Magtajas vs Pryce Facts: PAGCOR decided to expand its operations to Cagayan de Oro City.

It leased a portion of a building belonging to Pryce Properties Corporations, Inc., renovated & equipped the same, and prepared to inaugurate its casino during the Christmas season. Civil organizations angrily denounced the project. Petitioners opposed the casinos opening and enacted Ordinance No. 3353, prohibiting the issuance of business permit and cancelling existing business permit to the establishment for the operation of the casino, and Ordinance No. 3375-93, prohibiting the operation of the casino and providing a penalty for its violation. Respondents assailed the validity of the ordinances on the ground that they both violated Presidential Decree No. 1869. Petitioners contend that, pursuant to the Local Government Code, they have the police power authority to prohibit the operation of casino for the general welfare.

were led by the mayor and the city legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the city.

The contention of the petitioners is that it is violative of the Sangguniang Panlungsod of Cagayan de Oro City Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos.

On the other hand, the respondents invoke P.D. 1869 which created PAGCOR to help centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines.

The Court of Appeals ruled in favor of the respondents. Hence, the petition for review.

Issue: WON the Ordinance Nos. 3353 and 3375-93 are valid. Issue: Whether or not the Ordinance No. 3353 and Ordinance No. 3375-93 are valid

Held: No. CdeO is empowered to enact ordinances for the purposes indicated in the LGC. However, ordinances should not contravene a statute. Municipal governments are merely agents of the National Government. Local Councils exercise only delegated powers conferred by Congress. The delegate cannot be superior to the principal powers higher than those of the latter. PD 1869 authorized casino gambling. As a statute, it cannot be amended/nullified by a mere ordinance.

Held: No

Ratio: Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare Clause now embodied in Section 16 as follows: ***Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. There is a requirement that the ordinances should not contravene a statute. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than

VERSION 2

Facts: PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation, Inc., renovated and equipped the same, and prepared to inaugurate its casino there during the Christmas season.

. Civic organizations angrily denounced the project. The religious elements echoed the objection and so did the women's groups and the youth. Demonstrations

those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute. Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance.

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 construction 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 the LLDA, 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 therein and the authority to exercise such powers as are by its charter vested on it.

Therefore, the petition is DENIED and the challenged decision of the Court of Appeals is AFFIRMED. 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 ter m 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 cor porations 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

VERSION 2 Facts: RA 4850 was enacted creating the "Laguna Lake Development Authority." This agency was supposed to accelerate the development and balanced growth of the Laguna Lake area and the surrounding provinces, cities and towns, in the act, within the context of the national and regional plans and policies for social and economic development.

PD 813 amended certain sections RA 4850 because of the concern for the rapid expansion of Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de Bay, combined with current and prospective uses of the lake for municipal-industrial water supply, irrigation, fisheries, and the like.

Sec. 149. Fishery Rentals; Fees and Charges (a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and impose rental fees or charges therefor in accordance with the provisions of this Section.

To effectively perform the role of the Authority under RA 4850, the Chief Executive issued EO 927 further defined and enlarged the functions and powers of the Authority and named and enumerated the towns, cities and provinces encompassed by the term "Laguna de Bay Region". Also, pertinent to the issues in this case are the following provisions of EO 927 which include in particular the sharing of fees:

Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen permits. Big fishpen operators took advantage of the occasion to establish fishpens and fishcages to the consternation of the Authority. Unregulated fishpens and fishcages occupied almost one-third the entire lake water surface area, increasing the occupation drastically from 7,000 ha in 1990 to almost 21,000 ha in 1995. The Mayor's permit to construct fishpens and fishcages were all undertaken in violation of the policies adopted by the Authority on fishpen zoning and the Laguna Lake carrying capacity. In view of the foregoing circumstances, the Authority served notice to the general public that:

Sec 2: xxx the Authority shall have exclusive jurisdiction to issue permit for the use of all surface water for any projects or activities in or affecting the said region including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the like.

All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay Region, which were not registered or to which no application for registration and/or permit has been filed with Laguna Lake Development Authority as of March 31, 1993 are hereby declared outrightly as illegal.

