case briefs in public corporation

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1. Attys Humberto Basco et al vs Phil Amusements and Gaming Corp G.R. No. 91649 Facts: Petitioners seek for the annulment of PAGCOR Charter, PD 1869 being contrary to morals, public policy and order and for tending towards monopoly, “crony economy,” waiving the Manila City government’s right to impose taxes and license fees, and violating the equal protection clause, local autonomy and other state policies in the Constitution. Issue: Whether PD 1869 violates the local autonomy clause. Held: PD 1869 does not violate the local autonomy clause. The power of local government units to regulate gambling through the grant of franchises, licenses or permits was withdrawn by PD 771 and is now vested exclusively on the national governments. The power to demand or collect license fees is no longer vested in the city of Manila. Local government units have no power to tax government instrumentalities. Being a GOCC, PAGCOR is therefore exempt from local taxes. The national government is supreme over local governments. As such, mere creatures of the State cannot defeat national policies using the power to tax as a “tool for regulation.” The power to tax cannot be allowed to defeat an instrumentality of the very entity which has the inherent power to wield it. The power of LGUs to impose taxes and fees is always subject to limitation provided by Congress.

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Case digests on public corporation law

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Page 1: Case briefs in public corporation

1. Attys Humberto Basco et al vs Phil Amusements and Gaming Corp G.R. No. 91649

Facts: Petitioners seek for the annulment of PAGCOR Charter, PD 1869 being contrary to morals, public policy and order and for tending towards monopoly, “crony economy,” waiving the Manila City government’s right to impose taxes and license fees, and violating the equal protection clause, local autonomy and other state policies in the Constitution.

Issue: Whether PD 1869 violates the local autonomy clause.

Held: PD 1869 does not violate the local autonomy clause.

The power of local government units to regulate gambling through the grant of franchises, licenses or permits was withdrawn by PD 771 and is now vested exclusively on the national governments. The power to demand or collect license fees is no longer vested in the city of Manila.

Local government units have no power to tax government instrumentalities. Being a GOCC, PAGCOR is therefore exempt from local taxes. The national government is supreme over local governments. As such, mere creatures of the State cannot defeat national policies using the power to tax as a “tool for regulation.” The power to tax cannot be allowed to defeat an instrumentality of the very entity which has the inherent power to wield it. The power of LGUs to impose taxes and fees is always subject to limitation provided by Congress.

2. Juanito Mariano Jr et al vs Commission on Elections G.R. No. 118577

Facts: Petitioners seek for annulment of section 2 of Republic Act 7854 for being unconstitutional as they failed to delineate the land areas of Makati by metes and bounds with technical descriptions, section 51 for colliding with provisions of the Constitution as said section allows for the corporate existence of a new city, thereby, permitting the incumbent municipal elective officials to have a fresh term for their office, and section 52 for adding a legislative district.

Republic Act 7854 converts the municipality of Makati into a highly urbanized city to be known as City of Makati.

Issue: Whether RA 7854 is unconstitutional.

Held: RA 7854 is constitutional.

Page 2: Case briefs in public corporation

The said delineation did not change even by an inch the land area previously covered by Makati as a municipality. Section 2 did not add, subtract, divide or multiply the already established land area of Makati.

The court cannot entertain the challenge to the constitutionality of section 51 as petitioners only relied on contingencies which may or may not happen. At best, petitioners posed a hypothetical issue which has yet to ripen into an actual controversy.

The reapportionment of legislative districts may be done through a special law.

3. Municipality of Jimenez vs Hon. Vicente Baz, Jr. G.R. No. 105746

Facts: The Municipality of Jimenez and Municipality of Sinacaban argued over a certain lot, which, based on E.O. 258 enacted by then Pres Elpidio Quirino—creating the Municipality of Sinacaban— defined the latter’s territorial boundary.

Jimenez’s claim over the disputed lot is based on an agreement with the Municipality of Sinacaban and approved in resolution no. 77 by the Provincial Board of Misamis Occidental. But said resolution was superseded by another, declaring resolution no 77 as void.

The municipality of Jimenez filed for certiorari, prohibition and mandamus against Sinacaban, the Province of Misamis Occidental and its Provincial Board, the Commission of Audit and Department of Local Government Budget and Management and the Executive Secretary.

Issue: Whether Sinacaban has legal personality to file a claim and if it has, whether it is the boundary provided for in EO 248 or in Resolution 77 of the Board of Provincial Board of Misamis Occidental which should be used as the basis for adjudicating its territorial claim.

Held: Sinacaban is a de facto corporation since it had completely organized itself and exercised corporate powers for forty years before its existence was questioned. Where a municipality created as such by executive order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned.

Above all, it was held that whatever doubt there might be as to the de jure character of the municipality must be deemed to have been put to rest by the Local Government Code of 1991.

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4. City of Pasig vs Commission on Elections G.R. No. 125646

Facts: The Comelec withheld the holding of plebiscite on the creation of Barangay Karangalan until the court has settled with finality the boundary disputes, but not the petition creating barangay napico, ruling the same is moot and academic for the plebiscite was held and the creation of such barangay was approved by majority of the votes cast therein. The city of pasig filed a suit against comelec for holding in abeyance the plebiscite for creating Barangay Karangalan.

Issue: Whether or not the plebiscites scheduled for the creation of the two barangays should be suspended in view of the pending boundary dispute between two local governemtns.

