Manosca vs.

CA
G.R. NO. 106440, January 29, 1996

Facts: Petitioners inherited a piece of land when the parcel was ascertained by the NHI
to have been the birth site of Felix Y. Manalo, the founder of Iglesia Ni Cristo, it passed
Resolution No. 1, declaring the land to be a national historical landmark. Petitioners
moved to dismiss the complaint on the main thesis that the intended expropriation was
not for a public purpose and, incidentally, that the act would constitute an application of
public funds, directly or indirectly, for the use, benefit, or support of Iglesia ni Cristo, a
religious entity, contrary to the provision of Section 29(2), Article VI, of the 1987
Constitution.
Issue: Whether or not the expropriation of the land whereat Manalo was born is valid
and constitutional.
Held: Yes. The taking to be valid must be for public use. There was a time when it was
felt that a literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise,
expropriation is not allowable. It is not so any more. As long as the purpose of the
taking is public, then the power of eminent domain comes into play. As just noted, the
constitution in at least two cases, to remove any doubt, determines what public use is.
One is the expropriation of lands to be subdivided into small lots for resale at cost to
individuals. The other is the transfer, through the exercise of this power, of utilities and
other private enterprise to the government. It is accurate to state then that at present
whatever may be beneficially employed for the general welfare satisfies the requirement
of public use.

ProvinceofCamSurvCA,222SCRA137,GR103125(1993)
Facts: On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur
passed a Resolution authorizing the Provincial Governor to purchase or expropriate property
contiguous to the provincial Capitol site, in order to establish a pilot farm for non-food and nontraditional agricultural crops and a housing project for provincial government employees
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, filed two separate
cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, at the Regional
Trial Court, Pili, Camarines Sur.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered
for their property. In an order, the trial court denied the motion to dismiss and authorized the Province
of Camarines Sur to take possession of the property upon the deposit with the Clerk of Court the
amount provisionally fixed by the trial court to answer for damages that private respondents may
suffer in the event that the expropriation cases do not prosper.

The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur
to take possession of their property and a motion to admit an amended motion to dismiss. Both
motions were denied in the order dated February 26, 1990.
In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution of the
Sangguniang Panlalawigan be declared null and void; (b) that the complaints for expropriation be
dismissed; and (c) that the order denying the motion to dismiss and allowing the Province of
Camarines Sur to take possession of the property subject of the expropriation and the order dated
February 26, 1990, denying the motion to admit the amended motion to dismiss, be set aside. They
also asked that an order be issued to restrain the trial court from enforcing the writ of possession, and
thereafter to issue a writ of injunction.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that
under Section 9 of the Local Government Code (B.P. Blg. 337), there was no need for the approval by
the Office of the President of the exercise by the Sangguniang Panlalawigan of the right of eminent
domain. However, the Solicitor General expressed the view that the Province of Camarines Sur must
first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of
petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to
take possession of private respondents' lands and the order denying the admission of the amended
motion to dismiss. It also ordered the trial court to suspend the expropriation proceedings until after
the Province of Camarines Sur shall have submitted the requisite approval of the Department of
Agrarian Reform to convert the classification of the property of the private respondents from
agricultural to non-agricultural land.
Issue: WON the Province of Cam Sur must first secure the approval of the Department of Agrarian
Reform of the plan to expropriate the lands of the San Joaquins.
HELD: To sustain the Court of Appeals would mean that the local government units can no longer
expropriate agricultural lands needed for the construction of roads, bridges, schools, hospitals, etc.,
without first applying for conversion of the use of the lands with the Department of Agrarian Reform,
because all of these projects would naturally involve a change in the land use. In effect, it would then
be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose
or public use.
Ratio: WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals
is set aside insofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to
take possession of private respondents' property; (b) orders the trial court to suspend the
expropriation proceedings; and (c) requires the Province of Camarines Sur to obtain the approval of
the Department of Agrarian Reform to convert or reclassify private respondents' property from
agricultural to non-agricultural use.
The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court,
denying the amended motion to dismiss of the private respondents.
SO ORDERED.

Municipality of Paraaque vs V.M. Realty Corporation GR 127820 (July

20, 1998)
G.R. No. 127820
292 SCRA 676
July 20, 1998
Facts:
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, the Municipality of
Paraaque filed a Complaint for expropriation against V.M. Realty Corporation, over two
parcels of land. Allegedly, the complaint was filed for the purpose of alleviating the living
conditions of the underprivileged by providing homes for the homeless through a socialized
housing project. Petitioner, pursuant to its Sangguniang Bayan Resolution No. 577, Series of
1991, previously made an offer to enter into a negotiated sale of the property with private
respondent, which the latter did not accept. The RTC authorized petitioner to take possession
of the subject property upon its deposit with the clerk of court of an amount equivalent to
15% of its fair market value. Private Respondent filed an answer alleging that (a) the
complaint failed to state a cause of action because it was filed pursuant to a resolution and
not to an ordinance as required by RA 7160; and (b) the cause of action, if any, was barred
by a prior judgment or res judicata. On private respondents motion, its answer was treated
as a motion to dismiss. The trial court dismissed the complaint
Issue:
Whether a Local Government Unit can exercise its power of eminent domain pursuant to a
resolution by its law-making body.
Held:
Under Section 19, of the present Local Government Code (RA 7160), it is stated as the first
requisite that LGUs can exercise its power of eminent domain if there is an ordinance
enacted by its legislative body enabling the municipal chief executive. A resolution is not an
ordinance, the former is only an opinion of a law-making body, the latter is a law. The case
cited by Petitioner involves BP 337, which was the previous Local Government Code, which is
obviously no longer in effect. RA 7160 prevails over the Implementing Rules, the former
being the law itself and the latter only an administrative rule which cannot amend the
former.

