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G.R. No. 135962

March 27, 2000

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs. BEL-AIR

VILLAGE ASSOCIATION, INC., respondent.
PUNO, J.:
Not infrequently, the government is tempted to take legal shortcuts solve urgent
problems of the people. But even when government is armed with the best of
intention, we cannot allow it to run roughshod over the rule of law. Again, we let
the hammer fall and fall hard on the illegal attempt of the MMDA to open for public
use a private road in a private subdivision. While we hold that the general welfare
should be promoted, we stress that it should not be achieved at the expense of the
rule of law.
Petitioner MMDA is a government agency tasked with the delivery of basic services
in Metro Manila. Respondent Bel-Air Village Association, Inc. (BAVA) is a non-stock,
non-profit corporation whose members are homeowners in Bel-Air Village, a
private subdivision in Makati City. Respondent BAVA is the registered owner of
Neptune Street, a road inside Bel-Air Village.
On December 30, 1995, respondent received from petitioner, through its
Chairman, a notice dated December 22, 1995 requesting respondent to open
Neptune Street to public vehicular traffic starting January 2, 1996. The notice
reads:
SUBJECT: NOTICE of the Opening of Neptune Street to Traffic.
Dear President Lindo,
Please be informed that pursuant to the mandate of the MMDA law or
Republic Act No. 7924 which requires the Authority to rationalize the use
of roads and/or thoroughfares for the safe and convenient movement of
persons, Neptune Street shall be opened to vehicular traffic effective
January 2, 1996.
In view whereof, the undersigned requests you to voluntarily open the
points of entry and exit on said street.
Thank you for your cooperation and whatever assistance that may be
extended by your association to the MMDA personnel who will be
directing traffic in the area.
Finally, we are furnishing you with a copy of the handwritten instruction of
the President on the matter.
Very truly yours,

PROSPERO I. ORETA (Chairman 1)

On the same day, respondent was apprised that the perimeter wall
separating the subdivision from the adjacent Kalayaan Avenue would be
demolished.
On January 2, 1996, respondent instituted against petitioner before the Regional
Trial Court, Branch 136, Makati City, Civil Case No. 96-001 for injunction.
Respondent prayed for the issuance of a temporary restraining order and
preliminary injunction enjoining the opening of Neptune Street and prohibiting the
demolition of the perimeter wall. The trial court issued a temporary restraining
order the following day.
On January 23, 1996, after due hearing, the trial court denied issuance of a
preliminary injunction. 2 Respondent questioned the denial before the Court of
Appeals in CA-G.R. SP No. 39549. The appellate court conducted an ocular
inspection of Neptune Street 3 and on February 13, 1996, it issued a writ of
preliminary injunction enjoining the implementation of the MMDA's proposed
action. 4
On January 28, 1997, the appellate court rendered a Decision on the merits of the
case finding that the MMDA has no authority to order the opening of Neptune
Street, a private subdivision road and cause the demolition of its perimeter walls.
It held that the authority is lodged in the City Council of Makati by ordinance. The
decision disposed of as follows:
WHEREFORE, the Petition is GRANTED; the challenged Order dated
January 23, 1995, in Civil Case No. 96-001, is SET ASIDE and the Writ of
Preliminary Injunction issued on February 13, 1996 is hereby made
permanent.
For want of sustainable substantiation, the Motion to Cite Roberto L. del
Rosario in contempt is denied. 5 No pronouncement as to costs. SO
ORDERED. 6
The Motion for Reconsideration of the decision was denied on September 28, 1998.
Hence, this recourse.
Petitioner MMDA raises the following questions:
I.

HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY

(MMDA) THE MANDATE TO OPEN NEPTUNE STREET TO
PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND
POLICE POWERS?

II.

IS THE PASSAGE OF AN ORDINANCE A CONDITION

PRECEDENT BEFORE THE MMDA MAY ORDER THE OPENING
OF SUBDIVISION ROADS TO PUBLIC TRAFFIC?
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III.

IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC.

ESTOPPED FROM DENYING OR ASSAILING THE AUTHORITY
OF THE MMDA TO OPEN THE SUBJECT STREET?

IV.

WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE

THE SEVERAL MEETINGS HELD BETWEEN MMDA AND THE
AFFECTED EEL-AIR RESIDENTS AND BAVA OFFICERS?

V.

HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?

7

Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air

Village, a private residential subdivision in the heart of the financial and
commercial district of Makati City. It runs parallel to Kalayaan Avenue, a national
road open to the general public. Dividing the two (2) streets is a concrete
perimeter wall approximately fifteen (15) feet high. The western end of Neptune
Street intersects Nicanor Garcia, formerly Reposo Street, a subdivision road open
to public vehicular traffic, while its eastern end intersects Makati Avenue, a
national road. Both ends of Neptune Street are guarded by iron gates.
Petitioner MMDA claims that it has the authority to open Neptune Street to public
traffic because it is an agent of the state endowed with police power in the
delivery of basic services in Metro Manila. One of these basic services is traffic
management which involves the regulation of the use of thoroughfares to insure
the safety, convenience and welfare of the general public. It is alleged that the
police power of MMDA was affirmed by this Court in the consolidated cases
of Sangalang v. Intermediate Appellate Court. 8 From the premise that it has police
power, it is now urged that there is no need for the City of Makati to enact an
ordinance opening Neptune street to the public. 9
Police power is an inherent attribute of sovereignty. It has been defined as the
power vested by the Constitution in the legislature to make, ordain, and establish
all manner of wholesome and reasonable laws, statutes and ordinances, either
with penalties or without, not repugnant to the Constitution, as they shall judge to
be for the good and welfare of the commonwealth, and for the subjects of the
same. 10 The power is plenary and its scope is vast and pervasive, reaching and
justifying measures for public health, public safety, public morals, and the general
welfare. 11
It bears stressing that police power is lodged primarily in the National
Legislature. 12 It cannot be exercised by any group or body of individuals not
possessing legislative power. 13 The National Legislature, however, may
delegatethis power to the President and administrative boards as well as the
lawmaking bodies of municipal corporations or local government units. 14 Once
delegated, the agents can exercise only such legislative powers as are conferred
on them by the national lawmaking body. 15
A local government is a "political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs." 16The Local
Government Code of 1991 defines a local government unit as a "body politic and

corporate." 17 one endowed with powers as a political subdivision of the National

Government and as a corporate entity representing the inhabitants of its
territory. 18 Local government units are the provinces, cities, municipalities and
barangays. 19 They are also the territorial and political subdivisions of the state. 20
Our Congress delegated police power to the local government units in the Local
Government Code of 1991. This delegation is found in Section 16 of the same
Code, known as the general welfare clause, viz:
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. 21
Local government units exercise police power through their respective legislative
bodies. The legislative body of the provincial government is the sangguniang
panlalawigan, that of the city government is the sangguniang panlungsod, that of
the municipal government is the sangguniang bayan, and that of the barangay is
the sangguniang barangay. The Local Government Code of 1991 empowers
the sangguniang panlalawigan, sangguniang panlungsod and sangguniang
bayan to "enact ordinances, approve resolutions and appropriate funds for the
general welfare of the [province, city or municipality, as the case may be], and its
inhabitants pursuant to Section 16 of the Code and in the proper exercise of the
corporate powers of the [province, city municipality] provided under the Code . . .
" 22 The same Code gives the sangguniang barangay the power to "enact
ordinances as may be necessary to discharge the responsibilities conferred upon it
by law or ordinance and to promote the general welfare of the inhabitants
thereon."23
Metropolitan or Metro Manila is a body composed of several local government
units i.e., twelve (12) cities and five (5) municipalities, namely, the cities of
Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las
Pinas, Marikina, Paranaque and Valenzuela, and the municipalities of Malabon,
Navotas, Pateros, San Juan and Taguig. With the passage of Republic Act (R. A.)
No. 7924 24 in 1995, Metropolitan Manila was declared as a "special development
and administrative region" and the Administration of "metro-wide" basic services
affecting the region placed under "a development authority" referred to as the
MMDA. 25
"Metro-wide services" are those "services which have metro-wide impact and
transcend local political boundaries or entail huge expenditures such that it would
not be viable for said services to be provided by the individual local government
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units comprising Metro Manila." 26 There are seven (7) basic metro-wide services
and the scope of these services cover the following: (1) development planning; (2)
transport and traffic management; (3) solid waste disposal and management; (4)
flood control and sewerage management; (5) urban renewal, zoning and land use
planning, and shelter services; (6) health and sanitation, urban protection and
pollution control; and (7) public safety. The basic service of transport and traffic
management includes the following:
(b)
Transport
and
traffic
management
which
include
the
formulation, coordination, and monitoring of policies,standards, programs
and
projects
to
rationalize
the
existing
transport
operations, infrastructure requirements,the use of thoroughfares, and
promotion of safe and convenient movement of persons and
goods; provision for the mass transport system and the institution of a
system to regulate road users; administration and implementation of all
traffic enforcement operations, traffic engineering services and traffic
education programs, including the institution of a single ticketing system
in Metropolitan Manila;" 27
In the delivery of the seven (7) basic services, the MMDA has the following powers
and functions:
Sec. 5. Functions and powers of the Metro Manila Development Authority.
The MMDA shall:
(a) Formulate, coordinate and regulate the implementation of medium
and long-term plans and programs for the delivery of metro-wide
services, land use and physical development within Metropolitan
Manila, consistent with national development objectives and
priorities;
(b) Prepare, coordinate and regulate the implementation of mediumterm investment programs for metro-wide services which shall
indicate sources and uses of funds for priority programs and projects,
and which shall include the packaging of projects and presentation to
funding institutions;
(c) Undertake and manage on its own metro-wide programs and projects
for the delivery of specific services under its jurisdiction, subject to
the approval of the Council. For this purpose, MMDA can create
appropriate project management offices;
(d) Coordinate and monitor the implementation of such plans, programs
and projects in Metro Manila; identify bottlenecks and adopt solutions
to problems of implementation;
(e) The MMDA shall set the policies concerning traffic in Metro
Manila, and shall coordinate and regulate the implementation of all
programs and projects concerning traffic management, specifically

pertaining to enforcement, engineering and education. Upon request,

it shall be extended assistance and cooperation,including but not
limited to, assignment of personnel, by all other government
agencies and offices concerned;
(f)

Install and administer a single ticketing system, fix, impose and

collect fines and penalties for all kinds of violations of traffic rules
and regulations, whether moving or non-moving in nature, and
confiscate and suspend or revoke drivers' licenses in the
enforcement of such traffic laws and regulations, the provisions of RA
4136 and PD 1605 to the contrary notwithstanding. For this
purpose, the Authority shall impose all traffic laws and regulations in
Metro Manila, through its traffic operation center, and may deputize
members of the PNP, traffic enforcers of local government units, duly
licensed security guards, or members of non-governmental
organizations to whom may be delegated certain authority, subject
to such conditions and requirements as the Authority may
impose; and

(g) Perform other related functions required to achieve the objectives of

the MMDA, including the undertaking of delivery of basic services to
the local government units, when deemed necessary subject to prior
coordination with and consent of the local government unit
concerned.
The implementation of the MMDA's plans, programs and projects is undertaken by
the local government units, national government agencies, accredited people's
organizations, non-governmental organizations, and the private sector as well as
by the MMDA itself. For this purpose, the MMDA has the power to enter into
contracts, memoranda of agreement and other arrangements with these bodies
for the delivery of the required services Metro Manila. 28
The governing board of the MMDA is the Metro Manila Council. The Council is
composed of the mayors of the component 12 cities and 5 municipalities, the
president of the Metro Manila Vice-Mayors' League and the president of the Metro
Manila Councilors' League. 29 The Council is headed by Chairman who is appointed
by the President and vested with the rank of cabinet member. As the policymaking body of the MMDA, the Metro Manila Council approves metro-wide plans,
programs and projects, and issues the necessary rules and regulations for the
implementation of said plans; it approves the annual budget of the MMDA and
promulgate the rules and regulations for the delivery of basic services, collection
of service and regulatory fees, fines and penalties. These functions are particularly
enumerated as follows:
Sec. 6. Functions of the Metro Manila Council.
(a) The Council shall be the policy-making body of the MMDA;

