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I. Public Corporation: Introduction


a. Corporation- an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.

b. Classes of Corporations Private Corporation -those formed for some private purpose, benefit, aim or end. DEFINITION -created for private aim, gain, or benefits of its members -created by the will of the incorporators with the recognizance of the State. -constitute a voluntary agreement by and among its members

PURPOSE OF CREATION CREATORS

Public Corporation -one created by the State either by general or special act for purposes of administration of local government or rendering service in the public interest. -established for purposes connected with the administration of civil or local governments -creations of the State either by general or special act -involuntary consequence of legislation

NATURE

Metropolitan Manila Development Authority vs. Bel-Air Village Association, Inc G.R. No. 135962, March 27, 2000 A local government is a "political subdivision of a nation or state which is constituted by law and has substantial control of local affairs." The Local Government Code of 1991 defines a local government unit as a "body politic and corporate"-- one endowed with powers as a political subdivision of the National Government and as a corporate entity representing the inhabitants of its territory. Local government units are the provinces, cities, municipalities and barangays. They are also the territorial and political subdivisions of the state c. Classes of Public Corporations Quasi-public Corporations -created as agencies of the State for narrow and limited purposes without the powers and liabilities of self-governing corporations.

Municipal Corporations/Local Government -body politic and corporate constituted by the incorporation of the inhabitants for purposes of local government thereof. -established by law partly as an agency of the State to assist in the civil government of the country, but chiefly to regulate and administer the local or internal affairs of the city, town or district which is incorporated. -political subdivision of a nation or state which is constituted by law and has substantial control of local affairs

d. Elements: Municipal Corporations 1. A legal creation or incorporation 2. A corporate name by which the artificial personality or legal entity is known and in which all corporate acts are done 3. Inhabitants constituting the population who are invested with the political and corporate power which are executed through duly constituted officers and agents 4. A place or territory within which the local civil government and corporate functions are exercised e. Local Government: Dual Personality Public or Governmental -it is an agent of the state for the government of the territory and the inhabitants within the

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Private or Corporate -acts in a similar category as a business corporation, performing functions not strictly governmental or

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local government limits -exercises by delegation a part of the sovereignty of the state -they serve as an instrumentality of the State in carrying out the functions of government. f. political -patrimonial powers -they act as an agency of the community in the administration of local affairs.

Local Governments: Power and Functions i. Sources of Power of Local governments 1. Constitution 2. R. A. No. 7160 3. All existing laws, acts, decrees. Executive orders, proclamations and administrative orders not inconsistent with the Constitution and R. A. No. 7160. ii. Classification of local government power 1. Express power- those granted in express words 2. Implied powers- those necessarily or fairly implied in or incident to the powers expressly granted 3. Inherent powers- those essential to the declared objects and purposes of the corporation not simply convenient but indispensable. 4. Legislative powers- power to make laws 5. Executive powers- power to execute laws. 6. Intramural powers- those exercised within the corporate limits of a municipal corporation 7. Extramural powers- those exercised outside of the corporate limits, like those given for the protection of water supply, prevention of nuisance and also for police forces 8. Governmental powers- administer the powers of the State and promoting the public welfare within it. Example: Police power, Power of Eminent Domain. Power of Taxation 9. Municipal powers- those for the special benefit and advantage of the community. Example: erection of waterworks, gas works, electric plants, from which profits may be derived by the municipality.

g.

R.A. 7924 (Metropolitan Manila Development Authority)

This Act states the policy of the State to treat Metro Manila as a special development and administrative region and certain basic services affecting or involving Metro Manila as metro wide services more efficiently and effectively planned, supervised and coordinated by a development authority as created herein, without prejudice to the autonomy of the affected LGU. Among its pertinent provisions are: 1) Scope of MMDA (metro-wide) services: Development planning; transport and traffic management; solid waste disposal and management; Flood control; Urban renewal; zoning and land use planning; health sanitation; Urban protection and pollution control; pu8blic safety; 2) Creation of Metro Manila Council (MMC) consisting of all mayors in Metro Manila 3) Powers and Functions of MMDA, mainly to formulate, coordinate, and regulate implementation of above metro-wide services 4) Functions of MMC, mainly to approve projects of MMDA 5) Function of MMDA chairman: Execute policies of MMC and manage operations of MMDA; appointment power; prepare budget of MMDA; disciplinary power on subordinates; ex officio board member (or his representative) of departments related to activities of MMDA such as DOTC, DOH, etc. 6) Institutional linkages of MMDA: NEDA, NGOs , accredited peoples organizations y Only political units of the government can exercise police power Metropolitan Manila Development Authority vs. Bel-Air Village Association, Inc G.R. No. 135962, March 27, 2000 It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. There is no syllable in R. A. No. 7924 that grants the MMDA police power, let alone legislative power. The MMAs jurisdiction was limited to addressing common problems involving basic services that transcended local boundaries. It did not have legislative power. Its power was merely to provide the local government units technical assistance in the preparation of local development plans. Any semblance of legislative

