[LAW 154: LOCAL GOVERNMENT / PROF.GATMAYTAN / 2ND SEM, S.Y. 2013-2014 / D2015] DE LEON VS.

ESGUERRA Justice Melencio-Herrera, 31 August 1987 FACTS:

In the Barangay elections held on 17 May 1982, Alfredo M. De Leon (petitioner) was elected Barangay Captain and the other petitioners Salamat, Sta. Ana, Tolentino, de la Rosa and Resurreccion, as Barangay Councilmen of Barangay Dolores, Taytay, Rizal under BP 222, otherwise known as the Barangay Election Act of 1982. On 9 February 1987, De Leon received a Memorandum antedated December 1, 1986 but signed by OIC Governor Benjamin Esguerra on 8 February 1987 designating Florentino G. Magno as Barangay Captain of Barangay Dolores, Taytay, Rizal. The designation made by the OIC Governor was "by authority of the Minister of Local Government." The OIC Governor also signed a Memorandum designating Tigas, Lacanienta, Medina, Paz and Tolentino as members of the Barangay Council of the same Barangay and Municipality. De Leon and 5 other then filed an original action for Prohibition seeking to enjoin respondents from replacing them from their respective positions. Petitioners Arguments: Prayer: That the subject Memoranda be declared null and void and that respondents be prohibited from taking over their positions of Barangay Captain and Barangay Councilmen, respectively. Pursuant to Section 3 of the Barangay Election Act of 1982 (BP Blg. 222), their terms of office "shall be six (6) years which shall commence on June 7, 1982 and shall continue until their successors shall have elected and shall have qualified," or up to June 7, 1988. With the ratification of the 1987 Constitution, the OIC Governor no longer has the authority to replace them and to designate their successors. Respondents Arguments: Rely on Section 2, Article III of the Provisional Constitution, promulgated on March 25, 1986, which provided: SECTION 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such appointment is made within a period of one year from February 25,1986. The terms of office of elective and appointive officials were abolished and that petitioners continued in office by virtue of the provision and not because their term of six years had not yet expired The provision in the Barangay Election Act fixing the term of office of Barangay officials to six (6) years must be deemed to have been repealed for being inconsistent with the aforequoted provision of the Provisional Constitution. ISSUE AND HOLDING: Whether or not the memorandum is null and void. YES RATIO: THE MEMORANDUM WAS MADE WITHIN THE ONE YEAR PERIOD Considering the candid Affidavit of OIC Governor, the SC held that 8 February 1977, should be considered as the effective date of replacement and not 1 December 1986 to which it was ante dated, in keeping with the dictates of justice BUT, PROVISIONAL CONSTITUTION HAS BEEN SUPERSEDED BY THE 1987 CONSTITUTION While 8 February 1987 is ostensibly still within the one-year deadline, the aforequoted provision in the Provisional Constitution must be deemed to have been overtaken by Section 27, Article XVIII of the 1987 Constitution reading. SECTION 27. This Constitution shall take effect immediately upon its ratification by a majority of the votes cast in a plebiscite held for the purpose and shall supersede all previous Constitutions. The 1987 Constitution was ratified in a plebiscite on 2 February 1987. By that date, therefore, the Provisional Constitution must be deemed to have been superseded. Having become inoperative, the OIC Governor could no longer rely on Section 2, Article III, thereof to designate respondents to the elective positions occupied by petitioners. PETITIONERS HAS ACQUIRED SECURITY OF TENURE Petitioners must now be held to have acquired security of tenure specially 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. Relevantly, Section 8, Article X of the same 1987 Constitution further provides in part: Sec. 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years ... Until the term of office of barangay officials has been determined by law, therefore, the term of office of six (6) years provided for in the Barangay Election Act of 1982 should still govern. The Court finds nothing inconsistent between the term of six (6) years for elective Barangay officials and the 1987 Constitution, and the same should, therefore, be considered as still operative, pursuant to Section 3, Article XVIII of the 1987 Constitution, reading: Sec. 3. All existing laws, decrees, executive orders, proclamations letters of instructions, and other executive issuances not inconsistent, with this Constitution shall remain operative until amended, repealed or revoked. DISSENT, J. SARMIENTO The 1987 constitution took effect on 11 February 1987, the date the same was proclaimed ratified pursuant to Proclamation No. 58 of the President of the Philippines, and not 2 February 1987, plebiscite day.