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(b) It shall approve metro-wide plans, programs and projects and issue
rules and regulations deemed necessary by the MMDA to carry out
the purposes of this Act;

delivery of metro-wide services within Metro Manila, without diminution of

the autonomy of the local government units concerning purely local
matters. 31

(c) It may increase the rate of allowances and per diems of the members
of the Council to be effective during the term of the succeeding
Council. It shall fix the compensation of the officers and personnel of
the MMDA, and approve the annual budget thereof for submission to
the Department of Budget and Management (DBM);

Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate

Court 32 where we upheld a zoning ordinance issued by the Metro Manila
Commission (MMC), the predecessor of the MMDA, as an exercise of police power.
The first Sangalang decision was on the merits of the petition, 33 while the second
decision denied reconsideration of the first case and in addition discussed the case
of Yabut v. Court of Appeals. 34

(d) It shall promulgate rules and regulations and set policies and
standards for metro-wide application governing the delivery of basic
services, prescribe and collect service and regulatory fees, and
impose and collect fines and penalties.
Clearly, the scope of the MMDA's function is limited to the delivery of the seven (7)
basic services. One of these is transport and traffic management which includes
the formulation and monitoring of policies, standards and projects to rationalize
the existing transport operations, infrastructure requirements, the use of
thoroughfares and promotion of the safe movement of persons and goods. It also
covers the mass transport system and the institution of a system of road
regulation, the administration of all traffic enforcement operations, traffic
engineering services and traffic education programs, including the institution of a
single ticketing system in Metro Manila for traffic violations. Under the service, the
MMDA is expressly authorized "to set the policies concerning traffic" and
"coordinate and regulate the implementation of all traffic management programs."
In addition, the MMDA may "install and administer a single ticketing system," fix,
impose and collect fines and penalties for all traffic violations.
It will be noted that the powers of the MMDA are limited to the following acts:
formulation, coordination, regulation, implementation, preparation, management,
monitoring, setting of policies, installation of a system and administration. There is
no syllable in R.A. No. 7924 that grants the MMDA police power, let alone
legislative power.Even the Metro Manila Council has not been delegated any
legislative power. Unlike the legislative bodies of the local government units, there
is no provision in R.A. No. 7924 that empowers the MMDA or its Council to "enact
ordinances, approve resolutions appropriate funds for the general welfare" of the
inhabitants of Metro Manila. The MMDA is, as termed in the charter itself,
"development authority." 30 It is an agency created for the purpose of laying down
policies and coordinating with the various national government agencies, people's
organizations, non-governmental organizations and the private sector for the
efficient and expeditious delivery of basic services in the vast metropolitan
area. All its functions are administrative in nature and these are actually summed
up in the charter itself, viz:
Sec. 2. Creation of the Metropolitan Manila Development Authority.
....
The MMDA shall perform planning, monitoring and coordinative functions,
and in the process exerciseregulatory and supervisory authority over the

Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA
and three residents of Bel-Air Village against other residents of the Village and the
Ayala Corporation, formerly the Makati Development Corporation, as the developer
of the subdivision. The petitioners sought to enforce certain restrictive easements
in the deeds of sale over their respective lots in the subdivision. These were the
prohibition on the setting up of commercial and advertising signs on the lots, and
the condition that the lots be used only for residential purposes. Petitioners alleged
that respondents, who were residents along Jupiter Street of the subdivision,
converted their residences into commercial establishments in violation of the
"deed restrictions," and that respondent Ayala Corporation ushered in the full
commercialization" of Jupiter Street by tearing down the perimeter wall that
separated the commercial from the residential section of the village. 35
The petitions were dismissed based on Ordinance No. 81 of the Municipal Council
of Makati and Ordinance No. 81-01 of the Metro Manila Commission (MMC).
Municipal Ordinance No. 81 classified Bel-Air Village as a Class A Residential Zone,
with its boundary in the south extending to the center line of Jupiter Street. The
Municipal Ordinance was adopted by the MMC under the Comprehensive Zoning
Ordinance for the National Capital Region and promulgated as MMC Ordinance No.
81-01. Bel-Air Village was indicated therein as bounded by Jupiter Street and the
block adjacent thereto was classified as a High Intensity Commercial Zone. 36
We ruled that since both Ordinances recognized Jupiter Street as the boundary
between Bel-Air Village and the commercial district, Jupiter Street was not for the
exclusive benefit of Bel-Air residents. We also held that the perimeter wall on said
street was constructed not to separate the residential from the commercial blocks
but simply for security reasons, hence, in tearing down said wall, Ayala
Corporation did not violate the "deed restrictions" in the deeds of sale.
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate
exercise of police power. 37 The power of the MMC and the Makati Municipal Council
to enact zoning ordinances for the general welfare prevailed over the "deed
restrictions".
In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street
was warranted by the demands of the common good in terms of "traffic
decongestion and public convenience." Jupiter was opened by the Municipal Mayor
to alleviate traffic congestion along the public streets adjacent to the
Village. 38 The same reason was given for the opening to public vehicular traffic of
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Orbit Street, a road inside the same village. The destruction of the gate in Orbit
Street was also made under the police power of the municipal government. The
gate, like the perimeter wall along Jupiter, was a public nuisance because it
hindered and impaired the use of property, hence, its summary abatement by the
mayor was proper and legal. 39
Contrary to petitioner's claim, the two Sangalang cases do not apply to the case at
bar. Firstly, both involved zoning ordinances passed by the municipal council of
Makati and the MMC. In the instant case, the basis for the proposed opening of
Neptune Street is contained in the notice of December 22, 1995 sent by petitioner
to respondent BAVA, through its president. The notice does not cite any ordinance
or law, either by the Sangguniang Panlungsod of Makati City or by the MMDA, as
the legal basis for the proposed opening of Neptune Street. Petitioner MMDA
simply relied on its authority under its charter "to rationalize the use of roads
and/or thoroughfares for the safe and convenient movement of persons."
Rationalizing the use of roads and thoroughfares is one of the acts that fall within
the scope of transport and traffic management. By no stretch of the imagination,
however, can this be interpreted as an express or implied grant of ordinancemaking power, much less police power.

The administration of Metropolitan Manila was placed under the Metro Manila
Commission (MMC) vested with the following powers:
Sec. 4. Powers and Functions of the Commission. The Commission shall have the
following powers and functions:
1.

To act as a central government to establish and administer programs

and provide services common to the area;

2.

To levy and collect taxes and special assessments, borrow and

expend money and issue bonds, revenue certificates, and other
obligations of indebtedness. Existing tax measures should, however,
continue to be operative until otherwise modified or repealed by the
Commission;

3.

To charge and collect fees for the use of public service facilities;

4.

To appropriate money for the operation of the metropolitan

government and review appropriations for the city and municipal
units within its jurisdiction with authority to disapprove the same if
found to be not in accordance with the established policies of the
Commission, without prejudice to any contractual obligation of the
local government units involved existing at the time of approval of
this Decree;

5.

To review, amend, revise or repeal all ordinances, resolutions and

acts of cities and municipalities within Metropolitan Manila;

6.

To enact or approve ordinances, resolutions and to fix penalties for

any violation thereof which shall not exceed a fine of P10,000.00 or
imprisonment of six years or both such fine and imprisonment for a
single offense;

7.

To perform general administrative, executive and policy-making

functions;

8.

To establish a fire control operation center, which shall direct the fire
services of the city and municipal governments in the metropolitan
area;

9.

To establish a garbage disposal operation center, which shall direct

garbage collection and disposal in the metropolitan area;

Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the
MMC is the forerunner of the present MMDA, an examination of Presidential Decree
(P. D.) No. 824, the charter of the MMC, shows that the latter possessed greater
powers which were not bestowed on the present MMDA.
Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824.
It comprised the Greater Manila Area composed of the contiguous four (4) cities of
Manila, Quezon, Pasay and Caloocan, and the thirteen (13) municipalities of
Makati, Mandaluyong, San Juan, Las Pinas, Malabon, Navotas, Pasig, Pateros,
Paranaque, Marikina, Muntinlupa and Taguig in the province of Rizal, and
Valenzuela in the province of Bulacan. 40 Metropolitan Manila was created as a
response to the finding that the rapid growth of population and the increase of
social and economic requirements in these areas demand a call for simultaneous
and unified development; that the public services rendered by the respective local
governments could be administered more efficiently and economically if integrated
under a system of central planning; and this coordination, "especially in the
maintenance of peace and order and the eradication of social and economic ills
that fanned the flames of rebellion and discontent [were] part of reform measures
under Martial Law essential to the safety and security of the State." 41
Metropolitan Manila was established as a "public corporation" with the following
powers:
Sec. 1. Creation of the Metropolitan Manila. There is hereby created
a public corporation, to be known as the Metropolitan Manila, vested with
powers and attributes of a corporation including the power to make
contracts, sue and be sued, acquire, purchase, expropriate, hold, transfer
and dispose of property and such other powers as are necessary to carry
out its purposes. The Corporation shall be administered by a Commission
created under this Decree. 42

10. To establish and operate a transport and traffic center, which shall
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11. To coordinate and monitor governmental and private activities
pertaining to essential services such as transportation, flood control
and drainage, water supply and sewerage, social, health and
environmental services, housing, park development, and others;
12. To insure and monitor the undertaking of a comprehensive social,
economic and physical planning and development of the area;
13. To study the feasibility of increasing barangay participation in the
affairs of their respective local governments and to propose to the
President of the Philippines definite programs and policies for
implementation;
14. To submit within thirty (30) days after the close of each fiscal year an
annual report to the President of the Philippines and to submit a
periodic report whenever deemed necessary; and
15. To perform such other tasks as may be assigned or directed by the
President of the Philippines.
The MMC was the "central government" of Metro Manila for the purpose of
establishing and administering programs providing services common to the area.
As a "central government" it had the power to levy and collect taxes and special
assessments, the power to charge and collect fees; the power to appropriate
money for its operation, and at the same time, review appropriations for the city
and municipal units within its jurisdiction. It was bestowed the power to enact or
approve ordinances, resolutions and fix penalties for violation of such ordinances
and resolutions. It also had the power to review, amend, revise or repeal all
ordinances, resolutions and acts of any of the four (4) cities and thirteen (13)
municipalities comprising Metro Manila.
P.D. No. 824 further provided:

In addition, the Sangguniang Bayan shall be composed of as many

barangay captains as may be determined and chosen by the Commission,
and such number of representatives from other sectors of the society as
may be appointed by the President upon recommendation of the
Commission.
xxx

The creation of the MMC also carried with it the creation of the Sangguniang
Bayan. This was composed of the members of the component city and municipal
councils, barangay captains chosen by the MMC and sectoral representatives
appointed by the President. The Sangguniang Bayan had the power to recommend
to the MMC the adoption of ordinances, resolutions or measures. It was the MMC
itself, however, that possessed legislative powers. All ordinances, resolutions and
measures recommended by the Sangguniang Bayan were subject to the MMC's
approval. Moreover, the power to impose taxes and other levies, the power to
appropriate money, and the power to pass ordinances or resolutions with penal
sanctions were vested exclusively in the MMC.
Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully
possessed legislative police powers. Whatever legislative powers the component
cities and municipalities had were all subject to review and approval by the MMC.
After President Corazon Aquino assumed power, there was a clamor to restore the
autonomy of the local government units in Metro Manila. Hence, Sections 1 and 2
of Article X of the 1987 Constitution provided:
Sec. 1. The territorial and political subdivisions of the Republic of the
Philippines are the provinces, cities, municipalities and barangays. There
shall be autonomous regions in Muslim Mindanao and the Cordilleras as
herein provided.
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.

