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JUDGE DADOLE VS COA FACTS: In 1986, the RTC and MTC judges of Mandaue City started receiving monthly allowances throughthe yearly appropriation ordinance enacted by the Sangguniang Panlungsod of the said city. In 1991,Mandaue City increased the amount to P1,500 for each judge.On March 15, 1994, the Department of Budget and Management (DBM) issued the disputed LocalBudget Circular No. 55 (LBC 55) which provided that such additional allowances in the form of honorarium at rates shall be granted but it shall not exceed P1,000.00 in provinces and cities and P700.00 in municipalities subject to the following conditions:a) That the grant is not mandatory on the part of the LGUs;b) That all contractual and statutory obligations of the LGU including the implementation of R.A. 6758shall have been fully provided in the budget;c) That the budgetary requirements/limitations under Section 324 and 325 of R.A. 7160 should besatisfied and/or complied with; andd) That the LGU has fully implemented the devolution of functions/personnel in accordance with R.A.7160. 3 " (italics supplied)Acting on the DBM directive, the Mandaue City Auditor issued notices of disallowance to petitioners.Beginning October, 1994, the additional monthly allowances of the petitioner judges were reducedto P1,000 each. They were also asked to reimburse the amount they received in excess of P1,000 fromApril to September, 1994. The petitioner judges filed with the Office of the City Auditor a protest againstthe notices of disallowance. But the City Auditor treated the protest as a motion for reconsideration andindorsed the same to the COA Regional Office No. 7. In turn, the COA Regional Office referred themotion to the head office with a recommendation that the same be denied.On November 27, 1995, Executive Judge Mercedes Gozo-Dadole, for and in behalf of the petitioner judges, filed a motion for reconsideration of the decision of the COA. In a resolution dated May 28,1996, the COA denied the motion. Hence, this petition.Petitioner judges argue that LBC 55 is void for infringing on the local autonomy of Mandaue City. Theyalso maintain that said circular is not supported by any law and therefore goes beyond the supervisorypowers of the President. Respondent COA, on the other hand, insists that the constitutional andstatutory authority of a city government to provide allowances to judges stationed therein is notabsolute. Congress may set limitations on the exercise of autonomy. It is for the President, through theDBM, to check whether these legislative limitations are being followed by the local government units.ISSUE: Whether LBC 55 of the DBM is void for going beyond the supervisory powers of the President HELD: The petitioners contention is meritorious. Section 4 of Article X of the 1987 PhilippineConstitution provides that The President of the Philippines shall exercise general supervision over local governments. This provision has been interpreted to exclude the power of control. It was emphasizedthat the two terms -supervision and control -- differed in meaning and extent. The Court distinguishedthem as follows:"x x x In administrative law, supervision means overseeing or the power or authority of an officer to seethat subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the former maytake such action or step as prescribed by law to make them perform their duties. Control, on the otherhand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officerha[s] done in the performance of his duties and to substitute the judgment of the former for that of thelatter." ii 6 In Taule v. Santos, iii 7 we further stated that the Chief Executive wielded no more authority than that of checking whether local governments or their officials were performing their duties as provided by thefundamental law and by statutes. He cannot interfere with local governments, so long as they act withinthe scope of their authority. "Supervisory power, when contrasted with control, is the power of mereoversight over an inferior body; it does not include any restraining authority over such body," iv 8 we said.In a more recent case, Drilon v. Lim, v9 the difference between control and supervision was furtherdelineated. Officers in control lay down the rules in the performance or accomplishment of an act. If these rules are not followed, they may, in their discretion, order the act undone or redone by theirsubordinates or even decide to do it themselves. On the other hand, supervision does not cover suchauthority. Supervising officials merely see to it that the rules are followed, but they themselves do notlay down such rules, nor do they have the discretion to modify or replace them. If the rules are notobserved, they may order the work done or redone, but only to conform to such rules. They may notprescribe their own manner of execution of the act. They have no discretion on this matter except to seeto it that the rules are followed.By constitutional fiat, local government units are subject to the President's supervision only, not control,so long as their acts are exercised within the sphere of their legitimate powers. By the same token, thePresident may not withhold or alter any authority or power given them by the Constitution and the law.Clearly then, the President can only interfere in the affairs and activities of a local government unit if heor she finds that the latter has acted contrary to law. Hence, the President or any of his or her alter egos cannot interfere in local affairs as long as the concerned local government unit acts within theparameters of the law and the Constitution.It was then held that LBC 55 went beyond the law it seeks to implement.LBC 55 provides that the additional monthly allowances to be given by a local government unit shouldnot exceedP1,000 in provinces and cities and P700 in municipalities. Section 458, par. (a)(1)(xi), of RA7160, the law that supposedly serves as the legal basis of LBC 55, allows the grant of additionalallowances to judges "when the finances of the city government allow." The said provision does notauthorize setting a definite maximum limit to the additional allowances granted to judges. Setting auniform amount for the grant of additional allowances is an inappropriate way of enforcing the criterion found in Section 458, par. (a)(1)(xi), of RA 7160. The DBM over-stepped its power of supervision overlocal government units by imposing a prohibition that did not correspond with the law it sought toimplement. In other words, the prohibitory nature of the circular had no legal basis. WHEREFORE , the petition is hereby GRANTED, and the assailed decision and resolution, datedSeptember 21, 1995 and May 28, 1996, respectively, of the Commission on Audit are hereby set aside

Orodillo vs. comelec Facts: On January 30, 1990, the people of the provinces of Benguet, Mountain Province, Ifugao, Abra and KalingaApayao and the city of Baguio cast their votes in a p lebiscite held pursuant to Republic Act No. 6766 entitled An Act Providing for an Organic Act for the Cordillera Autonomous Region. The official Commission on Elections (COMELEC) results of the plebiscite showed that the creation of the Region was approved by a majority of 5,889 votes in only the Ifugao Province and was overwhelmingly rejected by 148,676 votes in the rest of the provinces and city above-mentioned.

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Consequently, the COMELEC, on February 14, 1990, issued Resolution No. 2259 stating that the Organic Act for the Region has been approved and/or ratified by majority of the votes cast only in the province of Ifugao. the petitioner filed a petition with COMELEC to declare the non-ratification of the Organic Act for the Region. The petitioners maintain that there can be no valid Cordillera Autonomous Region in only one province as the Constitution and Republic Act No. 6766 require that the said Region be composed of more than one constituent unit. Issue: The question raised in this petition is whether or not the province of Ifugao, being the only province which voted favorably for the creation of the Cordillera Autonomous Region can, alone, legally and validly constitute such Region. Held: The sole province of Ifugao cannot validly constitute the Cordillera Autonomous Region. It is explicit in Article X, Section 15 of the 1987 Constitution. 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. Ifugao is a province by itself. To become part of a region, it must join other provinces, cities, municipalities, and geographical areas. It joins other units because of their common and distinctive historical and cultural heritage, economic and social structures and other relevant characteristics. The Constitutional requirements are not present in this case. Article III, Sections 1 and 2 of Republic Act No. 6766 provide that the Cordillera Autonomous Region is to be administered by the Cordillera government consisting of the Regional Government and local government units. It further provides that: SECTION 2. The Regional Government shall exercise powers and functions necessary for the proper governance and development of all provinces, cities, municipalities, and barangay or ili within the Autonomous Region . . . 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 Province of Batangas vs. Romulo Posted on November 20, 2012 GR 152774 May 27, 2004 FACTS: In 1998, then President Estrada issued EO No. 48 establishing the Program for Devolution Adjustment and Equalization to enhance the capabilities of LGUs in the discharge of the functions and services devolved to them through the LGC. The Oversight Committee under Executive Secretary Ronaldo Zamora passed Resolutions No. OCD-99-005, OCD-99006 and OCD-99-003 which were approved by Pres. Estrada on October 6, 1999. The guidelines formulated by the Oversight Committee required the LGUs to identify the projects eligible for funding under the portion of LGSEF and submit the project proposals and other requirements to the DILG for appraisal before the Committee serves notice to the DBM for the subsequent release of the corresponding funds. Hon. Herminaldo Mandanas, Governor of Batangas, petitioned to declare unconstitutional and void certain provisos contained in the General Appropriations Acts (GAAs) of 1999, 2000, and 2001, insofar as they uniformly earmarked for each corresponding year the amount of P5billion for the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) & imposed conditions for the release thereof. ISSUE: Whether the assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD resolutions infringe the Constitution and the LGC of 1991. HELD: Yes. The assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD resolutions constitute a withholding of a portion of the IRA they effectively encroach on the fiscal autonomy enjoyed by LGUs and must be struck down. According to Art. II, Sec.25 of the Constitution, the State shall ensure the local autonomy of local governments. Consistent with the principle of local autonomy, the Constitution confines the Presidents power over the LGUs to one of general supervision, which has been interpreted to exclude the power of control. Drilon v. Lim distinguishes supervision from control: control lays down the rules in the doing of an act the officer has the discretion to order his subordinate to do or redo the act, or decide to do it himself;supervision merely sees to it that the rules are followed but has no authority to set down the rules or the discretion to modify/replace them. The entire process involving the distribution & release of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA or just share of the LGUs in the national taxes. Sec.6, Art.X of the Constitution mandates that the just share shall beautomatically released to the LGUs. Since the release is automatic, the LGUs arent required to perform any act to receive the just share it shall be released to them without need of further action. To subject its distribution & release to the vagaries of the implementing rules & regulations as sanctioned by the assailed provisos in the GAAs of 1999-2001 and the OCD Resolutions would violate this constitutional mandate. The only possible exception to the mandatory automatic release of the LGUs IRA is if the national internal revenue collections for the current fiscal year is less than 40% of the collections of the 3rd preceding fiscal year. The exception does not apply in this case. The Oversight Committees authority is limited to the implementation of the LGC of 1991 not to supplant or subvert the same, and neither can it exercise control over the IRA of the LGUs. Congress may amend any of the provisions of the LGC but only through a separate lawand not through appropriations laws or GAAs. Congress cannot include in a general appropriations bill matters that should be more properly enacted in a separate legislation. A general appropriations bill is a special type of legislation, whose content is limited to specified sums of money dedicated to a specific purpose or a separate fiscal unit any provision therein which is intended to amend another law is considered an inappropriate provision. Increasing/decreasing the IRA of LGUs fixed in the LGC of 1991 are matters of general & substantive law. To permit the Congress to undertake these amendments through the GAAs would unduly infringe the fiscal autonomy of the LGUs. The value of LGUs as institutions of democracy is measured by the degree of autonomy they enjoy. Our national officials should not only comply with the constitutional provisions in local autonomy but should also appreciate the spirit and liberty upon which these provisions are based

G.R. No. 103328 October 19, 1992 HON. ROY A. PADILLA, JR., In his capacity as Governor of the Province of Camarines Norte, petitioner,vs. COMMISSION ON ELECTIONS, respondent.FACTS:Republic Act No. 7155 creates the Municipality of Tulay-Na-Lupa in the Province of Camarines Norte to becomposed of Barangays Tulay-Na-Lupa, Lugui, San Antonio, Mabilo I, Napaod, Benit, Bayan-Bayan, Matanlang, Pag-Asa, Maot, and Calabasa, all in the Municipality of Labo, same province.Pursuant to said law, the COMELEC issued a resolution for the conduct of a plebiscite. The said resolution providesthat the plebiscite shall be held in the areas or units affected, namely the barangays comprising he proposedMunicipality of Tulay-Na-Lupa and the remaining

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areas of the mother Municipality of Labo, Camarines Norte.In the plebiscite held throughout the Municipality of Labo, majority of the votes cast were against the creation of the Municipality of Tulay-Na-Lupa.Thus, petitioner as Governor of Camarines Norte, seeks to set aside the plebiscite conducted throughout theMunicipality of Labo and prays that a new plebiscite be undertaken. It is the contention of petitioner that theplebiscite was a complete failure and that the results obtained were invalid and illegal because the plebiscite, asmandated by COMELEC, should have been conducted only in the political unit or units affected, i.e. the 12barangays comprising the new Municipality of Tulay-Na-Lupa namely Tulay-Na-Lupa, Lugui, San Antonio, Mabilo I,Napaod, Benit, Bayan-Bayan, Matanlang, Pag-Asa, Maot, and Calabasa. Petitioner stresses that the plebisciteshould not have included the remaining area of the mother unit of the Municipality of Labo, Camarines Norte. Insupport of his stand, petitioner argues that where a local unit is to be segregated from a parent unit, only thevoters of the unit to be segregated should be included in the plebiscite.Was the plebiscite conducted in the areas comprising the proposed Municipality of Tulay-Na-Lupa and theremaining areas of the mother Municipality of Labo valid?Yes.When the law states that the plebiscite shall be conducted "in the political units directly affected," it means thatresidents of the political entity who would be economically dislocated by the separation of a portion thereof havea right to vote in said plebiscite. Evidently, what is contemplated by the phase "political units directly affected," isthe plurality of political units which would participate in the plebiscite. Logically, those to be included in suchpolitical areas are the inhabitants of the 12 barangays of the proposed Municipality of Tulay-Na-Lupa as well asthose living in the parent Municipality of Labo, Camarines Norte. Thus, it was concluded that respondent COMELECdid not commit grave abuse of discretion in promulgating the resolution. G.R. No. 103702 December 6, 1994 MUNICIPALITY OF SAN NARCISO, QUEZON; MAYOR JUAN K. UY; COUNCILORS: DEOGRACIAS R. ARGOSINO III, BENITO T. CAPIO, EMMANUEL R. CORTEZ, NORMANDO MONTILLA, LEONARDO C. UY, FIDEL C. AURELLANA, PEDRO C. CARABIT, LEONARDO D. AURELLANA, FABIAN M. MEDENILLA, TRINIDAD F. CORTEZ, SALVADOR M. MEDENILLA, CERELITO B. AUREADA and FRANCISCA A. BAMBA, petitioners, vs. HON. ANTONIO V. MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th Judicial Region, Gumaca, Quezon; MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR FRANCISCO DE LEON; COUNCILORS: FE LUPINAC, TOMAS AVERIA, MANUEL O. OSAS, WILFREDO O. FONTANIL, ENRICO U. NADRES, RODELITO LUZOIR, LENAC, JOSE L. CARABOT, DOMING AUSA, VIDAL BANQUELES and CORAZON M. MAXIMO, respondents. local officials of the Municipality of San Andres be permanently ordered to refrain from performing the duties and functions of their respective offices. 3 Invoking the ruling of this Court in Pelaez v. Auditor General, 4the petitioning municipality contended that Executive Order No. 353, a presidential act, was a clear usurpation of the inherent powers of the legislature and in violation of the constitutional principle of separation of powers. Hence, petitioner municipality argued, the officials of the Municipality or Municipal District of San Andres had no right to exercise the duties and functions of their respective offices that righfully belonged to the corresponding officials of the Municipality of San Narciso. In their answer, respondents asked for the dismissal of the petition, averring, by way of affirmative and special defenses, that since it was at the instance of petitioner municipality that the Municipality of San Andres was given life with the issuance of Executive Order No. 353, it (petitioner municipality) should be deemed estopped from questioning the creation of the new municipality; 5 that because the Municipality of San Andred had been in existence since 1959, its corporate personality could no longer be assailed; and that, considering the petition to be one for quo warranto, petitioner municipality was not the proper party to bring the action, that prerogative being reserved to the State acting through the Solicitor General. 6 On 18 July 1991, after the parties had submitted their respective pre-trial briefs, the trial court resolved to defer action on the motion to dismiss and to deny a judgment on the pleadings. On 27 November 1991, the Municipality of San Andres filed anew a motion to dismiss alleging that the case had become moot and academic with the enactment of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, which took effect on 01 January 1991. The movant municipality cited Section 442(d) of the law, reading thusly: Sec. 442. Requisites for Creation. . . . (d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective set of elective municipal officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities. The motion was opposed by petitioner municipality, contending that the above provision of law was inapplicable to the Municipality of San Andres since the enactment referred to legally existing municipalities and not to those whose mode of creation had been void ab initio. 7 In its Order of 02 December 1991, the lower court 8 finally dismissed the petition 9 for lack of cause of action on what it felt was a matter that belonged to the State, adding that "whatever defects (were) present in the creation of municipal districts by the President pursuant to presidential issuances and executive orders, (were) cured by the enactment of R.A. 7160, otherwise known as Local Government Code of 1991." In an order, dated 17 January 1992, the same court denied petitioner municipality's motion for reconsideration. Hence, this petition "for review on certiorari." Petitioners 10 argue that in issuing the orders of 02 December 1991 and 17 January 1992, the lower court has "acted with grave abuse of discretion amounting to lack of or in excess of jurisdiction." Petitioners assert that the existence of a municipality created by a null and void presidential order may be attacked either directly or even collaterally by anyone whose interests or rights are affected, and that an unconstitutional act is not a law, creates no office and is inoperative such as though its has never been passed. 11 Petitioners consider the instant petition to be one for "review on certiorari" under Rules 42 and 45 of the Rules of Court; at the same time, however, they question the orders of the lower court for having been issued with "grave abuse of discretion amounting to lack of or in excess of jurisdiction, and that there is no other plain, speedy and adequate remedy in the ordinary course of law available to petitioners to correct said Orders, to protect their rights and to secure a final and definitive interpretation of the legal issues involved." 12 Evidently, then, the petitioners intend to submit their case in this instance under Rule 65. We shall disregard the procedural incongruence. The special civil action of quo warranto is a "prerogative writ by which the Government can call upon any person to show by what warrant he holds a public office or exercises a public franchise." 13 When the inquiry is focused on the legal existence of a body politic, the action is reserved to the State in a proceeding for quo warranto or any other credit

Manuel Laserna, Jr. for petitioners. Florante Pamfilo for private respondents.