City of Manila vs Chinese Community of Manila

FACTS: Petitioner (City of Manila) filed a petition praying that certain lands be expropriated for the purpose of
constructing a public improvement namely, the extension of Rizal Avenue, Manila and claiming that such
expropriation was necessary.
Herein defendants, on the other hand, alleged (a) that no necessity existed for said expropriation and (b) that the
land in question was a cemetery, which had been used as such for many years, and was covered with sepulchres
and monuments, and that the same should not be converted into a street for public purposes.
The lower court ruled that there was no necessity for the expropriation of the particular strip of land in question.
Petitioner therefore assails the decision of the lower court claiming that it (petitioner) has the authority to expropriate
any land it may desire; that the only function of the court in such proceedings is to ascertain the value of the land in
question; that neither the court nor the owners of the land can inquire into the advisable purpose of the expropriation
or ask any questions concerning the necessities therefor; that the courts are mere appraisers of the land involved in
expropriation proceedings, and, when the value of the land is fixed by the method adopted by the law, to render a
judgment in favor of the defendant for its value.
ISSUE: W/N the courts may inquire into and hear proof upon the necessity of the expropriation?
HELD: Yes. The courts have the power to restrict the exercise of eminent domain to the actual reasonable
necessities of the case and for the purposes designated by the law. When the municipal corporation or entity
attempts to exercise the authority conferred, it must comply with the conditions accompanying such authority. The
necessity for conferring the authority upon a municipal corporation to exercise the right of eminent domain is, without
question, within the power of the legislature. But whether or not the municipal corporation or entity is exercising the
right in a particular case under the conditions imposed by the general authority, is a question that the courts have
the right to inquire into.

Saguitanv.CityofMandaluyong,328SCRA137,GR135087(2000)
Facts: On October 13, 1994, the Sangguniang Panglungsod of Mandaluyong City issued a resolution
authorizing Mayor Benjamin S. Abalos to institute expropriation proceeding over the property of
Alberto Suguitan located at Boni Avenue and Sto. Rosario Streets in Mandaluyong City for the
expansion of Mandaluyong Medical Center. On January 20, 1995, Mayor Abalos wrote Alberto
Suguitan offering to buy his property, but Suguitan refused to sell. Consequently, the City of
Mandaluyong filed a complaint for expropriation with the Regional Trial Court of Pasig. Suguitan filed
a motion to dismiss. The trial court denied the said motion and subsequently, it allowed the
expropriation of the subject property. Aggrieved by the said order, the heirs of Suguitan asserted that
the City of Mandaluyong may only exercise its delegated power of eminent domain by means of an
ordinance as required by Section 19 of Republic Act No. 7160, and not by means of a mere
resolution.

Issue: WON the city of Mandaluyong has validly exercised its power of expropriation.
Held: NEGATIVE
Ratio: The Court ruled that the basis for the exercise of the power of eminent domain by local
government units is Section 19 of RA 7160 which provides that: "A local government unit may,
through its chief executive and acting pursuant to an ordinance, exercise the power of eminent
domain for public use, purpose, or welfare for the benefits of the poor and the landless, upon
payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws;
Provided, however, That the power of eminent domain may not be exercised unless a valid and
definite offer has been previously made to the owner, and such offer was not accepted; Provided,
further, That the local government unit may immediately take possession of the property upon the
filing of the expropriation proceedings and upon making a deposit with the proper court of at least
fifteen percent (15%) of the fair market value of the property based on the current tax declaration of
the property to be expropriated; Provided, finally, That the amount to be paid for the expropriated
property shall be determined by the proper court, based on the fair market value at the time of the
taking of the property. In the present case, the City of Mandaluyong sought to exercise the power of
eminent domain over petitioners' property by means of a resolution, in contravention of the first
requisite. The law in this case is clear and free from ambiguity. Section 19 of the Code requires an
ordinance, not a resolution, for the exercise of the power of eminent domain. Therefore, while the
Court remains conscious of the constitutional policy of promoting local autonomy, it cannot grant
judicial sanction to a local government unit's exercise of its delegated power of eminent domain in
contravention of the very law giving it such power.

Tano vs Socrates
Natural and Environmental Laws; Constitutional Law; Regalian Doctrine
GR No. 110249; August 21, 1997
FACTS:
On Dec 15, 1992, the Sangguniang Panglungsod ng Puerto Princesa enacted an ordinance banning the
shipment of all live fish and lobster outside Puerto Princesa City from January 1, 1993 to January 1, 1998.
Subsequently the Sangguniang Panlalawigan, Provincial Government of Palawan enacted a resolution
prohibiting the catching , gathering, possessing, buying, selling, and shipment of a several species of live
marine coral dwelling aquatic organisms for 5 years, in and coming from Palawan waters.
Petitioners filed a special civil action for certiorari and prohibition, praying that the court declare the said
ordinances and resolutions as unconstitutional on the ground that the said ordinances deprived them of
the due process of law, their livelihood, and unduly restricted them from the practice of their trade, in
violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution.
ISSUE:
Are the challenged ordinances unconstitutional?
HELD:
No. The Supreme Court found the petitioners contentions baseless and held that the challenged
ordinances did not suffer from any infirmity, both under the Constitution and applicable laws. There is
absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. Besides,
Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress
on the duty of the State to protect the nations marine wealth. The so-called preferential right of
subsistence or marginal fishermen to the use of marine resources is not at all absolute.

In accordance with the Regalian Doctrine, marine resources belong to the state and pursuant to the first
paragraph of Section 2, Article XII of the Constitution, their exploration, development and
utilization...shall be under the full control and supervision of the State.
In addition, one of the devolved powers of the LCG on devolution is the enforcement of fishery laws in
municipal waters including the conservation of mangroves. This necessarily includes the enactment of
ordinances to effectively carry out such fishery laws within the municipal waters. In light of the principles
of decentralization and devolution enshrined in the LGC and the powers granted therein to LGUs which
unquestionably involve the exercise of police power, the validity of the questioned ordinances cannot be
doubted.

SAMSON vs. CITY MAYOR OF BACOLOD CITYG.R. No. L-28745 October 23, 1974

Facts:
The City of Bacolod passed City Ordinance No. 1074 prohibiting twoindividuals to enter
into the amusement centers and movie houses using a singleticket.Elisa Samson and
Angel Gavilan filed a complaint alleging that the CityOrdinance No. 1074 of Bacolod City
is ultra vires and contrary to the due processprovision of the Constitution as they were
deprived of their property without dueprocess of law.They sought an injunction to
restrain the enforcement of the ordinance in themeanwhile, and it was granted by the
lower court through Judge Jose F. Fernandez.
Issue/s:
Whether or not City Ordinance No. 1074 is valid exercise of police power?
Held:
Yes it is a valid exercise of police power.When it is further remembered that insofar as
movie houses and other placesof amusement are concerned, the least doubt cannot be
entertained as to thevalidity of a measure prohibiting a proprietor, lessee or operator of
an amusementplace to admit two or more persons with only one admission ticket, not
only in theinterest of preventing fraud insofar as municipal taxes are concerned, but also
inaccordance with public health, public safety and the general welfare.Municipal / City
Ordinances is prima facie presumed to be valid andconstitutional; presumption of validity
should be offset by evidence.Property rights maybe regulated under the police power of
the state.Reliance on the possible adverse effect on property rights of a regulatory
measureunder the police power does not suffice for a declaration of unconstitutionality
underthe due process clause.

