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.

BELLOSILLO, J.:
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 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 governmentowned 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.
In full, Sec. 7 of Art. IX-B of the Constitution provides:

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 . . . ."

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

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

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.

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 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.

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

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.

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
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
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.
Padilla, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

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:
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;
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:

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.

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

otherwise provided by law, at noon on the thirtieth day of June next

following their election.

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.

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.

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

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 re-elected 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 highlyurbanized 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.

BIENVENIDO O. MARQUEZ, JR., petitioner,

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

VITUG, J.:
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:
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.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 112889 April 18, 1995

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:

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
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.

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.
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.
REP. CUENCO. Anong nakalagay diyan?
CHAIRMAN DE PEDRO. Iyong disqualification to
run for public office.

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.

Any person who is a fugitive from justice in

criminal or nonpolitical cases here or abroad.

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.

HONORABLE SAGUISAG. I think that is even a

good point, ano what is a fugitive? It is not
defined. We have loose understanding. . .

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.

Mabigat yung abroad. One who is facing criminal

charges with the warrant of arrest pending,
unserved. . .

CHAIRMAN DE PEDRO. So isingit na rin sa

definition of terms iyong fugitive.
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.

HON. DE PEDRO. Kulang pa rin ang ibig sabihin

niyan.

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

THE CHAIRMAN. Ano? Sige, tingnan natin.
THE CHAIRMAN. Wait, wait, wait. Can we just
agree on the wording, this is very important.
Manny, can you come up?

HON. DE PEDRO. Kung nasa loob ng presuhan,

fugitive pa rin siya?

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 semicolon. 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?
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?

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) . . .

MR. SANCHEZ. Means a person...

THE CHAIRMAN. Ha?
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.

(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
EN BANC

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 law-making. 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, 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)
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
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.
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 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."
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: (b1) 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 HernandezPerez 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:
(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.;
(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
(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
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."
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
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.

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.
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.
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.
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 lawmaking 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

proposal. If the people should reject it during the referendum, then there is
nothing to declare as illegal.

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."

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

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

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 quasijudicial 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.
Narvasa, C.J., Padilla, Regalado, Davide, Jr., Bellosillo, Melo, Vitug, Kapunan,
Francisco, Hermosisima, Jr. and Torres, Jr., JJ., concur.
Puno, J., took no part.
Romero and Mendoza, JJ., are on leave.
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 127820 July 20, 1998

MUNICIPALITY OF PARAAQUE, petitioner,

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 successors-in-interest (Vda. de Buncio vs. Estate
of the late Anita de Leon). The herein defendant is the successorin-interest of Limpan Investment Corporation as shown by the
"Deed of Assignment Exchange" executed on June 13, 1990.

vs.
V.M. REALTY CORPORATION, respondent.

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.

PANGANIBAN, J.:
SO ORDERED. 5
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.
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:

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

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.

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.

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,

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.

The petition is not meritorious.

First Issue:

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.
Hence, this appeal. 20
The Issues
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

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
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:

1. An ordinance is enacted by the local legislative council

authorizing the local chief executive, in behalf of the LGU, to
exercise the power of eminent domain or pursue expropriation
proceedings over a particular private property.
2. The power of eminent domain is exercised for public use,
purpose or welfare, or for the benefit of the poor and the landless.
3. There is payment of just compensation, as required under
Section 9, Article III of the Constitution, and other pertinent laws.
4. A valid and definite offer has been previously made to the owner
of the property sought to be expropriated, but said offer was not
accepted. 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.

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.

Second Issue:
SO ORDERED.
Eminent Domain Not Barred by Res Judicata
Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.
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

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.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

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 CO-STALLHOLDERS,respondents.
David D. Advincula, Jr. for petitioner.
Juan P. Banaga for private respondents.

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
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:

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

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.
Further, it is so provided in the guidelines under the said Ordinance
No. 2 of the MMC 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 the
squatters, and that the permits
granted are therefore
considered null and void.
This doctrine was reiterated in
the case of Baguio Citizens
Action Inc. vs. The City
Council, 121 SCRA 368, where
it was held that:
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.)
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.
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
illegally-constructed stalls on Heroes del '96 Street and asked for their demolition.
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-0-890146) 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. 8384, Rollo.) The OMBUDSMAN recommended the filing of the corresponding
information in court.

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. C12921, 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.
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 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."
The petition for mandamus is meritorious.
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).
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.
SO ORDERED.
Narvasa, C.J., Melecio-Herrera, Gutierrez, Jr. Cruz, Paras, Feliciano, Padilla, Bidin,
Medialdea, Regalado, Davide, Jr., Romero and Nocon, JJ., concur.
Bellosillo, J., took no part.

