#1 Bantangas CATV vs. C.A. G.R. No.

138810 September 29, 2004

Facts: On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 210 granting petitioner a permit to construct, install, and operate a CATV system in Batangas City. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein, provided, however, that any increase of rates shall be subject to the approval of the Sangguniang Panlungsod. In November 1993, petitioner increased its subscriber rates from P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner a letter threatening to cancel its permit unless it secures the approval of respondent Sangguniang Panlungsod, pursuant to Resolution No. 210. Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction alleging that respondent Sangguniang Panlungsod has no authority to regulate the subscriber rates charged by CATV operators because under Executive Order No. 205, the National Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation in the Philippines. Issue : Whether or not the local government unit (LGU) may regulate the subscriber rates charged by CATV operators within its territorial jurisdiction. Ruling: No, like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order to reach subscribers.) The physical realities of constructing CATV system the use of public streets, rights of ways, the founding of structures, and the parceling of large regions allow an LGU a certain degree of regulation over CATV operators. But, while we recognize the LGUs power under the general welfare clause, we cannot sustain Resolution No. 210. We are convinced that respondents strayed from the well recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the States deregulation policy over the CATV industry. LGUs must recognize that technical matters concerning CATV operation are within the exclusive regulatory power of the NTC. #2Sanchez vs COMELEC
G.R. Nos. 94459-60 January 24, 1991 Facts:

Balanon, a defeated candidate for City Mayor and Manuel D. Caete filed separate notices of recall against petitioners, Guillermo R. Sanchez and Carlito T. Tan, incumbent city mayor and vice-mayor, respectively, of Butuan City, before the City Election Registrar. On February 9, 1990, respondent City Election Registrar Pizarro approved the schedule of signing to be conducted from Mondays to Fridays beginning February 14, 1990 to March 15, 1990, as well as the designated five (5) signing centers for the purpose. In approving the schedule of signing, respondent City Election Registrar acted "in line with the guidelines provided in Sec. 6 and other provisions of Comelec Resolution No. 1612. On February 19, 1990, private respondents filed a proposal to amend the recall proceedings with the Election Registrar seeking to increase the number of signing centers from the original five (5) to sixteen (16) and the signing days to include Saturdays and Sundays. Petitioners filed their opposition thereto, contending among others, that there is no valid ground to justify the amendment of the recall proceedings already underway. On March 2, 1990, petitioners filed their "petition to deny the proposed amendments of schedule of signing" of the recall proceedings with the COMELEC upon learning that the proposed amendments have been indorsed to the latter. On the same date, respondent COMELEC issued Minute Resolution No. 90-0254 suspending the recall proceedings against petitioners until the funding requirements therefor shall have been adequately clarified. On May 23, 1990, respondent COMELEC promulgated Resolution No. 2272, providing for the rules and regulations on the recall of elective provincial, city and municipal officials. On June 27, 1990, respondent COMELEC issued Minute Resolution No. 90-0590 declaring as null and void the signing process conducted under Resolution

No. 1612, said resolution having been superseded by Resolution No. 2272 and setting the date for the signing process on August 11, 18 and 25 1990.Alleging lack or excess of jurisdiction or with grave abuse of discretion on the part of respondent COMELEC in issuing Resolution No. 2272 and Minute Resolution No. 90-0590, petitioners filed this instant petition for prohibition and injunction with prayer for the issuance of a temporary restraining order. Issue: Whether or not COMELEC acted in excess of jurisdiction or with grave abuse of discretion when it adopted Minute Resolution No. 90-0590 declaring as null and void the signing process conducted under Resolution No. 1612. Ruling: Yes, the court ruled that Public respondents are hereby enjoined from implementing Resolution No. 2272 and Minute Resolution No. 90-0590 is hereby declared null and void for having been issued with grave abuse of discretion. Respondent COMELEC issued said minute resolution using as basis Resolution No. 2272. The Court notes, however, that Resolution No. 2272 was promulgated on May 23, 1990 and took effect on June 2, 1990, seven (7) days after its publication (Sec. 16, Res. No. 2272) on May 26, 1990. By the time it took effect, three (3) months have already elapsed after the first notice of recall of petitioners was filed on February 5, 1990. In giving Min. Res. No. 90-0590 retroactive effect based on Res. No. 2272, respondent COMELEC violated the fundamental rule on applicability of laws. Art. 4 of the Civil Code provides that "(l)aws shall have no retroactive effect unless the contrary is provided." No retroactive effect had been provided in Resolution No. 2272. As aforesaid, Resolution No. 2272 took effect seven (7) days after its publication or on June 2, 1990. The Court holds, therefore, that the recall proceedings conducted as a result of the notice of recall filed pursuant to the provisions of Resolution No. 1612 must be continued under the schedule originally approved by the city election registrar counted from the time the same was suspended by respondent COMELEC (Minute Resolution No. 90-0254), considering that Resolution No. 2272 has no retroactive effect. # 3 GARCIA ET. AL. vs. COMELEC and PAYUMO et. al. GR 111511 5 October 1993 Facts: Petitioners brought suit for certiorari and prohibition with writ of preliminary injunction to annul the resolution of the Preparatory Recall Assembly of Bataan initiating recall proceedings against their governor, Enrique T. Garcia. The first time the local government officials constituted themselves into a PRA, they issued Resolution No. 1 as formal initiation of the recall proceedings. This was opposed by Garcia before the Commission on Elections, which was denied, at which point he filed the petition for certiorari. That first petition was granted by the Supreme Court, holding that the failure of the members of the PRA to notify all the members of the Assembly was fatal to the validity of the resolution. In view of the decision, the officials of Bataan again convened into a PRA, duly sent its notices, and once again issued a resolution initiating recall proceedings. That became the subject of the instant supplemental petition, assailing the constitutionality of Section 70 of RA 7160 for being inviolation of the exclusive right of the people to initiate recall proceedings, and further for contravention of the equal protection clause.

