Treas;
City of Calbayog, represented by Mayor Mel Senen S. Sarmiento; and Jerry P. Treas, in his personal
capacity as Taxpayer, Petitioners,
vs.
COMMISSION ON ELECTIONS; Municipality of Baybay, Province of Leyte; Municipality of Bogo, Province of
Cebu; Municipality of Catbalogan, Province of Western Samar; Municipality of Tandag, Province of Surigao
del Sur; Municipality of Borongan, Province of Eastern Samar; and Municipality of Tayabas, Province of
Quezon, Respondents.

These cases were initiated by the consolidated petitions for prohibition filed by the League of Cities of the Philippines
(LCP), City of Iloilo, City of Calbayog, and Jerry P. Treas, assailing the constitutionality of the sixteen (16)
laws,1 each converting the municipality covered thereby into a component city (Cityhood Laws), and seeking to
enjoin the Commission on Elections (COMELEC) from conducting plebiscites pursuant to the subject laws.
In the Decision dated November 18, 2008, the Court En Banc, by a 6-5 vote,2 granted the petitions and struck down
the Cityhood Laws as unconstitutional for violating Sections 10 and 6, Article X, and the equal protection clause.
In the Resolution dated March 31, 2009, the Court En Banc, by a 7-5 vote,3 denied the first motion for
reconsideration.

x - - - - - - - - - - - - - - - - - - - - - - -x

On April 28, 2009, the Court En Banc issued a Resolution, with a vote of 6-6,4 which denied the second motion for
reconsideration for being a prohibited pleading.

G.R. No. 177499


LEAGUE OF CITIES OF THE PHILIPPINES (LCP), Represented by LCP National President Jerry P. Treas;
City of Calbayog, represented by Mayor Mel Senen S. Sarmiento; and Jerry P. Treas, in his personal
capacity as Taxpayer, Petitioners,
vs.
COMMISSION ON ELECTIONS; Municipality of Lamitan, Province of Basilan; Municipality of Tabuk, Province
of Kalinga; Municipality of Bayugan, Province of Agusan del Sur; Municipality of Batac, Province of Ilocos
Norte; Municipality of Mati, Province of Davao Oriental; and Municipality of Guihulngan, Province of Negros
Oriental, Respondents.

In its June 2, 2009 Resolution, the Court En Banc clarified its April 28, 2009 Resolution in this wise
As a rule, a second motion for reconsideration is a prohibited pleading pursuant to Section 2, Rule 52 of the Rules of
Civil Procedure which provides that: "No second motion for reconsideration of a judgment or final resolution by the
same party shall be entertained." Thus, a decision becomes final and executory after 15 days from receipt of the
denial of the first motion for reconsideration.
However, when a motion for leave to file and admit a second motion for reconsideration is granted by the Court, the
Court therefore allows the filing of the second motion for reconsideration. In such a case, the second motion for
reconsideration is no longer a prohibited pleading.

x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 178056
LEAGUE OF CITIES OF THE PHILIPPINES (LCP), Represented by LCP National President Jerry P. Treas;
City of Calbayog, represented by Mayor Mel Senen S. Sarmiento; and Jerry P. Treas, in his personal
capacity as Taxpayer, Petitioners,
vs.
COMMISSION ON ELECTIONS; Municipality of Cabadbaran, Province of Agusan del Norte; Municipality of
Carcar, Province of Cebu; Municipality of El Salvador, Province of Misamis Oriental; Municipality of Naga,
Cebu; and Department of Budget and Management, Respondents.
RESOLUTION
BERSAMIN, J.:
For consideration of this Court are the following pleadings:
1. Motion for Reconsideration of the "Resolution" dated August 24, 2010 dated and filed on September 14,
2010 by respondents Municipality of Baybay, et al.; and

In the present case, the Court voted on the second motion for reconsideration filed by respondent cities. In effect, the
Court allowed the filing of the second motion for reconsideration. Thus, the second motion for reconsideration was no
longer a prohibited pleading. However, for lack of the required number of votes to overturn the 18 November 2008
Decision and 31 March 2009 Resolution, the Court denied the second motion for reconsideration in its 28 April 2009
Resolution.5
Then, in another Decision dated December 21, 2009, the Court En Banc, by a vote of 6-4,6 declared the Cityhood
Laws as constitutional.
On August 24, 2010, the Court En Banc, through a Resolution, by a vote of 7-6,7 resolved the Ad Cautelam Motion
for Reconsideration and Motion to Annul the Decision of December 21, 2009, both filed by petitioners, and the Ad
Cautelam Motion for Reconsideration filed by petitioners-in-intervention Batangas City, Santiago City, Legazpi City,
Iriga City, Cadiz City, and Oroquieta City, reinstating the November 18, 2008 Decision. Hence, the aforementioned
pleadings.

Considering these circumstances where the Court En Banc has twice changed its position on the constitutionality of
the 16 Cityhood Laws, and especially taking note of the novelty of the issues involved in these cases, the Motion for
Reconsideration of the "Resolution" dated August 24, 2010 deserves favorable action by this Court on the basis of
the following cogent points:
1.
The 16 Cityhood Bills do not violate Article X, Section 10 of the Constitution.
Article X, Section 10 provides
Section 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary
substantially altered, except in accordance with the criteria established in the local government code and subject to
approval by a majority of the votes cast in a plebiscite in the political units directly affected.
The tenor of the ponencias of the November 18, 2008 Decision and the August 24, 2010 Resolution is that the
exemption clauses in the 16 Cityhood Laws are unconstitutional because they are not written in the Local
Government Code of 1991 (LGC), particularly Section 450 thereof, as amended by Republic Act (R.A.) No. 9009,
which took effect on June 30, 2001, viz.
Section 450. Requisites for Creation. a) A municipality or a cluster of barangays may be converted into a
component city if it has a locally generated annual income, as certified by the Department of Finance, of at least One
Hundred Million Pesos (P100,000,000.00) for at least two (2) consecutive years based on 2000 constant prices, and
if it has either of the following requisites:

It is for that reason, Mr. President, that we are proposing among other things, that the financial requirement, which,
under the Local Government Code, is fixed at P20 million, be raised to P100 million to enable a municipality to have
the right to be converted into a city, and the P100 million should be sourced from locally generated funds.
What has been happening, Mr. President, is, the municipalities aspiring to become cities say that they qualify in
terms of financial requirements by incorporating the Internal Revenue share of the taxes of the nation on to their
regularly generated revenue. Under that requirement, it looks clear to me that practically all municipalities in this
country would qualify to become cities.
It is precisely for that reason, therefore, that we are seeking the approval of this Chamber to amend, particularly
Section 450 of Republic Act No. 7160, the requisite for the average annual income of a municipality to be converted
into a city or cluster of barangays which seek to be converted into a city, raising that revenue requirement from P20
million to P100 million for the last two consecutive years based on 2000 constant prices.8
While R.A. No. 9009 was being deliberated upon, Congress was well aware of the pendency of conversion bills of
several municipalities, including those covered by the Cityhood Laws, desiring to become component cities which
qualified under the P20 million income requirement of the old Section 450 of the LGC. The interpellation of Senate
President Franklin Drilon of Senator Pimentel is revealing, thus
THE PRESIDENT. The Chair would like to ask for some clarificatory point.
SENATOR PIMENTEL. Yes, Mr. President.
THE PRESIDENT. This is just on the point of the pending bills in the Senate which propose the conversion of a
number of municipalities into cities and which qualify under the present standard.

xxxx
(c) The average annual income shall include the income accruing to the general fund, exclusive of special funds,
transfers, and non-recurring income. (Emphasis supplied)
Prior to the amendment, Section 450 of the LGC required only an average annual income, as certified by the
Department of Finance, of at least P20,000,000.00 for the last two (2) consecutive years, based on 1991 constant
prices.
Before Senate Bill No. 2157, now R.A. No. 9009, was introduced by Senator Aquilino Pimentel, there were 57 bills
filed for conversion of 57 municipalities into component cities. During the 11th Congress (June 1998-June 2001), 33
of these bills were enacted into law, while 24 remained as pending bills. Among these 24 were the 16 municipalities
that were converted into component cities through the Cityhood Laws.
The rationale for the enactment of R.A. No. 9009 can be gleaned from the sponsorship speech of Senator Pimentel
on Senate Bill No. 2157, to wit
Senator Pimentel. Mr. President, I would have wanted this bill to be included in the whole set of proposed
amendments that we have introduced to precisely amend the Local Government Code. However, it is a fact that
there is a mad rush of municipalities wanting to be converted into cities. Whereas in 1991, when the Local
Government was approved, there were only 60 cities, today the number has increased to 85 cities, with 41 more
municipalities applying for conversion to the same status. At the rate we are going, I am apprehensive that before
long this nation will be a nation of all cities and no municipalities.

We would like to know the view of the sponsor: Assuming that this bill becomes a law, will the Chamber apply the
standard as proposed in this bill to those bills which are pending for consideration?
SENATOR PIMENTEL. Mr. President, it might not be fair to make this bill, on the assumption that it is approved,
retroact to the bills that are pending in the Senate conversion from municipalities to cities.
THE PRESIDENT. Will there be an appropriate language crafted to reflect that view? Or does it not become a policy
of the Chamber, assuming that this bill becomes a law tomorrow, that it will apply to those bills which are already
approved by the House under the old version of the Local Government Code and are now pending in the Senate?
The Chair does not know if we can craft a language which will limit the application to those which are not yet in the
Senate. Or is that a policy that the Chamber will adopt?
SENATOR PIMENTEL. Mr. President, personally, I do not think it is necessary to put that provision because what we
are saying here will form part of the interpretation of this bill. Besides, if there is no retroactivity clause, I do not think
that the bill would have any retroactive effect.
THE PRESIDENT. So the understanding is that those bills which are already pending in the Chamber will not be
affected.
SENATOR PIMENTEL. These will not be affected, Mr. President.
THE PRESIDENT. Thank you Mr. Chairman.9
Clearly, based on the above exchange, Congress intended that those with pending cityhood bills during the 11th
Congress would not be covered by the new and higher income requirement of P100 million imposed by R.A. No.

9009. When the LGC was amended by R.A. No. 9009, the amendment carried with it both the letter and the intent of
the law, and such were incorporated in the LGC by which the compliance of the Cityhood Laws was gauged.
Notwithstanding that both the 11th and 12th Congress failed to act upon the pending cityhood bills, both the letter
and intent of Section 450 of the LGC, as amended by R.A. No. 9009, were carried on until the 13th Congress, when
the Cityhood Laws were enacted. The exemption clauses found in the individual Cityhood Laws are the express
articulation of that intent to exempt respondent municipalities from the coverage of R.A. No. 9009.
Even if we were to ignore the above quoted exchange between then Senate President Drilon and Senator Pimentel,
it cannot be denied that Congress saw the wisdom of exempting respondent municipalities from complying with the
higher income requirement imposed by the amendatory R.A. No. 9009. Indeed, these municipalities have proven
themselves viable and capable to become component cities of their respective provinces. It is also acknowledged
that they were centers of trade and commerce, points of convergence of transportation, rich havens of agricultural,
mineral, and other natural resources, and flourishing tourism spots. In this regard, it is worthy to mention the
distinctive traits of each respondent municipality, viz
Batac, Ilocos Norte It is the biggest municipality of the 2nd District of Ilocos Norte, 2nd largest and most
progressive town in the province of Ilocos Norte and the natural convergence point for the neighboring towns to
transact their commercial ventures and other daily activities. A growing metropolis, Batac is equipped with amenities
of modern living like banking institutions, satellite cable systems, telecommunications systems. Adequate roads,
markets, hospitals, public transport systems, sports, and entertainment facilities. [Explanatory Note of House Bill No.
5941, introduced by Rep. Imee R. Marcos.]
El Salvador, Misamis Oriental It is located at the center of the Cagayan-Iligan Industrial Corridor and home to a
number of industrial companies and corporations. Investment and financial affluence of El Salvador is aptly credited
to its industrious and preserving people. Thus, it has become the growing investment choice even besting nearby
cities and municipalities. It is home to Asia Brewery as distribution port of their product in Mindanao. The Gokongwei
Group of Companies is also doing business in the area. So, the conversion is primarily envisioned to spur economic
and financial prosperity to this coastal place in North-Western Misamis Oriental. [Explanatory Note of House Bill No.
6003, introduced by Rep. Augusto H. Bacullo.]
Cabadbaran, Agusan del Norte It is the largest of the eleven (11) municipalities in the province of Agusan del Norte.
It plays strategic importance to the administrative and socio-economic life and development of Agusan del Norte. It is
the foremost in terms of trade, commerce, and industry. Hence, the municipality was declared as the new seat and
capital of the provincial government of Agusan del Norte pursuant to Republic Act No. 8811 enacted into law on
August 16, 2000. Its conversion will certainly promote, invigorate, and reinforce the economic potential of the
province in establishing itself as an agro-industrial center in the Caraga region and accelerate the development of
the area. [Explanatory Note of House Bill No. 3094, introduced by Rep. Ma. Angelica Rosedell M. Amante.]
Borongan, Eastern Samar It is the capital town of Eastern Samar and the development of Eastern Samar will
depend to a certain degree of its urbanization. It will serve as a catalyst for the modernization and progress of
adjacent towns considering the frequent interactions between the populace. [Explanatory Note of House Bill No.
2640, introduced by Rep. Marcelino C. Libanan.]
Lamitan, Basilan Before Basilan City was converted into a separate province, Lamitan was the most progressive
part of the city. It has been for centuries the center of commerce and the seat of the Sultanate of the Yakan people of
Basilan. The source of its income is agro-industrial and others notably copra, rubber, coffee and host of income
generating ventures. As the most progressive town in Basilan, Lamitan continues to be the center of commerce
catering to the municipalities of Tuburan, Tipo-Tipo and Sumisip. [Explanatory Note of House Bill No. 5786,
introduced by Rep. Gerry A. Salapuddin.]

prosperous cities of the Visayas like Tacloban City, Cebu City and the cities of Bicol region. The numerous banks and
telecommunication facilities showcases the healthy economic environment of the municipality. The preeminent and
sustainable economic situation of Catbalogan has further boosted the call of residents for a more vigorous
involvement of governance of the municipal government that is inherent in a city government. [Explanatory Note of
House Bill No. 2088, introduced by Rep. Catalino V. Figueroa.]
Bogo, Cebu Bogo is very qualified for a city in terms of income, population and area among others. It has been
elevated to the Hall of Fame being a five-time winner nationwide in the clean and green program. [Explanatory Note
of House Bill No. 3042, introduced by Rep. Clavel A. Martinez.]
Tandag, Surigao del Sur This over 350 year old capital town the province has long sought its conversion into a city
that will pave the way not only for its own growth and advancement but also help in the development of its
neighboring municipalities and the province as a whole. Furthermore, it can enhance its role as the provinces trade,
financial and government center. [Explanatory Note of House Bill No. 5940, introduced by Rep. Prospero A. Pichay,
Jr.]
Bayugan, Agusan del Sur It is a first class municipality and the biggest in terms of population in the entire province.
It has the most progressive and thickly populated area among the 14 municipalities that comprise the province. Thus,
it has become the center for trade and commerce in Agusan del Sur. It has a more developed infrastructure and
facilities than other municipalities in the province. [Explanatory Note of House Bill No. 1899, introduced by Rep.
Rodolfo "Ompong" G. Plaza.]
Carcar, Cebu Through the years, Carcar metamorphosed from rural to urban and now boast of its manufacturing
industry, agricultural farming, fishing and prawn industry and its thousands of large and small commercial
establishments contributing to the bulk of economic activities in the municipality. Based on consultation with multisectoral groups, political and non-government agencies, residents and common folk in Carcar, they expressed their
desire for the conversion of the municipality into a component city. [Explanatory Note of House Bill No. 3990,
introduced by Rep. Eduardo R. Gullas.]
Guihulngan, Negros Oriental Its population is second highest in the province, next only to the provincial capital and
higher than Canlaon City and Bais City. Agriculture contributes heavily to its economy. There are very good
prospects in agricultural production brought about by its favorable climate. It has also the Tanon Strait that provides a
good fishing ground for its numerous fishermen. Its potential to grow commercially is certain. Its strategic location
brought about by its existing linkage networks and the major transportation corridors traversing the municipality has
established Guihulngan as the center of commerce and trade in this part of Negros Oriental with the first
congressional district as its immediate area of influence. Moreover, it has beautiful tourist spots that are being
availed of by local and foreign tourists. [Explanatory Note of House Bill No. 3628, introduced by Rep. Jacinto V.
Paras.]
Tayabas, Quezon It flourished and expanded into an important politico-cultural center in [the] Tagalog region. For
131 years (1179-1910), it served as the cabecera of the province which originally carried the cabeceras own name,
Tayabas. The locality is rich in culture, heritage and trade. It was at the outset one of the more active centers of
coordination and delivery of basic, regular and diverse goods and services within the first district of Quezon
Province. [Explanatory Note of House Bill No. 3348, introduced by Rep. Rafael P. Nantes.]
Tabuk, Kalinga It not only serves as the main hub of commerce and trade, but also the cultural center of the rich
customs and traditions of the different municipalities in the province. For the past several years, the income of Tabuk
has been steadily increasing, which is an indication that its economy is likewise progressively growing. [Explanatory
Note of House Bill No. 3068, introduced by Rep. Laurence P. Wacnang.]
Available information on Baybay, Leyte; Mati, Davao Oriental; and Naga, Cebu shows their economic viability, thus:

Catbalogan, Samar It has always been the socio-economic-political capital of the Island of Samar even during the
Spanish era. It is the seat of government of the two congressional districts of Samar. Ideally located at the crossroad
between Northern and Eastern Samar, Catbalogan also hosts trade and commerce activates among the more

Covering an area of 46,050 hectares, Baybay [Leyte] is composed of 92 barangays, 23 of which are in the poblacion.
The remaining 69 are rural barangays. Baybay City is classified as a first class city. It is situated on the western coast

of the province of Leyte. It has a Type 4 climate, which is generally wet. Its topography is generally mountainous in
the eastern portion as it slopes down west towards the shore line. Generally an agricultural city, the common means
of livelihood are farming and fishing. Some are engaged in hunting and in forestall activities. The most common
crops grown are rice, corn, root crops, fruits, and vegetables. Industries operating include the Specialty Products
Manufacturing, Inc. and the Visayan Oil Mill. Various cottage industries can also be found in the city such as bamboo
and rattan craft, ceramics, dress-making, fiber craft, food preservation, mat weaving, metal craft, fine Philippine
furniture manufacturing and other related activities. Baybay has great potential as a tourist destination, especially for
tennis players. It is not only rich in biodiversity and history, but it also houses the campus of the Visayas State
University (formerly the Leyte State University/Visayas State College of Agriculture/Visayas Agricultural
College/Baybay National Agricultural School/Baybay Agricultural High School and the Jungle Valley Park.) Likewise,
it has river systems fit for river cruising, numerous caves for spelunking, forests, beaches, and marine treasures. This
richness, coupled with the friendly Baybayanos, will be an element of a successful tourism program. Considering the
role of tourism in development, Baybay City intends to harness its tourism potential.
(<http://en.wikipedia.org/wiki/Baybay City> visited September 19, 2008)
Mati [Davao Oriental] is located on the eastern part of the island of Mindanao. It is one hundred sixty-five (165)
kilometers away from Davao City, a one and a half-hour drive from Tagum City. Visitors can travel from Davao City
through the Madaum diversion road, which is shorter than taking the Davao-Tagum highway. Travels by air and sea
are possible, with the existence of an airport and seaport. Mati boasts of being the coconut capital of Mindanao if not
the whole country. A large portion of its fertile land is planted to coconuts, and a significant number of its population is
largely dependent on it. Other agricultural crops such as mango, banana, corn, coffee and cacao are also being
cultivated, as well as the famous Menzi pomelo and Valencia oranges. Mati has a long stretch of shoreline and one
can find beaches of pure, powder-like white sand. A number of resorts have been developed and are now open to
serve both local and international tourists. Some of these resorts are situated along the coast of Pujada Bay and the
Pacific Ocean. Along the western coast of the bay lies Mt. Hamiguitan, the home of the pygmy forest, where bonsai
plants and trees grow, some of which are believed to be a hundred years old or more. On its peak is a lake, called
"Tinagong Dagat," or hidden sea, so covered by dense vegetation a climber has to hike trails for hours to reach it.
The mountain is also host to rare species of flora and fauna, thus becoming a wildlife sanctuary for these life forms.
(<http://mati.wetpain.com/?t=anon> accessed on September 19, 2008.)
Mati is abundant with nickel, chromite, and copper. Louie Rabat, Chamber President of the Davao Oriental Eastern
Chamber of Commerce and Industry, emphasized the big potential of the mining industry in the province of Davao
Oriental. As such, he strongly recommends Mati as the mining hub in the Region.
(<http://www.pia.gov.ph/default.asp?m=12&sec=reader&rp=1&fi=p080115.htm&no.=9&date, accessed on September
19, 2008)
Naga [Cebu]: Historical BackgroundIn the early times, the place now known as Naga was full of huge trees locally
called as "Narra." The first settlers referred to this place as Narra, derived from the huge trees, which later simply
became Naga. Considered as one of the oldest settlements in the Province of Cebu, Naga became a municipality on
June 12, 1829. The municipality has gone through a series of classifications as its economic development has
undergone changes and growth. The tranquil farming and fishing villages of the natives were agitated as the
Spaniards came and discovered coal in the uplands. Coal was the first export of the municipality, as the Spaniards
mined and sent it to Spain. The mining industry triggered the industrial development of Naga. As the years
progressed, manufacturing and other industries followed, making Naga one of the industrialized municipalities in the
Province of Cebu.
Class of Municipality 1st class
Province Cebu
Distance from Cebu City 22 kms.
Number of Barangays 28

No. of Registered Voters 44,643 as of May 14, 2007


Total No. of Precincts 237 (as of May 14, 2007)
Ann. Income (as of Dec. 31, 2006) Php112,219,718.35 Agricultural, Industrial, Agro-Industrial, Mining
Product
(<http://www.nagacebu.com/index.php?option=com.content&view=article id=53:naga-facts-andfigures&catid=51:naga-facts-and-figures&Itemid=75> visited September 19, 2008)
The enactment of the Cityhood Laws is an exercise by Congress of its legislative power. Legislative power is the
authority, under the Constitution, to make laws, and to alter and repeal them.10 The Constitution, as the expression
of the will of the people in their original, sovereign, and unlimited capacity, has vested this power in the Congress of
the Philippines. The grant of legislative power to Congress is broad, general, and comprehensive. The legislative
body possesses plenary powers for all purposes of civil government. Any power, deemed to be legislative by usage
and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it elsewhere. In fine, except
as limited by the Constitution, either expressly or impliedly, legislative power embraces all subjects, and extends to
matters of general concern or common interest.11
Without doubt, the LGC is a creation of Congress through its law-making powers. Congress has the power to alter or
modify it as it did when it enacted R.A. No. 9009. Such power of amendment of laws was again exercised when
Congress enacted the Cityhood Laws. When Congress enacted the LGC in 1991, it provided for quantifiable
indicators of economic viability for the creation of local government unitsincome, population, and land area.
Congress deemed it fit to modify the income requirement with respect to the conversion of municipalities into
component cities when
it enacted R.A. No. 9009, imposing an amount of P100 million, computed only from locally-generated sources.
However, Congress deemed it wiser to exempt respondent municipalities from such a belatedly imposed modified
income requirement in order to uphold its higher calling of putting flesh and blood to the very intent and thrust of the
LGC, which is countryside development and autonomy, especially accounting for these municipalities as engines for
economic growth in their respective provinces.
Undeniably, R.A. No. 9009 amended the LGC. But it is also true that, in effect, the Cityhood Laws amended R.A. No.
9009 through the exemption clauses found therein. Since the Cityhood Laws explicitly exempted the concerned
municipalities from the amendatory R.A. No. 9009, such Cityhood Laws are, therefore, also amendments to the LGC
itself. For this reason, we reverse the November 18, 2008 Decision and the August 24, 2010 Resolution on their
strained and stringent view that the Cityhood Laws, particularly their exemption clauses, are not found in the LGC.
2.
The Cityhood Laws do not violate Section 6, Article X and the equal protection clause of the Constitution.
Both the November 18, 2008 Decision and the August 24, 2010 Resolution impress that the Cityhood Laws violate
the equal protection clause enshrined in the Constitution. Further, it was also ruled that Section 6, Article X was
violated because the Cityhood Laws infringed on the "just share" that petitioner and petitioners-in-intervention shall
receive from the national taxes (IRA) to be automatically released to them.
Upon more profound reflection and deliberation, we declare that there was valid classification, and the Cityhood
Laws do not violate the equal protection clause.

As this Court has ruled, the equal protection clause of the 1987 Constitution permits a valid classification, provided
that it: (1) rests on substantial distinctions; (2) is germane to the purpose of the law; (3) is not limited to existing
conditions only; and (4) applies equally to all members of the same class.12
The petitioners argue that there is no substantial distinction between municipalities with pending cityhood bills in the
11th Congress and municipalities that did not have pending bills, such that the mere pendency of a cityhood bill in
the 11th Congress is not a material difference to distinguish one municipality from another for the purpose of the
income requirement. This contention misses the point.
It should be recalled from the above quoted portions of the interpellation by Senate President Drilon of Senator
Pimentel that the purpose of the enactment of R.A. No 9009 was merely to stop the "mad rush of municipalities
wanting to be converted into cities" and the apprehension that before long the country will be a country of cities and
without municipalities. It should be pointed out that the imposition of the P100 million average annual income
requirement for the creation of component cities was arbitrarily made. To be sure, there was no evidence or empirical
data, such as inflation rates, to support the choice of this amount. The imposition of a very high income requirement
of P100 million, increased from P20 million, was simply to make it extremely difficult for municipalities to become
component cities. And to highlight such arbitrariness and the absurdity of the situation created thereby, R.A. No.
9009 has, in effect, placed component cities at a higher standing than highly urbanized cities under Section 452 of
the LGC, to wit
Section 452. Highly Urbanized Cities. (a) Cities with a minimum population of two hundred thousand (200,000)
inhabitants, as certified by the National Statistics Office, and with the latest annual income of at least Fifty Million
Pesos (P50,000,000.00) based on 1991 constant prices, as certified by the city treasurer, shall be classified as highly
urbanized cities.
(b) Cities which do not meet above requirements shall be considered component cities of the province in which they
are geographically located. (Emphasis supplied)
The P100 million income requirement imposed by R.A. No. 9009, being an arbitrary amount, cannot be conclusively
said to be the only amount "sufficient, based on acceptable standards, to provide for all essential government
facilities and services and special functions
commensurate with the size of its population," per Section 713 of the LGC. It was imposed merely because it is
difficult to comply with. While it could be argued that P100 million, being more than P20 million, could, of course,
provide the essential government facilities, services, and special functions vis--vis the population of a municipality
wanting to become a component city, it cannot be said that the minimum amount of P20 million would be insufficient.
This is evident from the existing cities whose income, up to now, do not comply with the P100 million income
requirement, some of which have lower than the P20 million average annual income. Consider the list14 below
CITY

AVERAGE ANNUAL INCOME

1. Marawi City

5,291,522.10

2. Palayan City

6,714,651.77

3. Sipalay City

9,713,120.00

4. Canlaon City

13,552,493.79

5. Himamaylan City

15,808,530.00

6. Isabela City

16,811,246.79

7. Munoz City

19,693,358.61

8. Dapitan City

20,529,181.08

9. Tangub City

20,943,810.04

10. Bayawan City

22,943,810.04

11. Island Garden City of Samal

23,034,731.83

12. Tanjay City

23,723,612.44

13. Tabaco City

24,152,853.71

14. Oroquieta City

24,279,966.51

15. Ligao City

28,326,745.86

16. Sorsogon City

30,403,324.59

17. Maasin City

30,572,113.65

18. Escalante City

32,113,970.00

19. Iriga City

32,757,871.44

20. Gapan City

34,254,986.47

21. Candon City

36,327,705.86

22. Gingoog City

37,327,705.86

23. Masbate City

39,454,508.28

24. Passi City

40,314,620.00

25. Calbayog City

40,943,128.73

26. Calapan City

41,870,239.21

27. Cadiz City

43,827,060.00

28. Alaminos City

44,352,501.00

29. Bais City

44, 646,826.48

30. San Carlos City

46,306,129.13

31. Silay City

47,351,730.00

32. Bislig City

47,360,716.24

33. Tacurong City

49,026,281.56

34. Talisay City (Negros Occidental)

52,609,790.00

35. Kabankalan City

53,560,580.00

36. Malaybalay City

54,423,408.55

37. La Carlota City

54,760,290.00

38. Vigan City

56,831,797.19

39. Balanga City

61,556,700.49

40. Sagay City


41. Cavite City
42. Koronadal City
43. Cotabato City

64,266,350.00 Indeed, substantial distinction lies in the capacity and viability of respondent municipalities to become component
cities of their respective provinces. Congress, by enacting the Cityhood Laws, recognized this capacity and viability
64,566,079.05 of respondent municipalities to become the States partners in accelerating economic growth and development in the
provincial regions, which is the very thrust of the LGC, manifested by the pendency of their cityhood bills during the
66,231,717.19 11th Congress and their relentless pursuit for cityhood up to the present. Truly, the urgent need to become a
component city arose way back in the 11th Congress, and such condition continues to exist.
66,302,114.52

46. Danao City

70,157,331.12 Petitioners in these cases complain about the purported reduction of their "just share" in the IRA. To be sure,
petitioners are entitled to a "just share," not a specific amount. But the feared reduction proved to be false when,
70,309,233.43 after the implementation of the Cityhood Laws, their respective shares increased, not decreased. Consider the
table15 below
72,621,955.30

47. Bago City

74,305,000.00

48. Valencia City

74,557,298.92

49. Victorias City

75,757,298.92

50. Cauayan City

82,949,135.46

Bais

219,338,056.00

51. Santiago City

83,816,025.89

Batangas

334,371,984.00

52. Roxas City

85,397,830.00

Bayawan

353,150,158.00

53. Dipolog City

85,503,262.85

Cadiz

329,491,285.00

54. Trece Martires City

87,413,786.64

Calapan

227,772,199.00

55. Talisay City (Cebu)

87,964,972.97

Calbayog

438,603,378.00

56. Ozamis city

89,054,056.12

Cauayan

250,477,157.00

57. Surigao City

89,960,971.33

Gen. Santos

518,388,557.00

58. Panabo City

91,425,301.39

Gingoog

314,425,637.00

59. Digos City

92,647,699.13

Himamaylan

248,154,381.00

Iloilo

358,394,268.00

Iriga

183,132,036.00

Legaspi

235,314,016.00

Ligao

215,608,112.00

Oroquieta

191,803,213.00

Pagadian

292,788,255.00

San Carlos

239,524,249.00

San
Fernando

182,320,356.00

Santiago

508,326,072.00

Silay

216,372,314.00

Surigao

233,968,119.00

44. Toledo City


45. San Jose City

The undeniable fact that these cities remain viable as component cities of their respective provinces emphasizes the
arbitrariness of the amount of P100 million as the new income requirement for the conversion of municipalities into
component cities. This arbitrariness can also be clearly gleaned from the respective distinctive traits and level of
economic development of the individual respondent municipalities as above submitted.
Verily, the determination of the existence of substantial distinction with respect to respondent municipalities does not
simply lie on the mere pendency of their cityhood bills during the 11th Congress. This Court sees the bigger picture.
The existence of substantial distinction with respect to respondent municipalities covered by the Cityhood Laws is
measured by the purpose of the law, not by R.A. No. 9009, but by the very purpose of the LGC, as provided in its
Section 2 (a), thus
SECTION 2. Declaration of Policy.(a) It is hereby declared the policy of the State that the territorial and political
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective partners in the attainment of national goals.
Toward this end, the State shall provide for a more responsive and accountable local government structure instituted
through a system of decentralization whereby local government units shall be given more powers, authority,
responsibilities and resources. The process of decentralization shall proceed from the National Government to the
local government units.

1avvphi1
CITY

CY 2006 IRA
(Before Implementation of Sixteen [16] Cityhood
Laws)

CY 2008 IRA
(Actual Release After Implementation of Sixte
Laws)

SENATOR SOTTO. I am glad that the sponsor, Mr. President, has spread that into the Record because otherwise, if
he did not mention the Department of Finance and the Department of Budget and Management, then I would have
been blamed for the misinterpretation. But anyway, the gentleman is correct. That was the interpretation given to us
during the hearings.

Tacurong

179,795,271.00

Tagaytay

130,159,136.00

Tarlac

348,186,756.00

Tangub

162,248,610.00

So now, from P20 million, we make it P100 million from locally generated income as far as population is concerned.

Urdaneta

187,721,031.00

SENATOR PIMENTEL. As far as population is concerned, there will be no change, Mr. President. Still 150,000.

Victorias

176,367,959.00

Zamboanga

918,013,016.00

SENATOR SOTTO. Still 150,000?


SENATOR PIMENTEL. Yes.

What these petitioner cities were stating as a reduction of their respective IRA shares was based on a computation of
what they would receive if respondent municipalities were not to become component cities at all. Of course, that
would mean a bigger amount to which they have staked their claim. After considering these, it all boils down to
money and how much more they would receive if respondent municipalities remain as municipalities and not share in
the 23% fixed IRA from the national government for cities.

SENATOR SOTTO. And then the land area?


SENATOR PIMENTEL. As to the land area, there is no change; it is still 100 square kilometers.

Moreover, the debates in the Senate on R.A. No. 9009, should prove enlightening:

SENATOR SOTTO. But before it was "either/or"?

SENATOR SOTTO. Mr. President, we just want to be enlightened again on the previous qualification and the present
one being proposed. Before there were three

SENATOR PIMENTEL. That is correct. As long as it has one of the three requirements, basically, as long as it meets
the financial requirement, then it may meet the territorial requirement or the population requirement.

SENATOR PIMENTEL. There are three requisites for a municipality to become a city. Let us start with the finance.

SENATOR SOTTO. So, it remains "or"?

SENATOR SOTTO. Will the distinguished sponsor please refresh us? I used to be the chairman of the Committee on
Local Government, but the new job that was given to me by the Senate has erased completely my memory as far as
the Local Government Code is concerned.

SENATOR PIMENTEL. We are now changing it into AND.

SENATOR PIMENTEL. Yes, Mr. President, with pleasure. There are three requirements. One is financial.

SENATOR PIMENTEL. Yes.

SENATOR SOTTO. All right. It used to be P20 million.

SENATOR SOTTO. I see.

SENATOR PIMENTEL. It is P20 million. Now we are raising it to P100 million of locally generated funds.

SENATOR PIMENTEL. That is the proposal, Mr. President. In other words

SENATOR SOTTO. In other words, the P20 million before includes the IRA.

SENATOR SOTTO. Does the gentleman not think there will no longer be any municipality that will qualify, Mr.
President?

SENATOR SOTTO. AND?

SENATOR PIMENTEL. No, Mr. President.


SENATOR SOTTO. It should not have been included?
SENATOR PIMENTEL. The internal revenue share should never have been included. That was not the intention
when we first crafted the Local Government Code. The financial capacity was supposed to be demonstrated by the
municipality wishing to become a city by its own effort, meaning to say, it should not rely on the internal revenue
share that comes from the government. Unfortunately, I think what happened in past conversions of municipalities
into cities was, the Department of Budget and Management, along with the Department of Finance, had included the
internal revenue share as a part of the municipality, demonstration that they are now financially capable and can
measure up to the requirement of the Local Government Code of having a revenue of at least P20 million.