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,

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
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.:

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.
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 subjectmatter 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 otherpublic 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.
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:

Republic of the Philippines

SUPREME COURT
Manila

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. 12-045 (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:
1) To DENY the Motion for Reconsideration of oppositor Governor Aurelio M.
Umali; and
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.
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.

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)
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.

The Issue
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.
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:

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:
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 non-delegation of legislative
powers.
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.
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.
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

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

The entire province of Nueva Ecija will be directly

affected by Cabanatuan Citys conversion
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.
a. "Political units directly affected" defined
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

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)
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
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." 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.
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?
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)
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?

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:

Senator Pimentel. Yes, Mr. President, because the municipality is affected directly by
the merger of two of its barangay.

(a) Provinces - Twenty-three percent (23%);

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?

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

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

Senator Pimentel. Do all the 51 barangay that the Gentleman mentioned, Mr.
President, belong to one municipality?
Senator Guingona. Yes.

(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:

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

(a) Population - Fifty percent (50%);

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

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

(c) Equal sharing - Twenty-five percent (25%)

Senator Pimentel. That is correct, Mr. President.

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
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.

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
Basis for IRA
Computation

b. Impact on Economic Rights

No. of Population
To recall, it was held in Miranda that the changes that will result in the downgrading of CY 2007 Census
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
Land Area
ratification. In a similar fashion, herein petitioner Umali itemized the adverse effects of
(sq. km.)
Cabanatuan Citys conversion to the province of Nueva Ecija to justify the provinces
participation in the plebiscite to be conducted.

Province of
Nueva Ecija

Cabanatuan
City

Province of
Nueva Ecija Net
of Cabanatuan
City

1,843,853

259,267

259,267

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

al

P125,550,744.85
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.
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:
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.
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

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

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

2nd District

Municipalities/Cities
Del Gallego
Ragay
Lupi
Sipocot
Cabusao

Libmanan
Minalabac
Pamplona
Pasacao
San Fernando

Gainza
Milaor
Naga
Pili
Ocampo

Canaman
Camaligan
Magarao
Bombon
Calabanga

Population
417,304

474,899

3rd District

4th District

Caramoan
Garchitorena
Goa
Lagonoy
Presentacion

Sangay
San Jose
Tigaon
Tinamba
Siruma

Iriga
Baao
Balatan
Bato

Buhi
Bula
Nabua

372,548

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

429,070

Petitioner Aquino III was one of two senators who voted against the approval of the
Bill by the Senate. His co-petitioner, 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.

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

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:

176,383

Article VI
Section 5. (1) x x x x

Libmanan
Minalabac
Pamplona
Pasacao

San Fernando
Gainza
Milaor

3rd District (formerly 2nd District)

Naga
Pili
Ocampo
Canaman

4th District (formerly 3rd District)

5th District (formerly 4th District)

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.

276,777

(2) x x x x

Camaligan
Magarao
Bombon
Calabanga

439,043

(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.

Caramoan
Garchitorena
Goa
Lagonoy
Presentacion

Sangay
San Jose
Tigaon
Tinamba
Siruma

372,548

Iriga
Baao
Balatan
Bato

Buhi
Bula
Nabua

429,070

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

(4) x x x x (Emphasis supplied).

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

(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 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.
(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.

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
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 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.
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).
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:
INTERPELLATION OF MR. NOLLEDO:

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.
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
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.
Benguet and Baguio are another reference point. The Journal further narrates:
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.

additional legislative district in a province, whose population growth has increased

beyond the 1986 numbers.
Translated in the terms of the present case:

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).
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.
The foregoing reading and review lead to a clear lesson.
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

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;
(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.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice

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.
x - - - - - - - - - - - - - - - - - - - - - - -x
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.
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.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 176951

February 15, 2011

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
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.
A brief background
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.

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 76,7 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.

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.

The 16 Cityhood Bills do not violate Article X, Section 10 of the Constitution.

Article X, Section 10 provides

In the Resolution dated March 31, 2009, the Court En Banc, by a 7-5 vote,3 denied
the first motion for reconsideration.
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.
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.
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

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:
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.
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.

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.
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

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.

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.]
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 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:
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

The Cityhood Laws do not violate Section 6, Article X and the equal protection clause
of the Constitution.

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-and-figures&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.

