Professional Documents
Culture Documents
372
AQUILINO Q. PIMENTEL JR., petitioner, ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998
vs.
Hon. ALEXANDER AGUIRRE in his capacity as Executive Secretary, Hon. EMILIA WHEREAS, the current economic difficulties brought about by the peso depreciation
BONCODIN in her capacity as Secretary of the Department of Budget and requires continued prudence in government fiscal management to maintain
Management, respondents. economic stability and sustain the country's growth momentum;
ROBERTO PAGDANGANAN, intervenor. WHEREAS, it is imperative that all government agencies adopt cash management
measures to match expenditures with available resources;
DECISION
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines,
PANGANIBAN, J.: by virtue of the powers vested in me by the Constitution, do hereby order and direct:
The Constitution vests the President with the power of supervision, not control, over SECTION 1. All government departments and agencies, including state
local government units (LGUs). Such power enables him to see to it that LGUs and universities and colleges, government-owned and controlled corporations and
their officials execute their tasks in accordance with law. While he may issue local governments units will identify and implement measures in FY 1998 that
advisories and seek their cooperation in solving economic difficulties, he cannot will reduce total expenditures for the year by at least 25% of authorized regular
prevent them from performing their tasks and using available resources to achieve appropriations for non-personal services items, along the following suggested
their goals. He may not withhold or alter any authority or power given them by the areas:
law. Thus, the withholding of a portion of internal revenue allotments legally due
them cannot be directed by administrative fiat. 1. Continued implementation of the streamlining policy on organization and
staffing by deferring action on the following:
The Case a. Operationalization of new agencies;
b. Expansion of organizational units and/or creation of positions;
Before us is an original Petition for Certiorari and Prohibition seeking (1) to annul c. Filling of positions; and
Section 1 of Administrative Order (AO) No. 372, insofar as it requires local d. Hiring of additional/new consultants, contractual and casual
government units to reduce their expenditures by 25 percent of their authorized personnel, regardless of funding source.
regular appropriations for non-personal services; and (2) to enjoin respondents from 2. Suspension of the following activities:
implementing Section 4 of the Order, which withholds a portion of their internal a. Implementation of new capital/infrastructure projects, except those
revenue allotments. which have already been contracted out;
b. Acquisition of new equipment and motor vehicles;
c. All foreign travels of government personnel, except those associated
On November 17, 1998, Roberto Pagdanganan, through Counsel Alberto C. Agra, filed
with scholarships and trainings funded by grants;
a Motion for Intervention/Motion to Admit Petition for Intervention,1 attaching
d. Attendance in conferences abroad where the cost is charged to the
thereto his Petition in Intervention2 joining petitioner in the reliefs sought. At the
government except those clearly essential to Philippine commitments
time, intervenor was the provincial governor of Bulacan, national president of the
in the international field as may be determined by the Cabinet;
League of Provinces of the Philippines and chairman of the League of Leagues of Local
e. Conduct of trainings/workshops/seminars, except those conducted by
Governments. In a Resolution dated December 15, 1998, the Court noted said Motion
government training institutions and agencies in the performance of
and Petition.
their regular functions and those that are funded by grants;
f. Conduct of cultural and social celebrations and sports activities, except
The Facts and the Arguments those associated with the Philippine Centennial celebration and those
involving regular competitions/events;
On December 27, 1997, the President of the Philippines issued AO 372. Its full text, g. Grant of honoraria, except in cases where it constitutes the only source
with emphasis on the assailed provisions, is as follows: of compensation from government received by the person concerned;
h. Publications, media advertisements and related items, except those Section 6, Article X of the Constitution, providing for the automatic release to each of
required by law or those already being undertaken on a regular basis; these units its share in the national internal revenue.
i. Grant of new/additional benefits to employees, except those expressly
and specifically authorized by law; and The solicitor general, on behalf of the respondents, claims on the other hand that AO
j. Donations, contributions, grants and gifts, except those given by 372 was issued to alleviate the "economic difficulties brought about by the peso
institutions to victims of calamities. devaluation" and constituted merely an exercise of the President's power of
3. Suspension of all tax expenditure subsidies to all GOCCs and LGUs supervision over LGUs. It allegedly does not violate local fiscal autonomy, because it
4. Reduction in the volume of consumption of fuel, water, office supplies, merely directs local governments to identify measures that will reduce their total
electricity and other utilities expenditures for non-personal services by at least 25 percent. Likewise, the
5. Deferment of projects that are encountering significant implementation withholding of 10 percent of the LGUs’ IRA does not violate the statutory prohibition
problems on the imposition of any lien or holdback on their revenue shares, because such
6. Suspension of all realignment of funds and the use of savings and withholding is "temporary in nature pending the assessment and evaluation by the
reserves Development Coordination Committee of the emerging fiscal situation."
SECTION 2. Agencies are given the flexibility to identify the specific sources of cost- The Issues
savings, provided the 25% minimum savings under Section 1 is complied with.
The Petition3 submits the following issues for the Court's resolution:
SECTION 3. A report on the estimated savings generated from these measures shall
be submitted to the Office of the President, through the Department of Budget and
"A. Whether or not the president committed grave abuse of discretion [in] ordering
Management, on a quarterly basis using the attached format.
all LGUS to adopt a 25% cost reduction program in violation of the LGU[']S fiscal
autonomy
SECTION 4. Pending the assessment and evaluation by the Development Budget
Coordinating Committee of the emerging fiscal situation, the amount equivalent
"B. Whether or not the president committed grave abuse of discretion in ordering the
to 10% of the internal revenue allotment to local government units shall be
withholding of 10% of the LGU[']S IRA"
withheld.
In sum, the main issue is whether (a) Section 1 of AO 372, insofar as it "directs" LGUs
SECTION 5. The Development Budget Coordination Committee shall conduct a
to reduce their expenditures by 25 percent; and (b) Section 4 of the same issuance,
monthly review of the fiscal position of the National Government and if necessary,
which withholds 10 percent of their internal revenue allotments, are valid exercises
shall recommend to the President the imposition of additional reserves or the lifting
of the President's power of general supervision over local governments.
of previously imposed reserves.
Additionally, the Court deliberated on the question whether petitioner had the locus
SECTION 6. This Administrative Order shall take effect January 1, 1998 and shall
standi to bring this suit, despite respondents' failure to raise the issue.4 However, the
remain valid for the entire year unless otherwise lifted.
intervention of Roberto Pagdanganan has rendered academic any further discussion
on this matter.
DONE in the City of Manila, this 27th day of December, in the year of our Lord,
nineteen hundred and ninety-seven."
The Court's Ruling
This provision has been interpreted to exclude the power of control. In Mondano v.
Hand in hand with the constitutional restraint on the President's power over local
Silvosa,5 the Court contrasted the President's power of supervision over local
governments is the state policy of ensuring local autonomy.12
government officials with that of his power of control over executive officials of the
national government. It was emphasized that the two terms -- supervision and control
-- differed in meaning and extent. The Court distinguished them as follows: In Ganzon v. Court of Appeals,13 we said that local autonomy signified "a more
responsive and accountable local government structure instituted through a system
of decentralization." The grant of autonomy is intended to "break up the monopoly of
"x x x In administrative law, supervision means overseeing or the power or authority
the national government over the affairs of local governments, x x x not x x x to end
of an officer to see that subordinate officers perform their duties. If the latter fail or
the relation of partnership and interdependence between the central administration
neglect to fulfill them, the former may take such action or step as prescribed by law
and local government units x x x." Paradoxically, local governments are still subject to
to make them perform their duties. Control, on the other hand, means the power of
regulation, however limited, for the purpose of enhancing self-government.14
an officer to alter or modify or nullify or set aside what a subordinate officer ha[s]
done in the performance of his duties and to substitute the judgment of the former
for that of the latter."6 Decentralization simply means the devolution of national administration, not power,
to local governments. Local officials remain accountable to the central government as
the law may provide.15 The difference between decentralization of administration
In Taule v. Santos,7 we further stated that the Chief Executive wielded no more
and that of power was explained in detail in Limbona v. Mangelin16 as follows:
authority than that of checking whether local governments or their officials were
performing their duties as provided by the fundamental law and by statutes. He
cannot interfere with local governments, so long as they act within the scope of their "Now, autonomy is either decentralization of administration or decentralization of
authority. "Supervisory power, when contrasted with control, is the power of mere power. There is decentralization of administration when the central government
oversight over an inferior body; it does not include any restraining authority over delegates administrative powers to political subdivisions in order to broaden the base
such body,"8 we said. of government power and in the process to make local governments 'more responsive
and accountable,'17 and 'ensure their fullest development as self-reliant communities
and make them more effective partners in the pursuit of national development and
In a more recent case, Drilon v. Lim,9 the difference between control and supervision
social progress.'18 At the same time, it relieves the central government of the burden
was further delineated. Officers in control lay down the rules in the performance or
of managing local affairs and enables it to concentrate on national concerns. The
accomplishment of an act. If these rules are not followed, they may, in their discretion,
President exercises 'general supervision'19 over them, but only to 'ensure that local
order the act undone or redone by their subordinates or even decide to do it
affairs are administered according to law.'20 He has no control over their acts in the
themselves. On the other hand, supervision does not cover such authority.
sense that he can substitute their judgments with his own.21
Supervising officials merely see to it that the rules are followed, but they themselves
do not lay down such rules, nor do they have the discretion to modify or replace them.
If the rules are not observed, they may order the work done or redone, but only to Decentralization of power, on the other hand, involves an abdication of political
conform to such rules. They may not prescribe their own manner of execution of the power in the favor of local government units declared to be autonomous. In that case,
act. They have no discretion on this matter except to see to it that the rules are the autonomous government is free to chart its own destiny and shape its future with
followed. 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 appropriate public agencies, various private sectors, and local government units." The
its constituency."22 President cannot do so unilaterally.