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power it had was confined to a "review [of] legislation proposed by the local legislative assemblies to ensure consistency among local governments and with the comprehensive development plan of Metro Manila," and to "advise the local governments accordingly." The MMDA is not a political unit of government thus cannot validly exercise police power.

Solicitor General v. Metropolitan Manila Authority The measures in question are enactments of local governments acting only as agents of the national legislature. Necessarily, the acts of these agents must reflect and conform to the will of their principal. To test the validity of such acts in the specific case now before us, we apply the particular requisites of a valid ordinance as laid down by the accepted principles governing municipal corporations. According to Elliot, a municipal ordinance, to be valid: 1) must not contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must not be partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and 6) must be general and consistent with public policy. A careful study of the Gonong decision will show that the measures under consideration do not pass the first criterion because they do not conform to existing law. The pertinent law is PD 1605. PD 1605 does not allow either the removal of license plates or the confiscation of driver's licenses for traffic violations committed in Metropolitan Manila. There is nothing in the following provisions of the decree authorizing the Metropolitan Manila Commission (and now the Metropolitan Manila Authority) to impose such sanctions. In fact, the provisions prohibit the imposition of such sanctions in Metropolitan Manila. The Commission was allowed to "impose fines and otherwise discipline" traffic violators only "in such amounts and under such penalties as are herein prescribed," that is, by the decree itself. Nowhere is the removal of license plates directly imposed by the decree or at least allowed by it to be imposed by the Commission. Notably, Section 5 thereof expressly provides that "in case of traffic violations, the driver's license shall not be confiscated." These restrictions are applicable to the Metropolitan Manila Authority and all other local political subdivisions comprising Metropolitan Manila, including the Municipality of Mandaluyong. The requirement that the municipal enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself.) They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government unit cannot contravene but must obey at all times the will of their principal. In the case before us, the enactments in question, which are merely local in origin, cannot prevail against the decree, which has the force and effect of a statute.

h. Administrative Regions DEFINITION Chiongbian vs. Orobos 254 SCRA 253 (1995) Administrative regions are mere groupings of contiguous Provinces for administrative purposes. They are not territiorial and political subdivisions like Provinces, Cities, Municipalities and Barangays. R. A. 6766 (Organic Act for Cordillera Autonomous Region of 1989) This Act provides for creation of the Cordillera Autonomous Region (CAR) shall consist of the cities and provinces that shall vote favorable in a plebiscite pursuant ant 10, Sec. 18 of the Constitution. Those cities and provinces are Benguet, Ifugao, Muslim Province, Abra, Kalinga-Apayao and Baguio The Act consists of the following pertinent articles: 1) Guiding principles and policies similar to that of Art. 2 of the 1987 Constitution 2) Vesting of legislative power in the Cordillera Assembly; executive power Cordillera governor with a deputy governor as well; creation of indigenous special courts whose decisions are final and executory but subject to the original and appellate jurisdiction of the Supreme Court 3) Creation of a Regional Commission on Appointments 4) Measures to protect and develop the ancestral lands and ancestral domains of indigenous cultural communities as well as the national economy and patrimony The rest of its provisions are roughly similar to the Organic Act for ARMM (see11-c) CAR never came to existence. Only Ifugao province voted in favor of CAR, so the Supreme Court in Ordillo v. COMELEC ruled that Ifugao could no constitute itself into the CAR

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The sole province of Ifugao cannot validly constitute the Cordillera Autonomous Region. Cordillera Regional Assembly v. COMELEC, G. R. No. 93054, December 4, 1990