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-inintervention 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)

2.
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

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

1. Marawi City

5,291,522.10

31. Silay City

47,351,730.00

2. Palayan City

6,714,651.77

32. Bislig City

47,360,716.24

3. Sipalay City

9,713,120.00

33. Tacurong City

49,026,281.56

4. Canlaon City

13,552,493.79

34. Talisay City (Negros Occidental)

52,609,790.00

5. Himamaylan City

15,808,530.00

35. Kabankalan City

53,560,580.00

6. Isabela City

16,811,246.79

36. Malaybalay City

54,423,408.55

7. Munoz City

19,693,358.61

37. La Carlota City

54,760,290.00

8. Dapitan City

20,529,181.08

38. Vigan City

56,831,797.19

9. Tangub City

20,943,810.04

39. Balanga City

61,556,700.49

10. Bayawan City

22,943,810.04

40. Sagay City

64,266,350.00

11. Island Garden City of Samal

23,034,731.83

41. Cavite City

64,566,079.05

12. Tanjay City

23,723,612.44

42. Koronadal City

66,231,717.19

13. Tabaco City

24,152,853.71

43. Cotabato City

66,302,114.52

14. Oroquieta City

24,279,966.51

44. Toledo City

70,157,331.12

15. Ligao City

28,326,745.86

45. San Jose City

70,309,233.43

16. Sorsogon City

30,403,324.59

46. Danao City

72,621,955.30

17. Maasin City

30,572,113.65

47. Bago City

74,305,000.00

18. Escalante City

32,113,970.00

48. Valencia City

74,557,298.92

19. Iriga City

32,757,871.44

49. Victorias City

75,757,298.92

20. Gapan City

34,254,986.47

50. Cauayan City

82,949,135.46

21. Candon City

36,327,705.86

51. Santiago City

83,816,025.89

53. Dipolog City

85,397,830.00 But the feared reduction proved to be false when, after the implementation of the
Cityhood Laws, their respective shares increased, not decreased. Consider the
85,503,262.85 table15 below

54. Trece Martires City

87,413,786.64

55. Talisay City (Cebu)

87,964,972.97

52. Roxas City

56. Ozamis city

89,054,056.12

57. Surigao City

89,960,971.33

58. Panabo City

91,425,301.39

59. Digos City

92,647,699.13

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 selfreliant 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.
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 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 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.
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.

1avvphi1
CITY

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

Bais

219,338,056.00

Batangas

334,371,984.00

Bayawan

353,150,158.00

Cadiz

329,491,285.00

Calapan

227,772,199.00

Calbayog

438,603,378.00

Cauayan

250,477,157.00

Gen. Santos

518,388,557.00

Gingoog

314,425,637.00

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

Tacurong

179,795,271.00

Tagaytay

130,159,136.00

Tarlac

348,186,756.00

C
(Actual Release Afte
C

Tangub

162,248,610.00

Urdaneta

187,721,031.00

Victorias

176,367,959.00

Zamboanga

918,013,016.00

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.

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

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

SENATOR PIMENTEL. As far as population is concerned, there will be no change,

Mr. President. Still 150,000.

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 SOTTO. Still 150,000?

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

SENATOR SOTTO. And then the land area?
SENATOR PIMENTEL. As to the land area, there is no change; it is still 100 square
kilometers.
SENATOR SOTTO. But before it was "either/or"?

SENATOR PIMENTEL. Yes, Mr. President, with pleasure. There are three
requirements. One is financial.
SENATOR SOTTO. All right. It used to be P20 million.
SENATOR PIMENTEL. It is P20 million. Now we are raising it to P100 million of
locally generated funds.

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 SOTTO. So, it remains "or"?
SENATOR PIMENTEL. We are now changing it into AND.

SENATOR SOTTO. In other words, the P20 million before includes the IRA.
SENATOR SOTTO. AND?
SENATOR PIMENTEL. No, Mr. President.
SENATOR PIMENTEL. Yes.
SENATOR SOTTO. It should not have been included?
SENATOR SOTTO. I see.
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

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

SENATOR SOTTO. Does the gentleman not think there will no longer be any
municipality that will qualify, Mr. President?
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.
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 midafternoon 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 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.
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
G.R. No. 187916
JOSE L. ATIENZA, JR., BIENVINIDO M. ABANTE, MA. LOURDES M. ISIPGARCIA, 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.
x-----------------------x
CHEVRON PHILIPPINES INC., PETRON CORPORATION AND PILIPINAS SHELL
PETROLEUM CORPORATION, Intervenors.
DECISION
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) ANDFormer Mayor Jose L. Atienza, Jr. (Mayor
HEAVY INDUSTRIAL ZONE (1-3), AND PROVIDING FOR ITS ENFORCEMENT" Atienza)
enacted by the Sangguniang Panlungsod of Manila (Sangguniang Panlungsod) on 14
May 2009.