VITUG, J.: On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630 of the Revised Administrative Code, as amended, Executive Order No. 353 creating the municipal district of San Andres, Quezon, by segregating from the municipality of San Narciso of the same province, the barrios of San Andres, Mangero, Alibijaban, Pansoy, Camflora and Tala along with their respective sitios. Executive Order No. 353 was issued upon the request, addressed to the President and coursed through the Provincial Board of Quezon, of the municipal council of San Narciso, Quezon, in its Resolution No. 8 of 24 May 1959. 1 By virtue of Executive Order No. 174, dated 05 October 1965, issued by President Diosdado Macapagal, the municipal district of San Andres was later officially recognized to have gained the status of a fifth class municipality beginning 01 July 1963 by operation of Section 2 of Republic Act No. 1515. 2 The executive order added that "(t)he conversion of this municipal district into (a) municipality as proposed in House Bill No. 4864 was approved by the House of Representatives." On 05 June 1989, the Municipality of San Narciso filed a petition for quo warranto with the Regional Trial Court, Branch 62, in Gumaca, Quezon, against the officials of the Municipality of San Andres. Docketed Special Civil Action No. 2014-G, the petition sought the declaration of nullity of Executive Order No. 353 and prayed that the respondent

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proceeding. 14 It must be brought "in the name of the Republic of the Philippines" 15 and commenced by the Solicitor General or the fiscal "when directed by the President of the Philippines . . . ." 16 Such officers may, under certain circumstances, bring such an action "at the request and upon the relation of another person" with the permission of the court. 17 The Rules of Court also allows an individual to commence an action for quo warranto in his own name but this initiative can be done when he claims to be "entitled to a public office or position usurped or unlawfully held or exercised by another." 18 While the quo warranto proceedings filed below by petitioner municipality has so named only the officials of the Municipality of San Andres as respondents, it is virtually, however, a denunciation of the authority of the Municipality or Municipal District of San Andres to exist and to act in that capacity. At any rate, in the interest of resolving any further doubt on the legal status of the Municipality of San Andres, the Court shall delve into the merits of the petition. While petitioners would grant that the enactment of Republic Act No. 7160 may have converted the Municipality of San Andres into a de facto municipality, they, however, contend that since the petition for quo warranto had been filed prior to the passage of said law, petitioner municipality had acquired a vested right to seek the nullification of Executive Order No. 353, and any attempt to apply Section 442 of Republic Act 7160 to the petition would perforce be violative of due process and the equal protection clause of the Constitution. Petitioners' theory might perhaps be a point to consider had the case been seasonably brought. 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. In the same manner that the failure of a public officer to question his ouster or the right of another to hold a position within a one-year period can abrogate an action belatedly filed, 19 so also, if not indeed with greatest imperativeness, must a quo warranto proceeding assailing the lawful authority of a political subdivision be timely raised. 20 Public interest demands it. Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutional delegation of legislative power, the peculiar circumstances obtaining in this case hardly could offer a choice other than to consider the Municipality of San Andres to have at least attained a status uniquely of its own closely approximating, if not in fact attaining, that of a de facto municipal corporation. Conventional wisdom cannot allow it to be otherwise. Created in 1959 by virtue of Executive Order No. 353, the Municipality of San Andres had been in existence for more than six years when, on 24 December 1965, Pelaez v. Auditor General was promulgated. The ruling could have sounded the call for a similar declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case. On the contrary, certain governmental acts all pointed to the State's recognition of the continued existence of the Municipality of San Andres. Thus, after more than five years as a municipal district, Executive Order No. 174 classified the Municipality of San Andres as a fifth class municipality after having surpassed the income requirement laid out in Republic Act No. 1515. Section 31 of Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980, constituted as municipal circuits, in the establishment of Municipal Circuit Trial Courts in the country, certain municipalities that comprised the municipal circuits organized under Administrative Order No. 33, dated 13 June 1978, issued by this Court pursuant to Presidential Decree No. 537. Under this administrative order, the Municipality of San Andres had been covered by the 10th Municipal Circuit Court of San Francisco-San Andres for the province of Quezon. At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the Ordinance (adopted on 15 October 1986) apportioning the seats of the House of Representatives, appended to the 1987 Constitution, the Municipality of San Andres has been considered to be one of the twelve (12) municipalities composing the Third District of the province of Quezon. 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." No pretension of unconstitutionality per seof Section 442(d) of the Local Government Code is proferred. It is doubtful whether such a pretext, even if made, would succeed. The power to create political subdivisions is a function of the legislature. Congress did just that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence are retrospective, 21 and aimed at giving "validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualification against impairment of vested rights. 22 All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now be conceded. WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Costs against petitioners. SO ORDERED. Rural Bank of Makati vs City of Makati G.R. No. 150763 Subject: Public Corporation Doctrine: General Welfare clause (Police Power of Municipality) Facts: Upon the request of the municipal treasurer, in August 1990, Atty. Victor A.L. Valero, then the municipal attorney of the Municipality of Makati, went to the Rural Bank of Makati to inquire about the banks payments of taxes and fees to the municipality. Petitioner Magdalena V. Landicho, corporate secretary of the bank, said that the bank was exempt from paying taxes under Republic Act No. 720, as amended. On November 19, 1990, the municipality filed complaint with the Prosecutors Office, charging petitioners Esteban S. Silva, president and general manager of the bank and Magdalena V. Landicho for violation of Section 21(a), Chapter II, Article 3 in relation to Sections 105 and 169 of the Metropolitan Tax Code. On April 5, 1991, the municipality submitted two (2) Information with the MTC against the respondent bank: 1) for non-payment of the mayors permit fee and 2) for non-payment of annual business tax. While said cases were pending with the municipal court, respondent municipality ordered the closure of the bank. This prompted petitioners to pay, under protest, the mayors permit fee and the annual fixed tax in the amount of P82,408.66. On October 18, 1991, petitioners filed with the RTC a Complaint for Sum of Money and Damages. Petitioners alleged that they were constrained to pay the amount of P82,408.66 because of the closure order, issued despite the pendency of the criminal cases and the lack of any notice or assessment of the fees to be paid. They averred that the collection of the taxes/fees was oppressive, arbitrary, unjust and illegal. Additionally, they alleged that respondent Atty. Valero had no power to enforce laws and ordinances, thus his action in enforcing the collection of the permit fees and business taxes was ultra vires. Respondent municipality asserted that petitioners payment of P82,408.66 was for a legal obligation because the payment of the mayors permit fee as well as the municipal business license was required of all business concerns. According to respondent, said requirement was in furtherance of the police power of the municipality to regulate businesses. RTC rules in favor of the municipal of Makati. According to the trial court, the bank was engaged in business as a rural bank. Hence, it should secure the necessary permit and business license, as well as pay the corresponding charges and fees. It found that the municipality had authority to impose licenses and permit fees on persons engaging in business, under its police power embodied under the general welfare clause. Also, the RTC declared unmeritorious petitioners claim for exemption under Rep. Act No. 720 since said exemption had been withdrawn by Executive Order No. 93 and the Rural Bank Act of 1992. These statutes no longer exempted rural banks from paying corporate income taxes and local taxes, fees and charges. The CA affirmed RTCs decision in toto. CA also brushed aside petitioners claim that the general welfare clause is limited only to legislative action. It declared that the exercise of police power by the municipality was mandated by the general welfare clause, which authorizes the local government units to enact ordinances, not only to carry into effect and discharge such duties as are conferred upon them by law, but also those for the good of the municipality and its inhabitants. This mandate includes the regulation of useful occupations and enterprises. Hence the present complaint.

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Petitioner bank claims that the closure of the bank was an improper exercise of police power because a municipal corporation has no inherent but only delegated police power, which must be exercised not by the municipal mayor but by the municipal council through the enactment of ordinances. It also assailed the Court of Appeals for invoking the General Welfare Clause embodied in Section 16 of the Local Government Code of 1991, which took effect in 1992, when the closure of the bank was actually done on July 31, 1991. ISSUE: Whether or not the municipalitys police power covers the power to tax and the power to order the respondents bank closure. HELD: Rep. Act No. 720, as amended by Republic Act No. 4106, approved on July 19, 1964, had exempted rural banks with net assets not exceeding one million pesos (P1,000,000) from the payment of all taxes, charges and fees. The records show that as of December 29, 1986, petitioner banks net assets amounted only to P745,432.29. Hence, petitioner bank could claim to be exempt from payment of all taxes, charges and fees under the aforementioned provision. However, EO 93 was issued by then President Aquino, withdrawing all tax and duty incentives with certain exceptions. Notably, not included among the exceptions were those granted to rural banks under Rep. Act No. 720. With the passage of said law, petitioner could no longer claim any exemption from payment of business taxes and permit fees. Indeed the Local Government Code of 1991 was not yet in effect when the municipality ordered petitioner banks closure on July 31, 1991. However, the general welfare clause invoked by the Court of Appeals is not found on the provisions of said law alone. Even under the old Local Government Code (Batas Pambansa Blg. 337) which was then in effect, a general welfare clause was provided for in Section 7 thereof. Municipal corporations are agencies of the State for the promotion and maintenance of local self-government and as such are endowed with police powers in order to effectively accomplish and carry out the declared objects of their creation. The authority of a local government unit to exercise police power under a general welfare clause is not a recent development. This was already provided for as early as the Administrative Code of 1917. Thus, the closure of the bank was a valid exercise of police power pursuant to the general welfare clause contained in and restated by B.P. Blg. 337, which was then the law governing local government units. No reversible error arises in this instance insofar as the validity of respondent municipalitys exercise of police power for the general welfare is concerned. The general welfare clause has two branches. The first, known as the general legislative power, authorizes the municipal council to enact ordinances and make regulations not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred upon the municipal council by law. The second, known as the police power proper, authorizes the municipality to enact ordinances as may be necessary and proper for the health and safety, prosperity, morals, peace, good order, comfort, and convenience of the municipality and its inhabitants, and for the protection of their property. In the present case, the ordinances imposing licenses and requiring permits for any business establishment, for purposes of regulation enacted by the municipal council of Makati, fall within the purview of the first branch of the general welfare clause. Moreover, the ordinance of the municipality imposing the annual business tax is part of the power of taxation vested upon local governments as provided for under Section 8 of B.P. Blg. 337. Consequently, the municipal mayor, as chief executive, was clothed with authority to create a Special Task Force headed by respondent Atty. Victor A.L. Valero to enforce and implement said ordinances and resolutions and to file appropriate charges and prosecute violators. Respondent Valero could hardly be faulted for performing his official duties under the cited circumstances. On the issue of the closure of the bank, we find that the bank was not engaged in any illegal or immoral activities to warrant its outright closure. The appropriate remedies to enforce payment of delinquent taxes or fees are provided for in Section 62 of the Local Tax Code. Said Section 62 did not provide for closure. Moreover, the order of closure violated petitioners right to due process, considering that the records show that the bank exercised good faith and presented what it thought was a valid and legal justification for not paying the required taxes and fees. The violation of a municipal ordinance does not empower a municipal mayor to avail of extrajudicial remedies. It should have observed due process before ordering the banks closure. WHEREFORE, the assailed Decision dated July 17, 2001, of the Court of Appeals in CA-G.R. CV No. 58214 is AFFIRMED with MODIFICATIONS, so that (1) the order denying any claim for refunds and fees allegedly overpaid by the bank, as well as the denial of any award for damages and unrealized profits, is hereby SUSTAINED; (2) the order decreeing the closure of petitioner bank is SET ASIDE; and (3) the award of moral damages and attorneys fees to Atty. Victor A.L. Valero is DELETED. No pronouncement as to costs BATANGAS CATV, INC. vs. THE COURT OF APPEALS, THE BATANGAS CITY SANGGUNIANG PANLUNGSOD and BATANGASCITY MAYOR [G.R. No. 138810. September 29, 2004]FACTS:On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 210 granting petitioner a permit toconstruct, install, and operate a CATV system in Batangas City. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein, p rovided, however, that any increase of ratesshall be subject to the approval of the Sangguniang Panlungsod.Sometime in November 1993, petitioner increased its subscriber rates from P88.00 to P180.00 per month. As a result,respondent Mayor wrote petitioner a letter threatening to cancel its permit unless it secures the approval of respondentSangguniang Panlungsod, pursuant to Resolution No. 210.Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction alleging that respondentSangguniang Panlungsod has no authority to regulate the subscriber rates charged by CATV operators because underExecutive Order No. 205, the National Telecommunications Commission (NTC) has the sole authority to regulate theCATV operation in the Philippines.ISSUE :may a local government unit (LGU) regulate the subscriber rates charged by CATV operators within its territorial jurisdiction?HELD: No.x x xThe logical conclusion, therefore, is that in light of the above laws and E.O. No. 436, the NTC exercises regulatory powerover CATV operators to the exclusion of other bodies.x x xLike any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarilybecause the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order toreach subscribers.) The physical realities of constructing CATV system the use of public streets, rights of ways, thefounding of structures, and the parceling of large regions allow an LGU a certain degree of regulation over CATVoperators.x x x But, while we recognize the LGUs power under the general welfare clause, we cannot sustain Resolution No. 210. We are convinced that respondents strayed from the well recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the States deregulation policy over the CATV industry. LGUs must recognize that technical matters concerning CATV operation are within the exclusive regulatory power of theNTC LIM vs. PACQUING G.R. 115044, January 27, 1995 Facts: On 15 September 1994, respondent Associated Development Corporation (ADC) fileda petition for prohibition seeking to prevent GAB from withdrawing the provisional authoritythat had been granted them to operate jai-alai. ADC's franchise was invalidated by PD No.771, which expressly revoked all existing franchises to operate all forms of gambling facilitiesissued by local governments.Respondent contends that Ordinance No. 7065 authorized the Mayor to allow ADC to operate Jai-Alai in the City of Manila. ADC also assails the constitutionality of PD No. 771 as violativeof the equal protection and non-impairment clauses of the Constitution.