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It is my reading that the Constitution takes effect on the date its ratification shall have been ascertained, and not at the time the people cast their votes to approve or reject it. For it cannot be logically said that Constitution was ratified during such a plebiscite, when the will of the people as of that time, had not, and could not have been, vet determined. (Note: Justice Sarmiento enumerated in this dissent several instances where the proclamation of their ratification were held to be the date when a Constitution or amendments thereto takes effect. See original for specific example.) SAN JUAN V. CSC, DBM, AND ALMAJOSE (1991) Gutierrez, Jr., J. NATURE: Pursuant to Consti Art. IX (A) Sec 7, Petitioner Governor of Rizal prays for the nullification of Resolution 89-868 (1989) & Res. 90-150 (1990) of the Civil Service Commission The Resolutions resolved to dismiss the appeal of the governor and approved the appointment of Cecilia Almajose as Provincial Budget Officer of Rizal The 2nd Resolution denied the governors MR FACTS: In 1988, the position of Rizal Prov. Budget Officer (PBO) was left vacant. Its former holder was a certain del Rosario. Gov. Reynaldo San Juan informed the Department of Budget & Management that Dalisay Santos assumed office as Acting PBO, pursuant to a Memo issued by the Governor. o He requested then DBM Region 4 Dir. Abella to endorse the appointment of Santos as PBO of Rizal. Before being an Acting PBO, Santos was Municipal Budget Officer. The Director addressed a Memo to the DBM Secretary that based on a comparative study of all Municipal Budget Officers which included 3 nominees of the Governor, Cecilia Almajose was the most qualified since she was the only CPA among the contenders. o Upon this recommendation by the Director, DBM Undersecretary Cabuquit Jr signed the appointment papers of Almajose The Governor wrote to Secretary Carague, reiterating his request for the appointment of Santos o DBM Director Galvez wrote the Governor that Santos and his other recommendees did not meet the minimum requirements under Local Budget Circular 31. The Governor, after being informed of Almajoses appointment, wrote to Secretary Carague, protesting against the appointment on the grounds: o That Cabuquit (as DBM USec) is not legally authorized to appoint the PBO o That Almajose lacks the required 3 yrs experience as provided in Local Budget Circular 31 o That under EO 112, it is the Provincial Governor who has the power to recommend nominees for the position of PBO The DBM Director of the Bureau of Legal & Legislative Affairs issued a Memo ruling that the Governors letter-protest is not meritorious because DBM validly exercised its prerogative in filling-up the position. The Governor wrote the CSC protesting the appointment of Almajose. The CSC then issued the resolutions (denying the Governors appeal). ISSUE/HELD: In the event that the Governor recommends an unqualified person, is the Secretary free to appoint anyone he fancies? ---- NO Governors argument: He, as the Governor, has the sole right and privilege to recommend nominees to the position and that the appointee should come only from his nominees. He invokes EO 112 Sec 1: o Sec. 1. All budget officers of provinces, cities and municipalities shall be appointed by the Minister of Budget and Management upon recommendation of the local chief executive concerned, subject to civil service law, rules and regulations, and they shall be placed under the administrative control and technical supervision of the Ministry of Budget and Management. RATIO: Under EO 112, the governors power to recommend is subject to the qualifications pre scribed by law. If the recommendations fall short of the standard, the Secretary of DBM is expected to reject them. But if the recommendations are unqualified, can the Secretary appoint anyone he fancies? (SC says no.) Before EO 112, BP 337 (Local Govt Code) vested upon the Governor the power to appoint the PBO. This Code further enumerated the qualifications for the position: o Citizen of the Phils o Of good moral character o A holder of a degree preferably in law, commerce, public administration or any related course from a recognized college or university o A first grade civil service eligibility or its equivalent o Has acquired at least 5 yrs experience in budgeting or in any related field The Governor argues: o Since the authority to appoint the PBO was vested in him before, the real intent of EO 112 in empowering him to recommend is to make such recommendation part and parcel of the appointment process