SEC. 3. Collection of Fees. The Authority is hereby empowered to collect fees for the use of the lake water and its tributaries for all beneficial purposes including but not limited to fisheries, recreation, municipal, industrial, agricultural, navigation, irrigation, and waste disposal purpose; Provided, that the rates of the fees to be collected, and the sharing with other government agencies and political subdivisions, if necessary, shall be subject to the approval of the President of the Philippines upon recommendation of the Authority's Board, except fishpen fee, which will be shared in the following manner: 20 percent of the fee shall go to the lakeshore local governments, 5 percent shall go to the Project Development Fund which shall be administered by a Council and the remaining 75 percent shall constitute the share of LLDA. However, after the implementation within the three-year period of the Laguna Lake Fishery Zoning and Management Plan the sharing will be modified as follows: 35 percent of the fishpen fee goes to the lakeshore local governments, 5 percent goes to the Project Development Fund and the remaining 60 percent shall be retained by LLDA; Provided, however, that the share of LLDA shall form part of its corporate funds and shall not be remitted to the National Treasury as an exception to the provisions of Presidential Decree No. 1234.

All fishpens; fishcages and other aqua-culture structures so declared as illegal shall be subject to demolition which shall be undertaken by the Presidential Task Force for illegal Fishpen and Illegal Fishing.

Owners of fishpens, fishcages and other aqua-culture structures declared as illegal shall, without prejudice to demolition of their structures be criminally charged in accordance with Section 39-A of Republic Act 4850 as amended by P.D. 813 for violation of the same laws. Violations of these laws carries a penalty of imprisonment of not exceeding 3 years or a fine not exceeding Five Thousand Pesos or both at the discretion of the court.

All operators of fishpens, fishcages and other aqua-culture structures declared as illegal in accordance with the foregoing Notice shall have one (1) month on or before 27 October 1993 to show cause before the LLDA why their said fishpens, fishcages and other aqua-culture structures should not be demolished/dismantled.

Then came Republic Act No. 7160. The municipalities in the Laguna Lake Region interpreted the provisions of this law to mean that the newly passed law gave municipal governments the exclusive jurisdiction to issue fishing privileges within their municipal waters because R.A. 7160 provides:

One month, thereafter, the Authority sent notices to the concerned owners of the illegally constructed fishpens, fishcages and other aqua-culture structures advising them to dismantle their respective structures within 10 days from receipt thereof, otherwise, demolition shall be effected.

The fishpen owners filed injunction cases against the LLDA. The LLDA filed motions to dismiss the cases against it on jurisdictional grounds. The motions to dismiss were denied. Meanwhile, TRO/writs of preliminary mandatory injunction were issued enjoining the LLDA from demolishing the fishpens and similar structures in question. Hence, the present petition for certiorari, prohibition and injunction. The CA dismissed the LLDAs consolidated petitions. It ruled that (A) LLDA is not among those quasi-judicial agencies of government appealable only to the Court of Appeals; (B) the LLDA charter does vest LLDA with quasi-judicial functions insofar as fishpens are concerned; (C) the provisions of the LLDA charter insofar as fishing privileges in Laguna de Bay are concerned had been repealed by the Local Government Code of 1991; (D) in view of the aforesaid repeal, the power to grant permits devolved to respective local government units concerned.

law. It is a well-settled rule in this jurisdiction that "a special statute, provided for a particular case or class of cases, is not repealed by a subsequent statute, general in its terms, provisions and application, unless the intent to repeal or alter is manifest, although the terms of the general law are broad enough to include the cases embraced in the special law." Where there is a conflict between a general law and a special statute, the special statute should prevail since it evinces the legislative intent more clearly that 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. This is because implied repeals are not favored and as much as possible, given to all enactments of the legislature. A special law cannot be repealed, amended or altered by a subsequent general law by mere implication.

Issue: 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?

Considering the reasons behind the establishment of the Authority, which are enviromental protection, navigational safety, and sustainable development, there is every indication that the legislative intent is for the Authority to proceed with its mission.

Held: LLDA. Section 4 (k) of RA 4850, the provisions of PD 813, and Section 2 of EO 927, specifically provide that the LLDA shall have exclusive jurisdiction to issue permits for the use or all surface water for any projects or activities in or affecting the said region, including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the like. On the other hand, RA 7160 has granted to the municipalities the exclusive authority to grant fishery privileges in municipal waters. The Sangguniang Bayan may grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area within a definite zone of the municipal waters.