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Issue: Whether ADC has a valid franchise to operate the Jai-Alai de Manila. Held: PD No. 771 is a valid exercise of the inherent police power of the State. Gambling isessentially antagonistic and self-reliance. It breeds indolence and erodes the value of good,honest and hard work. It is, as very aptly stated by PD No. 771, a vice and a social ill whichgovernment must minimize (if not eradicate) in pursuit of social and economic development. Jai-alai is not a mere economic activity which the law seeks to regulate. It is essentiallygambling and whether it should be permitted and, if so, under what conditions are questionsprimarily for the lawmaking authority to determine, talking into account national and localinterests. Here, it is the police power of the State that is paramount. On the alleged violationof the nonimpairment and equal protection clauses of the Constitution, it should beremembered that a franchise is not in the strict sense a simple contract but rather it is moreimportantly, a mere privilege specially in matters which are within the government's powerto regulate and even prohibit through the exercise of the police power. Thus, a gamblingfranchise is always subject to the exercise of police power for the public welfare.ADC has no franchise from Congress to operate the jai-alai therefore, it may not operateeven if it has a license from the Mayor to operate the jaialai in the City of Manila. Binay vs DomingoDate: September 11, 1991Petitioners: Jejomar Binay and Municipality of MakatiRespondents: Eufemio Domingo and commission on AuditPonente: ParasFacts: On September 27, 1988, petitioner Municipality, through its Council,approved Resolution No. 60 (A resolution to confirm and/or ratify the ongoing burialassistance program extending P500 to a bereaved family, funds to be taken out of unappropriated available funds existing in the municipal treasury.) Metro ManilaCommission approved Resolution No. 60. Thereafter, the municipal secretarycertified a disbursement fired of P400,000 for the implementation of the program.However, COA disapproved Resolution 60 and disallowed in audit thedisbursement of funds. COA denied the petitioners reconsideration as Resolution 60has no connection or relation between the objective sought to be attained and thealleged public safety, general welfare, etc of the inhabitant of Makati. Also, theResolution will only benefit a few individuals. Public funds should only be used forpublic purposes.Issue:WON Resolution No. 60, re-enacted under Resolution No. 243, of theMunicipality of Makati is a valid exercise of police power under the general welfareclause\H e l d : Y e s Ratio: The police power is a governmental function, an inherent attribute of sovereignty, which was born with civilized government. It is founded largely on themaxims, "Sic utere tuo et ahenum non laedas and "Salus populi est suprema lex Itsfundamental purpose is securing the general welfare, comfort and convenience of the people.Police power is inherent in the state but not in municipal corporations).Before a municipal corporation may exercise such power, there must be a validdelegation of such power by the legislature which is the repository of the inherentpowers of the State. A valid delegation of police power may arise from expressdelegation, or be inferred from the mere fact of the creation of the municipalcorporation; and as a general rule, municipal corporations may exercise policepowers within the fair intent and purpose of their creation which are reasonablyproper to give effect to the powers expressly granted, and statutes conferringpowers on public corporations have been construed as empowering them to do thethings essential to the enjoyment of life and desirable for the safety of the people.Municipal governments exercise this power under the general welfare clause:pursuant thereto they are clothed with authority to "enact such ordinances andissue such regulations as may be necessary to carry out and discharge theresponsibilities conferred upon it by law, and such as shall be necessary and properto provide for the health, safety, comfort and convenience, maintain peace andorder, improve public morals, promote the prosperity and general welfare of themunicipality and the inhabitants thereof, and insure the protection of propertytherein." And under Section 7 of BP 337, "every local government unit shallexercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary and proper for governance such as to promote health andsafety, enhance prosperity, improve morals, and maintain peace and order in thelocal government unit, and preserve the comfort and convenience of the inhabitantstherein."Police power is the power to prescribe regulations to promote the health,morals, peace, education, good order or safety and general welfare of the people. Itis the most essential, insistent, and illimitable of powers. In a sense it is the greatestand most powerful attribute of the government. The police power of a municipal corporation is broad, and has been said to becommensurate with, but not to exceed, the duty to provide for the real needs of thepeople in their health, safety, comfort, and convenience as consistently as may bewith private rights. It extends to all the great public needs, and, in a broad senseincludes all legislation and almost every function of the municipal government. Itcovers a wide scope of subjects, and, while it is especially occupied with whateveraffects the peace, security, health, morals, and general welfare of the community, itis not limited thereto, but is broadened to deal with conditions which exists so as tobring out of them the greatest welfare of the people by promoting publicconvenience or general prosperity, and to everything worthwhile for thepreservation of comfort of the inhabitants of the corporation. Thus, it is deemedinadvisable to attempt to frame any definition which shall absolutely indicate thelimits of police power.COA is not attuned to the changing of the times. Public purpose is notunconstitutional merely because it incidentally benefits a limited number of persons. As correctly pointed out by the Office of the Solicitor General, "the drift istowards social welfare legislation geared towards state policies to provide adequatesocial services, the promotion of the general welfare social justice (Section 10, Ibid)as well as human dignity and respect for human rights. The care for the poor isgenerally recognized as a public duty. The support for the poor has long been an accepted exercise of police power in the promotion of the common good. There is no violation of the equal protection clause in classifying paupers assubject of legislation. Paupers may be reasonably classified. Different groups mayreceive varying treatment. Precious to the hearts of our legislators, down to our local councilors, is the welfare of the paupers. Thus, statutes have been passedgiving rights and benefits to the disabled, emancipating the tenant-farmer from thebondage of the soil, housing the urban poor, etc.Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a paragon of the continuing program of our government towards social justice. The Burial Assistance Program is a relief of pauperism, though not complete. The loss of a member of a family is a painful experience, and it is more painful forthe poor to be financially burdened by such death. Resolution No. 60 vivifies thevery words of the late President Ramon Magsaysay 'those who have less in life,should have more in law." This decision, however must not be taken as a precedent,or as an official go-signal for municipal governments to embark on a philanthropic orgy of inordinate dole-outs for motives political or otherwise. Terrado v CA Through the maze and muddle of this protracted legalcontroversy, it is plain and clear that the complaints and petitions including all legal incidents and motions filed in the trialcourt, the appellate court and before this Tribunal are traceable.in origin to the enactment and implementation of MunicipalOrdinance No. 8, series of 1974, of the Municipality ofBayambang, Pangasinan, establishing the Bayambang Fishery &Hunting Park and Municipal Watershed coveting the so-calledMangabul Fisheries. As stated in Section of the Ordinance, thepurposes of the Park are: 1. To attract tourists to Bayambang andthus increase the income of the municipality and create newemployment and new sources of income for the people; 2. Torestore and conserve the natural environment of the area bymeans of reforestation of the forest or timberland reserved, thruengineering works, and other means within the Ipd-92 area; 3. Torestore or improve, conserve and develop the fisheries, zones,and exploit the fish resources of all the fisheries therein; 4. Tosupply agro-industrial enterprises that may be established inBayambang with raw materials from the area; and 5. To providesports and recreation facilities and wholesome sports andrecreational activities for the people.Further, under the Ordinance, the Municipality designated,appointed and constituted private respondent Lacuesta asManager-Administrator for a period of twenty-five (25) years,renewable for another twenty-five (25) years upon mutualagreement (Section 4). Among the powers, duties andobligations of the Manager-Administrator are: 1. To reforest withwoods or economic value all the timberland portions indicatedin Plan Ipd-92 and those that need to be reforested for ecological purposes; 2. To stock the forest with wildlife or economic value, protect the forest products and wildlife andregulate their multiplication in accordance with existing laws; 3.To deepen the fisheries, swamps and tributary streams bydredging, employing modern scientific and technologicalmethods to restore or improve and develop the fisheries toincrease the fees yield; 4. To conduct and regulate sports fishingand hunting in the park and collect

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fees therefrom; 5. To use or dispose of the fisheries portion in accordance with the generallaw on municipal waters; 6. To establish in a suitable site withinthe park a fishing and hunting camp to be called "CampImelda." In Section 7 of the Ordinance, the Manager-Administrator shall pay to the municipal government the sumequivalent to ten (10%) percent of the annual gross incomederived from an fees charged for fishing and hunting in the park and entry into Camp Imelda, from the sale of forest products,wild games and fish from the area, but not less than P200,000.00.In accordance with the Ordinance, a Contract of Managementand Administration was executed by the Municipality,represented by its Municipal Mayor as the Usufructuary and Atty.Geruncio Lacuesta as the Manager-Administrator, setting forththerein the terms and conditions laid down in the Ordinance aswell as the mode and manner of the payment of the sum ofP200,000.00 annually due to the Municipality including theposting of a surety bond and other details of the managementand administration of the fisheries by the Manager-Administrator,which contract was executed on January 28, 1975 atBayambang, Pangasinan.Thus, the validity or legality of the Municipal Ordinance inquestion is the crucial and vital issue that must be resolved onceand for all to put an end to this raging litigation that has becomethe tug-of-war between the Municipality and Lacuesta, together with other interested parties, over the vast and rich fishinggrounds. In resolving said issue and ultimately the very root of theconflict, the following undisputed facts are controlling anddecisive: 1. That Municipal Ordinance No. 8 has beendisapproved by the Secretary of Agriculture and NaturalResources; and 2. That private respondent has since died asshown in the Return of the Postmaster of Bayambang as noted inOur Resolution of July 2, 1984.The Ordinance is clearly against the provisions of the law for itgranted exclusive fishery privileges to the private respondentwithout benefit of public bidding. Under the Fisheries Act, theMunicipality may not delegate to a private individual asManager-Administrator to "use or dispose of the fisheries portionin accordance with the general law on municipal waters" nor tocharge foes for fishing and hunting in the park, much less sellforest products, wild games and fish from the area.From the foregoing conclusion that the ordinance is illegal andvoid, per force the contract of management and administrationbetween the Municipality and Lacuesta is likewise null and void.It also follows that the complaint filed by Lacuesta for prohibitionin Civil Case No. 516 to enjoin the Municipal Council ofBayambang from leasing the Mangabul Fisheries upon publicbidding as authorized in its Resolution' No. 31, series of 1977 iswithout legal basis and merit for Lacuesta has no right or interestunder the void ordinance and contract. The suit must bedismissed and We hereby order its immediate dismissal.2. We have noted earlier the death of Lacuesta in Our Resolutionof July 2, 1984. His death is an irreversible fact that throws anentirely new bearing on the legal controversy at hand. For essentially, the contract of management and administrationbetween the Municipality and Lacuesta is one of agencywhereby a person binds himself to render some service or to dosomething in representation or on behalf of another, with theconsent or authority of the latter. (Article 1868, New Civil Code).Here in the case at bar, Lacuesta bound himself as Manager-Administrator of the Bayambang Fishing & Hunting Park andMunicipal Watershed to render service or perform duties andresponsibilities in representation or on behalf of the Municipalityof Bayambang, with the consent or authority of the latter pursuant to Ordinance No. 8. Under Article 1919, New Civil Code,agency is extinguished by the death of the agent. His rights andobligations arising from the contract are not transmittable to hisheirs. (Art. 1311 , New Civil Code MATALIN COCONUT V. MUNICIPAL COUNCIL OF MALABANG, LANAO DEL SUR 143 SCRA 404 FACTS: Municipal Council of Malabang, Lanao del Sur, invoking the authority of Section 2 of Republic Act No. 2264, otherwise known as the Local Autonomy Act, enacted Municipal Ordinance No. 45-46, entitled "AN ORDINANCE IMPOSING A POLICE INSPECTION FEE OF P.30 PER SACK OF CASSAVA STARCH PRODUCED AND SHIPPED OUT OF THE MUNICIPALITY OF MALABANG AND IMPOSING PENALTIES FOR VIOLATIONS THEREOF." The ordinance made it unlawful for any person, company or group of persons "to ship out of the Municipality of Malabang, cassava starch or flour without paying to the Municipal Treasurer or his authorized representatives the corresponding fee fixed by (the) ordinance." It imposed a "police inspection fee" of P.30 per sack of cassava starch or flour, which shall be paid by the shipper before the same is transported or shipped outside the municipality. Any person or company or group of individuals violating the ordinance "is liable to a fine of not less than P100.00, but not more than P1,000.00, and to pay Pl.00 for every sack of flour being illegally shipped outside the municipality, or to suffer imprisonment of 20 days, or both, in the discretion of the court. This ordinance is now being questioned as unconstitutional. HELD: The amount collected under the ordinance in question partakes of the nature of a tax, although denominated as "police inspection fee" since its undeniable purpose is to raise revenue. However, we cannot agree with the trial court's finding that the tax imposed by the ordinance is a percentage tax on sales which is beyond the scope of the municipality's authority to levy under Section 2 of the Local Autonomy Act. Under the said provision, municipalities and municipal districts are prohibited from imposing" any percentage tax on sales or other taxes in any form based thereon. " The tax imposed under the ordinance in question is not a percentage tax on sales or any other form of tax based on sales. It is a fixed tax of P.30 per bag of cassava starch or flour "shipped out" of the municipality. It is not based on sales. However, the tax imposed under the ordinance can be stricken down on another ground. According to Section 2 of the abovementioned Act, the tax levied must be "for public purposes, just and uniform" (Emphasis supplied.) As correctly held by the trial court, the so-called "police inspection fee" levied by the ordinance is "unjust and unreasonable." Said the court a quo: ... It has been proven that the only service rendered by the Municipality of Malabang, by way of inspection, is for the policeman to verify from the driver of the trucks of the petitioner passing by at the police checkpoint the number of bags loaded per trip which are to be shipped out of the municipality based on the trip tickets for the purpose of computing the total amount of tax to be collect (sic) and for no other purpose. The pretention of respondents that the police, aside from counting the number of bags shipped out, is also inspecting the cassava flour starch contained in the bags to find out if the said cassava flour starch is fit for human consumption could not be given credence by the Court because, aside from the fact that said purpose is not so stated in the ordinance in question, the policemen of said municipality are not competent to determine if the cassava flour starch are fit for human consumption. The further pretention of respondents that the trucks of the petitioner

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hauling the bags of cassava flour starch from the mill to the bodega at the beach of Malabang are escorted by a policeman from the police checkpoint to the beach for the purpose of protecting the truck and its cargoes from molestation by undesirable elements could not also be given credence by the Court because it has been shown, beyond doubt, that the petitioner has not asked for the said police protection because there has been no occasion where its trucks have been molested, even for once, by bad elements from the police checkpoint to the bodega at the beach, it is solely for the purpose of verifying the correct number of bags of cassava flour starch loaded on the trucks of the petitioner as stated in the trip tickets, when unloaded at its bodega at the beach. The imposition, therefore, of a police inspection fee of P.30 per bag, imposed by said ordinance is unjust and unreasonable. The Court finally finds the inspection fee of P0.30 per bag, imposed by the ordinance in question to be excessive and confiscatory. It has been shown by the petitioner, Matalin Coconut Company, Inc., that it is merely realizing a marginal average profit of P0.40, per bag, of cassava flour starch shipped out from the Municipality of Malabang because the average production is P15.60 per bag, including transportation costs, while the prevailing market price is P16.00 per bag. The further imposition, therefore, of the tax of P0.30 per bag, by the ordinance in question would force the petitioner to close or stop its cassava flour starch milling business considering that it is maintaining a big labor force in its operation, including a force of security guards to guard its properties. The ordinance, therefore, has an adverse effect on the economic growth of the Municipality of Malabang, in particular, and of the nation, in general, and is contrary to the economic policy of the government. immorality which might grow out of the construction of separate rooms for massage of customers."The Court has been most liberal in sustaining ordinances based on the general welfare clausebecause it "delegates in statutory form the police power to a municipality; this clause has been given wideapplication by municipal authorities and has in its relation to the particular circumstances of the case beenliberally construed by the courts. Such, it is well to really is the progressive view of Philippine jurisprudence."The judgment of the lower court is affirmed. WHITE PLAINS HOMEOWNERS ASSOCIATION, INC., SYLVIA J. JAMORA, GLICERIO J. INTENGAN, MANUEL M. JASMINES, MANUEL M. CHING, RODOLFO M. PUNSALANG, ADEODATO DUQUE, JR., DAVID J. CRUZ, MA. ELENA C. SAMSON, VERONICA CATALAN, CARLOS TAN BON LIONG, ANTONIO RAMOS, CHOLLY ANTONIO, FELICITAS OCAMPO, ROGELIO A. VINLUAN and LUIS TERENCE, petitioners, vs. THE COURT OF APPEALS and THE QUEZON CITY DEVELOPMENT & FINANCING CORPORATION, respondents. D E C I S I O N MARTINEZ, J.: This is the third time this case has reached this Court. This petition for review takes its roots from two (2) cases previously decided by this Court. The first was White Plains Association, Inc. vs. Court of Appeals and Quezon City Development &, Financing Corporation docketed as G.R. No. 55868. The second case was White Plains Association, Inc. vs. Hon. Godofredo Legaspi, Presiding Judge of the Regional Trial Court of Quezon City, Branch 39, and Quezon City Development & Financing Corporation, et. al. These cases form part of the backdrop for the present dispute and which is synthesized, as follows: Respondent Quezon City Development & Financing Corporation (QCDFC) was the owner and developer of White Plains subdivision in Quezon City prior to the sale of the lots therein to the residents of the subdivision who comprised the petitioner White Plains Association, Inc. (Association) The disputed area of the land covered by TCT Nos. 156185, 156186 and 156187 was set aside and dedicated to the proposed Highway 38 of Quezon City. As subdivision owner and developer, respondent QCDFC represented to the lot buyers that there would be a thoroughfare known as Katipunan Avenue and that the width of the land allotted to said road was 38 meters. Of the 38 meters, respondent QCDFC developed only 20 meters. The undeveloped strip of land, 18 meters in width, of the proposed Katipunan Avenue has been and still is the subject of court litigation. As early as April 14, 1970, QCDFC filed a petition with the then Court of First Instance of Rizal for the conversion into residential lots of this undeveloped strip of land. The controversy reached this Court. On November 14, 1985, this Court en banc[1] dismissed the petition. In the said decision this Court ruled that "Road Lot 1 is withdrawn from the commerce of man and should be developed for the use of the general public." Then, sometime in 1989, the widening of Katipunan Avenue by 4-5 meters was began by the Department of Public Works & Highways through a private contractor. QCDFC filed a complaint for injunction and damages to enjoin the widening of Katipunan Avenue as registered owner thereof, in the Regional Trial Court of Quezon City. The writ prayed for was granted. The Association, as intervenor, elevated the case to this Court on certiorari which was docketed as G.R. No. 95522 entitled, "White Plains, Inc. vs. Legaspi." In that case, this Court again reiterated the doctrine that Road Lot 1 had been withdrawn from the commerce of man, thus constituting it as part of mandatory open space reserved for public use. The dispositive portion of the decision in the aforecited case was as follows: "WHEREFORE, the petition is granted. The questioned orders of respondent judge dated July 10, 1990 and September 26, 1990 are hereby reversed and set aside. Respondent Quezon City Development & Financing Corporation is hereby directed to execute a Deed of Donation of the remaining undeveloped Road Lot 1 consisting of about 18 meters wide in favor of the Quezon City government, otherwise, the Register of Deeds of Quezon City is hereby directed to cancel the registration of said Road Lot 1 of defendant Quezon City Development & Financing Corporation under TCT No. 112637 and to issue a new title covering said property in the name of the Quezon City government.