Sec. 9. Until otherwise provided, the governments of the four cities and
thirteen municipalities in the Metropolitan Manila shall continue to exist in
their present form except as may be inconsistent with this Decree. The
members of the existing city and municipal councils in Metropolitan
Manila shall, upon promulgation of this Decree, and until December 31,
1975, become members of the Sangguniang Bayan which is hereby
created for every city and municipality of Metropolitan Manila.

xxx

The Sangguniang Bayan may recommend to the Commission ordinances,

resolutions or such measures as it may adopt; Provided, that no such
ordinance, resolution or measure shall become effective, until after its
approval by the Commission; and Provided further, that the power to
impose taxes and other levies, the power to appropriate money and the
power to pass ordinances or resolutions with penal sanctions shall be
vested exclusively in the Commission.

xxx

The Constitution, however, recognized the necessity of creating metropolitan

regions not only in the existing National Capital Region but also in potential
equivalents in the Visayas and Mindanao. 43 Section 11 of the same Article X thus
provided:
Sec. 11. The Congress may, by law, create special metropolitan political
subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The
component cities and municipalities shall retain their basic autonomy and
shall be entitled to their own local executives and legislative assemblies.
The jurisdiction of the metropolitan authority that will thereby be created
shall be limited to basic services requiring coordination.
Constitution itself expressly provides that Congress may, by law, create "special
metropolitan political subdivisions" which shall be subject to approval by a
majority of the votes cast in a plebiscite in the political units directly affected; the
6

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jurisdiction of this subdivision shall be limited to basic services requiring
coordination; and the cities and municipalities comprising this subdivision shall
retain their basic services requiring coordination; and the cities and municipalities
comprising this subdivision shall retain their basic autonomy and their own local
executive and legislative assemblies. 44 Pending enactment of this law, the
Transitory Provisions of the Constitution gave the President of the Philippines the
power to constitute the Metropolitan Authority, viz:
Sec. 8. Until otherwise provided by Congress, the President may
constitute the Metropolitan Authority to be composed of the heads of all
local government units comprising the Metropolitan Manila area. 45
In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted
the Metropolitan Manila Authority (MMA). The powers and functions of the MMC
were devolved to the MMA. 46 It ought to be stressed, however, that not all powers
and functions of the MMC were passed to the MMA. The MMA's power was limited
to the "delivery of basic urban services requiring coordination in Metropolitan
Manila." 47 The MMA's governing body, the Metropolitan Manila Council, although
composed of the mayors of the component cities and municipalities, was merely
given power of: (1) formulation of policies on the delivery of basic services
requiring coordination and consolidation; and (2) promulgation resolutions and
other issuances, approval of a code of basic services and the exercise of its rulemaking power. 48
Under the 1987 Constitution, the local government units became primarily
responsible for the governance of their respective political subdivisions. The MMA's
jurisdiction was limited to addressing common problems involving basic services
that transcended local boundaries. It did not have legislative power. Its power was
merely to provide the local government units technical assistance in the
preparation of local development plans. Any semblance of legislative power it had
was confined to a "review [of] legislation proposed by the local legislative
assemblies to ensure consistency among local governments and with the
comprehensive development plan of Metro Manila," and to "advise the local
governments accordingly." 49
When R.A. No. 7924 took effect, Metropolitan Manila became a "special
development and administrative region" and the MMDA a "special development
authority" whose functions were "without prejudice to the autonomy of the
affected local government units." The character of the MMDA was clearly defined
in the legislative debates enacting its charter.
R.A. No. 7924 originated as House Bill No. 14170/11116 and was introduced by
several legislators led by Dante Tinga, Roilo Golez and Feliciano Belmonte. It was
presented to the House of Representatives by the Committee on Local
Governments chaired by Congressman Ciriaco R. Alfelor. The bill was a product of
Committee consultations with the local government units in the National Capital
Region (NCR), with former Chairmen of the MMC and MMA, 50 and career officials of
said agencies. When the bill was first taken up by the Committee on Local
Governments, the following debate took place:

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THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been
debated a long time ago, you know. It's a special . . . we can create a
special metropolitan political subdivision.
Actually, there are only six (6) political subdivisions provided for in the
Constitution: barangay, municipality, city, province, and we have the
Autonomous Region of Mindanao and we have the Cordillera. So we have
6. Now. . . . .
HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the
Autonomous Region, that is also specifically mandated by the
Constitution.
THE CHAIRMAN: That's correct. But it is considered to be a political
subdivision. What is the meaning of a political subdivision? Meaning to
say, that it has its own government, it has its own political personality, it
has the power to tax, and all governmental powers: police power and
everything. All right. Authority is different; because it does not have its
own government. It is only a council, it is an organization of political
subdivision, powers, "no, which is not imbued with any political power.
If you go over Section 6, where the powers and functions of the Metro
Manila Development Authority, it is purely coordinative. And it provides
here that the council is policy-making. All right.
Under the Constitution is a Metropolitan Authority with coordinative
power. Meaning to say, it coordinates all of the different basic services
which have to be delivered to the constituency. All right.
There is now a problem. Each local government unit is given its respective
. . . as a political subdivision. Kalookan has its powers, as provided for and
protected and guaranteed by the Constitution. All right, the exercise.
However, in the exercise of that power, it might be deleterious and
disadvantageous to other local government units. So, we are forming an
authority where all of these will be members and then set up a policy in
order that the basic services can be effectively coordinated. All right.
Of course, we cannot deny that the MMDA has to survive. We have to
provide some funds, resources. But it does not possess any political
power. We do not elect the Governor. We do not have the power to tax. As
a matter of fact, I was trying to intimate to the author that it must have
the power to sue and be sued because it coordinates. All right. It
coordinates practically all these basic services so that the flow and the
distribution of the basic services will be continuous. Like traffic, we cannot
deny that. It's before our eyes. Sewerage, flood control, water system,
peace and order, we cannot deny these. It's right on our face. We have to
look for a solution. What would be the right solution? All right, we envision
that there should be a coordinating agency and it is called an authority.
All right, if you do not want to call it an authority, it's alright. We may call
it a council or maybe a management agency.
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xxx

xxx

xxx

51

Clearly, the MMDA is not a political unit of government. The power delegated to
the MMDA is that given to the Metro Manila Council to promulgate administrative
rules and regulations in the implementation of the MMDA's functions. There is no
grant of authority to enact ordinances and regulations for the general welfare of
the inhabitants of the metropolis. This was explicitly stated in the last Committee
deliberations prior to the bill's presentation to Congress. Thus:
THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I
think this was already approved before, but it was reconsidered in view of
the proposals, set-up, to make the MMDA stronger. Okay, so if there is no
objection to paragraph "f". . . And then next is paragraph "b," under
Section 6. "It shall approve metro-wide plans, programs and projects and
issue ordinances or resolutions deemed necessary by the MMDA to carry
out the purposes of this Act." Do you have the powers? Does the
MMDA... because that takes the form of a local government unit, a
political subdivision.
HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we say
that it has the policies, it's very clear that those policies must be followed.
Otherwise, what's the use of empowering it to come out with policies.
Now, the policies may be in the form of a resolution or it may be in the
form of a ordinance. The term "ordinance" in this case really gives it more
teeth, your honor. Otherwise, we are going to see a situation where you
have the power to adopt the policy but you cannot really make it stick as
in the case now, and I think here is Chairman Bunye. I think he will agree
that that is the case now. You've got the power to set a policy, the body
wants to follow your policy, then we say let's call it an ordinance and see
if they will not follow it.
THE CHAIRMAN: That's very nice. I like that. However, there is a
constitutional impediment.1wphi1 You are making this MMDA a political
subdivision. The creation of the MMDA would be subject to a plebiscite.
That is what I'm trying to avoid. I've been trying to avoid this kind of
predicament. Under the Constitution it states: if it is a political
subdivision, once it is created it has to be subject to a plebiscite. I'm
trying to make this as administrative. That's why we place the Chairman
as a cabinet rank.
HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there
is . . . . .
THE CHAIRMAN: In setting up ordinances, it is a political exercise, Believe
me.
HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of
rules and regulations. That would be . . . it shall also be enforced.

HON. BELMONTE: Okay, I will . . . .

HON. LOPEZ: And you can also say that violation of such rule, you impose
a sanction. But you know, ordinance has a different legal connotation.
HON. BELMONTE: All right, I defer to that opinion, your Honor.
THE CHAIRMAN: So instead of ordinances, say rules and regulations.
HON. BELMONTE: Or resolutions. Actually, they are actually considering
resolutions now.
THE CHAIRMAN: Rules and resolutions.
HON. BELMONTE: Rules, regulations and resolutions.

52

The draft of H. B. No. 14170/11116 was presented by the Committee to the House
of Representatives. The explanatory note to the bill stated that the proposed
MMDA is a "development authority" which is a "national agency, not a political
government unit." 53 The explanatory note was adopted as the sponsorship speech
of the Committee on Local Governments. No interpellations or debates were made
on the floor and no amendments introduced. The bill was approved on second
reading on the same day it was presented. 54
When the bill was forwarded to the Senate, several amendments were
made.1wphi1 These amendments, however, did not affect the nature of the
MMDA as originally conceived in the House of Representatives. 55
It is thus beyond doubt that the MMDA is not a local government unit or a public
corporation endowed with legislative power. It is not even a "special metropolitan
political subdivision" as contemplated in Section 11, Article X of the Constitution.
The creation of a "special metropolitan political subdivision" requires the approval
by a majority of the votes cast in a plebiscite in the political units directly
affected." 56 R. A. No. 7924 was not submitted to the inhabitants of Metro Manila in
a plebiscite. The Chairman of the MMDA is not an official elected by the people,
but appointed by the President with the rank and privileges of a cabinet member.
In fact, part of his function is to perform such other duties as may be assigned to
him by the President, 57 whereas in local government units, the President merely
exercises supervisory authority. This emphasizes the administrative character of
the MMDA.
Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA
under R.A. No. 7924. Unlike the MMC, the MMDA has no power to enact ordinances
for the welfare of the community. It is the local government units, acting through
their respective legislative councils, that possess legislative power and police
power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass
any ordinance or resolution ordering the opening of Neptune Street, hence, its
proposed opening by petitioner MMDA is illegal and the respondent Court of
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Appeals did not err in so ruling. We desist from ruling on the other issues as they
are unnecessary.
We stress that this decision does not make light of the MMDA's noble efforts to
solve the chaotic traffic condition in Metro Manila. Everyday, traffic jams and traffic
bottlenecks plague the metropolis. Even our once sprawling boulevards and
avenues are now crammed with cars while city streets are clogged with motorists
and pedestrians. Traffic has become a social malaise affecting our people's
productivity and the efficient delivery of goods and services in the country. The
MMDA was created to put some order in the metropolitan transportation system
but unfortunately the powers granted by its charter are limited. Its good intentions
cannot justify the opening for public use of a private street in a private subdivision
without any legal warrant. The promotion of the general welfare is not antithetical
to the preservation of the rule of law.1wphi1.nt
IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 39549 are affirmed. SO ORDERED.

RODOLFO T. GANZON, petitioner, vs. THE HONORABLE COURT OF APPEALS and LUIS
T. SANTOS, in his capacity as the Secretary of the Department of Local Government,
respondents.
SARMIENTO, J.:p
The petitioners take common issue on the power of the President (acting through the
Secretary of Local Government), to suspend and/or remove local officials.
The petitioners are the Mayor of Iloilo City (G.R. Nos. 93252 and 95245) and a member of the
Sangguniang Panglunsod thereof (G.R. No. 93746), respectively.
The petitions of Mayor Ganzon originated from a series of administrative complaints, ten in
number, filed against him by various city officials sometime in 1988, on various charges,
among them, abuse of authority, oppression, grave misconduct, disgraceful and immoral
conduct, intimidation, culpable violation of the Constitution, and arbitrary detention. 1 The
personalities involved are Joceleehn Cabaluna, a clerk at the city health office; Salvador
Cabaluna, her husband; Dr. Felicidad Ortigoza, Assistant City Health Officer; Mansueto
Malabor, Vice-Mayor; Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong, and
Eduardo Pefia Redondo members of the Sangguniang Panglunsod; and Pancho Erbite, a
barangay tanod. The complaints against the Mayor are set forth in the opinion of the
respondent Court of Appeals. 2 We quote:
xxx xxx xxx

G.R. No. 93252 August 5, 1991

RODOLFO T. GANZON, petitioner, vs. THE HONORABLE COURT OF APPEALS and LUIS
T. SANTOS, respondents.
G.R. No. 93746 August 5,1991
MARY ANN RIVERA ARTIEDA, petitioner, vs. HON. LUIS SANTOS, in his capacity as
Secretary of the Department of Local Government, NICANOR M. PATRICIO, in his
capacity as Chief, Legal Service of the Department of Local Government and
SALVADOR CABALUNA JR., respondents.
G.R. No. 95245 August 5,1991

