law on public corpo- set1

7/25/2019 Law on Public Corpo- Set1

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essential pulic services4 &8' create recreation and integrated acilitieswhich will e3pand and i!prove the country2s e3isting tourist attractions4and &;' !ini!i0e$ i not totally eradicate$ all the evils$ !alpractices andcorruptions that are nor!ally prevalent on the conduct and operation oga!ling clus and casinos without direct govern!ent involve!ent.&ection )$ P.(. )*+,'

To attain these o/ectives PAGCOR is given territorial /urisdiction all over thePhilippines. Ender its Charter2s repealing clause$ all laws$ decrees$ e3ecutive

orders$ rules and regulations$ inconsistent therewith$ are accordingly repealed$a!ended or !odi%ed.

-t is reported that PAGCOR is the third largest source o govern!ent revenue$ne3t to the ureau o -nternal Revenue and the ureau o Custo!s. -n ),*,alone$ PAGCOR earned P;.I; illion$ and directly re!itted to the BationalGovern!ent a total o P8.J ill ion in or! o ranchise ta3$ govern!ent2s inco!eshare$ the President2s ocial 5und and ost Cities2 share. -n addition$ PAGCORsponsored other socio?cultural and charitale pro/ects on its own or incooperation with various govern!ental agencies$ and other private associationsand organi0ations. -n its ; )K8 years o operation under the presentad!inistration$ PAGCOR re!itted to the govern!ent a total o P+.8 illion. As o(ece!er ;)$ ),*,$ PAGCOR was e!ploying I$I,I e!ployees in its nine &,'casinos nationwide$ directly supporting the livelihood o 5our Thousand 5our

undred Binety?5our &I$I,I' a!ilies.

ut the petitioners$ are 6uestioning the validity o P.(. Bo. )*+,. They allege thatthe sa!e is "null and void" or eing "contrary to !orals$ pulic policy and pulicorder$" !onopolistic and tends toward "crony econo!y"$ and is violative o thee6ual protection clause and local autono!y as well as or running counter to thestate policies enunciated in ections )) &Personal (ignity and u!an Rights'$ )8&5a!ily' and ); &Role o outh' o Article --$ ection ) &ocial @ustice' o Article + B.H. 2nd++>$ ++;4 J, CRA ++4 see alsoe.g. alas v. @arencio$ I+CRA 9;I$ 9;, N),9>4 Peralta v. Co!!ission on Dlections$ *8 CRA ;JJ N),9*4 and eirs o Ordona v. Reyes$ )8J CRA 88>$ 8I)?8I8 N),*cited in Citi0ens Alliance or Consu!er Protection v. Dnergy Regulatoroard$ )+8 CRA J8)$ JI>'

O course$ there is %rst$ the procedural issue. The respondents are 6uestioninthe legal personality o petitioners to %le the instant petition.

Considering however the i!portance to the pulic o the case at ar$ and in#eeping with the Court2s duty$ under the ),*9 Constitution$ to deter!ine whor not the other ranches o govern!ent have #ept the!selves within the li!o the Constitution and the laws and that they have not aused the discretio

given to the!$ the Court has rushed aside technicalities o procedure and hta#en cogni0ance o this petition. &apatiran ng !ga Bagliling#od sa Pa!ahang Pilipinas -nc. v. Tan$ )+; CRA ;9)'

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Hith particular regard to the re6uire!ent o proper party as applied in thecases eore us$ He hold that the sa!e is satis%ed y the petitioners andintervenors ecause each o the! has sustained or is in danger osustaining an i!!ediate in/ury as a result o the acts or !easuresco!plained o. And even i$ strictly spea#ing they are not covered y thede%nition$ it is still within the wide discretion o the Court to waive there6uire!ent and so re!ove the i!pedi!ent to its addressing andresolving the serious constitutional 6uestions raised.

-n the %rst D!ergency Powers Cases$ ordinary citi0ens and ta3payers wereallowed to 6uestion the constitutionality o several e3ecutive ordersissued y President Fuirino although they were involving only an indirectand general interest shared in co!!on with the pulic. The Courtdis!issed the o/ection that they were not proper parties and ruled that"the transcendental i!portance to the pulic o these cases de!ands thatthey e settled pro!ptly and de%nitely$ rushing aside$ i we !usttechnicalities o procedure." He have since then applied the e3ception in!any other cases. &Association o !all =andowners in the Philippines$-nc. v. ec. o Agrarian Reor!$ )9J CRA ;I;'.

aving disposed o the procedural issue$ He will now discuss the sustantiveissues raised.

Ga!ling in all its or!s$ unless allowed y law$ is generally prohiited. ut theprohiition o ga!ling does not !ean that the Govern!ent cannot regulate it inthe e3ercise o its police power.

The concept o police power is well?estalished in this /urisdiction. -t has eende%ned as the "state authority to enact legislation that !ay interere withpersonal lierty or property in order to pro!ote the general welare." &Ddu v.Dricta$ ;J CRA I*)$ I*9' As de%ned$ it consists o &)' an i!position or restraintupon lierty or property$ &8' in order to oster the co!!on good. -t is not capaleo an e3act de%nition ut has een$ purposely$ veiled in general ter!s tounderscore its all?co!prehensive e!race. &Philippine Association o erviceD3porters$ -nc. v. (rilon$ )+; CRA ;*+'.

-ts scope$ ever?e3panding to !eet the e3igencies o the ti!es$ even to anticipatethe uture where it could e done$ provides enough roo! or an e7cient ande3ile response to conditions and circu!stances thus assu!ing the greatestene%ts. &Ddu v. Dricta$ supra'

-t %nds no speci%c Constitutional grant or the plain reason that it does not oits origin to the charter. Along with the ta3ing power and e!inent do!ain$ it inorn in the very act o statehood and sovereignty. -t is a unda!ental attrio govern!ent that has enaled it to peror! the !ost vital unctions ogovernance. 1arshall$ to who! the e3pression has een credited$ reers to itsuccinctly as the plenary power o the state "to govern its citi0ens". &Trie$A!erican Constitutional =aw$ ;8;$ ),9*'. The police power o the tate is apower co?e3tensive with sel?protection and is !ost aptly ter!ed the "law ooverwhel!ing necessity." &Rui v. Provincial oard o 1indoro$ ;, Phil. ++>$ 9

-t is "the !ost essential$ insistent$ and il li!itale o powers." &!ith ell Q CBational$ I> Phil. );+' -t is a dyna!ic orce that enales the state to !eet thagencies o the winds o change.

Hhat was the reason ehind the enact!ent o P.(. )*+,

P.(. )*+, was enacted pursuant to the policy o the govern!ent to "regulatecentrali0e thru an appropriate institution all ga!es o chance authori0ed ye3isting ranchise or per!itted y law" &)st whereas clause$ P( )*+,'. As wasuse6uently proved$ regulating and centrali0ing ga!ling operations in onecorporate entity the PAGCOR$ was ene%cial not /ust to the Govern!ent society in general. -t is a reliale source o !uch needed revenue or the casstrapped Govern!ent. -t provided unds or social i!pact pro/ects and su/ecga!ling to "close scrutiny$ regulation$ supervision and control o the

Govern!ent" &Ith Hhereas Clause$ P( )*+,'. Hith the creation o PAGCOR athe direct intervention o the Govern!ent$ the evil practices and corruptionsgo with ga!ling will e !ini!i0ed i not totally eradicated. Pulic welare$ tlies at the otto! o the enact!ent o P( )*,+.

Petitioners contend that P.(. )*+, constitutes a waiver o the right o the City1anila to i!pose ta3es and legal ees4 that the e3e!ption clause in P.(. )*+violative o the principle o local autono!y. They !ust e reerring to ectionpar. &8' o P.(. )*+, which e3e!pts PAGCOR$ as the ranchise holder ro! paany "ta3 o any #ind or or!$ inco!e or otherwise$ as well as ees$ charges olevies o whatever nature$ whether Bational or =ocal."

&8' Incoe and ot!er ta"es. a' 5ranchise older: Bo ta3 o any #indor!$ inco!e or otherwise as well as ees$ charges or levies o whatev

nature$ whether Bational or =ocal$ shall e assessed and collected unthis ranchise ro! the Corporation4 nor shall any or! or ta3 or chargattach in any way to the earnings o the Corporation$ e3cept a ranchta3 o %ve &JS' percent o the gross revenues or earnings derived y

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Corporation ro! its operations under this ranchise. uch ta3 shall e dueand payale 6uarterly to the Bational Govern!ent and shall e in lieu oall #inds o ta3es$ levies$ ees or assess!ents o any #ind$ nature ordescription$ levied$ estalished or collected y any !unicipal$ provincial ornational govern!ent authority &ection ); N8'.

Their contention stated hereinaove is without !erit or the ollowing reasons:

&a' The City o 1anila$ eing a !ere 1unicipal corporation has no inherent right

to i!pose ta3es &-card v. City o aguio$ *; Phil. *9>4 City o -loilo v. Villanueva$)>J Phil. ;;94 antos v. 1unicipality o Caloocan$ 9 CRA +I;'. Thus$ "the Charteror statute !ust plainly show an intent to coner that power or the !unicipalitycannot assu!e it" &1edina v. City o aguio$ )8 CRA +8'. -ts "power to ta3"thereore !ust always yield to a legislative act which is superior having eenpassed upon y the state itsel which has the "inherent power to ta3" &ernas$the Revised N),9; Philippine Constitution$ Vol. )$ ),*; ed. p. IIJ'.

&' The Charter o the City o 1anila is su/ect to control y Congress. -t shoulde stressed that "!unicipal corporations are !ere creatures o Congress" &Ensonv. =acson$ G.R. Bo. 9,>,$ @anuary )*$ ),J9' which has the power to "create andaolish !unicipal corporations" due to its "general legislative powers" &Asuncionv. riantes$ 8* Phil. +94 1erdanillo v. Orandia$ J CRA JI)'. Congress$ thereore$has the power o control over =ocal govern!ents &eron v. Reyes$ G.R. Bo.

,)8I$ @uly 8$ ),J>'. And i Congress can grant the City o 1anila the power to ta3certain !atters$ it can also provide or e3e!ptions or even ta#e ac# the power.

&c' The City o 1anila2s power to i!pose license ees on ga!ling$ has long eenrevo#ed. As early as ),9J$ the power o local govern!ents to regulate ga!lingthru the grant o "ranchise$ licenses or per!its" was withdrawn y P.(. Bo. 99)and was vested e3clusively on the Bational Govern!ent$ thus:

ec. ). Any provision o law to the contrary notwithstanding$ the authorityo chartered cities and other local govern!ents to issue license$ per!it orother or! o ranchise to operate$ !aintain and estalish horse and dograce trac#s$ /ai?alai and other or!s o ga!ling is herey revo#ed.

ec. 8. ereater$ all per!its or ranchises to operate$ !aintain andestalish$ horse and dog race trac#s$ /ai?alai and other or!s o ga!lingshall e issued y the national govern!ent upon proper application andveri%cation o the 6uali%cation o the applicant . . .