VELASCO v. VILLEGASFacts: The petitioners filed a declaratory relief challenging the constitutionality based on Ordinance No.4964 of the City of Manila, the contention being that it amounts to a deprivation of property of their meansof livelihood without due process of law.The assailed ordinance is worded thus: "It shall be prohibited for any operator of any barber shopto conduct the business of massaging customers or other persons in any adjacent room or rooms of saidbarber shop, or in any room or rooms within the same building where the barber shop is located as longas the operator of the barber shop and the room where massaging is conducted is the same person."The lower court ruled in favor of the constitutionality of the assailed ordinance. Hence, the appeal. Issue: Whether or not Ordinance No. 4964 is unconstitutional Held: NO Ratio: It is a police power measure. The objectives behind its enactment are: "(1) To be able to imposepayment of the license fee for engaging in the business of massage clinic under Ordinance No. 3659 asamended by Ordinance 4767, an entirely different measure than the ordinance regulating the business of barbershops and, (2) in order to forestall possible

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Costs against respondent Quezon City Development & Financing Corporation.[2] Respondent QCDFC filed a series of motions for reconsideration. On the second motion for reconsideration, this Court issued a resolution dated July 27, 1994, deleting the second sentence of the aforequoted dispositive portion, thus: WHEREFORE, the second motion for reconsideration is hereby partly granted by modifying the dispositive portion of this Court's decision of 7 February 1991 and now read as follows: 'WHEREFORE, the petition is hereby granted. The questioned orders of the respondent judge dated July 10, 1990 and September 26, 1990 are hereby reversed and set aside. x x x x x.' Costs against defendant Quezon City Development & Financing Corporation."[3] This is now the third case involving the Association and QCDFC. Petitioner Association filed before the Regional Trial Court of Quezon City, a case for injunction, entitled Quezon City Development & Financing Corporation vs. White Plains Homeowners Association, Inc., et. al. As in the two (2) previous cases, it is the remaining undeveloped 18 meters width of the proposed Katipunan Avenue (Road Lot 1) which is the subject of the controversy. The undeveloped portion has been occupied by garden operators who have been paying the Association monthly "special occupancy dues" for the use of the respective areas they occupy as commercial gardens and landscaping business. From 1985 to June, 1995, the Association collected and received the monthly rentals. QCDFC made demands on the Association to account for and deliver the amount collected from the garden operators which was, however, ignored by the Association. Thus, on August 4, 1985, QCDFC filed an action to enjoin the Association from collecting the rentals from the garden operators occupying the undeveloped 18 meters width of the proposed Katipunan Avenue (Highway 38). The case was raffled to Branch 222 of the Regional Trial Court of Quezon City presided by Judge Eudarlio B. Valencia, who issued a temporary restraining order commanding the Association to desist and refrain from collecting rentals from the occupants/possessors of the undeveloped 18 meters width of the proposed Katipunan Avenue. Thereafter, respondent judge issued an order granting the application for preliminary injunction. Aggrieved, the Association filed with the respondent court a petition for certiorari to set aside the order. The respondent court, in its decision dated December 14, 1985, [4] upheld the theory of the Association that the strip of undeveloped land, 18 meters wide, of the proposed 38-meter wide Katipunan Avenue, no longer belongs to QCDFC. However, it ruled that the strip of land belongs to Quezon City which has the right to lease/rent and collect therefrom the "special occupancy dues." Thus, it set aside the order of the Regional Trial Court granting the writ of preliminary injunction. The Association and QCDFC separately filed motions for reconsideration. QCDFC prayed that the respondent court's decision be set aside. On the other hand, the Association filed a partial motion for reconsideration seeking the modification of the respondent court's decision by deleting the obiter dictum regarding the authority of Quezon City to collect occupancy dues from tenants of the disputed property. The respondent court in its now assailed resolution dated January 31, 1997 [5] granted the motion for reconsideration of QCDFC and denied that of the Association. In the process, it also ruled that "on the basis of the records and applicable law" the full right of possession and ownership of the disputed property should now be restored to QCDFC." Hence this petition for review by the Association based on the following grounds: "I THE RESPONDENT COURT ERRONEOUSLY REFUSED TO FOLLOW THE RULING OF THIS HONORABLE COURT IN TWO PREVIOUS CASES INVOLVING THE SAME PARTIES TO THE EFFECT THAT 'ROAD LOT 1 HAD BEEN WITHDRAWN FROM THE COMMERCE OF MAN, THUS CONSTITUTING PART OF MANDATORY OPEN SPACE RESERVED FOR PUBLIC USE TO BE IMPROVED INTO THE WIDENED KATIPUNAN AVENUE.' II THE RESPONDENT COURT COMMITTED REVERSIBLE ERROR IN JUNKING THE AFORESAID RULING OF THIS HONORABLE COURT BASED UPON FINDINGS OF FACT TOTALLY DEVOID OF SUPPORT IN THE RECORD OR EVIDENCE. III THE RESPONDENT COURT ERRED IN REFUSING TO APPLY THE PRINCIPLE OF RES JUDICATA DESPITE THE PRESENCE OF ALL THE REQUISITES. IV THE RESPONDENT COURT COMMITTED REVERSIBLE ERROR IN GOING BEYOND THE ISSUES INVOLVED IN RESPECT OF THE VALIDITY OR PRORIETY OF THE ISSUANCE OF THE WRIT OF PRELIMINARY INJUNCTION AND EVEN BEYOND THE RELIEF PRAYED FOR BY GIVING 'FULL RIGHTS OF POSSESSION AND OWNERSHIP' TO QCDFC. V RESPONDENT COURT OF APPEALS ERRONEOUSLY SUSTAINED THE ISSUANCE BY THE REGIONAL TRIAL COURT OF QUEZON CITY OF THE WRIT OF PRELIMINARY INJUNCTION. (A) THE CASE IS BARRED BY PRIOR JUDGMENT. (B) THE PRIVATE RESPONDENT QCDFC DOES NOT HAVE A CLEAR AND UNMISTAKABLE' RIGHT TO INJUNCTIVE RELIEF. (C) THE PRIVATE RESPONDENT QCDFC WILL NOT SUFFER ANY IRREPARABLE INJURY BY THE NON-ISSUANCE OF THE INJUNCTION SINCE ITS ALLEGED INJURY IS QUANTIFIABLE AND MAY BE FULLY COMPENSATED IN DAMAGES. (D) A COURT SHOULD NOT ISSUE A WRIT OF PRELIMINARY INJUNCTION IF THE ISSUANCE THEREOF WOULD IN EFFECT DISPOSE OF THE CASE ON THE MERITS."[6] The petitioner Association raises the issue of res judicata. The respondent court allegedly disregarded. the ruling of this Court in the two related cases above-cited that the 18-meter wide strip of land along Katipunan Avenue is "beyond the commerce of man and should be developed for the use of the general public." Petitioner further contends that the respondent court not only disregarded the aforesaid ruling of this Court but expressly "overruled" it by its holding that "on the basis of the records and applicable law, this Court believes that full right of possession and ownership of the disputed property should now be restored to Quezon City Development & Financing Corporation."[7] On the other hand, respondent QCDFC is of the view that the ruling in White Plains Association vs. Legaspi [8] was not the final judgment in that case. QCDFC states that the February 7, 1991 "beyond the commerce of man" dictum and the dispositive portion of the judgment were set aside and modified on July 17, 1994 upon a second motion for reconsideration. QCDFC insists that the judgment in the two (2) aforecited decisions is still the same, i.e., title to Road Lot 1 remains in the name of QCDFC but a lien or reservation for the construction of Highway 38, now C-5, shall stay imposed upon the title. Thus, there is no disregard of the judgment in the two (2) above-cited cases since, up to the present, the inconclusive situation in both judgments exist. Respondent QCDFC now argues that since ultimately, the thoroughfare C-5 did not pass through Road Lot 1 as proposed, the lien or reservation for C-5 has ceased to have any force and may no longer be continued. The lien or reservation has been overtaken by supervening events and is no longer valid. Respondent states that the thoroughfare known as Highway 38, Katipunan Parkway, and C-5 passed through another part of Quezon City at the Libis area, completely bypassing its earlier proposed route through Road Lot 1. The decision in this petition, according to QCDFC, should now lift the meaningless and obsolete reservation or lien which disturbs its exercise of the right of full ownership. The facts of this case culled from the records of this petition, unrebutted averments of the parties, and the prior decisions of the Court of Appeals,[9] and the Supreme Court[10] show that Road Lot 1 covered by TCT Nos. 156185, 156186 and 156187 was set aside and dedicated to the proposed section of Highway 38 in Quezon City. The width of the land allotted as extension of the highway was 38 meters. Of this, QCDFC actually developed a 20-meter wide

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strip. It extends through the length of White Plains Subdivision from the street leading to Highway 54 or EDSA at the South end to the street fronting St. Ignatius Village at the North end.[11] When QCDFC developed the White Plains Subdivision, it reserved the 38-meter wide strip as required by the government. In the meantime that the thoroughfare was not yet constructed through Road Lot No. 1, QCDFC did not leave the entire 38-meter strip idle and undeveloped waiting for the government to construct the proposed highway. Respondent built the 20-meter wide portion adjacent to White Plains Subdivision into a street for the ingress and egress of the homeowners into and out of the subdivision. There is no dispute over the developed 20-meter width of Road Lot No. 1. However, it appears from the records of the case that when all the streets inside White Plains Subdivision were donated to Quezon City by the developer, the entire Road Lot 1 was excluded from the donation. Quezon City has acknowledged the exclusion of Road Lot 1 and as accepted all the other streets of the subdivision. It appears from the pleadings and apparent from Annex "1 -B" of the rejoinder that Road Lot 1 is less than a kilometer long. The Deed of Donation and the documents on its acceptance[12] are appended to the respondent's rejoinder.[13] The deed signed by Mayor Norberto Amoranto for the donee shows that the donation was accepted pursuant to City Council Resolution No. 7591, S-68, dated June 3, 1968. The letter from Acting City Engineer Baltazar Aquino dated February 10, 1964 verifies that "the roads which you have constructed in the White Plains Subdivision situated at Murphy, this City, had been completed in accordance with the plans and specifications therefor as approved by the City Council x x x." The letter dated February 4, 1976 from City Engineer Pantaleon P. Tabora shows that the city's acceptance of the donation is with the exception of Road Lot 1. There is likewise no dispute over the fact that the remaining 18-meter wide portion adjacent to Camp Aguinaldo, while awaiting the passage of C-5 through it, was not developed. In fact, we take public notice of the fact that up to the present it has not been developed because as stated elsewhere in this case, C-5 was constructed elsewhere. The dormant issue of ownership has been revived in view of QCDFC's grievance that rentals from the gardeners now occupying the undeveloped land had been illegally collected by the petitioner. It is the lien or reservation over the 18-meter wide strip which the respondent prays that we lift. Petitioner Association further posits the view that the pronouncement about Road Lot. 1 being beyond the commerce of man and should be developed for the use of the general public should bar all further inquiries into its ownership, development and use. Respondent QCDFC, however, counters that the "beyond the commerce of man" ruling is subject to a suspensive condition and that the purpose for which the strip of land was reserved is the construction of C-5 through Road Lot No. 1. But according to the petitioner, even if the government has abandoned the use of Road Lot 1 as part of C-5, this does not prevent the application of res judicata.[14] The lot could still be developed for the benefit of the public because it has been reserved as an open space. The legitimate use of Road Lot 1 has been the bone of contention in this case and in the preceding cases and should be resolved once and for all. The question is: Was the setting aside of a 38-meter wide strip of land, less than a kilometer long, exclusively for the thoroughfare now known as C-5? And if not, may the reserved area be used for any other public purpose? These are the questions which we will resolve. We leafed through the brochure used in the selling of lots to prospective buyers in the proposed White Plains Subdivision and the centerfold thereof consists of a lot of streets and open spaces in the subdivision. [15] According to the respondent, the total open spaces of the subdivision, exclusive of Road Lot 1, is 32,844 square meters which is more than the required 31,216 square meters or 6% of the total 520,274 square meters area of the subdivision. A perusal of the subdivision plan shows that the reserved Katipunan Parkway by its width, dimensions and location would not have been intended for any other purpose except as a highway or thoroughfare. The map clearly indicates that it was not reserved for a park, a school campus, nor even a subdivision street. We agree with the respondent court that Road Lot 1 was exclusively intended for C-5. Respondent QCDFC has been quick to ask: "Why should a 38-meter wide road be reserved for any other purpose except a planned expressway or parkway?" Or as otherwise stated, is there any existing development project in the country with a 38-meter wide subdivision street inside it? QCDFC asserts that contrary to the allegations of the petitioner, it never made any representations to prospective homeowners that it will on its own initiative build a 38-meter wide Katipunan Avenue in White Plains subdivision. It states that Annex "1-B" of the rejoinder is the only representation which was submitted as evidence during the trial. Thus: "x x x. The representations of QCDFC are found in a nine (9)-page brochure for prospective buyers. xxx xxx xxx (c) The centerfold map or plan divides the 38-meter wide strip into two (2) unequal parts. Road Lot 1 reserved for Katipunan Parkway, now C-5, is bisected off the center. The dotted line is not at the middle by one part is larger, the 20-meter wide portion, with the other part next to the Camp Murphy (now Camp Aguinaldo) is smaller at 18 meters wide. The map or plan in the brochure shows that both ends, north and south, of the 18-meter wide reserve have perpendicular lines cutting it off from White Plains. The 20meter wide portion is clear throughout and continues all the way to two connecting streets at the two ends."[16] The manifestation of QCDFC about the results after a painstakingly diligent analysis of the map in the brochure may be correct. However, it is doubtful if the average buyer of a lot in the proposed subdivision would undertake such a detailed analysis of a map in a sales brochure. It is a known fact that buyers simply act on what is apparently represented in the brochure. In retrospect, what appears is that the government, by asking for the reservation of Road Lot 1 as a national thoroughfare, was itself responsible for the representation. Some homeowners may have believed that QCDFC was promising to construct a 38-meter wide highway for them. However, highways are not constructed by subdivision developers, and not even by city governments. It is not the fault of QCDFC if the government did not follow through with its original plan. We must thus agree with the respondent that a 38-meter wide road by its nature and definition is a parkway, not a subdivision street. The construction of Road Lot 1 as part of the parkway, now C-5, is the responsibility of the Department of Public Works and Highways, not that of the developer and not even that of the City. The lien or reservation was imposed by the national government. The first ground invoked in this petition for review states that our earlier rulings are clear and unequivocal and nothing more has to be done except to follow them. Petitioner states that "there is no need, no room, for any interpretation."[17] We are not persuaded. The decisions and resolutions in the earlier decisions of this Court show that petitioner's contention about all issues having been settled is belied by questions still awaiting resolution or raised by the decisions themselves. As we see it, the previous decisions of this Court raise more questions which need to be resolved. Respondent QCDFC says it has been shuttled from one court to another in its 20-year quest to seek justice. For one, it seeks an answer to the nagging question: Why did this Court order that title remain in the name of QCDFC if, as petitioner claims, the land belongs to the government to be used for public purposes? Then, we need to resolve the allimportant issue on what could legally be constructed on the disputed property at this time. An 18-meter wide strip of raw land alongside a 20-meter wide completed street in a highly developed urban area could hardly be developed for public use other than a highway. Respondent contends that Road Lot 1 was specifically reserved for only one specific purpose, i.e., the eventual construction of a highway known as C-5 through the area. Petitioner, on the other hand, argues that the strip of land is reserved for public use. It refuses to grant that there is any connection between C-5 and the 38-meter wide reserved strip of land. It claims that there are no more questions to be settled. However, as we reviewed the previous decisions of this Court, we find that it left certain questions still needing determination. The final resolution of the Supreme Court in White Plains Association, Inc. vs. Court of Appeals, et. al., G.R. No. 55868, February 1, 1990, actually calls for negotiation or further litigation. It states:

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"G.R. No. 55868 (White Plains Association, Inc. vs. Court of Appeals, et. al.) - Upon consideration of the private respondents Motion for Clarification filed December 20, 1989 and petitioner's Comment thereon filed January 30, 1990, the Court Resolved to DENY said Motion, there being nothing to clarify in the Court's Resolution of November 14, 1985, which reinstated the Court of Appeals' Decision of February 12, 1980 in the case brought up for review (CA-G.R. No. 61810-R). Said Decision issued a simple, unmistakable mandate in terms that cannot be misunderstood and require no amplification, ordering '(t)he Register of Deeds of Quezon City *** to cancel TCT No. 15685, 15686 and 15687 and to issue in their stead TCT No. 112637 and to annotate on the latter the reservation or lien existing thereon prior to the decision of the CFI of Rizal dated May 14, 1970.' Except for also ordering said respondent to pay attorney's fees of P5,000.00 and costs, it required of said respondent nothing by way of compliance, being specifically directed to the Register of Deeds. Such matters alleged in the Motion for Clarification as: (a) sales of portions of the property covered by said titles to buyers in good faith; (b) private respondent's continuing to pay the real estate taxes thereon despite the declaration that it is beyond the commerce of man; and (c) petitioner's collection of rentals from lessees thereof, can no longer be properly addressed in this proceeding, said Resolution being already long final and executory ( Rollo, p. 245), but also for the equally compelling reason that being but newly-raised, their appropriate venue lies in negotiation or further litigation."[18] (Italics supplied) All of the titles to the land, both the old titles ordered cancelled and the new titles replacing them are in the name of QCDFC. The reservation or lien claimed by respondent to be for the construction of C5 ordered annotated on TCT No. 112637 is the only barrier or obstacle to respondent's exercise of full ownership rights. The ruling that negotiation or further litigation is necessary on at least three matters mentioned in the aforequoted resolution calls for further determination by this Court and not a mere dismissal on matters already settled. In fact, the dictum in G.R. No. 95522, White Plains Association, Inc. vs. Legaspi[19] that the developer can be compelled to execute a deed of donation of the undeveloped strip of Road Lot 1 and, in the event QCDFC refuses to donate the land, that the Register of Deeds of Quezon City may be ordered to cancel its old title and issue a new one in the name of the city was questioned by the respondent QCDFC as contrary to law. We agree with QCDFC that the final judgment in G.R. No. 95522 is not what appears in the published February 7, 1991 decision in White Plains Association, Inc. vs. Legaspi.[20] It is the following resolution issued three (3) years later, on July 27, 1991, which states, inter alia: "x x x (T)he Court is constrained to grant the instant Motion for Reconsideration but only insofar as the motion seeks to delete from the dispositive portion of the decision of 07 February 1991 the order of this Court requiring the execution of the deed of donation in question and directing the Register of Deeds of Quezon City, in the event that such deed is not executed, to cancel the title of QCDFC and to issue a new one in the name of the Quezon City government. It may well be that the public respondents would not be aversed to such modification of the Court's decision since they shall, in effect, have everything to gain and nothing to lose. WHEREFORE, the second motion for reconsideration is hereby partly granted by MODIFYING the dispositive portion of this Court's decision of 07 February 1991 and to now read, as follows: 'WHEREFORE, the petition is GRANTED. The questioned orders of respondent judge dated July 10, 1990 and September 26, 1990 are hereby reversed and set aside. x x x. Costs against respondent QCDFC. SO ORDERED'."[21] It is true that at some point in time, litigation must come to an end. However, our two (2) earlier decisions apparently did not finally put an end to the embryonic dispute between the parties relative to this 18meter undeveloped strip of land. To order that titles remain with QCDFC but with the lien for Highway 38 annotated thereof, cannot, and should not be, a final determination. This Court also left to future determination the contention that if the reserved land is dedicated to a public purpose other than the original plan, eminent domain proceedings will have to be instituted. Up to this date, this has remained unresolved and to our mind, there is no need to resolve the question as it has become moot and academic. For the highway has been built elsewhere, and is now known as C-5. We have no reason to doubt the respondent court's findings that based on QCDFC's claim and annexed documents,[22] Road Lot 1 has not been donated. No deed of donation exists. This is not disputed by petitioner nor has it intimated that such a document was ever executed. The question then is: May we now force the owner to donate the property? If the owner refuses, may the Register of Deeds be ordered to cancel the owner's title and issue a new one in the name of the government? To our mind, this would partake of an illegal taking. This directive in White Plains Association, Inc. vs. Legaspi[23] has not been executed for almost seven (7) years because it was abandoned by this Court in the second motion for reconsideration and because it is inextricably linked with the other ruling that the 18meter wide strip is to be utilized for the widening of Katipunan Avenue. Now that the respondent contends that C-5 has been built elsewhere, this Court cannot close its eyes as to what is alleged as maladministration of justice because of supervening events. The petitioner's argument that title was ordered registered in QCDFC's name but it has no legal rights to what remains titled in its name and that the strip of land may be used for any public purpose, is incongruous, to say the least. Respondent court resolved the above issue in this wise: 'Thus, to emphasize, the ownership and title to Road Lot 1 remained with QCDFC but there has been no decision which confirms this issue with finality. There was no donation nor cancellation of title. The

supervening event of the National Government abandoning the parkway that would include Road Lot 1 should now resolve the issue of ownership of the disputed 18-meter wide strip. Said unused portion will have to revert to its titled owner.

"This brings this Court to another reason for the grant of QCDFC's motion for reconsideration QCDFC is denied the equal protection of the law. Why were the developers of St. Ignatius Village and Green Meadows Subdivisions allowed to construct only 17 or 18-meter wide roads and sell part of their proposed 38-meter wide major thoroughfare to private persons, while QCDFC must reserve the entire 38-meter wide portion in White Plains Subdivision up to the present and for the indefinite future? If any expansion of the St. Ignatius and Green Meadows portion of the road would call for expropriation proceedings of the eighteen-meter wide portions, similar treatment must also be given to QCDFC. It is incorrect to rule that the Quezon City Government, to which Road Lot 1 belongs, has the right to lease/rent and collect from said lot special occupancy dues. QCDFC could not have donated Road Lot 1 by implication because no parkway was constructed on the disputed area. Only after a subdivision owner has developed a road may it be donated to the local government, if it so desires. On the other hand, a subdivision owner may even opt to retain ownership of private subdivision roads, as in fact is the usual practice of exclusive residential subdivisions, for example, those in Makati City. Neither is it correct to say that Road Lot 1 may be devoted to other public purposes such as a park or playground. As stressed by QCDFC, Road Lot 1 was reserved in compliance with a requirement imposed by the National Planning Commission that this particular strip Of land should be set aside or allocated for a major thoroughfare as that part of Highway 38, otherwise known as Katipunan Parkway or C-5, passing alongside White Plains Subdivision. The reservation arose from a specific plan or project of the National Government. It is not required by or implied in any law, regulation or ordinance. It is not required of subdivision developers. A parkway by its nature or definition is 38 meters wide and is the exclusive responsibility of the DPWH (National Government). The requirement of a 38-meter wide road in this case is peculiar for White Plains Subdivision and covers only a specific purpose. This means that Quezon City cannot claim an idle piece of property intended for a major thoroughfare or parkway and cannot use it for a purpose other than C-5. It appears that the Government is not paying QCDFC for Road Lot 1 because Quezon City considers the reservation for a major thoroughfare as a 'donation.' Assuming that Quezon City is correct, it follows that the rules on donation should apply. Under Article 764 of the Civil Code an action to revoke a donation may

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be made if the donee fails to comply with the conditions or(sic) the donation. In Barreto vs. City of Manila, 7 Phil. 416, Barreto donated his lot in front of Malacaang in order to beatify the vicinity in the construction of a great public plaza. Instead of building a park, the City of Manila decided to use the property for a public street. Barreto sued the City of Manila. The Supreme Court upheld him. Road Lot 1 in this case was reserved for the construction of a major thoroughfare called C-5; thus, it cannot be dedicated to another public purpose."[24] We agree with the aforequoted ruling of the respondent court. The second ground for review is linked to the first ground. Petitioner questions the factual findings of the respondent court in the assailed resolution, contending that it does not have any factual moorings in the case at bar. The assailed resolution contains as the "Antecedents," the following: "(1) The Decision of the Court of First Instance of Rizal, Branch IX, Quezon City, dated November 22, 1976, shows that the White Plains Subdivision was developed by QCDFC as early as 1960. When the National Planning Commission approved the subdivision plans, it required QCDFC to set aside Road Lot 1 for the construction of a parkway known as Highway 38. The parkway was also known as an extension of Katipunan Avenue and later as C-5 (hereinafter to be simple(sic) referred to as C-5). (2) C-5 was planned as a 38-meter wide secondary national road to traverse Quezon City and Rizal Province. As averred in the complaint filed with the Court of First Instance, there was the undertaking that should the Government construct C-5, reasonable compensation would be paid for the expropriated Road Lot. (3) The land set aside for C-5 was at the exact place where White Plains Subdivision shares a common boundary with Camp Aguinaldo. Road Lot 1 traverses the western periphery of the subdivision on a north to south or vice versa direction. Subdivision developers are usually required to construct their main roads or streets within or through the subdivision proper to maximize the benefits which the project can derive from it. The fact is that Road Lot 1 is at the western fringe of the two ends of the proposed parkway. (4) In the present case, QCDFC applied for a writ of preliminary injunction in its complaint. It was granted by the RTC. xxx xxx xxx The Katipunan Avenue was planned by the National Government as a 38-meter wide road because it formed part of the proposed major thoroughfare now known as C-5. But actually, only a 20-meter wide strip has been developed into a street by QCDFC. Any one passing along Katipunan Avenue can readily see that of this 20-meter wide street, only 10 meters wide has been paved and utilized as a street. There is an unusually wide sidewalk of 8 meters wide fronting the subdivision, while on the opposite side is the regular two-meter wide sidewalk. The 18-meter wide remaining portion has remained undeveloped for the past thirty-six (36) years because DPWH could not make up its mind as to when and where the C-5 should be constructed. It now appears that C-5 was constructed along Libis, a place which completely bypasses White Plains. As stated by QCDFC, the National Government has fully abandoned its earlier plan. C-5 is now a fait accompli cutting through the Libis area. If a piece of private land is reserved for a specific public highway, but the highway is never constructed at that place, to whom does the unused land belong? Another important consideration in this case is that Road Lot 1 has not only been abandoned by the project for which it was reserved but title thereto has always been and remains in the name of QCDFC. The fact of QCDFC being the titled owner is recognized by the Supreme Court decision in G.R. No. 55868, entitled White Plains Association, Inc. vs. Court of Appeals,et. al., February 1, 1990. The Supreme Court ordered the reinstatement of the Court of Appeals decision dated February 12, 1980 and directed the Register of Deeds of Quezon City to cancel TCT Nos.156185, 156186, and 156187 and to issue in lieu thereof TCT No. 112637 with an annotation that a reservation or lien existing prior to the CFI decision dated May 14, 1970 remains. Otherwise stated, QCDFC is the titled owner on the basis of TCT No. 112637 but a reservation for C-5 is annotated at the back of the title. This Court's decision dated February 12, 1980, in CA-G.R. No. 61810 makes mention of the trial court's finding that the requirement for a subdivision area is only 15 meters wide which may even be reduced to 12 meters as a collector road and that Quezon City Ordinance 60-4580 which requires that the minimum street-right-of-way for any parkway be 38 meters wide applies only to parkways or avenues which are the responsibility of the National Government."[25] Petitioner then posits the question: From whence or where did the respondent court derive some of its factual findings? The "Antecedents" as narrated by the respondent court apparently is culled from the previous decisions of this Court and respondent court. The issues in this petition cannot be resolved without resorting to the earlier decisions of this Court and the Court of Appeals decisions mentioned therein. Petitioner itself raises res judicata as an issue. Thus, this issue of res Judicata requires an examination of the earlier decisions. The all important fact that Road Lot 1 was reserved to form part of the national expressway in Quezon City is a finding in G.R. No. 95522. That it has been denominated as Highway 38 by this Court and not C-5 can be explained by the fact that the name of the new highway as C-5 was publicized only recently. By way of analogy, no proof is needed for the finding that EDSA was also known earlier as Highway 54. Neither is proof needed for the existence of C-5. The nature and appearance of the much traveled street along Camp Aguinaldo on one side and White Plains and St. Ignatius subdivision on the other, are matters of public notice and can be easily confirmed by motorists and/or pedestrians passing along White Plains subdivision. In its comment, the private respondent invites any homeowner to come out and categorically declare under oath that the existing street is anything other than what was taken notice of by the respondent court. The petitioner does not refute the factual findings as false, it simply states that they are not found in the records of the instant petition. However, this petition cannot be resolved in isolation from the earlier cases. We have to take into account what was taken up earlier. The allegation of petitioner Association that the setting aside of Road Lot 1 for the construction of a Parkway known as Highway 38, as extension of Katipunan Avenue and later as C-5 does not find any support in the evidence or records is not accurate. As can be seen in all the decisions of the Court of Appeals and this Court, this is a principal issue discussed in the respondent court and eventually elevated to this Court. There can be no dispute that Road Lot 1 was set aside for Highway 38. As argued by the petitioner, it may be true that there is no mention of C-5 in the decisions but as earlier stated, this is called Circumferential Road 5 or C-5, Katipunan Parkway or Avenue and Highway 38 are used interchangeably. The only 38-meter wide thoroughfare in the vicinity is now called C-5 and it does not pass through Road Lot 1. Highway 38 cited as Katipunan Avenue in the decision and C-5 are one and the same thoroughfare. There should also be no gainsaying the fact that the connecting streets on both ends of White Plains subdivision including the street fronting the St. Ignatius Village are much less than 20 meters wide. Thus, we cannot but agree with QCDFC in its comment, "Whoever heard of a 38-meter wide street within a subdivision? The undeveloped space was good only and existed solely for a national thoroughfare known as C-5."[26] It would indeed be bizarre if Quezon City will have a 38-meter wide highway less than one (1) kilometer long connected at both ends by standard sized city streets each of which is about 18 meters wide. Intended to form part of C-5, this is no longer feasible because C-5 has passed elsewhere. What is the legal significance of this anomalous situation? Even assuming that in spite of its dimensions, the 18-meter wide and 1 kilometer long undeveloped area may be used for public purpose other than C-5, QCDFC contends in this petition that just compensation will have to be paid for it. As stated by QCDFC, this is because the area has never been donated; title remains with the developer; the purpose for which the reservation was made can no longer be implemented; and under the law, even indisputably, subdivision streets belong to the owner until donated to the government or until expropriated upon payment of just compensation.[27] The third ground in this petition refers to the application of the principle of res judicata. The respondent court resolved inter alia the res judicata issue in this wise:

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"x x x. This Court is aware that in White Plains Association, Inc. vs. Legaspi G.R. No. 95522 (193 SCRA 765) decided on February 7, 1991 the Supreme Court stated that the cause of action of QCDFC in that case was barred by res judicata because of the earlier decision in G.R. 55868. This Court, with due respect, believes that this may be so, insofar as the decision to uphold the contemplated construction of a 38-meter wide road called C-5 along the area is concerned. However, as previously explained, supervening events have come in, which brought about a complete change to the scenario. When the National Government decided to construct C-5 in another part of Quezon City, completely bypassing the White Plains area, the reservation for C-5 in Road Lot 1 ceased to have any meaning. This Court believes that there can be no res judicata for something which can no longer be accomplished. Whatever the petitioner wishes to be done on Road Lot 1, be it another road parallel to the existing 20 meter highway or a park, a school building, a market, or a public garden to be leased to private gardeners, is no longer in accord with the purpose for which the reservation of Road Lot 1 was made. When the National Government abandoned its plan for C-5 or a 38 meter wide parkway through Road Lot 1, this Court is of the view that any claim based on res judicata ceases to have any validity. Res judicata simply means that when a right or a fact has been judicially determined by a court with competent jurisdiction, the determination is conclusive upon the parties and their privies unless the doctrine is reversed or modified by the Supreme Court or, in proper cases, by statute. (See Phil. National Bank vs. Baretto 52 Phil.. 816; Sarabia vs. Secretary of Agriculture and Natural Resources 111 Phil. 1081). xxx xxx xxx But it bears emphasis that there is no finial (sic) judgment or order barring this present case because the Supreme Court Resolution in G.R. No. 55868 merely ordered the issuance of a title in the name of respondent QCDFC with a lien or reservation intended for the 38-meter wide highway or parkway. Apart from the reservation having been mooted because the parkway was built elsewhere, the lot cannot be used for any other purpose. Changed circumstances such as the sale and titling of properties connecting both But even assuming for the sake of argument that the requisites of res judicata are present here, no less than the Supreme Court was(sic) had stated in Teodoro vs. Carague, 206 SCRA 429 (1992) that: 'Some members of the court, however, frown at the thought of disregarding the principle of res judicata in the instant case. This frown is hopelessly unrealistic cruel, and verily most unkind. Be it noted that this is not the first time in American or in Philippine jurisprudence when the principle of res judicata has been set aside in favor of substantial justice which is after all the avowed purpose of all law and jurisprudence. Thus, the following are in point. In this respect it has been declared that res judicata, as the embodiment of a public policy, must at times be weighed against competing interests, and must, on occasion, yield to other policies. The determination of the question is said to require a compromise, in each case of the two opposing policies, of the desirability of finality and the public interest in searching the right result. (46 Am. Jur. Pp. 402-403). Underlying all discussion of the problem must be the principle of fundamental fairness in the due process sense. It has accordingly been adjudged that the public policy underlying the principle of the res judicata must be considered together with the policy that a party shall not be deprived of a fair adversary proceeding in which to present his case. (46 Am. Jur. P. 403). x x x Res judicata is to be disregarded if the application would involve the sacrifice of justice to technicality.' (159 SCRA 264, Republic vs. De los Angeles)."[28] We agree. It may be noted that the respondent court called attention to the fact that the dictum in White Plains Association, Inc. vs. Legaspi found in the published reports[29] had been modified on the basis of a second motion for reconsideration. It is wrong to accept as settled the doctrine still not clearly resolved that a subdivision developer may be forced to donate a street to the city against the owner's will. Conclusively so, if the road to be donated was intended for a national highway which has been since abandoned. This is not what this Court finally promulgated in that case. In the White Plains Association, Inc. vs. Legaspi case, the Court simply went back to the decision in the earlier case, G.R. No. 55868, which ordered title to remain in the name of QCDFC but with a lien or a reservation for the construction of a thoroughfare or highway. Permanent ownership was not resolved. The ruling of the respondent court sustains the rejoinder of QCDFC which cites and then explains the law on subdivision streets donation: "(c) If Quezon City wants to use the 18 meter wide strip reserved for C-5 and to dedicate it to another public purpose, it must institute eminent domain proceedings and pay just compensation. It cannot force a private citizen to donate to the city government something reserved for a specific purpose. And which purpose has been abandoned. (d) In fact, Sec. 31 of P.D. 957 provides: 'The registered owner or developer of the subdivision or condominium project, upon completion of the development of said project, may at his option convey by way of donation the roads and open spaces found within the project to the city or municipality wherein the project is located. Upon acceptance of the donation by the city or municipality concerned, no portion of the area donated shall thereafter be converted to any other purpose or purposes unless, after hearing, the proposed conversion is approved by the (National Housing) Authority. -Italics supplied' Please note the phrase 'at his option.' There is also the provision that any portion thus donated cannot be converted to a purpose other than the original purpose. The approval by the National Housing Authority is required only in genuine donations. Donation has an established meaning in law. Any change from the

ends of the proposed parkway have also occurred.