The keywords provinces, cities, municipalities and geographical areas connote that "region" is to be made up of more than one constituent unit. The term "region" used in its ordinary sense means two or more provinces. This is supported by the fact that the thirteen (13) regions into which the Philippines is divided for administrative purposes are groupings of contiguous provinces. Aside from the 1987 Constitution, a reading of the provisions of Republic Act No. 6766 strengthens the petitioner's position that the Region cannot be constituted from only one province. xxx From these sections, it can be gleaned that Congress never intended that a single province may constitute the autonomous region. Otherwise, we would be faced with the absurd situation of having two sets of officials, a set of provincial officials and another set of regional officials exercising their executive and legislative powers over exactly the same small area. R.A. 6732 (Organic Act for ARMM [Autonomous Region in Muslim Mindanao]) Mindanao, encompassing 13 provinces and 9 cities, through a plebiscite for that purpose. This government shall operate within the framework of the Regional Government. The executive power is conferred on the Regional Governor. The legislative power is conferred in the Regional Assembly. The Supreme Court, the Court of Appeals and the lower courts shall continue to exercise their power as mandated in the Constitution; however, there shall be a Shariah Appellate Court which shall also be learned in Islamic law and jurisprudence. The Shariah Courts decisions shall be final and executory subject to the original and appellate jurisdiction of the Supreme Court. Tribal Appellate Courts for cases dealing with tribal codes shall also be established. The Regional Government shall have fiscal autonomy or the power to create its own sources of revenue, subject to the limitations of the Constitution and this Organic Act. The Organic Act also provides for: Protection of ancestral lands, ancestral domain and indigenous cultural communities; urban and rural planning and development; power to enact laws pertaining to the national economy and patrimony responsive to the needs of the Regional Government; public order and security; education, science and technology and sports development; social justice and services; and power to amend or revise the Organic Act, either by Congress or by the Regional Assembly, the latter being subject to approval by Congress. y Meaning of majority vote required to approve the creation of administrative region

Abbas vs. COMELEC G.R. No. 89651 (1989) As provided in the Constitution, the creation of the autonomous region in Muslim Mindanao is made effective upon the approval "by majority of the votes cast by the constituent units in a plebiscite called for the purpose" [Art. X, sec. 18]. The question has been raised as to what this majority means. Does it refer to a majority of the total votes cast in the plebiscite in all the constituent units, or a majority in each of the constituent units, or both? We need not go beyond the Constitution to resolve this question. It will readily be seen that the creation of the autonomous region is made to depend, not on the total majority vote in the plebiscite, but on the will of the majority in each of the constituent units and the proviso underscores this. For if the intention of the framers of the Constitution was to get the majority of the totality of the votes cast, they could have simply adopted the same phraseology as that used for the ratification of the Constitution, i.e. "the creation of the autonomous region shall be effective when approved by a majority of the votes cast in a plebiscite called for the purpose." It is thus clear that what is required by the Constitution is a simple majority of votes approving the Organic Act in individual constituent units and not a double majority of the votes in all constituent units put together, as well as in the individual constituent units. y Executive has power to merge administrative regions; no plebiscite is required

Abbas vs. COMELEC G.R. No. 89651 (1989) It must be pointed out that what is referred to in R.A. No. 6734 is the merger of administrative regions, i.e. Regions I to XII and the National Capital Region, which are mere groupings of contiguous provinces for administrative purposes [Integrated Reorganization Plan (1972), which was made as part of the law of the land by

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Pres. Dec. No. 1, Pres. Sec. No. 742]. Administrative regions are not territorial and political subdivisions like provinces, cities, municipalities and barangays [see Art. X, sec. 1 of the Constitution]. While the power to merge administrative regions is not expressly provided for in the Constitution, it is a power which has traditionally been lodged with the President to facilitate the exercise of the power of general supervision over local governments [see Art. X, sec. 4 of the Constitution]. There is no conflict between the power of the President to merge administrative regions with the constitutional provision requiring a plebiscite in the merger of local government units because the requirement of a plebiscite in a merger expressly applies only to provinces, cities, municipalities or barangays, not to administrative regions.

i.

General Principles (R.A. No. 7160)