Thereore$ only the Bational Govern!ent has the power to issue "licenses orper!its" or the operation o ga!ling. Becessarily$ the power to de!and orcollect license ees which is a conse6uence o the issuance o "licenses orper!its" is no longer vested in the City o 1anila.

&d' =ocal govern!ents have no power to ta3 instru!entalities o the BationaGovern!ent. PAGCOR is a govern!ent owned or controlled corporation with original charter$ P( )*+,. All o its shares o stoc#s are owned y the BationaGovern!ent. -n addition to its corporate powers &ec. ;$ Title --$ P( )*+,' it a

e3ercises regulatory powers thus:

ec. ,. Re#ulatory Po$er. The Corporation shall !aintain a Registrthe a7liated entities$ and shall e3ercise all the powers$ authority andresponsiilities vested in the ecurities and D3change Co!!ission ovsuch a7liating entities !entioned under the preceding section$ includut not li!ited to a!end!ents o Articles o -ncorporation and y?=awchanges in corporate ter!$ structure$ capitali0ation and other !attersconcerning the operation o the a7liated entities$ the provisions o thCorporation Code o the Philippines to the contrary notwithstanding$e3cept only with respect to original incorporation.

PAGCOR has a dual role$ to operate and to regulate ga!ling casinos. The larole is govern!ental$ which places it in the category o an agency or

instru!entality o the Govern!ent. eing an instru!entality o the Govern!PAGCOR should e and actually is e3e!pt ro! local ta3es. Otherwise$ itsoperation !ight e urdened$ i!peded or su/ected to control y a !ere =ocgovern!ent.

The states have no power y ta3ation or otherwise$ to retard$ i!pedeurden or in any !anner control the operation o constitutional lawsenacted y Congress to carry into e3ecution the powers vested in theederal govern!ent. &1C Culloch v. 1arland$ I Hheat ;)+$ I = Dd. J9,

This doctrine e!anates ro! the "supre!acy" o the Bational Govern!ent olocal govern!ents.

@ustice ol!es$ spea#ing or the upre!e Court$ !ade reerence to thentire asence o power on the part o the tates to touch$ in that wa&ta3ation' at least$ the instru!entalities o the Enited tates &@ohnson1aryland$ 8JI E J)' and it can e agreed that no state or political

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su%division can re#ulate a federal instruentality in suc! a $ay as toprevent it fro consuatin# its federal responsi%ilities, or even toseriously %urden it in t!e accoplis!ent of t!e. &Antieau$ 1odernConstitutional =aw$ Vol. 8$ p. )I>$ e!phasis supplied'

Otherwise$ !ere creatures o the tate can deeat Bational policies thrue3ter!ination o what local authorities !ay perceive to e undesirale activitiesor enterprise using the power to ta3 as "a tool or regulation" &E.. v. anche0$;I> E I8'.

The power to ta3 which was called y @ustice 1arshall as the "power to destroy"&1c Culloch v. 1aryland$ supra' cannot e allowed to deeat an instru!entality orcreation o the very entity which has the inherent power to wield it.

&e' Petitioners also argue that the =ocal Autono!y Clause o the Constitution wille violated y P.(. )*+,. This is a pointless argu!ent. Article < o the ),*9Constitution &on =ocal Autono!y' provides:

ec. J. Dach local govern!ent unit shall have the power to create its ownsource o revenue and to levy ta3es$ ees$ and other charges su%&ect tosuc! #uidelines and liitation as t!e con#ress ay provide$ consistentwith the asic policy on local autono!y. uch ta3es$ ees and chargesshall accrue e3clusively to the local govern!ent. &e!phasis supplied'

The power o local govern!ent to "i!pose ta3es and ees" is always su/ect to"li!itations" which Congress !ay provide y law. ince P( )*+, re!ains an"operative" law until "a!ended$ repealed or revo#ed" &ec. ;$ Art.


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1isa$ I; O.G. 8*I9'. The Constitution does not re6uire situations which arediLerent in act or opinion to e treated in law as though they were the sa!e&Go!e0 v. Palo!ar$ 8J CRA *89'.

@ust how P.(. )*+, in legali0ing ga!ling conducted y PAGCOR is violative o thee6ual protection is not clearly e3plained in the petition. The !ere act that so!ega!ling activities li#e coc#%ghting &P.( II,' horse racing &R.A. ;>+ as a!endedy RA ,*;'$ sweepsta#es$ lotteries and races &RA ))+, as a!ended y .P. I8'are legali0ed under certain conditions$ while others are prohiited$ does not

render the applicale laws$ P.(. )*+, or one$ unconstitutional.

- the law presu!aly hits the evil where it is !ost elt$ i t is not to eoverthrown ecause there are other instances to which i t !ight have eenapplied. &Go!e0 v. Palo!ar$ 8J CRA *89'

The e6ual protection clause o the )It!A!end!ent does not !ean thatall occupations called y the sa!e na!e !ust e treated the sa!e way4the state !ay do what it can to prevent which is dee!ed as evil and stopshort o those cases in which har! to the ew concerned is not less thanthe har! to the pulic that would insure i the rule laid down were !ade!athe!atically e3act. &(o!inican otel v. Ari0ona$ 8I, E 8+J)'.

Anent petitioners2 clai! that P( )*+, is contrary to the "avowed trend o the

Cory Govern!ent away ro! !onopolies and crony econo!y and toward reeenterprise and privati0ation" su7ce it to state that this is not a ground or thisCourt to nulliy P.(. )*+,. -$ indeed$ P( )*+, runs counter to the govern!ent2spolicies then it is or the D3ecutive (epart!ent to reco!!end to Congress itsrepeal or a!end!ent.

The /udiciary does not settle policy issues. The Court can only declarewhat the law is and not what the law should e.)*$p!i)Ender our syste!o govern!ent$ policy issues are within the do!ain o the politicalranches o govern!ent and o the people the!selves as the repositoryo all state power. &Val!onte v. el!onte$ @r.$ )9> CRA 8J+'.

On the issue o "!onopoly$" however$ the Constitution provides that:

ec. ),. The tate shall regulate or prohiit !onopolies when pulicinterest so re6uires. Bo co!inations in restraint o trade or unairco!petition shall e allowed. &Art. 4 Aas v. Co!elec$ )9, CRA 8*9'. Thereore$ or P( )*+, to e

nulli%ed$ it !ust e shown that there is a clear and une6uivocal reach o thConstitution$ not !erely a doutul and e6uivocal one. -n other words$ thegrounds or nullity !ust e clear and eyond reasonale dout. &Peralta v.Co!elec$ supra' Those who petition this Court to declare a law$ or parts therunconstitutional !ust clearly estalish the asis or such a declaration.Otherwise$ their petition !ust ail. ased on the grounds raised y petitionerchallenge the constitutionality o P.(. )*+,$ the Court %nds that petitioners hailed to overco!e the presu!ption. The dis!issal o this petition is thereorinevitale. ut as to whether P.(. )*+, re!ains a wise legislation considerinissues o "!orality$ !onopoly$ trend to ree enterprise$ privati0ation as well athe state principles on social /ustice$ role o youth and educational values" raised$ is up or Congress to deter!ine.

As this Court held in +itizens' lliance for +onsuer Protection v. Ener#y

Re#ulatory -oard$ )+8 CRA J8)

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Presidential (ecree Bo. ),J+$ as a!ended y D3ecutive Order Bo. );9has$ in any case$ in its avor the presu!ption o validity andconstitutionality which petitioners Val!onte and the 1E have notoverturned. Petitioners have not underta#en to identiy the provisions inthe Constitution which they clai! to have een violated y that statute.This Court$ however$ is not co!pelled to speculate and to i!agine howthe assailed legislation !ay possily oLend so!e provision o theConstitution. The Court notes$ urther$ in this respect that petitioners havein the !ain put in 6uestion the wisdo!$ /ustice and e3pediency o theestalish!ent o the OP5$ issues which are not properly addressed tothis Court and which this Court !ay not constitutionally pass upon. Thoseissues should e addressed rather to the political depart!ents ogovern!ent: the President and the Congress.

Parenthetically$ He wish to state that ga!ling is generally i!!oral$ and this isprecisely so when the ga!ling resorted to is e3cessive. This e3cessivenessnecessarily depends not only on the %nancial resources o the ga!ler and hisa!ily ut also on his !ental$ social$ and spiritual outloo# on lie. owever$ the!ere act that so!e persons !ay have lost their !aterial ortunes$ !entalcontrol$ physical health$ or even their li ves does not necessarily !ean that thesa!e are directly attriutale to ga!ling. a%lin# ay !ave %een t!eantecedent, %ut certainly not necessarily t!e cause. 5or the sa!e conse6uencescould have een preceded y an overdose o ood$ drin#$ e3ercise$ wor#$ andeven se3.

HDRD5ORD$ the petition is (-1-D( or lac# o !erit.

O OR(DRD(.

/ernan, +.0., 1arvasa, utierrez, 0r., +ruz, /eliciano, ancayco, -idin, (ariento,rio34uino, 5edialdea, Re#alado and Davide, 0r., 00., concur.

S!a"a# O!$%$o%&

PADILLA,J.,concurring:

- concur in the result o the learned decision penned y !y rother 1r. @usticParas. This !eans that - agree with the decision insoar as it holds that theprohiition$ control$ and regulation o the entire activity #nown as ga!lingproperly pertain to "state policy." -t is$ thereore$ the political depart!ents ogovern!ent$ na!ely$ the legislative and the e3ecutive that should decide onwhat govern!ent should do in the entire area o ga!ling$ and assu!e ullresponsiility to the people or such policy.

The courts$ as the decision states$ cannot in6uire into the wisdo!$ !orality o

e3pediency o policies adopted y the political depart!ents o govern!ent iareas which all within their authority$ e3cept only when such policies pose aclear and present danger to the lie$ lierty or property o the individual. Thiscase does not involve such a actual situation.

owever$ - hasten to !a#e o record that - do not suscrie to ga!ling in aor!. -t de!eans the hu!an personality$ destroys sel?con%dence andeviscerates one2s sel?respect$ which in the long run will corrode whatever is o the 5ilipino !oral character. Ga!ling has wrec#ed and will continue to wa!ilies and ho!es4 it is an antithesis to individual reliance and reliaility asas personal industry which are the touchstones o real econo!ic progress annational develop!ent.