In her verified complaint (Annex A), Mrs. Cabaluna, a clerk assigned to the City
Health, Office of Iloilo City charged that due to political reasons, having supported
the rival candidate, Mrs. Rosa 0. Caram, the petitioner City Mayor, using as an
excuse the exigency of the service and the interest of the public, pulled her out from
rightful office where her qualifications are best suited and assigned her to a work
that should be the function of a non-career service employee. To make matters
worse, a utility worker in the office of the Public Services, whose duties are alien to
the complainant's duties and functions, has been detailed to take her place. The
petitioner's act are pure harassments aimed at luring her away from her permanent
position or force her to resign.
In the case of Dra. Felicidad Ortigoza, she claims that the petitioner handpicked her
to perform task not befitting her position as Assistant City Health Officer of Iloilo City;
that her office was padlocked without any explanation or justification; that her salary
was withheld without cause since April 1, 1988; that when she filed her vacation
leave, she was given the run-around treatment in the approval of her leave in
connivance with Dr. Rodolfo Villegas and that she was the object of a wellengineered trumped-up charge in an administrative complaint filed by Dr. Rodolfo
Villegas (Annex B).
On the other hand, Mansuelo Malabor is the duly elected Vice-Mayor of Iloilo City
and complainants Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong and
Eduardo Pefia Pedondo are members of the Sangguniang Panglunsod of the City of
Iloilo. Their complaint arose out from the case where Councilor Larry Ong, whose
key to his office was unceremoniously and without previous notice, taken by
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petitioner. Without an office, Councilor Ong had to hold office at Plaza Libertad, The
Vice-Mayor and the other complainants sympathized with him and decided to do the
same. However, the petitioner, together with its fully-armed security men, forcefully
drove them away from Plaza Libertad. Councilor Ong denounced the petitioner's
actuations the following day in the radio station and decided to hold office at the
Freedom Grandstand at Iloilo City and there were so many people who gathered to
witness the incident. However, before the group could reach the area, the petitioner,
together with his security men, led the firemen using a firetruck in dozing water to
the people and the bystanders.
Another administrative case was filed by Pancho Erbite, a barangay tanod,
appointed by former mayor Rosa O. Caram. On March 13, 1988, without the benefit
of charges filed against him and no warrant of arrest was issued, Erbite was
arrested and detained at the City Jail of Iloilo City upon orders of petitioner. In jail,
he was allegedly mauled by other detainees thereby causing injuries He was
released only the following day. 3
The Mayor thereafter answered 4 and the cases were shortly set for hearing. The opinion of
the Court of Appeals also set forth the succeeding events:
xxx xxx xxx
The initial hearing in the Cabaluna and Ortigoza cases were set for hearing on June
20-21, 1988 at the Regional Office of the Department of Local Government in Iloilo
City. Notices, through telegrams, were sent to the parties (Annex L) and the parties
received them, including the petitioner. The petitioner asked for a postponement
before the scheduled date of hearing and was represented by counsel, Atty. Samuel
Castro. The hearing officers, Atty. Salvador Quebral and Atty. Marino Bermudez had
to come all the way from Manila for the two-day hearings but was actually held only
on June 20,1988 in view of the inability and unpreparedness of petitioner's counsel.
The next hearings were re-set to July 25, 26, 27,1988 in the same venue-Iloilo City.
Again, the petitioner attempted to delay the proceedings and moved for a
postponement under the excuse that he had just hired his counsel. Nonetheless, the
hearing officers denied the motion to postpone, in view of the fact that the parties
were notified by telegrams of the scheduled hearings (Annex M).
In the said hearings, petitioner's counsel cross-examined the complainants and their
witnesses.
Finding probable grounds and reasons, the respondent issued a preventive
suspension order on August 11, 1988 to last until October 11,1988 for a period of
sixty (60) days.
Then the next investigation was set on September 21, 1988 and the petitioner again
asked for a postponement to September 26,1988. On September 26, 1988, the
complainants and petitioner were present, together with their respective counsel.
The petitioner sought for a postponement which was denied. In these hearings
which were held in Mala the petitioner testified in Adm. Case No. C-10298 and
10299.

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The investigation was continued regarding the Malabor case and the complainants
testified including their witnesses.
On October 10, 1988, petitioner's counsel, Atty. Original moved for a postponement
of the October 24, 1988 hearing to November 7 to 11, 1988 which was granted.
However, the motion for change of venue as denied due to lack of funds. At the
hearing on November 7, 1988, the parties and counsel were present. Petitioner
reiterated his motion to change venue and moved for postponement anew. The
counsel discussed a proposal to take the deposition of witnesses in Iloilo City so the
hearing was indefinitely postponed. However, the parties failed to come to terms
and after the parties were notified of the hearing, the investigation was set to
December 13 to 15, 1988.
The petitioner sought for another postponement on the ground that his witnesses
were sick or cannot attend the investigation due to lack of transportation. The motion
was denied and the petitioner was given up to December 14, 1988 to present his
evidence.
On December 14,1988, petitioner's counsel insisted on his motion for postponement
and the hearing officers gave petitioner up to December 15, 1988 to present his
evidence. On December 15, 1988, the petitioner failed to present evidence and the
cases were considered submitted for resolution.
In the meantime, a prima facie evidence was found to exist in the arbitrary detention
case filed by Pancho Erbite so the respondent ordered the petitioner's second
preventive suspension dated October 11, 1988 for another sixty (60) days. The
petitioner was able to obtain a restraining order and a writ of preliminary injunction in
the Regional Trial Court, Branch 33 of Iloilo City. The second preventive suspension
was not enforced. 5
Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition
against the respondent Secretary of Local Government (now, Interior) in the Regional Trial
Court, Iloilo City, where he succeeded in obtaining a writ of preliminary injunction. Presently,
he instituted CA-G.R. SP No. 16417, an action for prohibition, in the respondent Court of
Appeals.
Meanwhile, on May 3, 1990, the respondent Secretary issued another order, preventively
suspending Mayor Ganzon for another sixty days, the third time in twenty months, and
designating meantime Vice-Mayor Mansueto Malabor as acting mayor. Undaunted, Mayor
Ganzon commenced CA-G.R. SP No. 20736 of the Court of Appeals, a petition for
prohibition, 6 (Malabor it is to be noted, is one of the complainants, and hence, he is interested
in seeing Mayor Ganzon ousted.)
On September 7, 1989, the Court of Appeals rendered judgment, dismissing CA-G.R. SP No.
16417. On July 5, 1990, it likewise promulgated a decision, dismissing CA-G.R. SP No. 20736.
In a Resolution dated January 24, 1990, it issued a Resolution certifying the petition of Mary
Ann Artieda, who had been similary charged by the respondent Secretary, to this Court.

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On June 26,1990, we issued a Temporary Restraining Order, barring the respondent Secretary
from implementing the suspension orders, and restraining the enforcement of the Court of
Appeals' two decisions.

reason to overrule Secretary Santos in denying his requests. Besides, postponements are a
matter of discretion on the part of the hearing officer, and based on Mayor Ganzon's above
story, we are not convinced that the Secretary has been guilty of a grave abuse of discretion.

In our Resolution of November 29, 1990, we consolidated all three cases. In our Resolutions
of January 15, 1991, we gave due course thereto.

The Court can not say, under these circumstances, that Secretary Santos' actuations deprived
Mayor Ganzon of due process of law.

Mayor Ganzon claims as a preliminary (GR No. 93252), that the Department of Local
Government in hearing the ten cases against him, had denied him due process of law and that
the respondent Secretary had been "biased, prejudicial and hostile" towards him 7 arising from
his (Mayor Ganzon's) alleged refusal to join the Laban ng Demokratikong Pilipino party 8 and
the running political rivalry they maintained in the last congressional and local elections; 9and
his alleged refusal to operate a lottery in Iloilo City. 10 He also alleges that he requested the
Secretary to lift his suspension since it had come ninety days prior to an election (the
barangay elections of November 14, 1988), 11notwithstanding which, the latter proceeded with
the hearing and meted out two more suspension orders of the aforementioned cases. 12 He
likewise contends that he sought to bring the cases to Iloilo City (they were held in Manila) in
order to reduce the costs of proceeding, but the Secretary rejected his request. 13 He states
that he asked for postponement on "valid and justifiable" 14 grounds, among them, that he was
suffering from a heart ailment which required confinement; that his "vital" 15 witness was also
hospitalized 16 but that the latter unduly denied his request. 17

We come to the core question: Whether or not the Secretary of Local Government, as the
President's alter ego, can suspend and/or remove local officials.

Mayor Ganzon's primary argument (G.R. Nos. 93252 and 95245) is that the Secretary of Local
Government is devoid, in any event, of any authority to suspend and remove local officials, an
argument reiterated by the petitioner Mary Ann Rivera Artieda (G.R. No. 93746).

It is the petitioners' argument that the 1987 Constitution 20 no longer allows the President, as
the 1935 and 1973 Constitutions did, to exercise the power of suspension and/or removal over
local officials. According to both petitioners, the Constitution is meant, first, to strengthen selfrule by local government units and second, by deleting the phrase 21 as may be provided by
law to strip the President of the power of control over local governments. It is a view, so they
contend, that finds support in the debates of the Constitutional Commission. The provision in
question reads as follows:
Sec. 4. The President of the Philippines shall exercise general supervision over local
governments. Provinces with respect to component cities and municipalities, and
cities and municipalities with respect to component barangays shall ensure that the
acts of their component units are within the scope of their prescribed powers and
functions. 22
It modifies a counterpart provision appearing in the 1935 Constitution, which we quote:

As to Mayor Ganzon's charges of denial of due process, the records do not show very clearly
in what manner the Mayor might have been deprived of his rights by the respondent Secretary.
His claims that he and Secretary Luis-Santos were (are) political rivals and that his
"persecution" was politically motivated are pure speculation and although the latter does not
appear to have denied these contentions (as he, Mayor Ganzon, claims), we can not take his
word for it the way we would have under less political circumstances, considering furthermore
that "political feud" has often been a good excuse in contesting complaints.
The Mayor has failed furthermore to substantiate his say-so's that Secretary Santos had
attempted to seduce him to join the administration party and to operate a lottery in Iloilo City.
Again, although the Secretary failed to rebut his allegations, we can not accept them, at face
value, much more, as judicial admissions as he would have us accept them 18 for the same
reasons above-stated and furthermore, because his say so's were never corroborated by
independent testimonies. As a responsible public official, Secretary Santos, in pursuing an
official function, is presumed to be performing his duties regularly and in the absence of
contrary evidence, no ill motive can be ascribed to him.
As to Mayor Ganzon's contention that he had requested the respondent Secretary to defer the
hearing on account of the ninety-day ban prescribed by Section 62 of Batas Blg. 337, the
Court finds the question to be moot and academic since we have in fact restrained the
Secretary from further hearing the complaints against the petitioners. 19
As to his request, finally, for postponements, the Court is afraid that he has not given any
compelling reason why we should overturn the Court of Appeals, which found no convincing

Sec. 10. The President shall have control of all the executive departments, bureaus,
or offices, exercise general supervision over all Local governments as may be
provided by law, and take care that the laws be faithfully executed. 23
The petitioners submit that the deletion (of "as may be provided by law") is significant, as their
argument goes, since: (1) the power of the President is "provided by law" and (2) hence, no
law may provide for it any longer.
It is to be noted that in meting out the suspensions under question, the Secretary of Local
Government acted in consonance with the specific legal provisions of Batas Blg. 337, the
Local Government Code, we quote:
Sec. 62. Notice of Hearing. Within seven days after the complaint is filed, the
Minister of local Government, or the sanggunian concerned, as the case may be,
shall require the respondent to submit his verified answer within seven days from
receipt of said complaint, and commence the hearing and investigation of the case
within ten days after receipt of such answer of the respondent. No investigation shall
be held within ninety days immediately prior to an election, and no preventive
suspension shall be imposed with the said period. If preventive suspension has
been imposed prior to the aforesaid period, the preventive suspension shall be
lifted. 24