SENATOR PIMENTEL. There may still be municipalities which can qualify, but it will take a little time. They will have
to produce more babies. I do not knowexpand their territories, whatever, by reclamation or otherwise. But the
whole proposal is geared towards making it difficult for municipalities to convert into cities.
On the other hand, I would like to advert to the fact that in the amendments that we are proposing for the entire Local
Government Code, we are also raising the internal revenue share of the municipalities.
SENATOR SOTTO. I see.
SENATOR PIMENTEL. So that, more or less, hindi naman sila dehado in this particular instance.

SENATOR SOTTO. Well, then, because of that information, Mr. President, I throw my full support behind the
measure.
Thank you, Mr. President.
SENATOR PIMENTEL. Thank you very much, Mr. President. (Emphasis supplied)16
From the foregoing, the justness in the act of Congress in enacting the Cityhood Laws becomes obvious, especially
considering that 33 municipalities were converted into component cities almost immediately prior to the enactment of
R.A. No. 9009. In the enactment of the Cityhood Laws, Congress merely took the 16 municipalities covered thereby
from the disadvantaged position brought about by the abrupt increase in the income requirement of R.A. No. 9009,
acknowledging the "privilege" that they have already given to those newly-converted component cities, which prior to
the enactment of R.A. No. 9009, were undeniably in the same footing or "class" as the respondent municipalities.
Congress merely recognized the capacity and readiness of respondent municipalities to become component cities of
their respective provinces.

invariably give the most careful consideration to questions involving the interpretation and application of the
Constitution, and approach constitutional questions with great deliberation, exercising their power in this respect with
the greatest possible caution and even reluctance; and they should never declare a statute void, unless its invalidity
is, in their judgment, beyond reasonable doubt. To justify a court in pronouncing a legislative act unconstitutional, or a
provision of a state constitution to be in contravention of the Constitution x x x, the case must be so clear to be free
from doubt, and the conflict of the statute with the constitution must be irreconcilable, because it is but a decent
respect to the wisdom, the integrity, and the patriotism of the legislative body by which any law is passed to presume
in favor of its validity until the contrary is shown beyond reasonable doubt. Therefore, in no doubtful case will the
judiciary pronounce a legislative act to be contrary to the constitution. To doubt the constitutionality of a law is to
resolve the doubt in favor of its validity.18
WHEREFORE, the Motion for Reconsideration of the "Resolution" dated August 24, 2010, dated and filed on
September 14, 2010 by respondents Municipality of Baybay, et al. is GRANTED. The Resolution dated August 24,
2010 is REVERSED and SET ASIDE. The Cityhood LawsRepublic Acts Nos. 9389, 9390, 9391, 9392, 9393, 9394,
9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491are declared CONSTITUTIONAL.
SO ORDERED.

Petitioners complain of the projects that they would not be able to pursue and the expenditures that they would not
be able to meet, but totally ignored the respondent municipalities obligations arising from the contracts they have
already entered into, the employees that they have already hired, and the projects that they have already initiated
and completed as component cities. Petitioners have completely overlooked the need of respondent municipalities to
become effective vehicles intending to accelerate economic growth in the countryside. It is like the elder siblings
wanting to kill the newly-borns so that their inheritance would not be diminished.
Apropos is the following parable:
There was a landowner who went out at dawn to hire workmen for his vineyard. After reaching an agreement with
them for the usual daily wage, he sent them out to his vineyard. He came out about midmorning and saw other men
standing around the marketplace without work, so he said to them, "You too go along to my vineyard and I will pay
you whatever is fair." They went. He came out again around noon and mid-afternoon and did the same. Finally, going
out in late afternoon he found still others standing around. To these he said, "Why have you been standing here idle
all day?" "No one has hired us," they told him. He said, "You go to the vineyard too." When evening came, the owner
of the vineyard said to his foreman, "Call the workmen and give them their pay, but begin with the last group and end
with the first." When those hired late in the afternoon came up they received a full days pay, and when the first group
appeared they thought they would get more, yet they received the same daily wage. Thereupon they complained to
the owner, "This last group did only an hours work, but you have paid them on the same basis as us who have
worked a full day in the scorching heat." "My friend," he said to one in reply, "I do you no injustice. You agreed on the
usual wage, did you not? Take your pay and go home. I intend to give this man who was hired last the same pay as
you. I am free to do as I please with my money, am I not? Or are you envious because I am generous?"17
Congress, who holds the power of the purse, in enacting the Cityhood Laws, only sought the well-being of
respondent municipalities, having seen their respective capacities to become component cities of their provinces,
temporarily stunted by the enactment of R.A. No. 9009. By allowing respondent municipalities to convert into
component cities, Congress desired only to uphold the very purpose of the LGC, i.e., to make the local government
units "enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant
communities and make them more effective partners in the attainment of national goals," which is the very mandate
of the Constitution.
Finally, we should not be restricted by technical rules of procedure at the expense of the transcendental interest of
justice and equity. While it is true that litigation must end, even at the expense of errors in judgment, it is nobler
rather for this Court of last resort, as vanguard of truth, to toil in order to dispel apprehensions and doubt, as the
following pronouncement of this Court instructs:
The right and power of judicial tribunals to declare whether enactments of the legislature exceed the constitutional
limitations and are invalid has always been considered a grave responsibility, as well as a solemn duty. The courts

LUCAS P. BERSAMIN
Associate Justice

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 187836

November 25, 2014

SOCIAL JUSTICE SOCIETY (SJS) OFFICERS, NAMELY, SAMSON S. ALCANTARA, and VLADIMIR ALARIQUE
T. CABIGAO, Petitioners,
vs.
ALFREDO S. LIM, in his capacity as mayor of the City of Manila, Respondent.
x-----------------------x

80274 entitled "AN ORDINANCE RECLASSIFYING THE LAND USE OF THAT PORTION OF LAND BOUNDED BY
THE PASIGRIVER IN THE NORTH, PNR RAILROAD TRACK IN THE EAST, BEATA ST. IN THE SOUTH,
PALUMPONG ST. IN THE SOUTHWEST AND ESTERO DE PANDACAN IN THE WEST, PNR RAILROAD IN THE
NORTHWEST AREA, ESTERO DE PANDACAN IN THE NORTHEAST, PASIG RIVER IN THE SOUTHEAST AND
DR. M. L. CARREON IN THE SOUTHWEST, THE AREA OF PUNTA, STA.ANA BOUNDED BY THE PASIG RIVER,
MARCELINO OBRERO ST., MAYO 28 ST. AND THE F. MANALO STREET FROM INDUSTRIAL II TO
COMMERCIAL I," and Ordinance No. 81195 entitled "AN ORDINANCE ADOPTING THE MANILA
COMPREHENSIVE LAND USE PLAN AND ZONING REGULATIONS OF 2006 AND PROVIDING FOR THE
ADMINISTRATION, ENFORCEMENT AND AMENDMENT THERETO."
The Parties
Petitioners allege the parties respective capacity to sue and be sued, viz:
Petitioners

Residence
in Manila

G.R. No. 187916


JOSE L. ATIENZA, JR., BIENVINIDO M. ABANTE, MA. LOURDES M. ISIP-GARCIA, RAFAEL P. BORROMEO
JOCELYN DAWIS-ASUNCION, minors MARIAN REGINA B. TARAN, MACAILA RICCI B. TARAN, RICHARD
KENNETH B. TARAN, represented and joined by their parents RICHARD AND MARITES TARAN, minors
CZARINA ALYSANDRA C. RAMOS, CEZARAH ADRIANNA C. RAMOS, and CRISTEN AIDAN C. RAMOS
represented and joined by their mother DONNA C. RAMOS, minors JAZMIN SYLLITA T. VILA AND ANTONIO
T. CRUZ IV, represented and joined by their mother MAUREEN C. TOLENTINO, Petitioners,
vs.
MAYOR ALFREDO S. LIM, VICE MAYOR FRANCISCO DOMAGOSO, COUNCILORS ARLENE W. KOA, MOISES
T. LIM, JESUS FAJARDO LOUISITO N. CHUA, VICTORIANO A. MELENDEZ, JOHN MARVIN C. NIETO,
ROLANDO M. VALERIANO, RAYMUNDO R. YUPANGCO, EDWARD VP MACEDA, RODERICK D. V ALBUENA,
JOSEFINA M. SISCAR, SALVADOR PHILLIP H. LACUNA, LUCIANO M. VELOSO, CARLO V. LOPEZ, ERNESTO
F. RIVERA,1 DANILO VICTOR H. LACUNA, JR., ERNESTO G. ISIP, HONEY H. LACUNA-PANGAN, ERNESTO M.
DIONISO, JR. and ERICK IAN O. NIEVA, Respondents.

Suing capacity aside from being residents of


Manila other personal circumstances

G.R. No. 187836


SJS Officer Samson S. Alcantara
(Alcantara)

Not mentioned in the


petition; holding office
in Ermita, Manila

Manila taxpayer;
One of the petitioners in SJS v. Atienza (G.R.
No. 156052);*
Pesident of ABAKADA GURO
PARTY LIST with members who
are residents of the City of Manila

SJS Officer Vladimir Alarique T. Cabigao


(Cabigao)

Pandacan

One of the petitioners in SJS v. Atienza (G.R.


No. 156052)

* The allegation is inaccurate. SJS Officer Alcantara is actually one of the counsels for petitioner SJS in G.R. No.
156052. The petitioners in that case are the SJS itself, Cabigao and Bonifacio S. Tumbokon (Tumbokon).

x-----------------------x
CHEVRON PHILIPPINES INC., PETRON CORPORATION AND PILIPINAS SHELL PETROLEUM
CORPORATION, Intervenors.
DECISION

G.R. No. 187916


Former Mayor Jose L. Atienza, Jr. (Mayor
Atienza)

San Andres

Former Mayor of Manila;


Secretary of Department of
Environment and Natural
Resources (DENR)

Bienvinido M. Abante

Sta. Ana

Citizen and taxpayer;


member of the House of
Representatives

Ma. Lourdes M. Isip-Garcia

San Miguel

Incumbent City Councilor of the


City of Manila

Rafael P. Borromeo

Paco

Incumbent City Councilor of the


City of Manila

Jocelyn Dawis-Asuncion

Sta. Mesa

Incumbent City Councilor of the


City of Manila

PEREZ, J.:
Challenged in these consolidated petitions2 is the validity of Ordinance No. 81873 entitled "AN ORDINANCE
AMENDING ORDINANCE NO. 8119, OTHERWISE KNOWN AS THE MANILA COMPREHENSIVE LAND USE
PLAN AND ZONING ORDINANCE OF 2006, BY CREATING A MEDIUM INDUSTRIAL ZONE (1-2) AND HEAVY
INDUSTRIAL ZONE (1-3), AND PROVIDING FOR ITS ENFORCEMENT" enacted by the Sangguniang Panlungsod
of Manila (Sangguniang Panlungsod) on 14 May 2009.
The creation of a medium industrial zone (1-2) and heavy industrial zone (1-3) effectively lifted the prohibition against
owners and operators of businesses, including herein intervenors Chevron Philippines, Inc. (Chevron), Pilipinas Shell
Petroleum Corporation (Shell), and Petron Corporation (Petron), collectively referred to as the oil companies, from
operating in the designated commercial zone an industrial zone prior to the enactment of Ordinance No.

Minors Marian Regina B. Taran, Macalia Ricci B.


Taran, Richard Kenneth B. Taran, represented
and joined by their parents Richard and Marites
Taran

Paco

Citizens, real estate owners and


taxpayers

Minors Czarina Alysandra C. Ramos, Cezarah


Adrianna C. Ramos, and Cristen Aidan C.
Ramos represented and joined by
their mother Donna c. Ramos

Tondo

Citizens, real estate owners and


taxpayers

Minors Jasmin Syllita T. Vila and Antonio T. Cruz


IV, represented and joined by their mother
Maureen C. Tolentino

Sta. Ana

Petron Corporation (PETRON)

manufacturing, refining, importing, distributing and marketing of petroleum


products in the Philippines

They claim that their rights with respect to the oil depots in Pandacan would be directly affected by the outcome of
these cases.
The Antecedents

Respondents

Citizens, real estate owners and


taxpayers

Sued in their capacity as

G.R. Nos. 187836 and 187916


Former Mayor Alfredo S. Lim (Mayor Lim)

Incumbent Mayor of Manila at


the time of the filing of the
present petitions

Respondents

Sued in their capacity as

These petitions are a sequel to the case of Social Justice Society v. Mayor Atienza, Jr.8 (hereinafter referred to
asG.R. No. 156052), where the Court found: (1) that the ordinance subject thereof Ordinance No. 8027 was
enacted "to safeguard the rights to life, security and safety of the inhabitants of Manila;"9 (2) that it had passed the
tests of a valid ordinance; and (3) that it is not superseded by Ordinance No. 8119.10 Declaring that it is
constitutional and valid,11 the Court accordingly ordered its immediate enforcement with a specific directive on the
relocation and transfer of the Pandacan oil terminals.12
Highlighting that the Court has soruled that the Pandacan oil depots should leave, herein petitioners now seek the
nullification of Ordinance No. 8187, which contains provisions contrary to those embodied in Ordinance No. 8027.
Allegations of violation of the right to health and the right to a healthful and balanced environment are also included.
For a better perspective of the facts of these cases, we again trace the history of the Pandacan oil terminals, aswell
as the intervening events prior to the reclassification of the land use from Industrial II to Commercial I under
Ordinance No. 8027 until the creation of Medium Industrial Zone and Heavy Industrial Zone pursuant to Ordinance
No. 8187.
History of the Pandacan
Oil Terminals

G.R. No. 187916

We quote the following from the Resolution of the Court in G.R. No. 156052:

Vice-Mayor Francisco Domagoso (Vice-Mayor


Domagoso)

Vice-Mayor and Presiding Officer


of the City Council of Manila

Arlene Woo Koa

Principal author of City


Ordinance No. 8187

Moises T. Lim, Jesus Fajardo, Louisito N. Chua, Victoriano A. Melendez,


John Marvin Nieto, Rolando M. Valeriano, Raymondo R. Yupangco,
Edward VP Maceda, Roderick D. Valbuena, Josefina M. Siscar, Phillip H.
Lacuna, Luciano M. Veloso, Carlo V. Lopez, Ernesto F. Rivera,6 Danilo
Victor H. Lacuna, Jr., Ernesto G. Isip, Honey H. Lacuna-Pangan, Ernesto
M. Dionisio, Jr., Erick Ian O. Nieva

Personal and official capacities as councilors


who voted and approved City Ordinance No.
8187

The following intervenors, all of which are corporations organized under Philippine laws, intervened:7
Intervenors

Nature of Business

Chevron Philippines,
Inc. (CHEVRON)

importing, distributing and marketing of petroleum products in the


Philippines since 1922

Pilipinas Shell Petroleum Corporation (SHELL)

manufacturing, refining, importing, distributing and marketing of petroleum


products in the Philippines

Pandacan (one of the districts of the City of Manila) is situated along the banks of the Pasig [R]iver. Atthe turn of the
twentieth century, Pandacan was unofficially designated as the industrial center of Manila. The area, then largely
uninhabited, was ideal for various emerging industries as the nearby river facilitated the transportation of goods and
products. In the 1920s, it was classifiedas an industrial zone. Among its early industrial settlers werethe oil
companies. x x x On December 8, 1941, the Second World War reached the shores of the Philippine Islands. x x x
[I]n their zealous attempt to fend off the Japanese Imperial Army, the United States Army took control of the
Pandacan Terminals and hastily made plans to destroy the storage facilities to deprive the advancing Japanese Army
of a valuable logistics weapon. The U.S. Army burned unused petroleum, causing a frightening conflagration.
Historian Nick Joaquin recounted the events as follows:
After the USAFFE evacuated the City late in December 1941, all army fuel storage dumps were set on fire. The
flames spread, enveloping the City in smoke, setting even the rivers ablaze, endangering bridges and all riverside
buildings. For one week longer, the "open city" blazeda cloud of smoke by day, a pillar of fire by night.
The fire consequently destroyed the Pandacan Terminals and rendered its network of depots and service stations
inoperative.
After the war, the oil depots were reconstructed. Pandacan changed as Manila rebuilt itself. The three major oil
companies resumed the operation of their depots. But the district was no longer a sparsely populated industrial zone;
it had evolved into a bustling, hodgepodge community. Today, Pandacan has become a densely populated area
inhabited by about 84,000 people, majority of whom are urban poor who call it home. Aside from numerous industrial
installations, there are also small businesses, churches, restaurants, schools, daycare centers and residences
situated there. Malacaang Palace, the official residence of the President of the Philippines and the seat of

governmental power, is just two kilometers away. There is a private school near the Petron depot. Along the walls of
the Shell facility are shanties of informal settlers. More than 15,000 students are enrolled in elementary and high
schools situated near these facilities. A university with a student population of about 25,000 is located directly across
the depot on the banks of the Pasig [R]iver.
The 36-hectare Pandacan Terminals house the oil companies distribution terminals and depot facilities.1wphi1 The
refineries of Chevron and Shell in Tabangao and Bauan, both in Batangas, respectively, are connected to the
Pandacan Terminals through a 114-kilometer underground pipeline system. Petrons refinery in Limay, Bataan, on the
other hand, also services the depot. The terminals store fuel and other petroleum products and supply 95% of the
fuel requirements of Metro Manila, 50% of Luzons consumption and 35% nationwide. Fuel can also be transported
through barges along the Pasig [R]iver ortank trucks via the South Luzon Expressway.13 (Citations omitted)
Memorandum of Agreement (MOA)
dated 12 October 2001 between the oil companies
and the Department of Energy (DOE)
On 12 October 2001, the oil companies and the DOE entered into a MOA14 "in light of recent international
developments involving acts of terrorism on civilian and government landmarks,"15 "potential new security risks
relating to the Pandacan oil terminals and the impact on the surrounding community which may be affected,"16and
"to address the perceived risks posed by the proximity of communities, businesses and offices to the Pandacan oil
terminals, consistent with the principle of sustainable development."17 The stakeholders acknowledged that "there is
a need for a comprehensive study to address the economic, social, environmental and security concerns with the
end in view of formulating a Master Plan to address and minimize the potential risks and hazards posed by the
proximity of communities, businesses and offices to the Pandacan oil terminals without adversely affecting the
security and reliability of supply and distribution of petroleum products to Metro Manila and the rest of Luzon, and the
interests of consumers and users of such petroleum products in those areas."18
The enactment of Ordinance No. 8027
against the continued stay of the oil depots
The MOA, however, was short-lived.
On 20 November 2001, during the incumbency of former Mayor Jose L. Atienza, Jr. (Mayor Atienza) nowone of the
petitioners in G.R. No. 187916 the Sangguniang Panlungsod enacted Ordinance No. 802719 reclassifying the use
of the land in Pandacan, Sta. Ana, and its adjoining areas from Industrial II to Commercial I.
The owners and operators of the businesses thus affected by the reclassification were given six months from the
date of effectivity of the Ordinance within which to stop the operation of their businesses.
Nevertheless, the oil companies weregranted an extension of until 30 April 2003 within which to comply with the
Ordinance pursuant to the following:
(1) Memorandum of Understanding (MOU)20 dated 26 June 2002 between the City of Manila and the
Department of Energy (DOE), on the one hand, and the oil companies, on the other, where the parties
agreed that "the scaling down of the Pandacan Terminals [was] the most viable and practicable
option"21and committed to adopt specific measures22 consistent with the said objective;
(2) Resolution No. 97 dated 25 July 200223 of the Sangguniang Panlungsod, which ratified the 26 June
2002 MOU but limited the extension of the period within which to comply to six months from 25 July 2002;
and

(3) Resolution No. 13 dated 30 January 200324 of the Sanguniang Panlungsod, which extended the
validity of Resolution No. 97 to 30 April 2003, authorized then Mayor Atienza to issue special business
permits to the oil companies, and called for a reassessment of the ordinance.
Social Justice Society v. Atienza (G.R. No. 156052):
The filing of an action for mandamus
before the Supreme Court
to enforce Ordinance No. 8027
In the interim, an original action for mandamus entitled Social Justice Society v. Atienza, Jr. docketed as G.R. No.
15605225 was filed on 4 December 2002 by Tumbokon and herein petitioners SJS and Cabigao against then Mayor
Atienza. The petitioners sought to compel former Mayor Atienza to enforce Ordinance No. 8027 and cause the
immediate removal of the terminals of the oil companies.26
Issuance by the Regional Trial Court (RTC)
of writs of preliminary prohibitory injunction
and preliminary mandatory injunction,
and status quo order in favor of the oil companies
Unknown to the Court, during the pendency of G.R. No. 156052, and before the expiration of the validity
ofResolution No. 13, the oil companies filed the following actions before the Regional Trial Court of Manila: (1) an
action for the annulment of Ordinance No. 8027 with application for writs of preliminary prohibitory injunction and
preliminary mandatory injunction by Chevron; (2) a petition for prohibition and mandamus also for the annulment of
the Ordinance with application for writs of preliminary prohibitory injunction and preliminary mandatory injunction by
Shell; and (3) a petition assailing the validity of the Ordinance with prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order (TRO) by Petron.27
Writs of preliminary prohibitory injunction and preliminary mandatory injunction were issued in favor of Chevron and
Shell on 19 May 2003. Petron, on the other hand, obtained a status quo order on 4 August 2004.28
The Enactment of Ordinance No. 8119 defining the Manila land use plan and zoning regulations
On 16 June 2006, then Mayor Atienza approved Ordinance No. 8119 entitled "An Ordinance Adopting the Manila
Comprehensive Land Use Plan and Zoning Regulations of 2006 and Providing for the Administration, Enforcement
and Amendment thereto."29
Pertinent provisions relative to these cases are the following:
(a) Article IV, Sec. 730 enumerating the existing zones or districts in the City of Manila;
(b) Article V, Sec. 2331 designating the Pandacan oil depot area as a "Planned Unit Development/Overlay
Zone" (O-PUD); and
(c) the repealing clause, which reads:
SEC. 84. Repealing Clause. All ordinances, rules, regulations in conflict with the provisions of this Ordinance are
hereby repealed; PROVIDED, That the rights that are vested upon the effectivity of this Ordinance shall not be
impaired.32

7 March 2007 Decision in G.R. No. 156052;


The mayor has the mandatory legal duty to enforce
Ordinance No. 8027 and order the removal of the Pandacan terminals

We reiterate our order to respondent Mayor of the City of Manila to enforce Ordinance No. 8027. In coordination with
the appropriate agencies and other parties involved, respondent Mayor is hereby ordered to oversee the relocation
and transfer of the Pandacan Terminals out of its present site.37

On 7 March 2007, the Court granted the petition for mandamus, and directed then respondent Mayor Atienza to
immediately enforce Ordinance No. 8027.33

13 February 2008 Resolution in G.R. No. 156052;


Ordinance No. 8027 was not impliedly repealed
by Ordinance No. 8119

Confined to the resolution of the following issues raised by the petitioners, to wit:
1. whether respondent [Mayor Atienza]has the mandatory legal duty to enforce Ordinance No. 8027 and
order the removal of the Pandacan Terminals, and
2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal Ordinance No.
8027.34
the Court declared:
x x x [T]he Local Government Code imposes upon respondent the duty, as city mayor, to "enforce all laws and
ordinances relative to the governance of the city." One of these is Ordinance No. 8027. As the chief executive of the
city, he has the duty to enforce Ordinance No. 8027 as long as it has not been repealed by the Sanggunian or
annulled by the courts. He has no other choice. It is his ministerial duty to do so. x x x

The Court also ruled that Ordinance No. 8027 was not impliedly repealed by Ordinance No. 8119. On this score, the
Court ratiocinated:
For the first kind of implied repeal, there must be an irreconcilable conflict between the two ordinances. There is no
conflict between the two ordinances. Ordinance No. 8027 reclassified the Pandacan area from Industrial II to
Commercial I. Ordinance No. 8119, Section 23, designated it as a "Planned Unit Development/Overlay Zone (OPUD)." In its Annex "C" which defined the zone boundaries, the Pandacan area was shown to be within the "High
Density Residential/Mixed Use Zone (R-3/MXD)." x x x [B]oth ordinances actually have a common objective, i.e., to
shift the zoning classification from industrial to commercial (Ordinance No. 8027) or mixed residential commercial
(Ordinance No. 8119)
xxxx
Ordinance No. 8027 is a special law since it deals specifically with a certain area described therein (the Pandacan oil
depot area) whereas Ordinance No. 8119 can be considered a general law as it covers the entire city of Manila.

xxxx
xxxx
The question now is whether the MOU entered into by respondent with the oil companies and the subsequent
resolutions passed by the Sanggunianhave made the respondents duty to enforce Ordinance No. 8027 doubtful,
unclear or uncertain. x x x
We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with Ordinance No. 8027, the
resolutions which ratified it and made it binding on the Cityof Manila expressly gave it full force and effect only until
April 30, 2003. Thus, at present, there is nothing that legally hinders respondent from enforcing Ordinance No. 8027.
Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world, witnessed the horror of
the September 11, 2001 attack on the Twin Towers of the World Trade Center in New York City. The objective of the
ordinance is toprotect the residents of Manila from the catastrophic devastation that will surely occur in case of a
terrorist attack on the Pandacan Terminals. No reason exists why such a protective measure should be
delayed.35 (Emphasis supplied; citations omitted)
13 February 2008 Resolution in G.R. No. 156052;
Ordinance No. 8027 is constitutional
The oil companies and the Republic of the Philippines, represented by the DOE, filed their motions for leave to
intervene and for reconsideration of the 7 March 2007 Decision. During the oral arguments, the parties submitted to
the power of the Court torule on the constitutionality and validity of the assailed Ordinance despite the pendency of
the cases in the RTC.36
On 13 February 2008, the Court granted the motions for leave to intervene of the oil companies and the Republic of
the Philippines but denied their respective motions for reconsideration. The dispositive portion of the Resolution
reads:
WHEREFORE, x x x

x x x The repealing clause of Ordinance No. 8119 cannot be taken to indicate the legislative intent to repeal all prior
inconsistent laws on the subject matter, including Ordinance No. 8027, a special enactment, since the aforequoted
minutes (an official record of the discussions in the Sanggunian) actually indicated the clear intent to preserve the
provisions of Ordinance No. 8027.38
Filing of a draft Resolution amending Ordinance No. 8027 effectively allowing
the oil depots to stay in the Pandacan area; Manifestation and
Motion to forestall the passing of the new Ordinance filed in G.R. No. 156052
On 5 March 2009, respondent then Councilor Arlene W. Koa, filed with the Sangguniang Panlungsod a draft
resolution entitled "An Ordinance Amending Ordinance No. 8119 Otherwise Known as The Manila Comprehensive
Land Use Plan and Zoning Ordinance of 2006 by Creating a Medium Industrial Zone (1-2) and Heavy Industrial
Zone (1-3) and Providing for its Enforcement."39 Initially numbered as Draft Ordinance No. 7177, this was later
renumbered as Ordinance No. 8187, the assailed Ordinance in these instant petitions.
Considering that the provisions thereof run contrary to Ordinance No. 8027, the petitioners in G.R. No. 156052 filed a
"Manifestation and Motion to: a) Stop the City Council of Manila from further hearing the amending ordinance to
Ordinance No. 8027; [and] b) Transfer the monitoring of the enforcement of the Resolution of the Honorable Court on
this case dated 13 February 2008 from Branch 39, Manila Regional Trial Court to the Supreme Court."40
28 April 2009 Resolution in G.R. No. 156052;
Second Motion for Reconsideration denied with finality;
succeeding motions likewise denied or otherwise noted without action
On 28 April 2009, pending the resolution of the Manifestation and Motion, the Court denied with finalitythe second
motion for reconsideration dated 27 February 2008 of the oil companies.41

It further ruled that no further pleadings shall be entertained in the case.42


Succeeding motions were thus deniedand/or noted without action. And, after the "Very Urgent Motion to Stop the
Mayor of the City of Manila from Signing Draft Ordinance No. 7177 and to Cite Him for Contempt if He Would Do So"
filed on 19 May 2009 was denied on 2 June 2009 for being moot,43 all pleadings pertaining to the earlier motion
against the drafting of an ordinance to amend Ordinance No. 8027 were noted without action.44
The Enactment of Ordinance No. 8187
allowing the continued stay of the oil depots

contrary Ordinance, thereby refusing to recognize that "judicial decisions applying or interpreting the laws
or the Constitution form part of the legal system of the Philippines;"49 and
4. Ordinance No. 8187 is violative of Sections 15 and 16, Article II of the Constitution of the Philippines on
the duty of the State "to protect and promote the right to health of the people"50 and "protect and advance
the right of the people to a balanced and healthful ecology."51 Petitioners pray that Ordinance No. 8187 of
the City of Manila be declared null and void, and that respondent, and all persons acting under him, be
prohibited from enforcing the same.
G.R. No. 187916

On 14 May 2009, during the incumbency of former Mayor Alfredo S. Lim (Mayor Lim), who succeeded Mayor
Atienza, the Sangguniang Panlungsod enacted Ordinance No. 8187.45
The new Ordinance repealed, amended, rescinded or otherwise modified Ordinance No. 8027, Section 23 of
Ordinance No. 8119, and all other Ordinances or provisions inconsistent therewith46 thereby allowing, once again,
the operation of "Pollutive/Non-Hazardous and Pollutive/Hazardous manufacturing and processing establishments"
and "Highly Pollutive/Non-Hazardous[,] Pollutive/Hazardous[,] Highly Pollutive/Extremely Hazardous[,] NonPollutive/Extremely Hazardous; and Pollutive/Extremely Hazardous; and Pollutive/Extremely Hazardous
manufacturing and processing establishments" within the newly created Medium Industrial Zone (1-2) and Heavy
Industrial Zone (1-3) in the Pandacan area.

The petition for Prohibition, Mandamus and Certiorari with Prayer for Temporary Restraining Order and/or Injunction
against the enforcement of Ordinance No. 8187 of former Secretary of Department of Environment and Natural
Resources and then Mayor Atienza, together with other residents and taxpayers of the City of Manila, also alleges
violation of the right to health of the people and the right to a healthful and balanced environment under Sections 15
and 16 of the Constitution.
Petitioners likewise claim that the Ordinance is in violation of the following health and environment-related municipal
laws, and international conventions and treaties to which the Philippines is a state party:
1. Municipal Laws

Thus, where the Industrial Zoneunder Ordinance No. 8119 was limited to Light Industrial Zone (I-1), Ordinance No.
8187 appended to the list a Medium Industrial Zone (I-2) and a Heavy Industrial Zone (I-3), where petroleum
refineries and oil depots are now among those expressly allowed.
Hence these petitions.

(a) Sections 4,52 12,53 1954 and 3055 of Republic Act No. 8749 otherwise known as the
Philippine Clean Air Act;
(b) Environment Code (Presidential Decree No. 1152);

The Petitions
G.R. No. 187836

(c) Toxic and Hazardous Wastes Law (Republic Act No. 6969); and
(d) Civil Code provisions on nuisance and human relations;

To support their petition for prohibition against the enforcement of Ordinance No. 8187, the petitioner Social Justice
Society (SJS) officers allege that:
1. The enactment of the assailed Ordinance is not a valid exercise of police power because the measures
provided therein do not promote the general welfare of the people within the contemplation of the following
provisions of law:
a) Article III, Section 18 (kk)47 of Republic Act No. 409 otherwise known as the "Revised Charter
of the City of Manila," which provides that the Municipal Board shall have the legislative power to
enact all ordinances it may deem necessary and proper;
b) Section 1648 of Republic Act No. 7160 known as the Local Government Code, which defines
the scope of the general welfare clause;
2. The conditions at the time the Court declared Ordinance No. 8027 constitutional in G.R. No. 156052
exist to this date;
3. Despite the finality of the Decision in G.R. No. 156052, and notwithstanding that the conditions and
circumstances warranting the validity of the Ordinance remain the same, the Manila City Council passed a

2. International Conventions and Treaties to which the Philippines is a state party


a. Section 1 of the Universal Declaration of Human Rights, which states that "[e]veryone has the
right to life, liberty and security of person;"
b. Articles 6,56 2457 and 2758 of the Convention on the Rights of the Child, summarized by the
petitioners in the following manner:
1. the human right to safe and healthy environment[;]
2. human right to the highest attainable standard of health[;]
3. the human right to ecologically sustainable development[;]
4. the human right to an adequate standard of living, including access to safe food and water[;]
5. the human right of the child to live in an environment appropriate for physical and mental development[;
and]

6. the human right to full and equal participation for all persons in environmental decision-making and
development planning, and in shaping decisions and policies affecting ones community, at the local,
national and international levels.59
Petitioners likewise posit that the title of Ordinance No. 8187 purports to amend or repeal Ordinance No. 8119 when
it actually intends to repeal Ordinance No. 8027. According to them, Ordinance No. 8027 was never mentioned in the
title and the body of the new ordinance in violation of Section 26, Article VI of the 1987 Constitution, which provides
that every bill passed by Congress shall embrace only one subject which shall be expressed in the title thereof.
Also pointed out by the petitioners is a specific procedure outlined in Ordinance No. 8119 that should be observed
when amending the zoning ordinance. This is provided for under Section 81 thereof, which reads:
SEC. 81. Amendments to the Zoning Ordinance. The proposed amendments to the Zoning Ordinance asreviewed
and evaluated by the City Planning and Development Office (CPDO)shall be submitted to the City Council for
approval of the majority of the Sangguniang Panlungsod members. The amendments shall be acceptable and
eventually approved: PROVIDED, That there is sufficient evidence and justification for such proposal; PROVIDED
FURTHER,That such proposal is consistent with the development goals, planning objectives, and strategies of the
Manila Comprehensive Land Use Plan. Said amendments shall take effect immediately upon approval or after thirty
(30) days from application.
Petitioners thus pray that:

On the procedural issues, he contends that: (1) it is the function of the Sangguniang Panlungsod to enact zoning
ordinances, for which reason, it may proceed to amend or repeal Ordinance No. 8119 without prior referral to the
Manila Zoning Board of Adjustment and Appeals (MZBAA) as prescribed under Section 80 (Procedure for ReZoning) and the City Planning and Development Office (CPDO) pursuant to Section 81 (Amendments to the Zoning
Ordinance) of Ordinance No. 8119, especially when the action actually originated from the Sangguniang Panlungsod
itself; (2) the Sangguniang Panlungsod may, in the later ordinance, expressly repeal all or part of the zoning
ordinance sought to be modified; and (3) the provision repealing Section 23 of Ordinance No. 8119 is not violative of
Section 26, Article VI of the 1987 Constitution, which requires that every bill must embrace only one subject and that
such shall be expressed in the title.
On the substantive issues, he posits that the petitions are based on unfounded fears; that the assailed ordinance is a
valid exercise of police power; that it is consistent with the general welfare clause and public policy, and is not
unreasonable; that it does not run contrary to the Constitution, municipal laws, and international conventions; and
that the petitioners failed to overcome the presumption of validity of the assailed ordinance.
Respondents Vice-Mayor Domagoso and the City Councilors who voted in favor of the assailed ordinance
On 14 September 2012, after the Court gave the respondents several chances to submit their Memorandum,62they,
through the Secretary of the Sangguniang Panlungsod, prayed that the Court dispense with the filing thereof.
In their Comment,63 however, respondents offered a position essentially similar to those proffered by former Mayor
Lim.

