cases for pubcorp

7/28/2019 Cases for Pubcorp

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Magtajas vs Pryce Properties, Inc. [234 SCRA 255]

(Municipal Corporation – Tests of a Valid Ordinance)

Facts: The Philippine Amusement and Gaming Corporation (PAGCOR) is a corporation created directly by P.D.

1869 to help centralize and regulate all games of chance, including casinos on land and sea within the territorial

jurisdiction of the Philippines. In Basco v. Philippine Amusements and Gaming Corporation, this Court sustainedthe constitutionality of the decree and even cited the benefits of the entity to the national economy as the third

highest revenue-earner in the government.

PAGCOR decided to expand its operations to Cagayan de Oro City by leasing a portion of a building belonging to

Pryce Properties Corporation Inc. for its casino.

On December 7, 1992, Sangguniang Panlungsod of CDO enacted ordinance 3353, prohibiting the issuance of

business permit and cancelling existing business permit to any establishment for the using and allowing to be used

its premises or portion thereof for the operation of a casino.

On January 4, 1993, it enacted Ordinance 3375-93, prohibiting the operation of casino and providing penalty for

violation therefore.

Pryce assailed the ordinances before the CA, where it was joined by PAGCOR as intervenor.

The Court found the ordinances invalid and issued the writ prayed for to prohibit their enforcement. CDO City and

its mayor filed a petition for review under Rules of Court with the Supreme Court.

Issue: WON the Sangguniang Panlungsod can prohibit the establishment of casino operated by PAGCOR through

an ordinance or resolution.

Held: No. Gambling is not illegal per se. While it is generally considered inimical to the interests of the people,

there is nothing in the Constitution categorically proscribing or penalizing gambling or, for that matter, even

mentioning it at all. In the exercise of its own discretion, the Congress may prohibit gambling altogether or allow it

without limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may consider

sufficient.

Under Sec. 458 of the Local Government Code, local government units are authorized to prevent or suppress, among

others, “gambling and other prohibited games of chance.”

Ordinances should not contravene a statue as municipal governments are only agents of the national government.

Local councils exercise only delegated powers conferred on them by Congress as the national lawmaking body. Thedelegate cannot be superior to the principal or exercise powers higher than those of the latter.

The tests of a valid ordinance are well established. A long line of decisions has held that to be valid, an ordinance

must conform to the following substantive requirements:

1) It must not contravene the constitution or any statute.

2) It must not be unfair or oppressive.



3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.

6) It must not be unreasonable.



Laguna Lake Development Authority vs. Court of Appeals

Facts: The Laguna Lake Development Authority (LLDA) was created through RA No. 4850 in order to execute the

policy towards environmental protection and sustainable development so as to accelerate the development and

balanced growth of the Laguna Lake area and the surrounding provinces and towns. PD No. 813 amended certain

sections of RA 4850 since water quality studies have shown that the lake will deteriorate further if steps are not

taken to check the same. EO 927 further defined and enlarged the functions and powers of the LLDA and

enumerated the towns, cities and provinces encompassed by the term “Laguna de Bay Region”. Upon

implementation of RA 7160 (Local Government Code of 1991), the municipalities assumed exclusive jurisdiction &

authority to issue fishing privileges within their municipal waters since Sec.149 thereof provides: “Municipal

corporations shall have the authority to grant fishery privileges in the municipal waters and impose rental fees or

charges therefore…” Big fishpen operators took advantage of the occasion to establish fishpens & fish cages to the

consternation of the LLDA. The implementation of separate independent policies in fish cages & fish pen operation

and the indiscriminate grant of fishpen permits by the lakeshore municipalities have saturated the lake with fishpens,

thereby aggravating the current environmental problems and ecological stress of Laguna Lake.

The LLDA then served notice to the general public that (1) fishpens, cages & other aqua-culture structures

unregistered with the LLDA as of March 31, 1993 are declared illegal; (2) those declared illegal shall be subject to

demolition by the Presidential Task Force for Illegal Fishpen and Illegal Fishing; and (3) owners of those declared

illegal shall be criminally charged with violation of Sec.39-A of RA 4850 as amended by PD 813.

A month later, the LLDA sent notices advising the owners of the illegally constructed fishpens, fishcages and other

aqua-culture structures advising them to dismantle their respective structures otherwise demolition shall be effected.