POLICY AND APPLICATION SEC. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the national government to the local government units. (b) It is also the policy of the State to ensure the accountability of local government units through the institution of effective mechanisms of recall, initiative and referendum. (c)It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with appropriate local government units, non-governmental and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions. Section 536. Effectivity Clause. This code shall take effect on January first, ineteen hundred ninety-two, unless otherwise provided herein, after its complete publication in at least one newspaper of general circulation. SEC. 3. Operative Principles of Decentralization. The formulation and implementation of policies and measures on local autonomy shall be guided by the following operative principles: (a) There shall be an effective allocation among the different local government units of their respective powers, functions, responsibilities, and resources; (b) There shall be established in every local government unit an accountable, efficient, and dynamic organizational structure and operating mechanism that will meet the priority needs and service requirements of its communities; (c) Subject to civil service law, rules and regulations, local officials and employees paid wholly or mainly from local funds shall be appointed or removed, according to merit and fitness, by the appropriate appointing authority; (d) The vesting of duty, responsibility, and accountability in local government units shall be accompanied with provision for reasonably adequate resources to discharge their powers and effectively carry out their functions; hence, they shall have the power to create and broaden their own sources of revenue and the right to a just share in national taxes and an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas; (e) 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; (f) Local government units may group themselves, consolidate or coordinate their efforts, services, and resources for purposes commonly beneficial to them; (g) The capabilities of local government units,especially the municipalities and barangays, shall beenhanced by providing them with opportunities to participate actively in the implementation of national programs and projects; (h) There shall be a continuing mechanism to enhance local autonomy not only by legislative enabling acts but also by administrative and organizational reforms; (i) Local government units shall share with the national government the responsibility in the management and maintenance of ecological balance within their territorial jurisdiction, subject to the provisions of this Code and national policies;

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(j) Effective mechanisms for ensuring the accountability of local government units to their respective constituents shall be strengthened in order to upgrade continually the quality of local leadership; (k) The realization of local autonomy shall be facilitated through improved coordination of national government policies and programs and extension of adequate technical and material assistance to less developed and deserving local government units; (l) The participation of the private sector in local governance, particularly in the delivery of basic services, shall be encouraged to ensure the viability of local autonomy as an alternative strategy for sustainable development; and (m) The national government shall ensure that decentralization contributes to the continuing improvement of the performance of local government units and the quality of community life.

San Juan vs. Civil Service Commission 196 SCRA 69 The tug of war between the Secretary of Budget and Management and the Governor of the premier province of Rizal over a seemingly innocuous position involves the application of a most important constitutional policy and principle, that of local autonomy. We have to obey the clear mandate on local autonomy. Where a law is capable of two interpretations, one in favor of centralized power in Malacaang and the other beneficial to local autonomy, the scales must be weighed in favor of autonomy. xxx National officials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit of liberty upon which these provisions are based. y The 1987 Constitution by deleting the phrase "as may be provided by law," did not stripped the President of the power of control over local governments.

Ganzon vs. CA G. R. No. 93252 August 5, 1991 It is a mistaken impression because legally, supervision is not incompatible with disciplinary authority. As hereinabove indicated, the deletion of "as may be provided by law" was meant to stress, sub silencio, the objective of the framers to strengthen local autonomy by severing congressional control of its affairs, as observed by the Court of Appeals, like the power of local legislation. The Constitution did nothing more, however, and insofar as existing legislation authorizes the President (through the Secretary of Local Government) to proceed against local officials administratively, the Constitution contains no prohibition. "Control" has been defined as "the power of an officer to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for test of the latter." "Supervision" on the other hand means "overseeing or the power or authority of an officer to see that subordinate officers perform their duties." As we held, however, "investigating" is not inconsistent with "overseeing", although it is a lesser power than "altering". y Provisional Constitution must be deemed to have been overtaken by Section 27, Article XVIII of the 1987 Constitution.

De Leon v. Esguerra, G.R. No. 78059 August 31, 1987 The 1987 Constitution was ratified in a plebiscite on February 2, 1987. By that date, therefore, the Provisional Constitution must be deemed to have been superseded. Having become inoperative, respondent OIC Governor could no longer rely on Section 2, Article III, thereof to designate respondents to the elective positions occupied by petitioners. Petitioners must now be held to have acquired security of tenure especially considering that the Barangay Election Act of 1982 declares it "a policy of the State to guarantee and promote the autonomy of the barangays to ensure their fullest development as self-reliant communities. Similarly, the 1987 Constitution ensures the autonomy of local governments and of political subdivisions of which the barangays form a part, and limits the President's power to "general supervision" over local governments. LOCAL AUTONOMY -means a more responsive and accountable local government structure instituted through a system of decentralization. -not meant to end the relation of partnership and interdependence between the central administration and LGU.