People vs. GozoG.R. No. L-36409 October 26, 1973

FACTS:
Appellant
Loreta
Gozo
bought
a
house
and
lot
located
inside
the
United
States Naval Reservation within the territorial jurisdiction of Olongapo City, which she then demolished to
build another one in its place. These she did without securing the building permit from the City Mayor of

Olongapo City, as provided for in Municipal Order No. 14Series of 1964. She was convicted by the trial
court of violation of the said ordinance,which she contested by invoking due process as taught in
People vs. Fajardo. Appellant G o z o m a i n t a i n e d t h a t h e r h o u s e w a s c o n s t r u c t e d w i t h i n t h e
n a v a l b a s e l e a s e d t o t h e American armed forces. She argued the validity of Municipal Order No. 14 or at
the veryleast its applicability to her in view of the location of her dwelling within the naval base.
ISSUE:
Whether or not Municipal Order No. 14 Series of 1964 is valid and may beenforced within the naval base.
HELD:
Yes . F i r s t , t h e C o u r t h e l d t h a t u s i n g t h e p r e c e d e n t i n P e o p l e v s . F a j a r d o i s fruitless
because
this
case
contemplates
upon
defendant
Fajardo
who
tried
securing
a permit from the Mayor and, when unable to, built his home nonetheless for needing it badly. The case at bar, o
n the other hand, shows that the appellant never bothered tocomply
with
the ordinance.
The Court
reiterated
that,
under
the terms
of
the Agreement between the Philippines and the United States, The Philippine Government has notabdicated
its sovereignty over the bases as part of the Philippine territory or divesteditself completely
of jurisdiction over offenses committed therein. The United StatesGovernment has prior or
preferential but not exclusive jurisdiction of such offenses. Jurisdiction of the Philippines over the
military bases may be diminished but it does notdisappear. These bases are under lease to the American
armed forces by virtue of themilitary bases agreement of 1947. They are not and cannot be foreign
territory.WHEREFORE, the appealed decision of November 11, 1969 is affirmed insofar as
itf o u n d t h e a c c u s e d , L o r e t a G o z o , g u i l t y
b e y o n d r e a s o n a b l e d o u b t o f a v i o l a t i o n o f Municipal Ordinance No. 14, series of 1964 and
sentencing her to pay a fine of P200.00w i t h s u b s i d i a r y i m p r i s o n m e n t i n c a s e o f i n s o l v e n c y, a n d
m o d i f i e d i n s o f a r a s s h e i s required to demolish the house that is the subject matter of the case,
she being given a period of thirty days from the finality of this decision within which to obtain the
required permit. Only upon her failure to do so will that portion of the appealed decision requiringdemolition be
enforced. Costs against the accused.
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING CORPORATION,
FACTS: There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City.
Civic organizations angrily denounced the project.The trouble arose when in 1992, flush with its tremendous
success in several cities, PAGCOR decided to expand its operations to Cagayan de Oro City.he reaction of the
Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992, it enacted
Ordinance No. 3353.Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93Pryce
assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and
supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals declared the
ordinances invalid and issued the writ prayed for to prohibit their enforcement
ISSUE: WON Ordinance 3353 and 3375-93 valid
HELD: No
Local Government Code, local government units are authorized to prevent or suppress, among others, "gambling
and other prohibited games of chance." Obviously, this provision excludes games of chance which are not
prohibited but are in fact permitted by law.The rationale of the requirement that the ordinances should not
contravene a statute is obvious.Casino gambling is authorized by P.D. 1869. This decree has the status of a statute
that cannot be amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang
Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation
of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their praiseworthy motives,
these ordinances are contrary to P.D. 1869 and the public policy announced therein and are therefore ultra vires and
void.

ZACARIAS VILLAVICENCIO, ET AL. vs. JUSTO LUKBAN, ET AL.

Issue:
The writ of Habeas Corpus was filed by the petitioner, with the prayer that the respondent produce around 170 women whom
Justo Lukban et, al deported to Davao. Liberty of abode was also raised versus the power of the executive of the Municipality in
deporting the women without their knowledge in his capacity as Mayor.
Facts:
Justo Lukban as Manila City's Mayor together with Anton Hohmann, the city's Chief of Police, took custody of about 170 women
at the night of October 25 beyond the latters consent and knowledge and thereafter were shipped to Mindanao specifically in
Davao where they were signed as laborers. Said women are inmates of the houses of prostitution situated in Gardenia Street, in
the district of Sampaloc.
That when the petitioner filed for habeas corpus, the respondent moved to dismiss the case saying that those women were
already out of their jurisdiction and that , it should be filed in the city of Davao instead.
The court ruled in favor of the petitioner with the instructions;
For the respondents to have fulfilled the court's order, three optional courses were open: (1) They could have produced the
bodies of the persons according to the command of the writ; or (2) they could have shown by affidavit that on account of
sickness or infirmity those persons could not safely be brought before the court; or (3) they could have presented affidavits to
show that the parties in question or their attorney waived the right to be present.
Held:
The court concluded the case by granting the parties aggrieved the sum of 400 pesos each, plus 100 pesos for nominal damage
due to contempt of court. Reasoning further that if the chief executive of any municipality in the Philippines could forcibly and
illegally take a private citizen and place him beyond the boundaries of the municipality, and then, when called upon to defend his
official action, could calmly fold his hands and claim that the person was under no restraint and that he, the official, had no
jurisdiction over this other municipality.
We believe the true principle should be that, if the respondent is within the jurisdiction of the court and has it in his power to obey
the order of the court and thus to undo the wrong that he has inflicted, he should be compelled to do so. Even if the party to
whom the writ is addressed has illegally parted with the custody of a person before the application for the writ is no reason why
the writ should not issue. If the mayor and the chief of police, acting under no authority of law, could deport these women from
the city of Manila to Davao, the same officials must necessarily have the same means to return them from Davao to Manila. The
respondents, within the reach of process, may not be permitted to restrain a fellow citizen of her liberty by forcing her to change
her domicile and to avow the act with impunity in the courts, while the person who has lost her birthright of liberty has no
effective recourse. The great writ of liberty may not thus be easily evaded.