The provisions of RA7160 do not necessarily repeal the laws creating the LLDA and granting the latter water rights authority over Laguna de Bay and the lake region.

The Local Government Code of 1991 does not contain any express provision which categorically expressly repeal the charter of the Authority. It has to be conceded that there was no intent on the part of the legislature to repeal Republic Act No. 4850 and its amendments. The repeal of laws should be made clear and expressed.

We are on all fours with the manifestation of LLDA that "Laguna de Bay, like any other single body of water has its own unique natural ecosystem. The 900 km lake surface water, the 8 major river tributaries and several other smaller rivers that drain into the lake, the 2,920 km2 basin or watershed transcending the boundaries of Laguna and Rizal provinces, constitute one integrated delicate natural ecosystem that needs to be protected with uniform set of policies; if we are to be serious in our aims of attaining sustainable development. This is an exhaustible natural resource-a very limited one-which requires judicious management and optimal utilization to ensure renewability and preserve its ecological integrity and balance. Managing the lake resources would mean the implementation of a national policy geared towards the protection, conservation, balanced growth and sustainable development of the region with due regard to the inter-generational use of its resources by the inhabitants in this part of the earth. The authors of Republic Act 4850 have foreseen this need when they passed this LLDA law-the special law designed to govern the management of our Laguna de Bay lake resources. Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies where lakeshore local government units exercise exclusive dominion over specific portions of the lake water. The implementation of a cohesive and integrated lake water resource management policy, therefore, is necessary to conserve, protect and sustainably develop Laguna de Bay."

It has to be conceded that the charter of the LLDA constitutes a special law. RA 7160 is a general law. It is basic is basic in statutory construction that the enactment of a later legislation which is a general law cannot be construed to have repealed a special

The power of the LGUs to issue fishing privileges was clearly granted for revenue purposes. This is evident from the fact that Section 149 of the New Local Government Code empowering local governments to issue fishing permits is embodied in Chapter 2, Book II, of Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing And Other Revenue Raising Power of LGUs.

On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other aqua-culture structures is for the purpose of effectively regulating and monitoring activities in the Laguna de Bay region and for lake quality control and management. 6 It does partake of the nature of police power which is the most pervasive, the least limitable and the most demanding of all State powers including the power of taxation. Accordingly the charter of the Authority which embodies a valid exercise of police power should prevail over the Local Government Code of 1991 on matters affecting Laguna de Bay.

DSWD to the City of Butuan. Pursuant to the MoA, Mayor Plaza issued EO No. 0692 reconstituting the City Social Services Development Office (CSSDO), devolving or adding thereto 19 additional DSWD employees headed by Virginia Tuazon as Officerin-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 & Tuazons designation as the CSSDOs Officer-in-charge are illegal. Respondents failed to report for work despite Mayor Plazas 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 Mayors instruct ions 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 leavemay be dropped from the service without prior notice. 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.

There should be no quarrel over permit fees for fishpens, fishcages and other aquaculture structures in the Laguna de Bay area. Section 3 of Executive Order No. 927 provides for the proper sharing of fees collected.

In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our holding that, considering the provisions of Section 4 of Republic Act No. 4850 and Section 4 of Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake Development Authority vs. Court of Appeals, there is no question that the Authority has express powers as a regulatory a quasi-judicial body in respect to pollution cases with authority to issue a "cease a desist order" and on matters affecting the construction of illegal fishpens, fishcages and other aqua-culture structures in Laguna de Bay. The Authority's pretense, however, that it is co-equal to the Regional Trial Courts such that all actions against it may only be instituted before the Court of Appeals cannot be sustained. On actions necessitating the resolution of legal questions affecting the powers of the Authority as provided for in its charter, the Regional Trial Courts have jurisdiction.

In view of the foregoing, this Court holds that Section 149 of RA 7160, otherwise known as the Local Government Code of 1991, has not repealed the provisions of the charter of the LLDA, Republic Act No. 4850, as amended. Thus, the Authority has the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities situated therein and 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

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.