Held: Yes, precisely because territorial jurisdiction is an issue raised in the pending civil case, until and unless such issue is resolved with finality, to define the territorial jurisdiction of the proposed barangays would only be an exercise in futility. Not only that, we would be paving the way for potentially ultra vires acts of such barangays. 

In the case at bar, while the City of Pasig vigorously claims that the areas covered by the proposed Barangays Karangalan and Napico are within its territory, it can not deny that portions of the same area are included in the boundary dispute case pending before the Regional Trial Court of Antipolo. Surely, whether the areas in controversy shall be decided as within the territorial jurisdiction of the Municipality of Cainta or the City of Pasig has material bearing to the creation of the proposed Barangays Karangalan and Napico. Indeed, a requisite for the creation of a barangay is for its territorial jurisdiction to be properly identified by metes and bounds or by more or less permanent natural boundaries.

5. Flaviano Mejia et al vs Pedro U. Balolong G.R. No. L-1925

Facts: In November 1947 General Election for provincial, municipal and city officials, petitioners were elected as councilors of Dagupan City. The respondents, having been defeated in the said election were nevertheless appointed as councilors by the President of the Philippines on Dec 30, 1947.

Petitioners filed an action for quo warranto against respondents on the ground that their appointments by the president of the republic of the phils were null and void.

Held: The appointments of the respondents effected on December 30, 1947, are null and void. The validity of the appointment of the respondents as councilors of the City of Dagupan by the President of the Philippines depends upon whether the City of Dagupan was created and came into existence on June 20, 1947, the date

Page 4: Case briefs in public corporation

Act No. 170 became effective, or on January 1, 1948, when the city government was organized by Executive Order No. 96.

The City of Dagupan created by Act 170 came into existence as a legal entity or a public corporation upon the approval of said Act, on June 20, 1947. Because a statute like Act No. 170 is to take effect upon its approval, it is operative from the exact instance upon its approval or becoming a law. 

Since the election of the members of the Municipal Board of the City of Dagupan created on June 20, 1947, was to take and took place at the general election held on November 11, 1947, and the President of the Philippines was empowered by section 88 of Act 170 to appoint those members only if the organization of the city government had taken place pending or before the said election.

6. Ricardo Aguado vs City of Manila G.R. No. L-3282

Ricardo Aguado was an assignor of claims held by Tomas Luna Munoz against the City of Manila, the latter being an administrator of the water supply and Carriedo funds. On April 28, 1903, Aguado filed an action to recover from the City of Manila the sum of P5,621.40. The Court of First Instance decided in plaintiff’s favor.

Issue: Whether or not the present City of Manila is liable under the contracts for the obligations created by the old City of Manila as its successor.

Held: The City of Manila is not liable.

The City of Manila is in no way the successor of the Ayuntamiento de Manila in law. The mere fact that the present authority in these islands has given to the present city powers like those exercised by the Ayuntamiento de Manila in no way makes the former the successor of the latter. It is an entirely new organization, a new agent of a new principal, and only has such authority, such powers, and such obligations and responsibilities as the new principal has seen fit to grant and impose.

7. Marcos Mendoza vs Francisco De Leon et al G.R. No. 9596

Facts: Marcos Mendoza file an action for damages against the individual members of the municipal council of the municipality of Villasis, Pangasinan, for the revocation of the lease of an exclusive ferry privilege duly awarded to Mendoz under the provisions of Act. No. 1643 of the Phil Commission. Mendoza was forcibly ejected after a little more than a year of use.

Page 5: Case briefs in public corporation

Issue: Are the individual members of municipal council personally liable?

Held: The defendants are liable jointly and severally for the damages sustained by the plaintiff from the rescission of his contract of lease of the ferry privilege in question.

Under the provisions of Municipal Code and Act No. 1634, the plaintiff had a vested right to the exclusive operation of the ferry in question for the period of his lease. Were the municipality a party to this action, it would be patent that a judgment for damages against it for the rescission of the contract would be proper.

8. The People of the Phil Islands vs Maximo Cruz G.R. No. 31265

Facts: Maximo Cruz was convicted of violating ordinance No. 4 series of 1928 of the municipality of Cabanatuan and was sentenced to a fine of P200 with subsidiary imprisonment in case of insolvency. Hence, this appeal.

Issue: Whether ordinance no. 4 is unconstitutional.

Held: The ordinance is constitutional.

Municipal councils are empowered to enact zonification ordinances within their jurisdiction in the exercise of their police power. It is a matter definitely settled by both Philippine and American cases that municipal corporation may, in the exercise of their police power, enact ordinances or regulations on zonification. Within the powers granted to municipal councils in section 2238 of the Revised Administrative Code, the municipal council of Cabanatuan was authorized to enact the zonification ordinance with which we are now concerned.

9. Seng Kee & Co vs Tomas Earnshaw G.R. No. 34976

Facts: Seng Kee & Co filed an appeal from the decision of the Court of First Instance of Manila, declaring sections 120, 121, 122, 1067 and 1068 of the Revised Ordinances No. 1600 of the City of Manila constitutional, thereby affecting his toyo manufacturing business.

Issue: Whether the assailed provisions are unconstitutional.

Held: The provisions are constitutional.

The power of the City of Manila to adopt ordinances of this kind is derived from sections 1019 and 1020 (g) of the Administrative Code. And the constitutionality

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of these two provisions cannot be put in issue as they flow from the police power inherent in every legislature, and here delegated to the City of Manila.