Issues: 1. Whether or not the people have the sole and exclusive right to initiate recall proceedings. 2. Whether or not the procedure for recall in RA 7160 violates the equal protection clause for being prejudiced against officials belonging to the minority. Ruling:

1. No, the lawmakers had observed that the mode was almost impossible to implement and had been poorly used, thus precipitating the enactment of Section 3 Article X, whic h sought to provide for a more responsible and accountable system of decentralization with effective means of recall. There is nothing in the Constitution that suggests that the power to initiate recall proceedings is the sole and exclusive prerogative of the people. Congress was given the power to choose the mechanism of recall without limit as to the number of modes and with the requisite only that the same be effectiveand it has in its wisdom provided for one that can be initiated by either a preparatory recall assembly or the people themselves. Indeed, there is no great difference between the two, as recall proceedings initiated by the recall assembly is also initiation by the people, albeit done indirectly through their representatives. 2. No, Petitioners contend that Section 70 violates the equal protection clause for being prejudicial to the minority, since the majority can always constitute itself into a PRA and render ineffectual the popular mandate of an elective official by initiating recall proceedings. These are fears that do not provide sufficient ground to declare a law unconstitutional. It is plain that the fear of petitioners is premised on the erroneous assumption that the initiation of recall proceedings is equivalent to the recall itself. This is not so. The resolution of recall is a mere proposal to subject the official to a new test of his mandate from the electorate, which can always choose to either affirm or withdraw it. #4 Drilon v. Lim G.R. No. 112497 August 4, 1994 Facts: Pursuant to Section 187 of the Local Government Code, the Secretary of Justice had, on appeal to him of four oil companies and a taxpayer, declared Ordinance No. 7794, otherwise known as the Manila Revenue Code, null and void for non-compliance with the prescribed procedure in the enactment of tax ordinances and for containing certain provisions contrary to law and public policy. In a petition for certiorari filed by the City of Manila, the Regional Trial Court of Manila revoked the Secretarys resolution and sustained the ordinance, holding inter alia that the procedural requirements had been observed. More importantly, it declared Section 187 of the Local Government Code as unconstitutional because of its vesture in the Secretary of Justice of the power of control over local governments in violation of the policy of local autonomy mandated in the Constitution and of the specific provision therein conferring on the President of the Philippines only the power of supervision over local governments. The court cited the familiar distinction between control and supervision, the first being the power of an officer to alter or modify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for the latter, while the second is the power of a superior officer to see to it that lower officers perform their functions is accordance with law. Issues: 1. Whether or not Section 187 of the Local Government Code is unconstitutional; and 2. Whether or not the Secretary of Justice can exercise control, rather than supervision, over the local government Ruling: 1. Yes, BP 129 vests in the regional trial courts jurisdiction over all civil cases in which the subject of the litigation are incapable of pecuniary estimation. Moreover, Article X, Section 5 ( 2 ) , o f t h e C o n s t i t u t i o n v e s t s i n t h e S u p r e m e C o u r t a p p e l l a t e j u r i s d i c t i o n o v e r f i n a l judgments and orders of lower courts in all cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance or regulation is in question. In the exercise of this jurisdiction, lower courts are advised to act with the utmost circumspection, bearing in mind the consequences of a declaration of unconstitutionality upon the stability of laws, no less than on the doctrine of separation of powers.