1. upon filing of [the] petition, [the] case be referred to the Court [E]n Banc, and setting (sic) the case for
oral argument;

The Intervenors Position on the Consolidated Petitions

2. upon the filing of [the] petition, a temporary restraining order be issued enjoining the respondents from
publishing and posting Manila City Ordinance No. 8187 and/or posting of Manila City Ordinance No. 8187;
and/or taking any steps to implementing (sic) and/or enforce the same and after due hearing, the
temporary restraining order be converted to a permanent injunction;

On the other hand, the oil companies sought the outright dismissal of the petitions based on alleged procedural
infirmities, among others, incomplete requisites of judicial review, violation of the principle of hierarchy of courts,
improper remedy, submission of a defective verification and certification against forum shopping, and forum
shopping.

3. x x x Manila City Ordinance 8187 [be declared] as null and void for being repugnant to the Constitution
and existing municipal laws and international covenants;

As to the substantive issues, they maintain, among others, that the assailed ordinance is constitutional and valid; that
the Sangguniang Panlalawigan is in the best position to determine the needs of its constituents; that it is a valid
exercise of legislative power; that it does not violate health and environment-related provisions of the Constitution,
laws, and international conventions and treaties to which the Philippines is a party; that the oil depots are not likely
targets of terrorists; that the scaling down of the operations in Pandacan pursuant to the MOU has been followed;
and that the people are safe in view of the safety measures installed in the Pandacan terminals.

4. x x x the respondents [be ordered] to refrain from enforcing and/or implementing Manila City Ordinance
No. 8187;
5. x x x respondent City Mayor Alfredo S. Lim [be enjoined] from issuing any permits (business or
otherwise) to all industries whose allowable uses are anchored under the provisions of Manila Ordinance
No. 8187; and
6. x x x respondent Mayor of Manila Alfredo S. Lim [be ordered] to comply with the Order of the Honorable
Court in G.R. 156052 dated February 13, 2008.60
The Respondents Position on the Consolidated Petitions

Incidentally, in its Manifestation dated 30 November 2010,64 Petron informed the Court that it will "cease [the]
operation of its petroleum product storage facilities"65 in the Pandacan oil terminal not later than January 2016 on
account of the following:
2.01 Environmental issues, many of which are unfounded, continually crop up and tarnish the Companys image.
2.02. The location of its Pandacanterminal is continually threatened, and made uncertain preventing long-term
planning, by the changing local government composition. Indeed, the relevant zoning ordinances have been
amended three (3) times, and their validity subjected to litigation.66

Respondent former Mayor Lim


Intervening Events
In his Memorandum,61 former Mayor Lim, through the City Legal Officer, attacks the petitioners lack of legal
standing to sue. He likewise points out that the petitioners failed to observe the principle of hierarchy of courts.
Maintaining that Ordinance No. 8187 is valid and constitutional, he expounds on the following arguments:

On 28 August 2012, while the Court was awaiting the submission of the Memorandum of respondents Vice-Mayor
Domagoso and the councilors who voted in favor of the assailed Ordinance, the Sangguniang Panlungsod, which
composition had already substantially changed, enacted Ordinance No. 828367 entitled "AN ORDINANCE

AMENDING SECTION 2 OF ORDINANCE NO. 8187 BY RECLASSIFYING THE AREA WHERE PETROLEUM
REFINERIES AND OIL DEPOTS ARE LOCATED FROM HEAVY INDUSTRIAL (1-3) TO HIGH INTENSITY
COMMERCIAL/MIXED USE ZONE (C3/MXD).

The resolution of the present controversy is, thus, confined to the determination of whether or not the enactment of
the assailed Ordinance allowing the continued stay of the oil companies in the depots is, indeed, invalid and
unconstitutional.

The new ordinance essentially amended the assailed ordinance to exclude the area where petroleum refineries and
oil depots are located from the Industrial Zone.
Ordinance No. 8283 thus permits the operation of the industries operating within the Industrial Zone. However, the oil
companies, whose oil depots are located in the High Intensity Commercial/Mixed Use Zone (C3/MXD), are given
until the end of January 2016 within which to relocate their terminals.
Former Mayor Lim, who was then the incumbent mayor, did not support the amendment. Maintaining that the
removal of the oil depots was prejudicial to public welfare, and, on account of the pending cases in the Supreme
Court, he vetoed Ordinance No. 8283 on 11 September 2012.68
On 28 November 2012, former Mayor Lim filed a Manifestation informing this Court that the Sangguniang
Panlungsod voted to override the veto, and that he, in turn, returned it again with his veto. He likewise directed the
Sangguniang Panlungsod to append his written reasons for his veto of the Ordinance, so that the same will be
forwarded to the President for his consideration in the event that his veto is overridden again.69
On 11 December 2012, Shell also filed a similar Manifestation.70
Meanwhile, three days after former Mayor Lim vetoed the new ordinance, Atty. Luch R. Gempis, Jr. (Atty. Gempis),
Secretary of the Sangguniang Panlungsod, writing on behalf of respondents Vice-Mayor Domagoso and the City
Councilors of Manila who voted in favor of the assailed Ordinance, finally complied with this Courts Resolution dated
17 July 2012 reiterating its earlier directives71 to submit the said respondents Memorandum.
In his Compliance/Explanation with Urgent Manifestation72 dated 13 September 2012, Atty. Gempis explained that it
was not his intention to show disrespect to this Court or to delay or prejudice the disposition of the cases.
According to him, he signed the Comment prepared by respondents Vice-Mayor and the City Councilors only to
attest that the pleading was personally signed by the respondents. He clarified that he was not designated as the
legal counsel of the respondents as, in fact, he was of the impression that, pursuant to Section 481(b)(3) of the Local
Government Code,73 it is the City Legal Officer who isauthorized to represent the local government unit or any
official thereof in a litigation. It was for the same reason that he thought that the filing of a Memorandum may already
be dispensed with when the City Legal Officer filed its own on 8 February 2010. He further explained that the
Ordinance subject of these cases was passed during the 7th Council (2007-2010); that the composition of the 8th
Council (2010-2013) had already changed after the 2010 elections; and that steps were already taken to amend the
ordinance again. Hence, he was in a dilemma as to the position of the Sangguniang Panlungsod at the time he
received the Courts Resolution of 31 May 2011.
Atty. Gempis, thus, prayed that the Court dispense with the filing of the required memorandum in view of the passing
of Ordinance No. 8283.
Issue
The petitioners arguments are primarily anchored on the ruling of the Court in G. R. No. 156052 declaring Ordinance
No. 8027 constitutional and valid after finding that the presence of the oil terminals in Pandacan is a threat to the life
and security of the people of Manila. From thence, the petitioners enumerated constitutional provisions, municipal
laws and international treaties and conventions on health and environment protection allegedly violated by the
enactment of the assailed Ordinance to support their position.

Our Ruling
We see no reason why Ordinance No. 8187 should not be stricken down insofar as the presence of the oil depots in
Pandacan is concerned.
I
We first rule on the procedural issues raised by the respondents and the oil companies.
At the outset, let it be emphasized that the Court, in G.R. No. 156052, has already pronounced that the matter of
whether or not the oil depots should remain in the Pandacan area is of transcendental importance to the residents of
Manila.74
We may, thus, brush aside procedural infirmities, if any, as we had in the past, and take cognizance of the cases75if
only to determine if the acts complained of are no longer within the bounds of the Constitution and the laws in
place.76
Put otherwise, there can be no valid objection to this Courts discretion to waive one or some procedural
requirements if only to remove any impediment to address and resolve the serious constitutional question77 raised in
these petitions of transcendental importance, the same having farreaching implications insofar as the safety and
general welfare of the residents of Manila, and even its neighboring communities, are concerned.
Proper Remedy
Respondents and intervenors argue that the petitions should be outrightly dismissed for failure on the part of the
petitioners to properly apply related provisions of the Constitution, the Rules of Court, and/or the Rules of Procedure
for Environmental Cases relative to the appropriate remedy available to them.
To begin with, questioned is the applicability of Rule 6578 of the Rules of Court to assail the validity and
constitutionality of the Ordinance.
there is no appeal, or any plain,
speedy, and adequate remedy
in the ordinary course of law
Rule 65 specifically requires that the remedy may be availed of only when "there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law."79
Shell argues that the petitioners should have sought recourse before the first and second level courts under the
Rules of Procedure for Environmental Cases,80 which govern "the enforcement or violations of environmental and
other related laws, rules and regulations."81 Petron additionally submits that the most adequate remedy available to
petitioners is to have the assailed ordinance repealed by the Sangguniang Panlungsod. In the alternative, a local
referendum may be had. And, assuming that there were laws violated, the petitioners may file an action for each
alleged violation of law against the particular individuals that transgressed the law.

It would appear, however, that the remedies identified by the intervenors prove to be inadequate toresolve the
present controversies in their entirety owing to the intricacies of the circumstances herein prevailing.
The scope of the Rules of Procedure for Environmental Cases is embodied in Sec. 2, Part I, Rule I thereof. It states
that the Rules shall govern the procedure in civil, criminal and special civil actions before the Metropolitan Trial
Courts, Municipal Trial Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts, and the Regional
Trial Courts involving enforcement or violations of environmental and other related laws, rules and regulations such
as but not limited to the following:
(k) R.A. No. 6969, Toxic Substances and Hazardous Waste Act;

xxxx
2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide,
final judgments and orders of lower courtsin:
a. All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Emphasis supplied)
To further support its position, it cites the case of Liga ng mga Barangay National v. City Mayor of Manila,85 where
the petitioners sought the nullification of the mayors executive order and the councils ordinance concerning certain
functions of the petitioners that are vested in them by law. There, the Court held:

xxxx
(r) R.A. No. 8749, Clean Air Act;
xxxx
(y) Provisions in C.A. No. 141, x x x; and other existing laws that relate to the conservation, development,
preservation, protection and utilization of the environment and natural resources.82 (Emphasis supplied)
Notably, the aforesaid Rules are limited in scope. While, indeed, there are allegations of violations of environmental
laws in the petitions, these only serve as collateral attacks that would support the other position of the petitioners
the protection of the rightto life, security and safety. Moreover, it bears emphasis that the promulgation of the said
Rules was specifically intended to meet the following objectives:
SEC. 3. Objectives.The objectives of these Rules are:
(a) To protect and advance the constitutional right of the people to a balanced and healthful ecology;
(b) To provide a simplified, speedy and inexpensive procedure for the enforcement of environmental rights and
duties recognized under the Constitution, existing laws, rules and regulations, and international agreements;
(c) To introduce and adopt innovations and best practices ensuring the effective enforcement of remedies and
redress for violation of environmental laws; and

Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the declaration by this
Court of the unconstitutionality or illegality of the questioned ordinance and executive order. It, thus, partakes of the
nature of a petition for declaratory relief over which this Court has only appellate, not original, jurisdiction.86Section
5, Article VIII of the Constitution provides: x x x
As such, this petition must necessary fail, as this Court does not have original jurisdiction over a petition for
declaratory relief even if only questions of law are involved.87
Assuming that a petition for declaratory relief is the proper remedy, and that the petitions should have been filed with
the Regional Trial Court, we have, time and again, resolved to treat such a petition as one for prohibition, provided
that the case has far-reaching implications and transcendental issues that need to be resolved,88 as in these
present petitions.
On a related issue, we initially found convincing the argument that the petitions should have been filed with the
Regional Trial Court, it having concurrent jurisdiction with this Court over a special civil action for prohibition, and
original jurisdiction over petitions for declaratory relief. However, as we have repeatedly said, the petitions at bar are
of transcendental importance warranting a relaxation of the doctrine of hierarchy of courts.89 In the case of Jaworski
v. PAGCOR,90 the Court ratiocinated:
Granting arguendothat the present action cannot be properly treated as a petition for prohibition, the transcendental
importance of the issues involved in this case warrants that weset aside the technical defects and take primary
jurisdiction over the petition at bar. x x x This is in accordance with the well-entrenched principle that rules of
procedure are not inflexible tools designed to hinder or delay, but to facilitate and promote the administration of
justice.Their strict and rigid application, which would result in technicalities that tend to frustrate, rather than promote
substantial justice, must always be eschewed. (Emphasis supplied)

(d) To enable the courts to monitor and exact compliance with orders and judgments in environmental cases.83
persons aggrieved thereby
Surely, the instant petitions are not within the contemplation of these Rules.
Relative to the position of Petron, it failed to consider that these petitions are already a sequel to G.R. No. 156052,
and that there are some issues herein raised that the remedies available at the level of the Sangguniang Panlungsod
could not address. Neither could the filing of an individual action for each law violated be harmonized with the
essence of a "plain, speedy, and adequate" remedy.
From another perspective, Shell finds fault with the petitioners direct recourse to this Court when, pursuant to
Section 5, Article VIII of the Constitution, the Supreme Court exercises only appellate jurisdiction over cases
involving the constitutionality or validity of an ordinance.84 Thus:
Section 5.The Supreme Court shall have the following powers:

As to who may file a petition for certiorari, prohibition or mandamus, Petron posits that petitioners are not among the
"persons aggrieved" contemplated under Sections 1 to 3 of Rule 65 of the Rules of Court.
Chevron argues that petitioners, whether as "citizens," taxpayers," or legislators," lack the legal standing toassail the
validity and constitutionality of Ordinance No. 8187. It further claims that petitioners failed to show that they have
suffered any injury and/or threatened injury as a result of the act complained of.91
Shell also points out that the petitions cannot be considered taxpayers suit, for then, there should be a claim that
public funds were illegally disbursed and that petitioners have sufficient interest concerning the prevention of illegal
expenditure of public money.92 In G.R. No. 187916, Shell maintains that the petitioners failed to show their personal
interest in the case and/or to establish that they may represent the general sentiments of the constituents of the City
of Manila so as to be treated as a class suit. Even the minors, it argues, are not numerous and representative

enough for the petition to be treated as a class suit. Asto the city councilors who joined the petitioners in assailing the
validity of Ordinance No. 8187, Shell posits that they cannot invoke the ruling in Prof. David v. Pres. MacapagalArroyo,93 where the Court held that legislators may question the constitutionality of a statute, if and when it infringes
upon their prerogatives as legislators, because of the absence of the allegation that the assailed ordinance indeed
infringes upon their prerogatives.
Former Mayor Lim submitted a similar position supported by a number of cases on the concept of locus standi,94the
direct injury test,95 an outline of the stringent requirements of legal standing when suing as a citizen,96 as a
taxpayer,97 as a legislator and in cases where class suits are filed in behalf of all citizens.98
Their arguments are misplaced.
In G.R. No. 156052, we ruled that the petitioners in that case have a legal right to seek the enforcement of
Ordinance No. 8027 because the subject of the petition concerns a public right, and they, as residents of Manila,
have a direct interest in the implementation of the ordinances of the city. Thus:

In like manner, the preservation of the life, security and safety of the people is indisputably a right of utmost
importance to the public. Certainly, the petitioners, as residents of Manila, have the required personal interest to seek
relief from this Court to protect such right.
in excess of its or his jurisdiction,
or with grave abuse of discretion
amounting to lack or excess of jurisdiction
Petron takes issue with the alleged failure of the petitioners to establish the facts with certainty that would show that
the acts of the respondents fall within the parameters of the grave abuse of discretion clause settled by
jurisprudence, to wit:
x x x "[G]rave abuse of discretion" means such capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility and must be so patent and gross asto amount to an evasion of
positive duty or to a virtual refusal to perform the duty enjoined by or to act all in contemplation of law.102

To support the assertion that petitioners have a clear legal right to the enforcement of the ordinance, petitioner SJS
states that it is a political party registered with the Commission on Elections and has its offices in Manila. It claims to
have many members who are residents of Manila. The other petitioners, Cabigao and Tumbokon, are allegedly
residents of Manila.

It is pointless to discuss the matter at length in these instant cases of transcendental importance in view of the
Courts pronouncement, in Magallona v. Ermita.103 There it held that the writs of certiorariand prohibition are proper
remedies to test the constitutionality of statutes, notwithstanding the following defects:

We need not belabor this point. We have ruled in previous cases that when a mandamus proceeding concerns a
public right and its object is to compel a public duty, the people who are interested in the execution of the laws are
regarded as the real parties in interest and they need not show any specific interest. Besides, as residents of Manila,
petitioners have a direct interest in the enforcement of the citys ordinances.99 x x x (Citations omitted)

In praying for the dismissal of the petition on preliminary grounds, respondents seek a strict observance of the offices
of the writs of certiorari and prohibition, noting that the writs cannot issue absent any showing of grave abuse
of discretion in the exercise of judicial, quasi-judicial or ministerial powers on the part of respondents and
resulting prejudice on the part of petitioners.

No different are herein petitioners who seek to prohibit the enforcement of the assailed ordinance, and who deal with
the same subject matter that concerns a public right. Necessarily, the people who are interested in the nullification of
such an ordinance are themselves the real parties in interest, for which reason, they are no longer required to show
any specific interest therein. Moreover, it is worth mentioning that SJS, now represented by SJS Officer Alcantara,
has been recognized by the Court in G.R. No. 156052 to have legal standing to sue in connection with the same
subject matter herein considered. The rest of the petitioners are residents of Manila. Hence, all of them have a direct
interest in the prohibition proceedings against the enforcement of the assailed ordinance.

Respondents submission holds true in ordinary civil proceedings. When this Court exercises its constitutional power
of judicial review, however, we have, by tradition, viewed the writs of certiorariand prohibition as proper remedial
vehicles to test the constitutionality of statutes, and indeed, of acts of other branches of government. Issues
of constitutional importx x x carry such relevance in the life of this nation that the Court inevitably finds
itself constrained to take cognizance of the case and pass upon the issues raised, noncompliance with the
letter of procedural rules notwithstanding. The statute sought to be reviewed here is one such law.104(Emphasis
supplied; citations omitted)

In the case of Initiatives for Dialogue and Empowerment through Alternative Legal Services, Inc. (IDEALS, INC.) v.
Power Sector Assets and Liabilities Management Corporation (PSALM),100 involving a petition for certiorari and
prohibition to permanently enjoin PSALM from selling the Angat Hydro-Electric Power Plant (AHEPP) to Korea Water
Resources Corporation (K-Water), the Court ruled:

Requisites of judicial review

"Legal standing" or locus standihas been defined as a personal and substantial interest in the case such that the
party has sustained or will sustain direct injury as a result of the governmental act that is being challenged, alleging
more than a generalized grievance. x x x This Court, however, has adopted a liberal attitude on the locus standi of a
petitioner where the petitioner is able to craft anissue of transcendental significance to the people, as when the
issues raised are of paramount importance to the public. Thus, when the proceeding involves the assertion of a
public right, the mere fact that the petitioner is a citizen satisfies the requirement of personal interest.
There can be no doubt that the matter of ensuring adequate water supply for domestic use is one of paramount
importance to the public. That the continued availability of potable water in Metro Manila might be compromised if
PSALM proceeds with the privatization of the hydroelectric power plant in the Angat Dam Complex confers upon
petitioners such personal stake in the resolution of legal issues in a petition to stop its implementation.101(Emphasis
supplied; citations omitted)

For a valid exercise of the power of judicial review, the following requisites shall concur: (1) the existence of a legal
controversy; (2) legal standing to sue of the party raising the constitutional question; (3) a plea that judicial review be
exercised at the earliest opportunity; and (4) the constitutional question is the lis mota of the case.105
Only the first two requisites are put in issue in these cases.
On the matter of the existence of a legal controversy, we reject the contention that the petitions consist of bare
allegations based on speculations, surmises, conjectures and hypothetical grounds.
The Court declared Ordinance No. 8027 valid and constitutional and ordered its implementation. Withthe passing of
the new ordinance containing the contrary provisions, it cannot be any clearer that here lies an actual case or
controversy for judicial review. The allegation on this, alone, is sufficient for the purpose.
The second requisite has already been exhaustively discussed.

Proof of identification required in the notarization


of the verification and certification against forum
shopping in G.R. No. 187916
At the bottom of the Verification and Certification against Forum Shopping of the petition in G.R. No. 187916 is the
statement of the notary public to the effect that the affiant, in his presence and after presenting "an integrally
competent proof of identification with signature and photograph,"106 signed the document under oath.
Citing Sec. 163 of the Local Government Code,107 which provides that an individual acknowledging any document
before a notary public shall present his Community Tax Certificate (CTC), Chevron posits that the petitioners failure
to present his CTC rendered the petition fatally defective warranting the outright dismissal of the petition.
We disagree.
The verification and certification against forum shopping are governed specifically by Sections 4 and 5,Rule 7 of the
Rules of Court.
Section 4 provides that a pleading, when required to be verified, shall be treated as an unsigned pleading if it lacks a
proper verification while Section 5 requires that the certification to be executed by the plaintiff or principal party be
under oath.
These sections, in turn, should be read together with Sections 6 and 12, Rule 2 of the 2004 Rules on Notarial
Practice.
Section 6108 of the latter Rules, specifically, likewise provides that any competent evidence of identity specified
under Section 12 thereof may now be presented before the notary public, to wit:
SEC. 12. Competent Evidence of Identity. - The phrase "competent evidence of identity" refers to the identification of
an individual based on:
(a) at least one current identification document issued by an official agency bearing the photograph and
signature of the individual, such as but not limited to passport, drivers license, Professional Regulations
Commission ID, National Bureau of Investigation clearance, police clearance, postal ID, voters ID, Barangay
certification, Government Service and Insurance System (GSIS) e-card, Social Security System (SSS) card,
Philhealth card, senior citizen card, Overseas Workers Welfare Administration (OWWA) ID, OFW ID, seamans
book, alien certificate of registration/immigrant certificate of registration, government office ID, certification from
the National Council for the Welfare of Disable Persons (NCWDP), Department of Social Welfare and
Development (DSWD) certification; or
(b) x x x.109
Forum shopping
Shell contends that the petitioners in G.R. No. 187836 violated the rule against forum shopping allegedly because all
the elements thereof are present in relation to G.R. No. 156052, to wit:
1. "identity of parties, or at least such parties who represent the same interests in both actions" According to
Shell, the interest of petitioner SJS in G.R. No. 156052 and the officers of SJS in G.R. No. 187836 are clearly
the same. Moreover, both actions implead the incumbent mayor of the City of Manila as respondent. Both then
respondent Mayor Atienza in G.R. No. 156052 and respondent former Mayor Lim in G.R. No. 187836 are sued
in their capacity as Manila mayor.

2. "identity of rights asserted and relief prayed for, the relief being founded on the same fact(s)" Shell
contends that, in both actions, petitioners assert the same rights to health and to a balanced and healthful
ecology relative to the fate of the Pandacan terminal, and seek essentially the same reliefs, that is, the removal
of the oil depots from the present site.
3. "the identity of the two preceding particulars is such that any judgment rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the other" Relative to the filing of the
Manifestation and Motion to: a) Stop the City Council of Manila from further hearing the amending ordinance to
Ordinance No. 8027 x x x (Manifestation and Motion) and Very Urgent Motion to Stop the Mayor of the City of
Manila from Signing Draft Ordinance No. 7177 [now Ordinance No. 8187] and to Cite Him for Contempt if He
Would Do So (Urgent Motion) both in G.R. No. 156052, Shell points out the possibility that the Court would
have rendered conflicting rulings "on cases involving the same facts, parties, issues and reliefs prayed for."110
We are not persuaded.
In Spouses Cruz v. Spouses Caraos,111 the Court expounded on the nature of forum shopping. Thus:
Forum shopping is an act of a party, against whom an adverse judgment or order has been rendered in one forum, of
seeking and possibly getting a favorable opinion in another forum, other than by appeal or special civil action for
certiorari. It may also be the institution of two or more actions or proceedings grounded on the same cause on the
supposition that one or the other court would make a favorable disposition. The established rule is that for forum
shopping to exist, both actions must involve the same transactions, same essential facts and circumstances and
must raise identical causes of actions, subject matter, and issues. x x x112 (Citations omitted) It bears to stress that
the present petitions were initially filed, not to secure a judgment adverse to the first decision, but, precisely, to
enforce the earlier ruling to relocate the oil depots from the Pandacan area.
As to the matter of the denial of the petitioners Manifestation and Urgent Motion in G.R. No. 156052, which wereboth
incidental to the enforcement of the decision favorable to them brought about by the intervening events after the
judgment had become final and executory, and which involve the same Ordinance assailed in these petitions, we so
hold that the filing of the instant petitions is not barred by res judicata.
In the same case of Spouses Cruz v. Spouses Caraos involving the refiling of a complaint, which had been earlier
dismissed without qualification that the dismissal was with prejudice, and which had not been decided on the merits,
the Court declared that such re-filing did not amount to forum shopping. It ratiocinated:
It is not controverted that the allegations of the respective complaints in both Civil Case No. 95-1387 and Civil Case
No. 96-0225 are similarly worded, and are identical in all relevant details, including typographical errors, except for
the additional allegations in support of respondents prayer for the issuance of preliminary injunction in Civil Case No.
95-1387. It is similarly not disputed that both actions involve the same transactions; same essential facts and
circumstances; and raise identical causes of actions, subject matter, and issues.
xxxx
x x x The dismissal of Civil Case No. 95-1387 was without prejudice. Indeed, the Order dated 20 November 1995,
dismissing Civil Case No. 95-1387 was an unqualified dismissal. More significantly, its dismissal was not based on
grounds under paragraphs (f), (h), and (i) of Section 1 of Rule 16 of the Rules of Court, which dismissal shall bar the
refiling of the same action or claim as crystallized in Section 5 of Rule 16 thereof, thus:
SEC. 5. Effect of dismissal. Subject to the right of appeal, an order granting a motion to dismiss based on
paragraphs (f), (h), and (i) of section 1 hereof shall bar the refiling of the same action or claim.

From the foregoing, it is clear that dismissals under paragraphs (f), (h), and (i) of Section 1 of Rule 16 of the Rules of
Court constitute res judicata, to wit:

We summarize the position of the Sangguniang Panlungsodon the matter subject of these petitions. In 2001, the
Sanggunian found the relocation of the Pandacan oil depots necessary. Hence, the enactment of Ordinance No.
8027.

(f) That the cause of action isbarred by a prior judgment or by the statute of limitations;
xxxx
(h) That the claim or demand set forth in the plaintiffs pleading has been paid, waived, abandoned, or otherwise
extinguished;
(i) That the claim on which the action is founded is unenforceable under the provisions of the statute of frauds.
Res judicata or bar by prior judgmentis a doctrine which holds that a matter that has been adjudicated by a court of
competent jurisdiction must be deemed to have been finally and conclusively settled if it arises in any subsequent
litigation between the same parties and for the same cause. Res judicata exists when the following elements are
present: (a) the former judgment must be final; (b) the court which rendered judgment had jurisdiction over the
parties and the subject matter; (3)it must be a judgment on the merits; and (d) and there must be, between the first
and second actions, identity ofparties, subject matter, and cause of action.113 (Emphasis supplied; citations omitted)
Here, it should be noted that this Court denied the said Manifestation and Urgent Motion, and refused to act on the
succeeding pleadings, for being moot.114 Clearly, the merits of the motion were not considered by the Court. The
following disquisition of the Court in Spouses Cruz v. Spouses Caraosis further enlightening:
The judgment of dismissal in Civil Case No. 95-1387 does not constitute res judicata to sufficiently bar the refiling
thereof in Civil Case No. 96-0225. As earlier underscored, the dismissal was one without prejudice. Verily, it was not
a judgment on the merits. It bears reiterating that a judgment on the merits is one rendered after a determination of
which party is right, as distinguished from a judgment rendered upon some preliminary or formal or merely technical
point. The dismissal of the case without prejudice indicates the absence of a decision on the merits and leaves the
parties free to litigate the matter in a subsequent action asthough the dismissed action had not been
commenced.115 (Emphasis supplied; citations omitted)
Considering that there is definitely no forum shopping in the instant cases, we need not discuss in detail the
elements of forum shopping.
II
The Local Government Code of 1991 expressly provides that the Sangguniang Panlungsod is vested with the power
to "reclassify land within the jurisdiction of the city"116 subject to the pertinent provisions of the Code. It is also
settled that an ordinance may be modified or repealed by another ordinance.117 These have been properly applied
in G.R. No. 156052, where the Court upheld the position of the Sangguniang Panlungsod to reclassify the land
subject of the Ordinance,118 and declared that the mayor has the duty to enforce Ordinance No. 8027, provided that
it has not been repealed by the Sangguniang Panlungsod or otherwise annulled by the courts.119 In the same case,
the Court also used the principle that the Sanguniang Panlungsod is in the best position to determine the needs of its
Constituents120 that the removal of the oil depots from the Pandacan area is necessary "to protect the residents of
Manila from catastrophic devastation in case of a terrorist attack on the Pandacan Terminals."121
Do all these principles equally apply to the cases at bar involving the same subject matter to justify the contrary
provisions of the assailed Ordinance?
We answer in the negative.

In 2009, when the composition of the Sanggunian had already changed, Ordinance No. 8187 was passed in favor of
the retention of the oil depots. In 2012, again when some of the previous members were no longer re-elected, but
with the Vice-Mayor still holding the same seat, and pending the resolution of these petitions, Ordinance No. 8283
was enacted to give the oil depots until the end of January 2016 within which to transfer to another site. Former
Mayor Lim stood his groundand vetoed the last ordinance.
In its Comment, the 7th Council (2007-2010) alleged that the assailed Ordinance was enacted to alleviate the
economic condition of its constituents.122
Expressing the same position, former Mayor Lim even went to the extent of detailing the steps123 he took prior to
the signing of the Ordinance, if only to show his honest intention to make the right decision.
The fact remains, however, that notwithstanding that the conditions with respect to the operations of the oil depots
existing prior to the enactment of Ordinance No. 8027 do not substantially differ to this day, as would later be
discussed, the position of the Sangguniang Panlungsod on the matter has thrice changed, largely depending on the
new composition of the council and/or political affiliations. The foregoing, thus, shows that its determination of the
"general welfare" of the city does not after all gear towards the protection of the people in its true sense and
meaning, but is, one way or another, dependent on the personal preference of the members who sit in the council as
to which particular sector among its constituents it wishes to favor.
Now that the City of Manila, through the mayor and the city councilors, has changed its view on the matter, favoring
the citys economic related benefits, through the continued stay of the oil terminals, over the protection of the very
lives and safety of its constituents, it is imperative for this Court to make a final determination on the basis of the
facts on the table as to which specific right of the inhabitants of Manila should prevail. For, in this present
controversy, history reveals that there is truly no such thing as "the will of Manila" insofar as the general welfare of
the people is concerned.
If in sacrilege, in free translation of Angara124 by Justice Laurel, we say when the judiciary mediates we do notin
reality nullify or invalidate an act of the Manila Sangguniang Panlungsod, but only asserts the solemn and sacred
obligation assigned to the Court by the Constitution to determine conflicting claims of authority under the Constitution
and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to
them.
III
The measures taken by the intervenors to lend support to their position that Manila is now safe despite the presence
of the oil terminals remain ineffective. These have not completely removed the threat to the lives of the in habitants of
Manila.
In G.R. No. 156052, the validity and constitutionality of Ordinance No. 8027 was declared as a guarantee for the
protection of the constitutional right to life of the residents of Manila. There, the Court said that the enactment of the
said ordinance was a valid exercise of police power with the concurrence of the two requisites: a lawful subject "to
safeguard the rights to life, security and safety of all the inhabitants of Manila;"125 and a lawful method the
enactment of Ordinance No. 8027 reclassifying the land use from industrial to commercial, which effectively ends the
continued stay of the oil depots in Pandacan.126
In the present petitions, the respondents and the oil companies plead that the Pandacan Terminal has never been
one of the targets of terrorist attacks;127 that the petitions were based on unfounded fears and mere

conjectures;128 and that the possibility that it would be picked by the terrorists is nil given the security measures
installed thereat.129
The intervenors went on to identify the measures taken to ensure the safety of the people even with the presence of
the Pandacan Terminals. Thus:

For, given that the threat sought to be prevented may strike at one point or another, no matter how remote it is as
perceived by one or some, we cannot allow the right to life to bedependent on the unlikelihood of an event. Statistics
and theories of probability have no place in situations where the very life of not just an individual but of residents of
big neighborhoods is at stake.
IV

1. Chevron claims that it, together with Shell and Petron, continues to enhance the safety and security features
of the terminals. They likewise adopt fire and product spill prevention measures in accordance with the local
standards set by the Bureau of Fire Protection, among others, and with the international standards of the
American Petroleum Industry ("API") and the National Fire Prevention and Safety Association ("NFPSA"); that
since 1914, the oil depots had not experienced "any incident beyond the ordinary risks and expectations"130 of
the residents of Manila; and that it received a passing grade on the safety measures they installed in the
facilities from the representatives of the City of Manila who conducted an ocular inspection on 22 May 2009;
and
2. Referring to the old MOU entered into between the City of Manila and the DOE, on the one hand, and the oil
companies, on the other, where the parties thereto conceded and acknowledged that the scale-down option for
the Pandacan Terminal operations is the best alternative to the relocation of the terminals, Shell enumeratesthe
steps taken to scale down its operations.
As to the number of main fuel tanks, the entire Pandacan Terminal has already decommissioned twenty-eight out of
sixty-four tanks. Speaking for Shell alone, its LPG Spheres, which it claims is the only product that may cause
explosion, was part of those decommissioned, thereby allegedly removing the danger of explosion. Safety buffer
zones and linear/green parks were likewise created to separate the terminal from the nearest residential area. Shells
portion of the oil depot is likewise allegedly equipped with the latest technology to ensure air-quality control and
waterquality control, and to prevent and cope with possible oil spills with a crisis management plan in place in the
event that an oil spill occurs. Finally, Shell claims that the recommendations of EQE International in its Quantitative
Risk Assessment (QRA) study, which it says is one of the leading independent risk assessment providers in the
world and largest risk management consultancy, were sufficiently complied with; and that, on its own initiative, it
adopted additional measures for the purpose, for which reason, "the individual risk level resulting from any incident
occurring from the Pandacan Terminal, per the QRA study, is twenty (20) times lower compared to the individual risk
level of an average working or domestic environment."131

It is the removal of the danger to life not the mere subdual of risk of catastrophe, that we saw in and made us favor
Ordinance No. 8027. That reason, unaffected by Ordinance No. 8187, compels the affirmance of our Decision in
G.R. No. 156052.
In striking down the contrary provisions of the assailed Ordinance relative to the continued stay of the oil depots, we
follow the same line of reasoning used in G.R. No. 156052, to wit: Ordinance No. 8027 was enacted "for the purpose
of promoting sound urban planning, ensuring health, public safety and general welfare" of the residents of Manila.
The Sanggunian was impelled to take measures to protect the residents of Manila from catastrophic devastation in
case of a terrorist attack on the Pandacan Terminals. Towards this objective, the Sanggunian reclassified the area
defined in the ordinance from industrial to commercial.
The following facts were found by the Committee on Housing, Resettlement and Urban Development of the City of
Manila which recommended the approval of the ordinance:
(1) the depot facilities contained 313.5 million liters of highly flammable and highly volatile products which
include petroleum gas, liquefied petroleum gas, aviation fuel, diesel, gasoline, kerosene and fuel oil among
others;
(2) the depot is open to attack through land, water or air;
(3) it is situated in a densely populated place and near Malacaang Palace; and
(4) in case of an explosion or conflagration in the depot, the fire could spread to the neighboring
communities.

We are not persuaded.