MMDA v Bel-Air Village Association, Inc. FACTS: On December 30, 1995, respondent received from petitioner a notice requesting the former to open its private road, Neptune Street, to public vehicular traffic starting January 2, 1996. On the same day, respondent was apprised that the perimeter separating the subdivision from Kalayaan Avenue would be demolished. Respondent instituted a petition for injunction against petitioner, praying for the issuance of a TRO and preliminary injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall. ISSUE: WON MMDA has the authority to open Neptune Street to public traffic as an agent of the state endowed with police power. HELD: A local government is a political subdivision of a nation or state which is constituted by law and has substantial control of local affairs. It is a body politic and corporate one endowed with powers as a political subdivision of the National Government and as a corporate entity representing the inhabitants of its territory (LGC of 1991). Our Congress delegated police power to the LGUs in Sec.16 of the LGC of 1991. It empowers the sangguniang panlalawigan, panlungsod and bayan to enact ordinances, approve resolutions and appropriate funds for the general welfare of the [province, city or municipality] and its inhabitants pursuant to Sec.16 of the Code and in the proper exercise of the [LGU's corporate powers] provided under the Code. There is no syllable in RA 7924 that grants the MMDA police power, let alonelegislative power. Unlike the legislative bodies of the LGUs, there is no grant of authority in RA 7924 that allows the MMDA to enact ordinances and regulations for the general welfare of the inhabitants of Metro Manila. The MMDA is merely a development authority and not a political unit of government since it is neither an LGU or a public corporation endowed with legislative power. The MMDA Chairman is not an elective official, but is merely appointed by the President with the rank and privileges of a cabinet member. In sum, the MMDA has no power to enact ordinances for the welfare of the community. It is the LGUs, acting through their respective legislative councils, that possess legislative power and police power. The Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of Neptune Street, hence, its proposed opening by the MMDA is illegal. VERSION 2

Facts: Metropolitan Manila Development Authority (MMDA), petitioner herein, is a Government Agency tasked with the delivery ofbasic services in Metro Manila. BelAir Village Association (BAVA), respondent herein, received a letter of request from the petitioner to open Neptune Street of Bel-Air Village for the use of the public. The said opening of Neptune Street will be for the safe and convenient movement of persons and to regulate the flow of traffic in Makati City. This was pursuant to MMDA law or Republic Act No. 7924. On the same day, the respondent was appraised that the perimeter wall separating the subdivision and Kalayaan Avenue would be demolished. The respondent, to stop the opening of the said street and demolition of the wall, filed a preliminary injunction and a temporary restraining order. Respondent claimed that the MMDA had no authority to do so and the lower court decided in favor of the Respondent. Petitioner appealed the decision of the lower courts and claimed that it has the authority to open Neptune Street to public traffic because it is an agent of the State that can practice police power in the delivery ofbasic services in Metro Manila.

Issue: Whether or not the MMDA has the mandate to open NeptuneStreet to public traffic pursuant to its regulatory and police powers.

Held: The Court held that the MMDA does not have the capacity to exercise police power. Police power is primarily lodged in the National Legislature. However, police power may be delegated to government units. Petitioner herein is a development authority and not a political government unit. Therefore, the MMDA cannot exercise police power because it cannot be delegated to them. It is not a legislative unit of the government. Republic Act No. 7924 does not empower the MMDA to enact ordinances, approve resolutions and appropriate funds for the general welfare of the inhabitants of Manila. There is no syllable in the said act that grants MMDA police power. It is an agency created for the purpose of laying down policies and coordinating with various national government agencies, peoples organizations, non-governmental organizations and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area.

Basco vs PAGCOR FACTS: Petitioners seek to annul the PAGCOR charter PD 1869 for being allegedly contrary to morals, public policy and order, monopolistic & tends toward crony economy, waiving the Manila City governments right to impose taxes & license fees, and violating the equal protection clause, local autonomy and other state policies in the Constitution.