2. Yes, Section 187 authorizes the Secretary of Justice to review only the constitutionality or legality of the tax ordinance and, if warranted, to revoke it on either or both of these grounds. When he alters or modifies or sets aside a tax ordinance, he is not also permitted to substitute his own judgment for the judgment of the local government that enacted the measure. Secretary Drilon did set aside the Manila Revenue Code, but he did not replace it with his own version of what the Code should be. An officer in control lays down the rules in the doing of an act. It they are not followed, he may, in his discretion, order the act undone or re-done by his subordinate or he may even decide to do it himself. Two grounds of declaring Manila Revenue Code null and void (1) inclusion of certain ultra vires provisions (2) non-compliance with prescribed procedure in its enactment but were followed. The requirements are upon approval of local development plans and public investment programs of LGU not to tax ordinances. #5. Manila Electric Co, Inc. vs Province of Laguna G.R. No. 131359 Facts: MERALCO was likewise granted a franchise by the National Electrification Administration to operate an electric light and power service in the Municipality of Calamba, Laguna. On 12 September 1991, Republic Act No. 7160, otherwise known as the Local Government Code of 1991, was enacted to take effect on 01 January 1992 enjoining local government units to create their own sources of revenue and to levy taxes, fees and charges, subject to the limitations expressed therein, consistent with the basic policy of local autonomy. Pursuant to the provisions of the Code, respondent province enacted Laguna Provincial Ordinance providing for franchise tax at a rate of 50% of 1% of the gross annual receipts. Provincial Treasurer, then sent a demand letter to MERALCO for the corresponding tax payment. Petitioner MERALCO paid the tax, which then amounted to P19,520,628.42, under protest. A formal claim for refund was thereafter sent by MERALCO to the Provincial Treasurer of Laguna claiming that the franchise tax it had paid and continued to pay to the National Government pursuant to P.D. 551 already included the franchise tax imposed by the Provincial Tax Ordinance. MERALCO contended that the imposition of a franchise tax under Section 2.09 of Laguna Provincial Ordinance No. 01-92, insofar as it concerned MERALCO, contravened the provisions of Section 1 of P.D. 551 which provides Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all grantees of franchises to generate, distribute and sell electric current for light, heat and power shall be two per cent (2%) of their gross receipts received from the sale of electric current and from transactions incident to the generation, distribution and sale of electric current. Issue: Whether or not the power to tax was validly exercised . Ruling: Yes, under Article X of the 1987 Constitution, a general delegation of that power has been given in favor of local government units. Under the now prevailing Constitution, where there is neither a grant nor a prohibition by statute, the tax power must be deemed to exist although Congress may provide statutory limitations and guidelines. The basic rationale for the current rule is to safeguard the viability and self-sufficiency of local government units by directly granting them general and broad tax powers. The 1991 Code explicitly authorizes provincial governments, notwithstanding any exemption granted by any law or other special law, x x x (to) impose a tax on businesses enjoying a franchise. Indicative of the legislative intent to carry out the Constitutional

mandate of vesting broad tax powers to local government units, the Local Government Code has effectively withdrawn under Section 193 thereof, tax exemptions or incentives theretofore enjoyed by certain entities.

# 6 Batangas Power Corporation vs. Batangas City GR 152675 April 28, 2004 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. 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. 2. Whether NPCs tax exemption privileges under its Charter were withdrawn by Sec.193 of the LGC. Ruling: 1. Yes, 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. Yes, 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. # 7 NPC vs. City of Cabanatuan Facts:

City of Cabanatuan filed a collection suit against NPC, a government-owned and controlled corporation demanding that the latter pay the assessed franchise tax due, plus surcharge and interest. It alleged that NPCs exemption from local taxes has already been withdrawn by the Local Government Code. NPC submitted that it is not liable to pay an annual franchise because the citys taxing power is limited to private entities that are engaged in trade or occupation for profit, and that the NAPOCOR Charter, being a valid exercise of police power, should prevail over the LGC. Issue: Whether NPC is liable to pay annual franchise tax to the City of Cabanatuan Ruling: Yes, 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. Although as a general rule, LGUs cannot impose taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, this rule now admits of an exception, i.e., when specific provisions of the LGC authorize the LGUs to impose taxes, fees or charges on the aforementioned entities. Nothing prevents Congress from decreeing that even instrumentalities or agencies of the government performing governmental functions may be subject to tax. A franchise is a privilege conferred by government authority, which does not belong to citizens of the country generally as a matter of common right. A franchise tax is understood in the second sense; it is not levied on the corporation simply for existing as a corporation but on its exercise of the rights or privileges granted to it by the government. NPC is covered by the franchise tax because it exercises a franchise in the second sense and it is exercising its rights or privileges under this franchise within the territory of the City.