San Andres

Former Mayor of Manila;

Secretary of Department of
Environment and Natural
Resources (DENR)

Bienvinido M. Abante
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
Ma. Lourdes M. Isip-Garcia
companies, from operating in the designated commercial zone an industrial zone
prior to the enactment of Ordinance No. 80274 entitled "AN ORDINANCE
RECLASSIFYING THE LAND USE OF THAT PORTION OF LAND BOUNDED BY Rafael P. Borromeo
THE PASIGRIVER IN THE NORTH, PNR RAILROAD TRACK IN THE EAST, BEATA
ST. IN THE SOUTH, PALUMPONG ST. IN THE SOUTHWEST AND ESTERO DE
Jocelyn Dawis-Asuncion
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
Minors Marian Regina B. Taran, Macalia
BOUNDED BY THE PASIG RIVER, MARCELINO OBRERO ST., MAYO 28 ST. AND
Ricci B. Taran, Richard Kenneth B. Taran,
THE F. MANALO STREET FROM INDUSTRIAL II TO COMMERCIAL I," and
represented and joined by their parents
Ordinance No. 81195 entitled "AN ORDINANCE ADOPTING THE MANILA
Richard and Marites Taran
COMPREHENSIVE LAND USE PLAN AND ZONING REGULATIONS OF 2006 AND
PROVIDING FOR THE ADMINISTRATION, ENFORCEMENT AND AMENDMENT Minors Czarina Alysandra C. Ramos,
THERETO."
Cezarah Adrianna C. Ramos, and Cristen

Sta. Ana

Citizen and taxpayer;

member of the House of
Representatives

San Miguel

Incumbent City Councilor of the

City of Manila

Paco

Incumbent City Councilor of the

City of Manila

Sta. Mesa

Incumbent City Councilor of the

City of Manila

Paco

Citizens, real estate owners and

taxpayers

Tondo

Citizens, real estate owners and

taxpayers

Aidan C. Ramos represented and joined by

their mother Donna c. Ramos

The Parties
Petitioners allege the parties respective capacity to sue and be sued, viz:
Petitioners

Residence
in Manila

Minors Jasmin Syllita T. Vila and Antonio T. Sta. Ana

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

Suing capacity aside from being residents

of Manila other personal circumstances

G.R. No. 187836

S Officer Samson S. Alcantara

cantara)

S Officer Vladimir Alarique T. Cabigao

abigao)

Respondents

Sued in their capacity as

G.R. Nos. 187836 and 187916

Not mentioned in
the petition; holding
office in Ermita,
Manila

Pandacan

Manila taxpayer;
Former Mayor Alfredo S. Lim (Mayor Lim)
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
Respondents

Incumbent Mayor of Manila at

the time of the filing of the
present petitions
Sued in their capacity as

One of the petitioners in SJS v. Atienza

(G.R. No. 156052)

G.R. No. 187916

* 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).
Vice-Mayor Francisco Domagoso (Vice-Mayor
Domagoso)
G.R. No. 187916

Citizens, real estate owners and

taxpayers

Vice-Mayor and Presiding Officer

of the City Council of Manila

creation of Medium Industrial Zone and Heavy Industrial Zone pursuant to Ordinance
No. 8187.

ene Woo Koa

Principal author of City

Ordinance No. 8187

ises T. Lim, Jesus Fajardo, Louisito N. Chua, Victoriano A.

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

Personal and official capacities as

History of the Pandacan
councilors who voted and approved CityOil Terminals
Ordinance No. 8187
We quote the following from the Resolution of the Court in G.R. No. 156052:

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
The following intervenors, all of which are corporations organized under Philippine
ideal for various emerging industries as the nearby river facilitated the transportation
laws, intervened:7
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
Intervenors
Nature of Business
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
evron Philippines,
importing, distributing and marketing of petroleum products in the
U.S. Army burned unused petroleum, causing a frightening conflagration. Historian
. (CHEVRON)
Philippines since 1922
Nick Joaquin recounted the events as follows:
pinas Shell Petroleum Corporation
manufacturing, refining, importing, distributing and marketing of
HELL)
petroleum products in the Philippines
After the USAFFE evacuated the City late in December 1941, all army fuel storage
ron Corporation (PETRON)
manufacturing, refining, importing, distributing and marketing ofdumps 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
petroleum products in the Philippines
week longer, the "open city" blazeda cloud of smoke by day, a pillar of fire by night.
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
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

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)

(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

Memorandum of Agreement (MOA)

dated 12 October 2001 between the oil companies
and the Department of Energy (DOE)

(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.