What was settled in G.R. No. 55868 was limited to the construction of the 38-meter wide C-5. Other matters were left by G.R. No. 55868 itself to negotiation or future litigation. xxx xxx xxx In fact, to repeat, the February 7, 1991 decision in G.R. No. 95522 was itself modified by the Supreme Court on July 27, 1994 in a resolution acting on a second motion for reconsideration in the case. If there was res judicata in G.R. No. 55868, neither G.R. No. 95522 nor the July 27, 1994 resolution could have modified it. Furthermore, both the 1991 decision and the July 27, 1994 modification are premised on C-5 being pushed through in Road Lot 1, something which was not done. G.R. No. 95522 was not the further litigation that would have settled the sales of portion of the property to buyers in good faith and for value, the payment of real estate taxes by QCDFC, and the collection of rentals from lessees. This Court therefore believes that there is no conclusive determination of the issues raised in this present petition by the earlier judgments, hence res judicata will not apply. (Moldes vs. Mullet, 104 Phil. 731;

Maxion vs. Manila Railroad Co., 44 Phil. 595; Bayot vs. Zurbito, 39 Phil. 651; O'Connell vs. Mayuga, 8 Phil. 442). This Court need not belabor that the doctrine of res judicata is based on the principle that there should be an end to litigation at some time (PCIBank vs. Pfleider 65 SCRA 22). But where the previous judgment did not determine all the issues because it required the parties to either negotiate or litigate, res judicata cannot be invoked. (See Phil. Coal Miners Union vs. Cebu Portland Cement Co. 10 SCRA 784 [1964]).

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original purpose always results in reversion of the donated property to the donor or his heirs. At any rate, the law calls for a 'donation.' (e) P.D. 1216, Section 2 gives the owner or developer the option of donation to either the Homeowners Association or the local government. There is nothing about forcible donation. What is mandatory is for the local government to accept a developed road or open space given as a donation."[30] These provisions of the law are only a carryover from existing jurisprudence. In the early case of Young vs. City of Manila,[31] this Court ruled: "We are therefore of the opinion and so hold that the plaintiff cannot compel the defendant City of Manila to purchase from him the street areas described in his complaint. Neither can he be compelled to donate said land and transfer his title to the city so that the latter may build and maintain the streets. But as long as the plaintiff retains title and ownership of said street areas, he is under obligation to pay the land taxes thereon as well as to reimburse to the city the expenses of filling the same." The third and fourth grounds in the petition revolve around the issuance or non-issuance of a preliminary injunction. The answer to the questions raised by the grounds of the petition are subsumed in the discussion of the first two (2) grounds. The decision of the respondent court cannot be faulted for alleged over-breadth. The issue as to whom rentals should be paid cannot be resolved without determining who legally owns or possesses the property. It also begs the question on the legality of the gardeners' continued occupancy of the premises. The petitioner Association admits that it is not the owner of the disputed property. Quezon City has expressly excluded Road Lot 1 from the streets and open spaces of White Plains donated by QCDFC and accepted by the City. Quezon City cannot be the owner of a national highway traversing not only the city but other cities and municipalities as well. The national government has constructed C-5 in another location, thereby abandoning the reserved highway. We note that only a. lien or reservation for Highway 38 or C-5 was imposed on the developer. There was no requirement that QCDFC would develop the highway obviously because the construction of national highways is a function of the national government. Under the facts and applicable law, there is no reason why QCDFC should be restrained from exercising the rights of full ownership and possession with no more reservation or lien. The respondent court ruled: "This case has been shuttling back and forth from the trial court to this Court, and then to the Supreme Court for approximately twenty (20) years now without any final resolution of the basic issue as to who should exercise full ownership and possession over the disputed 18-meter wide portion of Road Lot 1. Since any leasing out or disposition of the property, collection of occupancy dues, and other rights of an owner cannot be justified unless the basic question is resolved, this Court has decided to cut the Gordian knot in this case and hopefully resolve this controversy once and for all. This Court agrees with QCDFC that the former's decision of December 14, 1995 leaves the status of the disputed land in an even more confusing limbo than before. Earlier decisions of this Court and the Supreme Court left it to future litigation or negotiations to resolve remaining issues. QCDFC points out that the parties have now gone to court to resolve this festering sore that has plagued them for 36 years. It therefore behooves this Court to prevent the seeds of future litigation from flourishing further. Too much of the precious time and limited resources of our courts of justice have been used up by this one single controversy." We cannot dispute the wisdom of the aforecited observation of the respondent court. It is time we think to cut the Gordian knot. The unresolved issues have to be decided. Thus, we treat this petition in the light of unsettled matters in our two (2) earlier decisions. The orders in G.R. No. 55868 and G.R. No. 95522, that title to Road Lot 1 remains with QCDFC but the lien or reservation for the expanded highway shall be maintained, should be conclusively resolved in the light of the government's abandoning its plan to use Road Lot 1 as part of C-5. WHEREFORE, the instant petition is DISMISSED. The reservation or lien on Road Lot 1 intended for a highway or parkway is LIFTED. Rights of full ownership including the development of the property or the collection of fees and rentals from the gardeners therein are restored to the Quezon City Development & Financing Corporation. SO ORDERED. PHILIPPINE PETROLEUM CORPORATION, petitioner, vs. MUNICIPALITY OF PILILLA, RIZAL, Represented by MAYOR NICOMEDES F. PATENIA, respondent.

Quiason, Makalintal, Barot, Torres & Ibarra for petitioner.

PARAS, J.:p This is a petition for certiorari seeking to annul and set aside: (a) the March 17, 1989 decision * of the Regional Trial Court, Branch 80, Tanay, Rizal in Civil Case No. 057-T entitled, "Municipality of Pililla, Rizal, represented by Mayor Nicomedes F. Patenia vs. Philippine Petroleum Corporation", (PPC for short) upholding the legality of the taxes, fees and charges being imposed in Pililla under Municipal Tax Ordinance No. 1 and directing the herein petitioner to pay the amount of said taxes, fees and charges due the respondent: and (b) the November 2, 1989 resolution of the same court denying petitioner's motion for reconsideration of the said decision. The undisputed facts of the case are: Petitioner, Philippine Petroleum Corporation (PPC for short) is a business enterprise engaged in the manufacture of lubricated oil basestock which is a petroleum product, with its refinery plant situated at Malaya, Pililla, Rizal, conducting its business activities within the territorial jurisdiction of the Municipality of Pililla, Rizal and is in continuous operation up to the present (Rollo p. 60). PPC owns and maintains an oil refinery including forty-nine storage tanks for its petroleum products in Malaya, Pililla, Rizal (Rollo, p. 12). Under Section 142 of the National Internal Revenue Code of 1939, manufactured oils and other fuels are subject to specific tax. On June 28, 1973, Presidential Decree No. 231, otherwise known as the Local Tax Code was issued by former President Ferdinand E. Marcos governing the exercise by provinces, cities, municipalities and barrios of their taxing and other revenue-raising powers. Sections 19 and 19 (a) thereof, provide among others, that the municipality may impose taxes on business, except on those for which fixed taxes are provided on manufacturers, importers or producers of any article of commerce of whatever kind or nature, including brewers, distillers, rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in accordance with the schedule listed therein. The Secretary of Finance issued Provincial Circular No. 26-73 dated December 27, 1973, directed to all provincial, city and municipal treasurers to refrain from collecting any local tax imposed in old or new tax ordinances in the business of manufacturing, wholesaling, retailing, or dealing in petroleum products subject to the specific tax under the National Internal Revenue Code (Rollo, p. 76). Likewise, Provincial Circular No. 26 A-73 dated January 9, 1973 was issued by the Secretary of Finance instructing all City Treasurers to refrain from collecting any local tax imposed in tax ordinances enacted before or after the effectivity of the Local Tax Code on July 1, 1973, on the businesses of manufacturing, wholesaling, retailing, or dealing in, petroleum products subject to the specific tax under the National Internal Revenue Code ( Rollo, p. 79). Respondent Municipality of Pililla, Rizal, through Municipal Council Resolution No. 25, S-1974 enacted Municipal Tax Ordinance No. 1, S-1974 otherwise known as "The Pililla Tax Code of 1974" on June 14, 1974, which took effect on July 1, 1974 (Rollo, pp. 181-182). Sections 9 and 10 of the said ordinance imposed a tax on business, except for those for which fixed taxes are provided in the Local Tax Code on manufacturers, importers, or producers of any article of commerce of whatever kind or nature, including brewers, distillers, rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in accordance with the schedule found in the Local Tax Code, as well as mayor's permit, sanitary inspection fee and storage permit fee for flammable, combustible or explosive substances ( Rollo, pp. 183-187),

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while Section 139 of the disputed ordinance imposed surcharges and interests on unpaid taxes, fees or charges (Ibid., p. 193). On March 30, 1974, Presidential Decree No. 426 was issued amending certain provisions of P.D. 231 but retaining Sections 19 and 19 (a) with adjusted rates and 22(b). On April 13, 1974, P.D. 436 was promulgated increasing the specific tax on lubricating oils, gasoline, bunker fuel oil, diesel fuel oil and other similar petroleum products levied under Sections 142, 144 and 145 of the National Internal Revenue Code, as amended, and granting provinces, cities and municipalities certain shares in the specific tax on such products in lieu of local taxes imposed on petroleum products. The questioned Municipal Tax Ordinance No. 1 was reviewed and approved by the Provincial Treasurer of Rizal on January 13, 1975 (Rollo, p. 143), but was not implemented and/or enforced by the Municipality of Pililla because of its having been suspended up to now in view of Provincial Circular Nos. 26-73 and 26 A-73. Provincial Circular No. 6-77 dated March 13, 1977 was also issued directing all city and municipal treasurers to refrain from collecting the so-called storage fee on flammable or combustible materials imposed under the local tax ordinance of their respective locality, said fee partaking of the nature of a strictly revenue measure or service charge. On June 3, 1977, P.D. 1158 otherwise known as the National Internal Revenue Code of 1977 was enacted, Section 153 of which specifically imposes specific tax on refined and manufactured mineral oils and motor fuels. Enforcing the provisions of the above-mentioned ordinance, the respondent filed a complaint on April 4, 1986 docketed as Civil Case No. 057-T against PPC for the collection of the business tax from 1979 to 1986; storage permit fees from 1975 to 1986; mayor's permit and sanitary inspection fees from 1975 to 1984. PPC, however, have already paid the lastnamed fees starting 1985 (Rollo, p. 74). After PPC filed its answer, a pre-trial conference was held on August 24, 1988 where the parties thru their respective counsel, after coming up with certain admissions and stipulations agreed to the submission of the case for decision based on documentary evidence offered with their respective comments (Rollo, p. 41). On March 17, 1987, the trial court rendered a decision against the petitioner, the dispositive part of which reads as follows: WHEREFORE, premises considered, this Court hereby renders judgment in favor of the plaintiffs as against the defendants thereby directing the defendants to 1) pay the plaintiffs the amount of P5,301,385.00 representing the Tax on Business due from the defendants under Sec. 9 (A) of the Municipal Tax Ordinance of the plaintiffs for the period from 1979 to 1983 inclusive plus such amount of tax that may accrue until final determination of case; 2) to pay storage permit fee in the amount of P3,321,730.00 due from the defendants under Sec. 10, par. z (13) (b) (1 C) of the Municipal Tax Ordinance of the plaintiffs for the period from 1975 to 1986 inclusive plus such amount of fee that may accrue until final determination of case; 3) to pay Mayor's Permit Fee due from the defendants under Sec. 10, par. (P) (2) of the Municipal Tax Ordinance of the plaintiffs from 1975 to 1984 inclusive in the amount of P12,120.00 plus such amount of fee that may accrue until final determination of the case; and 4) to pay sanitary inspection fee in the amount of P1,010.00 for the period from 1975 to 1984 plus such amount that may accrue until final determination of case and 5) to pay the costs of suit. SO ORDERED. (Rollo, pp. 49-50) PPC moved for reconsideration of the decision, but this was denied by the lower court in a resolution of November 2, 1989, hence, the instant petition. The Court resolved to give due course to the petition and required both parties to submit simultaneous memoranda (June 21, 1990 Resolution; Rollo, p. 305). PPC assigns the following alleged errors: 1. THE RTC ERRED IN ORDERING THE PAYMENT OF THE BUSINESS TAX UNDER SECTION 9 (A) OF THE TAX ORDINANCE IN THE LIGHT OF PROVINCIAL CIRCULARS NOS. 26-73 AND 26 A-73;. 2. THE RTC ERRED IN HOLDING THAT PETITIONER WAS LIABLE FOR THE PAYMENT OF STORAGE PERMIT FEE UNDER SECTION 10 Z (13) (b) (1-c) OF THE TAX ORDINANCE CONSIDERING THE ISSUANCE OF PROVINCIAL CIRCULAR NO. 6-77; 3. THE RTC ERRED IN FAILING TO HOLD THAT RESPONDENTS COMPUTATION OF TAX LIABILITY HAS ABSOLUTELY NO BASIS; 4. THE RTC ERRED IN ORDERING THE PAYMENT OF MAYOR'S PERMIT AND SANITARY INSPECTION FEES CONSIDERING THAT THE SAME HAS BEEN VALIDLY AND LEGALLY WAIVED BY THE MAYOR; 5. THE RTC ERRED IN FAILING TO HOLD THAT THE TAXES AND DUTIES NOT COLLECTED FROM PETITIONER PRIOR TO THE FIVE (5) YEAR PERIOD FROM THE FILING OF THIS CASE ON APRIL 4, 1986 HAS ALREADY PRESCRIBED. The crucial issue in this case is whether or not petitioner PPC whose oil products are subject to specific tax under the NIRC, is still liable to pay (a) tax on business and (b) storage fees, considering Provincial Circular No. 6-77; and mayor's permit and sanitary inspection fee unto the respondent Municipality of Pililla, Rizal, based on Municipal Ordinance No. 1. Petitioner PPC contends that: (a) Provincial Circular No. 2673 declared as contrary to national economic policy the imposition of local taxes on the manufacture of petroleum products as they are already subject to specific tax under the National Internal Revenue Code; (b) the above declaration covers not only old tax ordinances but new ones, as well as those which may be enacted in the future; (c) both Provincial Circulars (PC) 26-73 and 26 A-73 are still effective, hence, unless and until revoked, any effort on the part of the respondent to collect the suspended tax on business from the petitioner would be illegal and unauthorized; and (d) Section 2 of P.D. 436 prohibits the imposition of local taxes on petroleum products. PC No. 26-73 and PC No. 26 A-73 suspended the effectivity of local tax ordinances imposing a tax on business under Section 19 (a) of the Local Tax Code (P.D. No. 231), with regard to manufacturers, retailers, wholesalers or dealers in petroleum products subject to the specific tax under the National Internal Revenue Code NIRC, in view of Section 22 (b) of the Code regarding non-imposition by municipalities of taxes on articles, subject to specific tax under the provisions of the NIRC. There is no question that Pililla's Municipal Tax Ordinance No. 1 imposing the assailed taxes, fees and charges is valid especially Section 9 (A) which according to the trial court "was lifted in toto and/or is a literal reproduction of Section 19 (a) of the Local Tax Code as amended by P.D. No. 426." It conforms with the mandate of said law. But P.D. No. 426 amending the Local Tax Code is deemed to have repealed Provincial Circular Nos. 26-73 and 26 A-73 issued by the Secretary of Finance when Sections 19 and 19 (a), were carried over into P.D. No. 426 and no exemptions were given to manufacturers, wholesalers, retailers, or dealers in petroleum products. Well-settled is the rule that administrative regulations must be in harmony with the provisions of the law. In case of discrepancy between the basic law and an implementing rule or regulation, the former prevails (Shell Philippines, Inc. v. Central Bank of the Philippines, 162 SCRA 628 [1988]). As aptly held by the court a quo: Necessarily, there could not be any other logical conclusion than that the framers of P.D. No. 426 really and actually intended to terminate the effectivity and/or enforceability of Provincial Circulars Nos. 26-73 and 26 A-73 inasmuch as clearly these circulars are in contravention with Sec. 19 (a) of P.D. 426-the amendatory law to P.D. No. 231. That intention to terminate is very apparent and in fact it is expressed in clear and unequivocal terms in the effectivity and repealing clause of P.D. 426 . . . Furthermore, while Section 2 of P.D. 436 prohibits the imposition of local taxes on petroleum products, said decree did not amend Sections 19 and 19 (a) of P.D. 231 as amended by P.D. 426, wherein the municipality is granted the right to levy taxes on business of manufacturers, importers, producers of any article of commerce of whatever kind or nature. A