Issues:

1.Which agency of the government – the LLDA or the towns and municipalities comprising the region – should

exercise jurisdiction over the Laguna lake and its environs insofar as the issuance of permits for fishery privileges is

concerned?

2. Whether the LLDA is a quasi-judicial agency?

Held:

1. Sec.4(k) of the charter of the LLDA, RA 4850, the provisions of PD 813,and Sec.2 of EO No.927, specifically

provide that the LLDA shall have exclusive jurisdiction to issue permits for the use of all surface water for any

projects or activities in or affecting the said region. On the other hand, RA 7160 has granted to the municipalities the

exclusive authority to grant fishery privileges on municipal waters. The provisions of RA 7160 do not necessarily

repeal the laws creating the LLDA and granting the latter water rights authority over Laguna de Bay and the lake

region. Where there is a conflict between a general law and a special statute, latter should prevail since it

evinces the legislative intent more clearly than the general statute.The special law is to be taken as an exception

to the general law in the absence of special circumstances forcing a contrary conclusion. Implied repeals are not



favored and, as much as possible, effect must be given to all enactments of the legislature. A special law cannot be

repealed, amended or altered by a subsequent general law by mere implication. The power of LGUs to issue

fishing privileges was granted for revenue purposes. On the other hand, the power of the LLDA to grant permits for

fishpens, fish cages, and other aqua-culture structures is for the purpose of effectively regulating & monitoring

activities in the Laguna de Bay region and for lake control and management. It partakes of the nature of police

power which is the most pervasive, least limitable and most demanding of all state powers including the power

of taxation. Accordingly, the charter of the LLDA which embodies a valid exercise of police power should prevail

over the LGC of 1991 on matters affecting Laguna de Bay.

2. The LLDA has express powers as a regulatory and quasi-judicial body in respect to pollution cases with authority

to issue a “cease and desist order” and on matters affecting the constru ction of illegal fishpens, fish cages and other

aqua-culture structures in Laguna de Bay. Sec.149 of RA 7160 has not repealed the provisions of the charter of theLLDA, RA 4850, as amended. Thus, the LLDA has the exclusive jurisdiction to issue permits for enjoyment of

fishery privileges in Laguna de Bay to the exclusion of municipalities situated thereinand the authority to exercise

such powers as are by its charter vested on it .

Plaza II vs Cassion

FACTS: The City of Butuan, through its Sanggunian, passed SP Resolution 427-92 authorizing the City Mayor to

sign the “Memorandum of Agreement for the Devolution of the DSWD to the City of Butuan”. Pursuant to the

MoA, Mayor Plaza issued EO No. 06-92 reconstituting the City Social Services Development Office (CSSDO),

devolving or adding thereto 19 additional DSWD employees headed by Virginia Tuazon as Officer-in-charge. Its

office was transferred from the original CSSDO building to the DSWD building. Aggrieved by the development,

Respondents refused to recognize Tuazon as their new head & to report at the DSWD building contending that the

issuance of EO No. 06-92 & Tuazon’s designation as the CSSDO’s Officer -in-charge are illegal. Respondents failed

to report for work despite Mayor Plaza’s series of orders directing them to do so. Thereafter, they were

administratively charged for grave misconduct & insubordination and were preventively suspended for 60 days.

Upon expiration of their suspension, the respondents informed the Mayor that they are willing to return to work but

only to their old office, not the DSWD building. They also failed to report to Tuazon at the DSWD building despite

the Mayor’s instructions to do so. Mayor Plaza then dropped the respondents from the rolls pursuant to the CSC

Memorandum Circular No. 38, Series of 1993 which provides that “officers & employees who are absent for at

least 30 days without approved leave…may be dropped from the service without prior notice.“

http://lexislove.wordpress.com/2012/11/18/plaza-ii-vs-cassion/

http://lexislove.wordpress.com/2012/11/18/plaza-ii-vs-cassion/



ISSUE: 1. Whether EO No. 06-92 directing the devolution of 19 national DSWD employees to the city DSWD to be

headed by petitioner Tuazon should be upheld as valid. 2. Whether private respondents were denied due process

when they were dropped from the rolls.