Ga!ling is reprehensile whether !aintained y govern!ent or privati0ed.

revenues reali0ed y the govern!ent out o "legali0ed" ga!ling will$ in the run$ e !ore than oLset and negated y the irreparale da!age to the peop!oral values.

Also$ the !oral standing o the govern!ent in its repeated avowals against"illegal ga!ling" is atally awed and eco!es untenale when it itsel engin the very activity it see#s to eradicate.

One can go through the Court2s decision today and !entally replace the actireerred to therein as#a%lin#$ which is legal only ecause it is authori0ed law and run y the govern!ent$ with the activity #nown asprostitution. Houlprostitution e any less reprehensile were it to e authori0ed y law$ ranchand "regulated" y the govern!ent$ in return or the sustantial revenues itwould yield the govern!ent to carry out its laudale pro/ects$ such as

inrastructure and social a!elioration The 6uestion$ - elieve$ answers itselsu!it that the sooner the legislative depart!ent outlaws all or!s o



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ga!ling$ as a fundaental state policy$ and the sooner the e3ecutivei!ple!ents such policy$ the etter it will e or the nation.

G.R. No. '119 No*+" 1, 199

CITY O- MANILA, a% E/ANGELINE SU/A, petitioners$

vs.

HON. INTERMEDIATE APPELLATE COURT, IRENE STO. DOMINGO a% 0o"

a% $% +a20 o0 " *$%o" 3$2"%, /I/ENCIO, R., IRIS, /ERGEL a%IMELDA, a22 &5"%a* STO. DOMINGO, respondents.

6!e +ity 7e#al 89cer for petitioners.

0ose 5. +astillo for respondents.

PARAS,J.:

This is a petition or review on certiorari see#ing to reverse and set aside: &a' the

(ecision o the -nter!ediate Appellate Court now Court o Appeals

1

pro!ulgatedon 1ay ;)$ ),*I in AC?G.R. CV Bo. >>+);?R entitled Irene (to. Doin#o et al. , v.

+ity +ourt of 5anila et al.,!odiying the decision o the then Court o 5irst

-nstance o 1anila$ ranch V--- in Civil Case Bo. )8),8) ordering the deendants

&herein petitioners$' to give plaintiLs &herein private respondents' the right to use

a urial lot in the Borth Ce!etery corresponding to the une3pired ter! o the

ully paid lease sued upon$ to search the re!ains o the late Vivencio to.

(o!ingo$ r. and to ury the sa!e in a sustitute lot to e chosen y the

plaintiLs4 and &' the Resolution o the Court o Appeals dated 1ay 8*$ ),*J

denying petitioner2s !otion or reconsideration.

As ound y the Court o Appeals and the trial court$ the undisputed acts o the

case are as ollows:

rought on 5eruary 88$ ),9, y the widow and children o the

late Vivencio to. (o!ingo$ r. was this action or da!ages against

the City o 1anila4 Dvangeline uva o the City ealth O7ce4

1allari$ o7cer?in?charge o the Borth Ce!etery4 and @oseph

el!uth$ the latter2s predecessor as o7cer?in?charge o the sa

urial grounds owned and operated y the City Govern!ent o

1anila.

Vivencio to. (o!ingo$ r. deceased husand o plaintiL -rene

(o!ingo and ather o the litigating !inors$ died on @une I$),

and uried on @une +$),9) in =ot Bo. )J,$ loc# Bo. ),I o theBorth Ce!etery which lot was leased y the city to -rene to.

(o!ingo or the period ro! @une +$ ),9) to @une +$ 8>8) per

O7cial Receipt Bo. +);>9 dated @une +$ ),9) &see D3h. A' with

e3piry date o @une +$ 8>8) &see D3h. A?)'. 5ull pay!ent o the

rental thereor o PJ>.>> is evidenced y the said receipt whic

appears to e regular on its ace. Apart ro! the aore!ention

receipt$ no other docu!ent was e3ecuted to e!ody such leas

over the urial lot in 6uestion. -n act$ the urial record or lo

Bo. ),I o 1anila Borth Ce!etery &see D3h. 8' in which su/ec

Bo. )J, is situated does not reect the ter! o duration o the

lease thereover in avor o the to. (o!ingos.

elieving in good aith that$ in accordance with Ad!inistrative

Order Bo. J$ eries o ),9J$ dated 1arch +$ ),9J$ o the City 1

o 1anila &ee D3h. )' prescriing unior! procedure and

guidelines in the processing o docu!ents pertaining to and o

use and disposition o urial lots and plots within the Borth

Ce!etery$ etc.$ su/ect =ot Bo. )J, o loc# ),I in which the

!ortal re!ains o the late Vivencio to. (o!ingo were laid to

was leased to the ereaved a!ily or %ve &J' years only$ su/e

lot was certi%ed on @anuary 8J$ ),9* as ready or e3hu!ation.

On the asis o such certi%cation$ the authorities o the Borth

Ce!etery then headed y deendant @oseph el!uth authori0

the e3hu!ation and re!oval ro! su/ect urial lot the re!ainthe late Vivencio to. (o!ingo$ r.$ placed the ones and s#ul

ag or sac# and #ept the sa!e in the depository or odega o

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ce!etery y use6uently$ the sa!e lot in 6uestion was rented out

to another lessee so that when the plaintiLs herein went to said lot

on All ouls (ay in their shoc#$ consternation and dis!ay$ that the

resting place o their dear departed did not any!ore ear the

stone !ar#er which they lovingly placed on the to!. -ndignant

and disgusted over such a sorrowul %nding$ -rene to. (o!ingo

lost no ti!e in in6uiring ro! the o7cer?in?charge o the Borth

Ce!etery$ deendant ergio 1allari$ and was told that the re!ains

o her late husand had een ta#en ro! the urial lot in 6uestion

which was given to another lessee.

-rene to. (o!ingo was also inor!ed that she can loo# or the

ones o her deceased husand in the warehouse o the ce!etery

where the e3hu!ed re!ains ro! the diLerent urial lots o the

Borth Ce!etery are eing #ept until they are retrieved y

interested parties. ut to the ereaved widow$ what she was

advised to do was si!ply unacceptale. According to her$ it was

/ust i!possile to locate the re!ains o her late husand in a

depository containing thousands upon thousands o sac#s o

hu!an ones. he did not want to run the ris# o clai!ing or the

wrong set o ones. he was even oLered another lot ut was

never appeased. he was too aggrieved that she ca!e to court orrelie even eore she could or!ally present her clai!s and

de!ands to the city govern!ent and to the other deendants

na!ed in the present co!plaint. &(ecision$ Court o Appeals$ pp. 8?

;4 Rollo$ pp. ;I?JJ'

The trial court$ on August I$ ),*)$ rendered its (ecision$ the dispositive portion

o which states:

HDRD5ORD$ /udg!ent is herey rendered$ ordering the

deendants to give plaintiLs the right to !a#e use o another single

lot within the Borth Ce!etery or a period o orty?three &I;' years

our &I' !onths and eleven &))' days$ corresponding to theune3pired ter! o the ully paid lease sued upon4 and to search

without let up and with the use o all !eans hu!anly possile$ or

the re!ains o the late Vivencio to. (o!ingo$ r. and thereat

to ury the sa!e in the sustitute lot to e chosen y the plain

pursuant to this decision.

5or want o !erit$ deendant2s counterclai! is (-1-D(.

Bo pronounce!ent as to costs.

O OR(DRD(. &Rollo$ p. ;)'

The decision was appealed to the Court o Appeals which on 1ay ;)$ ),*I

rendered a decision &Rollo$ pp. ;;?I>' !odiying the decision appealed ro!$

dispositive portion o which reads:

HDRD5ORD$ PRD1-D COB-(DRD($ the decision appealed

is herey RDVDRD( &is herey !odi%ed' and another one is

herey entered:

). Re6uiring in ull orce the deendants to loo# in earnest or t

ones and s#ull o the late Vivencio to. (o!ingo$ r.$ and to

the sa!e in the sustitute lot ad/udged in avor o plaintiLs

hereunder4

8. Ordering deendants to pay plaintiLs?appellants /ointly and

severally P)>$>>>.>> or reach o contract4

;. Ordering deendants to pay plaintiLs?appellants$ /ointly and

severally$ P8>$>>>.>> or !oral da!ages4

I. Ordering deendants to pay plaintiLs?appellants /ointly and

severally$ P8>$>>>.>> or e3e!plary da!ages4

J. Ordering deendants to pay plaintiLs?appellants$ /ointly and

severally$ P)>$>>>.>> as and or attorney2s ees4

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10/112

+. Ordering deendants$ to pay plaintiLs?appellants$ /ointly and

severally$ on the oregoing a!ounts legal rate o interest

co!puted ro! %ling hereo until ully paid4 and

9. Ordering deendants$ to pay plaintiLs?appellants$ /ointly and

severally$ the cost o suit.

O OR(DRD(. &Rollo$ p. I>'

The petitioners2 !otion or reconsideration was li#ewise denied.

ence$ this instant petition &Rollo$ pp. 9?89' %led on @uly 89$ ),*J.

The grounds relied upon or this petition are as ollows:

-

TD OBORA=D -BTDR1D(-ATD APPD==ATD COERT DRRD( -B

AHAR(-BG (A1AGD AGA-BT TD PDT-T-OBDR DRD-B$

BOTH-TTAB(-BG TD-R GOO( 5A-T AB( TD-R =AC O5

BOH=D(GD OR COBDBT TO TD RD1OVA= O5 TD D=DTA=

RD1A-B O5 TD =ATD V-VDBC-O TO. (O1-BGO$ R. 5RO1 TD

E@DCT ER-A= =OT.

--

TD OB. -BTDR1D(-ATD APPD==ATD COERT DRRD( -B O=(-BG

PDT-T-OBDR DRD-B RDPOB-=D 5OR TD A==DGD( TORT O5

TD-R EOR(-BATD O55-C-A= AB( D1P=ODD$ -BP-TD O5 TD

PROV--OB O5 DCT-OB I O5 TD RDPE=-C ACT BO. I>,

&RDV-D( CARTDR O5 1AB-=A' AB( OTDR APP=-CA=D

@ER-PRE(DBCD OB TD E@DCT D


11/112

welare and they include the legislative$ /udicial$ pulic and political. 1unicipal

powers on the one hand are e3ercised or the special ene%t and advantage o

the co!!unity and include those which are !inisterial$ private and corporate. -n

1cFuillin on 1unicipal Corporation$ the rule is stated thus: "A !unicipal

corporation proper has ... a pulic character as regards the state at large insoar

as it is its agent in govern!ent$ and private &so called' insoar as it is to pro!ote

local necessities and conveniences or its own co!!unity &Torio v. 5ontanilla$ *J

CRA J,, N),9*'. -n connection with the powers o a !unicipal corporation$ it

!ay ac6uire property in its pulic or govern!ental capacity$ and private or

proprietary capacity. The Bew Civil Code divides such properties into property or

pulic use and patri!onial properties &Article I8;'$ and urther enu!erates the

properties or pulic use as provincial roads$ city streets$ !unicipal streets$ the

s6uares$ ountains$ pulic waters$ pro!enades$ and pulic wor#s or pulic

service paid or y said provisions$ cities or !unicipalities$ all other property is

patri!onial without pre/udice to the provisions o special laws &Article I8I4

Province o Ma!oanga del Borte v. City o Ma!oanga$ et al.$ 88 CRA );;I

N),+*'.