The issue of whether or not the Pandacan Terminal is not a likely target of terrorist attacks has already been passed
upon in G. R. No. 156052. Based on the assessment of the Committee on Housing, Resettlement and Urban
Development of the City of Manila and the then position of the Sangguniang Panlungsod,132 the Court was
convinced that the threat of terrorism is imminent. It remains so convinced.
Even assuming that the respondents and intervenors were correct, the very nature of the depots where millions of
liters of highly flammable and highly volatile products, regardless of whether ornot the composition may cause
explosions, has no place in a densely populated area. Surely, any untoward incident in the oil depots, beit related to
terrorism of whatever origin or otherwise, would definitely cause not only destruction to properties within and among
the neighboring communities but certainly mass deaths and injuries.

The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants of Manila and not
just of a particular class. The depot is perceived, rightly or wrongly, as a representation of western interests which
means that it is a terrorist target. As long as it (sic) there is such a target in their midst, the residents of Manila are
not safe. It therefore became necessary to remove these terminals to dissipate the threat. According to respondent:
Such a public need became apparent after the 9/11 incident which showed that what was perceived to be impossible
to happen, to the most powerful country in the world at that, is actually possible. The destruction of property and the
loss of thousands of lives on that fateful day became the impetus for a public need. Inthe aftermath of the 9/11
tragedy, the threats of terrorism continued [such] that it became imperative for governments to take measures to
combat their effects.
xxxx

With regard to the scaling down of the operations in the Pandacan Terminals, which the oil companies continue to
insist to have been validated and recognized by the MOU, the Court,in G.R. No. 156052, has already put this issue
to rest. It specifically declared that even assuming that the terms of the MOU and Ordinance No. 8027 were
inconsistent, the resolutions ratifying the MOU gave it full force and effect only until 30 April 2003.133
The steps taken by the oil companies, therefore, remain insufficient to convince the Court that the dangers posed by
the presence of the terminals in a thickly populated area have already been completely removed.

Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without a doubt, there
are no impediments to its enforcement and implementation. Any delay is unfair to the inhabitants of the City of Manila
and its leaders who have categorically expressed their desire for the relocation of the terminals. Their power to chart
and control their own destiny and preserve their lives and safety should not be curtailed by the intervenors warnings
of doomsday scenarios and threats of economic disorder if the ordinance is enforced.134

The same best interest of the public guides the present decision. The Pandacan oil depot remains a terrorist target
even if the contents have been lessened. In the absence of any convincing reason to persuade this Court that the
life, security and safety of the inhabitants of Manila are no longer put at risk by the presence of the oil depots, we
hold that Ordinance No. 8187 in relation to the Pandacan Terminals is invalid and unconstitutional.
There is, therefore, no need to resolve the rest of the issues.
Neither is it necessary to discuss at length the test of police power against the assailed ordinance. Suffice it to state
that the objective adopted by the Sangguniang Panlungsod to promote the constituents general welfare in terms of
economic benefits cannot override the very basic rights to life, security and safety of the people.
In. G.R. No. 156052, the Court explained:
Essentially, the oil companies are fighting for their right to property. They allege that they stand tolose billions of
pesos if forced to relocate. However, based on the hierarchy of constitutionally protected rights, the right to life
enjoys precedence over the right to property. The reason is obvious: life is irreplaceable, property is not. When the
state or LGUs exercise of police power clashes with a few individuals right to property, the former should prevail.135

The periods were given in the Decision in G.R. No. 156052 which became final on 23 April 2009. Five years have
passed, since then. The years of non-compliance may be excused by the swing of local legislative leads. We now
stay the sway and begin a final count.
A comprehensive and well-coordinated plan within a specific timeframe shall, therefore, be observed in the relocation
of the Pandacan Terminals. The oil companies shall begiven a fresh non-extendible period of forty-five (45) days
from notice within which to submit to the Regional Trial Court, Branch 39, Manila an updated comprehensive plan
and relocation schedule. The relocation, inturn, shall be completed not later than six months from the date of their
submission. Finally, let it be underscored that after the last Manifestation filed by Shell informing this Court that
respondent former Mayor Lim vetoed Ordinance No. 8283 for the second time, and was anticipating its referral to the
President for the latters consideration, nothing was heard from any of the parties until the present petitions as to the
status of the approval or disapproval of the said ordinance. As it is, the fate of the Pandacan Terminals remains
dependent on this final disposition of these cases.
VI
On the matter of the failure of Atty. Gempis to immediately comply with the directives of this Court to file the
Memorandum for the Vice-Mayor and the city councilors who voted in favor of the assailed Ordinance, the records do
not bear proof that he received a copy of any of the resolutions pertaining to the filing of the Memorandum.

We thus conclude with the very final words in G.R. No. 156052:
On Wednesday, January 23, 2008, a defective tanker containing 2,000 liters of gasoline and 14,000 liters of diesel
exploded in the middle of the street a short distance from the exit gate of the Pandacan Terminals, causing death,
extensive damage and a frightening conflagration in the vicinity of the incident. Need we say anthing about what will
happen if it is the estimated 162 to 211 million liters [or whatever is left of the 26 tanks] of petroleum products in the
terminal complex will blow up?136
V
As in the prequel case, we note that as early as October 2001, the oil companies signed a MOA with the DOE
obliging themselves to:
... undertake a comprehensive and comparative study ... [which] shall include the preparation ofa Master Plan,
whose aim is to determine the scope and timing of the feasible location of the Pandacan oil terminals and all
associated facilities and infrastructure including government support essential for the relocation such as the
necessary transportation infrastructure, land and right of way acquisition, resettlement of displaced residents and
environmental and social acceptability which shall be based on mutual benefit of the Parties and the public.
such that:
Now that they are being compelled to discontinue their operations in the Pandacan Terminals, they cannot feign
unreadiness considering that they had years to prepare for this eventuality.137
On the matter of the details of the relocation, the Court gave the oil companies the following time frames for
compliance:
To ensure the orderly transfer, movement and relocation of assets and personnel, the intervenors Chevron
Philippines Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation shall, within a nonextendible period of
ninety (90) days, submit to the Regional Trial Court of Manila, Branch 39, the comprehensive plan and relocation
schedule which have allegedly been prepared. The presiding judge of Manila RTC, Branch 39 will monitor the strict
enforcement of this resolution.138

A narration of the events from his end would show, however, that he was aware of the directive issued in 2009 when
he stated that "when the City Legal Officer filed its Memorandum dated 8 February 2010, [he] thought the filing of a
Memorandum for the other respondent city officials could be dispensed with."139 There was also a categorical
admission that he received the later Resolution of 31 May 2011 but that he could not prepare a Memorandum
defending the position of respondents vice-mayor and the city councilors who voted in favor of Ordinance No. 8187
in view of the ongoing drafting of Ordinance No. 8283, which would change the position of the Sanggunian, if
subsequently approved.
The reasons he submitted are notimpressed with merit.
That he was not officially designated as the counsel for the vicemayor and the city councilors is beside the point. As
an officer of the court, he cannot feign ignorance of the fact that"a resolution of this Court is not a mere request but
an order which should be complied with promptly and completely."140 As early as 2009, he should have immediately
responded and filed a Manifestation and therein set forth his reasons why he cannot represent the vice-mayor and
the city councilors. And, even assuming that the 31 May 2011 Resolution was the first directive he personally
received, he had no valid excuse for disregarding the same. Worse, the Court had to issue a show cause order
before he finally heeded.
Atty. Gempis should "strive harderto live up to his duties of observing and maintaining the respect dueto the courts,
respect for law and for legal processes and of upholding the integrity and dignity of the legal profession in order to
perform his responsibilities asa lawyer effectively."141
In Sibulo v. Ilagan,142 which involves a lawyers repeated failure to comply with the directives of the Court, the
penalty recommended by the Integrated Bar of the Philippines was reduced from suspension to reprimand and a
warning. The Court ratiocinated:
Considering, however, that respondent was absolved of the administrative charge against him and is being taken to
task for his intransigence and lack of respect, the Court finds that the penalty of suspension would not be warranted
under the circumstances.
xxxx

To the Courts mind, a reprimand and a warning are sufficient sanctions for respondents disrespectful actuations
directed against the Court and the IBP. The imposition of these sanctions in the present case would be more
consistent with the avowed purpose of disciplinary case, which is "not so much to punish the individual attorney as to
protect the dispensation of justice by sheltering the judiciary and the public from the misconduct or inefficiency of
officers of the court."143
We consider the participation of Atty. Gempis in this case and opt to be lenient even as we reiterate the objective of
protecting the dispensation of justice. We deem it sufficient to remind Atty. Gempis to be more mindful of his duty as
a lawyer towards the Court.
WHEREFORE, in light of all the foregoing, Ordinance No. 8187 is hereby declared UNCONSTITUTIONAL and
INVALID with respect to the continued stay of the Pandacan Oil Terminals.
The incumbent mayor of the City of Manila is hereby ordered to CEASE and DESIST from enforcing Ordinance No.
8187.1wphi1 In coordination with the appropriate government agencies and the parties herein involved, he is further
ordered to oversee the relocation and transfer of the oil terminals out of the Pandacan area.
As likewise required in G.R. No. 156052, the intervenors Chevron Philippines, Inc., Pilipinas Shell Petroleum
Corporation, and Petron Corporation shall, within a non-extendible period of forty-five (45) days, submit to the
Regional Trial Court, Branch 39, Manila an updated comprehensive plan and relocation schedule, which relocation
shall be completed not later than six (6) months from the date the required documents are submitted. The presiding
judge of Branch 39 shall monitor the strict enforcement of this Decision.
For failure to observe the respect due to the Court, Atty. Luch R. Gempis, Jr., Secretary of the Sangguniang
Panlungsod, is REMINDED of his duties towards the Court and WARNED that a repetition of an act similar to that
here committed shall be dealt with more severely.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 191667

April 17, 2013

In addition, Cacayuran wrote a letter15 dated December 8, 2006 addressed to Mayor Eriguel, Vice Mayor Antonio
Eslao (Vice Mayor Eslao), and the members of the SB namely, Violeta Laroya-Balbin, Jaime Boado, Jr., Rogelio De
Vera, James Dy, Crisogono Colubong, Ricardo Fronda, Josephus Komiya, Erwina Eriguel, Felizardo Villanueva, and
Gerard Mamuyac (Implicated Officers), expressing the growing public clamor against the conversion of the Agoo
Plaza into a commercial center. He then requested the foregoing officers to furnish him certified copies of various
documents related to the aforementioned conversion including, among others, the resolutions approving the
Redevelopment Plan as well as the loan agreements for the sake of public information and transparency.
Unable to get any response, Cacayuran, invoking his right as a taxpayer, filed a Complaint16 against the Implicated
Officers and Land Bank, assailing, among others, the validity of the Subject Loans on the ground that the Plaza Lot
used as collateral thereof is property of public dominion and therefore, beyond the commerce of man.17

LAND BANK OF THE PHILIPPINES, Petitioner,


vs.
EDUARDO M. CACAYURAN, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this Petition for Review on Certiorari1 is the March 26, 2010 Decision2 of the Court of Appeals (CA) in
CA-G.R. CV. No. 89732 which affirmed with modification the April 10, 2007 Decision3 of the Regional Trial Court
(RTC) of Agoo, La Union, Branch 31, declaring inter alia the nullity of the loan agreements entered into by petitioner
Land Bank of the Philippines (Land Bank) and the Municipality of Agoo, La Union (Municipality).
The Facts

Upon denial of the Motion to Dismiss dated December 27, 2006,18 the Implicated Officers and Land Bank filed their
respective Answers.
For its part, Land Bank claimed that it is not privy to the Implicated Officers acts of destroying the Agoo Plaza. It
further asserted that Cacayuran did not have a cause of action against it since he was not privy to any of the Subject
Loans.19
During the pendency of the proceedings, the construction of the commercial center was completed and the said
structure later became known as the Agoos People Center (APC).
On May 8, 2007, the SB passed Municipal Ordinance No. 02-2007,20 declaring the area where the APC stood as
patrimonial property of the Municipality.

From 2005 to 2006, the Municipalitys Sangguniang Bayan (SB) passed certain resolutions to implement a multiphased plan (Redevelopment Plan) to redevelop the Agoo Public Plaza (Agoo Plaza) where the Imelda Garden and
Jose Rizal Monument were situated.
To finance phase 1 of the said plan, the SB initially passed Resolution No. 68-20054 on April 19, 2005, authorizing
then Mayor Eufranio Eriguel (Mayor Eriguel) to obtain a loan from Land Bank and incidental thereto, mortgage a
2,323.75 square meter lot situated at the southeastern portion of the Agoo Plaza (Plaza Lot) as collateral. To serve
as additional security, it further authorized the assignment of a portion of its internal revenue allotment (IRA) and the
monthly income from the proposed project in favor of Land Bank.5 The foregoing terms were confirmed, approved
and ratified on October 4, 2005 through Resolution No. 139-2005.6 Consequently, on November 21, 2005, Land
Bank extended a P4,000,000.00 loan in favor of the Municipality (First Loan),7 the proceeds of which were used to
construct ten (10) kiosks at the northern and southern portions of the Imelda Garden. After completion, these kiosks
were rented out.8

The Ruling of the RTC


In its Decision dated April 10, 2007,21 the RTC ruled in favor of Cacayuran, declaring the nullity of the Subject
Loans.22 It found that the resolutions approving the said loans were passed in a highly irregular manner and thus,
ultra vires; as such, the Municipality is not bound by the same.23 Moreover, it found that the Plaza Lot is proscribed
from collateralization given its nature as property for public use.24
Aggrieved, Land Bank filed its Notice of Appeal on April 23, 2007.25 On the other hand, the Implicated Officers
appeal was deemed abandoned and dismissed for their failure to file an appellants brief despite due notice.26 In this
regard, only Land Banks appeal was given due course by the CA.
Ruling of the CA

On March 7, 2006, the SB passed Resolution No. 58-2006,9 approving the construction of a commercial center on
the Plaza Lot as part of phase II of the Redevelopment Plan. To finance the project, Mayor Eriguel was again
authorized to obtain a loan from Land Bank, posting as well the same securities as that of the First Loan. All previous
representations and warranties of Mayor Eriguel related to the negotiation and obtention of the new loan10 were
ratified on September 5, 2006 through Resolution No. 128-2006.11 In consequence, Land Bank granted a second
loan in favor of the Municipality on October 20, 2006 in the principal amount of P28,000,000.00 (Second Loan).12
Unlike phase 1 of the Redevelopment Plan, the construction of the commercial center at the Agoo Plaza was
vehemently objected to by some residents of the Municipality. Led by respondent Eduardo Cacayuran (Cacayuran),
these residents claimed that the conversion of the Agoo Plaza into a commercial center, as funded by the proceeds
from the First and Second Loans (Subject Loans), were "highly irregular, violative of the law, and detrimental to
public interests, and will result to wanton desecration of the said historical and public park."13 The foregoing was
embodied in a Manifesto,14 launched through a signature campaign conducted by the residents and Cacayuran.

In its Decision dated March 26, 2010,27 the CA affirmed with modification the RTCs ruling, excluding Vice Mayor
Eslao from any personal liability arising from the Subject Loans.28
It held, among others, that: (1) Cacayuran had locus standi to file his complaint, considering that (a) he was born,
raised and a bona fide resident of the Municipality; and (b) the issue at hand involved public interest of
transcendental importance;29 (2) Resolution Nos. 68-2005, 139-2005, 58-2006, 128-2006 and all other related
resolutions (Subject Resolutions) were invalidly passed due to the SBs non-compliance with certain sections of
Republic Act No. 7160, otherwise known as the "Local Government Code of 1991" (LGC); (3) the Plaza Lot, which
served as collateral for the Subject Loans, is property of public dominion and thus, cannot be appropriated either by
the State or by private persons;30 and (4) the Subject Loans are ultra vires because they were transacted without
proper authority and their collateralization constituted improper disbursement of public funds.

Dissatisfied, Land Bank filed the instant petition.

taxpayer need not be a party to the contract to challenge its validity; as long as taxes are involved, people have a
right to question contracts entered into by the government.37

Issues Before the Court


Therefore, as the above-stated requisites obtain in this case, Cacayuran has standing to file the instant suit.
The following issues have been raised for the Courts resolution: (1) whether Cacayuran has standing to sue; (2)
whether the Subject Resolutions were validly passed; and (3) whether the Subject Loans are ultra vires.
The Courts Ruling
The petition lacks merit.
A. Cacayurans standing to sue
Land Bank claims that Cacayuran did not have any standing to contest the construction of the APC as it was funded
through the proceeds coming from the Subject Loans and not from public funds. Besides, Cacayuran was not even a
party to any of the Subject Loans and is thus, precluded from questioning the same.

B. Validity of the Subject Resolutions


Land Bank avers that the Subject Resolutions provided ample authority for Mayor Eriguel to contract the Subject
Loans. It posits that Section 444(b)(1)(vi) of the LGC merely requires that the municipal mayor be authorized by the
SB concerned and that such authorization need not be embodied in an ordinance.38
A careful perusal of Section 444(b)(1)(vi) of the LGC shows that while the authorization of the municipal mayor need
not be in the form of an ordinance, the obligation which the said local executive is authorized to enter into must be
made pursuant to a law or ordinance, viz:
Sec. 444. The Chief Executive: Powers, Duties, Functions and Compensation. xxxx

The argument is untenable.


It is hornbook principle that a taxpayer is allowed to sue where there is a claim that public funds are illegally
disbursed, or that public money is being deflected to any improper purpose, or that there is wastage of public funds
through the enforcement of an invalid or unconstitutional law. A person suing as a taxpayer, however, must show that
the act complained of directly involves the illegal disbursement of public funds derived from taxation. In other words,
for a taxpayers suit to prosper, two requisites must be met namely, (1) public funds derived from taxation are
disbursed by a political subdivision or instrumentality and in doing so, a law is violated or some irregularity is
committed; and (2) the petitioner is directly affected by the alleged act.31

(b) For efficient, effective and economical governance the purpose of which is the general welfare of the municipality
and its inhabitants pursuant to Section 16 of this Code, the municipal mayor shall:
xxxx
(vi) Upon authorization by the sangguniang bayan, represent the municipality in all its business transactions and sign
on its behalf all bonds, contracts, and obligations, and such other documents made pursuant to law or ordinance;
(Emphasis and underscoring supplied)

Records reveal that the foregoing requisites are present in the instant case.
First, although the construction of the APC would be primarily sourced from the proceeds of the Subject Loans,
which Land Bank insists are not taxpayers money, there is no denying that public funds derived from taxation are
bound to be expended as the Municipality assigned a portion of its IRA as a security for the foregoing loans.
Needless to state, the Municipalitys IRA, which serves as the local government units just share in the national
taxes,32 is in the nature of public funds derived from taxation. The Court believes, however, that although these
funds may be posted as a security, its collateralization should only be deemed effective during the incumbency of the
public officers who approved the same, else those who succeed them be effectively deprived of its use.
In any event, it is observed that the proceeds from the Subject Loans had already been converted into public funds
by the Municipalitys receipt thereof. Funds coming from private sources become impressed with the characteristics
of public funds when they are under official custody.33

In the present case, while Mayor Eriguels authorization to contract the Subject Loans was not contained as it need
not be contained in the form of an ordinance, the said loans and even the Redevelopment Plan itself were not
approved pursuant to any law or ordinance but through mere resolutions. The distinction between ordinances and
resolutions is well-perceived. While ordinances are laws and possess a general and permanent character,
resolutions are merely declarations of the sentiment or opinion of a lawmaking body on a specific matter and are
temporary in nature.39 As opposed to ordinances, "no rights can be conferred by and be inferred from a
resolution."40 In this accord, it cannot be denied that the SB violated Section 444(b)(1)(vi) of the LGC altogether.
Noticeably, the passage of the Subject Resolutions was also tainted with other irregularities, such as (1) the SBs
failure to submit the Subject Resolutions to the Sangguniang Panlalawigan of La Union for its review contrary to
Section 56 of the LGC;41 and (2) the lack of publication and posting in contravention of Section 59 of the LGC.42
In fine, Land Bank cannot rely on the Subject Resolutions as basis to validate the Subject Loans.

Accordingly, the first requisite has been clearly met.


C. Ultra vires nature of the Subject
Second, as a resident-taxpayer of the Municipality, Cacayuran is directly affected by the conversion of the Agoo
Plaza which was funded by the proceeds of the Subject Loans. It is well-settled that public plazas are properties for
public use34 and therefore, belongs to the public dominion.35 As such, it can be used by anybody and no one can
exercise over it the rights of a private owner.36 In this light, Cacayuran had a direct interest in ensuring that the Agoo
Plaza would not be exploited for commercial purposes through the APCs construction. Moreover, Cacayuran need
not be privy to the Subject Loans in order to proffer his objections thereto. In Mamba v. Lara, it has been held that a

Loans
Neither can Land Bank claim that the Subject Loans do not constitute ultra vires acts of the officers who approved
the same.

Generally, an ultra vires act is one committed outside the object for which a corporation is created as defined by the
law of its organization and therefore beyond the powers conferred upon it by law.43 There are two (2) types of ultra
vires acts. As held in Middletown Policemen's Benevolent Association v. Township of Middletown:44

WHEREFORE, the petition is DENIED. Accordingly, the March 26, 2010 Decision of the Court of Appeals in CA-G.R.
CV. No. 89732 is hereby AFFIRMED.
SO ORDERED.

There is a distinction between an act utterly beyond the jurisdiction of a municipal corporation and the irregular
exercise of a basic power under the legislative grant in matters not in themselves jurisdictional. The former are ultra
vires in the primary sense and void; the latter, ultra vires only in a secondary sense which does not preclude
ratification or the application of the doctrine of estoppel in the interest of equity and essential justice. (Emphasis and
underscoring supplied)
In other words, an act which is outside of the municipalitys jurisdiction is considered as a void ultra vires act, while
an act attended only by an irregularity but remains within the municipalitys power is considered as an ultra vires act
subject to ratification and/or validation. To the former belongs municipal contracts which (a) are entered into beyond
the express, implied or inherent powers of the local government unit; and (b) do not comply with the substantive
requirements of law e.g., when expenditure of public funds is to be made, there must be an actual appropriation and
certificate of availability of funds; while to the latter belongs those which (a) are entered into by the improper
department, board, officer of agent; and (b)do not comply with the formal requirements of a written contract e.g., the
Statute of Frauds.45
Applying these principles to the case at bar, it is clear that the Subject Loans belong to the first class of ultra vires
acts deemed as void.
Records disclose that the said loans were executed by the Municipality for the purpose of funding the conversion of
the Agoo Plaza into a commercial center pursuant to the Redevelopment Plan. However, the conversion of the said
plaza is beyond the Municipalitys jurisdiction considering the propertys nature as one for public use and thereby,
forming part of the public dominion. Accordingly, it cannot be the object of appropriation either by the State or by
private persons.46 Nor can it be the subject of lease or any other contractual undertaking.47 In Villanueva v.
Castaeda, Jr.,48 citing Espiritu v. Municipal Council of Pozorrubio,49 the Court pronounced that:
x x x Town plazas are properties of public dominion, to be devoted to public use and to be made available to the
public in general. They are outside the commerce of man and cannot be disposed of or even leased by the
municipality to private parties.1wphi1
In this relation, Article 1409(1) of the Civil Code provides that a contract whose purpose is contrary to law, morals,
good customs, public order or public policy is considered void50 and as such, creates no rights or obligations or any
juridical relations.51 Consequently, given the unlawful purpose behind the Subject Loans which is to fund the
commercialization of the Agoo Plaza pursuant to the Redevelopment Plan, they are considered as ultra vires in the
primary sense thus, rendering them void and in effect, non-binding on the Municipality.
At this juncture, it is equally observed that the land on which the Agoo Plaza is situated cannot be converted into
patrimonial property as the SB tried to when it passed Municipal Ordinance No. 02-200752 absent any express
grant by the national government.53 As public land used for public use, the foregoing lot rightfully belongs to and is
subject to the administration and control of the Republic of the Philippines.54 Hence, without the said grant, the
Municipality has no right to claim it as patrimonial property.
Nevertheless, while the Subject Loans cannot bind the Municipality for being ultra vires, the officers who authorized
the passage of the Subject Resolutions are personally liable. Case law states that public officials can be held
personally accountable for acts claimed to have been performed in connection with official duties where they have
acted ultra vires,55 as in this case.

ESTELA M. PERLAS-BERNABE
Associate Justice

On October 1, 1997, the trial court issued an Order appointing three persons as Commissioners to ascertain the
amount of just compensation for the property. 9 Petitioners filed a "Motion to Hold in Abeyance the Hearing of the
Court Appointed Commissioners to Determine Just Compensation and for Clarification of the Courts Order dated
October 1, 1997" which was denied by the trial court on November 3, 1997. 10 Petitioners Motion for
Reconsideration was also denied on December 9, 1997. 11

G.R. No. 153974 August 7, 2006

Petitioners then filed on March 2, 1998 a Petition for Certiorari before the CA claiming that they were denied due
process when the trial court declared that the taking was for public purpose without receiving evidence on petitioners
claim that the Mayor of Panay was motivated by politics in expropriating their property and in denying their Motion to
Hold in Abeyance the Hearing of the Court Appointed Commissioners; and that the trial court also committed grave
abuse of discretion when it disregarded the affidavits of persons denying that they signed a petition addressed to the
municipal government of Panay. 12 On January 17, 2001, petitioners filed a Motion to Admit Attached Memorandum
and the Memorandum itself where they argued that based on the Petition for Expropriation filed by respondent, such
expropriation was based only on a resolution and not on an ordinance contrary to Sec. 19 of Republic Act (R.A.) No.
7160; there was also no valid and definite offer to buy the property as the price offered by respondent to the
petitioners was very low. 13

MIGUEL BELUSO, NATIVIDAD BELUSO, PEDRO BELUSO, ANGELITA BELUSO, RAMON BELUSO, and
AMADA DANIEL, substituted by her heirs represented by TERESITA ARROBANG, Petitioners,
vs.
THE MUNICIPALITY OF PANAY (CAPIZ), represented by its Mayor, VICENTE B. BERMEJO, Respondent.

On March 20, 2002, the CA rendered its Decision dismissing the Petition for Certiorari. It held that the petitioners
were not denied due process as they were able to file an answer to the complaint and were able to adduce their
defenses therein; and that the purpose of the taking in this case constitutes "public use". 14 Petitioners filed a Motion
for Reconsideration which was denied on June 11, 2002. 15

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION

DECISION
AUSTRIA-MARTINEZ, J.:
Before this Court is a petition for review questioning the Decision 1 of the Court of Appeals (CA) dated March 20,
2002 in CA-G.R. SP No. 47052, as well the Resolution 2 dated June 11, 2002 denying petitioners Motion for
Reconsideration thereof.
The facts are as follows:
Petitioners are owners of parcels of land with a total area of about 20,424 square meters, covered by Free Patent
Nos. 7265, 7266, 7267, 7268, 7269, and 7270. 3 On November 8, 1995, the Sangguniang Bayan of the Municipality
of Panay issued Resolution No. 95-29 authorizing the municipal government through the mayor to initiate
expropriation proceedings. 4 A petition for expropriation was thereafter filed on April 14, 1997 by the Municipality of
Panay (respondent) before the Regional Trial Court (RTC), Branch 18 of Roxas City, docketed as Civil Case No. V6958. 5
Petitioners filed a Motion to Dismiss alleging that the taking is not for public use but only for the benefit of certain
individuals; that it is politically motivated because petitioners voted against the incumbent mayor and vice-mayor;
and that some of the supposed beneficiaries of the land sought to be expropriated have not actually signed a petition
asking for the property but their signatures were forged or they were misled into signing the same. 6
On July 31, 1997, the trial court denied petitioners Motion to Dismiss and declared that the expropriation in this case
is for "public use" and the respondent has the lawful right to take the property upon payment of just compensation. 7

Thus, the present petition claiming that:


A. RESPONDENT IS WITHOUT, LACKS AND DOES NOT HAVE THE LAWFUL POWER TO ACQUIRE ANY OR
ALL OF THE SUBJECT PROPERTIES THROUGH EMINENT DOMAIN, IT BEING EXERCISED BY MEANS OF A
MERE RESOLUTION, AND NOT THROUGH AN ORDINANCE AS REQUIRED BY LAW AND APPLICABLE
JURISPRUDENCE;
B. RESPONDENT IS LIKEWISE WITHOUT, LACKS AND DOES NOT HAVE THE LAWFUL POWER TO ACQUIRE
ANY OR ALL OF THE SUBJECT PROPERTIES THROUGH EMINENT DOMAIN, ITS PREVIOUS OFFER TO BUY
THEM BEING NOT VALID; and
C. IT WAS A SERIOUS ERROR ON THE PART OF THE HONORABLE COURT OF APPEALS NOT TO DISCUSS,
MUCH LESS RULE ON, BOTH IN ITS QUESTIONED DECISION AND ITS RESOLUTION PROMULGATED ON 11
JUNE 2002 PETITIONERS ARGUMENTS THAT RESPONDENT IS WITHOUT, LACKS AND DOES NOT HAVE THE
LAWFUL POWER TO ACQUIRE ANY OR ALL OF THE SUBJECT PROPERTIES THROUGH EMINENT DOMAIN, IT
BEING EXERCISED BY MEANS OF A MERE RESOLUTION, AND NOT THROUGH AN ORDINANCE AS
REQUIRED BY LAW AND APPLICABLE JURISPRUDENCE, AND ITS PREVIOUS OFFER TO BUY THEM BEING
NOT VALID, DESPITE THE FACT THAT THESE OBJECTIONS WERE PROPERLY PLEADED IN PETITIONERS
MEMORANDUM WHICH WAS DULY ADMITTED IN ITS RESOLUTION PROMULGATED ON 29 JANUARY 2001;
and
D. PETITIONERS WERE UTTERLY DENIED PROCEDURAL DUE PROCESS OF LAW BY THE COURT A QUO,
WHEN IT SIMPLY DECLARED IN ITS ORDER DATED 31 JULY 1997 THAT THE TAKING BY RESPONDENT OF
PETITIONERS PROPERTIES IS PURPORTEDLY FOR PUBLIC PURPOSE WITHOUT RECEIVING EVIDENCE
ON THEIR ASSERTED CLAIM THAT RESPONDENTS MUNICIPAL MAYOR WAS POLITICALLY MOTIVATED IN
SEEKING THE EXPROPRIATION OF THEIR PROPERTIES AND NOT FOR PUBLIC PURPOSE. 16

Petitioners filed an Answer on August 12, 1997 reasserting the issues they raised in their Motion to Dismiss. 8
Petitioners argue that: contrary to Sec. 19 of R.A. No. 7160 of the Local Government Code, which provides that a
local government may exercise the power of eminent domain only by "ordinance," respondents expropriation in this

case is based merely on a "resolution"; while objection on this ground was neither raised by petitioners in their
Motion to Dismiss nor in their Answer, such objection may still be considered by this Court since the fact upon which
it is based is apparent from the petition for expropriation itself; a defense may be favorably considered even if not
raised in an appropriate pleading so long as the facts upon which it is based are undisputed; courts have also
adopted a more censorious attitude in resolving questions involving the proper exercise of local bodies of the
delegated power of expropriation, as compared to instances when it is directly exercised by the national legislature;
respondent failed to give, prior to the petition for expropriation, a previous valid and definite offer to petitioners as the
amount offered in this case was only P10.00 per square meter, when the properties are residential in nature and
command a much higher price; the CA failed to discuss and rule upon the arguments raised by petitioners in their
Memorandum; attached to the Motion to Dismiss were affidavits and death certificates showing that there were
people whose names were in the supposed petition asking respondent for land, but who did not actually sign the
same, thus showing that the present expropriation was not for a public purpose but was merely politically motivated;
considering the conflicting claims regarding the purpose for which the properties are being expropriated and
inasmuch as said issue may not be rightfully ruled upon merely on the basis of petitioners Motion to Dismiss and
Answer as well as respondents Petition for Expropriation, what should have been done was for the RTC to conduct
hearing where each party is given ample opportunity to prove its claim. 17
Respondent for its part contends that its power to acquire private property for public use upon payment of just
compensation was correctly upheld by the trial court; that the CA was correct in finding that the petitioners were not
denied due process, even though no hearing was conducted in the trial court, as petitioners were still able to adduce
their objections and defenses therein; and that petitioners arguments have been passed upon by both the trial court
and the CA and were all denied for lack of substantial merit. 18
Respondent filed a Memorandum quoting at length the decision of the CA to support its position. 19 Petitioners
meanwhile opted to have the case resolved based on the pleadings already filed. 20
We find the petition to be impressed with merit.
Eminent domain, which is the power of a sovereign state to appropriate private property to particular uses to promote
public welfare, is essentially lodged in the legislature. 21 While such power may be validly delegated to local
government units (LGUs), other public entities and public utilities the exercise of such power by the delegated
entities is not absolute. 22 In fact, the scope of delegated legislative power is narrower than that of the delegating
authority and such entities may exercise the power to expropriate private property only when authorized by Congress
and subject to its control and restraints imposed through the law conferring the power or in other
legislations. 23 Indeed, LGUs by themselves have no inherent power of eminent domain. 24 Thus, strictly speaking,
the power of eminent domain delegated to an LGU is in reality not eminent but "inferior" since it must conform to the
limits imposed by the delegation and thus partakes only of a share in eminent domain. 25 The national legislature is
still the principal of the LGUs and the latter cannot go against the principals will or modify the same. 26
The exercise of the power of eminent domain necessarily involves a derogation of a fundamental right. 27 It greatly
affects a landowners right to private property which is a constitutionally protected right necessary for the
preservation and enhancement of personal dignity and is intimately connected with the rights to life and
liberty. 28Thus, whether such power is exercised directly by the State or by its authorized agents, the exercise of
such power must undergo painstaking scrutiny. 29
Indeed, despite the existence of legislative grant in favor of local governments, it is still the duty of the courts to
determine whether the power of eminent domain is being exercised in accordance with the delegating law.
Sec. 19 of R.A. No. 7160, which delegates to LGUs the power of eminent domain expressly provides:

SEC. 19. Eminent Domain. - A local government unit may, through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor
and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent
laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer
has been previously made to the owner, and such offer was not accepted: Provided, further, That the local
government unit may immediately take possession of the property upon the filing of the expropriation proceedings
and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the
property based on the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to
be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the
time of the taking of the property.
It is clear therefore that several requisites must concur before an LGU can exercise the power of eminent domain, to
wit:
1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the local
government unit, 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. 30
The Court in no uncertain terms have pronounced that a local government unit cannot authorize an expropriation of
private property through a mere resolution of its lawmaking body. 31 R.A. No. 7160 otherwise known as the Local
Government Code expressly requires an ordinance for the purpose and a resolution that merely expresses the
sentiment of the municipal council will not suffice. 32
A resolution will not suffice for an LGU to be able to expropriate private property; and the reason for this is settled:
x x x 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, Sec. 19 of R.A. [No.] 7160 categorically requires that the local chief executive act
pursuant to an ordinance. x x x 33
As respondents expropriation in this case was based merely on a resolution, such expropriation is clearly defective.
While the Court is aware of the constitutional policy promoting local autonomy, the court cannot grant judicial
sanction to an LGUs exercise of its delegated power of eminent domain in contravention of the very law giving it
such power. 34

The Court notes that petitioners failed to raise this point at the earliest opportunity. Still, we are not precluded from
considering the same. This Court will not hesitate to consider matters even those raised for the first time on appeal in
clearly meritorious situations, 35 such as in this case.
Thus, the Court finds it unnecessary to resolve the other issues raised by petitioners.
It is well to mention however that despite our ruling in this case respondent is not barred from instituting similar
proceedings in the future, provided that it complies with all legal requirements. 36
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 47052
isREVERSED and SET ASIDE. The Complaint in Civil Action No. V-6958 is DISMISSED without prejudice.
No costs.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice

Republic of the Philippines


SUPREME COURT
Manila

However, on June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a memorandum of
understanding (MOU)6 with the oil companies in which they agreed that "the scaling down of the Pandacan
Terminals [was] the most viable and practicable option." Under the MOU, the oil companies agreed to perform the
following:

FIRST DIVISION
G.R. No. 156052

March 7, 2007

SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO, and BONIFACIO S.