Under the Philippine concept of local autonomy, the national government has not Consequently, the Local Government Code provides:27
completely relinquished all its powers over local governments, including autonomous
regions. Only administrative powers over local affairs are delegated to political "x x x [I]n the event the national government incurs an unmanaged public sector
subdivisions. The purpose of the delegation is to make governance more directly deficit, the President of the Philippines is hereby authorized, upon the
responsive and effective at the local levels. In turn, economic, political and social recommendation of [the] Secretary of Finance, Secretary of the Interior and Local
development at the smaller political units are expected to propel social and economic Government and Secretary of Budget and Management, and subject to consultation
growth and development. But to enable the country to develop as a whole, the with the presiding officers of both Houses of Congress and the presidents of the liga,
programs and policies effected locally must be integrated and coordinated towards a to make the necessary adjustments in the internal revenue allotment of local
common national goal. Thus, policy-setting for the entire country still lies in the government units but in no case shall the allotment be less than thirty percent (30%)
President and Congress. As we stated in Magtajas v. Pryce Properties Corp., Inc., of the collection of national internal revenue taxes of the third fiscal year preceding
municipal governments are still agents of the national government.23 the current fiscal year x x x."
The Nature of AO 372 There are therefore several requisites before the President may interfere in local
fiscal matters: (1) an unmanaged public sector deficit of the national government; (2)
Consistent with the foregoing jurisprudential precepts, let us now look into the nature consultations with the presiding officers of the Senate and the House of
of AO 372. As its preambular clauses declare, the Order was a "cash management Representatives and the presidents of the various local leagues; and (3) the
measure" adopted by the government "to match expenditures with available corresponding recommendation of the secretaries of the Department of Finance,
resources," which were presumably depleted at the time due to "economic difficulties Interior and Local Government, and Budget and Management. Furthermore, any
brought about by the peso depreciation." Because of a looming financial crisis, the adjustment in the allotment shall in no case be less than thirty percent (30%) of the
President deemed it necessary to "direct all government agencies, state universities collection of national internal revenue taxes of the third fiscal year preceding the
and colleges, government-owned and controlled corporations as well as local current one.
governments to reduce their total expenditures by at least 25 percent along suggested
areas mentioned in AO 372. Petitioner points out that respondents failed to comply with these requisites before
the issuance and the implementation of AO 372. At the very least, they did not even
Under existing law, local government units, in addition to having administrative try to show that the national government was suffering from an unmanageable public
autonomy in the exercise of their functions, enjoy fiscal autonomy as well. Fiscal sector deficit. Neither did they claim having conducted consultations with the
autonomy means that local governments have the power to create their own sources different leagues of local governments. Without these requisites, the President has no
of revenue in addition to their equitable share in the national taxes released by the authority to adjust, much less to reduce, unilaterally the LGU's internal revenue
national government, as well as the power to allocate their resources in accordance allotment.
with their own priorities. It extends to the preparation of their budgets, and local
officials in turn have to work within the constraints thereof. They are not formulated The solicitor general insists, however, that AO 372 is merely directory and has been
at the national level and imposed on local governments, whether they are relevant to issued by the President consistent with his power of supervision over local
local needs and resources or not. Hence, the necessity of a balancing of viewpoints governments. It is intended only to advise all government agencies and
and the harmonization of proposals from both local and national officials,24 who in instrumentalities to undertake cost-reduction measures that will help maintain
any case are partners in the attainment of national goals. economic stability in the country, which is facing economic difficulties. Besides, it
does not contain any sanction in case of noncompliance. Being merely an advisory,
Local fiscal autonomy does not however rule out any manner of national government therefore, Section 1 of AO 372 is well within the powers of the President. Since it is
intervention by way of supervision, in order to ensure that local programs, fiscal and not a mandatory imposition, the directive cannot be characterized as an exercise of
otherwise, are consistent with national goals. Significantly, the President, by the power of control.
constitutional fiat, is the head of the economic and planning agency of the
government,25 primarily responsible for formulating and implementing continuing, While the wordings of Section 1 of AO 372 have a rather commanding tone, and while
coordinated and integrated social and economic policies, plans and programs26 for we agree with petitioner that the requirements of Section 284 of the Local
the entire country. However, under the Constitution, the formulation and the Government Code have not been satisfied, we are prepared to accept the solicitor
implementation of such policies and programs are subject to "consultations with the
general's assurance that the directive to "identify and implement measures x x x that President as chief fiscal officer; and (3) the withholding of the LGUs’ IRA is implied in
will reduce total expenditures x x x by at least 25% of authorized regular the President's authority to adjust it in case of an unmanageable public sector deficit.
appropriation" is merely advisory in character, and does not constitute a mandatory
or binding order that interferes with local autonomy. The language used, while First, on prematurity. According to the Dissent, when "the conduct has not yet
authoritative, does not amount to a command that emanates from a boss to a occurred and the challenged construction has not yet been adopted by the agency
subaltern. charged with administering the administrative order, the determination of the scope
and constitutionality of the executive action in advance of its immediate adverse
Rather, the provision is merely an advisory to prevail upon local executives to effect involves too remote and abstract an inquiry for the proper exercise of judicial
recognize the need for fiscal restraint in a period of economic difficulty. Indeed, all function."
concerned would do well to heed the President's call to unity, solidarity and
teamwork to help alleviate the crisis. It is understood, however, that no legal sanction This is a rather novel theory -- that people should await the implementing evil to
may be imposed upon LGUs and their officials who do not follow such advice. It is in befall on them before they can question acts that are illegal or unconstitutional. Be it
this light that we sustain the solicitor general's contention in regard to Section 1. remembered that the real issue here is whether the Constitution and the law are
contravened by Section 4 of AO 372, not whether they are violated by the acts
Withholding a Part of LGUs' IRA implementing it. In the unanimous en banc case Tañada v. Angara,33 this Court held
that when an act of the legislative department is seriously alleged to have infringed
Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal the Constitution, settling the controversy becomes the duty of this Court. By the mere
autonomy is the automatic release of the shares of LGUs in the national internal enactment of the questioned law or the approval of the challenged action, the dispute
revenue. This is mandated by no less than the Constitution.28 The Local Government is said to have ripened into a judicial controversy even without any other overt act.
Code29 specifies further that the release shall be made directly to the LGU concerned Indeed, even a singular violation of the Constitution and/or the law is enough to
within five (5) days after every quarter of the year and "shall not be subject to any lien awaken judicial duty. Said the Court:
or holdback that may be imposed by the national government for whatever purpose."30
As a rule, the term "shall" is a word of command that must be given a compulsory "In seeking to nullify an act of the Philippine Senate on the ground that it contravenes
meaning.31 The provision is, therefore, imperative. the Constitution, the petition no doubt raises a justiciable controversy. Where an
action of the legislative branch is seriously alleged to have infringed the Constitution,
Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 it becomes not only the right but in fact the duty of the judiciary to settle the dispute.
percent of the LGUs' IRA "pending the assessment and evaluation by the Development 'The question thus posed is judicial rather than political. The duty (to adjudicate)
Budget Coordinating Committee of the emerging fiscal situation" in the country. Such remains to assure that the supremacy of the Constitution is upheld.'34 Once a
withholding clearly contravenes the Constitution and the law. Although temporary, it 'controversy as to the application or interpretation of a constitutional provision is
is equivalent to a holdback, which means "something held back or withheld, often raised before this Court x x x , it becomes a legal issue which the Court is bound by
temporarily."32 Hence, the "temporary" nature of the retention by the national constitutional mandate to decide.'35
government does not matter. Any retention is prohibited.
xxx xxx xxx
In sum, while Section 1 of AO 372 may be upheld as an advisory effected in times of
national crisis, Section 4 thereof has no color of validity at all. The latter provision "As this Court has repeatedly and firmly emphasized in many cases,36 it will not shirk,
effectively encroaches on the fiscal autonomy of local governments. Concededly, the digress from or abandon its sacred duty and authority to uphold the Constitution in
President was well-intentioned in issuing his Order to withhold the LGUs’ IRA, but the matters that involve grave abuse of discretion brought before it in appropriate cases,
rule of law requires that even the best intentions must be carried out within the committed by any officer, agency, instrumentality or department of the government."
parameters of the Constitution and the law. Verily, laudable purposes must be carried
out by legal methods. In the same vein, the Court also held in Tatad v. Secretary of the Department of
Energy:37
Refutation of Justice Kapunan's Dissent
"x x x Judicial power includes not only the duty of the courts to settle actual
Mr. Justice Santiago M. Kapunan dissents from our Decision on the grounds that, controversies involving rights which are legally demandable and enforceable, but also
allegedly, (1) the Petition is premature; (2) AO 372 falls within the powers of the the duty to determine whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of government. The courts, as guardians of the Constitution, have the same time president of the League of Provinces of the Philippines and chairman of the
inherent authority to determine whether a statute enacted by the legislature League of Leagues of Local Governments) have protested and instituted this action.
transcends the limit imposed by the fundamental law. Where the statute violates the Significantly, respondents do not deny the lack of consultation.
Constitution, it is not only the right but the duty of the judiciary to declare such act
unconstitutional and void." In addition, Justice Kapunan cites Section 28740 of the LGC as impliedly authorizing
the President to withhold the IRA of an LGU, pending its compliance with certain
By the same token, when an act of the President, who in our constitutional scheme is requirements. Even a cursory reading of the provision reveals that it is totally
a coequal of Congress, is seriously alleged to have infringed the Constitution and the inapplicable to the issue at bar. It directs LGUs to appropriate in their annual budgets
laws, as in the present case, settling the dispute becomes the duty and the 20 percent of their respective IRAs for development projects. It speaks of no positive
responsibility of the courts. power granted the President to priorly withhold any amount. Not at all.
Besides, the issue that the Petition is premature has not been raised by the parties; WHEREFORE, the Petition is GRANTED. Respondents and their successors are hereby
hence it is deemed waived. Considerations of due process really prevents its use permanently PROHIBITED from implementing Administrative Order Nos. 372 and 43,
against a party that has not been given sufficient notice of its presentation, and thus respectively dated December 27, 1997 and December 10, 1998, insofar as local
has not been given the opportunity to refute it.38 government units are concerned.