EMH-MOA VS MAYOR OF MNLA

Facts: On June 13, 1963, the Municipal Board of Manila passed Ordinance No. 4760 with the following provisions
questioned for its violation of due process:

1. refraining from entertaining or accepting any guest or customer unless it fills out a prescribed form in the
lobby in open view;
2. prohibiting admission o less than 18 years old;
3. usurious increase of license fee to P4,500 and 6,000 o 150% and 200% respectively (tax issue also);
4. making unlawful lease or rent more than twice every 24 hours; and
5. cancellation of license for subsequent violation.
The lower court issued preliminary injunction and petitioners raised the case to SC on certiorari.
Issue: Is the ordinance compliant with the due process requirement of the constitution?
Held: Ordinance is a valid exercise of police power to minimize certain practices hurtful to public morals. There is no
violation o constitutional due process for being reasonable and the ordinance is enjoys the presumption of
constitutionality absent any irregularity on its face. Taxation may be made to implement a police power and the
amount, object, and instance of taxation is dependent upon the local legislative body. Judgment of lower court
reversed and injunction lifted.

ACEBEDO OPTICAL Co. v. CA

G.R. No. 100152, March 31, 2000
Police Power as exercised by LGUs, restrictions and qualifications
Power of city mayor to grant/cancel/revoke business permits
Granting of business permits vs. granting of permit to practice profession
FACTS:
Petitioner applied with the Office of the City Mayor of Iligan for a business pe
rmit. Permit was therefor issued, subject to certain conditions like prohibition
of putting up an optical clinic, examining and/or prescribing reading and simil
ar optical glasses, etc. When it was found that petitioner violated these condit
ions, its business permit was cancelled.
ISSUE:
Whether or not the imposition of special conditions by the public respondents
we
re acts ultra vires
RULING:
Police Power exercised by LGUs
Police power as an inherent attribute of sovereignty is the power to prescribe r

egulations to promote the health, morals, peace, education, good order or

safety
and general welfare of the people. The State, through the legislature, has dele
gated the exercise of police power to local government units, as agencies of
the
State, in order to effectively accomplish and carry out the declared objects of
their creation. This delegation of police power is embodied in the general welf
are clause of the Local Government Code xxx
The scope of police power has been held to be so comprehensive as to
encompass a
lmost all matters affecting the health, safety, peace, order, morals, comfort an
d convenience of the community. Police power is essentially regulatory in
nature
and the power to issue licenses or grant business permits, if exercised for a r
egulatory and not revenue-raising purpose, is within the ambit of this power.
Power of city mayor to grant business permits
The authority of city mayors to issue or grant licenses and business permits is
beyond cavil. It is provided for by law.
However, the power to grant or issue licenses or business permits must always
be
exercised in accordance with law, with utmost observance of the rights of all c
oncerned to due process and equal protection of the law.
But can city mayor cancel business permits or impose special conditions? As
aptl
y discussed by the Solicitor General in his Comment, the power to issue
licenses
and permits necessarily includes the corollary power to revoke, withdraw or
can
cel the same. And the power to revoke or cancel, likewise includes the power
to
restrict through the imposition of certain conditions.
Did the conditions or restrictions imposed amount to a confiscation of the busin
ess?
Distinction must be made between the grant of a license or permit to do
business
and the issuance of a license to engage in the practice of a particular profess
ion. The first is usually granted by the local authorities and the second is iss
ued by the Board or Commission tasked to regulate the particular profession. A
b

usiness permit authorizes the person, natural or otherwise, to engage in

busines
s or some form of commercial activity. A professional license, on the other
hand
, is the grant of authority to a natural person to engage in the practice or exe
rcise of his or her profession.
In the case at bar, what is sought by petitioner from respondent City Mayor is a
permit to engage in the business of running an optical shop. It does not purpor
t to seek a license to engage in the practice of optometry as a corporate body
o
r entity, although it does have in its employ, persons who are duly licensed to
practice optometry by the Board of Examiners in Optometry.

BINAY VS DOMINGO
Facts:
Petitioner Municipality of Makati, through its Council, approved Resolution No. 60 which extends P500
burial assistance to bereaved families whose gross family income does not exceed P2,000.00 a
month. The funds are to be taken out of the unappropriated available funds in the municipal treasury.
The Metro Manila Commission approved the resolution. Thereafter, the municipal secretary certified a
disbursement of P400,000.00 for the implementation of the program. However, the Commission on
Audit disapproved said resolution and the disbursement of funds for the implementation thereof for
the following reasons: (1) the resolution has no connection to alleged public safety, general welfare,
safety, etc. of the inhabitants of Makati; (2) government funds must be disbursed for public purposes
only; and, (3) it violates the equal protection clause since it will only benefit a few individuals.
Issues:
1. Whether Resolution No. 60 is a valid exercise of the police power under the general welfare clause
2. Whether the questioned resolution is for a public purpose
3. Whether the resolution violates the equal protection clause
Held:
1. The police power is a governmental function, an inherent attribute of sovereignty, which was born
with civilized government. It is founded largely on the maxims, "Sic utere tuo et ahenum non laedas
and "Salus populi est suprema lex. Its fundamental purpose is securing the general welfare, comfort
and convenience of the people.
Police power is inherent in the state but not in municipal corporations. Before a municipal corporation
may exercise such power, there must be a valid delegation of such power by the legislature which is
the repository of the inherent powers of the State.

Municipal governments exercise this power under the general welfare clause. Pursuant thereto they
are clothed with authority to "enact such ordinances and issue such regulations as may be necessary
to carry out and discharge the responsibilities conferred upon it by law, and such as shall be
necessary and proper to provide for the health, safety, comfort and convenience, maintain peace and
order, improve public morals, promote the prosperity and general welfare of the municipality and the
inhabitants thereof, and insure the protection of property therein.
2. Police power is not capable of an exact definition but has been, purposely, veiled in general terms
to underscore its all comprehensiveness. Its scope, over-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 assuring the greatest benefits.
The police power of a municipal corporation is broad, and has been said to be commensurate with,
but not to exceed, the duty to provide for the real needs of the people in their health, safety,
comfort, and convenience as consistently as may be with private rights. It extends to all the great
public needs, and, in a broad sense includes all legislation and almost every function of the municipal
government. It covers a wide scope of subjects, and, while it is especially occupied with whatever
affects the peace, security, health, morals, and general welfare of the community, it is not limited
thereto, but is broadened to deal with conditions which exists so as to bring out of them the greatest
welfare of the people by promoting public convenience or general prosperity, and to everything
worthwhile for the preservation of comfort of the inhabitants of the corporation. Thus, it is deemed
inadvisable to attempt to frame any definition which shall absolutely indicate the limits of police
power.
Public purpose is not unconstitutional merely because it incidentally benefits a limited number of
persons. As correctly pointed out by the Office of the Solicitor General, "the drift is towards social
welfare legislation geared towards state policies to provide adequate social services, the promotion of
the general welfare, social justice as well as human dignity and respect for human rights." The care
for the poor is generally recognized as a public duty. The support for the poor has long been an
accepted exercise of police power in the promotion of the common good.
3. There is no violation of the equal protection clause. Paupers may be reasonably classified.
Different groups may receive varying treatment. Precious to the hearts of our legislators, down to our
local councilors, is the welfare of the paupers. Thus, statutes have been passed giving rights and
benefits to the disabled, emancipating the tenant-farmer from the bondage of the soil, housing the
urban poor, etc. Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati
is a paragon of the continuing program of our government towards social justice. The Burial
Assistance Program is a relief of pauperism, though not complete. The loss of a member of a family is
a painful experience, and it is more painful for the poor to be financially burdened by such death.
Resolution No. 60 vivifies the very words of the late President Ramon Magsaysay 'those who have
less in life, should have more in law." This decision, however must not be taken as a precedent, or as
an official go-signal for municipal governments to embark on a philanthropic orgy of inordinate doleouts for motives political or otherwise. (Binay vs Domingo, G.R. No. 92389, September 11, 1991)