ISSUES: Whether PD 1869 is valid. HELD: Every law has in its favor the presumption of constitutionality. For a law to be nullified, it must be shown that there is a clear & unequivocal breach of the Constitution. The grounds for nullity must be clear and beyond reasonable doubt. The question of wether PD 1869 is a wise legislation is up for Congress to determine. The power of LGUs to regulate gambling through the grant of franchises, licenses or permits was withdrawn by PD 771, and is now vested exclusively on the National Government. Necessarily, the power to demand/collect license fees is no longer vested in the City of Manila. LGUs have no power to tax Government instrumentalities. PAGCOR, being a GOCC, is therefore exempt from local taxes. The National Government is supreme over local governments. As such, mere creatures of the State cannot defeat national policies using the power to tax as a tool for regulation. The power to tax cannot be allowed to defeat an instrumentality of the very entity which has the inherent power to wield it. The power of LGUs to impose taxes & fees is always subject to limitation provided by Congress. The principle of local autonomy does not make LGUs sovereign within a state, it simply means decentralization. A law doesnt have to operate in equal force on all persons/things. The equal protection clause doesnt preclude classification of individuals who may be accorded different treatment under the law as long as the classification is not unreasonable/arbitrary. The mere fact that some gambling activities are legalized under certain conditions, while others are prohibited, does not render the applicable laws unconstitutional.

Section 13 par. (2) of P.D. 1869 exempts PAGCOR, as the franchise holder from paying any "tax of any kind or form, income or otherwise, as well as fees, charges or levies of whatever nature, whether National or Local." Issue: Does the local Government of Manila have the power to impose taxes on PAGCOR? Held No, the court rules that The City government of Manila has no power to impose taxes on PAGCOR. Reason: The principle of Local autonomy does not make local governments sovereign within the state; the principle of local autonomy within the constitution simply means decentralization. It cannot be an Imperium in imperio it can only act intra sovereign, or as an arm of the National Government. PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is governmental, which places it in the category of an agency or instrumentality of the Government. Being an instrumentality of the Government, PAGCOR should be and actually is exempt from local taxes. The power of local government to "impose taxes and fees" is always subject to "limitations" which Congress may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception to the exercise of the power of local governments to impose taxes and fees. It cannot therefore be violative but rather is consistent with the principle of local autonomy. Note: other issues were raised in the case, such as if whether the petitioners have standing in filing the case, but to make the digest fit into one page I just included the issue which focused that was in accordance to the outline. Please do read the case in its original when you have the time since there are explanations to its nature which are not included in this digest Province of Batangas vs. Romulo FACTS: In 1998, then President Estrada issued EO No. 48 establishing the Program for Devolution Adjustment and Equalization to enhance the capabilities of LGUs in the discharge of the functions and services devolved to them through the LGC. The Oversight Committee under Executive Secretary Ronaldo Zamora passed Resolutions No. OCD-99-005, OCD-99-006 and OCD-99-003 which were approved by Pres. Estrada on October 6, 1999. The guidelines formulated by the Oversight Committee required the LGUs to identify the projects eligible for funding under the portion of LGSEF and submit the project proposals and other requirements to the DILG for appraisal before the Committee serves notice to the DBM for the subsequent release of the corresponding funds.

VERSION 2 Facts: The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January 1, 1977 "to establish, operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines." Petitioners filed an instant petition seeking to annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter PD 1869, because it is allegedly contrary to morals, public policy and order Petitioners claim that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees; that the exemption clause in P.D. 1869 is in violation of the principle of local autonomy.

Hon. Herminaldo Mandanas, Governor of Batangas, petitioned to declare unconstitutional and void certain provisos contained in the General Appropriations Acts (GAAs) of 1999, 2000, and 2001, insofar as they uniformly earmarked for each corresponding year the amount of P5billion for the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) & imposed conditions for the release thereof. ISSUE: Whether the assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD resolutions infringe the Constitution and the LGC of 1991. HELD: Yes. The assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD resolutions constitute a withholding of a portion of the IRA they effectively encroach on the fiscal autonomy enjoyed by LGUs and must be struck down. According to Art. II, Sec.25 of the Constitution, the State shall ensure the local autonomy of local governments. Consistent with the principle of local autonomy, the Constitution confines the Presidents power over the LGUs to one of general supervision, which has been interpreted to exclude the power of control. Drilon v. Lim distinguishes supervision from control: control lays down the rules in the doing of an act the officer has the discretion to order his subordinate to do or redo the act, or decide to do it himself; supervision merely sees to it that the rules are followed but has no authority to set down the rules or the discretion to modify/replace them. The entire process involving the distribution & release of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA or just share of the LGUs in the national taxes. Sec.6, Art.X of the Constitution mandates that the just shareshall be automatically released to the LGUs. Since the release is automatic, theLGUs arent required to perform any act to receive the just share it shall bereleased to them without need of further action. To subject its distribution & release to the vagaries of the implementing rules & regulations as sanctioned by the assailed provisos in the GAAs of 1999-2001 and the OCD Resolutions would violate this constitutional mandate. The only possible exception to the mandatory automatic release of the LGUs IRA is if the national internal revenue collections for the current fiscal year is less than 40% of the collections of the 3rd preceding fiscal year. The exception does not apply in this case. The Oversight Committees authority is limited to the implementation of the LGC of 1991 not to supplant or subvert the same, and neither can it exercise control over the IRA of the LGUs. Congress may amend any of the provisions of the LGC but only through a separate law and not through appropriations laws or GAAs. Congress cannot include in a general appropriations bill matters that should be more properly enacted in a separate legislation.