TUMBOKON,Petitioners,
vs.
HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of Manila, Respondent.
DECISION

Section 1. - Consistent with the objectives stated above, the OIL COMPANIES shall, upon signing of this MOU,
undertake a program to scale down the Pandacan Terminals which shall include, among others, the immediate
removal/decommissioning process of TWENTY EIGHT (28) tanks starting with the LPG spheres and the
commencing of works for the creation of safety buffer and green zones surrounding the Pandacan Terminals. xxx
Section 2. Consistent with the scale-down program mentioned above, the OIL COMPANIES shall establish joint
operations and management, including the operation of common, integrated and/or shared facilities, consistent with
international and domestic technical, safety, environmental and economic considerations and standards.
Consequently, the joint operations of the OIL COMPANIES in the Pandacan Terminals shall be limited to the common
and integrated areas/facilities. A separate agreement covering the commercial and operational terms and conditions
of the joint operations, shall be entered into by the OIL COMPANIES.

CORONA, J.:
In this original petition for mandamus,1 petitioners Social Justice Society (SJS), Vladimir Alarique T. Cabigao and
Bonifacio S. Tumbokon seek to compel respondent Hon. Jose L. Atienza, Jr., mayor of the City of Manila, to enforce
Ordinance No. 8027.

Section 3. - The development and maintenance of the safety and green buffer zones mentioned therein, which shall
be taken from the properties of the OIL COMPANIES and not from the surrounding communities, shall be the sole
responsibility of the OIL COMPANIES.
The City of Manila and the DOE, on the other hand, committed to do the following:

The antecedents are as follows.


On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No. 8027.2 Respondent mayor
approved the ordinance on November 28, 2001.3 It became effective on December 28, 2001, after its publication.4
Ordinance No. 8027 was enacted pursuant to the police power delegated to local government units, a principle
described as the power inherent in a government to enact laws, within constitutional limits, to promote the order,
safety, health, morals and general welfare of the society.5 This is evident from Sections 1 and 3 thereof which state:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety, and general
welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land use of [those] portions of
land bounded by the Pasig River in the north, PNR Railroad Track in the east, Beata St. in the south, Palumpong St.
in the southwest, and Estero de Pancacan in the west[,] PNR Railroad in the northwest area, Estero de Pandacan in
the [n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana
bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from
Industrial II to Commercial I.
xxx xxx xxx
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no longer permitted
under Section 1 hereof, are hereby given a period of six (6) months from the date of effectivity of this Ordinance
within which to cease and desist from the operation of businesses which are hereby in consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed the owners
and operators of businesses disallowed under Section 1 to cease and desist from operating their businesses within
six months from the date of effectivity of the ordinance. Among the businesses situated in the area are the so-called
"Pandacan Terminals" of the oil companies Caltex (Philippines), Inc., Petron Corporation and Pilipinas Shell
Petroleum Corporation.

Section 1. - The City Mayor shall endorse to the City Council this MOU for its appropriate action with the view of
implementing the spirit and intent thereof.
Section 2. - The City Mayor and the DOE shall, consistent with the spirit and intent of this MOU, enable the OIL
COMPANIES to continuously operate in compliance with legal requirements, within the limited area resulting from the
joint operations and the scale down program.
Section 3. - The DOE and the City Mayor shall monitor the OIL COMPANIES compliance with the provisions of this
MOU.
Section 4. - The CITY OF MANILA and the national government shall protect the safety buffer and green zones and
shall exert all efforts at preventing future occupation or encroachment into these areas by illegal settlers and other
unauthorized parties.
The Sangguniang Panlungsod ratified the MOU in Resolution No. 97.7 In the same resolution,
the Sangguniandeclared that the MOU was effective only for a period of six months starting July 25,
2002.8 Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 139 extending the validity of
Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza to issue special business permits to the oil
companies. Resolution No. 13, s. 2003 also called for a reassessment of the ordinance.10
Meanwhile, petitioners filed this original action for mandamus on December 4, 2002 praying that Mayor Atienza be
compelled to enforce Ordinance No. 8027 and order the immediate removal of the terminals of the oil companies.11
The issues raised by petitioners are as follows:
1. whether respondent has the mandatory legal duty to enforce Ordinance No. 8027 and order the removal
of the Pandacan Terminals, and

2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal Ordinance No.
8027.12
Petitioners contend that respondent has the mandatory legal duty, under Section 455 (b) (2) of the Local
Government Code (RA 7160),13 to enforce Ordinance No. 8027 and order the removal of the Pandacan Terminals of
the oil companies. Instead, he has allowed them to stay.
Respondents defense is that Ordinance No. 8027 has been superseded by the MOU and the
resolutions.14However, he also confusingly argues that the ordinance and MOU are not inconsistent with each other
and that the latter has not amended the former. He insists that the ordinance remains valid and in full force and effect
and that the MOU did not in any way prevent him from enforcing and implementing it. He maintains that the MOU
should be considered as a mere guideline for its full implementation.15
Under Rule 65, Section 316 of the Rules of Court, a petition for mandamus may be filed when any tribunal,
corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins
as a duty resulting from an office, trust or station. Mandamus is an extraordinary writ that is employed to compel the
performance, when refused, of a ministerial duty that is already imposed on the respondent and there is no other
plain, speedy and adequate remedy in the ordinary course of law. The petitioner should have a well-defined, clear
and certain legal right to the performance of the act and it must be the clear and imperative duty of respondent to do
the act required to be done.17
Mandamus will not issue to enforce a right, or to compel compliance with a duty, which is questionable or over which
a substantial doubt exists. The principal function of the writ of mandamus is to command and to expedite, not to
inquire and to adjudicate; thus, it is neither the office nor the aim of the writ to secure a legal right but to implement
that which is already established. Unless the right to the relief sought is unclouded, mandamus will not issue.18
To support the assertion that petitioners have a clear legal right to the enforcement of the ordinance, petitioner SJS
states that it is a political party registered with the Commission on Elections and has its offices in Manila. It claims to
have many members who are residents of Manila. The other petitioners, Cabigao and Tumbokon, are allegedly
residents of Manila.
We need not belabor this point. We have ruled in previous cases that when a mandamus proceeding concerns a
public right and its object is to compel a public duty, the people who are interested in the execution of the laws are
regarded as the real parties in interest and they need not show any specific interest.19 Besides, as residents of
Manila, petitioners have a direct interest in the enforcement of the citys ordinances. Respondent never questioned
the right of petitioners to institute this proceeding.
On the other hand, the Local Government Code imposes upon respondent the duty, as city mayor, to "enforce all
laws and ordinances relative to the governance of the city.">20 One of these is Ordinance No. 8027. As the chief
executive of the city, he has the duty to enforce Ordinance No. 8027 as long as it has not been repealed by
theSanggunian or annulled by the courts.21 He has no other choice. It is his ministerial duty to do so. In Dimaporo v.
Mitra, Jr.,22 we stated the reason for this:
These officers cannot refuse to perform their duty on the ground of an alleged invalidity of the statute imposing the
duty. The reason for this is obvious. It might seriously hinder the transaction of public business if these officers were
to be permitted in all cases to question the constitutionality of statutes and ordinances imposing duties upon them
and which have not judicially been declared unconstitutional. Officers of the government from the highest to the
lowest are creatures of the law and are bound to obey it.23
The question now is whether the MOU entered into by respondent with the oil companies and the subsequent
resolutions passed by the Sanggunian have made the respondents duty to enforce Ordinance No. 8027 doubtful,

unclear or uncertain. This is also connected to the second issue raised by petitioners, that is, whether the MOU and
Resolution Nos. 97, s. 2002 and 13, s. 2003 of the Sanggunian can amend or repeal Ordinance No. 8027.
We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with Ordinance No. 8027, the
resolutions which ratified it and made it binding on the City of Manila expressly gave it full force and effectonly until
April 30, 2003. Thus, at present, there is nothing that legally hinders respondent from enforcing Ordinance No.
8027.24
Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world, witnessed the horror of
the September 11, 2001 attack on the Twin Towers of the World Trade Center in New York City. The objective of the
ordinance is to protect the residents of Manila from the catastrophic devastation that will surely occur in case of a
terrorist attack25 on the Pandacan Terminals. No reason exists why such a protective measure should be delayed.
WHEREFORE, the petition is hereby GRANTED. Respondent Hon. Jose L. Atienza, Jr., as mayor of the City of
Manila, is directed to immediately enforce Ordinance No. 8027.
SO ORDERED.
RENATO C. CORONA
Associate Justice

republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 171873

July 9, 2010

MUNICIPALITY OF TIWI, represented by Hon. Mayor JAIME C. VILLANUEVA and the SANGGUNIANG BAYAN
of TIWI, Petitioners,
vs.
ANTONIO B. BETITO, Respondent.
DECISION
DEL CASTILLO, J.:
A judgment on the pleadings is proper when the answer admits all the material averments of the complaint. But
where several issues are properly tendered by the answer, a trial on the merits must be resorted to in order to afford
each party his day in court.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeals (CA) October 19, 2005
Decision1 in CA G.R. CV No. 79057, which affirmed the March 3, 2001 Partial Decision 2 of the Regional Trial Court
(RTC) of Quezon City, Branch 96 in Civil Case No. Q-99-39370, and the March 10, 2006 Resolution 3denying
petitioners motion for reconsideration.
Factual Antecedents
The instant case is an offshoot of National Power Corporation v. Province of Albay4 and Salalima v. Guingona, Jr.5 It
is, thus, necessary to revisit some pertinent facts from these cases in order to provide an adequate backdrop for the
present controversy.
On June 4, 1990, this Court issued a Decision in the case of National Power Corporation v. Province of Albayfinding,
among others, the National Power Corporation (NPC) liable for unpaid real estate taxes from June 11, 1984 to March
10, 1987 on its properties located in the Province of Albay (Albay). These properties consisted of geothermal plants
in the Municipality of Tiwi (Tiwi) and substations in the Municipality of Daraga. Previously, the said properties were
sold at an auction sale conducted by Albay to satisfy NPCs tax liabilities. As the sole bidder at the auction, Albay
acquired ownership over said properties.
On July 29, 1992, the NPC, through its then President Pablo Malixi (President Malixi), and Albay, represented by
then Governor Romeo R. Salalima (Governor Salalima), entered into a Memorandum of Agreement (MOA) where
the former agreed to settle its tax liabilities estimated at P214,845,104.76. The MOA provided, among others, that:
(1) the actual amount collectible from NPC will have to be recomputed/revalidated; (2) NPC shall make an initial
payment of P17,763,000.00 upon signing of the agreement; (3) the balance of the recomputed/ revalidated amount
(less the aforesaid initial payment), shall be paid in 24 equal monthly installments to commence in September 1992;
and (4) ownership over the auctioned properties shall revert to NPC upon satisfaction of the tax liabilities.

On August 3, 1992, then Mayor Naomi C. Corral (Mayor Corral) of Tiwi formally requested Governor Salalima to
remit the rightful tax shares of Tiwi and its barangays where the NPCs properties were located relative to the
payments already made by NPC to Albay. On even date, the Sangguniang Bayan of Tiwi passed Resolution No. 1292 requesting the Sangguniang Panlalawigan of Albay to hold a joint session for the purpose of discussing the
distribution of the NPC payments.
On August 10, 1992, Governor Salalima replied that the request cannot be granted as the initial payment amounting
to P17,763,000.00 was only an "earnest money" and that the total amount to be collected from the NPC was still
being validated.
Due to the brewing misunderstanding between Tiwi and the concerned barangays on the one hand, and Albay on the
other, and so as not to be caught in the middle of the controversy, NPC requested a clarification from the Office of
the President as to the scope and extent of the shares of the local government units in the real estate tax collections.
On August 30, 1992, the Sangguniang Bayan of Tiwi passed Resolution No. 15-92 authorizing Mayor Corral to hire a
lawyer to represent Tiwi and its barangays in the recovery of their rightful share in the aforesaid realty taxes.
Thereafter, Mayor Corral sought the services of respondent Atty. Antonio B. Betito (respondent) and Atty. Alberto
Lawenko (Atty. Lawenko). As a result, on January 25, 1993, Mayor Corral, representing Tiwi, and respondent and
Atty. Lawenko entered into a Contract of Legal Services (subject contract). The subject contract provided, among
others, that respondent and Atty. Lawenko would receive a 10% contingent fee on whatever amount of realty taxes
that would be recovered by Tiwi through their efforts.
On December 3, 1992, the Office of the President, through then Chief Presidential Legal Counsel Antonio T.
Carpio,6 opined that the MOA entered into by NPC and Albay merely recognized and established NPCs realty taxes.
He further clarified that the sharing scheme and those entitled to the payments to be made by NPC under the MOA
should be that provided under the law, and since Tiwi is entitled to share in said realty taxes, NPC may remit such
share directly to Tiwi, viz:
xxxx
The Memorandum of Agreement entered into by the Province of Albay and NPC merely enunciates the tax liability of
NPC. The Memorandum of Agreement does not provide for the manner of payment of NPC's liability. Thus, the
manner of payment as provided for by law shall govern. In any event, the Memorandum of Agreement cannot amend
the law allowing the payment of said taxes to the Municipality of Tiwi.
The decision in the case of NPC v. Province of Albay (186 SCRA 198), likewise, only established the liability of NPC
for real property taxes but does not specifically provide that said back taxes be paid exclusively to Albay province.
Therefore, it is our opinion that the NPC may pay directly to the municipality of Tiwi the real property taxes accruing
to the same.
Please be guided accordingly.
Very truly yours,
(Sgd.)
ANTONIO T. CARPIO
Chief Presidential Legal Counsel7

Because of this opinion, NPC President Malixi, through a letter dated December 9, 1992, informed Mayor Corral and
Governor Salalima that starting with the January 1993 installment, NPC will directly pay Tiwi its share in the
payments under the MOA. As of December 9, 1992, payments made by NPC to Albay reached P40,724,471.74.
On December 19, 1992, in an apparent reaction to NPCs Decision to directly remit to Tiwi its share in the payments
made and still to be made pursuant to the MOA, the Sangguniang Panlalawigan of Albay passed Ordinance No. 0992, which, among others: (1) authorized the Provincial Treasurer upon the direction of the Provincial Governor to sell
the real properties (acquired by Albay at the auction sale) at a public auction, and to cause the immediate transfer
thereof to the winning bidder; and (2) declared as forfeited in favor of Albay, all the payments already made by NPC
under the MOA.
From Albays refusal to remit Tiwis share in the aforementioned P40,724,471.74 stemmed several administrative
complaints and court cases that respondent allegedly handled on behalf of Tiwi to recover the latters rightful share in
the unpaid realty taxes, including the case of Salalima v. Guingona, Jr. In this case, the Court held, among others,
that the elective officials of Albay are administratively liable for abuse of authority due to their unjustified refusal to
remit the rightful share of Tiwi in the subject realty taxes.1avvph!1
The present controversy arose when respondent sought to enforce the Contract of Legal Services after rendering the
aforementioned legal services which allegedly benefited Tiwi. In his Complaint 8 for sum of money against Tiwi,
represented by then Mayor Patricia Gutierrez, Vice Mayor Vicente Tomas Vera III, Sangguniang BayanMembers
Rosana Parcia, Nerissa Cotara, Raul Corral, Orlando Lew Velasco, Liberato Ulysses Pacis, Lorenzo Carlet,
Bernardo Costo, Jaime Villanueva, Benneth Templado and Municipal Treasurer Emma Cordovales (collectively
petitioners), respondent claims that he handled numerous cases which resulted to the recovery of Tiwis share in the
realty taxes. As a result of these efforts, Tiwi was able to collect the amount ofP110,985,181.83 and
another P35,594,480.00 from the NPC as well as other amounts which will be proven during the trial. Under the
Contract of Legal Services, respondent is entitled to 10% of whatever amount that would be collected from the NPC.
However, despite repeated demands for the Sangguniang Bayan of Tiwi to pass an appropriate ordinance for the
payment of his attorneys fees, the former refused to pass the ordinance and to pay what is justly owed him.
Respondent prayed that Tiwi be ordered to pay P11,000,000.00 in attorneys fees and 10% of the other amounts to
be determined during trial plus interest and damages; that theSangguniang Bayan be ordered to pass the necessary
appropriation ordinance; that the municipal treasurer surrender all the receipts of payments made by the NPC to Tiwi
from January 1993 to December 1996 for the examination of the court; and that Tiwi pay P500,000.00 as attorneys
fees.
In their Answer,9 petitioners admitted that the Sangguniang Bayan of Tiwi passed Resolution No. 15-92 but denied
that said resolution authorized then Mayor Corral to enter into the subject contract. In particular, Mayor Corral
exceeded her authority when she bound Tiwi to a gargantuan amount equivalent to 10% of the amount of realty
taxes recovered from NPC. Further, the legal services under the subject contract should have been limited to the
execution of the decision in National Power Corporation v. Province of Albay as per Resolution No. 15-92.For these
reasons, the subject contract is void, unenforceable, unconscionable and unreasonable. Petitioners further claim that
they are not aware of the cases which respondent allegedly handled on behalf of Tiwi since these cases involved
officials of the previous administration; that some of these cases were actually handled by the Office of the Solicitor
General; and that these were personal cases of said officials. In addition, the Contract of Legal Services was not
ratified by the Sangguniang Bayan of Tiwi in order to become effective. Petitioners also raise the defense that the
realty taxes were recovered by virtue of the opinion rendered by then Chief Presidential Legal Counsel Antonio T.
Carpio and not through the efforts of respondent.
As to the amount of P110,985,181.83 in realty taxes, the same was received by Albay and not Tiwi while the amount
of P35,594,480.00 is part of the share of Tiwi in the utilization of the national wealth. Furthermore, in a Commission
on Audit (COA) Memorandum dated January 15, 1996, the COA ruled that the authority to pass upon the
reasonableness of the attorneys fees claimed by respondent lies with the Sangguniang Bayan of Tiwi. Pursuant to
this memorandum, the Sangguniang Bayan of Tiwi passed Resolution No. 27-98 which declared the subject contract
invalid. Petitioners also allege that the contract is grossly disadvantageous to Tiwi and that respondent is guilty of

laches because he lodged the present complaint long after the death of Mayor Corral; and that the amount collected
from NPC has already been spent by Tiwi.
On November 7, 2000, respondent filed a motion10 for partial judgment on the pleadings and/or partial summary
judgment.
Regional Trial Courts Ruling
On March 3, 2001, the trial court rendered a partial judgment on the pleadings in favor of respondent:
WHEREFORE, partial judgment on the pleadings is rendered ordering the defendant Municipality of Tiwi, Albay to
pay the plaintiff the sum of P14,657,966.18 plus interest at the legal rate from the filing of the complaint until payment
is fully delivered to the plaintiff; and, for this purpose, the defendant Sangguniang Bayan of Tiwi, represented by the
co-defendants officials, shall adopt and approve the necessary appropriation ordinance.
Trial to receive evidence on the remaining amounts due and payable to the plaintiff pursuant to the contract of legal
services shall hereafter continue, with notice to all the parties.
SO ORDERED.11
The trial court held that petitioners answer to the complaint failed to tender an issue, thus, partial judgment on the
pleadings is proper. It noted that petitioners did not specifically deny under oath the actionable documents in this
case, particularly, the Contract of Legal Services and Resolution No. 15-92. Consequently, the genuineness and due
execution of these documents are deemed admitted pursuant to Section 8, Rule 8 of the Rules of Court. Thus, the
authority of Mayor Corral to enter into the subject contract was deemed established.
It added that the authority given to Mayor Corral to hire a lawyer was not only for the purpose of executing the
decision in National Power Corporation v. Province of Albay but extended to representing the interest of Tiwi in other
cases as well. Further, the said resolution did not impose as a condition precedent the ratification of the subject
contract by the Sangguniang Bayan in order to render it effective. Lastly, the trial court ruled that the answer
admitted, through a negative pregnant, that Tiwi was paid the amounts of P110,985,181.83 andP35,594,480.00,
hence, respondent is entitled to 10% thereof as attorneys fees under the terms of the subject contract.
Court of Appeals Ruling
In its assailed October 19, 2005 Decision, the CA affirmed the Decision of the trial court:
WHEREFORE, premises considered, the Partial Decision of the Regional Trial Court of Quezon City, Branch 96,
dated March 3, 2001, is AFFIRMED.
SO ORDERED.12
The appellate court agreed with the trial court that the genuineness and due execution of the Contract of Legal
Services and Resolution No. 15-92 was impliedly admitted by petitioners because of their failure to make a verified
specific denial thereof. Further, the answer filed by the petitioners admitted the material averments of the complaint
concerning Tiwis liability under the subject contract and its receipt from the NPC of a total ofP146,579,661.84 as
realty taxes. Petitioners cannot claim that the subject contract required ratification because this

is not a requisite for the enforceability of a contract against a local government unit under the express terms of the
contract and the provisions of the Local Government Code (LGC). Also, petitioners are estopped from questioning
the enforceability of the contract after having collected and enjoyed the benefits derived therefrom.
The appellate court found nothing objectionable in the stipulated contingent fee of 10% as this was voluntarily agreed
upon by the parties and allowed under existing jurisprudence. The fee was justified given the numerous
administrative and court cases successfully prosecuted and defended by the respondent in the face of the provincial
governments stubborn refusal to release Tiwis share in the realty taxes paid by NPC. The stipulated fee is not
illegal, unreasonable or unconscionable. It is enforceable as the law between the parties.
Issues
Petitioners raise the following issues for our resolution:
1. The amount of award of attorneys fees to respondent is unreasonable, unconscionable and without any
proof of the extent, nature and "result of his legal service" as required by the purported "contract of legal
services" and pursuant to Section 24, Rule 138 of the Rules of Court.
2. The application of the rule of judgment on the pleadings and/or summary judgment is baseless,
improper and unwarranted in the case at bar.
3. The purported "contract of legal services" exceeded the authority of the late Mayor Corral and should
have been ratified by the Sangguniang Bayan of Tiwi in order to be enforceable.13

Respondent counters that the Contract of Legal Services was not limited to the NPC case but to other services done
pursuant to said contract. Thus, the attorneys fees should cover these services as well. He also stresses that
despite this Courts ruling in National Power Corporation v. Province of Albay and the opinion of then Chief
Presidential Legal Counsel Antonio T. Carpio, Governor Salalima and the Sangguniang Panlalawigan of Albay
stubbornly resisted and disobeyed the same. Consequently, respondent prosecuted and defended on behalf of Tiwi
several administrative and court cases involving the elective officials of Albay to compel the latter to comply with the
aforesaid issuances. He also filed a civil case to prevent the NPC from remitting Tiwis share in the realty taxes
directly to Albay.
Respondent adds that he also acted as counsel for Mayor Corral after Governor Salalima and his allies sought to
remove Mayor Corral in retaliation to the administrative cases that she (Mayor Corral) previously filed against
Governor Salalima for the latters failure to remit Tiwis share in the realty taxes. These administrative cases reached
this Court in Salalima v. Guingona, Jr. where respondent appears as the counsel of record of Mayor Corral and the
other local officials of Tiwi. The filing and handling of these cases belies petitioners claim that what respondent did
for Tiwi was a mere messengerial service.
Respondent also argues that the Contract of Legal Services is valid and enforceable due to petitioners failure to
specifically deny the same under oath in their Answer. Moreover, the law does not require that the subject contract
be ratified by the Sangguniang Bayan in order to become enforceable. Instead, the law merely requires that
the Sangguniang Bayan authorize the mayor to enter into contracts as was done here through Resolution No. 15-92.
Last, the 10% attorneys fees in the subject contract is reasonable, more so because the fee is contingent in nature.
In a long line of cases, it has been ruled that a 10% attorneys fees of the amount recoverable is reasonable.
Our Ruling

Petitioners Arguments
The petition is meritorious.
Petitioners claim that their answer raised factual issues and defenses which merited a full-blown trial. In their answer,
they asserted that the 10% contingent fee is unreasonable, unconscionable and unfounded considering that
respondent did not render any legal service which accrued to the benefit of Tiwi. The Contract of Legal Services
specifically provided that for the attorneys fees to accrue, respondents legal services should result to the recovery of
Tiwis claims against Albay and NPC. It is, thus, incumbent upon respondent to prove in a trial on the merits that his
legal efforts resulted to the collection of the realty taxes in favor of Tiwi. Petitioners belittle as mere messengerial
service the legal services rendered by respondent on the ground that what remained to be done was the execution of
the judgment of this Court in National Power Corporation v. Province of Albay and the opinion of then Chief
Presidential Legal Counsel Antonio T. Carpio.
In their answer, petitioners also questioned the authority of Mayor Corral to enter into the subject contract providing
for a 10% contingent fee because the provisions of Resolution No. 15-92 do not grant her such power. In addition,
under the said contract, Tiwi was made liable for legal services outside of those related to the satisfaction of the
judgment in National Power Corporation v. Province of Albay. These stipulations are void and unenforceable. Hence,
any claim of respondent must be based on quantum meruit which should be threshed out during a full-blown trial.
Finally, petitioners argue that respondent cannot capitalize on the admission of the genuineness and due execution
of the subject contract because this merely means that the signature of the party is authentic and the execution of
the contract complied with the formal solemnities. This does not extend to the documents substantive validity and
efficacy.
Respondents Arguments

Judgment on the pleadings is improper when the answer to the complaint tenders several issues.
A motion for judgment on the pleadings admits the truth of all the material and relevant allegations of the opposing
party and the judgment must rest on those allegations taken together with such other allegations as are admitted in
the pleadings.14 It is proper when an answer fails to tender an issue, or otherwise admits the material allegations of
the adverse partys pleading.15 However, when it appears that not all the material allegations of the complaint were
admitted in the answer for some of them were either denied or disputed, and the defendant has set up certain
special defenses which, if proven, would have the effect of nullifying plaintiffs main cause of action, judgment on the
pleadings cannot be rendered.16
In the instant case, a review of the records reveal that respondent (as plaintiff) and petitioners (as defendants) set-up
multiple levels of claims and defenses, respectively, with some failing to tender an issue while others requiring the
presentation of evidence for resolution. The generalized conclusion of both the trial and appellate courts that
petitioners answer admits all the material averments of the complaint is, thus, without basis. For this reason, a
remand of this case is unavoidable. However, in the interest of justice and in order to expedite the disposition of this
case which was filed with the trial court way back in 1999, we shall settle the issues that can be resolved based on
the pleadings and remand only those issues that require a trial on merits as hereunder discussed.
Preliminarily, it was erroneous for the trial court to rule that the genuineness and due execution of the Contract of
Legal Services was impliedly admitted by petitioners for failure to make a sworn specific denial thereof as required
by Section 8,17 Rule 8 of the Rules of Court. This rule is not applicable when the adverse party does not appear to be
a party to the instrument.18 In the instant case, the subject contract was executed between respondent and Atty.
Lawenko, on the one hand, and Tiwi, represented by Mayor Corral, on the other. None of the petitioners, who are the

incumbent elective and appointive officials of Tiwi as of the filing of the Complaint, were parties to said contract.
Nonetheless, in their subsequent pleadings,19 petitioners admitted the genuineness and due execution of the subject
contract. We shall, thus, proceed from the premise that the genuineness and due execution of the Contract of Legal
Services has already been established. Furthermore, both parties concede the contents and efficacy of Resolution
15-92. As a result of these admissions, the issue, at least as to the coverage of the subject contract, may be resolved
based on the pleadings as it merely requires the interpretation and application of the provisions of Resolution 15-92
vis--vis the stipulations in the subject contract.

WHEREAS, not (sic) of [the] P 17.7 Million already paid by NAPOCOR as per decision of the court nothing has yet
been given by Governor Salalima to the Municipality of Tiwi as its share cost (sic) to be 45% of said amount nor the
affected barangays of Tiwi has ever been given each corresponding shares despite representation made by the
Municipal Mayor Naomi Corral, the Governor is hesitant and showing signs that the share of the Municipality will
never be given;
WHEREAS, on motion of Kagawad Bennett Templado duly seconded by Joselito Cantes and Kagawad Francisco
Alarte, be it

Mayor Corral was authorized to enter into the Contract of Legal Services
Petitioners argue that Resolution No. 15-92 did not authorize Mayor Corral to enter into the subject contract, hence,
the contract must first be ratified to become binding on Tiwi.

RESOLVED, as it is hereby resolved, To authorize the Mayor to hire the Services of a lawyer to represent the interest
of the Municipality of Tiwi and its Barangays and for this purpose and authorization be given to the Municipal Mayor
to hire a lawyer of her choice; Further divesting the lawyer hired by Governor Salalima and on (sic) the Province of
Albay of its authority to represent the Municipality of Tiwi and the six Geothermal Barangays;

The argument is unpersuasive. Section 444(b)(1)(vi) of the LGC provides:


SECTION 444. The Chief Executive: Powers, Duties, Functions and Compensation. x x x
(b) For efficient, effective and economical governance the purpose of which is the general welfare of the municipality
and its inhabitants pursuant to Section 16 of this Code, the municipal mayor shall: x x x
(1) Exercise general supervision and control over all programs, projects, services, and activities of the municipal
government, and in this connection, shall: x x x
(vi) Upon authorization by the sangguniang bayan, represent the municipality in all its business transactions and sign
on its behalf all bonds, contracts, and obligations, and such other documents made pursuant to law or ordinance; x x
x
Pursuant to this provision, the municipal mayor is required to secure the prior authorization of the Sangguniang
Bayan before entering into a contract on behalf of the municipality. In the instant case, the Sangguniang Bayan of
Tiwi unanimously passed Resolution No. 15-92 authorizing Mayor Corral to hire a lawyer of her choice to represent
the interest of Tiwi in the execution of this Courts Decision in National Power Corporation v. Province of Albay
RESOLUTION AUTHORIZING THE MUNICIPAL MAYOR OF TIWI TO HIRE THE SERVICES OF A LAWYER TO
REPRESENT THE MUNICIPALITY OF TIWI AND THE SIX GEOTHERMAL BARANGAYS IN THE EXECUTION OF
G.R. NO. 87479 AND DIVESTING THE LAWYER HIRED BY THE PROVINCIAL GOVERNOR AND THE PROVINCE
OF ALBAY OF ITS AUTHORITY TO REPRESENT THE MUNICIPALITY OF TIWI AND THE SIX BARANGAYS
WHEREAS, In an en banc decision G.R. No. 87479, the Supreme Court sustained the posture of the Province of
Albay and legally declared that the NAPOCOR is under obligation to pay the Province of Albay, the Municipality of
Tiwi and Daraga the amount of P 214 Million representing Realty Taxes covering the period from the year 1984 to
1987 which decision had already been final and executory per entry of judgment dated June 4, 1990;

FINALLY RESOLVED, that copy of this resolution be furnished [the] Office of the Provincial Governor, Vice Governor,
Office of the Sangguniang Panlalawigan, President Malixi of NAPOCOR for [their] information and guidance.
Approved unanimously.20
The above-quoted authority necessarily carried with it the power to negotiate, execute and sign on behalf of Tiwi the
Contract of Legal Services. That the authorization did not set the terms and conditions of the compensation signifies
that the council empowered Mayor Corral to reach a mutually agreeable arrangement with the lawyer of her choice
subject, of course, to the general limitation that the contracts stipulations should not be contrary to law, morals, good
customs, public order or public policy,21 and, considering that this is a contract of legal services, to the added
restriction that the agreed attorneys fees must not be unreasonable and unconscionable.22 On its face, and there is
no allegation to the contrary, this prior authorization appears to have been given by the council in good faith to the
end of expeditiously safeguarding the rights of Tiwi. Under the particular circumstances of this case, there is, thus,
nothing objectionable to this manner of prior authorization. InConstantino v. Hon. Ombudsman,Desierto,23 we
reached a similar conclusion:
More persuasive is the Mayor's second contention that no liability, whether criminal or administrative, may be
imputed to him since he merely complied with the mandate of Resolution No. 21, series of 1996 and Resolution No.
38, series of 1996, of the Municipal Council; and that the charges leveled against him are politically motivated. A
thorough examination of the records convinces this Court that the evidence against him is inadequate to warrant his
dismissal from the service on the specified grounds of grave misconduct, conduct prejudicial to the best interest of
the service and gross neglect of duty.
The explicit terms of Resolution No. 21, Series of 1996 clearly authorized Mayor Constantino to "lease/purchaseone
(1) fleet of heavy equipment" composed of seven (7) generally described units, through a "negotiated contract." That
resolution, as observed at the outset, contained no parameters as to rate of rental, period of lease, purchase price.
Pursuant thereto, Mayor Constantino, representing the Municipality of Malungon, and Norberto Lindong,
representing the Norlovanian Corporation, executed two written instruments on the same date and occasion, viz.:

WHEREAS, NAPOCOR finally paid the Province of Albay the amount of P 17.7 Million as initial payment [d]ated July
29, 1992 that amount will inevitably increase the financial resources of the Local Government Units concerned;

One an agreement (on a standard printed form) dated February 28, 1996 for the lease by the
corporation to the municipality of heavy equipment of the number and description required by Resolution
No. 21, and

WHEREAS, the Province of Albay headed by Governor Salalima and his men are still reconciling theP 214 Million
with NAPOCOR which contravene the final decision of the Supreme Court and considered the P 17.7 Million as an
Earnest money to the damage and prejudice of the Municipality of Tiwi and the Six Barangays, since that amount
should be pro-rated accordingly as mandated by Law after deducting the legitimate expenses and attorneys fees;

Two an undertaking for the subsequent conveyance and transfer of ownership of the equipment to the
municipality at the end of the term of the lease.

xxxx
In light of the foregoing facts, which appear to the Court to be quite apparent on the record, it is difficult to perceive
how the Office of the Ombudsman could have arrived at a conclusion of any wrongdoing by the Mayor in relation to
the transaction in question. It is difficult to see how the transaction between the Mayor and Norlovanian Corporation
entered into pursuant to Resolution No. 21 and tacitly accepted and approved by the town Council through its
Resolution No. 38 could be deemed an infringement of the same Resolution No. 21. In truth, an examination of
the pertinent writings (the resolutions, the two (2) instruments constituting the negotiated contract, and the certificate
of delivery) unavoidably confirms their integrity and congruity. It is, in fine, difficult to see how those pertinent written
instruments," could establish a prima facie case to warrant the preventive suspension of Mayor Constantino. A
person with the most elementary grasp of the English language would, from merely scanning those material
documents, at once realize that the Mayor had done nothing but carry out the expressed wishes of the Sangguniang
Bayan.