Sultan Osop Camid vs. The office of the President

G.R. No. 161414 January 14, 2005

Facts:
The municipality of Andong, Lanao del Sur, is a town that is not supposed to exist yet is
actually insisted by some as alive and thriving. The creation of the putative municipality was
declared void ab initio by the Supreme Court four decades ago, but the present petition
insists that Andong thrives on and, hence, its legal personality should be given judicial
affirmation.
xxx
The factual antecedents derive from the ruling in Pelaez vs.Auditor General in 1965. Then
President Diosdado Macapagal issued several Executive Orders creating 33 municipalities in
Mindanao.
President Macapagal justified the creation of these municipalities citing his powers
underSec.68 of the Revised Admin. Code. Then VP Emmanuel Pelaez filed a special civil
action for a writ of prohibition alleging that the EOs were null and void, Sec. 68 having been
repealed by RA 2370, and said orders constituting an undue delegation of legislative power.
After due deliberation, the SC ruled that the challenged EOs were null and void since Sec. 68
of the Revised Admin. Code did not meet the well-settled requirements for a valid delegation
of legislative power to the executive branch.
Among the EOs annulled was EO 107 which created the Municipality of Andong.
Petitioner represents himself as a current resident of Andong and alleged that Andong has
metamorphosed into a full-blown municipality with a complete set of officials appointed to
handle essential services for the municipality and its constituents, despite the fact that no
person has been appointed, elected or qualified to serve any of the local government offices
of Andong since 1968.
Camid imputed grave abuse of discretion on the part of DILG in not classifying [Andong] as
a regular existing municipality and in not including said municipality in its records and official
database as [an] existing regular municipality. He argues that Pelaez has already been
modified by supervening events consisting of subsequent laws and jurisprudence,
particularly citing Municipality of San Narciso v. Hon. Mendez wherein the court affirmed the
unique status of the Municipality of San Andres as a de facto municipal corporation. Camid
also cites Sec. 442(d) of the Local Government Code of 1991 as basis for the recognition of
the impugned municipality.
Issue:
Whether the judicial annulment of the Municipality of Andong continues despite the
petitioners allegation that Andong has thrived into a full-blown municipality
Held:
Municipal corporations may exist by prescription where it is shown that the community has

claimed and exercised corporate functions with the knowledge and acquiescence of the
legislature, and without interruption or objection for period long enough to afford title by
prescription. What is clearly essential is a factual demonstration of the continuous exercise
by the municipal corporation of its corporate powers, as well as the acquiescence thereto by
instrumentalities of the state. Camids plaint should have undergone the usual
administrative gauntlet and, once that was done, should have been filed first with the Court
of Appeals, which at least would have had the power to make the necessary factual
determinations. Petitioners seeming ignorance of the principles of exhaustion of
administrative remedies and hierarchy of courts, as well as the concomitant prematurity of
the present petition, cannot be countenanced.
The question as to whether a municipality previously annulled by the Supreme Court may
attain recognition in the absence of any curative/reimplementing statute has never been
decided before. The effect of Sec. 442(d) of the Local Government Code on municipalities
such as Andong warrants explanation.
EO 107 which established Andong was declared null and void ab initio in 1965 by the
Supreme Court in Pelaez vs. Auditor General, 15 SCRA 569 (1965), along with 33 other EOs.
The phrase ab initio means from the beginning. Pelaez was never reversed by the SC but
was rather expressly affirmed in the cases of Municipality of San Joaquin v. Siva, Municipality
of Malabang v. Benito, and Municipality of Kapalong v. Moya. No subsequent ruling
declared Pelaez as overturned/inoperative. No subsequent legislation has been passed since
1965 creating the Municipality of Andong. Given these facts, there is hardly any reason to
elaborate why Andong does not exist as a duly constituted municipality.
Pelaez and its offspring cases ruled that the President has no power to create
municipalities yet limited its nullificatory effects to the particular municipalities challenged
in actual cases before this Court. With the promulgation of the LGC in 1991, the legal cloud
was lifted over the municipalities similarly created by executive order but not judicially
annulled Sec. 442(b) of the LGC deemed curative whatever legal defects to title these
municipalities had labored under.
There are eminent differences between Andong and municipalities such as San Andres, Alicia
and Sinacaban. Most prominent is the fact that the EO creating Andong was expressly
annulled by the SC in 1965. Court decisions cannot lose their efficacy due to sheer defiance
by the parties aggrieved.
Sec. 442(d) of the LGC does not serve to affirm/reconstitute the judicially dissolved
municipalities which had been previously created by presidential issuances/EOs. The
provision only affirms the legal personalities of those municipalities which may have been

created using the same infirm legal basis, yet were fortunate enough not to have been
judicially annulled. On the other hand, the municipalities judicially dissolved remain
inexistent unless recreated through specific legislative enactments.
The legal effect of the nullification of a municipality in Pelaez was to revert the constituent
barrios of the voided town back to their original municipalities.
If there is only a strong impulse for the reconstitution of the municipality nullified in Pelaez,
the solution is through the legislature and not judicial confirmation of void title. The time
has come for the light to seep in and for the petitioner and like-minded persons to
awaken to legal reality.