A general appropriations bill is a special type of legislation, whose content is limited to specified sums of money dedicated to a specific purpose or a separate fiscal unit any provision therein which is intended to amend another law is considered an inappropriate provision. Increasing/decreasing the IRA of LGUs fixed in the LGC of 1991 are matters of general & substantive law. To permit the Congress to undertake these amendments through the GAAs would unduly infringe the fiscal autonomy of the LGUs. The value of LGUs as institutions of democracy is measured by the degree of autonomy they enjoy. Our national officials should not only comply with the constitutional provisions in local autonomy but should also appreciate the spirit and liberty upon which these provisions are based.

VERSION 2 Relevant Background:

It was a case filed by Hon. HERMILANDO I. MANDANAS, Governor of Batangas petition for certiorari, prohibition and mandamus to declare as unconstitutional and void certain provisos contained in the General Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they uniformly earmarked (allocated) for each corresponding year the amount of five billion pesos (P5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) and imposed conditions for the release thereof.

It started in 1998 when then President Joseph Estrada issued Executive Order No. 48 entitled ESTABLISHING A PROGRAM FOR DEVOLUTION ADJUSTMENT AND EQUALIZATION to facilitate the process of enhancing the capabilities of local government units in the discharge of the functions and services devolved to them pursuant to the Local Government Code. Included in the EO No. 48 is the appointment of the Oversight Committee authorized to issue the implementing rules and regulations governing the equitable allocation and distribution of said fund to the LGUs..

Subject of the case are the resolutions passed by the Oversight Committee (Chaired by the Executive Secretary Ronaldo B. Zamora). These are the resolutions with numbers OCD-99-005, OCD-99-006, and OCD-99-003. Further, these OCDs were approved by then Pres. Estrada on October 6, 1999. The guidelines along with these OCDs as formulated by the Oversight Committee requires the LGUs to identify the projects eligible for funding under the portion of LGSEF and submit the project proposals and other requirements to the DILG for appraisal before the Committee serves notice to the DBM for the subsequent release of corresponding funds.

For the year 2000 and 2001, the same LGSEF of 1999 GAA were adopted due to failure of Congress to enact general appropriation laws.

Unconstitutionality and void provisos in the GAAs of 1999, 2000, and 2001.

The standing point was when Gov. Mandanas received the LGSEF in the GAA of 1991.

The 5Billion LGESF for 2001 were as follows:

Unlawful and illegal imposition of conditions issued by the Oversight Committee requiring project proposals and documentary requirements prior to the release of LGUs just share in the IRA is an anathema to the principle of local autonomy as embodied in the Constitution and the Local Government Code of 1991 (and that the possible disapproval by the Committee of the project proposals of the LGUs is a diminution to then latters share in the IRA).

Modified Codal Formula P3.0Billion Priority Projects P1.9 Billion

The petitioner contends the following:

Capability Building Fund P0.1 Billion, Total = P5Billion

Furthere, the P3.0Billion of the abovementioned LGESF shall be allocated according to the modified codal formula and be released to the four levels of LGUs., ie., provinces, cities, municipalities and barangays as follos:

In issue No.1 & 3, the respondent theorized that Section 285 of the Local Government Code of 1991 which provides for the percentage sharing of the IRA among the LGUs was not intended to be a fixed determination of share in the national taxes as the Congress may enact other laws, including the aforementioned oppropriations law providing for a different sharing formula. Section 285 merely intended to be the default share of the LGUs to do away with the need to determine annually.