Second, on the President's power as chief fiscal officer of the country. Justice Kapunan SO ORDERED.
posits that Section 4 of AO 372 conforms with the President's role as chief fiscal
officer, who allegedly "is clothed by law with certain powers to ensure the observance
of safeguards and auditing requirements, as well as the legal prerequisites in the
release and use of IRAs, taking into account the constitutional and statutory
mandates."39 He cites instances when the President may lawfully intervene in the
fiscal affairs of LGUs.
Precisely, such powers referred to in the Dissent have specifically been authorized by
law and have not been challenged as violative of the Constitution. On the other hand,
Section 4 of AO 372, as explained earlier, contravenes explicit provisions of the Local
Government Code (LGC) and the Constitution. In other words, the acts alluded to in the
Dissent are indeed authorized by law; but, quite the opposite, Section 4 of AO 372 is
bereft of any legal or constitutional basis.
Notably, Justice Kapunan recognizes the need for "interaction between the national
government and the LGUs at the planning level," in order to ensure that "local
development plans x x x hew to national policies and standards." The problem is that
no such interaction or consultation was ever held prior to the issuance of AO 372. This
is why the petitioner and the intervenor (who was a provincial governor and at the
G.R. No. 164282 October 12, 2005 Failing to acquire the land by negotiation, the City filed a case for eminent domain
against petitioner as owner of the property. Filed on 22 August 1996, the case
TERESITA M. YUJUICO, Petitioner was raffled to Branch 15, RTC of Manila and docketed as Civil Case No. 96-79699.5
vs.
HON. JOSE L. ATIENZA, Chairman, City School, Board of Manila, DR. MA. On 30 June 2000, the RTC rendered a Decision6 in the expropriation case in favor
LUISA S. QUIÑONES, Co-Chairman, City School Board, and Schools Division of the City. The dispositive portion reads:
Superintendent, ROGER GERNALE, Member, City School Board of Manila,
HON. MANUEL M. ZARCAL, (in substitution of ARLENE ORTIZ), Member, WHEREFORE, judgment is hereby rendered as follows:
City School Board of Manila, BENJAMIN VALBUENA (In substitution of
MILES ROCES), Member, City School Board of Manila, LIBERTY TOLEDO, 1.) The lots including the improvements therein of defendant Teresita M.
Member, City School Board of Manila, HON. FRANCESCA GERNALE (In Yujuico, as described in the complaint, are declared expropriated for
substitution of PERCIVAL FLORIENDO), Member, City School Board of public use;
Manila, ISABELITA SANTOS, Secretary, City School Board of Manila, 2.) The fair market value of the lots of defendant is fixed at ₱18,164.80 per
VICENTE MACARUBBO (In substitution of Isabelita Ching), Assistant square meter. The fair market value of the improvements of lots subject of
Secretary, City School Board of Manila, CITY SCHOOL BOARD OF MANILA this action is fixed at ₱ 978,000.00;
and JUDGE MERCEDES POSADA-LACAP, in her capacity as PRESIDING 3.) The plaintiff must pay defendant the sum of ₱72,279,555.68 (3,979.10 sq.
JUDGE OF THE REGIONAL TRIAL COURT OF MANILA, BRANCH 15, m. x ₱18,164.80) representing the value of the subject lots plus
Respondents. ₱978,000.00 representing the value of the improvements or the total
amount of ₱73,257,555.00 as just compensation for the whole property
DECISION (including the improvements) minus the sum of ₱5,363,289.00 that
plaintiff deposited in Court per Order dated April 30, 1997, hence the
Tinga, J.: balance of ₱67,894,266.00 with interest at the rate of 6% per annum from
July 15, 1997 (date of possession of subject property for the purpose of
This is a Petition for Review on Certiorari instituted by Teresita M. Yujuico, this proceedings) until the day full payment is made to defendant or
petitioner in the case for mandamus docketed as Civil Case No. 02-103748 before deposited in Court.7
the Regional Trial Court (RTC) of Manila, Branch 15. Petitioner is questioning the
propriety of the Order1 dated 25 June 2004, granting respondents’ Petition for The judgment became final and executory, no appeal having been interposed by
Relief from Judgment under Section 2, Rule 38 of the 1997 Rules of Civil either party.8
Procedure.
On 6 April 2001, petitioner filed a Motion for Execution of Judgment9 which the
The operative facts are not disputed. trial court granted. Pursuant to a Writ of Execution10 dated 28 June 2001, the
branch sheriff served a Notice of Garnishment on the funds of the City deposited
On 8 December 1995, the City Council of Manila enacted an Ordinance2 with the Land Bank of the Philippines, YMCA Branch, Manila (Land Bank) to
authorizing the City Mayor to acquire by negotiation or expropriation certain satisfy the judgment amount of ₱67,894,226.00, with interest at 6% per annum.11
parcels of land for utilization as a site for the Francisco Benitez Elementary
School.3 The property chosen is located along Solis St. near Juan Luna St. in the Invoking jurisprudence holding that public funds cannot be made subject to
Second District of Manila and contains an approximate area of 3,979.10 square garnishment, the City filed a motion to quash the Notice of Garnishment.12 Acting
meters. It is covered by Transfer Certificates of Title Nos. 71541, 71548, 24423, on the motion, the trial court issued an Order dated 2 August 2001.
71544 and 71546, all in the name of petitioner. The Ordinance provides that an
amount not to exceed the fair market value of the land then prevailing in the area In the Order, the lower court recalled that during the hearing on the motion, the
will be allocated out of the Special Education Fund (SEF) of the City of Manila counsel for the City manifested that the amount of ₱36,403,170.00 had been
(City) to defray the cost of the property’s acquisition.4 appropriated by the City School Board (CSB) under CSB Resolutions Nos. 613 and
623, of which ₱31,039,881.00 was available for release. The amount of
₱5,363,269.00, representing fifteen percent (15%) of the assessed value of the
property, had been deposited in court at the start of the expropriation Floriendo, Liberty Toledo, Isabelita Santos and Isabelita Ching in their capacities
proceedings and subsequently received by petitioner. In line with the as officers and members of the CSB.19 The case was docketed as Civil Case No. 02-
manifestation made by the counsel for the City, the trial court ordered the release 102837 of the Manila RTC.20
to petitioner of the amount of ₱31,039,881.00 deposited with the Land Bank, in
partial payment of the just compensation adjudged in favor of petitioner.13 Countering the petition for contempt, respondents filed a Motion to Dismiss,21
wherein they alleged inter alia that they never disregarded the Order as the
The trial court further stated in the Order: matter had in fact been calendared and deliberated upon during the meetings of
the CSB.22 In their subsequent Omnibus Reply,23 respondents argued that
Considering that this case is on all fours with the case of the Municipality of petitioner’s failure to avail of the proper recourse to enforce the final and
Makati vs. Court of Appeals (190 SCRA 206), wherein it was ruled that "x x x executory judgment24 should not be a ground to hold them in contempt of court.
Public funds are not subject to levy and execution," the Court therefore grants Citing the case of Municipality of Makati v. Court of Appeals,25 respondents
plaintiff’s Motion to Quash the Notice of Garnishment and the Notice of asserted that petitioner should have filed a petition for mandamus to force the
Garnishment to the Landbank of the Philippines issued by the Branch Sheriff of CSB to pass the necessary resolution for immediate payment of the balance of the
this Court is hereby ordered lifted. just compensation awarded in her favor.26
There being no opposition for the release of the Thirty One Million Thirty Nine According to respondents, petitioner took the Order as a writ of mandamus when
Thousand Eight Hundred Eighty One Pesos (₱31,039,881.00) deposited with the in fact it was a mere order in furtherance of the Writ of Execution.27 This
Land Bank, YMCA Branch as Special Education Fund, the Manager of the interpretation, respondents insisted, should never be allowed since petitioner
Landbank of the Philippines, YMCA, Manila is hereby directed to release the said merely wanted to escape the payment of docket fees in the filing of the petition
amount to defendant Teresita M. Yujuico in partial payment of the just for mandamus.28
compensation adjudged by this Court in its Decision dated June 30, 2000.
In an Order29 dated 17 May 2002, the trial court denied the petition for contempt
Upon manifestation of the counsel for the plaintiff that it is the City School Board of court.
which has the authority to pass a resolution allocating funds for the full
satisfaction of the just compensation fixed, the said body is hereby given thirty On 6 June 2002, petitioner filed a Petition for Mandamus 30 against the members
(30) days from receipt of this Order to pass the necessary resolution for the of the CSB, the same respondents in the petition for contempt of court, seeking to
payments of the remaining balance due to defendant Teresita M. Yujuico. 14 compel them to pass a resolution appropriating the amount necessary to pay the
balance of the just compensation awarded to petitioner in the expropriation case,
A copy of the Order dated 2 August 2001 was served on the CSB on 3 August Civil Case No. 96-79699. The petition was docketed as Spl. Civil Action No. 02-
2001.15 103748 and raffled to Branch 51 of the RTC of Manila. 31
On 30 August 2001, petitioner submitted a manifestation before the trial court Upon petitioner’s motion,32 Branch 51 of the Manila RTC before which the
requesting that she be informed by both the City and the CSB if a resolution had mandamus case was pending, in an Order33 dated 23 August 2002, directed its
already been passed by the latter in compliance with the Order.16 Earlier, consolidation with the expropriation case before Branch 15.34
petitioner sent a letter to the Superintendent of City Schools of Manila to verify
the CSB’s compliance with the Order.17 In a Decision35 dated 9 October 2002, the lower court (Branch 15) granted the
petition for mandamus. Specifically, it ordered respondents to immediately pass
Not having been favored with a reply to her queries even after the lapse of the a resolution appropriating the necessary amount and the corresponding
thirty (30)-day compliance period, petitioner sent a letter to the CSB dated 10 disbursement thereof for the full and complete payment of the balance of the
September 2001, demanding compliance with the Order.18 court-adjudged compensation still due petitioner, ratiocinating as follows:36
As there was no action from the CSB, on 1 February 2002, petitioner filed a This case is on all fours with the case of Municipality of Makati v. Court of Appeals
petition for contempt of court against respondents Hon. Jose L. Atienza, Jr., Dr. (190 SCRA 206).