Thus in 6orio v. /ontanilla,supra,the Court declared that with respect to

proprietary unctions the settled rule is that a !unicipal corporation can e held

liale to third persons e" contractu&1unicipality o 1oncada v. Ca/uigan$ et al.$

8) Phil. )*I &),)8' or e" delicto &1endo0a v. de =eon$ ;; Phil. J>* &),)+'.

The Court urther stressed:

1unicipal corporations are su/ect to e sued upon contracts and

in tort....

333 333 333

The rule o law is a general one$ that the superior or e!ployer

!ust answer civilly or the ne#li#ence or $ant of skill of its a#ent

or servant in t!e course or line of !is eployent, %y $!ic!

anot!er $!o is free fro contri%utory fault, is in&ured. 5unicipalcorporations under t!e conditions !erein stated, fall $it!in tile

operation of t!is rule of la$, and are lia%le accordin#ly, to civil

actions for daa#es $!en t!e re4uisite eleents of lia%ility co

e"ist. ... &D!phasis supplied'

The Court added:

... while the ollowing are corporate or proprietary in character

!unicipal waterwor#s$ slaughter houses$ !ar#ets$ stales$ at

estalish!ents$ wharves$ erries and %sheries. 5aintenance of

parks, #olf courses, ceeteries and airports aon# ot!ers, arealso reco#nized as unicipal or city activities of a proprietary

c!aracter. &(ept. o Treasury v. City o Dvansvulle$ up. Ct. o

-ndiana$ +> B.D. 8nd ,J8$ ,JI cited in Torio v. 5ontanilla$ supra

&D!phasis supplied'

Ender the oregoing considerations and in the asence o a special law$ the B

Ce!etery is a patri!onial property o the Ci ty o 1anila which was created

resolution o the 1unicipal oard o August 89$ ),>; and @anuary 9$ ),>I

&Petition$ Rollo pp. 8>?8) Co!pilation o the Ordinances o the City o 1anila

The ad!inistration and govern!ent o the ce!etery are under the City eal

O7cer &I%id.$ ec. ;)*,'$ the order and police o the ce!etery &I%id.$ ee. ;)

the opening o graves$ niches$ or to!s$ the e3hu!ing o re!ains$ and the

puri%cation o the sa!e &I%id.$ ec. ;89' are under the charge and responsi

o the superintendent o the ce!etery. The Ci ty o 1anila urther!ore prescr

the procedure and guidelines or the use and dispositions o urial lots and p

within the Borth Ce!etery through Ad!inistrative Order Bo. J$ s. ),9J &Rollo

II'. Hith the acts o do!inion$ there is$ thereore no dout that the Borth

Ce!etery is within the class o property which the City o 1anila owns in its

proprietary or private character. 5urther!ore$ there is no dispute that the u

lot was leased in avor o the private respondents. ence$ oligations arising

contracts have the orce o law etween the contracting parties. Thus a lease

contract e3ecuted y the lessor and lessee re!ains as the law etween the!

&enson v. -nter!ediate Appellate Court$ )I* CRA )) N) ,*9'. Thereore$ a

reach o contractual provision entitles the other party to da!ages even i n

penalty or such reach is prescried in the contract. &oysaw v. -nterphilPro!otions$ -nc.$ )I* CRA +;J N),*9'.

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12/112

Boteworthy are the %ndings o the Court o Appeals as to the harrowing

e3perience o private respondents and their wounded eelings upon discovery

that the re!ains o their loved one were e3hu!ed without their #nowledge and

consent$ as said Court declared:

-t has een ully estalished that the appellants$ in spite or perhaps

ecause$ o their lowly station in lie have ound great consolation

in their ereave!ent ro! the loss o their a!ily head$ y visiting

his grave on special or even ordinary occasions$ ut particularly on

All aints (ay$ in #eeping with the deep$ eautiul and Catholic

5ilipino tradition o revering the !e!ory o their dead. -t would

have een ut air and e6uitale that they were noti%ed o the

intention o the city govern!ent to transer the s#eletal re!ains o

the late Vivencio to. (o!ingo to give the! an opportunity to

de!and the aithul ul%ll!ent o their contract$ or at least to

prepare and !a#e provisions or said transer in order that they

would not lose trac# o the re!ains o their eloved dead$ as what

has actually happened on this case. He understand ully what the

a!ily o the deceased !ust have elt when on All aints (ay o

),9*$ they ound a new !ar#er on the grave they were to visit$

only to e told to locate their eloved dead a!ong thousands o

s#eletal re!ains which to the! was desecration and an i!possiletas#. Dven the lower court recogni0ed this when it stated in its

decision thus:

All things considered$ even as the Court

co!!iserates with plaintiLs or the unortunate

happening co!plained o and unti!ely desecration

o the resting place and re!ains o their deceased

dearly eloved$ it %nds the relies prayed or y

the! lac#ing in legal and actual asis. Ender the

aore!entioned acts and circu!stances$ the !ost

that plaintiLs ran as# or is the replace!ent o

su/ect lot with another lot o e6ual si0e and si!ilarlocation in the Borth Ce!etery which sustitute lot

plaintiLs can !a#e use o without paying any rental

to the city govern!ent or a period o orty?thre

&I;' years$ our &I' !onths and eleven &))' days

corresponding to the une3pired portion o the te

o the lease sued upon as o @anuary 8J$ ),9* w

the re!ains o the late Vivencio to. (o!ingo$

were pre!aturely re!oved ro! the disputed lo

and to re6uire the deendants to loo# in earnest

the ones and s#ull o the late Vivencio to.

(o!ingo r. and to ury the sa!e in the sustit

lot ad/udged in avor o plaintiLs hereunder.

&(ecision$ -nter!ediate Appellate Court$ p. 9$ Ro

p. ;,'

As regards the issue o the validity o the contract o lease o grave lot Bo. )

loc# Bo. ),J o the Borth Ce!etery or J> years eginning ro! @une +$ ),9

@une +$ 8>8) as clearly stated in the receipt duly signed y the deputy treasu

o the City o 1anila and sealed y the city govern!ent$ there is nothing in t

record that /usti%es the reversal o the conclusion o oth the trial court and

-nter!ediate Appellate Court to the eLect that the receipt is in itsel a contra

lease. &(ecision$ -nter!ediate Appellate Court$ p. ;$ Rollo$ pp. J?+'.

Ender the doctrine o respondent superior$ &Torio v. 5ontanilla$ supra'$ petitioCity o 1anila is liale or the tortious act co!!itted y its agents who ailed

veriy and chec# the duration o the contract o lease. The contention o the

petitioner?city that the lease is covered y Ad!inistrative Order Bo. J$ series

),9J dated 1arch +$ ),9J o the Ci ty o 1anila or %ve &J' years only eginn

ro! @une +$ ),9) is not !eritorious or the said ad!inistrative order covers

leases. Hhen su/ect lot was certi%ed on @anuary 8J$ ),9* as ready or

e3hu!ation$ the lease contract or %ty &J>' years was still in ull orce and e

PRD1-D COB-(DRD($ the (ecision o the -nter!ediate Appellate Court is

herey A55-R1D(.

O OR(DRD(.

G.R. No. 97 A585 , 1991

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RODOL-O T. GANZON, petitioner$

vs.

THE HONORABLE COURT O- APPEALS a% LUIS T. SANTOS, respondents.

G.R. No. 97'46 A585 ,1991

MARY ANN RI/ERA ARTIEDA, petitioner$

vs.

HON. LUIS SANTOS, $% $& 3a!a3$#y a& S3"#a"y o0 # D!a"#*%# o0

Lo3a2 Go"%*%#, NICANOR M. PATRICIO, $% $& 3a!a3$#y a& C$0, L8a2

S"$3 o0 # D!a"#*%# o0 Lo3a2 Go"%*%# a% SAL/ADOR

CABALUNA R., respondents.

G.R. No. 94 A585 ,1991

RODOL-O T. GANZON, petitioner$

vs.

THE HONORABLE COURT O- APPEALS a% LUIS T. SANTOS, $% $&

3a!a3$#y a& # S3"#a"y o0 # D!a"#*%# o0 Lo3a2 Go"%*%#$

respondents.

1icolas P. (onalan for petitioner in :;2?.

Eu#enio 8ri#inal for petitioner in :. Cara!$ the petitioner City 1ayor$ using as an e3cuse the

e3igency o the service and the interest o the pulic$ pulled h

out ro! rightul o7ce where her 6uali%cations are est suited

assigned her to a wor# that should e the unction o a non?ca

service e!ployee. To !a#e !atters worse$ a utility wor#er in to7ce o the Pulic ervices$ whose duties are alien to the

co!plainant2s duties and unctions$ has een detailed to ta#e

place. The petitioner2s act are pure harass!ents ai!ed at lurin

her away ro! her per!anent position or orce her to resign.

-n the case o (ra. 5elicidad Ortigo0a$ she clai!s that the petit

handpic#ed her to peror! tas# not e%tting her position as

Assistant City ealth O7cer o -loilo City4 that her o7ce was

padloc#ed without any e3planation or /usti%cation4 that her sa

was withheld without cause since April )$ ),**4 that when she

her vacation leave$ she was given the run?around treat!ent in

approval o her leave in connivance with (r. Rodolo Villegas athat she was the o/ect o a well?engineered tru!ped?up char

an ad!inistrative co!plaint %led y (r. Rodolo Villegas &Anne

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14/112

On the other hand$ 1ansuelo 1alaor is the duly elected Vice?