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That the phrase "upon recommendation of the local chief executive concerned" must be given mandatory application in consonance with the state policy of local autonomy as guaranteed by the 1987 Constitution under Art. II, Sec. 25 and Art. X, Sec. 2. o That his power to recommend cannot validly be defeated by a mere administrative issuance of DBM reserving to itself the right to fill-up any existing vacancy in case the governors nominees do not meet the qualification requirements as embodied in public respondent DBM's Local Budget Circular No. 31 The CSCs justification is this: o As required by EO 112, the DBM Secretary may choose from among the recommendees of the Governor who are qualified for appointment to the position of PBO. Notwithstanding, the recommendation is merely directory and not a condition sine qua non to the exercise by the Secretary of DBM of his appointing prerogative. o To rule otherwise would in effect give the law or EO 112 a different interpretation or construction not intended o It cannot be said that said national officer (PBO) has a similar role in the LGU, to that of a Commission on Audit resident auditor. Hence, to preserve and maintain the independence of the PBO from the LGU, he must be primarily the choice of the national appointing official, and the appointment power must not be unduly hampered or interfered with. o The appointing official is not restricted to the list recommended by the local chief executive. He may consider other nominees for the position vis a vis the nominees of the local chief executive. The tug of war between the Secretary of DBM and the Governor involves the application of a most impt consti policy: that of local autonomy. o We have to obey the clear mandate on local autonomy. o Where a law is capable of 2 interpretations, 1 in favor of centralized power in Malacanang, the other beneficial to local autonomy, the scales must be weighed in favor of autonomy The exercise by LGUs of meaningful power has been a national goal since the turn of the century. And yet, inspite of constitutional provisions and legislation mandating greater autonomy, national officers cannot seem to let go of centralized powers. Pres. McKinleys instructions in 1900 ordered the new govt to devote their attention to the establishment of municipal govts in which natives of the islands are to be afforded the opportunity to manage their own local offices o In this initial organic act, the Second Phil Commission, combined both exec and legis powers, was directed to give priority to making local autonomy effective The 1935 Consti had no specific article on local autonomy. However, in Art VII Sec 11: The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed o The Consti clearly limited the exec power over local govt to gen. supervision as may be provided by law o The Pres controls the exec dept; he has no such power over local govts In the case of Tecson v. Salas, it was said: the presidential competence is not even supervision in general, but general supervision as may be provided by law. o He could not go beyond the applicable statutory provs o Supervision goes no further than "overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If they fail to fulfill them, the superior officer may take such action as prescribed by law to make them perform their duties o Control means the power of an officer to alter or modify or nullify or set aside what a subordinate had done in the performance of their duties and to substitute the judgment of the former for that of the latter. Pursuant to this principle under the 1935 Consti, legislation implementing local autonomy was enacted. RA 2264 An Act Amending the Law Governing Local Governments by Increasing Their Autonomy and Reorganizing Local Governments. It was followed by RA 5185 (the Decentralization Law) was enacted, giving "further autonomous powers to local governments in 1967. By the 1973 Consti, legal provs moved towards greater economy. In Art II: o Sec. 10. The State shall guarantee and promote the autonomy of local government units, especially the barangay to ensure their fullest development as self-reliant communities An entire article on Local Govt was incorporated into the Consti. It called for a local govt code defining more responsive and accountable local govt structures. In the present Consti, the exercise of greater local autonomy is even more marked: o Art II. Sec. 25. The State shall ensure the autonomy of local governments o The 14 sections in Article X on Local Government not only reiterate earlier doctrines but give in greater detail the provisions making local autonomy more meaningful o Art X. Sec 2. The territorial and political subdivisions shall enjoy local autonomy. o Art X. Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units. When the CSC interpreted the recommending power of the Governor as purely directory, it went against the letter and spirit of the constitutional provisions on local autonomy The right given by Local Budget Circular 31 is ultra vires and is set aside: this one----

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Sec. 6 The DBM reserves the right to fill up any existing vacancy where none of the nominees of the local chief executive meet the prescribed requirements. The PBO is expected to synchronize his work with DBM . Provincial and municipal budgets are prepared at the local level and after completion are forwarded to the national officials for review. o It is for this reason that there should be interplay, a balancing of viewpoints, and a harmonization of proposals from both the local and national officials. o It is for this reason that the nomination and appointment process involves a sharing of power between the two levels of government. The appointment of the Almajose was formalized before the Governor was extended the courtesy of being informed that his nominee had been rejected. The complete disregard of the local government's prerogative and the smug belief that the DBM has absolute wisdom, authority, and discretion are manifest. In his classic work "Philippine Political Law" Dean Sinco stated that the value of local governments as institutions of democracy is measured by the degree of autonomy that they enjoy. Our 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.