Ma. Luisa S. Quiñoňes, Roger Gernale, Arlene Ortiz, Miles Roces, Percival
.... of the lower court giving due course to respondents’ appeal be reversed and set
aside on a pure question of law.46
The State’s power of eminent domain should be exercised within the bounds of
fair play and justice. In the case at bar, considering that valuable property has Before resolving the substantive issues raised by the parties, the Court will first
been taken, the compensation to be paid fixed and the municipality is in full address the procedural infirmities ascribed by respondents to the petition at bar.
possession and utilizing the property for the public purpose, for three (3) years,
the Court finds that the municipality has had more than reasonable time to pay Respondents assail the correctness and propriety of the mode of appeal resorted
full compensation. to by petitioner.47 According to them, the order granting the petition for relief
from judgment is an interlocutory order which cannot be made the subject of an
The arguments of the herein respondents that passing the ordinance or the act of appeal.48 Respondents likewise argue that petitioner failed to respect the rule on
appropriating special educational fund is a discretionary act that could not be hierarchy of courts. This Court, they aver, had consistently held that its original
compelled by mandamus should be thrown overboard. It must be stressed that jurisdiction to issue a writ of certiorari is not exclusive but is concurrent with that
what we have here is a final and executory judgment, establishing a legal right for of the RTC and the Court of Appeals in certain cases.49
the petitioner to demand fulfillment which on the other hand became an
imperative duty on the part of the respondent to perform the act required. Respondents have correctly pointed out that an interlocutory order cannot be
made subject to an appeal. However, when viewed in context, the recitals of the
WHEREFORE, premises considered, the petition is GRANTED, and the petition clearly disclose and the Court is convinced that the lower court
respondents are hereby ordered to immediately pass a resolution appropriating committed grave abuse of discretion amounting to lack or excess of jurisdiction
the necessary amount; and the corresponding disbursement thereof, for the full when it granted respondents’ petition for relief from judgment. While this case
and complete payment of the remaining balance of the court-adjudged should have been elevated to this Court not by way of a petition for review under
compensation due and owing to petitioner Teresita M. Yujuico. Rule 45 but through a special civil action for certiorari under Rule 65, in the
exercise of our sound discretion and in order to write finis to this case which has
SO ORDERED.37 needlessly dragged on for so long, we shall treat the petition as a special civil
action for certiorari. After all, it was filed within the reglementary period for the
Respondents filed a motion for reconsideration, which the trial court denied in filing of a Rule 65 petition. As we held in Salinas v. NLRC,50 in the interest of justice,
an Order38 dated 13 December 2002. this Court has often judiciously treated petitions erroneously captioned as
petitions for review on certiorari as special civil actions for certiorari. This is in
line with the principle that the strict application of procedural technicalities
With respondents not interposing an appeal, the Decision became final and should not hinder the speedy disposition of the case on the merits.51
executory on 2 January 200339 and eventually, the corresponding Entry of
Judgment was issued on 15 January 2003.40 The court granted petitioner’s Motion
for Execution41 in an Order42 dated 12 March 2003. Accordingly, facial allegations of reversible error in the petition will be treated,
as they should be, as contextual averments of grave abuse of discretion on the
part of the court a quo. Appropriately, petitioner impleaded the RTC Presiding
However, on 14 March 2003, respondents filed a Petition for Relief from Judge as party-respondent in the instant petition.
Judgment,43 wherein they also prayed for a temporary restraining order (TRO)
and a writ of preliminary injunction. Respondents invoked excusable negligence
as a ground for their failure to seasonably file an appeal. 44 While it denied the Anent the alleged breach of the rule on hierarchy of courts, the doctrine is not an
application for TRO in view of its prior order granting petitioner’s Motion for iron-clad dictum.52 The rule may be relaxed when exceptional and compelling
Execution, the court granted the Petition for Relief from Judgment in an Order45 circumstances warrant the exercise of this Court’s primary jurisdiction.53 In this
dated 25 June 2004. This had the effect of giving due course to respondents’ case, the judgment sought to be satisfied has long attained finality and the
appeal despite the fact that the decision of the trial court had already attained expropriated property has been utilized as a school site for five (5) years now;
finality. yet, the awarded just compensation has not been fully paid. These circumstances,
in the Court’s estimation, merit the relaxation of the technical rules of procedure
to ensure that substantial justice will be served.
Finding the Order unacceptable, petitioner elevated it to this Court by way of a
petition for certiorari under Rule 45. In her petition, petitioner asks that the order
Concerning petitioner’s alleged failure to implead the CSB or its new members was failure to include a verified statement indicating the material dates relative
before the trial court,54 respondents argue that since there are five (5) new to the receipt of the judgments and the filing of the pleadings. The verification,
members in the CSB any decision in the case requiring the CSB to act as a body moreover, allegedly failed to state that petitioner has read the petition61 and that
would prove to be legally impossible. The former members of the CSB could no the copies attached thereto are based on authentic records. 62 The defects of the
longer be compelled to act according to the orders of the Court since they no verification allegedly render the petition without legal effect and constitute
longer have the capacity to do so. On the other hand, respondents continue, the grounds for its dismissal.
new members cannot be directed to comply with the Court’s judgment either;
they have never been impleaded in the case; thus, the Court never acquired The purpose of requiring a verification is to secure an assurance that the
jurisdiction over their persons.55 allegations of the petition have been made in good faith; or are true and correct,
not merely speculative.63 This requirement is simply a condition affecting the
The arguments were effectively neutered in our Resolution dated 8 August 2005. form of pleadings and non-compliance therewith does not necessarily render it
There, we declared: fatally defective.64 Perusal of the verification in question shows that there was
sufficient compliance with the requirements of the Rules and the alleged defects
Considering the arguments posited by both parties, this Court is of the view that are not so material as to justify the dismissal of the petition.
a substitution of the original respondents by the members of the CSB who
replaced them is warranted. The phrase "or such time as may be granted by the Now, the substantial issues.
Court" in Sec. 17, Rule 3 of the 1997 Rules of Civil Procedure denotes that the
Court before whom the motion for substitution is filed may grant a period longer Up for determination is the tenability of the RTC’s favorable action on
than thirty (30) days for the purpose. In any event, technical rules on substitution respondents’ petition for relief from judgment. This engenders a look at the
of a party should not be so narrowly construed as to prevent this Court from grounds and defenses relied upon by respondents in support of their petition.
taking cognizance of a case and deciding it on the merits. Moreover, petitioner Sections 2 and 3, Rule 38 of the 1997 Rules of Civil Procedure provide that a
did make an attempt to implead the new members of the CSB by making the CSB petition for relief may be granted upon a showing that (1) through fraud,
itself a respondent before this Court. There is also no showing that the new accident, mistake or excusable negligence, a party has been prevented from
members of the CSB have deviated from the stand of their predecessors-in- taking an appeal, and (2) the party has a good and substantial cause of action or
interest; hence, there is a substantial need for continuing or maintaining defense.
petitioner’s action against them.56
The above requisites notwithstanding, it bears stressing that relief from
In the same Resolution, the Court ordered the impleading of the new CSB judgment is premised on equity. It is an act of grace which is allowed only in
members Roger Gernale, Manuel M. Zarcal, Benjamin Valbuena and Francesca exceptional cases.65
Gernale as party respondents—the last three in substitution of Arlene Ortiz,
Percival Floriendo, Miles Roces—and the new CSB Assistant Secretary Vicente In this case, according to respondents they were unable to seasonably file a notice
Macarubbo in substitution of Isabelita Ching.57 Only Manuel Zarcal filed a of appeal due to "excusable negligence."66 One Ronald Silva (Silva), an employee
Comment58 dated 30 August 2005 through a new counsel, adopting in toto the of the OCLO, allegedly failed to forward the Order denying respondents’ motion
comment of his co-respondents. Hence, the other four newly impleaded party for reconsideration in Civil Case No. 02-103748 to the handling lawyers. When
respondents are deemed to have retained the Office of the City Legal Officer the order was delivered to the OCLO on 17 December 2002,67 Silva was the one
(OCLO) as their counsel and to have adopted the Comment already filed by the who received it because the employee designated to do so was out on official
OCLO in behalf of their co-respondents. business.68 Since the employees were busy preparing for the office Christmas
party that day,69 Silva forgot all about the order. He only remembered it when the
Thus, the proper substitutions of some party respondents have already taken order for entry of judgment in the case was received on 29 January 2003. By that
place in this case. time, however, the order dated 17 December 2002 had already been misplaced.70
The last procedural hurdle thrown petitioner’s way by respondents refers to the Clearly, the situation does not present a case of excusable negligence which
supposed failure of the petition to comply with the requirements of Section 4, would warrant relief under Rule 38. Time and again, this Court has ruled that the
Rule 7 and Section 4, Rule 45 of the 1997 Rules of Civil Procedure 59 as amended
by Supreme Court Circular A.M. No. 00-2-10-SC.60 Respondents claim that there
inability to perfect an appeal in due time by reason of failure of a counsel’s clerk Even assuming that the negligence invoked by respondents could be considered
to notify the handling lawyer is not a pardonable oversight.71 As held in one case: excusable, still the petition should not have been granted. It must be borne in
mind that two requisites must be satisfied before a petition under Rule 38 may
. . . The excuse offered by respondent . . . as reason for his failure to perfect in due be granted, the other being the existence of a good and substantial cause of action
time his appeal from the judgment of the Municipal Court, that counsel’s clerk or defense.
forgot to hand him the court notice, is the most hackneyed and habitual
subterfuge employed by litigants who fail to observe the procedural Respondents’ defense consisted of their claim that the CSB has a personality
requirements prescribed by the Rules of Court. The uncritical acceptance of this separate and distinct from the City such that it should not be made to pay for the
kind of common-place excuses, in the face of the Supreme Court’s repeated City’s obligations.76 However, the argument is undercut by the particular
rulings that they are neither credible nor constitutive of excusable negligence circumstances of this case.