1ayor o -loilo City and co!plainants Rolando (aao$ (an (alido$

Ger!an Gon0ales$ =arry Ong and Dduardo Pe%a Pedondo are

!e!ers o the angguniang Panglunsod o the City o -loilo. Their

co!plaint arose out ro! the case where Councilor =arry Ong$

whose #ey to his o7ce was uncere!oniously and without previous

notice$ ta#en y petitioner. Hithout an o7ce$ Councilor Ong had to

hold o7ce at Pla0a =iertad$ The Vice?1ayor and the other

co!plainants sy!pathi0ed with hi! and decided to do the sa!e.

owever$ the petitioner$ together with its ully?ar!ed security

!en$ orceully drove the! away ro! Pla0a =iertad. Councilor

Ong denounced the petitioner2s actuations the ollowing day in the

radio station and decided to hold o7ce at the 5reedo! Grandstand

at -loilo City and there were so !any people who gathered to

witness the incident. owever$ eore the group could reach the

area$ the petitioner$ together with his security !en$ led the

%re!en using a %retruc# in do0ing water to the people and the

ystanders.

Another ad!inistrative case was %led y Pancho Drite$ a arangay

tanod$ appointed y or!er !ayor Rosa O. Cara!. On 1arch );$

),**$ without the ene%t o charges %led against hi! and nowarrant o arrest was issued$ Drite was arrested and detained at

the City @ail o -loilo City upon orders o petitioner. -n /ail$ he was

allegedly !auled y other detainees therey causing in/uries e

was released only the ollowing day. 7

The 1ayor thereater answered 4and the cases were shortly set or hearing. The

opinion o the Court o Appeals also set orth the succeeding events:

333 333 333

The initial hearing in the Caaluna and Ortigo0a cases were set or

hearing on @une 8>?8)$ ),** at the Regional O7ce o the(epart!ent o =ocal Govern!ent in -loilo City. Botices$ through

telegra!s$ were sent to the parties &Anne3 =' and the parties

received the!$ including the petitioner. The petitioner as#ed o

postpone!ent eore the scheduled date o hearing and was

represented y counsel$ Atty. a!uel Castro. The hearing o7c

Atty. alvador Fueral and Atty. 1arino er!ude0 had to co!e

the way ro! 1anila or the two?day hearings ut was actually

only on @une 8>$),** in view o the inaility and unpreparedne

petitioner2s counsel.

The ne3t hearings were re?set to @uly 8J$ 8+$ 89$),** in the sa

venue?-loilo City. Again$ the petitioner atte!pted to delay the

proceedings and !oved or a postpone!ent under the e3cuse

he had /ust hired his counsel. Bonetheless$ the hearing o7cers

denied the !otion to postpone$ in view o the act that the par

were noti%ed y telegra!s o the scheduled hearings &Anne3 1

-n the said hearings$ petitioner2s counsel cross?e3a!ined the

co!plainants and their witnesses.

5inding proale grounds and reasons$ the respondent issued

preventive suspension order on August ))$ ),** to last until

Octoer ))$),** or a period o si3ty &+>' days.

Then the ne3t investigation was set on epte!er 8)$ ),** an

the petitioner again as#ed or a postpone!ent to epte!er

8+$),**. On epte!er 8+$ ),**$ the co!plainants and petitio

were present$ together with their respective counsel. The petit

sought or a postpone!ent which was denied. -n these hearing

which were held in 1ala the petitioner testi%ed in Ad!. Case B

)>8,* and )>8,,.

The investigation was continued regarding the 1alaor case a

the co!plainants testi%ed including their witnesses.

On Octoer )>$ ),**$ petitioner2s counsel$ Atty. Original !ovea postpone!ent o the Octoer 8I$ ),** hearing to Bove!er

))$ ),** which was granted. owever$ the !otion or change

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15/112

venue as denied due to lac# o unds. At the hearing on Bove!er

9$ ),**$ the parties and counsel were present. Petitioner reiterated

his !otion to change venue and !oved or postpone!ent anew.

The counsel discussed a proposal to ta#e the deposition o

witnesses in -loilo City so the hearing was inde%nitely postponed.

owever$ the parties ailed to co!e to ter!s and ater the parties

were noti%ed o the hearing$ the investigation was set to (ece!er

); to )J$ ),**.

The petitioner sought or another postpone!ent on the ground

that his witnesses were sic# or cannot attend the investigation due

to lac# o transportation. The !otion was denied and the petitioner

was given up to (ece!er )I$ ),** to present his evidence.

On (ece!er )I$),**$ petitioner2s counsel insisted on his !otion

or postpone!ent and the hearing o7cers gave petitioner up to

(ece!er )J$ ),** to present his evidence. On (ece!er )J$

),**$ the petitioner ailed to present evidence and the cases were

considered su!itted or resolution.

-n the !eanti!e$ a pri!a acie evidence was ound to e3ist in the

aritrary detention case %led y Pancho Drite so the respondentordered the petitioner2s second preventive suspension dated

Octoer ))$ ),** or another si3ty &+>' days. The petitioner was

ale to otain a restraining order and a writ o preli!inary

in/unction in the Regional Trial Court$ ranch ;; o -loilo City. The

second preventive suspension was not enorced.

A!idst the two successive suspensions$ 1ayor Gan0on instituted an action or

prohiition against the respondent ecretary o =ocal Govern!ent &now$ -nterior'

in the Regional Trial Court$ -loilo City$ where he succeeded in otaining a writ o

preli!inary in/unction. Presently$ he instituted CA?G.R. P Bo. )+I)9$ an action

or prohiition$ in the respondent Court o Appeals.

1eanwhile$ on 1ay ;$ ),,>$ the respondent ecretary issued another order$

preventively suspending 1ayor Gan0on or another si3ty days$ the third ti!e in

twenty !onths$ and designating !eanti!e Vice?1ayor 1ansueto 1alaor as

acting !ayor. Endaunted$ 1ayor Gan0on co!!enced CA?G.R. P Bo. 8>9;+

the Court o Appeals$ a petition or prohiition$ 6&1alaor it is to e noted$ is

o the co!plainants$ and hence$ he is interested in seeing 1ayor Gan0on ous

On epte!er 9$ ),*,$ the Court o Appeals rendered /udg!ent$ dis!issing

G.R. P Bo. )+I)9. On @uly J$ ),,>$ it li#ewise pro!ulgated a decision$ dis!i

CA?G.R. P Bo. 8>9;+. -n a Resolution dated @anuary 8I$ ),,>$ it issued a

Resolution certiying the petition o 1ary Ann Artieda$ who had een si!ilary

charged y the respondent ecretary$ to this Court.

On @une 8+$),,>$ we issued a Te!porary Restraining Order$ arring the

respondent ecretary ro! i!ple!enting the suspension orders$ and restrain

the enorce!ent o the Court o Appeals2 two decisions.

-n our Resolution o Bove!er 8,$ ),,>$ we consolidated all three cases. -n o

Resolutions o @anuary )J$ ),,)$ we gave due course thereto.

1ayor Gan0on clai!s as a preli!inary &GR Bo. ,;8J8'$ that the (epart!ent

=ocal Govern!ent in hearing the ten cases against hi!$ had denied hi! due

process o law and that the respondent ecretary had een "iased$ pre/udic

and hostile" towards hi! 'arising ro! his &1ayor Gan0on2s' alleged reusal /oin the =aan ng (e!o#rati#ong Pilipino partyand the running political riv

they !aintained in the last congressional and local elections49and his allege

reusal to operate a lottery in -loilo City. 1e also alleges that he re6uested

ecretary to lit his suspension since it had co!e ninety days prior to an elec

&the arangay elections o Bove!er )I$ ),**'$ 11notwithstanding which$ the

latter proceeded with the hearing and !eted out two !ore suspension order

the aore!entioned cases. 1e li#ewise contends that he sought to ring th

cases to -loilo City &they were held in 1anila' in order to reduce the costs o

proceeding$ ut the ecretary re/ected his re6uest. 17e states that he as#ed

postpone!ent on "valid and /usti%ale" 14grounds$ a!ong the!$ that he was

suLering ro! a heart ail!ent which re6uired con%ne!ent4 that his

"vital" 1witness was also hospitali0ed 16ut that the latter unduly denied hire6uest. 1'

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17/112

-t is to e noted that in !eting out the suspensions under 6uestion$ the ecretary

o =ocal Govern!ent acted in consonance with the speci%c legal provisions o

atas lg. ;;9$ the =ocal Govern!ent Code$ we 6uote:

ec. +8. 1otice of @earin#. A Hithin seven days ater the

co!plaint is %led$ the 1inister o local Govern!ent$ or the

sanggunian concerned$ as the case !ay e$ shall re6uire the

respondent to su!it his veri%ed answer within seven days ro!

receipt o said co!plaint$ and co!!ence the hearing and

investigation o the case within ten days ater receipt o such

answer o the respondent. Bo investigation shall e held within

ninety days i!!ediately prior to an election$ and no preventive

suspension shall e i!posed with the said period. - preventive

suspension has een i!posed prior to the aoresaid period$ the

preventive suspension shall e lited. 4

ec. +;. Preventive (uspension. &)' Preventive suspension !ay

e i!posed y the 1inister o =ocal Govern!ent i the respondent

is a provincial or city o7cial$ y the provincial governor i the

respondent is an elective !unicipal o7cial$ or y the city or

!unicipal !ayor i the respondent is an elective arangay o7cial.

&8' Preventive suspension !ay e i!posed at any ti!e ater the

issues are /oined$ when there is reasonale ground to elieve that

the respondent has co!!itted the act or acts co!plained o$ when

the evidence o culpaility is strong$ when the gravity o the

oLense so warrants$ or when the continuance in o7ce o the

respondent could inuence the witnesses or pose a threat to the

saety and integrity o the records and other evidence. -n all cases$

preventive suspension shall not e3tend eyond si3ty days ater the

start o said suspension.

&;' At the e3piration o si3ty days$ the suspended o7cial shall e

dee!ed reinstated in o7ce without pre/udice to the continuation othe proceedings against hi! until its ter!ination. owever 2 i the

delay in the proceedings o the case is due to his ault$ neglect or

re6uest$ the ti!e o the delay shall not e counted in co!puti

the ti!e o suspension.

The issue$ as the Court understands it$ consists o three 6uestions: &)' (id th

),*9 Constitution$ in deleting the phrase "as !ay e provided y law" intend

divest the President o the power to investigate$ suspend$ discipline$ andKor

re!ove local o7cials &8' as the Constitution repealed ections +8 and +;

the =ocal Govern!ent Code &;' Hhat is the signi%cance o the change in the

constitutional language

-t is the considered opinion o the Court that notwithstanding the change in t

constitutional language$ the charter did not intend to divest the legislature o

right or the President o her prerogative as conerred y e3isting legislation t

provide ad!inistrative sanctions against local o7cials. -t is our opinion that t

o!ission &o "as !ay e provided y law"' signi%es nothing !ore than to

underscore local govern!ents2 autono!y ro! congress and to rea# Congre

"control" over local govern!ent aLairs. The Constitution did not$ however$

intend$ or the sa#e o local autono!y$ to deprive the legislature o all autho

over !unicipal corporations$ in particular$ concerning discipline.