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;

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;

2003. Thus, at present, there is nothing that legally hinders respondent from enforcing
Ordinance No. 8027.

(b) Article V, Sec. 2331 designating the Pandacan oil depot area as a
"Planned Unit Development/Overlay Zone" (O-PUD); and

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)

(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
On 7 March 2007, the Court granted the petition for mandamus, and directed then
respondent Mayor Atienza to immediately enforce Ordinance No. 8027.33
Confined to the resolution of the following issues raised by the petitioners, to wit:

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:

1. whether respondent [Mayor Atienza]has the mandatory legal duty to

enforce Ordinance No. 8027 and order the removal of the Pandacan
Terminals, and

WHEREFORE, x x x

2. whether the June 26, 2002 MOU and the resolutions ratifying it can
amend or repeal Ordinance No. 8027.34

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

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
xx
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,

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

Ordinance No. 8027 was not impliedly repealed
by Ordinance No. 8119
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
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
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[,] Non-Pollutive/Extremely Hazardous; and
Pollutive/Extremely Hazardous; and Pollutive/Extremely Hazardous manufacturing
and processing establishments" within the newly created Medium Industrial Zone (12) and Heavy Industrial Zone (1-3) in the Pandacan area.
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.
The Petitions
G.R. No. 187836
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
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
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
(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);
(c) Toxic and Hazardous Wastes Law (Republic Act No. 6969); and
(d) Civil Code provisions on nuisance and human relations;
2. International Conventions and Treaties to which the Philippines is a state
party

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:

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;"

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

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;
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;
4. x x x the respondents [be ordered] to refrain from enforcing and/or
implementing Manila City Ordinance No. 8187;

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.

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

The Intervenors Position on the Consolidated Petitions

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

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.

The Respondents Position on the Consolidated Petitions

Respondent former Mayor Lim
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 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.

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.
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
Intervening Events

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

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 new ordinance essentially amended the assailed ordinance to exclude the area
where petroleum refineries and oil depots are located from the Industrial Zone.

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

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

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.
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.
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.

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)

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.

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:

there is no appeal, or any plain,

(a) To protect and advance the constitutional right of the people to a balanced and
healthful ecology;

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
(r) R.A. No. 8749, Clean Air Act;

(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
(d) To enable the courts to monitor and exact compliance with orders and
judgments in environmental cases.83
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:
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:
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)

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. Macapagal-Arroyo,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:
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. Besides, as
residents of Manila, petitioners have a direct interest in the enforcement of the citys
ordinances.99 x x x (Citations omitted)

persons aggrieved thereby

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

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.
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:
"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)
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

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:
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.
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)
Requisites of judicial review
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) ecard, 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:

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

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:
(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.

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.

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

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.
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:
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
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.

(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;

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.

(3) it is situated in a densely populated place and near Malacaang Palace;

and

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.
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
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:

(2) the depot is open to attack through land, water or air;

(4) in case of an explosion or conflagration in the depot, the fire could spread
to the neighboring communities.
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
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.

relocation schedule which have allegedly been prepared. The presiding judge of
Manila RTC, Branch 39 will monitor the strict enforcement of this resolution.138

In. G.R. No. 156052, the Court explained:

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.

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
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

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.
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 vicemayor 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

Court and WARNED that a repetition of an act similar to that here committed shall be
dealt with more severely.

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:

JOSE PORTUGAL PEREZ

Associate Justice

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 nonextendible 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

SO ORDERED.

Republic of the Philippines

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

April 17, 2013

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
From 2005 to 2006, the Municipalitys Sangguniang Bayan (SB) passed certain
resolutions to implement a multi-phased 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. 6820054 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. 1392005.6 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
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 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

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
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 noncompliance 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.

Upon denial of the Motion to Dismiss dated December 27, 2006,18 the Implicated
Officers and Land Bank filed their respective Answers.

Issues Before the Court

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

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.

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.

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.

its validity; as long as taxes are involved, people have a right to question contracts
entered into by the government.37
Therefore, as the above-stated requisites obtain in this case, Cacayuran has standing
to file the instant suit.

The argument is untenable.