(Gaerlan v. Bernal, L-4039, 29 January 1952; Mercado v. Judge Domingo, L-19457,
17 December 1966) is certainly such whimsical exercise of judgment as to be a It is worthy of note that the records of this case clearly show that the same
grave abuse of discretion. counsel, the OCLO, represented the City in the expropriation case and now, all
except one of the individual respondents in the case at bar. Worthy of note are
.... the following manifestations relied upon by the lower court in issuing the order
on the motion to quash the Notice of Garnishment over the funds of the City, to
In the face of all these facts and circumstances, . . . the respondent judge revealed wit:
a simple-minded willingness to swallow a story patently concocted to delay as
much as possible the satisfaction of a judgment against respondent . . . .This The Motion to Quash Notice of Garnishment was heard by this court this morning
indiscriminating credulity does not conform to what is to be expected of a judicial and Atty. Joseph Aquino appeared for the plaintiff (City of Manila) and Atty.
mind.72 Federico Alday, for the defendant. Atty. Aquino manifested that the amount of
Thirty Six Million Four Hundred Three Thousand One Hundred Seventy
Reiterated in numerous cases is the rule that the clerks’ faults are attributable to Pesos (₱36,403,170.00) had been appropriated by the City School Board
the handling lawyers.73 Thus, excuses offered based on the former’s negligence (CSB) under CSB Resolution Nos. 613 and 623 for this purpose.
are not deemed excusable. That the admonitions issued out by this Court were
mostly directed against lawyers in law firms does not exempt respondents herein ....
from the same treatment. For all intents and purposes, the set-up at the OCLO is
akin to that of a law firm, the only difference being that the former serves a public Upon manifestation of the counsel for the plaintiff that it is the City School
entity while the latter caters to private clients. The following pronouncement in Board which has the authority to pass a resolution allocating funds for the
Negros Stevedoring Co., Inc. v. Court of Appeals74 is apropos: full satisfaction of the just compensation fixed, the said body is hereby given
thirty (30) days from receipt of this Order to pass the necessary resolution for
The negligence committed in the case at bar cannot be considered excusable, nor the payments of the remaining balance due to defendant Teresita M. Yujuico.
is it unavoidable. Time and again, the Court has admonished law firms to adopt a (Emphasis supplied.)77
system of distributing pleadings and notices, whereby lawyers working therein
receive promptly notices and pleadings intended for them, so that they will The manifestation was made by the same counsel now claiming that it is actually
always be informed of the status of their cases. The Court has also often repeated the City which should be made liable for the payment of its own obligations. This,
that the negligence of clerks which adversely affect the cases handled by lawyers after it trotted out the CSB as the entity with authority to pass a resolution that
is binding upon the latter.75 would satisfy the obligation it had vigorously pursued.
Without doubt, it was grave abuse of discretion for the lower court to have given The above circumstances, coupled with the rule that an act performed by counsel
due course to respondents’ appeal through the grant of their petition for relief within the scope of a "general or implied authority" is regarded as an act of the
from judgment based on the flimsy ground they proferred. client,78 render the City and, through it, respondents in estoppel. By estoppel is
meant that an admission or representation is rendered conclusive upon the
person making it and cannot be denied or disproved as against the person relying
thereon.79 Petitioner and the courts acted in accordance with the City’s own remuneration while NGO representatives merely receive allowances
manifestations by running after the CSB. At this point, respondents and the OCLO underscores the absurdity of respondents’ argument all the more. Indeed, such
can no longer turn around and toss the obligation back to the City. After all, it was would not be the situation if the school board has a personality separate and
the legal counsel of both the City and respondents who made a big production out distinct from the LGU.
of showing that the liability incurred by the City will be borne by the CSB.
Respondents also argue that the members of the CSB cannot be directed to decide
Contrary to respondents’ claim, the law does not make the CSB an entity a discretionary function in the specific manner the court desires. 81 The question
independent from the City of Manila. This is evident from the provisions of the of whether the enactment of an ordinance to satisfy the appropriation of a final
Local Government Code of 1991, the law providing for the creation of school money judgment rendered against an LGU may be compelled by mandamus has
boards. It states: already been settled in Municipality of Makati v. Court of Appeals.82
TITLE IV.- LOCAL SCHOOL BOARDS Nevertheless, this is not to say that private respondent and PSB are left with no
legal recourse. Where a municipality fails or refuses, without justifiable reason,
Section 98. Creation, Composition and Compensation.- to effect payment of a final money judgment rendered against it, the claimant may
avail of the remedy of mandamus in order to compel the enactment and approval
(a) There shall be established in every province, city or municipality a of the necessary appropriation ordinance, and the corresponding disbursement
provincial, city, or municipal school board, respectively. of municipal funds therefore [See Viuda De Tan Toco v. The Municipal Council of
(b) The composition of local school boards shall be as follows: Iloilo, supra, Baldivia v. Lota, 107 Phil 1099 (1960); Yuviengco v. Gonzales, 108
Phil 247 (1960)].83
...
Clearly, mandamus is a remedy available to a property owner when a money
judgment is rendered in its favor and against a municipality or city, as in this case.
(2) The city school board shall be composed of the city mayor and the city
superintendent of schools as co-chairmen; the chairman of the education
committee of the sangguniang panlungsod, the city treasurer, the representative Moreover, the very ordinance authorizing the expropriation of petitioner’s
of the "pederasyon ng mga sangguniang kabataan" in the sangguniang property categorically states that the payment of the expropriated property will
panlungsod, the duly elected president of the city federation of parents-teachers be defrayed from the SEF. To quote:
associations, the duly elected representative of the non-academic personnel of
public schools in the city, as members; An amount not to exceed the current fair market value, prevailing in the area
appraised in accordance with the requirements of existing laws, rules and
... regulations, of the property to be acquired or so much thereof as may be
necessary for the purpose shall be allocated out of the Special Education Fund of
the City to defray the cost of acquisition of the above-mentioned parcels of land.84
Section 101. Compensation and Remuneration.-
The legality of the above-quoted provision is presumed. The source of the amount
The co-chairmen and members of the provincial, city or municipal school board necessary to acquire petitioner’s property having in fact been specified by the
shall perform their duties as such without compensation or remuneration. City Council of Manila, the passage of the resolution for the allocation and
Members thereof who are not government officials or employees shall be entitled disbursement thereof is indeed a ministerial duty of the CSB.
to traveling expenses and allowances chargeable against the funds of the local
school board concerned, subject to existing accounting and auditing rules and
regulations.80 Furthermore, respondents had argued in the petition for contempt filed against
them by petitioner that the latter’s failure to invoke the proper remedy of
mandamus should not be a ground to penalize them with contempt. In their haste
The fact that the highest ranking official of a local government unit (LGU) is to have the contempt petition dismissed, respondents consistently contended
designated as co-chairman of the school board negates the claim in this case that that what petitioner should have filed was a case for mandamus to compel
the CSB has a personality separate and distinct from the City. The other fact that passage of the corresponding resolution of the CSB if she wanted immediate
government officials in the school board do not receive any compensation or
payment.85 Having relied on these representations of respondents and having government, whenever it takes property from private persons against their will,
filed the action they adverted to, petitioner cannot now be sent by respondents to facilitate the payment of just compensation.89 (Citations omitted)
on another wild goose chase to obtain ultimate recovery of what she is legally
entitled to. Given the above ruling, the reversion of the expropriated property to the
petitioner would prove not to be a remote prospect should respondents and the
While this Court recognizes the power of LGU to expropriate private property for City they represent insist on trudging on their intransigent course.
public use, it will not stand idly by while the expropriating authority maneuvers
to evade the payment of just compensation of property already in its possession. One final note. Respondents’ appeal from the Decision dated 9 October 2002 of
the lower court, made possible by its grant of their petition for relief, is before the
The notion of expropriation is hard enough to take for a private owner. He is Court of Appeals where it is docketed as CA-G.R. No. 86692.90 The court’s Decision
compelled to give up his property for the common weal. But to give it up and wait in this case would have obvious consequences on said appeal; hence, referral of
in vain for the just compensation decreed by the courts is too much to bear. In this Decision to the Court of Appeals is in order.
cases like these, courts will not hesitate to step in to ensure that justice and fair
play are served. As we have already ruled: WHEREFORE, the petition is GRANTED. The Order of the trial court dated 25 June
2004, granting respondents’ Petition for Relief from Judgment is REVERSED and
. . . This Court will not condone petitioner’s blatant refusal to settle its legal set aside and its Decision dated 9 October 2002, ordering respondents to
obligation arising from expropriation proceedings it had in fact initiated. It immediately pass a resolution for the payment of the balance of the court-
cannot be over-emphasized that within the context of the State’s inherent power adjudged compensation due petitioner, is reinstated.
of eminent domain,
Let a copy of this Decision be furnished the Court of Appeals for its information
. . . (j)ust compensation means not only the correct determination of the amount and guidance in relation to CA-G.R. No. 86692 entitled "Teresita M. Yujuico v. Hon.
to be paid to the owner of the land but also the payment of the land within a Jose L. Atienza, Jr., et al."
reasonable time from its taking. Without prompt payment, compensation cannot
be considered ‘just’ for the property owner is made to suffer the consequence of SO ORDERED.
being immediately deprived of his land while being made to wait for a decade or
more before actually receiving the amount necessary to cope with his loss
(Consculluela v. The Honorable Court of Appeals, G.R. No. 77765, August 15,
1988, 164 SCRA 393, 400. See also Provincial Government of Sorsogon v. Vda. De
Villaroya, G.R. No. 64037, August 27, 1987, 153 SCRA 291).86
On June 22, 1999, the trial court denied petitioner’s application for a temporary Thus, the trial and appellate courts were correct in upholding the validity of Ordinance No.
restraining order (TRO) and writ of preliminary injunction. The trial court reasoned that 59, s. 1993. It was enacted in the exercise of the City of Marikina’s police powers to regulate
the questioned undertaking was covered by PD 1818 and Supreme Court Circular No. 68- the use of sidewalks. However, both the trial and appellate courts erred when they invoked
our 1991 decision in White Plains Association and automatically applied it in this case.