Municipality of San Narciso, Quezon v. Mendez

Sec. 442(d) of the Local Government Code of 1991, provides that municipal districts organized pursuant to
presidential issuances or executive orders & which have their respective sets of elective municipal officials
holding at the time of the effectivity of the code shall henceforth be considered as a regular municipalities.
This is a curative statute as it validates the creation of municipalities by EO which had been held to be an
invalid usurpation of legislative power.
MUNICIPALITY OF SAN NARCISO vs. HON. ANTONIO V. MENDEZ, SR.
G.R. No. 103702 December 6, 1994
FACTS: On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630 of the Revised
Administrative Code, as amended, Executive Order No. 353 creating the municipal district of San Andres, Quezon, by segregating from
the municipality of San Narciso of the same province, the barrios of San Andres, Mangero, Alibijaban, Pansoy, Camflora and Tala along
with their respective sitios.
EO No. 353 was issued upon the request, addressed to the President and coursed through the Provincial Board of Quezon, of the
municipal council of San Narciso, Quezon
By virtue of EO No. 174, dated 05 October 1965, issued by President Diosdado Macapagal, the municipal district of San Andres was
later officially recognized to have gained the status of a fifth class municipality beginning 01 July 1963 by operation of Section 2 of
Republic Act No. 1515. 2 The executive order added that (t)he conversion of this municipal district into (a) municipality as proposed in
House Bill No. 4864 was approved by the House of Representatives.
Petitioner Municipality of San Narciso: filed a petition for quo warranto with RTC which petition sought the declaration of nullity of EO
No. 353 Invoking the ruling of this Court in Pelaez v. Auditor General.
Respondent San Andres: San Narciso is estopped from questioning the creation of the new municipality and that the case had become
moot and academic with the enactment of Republic Act No. 7160 (Sec. 442. Requisites for Creation. . . .(d) Municipalities existing as
of the date of the effectivity of this Code shall continue to exist and operate as such.)
Petitioner: The above provision of law was inapplicable to the Municipality of San Andres since the enactment referred to legally existing
municipalities and not to those whose mode of creation had been void ab initio.
ISSUE: W/N Municipality of San Andres is a de jure or de facto municipal corporation.
HELD: Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but it was only after almost
thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally decided to challenge the legality of the executive order.
Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutional delegation of legislative
power, the peculiar circumstances obtaining in this case hardly could offer a choice other than to consider the Municipality of

San Andres to have at least attained a status uniquely of its own closely approximating, if not in fact attaining, that of a de
facto municipal corporation. Conventional wisdom cannot allow it to be otherwise. Created in 1959 by virtue of Executive Order No.
353, the Municipality of San Andres had been in existence for more than six years when, on 24 December 1965, Pelaez v. Auditor
General was promulgated. The ruling could have sounded the call for a similar declaration of the unconstitutionality of Executive Order
No. 353 but it was not to be the case. On the contrary, certain governmental acts all pointed to the States recognition of the continued
existence of the Municipality of San Andres. Thus, after more than five years as a municipal district, Executive Order No. 174 classified
the Municipality of San Andres as a fifth class municipality after having surpassed the income requirement laid out in Republic Act No.
1515.
At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the Ordinance (adopted on 15
October 1986) apportioning the seats of the House of Representatives, appended to the 1987 Constitution, the Municipality of San
Andres has been considered to be one of the twelve (12) municipalities composing the Third District of the province of Quezon. Equally
significant is Section 442(d) of the Local Government Code to the effect that municipal districts organized pursuant to presidential
issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the
effectivity of (the) Code shall henceforth be considered as regular municipalities.
All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now be conceded.

EMMANUEL PELAEZ VS AUDITOR GENERAL

In 1964, President Ferdinand Marcos issued executive orders creating 33 municipalities this was
purportedly pursuant to Section 68 of the Revised Administrative Code which provides in part:
The President may by executive order define the boundary of any municipality and may change the
seat of government within any subdivision to such place therein as the public welfare may require
The then Vice President, Emmanuel Pelaez, as a taxpayer, filed a special civil action to prohibit the
auditor general from disbursing funds to be appropriated for the said municipalities. Pelaez claims that the
EOs were unconstitutional. He said that Section 68 of the RAC had been impliedly repealed by Section 3
of RA 2370 which provides that barrios may not be created or their boundaries altered nor their names
changed except by Act of Congress. Pelaez argues: If the President, under this new law, cannot even
create a barrio, how can he create a municipality which is composed of several barrios, since barrios are
units of municipalities?
The Auditor General countered that there was no repeal and that only barrios were barred from being
created by the President. Municipalities are exempt from the bar and that a municipality can be created
without creating barrios. He further maintains that through Sec. 68 of the RAC, Congress has delegated
such power to create municipalities to the President.
ISSUE: Whether or not Congress has delegated the power to create barrios to the President by virtue of
Sec. 68 of the RAC.
HELD: No. There was no delegation here. Although Congress may delegate to another branch of the
government the power to fill in the details in the execution, enforcement or administration of a law, it is
essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in
itself it must set forth therein the policy to be executed, carried out or implemented by the delegate
and (b) fix a standard the limits of which are sufficiently determinate or determinable to which the
delegate must conform in the performance of his functions. In this case, Sec. 68 lacked any such

standard. Indeed, without a statutory declaration of policy, the delegate would, in effect, make or formulate
such policy, which is the essence of every law; and, without the aforementioned standard, there would be
no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the
scope of his authority.
Further, although Sec. 68 provides the qualifying clause as the public welfare may require which would
mean that the President may exercise such power as the public welfare may require is present, still,
such will not replace the standard needed for a proper delegation of power. In the first place, what the
phrase as the public welfare may require qualifies is the text which immediately precedes hence, the
proper interpretation is the President may change the seat of government within any subdivision to such
place therein as the public welfare may require. Only the seat of government may be changed by the
President when public welfare so requires and NOT the creation of municipality.
The Supreme Court declared that the power to create municipalities is essentially and eminently
legislative in character not administrative (not executive).

Vilas vs City of Manila 42 Phil 935

Facts
Prior to the incorporation of the City of Manila under the Republic Act No. 183, petitioner Vilas is the creditor
of the City. After the incorporation, Vilas brought an action to recover the sum of money owed to him by the
city. The City of Manila that incurred the debts has changed its sovereignty after the cession of the Philippines
to the US by the Treaty of Paris and its contention now is founded on the theory that by virtue of the Act No.
183 its liability has been extinguished.
Issue
Whether or not the change of the sovereignty extinguishes the previous liability of the City of Manila to its
creditor?
Held
No. The mere change of sovereignty of a country does not necessarily dissolve the municipal corporation
organized under the former sovereign. The new City of Manila is in a legal sense the successor of the old city.
Thus the new city is entitled to all property and property rights of the predecessor corporation including its
liabilities. The court held that only the governmental functions that are not compatible with the present
sovereignty are suspended. Because the new City of Manila retains its character as the predecessor of the old
city it is still liable to the creditors of the old City of Manila.