Petition granted. CSC resolutions set aside. GANZON V. CA 05 AUG 1991 | Sarmiento | appeal of a CA decision Petitioners: Rodolfo Ganzon and Mary Artieda Respondents: Court of Appeals, Luis Santos, Nicanor Patricio, Salvador Cabaluna Facts: This is a consolidation of three petitions for prohibition, two of which were filed by Ganzon. Ganzon is the Mayor of Iloilo City while Artieda is a member of its Sangguniang Panglungsod. Ganzons petitions arose from 10 administrative complaints filed by different city officials in 1988, where he was charged with abuse of authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable violation of the Constitution, and arbitrary detention. Specifics of the administrative cases: 1. Cabaluna was a clerk at the City Health Office of Iloilo City. She supported Ganzons rival mayoral candidate Caram, and because of this, Ganzon pulled Cabaluna out of her office despite being well qualified and assigned her to the work of a non-career service employee. A utility worker from Public Services replaced her. Cabaluna claimed this was harrassment. 2. Dra. Ortigoza was an Assistant City Health Officer. Her office was padlocked without explanation and her salary was withheld. She filed her vacation leave but Ganzon, in connivance with Dr. Villegas made her run around for its approval, and they also engineered a trumped-up administrative complaint against her. 3. Malabor was the citys Vice-Mayor. He, along with other members of the Sangguniang Panglungsod filed the complaint when Councilor Ongs key to his office was taken without notice by Ganzon. He was forced to hold office at Plaza Libertad, and the other complainants sympathized and joined him there. Ganzon and armed security forced them out of the Plaza. Ong denounced Ganzon in the radio station and planned to hold office at the Freedom Grandstand but he and his sympathizers were prevented from entering the area and were dozed with water from a firetruck by Ganzon and his men. 4. Erbite was a barangay tanod appointed by former Mayor Caram. On 13 MAR 1988, he was arrested and detained without charges and without a warrant. He was mauled while he was in jail for an entire day until he was released. The initial hearings were set at the Regional Office of the Department of Local Government in Iloilo City but Ganzon kept asking for postponement. His motion to postpone was granted once, but his subsequent motions for postponement were denied. After the hearings for Cabaluna and Ortigozas com plaints, probable cause was found and the Department of Local Government Secretary Luis Santos issued a 60-day preventive suspension order. The other hearings were scheduled and Ganzon kept asking for postponement; some granted, most denied (reasons: witnesses sick, no transportation). His motion to change the venue was denied due to lack of funds. The hearing officers gave Ganzon until 15 DEC 1988 to present his evidence but he failed to do so, hence, the cases were considered submitted for resolution. In Erbites arbitrary detention case, prima facie evidence was found to exist so Sec. Santos issued another 60-day preventive suspension order. But Ganzon was able to secure a writ of preliminary injuction with the RTC Iloilo so the 2nd suspension order was not enforced. Aside from his action for prohibition with the RTC, he filed the same action with the CA. 03 MAY 1990, Sec. Santos issued the third 60-day preventive suspension and designated Vice Mayor Malabor as acting mayor. Ganzon again filed a petition for prohibition with the CA. CA dismissed both of Ganzons petitions and certified Artiedas petition to the SC. Artieda was similarly charged by Sec. Santos. SC issued TRO to prevent the implementation of the suspension orders and consolidated the cases. Ganzon claimed that Sec. Santos was biased, prejudiced, and hostile towards him after Ganzon refused to join the Laban ng Demokratikong Pilipino party and to operate a lottery, and also because of their political rivalry in the

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previous elections. He contended that his motion to change the venue of the cases held in Manila to Iloilo and some of his motions to postpone the hearings were unjustly rejected. Minor issues (irrelevant to topic): Ganzons claim that Sec. Santos was biased against him becaus e of the issues on the party and the lottery was not supported by proof other than his mere assertions. Although Sec. Santos did not rebut the allegations, SC cannot accept Ganzons claims at face value. Ganzons request to defer the hearing on account of the ninety-day ban prescribed by Section 62 of Batas Blg. 337 moot due to the SCs TRO. SC found no compelling evidence to overturn the CAs findings that Sec. Santos was not wrong in denying Ganzons motions for postponement, which is a matter of discretion on Sec. Santos part. Main Issue: Did Sec. Santos, as the Presidents alter ego, have authority to suspend and remove local officials? YES, but in this case, the rule on the 60-day preventive suspension was violated. Ratio: Ganzons assertion that the 1987 Constitution no longer allowed the President to exercise the power of suspension and/or removal over local officials is unmeritorious. Both Ganzon and Artieda claimed that when the phrase as may be provided by law was removed in the provision, it s tripped the President of the power of control over local governments. 1987 Constitution 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. 1935 Constitution Sec. 10. The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all Local governments as may be provided by law, and take care that the laws be faithfully executed.