This Court has already resolved three interrelated White Plains Association cases:15 (1) G.R. maintenance, repair and improvement of road lots and open spaces of the subdivision
No. 5568516 resolved in 1985; (2) G.R. No. 9552217 decided in 1991 and (3) G.R. No. prior to their donation to the concerned LGU. The owner or developer shall be deemed
12813118 decided in 1998. relieved of the responsibility of maintaining the road lots and open space only upon
securing a certificate of completion and executing a deed of donation of these road lots and
The ruling in the 1991 White Plains Association decision relied on by both the trial and open spaces to the LGU.31
appellate courts was modified by this Court in 1998 in White Plains Association v. Court of
Appeals.19 Citing Young v. City of Manila,20 this Court held in its 1998 decision that Therefore, the use of LGU funds for the widening and improvement of privately-owned
subdivision streets belonged to the owner until donated to the government or until sidewalks is unlawful as it directly contravenes Section 335 of RA 7160. This conclusion
expropriated upon payment of just compensation. finds further support from the language of Section 17 of RA 7160 which mandates LGUs to
efficiently and effectively provide basic services and facilities. The law speaks of
The word "street," in its correct and ordinary usage, includes not only the roadway used infrastructure facilities intended primarily to service the needs of the residents of the LGU
for carriages and vehicular traffic generally but also the portion used for pedestrian and "which are funded out of municipal funds."32 It particularly refers to "municipal roads
travel.21 The part of the street set aside for the use of pedestrians is known as a sidewalk.22 and bridges" and "similar facilities."33
Moreover, under subdivision laws,23 lots allotted by subdivision developers as road lots Applying the rules of ejusdem generis, the phrase "similar facilities" refers to or includes
include roads, sidewalks, alleys and planting strips.24 Thus, what is true for subdivision infrastructure facilities like sidewalks owned by the LGU. Thus, RA 7160 contemplates that
roads or streets applies to subdivision sidewalks as well. Ownership of the sidewalks in a only the construction, improvement, repair and maintenance of infrastructure facilities
private subdivision belongs to the subdivision owner/developer until it is either owned by the LGU may be bankrolled with local government funds.
transferred to the government by way of donation or acquired by the government through
expropriation. Clearly, the question of ownership of the open spaces (including the sidewalks) in
Marikina Greenheights Subdivision is material to the determination of the validity of the
Section 335 of RA 7160 is clear and specific that no public money or property shall be challenged appropriation and disbursement made by the City of Marikina. Similarly
appropriated or applied for private purposes. This is in consonance with the fundamental significant is the character of the direct object of the expenditure, that is, the sidewalks.
principle in local fiscal administration that local government funds and monies shall be
spent solely for public purposes.25 Whether V.V. Soliven, Inc. has retained ownership of the open spaces and sidewalks or has
already donated them to the City of Marikina, and whether the public has full and
In Pascual v. Secretary of Public Works,26 the Court laid down the test of validity of a public unimpeded access to the roads and sidewalks of Marikina Greenheights Subdivision, are
expenditure: it is the essential character of the direct object of the expenditure which must factual matters. There is a need for the prior resolution of these issues before the validity
determine its validity and not the magnitude of the interests to be affected nor the degree of the challenged appropriation and expenditure can be determined.
to which the general advantage of the community, and thus the public welfare, may be
ultimately benefited by their promotion.27 Incidental advantage to the public or to the WHEREFORE, this case is hereby ordered REMANDED to the Regional Trial Court of
State resulting from the promotion of private interests and the prosperity of private Marikina City for the reception of evidence to determine (1) whether V.V. Soliven, Inc. has
enterprises or business does not justify their aid by the use of public money.28 retained ownership of the open spaces and sidewalks of Marikina Greenheights
Subdivision or has donated them to the City of Marikina and (2) whether the public has
In Pascual, the validity of RA 920 ("An Act Appropriating Funds for Public Works") which full and unimpeded access to, and use of, the roads and sidewalks of the subdivision. The
appropriated P85,000 for the construction, repair, extension and improvement of feeder Marikina City Regional Trial Court is directed to decide the case with dispatch.
roads within a privately-owned subdivision was questioned. The Court held that where
the land on which the projected feeder roads were to be constructed belonged to a private SO ORDERED.
person, an appropriation made by Congress for that purpose was null and void.29
In Young v. City of Manila,30 the City of Manila undertook the filling of low-lying streets of
the Antipolo Subdivision, a privately-owned subdivision. The Court ruled that as long as
the private owner retained title and ownership of the subdivision, he was under the
obligation to reimburse to the city government the expenses incurred in land-filling the
streets.
DECISION The following day, Anita Punzalan sent Avelina a letter4 informing her that the
lease is being terminated and demanding that petitioners vacate the premises
SANDOVAL-GUTIERREZ, J.: within 30 days from notice.
Before us is a petition for review on certiorari1 assailing the Decision2 of the Despite several barangay conciliation sessions, the parties failed to settle their
Court of Appeals dated September 12, 2000 and its Resolution dated December dispute amicably. Hence, the Barangay Chairman issued a Certification to File
1, 2000 in CA-G.R. SP No. 54541, entitled "Avelina Zamora, et al., petitioners, Action dated September 14, 1997.5
versus Heirs of Carmen Izquierdo, represented by the executrix, Anita F.
Punzalan, respondents." Consequently, on October 2, 1997, respondents, represented by Anita Punzalan,
filed with the Metropolitan Trial Court (MTC), Branch 49, Caloocan City, a
The records show that sometime in 1973, Carmen Izquierdo and Pablo Zamora complaint for unlawful detainer and damages against petitioners, docketed as
entered into a verbal stipulation whereby the former leased to the latter one of Civil Case No. 23702.6 Forthwith, petitioners filed a motion to dismiss7 the
her apartment units located at 117-B General Luna Street, Caloocan City. They complaint on the ground that the controversy was not referred to the barangay
agreed on the following: the rental is P3,000.00 per month; the leased premises for conciliation. First, they alleged that the barangay Certification to File Action
is only for residence; and only a single family is allowed to occupy it. "is fatally defective" because it pertains to another dispute, i.e., the refusal by
respondents' attorney-in-fact to give her written consent to petitioners' request
After the death of Carmen (lessor) in 1996 her attorney-in-fact, Anita Punzalan, for installation of water facilities in the premises. And, second, when the parties
representing the heirs, herein respondents, prepared a new contract of lease failed to reach an amicable settlement before the Lupong Tagapamayapa, the
wherein the rental was increased from P3,000.00 to P3,600.00 per month.3 Punong Barangay (as Lupon Chairman), did not constitute the Pangkat ng
However, petitioners refused to sign it. Tagapagkasundo before whom mediation or arbitration proceedings should have
been conducted, in violation of Section 410(b), Chapter 7 (Katarungang
Pambarangay), Title One, Book III of Republic Act No. 71608 (otherwise known
In January 1997, Pablo (lessee) died. His wife, Avelina Zamora, and their children as the Local Government Code of 1991), which reads:
(two of whom have their own families), herein petitioners, continued to reside in
the apartment unit. However, they refused to pay the increased rental and
persisted in operating a photocopying business in the same apartment. "SECTION 410. Procedure for Amicable Settlement.–
"SEC. 19. Prohibited pleadings and motions. – The following pleadings, The primordial objective of Presidential Decree No. 1508 (the Katarungang
motions, or petitions shall not be allowed in the cases covered by this Rule: Pambarangay Law), now included under R.A. No. 7160 (the Local Government
Code of 1991), is to reduce the number of court litigations and prevent the
(a) Motion to dismiss the complaint or to quash the complaint or information deterioration of the quality of justice which has been brought about by the
except on the ground of lack of jurisdiction over the subject matter, or failure indiscriminate filing of cases in the courts.19 To attain this objective, Section
to comply with the preceding section [referring to Section 18 on referral of 412(a) of R.A. No. 7160 requires the parties to undergo a conciliation process
the complaint to the Lupon for conciliation]; before the Lupon Chairman or the Pangkat as a precondition to filing a complaint
in court, thus:
x x x."
"SECTION 412. Conciliation. – (a) Pre-condition to Filing of Complaint in
On August 26, 1998, the MTC rendered a Judgment14 in favor of respondents and Court.– No complaint, petition, action, or proceeding involving any matter
against petitioners, the dispositive portion of which reads: within the authority of the lupon shall be filed or instituted directly in
court or any other government office for adjudication, unless there has
"WHEREFORE, Judgment is hereby rendered in favor of the plaintiff and been a confrontation between the parties before the lupon chairman or the
against the defendants, ordering defendants and all persons claiming right pangkat, and that no conciliation or settlement has been reached as
under them: certified by the lupon or pangkat secretary and attested to by the lupon or
pangkat chairman x x x." (Underscoring supplied)
1) To vacate the leased premises located at No. 117-B General Luna
Street, Caloocan City and to surrender possession thereof to the In the case at bar, the Punong Barangay, as Chairman of the Lupong
plaintiff; Tagapamayapa, conducted conciliation proceedings to resolve the dispute
2) To pay the amount of three thousand six hundred (P3,600.00) pesos between the parties herein. Contrary to petitioners' contention, the complaint
per month starting January, 1997 until the premises being occupied does not only allege, as a cause of action, the refusal of respondents' attorney-in-
by them is finally vacated and possession thereof is restored to the fact to give her consent to the installation of water facilities in the premises, but
plaintiff; also petitioners' violation of the terms of the lease, specifically their use of a
3) To pay plaintiff the sum of five thousand (P5,000.00) pesos as and portion therein for their photocopying business and their failure to pay the
for attorney's fees; and increased rental. As correctly found by the RTC:
4) To pay the costs of this suit.