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Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by
the Minister of Local Government if the respondent is a provincial or city official, by
the provincial governor if the respondent is an elective municipal official, or by the
city or municipal mayor if the respondent is an elective barangay official.
(2) Preventive suspension may be imposed at any time after the issues are joined,
when there is reasonable ground to believe that the respondent has committed the
act or acts complained of, when the evidence of culpability is strong, when the
gravity of the offense so warrants, or when the continuance in office of the
respondent could influence the witnesses or pose a threat to the safety and integrity
of the records and other evidence. In all cases, preventive suspension shall not
extend beyond sixty days after the start of said suspension.
(3) At the expiration of sixty days, the suspended official shall be deemed reinstated
in office without prejudice to the continuation of the proceedings against him until its
termination. However ' if the delay in the proceedings of the case is due to his fault,
neglect or request, the time of the delay shall not be counted in computing the time
of suspension. 25
The issue, as the Court understands it, consists of three questions: (1) Did the 1987
Constitution, in deleting the phrase "as may be provided by law" intend to divest the President
of the power to investigate, suspend, discipline, and/or remove local officials? (2) Has the
Constitution repealed Sections 62 and 63 of the Local Government Code? (3) What is the
significance of the change in the constitutional language?
It is the considered opinion of the Court that notwithstanding the change in the constitutional
language, the charter did not intend to divest the legislature of its right or the President of her
prerogative as conferred by existing legislation to provide administrative sanctions against
local officials. It is our opinion that the omission (of "as may be provided by law") signifies
nothing more than to underscore local governments' autonomy from congress and to break
Congress' "control" over local government affairs. The Constitution did not, however, intend,
for the sake of local autonomy, to deprive the legislature of all authority over municipal
corporations, in particular, concerning discipline.
Autonomy does not, after all, contemplate making mini-states out of local government units, as
in the federal governments of the United States of America (or Brazil or Germany), although
Jefferson is said to have compared municipal corporations euphemistically to "small
republics." 26 Autonomy, in the constitutional sense, is subject to the guiding star, though not
control, of the legislature, albeit the legislative responsibility under the Constitution and as the
"supervision clause" itself suggest-is to wean local government units from over-dependence
on the central government.
It is noteworthy that under the Charter, "local autonomy" is not instantly self-executing, but
subject to, among other things, the passage of a local government code, 27 a local tax
law, 28 income distribution legislation, 29 and a national representation law, 30 and
measures 31 designed to realize autonomy at the local level. It is also noteworthy that in spite
of autonomy, the Constitution places the local government under the general supervision of
the Executive. It is noteworthy finally, that the Charter allows Congress to include in the local
government code provisions for removal of local officials, which suggest that Congress may
exercise removal powers, and as the existing Local Government Code has done, delegate its
exercise to the President. Thus:

Sec. 3. The Congress shall enact a local government code which shall provide for a
more responsive and accountable local government structure instituted through a
system of decentralization with effective mechanisms of recall, initiative, and
referendum, allocate among the different local government units their powers,
responsibilities and resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and functions and duties of local
officials, and all other matters relating to the organization and operation of the local
units. 32
As hereinabove indicated, the deletion of "as may be provided by law" was meant to
stress, sub silencio, the objective of the framers to strengthen local autonomy by severing
congressional control of its affairs, as observed by the Court of Appeals, like the power of local
legislation. 33 The Constitution did nothing more, however, and insofar as existing legislation
authorizes the President (through the Secretary of Local Government) to proceed against local
officials administratively, the Constitution contains no prohibition.
The petitioners are under the impression that the Constitution has left the President mere
supervisory powers, which supposedly excludes the power of investigation, and denied her
control, which allegedly embraces disciplinary authority. It is a mistaken impression because
legally, "supervision" is not incompatible with disciplinary authority as this Court has
held, 34 thus:
xxx xxx xxx
It is true that in the case of Mondano vs. Silvosa, 51 Off. Gaz., No. 6 p. 2884, this
Court had occasion to discuss the scope and extent of the power of supervision by
the President over local government officials in contrast to the power of control given
to him over executive officials of our government wherein it was emphasized that the
two terms, control and supervision, are two different things which differ one from the
other in meaning and extent. Thus in that case the Court has made the following
digression: "In administration law supervision means overseeing or the power or
authority of an officer to see that subordinate officers perform their duties. If the
latter fail or neglect to fulfill them the former may take such action or step as
prescribed by law to make them perform their duties. Control, on the other hand,
means the power of an officer to alter or modify or nullify of set aside what a
subordinate officer had done in the performance of his duties and to substitute the
judgment of the former for that of the latter." But from this pronouncement it cannot
be reasonably inferred that the power of supervision of the President over local
government officials does not include the power of investigation when in his opinion
the good of the public service so requires, as postulated in Section 64(c) of the
Revised Administrative Code. ... 35
xxx xxx xxx
"Control" has been defined as "the power of an officer to alter or modify or nullify or set aside
what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former for test of the latter." 36 "Supervision" on the other hand means
"overseeing or the power or authority of an officer to see that subordinate officers perform their
duties. 37 As we held, 38 however, "investigating" is not inconsistent with "overseeing", although
it is a lesser power than "altering". The impression is apparently exacerbated by the Court's
pronouncements in at least three cases,Lacson v. Roque, 39 Hebron v. Reyes, 40 and Mondano
12

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v. Silvosa, 41 and possibly, a fourth one, Pelaez v. Auditor General. 42 In Lacson, this Court said
that the President enjoyed no control powers but only supervision "as may be provided by
law,"43 a rule we reiterated in Hebron, and Mondano. In Pelaez, we stated that the President
"may not . . . suspend an elective official of a regular municipality or take any disciplinary
action against him, except on appeal from a decision of the corresponding provincial
board." 44 However, neither Lacson nor Hebron nor Mondano categorically banned the Chief
Executive from exercising acts of disciplinary authority because she did not exercise control
powers, but because no law allowed her to exercise disciplinary authority. Thus, according
to Lacson:
The contention that the President has inherent power to remove or suspend
municipal officers is without doubt not well taken. Removal and suspension of public
officers are always controlled by the particular law applicable and its proper
construction subject to constitutional limitations. 45
In Hebron we stated:
Accordingly, when the procedure for the suspension of an officer is specified by law,
the same must be deemed mandatory and adhered to strictly, in the absence of
express or clear provision to the contrary-which does not et with respect to
municipal officers ... 46
In Mondano, the Court held:
... The Congress has expressly and specifically lodged the provincial supervision
over municipal officials in the provincial governor who is authorized to "receive and
investigate complaints made under oath against municipal officers for neglect of
duty, oppression, corruption or other form of maladministration of office, and
conviction by final judgment of any crime involving moral turpitude." And if the
charges are serious, "he shall submit written charges touching the matter to the
provincial board, furnishing a copy of such charges to the accused either personally
or by registered mail, and he may in such case suspend the officer (not being the
municipal treasurer) pending action by the board, if in his opinion the charge by one
affecting the official integrity of the officer in question." Section 86 of the Revised
Administration Code adds nothing to the power of supervision to be exercised by the
Department Head over the administration of ... municipalities ... . If it be construed
that it does and such additional power is the same authority as that vested in the
Department Head by section 79(c) of the Revised Administrative Code, then such
additional power must be deemed to have been abrogated by Section 110(l), Article
VII of the Constitution. 47

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gave him the power, the Court, as in Ganzon v. Kayanan, found little difficulty in sustaining
him. 49
The Court does not believe that the petitioners can rightfully point to the debates of the
Constitutional Commission to defeat the President's powers. The Court believes that the
deliberations are by themselves inconclusive, because although Commissioner Jose Nolledo
would exclude the power of removal from the President, 50 Commissioner Blas Ople would
not. 51
The Court is consequently reluctant to say that the new Constitution has repealed the Local
Government Code, Batas Blg. 37. As we said, "supervision" and "removal" are not
incompatible terms and one may stand with the other notwithstanding the stronger expression
of local autonomy under the new Charter. We have indeed held that in spite of the approval of
the Charter, Batas Blg. 337 is still in force and effect. 52
As the Constitution itself declares, local autonomy means "a more responsive and accountable
local government structure instituted through a system of decentralization." 53 The Constitution
as we observed, does nothing more than to break up the monopoly of the national government
over the affairs of local governments and as put by political adherents, to "liberate the local
governments from the imperialism of Manila." Autonomy, however, is not meant to end the
relation of partnership and inter-dependence between the central administration and local
government units, or otherwise, to user in a regime of federalism. The Charter has not taken
such a radical step. Local governments, under the Constitution, are subject to regulation,
however limited, and for no other purpose than precisely, albeit paradoxically, to enhance selfgovernment.
As we observed in one case, 54 decentralization means devolution of national administration
but not power to the local levels. Thus:
Now, autonomy is either decentralization of administration or decentralization of
power. There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden the
base of government power and in the process to make local governments "more
responsive and accountable," and "ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national
development and social progress." At the same time, it relieves the central
government of the burden of managing local affairs and enables it to concentrate on
national concerns. The President exercises "general supervision" over them, but
only to "ensure that local affairs are administered according to law." He has no
control over their acts in the sense that he can substitute their judgments with his
own.

xxx xxx xxx

In Pelaez, we stated that the President can not impose disciplinary measures on local officials
except on appeal from the provincial board pursuant to the Administrative Code. 48
Thus, in those case that this Court denied the President the power (to suspend/remove) it was
not because we did not think that the President can not exercise it on account of his limited
power, but because the law lodged the power elsewhere. But in those cases ii which the law

Decentralization of power, on the other hand, involves an abdication of political

power in the favor of local governments units declared to be autonomous, In that
case, the autonomous government is free to chart its own destiny and shape its
future with minimum intervention from central authorities. According to a
constitutional author, decentralization of power amounts to "self-immolation," since
in that event, the autonomous government becomes accountable not to the central
authorities but to its constituency. 55

13

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Pubcorp
The successive sixty-day suspensions imposed on Mayor Rodolfo Ganzon is albeit another
matter. What bothers the Court, and what indeed looms very large, is the fact that since the
Mayor is facing ten administrative charges, the Mayor is in fact facing the possibility of 600
days of suspension, in the event that all ten cases yield prima faciefindings. The Court is not of
course tolerating misfeasance in public office (assuming that Mayor Ganzon is guilty of
misfeasance) but it is certainly another question to make him serve 600 days of suspension,
which is effectively, to suspend him out of office. As we held: 56
2. Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His term
of office does not expire until 1986. Were it not for this information and the
suspension decreed by the Sandiganbayan according to the Anti-Graft and Corrupt
Practices Act, he would have been all this while in the full discharge of his functions
as such municipal mayor. He was elected precisely to do so. As of October 26,
1983, he has been unable to. it is a basic assumption of the electoral process
implicit in the right of suffrage that the people are entitled to the services of elective
officials of their choice. For misfeasance or malfeasance, any of them could, of
course, be proceeded against administratively or, as in this instance, criminally. In
either case, Ms culpability must be established. Moreover, if there be a criminal
action, he is entitled to the constitutional presumption of innocence. A preventive
suspension may be justified. Its continuance, however, for an unreasonable length
of time raises a due process question. For even if thereafter he were acquitted, in
the meanwhile his right to hold office had been nullified. Clearly, there would be in
such a case an injustice suffered by him. Nor is he the only victim. There is injustice
inflicted likewise on the people of Lianga They were deprived of the services of the
man they had elected to serve as mayor. In that sense, to paraphrase Justice
Cardozo, the protracted continuance of this preventive suspension had outrun the
bounds of reason and resulted in sheer oppression. A denial of due process is thus
quite manifest. It is to avoid such an unconstitutional application that the order of
suspension should be lifted. 57
The plain truth is that this Court has been ill at ease with suspensions, for the above
reasons, 58 and so also, because it is out of the ordinary to have a vacancy in local
government. The sole objective of a suspension, as we have held, 59 is simply "to prevent the
accused from hampering the normal cause of the investigation with his influence and authority
over possible witnesses" 60 or to keep him off "the records and other evidence. 61
It is a means, and no more, to assist prosecutors in firming up a case, if any, against an erring
local official. Under the Local Government Code, it can not exceed sixty days, 62 which is to
say that it need not be exactly sixty days long if a shorter period is otherwise sufficient, and
which is also to say that it ought to be lifted if prosecutors have achieved their purpose in a
shorter span.