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tax on business is distinct from a tax on the article itself. Thus, if the imposition of tax on business of manufacturers, etc. in petroleum products contravenes a declared national policy, it should have been expressly stated in P.D. No. 436. The exercise by local governments of the power to tax is ordained by the present Constitution. To allow the continuous effectivity of the prohibition set forth in PC No. 26-73 (1) would be tantamount to restricting their power to tax by mere administrative issuances. Under Section 5, Article X of the 1987 Constitution, only guidelines and limitations that may be established by Congress can define and limit such power of local governments. Thus: Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy . . . Provincial Circular No. 6-77 enjoining all city and municipal treasurers to refrain from collecting the so-called storage fee on flammable or combustible materials imposed in the local tax ordinance of their respective locality frees petitioner PPC from the payment of storage permit fee. The storage permit fee being imposed by Pililla's tax ordinance is a fee for the installation and keeping in storage of any flammable, combustible or explosive substances. Inasmuch as said storage makes use of tanks owned not by the municipality of Pililla, but by petitioner PPC, same is obviously not a charge for any service rendered by the municipality as what is envisioned in Section 37 of the same Code. Section 10 (z) (13) of Pililla's Municipal Tax Ordinance No. 1 prescribing a permit fee is a permit fee allowed under Section 36 of the amended Code. As to the authority of the mayor to waive payment of the mayor's permit and sanitary inspection fees, the trial court did not err in holding that "since the power to tax includes the power to exempt thereof which is essentially a legislative prerogative, it follows that a municipal mayor who is an executive officer may not unilaterally withdraw such an expression of a policy thru the enactment of a tax." The waiver partakes of the nature of an exemption. It is an ancient rule that exemptions from taxation are construed in strictissimi juris against the taxpayer and liberally in favor of the taxing authority (Esso Standard Eastern, Inc. v. Acting Commissioner of Customs, 18 SCRA 488 [1966]). Tax exemptions are looked upon with disfavor (Western Minolco Corp. v. Commissioner of Internal Revenue, 124 SCRA 121 [1983]). Thus, in the absence of a clear and express exemption from the payment of said fees, the waiver cannot be recognized. As already stated, it is the law-making body, and not an executive like the mayor, who can make an exemption. Under Section 36 of the Code, a permit fee like the mayor's permit, shall be required before any individual or juridical entity shall engage in any business or occupation under the provisions of the Code. However, since the Local Tax Code does not provide the prescriptive period for collection of local taxes, Article 1143 of the Civil Code applies. Said law provides that an action upon an obligation created by law prescribes within ten (10) years from the time the right of action accrues. The Municipality of Pililla can therefore enforce the collection of the tax on business of petitioner PPC due from 1976 to 1986, and NOT the tax that had accrued prior to 1976. PREMISES CONSIDERED, with the MODIFICATION that business taxes accruing PRIOR to 1976 are not to be paid by PPC (because the same have prescribed) and that storage fees are not also to be paid by PPC (for the storage tanks are owned by PPC and not by the municipality, and therefore cannot be a charge for service by the municipality), the assailed DECISION is hereby AFFIRMED. SO ORDERED. Mactan Cebu International Airport Authority vs MarcosDate: September 11, 1996Petitioner: Mactan Cebu International Airport AuthorityRespondents: Hon. Ferdinand Marcos, City of Cebu, et alPonente: Davide JrFacts: Petitioner was created by virtue of RA6958, mandated to "principally undertake the economical,efficient and effective control, management and supervision of the Mactan International Airport in theProvince of Cebu and the Lahug Airport in Cebu City. Under Section 1: The authority shall be exempt fromrealty taxes imposed by the National Government or any of its political subdivisions, agencies andinstrumentalities.However, the Officer of the Treasurer of Cebu City demanded payment for realty taxes on parcels of land belonging to petitioner. Petitioner objected invoking its tax exemption. It also asserted that it is aninstrumentality of the government performing governmental functions, citing section 133 of the LGC whichputs limitations on the taxing powers of LGUs. The city refused insisting that petitioner is a GOCCperforming proprietary functions whose tax exemption was withdrawn by Sections 193 and 234 of the LGC.Petitioner filed a declaratory relief before the RTC. The trial court dismissed the petitioner rulingthat the LGC withdrew the tax exemption granted the GOCCs.Issue:WON the City of Cebu has the power to impose taxes on petitionerH e l d : Y e s Ratio: As a general rule, the power to tax is an incident of sovereignty and is unlimited in its range,acknowledging in its very nature no limits, so that security against its abuse is to be found only in theresponsibility of the legislature which imposes the tax on the constituency who are to pay it. Since taxesare what we pay for civilized society, or are the lifeblood of the nation, the law frowns against exemptionsfrom taxation and statutes granting tax exemptions are thus construed strictissimi juris against thetaxpayers and liberally in favor of the taxing authority. A claim of exemption from tax payment must beclearly shown and based on language in the law too plain to be mistaken. There can be no question that under Section 14 RA 6958 the petitioner is exempt from the paymentof realty taxes imposed by the National Government or any of its political subdivisions, agencies, andinstrumentalities. Nevertheless, since taxation is the rule and exemption is the exception, the exemptionmay thus be withdrawn at the pleasure of the taxing authority. The LGC, enacted pursuant to Section 3, Article X of the constitution provides for the exercise byLGUs of their power to tax, the scope thereof or its limitations, and the exemption from taxation. Section133 of the LGC prescribes the common limitations on the taxing powers of LGUs: (o) Taxes, fees or chargesof any kind on the national government, its agencies and instrumentalities and LGUs. Among the "taxes"enumerated in the LGC is real property tax. Section 234 of LGC provides for the exemptions from paymentof GOCCs, except as provided therein. On the other hand, the LGC authorizes LGUs to grant tax exemptionprivileges. Reading together Section 133, 232 and 234 of the LGC, we conclude that as a general rule, aslaid down in Secs 133 the taxing powers of LGUs cannot extend to the levy of inter alia, "taxes, fees, andcharges of any kind of the National Government, its agencies and instrumentalties, and LGUs"; however,pursuant to Sec 232, provinces, cities, municipalities in the Metropolitan Manila Area may impose the realproperty tax except on, inter alia, "real property owned by the Republic of the Philippines or any of itspolitical subdivisions except when the beneficial used thereof has been granted to a taxable person."As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons,including government-owned and controlled corporations, Section 193 of the LGC prescribes the generalrule, viz., they are withdrawn upon the effectivity of the LGC, except upon the effectivity of the LGC,except those granted to local water districts, cooperatives duly registered under R.A. No. 6938, non stockand nonprofit hospitals and educational institutions, and unless otherwise provided in the LGC. The latterproviso could refer to Section 234, which enumerates the properties exempt from real property tax. Butthe last paragraph of Section 234 further qualifies the retention of the exemption in so far as the realproperty taxes are concerned by limiting the retention only to those enumerated there-in; all others notincluded in the enumeration lost the privilege upon the effectivity of the LGC. Moreover, even as the realproperty is owned by the Republic of the Philippines, or any of its political subdivisions covered by item (a)of the first paragraph of Section 234, the exemption is withdrawn if the beneficial use of such property hasbeen granted to taxable person for consideration or otherwise.Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC,exemptions from real property taxes granted to natural or juridical persons, including GOCCs, except as provided in the said section, and the petitioner is, undoubtedly, a government-owned corporation, itnecessarily follows that its exemption from such tax granted it in Section 14 of its charter, R.A. No. 6958,has been withdrawn. Any claim to the contrary can only be justified if the petitioner can seek refuge underany of the exceptions provided in Section 234, but not under Section 133, as it now asserts, since, asshown above, the said section is qualified by Section 232 and 234. In short, the petitioner can no longerinvoke the general rule in Section 133.It must show that the parcels of land in question, which are real property, are any one of thoseenumerated in Section 234, either by virtue of ownership, character, or use of the property. Most likely, itcould only be the first, but not under any explicit provision of the said section, for one exists. In light of thepetitioner's theory that it is an "instrumentality of the Government", it could only be within be first item

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of the first paragraph of the section by expanding the scope of the terms Republic of the Philippines" toembrace ."instrumentalities" and "agencies." This view does not persuade us. In the first place, the petitioner's claim that it is an instrumentalityof the Government is based on Section 133(o), which expressly mentions the word "instrumentalities"; andin the second place it fails to consider the fact that the legislature used the phrase "National Government,its agencies and instrumentalities" "in Section 133(o),but only the phrase "Republic of the Philippines orany of its political subdivision "in Section 234(a). The terms "Republic of the Philippines" and "National Government" are not interchangeable. The former isboarder and synonymous with "Government of the Republic of the Philippines" which the Administrative Code of the1987 defines as the "corporate governmental entity though which the functions of the government are exercisedthrough at the Philippines, including, saves as the contrary appears from the context, the various arms through whichpolitical authority is made effective in the Philippines, whether pertaining to the autonomous reason, the provincial,city, municipal or barangay subdivision or other forms of local government." These autonomous regions, provincial,city, municipal or barangay subdivisions" are the political subdivision. On the other hand, "National Government"refers "to the entire machinery of the central government, as distinguished from the different forms of localGovernments." The National Government then is composed of the three great departments the executive, thelegislative and the judicial. An "agency" of the Government refers to "any of the various units of the Government,including a department, bureau, office instrumentality, or government-owned or controlled corporation, or a localgovernment or a distinct unit therein;" while an "instrumentality" refers to "any agency of the National Government,not integrated within the department framework, vested with special functions or jurisdiction by law, endowed withsome if not all corporate powers, administering special funds, and enjoying operational autonomy; usually through acharter. This term includes regulatory agencies, chartered institutions and governmentowned and controlledcorporations". If Section 234(a) intended to extend the exception therein to the withdrawal of the exemption frompayment of real property taxes under the last sentence of the said section to the agencies andinstrumentalities of the National Government mentioned in Section 133(o), then it should have restatedthe wording of the latter. Yet, it did not Moreover, that Congress did not wish to expand the scope of theexemption in Section 234(a) to include real property owned by other instrumentalities or agencies of thegovernment including government-owned and controlled corporations is further borne out by the fact thatthe source of this exemption is Section 40(a) of P.D. No. 646, otherwise known as the Real Property TaxCode.Note that as a reproduced in Section 234(a), the phrase "and any government-owned or controlledcorporation so exempt by its charter" was excluded. The justification for this restricted exemption inSection 234(a) seems obvious: to limit further tax exemption privileges, specially in light of the generalprovision on withdrawal of exemption from payment of real property taxes in the last paragraph of property taxes in the last paragraph of Section 234. These policy considerations are consistent with theState policy to ensure autonomy to local governments 33 and the objective of the LGC that they enjoygenuine and meaningful local autonomy to enable them to attain their fullest development as self-reliantcommunities and make them effective partners in the attainment of national goals. 34 The power to tax isthe most effective instrument to raise needed revenues to finance and support myriad activities of localgovernment units for the delivery of basic services essential to the promotion of the general welfare andthe enhancement of peace, progress, and prosperity of the people. It may also be relevant to recall thatthe original reasons for the withdrawal of tax exemption privileges granted to government-owned andcontrolled corporations and all other units of government were that such privilege resulted in serious taxbase erosion and distortions in the tax treatment of similarly situated enterprises, and there was a needfor this entities to share in the requirements of the development, fiscal or otherwise, by paying the taxesand other charges due from them. The crucial issues then to be addressed are: (a) whether the parcels of land in question belong to theRepublic of the Philippines whose beneficial use has been granted to the petitioner, and (b) whether thepetitioner is a "taxable person". It may be reasonable to assume that the term "lands" refer to "lands" inCebu City then administered by the Lahug Air Port and includes the parcels of land the respondent City of Cebu seeks to levy on for real property taxes. This section involves a "transfer" of the "lands" among other things, to the petitioner and not just the transfer of the beneficial use thereof, with the ownership beingretained by the Republic of the Philippines. This "transfer" is actually an absolute conveyance of the ownership thereof because the petitioner'sauthorized capital stock consists of "the value of such real estate owned and/or administered by theairports." Hence, the petitioner is now the owner of the land in question and the exception in Sec 234(c) of the LGC is inapplicable. Petitioner cannot claim that it was never a "taxable person" under its Charter. Itwas only exempted from the payment of real property taxes. The grant of the privilege only in respect of this tax is conclusive proof of the legislative intent to make it a taxable person subject to all taxes, exceptreal property tax.Finally, even if the petitioner was originally not a taxable person for purposes of real property tax,in light of the forgoing disquisitions, it had already become even if it be conceded to be an "agency" or"instrumentality" of the Government, a taxable person for such purpose in view of the withdrawal in thelast paragraph of Section 234 of exemptions from the payment of real property taxes, which, as earlieradverted to, applies to the petitioner. Accordingly, the position taken by the petitioner is untenable.Reliance on Basco vs. Pagcor is unavailing since it was decided before the effectivity of the LGC. Besides,nothing can prevent Congress from decreeing that even instrumentalities or agencies of the governmentperforming governmental functions may be subject to tax. Where it is done precisely to fulfill aconstitutional mandate and national policy, no one can doubt its wisdom. Moday vs ca

Municipal Corporation Eminent Domain Disapproval by SP of SB Resolution

Moday is a landowner in Bunawan, Agusan del Sur. In 1989, the Sangguniang Bayan of Bunawan passed a resolution authorizing the mayor to initiate an expropriation case against a 1 hectare portion of Modays land. Purpose of which is to erect a gymnasium and other public buildings. The mayor approved the resolution and the resolution was transmitted to the Sangguniang Panlalawigan which disapproved the said resolution ruling that the expropriation is not necessary because there are other lots owned by Bunawan that can be used for such purpose. The mayor pushed through with the expropriation nonetheless. ISSUE: Whether or not a municipality may expropriate private property by virtue of a municipal resolution which was disapproved by the Sangguniang Panlalawigan. HELD: Yes. Eminent domain, the power which the Municipality of Bunawan exercised in the instant case, is a fundamental State power that is inseparable from sovereignty. It is governments right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose. Inherently possessed by the national legislature, the power of eminent domain may be validly delegated to local governments, other public entities and public utilities. For the taking of private property by the government to be valid, the taking must be for public use and there must be just compensation. The only ground upon which a provincial board may declare any municipal resolution, ordinance, or order invalid is when such resolution, ordinance, or order is beyond the powers conferred upon the cou ncil or president making the same. This was not the case in the case at bar as the SP merely stated that there are other available lands for the purpose sought, the SP did not even bother to declare the SB resolution as invalid. Hence, the expropriation case is valid. MUNICIPALITY OF PARAAQUE, petitioner, vs. V.M. REALTY CORPORATION, respondent. 292 SCRA 676

Facts: Pursuant to Sangguniang Bayan Resolution No. 93-95, the Municipality of Paraaque filed on September 20, for expropriation against Private Respondent V.M. over two parcels of land located at Wakas, San