Autono!y does not$ ater all$ conte!plate !a#ing !ini?states out o local

govern!ent units$ as in the ederal govern!ents o the Enited tates o A!e&or ra0il or Ger!any'$ although @eLerson is said to have co!pared !unicipa

corporations euphe!istically to "s!all repulics." 6Autono!y$ in the

constitutional sense$ is su/ect to the guiding star$ though not control$ o the

legislature$ aleit the legislative responsiility under the Constitution and as

"supervision clause" itsel suggest?is to wean local govern!ent units ro! ov

dependence on the central govern!ent.

-t is noteworthy that under the Charter$ "local autono!y" is not instantly sel

e3ecuting$ ut su/ect to$ a!ong other things$ the passage o a local govern

code$ 'a local ta3 law$ inco!e distriution legislation$ 9and a national

representation law$ 7and !easures 71designed to reali0e autono!y at the l

level. -t is also noteworthy that in spite o autono!y$ the Constitution placeslocal govern!ent under the general supervision o the D3ecutive. -t is notew

%nally$ that the Charter allows Congress to include in the local govern!ent c

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provisions or re!oval o local o7cials$ which suggest that Congress !ay

e3ercise re!oval powers$ and as the e3isting =ocal Govern!ent Code has done$

delegate its e3ercise to the President. Thus:

ec. ;. The Congress shall enact a local govern!ent code which

shall provide or a !ore responsive and accountale local

govern!ent structure instituted through a syste! o

decentrali0ation with eLective !echanis!s o recall$ initiative$ and

reerendu!$ allocate a!ong the diLerent local govern!ent units

their powers$ responsiilities and resources$ and provide or the

6uali%cations$ election$ appoint!ent and re!oval$ ter!$ salaries$

powers and unctions and duties o local o7cials$ and all other

!atters relating to the organi0ation and operation o the local

units. 7

As hereinaove indicated$ the deletion o "as !ay e provided y law" was

!eant to stress$ su% silencio$ the o/ective o the ra!ers to strengthen local

autono!y y severing congressional control o its aLairs$ as oserved y the

Court o Appeals$ li#e the power o local legislation. 77The Constitution did

nothing !ore$ however$ and insoar as e3isting legislation authori0es the

President &through the ecretary o =ocal Govern!ent' to proceed against local

o7cials ad!inistratively$ the Constitution contains no prohiition.

The petitioners are under the i!pression that the Constitution has let the

President !ere supervisory powers$ which supposedly e3cludes the power o

investigation$ and denied her control$ which allegedly e!races disciplinary

authority. -t i s a !ista#en i!pression ecause legally$ "supervision" is not

inco!patile with disciplinary authority as this Court has held$74thus:

333 333 333

-t is true that in the case o 1ondano vs. ilvosa$ J) OL. Ga0.$ Bo. +

p. 8**I$ this Court had occasion to discuss the scope and e3tent o

the power o supervision y the President over local govern!ento7cials in contrast to the power o control given to hi! over

e3ecutive o7cials o our govern!ent wherein it was e!phasi0ed

that the two ter!s$ control and supervision$ are two diLerent

things which diLer one ro! the other in !eaning and e3tent.

in that case the Court has !ade the ollowing digression: "-n

ad!inistration law supervision !eans overseeing or the powe

authority o an o7cer to see that suordinate o7cers peror!

duties. - the latter ail or neglect to ul%ll the! the or!er !ay

ta#e such action or step as prescried y law to !a#e the!

peror! their duties. Control$ on the other hand$ !eans the po

o an o7cer to alter or !odiy or nulliy o set aside what a

suordinate o7cer had done in the peror!ance o his duties ato sustitute the /udg!ent o the or!er or that o the latter."

ro! this pronounce!ent it cannot e reasonaly inerred that

power o supervision o the President over local govern!ent

o7cials does not include the power o investigation when in hi

opinion the good o the pulic service so re6uires$ as postulate

ection +I&c' o the Revised Ad!inistrative Code. ...7

333 333 333

"Control" has een de%ned as "the power o an o7cer to alter or !odiy or n

or set aside what a suordinate o7cer had done in the peror!ance o his du

and to sustitute the /udg!ent o the or!er or test o thelatter." 76"upervision" on the other hand !eans "overseeing or the power o

authority o an o7cer to see that suordinate o7cers peror! their duties. 7'

we held$ 7however$ "investigating" is not inconsistent with "overseeing"$

although it is a lesser power than "altering". The i!pression is apparently

e3acerated y the Court2s pronounce!ents in at least three cases$ 7acson v

Ro4ue$ 79@e%ron v. Reyes$ 4and 5ondano v. (ilvosa$ 41and possily$ a ourt

one$ Pelae0 v. Auditor General.4-n 7acson$ this Court said that the President

en/oyed no control powers ut only supervision "as !ay e provided y law$

rule we reiterated in @e%ron$ and 5ondano. -n Pelaez$ we stated that the

President "!ay not . . . suspend an elective o7cial o a regular !unicipality

ta#e any disciplinary action against hi!$ e3cept on appeal ro! a decision o

corresponding provincial oard."44

owever$neither 7acsonnor @e%ronnor 5ondanocategorically anned the Chie D3ec

ro! e3ercising acts o disciplinary authority ecause she did not e3ercise co

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powers$ ut ecause no law allowed her to e3ercise disciplinary authority. Thus$

according to 7acson:

The contention that the President has inherent power to re!ove or

suspend !unicipal o7cers is without dout not well ta#en.

Re!oval and suspension o pulic o7cers are always controlled y

the particular law applicale and its proper construction su/ect to

constitutional li!itations. 4

-n @e%ronwe stated:

Accordingly$ when the procedure or the suspension o an o7cer is

speci%ed y law$ the sa!e !ust e dee!ed !andatory and

adhered to strictly$ in the asence o e3press or clear provision to

the contrary?which does not et with respect to !unicipal

o7cers ... 46

-n 5ondano$ the Court held:

... The Congress has e3pressly and speci%cally lodged the

provincial supervision over !unicipal o7cials in the provincial

governor who is authori0ed to "receive and investigate co!plaints!ade under oath against !unicipal o7cers or neglect o duty$

oppression$ corruption or other or! o !alad!inistration o o7ce$

and conviction y %nal /udg!ent o any cri!e involving !oral

turpitude." And i the charges are serious$ "he shall su!it written

charges touching the !atter to the provincial oard$ urnishing a

copy o such charges to the accused either personally or y

registered !ail$ and he !ay in such case suspend the o7cer &not

eing the !unicipal treasurer' pending action y the oard$ i in

his opinion the charge y one aLecting the o7cial integrity o the

o7cer in 6uestion." ection *+ o the Revised Ad!inistration Code

adds nothing to the power o supervision to e e3ercised y the

(epart!ent ead over the ad!inistration o ... !unicipalities ... . -it e construed that it does and such additional power is the sa!e

authority as that vested in the (epart!ent ead y section 9,&c'

o the Revised Ad!inistrative Code$ then such additional powe

!ust e dee!ed to have een arogated y ection ))>&l'$ Ar

V-- o the Constitution. 4'

333 333 333

-n Pelaez$ we stated that the President can not i!pose disciplinary !easures

local o7cials e3cept on appeal ro! the provincial oard pursuant to the

Ad!inistrative Code. 4

Thus$ in those case that this Court denied the President the power &to

suspendKre!ove' it was not ecause we did not thin# that the President can

e3ercise it on account o his li!ited power$ ut ecause the law lodged the p

elsewhere. ut in those cases ii which the law gave hi! the power$ the Court

in anzon v. Bayanan$ ound little di7culty in sustaining hi!. 49

The Court does not elieve that the petitioners can rightully point to the de

o the Constitutional Co!!ission to deeat the President2s powers. The Cour

elieves that the delierations are y the!selves inconclusive$ ecause alth

Co!!issioner @ose Bolledo would e3clude the power o re!oval ro! the

President$Co!!issioner las Ople would not. 1

The Court is conse6uently reluctant to say that the new Constitution has rep

the =ocal Govern!ent Code$ atas lg. ;9. As we said$ "supervision" and

"re!oval" are not inco!patile ter!s and one !ay stand with the other

notwithstanding the stronger e3pression o local autono!y under the new

Charter. He have indeed held that in spite o the approval o the Charter$ at

lg. ;;9 is still in orce and eLect.

As the Constitution itsel declares$ local autono!y !eans "a !ore responsiv

accountale local govern!ent structure instituted through a syste! o

decentrali0ation." 7The Constitution as we oserved$ does nothing !ore tha

rea# up the !onopoly o the national govern!ent over the aLairs o local

govern!ents and as put y political adherents$ to "lierate the localgovern!ents ro! the i!perialis! o 1anila." Autono!y$ however$ is not !e

to end the relation o partnership and inter?dependence etween the central

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ad!inistration and local govern!ent units$ or otherwise$ to user in a regi!e o

ederalis!. The Charter has not ta#en such a radical step. =ocal govern!ents$

under the Constitution$ are su/ect to regulation$ however li!ited$ and or no

other purpose than precisely$ aleit parado3ically$ to enhance sel? govern!ent.

As we oserved in one case$ 4decentrali0ation !eans devolution o national

ad!inistration ut not power to the local levels. Thus:

Bow$ autono!y is either decentrali0ation o ad!inistration or

decentrali0ation o power. There is decentrali0ation o

ad!inistration when the central govern!ent delegates

ad!inistrative powers to political sudivisions in order to roaden

the ase o govern!ent power and in the process to !a#e local

govern!ents "!ore responsive and accountale$" and "ensure

their ullest develop!ent as sel?reliant co!!unities and !a#e

the! !ore eLective partners in the pursuit o national

develop!ent and social progress." At the sa!e ti!e$ it relieves the

central govern!ent o the urden o !anaging local aLairs and

enales it to concentrate on national concerns. The President

e3ercises "general supervision" over the!$ ut only to "ensure that

local aLairs are ad!inistered according to law." e has no control

over their acts in the sense that he can sustitute their /udg!entswith his own.

(ecentrali0ation o power$ on the other hand$ involves an

adication o political power in the avor o local govern!ents units

declared to e autono!ous$ -n that case$ the autono!ous

govern!ent is ree to chart its own destiny and shape its uture

with !ini!u! intervention ro! central authorities. According to a

constitutional author$ decentrali0ation o power a!ounts to "sel?

i!!olation$" since in that event$ the autono!ous govern!ent

eco!es accountale not to the central authorities ut to its

constituency.