SC said that notwithstanding the change in the language, the charter did not intend to divest the legislature of its right or the President of her prerogative as conferred by existing legislation to provide administrative sanctions against local officials. The omission of the phrase signified nothing more than to underscore the local governments autonomy and to break Congress control over its affairs, but it did not deprive the legislature of its authority over them, particularly concerning discipline. Autonomy, in the constitutional sense, is subject to the guiding star, though not control, of the legislature, albeit the legislative responsibility under the Constitution and as the "supervision clause" itself suggest, is to wean local government units from over-dependence on the central government. It is not meant to create mini -states out of local government units. The Constitution does not prescribe federalism. Under the Charter, "local autonomy" is not instantly self-executing, but subject to, among other things, the passage of a local government code, a local tax law, income distribution legislation, and a national representation law, and measures designed to realize autonomy at the local level. It is also noteworthy that in spite of autonomy, the Constitution places the local government under the general supervision of the Executive. It is noteworthy finally, that the Charter allows Congress to include in the local government code provisions for removal of local officials1, which suggest that Congress may exercise removal powers, and as the existing Local Government Code has done, delegate its exercise to the President. The Constitution contains no prohibition against legislation authorizing the President, through the Secretary of Local Government, to proceed against local officials administratively. "Supervision" is not incompatible with disciplinary authority. In Mondano vs. Silvosa, SC held that supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify of set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for that of the latter." But from this pronouncement it cannot be reasonably inferred that the power of supervision of the President over local government officials does not include the power of investigation when in his opinion the good of the public service so requires. "Investigating" is not inconsistent with "overseeing", although it is a lesser power than "altering". Neither Lacson nor Hebron nor Mondano categorically banned the Chief Executive from exercising acts of disciplinary authority because she did not exercise control powers, but because back then, no law allowed her to exercise disciplinary authority. Deliberations of the Constitutional Commission are inconclusive since Nolledo wanted to exclude the power of removal from the President, but Ople would not.

LGC Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units.

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The Constitution did not repeal BP 337 (Local Government Code) since suspension and removal are not incompatible terms. Hence, the provisions on preventive suspension2 are still in force and effect. Local autonomy means "a more responsive and accountable local government structure instituted through a system of decentralization." Decentralization means devolution of national administration but not power to the local levels. Local officials remain accountable to the central government in the manner the law may provide. Although the court recognized the power of Sec. Santos to impose preventive suspension, the successive 60-day suspensions bothered the court since Ganzon is facing the possibility of 600 days of suspension in case all 10 cases yield prima facie findings. Preventive suspension may be justified but its continuance for an unreasonable length of time raises a due process issue, since even if the accused official was acquitted, his right to hold office had already been nullified and depriving the electorate of the services the official they elected would have rendered. The sole objective of a suspension is simply "to prevent the accused from hampering the normal cause of the investigation with his influence and authority over possible witnesses" or to keep him off "the records and other evidence. It is not a penalty but a means to assist prosecutors in firming up a case. It cannot exceed 60 days. A longer suspension is unjust and unreasonable. Ganzon had already served 120 days of suspension and 60 more days if the third order was to be implemented. SC held that Sec. Santos gravely abused his discretion in imposing subsequent suspension orders when it already had sufficient time to gather the necessary evidence to build a case against Ganzon. The prolonged suspension is already in fact a punishment in spite of the fact that Ganzons guilt has not yet been prove n. Dispositive: Petitions DISMISSED. Ganzons suspensions affirmed but he cannot be made to serve future suspensions on account of the rest of the 10 administrative charges pending against him for acts prior to 11 AUG 1988. If he causes delays in the investigations, the time of the delay will not be counted in computing the time of suspension. If he commits other offenses during or after his suspension, he may be preventively suspended again if warranted. Artiedas 60-day suspension also affirmed.