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TYPES OF DECENTRALIZATION Limbona vs. Mangelin 170 SCRA 786 (1989) Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of administration when the central government delegates administrative powers to political subdivisions in order to broaden the base of government power and in the process to make local governments "more responsive and accountable," "and ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress." At the same time, it relieves the central government of the burden of managing local affairs and enables it to concentrate on national concerns. The President exercises "general supervision" over them, but only to "ensure that local affairs are administered according to law." He has no control over their acts in the sense that he can substitute their judgments with his own. Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments units declare to be autonomous. In that case, the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central authorities. According to a constitutional author, decentralization of power amounts to "self-immolation," since in that event, the autonomous government becomes accountable not to the central authorities but to its constituency. y Decentralization of power is a political question; decentralization of administration is a judicial question

Limbona vs. Mangelin 170 SCRA 786 (1989) An autonomous government that enjoys autonomy of the latter category [decentralization of power] is subject alone to the decree of the organic act creating it and accepted principles on the effects and limits of "autonomy." On the other hand, an autonomous government of the former class [decentralization of administration] is, as we noted, under the supervision of the national government acting through the President (and the Department of Local Government). If the Sangguniang Pampook (of Region XII), then, is autonomous in the latter sense [decentralization of power], its acts are, debatably beyond the domain of this Court in perhaps the same way that the internal acts, say, of the Congress of the Philippines are beyond our jurisdiction. But if it is autonomous in the former category [decentralization of administration] only, it comes unarguably under our jurisdiction. DEVOLUTION Tano vs. Socrates 278 SCRA 154 Finally, the centerpiece of LGC is the system of decentralization as expressly mandated by the Constitution. Indispensable thereto is devolution and the LGC expressly provides that [a]ny provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned, Devolution refers to the act by which the National Government confers power and authority upon the various local government units to perform specific functions and responsibilities. One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery laws in municipal waters including the conservation of mangroves. This necessarily includes enactment of ordinances to effectively carry out such fishery laws within the municipal waters.

FISCAL AUTONOMY y Internal Revenue Allotment forms part of a local governments annual income Alvarez v Giungona 252 SCRA 695 The practical side to development through a decentralized local government system certainly concerns the matter of financial resources. With its broadened powers and increased responsibilities, a local government unit must now operate on a much wider scale. More extensive operations, in turn, entail more expenses. Understandably, the vesting of duty, responsibility and accountability in every local government unit is accompanied with a provision for reasonably adequate resources to discharge its powers and effectively carry out its functions. Availment of such resources is effectuated through the vesting in every local government unit of (1) the right to create and broaden its own source of revenue; (2) the right to be allocated a just share in national taxes, such share being in the form of internal revenue allotments (IRAs); and (3) the right to be given its equitable share in the proceeds of the utilization and development of the national wealth, if any, within its territorial boundaries. xxx

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The IRAs are items of income because they form part of the gross accretion of the funds of the local government unit. The IRAs regularly and automatically accrue to the local treasury without need of any further action on the part of the local government unit. They thus constitute income which the local government can invariably rely upon as the source of much needed funds.

SEC. 4. Scope of Application. - This Code shall apply to all provinces, cities, municipalities, barangays, and other political subdivisions as may be created by law, and, to the extent herein provided, to officials, offices, or agencies of the national government. Cordillera Broad Coalition vs. Commission on Audit G. R. No. 79956, January 29, 1990 We find that it [EO 220] did not create a new territorial and political subdivision or merge existing ones into a larger subdivision. Firstly, the CAR is not a public corporation or a territorial and political subdivision. It does not have a separate juridical personality, unlike provinces, cities and municipalities. Neither is it vested with the powers that are normally granted to public corporations, e.g. the power to sue and be sued, the power to own and dispose of property, the power to create its own sources of revenue, etc. As stated earlier, the CAR was created primarily to coordinate the planning and implementation of programs and services in the covered areas. Then, considering the control and supervision exercised by the President over the CAR and the offices created under E.O. No. 220, and considering further the indispensable participation of the line departments of the National Government, the CAR may be considered more than anything else as a regional coordinating agency of the National Government, similar to the regional development councils which the President may create under the Constitution. These councils are "composed of local government officials, regional heads of departments and other government offices, and representatives from non-governmental organizations within the region for purposes of administrative decentralization to strengthen the autonomy of the units therein and to accelerate the economic and social growth and development of the units in the region." In this wise, the CAR may be considered as a more sophisticated version of the regional development council. y EO 220 which created CAR did not contravene the constitutional guarantee of local autonomy of the member LGUs. Cordillera Broad Coalition vs. Commission on Audit G. R. No. 79956, January 29, 1990 As we have said earlier, the CAR is a mere transitory coordinating agency that would prepare the stage for political autonomy for the Cordilleras. It fills in the resulting gap in the process of transforming a group of adjacent territorial and political subdivisions already enjoying local or administrative autonomy into an autonomous region vested with political autonomy. Abbas vs. COMELEC G.R. No. 89651 (1989) Under the Constitution, the creation of the autonomous region hinges only on the result of the plebiscite. If the Organic Act is approved by majority of the votes cast by constituent units in the scheduled plebiscite, the creation of the autonomous region immediately takes effect. The questioned provisions in R.A. No. 6734 requiring an Oversight Committee to supervise the transfer do not provide for a different date of effectivity. Much less would the organization of the Oversight Committee cause an impediment to the operation of the Organic Act, for such is evidently aimed at effecting a smooth transition period for the regional government. The constitutional objection on this point thus cannot be sustained as there is no basis therefor. y The power to merge administrative regions is executive in character. Chiongbian, et al vs. Orbos, et al G.R. No. 96754, June 22, 1995 As this Court observed in Abbas, while the power to merge administrative regions is not expressly provided for in the Constitution, it is a power which has traditionally been lodged with the President to facilitate the exercise of the power of general supervision over local governments. R.A. No. 5435 was passed authorizing the President of the Philippines, with the help of a Commission on Reorganization, to reorganize the different executive departments, bureaus, offices, agencies and instrumentalities of the government, including banking or financial institutions and corporations owned or controlled by it. The purpose was to promote simplicity, economy and efficiency in the government. The law provided that any reorganization plan submitted