"The records show that confrontations before the barangay chairman We hold that petitioners' motion to dismiss the complaint for unlawful detainer
were held on January 26, 1997, February 9, 1997, February 23, 1997, is proscribed by Section 19(a) of the 1991 Revised Rule on Summary Procedure,
February 28, 1997, July 27, 1997, August 3, 1997, August 10, 1997, August quoted earlier. Section 19(a) permits the filing of such pleading only when the
17, 1997 and August 24, 1997 wherein not only the issue of water ground for dismissal of the complaint is anchored on lack of jurisdiction over the
installation was discussed but also the terms of the lease and the proposed subject matter, or failure by the complainant to refer the subject matter of his/her
execution of a written contract relative thereto. It appears, however, that complaint "to the Lupon for conciliation" prior to its filing with the court. This is
no settlement was reached despite a total of nine meetings at the barangay clear from the provisions of Section 18 of the same Rule, which reads:
level.
"SEC. 18. Referral to Lupon. – Cases requiring referral to the Lupon for
It is of no moment that the complaint was initially made by defendant- conciliation under the provisions of Presidential Decree No. 1508 where
appellant Avelina Zamora because herein plaintiff-appellee was given by there is no showing of compliance with such requirement, shall be
the Sangguniang Barangay the authority to bring her grievance to the dismissed without prejudice, and may be revived only after such
Court for resolution. While it is true that the Sertifikasyon dated requirement shall have been complied with. This provision shall not
September 14, 1997 is entitled 'Ukol Sa Hindi Pagbibigay Ng Pahintulot Sa apply to criminal cases where the accused was arrested without a
Pagpapakabit Ng Tubig', this title must not prevail over the actual issues warrant." (Underscoring supplied)
discussed in the proceedings.
As discussed earlier, the case was referred to the Lupon Chairman for
Hence, to require another confrontation at the barangay level as a sine qua conciliation. Obviously, petitioners' motion to dismiss, even if allowed, is bereft
non for the filing of the instant case would not serve any useful purpose of merit.
anymore since no new issues would be raised therein and the parties have
proven so many times in the past that they cannot get to settle their WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the
differences amicably."20 Court of Appeals in CA-G.R. SP No. 54541 sustaining the Decision of the RTC
which upheld the MTC Judgment is AFFIRMED.
We cannot sustain petitioners' contention that the Lupon conciliation alone,
without the proceeding before the Pangkat ng Tagapagkasundo, contravenes the Costs against petitioners.
law on Katarungang Pambarangay. Section 412(a) of R.A. No. 7160, quoted
earlier, clearly provides that, as a precondition to filing a complaint in court, the SO ORDERED.
parties shall go through the conciliation process either before the Lupon
Chairman (as what happened in the present case), or the Pangkat.
II
G.R. No. L-23825 December 24, 1965 provincial board of the province, upon recommendation of the council of the
municipality or municipalities in which the proposed barrio is stipulated.
EMMANUEL PELAEZ, petitioner, The recommendation of the municipal council shall be embodied in a
vs. resolution approved by at least two-thirds of the entire membership of the
THE AUDITOR GENERAL, respondent. said council: Provided, however, That no new barrio may be created if its
population is less than five hundred persons.
Zulueta, Gonzales, Paculdo and Associates for petitioner.
Office of the Solicitor General for respondent. Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios
may "not be created or their boundaries altered nor their names changed" except by
Act of Congress or of the corresponding provincial board "upon petition of a majority
CONCEPCION, J.:
of the voters in the areas affected" and the "recommendation of the council of the
municipality or municipalities in which the proposed barrio is situated." Petitioner
During the period from September 4 to October 29, 1964 the President of the argues, accordingly: "If the President, under this new law, cannot even create a barrio,
Philippines, purporting to act pursuant to Section 68 of the Revised Administrative can he create a municipality which is composed of several barrios, since barrios are
Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty- units of municipalities?"
three (33) municipalities enumerated in the margin.1 Soon after the date last
mentioned, or on November 10, 1964 petitioner Emmanuel Pelaez, as Vice President
Respondent answers in the affirmative, upon the theory that a new municipality can
of the Philippines and as taxpayer, instituted the present special civil action, for a writ
be created without creating new barrios, such as, by placing old barrios under the
of prohibition with preliminary injunction, against the Auditor General, to restrain
jurisdiction of the new municipality. This theory overlooks, however, the main import
him, as well as his representatives and agents, from passing in audit any expenditure
of the petitioner's argument, which is that the statutory denial of the presidential
of public funds in implementation of said executive orders and/or any disbursement
authority to create a new barrio implies a negation of the bigger power to create
by said municipalities.
municipalities, each of which consists of several barrios. The cogency and force of this
argument is too obvious to be denied or even questioned. Founded upon logic and
Petitioner alleges that said executive orders are null and void, upon the ground that experience, it cannot be offset except by a clear manifestation of the intent of Congress
said Section 68 has been impliedly repealed by Republic Act No. 2370 and constitutes to the contrary, and no such manifestation, subsequent to the passage of Republic Act
an undue delegation of legislative power. Respondent maintains the contrary view No. 2379, has been brought to our attention.
and avers that the present action is premature and that not all proper parties —
referring to the officials of the new political subdivisions in question — have been
Moreover, section 68 of the Revised Administrative Code, upon which the disputed
impleaded. Subsequently, the mayors of several municipalities adversely affected by
executive orders are based, provides:
the aforementioned executive orders — because the latter have taken away from the
former the barrios composing the new political subdivisions — intervened in the
case. Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando The (Governor-General) President of the Philippines may by executive order
were allowed to and did appear as amici curiae. define the boundary, or boundaries, of any province, subprovince,
municipality, [township] municipal district, or other political subdivision,
and increase or diminish the territory comprised therein, may divide any
The third paragraph of Section 3 of Republic Act No. 2370, reads:
province into one or more subprovinces, separate any political division
other than a province, into such portions as may be required, merge any of
Barrios shall not be created or their boundaries altered nor their names such subdivisions or portions with another, name any new subdivision so
changed except under the provisions of this Act or by Act of Congress. created, and may change the seat of government within any subdivision to
such place therein as the public welfare may require: Provided, That the
Pursuant to the first two (2) paragraphs of the same Section 3: authorization of the (Philippine Legislature) Congress of the Philippines
shall first be obtained whenever the boundary of any province or
All barrios existing at the time of the passage of this Act shall come under the subprovince is to be defined or any province is to be divided into one or more
provisions hereof. subprovinces. When action by the (Governor-General) President of the
Philippines in accordance herewith makes necessary a change of the
territory under the jurisdiction of any administrative officer or any judicial
Upon petition of a majority of the voters in the areas affected, a new barrio
officer, the (Governor-General) President of the Philippines, with the
may be created or the name of an existing one may be changed by the
recommendation and advice of the head of the Department having executive
control of such officer, shall redistrict the territory of the several officers Section 68 of the Revised Administrative Code does not meet these well settled
affected and assign such officers to the new districts so formed. requirements for a valid delegation of the power to fix the details in the enforcement
of a law. It does not enunciate any policy to be carried out or implemented by the
Upon the changing of the limits of political divisions in pursuance of the President. Neither does it give a standard sufficiently precise to avoid the evil effects
foregoing authority, an equitable distribution of the funds and obligations of above referred to. In this connection, we do not overlook the fact that, under the last
the divisions thereby affected shall be made in such manner as may be clause of the first sentence of Section 68, the President:
recommended by the (Insular Auditor) Auditor General and approved by the
(Governor-General) President of the Philippines. ... may change the seat of the government within any subdivision to such
place therein as the public welfare may require.
Respondent alleges that the power of the President to create municipalities under this
section does not amount to an undue delegation of legislative power, relying upon It is apparent, however, from the language of this clause, that the phrase "as the public
Municipality of Cardona vs. Municipality of Binañgonan (36 Phil. 547), which, he welfare may require" qualified, not the clauses preceding the one just quoted, but only
claims, has settled it. Such claim is untenable, for said case involved, not the creation the place to which the seat of the government may be transferred. This fact becomes
of a new municipality, but a mere transfer of territory — from an already existing more apparent when we consider that said Section 68 was originally Section 1 of Act
municipality (Cardona) to another municipality (Binañgonan), likewise, existing at the No. 1748,3 which provided that, "whenever in the judgment of the Governor-General
time of and prior to said transfer (See Gov't of the P.I. ex rel. Municipality of Cardona the public welfare requires, he may, by executive order," effect the changes
vs. Municipality, of Binañgonan [34 Phil. 518, 519-5201) — in consequence of the enumerated therein (as in said section 68), including the change of the seat of the
fixing and definition, pursuant to Act No. 1748, of the common boundaries of two government "to such place ... as the public interest requires." The opening statement
municipalities. of said Section 1 of Act No. 1748 — which was not included in Section 68 of the Revised
Administrative Code — governed the time at which, or the conditions under which,
It is obvious, however, that, whereas the power to fix such common boundary, in the powers therein conferred could be exercised; whereas the last part of the first
order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may sentence of said section referred exclusively to the place to which the seat of the
partake of an administrative nature — involving, as it does, the adoption of means and government was to be transferred.
ways to carry into effect the law creating said municipalities — the authority to create
municipal corporations is essentially legislative in nature. In the language of other At any rate, the conclusion would be the same, insofar as the case at bar is concerned,
courts, it is "strictly a legislative function" (State ex rel. Higgins vs. Aicklen, 119 S. 425, even if we assumed that the phrase "as the public welfare may require," in said
January 2, 1959) or "solely and exclusively the exercise of legislative power" (Udall vs. Section 68, qualifies all other clauses thereof. It is true that in Calalang vs. Williams
Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of Washington has (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had upheld "public
put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405, 409), welfare" and "public interest," respectively, as sufficient standards for a valid
"municipal corporations are purely the creatures of statutes." delegation of the authority to execute the law. But, the doctrine laid down in these
cases — as all judicial pronouncements — must be construed in relation to the
Although1a Congress may delegate to another branch of the Government the power to specific facts and issues involved therein, outside of which they do not constitute
fill in the details in the execution, enforcement or administration of a law, it is precedents and have no binding effect.4 The law construed in the Calalang case
essential, to forestall a violation of the principle of separation of powers, that said law: conferred upon the Director of Public Works, with the approval of the Secretary of
(a) be complete in itself — it must set forth therein the policy to be executed, carried Public Works and Communications, the power to issue rules and regulations to
out or implemented by the delegate2 — and (b) fix a standard — the limits of which promote safe transit upon national roads and streets. Upon the other hand, the
are sufficiently determinate or determinable — to which the delegate must conform Rosenthal case referred to the authority of the Insular Treasurer, under Act No. 2581,
in the performance of his functions.2a Indeed, without a statutory declaration of to issue and cancel certificates or permits for the sale of speculative securities. Both
policy, the delegate would in effect, make or formulate such policy, which is the cases involved grants to administrative officers of powers related to the exercise of
essence of every law; and, without the aforementioned standard, there would be no their administrative functions, calling for the determination of questions of fact.