The successive si3ty?day suspensions i!posed on 1ayor Rodolo Gan0on is aleit

another !atter. Hhat others the Court$ and what indeed loo!s very large$ is the

act that since the 1ayor is acing ten ad!inistrative charges$ the 1ayor is in

acing the possiility o +>> days o suspension$ in the event that all ten case

yieldpria facie%ndings. The Court is not o course tolerating !iseasance

pulic o7ce &assu!ing that 1ayor Gan0on is guilty o !iseasance' ut it is

certainly another 6uestion to !a#e hi! serve +>> days o suspension$ which

eLectively$ to suspend hi! out o o7ce. As we held: 6

8. Petitioner is a duly elected !unicipal !ayor o =ianga$ urig

del ur. is ter! o o7ce does not e3pire until ),*+. Here it n

this inor!ation and the suspension decreed y the andiganaccording to the Anti?Grat and Corrupt Practices Act$ he would

have een all this while in the ull discharge o his unctions as

such !unicipal !ayor. e was elected precisely to do so. As o

Octoer 8+$ ),*;$ he has een unale to. it is a asic assu!pt

o the electoral process i!plicit in the right o suLrage that the

people are entitled to the services o elective o7cials o their

choice. 5or !iseasance or !aleasance$ any o the! could$ o

course$ e proceeded against ad!inistratively or$ as in this

instance$ cri!inally. -n either case$ 1s culpaility !ust e

estalished. 1oreover$ i there e a cri!inal action$ he is entit

to the constitutional presu!ption o innocence. A preventive

suspension !ay e /usti%ed. -ts continuance$ however$ or anunreasonale length o ti!e raises a due process 6uestion. 5o

even i thereater he were ac6uitted$ in the !eanwhile his righ

hold o7ce had een nulli%ed. Clearly$ there would e in such a

case an in/ustice suLered y hi!. Bor is he the only victi!. Th

is in/ustice inicted li#ewise on the people o =ianga They were

deprived o the services o the !an they had elected to serve

!ayor. -n that sense$ to paraphrase @ustice Cardo0o$ the protra

continuance o this preventive suspension had outrun the ou

o reason and resulted in sheer oppression. A denial o due pro

is thus 6uite !aniest. -t is to avoid such an unconstitutional

application that the order o suspension should e l ited. '

The plain truth is that this Court has een ill at ease with suspensions$ or th

aove reasons$ and so also$ ecause it is out o the ordinary to have a vac

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in local govern!ent. The sole o/ective o a suspension$ as we have held$ 9is

si!ply "to prevent the accused ro! ha!pering the nor!al cause o the

investigation with his inuence and authority over possile witnesses"6or to

#eep hi! oL "the records and other evidence. 61

-t is a !eans$ and no !ore$ to assist prosecutors in %r!ing up a case$ i any$

against an erring local o7cial. Ender the =ocal Govern!ent Code$ it can not

e3ceed si3ty days$ 6which is to say that it need not e e3actly si3ty days long i

a shorter period is otherwise su7cient$ and which is also to say that it ought to

e lited i prosecutors have achieved their purpose in a shorter span.

uspension is not a penalty and is not unli#e preventive i!prison!ent in which

the accused is held to insure his presence at the trial. -n oth cases$ the accused

&the respondent' en/oys a presu!ption o innocence unless and until ound guilty.

uspension %nally is te!porary and as the =ocal Govern!ent Code provides$ it

!ay e i!posed or no !ore than si3ty days. As we held$ 67a longer suspension

is un/ust and unreasonale$ and we !ight add$ nothing less than tyranny.

As we oserved earlier$ i!posing +>> days o suspension which is not a re!ote

possiility 1ayor Gan0on is to all intents and purposes$ to !a#e hi! spend the

rest o his ter! in inactivity. -t is also to !a#e$ to all intents and purposes$ hissuspension per!anent.

-t is also$ in act$ to !ete out punish!ent in spite o the act that the 1ayor2s

guilt has not een proven. Horse$ any asolution will e or naught ecause

needless to say$ the length o his suspension would have$ y the ti!e he is

reinstated$ wiped out his tenure consideraly.

The Court is not to e !ista#en or ostructing the eLorts o the respondent

ecretary to see that /ustice is done in -loilo City$ yet it i s hardly any argu!ent to

inict on 1ayor Gan0on successive suspensions when apparently$ the respondent

ecretary has had su7cient ti!e to gather the necessary evidence to uild a

case against the 1ayor without suspending hi! a day longer. Hhat is intriguing isthat the respondent ecretary has een crac#ing down$ so to spea#$ on the

1ayor piece!eal apparently$ to pin hi! down ten ti!es the pain$ when he$ t

respondent ecretary$ could have pursued a consolidated eLort.

He reiterate that we are not precluding the President$ through the ecretary

-nterior ro! e3ercising a legal power$ yet we are o the opinion that the

ecretary o -nterior is e3ercising that power oppressively$ and needless to s

with a grave ause o discretion.

The Court is aware that only the third suspension is under 6uestions$ and tha

any tal# o uture suspensions is in act pre!ature. The act re!ains$ howevethat 1ayor Gan0on has een !ade to serve a total o )8> days o suspension

the possiility o si3ty days !ore is argualy around the corner &which a!ou

to a violation o the =ocal Govern!ent Code which rings to light a pattern o

suspensions intended to suspend the 1ayor the rest o his natural tenure. Th

Court is si!ply oreclosing what appears to us as a concerted eLort o the t

to perpetuate an aritrary act.

As we said$ we can not tolerate such a state o aLairs.

He are thereore allowing 1ayor Rodolo Gan0on to suLer the duration o his

suspension and liting$ or the purpose$ the Te!porary Restraining Order earl

issued. -nsoar as the seven re!aining charges are concerned$ we are urging(epart!ent o =ocal Govern!ent$ upon the %nality o this (ecision$ to under

steps to e3pedite the sa!e$ su/ect to 1ayor Gan0on2s usual re!edies o ap

/udicial or ad!inistrative$ or certiorari$ i warranted$ and !eanwhile$ we are

precluding the ecretary ro! !eting out urther suspensions ased on thos

re!aining co!plaints$ notwithstanding %ndings opria facie evidence.

-n resu!e the Court is laying down the ollowing rules:

). =ocal autono!y$ under the Constitution$ involves a !ere decentrali0ation

ad!inistration$ not o power$ in which local o7cials re!ain accountale to th

central govern!ent in the !anner the law !ay provide4

8. The new Constitution does not prescrie ederalis!4

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;. The change in constitutional language &with respect to the supervision clause'

was !eant ut to deny legislative control over local govern!ents4 it did not

e3e!pt the latter ro! legislative regulations provided regulation is consistent

with the unda!ental pre!ise o autono!y4

I. ince local govern!ents re!ain accountale to the national authority$ the

latter !ay$ y law$ and in the !anner set orth therein$ i!pose disciplinary action

against local o7cials4

J. "upervision" and "investigation" are not inconsistent ter!s4 "investigation"does not signiy "control" &which the President does not have'4

+. The petitioner$ 1ayor Rodolo Gan0on. !ay serve the suspension so ar

ordered$ ut !ay no longer e suspended or the oLenses he was charged

originally4 provided:

a' that delays in the investigation o those charges

"due to his ault$ neglect or re6uest$ &the ti!e o the

delay' shall not e counted in co!puting the ti!e o

suspension. N(upra$ sec. +;&;'

' that i during$ or ater the e3piration o$ hispreventive suspension$ the petitioner co!!its

another or other cri!es and auses or which proper

charges are %led against hi! y the aggrieved party

or parties$ his previous suspension shall not e a ar

to his eing preventively suspended again$ i

warranted under supar. &8'$ ection +; o the =ocal

Govern!ent Code.

HDRD5ORD$ pre!ises considered$ the petitions are (-1-D(. The Te!porary

Restraining Order issued is =-5TD(. The suspensions o the petitioners are

A55-R1D($ provided that the petitioner$ 1ayor Rodolo Gan0on$ !ay not e !ade

to serve uture suspensions on account o any o the re!aining ad!inistrativecharges pending against hi! or acts co!!itted prior to August ))$ ),**. The

ecretary o -nterior is OR(DRD( to consolidate all such ad!inistrative cases

pending against 1ayor Gan0on.

The si3ty?day suspension against the petitioner$ 1ary Ann Rivera Artieda$ is

A55-R1D(. Bo costs.

O OR(DRD(.

G.R. No. 79' D3*+" ', 1994

GREATER BALANGA DE/ELOPMENT CORPORATION, petitioner$

vs.

MUNICIPALITY O- BALANGA, BATAAN: SANGGUNIANG BAYAN O-

BALANGA, BATAAN: HON. MELANIO S. BANZON, R.: HON. DOMINGO

DIZON: HON. AGRIPINO C. BANZON: HON. EDUARDO P. TUAZON: HON

GABRIEL . NISAY: HON. LORENZO P. TAPAN: HON. -EDERICO S.

BUSTAMANTE: HON. ROLANDO H. DA/ID: HON. EDILBERTO ;. DE

GUZMAN: HON. AL-REDO C. GUILA: a% HON. GA/INO S.

SANTIAGO,respondents.

Ricardo +. Valonte and Reynaldo 7. -a#atsin# for petitioner.

;UIASON,J.:

This a a petition or certiorari$ prohiition and andaus under Rule +J o th

Revised Rules o Court to annul D3ecutive Order Bo. )$ s?** and Resolution B

)8$ s?** issued$ respectively$ y the 1ayor and the angguniang ayan o

alanga$ ataan.

-

This case involves a parcel o land$ =ot 8+)??+?A?; o the sudivision plan Ps

>;?>>9+8;$ situated in arrio an @ose$ 1unicipality o alanga$ Province o



23/112

ataan. The lot has an area o *$I+9 s6uare !eters. -t is registered under

Transer Certi%cate o Title Bo. )8>)J8 issued on @anuary ))$ ),** y the

Register o (eeds o the Province o ataan in the na!e o petitioner Greater

alanga (evelop!ent Corporation. Petitioner is a do!estic corporation owned

and controlled y the Ca!acho a!ily$ which donated to the 1unicipality o

alanga the present site o the alanga Pulic 1ar#et. The lot in dispute lies

ehind the alanga Pulic 1ar#et.

-n ),*9$ petitioner conducted a relocation survey o the area. -t discovered that

certain portions o the property had een "unlawully usurped and invaded" ythe 1unicipality o alanga$ which had "allowedKtoleratedKaetted" the

construction o shanties and !ar#et stalls while charging !ar#et ees and !ar#et

entrance ees ro! the occupants and users o the area. A portion o the lot had

also een utili0ed as an unloading site &"agsa#an"' o transient vegetale

vendors$ who were charged !ar#et and entrance ees y the !unicipality.