HELD: 1. Sec.17 of the LGC authorizes the devolution of personnel, assets & liabilities, records basic services,

and facilities of a national government agency to LGUs. Under this Code, the term “devolution” refers to the act

by which the government confers power and authority upon the various LGUs to perform specific functions

& responsibilities. Mayor Plaza is empowered to issue EO No. 06-92 in order to give effect to the devolution

decreed by the LGC. As the local chief executive of Butuan City, Mayor Plaza has the authority to reappoint

devolved personnel & may designate an employee to take charge of a department until the appointment of a regular

head . EO No. 06-92 did not violate respondents’ security of tenure as they were not transferred to another office

without their consent. Transfer is a movement from one position to another which is of equivalent rank, level

or salary without break in service & may be imposed as an administrative penalty. The change of respondents’ place of work from the CSSDO to the DSWD building is not a transfer. It was only a physical transfer of their office

to a new one done in the interest of public service.

2. Dropping from the rolls is not an administrative sanction. Thus, private respondents need not be notified or

heard . Their assertion that they were denied due process is, therefore, untenable.

Batangas Power Corporation vs. Batangas City

FACTS: In the early 1990′s, the country suffered from a crippling power crisis. The government, through the

National Power Corporation (NPC), sought to attract investors in power plant operations by providing them with

incentives, one of which was the NPC’s assumption of their tax payments in the Build Operate and Transfer (BOT)

Agreement. On June 29, 1993, Enron Power Development Corporation (Enron) and NPC entered into a Fast Track

BOT Project. Enron agreed to supply a power station to NPC & transfer its plant to the latter after 10 years of

operation. The BOT Agreement provided that NPC shall be responsible for the payment of all taxes imposed on the

power station except income & permit fees. Subsequently, Enron assigned its obligation under the BOT Agreement

to Batangas Power Corporation (BPC). On September 23, 1992, the BOI issued a certificate of registration to BPC

as a pioneer enterprise entitled to a tax holiday of 6 years. On October 12, 1998, Batangas City sent a letter to BPC

demanding payment of business taxes & penalties. BPC refused to pay citing its tax exemption as a pioneer

enterprise for 6 years under Sec.133(g) of the LGC. The city’s tax claim was modified and it demanded payment of

business taxes for the years 1998-1999. BPC still refused to pay the tax, insisting that the 6-year tax holiday

commenced from the date of its commercial operation on July 16, 1993, not from the date of its BOI registration in

September 1992. In the alternative, BPC asserted that the city should collect the taxes from NPC since the latter



assumed responsibility for their payment under the BOT Agreement. The NPC intervened that while it admitted

assumption of the BPC’s tax obligations under the BOT Agreement, it refused to pay BPC’s business tax as it

allegedly constituted an indirect tax on NPC which is a tax-exempt corporation under its Charter.

BPC filed a petition for declaratory relief with the Makati RTC against Batangas City & NPC alleging that under the

BOT Agreement, NPC is responsible for the payment of such taxes but since it is exempt from such, both the BPC

and NPC aren’t liable for its payment.

ISSUES: 1. Whether BPC’s 6-year tax holiday commenced on the day of its registration or on the date of its actual

commercial operation as certified by the BOI. 2. Whether NPC’s tax exemption privileges under its Charter were

withdrawn by Sec.193 of the LGC.

HELD: 1. Sec.133(g) of the LGC applies specifically to taxes imposed by the local government. The provision of

the LGC should apply on the tax claim of Batangas City against the BPC. The 6-years tax claim should thus

commence from the date of BPC’s registration with the BOI on July 16, 1993 and end on July 15, 1999. 2. In the case of NPC vs. City of Cabanatuan, the removal of the blanket exclusion of government instrumentalities

from local taxation is recognized as one of the most significant provisions of the 1991 LGC. Sec.193 of the LGC

withdrew the sweeping tax privileges previously enjoined by the NPC under its Charter.

The power to tax is no longer exclusively vested on Congress; local legislative bodies are now given authority to

levy taxes, fees and other charges pursuant to Art.X, Sec.5 of the 1987 Constitution. The LGC effectively deals with

the fiscal constraints faced by the LGUs. It widens the tax base of LGUs to include taxes which were prohibited by

previous laws. When NPC assumed tax liabilities of the BPC under their 1992 BOT Agreement, the LGC which

removed NPC’s tax exemption privileges had already been in effect for 6 months. Thus, while the BPC remains to

be the entity doing business in the city, it is the NPC that is ultimately liable to pay said taxes under the provisions

of both the 1992 BOT Agreement & the 1991 LGC.

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