The contention is erroneous. The wording of Resolution No. 15-92 is clear. Its title and whereas clauses, previously
quoted above, indicate that the hiring of a lawyer was for the sole purpose of executing the judgment inNational
Power Corporation v. Province of Albay, that is, to allow Tiwi to recover its rightful share in the unpaid realty taxes of
NPC. In his Complaint, respondent admits that he was furnished and read a copy of the said resolution before he
entered into the subject contract. He cannot now feign ignorance of the limitations of the authority of Mayor Corral to
enter into the subject contract and the purpose for which his services were employed.
We cannot accept respondents strained reading of Resolution No. 15-92 in that the phrase "to represent the interest
of the Municipality of Tiwi and its Barangays" is taken to mean such other matters not related to the execution of the
decision in National Power Corporation v. Province of Albay. It could not have been the intention of the Sangguniang
Bayan of Tiwi to authorize the hiring of a lawyer to perform general legal services because this duty devolves upon
the municipal legal officer. The council sought the services of a lawyer because the dispute was between the
municipality (Tiwi) and province (Albay) so much so that it f ell under the exception provided in Section 481(b)(3)
(i)27 of the LGC

xxxx
[T]he Court is thus satisfied that it was in fact the Council's intention, which it expressed in clear language, to confer
on the Mayor ample discretion to execute a "negotiated contract" with any interested party, without regard to any
official acts of the Council prior to Resolution No. 21.24
Prescinding therefrom, petitioners next contention that the subject contract should first be ratified in order to become
enforceable as against Tiwi must necessarily fail. As correctly held by the CA, the law speaks of prior authorization
and not ratification with respect to the power of the local chief executive to enter into a contract on behalf of the local
government unit.25 This authority, as discussed above, was granted by the Sangguniang Bayan to Mayor Corral as
per Resolution No. 15-92.
The scope of the legal services contemplated in Resolution No. 15-92 was limited to the execution of the decision in
National Power Corporation v. Province of Albay.
For his part, respondent claims that the Contract of Legal Services should be construed to include such services
even outside the scope of the execution of the ruling in National Power Corporation v. Province of Albay. Respondent
relies on the broad wording of paragraph 4 of the subject contract to support this contention, viz:
4. That the legal services which the Party of the FIRST PART is obliged to render to the Party of the SECOND PART
under this AGREEMENT consists of the following:
a) To prepare and file cases in courts, Office of the President, Ombudsman, Sandiganbayan, Department
of Interior and Local Government and Department of Finance or to represent the Party of the SECOND
PART in cases before said bodies;
b) To coordinate or assist the Commission on Audit, The National Bureau of Investigation or the Fiscals
Office in the prosecution of cases for the Party of the SECOND PART;
c) To follow-up all fees, taxes, penalties and other receivables from National Power Corporation (NPC) and
Philippine Geothermal Inc. due to the Municipality of Tiwi;
d) To provide/give legal advice to the Party of the SECOND PART in her administration of the Municipal
Government of Tiwi where such advice is necessary or proper; and
e) To provide other forms of legal assistance that may be necessary in the premises. 26

which permits a local government unit to employ the services of a special legal officer. Thus, the provisions of
paragraph 4 of the Contract of Legal Services to the contrary notwithstanding, the basis of respondents
compensation should be limited to the services he rendered which reasonably contributed to the recovery of Tiwis
share in the subject realty taxes.
In sum, the allegations and admissions in the pleadings are sufficient to rule that Mayor Corral was duly authorized to
enter into the Contract of Legal Services. However, the legal services contemplated therein, which are properly
compensable, are limited to such services which reasonably contributed to the recovery of Tiwis rightful share in the
unpaid realty taxes of NPC. Paragraph 4 of the Contract of Legal Services, insofar as it covers legal services outside
of this purpose, is therefore unenforceable.
While the foregoing issues may be settled through the admissions in the pleadings, the actual attorneys fees due to
respondent cannot still be determined.
The issue of the reasonable legal fees due to respondent still needs to be resolved in a trial on the merits.
The subject contract stipulated that respondents 10% fee shall be based on "whatever amount or payment collected
from the National Power Corporation (NPC) as a result of the legal service rendered by [respondent]."28 As will
be discussed hereunder, the extent and significance of respondents legal services that reasonably contributed to the
recovery of Tiwis share as well as the amount of realty taxes recovered by Tiwi arising from these alleged services
requires a full-blown trial.
The main source of respondents claim for attorneys fees lies with respect
to several administrative and court cases that he allegedly prosecuted and defended on behalf of Tiwi against the
elective officials of Albay in order to compel the latter to remit the rightful share of Tiwi in the unpaid realty taxes. In
their Answer, petitioners denied knowledge of these cases on the pretext that they were filed during the prior term of
Mayor Corral. However, we can take judicial notice of Salalima v. Guingona, Jr. where respondent appears as the
counsel of record. In Salalima v. Guingona, Jr., the Court found, among others, that the elective officials of Albay are
administratively liable for (1) their unjustified refusal to release the share of Tiwi in the subject realty taxes, and (2)
initiating unfounded and harassment disciplinary actions against Mayor Corral as a retaliatory tactic. This case, at the
minimum, is evidence of the efforts of respondent in recovering Tiwis share. Nevertheless, the other cases allegedly
handled by respondent cannot be deemed admitted for purposes of fixing respondents compensation because
petitioners controverted the same on several grounds, to wit: (1) these cases where not handled by respondent, (2)
the OSG was the lead counsel in these cases, and (3) these cases were the personal cases of Mayor Corral and
other officials of Tiwi which had no bearing in the eventual recovery of Tiwis share in the subject realty taxes. With

our previous finding that the subject contract only covers legal services which reasonably contributed to the recovery
of Tiwis share, these defenses properly tender issues which should be determined in a trial on the merits.
More important, in their Answer, petitioners raise the main defense that the subject realty taxes were recovered by
virtue of the opinion rendered by then Chief Presidential Legal Counsel Antonio T. Carpio and not through the efforts
of respondent. As narrated earlier, the said opinion was issued after then NPC President Malixi asked clarification
from the Office of the President regarding the distribution of the unpaid realty taxes to Albay and its municipalities
and barangays, including Tiwi. Significantly, respondent himself stated in his Complaint that "pursuant to the advice
of Sec. Carpio, NPC started to remit their shares directly to Tiwi and its barangays in January 1993."29 Our
pronouncements in Salalima v. Guingona, Jr., which respondent himself relies on in his pleadings, tell the same
story, viz:
Fortunately, the Municipalities of Tiwi and Daraga and the National Government eventually received their respective
shares, which were paid directly to them by the NPC pursuant to the directive of the Office of the President
issued after the NPC requested clarification regarding the right of the municipalities concerned to share in
the realty tax delinquencies. But this fact does not detract from the administrative liability of the petitioners.
Notably, when the NPC advised the Province of Albay on 9 December 1992 that starting with the January 1993
installment it would pay directly to the Municipality of Tiwi by applying the sharing scheme provided by law, the
petitioners passed on 19 December 1992 an ordinance declaring as forfeited in favor of the Province all the
payments made by the NPC under the MOA and authorizing the sale of the NPC properties at public auction. This
actuation of the petitioners reveals all the more their intention to deprive the municipalities concerned of their shares
in the NPC payments. 30 (Emphasis supplied)
What appears then from the pleadings is that respondent, by his own admission, concedes the immense importance
of the aforesaid opinion to the eventual recovery of the unpaid realty taxes. However, respondent never asserted the
degree of his participation in the crafting or issuance of this opinion. It is evident, therefore, that the recovery of the
realty taxes is not solely attributable to the efforts of respondent. This aspect of the case is decisive because it goes
into the central issue of whether the 10% contingent fee is unreasonable and unconscionable. Consequently, it
becomes necessary to weigh, based on the evidence that will be adduced during trial, the relative importance of the
aforesaid opinion vis--vis the cases allegedly handled by respondent on behalf of Tiwi insofar as they aided in the
eventual recovery of the unpaid realty taxes. And from here, the trial court may reasonably determine what weight or
value to assign the legal services which were rendered by respondent.
Apart from this, there is another vital issue tendered by the pleadings regarding the extent of the benefits which Tiwi
allegedly derived from the legal services rendered by respondent. In partially ruling that these amounts should
be P110,985,181.83 and P35,594,480.00, respectively, the trial court explained in this wise:
The complaint alleged as to this:
"18. Based on the available records obtained by the plaintiff from the NPC, the Municipality of Tiwi received One
Hundred Ten Million Nine Hundred Eighty Five Thousand One Hundred Eighty One & 83/100 (P110,985.83) [sic] plus
Thirty Five Million Five Hundred Ninety Four Thousand Four Hundred Eighty (P35,594,480.00) Pesos remittances
from the said agency. The total receipts of taxes by Tiwi remitted by the NPC could be higher and this will be proven
during the trial when all the records of remittances of taxes of the NPC-SLRC in Bian, Laguna are subpoenaed,
marked as ANNEXES-P; Q and R;"
In relation thereto, the answer stated:
"14. With respect to the allegation in paragraph 18 of the complaint answering defendant admits that the amount
of P110,985.83 [sic] was remitted to Albay province so far as the annex is concerned but the same is immaterial,
useless as there was no allegation that this was recovered/received by Tiwi. With respect to the amount

ofP35,594,480.00, the said amount was received as a matter of the clear provision of the law, specifically Sections
286-293 of the present Local Government Code and not through the effort of the plaintiff. Annex "R" is hearsay and
self-serving."
While the plaintiff directly averred that "the Municipality of Tiwi received One Hundred Ten Million Nine Hundred
Eighty Five Thousand One Hundred Eighty One & 83/100 (P110,985.83) [sic] plus Thirty Five Million Five Hundred
Ninety Four Thousand Four Hundred Eighty (P35,594,480.00) Pesos remittances from the said agency," the
defendant evasively stated that "the amount of P110,985.83 [sic] was remitted to Albay province" and that "the
same is immaterial, useless as there was no allegation that this was recovered/received by Tiwi." Thereby, the
answer was a negative pregnant because its denial was not specific. Hence, the defendants have admitted that Tiwi
was paid the stated amounts.
The defendants further stated that Tiwi received the amount of P35,594,480.00 "as a matter of the clear provision of
the law, [sic] and not through the effort of the plaintiff." However, considering that the legal services of the plaintiff
were rendered under a written contract, the qualification as to the P35,594,480.00 was meaningless.
The pleadings render it indubitable, therefore, that the total amount of P146,579,661.84, which was received by Tiwi
from NPC, is subject to the 10% attorneys fees under the plaintiffs contract of legal services.31
We disagree. Although concededly petitioners counter-allegations in their Answer were not well-phrased, the overall
tenor thereof plainly evinces the defense that the amount of P110,985,181.83 was received by Albay and not by
Tiwi.32 Consequently, the said amount cannot be deemed admitted for the purpose of fixing respondents
compensation. There is no occasion to apply the rule on negative pregnant because the denial of the receipt of the
said amount by Tiwi is fairly evident. The dictates of simple justice and fairness precludes us from unduly prejudicing
the rights of petitioners by the poor phraseology of their counsel. Verily, the Rules of Court were designed to
ascertain the truth and not to deprive a party of his legitimate defenses. In fine, we cannot discern based merely on
the pleadings that this line of defense employed by petitioners is patently sham especially since the documentary
evidence showing the alleged schedule of payments made by NPC to Albay and its municipalities and barangays,
including Tiwi, was not even authenticated by NPC.
We also disagree with the trial courts above-quoted finding that the qualification as to the amount ofP35,594,480.00
which was received "as a matter of the clear provision of the law, [sic] and not through the effort of the plaintiff" is
meaningless. The error appears to have been occasioned by the failure to quote the exact allegation in petitioners
Answer which reads "the said amount [P35,594,480.00] was received as a matter of the clear provision of the
law, specifically Sections 286-293 of the present Local Government Code and not through the effort of the
plaintiff."33 The omitted portion is significant because Sections 286-293 of the LGC refer to the share of the local
government unit in the utilization of the national wealth. Petitioners are, in effect, claiming that the P35,594,480.00
was received by Tiwi as its share in the utilization and development of the national wealth within its area and not as
its share in the unpaid realty taxes of NPC subject of National Power Corporation v. Province of Albay. Whats more,
respondents own documentary evidence, appended to his Complaint, confirms this posture because said document
indicates that the P35,594,480.00 was derived from the "Computation of the Share of Local Government from
Proceeds Derived in the Utilization of National Wealth SOUTHERN LUZON For CY 1992 and First Quarter 1993." 34 It
may be added that the unpaid realty taxes of NPC subject of National Power Corporation v. Province of
Albay covered the period from June 11, 1984 to March 10, 1987 and not from 1992 to 1993. There is, thus, nothing
from the above which would categorically establish that the amount ofP35,594,480.00 was part of the realty taxes
that NPC paid to Tiwi or that said amount was recovered from the legal services rendered by respondent on behalf of
Tiwi.
Based on the preceding discussion, it was, thus, erroneous for the trial and appellate courts to peg the amount of
realty taxes recovered for the benefit of Tiwi at P110,985,181.83 and P35,594,480.00 considering that petitioners
have alleged defenses in their Answer and, more importantly, considering that said amounts have not been
sufficiently established as reasonably flowing from the legal services rendered by respondent.

Conclusion
The foregoing considerations cannot be brushed aside for it would be iniquitous for Tiwi to compensate respondent
for legal services which he did not render; or which has no reasonable connection to the recovery of Tiwis share in
the subject realty taxes; or whose weight or value has not been properly appraised in view of respondents admission
in his Complaint that the opinion issued by then Chief Presidential Legal Counsel Antonio T. Carpio (in which
respondent had no clear participation) was instrumental to the recovery of the subject realty taxes. Hence, the
necessity of a remand of this case to determine these issues of substance.
To recap, the following are deemed resolved based on the allegations and admissions in the pleadings: (1) then
Mayor Corral was authorized to enter into the Contract of Legal Services, (2) the legal services contemplated in
Resolution No. 15-92 was limited to such services which reasonably contributed to the recovery of Tiwis rightful
share in the unpaid realty taxes of NPC, and (3) paragraph 4 of the Contract of Legal Services, insofar as it covers
services outside of this purpose, is unenforceable. Upon the other hand, the issue of the reasonable legal fees due
to respondent still needs to be resolved in a trial on the merits with the following integral sub-issues: (1) the
reasonableness of the 10% contingent fee given that the recovery of Tiwis share was not solely attributable to the
legal services rendered by respondent, (2) the nature, extent of legal work, and significance of the cases allegedly
handled by respondent which reasonably contributed, directly or indirectly, to the recovery of Tiwis share, and (3) the
relative benefit derived by Tiwi from the services rendered by respondent. In addition, we should note here that the
amount of reasonable attorneys fees finally determined by the trial court should be without legal interest in line with
well-settled jurisprudence.35
As earlier noted, this case was filed with the trial court in 1999, however, we are constrained to remand this case for
further proceedings because the subject partial judgment on the pleadings was clearly not proper under the
premises. At any rate, we have narrowed down the triable issue to the determination of the exact extent of the
reasonable attorneys fees due to respondent. The trial court is, thus, enjoined to resolve this case with deliberate
dispatch in line with the parameters set in this Decision.
To end, justice and fairness require that the issue of the reasonable attorneys fees due to respondent be ventilated
in a trial on the merits amidst the contentious assertions by both parties because in the end, neither party must be
allowed to unjustly enrich himself at the expense of the other. More so here because contracts for attorneys services
stand upon an entirely different footing from contracts for the payment of compensation for any other services. Verily,
a lawyers compensation for professional services rendered are subject to the supervision of the court, not just to
guarantee that the fees he charges and receives remain reasonable and commensurate with the services rendered,
but also to maintain the dignity and integrity of the legal profession to which he belongs. 36
WHEREFORE, the petition is GRANTED. The October 19, 2005 Decision and March 10, 2006 Resolution of the
Court of Appeals in CA G.R. CV No. 79057 are REVERSED and SET ASIDE. This case is REMANDED to the trial
court for further proceedings to determine the reasonable amount of attorneys fees which respondent is entitled to in
accordance with the guidelines set in this Decision.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice

Republic of the Philippines


SUPREME COURT
Baguio City
FIRST DIVISION
G.R. No. 160025

April 23, 2014

SANGGUNIANG PANLUNGSOD NG BAGUIO CITY, Petitioner,


vs.
JADEWELL PARKING SYSTEMS CORPORATION, Respondent.

OF BAGUIO CITY, BENEDICTO BALAJADIA, PATERNO AQUINO, RICHARD LABERINTO, ROLANDO


ABELLERA, FERNANDO SANGALANG, ALLAN ATOS, ANGELINO SANGALANG, CITY OF BAGUIO, AND CITY
MAYOR BRAULIO D. YARANON, Respondents.
x-----------------------x
G.R. No. 172216
JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,
vs.
JUDGE FERNANDO VIL PAMINTUAN, PRESIDING JUDGE, BRANCH 03 REGIONAL TRIAL COURT OF
BAGUIO CITY, Respondent.

x-----------------------x
x-----------------------x
G.R. No. 163052
G.R. No. 173043
JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,
vs.
MAYOR BERNARDO M. VERGARA, CITY MAYOR OF BAGUIO, VICE MAYOR BETTY LOURDES F. TABANDA,
VICE MAYOR OF BAGUIO, COUNCILOR BRAULIO D. YARANON, COUNCILOR ELMER O. DATUIN,
COUNCILOR ANTONIO R. TABORA, JR., COUNCILOR GALO D. WEYGAN, COUNCILOR EDILBERTO B.
TENEFRANCIA, COUNCILOR FEDERICO J. MANDAPAT, JR., COUNCILOR RICHARD A. CARINO,
COUNCILOR FAUSTINO A. OLOWAN, COUNCILOR DELFIN V. BALAJADIA, COUNCILOR RUFINO M.
PANAGAN, CITY SECRETARY RONALDO B. PEREZ, SANGGUNIANG PANLUNGSOD NG
BAGUIO,Respondents.
x-----------------------x

JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,


vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.
x-----------------------x
G.R. No. 174879

JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,


vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.

JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,


vs.
ACTING CITY MAYOR AND FORMERLY VICE MAYOR AND PRESIDING OFFICER OF THE SANGGUNIANG
PANLUNGSOD NG BAGUIO, REINALDO A. BAUTISTA, JR., MEMBERS OF THE SANGGUNIANG
PANLUNGSOD NG BAGUIO, LEONARDO B. YANGOT, JR., ROCKY THOMAS A. BALISONG, EDILBERTO B.
TENEFRANCIA, FAUSTINO A. OLOWAN, GALO P. WEYGAN, FEDERICO J. MANDAP AT, PERLITA L. CHANRONDEZ, ANTONIO R. TABORA, JOSE M. MOLINTAS AND RUFINO M. PANAGAN AND CITY LEGAL OFFICER
MELCHOR CARLOS R. RABANES, Respondents.

x-----------------------x

x-----------------------x

G.R. No. 165564

G.R. No. 181488

JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,


vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.

CITY MAYOR BRAULIO D. YARANON, Petitioner,


vs.
JADEWELL PARKING SYSTEMS CORPORATION, HON. EXECUTIVE SECRETARY EDUARDO R. ERMITA,
ACTING BY AUTHORITY OF THE PRESIDENT, AND HON. RONALDO V. PUNO, IN HIS CAPACITY AS
SECRETARY OF THE DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT, Respondents.

G.R. No. 164107

x-----------------------x

DECISION

G.R. No. 172215


JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,
vs.
JUDGE FERNANDO VIL PAMINTUAN, PRESIDING JUDGE OF BRANCH 3 OF THE REGIONAL TRIAL COURT

SERENO, CJ:

Before this Court are nine (9) Petitions involving essentially the same parties - officials of the City Government of
Baguio and Jadewell Parking Systems Corporation (Jadewell). The only party here that is neither an official of the
City Government of Baguio nor an officer of Jadewell is former Judge Fernando Vil Pamintuan.

On 16 July 1999, the City Mayor of Baguio wrote to Jadewell, transmitting to it the finalized draft of the MOA, with
amendments emanating from his office. The City Mayor informed Jadewell that the finalization of the MOA would be
subject to the appropriate action of the Sanggunian and the passage of an enabling ordinance.7

The two principal parties executed a Memorandum of Agreement (MOA) on 26 June 2000, whereby the City of
Baguio authorized Jadewell to regulate and collect parking fees for on-street parking in the city, as well as to
implement the installation of modern parking meters.

On 27 March 2000, respondent Sanggunian enacted City Ordinance No. 003, Series of 2000 (Ordinance No. 0032000) amending Ordinance No. 13, Series of 1983, outlining the rules and policy on the privatization of the
administration of on-street parking in the city streets of Baguio.8 For this purpose, the City of Baguio authorized the
intervention of a private operator for the regulation, charging and collection of parking fees and the installation of
modern parking meters, among others.

The legal disputes embodied in the nine Petitions began when the Sangguniang Panlungsod of Baguio City
(Sanggunian) revoked the MOA through City Resolution No. 037, Series of 2002 (Resolution 37), alleging substantial
breach of the MOA on the part of Jadewell. Then Mayor Alfredo Vergara vetoed the Resolution. The Sanggunian
Panlungsod overrode the veto through an unnumbered Resolution dated 17 April 2002. These twin Resolutions
constitute what we call here as the first act of Rescission1 of the MOA by the city officials of Baguio. Jadewell denied
the breach and commenced an action before the Regional Trial Court (RTC) of Baguio,2questioning the validity of the
MOAs revocation and the Sanggunians capacity to pass a resolution revoking the MOA.
There was a second act of rescission that the city officials of Baguio performed in 2006, the circumstances of which
will be narrated later on.
While the main case was under litigation, and then under appeal, the parties filed contempt charges against each
other. Six of these cases are part of the consolidated Petitions before us.
These nine highly-voluminous cases, however, all boil down essentially to just these five sets of legal questions
requiring resolution:
(a) The validity or invalidity and legal efficacy of Saggunians two distinct acts of rescission of the MOA;
(b) The duty of a trial judge to dismiss a case assailing the validity of the MOA and the city resolution
approving it in view of the pendency of the various petitions before this Court;
(c) the liability of : (i) respondent city officials of Baguio, for various counts of indirect contempt of this
court, (ii) some respondents, who are lawyers at the same time, for acts that require the disciplinary action
of disbarment, (iii) respondent Judge Pamintuan, for taking cognizance of a civil case allegedly in defiance
of this Courts authority;
(d) the validity of the administrative suspension of one of the respondents herein, former Mayor Braulio
Yaranon, by the Office of the President in relation to his acts of non-recognition of the MOA; and
(e) the nullification of certain acts of officials of Baguio City directed against Jadewell pursuant to their
belief that the latter had no authority to continue implementing the terms of the MOA.
THE ANTECEDENT FACTS
On 1 March 1999, Jadewell proposed the privatization3 of the administration of on-street parking in Baguio City using
Schlumbergers DG4S Pay and Display Parking Meter (hereinafter "DG4S P&D"), which it touted as "technologically
advanced, up to the level of more progressive countries and which would make the city as the first and only city in
the Philippines, if not in Asia, to have metered parking as an important part of its traffic and parking system." 4
Respondent Sanggunian acted favorably on the proposal.5 On 31 May 2000, it passed Resolution No. 159, Series of
1999, authorizing the City Mayor of Baguio to negotiate and enter into a Memorandum of Agreement with Jadewell
for the installation of its proposed DG4S parking technology.6

On 10 April 2000, the City Legal Officer of Baguio City advised the City Mayor that the project for the regulation of
on-street parking and installation of parking meters was not an infrastructure. Hence, the project was not covered by
the Build-Operate-Transfer Law9 and did not require publication of a notice for its validity.10
Nevertheless, for the sake of transparency, the City Legal Officer recommended the publication of the appropriate
notice on the project and an invitation to bid. An invitation to bid for the proposed regulation of on-street parking and
installation of parking meters on Baguio Citys streets was published in the Philippine Daily Inquirer on 8, 9 and 10
May 2000. Four interested bidders submitted their proposals, but three were disqualified. The bid of Jadewell was
the only one not disqualified; hence, it was awarded the project.11
On 26 June 2000, the MOA was finally executed between Jadewell and the City of Baguio through its then City
Mayor, Mauricio G. Domogan for the installation, management and operation of the DG4S P&D parking meters. 12
On 17 July 2000, the Sanggunian confirmed the MOA through its Resolution No. 205-2000.13
On 31 August 2000, the parties executed a supplemental MOA to include the Ganza/Burnham parking space, owned
by the Philippine Tourism Authority and managed by the City of Baguio, in the project.14 This supplemental
agreement was neither confirmed nor ratified by the Sanggunian.
In September of 2000, Jadewell began to mobilize and take over the parking facilities at the Ganza/Burnham Park
area.15 Around this time, questions arose regarding the compliance by Jadewell with the provisions of the MOA,
notably on matters such as obtaining the recommendation from the Department of Public Works and Highways
(DPWH) for the installation of the parking meters and the legality of the collection of parking fees being done by its
parking attendants prior to the installation of the parking meters at Burnham Park.16
On 20 December 2000, Jadewell wrote then Vice-Mayor Daniel T. Farias to inform him of the progress of the
deputization by the Department of Transportation and CommunicationsLand Transportation Office (DOTC-LTO) of
parking attendants required for the implementation of the MOA. Jadewell explained that they were still working on
the required deputization of Jadewells parking attendants. Nevertheless, it claimed that its parking attendants were
authorized to collect parking fees pending the actual installation of the parking meters. It also claimed that the
parking meters had not yet been installed because the necessary civil works were yet to be completed. 17
Shortly thereafter, a case was filed by Edgar M. Avila, et al. with the RTC-Baguio City (Branch 61), assailing
Ordinance No. 003-2000 as unconstitutional and seeking to restrain the City Government of Baguio from
implementing the provisions of the MOA. It further alleged that the City Government could not delegate the
designation of pay parking zones to Jadewell, that the parking attendants deployed by Jadewell were not deputized,
and that the questioned ordinance creates class legislation as the designated taxi and jeepney stands were
discriminatorily removed. The case was docketed as Civil Case No. 4892-R.18 This was dismissed on motion by
Jadewell joined by the City Government of Baguio. The lower court declared that Ordinance No. 003-2000 is
constitutional and that all acts emanating from it are deemed "reasonable and non-discriminatory...having been
enacted in accordance with the powers granted to Baguio City by law." 19 Complainants Motion for Reconsideration
(MR) was denied.

On 24 August 2001, Edgar Avila, et al., filed a Rule 65 Petition for Certiorari, Prohibition and Mandamus with the
Supreme Court assailing the RTCs dismissal of their Complaint. The case was docketed as G.R. No. 149642. On 10
October 2001, this Court issued a Resolution dismissing the petition of Avila, et al. for failure to state in their petition
the material dates when they received the appealed resolution and order, and to append the original or certified true
copies of the questioned resolution and order subject of their petition.20 There was no resolution on the merits. The
Resolution became final and executory on 2 April 2002.21
A case was also filed by Nelia G. Cid against then Mayor Bernardo Vergara, et al. when her vehicle was clamped,
towed away, and impounded by Jadewell after the latter found her car to be illegally parked. She refused to pay the
corresponding fees to Jadewell and as a result, the latter refused to release her vehicle. 22 Cid filed a case for replevin
and questioned the validity of Ordinance No. 003-2000 and the MOA, as well as the authority of Jadewell to clamp
down/tow away vehicles whose owners refuse to pay parking fees. The case was docketed as Civil Case No. 5165-R
and was assigned to Branch 7 of RTC-Baguio. On 24 May 2002, an Omnibus Order was issued by this RTC that
addressed several pending incidents related to the authority of Jadewell to clamp down/tow away vehicles. The
Omnibus Order upheld Jadewells authority to retain the vehicle of petitioner Nelia G. Cid pending her payment of the
parking and towage fees to Jadewell, and held that the authority of Jadewell was lawfully provided in Ordinance No.
003-2000 and the MOA. Also, the RTC-Baguio took cognizance of the ruling by this Court in G.R. No. 149642 which,
in its mistaken view, upheld the validity of the questioned ordinance and the MOA. 23
Ultimately, Jadewell was able to install no more than 14 parking meters in three (3) areas of Baguio City: six (6) on
Session Road, five (5) on Harrison Road and three (3) on Lake Drive.24 At the time that these meters were installed,
there were already verbal complaints being raised against Jadewell by the Sanggunian for the following alleged
violations:
a. Failure to install parking meters for each parking space as specified in Section 3-F of Ordinance No.
003-2000;25
b. Failure to install a convenient and technologically advanced parking device that is solar-powered and
can measure the time a vehicle stays in a parking slot;26
c. Failure to give the City of Baguio the latter's share of the collected parking fee;27
d. Failure to post a performance bond in the amount of P1 million after its previous bond expired.28
The Sanggunian passed Resolution No. 395, Series of 2000, directing Jadewell to comply with its obligations under
the MOA for the installation of the necessary number of parking meters.29
On 15 March 2001, Jadewell wrote to the City Mayor in response to the mentioned Resolution, informing the said
office that the former had started operation of the off-street parking on 2 December 2000 and of the on-street parking
on 15 December 2000.30 On 27 January 2001, Jadewell also wrote the City Treasurer that the former had completed
installation of the parking meters.31
In response to the letter of Jadewell, the City Treasurer demanded the remittance of Baguios share of the parking
fees collected by Jadewell since it started operations. Jadewell responded by saying that it had complied with this
obligation.32
On 19 February 2002, the Sanggunian passed Resolution 37,33 expressing its intent to rescind the MOA with
Jadewell. The said Resolution enumerated in the "Whereas" clauses the alleged violations of Jadewell prompting it
to rescind the MOA. It reads:
xxxx

WHEREAS, it now appears from verified facts that:


1. contrary to its commitment to install a technologically based P & D parking system, at no cost to the City,
including "such equipment and paraphernalia to meter the length of usage of the affected parking spaces
for purposes of payment of the parking fees", Jadewell has installed only fourteen (14) parking meters
(only 12 of which are working) in only three (3) streets, and Jadewell does not intend to install anymore
[sic]; instead it has resorted as a rule to an exceptional circumstance of manual collection of parking fees
by parking attendants who, despite express provisions of the Ordinance, are not duly deputized by the
DOTC-LTO. Despite assurances to the Honorable City Mayor that Jadewell would stop collection of
parking fees until the parking meters have been duly installed, Jadewell continues to collect parking fees
manually by using undeputized parking attendants to do the collection;
2. contrary to its commitment to install a technologically based P & D parking system, at no cost to the City,
Jadewell has charged the cost of such and similar equipment as direct costs, thus substantially eroding the
share of the City in the parking fees;
3. contrary to its obligation to post a performance bond, Jadewell has not fully complied, and when
required to update its performance bond Jadewell refused to do so rationalizing its non-compliance by the
assertion that they are already performing and therefore are no longer obligated to post a performance
bond;
4. contrary to its obligation to remit the share of the City within the first ten (10) days of the following
month, Jadewell had initially resisted making payments to the City on the pretext that the profits cannot be
determined until after the end of the fiscal year and initially failed to have their tickets pre-numbered and
registered with the Office of the City Treasurer;
5. contrary to its promise that the City would derive substantial revenue from the on-street pay parking
system, Jadewell has not paid a single centavo of the City share in on-street parking operation; whatever
Jadewell has remitted to the City are properly chargeable against the share of the City in the MOA on offstreet parking (the Burnham Parking Area near Ganza), and it appears less than what the City is entitled
thereto; and
6. contrary to its representations that the P & D System which it proposed would eliminate fraud in the
collection of parking fees, Jadewell has perpetrated fraud on the City by, according to the affidavit of its
former bookkeeper, Mr. Adonis Cabungan, doctoring the financial statements before the same are
submitted to City authorities.34
WHEREAS, there has been no substantial improvement of the traffic situation in the City even with the introduction of
the P & D Parking System and thus it increasingly appears that the system introduced by Jadewell is more for
revenue raising than for regulatory purposes. As a consequence the legal principle applies that the collection of taxes
cannot be let to any person. In other words, government cannot allow private persons to collect public funds for
themselves with the agreement that part thereof or as it turned out in this case no part thereof is shared with the City;
WHEREAS, in its financial reports to the City showing substantial loses [sic] and in its statement to other persons
that it is losing money on the project, the kindest thing that the City can do for Jadewell is to prevent Jadewell from
incurring anymore [sic] loses.
NOW THEREFORE, on motion of Hon. Bautista, and Hon. Cario, seconded by Hon. Yaranon, Hon. Weygan and
Hon. Tabora, be it RESOLVED, as it is hereby resolved, to rescind the Memorandum of Agreement (MOA) executed
between the City of Baguio and Jadewell Parking System Corporation dated 26 June 2000 on the basis of the
foregoing premises and exercising its rights under Section 12 of the MOA on the subject of On-Street Parking
executed between the City of Baguio and Jadewell Parking Systems Corporation dated 26 June 2000 and, more
importantly, performing its duty to protect and promote the general welfare of the people of Baguio City.