On @anuary ))$ ),**$ petitioner applied with the O7ce o the 1ayor o alanga

or a usiness per!it to engage in usiness in the said area. On the sa!e day$

1ayor 1elanio . an0on$ @r. issued 1ayor2s Per!it Bo. 898,$ granting petitioner

the privilege o a "real estate dealerKprivately?owned pulic !ar#et operator"

under the trade na!e o alanga Pulic 1ar#et. The per!it was to e3pire on

(ece!er ;)$ ),**. Petitioner li#ewise registered "alanga Central 1ar#et" as atrade na!e with the ureau o Trade Regulations and Consu!er Protection.

On 5eruary ),$ ),**$ however$ the angguniang ayan o alanga passed

Resolution Bo. )8$ s?** annulling the 1ayor2s per!it issued to petitioner and

advising the 1ayor to revo#e the per!it "to operate a pulic !ar#et."

Pursuant to said Resolution$ 1ayor an0on$ on 1arch 9$ ),**$ issued D3ecutive

Order Bo. )$ s?** revo#ing the per!it insoar as it authori0ed the operation o a

pulic !ar#et.

On @uly );$ ),**$ petitioner %led the instant petition with a prayer or the

issuance o a writ o preli!inary !andatory and prohiitory in/unction orrestraining order ai!ed at the reinstate!ent o the 1ayor2s per!it and the

curtail!ent o the !unicipality2s collection o !ar#et ees and !ar#et entran

ees. The Court did not issue the preli!inary relies prayed or.

Respondent asserted that as the local chie e3ecutive$ the 1ayor !ay issue$

or revo#e !unicipal licenses and per!its. They contended that Resolution Bo

s?** o the angguniang ayan$ the asis o D3ecutive Order Bo. )$ s?**$ was

legiti!ate e3ercise o local legislative authority and$ as such$ the revocation

petitioner2s per!it was not tainted with any grave ause o discretion.

Petitioner replied that since it had not violated any law or ordinance$ there wno reason or respondents to revo#e the 1ayor2s per!it issued to it. On the

contrary$ petitioner asserted that the e3ecutive order and the resolution in

6uestion were 6uasi?/udicial acts and not !ere e3ercises o police power. -t

6uestioned respondents2 ailure to oserve due process in revo#ing the per!

and challenged the legality o the collection o the !ar#et and entrance ees

the !unicipality.

-n their Re/oinder$ respondents pointed out that petitioner had violated an

e3isting !unicipal ordinance when it ailed to disclose the true status o the

involved in the per!it and when it did not secure separate per!its or its tw

usinesses$ i.e.$ one as "real estate dealer" and another as "privately?owned

pulic !ar#et operator." Respondents reerred to ection ;A?>+&' o the alRevenue Code which$ inter alia$ en/oins an applicant or a 1ayor2s per!it ro

!a#ing a alse state!ent in his application and provides or the penalties o

violation o any e3isting ordinance regulating usiness estalish!ents.

--

1ayor2s Per!it Bo. 898, was revo#ed y D3ecutive Order Bo. )$ s?**$ which r

as ollows:

y virtue o the authority vested upon !e y law as 1ayor o t

1unicipality o alanga$ and as per Resolution Bo. )8$ s?** o t

angguniang ayan o alanga$ the 1ayor2s Per!it in the latteportion o its purpose$ i.e.$ "to operate a pulic !ar#et$" issued

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the Greater alanga (evelop!ent Corporation$ is herey

RDVOD($ eLective i!!ediately.

-B H-TBD HDRDO5$ - hereunto have set !y hand this 9th day

o 1arch ),**$ at alanga$ ataan.

&G

(.'

1D=

AB-O .

AB

MOB

$ @R.

1un

icip

al

1ay

or

&Rollo$ p. ;+'

The authority o the 1ayor to revo#e a per!it he issued is pre!ised on a

violation y the grantee o any o the conditions or which the per!it had een

granted. Respondents clai!ed that petitioner had violated the provisions o

ection ;A?>+&' o the alanga Revenue Code when it ailed to inor! the 1ayor

that the lot in controversy was the su/ect o adverse clai!s or which a civil case

was %led.

ection ;A?>+&' o the alanga Revenue Code reads:

333 333 333

&' The application or a 1ayor2s per!it shall state the na!e$residence and citi0enship o &sic' the applicant2s ull description o

the usiness$ the particular place where &sic' the sa!e shall e

conducted$ and such other pertinent inor!ation and date &sic

any &sic' e re6uired. - the applicant delierately !a#es a als

state!ent in the application or!$ the 1unicipal 1ayor !ay re

the per!it and the applicant !ay e prosecuted and penali0ed

accordance with the pertinent provisions o penal laws.

-n case a person desires to conduct the sa!e #ind or line o

usiness in another place within the 1unicipality$ in addition t

aside ro! the estalish!ent speci%ed in his per!it$ he shall

secure a separate per!it or each usiness and pay thecorresponding ee i!posed in this article. - a person desires to

engage in !ore than one #ind or line o usiness$ he shall pay

ee i!posed on each separate usiness$ notwithstanding the

that he !ay conduct or operate all distinct usiness &sic'$ trad

occupation in one place only.

333 333 333

&h' Revocation of Perit. The 1unicipal 1ayor !ay revo#e a

per!it$ in eLect close the estalish!ent$ upon a violation o

e3isting ordinance regulating usiness estalish!ents or any

provisions o this article$ in addition to the %ne and i!prison!that they &sic' !ay e i!posed y the court or violation o thi

article &1e!orandu! o the olicitor General$ pp. )+?)94 Rollo

;88'.

Respondents clai! that petitioner &)' delierately !ade a alse state!ent in

application or! when it ailed to provide the inor!ation that their place o

usiness is the su/ect o adverse clai!s4 and &8' ailed to apply or two sepa

per!its or the two lines o usiness it proposed to engage in.

The application or 1ayor2s per!it in the case at ench re6uires the applican

state what type o "usiness"$ proession$ occupation andKor calling privilege

eing applied or. Petitioner let this entry an# in its application or! &Rollo$ ;8I'. -t is only in the 1ayor2s per!it itsel that petitioner2s lines o usiness

CADB CDRVABC-A CA-GEDB$ 1=FE COO= O5 =AH=AH OB PE=-C CORPORAT-OB Page 8I


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appear$ which in this case are two separate types$ one as real estate dealer and

another as pulic !ar#et operator.

The per!it should not have een issued without the re6uired inor!ation given in

the application or! itsel. Revo#ing the per!it$ however$ ecause o a alse

state!ent in the application or! cannot e /usti%ed under the aore!entioned

provision. There !ust e proo o willul !isrepresentation and delierate intent

to !a#e a alse state!ent. Good aith is always presu!ed$ and as it happened$

petitioner did not !a#e any alse state!ent in the pertinent entry.

Beither was petitioner2s applying or two usinesses in one per!it a ground or

revocation. The second paragraph o ection ;A?>+&' does not e3pressly re6uire

two per!its or their conduct o two or !ore usinesses in one place$ ut only

that separate ees e paid or each usiness. The powers o !unicipal

corporations are to e construed in strictissii &urisand any dout or a!iguity

!ust e construed against the !unicipality &City o O0a!i0 v. =u!apas$ +J CRA

;; N),9J'. Granting$ however$ that separate per!its are actually re6uired$ the

application or! does not contain any entry as regards the nu!er o usinesses

the applicant wishes to engage in.

Respondents insinuated ad aith on the part o petitioner in ailing to supply the

pertinent inor!ation in the application or! and or ta#ing advantage o the actthat 1ayor an0on was then newly installed as 1ayor o alanga. The asence o

the !aterial inor!ation in the application or! was nonetheless supplied in the

ace o the per!it signed and issued y 1ayor an0on hi!sel &Rollo$ p. )9'.

Ender the law$ the angguniang ayan has the power to provide or the

estalish!ent and !aintenance o pulic !ar#ets in the !unicipality and "to

regulate any usiness su/ect to !unicipal license ta3 or ees and prescrie the

conditions under which a !unicipal license !ay e revo#ed" &.P. lg. ;;9$ ec.

)I, N) N Q r'. -t was this authority which respondent angguniang ayan

invo#ed when it issued Resolution Bo. )8$ s?**.

The said Resolution stated that the land su/ect o this case was ear!ar#ed orthe e3pansion o the alanga Pulic 1ar#et4 that this land was owned not y

petitioner ut y the plaintiLs in Civil Case Bo. ;*>; entitled "=eoncia (i0on$ et.

al. v. Aurora . Ca!acho"4 that the 1unicipality o alanga was not apprised

the e3istence o the civil case4 that the decision awarding the lot to the plain

and the issuance o the 1ayor2s per!it to petitioner who was not the rightu

owner had caused "an3iety$ uncertainty and restiveness" a!ong the stallhol

and traders in the su/ect lot4 and that the angguniang ayan thereore

resolved to annul the said 1ayor2s per!it insoar as it concerns the operation

pulic !ar#et.

As !ay e gleaned ro! said Resolution$ the !ain reason or the revocation

the 1ayor2s per!it was the controversy engendered y the %ling o Civil Cas;*>; eore the Regional Trial Court$ alanga$ ataan involving the ownersh

certain portions o =ot 8+)?$ the land ro! which =ot 8+)??+?A?; was derive

=ot 8+)? was originally owned and registered in the na!e o Aurora T. an0

Ca!acho$ who sudivided the land into nine lots under =RC

Psd?899>J> and designated the! as =ots 8+)??) to 8+)??,. he denoted so

o the lots to the 1unicipality o alanga which now co!prise the alanga Pu

1ar#et$ and sold others to third persons.

On @anuary ;>$ ),9I$ %ve uyers o certain portions o =ot 8+)? %led Civil C

Bo. ;*>; against Ca!acho or partition and delivery o titles. Ca!acho was

declared in deault and the plaintiLs orthwith presented their evidence. On(ece!er 8>$ ),9I$ the trial court rendered a decision ordering the deenda

segregate the de%nite portions sold to the plaintiLs and deliver to the! the

corresponding titles thereto. This decision was a7r!ed y the Court o Appe

on @anuary ;>$ ),*) in CA?G.R. Bo. J,)I*?R &G.R. Bo. +888;$ Rollo$ pp. J>?J*

The deendant elevated the !atter to this Court. -n a Resolution dated 1arch

),*;$ we denied the petition or lac# o !erit &G.R. Bo. +888;$ Rollo$ p. )>>'.

The 6uestion now is whether =ot 8+)??+?A?; is a part o the land ad/udged

the trial court in Civil Case Bo. ;*>; to the plaintiLs$ or any one o the!.

=ot 8+)??+?A?; was originally registered in the na!e o Ca!acho under TCTT?)>II;*. he denoted the lan

law on public corpo- set1

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