B. Validity of the Subject Resolutions
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
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
Accordingly, the first requisite has been clearly met.
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 taxpayer need not be a party to the contract to challenge

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
(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)
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

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:

In fine, Land Bank cannot rely on the Subject Resolutions as basis to validate the
Subject Loans.

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

C. Ultra vires nature of the Subject

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
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

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.
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.
ESTELA M. PERLAS-BERNABE
Associate Justice

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 153974 August 7, 2006
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.
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. V-6958. 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
Petitioners filed an Answer on August 12, 1997 reasserting the issues they raised in
their Motion to Dismiss. 8
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
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
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

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 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 CAG.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
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

CORONA, J.:

viable and practicable option." Under the MOU, the oil companies agreed to perform
the following:

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.
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.

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.
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:
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.

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.
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

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 Decision2 of the Regional Trial Court (RTC) of Quezon City,
Branch 96 in Civil Case No. Q-99-39370, and the March 10, 2006 Resolution3denying
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. 12-92 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. 09-92, 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 Complaint8 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.

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.

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.

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.

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

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
Petitioners Arguments
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
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

The petition is meritorious.

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.
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.
The argument is unpersuasive. Section 444(b)(1)(vi) of the LGC provides:
SECTION 444. The Chief Executive: Powers, Duties, Functions and Compensation.
xxx
(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;
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;

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;
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
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;
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.:
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
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.

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;

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.
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

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
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
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

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
G.R. No. 164107
JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,
vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.
x-----------------------x
G.R. No. 165564
JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,
vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.
x-----------------------x
G.R. No. 172215
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.
x-----------------------x
G.R. No. 163052

JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,

vs.
JUDGE FERNANDO VIL PAMINTUAN, PRESIDING JUDGE OF BRANCH 3 OF
THE REGIONAL TRIAL COURT 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
G.R. No. 173043
JADEWELL PARKING SYSTEMS CORPORATION, Petitioner,
vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.
x-----------------------x
G.R. No. 174879
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. CHAN-RONDEZ, ANTONIO R. TABORA, JOSE M.
MOLINTAS AND RUFINO M. PANAGAN AND CITY LEGAL OFFICER MELCHOR
CARLOS R. RABANES, Respondents.

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.
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;

x-----------------------x
G.R. No. 181488
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.

(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;

DECISION
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.

(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 onstreet 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 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
On 27 March 2000, respondent Sanggunian enacted City Ordinance No. 003, Series
of 2000 (Ordinance No. 003-2000) 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.
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-OperateTransfer 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. 2052000.13
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 offstreet 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 off-street 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;

Region (COA-CAR) on the operations of Jadewell as regards the pay parking project
embodied in the MOA.

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.

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).

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 (DOTCCAR) 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

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 CAG.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.
On 7 July 2003, the CA rendered a Decision42 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
Superintendent-Burnham 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 ViceMayor, 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.
On 23 June 2004, this Court through its First Division, ordered G.R. No. 163052
consolidated with G.R. No. 160025.62
On 1 July 2004, then Baguio City Mayor Braulio D. Yaranon issued Executive Order
No. 001-04,63 the decretal portion of which reads:
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 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-G294, 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-G294.
On the following day, 16 July 2004, Jadewell filed a Supplemental Petition with Motion
for Leave of this Court65 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 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 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 10 January 2005, this Court through a Resolution73 ordered the consolidation of
G.R. No. 160025 with G.R. Nos. 163052, 164107, and 165564.
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
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 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 200689 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
200692directing Jadewell to comply with the writ of preliminary prohibitory injunction
under pain of direct contempt.

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 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 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 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 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 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 60-day 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
quasi-judicial 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.

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.

2. On the substantive issues:

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. 00104 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.
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.
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.
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 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
The CA nevertheless proceeded to treat the Petition as an original action for
injunction, ruling in this wise:
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
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.
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
x x x.
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 offstreet 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
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

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 government-monopolized 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 obligation156but 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 quasijudicial function. The Sanggunian Panlungsod does not possess any judicial or quasijudicial 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;

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:
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.
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.

(f) Failure to obey a subpoena duly served;

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.

(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.

No such similar situation occurred here. Public respondents never asked anyone to
employ pressure or influence on this Court for the formers benefit.

(e) Assuming to be an attorney or an officer of a court, and acting as such

without authority;

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

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 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

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:

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.

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.

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

In Indiana Aerospace University v. Commission on Higher Education,169 this Court

ruled thus:

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

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.

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

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)
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 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.
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)
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