NORBERTO ASUNCION, ET AL. vs. MANUEL DE YRIARTE

[G.R. No. 9321. September 24, 1914.]
FACTS: The proposed incorporators began an action in the CFI to compel the chief of the division of archives to receive and register
said articles of incorporation and to do any and all acts necessary for the complete incorporation of the persons named in the articles.
The court below found in favor of the defendant and refused to order the registration of the articles mentioned, maintaining and holding
that the defendant, under the Corporation Law, had authority to determine both the sufficiency of the form of the articles and the legality
of the object of the proposed corporation. This appeal is taken from that judgment
The chief of the division of archives, the respondent, refused to file the articles of incorporation, upon the ground that the object of the
corporation, as stated in the articles, was not lawful and that, in pursuance of section 6 of Act No. 1459, they were not registerable.
Hence, this action to obtain a writ of mandamus.
ISSUE: Whether or not the chief of the division of archives has authority, under the Corporation Law, on being presented with articles of
incorporation for registration, to decide not only as to the sufficiency of the form of the articles, but also as to the lawfulness of the
purposes of the proposed corporation.
HELD: YES.
CORPORATION LAW; POWERS AND DUTIES OF CHIEF OF DIVISION OF ARCHIVES, EXECUTIVE BUREAU. The chief of the
division of archives, for and on behalf of the division, has authority under the Corporation Law (Act No. 1459) to determine the
sufficiency of the form of articles of incorporation offered for registration with the division.
Section 6 of the Corporation Law reads in part as follows:
Five or more persons, not exceeding fifteen, a majority of whom are residents of the Philippine Islands, may form a private corporation
for any lawful purpose by filing with the division of archives, patents, copyrights, and trademarks of the Executive Bureau articles of
incorporation duly executed and acknowledged before a notary public, . . .
Simply because the duties of an official happen to be ministerial, it does not necessarily follow that he may not, in the
administration of his office, determine questions of law. We are of the opinion that it is the duty of the division of archives, when
articles of incorporation are presented for registration, to determine whether the objects of the corporation as expressed in the articles
are lawful. We do not believe that, simply because articles of incorporation presented for registration are perfect in form, the division of
archives must accept and register them and issue the corresponding certificate of incorporation no matter what the purpose of the
corporation may be as expressed in the articles. The chief of the division of archives, on behalf of the division, has also the power and
duty to determine from the articles of incorporation presented for registration the lawfulness of the purposes of the proposed corporation
and whether or not those purposes bring the proposed corporation within the purview of the law authorizing corporations for given
purposes.
MANDAMUS TO COMPEL HIM TO PERFORM DUTIES. The duties of the chief of the division of archives, so far as relates to the
registration of articles of incorporation, are purely ministerial and not discretional; and mandamus will lie to compel him to perform his
duties under the Corporation Law if, in violation of law, he refuse to perform them
On the contrary, there is no incompatibility in holding, as we do hold, that his duties are ministerial and that he has no authority to
exercise discretion in receiving and registering articles of incorporation. He may exercise judgment that is, the judicial function in
the determination of the question of law referred to, but he may not use discretion. The question whether or not the objects of a
proposed corporation are lawful is one that can be decided one way only. If he err in the determination of that question and refuse to file
articles which should be filed under the law, that decision is subject to review and correction and, upon proper showing, he will be
ordered to file the articles.
Discretion, it may be said generally, is a faculty conferred upon a court or other official by which he may decide a question
either way and still be right. The power conferred upon the division of archives with respect to the registration of articles of
incorporation is not of that character. It is of the same character as the determination of a lawsuit by a court upon the merits.
It can be decided only one way correctly.

UMALI vs. COMMISSION ON ELECTIONS, G.R. No. 203974, April 22,

2014
CONSTITUTIONAL LAW; SUPREME LAW OF THE LAND; Hornbook doctrine is that neither the legislative, the
executive, nor the judiciary has the power to act beyond the Constitutions mandate. The Constitution is supreme; any
exercise of power beyond what is circumscribed by the Constitution is ultra vires and a nullity. As elucidated by former
Chief Justice Enrique Fernando in Fernandez v. Cuerva:

CONSTITUTIONAL LAW; CONTRARY TO THE CONSTITUTION; LEGISLATIVE OR EXECUTIVE ACTS ARE VOID.
Where the assailed legislative or executive act is found by the judiciary to be contrary to the Constitution, it is null and
void. As the new Civil Code puts it: "When the courts declare a law to be inconsistent with the Constitution, the former
shall be void and the latter shall govern." Administrative or executive acts, orders and regulations shall be valid only when
they are not contrary to the laws or the Constitution. The above provision of the civil Code reflects the orthodox view that
an unconstitutional act, whether legislative or executive, is not a law, confers no rights, imposes no duties, and affords no
protection. x x x

CONSTITUTIONAL LAW; LAW SHOULD BE CONSTRUED IN HARMONY OF THE CONSTITUTION. Applying this
orthodox view, a law should be construed in harmony with and not in violation of the Constitution. In a long line of cases,
the cardinal principle of construction established is that a statute should be interpreted to assure its being in consonance
with, rather than repugnant to, any constitutional command or prescription. If there is doubt or uncertainty as to the
meaning of the legislative, if the words or provisions are obscure or if the enactment is fairly susceptible of two or more
constitution, that interpretation which will avoid the effect of unconstitutionality will be adopted, even though it may be
necessary, for this purpose, to disregard the more usual or apparent import of the language used.

POLITICAL LAW; MEANING OF QUALIFIED VOTERS THEREIN.Pursuant to established jurisprudence, the phrase "by
the qualified voters therein" in Sec. 453 should be construed in a manner that will avoid conflict with the Constitution. If
one takes the plain meaning of the phrase in relation to the declaration by the President that a city is an HUC, then, Sec.
453 of the LGC will clash with the explicit provision under Sec. 10, Art. X that the voters in the "political units directly
affected" shall participate in the plebiscite. Such construction should be avoided in view of the supremacy of the
Constitution. Thus, the Court treats the phrase "by the qualified voters therein" in Sec. 453 to mean the qualified voters
not only in the city proposed to be converted to an HUC but also the voters of the political units directly affected by such
conversion in order to harmonize Sec. 453 with Sec. 10, Art. X of the Constitution.