Provinces, 25% Cities, 25% Municipalities, 35% Barangays, 15% -

P0.750Billion 0.750 1.050 0.450, Total = P3Billion

Further, the respondent avers that the petition has already been rendered as moot and academic as it no longer presents a justifiable controversy because the IRAs of the years 1999, 2000 and 2001 have already been released and therefore, nothing more to prohibit, aside from the fact that the petition should not have been filed with the Supreme Court because this court is not a trier of facts, but, the lower courts of jurisdiction.

Resolved Further, the P1.9Billion earmarked for Priority Projects shall be distributed according to the following criteria: In issue No.2, the assailed resolutions issued by the Oversight Committee are not constitutionally infirm. The respondents stands that Section 6 of Article X of the Constitution does not specify the just share of the LGUs shall be determined solely by the Local Government Code of 1991 and that the phrase to be determined by law in the same provision means that there exists no limitation on the power of Congress to determine what is the just share of the LGUs in the national taxes. In effect, the Congress serves as the arbiter of what should be the just share. Courts Ruling:

For projects of the 4th, 5th, and 6th class LGUs, or Projects in consonance with the Presidents SONA

Upon Upon receipt of a copy of the above resolution, Gov. Mandanas wrote to the individual members of the Oversight Committee seeking the reconsideration of Resolution No. OCD-2002-001. He also wrote to Pres. Macapagal-Arroyo urging her to disapprove said resolution as it violates the Constitution and the Local Government Code of 1991 but otherwise, approved by Pres. Arroyo on January 25, 2002.

The Petitioner Points the Following Issues:

The Court finds the petition to involve a significant legal issue. Issue No.1 is the crux of the instant controversy as contained in the GAAs of 1999, 2000 and 2001 and the OCD resolutions infringe the Constitution and the Local Government Code of 1991 and undoubtedly a legal question. However, the earmarking of the LGSEF, the

promulgation of the assailed OCD resolutions and the release of the LGSEF to the LGU following the requirements are not disputed.

Substantive issues stated above, in the course of the argument, although the supervening events as the IRA including the LGSEF for 1999, 2000 and 2001 had already been released, still, there was a compelling reason to resolve the substantive issue raised in the instant petition, whether intended or incidental, cannot prevent the Court from rendering a decision if grave violation of the Constitution is proved even where the supervening events had made the cases moot in order to resolve the legal or constitutional issues raised to formulate controlling principles to guide the bench, bar and public. The court held that, the state shall ensure the autonomy of local governments. (Art. II Sec. 25 of the Constitution). Consistent with the principle of local autonomy, the Constitution confines the Presidents power over the LGUs to one of general supervision and has no power to control

sanctioned by the assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions, makes the release not automatic, a flagrant violation of the constitutional and statutory mandate that the just share of the LGUs shall be automatically released to them. The LGUs are, thus, placed at the mercy of the Oversight Committee.

That the automatic release of the IRA was precisely intended to guarantee and promote local autonomy can be gleaned from the discussion below between Messrs. Jose N. Nolledo and Regalado M. Maambong, then members of the 1986 Constitutional Commission.

Our national officials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit and liberty upon which these provisions are based.

The Local Government Code of 1991 was enacted to flesh out the mandate of the Constitution. The State policy on local autonomy is amplified in Section 2 thereof: Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources.

WHEREFORE, the petition is GRANTED. The assailed provisos in the General Appropriations Acts of 1999, 2000 and 2001, and the assailed OCD Resolutions, are declared UNCONSTITUTIONAL.

Batangas Power Corporation vs. Batangas City FACTS In the early 1990s, 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 NPCs 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 citys 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.