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would become effective only upon the approval of Congress. Thus the creation and subsequent reorganization of administrative regions have been exercised by the President pursuant to authority granted to him by law. y The power granted authorizes the reorganization even of regions, provinces and cities that did not take part in the plebiscite on the creation of the Autonomous Region or did not vote in favor of it

While Article XIX, Section 13 provides that The provinces and cities which in the plebiscite do not vote for inclusion in the Autonomous Region shall remain in the existing administrative regions, this provision is subject to the qualification that the President may, by administrative determination, merge the existing regions. This means that while non-assenting provinces and cities are to remain in the regions as designated upon the creation of the Autonomous Region, they may nevertheless be regrouped with contiguous provinces forming other regions as the exigency of administration may require. On the applicability to only those which voted for inclusion in the Autonomous Region, the Presidents power cannot be so limited without neglecting the necessities of administration.

A tribal court of the Cordillera Bodong Administration cannot render a valid and executory decision in a land dispute BADUA vs. CORDILLERA BODONG ADMINISTRATION 1991 Feb 14G.R. No. 92649

. In "Cordillera Regional Assembly Member Alexander P. Ordillo, et al. vs. The Commission on Elections, et al found that in the plebiscite that was held on January 23, 1990 pursuant to Republic Act 6766, the creation of the Cordillera Autonomous Region was rejected by all the provinces and city of the Cordillera region, except Ifugao province, hence, the Cordillera Autonomous Region did not come to be. As a logical consequence of that judicial declaration, the Cordillera Bodong Administration created under Section 13 of Executive Order No. 220, the indigenous and special courts for the indigenous cultural communities of the Cordillera region (Sec. 1, Art. VII, Rep. Act 6766), and the Cordillera People's Liberation Army, as a regional police force or a regional command of the Armed Forces of the Philippines (Secs. 2 and 4, Article XVIII of R.A. 6766), do not legally exist. Since the Cordillera Autonomous Region did not come into legal existence, the Maeng Tribal Court was not constituted into an indigenous or special court under R.A. No. 6766. Hence, the Maeng Tribal Court is an ordinary tribal court existing under the customs and traditions of an indigenous cultural community. Such tribal courts are not a part of the Philippine judicial system which consists of the Supreme Court and the lower courts which have been established by law (Sec. 1, Art. VIII, 1987 Constitution). They do not possess judicial power. Like the pangkats or conciliation panels created by P.D. No. 1508 in the barangays, they are advisory and conciliatory bodies whose principal objective is to bring together the parties to a dispute and persuade them to make peace, settle, and compromise. SEC. 5. Rules of Interpretation. - In the interpretation of the provisions of this Code, the following rules shall apply: (a)Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned; (b) In case of doubt, any tax ordinance or revenue measure shall be construed strictly against the local government unit enacting it, and liberally in favor of the taxpayer. Any tax exemption, incentive or relief granted by any local government unit pursuant to the provisions of this Code shall be construed strictly against the person claiming it. (c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in accelerating economic development and upgrading the quality of life for the people in the community; (d) Rights and obligations existing on the date of effectivity of this Code and arising out of contracts or any other source of prestation involving a local government unit shall be governed by the original terms and conditions of said contracts or the law in force at the time such rights were vested; and (e)In the resolution of controversies arising under this Code where no legal provision or jurisprudence applies, resort may be had to the customs and traditions in the place where the controversies take place.