RESOLVED FURTHER, to direct the City Legal Officer to cause the proper notice of rescission to Jadewell Parking
Systems Corporation forthwith and to take all appropriate steps to implement and enforce the intent of this
Resolution.
RESOLVED FURTHERMORE, to inform all City officials and employees and all other persons concerned to be
guided accordingly.35
On 1 March 2002, the then City Mayor of Baguio, Bernardo M. Vergara, vetoed Resolution 37, through a letter dated
1 March 2002 addressed to the Vice-Mayor, as Presiding Officer of the Sanggunian, and its members. Mayor
Vergara reasoned that it was premature for the Sangguniang Panlungsod to rescind the MOA, because the latter
provides for a minimum period of five years before the right of rescission can be exercised; and, that the right of
Jadewell to due process was violated due to the lack of opportunity to hear the latters side. The City Mayor
proposed a re-negotiation of the MOA with Jadewell as a solution to the problem.36
Meanwhile, on 13 March 2002, the DOTCCordillera Autonomous Region (DOTC-CAR) issued a cease and desist
order to Jadewell prohibiting it from clamping down and/or towing away vehicles in Baguio City for violation of traffic
rules and regulations.37
On 17 April 2002, the Sanggunian resolved through a Resolution of the same date, to override the veto of the City
Mayor, worded thus:
NOW THEREFORE, the Sangguniang Panlungsod (City Council) in Regular Session assembled, by twelve
affirmative votes constituting more that [sic] a two-thirds vote of all its Members, has resolved to override, as it
hereby overrides, the veto of His Honor, Mayor Bernardo M. Vergara, of City Resolution Numbered 037, Series of
2002, entitled "Rescinding the Memorandum of Agreement (MOA) Executed Between the City of Baguio and
Jadewell Parking Systems Corporation Dated 26 June 2000."38
Also at this time, Braulio D. Yaranon, who was then a member of the Sanggunian, requested a special audit from the
Commission on AuditCordillera Autonomous Region (COA-CAR) on the operations of Jadewell as regards the pay
parking project embodied in the MOA.
On 27 May 2002, Jadewell filed with the RTC of Baguio City a Rule 65 Petition for Certiorari, Prohibition and
Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction, assailing the validity of Resolution No.
037-2002, which rescinded the MOA between the Sangguniang Panlungsod and Jadewell. 39 The case was docketed
as Civil Case No. 5285-R and was raffled off to RTC-Baguio (Branch 61).
On 8 October 2002, the RTC Br. 61 promulgated its Decision40 finding the Sanggunians rescission of the MOA
unlawful. The Sanggunian then filed an appeal assailing the RTCs decision with the Court of Appeals; the case was
docketed as CA-G.R. SP No. 74756.
Meanwhile, pending resolution of CA-G.R. SP No. 74756 before the CA, the Sanggunian passed Resolution No. 089,
Series of 2003. The resolution sought the assistance of the DOTC-CAR specifically, for it to take immediate action
against the officers and personnel of Jadewell for defying the 13 March 2002 cease-and-desist Order it issued
prohibiting the latter from clamping down and/or towing away vehicles. 41 On 27 May 2003, City Mayor Vergara
approved and signed Resolution No. 089-2003. In response, Jadewell filed a Petition for Indirect Contempt with the
CA against Mayor Vergara, the Sanggunian and other local government officers. The case was docketed as CA-G.R.
SP No. 77341. The original petition was followed by three (3) supplemental petitions filed by Jadewell in the same
case.
42

On 7 July 2003, the CA rendered a Decision in CA G.R. SP No. 74756, affirming the assailed Decision of the trial
court which declared as invalid the Sanggunians rescission of the MOA. The Sanggunian filed a Motion For
Reconsideration, but this was denied by the CA through a Resolution dated 4 September 2003.43 Aggrieved by the
denial of their appeal, the Sanggunian filed a Rule 45 Petition for Review on Certiorari with this Court, seeking to

reverse and set aside the 7 July 2003 Decision and its Resolution dated 04 September 2003 of the CA. The petition
was docketed as G.R. No. 160025, the first of the consolidated petitions herein.44
In CA-G.R. SP No. 77341, the CA dismissed in a Decision45 promulgated on 28 July 2004 the contempt petitions filed
by Jadewell for lack of merit. The latters Motion For Reconsideration was likewise denied by the CA. 46Jadewell
elevated the dismissal of its contempt petitions to this Court on 8 December 2004 by filing a Rule 45 Petition for
Review on Certiorari. The case was docketed as G.R. No. 166094. This is not among the consolidated petitions
herein.
On 13 July 2003, the COA-CAR promulgated the requested Report.47 The Reports objective was to ascertain
compliance by the contracting parties the City of Baguio and Jadewell with Ordinance No. 003-2000 and the
MOA. The COA-CAR Report has 12 findings, essentially as follows:
1) The provisions of the MOA and its Supplement as regards the sharing of the fees are contradicting,
hence the share of the City Government cannot be determined;48
2) There was no proper segregation by area of the parking fees collected, hence the proper share of
Baguio City cannot be determined;49
3) The City Government did not strictly implement the collection of penalties arising from the late
remittances of Jadewell, hence additional revenues were not collected;50
4) The City Treasurer did not conduct an audit of the books and accounts of Jadewell, thus the City
Governments share from parking fees cannot be ascertained;51
5) The use of the P&D parking meters were [sic] not maximized due to Jadewells non-compliance with
Ordinance No. 003-2000 and the MOA, resulting in the collection of meager income from its use;52
6) The MOA does not specify the guidelines for determining the economic viability of installing the parking
meters and the period within which to install it [sic];53
7) The Supplemental MOA was not confirmed by the City Council of Baguio in violation of R.A. No. 7160
(the Local Government Code);54
8) The coverage of the parking operations contained in Annex "A" of the MOA was not confirmed by the
City Council in violation of R.A. No. 7160;55
9) The City Government failed to ensure proper compliance by Jadewell with the MOA provisions; 56
10) The pay parking project was awarded to a bidder who did not have all the qualifications as stated in the
"Invitation to Bid" in violation of R.A. No. 7160 and Audit Circular No. 92-386;57
11) The provisions on deputization in Ordinance No. 003-2000 and the MOA are contrary to R.A. No. 4136
(the Land Transportation and Traffic Code), thus rendering it invalid;58
12) The monthly minimum amount to be remitted to the City Government is doubtful due to the
discrepancy in the amounts collected and expenses for the year 1999 provided by the City Government to
Jadewell as against the amount certified by the Office of the City Architect and Parks SuperintendentBurnham Parks Office for the City Government overseeing the Ganza-Burnham parking spaces.59

On 11 February 2004, after G.R. No. 160025 was filed and pending resolution by this Court, the Sangguniang
Panlungsod adopted Resolution No. 056, Series of 2004. The said Resolution informs the general public that
Jadewell had neither the authority nor the police power to clamp, tow, or impound vehicles at any place in the City of
Baguio.60 Also, on the same date, the Sangguniang Panlungsod passed Resolution No. 059, Series of 2004, in which
it made a formal demand upon Jadewell to restore to it possession of the Ganza Parking Area. 61
With these developments, Jadewell filed directly with this Court its first indirect contempt case against Bernardo M.
Vergara (then City Mayor of Baguio), its Vice-Mayor, and the entire City Council for enacting Resolution Nos. 056 &
059, Series of 2004 pending resolution by this Court of G.R. 160025. The case was docketed as G.R. No. 163052.

In addition to Executive Order No. 005-2004, Mayor Yaranon issued Executive Order No. 005-2004-A, which is
essentially a rehash of Executive Order No. 005-2004.70
On 25 October 2004, Jadewell filed a third Petition with this Court, praying that Mayor Yaranon be cited for contempt
and that Executive Order No. 005-2004 be nullified.71 This case was docketed as G.R. No. 165564. On 16 November
2004, Jadewell filed a Supplemental Petition to this Petition alleging as a supplemental ground the issuance of
Executive Order No. 005-2004-A.72

On 23 June 2004, this Court through its First Division, ordered G.R. No. 163052 consolidated with G.R. No.
160025.62

On 20 December 2004, Mayor Yaranon issued Administrative Order No. 622, Series of 2004, which declared that
Jadewell exceeded its area of operations for the administration of on-street parking and was thus required to show
lawful cause why its business permit should not be revoked. In response to this Order, Jadewell filed a Second
Supplemental Petition for contempt against Mayor Yaranon in G.R. No. 165564 on 25 January 2005.

On 1 July 2004, then Baguio City Mayor Braulio D. Yaranon issued Executive Order No. 001-04,63 the decretal
portion of which reads:

On 10 January 2005, this Court through a Resolution73 ordered the consolidation of G.R. No. 160025 with G.R. Nos.
163052, 164107, and 165564.

NOW, THEREFORE, the undersigned City Mayor, pursuant to his authority to enforce all laws and ordinances
relative to the governance of the City, and to issue executive orders for the faithful and appropriate enforcement and
execution of such laws and ordinances (Sec. 455 (b) (2) and (iii), R.A. 7160) hereby affirms and gives protection to
the right of the citizenry, particularly affected motor vehicle owners, operators, and drivers, to refuse to submit to the
enforcement of Ordinance 003-2000, by the Jadewell Parking Systems Corporation, and further to refuse to pay
public revenue in the form of fees, charges, impositions, fines, and penalties provided for in the said ordinance, to
the said entity, such acts being patently illegal and prohibited by law; this Executive Order shall be in force and effect
until the City Council, as the legislative arm of the City of Baguio, shall have adopted appropriate remedial or
corrective measures on the matters and concerns specified hereinabove.

On 17 January 2005, this Court denied Jadewells petition in G.R. No. 166094 for failure to show any reversible error
on the part of the CA in dismissing its petition for contempt in CA-G.R. SP No. 77341.74 Its Motion For
Reconsideration was likewise denied with finality.75

On 8 July 2004, Mayor Yaranon issued a Memorandum64 to the City Director of the Baguio City Police Department,
directing the department to stop and prevent Jadewell from clamping, towing, and impounding vehicles; to arrest and
file criminal charges against Jadewell personnel who would execute the proscribed acts specified in the said
Memorandum; and to confiscate the equipment used by Jadewell to clamp, tow, or impound vehicles under the
authority of the rescinded MOA.
On 12 July 2004, Jadewell filed its second Petition for indirect contempt again with this Court, this time against
Mayor Yaranon for having issued the above-cited Order also for the same reasons given in its first contempt petition
with this Court. The Petition was docketed as G.R. No. 164107.
Furthermore, on 15 July 2004, Jadewell filed an administrative case against Mayor Yaranon before the Office of the
President (OP). Docketed as Case No. OP 04-G-294, it sought the mayors suspension and removal from office. The
case against Mayor Yaranon was for his issuance of the following: (1) Executive Order No. 001-04 dated 1 July
2004; (2) the Memorandum dated 7 July 2004 limiting the pay parking business of Jadewell to certain parts of Baguio
City;; and (3) Memorandum dated 8 July 2004 directing the Baguio City Police Department to prevent Jadewell from
apprehending, towing and impounding vehicles. A supplemental petition filed by Jadewell on 19 January 2005,
complaining of Executive Order No. 005-2004, which was issued on 15 October 2004, was also included in
administrative case OP 04-G-294.
On the following day, 16 July 2004, Jadewell filed a Supplemental Petition with Motion for Leave of this Court 65 in the
second contempt petition before this Court, G.R. No. 164107, alleging as a supplemental fact, Mayor Yaranons
Memorandum of 08 July 2004.
On 15 October 2004, Mayor Yaranon issued Executive Order No. 005-2004.66 This was a cease and desist order
against Jadewell to prevent it from performing the following acts: (1) charging and collecting from motorists, parking
fees without their consent;67 (2) seizing and detaining vehicles of motorists who refuse to pay parking fees to
Jadewell;68 and (3) using yellow-colored heavy wreckers or tow trucks bearing the name "City of Baguio".69

In the beginning of the year 2005, Jadewell attempted to renew its business permit from the City of Baguio and
tendered the fees required. However, the Office of the City Mayor refused to renew the business permit and returned
the amount tendered.76 Because of these actions of Mayor Yaranon, Jadewell filed on 15 April 2005 its Third
Supplemental Petition in G.R. No. 164107, which had been consolidated with G.R. Nos. 160025, 163052, and
165564. Aside from its main prayer to cite the mayor for contempt, Jadewell also prayed that Mayor Yaranon, a
lawyer, be disbarred.77 On 25 April 2005, this Court, through its Third Division, admitted the Third Supplemental
Petition of Jadewell.78
On 9 February 2005, this Court, in G.R. No. 160025, issued a Writ of preliminary mandatory injunction ordering
Mayor Yaranon to immediately reopen the streets and premises occupied and/or operated by Jadewell. The Court
also required Jadewell to post a cash or surety bond in the amount of P100,000 within five days from receipt of the
order.79
The order, in part, reads:
Acting on the urgent motion dated January 26, 2005 of respondent Jadewell Parking Systems Corporation for the
issuance of a temporary mandatory/preventive order and/or for writ of preliminary mandatory/prohibitory injunction
pending appeal in G.R. No. 160025, alleging that the effects of the acts of City Mayor Yaranon, unless stayed, would
also make effective what the petitioner Sangguniang Panglungsod ng Baguio failed to obtain in the instant case, the
net effect of which would not only be grave damage and injury to the respondent but also to the City of Baguio, the
Court further Resolved:
(a) to ISSUE, the WRIT OF PRELIMINARY MANDATORY INJUNCTION prayed for, effective immediately,
commanding City Mayor Yaranon to immediately reopen the streets and/or premises operated and/or
occupied by the respondent and to let them remain open, until further orders of this Court; and
(b) to require petitioner to POST a CASH BOND or a SURETY BOND from a reputable bonding company
of indubitable solvency in the amount of ONE HUNDRED THOUSAND PESOS (P100,000.00), with terms
and conditions to be approved by the Court, within five (5) days from notice, otherwise, the writ of
preliminary mandatory injunction herein issued shall AUTOMATICALLY be lifted.

NOW THEREFORE, You, [City Mayor Braulio D. Yaranon], your agents, representatives and/or any person or
persons acting upon your orders or in your place or stead, are hereby DIRECTED to IMMEDIATELY REOPEN the
streets and/or premises operated and/or occupied by the respondents and to let the said streets and premises
remain OPEN, until further orders from this Court.
On 8 April 2005, Mayor Yaranon issued a Memorandum80 directing Col. Isagani Nerez, Director of the Baguio City
Police District, to create a special task force to stop Jadewell from clamping, towing, and impounding vehicles in
violation of parking rules in Baguio City; to impound the wrecker/tow trucks used by Jadewell.
On 20 April 2005, this Court promulgated a Resolution in G.R. No. 160025, finding Mayor Yaranon guilty of direct and
indirect contempt. He was cited for direct contempt when it was proven that he had submitted pleadings before this
Court containing falsehoods. Mayor Yaranon had stated in his Compliance that the streets were opened for Jadewell
to resume operations, but upon inspection these were found to be closed.81 He was also cited for indirect contempt,
for having continuously refused to carry out the writ issued by this Court to reopen the streets so Jadewell could
resume operations.82 This Court likewise fined Mayor Yaranon the amount of P10,000, which he paid. The Court
further ordered the National Bureau of Investigation (NBI) to immediately arrest and detain Mayor Yaranon pending
his compliance with the 9 February 2005 writ of preliminary mandatory injunction issued by this Court, which ordered
the reopening of some streets so Jadewell could continue its operations.83
On 10 August 2005, Benedicto Balajadia, et al. filed Civil Case No. 6089-R against Jadewell before the RTCBaguio
City. The case was subsequently raffled to Branch 3 of the RTC presided by Judge Fernando Vil
Pamintuan.84 Balajadia, et al. sought to nullify the MOA between Jadewell and the City Government of Baguio and its
enabling ordinance, Ordinance No. 003-2000. The complainants also prayed for the issuance of a Temporary
Restraining Order (TRO) and for a writ of preliminary injunction against Jadewell.
On 19 April 2006, Judge Pamintuan issued an Order in Civil Case No. 6089-R granting the prayer of complainants
Balajadia et al. for the issuance of a Writ of Preliminary Prohibitory Injunction. The injunction was meant to restrain
Jadewell from proceeding with the supervision and collection of parking, towing, and impounding fees on the streets
of Baguio City. Further, Judge Pamintuan ordered the holding in abeyance of the implementation of City Ordinance
No. 003-2000 and the MOA.85
On 27 April 2006, Jadewell filed with this Court a Rule 65 Petition for Certiorari, Prohibition, and Mandamus against
Judge Pamintuan86 for refusing to dismiss Civil Case No. 6089-R. The case was docketed as G.R. No. 172215. On
the same day, Jadewell filed a Petition asking this Court to cite Judge Pamintuan for contempt. This fourth contempt
case, albeit primarily against a member of the judiciary, was docketed as G.R. No. 172216.
On 19 June 2006, G.R. No. 172215 was ordered consolidated with G.R. Nos. 160025, 163052, 164107, and
165564.87
On 23 June 2006, Mayor Yaranon wrote Jadewell a letter demanding that it desist from operating the pay parking
system in Baguio City. Simultaneously, he wrote the Sanggunian, requesting it to cancel Ordinance No. 003-2000,
the enabling ordinance for the MOA.
On 26 June 2006, Jadewell filed a Supplemental Petition88 in G.R. No. 172215 complaining of Judge Pamintuans
issuance of the following Orders in Civil Case No. 6089-R: (a) Order dated 24 April 2006 89 directing the parties to file
a pre-trial brief and setting the pre-trial of the case; (b) Order dated 01 June 200690 informing Jadewell that public
respondent was not suspending the proceedings, because he believed he was not covered by the writ issued by this
Court; (c) Order dated 14 June 200691 upholding the writ he issued in the civil case despite his receipt of a copy of
the writ of preliminary injunction issued by this Court; and (d) Order dated 16 June 2006 92directing Jadewell to
comply with the writ of preliminary prohibitory injunction under pain of direct contempt.
On the same day, 26 June 2006, the Office of the President (OP) rendered a Decision in OP 04-G-294, the
administrative case Jadewell had filed against Mayor Yaranon, finding him guilty of grave misconduct, abuse of
authority, and oppression. Mayor Yaranon was meted out a penalty totalling 12 months suspension from office. 93This

suspension was implemented by the Department of Interior and Local Government (DILG). Aggrieved by his
suspension, Mayor Yaranon filed his Motion For Reconsideration, which was denied on 22 August 2006 by the OP.
On 29 June 2006, in response to Mayor Yaranons letters of 23 June 2006, Jadewell filed before this Court yet
another case for contempt its fifth contempt case, and the third one specifically against Mayor Yaranon. In addition
to its prayer to cite the mayor for contempt, Jadewell also prayed that Mayor Yaranon, a lawyer, be disbarred. 94 The
case was docketed as G.R. No. 173043.
On 31 July 2006, G.R. No. 173043 was ordered consolidated with G.R. Nos. 160025, 163052, 164107, 165564, and
172215.95 On 27 September 2006, G.R. No. 172216 was consolidated with G.R. Nos. 160025, 163052, 164107,
165564.96
On 23 August 2006, while the consolidated cases were pending resolution before this Court, the Sangguniang
Panlungsod enacted Resolution No. 204, Series of 2006. The Resolution directed the City Legal Officer to notify
Jadewell of the Baguio City Governments intention to rescind the MOA, and to inform Jadewell to stop its operations
under the MOA 60 days after receipt of the Notice.97
On 28 August 2006, the legal counsel for Jadewell wrote to Baguio City Vice-Mayor Bautista, Jr., informing him that
the OP had denied the Motion for Reconsideration of Mayor Yaranon assailing the OP resolution ordering the latters
suspension as City Mayor of Baguio City.98 The counsel for Jadewell likewise stated in his letter that they were aware
that the Sanggunian was planning to issue a resolution to repeal Ordinance No. 003-2000 and rescind the MOA. The
letter requested the Vice-Mayor to veto the measure in light of the pending petitions with the Supreme Court.99 The
said counsel likewise sent a similar letter to the Sanggunian, urging it to desist from implementing the repeal of
Ordinance No. 003-2000 and the rescission of the MOA pending the resolution of the cases with the Supreme
Court.100
On 13 September 2006, Mayor Yaranon appealed to the CA, in a case docketed as CA G.R. CV SP No. 96116,
praying for the lifting of the penalty of suspension meted him in OP 04-G-294, but this appeal was denied. Mayor
Yaranon moved for reconsideration.101
On 22 September 2006, City Legal Officer Rabanes wrote a letter to Jadewell, through its President, Mr. Rogelio Tan,
informing Jadewell of Resolution No. 204, Series of 2006, which rescinded the MOA, and ordering it to stop
operations within 60 days from notice.102 This letter was received on the same day it was issued;103 hence, the 60day period lapsed on 22 November 2006. This notice, together with the resolution, constitute the second act of
rescission of the MOA by the city officials of Baguio.
On 19 October 2006, Jadewell filed the sixth contempt case with this Court against the acting City Mayor of Baguio,
Reinaldo A. Bautista, Jr., and the members of the Sanggunian, including City Legal Officer Melchor Carlos R.
Rabanes, for the second act of rescission of the MOA.104 The case was docketed as G.R. No. 174879.
On 9 October 2007, the CA dismissed Mayor Yaranons Petition in CA G.R. CV SP No. 96116 on the ground that it
had become moot and academic due to Mayor Yaranons failure to be re-elected in the 17 May 2007 elections.
Mayor Yaranon filed a Motion for Reconsideration on 07 November 2007, but this was also denied by the CA on 24
January 2008. Thus, on 17 March 2008, Mayor Yaranon filed a Rule 45 Petition before this Court seeking to reverse
and set aside the CA Decision and Resolution. It was docketed as G.R. No. 181488.
On 12 November 2008, G.R. No. 181488 was ordered consolidated with the cases already mentioned.105
THE ISSUES
1. On G.R. No. 160025 and on the
claim in G.R. No. 174879 that the second

act of rescission was a valid act of


rescission.
Whilst the issues are spread out among the nine cases, we have grouped these according to what are common to
the specific cases.
In our effort to simplify the issues and provide forms of relief to the parties that are not purely academic, it is
necessary to examine the operative effects that may result from any resolution of this Court. Such examination may
also help guide the parties in their future actions, and perhaps the overly-litigated matters brought before us in the
consolidated petitions may finally be put to rest.
We note at the outset that on 22 November 2006, 60 days had lapsed from receipt of the letter dated 22 September
2006, informing Jadewell of the decision of the City of Baguio to rescind the MOA under Section 12 thereof. It may
be recalled that Section 12 requires that notice of the intention to rescind be given 60 days prior to the effectivity of
the rescission. Jadewell has not questioned the legal efficacy of this notice. It has brought this matter of a second
rescission to the Courts attention only as a matter of contumacious behavior on the part of the respondents in G.R.
No. 174879, in the same way that it brought various actions of the public respondents before the Court in its other
contempt petitions. Since the legal efficacy of the rescission in 2006 has not been contested by Jadewell in any of
the petitions before us, we thus consider this notice of rescission to have taken legal effect and therefore, at the
latest, the MOA between the City of Baguio and Jadewell has ceased to legally exist as of 22 November 2006.
Parenthetically, we note that while the validity of the second act of rescission described in G.R. No. 174879 is not
principally determinative of the respondents liability for indirect contempt therein, a conclusion that the second act of
rescission was undertaken competently and appropriately will to a certain degree impact our appreciation of such
possible liability. We will discuss this issue in our subsequent discussion on the charges of contempt.
Inasmuch as there is no longer any existing MOA, no order of this Court can have the effect of directing the City of
Baguio to enforce any of the terms of the MOA, which brings us to the matter of G.R. No. 160025. In whatever
direction we rule on the question of the validity of the first act of rescission, such ruling will only have the effect of
either providing Jadewell a basis to seek damages from the City of Baguio for the wrongful termination of the MOA,
should we find wrongful termination to have taken place, or, deny Jadewell that right. The possible susceptibility of
the City of Baguio and its officials to an action for damages on a finding of wrongful termination is why we do not
consider G.R. No. 160025 as having been rendered moot by the lawful rescission of the MOA on 22 November 2006.
Thus, we will proceed to rule on the issues in G.R. No. 160025.
The fallo of the RTC Decision upheld by the CA, which affirmance is the lis mota in G.R. No. 160025, reads as
follows:
WHEREFORE, judgment is rendered declaring both Sangguniang Panlungsod Resolution No. 037, Series of 2002
and the April 17, 2002 Resolution overriding the Mayors veto as NULL and VOID. The Writ of Preliminary Injunction
earlier issued by this Court is made PERMANENT, with costs against respondents. 106
The RTC did not order the respondents therein to comply with the MOA. An order to perform a contract is not
necessarily subsumed in an order not to terminate the same.
Contrast this legal point with the fact that the prayer of Jadewell in its original petition asked the RTC, in relevant
part:
...that the writ of preliminary injunction be made permanent and the writs applied for be issued against the
respondents nullifying and voiding Resolution No. 037, series of 2002 and the resolution over-riding the veto and
instead, directing them to perform what the memorandum of agreement requires them to do. (Emphasis supplied) 107

This latter part, which is effectively a prayer for a permanent mandatory injunction against respondents therein to
perform the terms of the MOA, are not in the fallo of the RTC decision. We consider therefore that the RTC
deliberately withheld granting the specific prayer to order Baguio City to perform the MOA. No motion to correct or
clarify the said fallo having been filed by Jadewell, the prayer to order the city officials of Baguio to perform the MOA
is hereby deemed abandoned.
We further note three things:
1. Jadewell has not questioned - in its Petition, Reply to Comment, and Memorandum before this Court the implication of the RTC and CA Decisions to the effect that the Sanggunian had the authority to perform
acts of contractual rescission on behalf of the City of Baguio when both these courts ignored the issue
raised by Jadewell in its Petition before the RTC, and we therefore do not consider this to be a genuine
issue in this Petition before us;
2. While the Sangguniang Panlungsod has insinuated that there was fraud and excess of authority on the
part of the mayor in the execution108 of the MOA - because the latter provided for a smaller sharing of "20
% from the gross profit of the operation or 50% of the net profit whichever is higher" instead of the
intended "20% of gross receipts,"109- petitioners in G.R. No. 160025 conceded even at the RTC level that
they are not assailing the MOA for being defective but for having been breached in the performance. We
thus disregard all arguments in G.R. No. 160025 regarding the validity of the execution of the MOA, for
being a non-issue in this case;110
3. We also immediately set aside claims of Jadewell in its Petition before the RTC that an alternative relief
should be provided by the courts in the form of compensation for terminated Build-Operate-Transfer (BOT)
contracts under the BOT Law (Republic Act No. 6957) as there is not the slightest basis on record that the
administration of on-street parking can be classified as an infrastructure contract, a basic element that
must be present for any contract to come within the terms of the BOT Law.
Having preliminarily screened out the non-issues in this case, we proceed to examine the rulings of the courts a quo
in G.R. 160025.
The CA affirmed the RTC Decision in toto, along the following points:
1. On the sole procedural issue. - The RTC was correct in treating the Petition as one for permanent
injunction with a prayer for a preliminary injunction, instead of treating it by its formal title: "Petition for
Certiorari, Prohibition and Mandamus with a Prayer for a Writ of Preliminary Injunction." It was correct in
holding that if the Petition had been treated by its formal denomination, then it would have been dismissed
for failing to satisfy the requirement that the act sought to be nullified was rendered in a judicial or quasijudicial capacity by the respondents, but then this formal denomination could be disregarded and the
nature of the Petition should be determined by its allegations and prayers. Since there was a prayer to
permanently enjoin respondents from enforcing the questioned resolutions, the RTC was correct in treating
it as one for permanent injunction.
2. On the substantive issues:
a. On the lack of due process afforded Jadewell. The RTC was correct in ruling that Jadewell
was denied the right to be heard before the Sanggunian rescinded the MOA. There is no
evidence on record that the Sanggunian afforded Jadewell an opportunity to present its side or
refute the charges of the latters violation committed under the MOA. 111
b. On the authority of the RTC to consider the effect of Section 9 of the MOA112 when Jadewell
never raised the matter of Section 9 in any of its pleadings. The RTC correctly considered
Jadewells letter dated 24 November 2001, addressed to the Sanggunian and offered during the

trial, which introduced the subject matter of the five (5) year guarantee against rescission
provided in Section 9 of the MOA. The CA regarded the RTCs consideration of said letter as
judicious and added that even without it, the MOA, and its provisions, form part of the case
records.113
c. On the failure to observe the 60-day notice requirement. The RTC correctly found that the
Sanggunian cannot validly and unilaterally rescind the MOA without observing the provisions in
Section 12 of the MOA requiring that a 60-day notice be given before rescission can take place.
To allow the Sanggunian to unilaterally rescind the MOA without giving Jadewell an opportunity
to present its side is to render the right to rescission provided in the MOA legally vulnerable. 114
d. On the lack of substantiveness of the alleged breach of performance of the MOA by Jadewell.
The CA reviewed the records of the case and upheld the findings of the RTC that the violations
of Jadewell were not substantial to merit the consequence of rescission under the MOA.115
We elucidate on the arguments of the parties, the RTC, and the CA.
In its Petition before the RTC, Jadewell argues that the rescission of the MOA was not valid, on due process
grounds, and also because there was no substantial breach on its part to justify a rescission of the MOA. 116 It also
asserts that the Sanggunian had no authority to rescind the MOA, because the latter was not a party thereto.117
Jadewell sought a writ of preliminary injunction to prevent the implementation of the questioned Resolution, and
prayed that after hearing, the preliminary injunction be made permanent. It further prayed for the issuance of a writ of
certiorari to nullify the assailed Resolution; and for a mandatory injunction to compel the City Government to perform
the latters obligations under the MOA.118 Jadewell alternatively invoked the provisions of Section 18 of the
Implementing Rules and Regulations (IRR) of the BOT Law,119 in the event the RTC would uphold the validity of the
questioned Resolution.
The trial court ruled that the rescission violated the due process clause of the Constitution and failed to meet the
requirements for rescission under the Civil Code and the MOA itself. In the Sanggunians Memorandum, on appeal
before the CA, the Sanggunian assigned three errors to the Decision of the trial court: (1) the RTC ignored the
evidence on record and the requirements of Rule 65 when it declared the subject Resolution void; (2) Jadewell was
not denied due process when the MOA was rescinded; and (3) by ruling that the Sangguniang Panlungsod had no
right of rescission for the first 5 years of the MOA an issue not raised in the pleadings the trial court improperly
took up the cudgels for Jadewell in the case.120
As earlier stated, the CA upheld the RTCs Decision in toto.
The Sanggunian filed its Motion for Reconsideration arguing that the CA had erred as follows: (1) treating Jadewells
petition as an original action for injunction;121 (2) ruling that Jadewell was deprived of due process122when it rescinded
the MOA; and (3) finding that the MOA stipulated for a five-year minimum guarantee against rescission. 123 This was
denied, and this denial and the CA Decision are the subjects of G. R. 160025.
2. G.R. No. 172215 Certiorari,
Prohibition and Mandamus, filed by
Jadewell against Judge Pamintuan
for not dismissing Civil Case No. 6089-R
Jadewell directly filed the instant Rule 65 Petition for Certiorari before this Court to nullify the denial by the trial court
of its Motion to Dismiss and its Motion for Reconsideration of the same order,124 and for ordering Jadewell to cease
collecting parking fees, and from towing and impounding vehicles on the streets of Baguio City. It also seeks to nullify
the proceedings in Civil Case No. 6089-R, invoking both res judicata and litis pendentia. 125 It contends that, since the
issue on the validity of the questioned city ordinance and the MOA was favorably ruled upon previously by RTC

Branches 7 and 61 of Baguio City in separate cases, Branch 3 of the same RTC presided by Judge Pamintuan is
bound by the rulings of the other branches.126 Litis pendentia is being invoked in relation to the petitions already
before this Court.
Mayor Yaranon is impleaded in this case on the basis of the order of Judge Pamintuan to the city mayor to perform
his duty to supervise the roads, streets and park of Baguio City, in coordination with the police and the LTO during
the validity of the Writ of Injunction that Judge Pamintuan issued.127
The main issue to be resolved in Jadewells Petition for certiorari is whether Judge Pamintuans rulings in Civil Case
No. 6089-R violated the res judicata/litis pendentia doctrines.
3. G.R. No. 181488 The
Certiorari petition filed by Yaranon
seeking to reverse Resolutions dated
9 October 2008 and 24 January 2008
in CA-G.R. SP No. 96116 which
upheld the validity of his suspension
as City Mayor of Baguio.
Mayor Yaranons instant Petition before this Court raises the following issues: (1) that his failed re-election bid was
not a supervening event in the final determination by the CA of whether he was guilty of grave misconduct, abuse of
authority, and oppression; and (2) that the CA should rule on the substantive validity of his suspension.
4. The Petitions for Contempt
a. G.R. No. 163052 This is the first contempt petition filed by Jadewell directly with this Court against City Mayor
Vergara, the Vice Mayor, and the entire Sanggunian, for enacting Resolution Nos. 056 & 059, Series of 2004. To
recall, Resolution No. 056, Series of 2004 informs the general public that Jadewell had neither the authority nor the
police power to clamp, tow or impound vehicles at any place in the City of Baguio.128 In Resolution No. 059, Series of
2004, the City of Baguio made a formal demand upon Jadewell to surrender the Ganza and Burnham Park Parking
Areas within thirty days. In the same Resolution, the City of Baguio also directed the City Legal Officer to file the
appropriate legal actions necessary to recover the said parking areas and to ask for damages against Jadewell. 129
The core issue to be resolved in this case is whether the Sanggunian Panlungsod is guilty of indirect contempt for
enacting the above resolutions, pending resolution of G.R. No. 160025.
b. G.R. No. 164107 This contempt petition was filed directly with this Court against then Baguio City Mayor Braulio
D. Yaranon after he issued Executive Order No. 001-04 announcing that, as City Mayor, he would give protection to
motor vehicle owners, operators, and drivers who would refuse to submit to the enforcement of traffic rules by
Jadewell such as by refusing to pay the parking fees or fines the latter imposes.
Yaranon also issued a Memorandum dated 8 July 2004, ordering the arrest and filing of criminal charges against
Jadewell personnel who would clamp, tow, or impound motor vehicles in defiance of Executive Order No. 001-04.
This was followed by a Memorandum on 8 April 2005 directing the Baguio City Police District to create a special task
force to prevent Jadewell from clamping, towing, and impounding vehicles found to be in violation of the parking
rules in Baguio City.
The issue to be resolved in this petition is whether Mayor Yaranon could be cited for contempt for the above, pending
resolution of the issue of the validity of the rescission of the MOA in G.R. Nos. 160025 and 163052.
c. G.R. No. 165564 Jadewell filed this third contempt petition against Mayor Yaranon for issuing Executive Order
No. 005-2004 dated 15 October 2004. The order directs Jadewell to cease and desist from: (a) charging and

collecting parking fees on the streets of Baguio City without the consent of the City Government; 130 (b) seizing and
detaining vehicles of motorists who refuse to pay the parking fees to Jadewell131 and (c) using yellow-colored tow
trucks bearing the name "City of Baguio".132 Jadewells petition also seeks to nullify Executive Order No. 005-2004.

judicial or quasi-judicial functions; (b) that such tribunal, board, or officer has acted without or in excess of jurisdiction
or with grave abuse of discretion; and (c) that there is no appeal nor any plain, speedy and adequate remedy in the
ordinary course of law.138

On 16 November 2004, Jadewell filed a Supplemental Petition. The act complained of this time was the issuance of
Executive Order No. 005-2004-A which is a mere rehash of Executive Order No. 005-2004.133 On 25 January 2005,
Jadewell filed a Second Supplemental Petition in connection with Mayor Yaranons issuance of Administrative Order
No. 622, Series of 2004. The said administrative order declared that Jadewell exceeded its area of operations for the
administration of on-street parking and it required to show lawful cause why its business permit should not be
revoked.