Guided by these precepts, the Court shall now determine whether the assailed provisos in the GAAs of 1999, 2000 and 2001, earmarking for each corresponding year the amount of five billion pesos of the IRA for the LGSEF and the OCD resolutions promulgated pursuant thereto, transgress the Constitution and the Local Government Code of 1991. To the Courts mind, the entire process involving the distribution and release of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA or just share of the LGUs in the national taxes. To subject its distribution and release to the vagaries of the implementing rules and regulations, including the guidelines and mechanisms unilaterally prescribed by the Oversight Committee from time to time, as

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 BPCs tax obligations under the BOT Agreement, it refused to pay BPCs 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 arent liable for its payment. ISSUES 1. Whether BPCs 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 NPCs 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 BPCs 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 NPCs 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. VERSION 2 Facts: In the early 1990s, power outages lasted 8 -12 hours daily and power generation was badly needed. 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 through the NPCs assumption of payment of their taxes in the Build Operate and Transfer (BOT) Agreement. On June 29, 1992, Enron Power Development Corporation (Enron) and petitioner NPC entered into a Fast Track BOT Project. Enron agreed to supply a power station to NPC and transfer its plant to the latter after ten (10) years of operation. Section 11.02 of the BOT Agreement provided that NPC shall be responsible for the payment of all taxes

that may be imposed on the power station, except income taxes and permit fees. Subsequently, Enron assigned its obligation under the BOT Agreement to petitioner 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 for a period of six (6) years. On October 12, 1998, Batangas City sent a letter to BPC demanding payment of business taxes and penalties, commencing from the year 1994, BPC refused to pay, citing its tax-exempt status as a pioneer enterprise for six (6) years under Section 133 (g) of the Local Government Code (LGC). The citys tax claim was modified and demanded payment of business taxes from BPC only for the years 1998-1999. BPC still refused to pay the tax. It insisted that its 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 tax from the NPC as the latter assumed responsibility for its payment under their BOT Agreement. On August 26, 1999, the NPC intervened. While admitting assumption of BPCs tax obligations under their BOT Agreement, NPC refused to pay BPCs 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 relief12 with the Makati RTC against Batangas City and NPC. It alleged that under the BOT Agreement, NPC is responsible for the payment of such taxes but as NPC is exempt from taxes, both the BPC and NPC are not liable for its payment. Makati RTC dismissed the petition and held that: (1) BPC is liable to pay business taxes to the city; (2) NPCs tax exemption was withdrawn with the passa ge of R.A. No. 7160 (The Local Government Code); and, (3) the 6-year tax holiday granted to pioneer business enterprises starts on the date of registration with the BOI as provided in Section 133 (g) of R.A. No. 7160, and not on the date of its actual business operations. Issue: Whether or not NPCs tax exemption privileges under its Charter were withdrawn by Section 193 of the Local Government Code (LGC). Held: Yes. The effect of the LGC on the tax exemption privileges of the NPC has already been extensively discussed and settled in the recent case of National Power Corporation v. City of Cabanatuan. In said case, this Court recognized the removal of the blanket exclusion of government instrumentalities from local taxation as one of the most significant provisions of the 1991 LGC. Specifically, we stressed that Section 193 of the LGC, an express and general repeal of all statutes granting exemptions from local taxes, withdrew the sweeping tax privileges previously enjoyed by the NPC under its Charter. The power to tax is no longer vested exclusively on Congress; local legislative bodies are now given direct authority to levy taxes, fees and other charges pursuant to Article X, section 5 of the 1987 Constitution. The LGC is considered as the most revolutionary piece of legislation on local autonomy, the LGC effectively deals with the fiscal constraints faced by LGUs. It widens the tax base of LGUs to include taxes which were prohibited by previous laws.

Neither can the NPC successfully rely on the Basco case as this was decided prior to the effectivity of the LGC, when there was still no law empowering local government units to tax instrumentalities of the national government. Thus, while BPC remains to be the entity doing business in said city, it is the NPC that is ultimately liable to pay said taxes under the provisions of both the 1992 BOT Agreement and the 1991 Local Government Code. Other Issue: Whether BPCs 6-year tax holiday commenced on the date of its BOI registration as a pioneer enterprise or on the date of its actual commercial operation as certified by the BOI. Sec. 133 (g) of the LGC, which proscribes local government units (LGUs) from levying taxes on BOI-certified pioneer enterprises for a period of six years from the date of registration, applies specifically to taxes imposed by the local government, like the business tax imposed by Batangas City on BPC in the case at bar. The 6-year tax exemption of BPC should thus commence from the date of BPCs registration with the BOI.