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Resolution No. 27, S-1960 declaring the western part of Highway 54, now E. de los Santos Avenue (EDSA, for
short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone, was obviously passed by
the Municipal Council of Mandaluyong, Rizal in the exercise of police power to safeguard or promote the health,
safety, peace, good order and general welfare of the people in the locality. Judicial notice may be taken of the
conditions prevailing in the area, especially where Lots Nos. 5 and 6 are located. The lots themselves not only
front the highway; industrial and commercial complexes have flourished about the place. EDSA, a main traffic
artery which runs through several cities and municipalities in the Metro Manila are, supports an endless stream
of traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or welfare of
the residents in its route. Having been expressly granted the power to adopt zoning and subdivision ordinances
or regulations, the municipality of Mandaluyong, through its Municipal Council, was reasonably, if not perfectly,
justified under the circumstances, in passing the subject resolution.
Under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the
defective roads or streets belong to the province, city or municipality from which responsibility is exacted. What
said article requires is that the province, city or municipality has either "control or supervision" o ver said street
or road.
must undergo painstaking scrutiny. Indeed, despite the existence of legislative grant in favor of local
governments, it is still the duty of the courts to determine whether the power of eminent domain is being
exercised in accordance with the delegating law.
It is clear therefore that several requisites must concur before an LGU can exercise the power of eminent domain,
to wit: 1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf
of the local government unit, to exercise the power of eminent domain or pursue expropriation proceedings over
a particular private property. 2. The power of eminent domain is exer cised for public use, purpose or welfare, or
for the benefit of the poor and the landless. 3. There is payment of just compensation, as required under Section
9, Article III of the Constitution, and other pertinent laws. 4. A valid and definite offer has been previously made
to the owner of the property sought to be expropriated, but said offer was not accepted.
The Court in no uncertain terms have pronounced that a local government unit cannot authorize an expropriation
of private property through a mere resolution of its lawmaking body. R.A. No. 7160 otherwise known as the Local
Government Code expressly requires an ordinance for the purpose and a resolution that merely expresses the
sentiment of the municipal council will not suffice. A resolution will not suffice for an LGU to be able to
expropriate private property; and the reason for this is settled: x x x A municipal ordinance is different from a
resolution. An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a
lawmaking body on a specific matter. An ordinance possesses a general and permanent character, but a
resolution is temporary in nature. Additionally, the two are enacted differentlya third reading is necessary for
an ordinance, but not for a resolution, unless decided otherwise by a majority of all the Sanggunian members.
As re-spondents expropriation in this case was based merely on a resolution, such expropriation is clearly
defective. While the Court is aware of the constitutional policy promoting local autonomy, the court cannot grant
judicial sanction to an LGUs exercise of its delegated power of eminent domain in contravention of the very law
giving it such power. The Court notes that petitioners failed to raise this point at the earliest opportunity. Still,
we are not precluded from considering the same. This Court will not hesitate to consider matters even those
raised for the first time on appeal in clearly meritorious situations, such as in this case.
Although the construction of the APC would be primarily sourced from the proceeds of the Subject Loans, which
Land Bank insists are not taxpayers money, there is no denying that public funds derived from taxation are bound
to be expended as the Municipality assigned a portion of its IRA as a security for the foregoing loans. Needless
to state, the Municipalitys IRA, which serves as the local government units just share in the national taxes, is in
the nature of public funds derived from taxation. The Court believes, however, that although these funds may be
posted as a security, its collateralization should only be deemed effective during the incumbency of the public
officers who approved the same, else those who succeed them be effectively deprived of its use. In any event, it
is observed that the proceeds from the Subject Loans had already been converted into public funds by the
Municipalitys receipt thereof. Funds coming from private sources become impressed with the characteristics of
public funds when they are under official custody.
Generally, an ultra vires act is one committed outside the object for which a corporation is created as defined by
the law of its organization and therefore beyond the powers conferred upon it by law. There are two (2) types of
ultra vires acts. As held in Middletown Policemens Benevolent Association v. Township of Middletown, 162 N.J.
361, 368 (2000): There is a distinction between an act utterly beyond the jurisdiction of a municipal corporation
and the irregular exercise of a basic power under the legislative grant in matters not in themselves jurisdictional.
The former are ultra vires in the primary sense and void; the latter, ultra vires only in a secondary sense which
does not preclude ratification or the application of the doctrine of estoppel in the interest of equity and essential
justice. (Emphasis and underscoring supplied) In other words, an act which is outside of the municipalitys
jurisdiction is considered as a void ultra vires act, while an act attended only by an irregularity but remains within
the municipalitys power is considered as an ultra vires act subject to ratification and/or validation. To the former
belongs municipal contracts which (a) are entered into beyond the express, implied or inherent powers of the
local government unit; and (b) do not comply with the substantive requirements of law e.g., when expenditure
of public funds is to be made, there must be an actual appropriation and certificate of availability of funds; while
to the latter belongs those which (a) are entered into by the improper department, board, officer of agent; and
(b) do not comply with the formal requirements of a written contract e.g., the Statute of Frauds.
Article 1409(1) of the Civil Code provides that a contract whose purpose is contrary to law, morals, good customs,
public order or public policy is considered void and as such, creates no rights or obligations or any juridical
relations. Consequently, given the unlawful purpose behind the Subject Loans which is to fund the
commercialization of the Agoo Plaza pursuant to the Redevelopment Plan, they are considered as ultra vires in
the primary sense thus, rendering them void and in effect, non-binding on the Municipality. At this juncture, it is
equally observed that the land on which the Agoo Plaza is situated cannot be converted into patrimonial
propertyas the SB tried to when it passed Municipal Ordinance No. 02-2007absent any express grant by the
national government. As public land used for public use, the foregoing lot rightfully belongs to and is subject to
the administration and control of the Republic of the Philippines. Hence, without the said grant, the Municipality
has no right to claim it as patrimonial property.
Nevertheless, while the Subject Loans cannot bind the Municipality for being ultra vires, the officers who
authorized the passage of the Subject Resolutions are personally liable. Case law states that public officials can
be held personally accountable for acts claimed to have been performed in connection with official duties where
they have acted ultra vires, as in this case.
to contest and to adjudicate. It is only when the people have voted for it and it has become an approved
ordinance or resolution that rights and obligations can be enforced or implemented there-under. At this point,
it is merely a proposal and the writ of prohibition cannot issue upon a mere conjecture or possibility.
Constitutionally speaking, courts may decide only actual controversies, not hypothetical questions or cases.
the interest of Tiwi in the execution of this Courts Decision in National Power Corporation v. Province of Albay,
186 SCRA 198 (1990).