POLITICAL LAW; POLITICAL UNITS DIRECTLY AFFECTED; DEFINED.In identifying the LGU or LGUs that should be
allowed to take part in the plebiscite, what should primarily be determined is whether or not the unit or units that desire
to participate will be "directly affected" by the change. To interpret the phrase, Tan v. COMELEC and Padilla v. COMELEC
are worth revisiting.

We have ruled in Tan, involving the division of Negros Occidental for the creation of the new province of Negros del Norte,
that the LGUs whose boundaries are to be altered and whose economy would be affected are entitled to participate in the
plebiscite. As held:

It can be plainly seen that the aforecited constitutional provision makes it imperative that there be first obtained "the
approval of a majority of votes in the plebiscite in the unit or units affected" whenever a province is created, divided or

merged and there is substantial alteration of the boundaries. It is thus inescapable to conclude that the boundaries of the
existing province of Negros Occidental would necessarily be substantially altered by the division of its existing boundaries
in order that there can be created the proposed new province of Negros del Norte. Plain and simple logic will demonstrate
than that two political units would be affected.

LA BUGAL BLAAN TRIBAL ASSOCIATION INC., et. al. v. VICTOR O. RAMOS, Secretary Department of
Environment and Natural Resources; HORACIO RAMOS, Director, Mines and Geosciences Bureau (MGBDENR); RUBEN TORRES, Executive Secretary; and WMC (PHILIPPINES) INC.
G.R. No. 127882, 27 January 2004, En Banc (Carpio-Morales, J.)
The constitutional provision allowing the President to enter into FTAA is a exception to the rule that
participation in the nations natural resources is reserved exclusively to Filipinos. Provision must be
construed strictly against their enjoyment by non-Filipinos.
FACTS: RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the effectivity of RA 7942, or on
March 30, 1995, the President signed a Financial and Technical Assistance Agreement (FTAA) with WMCP, a
corporation organized under Philippine laws, covering close to 100,000 hectares of land in South Cotabato, Sultan
Kudarat, Davao del Sur and North Cotabato. On August 15, 1995, the Environment Secretary Victor Ramos issued
DENR Administrative Order 95-23, which was later repealed by DENR Administrative Order 96-40, adopted on
December 20, 1996.
Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the government and WMCP be
declared unconstitutional on ground that they allow fully foreign owned corporations like WMCP to exploit, explore
and develop Philippine mineral resources in contravention of Article XII Section 2 paragraphs 2 and 4 of the
Charter.
In January 2001, WMC - a publicly listed Australian mining and exploration company - sold its whole stake in WMCP
to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which is owned by Indophil Resources, an
Australian company. DENR approved the transfer and registration of the FTAA in Sagittarius name but Lepanto
Consolidated assailed the same. The latter case is still pending before the Court of Appeals.
EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to accept, consider and
evaluate proposals from foreign owned corporations or foreign investors for contracts or agreements involving
wither technical or financial assistance for large scale exploration, development and utilization of minerals which
upon appropriate recommendation of the (DENR) Secretary, the President may execute with the foreign proponent.
WMCP likewise contended that the annulment of the FTAA would violate a treaty between the Philippines and
Australia which provides for the protection of Australian investments.
ISSUES:
1.
Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-owned corporations to
exploit the Philippine mineral resources.
2.
Whether or not the FTAA between the government and WMCP is a service contract that permits fully
foreign owned companies to exploit the Philippine mineral resources.
HELD:
First Issue: RA 7942 is Unconstitutional

RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign owned corporations to
exploit the Philippine natural resources.
Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which states that All lands of the
public domain, waters, minerals, coal, petroleum, and other minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are
owned by the State. The same section also states that, the exploration and development and utilization of
natural resources shall be under the full control and supervision of the State.
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution authorizing the State to grant
licenses, concessions, or leases for the exploration, exploitation, development, or utilization of natural resources. By
such omission, the utilization of inalienable lands of the public domain through license, concession or lease is no
longer allowed under the 1987 Constitution.
Under the concession system, the concessionaire makes a direct equity investment for the purpose of exploiting a
particular natural resource within a given area. The concession amounts to complete control by the concessionaire
over the countrys natural resource, for it is given exclusive and plenary rights to exploit a particular resource at the
point of extraction.
The 1987 Constitution, moreover, has deleted the phrase management or other forms of assistance in the 1973
Charter. The present Constitution now allows only technical and financial assistance. The management and the
operation of the mining activities by foreign contractors, the primary feature of the service contracts was precisely
the evil the drafters of the 1987 Constitution sought to avoid.
The constitutional provision allowing the President to enter into FTAAs is an exception to the rule that participation in
the nations natural resources is reserved exclusively to Filipinos. Accordingly, such provision must be construed
strictly against their enjoyment by non-Filipinos. Therefore, RA 7942 is invalid insofar as the said act authorizes
service contracts. Although the statute employs the phrase financial and technical agreements in accordance
with the 1987 Constitution, its pertinent provisions actually treat these agreements as service contracts that grant
beneficial ownership to foreign contractors contrary to the fundamental law.
The underlying assumption in the provisions of the law is that the foreign contractor manages the mineral resources
just like the foreign contractor in a service contract. By allowing foreign contractors to manage or operate all the
aspects of the mining operation, RA 7942 has, in effect, conveyed beneficial ownership over the nations mineral
resources to these contractors, leaving the State with nothing but bare title thereto.
The same provisions, whether by design or inadvertence, permit a circumvention of the constitutionally ordained 6040% capitalization requirement for corporations or associations engaged in the exploitation, development and
utilization of Philippine natural resources.
When parts of a statute are so mutually dependent and connected as conditions, considerations, inducements or
compensations for each other as to warrant a belief that the legislature intended them as a whole, then if some parts
are unconstitutional, all provisions that are thus dependent, conditional or connected, must fail with them.
Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only to merely technical or
financial assistance to the State for large scale exploration, development and utilization of minerals, petroleum and
other mineral oils.
Second Issue: RP Government-WMCP FTAA is a Service Contract

The FTAA between he WMCP and the Philippine government is likewise unconstitutional since the agreement itself
is a service contract.
Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive right to explore, exploit,
utilize and dispose of all minerals and by-products that may be produced from the contract area. Section 1.2 of the
same agreement provides that EMCP shall provide all financing, technology, management, and personnel
necessary for the Mining Operations.
These contractual stipulations and related provisions in the FTAA taken together, grant WMCP beneficial ownership
over natural resources that properly belong to the State and are intended for the benefit of its citizens. These
stipulations are abhorrent to the 1987 Constitution. They are precisely the vices that the fundamental law seeks to
avoid, the evils that it aims to suppress. Consequently, the contract from which they spring must be struck down.