Municipality of Malabang vs.

Benito (1969) The municipality of Balabagan was created by EO 386 of President Garcia out of barrios and sitios of Malabang. The petitioners seek to nullify the EO. They rely on the Pelaez ruling that the Presidents power to create municipalities under Sec. 68 of the Administrative Code is unconstitutional. Respondents argue that the Pelaez ruling is inapplicable because Balabagan is a de facto corporation. HELD: The Municipality of Balabagan was not a de facto corporation. The color of authority requisite to a de facto municipal corporation may be an unconstitutional law, valid on its face, which has either: a. Been upheld for a time by the courts; or b. Not yet been declared void; provided that a warrant for its creation can be found in some other valid law or in the recognition of its potential existence in the general constitution of the state. The mere fact that Balabagan was organized before the statute was invalidated cannot make it a de facto corporation because, independently of the Administrative Code, there is no other valid statute to give color of authority to its creation. This doesnt mean that the acts done by Balabagan inthe exercise of its corporate powers are a nullity. The existence of EO 386 is an operative fact which cannot be justly ignored.