BASCO V. PAGCOR ATTY. Humberto Basco, et al vs. Philippine Amusements and Gaming Corporation (PAGCOR) 1991|| Paras, J: Facts: Petitioners seek to annul PAGCORs charter PD 1869 because: 1. Allegedly contrary to morals, public policy and order 2. Waived Manila City governments right to impose taxes and license fees 3. Contravened the principle of local autonomy 4. Violates equal protection clause (legalizes PAGCOR or conducted gambling while other gambling forms are outlawed) 5. Violates the trend of the Cory govt to promote free enterprise and privatization instead of cronyism 6. It has a gambling objective and is contrary to Sections 11, 12 and 13 of Article II, Section 1 of Article XIII and Section 3(2) of Article XIV

History of PAGCOR PAGCOR was created by PD 1067-A in 1977 and was granted a franchise under P.D. 1067-B "to establish, operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines." Its operation was originally conducted in the well known floating casino "Philippine Tourist."

Sec. 62. Notice of Hearing. Within seven days after the complaint is filed, the Minister of local Government, or the sanggunian concerned, as the case may be, shall require the respondent to submit his verified answer within seven days from receipt of said complaint, and commence the hearing and investigation of the case within ten days after receipt of such answer of the respondent. No investigation shall be held within ninety days immediately prior to an election , and no preventive suspension shall be imposed with the said period. If preventive suspension has been imposed prior to the aforesaid period, the preventive suspension shall be lifted. Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by the Minister of Local Government if the respondent is a provincial or city official, by the provincial governor if the respondent is an elective municipal official, or by the city or municipal mayor if the respondent is an elective barangay official. (2) Preventive suspension may be imposed at any time after the issues are joined , when there is reasonable ground to believe that the respondent has committed the act or acts complained of , when the evidence of culpability is strong, when the gravity of the offense so warrants, or when the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. In all cases, preventive suspension shall not extend beyond sixty days after the start of said suspension. (3) At the expiration of sixty days, the suspended official shall be deemed reinstated in office without prejudice to the continuation of the proceedings against him until its termination. However ' if the delay in the proceedings of the case is due to his fault, neglect or request, the time of the delay shall not be counted in computing the time of suspension.

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The operation was considered a success for it proved to be a potential source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to fully attain this objective. In 1983, PAGCOR was created under P.D. 1869 to enable the Government to regulate and centralize all games of chance authorized by existing franchise or permitted by law It was given territorial jurisdiction all over the Philippines and any laws, decrees, EOs, rules inconsistent to it were repealed 3rd largest source of revenue (P6.2B remitted to govt in 3 years)

Issue: WoN PD 1869 is constitutional YES Ratio: 1.) Statute is presumed to be valid (constitutional) 2.) Procedural issue brushed aside technicalities because of importance to the public 3.) Police power government can regulate gambling Gambling is generally prohibited unless allowed by law. Police power is the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare." It consists of (1) an imposition or restraint upon liberty or property, (2) in order to foster the common good. It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the charter. Along with the taxing power and eminent domain, it is a fundamental attribute of government. It is the plenary power of the state to govern its citizens. 4.) P.D. 1869 was enacted for PUBLIC WELFARE. It was pursuant to the policy of the government to "regulate and centralize thru an appropriate institution all games of chance authorized by existing franchise or permitted by law" It provided funds for social impact projects and subjected gambling to "close scrutiny, regulation, supervision and control of the Government" Contentions: Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees. Section 13(2) of P.D. 1869 exempts PAGCOR, as the franchise holder from paying any "tax of any kind or form, income or otherwise, as well as fees, charges or levies of whatever nature, whether National or Local." (2) Income and other taxes. a) Franchise Holder: No tax of any kind or form, income or otherwise as well as fees, charges or levies of whatever nature, whether National or Local, shall be assessed and collected under this franchise from the Corporation; nor shall any form or tax or charge attach in any way to the earnings of the Corporation, except a franchise tax of five (5%) percent of the gross revenues or earnings derived by the Corporation from its operations under this franchise. Such tax shall be due and payable quarterly to the National Government and shall be in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or description, levied, established or collected by any municipal, provincial or national government authority Their contention stated hereinabove is without merit for the following reasons: (a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes. Thus, "the Charter or statute must plainly show an intent to confer that power or the municipality cannot assume it." Its "power to tax" must always yield to a legislative act which is superior having been passed upon by the state itself which has the "inherent power to tax" (Bernas) (b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that "municipal corporations are mere creatures of Congress" which has the power to "create and abolish municipal corporations" due to its "general legislative powers." Congress, therefore, has the power of control over Local governments. And if Congress can grant the City of Manila the power to tax certain matters, it can also provide for exemptions or even take back the power. (c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early as 1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National Government. (d) Local governments have no power to tax instrumentalities of the National Government. PAGCOR is a government owned or controlled corporation with an original charter, PD 1869. All of its shares of stocks are owned by the National Government. In addition to its corporate powers, it also exercises regulatory powers. PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is governmental, which places it in the category of an agency or instrumentality of the Government. Being an instrumentality, PAGCOR should be and actually is exempt from local taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a mere Local government. Supremacy of the National Government over local government The power to tax cannot be allowed to defeat an instrumentality or creation of the very entity having the inherent power to wield it. Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution provides: Sec. 5. Each local government unit shall have the power to create its own source of revenue and to levy taxes, fees, and other charges subject to such guidelines and limitation as the congress may provide , consistent with the basic policy on local autonomy. Such taxes, fees and charges shall accrue exclusively to the local government.