The CA nevertheless proceeded to treat the Petition as an original action for injunction, ruling in this wise:

Like in the earlier contempt petitions, Jadewell alleges that these issuances by Mayor Yaranon are contumacious
because they were made while the main petition, G.R. No. 160025 questioning the rescission of the MOA by the
Sanggunian, is still pending resolution with this Court.
d. G.R. No. 172216 On 27 April 2006, Jadewell filed a petition for contempt against Judge Fernando Vil Pamintuan,
Presiding Judge of RTC-Branch 3 of Baguio City, in relation to Civil Case No. 6089-R pending before his sala. 134 In
the said civil case, Judge Pamintuan issued an Order directing Jadewell to desist from the collection of parking fees,
from towing and impounding vehicles on the streets of Baguio City and to hold in abeyance the implementation of
City Ordinance 003-2000 and the MOA. The validity of the Order of Judge Pamintuan is the subject of a Petition for
Certiorari, Prohibition, and Mandamus instituted by Jadewell in G.R. No. 172215.

xxxx
Although in the trial court, Jadewell filed said petition for Certiorari, Prohibition and Mandamus under Rule 65, it is
essentially one for Injunction under Rule 58. Said petitions form and substance satisfied all the requirements of a
civil action for Injunction, which is the proper remedy under the attendant circumstances.
The rules of procedure ought not to be applied in a very rigid technical sense, rules of procedure are used only to
help secure, not override substantial justice. If a technical and rigid enforcement of the rules is made, their aim would
be defeated.
Considering the clear and patent denial of due process committed by the Sanggunian in precipitately rescinding the
MOA and in the interest of substantial justice, WE deem it more prudent to treat the petition filed below as an action
for Injunction under Rule 58, which is well within the jurisdiction of the trial court. Consequently, the present appeal
shall be considered as an appeal from the permanent injunction ordered by the trial court, which is properly
appealable to this Court, as held in Casilan vs. Ybaez.139

The main issue to be resolved in this case is whether Judge Pamintuan should be cited for indirect contempt by this
Court for issuing the assailed Orders.
e. G.R. No. 173043 On 29 June 2006, Jadewell filed yet another contempt case against Mayor Yaranon. In addition
to its prayer to cite him for contempt, Jadewell also prays that Mayor Yaranon, as a lawyer, be disbarred. 135 Jadewell
instituted this fifth contempt case after it received a letter from Mayor Yaranon demanding that it stop its business
operations in Baguio City, at the same time directing the Sangguniang Panlungsod to cancel Ordinance 003-2000.
The issue to be resolved in this case is whether Mayor Yaranon was guilty of indirect contempt and professional
misconduct for the above acts pending resolution of G.R. Nos. 160025, 163052,164107, 165564 and 172215.136
f. G.R. No. 174879 - On 19 October 2006, Jadewell filed a contempt case against the acting City Mayor of Baguio,
Reinaldo A. Bautista, Jr., and the members of the Sangguniang Panlungsod, including City Legal Officer Melchor
Carlos R. Rabanes, in connection with the second act of rescission.137 Jadewell also asks that the respondents who
are lawyers, namely: Rocky Thomas A. Balisong, Edilberto B. Tenefrancia, Faustino A. Olowan, Federico J.
Mandapat, Perlita L. Chan-Rondez, and Jose M. Molintas, be disbarred.
These acts, in Jadewells view, are contumacious in light of the pending G.R. No. 160025 before this Court.
OUR RULINGS
1. On G.R. No. 160025
a. On the Treatment of
Jadewells Petition as one for
Permanent Injunction.
The CA sustained the position of the Sanggunian that certiorari could not prosper because when the latter enacted
Resolution 37, the Sanggunian was exercising its legislative function and not its judicial or quasi-judicial function. The
writ of certiorari under Rule 65 requires: (a) that it is directed against a tribunal, a board or an officer exercising

xxxx
We sustain the ruling of the appellate court treating Jadewells original action for certiorari as one for injunction based
on the allegations in the latters pleadings.
In Ramon Jimenez, Jr. v. Juan Jose Jordana,140 the issue to be resolved was whether the nature of the action was
one for specific performance or for recovery of real property. In determining that the case was one for the recovery of
real property, the Court characterized the suit on the basis of the allegations in the Complaint. We restated the rule
that the nature of an action is determined by the material averments in the complaint and the character of the relief
sought. In the recent case of Reyes v. Alsons Development and Investment Corporation,141we likewise ruled that the
nature of an action is determined by the allegations in the pleadings.
In Lee, Jr. v. Court of Appeals,142 the controversy to be resolved was whether the appeal filed by the petitioner was
one under Rule 65 or Rule 42. The determination of the issue was crucial, because the appellate court had
dismissed the appeal of the petitioner, saying that the wrong mode of appeal had been used. The CA had ruled that
petitioner should have filed a certiorari petition under Rule 65 instead of a petition under Rule 42 to appeal the
assailed decision rendered by the RTC in the exercise of its appellate jurisdiction.
We held:
Our perusal of the petition filed before the Court of Appeals clearly shows that it is a petition for review under Rule
42, and not a special civil action for certiorari under Rule 65. We note that in the Court of Appeals petition, under the
heading "Nature of the Petition," petitioner stated that it was a "petition for review on certiorari to set aside, invalidate
and reverse the Decision dated December 14, 2001 of public respondent Judge Victor T. Llamas, Jr." Also, the
reversal sought was premised on the ground that the decision was issued in gross error. The statement under the
heading "Nature of the Petition" that the trial courts decisions were issued with grave abuse of discretion amounting
to lack of jurisdiction, and even the caption impleading the lower courts, would not automatically bring the petition
within the coverage of Rule 65. It is hornbook doctrine that it is not the caption of the pleading but the allegations
therein that determine the nature of the action. (Emphasis supplied)

In the original action filed by Jadewell before the RTC of Baguio City, although the action was clearly denominated as
a Petition for Certiorari, Prohibition and Mandamus against the Sangguniang Panlungsod, the allegations actually
supported an action for injunction under Rule 58 of the Revised Rules on Civil Procedure. As can be gleaned from its
allegations and especially in its prayers, Jadewell filed the case with the trial court with the ultimate end of restraining
the implementation of Resolution No. 037, Series of 2002.
We agree with the CA when it ruled that Jadewell sought permanent injunction aside from the auxiliary remedy of
preliminary injunction, thus:
An action for injunction is a recognized remedy in this jurisdiction. It is a suit for the purpose of enjoining the
defendant, perpetually or for a particular time, from committing or continuing to commit a specific act, or compelling
the defendant to continue performing a particular act. It has an independent existence. The action for injunction is
distinct from the ancillary remedy of preliminary injunction, which cannot exist except only as part or an incident of an
independent action or proceeding.143 xxxx...
In Garcia v. Adeva,144 this Court had the opportunity to clarify that while injunction can be a provisional remedy, it can
also be a main case. The Court had to make this preliminary distinction in order to find out whether the SEC had the
jurisdiction to prevent, on a permanent basis, the commission of certain acts by the respondents. Thus, the necessity
to make the distinction between injunction as a provisional remedy and injunction as a main case. It found guidance
from Garayblas v. Atienza, Jr.,145 and quoting from the latter:
Injunction is a judicial writ, process or proceeding whereby a party is ordered to do or refrain from doing a certain act.
It may be the main action or merely a provisional remedy for and as an incident in the main action. The Court has
distinguished the main action for injunction from the provisional or ancillary remedy of preliminary injunction, thus:
The main action for injunction is distinct from the provisional or ancillary remedy of preliminary injunction which
cannot exist except only as part or an incident of an independent action or proceeding. As a matter of course, in an
action for injunction, the auxiliary remedy of preliminary injunction, whether prohibitory or mandatory, may issue.
Under the law, the main action for injunction seeks a judgment embodying a final injunction which is distinct from,
and should not be confused with, the provisional remedy of preliminary injunction, the sole object of which is to
preserve the status quo until the merits can be heard. A preliminary injunction is granted at any stage of an action or
proceeding prior to the judgment or final order. It persists until it is dissolved or until the termination of the action
without the court issuing a final injunction.
We, therefore, rule that the CA did not commit any error in treating Jadewells Petition for Certiorari as an original
action for injunction.

Both courts held that Jadewell was denied due process. When the denial of due process argument is raised, it is
directed primarily against the exercise of governmental authority that "deprives life, liberty and property" without
observance what is, in the circumstances, the applicable standards of "due process." It is not an argument that is
relevant in situations of contractual breach between two purely private entities, nor is it available against the
government when the latter is not discharging a governmental function, but merely pursuing a purely commercial
activity in a proprietary capacity. In order to consider the due process argument, this Court must first determine
whether the MOA was entered into by the City of Baguio in a governmental capacity, or in a purely proprietary
capacity.
The regulation of on-street and off-street parking is a governmental function that can be exercised by local
governments. It is important to understand the objective of the Baguio City Government in: (1) privatizing the
administration of on-street and off-street parking; and (2) its execution of a MOA with Jadewell. This can be gleaned
from the Explanatory Note and other provisions of the agreement, to wit:
The City of Baguio has earned the reputation of the CLEANEST AND GREENEST HIGHLY URBANIZED CITY for
the previous years. This has become possible due to the collective effort of both the Citizens of Baguio and the City
Government. However, the increase in population, volume of vehicles and the absence of a regulatory measure to
address this concern gradually tainted what used to be a reputation we were proud of.
The ever increasing problems, specifically those relevant to the Traffic situation is at this point the biggest contributor
to environmental degradation. Other Salient points we must consider relevant to this matter are the problems on
OBSTRUCTION AND DOUBLE PARKING which are very rampant. We further add to these the problems on
DISORGANIZED PARKING, LACK OF DEPUTIZED AGENTS to monitor, supervise and enforce traffic rules and
regulations.
At this point in time, we feel the immediate need of focusing on these problems. There is an urgent need to adopt
measures that would alleviate these matters. This we recommend that PARKING SPACES should be REGULATED
in such a manner that it would bring advantage both to the City Government and the Citizens of Baguio. We further
propose the collection of REGULATORY FEES that would be used in maintaining our roads and to hire people that
would de deputized to help ease the problems as stated above.
Finally, we believe that our roads are beyond the Commerce of Man. To convert our roads into PAY PARKING
SPACES, would be violative of this principle. However to REGULATE its use and its eventual effect would redound to
the GENERAL WELFARE will be an appreciated gesture to help preserve our image as the CLEANEST AND
GREENEST HIGHLY URBANIZED CITY.
xxxx

b. On the denial of due process.


The second issue in this Petition is the correctness of the CAs ruling that Jadewell was deprived of due process
when the Sangguniang Panlungsod rescinded the MOA. The findings of the CA are as follows:
In the instant case, evidence on record does not show that before the Sanggunian passed the disputed Resolution it
gave Jadewell an opportunity to present its side. Neither did the Sanggunian convene an investigatory body to
inquire into Jadewells alleged violations nor at least invite Jadewell to a conference to discuss the alleged violations,
if only to give Jadewell the chance to refute any evidence gathered by it against the latter. As it is, the Sanggunian
arrogated upon itself the role of a prosecutor, judge and executioner in rescinding the MOA, all in clear violation of
Jadewells constitutionally embedded right to due process.146

SECTION 4. Parking spaces. A parking place may be divided into parking spaces and for the purposes of this
Ordinance, each space or for a number of spaces as determined by the private parking operator in consultation with
the concerned Official of the City of Baguio.
xxxx
SECTION 5. Prohibitions against parking outside the parking spaces. No spaces shall park any motor vehicle on the
sidewalk or cause or permit any motor vehicle to wait to any road or length of road on which in any place in which or
adjacent to or in close proximity to which there is a parking place.
xxxx

x x x.
SECTION 7. Payment of Prescribed Charges. (1) No person shall park any motor vehicle in a parking place or
parking space during the times specified in this Ordinance without paying the prescribed charge for the required

parking period; (2) The prescribed charge payable in respect to the parking of a motor vehicle in a parking space
shall be paid by the insertion into the parking meter provided for that parking space a coin/coins of Philippine
Currency or by using cards in order to obtain the payment ticket to evidence the payment of the prescribed charge;
(3) The payment ticket shall be displayed at a conspicuous part of a motor vehicle in a parking place or parking
space; (4) The payment ticket shall be valid to be used on any parking space within the authorized period indicated
in the payment ticket.
xxxx
SECTION 22. Rules. The Memorandum of Agreement (MOA) to be entered into by the City Mayor shall be governed
by this Ordinance.
From the above, the following are clear: (1) that the City of Baguio decided on the privatization of the administration
of parking for environmental and peace and safety reasons, both of which are within its powers under Section 458(A)
(5)(v) and (vi) of the Local Government Code; and (2) that the terms of agreement between the City of Baguio and
Jadewell involve the delegation of governmental functions in terms of regulating the designation and use of parking
spaces as well as the collection of fees for such use. These are indicators that any privatization contract pursuant to
the above Resolution takes the essential character of a franchise because what is being privatized is a governmentmonopolized function.
It would thus be relevant to ask if there is a provision in the applicable laws or the franchise (MOA) that grants the
City of Baguio the right to revoke the latter either at will, or upon the satisfaction of certain conditions, such that
ordinary due process protection can be considered to have been waived by the franchisee. We must caution that
when we refer to revocation at will here, we are referring to the revocation of resolutory, not suspensive,
obligations.147
We have looked closely at Resolution No. 003-2000 and the MOA and have additionally reflected on the applicable
provision under the Civil Code. We have come to the conclusion that:
(a) There is only one provision that allows for unilateral revocation of the MOA, which can be found in
Section 9 thereof:
9. Minimum Guaranty The FIRST PARTY guaranties (sic) a minimum period of five (5) years against
rescission; provided that after such period, the parties may agree to increase to a reasonable rate the
parking fees and the share of the city from the parking fees collected as provided for in the guidelines,
(Annex "B");
(b) This Section 9 requires that five years must have lapsed presumably from the date of execution of the
MOA before the unilateral right to revoke the MOA can be exercised;
(c) Therefore, before the five year period has lapsed, the right to revoke the MOA arises only under Article
1191 of the Civil Code, which reads:
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance
with Articles 1385 and 1388 and the Mortgage Law.
From the above, it appears that in order to effect a valid revocation of the MOA prior to the lapse of the 5-year period
provided for in Section 9, the City of Baguio had to approach the problem from one or both of two perspectives: one,
negotiate the termination of the MOA with Jadewell, or two, exercise its option under Article 1191 of the Civil Code.
The first option, a negotiated pretermination of the contract, is an inherent right of every party in a contract. This can
be inferred from the freedom of the parties to contract and modify their previous covenants provided it would not be
contrary to law, morals, good customs, public order or public policy.148 Despite the provision on the minimum
warranty against rescission stipulated in the MOA, the parties were not constrained to mutually modify such
restriction. The Sanggunian could have proposed to Jadewell the possibility of lifting the warranty against rescission
subject to the condition that the latter will comply with its obligations under the MOA.
This scenario could have impressed upon Jadewell that its contractual relations with the city government of Baguio
were less than ideal. The suggested approach for the Sanggunian could have been legally sound and practical.
Obviously, this was not done in this case; thus, Jadewells Complaint before the RTC of Baguio City.
The second option is the exercise of the unilateral right to rescind a bilateral contract on the part of a party who
believes that it has been injured by a breach substantial enough to warrant revocation. Where one party allegedly
failed to comply with his obligations under a contract, the injured party may rescind the obligation if the other does
not perform or is not ready and willing to perform.149 We will examine the acts of Baguio City in relation to what is
allowed under Article 1191.
Rescission under Article 1191 takes place through either of two modes: (1) through an extrajudicial declaration of
rescission; or (2) upon the grant of a judicial decree of rescission.
Extrajudicial declaration of rescission is recognized as a power which does not require judicial intervention. 150 If the
rescission is not opposed, extrajudicial declaration of rescission produces legal effect151 such that the injured party is
already relieved from performing the undertaking.152
However, the power of declaring extrajudicial rescission conferred upon the injured party is regulated by the Civil
Code. If the extrajudicial rescission is impugned by the other party, it shall be subject to a judicial
determination153where court action must be taken, and the function of the court is to declare the rescission as having
been properly or improperly made, or to give a period within which the debtor must perform the obligation alleged to
be breached.154 A unilateral cancellation of a contract may be questioned in courts by the affected party to determine
whether or not cancellation is warranted.155 Thus, in an extrajudicial decree of rescission, revocation cannot be
completely exercised solely on a partys own judgment that the other has committed a breach of the obligation 156but
always subject to the right of the other party to judicially impugn such decision.
It is important to contextualize that the agreement entered into by the City of Baguio with Jadewell is the embodiment
of a grant of franchise imbued with public interest and is not merely an agreement between two private parties.
It is our view that the first act of rescission by the City of Baguio may be valid even if there is a stipulation against it
within the first five years of the MOAs existence. Article 1191 of the New Civil Code provides a party the right to
rescind the agreement and clearly overrides any stipulation to the contrary. However, the grounds that would serve
as basis to the application of the said article must be clearly established.
In the exercise of this option under Article 1191, was it necessary for the City of Baguio to provide Jadewell an
opportunity to air its side on the matter before the former implemented the rescission of the MOA? In the instant
case, was Jadewell deprived of procedural due process?

We answer in the negative. We disagree with the rulings of the RTC and the CA that Jadewell was deprived of due
process. In Taxicab Operators of Metro Manila v. The Board of Transportation,157 we confronted the issue of whether
the petitioners were denied procedural due process when the respondent Board of Transportation issued a circular
ordering the phasing out of old vehicles to be used as taxicabs. In the said case, the phase-out was embodied in a
circular that was promulgated without holding a public hearing or at least requiring those affected to submit their
position papers on the policy to be implemented. We held for the respondent Board, and ruled in this wise:
Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process.
As held in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):
Previous notice and hearing as elements of due process, are constitutionally required for the protection of life or
vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or
quasi-judicial proceeding, generally dependent upon a past act or event which has to be established or ascertained.
It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class or
persons or enterprises, unless the law provides otherwise.
In the instant case, the assailed act by the Sanggunian Panlungsod in rescinding the MOA be it first or second act
of rescission was clearly in the exercise of its legislative or administrative functions and was not an exercise of a
judicial or quasi-judicial function. The Sanggunian Panlungsod does not possess any judicial or quasi-judicial
functions. The preamble of the MOA lends support to this view. Evidently, the foremost reason why the agreement
was entered into by the parties was to provide order, given Baguio Citys parking problems in identified areas, as well
as to generate income.
The objectives of the Sanggunian Panlungsod, as well as its intention to rescind the MOA; because it deems to no
longer serve the interest of the City of Baguio, are clearly an exercise of its legislative or administrative function.
However, it is another matter as to whether the City of Baguio was able to clearly establish the grounds as basis for
the exercise of its right to rescind.
c. On the allegation of Jadewells
substantial breach of the MOA.
The Baguio City government has repeatedly mentioned that Jadewell had so far installed only 14 parking meters,
with only 12 functioning. The COA-CAR Report dated 13 July 2003 enumerated 12 findings, 158 a majority of which
indicates that Jadewell was remiss in the fulfilment of its obligations under the MOA. While Finding Nos. (1), (2), (3),
(4), (5), (8) and (12) of the COA-CAR Report state that Jadewell collected parking fees, Jadewell failed to properly
remit the same. Finding No. (11) of the COA-CAR Report states that Jadewell failed to have its parking attendants
deputized,159 a condition under the MOA that is also important to the overall objective of the endeavor.
The MOA does not specifically provide for the exact number of parking meters to be installed by Jadewell pursuant to
the parties objective in regulating parking in the city. Nevertheless, 100 parking spaces were allotted as mentioned in
Annex A of the MOA.160 The agreement also obligates Jadewell to have its parking attendants deputized by the
DOTC-LTO so that they shall have the authority to enforce traffic rules and regulations in the regulated areas. 161 To
the Courts mind, these are two of the most important obligations that Jadewell had to comply with, considering the
nature and objective of the agreement it had entered into.
Despite the enumeration of the above-mentioned faults of Jadewell, we do not make a categorical finding that there
was substantial breach committed by Jadewell to justify a unilateral rescission of the MOA. We find, however, that
the RTC had not properly received evidence that would allow it to determine the extent of the claimed violations of
the MOA. Had these violations by Jadewell been proven in a proper hearing, the finding of a substantial breach of
the MOA would have been a distinct probability.
Unfortunately, neither the RTC nor the CA provided a clear basis for their rulings on the extent of the breach of the
MOA by Jadewell. Save from reiterating the Sanggunians litany of violations said to be committed by Jadewell, there

was no testimony on record to prove such facts and no indication as to whether the RTC or CA dismissed them or
took them at face value.
Whatever the extent of breach of contract that Jadewell may have committed and the enumeration of Jadewells
alleged faults in Resolution 37 is quite extensive the City of Baguio was still duty-bound to establish the alleged
breach.
Matters became complicated when the RTC and the CA lumped the issues on the due process violation of Baguio
City with Jadewells alleged substantial breaches under the MOA, instead of making a clear finding on the existence
and extent of such breach. The facts and legal issues were thus muddled.
We find fault in the lower and appellate courts lapse in examining the issue on Jadewells alleged substantial breach.
Evidence-taking had to be undertaken by these courts before they could arrive at a judicial conclusion on the
presence of substantial breach.
We thus DENY the Petition of the Sanggunian Panlungsod in G.R. No. 160025 and AFFIRM the questioned CA
Decision. However, we reject the ruling made by the appellate court that the violations of Jadewell under the MOA
were not substantial. We hold that there is no sufficient evidence on record to make such determination.
While Jadewell prays for damages against the public respondent, and while ordinarily we could grant the same, the
context of this case prevents us from giving any form of recompense to Jadewell even if the rescission of the MOA
did not follow the required legal procedure. This is because it would be appalling to grant Jadewell any award of
damages, considering (1) it installed only 14 out of the apparently 100 contemplated parking meters; (2) its
employees, private citizens who did not possess any authority from the LTO, were manually collecting parking fees
from the public, and (3) it did not, apparently properly remit any significant amount of money to the City of Baguio.
These three facts are uncontested, these omissions are offensive to the concept of public service that the residents
of Baguio were promised through Jadewell. From its ambiguous responses extant in the records, it is clear that
Jadewell does not appear to be an investor who has lost in its investments in the Baguio City project. Thus, we do
not award any damages to Jadewell.
2. On G.R. Nos. 163052, 164107,
165564, 172216, 173043 and 174879
(The Contempt Petitions)
Section 3 of Rule 71 of the Revised Rules of Civil Procedure enumerates the acts constituting indirect contempt,
thus:
(a) Misbehavior of an officer of a court in the performance of his official duties or in his official transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court, including the act
of a person who, after being dispossessed or ejected from any real property by the judgment or process of
any court of competent jurisdiction, enters or attempts or induces another to enter into or upon such real
property, for the purpose of executing acts of ownership or possession, or in any manner disturbs the
possession given to the person adjudged to be entitled thereto;
(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting
direct contempt under Section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration
of justice;
(e) Assuming to be an attorney or an officer of a court, and acting as such without authority;

(f) Failure to obey a subpoena duly served;


(g) The rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an
order or process of a court held by him.
But nothing in this section shall be so construed as to prevent the court from issuing process to bring the respondent
into court, or from holding him in custody pending such proceedings.
The rule alerts us to three possible situations, wherein, in the context of the facts of these petitions, contumacious
behaviour could have been committed by public respondents. First, disobedience or resistance to a lawful order of
this Court under paragraph (b). Second, unlawful interference with the proceedings of this Court under paragraph (c).
Third, improper conduct tending, directly or indirectly, to impeded, obstruct, or degrade the administration of justice
by this Court under paragraph (d).
Jadewell, in G.R. Nos. 163052, 164107, 165564, 172216, 173043, and 174879, bases its charges of indirect
contempt against public respondents on a claim that any action that tends to stop the implementation of the MOA is
contumacious. Such actions include desistance orders to desist against Jadewell itself, the second act of unilateral
rescission of the MOA; orders to other public officers to prevent Jadewell from exercising its authority under the
MOA; and the official encouragement for motorists to resist attempts of Jadewell to collect parking fees or clamp/tow
vehicles that do not observe the parking regulations.
We find scant jurisprudence to guide us on this matter. The closest situation is that presented in Southern
Broadcasting Network v. Davao Light and Power,162 penned by Justice Felix Makasiar. In that case, petitioners
representative, Carmen Pacquing, wrote a letter to President Marcos asking for his intervention so that her Motion
for Reconsideration (MR) of the resolution of this Court denying her Petition could be favorably granted. Respondent
Davao Light asked that petitioner Pacquing be cited for contempt, arguing that her act in writing to the President
asking him to intervene in the case showed disrespect to and disregard for the authority of this Court as the final
arbiter of all cases. We found petitioner Pacquing guilty of contempt, thus:

on 9 February 2005 is directed to Mayor Yaranon only, and it directs him to perform only one specific act: to reopen,
and maintain open, the street and premises then being occupied and operated by Jadewell.
Mayor Yaranon did not immediately comply with this WPMI. Thus, this Court fined him P10,000 on 20 April 2005, and
ordered the NBI to arrest him if he further failed to comply with the WPMI. Subsequently, Mayor Yaranon paid the
fine, and there is nothing on record to show that he has, since April of 2005, further defied this Court on that score.
The Court did not issue a WPMI specifically ordering the parties to observe the terms of the MOA. Thus, public
respondents were not expressly prohibited to act on their beliefs regarding the validity or invalidity of the MOA, or,
the authority or lack of authority of Jadewell personnel to perform governmental functions in the streets of Baguio.
This is an important result, because to hold otherwise is to effectively grant one of the parties a mandatory injunction
even without an express resolution to this effect from the Court. Without an express order, the pendency of a suit
before the Supreme Court is not a prima facie entitlement of provisional relief to either party.
Public respondents therefore were, at liberty to question and inform the public of their belief regarding the lack of
authority of Jadewell and its personnel to regulate public parking in Baguio. They were certainly free to formally write
Jadewell on their beliefs and pass the corresponding resolutions to this effect. The mayor was also not under legal
compulsion to renew Jadewells business permit in view of his opinion that Jadewell was exceeding its allowable
area of operation, which Jadewell was not able to fully disprove. This is especially true for two important reasons: (1)
there is an uncontested cease and desist order that was issued by the DOTC-CAR on 13 March 2002 which
Jadewell defied well into 2005, and (2) public respondents are city officials of Baguio who have the legal duty to
ensure the laws are being followed, including laws that define who may enforce regulations on public parking.
That Jadewell personnel do not have the legal authority to enforce regulations on public parking is categorical from
the Letter dated 1 February 2001 by the Regional Director of the DOTC-CAR denying the request of Jadewell for the
deputation of its personnel.163

x x x. WE hold that such actuation of herein petitioners representative only bespeaks more of her contumacious
attempt to trifle with the orderly administration of justice because if she know that this Court will ultimately decide the
case "regardless of the Presidents intervention," then she should have desisted from writing to the President.

We therefore do not find any of the public respondents who were then officials of the City of Baguio, liable for indirect
contempt, and thereby dismiss G.R. Nos. 163052, 164107, 165564, 173043 and 174879. In G.R. 174879, we have
already pronounced that the Sanggunian was within its full right to perform the second act of rescission, and thus, it
is even with more reason, that its members and the City Legal Officer cannot be held in contempt therefor. We deny
the prayer in the petitions to disbar the respondents therein who are lawyers.

In the light of the foregoing, there is no doubt that Mrs. Pacquing committed an "improper conduct tending, directly or
indirectly, to impede, obstruct, or degrade the administration of justice" (Section 3, par. [d] Rule 71, Rules of Court)
and impair the respect due to the courts of justice in general, and the Supreme Court, in particular.

We also do not find Judge Fernando Vil Pamintuan liable for contempt in G.R. No. 172216.

In the above case, respondent Carmen Pacquing was clearly asking the President to commit an improper act to
influence the Supreme Court that obstructs the orderly administration of justice, as the Court is constitutionally
required to act independently free from the promptings of the President. Pacquing clearly violated both Sections (c)
and (d) of Section 3, Rule 71.
No such similar situation occurred here. Public respondents never asked anyone to employ pressure or influence on
this Court for the formers benefit.
Instead, the acts that have been allegedly committed by public respondents are acts done pursuant to their belief
that: (a) the MOA has been validly voided, and more importantly, (b) that Jadewells personnel do not have the legal
authority to perform the governmental function of administering the regulation of on-street and off-street parking, of
towing or clamping vehicles that violate such regulation, and of collecting parking fees from motorists.
It is important to note that the Court never gave a mandatory injunction that is couched in a way that requires public
respondents to fully comply with the terms of the MOA. The writ of preliminary mandatory injunction (WPMI) issued

Jadewell wants this Court to cite Judge Pamintuan for contempt for issuing a writ of preliminary prohibitory injunction
ordering Jadewell to stop collecting parking fees; to refrain from supervising the parking in Baguio City; as well as to
hold in abeyance the implementation of the MOA and its enabling ordinance.164
It was only on 5 June 2006 that this Court, in G.R. No. 172215, issued a Temporary Restraining Order
(TRO)165directing the trial court to discontinue the proceedings in Civil Case No. 6089-R. Upon receipt by Judge
Pamintuan of the TRO, he immediately ordered the cancellation of the 29 June 2006 hearing.166
We do not consider the promulgation of the assailed writ of preliminary prohibitory injunction against Jadewell as a
defiance of our writ issued on 9 February 2005, considering, it was directed against Mayor Yaranon only. We have
held in Leonidas v. Supnet that "a party cannot be held in indirect contempt for disobeying a court order which is not
addressed to him."167 We note that Judge Pamintuan observed deference to the Orders of this Court when he
immediately suspended the proceedings in Civil Case No. 6089-R upon receipt of the TRO.
G.R. No. 172215

In this Petition for certiorari, prohibition, and mandamus under Rule 65 of the Rules of Civil Procedure, Jadewell
assails the Orders of RTC-Branch 3 (Baguio City) denying its motion to dismiss and motion for reconsideration in
Civil Case No. 6089-R.
We deny the petition of Jadewell in this case.
In Manuel Camacho v. Atty. Jovito Coresis, Jr.,168 we described the nature of special civil action for certiorari under
Rule 65, as follows:

had become moot and academic due to his non-re-election to office. The CA cited Crespo v. Provincial Board of
Nueva Ecija173 as basis for the dismissal.
For his part, Mayor Yaranon contends that the appellate court should have ruled on the validity of his suspension
from office despite his failure to get re-elected as City Mayor. He argues that he has the right to know whether his
suspension was valid or not and, in the event his suspension is declared invalid, Mayor Yaranon believes he is
entitled to the salaries and benefits accruing during the period he was suspended.
We deny the Petition of Mayor Yaranon.

A special civil action for certiorari under Rule 65 of the Rules of Court is an extraordinary remedy for the correction of
errors of jurisdiction. To invoke the Courts power of judicial review under this Rule, it must first be shown that
respondent tribunal, board or officer exercising judicial or quasi- judicial functions has indeed acted without or in
excess of its or his jurisdiction, and that there is no appeal, or any plain, speedy and adequate remedy in the
ordinary course of law. Conversely, absent a showing of lack or excess of jurisdiction or grave abuse of discretion
amounting to lack or excess of jurisdiction, the acts of the respondents may not be subjected to our review under
Rule 65.
In Indiana Aerospace University v. Commission on Higher Education,169 this Court ruled thus:
An order denying a motion to dismiss is interlocutory, and so the proper remedy in such a case is to appeal after a
decision has been rendered. A writ of certiorari is not intended to correct every controversial interlocutory ruling; it is
resorted to only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to lack of
jurisdiction. Its function is limited to keeping an inferior court within its jurisdiction and to relieve persons from
arbitrary acts -- acts which courts or judges have no power or authority in law to perform. It is not designed to correct
erroneous findings and conclusions made by the court.
In East Asia Traders, Inc. v. Republic of the Philippines, et al.,170 we decreed:
The petition for certiorari and prohibition filed by petitioner with the Court of Appeals is not the proper remedy to
assail the denial by the RTC of the motion to dismiss. The Order of the RTC denying the motion to dismiss is merely
interlocutory. An interlocutory order does not terminate nor finally dispose of the case, but leaves something to be
done by the court before the case is finally decided on the merits. It is always under the control of the court and may
be modified or rescinded upon sufficient grounds shown at any time before final judgment. This proceeds from the
courts inherent power to control its process and orders so as to make them conformable to law and justice. The only
limitation is that the judge cannot act with grave abuse of discretion, or that no injustice results thereby.
East Asia Trader also reiterated our ruling in Indiana Aerospace. Further, in Bonifacio Construction Management
Corporation v. Hon. Perlas Bernabe,171 we reiterated our rulings in East Asia Traders and Indiana Aerospace. We had
ruled in these earlier cases that an order of the trial court denying a motion to dismiss is an interlocutory order, and to
use a writ of certiorari to assail it is improper.
The procedural policy in the cited cases was again referred to in Bernas v. Sovereign Ventures, Inc., 172highlighting
the following:
Let it be stressed at this point the basic rule that when a motion to dismiss is denied by the trial court, the remedy is
not to file a petition for certiorari, but to appeal after a decision has been rendered. (Emphasis supplied)

The appeal of Mayor Yaranon has been rendered moot and academic. We hold that the resolution of the issue raised
herein would serve no practical purpose.
In Miriam College v. Court of Appeals,174 we ruled that a case becomes moot and academic when there is no more
actual controversy between the parties, or when no useful purpose can be served in passing upon the merits.
Further, courts will not determine a moot question in which no practical relief can be granted. 175
Mayor Yaranon has already served his suspension. We find no practical value in remanding his case to the appellate
court for the determination of the factual basis and legal issues of his appeal pertaining to the validity of his
suspension as then City Mayor of Baguio City.
We have held in Nicart, Jr. v. Sandiganbayan (Third Division), 176 that an issue becomes moot when a petitioner is not
entitled to substantial relief:
x x x [T]he propriety of the preventive suspension of petitioner effected through the assailed Resolution of February
15, 2001 has become a moot issue, it appearing that he has already served his suspension. An issue becomes moot
and academic when it ceases to present a justifiable controversy so that a determination thereof would be of no
practical use and value. In such cases, there is no actual substantial relief to which petitioner would be entitled to
and which would be negated by the dismissal of the petition.
We cannot sustain Mayor Yaranons argument that his appeal should not have been dismissed because, in the event
that the finding of the Office of the President to suspend him is reversed, he is still entitled to the salaries accruing
during the period he was suspended. We take note of the cases cited by Mayor Yaranon such as Crespo v.
Provincial Board of Nueva Ecija,177 Baquerfo v. Sanchez178 and Reyes v. Cristi,179 among others. These cases involve
substantial issues such as denial of due process and procedural irregularities other than a mere claim for
entitlement to salaries. The factual background and the legal issues for resolution in the cases mentioned are not
similar to the case at bar.
In Triste v. Leyte State College Board of Trustees180 the Court elucidated on the nature of the salary of a public
official:
Mechem states that "(l)ike the requirement of an oath, the fact of the payment of a salary and/or fees may aid in
determining the nature of a position, but it is not conclusive, for while a salary or fees are usually annexed to the
office, it is not necessarily so. As in the case of the oath, the salary or fees are mere incidents and form no part of the
office. Where a salary or fees are annexed, the office is often said to be coupled with an interest; where neither is
provided for it is a naked or honorary office, and is supposed to be accepted merely for the public good." (Emphasis
supplied)

G.R. No. 181488


The question of law raised by petitioner Yaranon in this Petition for Review on Certiorari is whether the CA correctly
dismissed his appeal questioning the validity of his suspension from office as City Mayor, on the ground that his suit

Given the circumstances of this case, we find that Mayor Yaranons claim for unpaid salaries, in case of exoneration,
does not constitute such substantial relief that would justify the revival of his appeal. Even if we did sustain his
Petition, we nevertheless find that it has been mooted by our resolution in the main petition.

WHEREFORE, we hereby rule as follows:


a.) In G.R. No. 160025, the Petition of the Sangguniang Panlungsod of Baguio City is DENIED. The CA
Decision dated 7 July 2003 in CA G.R. SP No. 74756 is hereby AFFIRMED with modification. There is not
enough evidence on record to conclude that Jadewells violations were sufficient to justify the unilateral
cancellation of the MOA by the Sangguniang Panlungsod of Baguio City; at the same time, neither the
RTC nor the CA provided a clear finding whether the breach of the MOA by Jadewell was substantial. We
affirm the CA as to the rest of its dispositions in its assailed Decision. Nevertheless, no award of damages
is hereby made in favour of Jadewell and neither is there any pronouncement as to costs.
b.) G.R. Nos. 163052, 164107, 165564, 172216, 173043 and 174879, the Petitions of Jadewell to cite
Mayor Braulio D. Yaranon, Mayor Bernardo M. Vergara, Acting City Mayor Reinaldo A. Bautista, Vice
Mayor Betty Lourdes F. Tabanda, the members of the Sangguniang Panlungsod of Baguio City namely:
Elmer O. Datuin, Antonio R. Tabora, Edilberto B. Tenefrancia, Federico J. Mandapat, Jr., Richard A.
Carino, Faustino A. Olowan, Rufino M. Panagan, Leonardo B. Yangot, Jr., Rocky Thomas A. Balisong,
Galo P. Weygan, Perlita L. Chan-Rondez, Jose M. Molintas, and Judge Fernando Vil Pamintuan for
indirect contempt and to disbar Sangguniang Panlungsod members Rocky Thomas A. Balisong, Edilberto
B. Tenefrancia, Faustino A. Olowan, Federico J. Mandapat, Perlita L. Chan-Rondez, Jose M. Molintas,

Melchor Carlos B. Rabanes and Mayor Braulio D. Yaranon are all hereby DISMISSED for lack of merit. No
pronouncement as to costs.
c.) We DENY the Petition of Jadewell for lack of merit in G.R. No. 172215. We likewise DENY its prayer for
the issuance of a temporary restraining order and/or writ of preliminary injunction for being moot and
academic. No pronouncement as to costs.
d.) We DENY the Petition of Mayor Braulio D. Yaranon in G.R. No. 181488, for lack of merit and AFFIRM
the CA Decision CA-G.R. SP No. 96116. No pronouncement as to costs.
SO ORDERED.
MARIA LOURDES P. A. SERENO
Chief Justice, Chairperson

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