As we observed earlier, imposing 600 days of suspension which is not a remote possibility
Mayor Ganzon is to all intents and purposes, to make him spend the rest of his term in
inactivity. It is also to make, to all intents and purposes, his suspension permanent.
It is also, in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not been
proven. Worse, any absolution will be for naught because needless to say, the length of his
suspension would have, by the time he is reinstated, wiped out his tenure considerably.
The Court is not to be mistaken for obstructing the efforts of the respondent Secretary to see
that justice is done in Iloilo City, yet it is hardly any argument to inflict on Mayor Ganzon
successive suspensions when apparently, the respondent Secretary has had sufficient time to
gather the necessary evidence to build a case against the Mayor without suspending him a
day longer. What is intriguing is that the respondent Secretary has been cracking down, so to
speak, on the Mayor piecemeal apparently, to pin him down ten times the pain, when he, the
respondent Secretary, could have pursued a consolidated effort.
We reiterate that we are not precluding the President, through the Secretary of Interior from
exercising a legal power, yet we are of the opinion that the Secretary of Interior is exercising
that power oppressively, and needless to say, with a grave abuse of discretion.
The Court is aware that only the third suspension is under questions, and that any talk of
future suspensions is in fact premature. The fact remains, however, that Mayor Ganzon has
been made to serve a total of 120 days of suspension and the possibility of sixty days more is
arguably around the corner (which amounts to a violation of the Local Government Code
which brings to light a pattern of suspensions intended to suspend the Mayor the rest of his
natural tenure. The Court is simply foreclosing what appears to us as a concerted effort of the
State to perpetuate an arbitrary act.
As we said, we can not tolerate such a state of affairs.
We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third suspension
and lifting, for the purpose, the Temporary Restraining Order earlier issued. Insofar as the
seven remaining charges are concerned, we are urging the Department of Local Government,
upon the finality of this Decision, to undertake steps to expedite the same, subject to Mayor
Ganzon's usual remedies of appeal, judicial or administrative, or certiorari, if warranted, and
meanwhile, we are precluding the Secretary from meting out further suspensions based on
those remaining complaints, notwithstanding findings of prima facie evidence.
In resume the Court is laying down the following rules:

Suspension is not a penalty and is not unlike preventive imprisonment in which the accused is
held to insure his presence at the trial. In both cases, the accused (the respondent) enjoys a
presumption of innocence unless and until found guilty.

1.

Local autonomy, under the Constitution, involves a mere decentralization of

administration, not of power, in which local officials remain accountable to the
central government in the manner the law may provide;

Suspension finally is temporary and as the Local Government Code provides, it may be
imposed for no more than sixty days. As we held, 63 a longer suspension is unjust and
unreasonable, and we might add, nothing less than tyranny.

2.

The new Constitution does not prescribe federalism;

3.

The change in constitutional language (with respect to the supervision clause) was
meant but to deny legislative control over local governments; it did not exempt the
14

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Pubcorp
latter from legislative regulations provided regulation is consistent with the
fundamental premise of autonomy;

A TV ad proudly announces:
"The new PAGCOR responding through responsible gaming."

4.

5.

6.

Since local governments remain accountable to the national authority, the latter may,
by law, and in the manner set forth therein, impose disciplinary action against local
officials;
"Supervision" and "investigation" are not inconsistent terms; "investigation" does not
signify "control" (which the President does not have);
The petitioner, Mayor Rodolfo Ganzon. may serve the suspension so far ordered,
but may no longer be suspended for the offenses he was charged originally;
provided:
a)

that delays in the investigation of those charges "due to his fault, neglect
or request, (the time of the delay) shall not be counted in computing the
time of suspension. [Supra, sec. 63(3)]

b)

that if during, or after the expiration of, his preventive suspension, the
petitioner commits another or other crimes and abuses for which proper
charges are filed against him by the aggrieved party or parties, his
previous suspension shall not be a bar to his being preventively
suspended again, if warranted under subpar. (2), Section 63 of the Local
Government Code.

But the petitioners think otherwise, that is why, they filed the 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, and because
A.
B.

C.
D.

WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary

Restraining Order issued is LIFTED. The suspensions of the petitioners are AFFIRMED,
provided that the petitioner, Mayor Rodolfo Ganzon, may not be made to serve future
suspensions on account of any of the remaining administrative charges pending against him
for acts committed prior to August 11, 1988. The Secretary of Interior is ORDERED to
consolidate all such administrative cases pending against Mayor Ganzon.
The sixty-day suspension against the petitioner, Mary Ann Rivera Artieda, is AFFIRMED. No
costs.
SO ORDERED.

G.R. No. 91649

May 14, 1991

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND

LORENZO SANCHEZ,petitioners, vs. PHILIPPINE AMUSEMENTS AND GAMING
CORPORATION(PAGCOR), respondent.

It constitutes a waiver of a right prejudicial to a third person with a right

recognized by law. It waived the Manila City government's right to impose
taxes and license fees, which is recognized by law;
For the same reason stated in the immediately preceding paragraph, the law
has intruded into the local government's right to impose local taxes and license
fees. This, in contravention of the constitutionally enshrined principle of local
autonomy;
It violates the equal protection clause of the constitution in that it legalizes
PAGCOR conducted gambling, while most other forms of gambling are
outlawed, together with prostitution, drug trafficking and other vices;
It violates the avowed trend of the Cory government away from monopolistic
and crony economy, and toward free enterprise and privatization. (p. 2,
Amended Petition; p. 7, Rollo)

In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the
declared national policy of the "new restored democracy" and the people's will as expressed in
the 1987 Constitution. The decree is said to have a "gambling objective" and therefore is
contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article
XIV, of the present Constitution (p. 3, Second Amended Petition; p. 21, Rollo).
The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner
Basco being also the Chairman of the Committee on Laws of the City Council of Manila), can
question and seek the annulment of PD 1869 on the alleged grounds mentioned above.
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." Its operation was originally conducted in the well
known floating casino "Philippine Tourist." The operation was considered a success for it
proved to be a potential source of revenue to fund infrastructure and socio-economic projects,
thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to fully attain this objective.
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the
Government to regulate and centralize all games of chance authorized by existing franchise or
permitted by law, under the following declared policy
Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to
centralize and integrate all games of chance not heretofore authorized by existing
franchises or permitted by law in order to attain the following objectives:

PARAS, J.:
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(a) To centralize and integrate the right and authority to operate and conduct games
of chance into one corporate entity to be controlled, administered and supervised by
the Government.
(b) To establish and operate clubs and casinos, for amusement and recreation,
including sports gaming pools, (basketball, football, lotteries, etc.) and such other
forms of amusement and recreation including games of chance, which may be
allowed by law within the territorial jurisdiction of the Philippines and which will: (1)
generate sources of additional revenue to fund infrastructure and socio-civic
projects, such as flood control programs, beautification, sewerage and sewage
projects, Tulungan ng Bayan Centers, Nutritional Programs, Population Control and
such other essential public services; (2) create recreation and integrated facilities
which will expand and improve the country's existing tourist attractions; and (3)
minimize, if not totally eradicate, all the evils, malpractices and corruptions that are
normally prevalent on the conduct and operation of gambling clubs and casinos
without direct government involvement. (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines.
Under its Charter's repealing clause, all laws, decrees, executive orders, rules and regulations,
inconsistent therewith, are accordingly repealed, amended or modified.
It is reported that PAGCOR is the third largest source of government revenue, next to the
Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned
P3.43 Billion, and directly remitted to the National Government a total of P2.5 Billion in form of
franchise tax, government's income share, the President's Social Fund and Host Cities' share.
In addition, PAGCOR sponsored other socio-cultural and charitable projects on its own or in
cooperation with various governmental agencies, and other private associations and
organizations. In its 3 1/2 years of operation under the present administration, PAGCOR
remitted to the government a total of P6.2 Billion. As of December 31, 1989, PAGCOR was
employing 4,494 employees in its nine (9) casinos nationwide, directly supporting the
livelihood of Four Thousand Four Hundred Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is
"null and void" for being "contrary to morals, public policy and public order," monopolistic and
tends toward "crony economy", and is violative of the equal protection clause and local
autonomy as well as for running counter to the state policies enunciated in Sections 11
(Personal Dignity and Human Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section
1 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987
Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most
deliberate consideration by the Court, involving as it does the exercise of what has been
described as "the highest and most delicate function which belongs to the judicial department
of the government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).
As We enter upon the task of passing on the validity of an act of a co-equal and coordinate
branch of the government We need not be reminded of the time-honored principle, deeply
ingrained in our jurisprudence, that a statute is presumed to be valid. Every presumption must
be indulged in favor of its constitutionality. This is not to say that We approach Our task with
diffidence or timidity. Where it is clear that the legislature or the executive for that matter, has
over-stepped the limits of its authority under the constitution, We should not hesitate to wield

1st SET 4 cases

the axe and let it fall heavily, as fall it must, on the offending statute (Lozano v.
Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice
Zaldivar underscored the
. . . thoroughly established principle which must be followed in all cases where
questions of constitutionality as obtain in the instant cases are involved. All
presumptions are indulged in favor of constitutionality; one who attacks a statute
alleging unconstitutionality must prove its invalidity beyond a reasonable doubt; that
a law may work hardship does not render it unconstitutional; that if any reasonable
basis may be conceived which supports the statute, it will be upheld and the
challenger must negate all possible basis; that the courts are not concerned with the
wisdom, justice, policy or expediency of a statute and that a liberal interpretation of
the constitution in favor of the constitutionality of legislation should be adopted.
(Danner v. Hass, 194 N.W. 2nd534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660,
663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970];
Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v.
Reyes, 125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer
Protection v. Energy Regulatory Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the legal
personality of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping with the
Court's duty, under the 1987 Constitution, to determine whether or not the other branches of
government have kept themselves within the limits of the Constitution and the laws and that
they have not abused the discretion given to them, the Court has brushed aside technicalities
of procedure and has taken cognizance of this petition. (Kapatiran ng mga Naglilingkod sa
Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA 371)
With particular regard to the requirement of proper party as applied in the cases
before us, We hold that the same is satisfied by the petitioners and intervenors
because each of them has sustained or is in danger of sustaining an immediate
injury as a result of the acts or measures complained of. And even if, strictly
speaking they are not covered by the definition, it is still within the wide discretion of
the Court to waive the requirement and so remove the impediment to its addressing
and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed
to question the constitutionality of several executive orders issued by President
Quirino although they were involving only an indirect and general interest shared in
common with the public. The Court dismissed the objection that they were not
proper parties and ruled that "the transcendental importance to the public of these
cases demands that they be settled promptly and definitely, brushing aside, if we
must technicalities of procedure." We have since then applied the exception in many
other cases. (Association of Small Landowners in the Philippines, Inc. v. Sec. of
Agrarian Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the substantive issues raised.
16

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Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of
gambling does not mean that the Government cannot regulate it in the exercise of its police
power.
The concept of police power is well-established in this jurisdiction. It has been defined as the
"state authority to enact legislation that may interfere with personal liberty or property in order
to promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of
(1) an imposition or restraint upon liberty or property, (2) in order to foster the common good. It
is not capable of an exact definition but has been, purposely, veiled in general terms to
underscore its all-comprehensive embrace. (Philippine Association of Service Exporters, Inc. v.
Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future
where it could be done, provides enough room for an efficient and flexible response to
conditions and circumstances thus assuming the greatest benefits. (Edu v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
charter. Along with the taxing power and eminent domain, it is inborn in the very fact of
statehood and sovereignty. It is a fundamental attribute of government that has enabled it to
perform the most vital functions of governance. Marshall, to whom the expression has been
credited, refers to it succinctly as the plenary power of the state "to govern its citizens". (Tribe,
American Constitutional Law, 323, 1978). The police power of the State is a power coextensive with self-protection and is most aptly termed the "law of overwhelming necessity."
(Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 708) It is "the most essential, insistent, and
illimitable of powers." (Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that
enables the state to meet the agencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize
thru an appropriate institution all games of chance authorized by existing franchise or
permitted by law" (1st whereas clause, PD 1869). As was subsequently proved, regulating and
centralizing gambling operations in one corporate entity the PAGCOR, was beneficial not
just to the Government but to society in general. It is a reliable source of much needed
revenue for the cash strapped Government. It provided funds for social impact projects and
subjected gambling to "close scrutiny, regulation, supervision and control of the Government"
(4th Whereas Clause, PD 1869). With the creation of PAGCOR and the direct intervention of
the Government, the evil practices and corruptions that go with gambling will be minimized if
not totally eradicated. Public welfare, then, lies at the bottom of the enactment of PD 1896.
Petitioners contend 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 violative of the principle
of local autonomy. They must be referring to Section 13 par. (2) of P.D. 1869 which 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."
(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form,
income or otherwise as well as fees, charges or levies of whatever nature, whether
National or Local, shall be assessed and collected under this franchise from the
Corporation; nor shall any form or tax or charge attach in any way to the earnings of