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Since PD 1869 remains an "operative" law until "amended, repealed or revoked," its "exemption clause" remains as an exception to the exercise of the power of local governments to impose taxes and fees. It cannot therefore be violative but rather is consistent with the principle of local autonomy. Besides, the principle of local autonomy under the 1987 Constitution simply means "decentralization" It does not make local governments sovereign within the state or an "imperium in imperio." Local Government has been described as a political subdivision of a nation or state which is constituted by law and has substantial control of local affairs. In a unitary system of government, such as the government under the Philippine Constitution, local governments can only be an intra sovereign subdivision of one sovereign nation, it cannot be an imperium in imperio. Local government in such a system can only mean a measure of decentralization of the function of government. As to what state powers should be "decentralized" and what may be delegated to local government units remains a matter of policy, which concerns wisdom. It is therefore a political question. The matter of regulating, taxing or otherwise dealing with gambling is a State concern and hence, it is the sole prerogative of the State to retain it or delegate it to local governments. Gambling is an offense against the state.

Does it violate the equal protection clause? NO. Equal protection does not preclude classification of individuals who may be accorded different treatment under the law as long as the classification is not unreasonable or arbitrary. It does not prohibit the Legislature from establishing classes of individuals or objects upon which different rules shall operate. The mere fact that some gambling activities like cockfighting (P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are legalized under certain conditions, while others are prohibited, does not render the applicable laws, P.D. 1869 for one, unconstitutional. Does it violate the avowed trend away from cronyism and monopolies? NO This is not a reason to annul the statute. If, indeed, PD 1869 runs counter to the government's policies then it is for the Executive Department to recommend to Congress its repeal or amendment. Monopolies are not necessarily prohibited by the Constitution. The state must still decide whether public interest demands that monopolies be regulated or prohibited. Again, this is a matter of policy for the Legislature to decide. What about the alleged violation of Sections 11 (Personality Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution? NO These are statements of principles and policies. They are basically not self-executing, meaning a law should be passed by Congress. Petitioners failed to overcome the presumption of constitutionality. It must be shown that there is a clear and unequivocal breach of the Constitution, not merely a doubtful and equivocal one. DISMISSED for lack of merit. MAGTAJAS V. PRYCE PROPERTIES CORP INC Petitioners: Mayor Pablo Magtajas, City of Cagayan de Oro Respondents: Pryce Properties Corp, Philippine Amusement and Gaming Corporation (PAGCOR) Cruz 1992- PAGCOR decided to expand its operations in Cagayan de Oro City. It leased a portion of a building belonging to Pryce Properties Corp (respondent). Several civic organizations and religious groups opposed. The Sangguniang Panlungsod of CDO City enacted 2 ordinances: 1. Ordinance No. 3353 prohibits the issuance of a business permit and cancels the existing business permit of an establishment which allows its premises to be used for the operation of a casino 2. Ordinance No. 3375-93 prohibits the operation of a casino and provides a penalty for violation Pryce assailed the ordinances before the CA. It was joined by PAGCOR. CA declared the ordinances invalid and issued a writ of prohibition. Cagayan de Oro City and Mayor Magtajas filed with the SC a petition for review under Rule 45

Arguments of CDO City and Mayor Magtajas: 1. By virtue of the General Welfare Clause (Sec 16) in the LGC, and Section 458, the Sangguniang Panlungsod may prohibit the operation of casinos which are detrimental to the welfare of the people Section 16. General Welfare. - Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. xxx Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod shall:

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(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall: (v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute, gambling and other prohibited games of chance and such other activities inimical to the welfare and morals of the inhabitants of the city. 2. 3. When the LGC expressly authorized LGUs to prevent and supress gambling and other prohibited games of chance, it meant all forms of gambling without distinction. Ubi lex non distinguit, nec nos distinguere (where the law does not distinguish, neither ought we to distinguish) The adoption of the LGC had the effect of modifying the charter of PAGCOR (PD 1869). The LGCs repealing clause under par (f) states that all general and special laws, acts, city charters, decrees, executive orders, proclamations and admin regulations which inconsistent with the provisions of the LGC are repealed. Doubt must be resolved in favor of the City because the LGC calls for its liberal interpretation in favor of the LGUs (Sec 5) Gambling is intrinsically harmful. They cite provisions of the Constitution and SC decisions (case did not show what these are) W/N the ordinances enacted by the Sangguinang Panlungsod are valid NO

4. 5.

ISSUE: RATIO:

Morality of gambling is NOT a justiciable issue Nothing in the constitution categorally proscribes gambling. It is not even mentioned at all. In the exercise of its own discretion, the legislature may prohibit gambling altogether or allow it without limitation or prohibit only some forms. Thus, the only question to be resolved is the validity of the ordinances

Tests of a valid ordinance: 1. It must not contravene the Constitution or any statute 2. Must not be unfair or oppressive 3. Must not be partial or discriminatory 4. Must not prohibit but may regulate trade 5. Must be general and consistent with public policy 6. Must not be unreasonable Re gambling and other prohibited games of chance under Sec 458 Noscitur a nociis (a word or phrase should be interpreted in relation to, or given the same meaning of, words with which it is associated) Since gambling is associated with and other prohibited games of chance, the word should be read as referring to only illegal gambling which, like other prohibited games of chance, must be prevented or suppressed.

LGC did not modify or repeal PD 1869 (PAGCOR charter) Petitioners are playing with words they said that the decree has only been modified pro tanto but they are really arguing that it is dead, repealed and useless because the LGC has prevented PAGCOR from regulating casinos (because under Sec 458, the sangguniang panglungsod SHALL enact ordinances to prevent gambling and other prohibited games of chance) Noteworthy: petitioners only cited Par (f) of the repealing clause. They discarded the rest of the provision which mentions specific laws which are repealed. PD 1869 is not one of them. Implied repeals are not lightly presumed in the absence of clear and unmistakable showing of such intention. In this case, there is no sufficient indication of a repeal of PD 1869. In fact, PAGCOR is mentioned as a source of funding in two later laws.

The Local Government Code and PD 1869 must be reconciled Instead of pitting one statute against another in a destructive confrontation, courts must exert every effort to reconcile them PROPER RESOLUTION: hold that under the LGC, LGUs may prevent and suppress all kinds of gambling within their territories except only those allowed by statutes like PD 1869.

Ordinances should not contravene a statute; Congress still retains control of LGUs Ordinances should not contravene a statute because municipal governments are only agents of the national government Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the

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latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute. This basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Congress retains control of the local government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of the power to tax, which cannot now be withdrawn by mere statute. BUT: the national legislature is still the principal of the local government units, which cannot defy its will, modify or violate it. The power of PAGCOR to centralize and regulate all games of chance remains unimpaired. The Ordinances are invalid.

Petition denied. CA affirmed. Padilla, separate opinion Concurs with the majority that the city ordinances cannot modify or repeal PAGCORs authority to establish gambling casinos under PD 1869 (cites his separate opinion in Basco v PAGCOR) BUT says that gambling runs counter to the governments efforts to reestablish the Filipino moral character. That PAGCOR contributes to the coffers of government is not enough reason to set up more casinos. What is legal is not always moral. The ends do not always justify the means. Compared prostitution with gambling legalization does make it less reprehensible Davide Jr., separate opinion Pryce filed with the CA a petition for prohibition, but it should be a petition for declaratory relief. Accordingly, CA does not have jurisdiction. Petition should have been filed with CDO RTC. Points out that the Ordinances were enacted 2 years before Pryce and PAGCOR entered into a contract of lease. Agrees that the ordinances cannot repeal PD 1869 CAs nullification of the ordinances as unconstitutional because it is in contravention to PD 1869 is unwarranted. A contravention of a law is not necessarily a contravention of the constitution.