Series of 1993, 1993, a Complaint Realty Corporation, Dionisio, Paraaque,

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Metro Manila. Allegedly, the complaint was filed "for the purpose of alleviating the living conditions of the underprivileged by providing homes for the homeless through a socialized housing project." It was also for this stated purpose that petitioner, pursuant to its Sangguniang Bayan Resolution No. 577, Series of 1991, previously made an offer to enter into a negotiated sale of the property with private respondent, which the latter did not accept. Issue: Council statutory Held: The following essential requisites must concur before an LGU can exercise the power of eminent domain: 1.An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property. 2.The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless. 3.There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws. 4.A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted. In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to a resolution of the municipal council. Thus, there was no compliance with the first requisite that the mayor be authorized through an ordinance. A valid ordinance is required before an LGU can exercise the power of eminent domain. A mere resolution will not suffice. THE CITY OF CEBU, petitioner, vs. SPOUSES APOLONIO and BLASA DEDAMO, respondents. D E C I S I O N DAVIDE, JR., C.J.: In its petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner City of Cebu assails the decision of 11 October 1999 of the Court of Appeals in CA-G.R. CV No. 59204[1]affirming the judgment of 7 May 1996 of the Regional Trial Court, Branch 13, Cebu City, in Civil Case No. CEB-14632, a case for eminent domain, which fixed the valuation of the land subject thereof on the basis of the recommendation of the commissioners appointed by it. The material operative facts are not disputed. On 17 September 1993, petitioner City of Cebu filed in Civil Case No. CEB-14632 a complaint for eminent domain against respondents spouses Apolonio and Blasa Dedamo. The petitioner alleged therein that it needed the following parcels of land of respondents, to wit: Whether or not the Resolution of the No. 93-95, Series of 1993 is a substantial requirement in the exercise of its power Paraaque Municipal compliance of the of eminent domain Lot No. 1527 Area----------------------------1,146 square meters Tax Declaration---------------03472 Title No.-----------------------31833 Market value------------------P240,660.00 Assessed Value---------------P72,200.00 Lot No. 1528 Area--------------------------------------------------------793 square meters Area sought to be-----------------------------------------478 square meters expropriated Tax Declaration-------------------------------------------03450 Title No. ---------------------------------------------------31832 Market value for the whole lot--------------------------P1,666,530.00 Market value of the Area to be expropriated----------P100,380.00 Assessed Value--------------------------------------------P49,960.00 for a public purpose, i.e., for the construction of a public road which shall serve as an access/relief road of Gorordo Avenue to extend to the General Maxilum Avenue and the back of Magellan International Hotel Roads in Cebu City. The lots are the most suitable site for the purpose. The total area sought to be expropriated is 1,624 square meters with an assessed value of P1,786,400. Petitioner deposited with the Philippine National Bank the amount of P51,156 representing 15% of the fair market value of the property to enable the petitioner to take immediate possession of the property pursuant to Section 19 of R.A. No. 7160.[2] Respondents, filed a motion to dismiss the complaint because the purpose for which their property was to be expropriated was not for a public purpose but for benefit of a single private entity, the Cebu Holdings, Inc. Petitioner could simply buy directly from them the property at its fair market value if it wanted to, just like what it did with the neighboring lots. Besides, the price offered was very low in light of the consideration of P20,000 per square meter, more or less, which petitioner paid to the neighboring lots. Finally, respondents alleged that they have no other land in Cebu City. A pre-trial was thereafter had. On 23 August 1994, petitioner filed a motion for the issuance of a writ of possession pursuant to Section 19 of R.A. No. 7160. The motion was granted by the trial court on 21 September 1994.[3] On 14 December 1994, the parties executed and submitted to the trial court an Agreement[4] wherein they declared that they have partially settled the case and in consideration thereof they agreed: 1. That the SECOND PARTY hereby conforms to the intention to [sic] the FIRST PARTY in expropriating their parcels of land in the above-cited case as for public purpose and for the benefit of the general public; 2. That the SECOND PARTY agrees to part with the ownership of the subject parcels of land in favor of the FIRST PARTY provided the latter will pay just compensation for the same in the amount determined by the court after due notice and hearing; 3. That in the meantime the SECOND PARTY agrees to receive the amount of ONE MILLION SEVEN HUNDRED EIGHTY SIX THOUSAND FOUR HUNDRED PESOS (1,786,400.00) as provisional payment for the subject parcels of land, without prejudice to the final valuation as maybe determined by the court; 4. That the FIRST PARTY in the light of the issuance of the Writ of Possession Order dated September 21, 1994 issued by the Honorable Court, agreed to take possession over that portion of the lot sought to be expropriated where the house of the SECOND PARTY was located only after fifteen (15) days upon the receipt of the SECOND PARTY of the amount of P1,786,400.00;

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5. That the SECOND PARTY upon receipt of the aforesaid provisional amount, shall turn over to the FIRST PARTY the title of the lot and within the lapse of the fifteen (15) days grace period will voluntarily demolish their house and the other structure that may be located thereon at their own expense; 6. That the FIRST PARTY and the SECOND PARTY jointly petition the Honorable Court to render judgment in said Civil Case No. CEB-14632 in accordance with this AGREEMENT; 7. That the judgment sought to be rendered under this agreement shall be followed by a supplemental judgment fixing the just compensation for the property of the SECOND PARTY after the Commissioners appointed by this Honorable Court to determine the same shall have rendered their report and approved by the court. Pursuant to said agreement, the trial court appointed three commissioners to determine the just compensation of the lots sought to be expropriated. The commissioners were Palermo M. Lugo, who was nominated by petitioner and who was designated as Chairman; Alfredo Cisneros, who was nominated by respondents; and Herbert E. Buot, who was designated by the trial court. The parties agreed to their appointment. Thereafter, the commissioners submitted their report, which contained their respective assessments of and recommendation as to the valuation of the property. On the basis of the commissioners report and after due deliberation thereon, the trial court rendered its decision on 7 May 1996,[5] the decretal portion of which reads: WHEREFORE, in view of the foregoing, judgment is hereby rendered in accordance with the report of the commissioners. Plaintiff is directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the sum of pesos: TWENTY FOUR MILLION EIGHT HUNDRED SIXTY-FIVE THOUSAND AND NINE HUNDRED THIRTY (P24,865.930.00) representing the compensation mentioned in the Complaint. Plaintiff and defendants are directed to pay the following commissioners fee; 1. To Palermo Lugo - P21,000.00 2. To Herbert Buot - P19,000.00 3. To Alfredo Cisneros - P19,000.00 Without pronouncement as to cost. SO ORDERED. Petitioner filed a motion for reconsideration on the ground that the commissioners report was inaccurate since it included an area which was not subject to expropriation. More specifically, it contended that Lot No. 1528 contains 793 square meters but the actual area to be expropriated is only 478 square meters. The remaining 315 square meters is the subject of a separate expropriation proceeding in Civil Case No. CEB-8348, then pending before Branch 9 of the Regional Trial Court of Cebu City. On 16 August 1996, the commissioners submitted an amended assessment for the 478 square meters of Lot No. 1528 and fixed it at P12,824.10 per square meter, or in the amount of P20,826,339.50. The assessment was approved as the just compensation thereof by the trial court in its Order of 27 December 1996. [6] Accordingly, the dispositive portion of the decision was amended to reflect the new valuation. Petitioner elevated the case to the Court of Appeals, which docketed the case as CA-G.R. CV No. 59204. Petitioner alleged that the lower court erred in fixing the amount of just compensation at P20,826,339.50. The just compensation should be based on the prevailing market price of the property at the commencement of the expropriation proceedings. The petitioner did not convince the Court of Appeals. In its decision of 11 October 1999,[7] the Court of Appeals affirmed in toto the decision of the trial court. Still unsatisfied, petitioner filed with us the petition for review in the case at bar. It raises the sole issue of whether just compensation should be determined as of the date of the filing of the complaint. It asserts that it should be, which in this case should be 17 September 1993 and not at the time the property was actually taken in 1994, pursuant to the decision in National Power Corporation vs. Court of Appeals.[8] In their Comment, respondents maintain that the Court of Appeals did not err in affirming the decision of the trial court because (1) the trial court decided the case on the basis of the agreement of the parties that just compensation shall be fixed by commissioners appointed by the court; (2) petitioner did not interpose any serious objection to the commissioners report of 12 August 1996 fixing the just compensation of the 1,624-square meter lot at P20,826,339.50; hence, it was estopped from attacking the report on which the decision was based; and (3) the determined just compensation fixed is even lower than the actual value of the property at the time of the actual taking in 1994. Eminent domain is a fundamental State power that is inseparable from sovereignty. It is the Governments right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose.[9] However, the Government must pay the owner thereof just compensation as consideration therefor. In the case at bar, the applicable law as to the point of reckoning for the determination of just compensation is Section 19 of R.A. No. 7160, which expressly provides that just compensation shall be determined as of the time of actual taking. The Section reads as follows: SECTION 19. Eminent Domain. -- A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property. The petitioner has misread our ruling in The National Power Corp. vs. Court of Appeals.[10] We did not categorically rule in that case that just compensation should be determined as of the filing of the complaint. We explicitly stated therein that although the general rule in determining just compensation in eminent domain is the value of the property as of the date of the filing of the complaint, the rule admits of an exception: where this Court fixed the value of the property as of the date it was taken and not at the date of the commencement of the expropriation proceedings. Also, the trial court followed the then governing procedural law on the matter, which was Section 5 of Rule 67 of the Rules of Court, which provided as follows: SEC. 5. Ascertainment of compensation. -- Upon the entry of the order of condemnation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report is to be filed with the court. More than anything else, the parties, by a solemn document freely and voluntarily agreed upon by them, agreed to be bound by the report of the commission and approved by the trial court. The agreement is a contract between the parties. It has the force of law between them and should be complied with in good faith. Article 1159 and 1315 of the Civil Code explicitly provides: Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.

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Furthermore, during the hearing on 22 November 1996, petitioner did not interpose a serious objection. [11] It is therefore too late for petitioner to question the valuation now without violating the principle of equitable estoppel. Estoppel in pais arises when one, by his acts, representations or admissions, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts.[12] Records show that petitioner consented to conform with the valuation recommended by the commissioners. It cannot detract from its agreement now and assail correctness of the commissioners assessment. Finally, while Section 4, Rule 67 of the Rules of Court provides that just compensation shall be determined at the time of the filing of the complaint for expropriation,[13]such law cannot prevail over R.A. 7160, which is a substantive law.[14] WHEREFORE, finding no reversible error in the assailed judgment of the Court of Appeals in CA-G.R. CV No. 59204, the petition in this case is hereby DENIED. No pronouncement as to costs. SO ORDERED. B. Petitioner has the irrefutable right to exercise its power of eminent domain. It being a local government unit, the basis for its exercise is granted under Section 19 of Rep. Act No. 7160, to wit: Sec. 19 Eminent Domain. - A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws. C. For a writ of possession to issue, only two requirements are required: the sufficiency in form and substance of the complaint and the required provisional deposit. Section 19 of Rep. Act No. 7160 provides that the local government unit may take immediate possession of the property upon the filing of the expropriation proceedings and upon making a deposit of at least fifteen percent (15%) of the fair market value of the property based on its current tax declaration. As long as the expropriation proceedings have been commenced and the deposit has been made, the local government unit cannot be barred from praying for the issuance of a writ of possession. Petition is hereby GRANTED. FORTICH vs. CORONA 298 SCRA 678

THE CITY OF ILOILO, Represented by HON. JERRY P. TREAS, City Mayor, petitioner, vs. HON. JUDGE EMILIO LEGASPI, Presiding Judge, RTC, Iloilo City, Branch 22, and HEIRS OF MANUELA YUSAY, Represented by SYLVIA YUSAY DEL ROSARIO and ENRIQUE YUSAY, JR.,respondents. G.R. No. 154614 November 25, 2004 FACTS: The Sangguniang Panlungsod of the City of Iloilo on March 7, 2001 enacted regulation ordinance granting umbrella authority to then Mayor Mansueto A. Malabor to institute expropriation proceedings on Lot No. 935, registered in the name of Manuela Yusay, located at barangay Sto. Nio Norte, Arevalo, Iloilo City. On March 14, 2001, Mayor Malabor wrote Mrs. Sylvia Yusay del Rosario, administration of the estate, making formal offer to purchase the property for the purpose of converting the same as an on-site relocation for the poor and landless resident of the city. With apparent refusal to sell the property, the city represented by Mayor Jerry P. Treas filed an expropriation case based on the Power of State on Eminent Domain. Upon the strict compliance to the governing rules on expropriation, the city of Iloilo argued that it is entitled to an immediate issuance of a writ of possession. ISSUES: 1. When does a court order become final and executory? 2. What is the legal basis of the Local Government Unit to exercise power 3. What are the requisites in issuance of Writ of Possession?

Facts: This pertains to the two (2) separate motions for reconsideration filed by herein respondent and the applicants for intervention, seeking a reversal of our April 24, 1998 Decision nullfying the so-called "win-win" Resolution dated November 7, 1997, issued by the Office of the President in O.P. Case No. 96-C-6424, and denying the applicants Motion For Leave To Intervene. The issue in this case stems from a proposed agro-economic development of the disputed land which the province of Bukidnon and the municipality of Sumilao, Bukidnon intend to undertake. Expressing full support for the proposed project, the Sangguniang Bayan of Sumilao, Bukidnon on March 4, 1193 enacted Ordinance No. 24 converting or reclassifying the subject 144-hectare land from agricultural to industrial/institutional use. It was intended to provide an opportunity to attract investors, who can inject new economic vitality, provide more jobs and raise the income of its people. Bukidnon Provincial Board also supported the said project. Issue: Whether reclassify lands Agrarian Held: Local Government Units convert or reclassify It should be stressed need lands that obtain the approval of the DAR from agricultural to non-agricultural when the March 29, 1996 OP Decision not to use. was or is not the subject power of the the approval Reform local of government units the Department to of (DAR)

of eminent domain?

RULING: A. Time-honored and of constant observance is the principle that no order dictated in open court had no juridical existence before it is set in writing, signed, promulgated and served on the parties. Since the order orally pronounced in court had no juridical existence yet, the period within which to file a motion for reconsideration cannot be reckoned therefrom, but from the time the same was received in writing. Petitioner hadfifteen (15) days from its receipt of the written order within which to file a motion for reconsideration.

to

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declared final and executory, vested rights were acquired by the herein petitioners, namely, the province of Bukidnon, the municipality of Sumilao, Bukidnon, and the NQSR Management and Development Corporations, and all others who should be benefited by the said decision. The issue here is not a question of technicality but that of substance and merit. Whether the Sangguniang Bayan of Sumilao has the legal authority to reclassify the land into industrial/institutional use, the March 29, 1996 OP Decision has thoroughly and properly disposed the issue. Converting the land in question from agricultural to agro-industrial would open great opportunities for employment and bring about real development in the area towards a sustained economic growth of the municipality. Procedural lapses in the manner of identifying/reclassifying the subject property for agro-industrial purposes cannot be allowed to defeat the very purpose of the law granting autonomy to local government units in the management of their local affairs. Stated more simply, the language of Section 20 of R.A. No. 7160 is clear and affords no room for any other interpretation. By unequivocal legal mandate, it grants local governments units autonomy in their local affairs including the power to convert portions of their agricultural lands and provide for the manner of their utilization and disposition to enable them to attain their fullest development as self-reliant communities. Macasiano v. DioknoFacts: On 13 June 1990, the Municipality of Paranaque passed Ordinance 86, s. 1990 which authorized theclosure of J. Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located atBaclar an, Par aaque, Metro Mani la and the establishment of a f lea market thereon. The saidordinance was approved by the municipal council pursuant to MCC Ordinance 2, s. 1979, authorizinga n d r e g u l a t i n g t h e u s e o f c e r t a i n c i t y a n d / o r m u n i c i p a l s t r e e t s , r o a d s a n d o p e n s p a c e s w i t h i n Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and conditions.On 20 July 1990, the Metropolitan Manila Authority approved Ordinance 86, s. 1990 of the municipalcouncil subject to conditions. On 20 June 1990, the municipal council issued a resolution authorizingthe Paraaque M ayor to enter into contr act w ith any service cooperative for the establishment, operation, maintenance and management of flea markets and/or vending areas. On 8 August 1990,the municipality and Palanyag, a service cooperative, entered into an agreement whereby the latter shall operate, maintain and manage the flea market with the obligation to remit dues to the treasury of the municipal government of Paraaque. Consequently, market stalls were put up by Palanyag on thesaid streets. On 13 September 1990 Brig. Gen. Macasiano, PNP Superintendent of the MetropolitanTraffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. GabrielleSt. in Baclaran. These stalls were later returned to Palanyag. On 16 October 1990, Macasiano wrotea letter to Palanyag giving the latter 10 days to discontinue the flea market; otherwise, the marketstalls shall be dismantled.On 23 October 1990, the municipality an d Palany ag filed w ith the trial court a joint petition for prohibition an d man damus w ith damages and pr ayer for prelimin ar y injunction. On 17 December 1990, the trial court issued an order upholding the validity of Ordinance 86 s. 1990 of the Municipalityof Paraaque and enjoining Macasiano from enforcing his letter-order against Palanyag. Hence, apetition for certiorari under Rule 65 was filed by Macasiano thru the OSG. Issue: Whether or not an ordinance or resolution issued by the municipal council of Paraaque authorizingthe lease and use of public streets or thoroughfares as sites for flea markets is valid? Held: The property of provinces, cities and municipalities is divided into property for publi c u s e a n d patrimonial pr op erty (Art. 423, Civil Code). As to property for public use, Article 424 of Civil Codeprovides that "pr operty for publi c use, in the provinces, cities and mun icipalities, consists of theprovincial roads, city streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities or municipalities. All other property possessed by anyof them is patrimonial an d shall be governed by this Code, w ithout prejudice to the provisions of special laws." In the present case, thus, J. Gabrielle G.G. Cruz, Bayanihan, Lt. Gacia Extension andOpena streets are local roads used for public service and are therefore considered public propertiesof the municipality. Properties of the local government w hich are devoted to public service aredeemed public and are under the absolute control of Congress. Hence, local government have noauthority whatsoever to control o r regulat e the use of public properties unless specific authority isvested upon them by Congress.