1st SET 4 cases

the Corporation, except a franchise tax of five (5%) percent of the gross revenues or
earnings derived by the Corporation from its operations under this franchise. Such
tax shall be due and payable quarterly to the National Government and shall be in
lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or
description, levied, established or collected by any municipal, provincial or national
government authority (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose
taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v.
Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or statute must plainly show an
intent to confer that power or the municipality cannot assume it" (Medina v. City of Baguio, 12
SCRA 62). Its "power to tax" therefore must always yield to a legislative act which is superior
having been passed upon by the state itself which has the "inherent power to tax" (Bernas, the
Revised [1973] Philippine Constitution, Vol. 1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed
that "municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No.
7909, January 18, 1957) which has the power to "create and abolish municipal corporations"
due to its "general legislative powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia,
5 SCRA 541). Congress, therefore, has the power of control over Local governments (Hebron
v. Reyes, G.R. No. 9124, July 2, 1950). And if Congress can grant the City of Manila the power
to tax certain matters, it can also provide for exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As
early as 1975, the power of local governments to regulate gambling thru the grant of
"franchise, licenses or permits" was withdrawn by P.D. No. 771 and was vested exclusively on
the National Government, thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of
chartered cities and other local governments to issue license, permit or other form of
franchise to operate, maintain and establish horse and dog race tracks, jai-alai and
other forms of gambling is hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse
and dog race tracks, jai-alai and other forms of gambling shall be issued by the
national government upon proper application and verification of the qualification of
the applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits" for the
operation of gambling. Necessarily, the power to demand or collect license fees which is a
consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National Government.
PAGCOR is a government owned or controlled corporation with an original charter, PD 1869.
All of its shares of stocks are owned by the National Government. In addition to its corporate
powers (Sec. 3, Title II, PD 1869) it also exercises regulatory powers thus:

17

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Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the
affiliated entities, and shall exercise all the powers, authority and the responsibilities
vested in the Securities and Exchange Commission over such affiliating entities
mentioned under the preceding section, including, but not limited to amendments of
Articles of Incorporation and By-Laws, changes in corporate term, structure,
capitalization and other matters concerning the operation of the affiliated entities,
the provisions of the Corporation Code of the Philippines to the contrary
notwithstanding, except only with respect to original incorporation.
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. Otherwise, its operation might be burdened, impeded or subjected to
control by a mere Local government.
The states have no power by taxation or otherwise, to retard, impede, burden or in
any manner control the operation of constitutional laws enacted by Congress to
carry into execution the powers vested in the federal government. (MC Culloch v.
Marland, 4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local
governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire
absence of power on the part of the States to touch, in that way (taxation) at least,
the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it
can be agreed that no state or political subdivision can regulate a federal
instrumentality in such a way as to prevent it from consummating its federal
responsibilities, or even to seriously burden it in the accomplishment of them.
(Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination of what
local authorities may perceive to be undesirable activities or enterprise using the power to tax
as "a tool for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch
v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity
which has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated
by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution (on Local
Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own source of
revenue and to levy taxes, fees, and other charges subject to such guidelines and
limitation as the congress may provide, consistent with the basic policy on local
autonomy. Such taxes, fees and charges shall accrue exclusively to the local
government. (emphasis supplied)

1st SET 4 cases

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.
Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in
Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It
does not make local governments sovereign within the state or an "imperium in imperio."
Local Government has been described as a political subdivision of a nation or state
which is constituted by law and has substantial control of local affairs. In a unitary
system of government, such as the government under the Philippine Constitution,
local governments can only be an intra sovereign subdivision of one sovereign
nation, it cannot be an imperium in imperio. Local government in such a system can
only mean a measure of decentralization of the function of government. (emphasis
supplied)
As to what state powers should be "decentralized" and what may be delegated to local
government units remains a matter of policy, which concerns wisdom. It is therefore a political
question. (Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA
539).
What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a
State concern and hence, it is the sole prerogative of the State to retain it or delegate it to local
governments.
As gambling is usually an offense against the State, legislative grant or express
charter power is generally necessary to empower the local corporation to deal with
the subject. . . . In the absence of express grant of power to enact, ordinance
provisions on this subject which are inconsistent with the state laws are void. (Ligan
v. Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757
following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as
cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution,
because "it legalized PAGCOR conducted gambling, while most gambling are outlawed
together with prostitution, drug trafficking and other vices" (p. 82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores
the well-accepted meaning of the clause "equal protection of the laws." The clause does not
preclude classification of individuals who may be accorded different treatment under the law
as long as the classification is not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil.
1155). A law does not have to operate in equal force on all persons or things to be
conformable to Article III, Section 1 of the Constitution (DECS v. San Diego, G.R. No. 89572,
December 21, 1989).

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The "equal protection clause" does not prohibit the Legislature from establishing classes of
individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847).
The Constitution does not require situations which are different in fact or opinion to be treated
in law as though they were the same (Gomez v. Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal
protection is not clearly explained in the petition. The mere fact that some gambling activities
like cockfighting (P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes,
lotteries and races (RA 1169 as amended by B.P. 42) are legalized under certain conditions,
while others are prohibited, does not render the applicable laws, P.D. 1869 for one,
unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been applied. (Gomez v.
Palomar, 25 SCRA 827)
The equal protection clause of the 14th Amendment does not mean that all
occupations called by the same name must be treated the same way; the state may
do what it can to prevent which is deemed as evil and stop short of those cases in
which harm to the few concerned is not less than the harm to the public that would
insure if the rule laid down were made mathematically exact. (Dominican Hotel v.
Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government
away from monopolies and crony economy and toward free enterprise and privatization"
suffice it to state that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869
runs counter to the government's policies then it is for the Executive Department to
recommend to Congress its repeal or amendment.
The judiciary does not settle policy issues. The Court can only declare what the law
is and not what the law should be.1wphi1 Under our system of government, policy
issues are within the domain of the political branches of government and of the
people themselves as the repository of all state power. (Valmonte v. Belmonte, Jr.,
170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public interest so
requires. No combinations in restraint of trade or unfair competition shall be allowed.
(Art. XII, National Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily prohibited
by the Constitution. The state must still decide whether public interest demands that
monopolies be regulated or prohibited. Again, this is a matter of policy for the Legislature to
decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family)
and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2
(Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these

are merely statements of principles and, policies. As such, they are basically not selfexecuting, meaning a law should be passed by Congress to clearly define and effectuate such
principles.
In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and the legislature. If the executive and the legislature
failed to heed the directives of the articles the available remedy was not judicial or
political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot. (Bernas, Vol. II, p.
2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47
Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v.
Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified, it must be shown that there
is a clear and unequivocal breach of the Constitution, not merely a doubtful and equivocal one.
In other words, the grounds for nullity must be clear and beyond reasonable doubt. (Peralta v.
Comelec, supra) Those who petition this Court to declare a law, or parts thereof,
unconstitutional must clearly establish the basis for such a declaration. Otherwise, their
petition must fail. Based on the grounds raised by petitioners to challenge the constitutionality
of P.D. 1869, the Court finds that petitioners have failed to overcome the presumption. The
dismissal of this petition is therefore, inevitable. But as to whether P.D. 1869 remains a wise
legislation considering the issues of "morality, monopoly, trend to free enterprise, privatization
as well as the state principles on social justice, role of youth and educational values" being
raised, is up for Congress to determine.
As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board,
162 SCRA 521
Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any
case, in its favor the presumption of validity and constitutionality which petitioners
Valmonte and the KMU have not overturned. Petitioners have not undertaken to
identify the provisions in the Constitution which they claim to have been violated by
that statute. This Court, however, is not compelled to speculate and to imagine how
the assailed legislation may possibly offend some provision of the Constitution. The
Court notes, further, in this respect that petitioners have in the main put in question
the wisdom, justice and expediency of the establishment of the OPSF, issues which
are not properly addressed to this Court and which this Court may not
constitutionally pass upon. Those issues should be addressed rather to the political
departments of government: the President and the Congress.
Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so
when the gambling resorted to is excessive. This excessiveness necessarily depends not only
on the financial resources of the gambler and his family but also on his mental, social, and
spiritual outlook on life. However, the mere fact that some persons may have lost their material
fortunes, mental control, physical health, or even their lives does not necessarily mean that the
same are directly attributable to gambling. Gambling may have been the antecedent, but
certainly not necessarily the cause. For the same consequences could have been preceded
by an overdose of food, drink, exercise, work, and even sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
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SO ORDERED.

CIVIL SERVICE COMMISSION, petitioner, vs. THE HON. COURT OF APPEALS and
ISMAEL A. MATHAY, JR., respondents.
G.R. No. 126366 December 15, 1999
ISMAEL A. MATHAY, JR., in his capacity as MAYOR OF QUEZON CITY, petitioner, vs.
COURT OF APPEALS, CIVIL SERVICE COMMISSION and SANDY C. MARQUEZ,
respondents.
YNARES-SANTIAGO, J.:
Before this Court are three, consolidated petitions 1 filed under Rule 45 of the Revised Rules
of Court.
The facts behind the consolidated petitions are undisputed.
During his term as Mayor of Quezon City, Mr. Brigido R. Simon appointed private
respondents 2 to positions in the Civil Service Unit ("CSU") of the local government of Quezon
City. Civil Service Units were created pursuant to Presidential Decree No. 51 which was
allegedly signed into law on November 15 or 16, 1972.
On February 23, 1990, the Secretary of Justice rendered Opinion No. 33, stating that
Presidential Decree No. 51 was never published in the Official Gazette. Therefore,
conformably with our ruling in Tanada vs. Tuvera3 the presidential decree is deemed never "in
force or effect and therefore cannot at present, be a basis for establishment of the
CSUs . . . ." 4
On June 4, 1990, the Civil Service Commission issued Memorandum Circular No. 30, directing
all Civil Service Regional or Field Offices to recall, revoke and disapprove within one year from
issuance of the said Memorandum, all appointments in CSUs created pursuant to Presidential
Decree No. 51 on the ground that the same never became law. Among those affected by the
revocation of appointments are private respondents in these three petitions.
For Quezon City CSU employees, the effects of the circular were temporarily cushioned by the
enactment of City Ordinance No. NC-140, Series of 1990, which established the Department
of Public Order and Safety ("DPOS").

G.R. No. 124374 December 15, 1999

ISMAEL A. MATHAY JR., in his capacity as MAYOR OF QUEZON CITY, petitioner, vs.
COURT OF APPEALS, CIVIL SERVICE COMMISSION, EDUARDO A. TAN, LOURDES M.
DE GUZMAN, MANUEL CHUA, ANSELMO MATEO, CHRISTOPHER SANTOS,
BUENAVENTURA PUNAY, ENRICO BANDILLA, FELINO CAMACHO, DANTE E.
DEOQUINO, JAIME P. URCIA, JESUS B. REGONDOLA, ROMUALDO LIBERATO, CESAR
FRANCISCO, WILLIAM PANTI, JR., MICHAEL A. JACINTO and CESAR
DACIO, respondents.

At the heart of these petitions is Section 3 of the Ordinance which provides:

Sec. 3. The present personnel of the Civil Security Unit, Traffic Management Unit,
Anti-Squatting and Surveillance and Enforcement Team, and Disaster Coordinating
Council are hereby absorbed into the department of public order and safety
established under Section one hereof to be given appropriate position titles without
reduction in salary, seniority rights and other benefits. Funds provided for in the
1990 Budget for the absorbed offices shall be used as the initial budgetary allocation
of the Department. (Emphasis ours).