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Tano vs. Socrates 278 SCRA 154

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Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC shall be liberally interpreted to give more powers to the local government units in accelerating economic development and upgrading the quality of life for the people of the community. y Rights existing on the date of effectivity of this Code involving a local government unit shall be governed by the law in force at the time such rights were vested THE SECRETARY OF HEALTH vs.COURT OF APPEALS G. R. No. 112243, Feb. 23, 1995 At the time of the commencement of the administrative action, the operative laws are the Administrative Code of 1987 and Executive Order No. 119. Under the said laws, the Secretary of Health exercises control, direction and supervision over his subordinates, which include private respondent. Consequently, since jurisdiction has been acquired by the Secretary of Health over the person of private respondent before the effectivity of the Local Government Code on January 1, 1992, it continues until the final disposition of the administrative case. Greater Balanga Dev. Corp vs Balanga G. R. No. 83987, Dec. 27, 1994 The second paragraph of Section 3A-06(b) does not expressly require two permits for their conduct of two or more businesses in one place, but only that separate fees be paid for each business. The powers of municipal corporations are to be construed in strictissimi juris and any doubt or ambiguity must be construed against the municipality (City of Ozamiz v. Lumapas, 65 SCRA 33 [1975]). Granting, however, that separate permits are actually required, the application form does not contain any entry as regards the number of businesses the applicant wishes to engage in. Evardone vs COMELEC GR. No. 95063, December 2, 1991 Art. 18 Sec. 3 of the Consti expressly provides that all existing laws not inconsistent with the 1987 Consti shall remain operative until amended repealed or revoked. RA 7160 providing for the Local Government Code of 1991, expressly repeals BP 337. But, the new LGC will take effect only on January 1, 1992 therefore the old LGC (BP 337) is still the applicable law to the present case. The Court ruled that Resolution 2272 is valid and constitutional.

CREATION, CONVERSION AND ABOLITION OF LOCAL GOVERNMENT UNITS SEC. 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. SEC. 7. Creation and Conversion. - As a general rule, the creation of alocal government unit or its conversion from one level to another level shall be based on verifiable indicators of viability and projected capacity to provide services, to wit: (a) Income. - It must be sufficient, based on acceptable standards, to provide for all essential government facilities and services and special functions commensu- rate with the size of its population, as expected of the local government unit concerned; (b) Population. - It shall be determined as the total number of inhabitants within the territorial jurisdiction of the local government unit concerned; and (c) Land Area. - It must be contiguous, unless it comprises two or more islands or is separated by a local government unit independent of the others; properly identified by metes and bounds with technical descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its populace. Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF), the NationalStatistics Office (NSO), and the Lands Management Bureau(LMB) of the Department of Environment and Natural Resources(DENR). SEC. 8. Division and Merger. - Division and merger of existinglocal government units shall comply with the same requirements herein prescribed for their creation: Provided, however, That such division shall not reduce the income, population, or land area of the local government unit or units concerned to less than the minimum

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requirements prescribed in this Code: Provided, further, That the income classification of the original local government unit or units shall not fall below its current income classification prior to such division. The income classification of local government units shall be updated within six (6) months from the effectivity of this Code to reflect the changes in their financial position resulting from the increased revenues as provided herein. SEC. 9. Abolition of Local Government Units. - A local government unit may be abolished when its income, population, or land area has been irreversibly reduced to less than the minimum standards prescribed for its creation under Book III of this Code, as certified by the national agencies mentioned in Section 17 hereof to Congress or to the sanggunian concerned, as the case may be. The law or ordinance abolishing a local government unit shall specify the province, city, municipality, or barangay with which thelocal government unitsought to be abolished will be incorporated or merged. SEC. 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. Said plebiscite shall be conducted by the Commission on Elections (Comelec) within one hundred twenty (120) days from the date of effectivity of the law or ordinance effecting such action, unless said law or ordinance fixes another date.