G.R. No. 126354 December 15, 1999

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Despite the provision on absorption, the regular and permanent positions in the DPOS were
not filled due to lack of funds for the new DPOS and the insufficiency of regular and
permanent positions created.
Mayor Brigido R. Simon remedied the situation by offering private respondents contractual
appointments for the period of June 5, 1991 to December 31, 1991. The appointments were
renewed by Mayor Simon for the period of January 1, 1992 to June 30, 1992.
On May 11, 1992, petitioner Ismael A. Mathay, Jr. was elected Mayor of Quezon City. On July
1, 1992, Mayor Mathay again renewed the contractual appointments of all private respondents
effective July 1 to July 31, 1992. Upon their expiry, these appointments, however, were no
longer renewed.
The non-renewal by Quezon City Mayor Ismael A. Mathay, Jr. of private respondents'
appointments became the seed of discontent from which these three consolidated petitions
grew.

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absorption of the personnel of the defunct CSU into the new DPOS. The Ordinance refers to
personnel and not to positions. Hence, the city council or sanggunian, through the Ordinance,
is in effect dictating who shall occupy the newly created DPOS positions. However, a review of
the provisions of B.P. 337 shows that the power to appoint rests exclusively with the local chief
executive and thus cannot be usurped by the city council or sanggunian through the simple
expedient of enacting ordinances that provide for the "absorption" of specific persons to
certain positions.
In upholding the provisions of the Ordinance on the automatic absorption of the personnel of
the CSU into the DPOS without allowance for the exercise of discretion on the part of the City
Mayor, the Court of Appeals makes the sweeping statement that "the doctrine of separation of
powers is not applicable to local governments." 8 We are unable to agree. The powers of the
city council and the city mayor are expressly enumerated separately and delineated by B.P.
337.

G.R. No. 124374 and G.R. No. 126366

The provisions of B.P. 337 are clear. As stated above, the power to appoint is vested in the
local chief executive. 9 The power of the city council or sanggunian, on the other hand, is
limited to creating, consolidatingand reorganizing city officers and positions supported by local
funds. The city council has no power to appoint. This is clear from Section 177 of B.P. 337
which lists the powers of the sanggunian. The power to appoint is not one of them. Expressio
inius est exclusio alterius. 10 Had Congress intended to grant the power to appoint to both the
city council and the local chief executive, it would have said so in no uncertain terms.

After the non-renewal of their appointments, private respondents in these two petitions
appealed to the Civil Service Commission. The CSC issued separate resolutions holding that
the reappointment of private respondents to the DPOS was automatic, pursuant to the
provision on absorption in Quezon City Ordinance No. NC-140, Series of 1990, 5 and ordering
their reinstatement to their former positions in the DPOS. 6 Petitioner brought petitions
for certiorari to this Court, 7 to annul the resolutions but, in accordance with Revised
Administrative Circular No. 1-95, the petition were referred to the Court of Appeals. As stated,
the Court of Appeals dismissed the petitions for certiorari.

By
ordering
petitioner
to
"reinstate"
private
respondents
pursuant
to
Section 3 of the Ordinance, the Civil Service Commission substituted its own judgment for that
of the appointing power. This cannot be done. In a long line of cases, 11 we have consistently
ruled that the Civil Service Commission's power is limited to approving or disapproving an
appointment. It does not have the authority to direct that an appointment of a specific
individual be made. Once the Civil Service Commission attests whether the person chosen to
fill a vacant position is eligible, its role in the appointment process necessarily ends. The Civil
Service Commission cannot encroach upon the discretion vested in the appointing authority.

We discuss the merits of the petitions of Mayor Ismael A. Mathay, Jr. jointly.

The Civil Service Commission argues that it is not substituting its judgment for that of the
appointing power and that it is merely implementing Section 3 of Ordinance NC-140.
In the instant petition for review, petitioner asserts that the Court of Appeals erred when it ruled
that respondent Civil Service Commission has the authority to direct him to "reinstate" private
respondents in the DPOS.

We agree with petitioner.

The law applicable is B.P. 337 or the old Local Government Code and not the Local
Government Code of 1992 which became effective only on January 1, 1992, when the
material events in this case transpired.
Applying the said law, we find that the Civil Service Commission erred when it applied the
directives of Ordinance NC-140 and in so doing ordered petitioner to "reinstate" private
respondents to positions in the DPOS. Section 3 of the said Ordinance is invalid for being
inconsistent with B.P. 337. We note that Section 3 of the questioned Ordinance directs the

The Ordinance refers to the "personnel of the CSU", the identities of which could not be
mistaken. The resolutions of the Civil Service Commission likewise call for the reinstatement of
named individuals. There being no issue as to who are to sit in the newly created DPOS, there
is therefore no room left for the exercise of discretion. In Farinas vs. Barba, 12 we held that the
appointing
authority
is
not
bound
to
appoint
anyone
recommended
by
the sanggunian concerned, since the power of appointment is a discretionary power.
When the Civil Service Commission ordered the reinstatement of private respondents, it
technically issued a new appointment. 13 This task, i.e. of appointment, is essentially
discretionary and cannot be controlled even by the courts as long as it is properly and not
arbitrarily exercised by the appointing authority.
In Apurillo vs. Civil Service Commission, we held that "appointment is essentially a
discretionary power and must be performed by the officer in which it is vested." 14
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The above premises considered, we rule that the Civil Service Commission has no power to
order petitioner Ismael A. Mathay, Jr., to reinstate private respondents.
Petitioner similarly assails as error the Court of Appeals' ruling that private respondents should
be automatically absorbed in the DPOS pursuant to Section 3 of the Ordinance.
In its decision of March 21, 1996 the Court of Appeals held:
It is clear however, that Ordinance No. NC-140, absorbing the "present personnel of
the Civil Security Agent Unit" in the DPOS was earlier enacted, particularly on March
27, 1990, thus,private respondents were still holders of de jure appointments as
permanent regular employees at the time, and therefore, by operation of said
Ordinance private respondents were automatically absorbed in the DPOS effectively
as of March 27, 1990. 15 (Emphasis ours.)
The decision is based on the wrong premise.
Even assuming the validity of Section 3 of the Ordinance, the absorption contemplated therein
is not possible. Since the CSU never legally came into existence, the private respondents
never held permanent positions. Accordingly, as petitioner correctly points out, 16 the private
respondents' appointments in the defunct CSU
were invalid ab initio. Their seniority and permanent status did not arise since they
have no valid appointment. For then to enter the Civil Service after the revocation
and cancellation of their invalid appointment, they have to be extended an original
appointment, subject again to the attesting power of the Civil Service Commission.
Being then not members of the Civil Service as of June 4, 1991, they cannot be
automatically absorbed/reappointed/appointed/reinstated into the newly created
DPOS. (Emphasis ours).
It is axiomatic that the right to hold public office is not a natural right. The right exists only by
virtue of a law expressly or impliedly creating and conferring it. 17 Since Presidential Decree 51
creating the CSU never became law, it could not be a source of rights. Neither could it impose
duties. It could not afford any protection. It did not create an office. It is as inoperative as
though it was never passed.
In Debulgado vs. Civil Service Commission 18 we held that "a void appointment cannot give
rise to security of tenure on the part of the holder of the appointment."
While the Court of Appeals was correct when it stated that "the abolition of an office does not
mean the invalidity of appointments thereto," 19 this cannot apply to the case at bar. In this
case, the CSU was not abolished. It simply did not come into existence as the Presidential
Decree creating it never became law.
At the most, private respondents held temporary and contractual appointments. The nonrenewal of these appointments cannot therefore be taken against petitioner. In Romualdez III
vs. Civil Service Commission 20we treated temporary appointments as follows:

The acceptance by the petitioner of a temporary appointment resulted in the

termination of official relationship with his former permanent position. When the
temporary appointment was not renewed, the petitioner had no cause to demand
reinstatement thereto. (Emphasis ours.)
Another argument against the concept of automatic absorption is the physical and legal
impossibility given the number of available positions in the DPOS and the number of
personnel to be absorbed. 21 We note that Section 1 of Ordinance NC-140 provides:
There is hereby established in the Quezon City Government the Department of
Public Order and Safety whose organization, structure, duties, functions and
responsibilities are as provided or defined in the attached supporting documents
consisting of eighteen (18) pages which are made integral parts of this Ordinance.
A review of the supporting documents shows that Ordinance No. NC-140 allowed only two
slots for the position of Security Officer II with a monthly salary of P4,418.00 and four slots for
the position of Security Agent with a monthly salary of P3,102.00. The limited number of slots
provided in the Ordinance renders automatic absorption unattainable, considering that in the
defunct CSU there are twenty Security Officers with a monthly salary of P4,418.00 and six
Security Agents with a monthly salary of P3,102.00. Clearly, the positions created in the DPOS
are not sufficient to accommodate the personnel of the defunct CSU, making automatic
absorption impossible.
Considering that private respondents did not legally hold valid positions in the CSU, for lack of
a law creating it, or the DPOS, for lack of a permanent appointment to the said agency, it
becomes unnecessary to discuss whether their acceptance of the contractual appointments
constitutes an "abandonment" or "waiver" of such positions. It escapes us how one can
"relinquish" or "renounce" a right one never possessed. A person waiving must actually have
the right which he is renouncing.
G.R. 126354
In this case, petitioner, Civil Service Commission seeks the reversal of the decision of the
Court of Appeals of July 5, 1996, which overturned CSC Resolution Nos. 955040 and 932732
and held that the Civil Service Commission has no authority to compel the mayor of Quezon
City to "reinstate" Jovito C. Labajo to the DPOS.
The standing of petitioner Civil Service Commission to bring this present appeal is
questionable.
We note that the person adversely affected by the Court of Appeals decision, Jovito C. Labajo
has opted notto appeal.
Basic is the rule that "every action must be prosecuted or defended in the name of the real
party in interest." 22 A real party in interest is the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of the suit.
In Ralla vs. Ralla we defined interest as "material interest, an interest in issue and to be
affected by the decree, as distinguished from mere interest in the question involved, or mere
22

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incidental interest." 23 As a general rule, one having no right or interest to protect cannot
invoke the jurisdiction of the court as a party-plaintiff in an action.
In the case at bar, it is evident that Jovito C. Labajo, not the Civil Service Commission, is the
real party in interest. It is Jovito C. Labajo who will be benefited or injured by his reinstatement
or non-reinstatement.
We are aware of our pronouncements in the recent case of Civil Service Commission v. Pedro
Dacoycoy 24which overturned our rulings in Paredes vs. Civil Service Commission 25 Mendez
vs. Civil Service Commission 26and Magpale vs. Civil Service Commission. 27 In Dacoycoy, we
affirmed the right of the Civil Service Commission to bring an appeal as the aggrieved party
affected by a ruling which may seriously prejudice the civil service system.

1st SET 4 cases

To be sure, when the resolutions of the Civil Service Commission were brought before the
Court of Appeals, the Civil Service Commission was included only as a nominal party. As
a quasi-judical body, the Civil Service Commission can be likened to a judge who should
"detach himself from cases where his decision is appealed to a higher court for review." 28
In instituting G.R. No. 126354, the Civil Service Commission dangerously departed from its
role as adjudicator and became an advocate. Its mandated functions is to "hear and decide
administrative cases instituted by or brought before it directly or on appeal, including contested
appointments and to review decisions and actions of its offices and agencies," 29 not to litigate.
Therefore, we rule that the Civil Service Commission has no legal standing to prosecute G.R.
No. 126354.

The aforementioned case, however, is different from the case at bar. Dacoycoy was an
administrative case involving nepotism whose deleterious effect on government cannot be
over emphasized. The subject of the present case, on the other hand, is "reinstatement."

WHEREFORE, the petitions of Ismael A. Mathay in G.R. No. 124374 and G.R. No. 126366 are
GRANTED and the decisions of the Court of Appeals dated March 21, 1996 and January 15,
1996 are REVERSED and SET ASIDE.

We fail to see how the present petition, involving as it does the reinstatement or nonreinstatement of one obviously reluctant to litigate, can impair the effectiveness of
government. Accordingly, the ruling inDacoycoy does not apply.

The petition of the Civil Service Commission in G.R. No. 126354 is DISMISSED for lack of
legal standing to sue. The assailed decision of the respondent Court of Appeals dated July 5,
1996 is AFFIRMED. No costs. SO ORDERED.

23