MMDA vs Dante O. Garin G. R. No. 130230, April 15, 2005 The MMDA is not a political unit of government. The power delegated to the MMDA is that given to the Metro Manila Council to promulgate administrative rules and regulations in the implementation of the MMDA's functions. There is no grant of authority to enact ordinances and regulations for the general welfare of the inhabitants of the metropolis. Therefore, insofar as Sec. 5(f) of Rep. Act No. 7924 is understood by the lower court and by the petitioner to grant the MMDA the power to confiscate and suspend or revoke drivers' licenses without need of any other legislative enactment, such is an unauthorized exercise of police power. Sec. 5(f) grants the MMDA with the duty to enforce existing traffic rules and regulations. MMDA may enforce, but not enact, ordinaces. Sultan Osop B. Camid vs Office of the President et. al. G. R. No. 161414, Jan. 17, 2005 Section 442(d) of the Local Government Code requires that in order that the municipality created by executive order may receive recognition, they must have their respective set of elective municipal officials holding office at the time of the effectivity of the Local Government Code. Petitioner admits that Andong has never elected its municipal officers at all.

Padilla vs. Comelec, G.R. No. 103328, October 19, 1992. It stands to reason that when the law states that the plebiscite shall be conducted "in the political units directly affected," it means that residents of the political entity who would be economically dislocated by the separation of a portion thereof have a right to vote in said plebiscite. Evidently, what is contemplated by the phrase "political units directly affected," is the plurality of political units which would participate in the plebiscite. Logically, those to be included in such political areas are the inhabitants of the barangays of the proposed Municipality of Tulay-Na-Lupa as well as those living in the parent Municipality of Labo, Camarines Norte. Grio v. COMELEC "SEC. 462. Existing Subprovinces. Existing sub-provinces are hereby converted into regular provinces upon approval by a majority of the votes cast in a plebiscite to be held in the said sub-provinces and the original provinces directly affected. The plebiscite shall be conducted by the Comelec simultaneously with the national elections following the effectivity of this Code. "The new legislative districts created as a result of such conversion shall continue to be represented in Congress by the duly elected representatives of the original districts out of which said new provinces or districts

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were created until their own representatives shall have been elected in the next regular congressional elections and qualified. As it is worded, Section 462 completely addresses an eventuality where the people of both the original district and the people of the new district to be created agree to the proposed creation of the latter. Mun. of San Narciso, Quezon v. Mendez Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally decided to challenge the legality of the executive order. In the meantime, the Municipal District, and later the Municipality, of San Andres, began and continued to exercise the powers and authority of a duly created local government unit. Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities." Tan v. COMELEC 142 SCRA 727 The phrase subject to the approval by a majority of the votes in a plebiscite in the unit or units affected must be construed to mean that the remaining areas in the province of Negros Occidental should have been allowed to participate in the said plebiscite. The reason is that cities belonging to Negros Occidental will be added to Negros del Norte, thus Negros Occidentals land area will be dismembered. Certainly, the people of Negros Occidental should have been allowed to vote in the plebiscite as they are directly affected by the diminution in land size of their province. A reading of the last sentence of the first paragraph of Section 197 LGC of 1983 says. The territory need not be contiguous if it comprises 2 or more islands. The use of the word territory clearly reflects that the law refers only to the land mass and excludes the waters over which the political unit has control. In other words, Negros del Norte failed to meet the required land area of 3,500 sq. km for it to become a province. Lopez v. COMELEC G. R. No. L-56022 & L-56124, May 31, 1985 The Court xxx came to the conclusion that the constitutional provision on the need for a majority of the votes cast in the plebiscite in the unit or units affected would be satisfied even if "those voters who are not from the barangay to be separated [were] excluded in the plebiscite." It cannot be argued therefore that the plebiscite held in the areas affected to constitute Metropolitan Manila, having manifested their will, the constitutional provision relied upon by petitioners has been satisfied. Mun. of Malabang v. Benito G.R. No. L-28113, March 28, 1969 In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a time when the statute had not been invalidated cannot conceivably make it a de facto corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to give color of authority to its creation.

Authority to create municipal corporations is essentially legislative in nature. Pelaez vs. Auditor General, G. R. No. L-23825, December 24, 1965

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Note: TYPES OF LOCAL GOVERNMENTS 1. De jure Municipal Corporations- those created or recognized by operation of law 2. De facto municipal corporations- where the people have organized themselves, under color of law, into ordinary municipal bodies, and have gone on, year after year, raising taxes, making improvements, and exercising their usual franchises, with their rights dependent quite as much on acquiescence as on the regularity of their origin Elements: a. A valid law authorizing incorporation b. An attempt in good faith to organize under it c. A colorable compliance with law d. An assumption of corporate powers Municipal Corporation by prescription- exercised their powers from time immemorial with a charter which is presumed to have been lost or destroyed.

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Special thanks to:


Julse Bacolod Lemuel Leal Russel Pernites Welfredo Pongot ..and to all who submitted their case digests and made this possible. Godbless EH 402!

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