means to determine, with reasonable certainty, whether the delegate has acted within
or beyond the scope of his authority.2b Hence, he could thereby arrogate upon himself Such is not the nature of the powers dealt with in section 68. As above indicated, the
the power, not only to make the law, but, also — and this is worse — to unmake it, by creation of municipalities, is not an administrative function, but one which is
adopting measures inconsistent with the end sought to be attained by the Act of essentially and eminently legislative in character. The question of whether or not
Congress, thus nullifying the principle of separation of powers and the system of "public interest" demands the exercise of such power is not one of fact. it is "purely a
checks and balances, and, consequently, undermining the very foundation of our legislative question "(Carolina-Virginia Coastal Highway vs. Coastal Turnpike
Republican system. Authority, 74 S.E. 2d. 310-313, 315-318), or a political question (Udall vs. Severn, 79
P. 2d. 347-349). As the Supreme Court of Wisconsin has aptly characterized it, "the correction and expansion described in Sec. 1. In view of the scope of that
question as to whether incorporation is for the best interest of the community in any broad declaration, and of the nature of the few restrictions that are imposed,
case is emphatically a question of public policy and statecraft" (In re Village of North the discretion of the President in approving or prescribing codes, and thus
Milwaukee, 67 N.W. 1033, 1035-1037). enacting laws for the government of trade and industry throughout the
country, is virtually unfettered. We think that the code making authority thus
For this reason, courts of justice have annulled, as constituting undue delegation of conferred is an unconstitutional delegation of legislative power.
legislative powers, state laws granting the judicial department, the power to
determine whether certain territories should be annexed to a particular municipality If the term "unfair competition" is so broad as to vest in the President a discretion
(Udall vs. Severn, supra, 258-359); or vesting in a Commission the right to determine that is "virtually unfettered." and, consequently, tantamount to a delegation of
the plan and frame of government of proposed villages and what functions shall be legislative power, it is obvious that "public welfare," which has even a broader
exercised by the same, although the powers and functions of the village are connotation, leads to the same result. In fact, if the validity of the delegation of powers
specifically limited by statute (In re Municipal Charters, 86 Atl. 307-308); or made in Section 68 were upheld, there would no longer be any legal impediment to a
conferring upon courts the authority to declare a given town or village incorporated, statutory grant of authority to the President to do anything which, in his opinion, may
and designate its metes and bounds, upon petition of a majority of the taxable be required by public welfare or public interest. Such grant of authority would be a
inhabitants thereof, setting forth the area desired to be included in such village virtual abdication of the powers of Congress in favor of the Executive, and would bring
(Territory ex rel Kelly vs. Stewart, 23 Pac. 405-409); or authorizing the territory of a about a total collapse of the democratic system established by our Constitution, which
town, containing a given area and population, to be incorporated as a town, on certain it is the special duty and privilege of this Court to uphold.
steps being taken by the inhabitants thereof and on certain determination by a court
and subsequent vote of the inhabitants in favor thereof, insofar as the court is allowed It may not be amiss to note that the executive orders in question were issued after the
to determine whether the lands embraced in the petition "ought justly" to be included legislative bills for the creation of the municipalities involved in this case had failed to
in the village, and whether the interest of the inhabitants will be promoted by such pass Congress. A better proof of the fact that the issuance of said executive orders
incorporation, and to enlarge and diminish the boundaries of the proposed village "as entails the exercise of purely legislative functions can hardly be given.
justice may require" (In re Villages of North Milwaukee, 67 N.W. 1035-1037); or
creating a Municipal Board of Control which shall determine whether or not the laying
Again, Section 10 (1) of Article VII of our fundamental law ordains:
out, construction or operation of a toll road is in the "public interest" and whether the
requirements of the law had been complied with, in which case the board shall enter
an order creating a municipal corporation and fixing the name of the same (Carolina- The President shall have control of all the executive departments, bureaus,
Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310). or offices, exercise general supervision over all local governments as may be
provided by law, and take care that the laws be faithfully executed.
Insofar as the validity of a delegation of power by Congress to the President is
concerned, the case of Schechter Poultry Corporation vs. U.S. (79 L. Ed. 1570) is quite The power of control under this provision implies the right of the President to
relevant to the one at bar. The Schechter case involved the constitutionality of Section interfere in the exercise of such discretion as may be vested by law in the officers of
3 of the National Industrial Recovery Act authorizing the President of the United the executive departments, bureaus, or offices of the national government, as well as
States to approve "codes of fair competition" submitted to him by one or more trade to act in lieu of such officers. This power is denied by the Constitution to the Executive,
or industrial associations or corporations which "impose no inequitable restrictions insofar as local governments are concerned. With respect to the latter, the
on admission to membership therein and are truly representative," provided that fundamental law permits him to wield no more authority than that of checking
such codes are not designed "to promote monopolies or to eliminate or oppress small whether said local governments or the officers thereof perform their duties as
enterprises and will not operate to discriminate against them, and will tend to provided by statutory enactments. Hence, the President cannot interfere with local
effectuate the policy" of said Act. The Federal Supreme Court held: governments, so long as the same or its officers act Within the scope of their authority.
He may not enact an ordinance which the municipal council has failed or refused to
pass, even if it had thereby violated a duty imposed thereto by law, although he may
To summarize and conclude upon this point: Sec. 3 of the Recovery Act is
see to it that the corresponding provincial officials take appropriate disciplinary
without precedent. It supplies no standards for any trade, industry or
action therefor. Neither may he vote, set aside or annul an ordinance passed by said
activity. It does not undertake to prescribe rules of conduct to be applied to
council within the scope of its jurisdiction, no matter how patently unwise it may be.
particular states of fact determined by appropriate administrative
He may not even suspend an elective official of a regular municipality or take any
procedure. Instead of prescribing rules of conduct, it authorizes the making
disciplinary action against him, except on appeal from a decision of the corresponding
of codes to prescribe them. For that legislative undertaking, Sec. 3 sets up no
provincial board.5
standards, aside from the statement of the general aims of rehabilitation,
Upon the other hand if the President could create a municipality, he could, in effect, connection therewith. It is, however, a matter of common, public knowledge, subject
remove any of its officials, by creating a new municipality and including therein the to judicial cognizance, that the President has, for many years, issued executive orders
barrio in which the official concerned resides, for his office would thereby become creating municipal corporations and that the same have been organized and in actual
vacant.6 Thus, by merely brandishing the power to create a new municipality (if he operation, thus indicating, without peradventure of doubt, that the expenditures
had it), without actually creating it, he could compel local officials to submit to his incidental thereto have been sanctioned, approved or passed in audit by the General
dictation, thereby, in effect, exercising over them the power of control denied to him Auditing Office and its officials. There is no reason to believe, therefore, that
by the Constitution. respondent would adopt a different policy as regards the new municipalities involved
in this case, in the absence of an allegation to such effect, and none has been made by
Then, also, the power of control of the President over executive departments, bureaus him.
or offices implies no more than the authority to assume directly the functions thereof
or to interfere in the exercise of discretion by its officials. Manifestly, such control does WHEREFORE, the Executive Orders in question are hereby declared null and void ab
not include the authority either to abolish an executive department or bureau, or to initio and the respondent permanently restrained from passing in audit any
create a new one. As a consequence, the alleged power of the President to create expenditure of public funds in implementation of said Executive Orders or any
municipal corporations would necessarily connote the exercise by him of an authority disbursement by the municipalities above referred to. It is so ordered.
even greater than that of control which he has over the executive departments,
bureaus or offices. In other words, Section 68 of the Revised Administrative Code does Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur.
not merely fail to comply with the constitutional mandate above quoted. Instead of
giving the President less power over local governments than that vested in him over
Zaldivar, J., took no part.
the executive departments, bureaus or offices, it reverses the process and does the
exact opposite, by conferring upon him more power over municipal corporations than
that which he has over said executive departments, bureaus or offices. Separate Opinions
In short, even if it did entail an undue delegation of legislative powers, as it certainly BENGZON, J.P., J., concurring and dissenting:
does, said Section 68, as part of the Revised Administrative Code, approved on March
10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, A sign of progress in a developing nation is the rise of new municipalities. Fostering
in 1935, which is utterly incompatible and inconsistent with said statutory their rapid growth has long been the aim pursued by all three branches of our
enactment.7 Government.
There are only two (2) other points left for consideration, namely, respondent's claim So it was that the Governor-General during the time of the Jones Law was given
(a) that "not all the proper parties" — referring to the officers of the newly created authority by the Legislature (Act No. 1748) to act upon certain details with respect to
municipalities — "have been impleaded in this case," and (b) that "the present said local governments, such as fixing of boundaries, subdivisions and mergers. And
petition is premature." the Supreme Court, within the framework of the Jones Law, ruled in 1917 that the
execution or implementation of such details, did not entail abdication of legislative
As regards the first point, suffice it to say that the records do not show, and the parties power (Government vs. Municipality of Binañgonan, 34 Phil. 518; Municipality of
do not claim, that the officers of any of said municipalities have been appointed or Cardona vs. Municipality of Binañgonan, 36 Phil. 547). Subsequently, Act No. 1748's
elected and assumed office. At any rate, the Solicitor General, who has appeared on aforesaid statutory authorization was embodied in Section 68 of the Revised
behalf of respondent Auditor General, is the officer authorized by law "to act and Administrative Code. And Chief Executives since then up to the present continued to
represent the Government of the Philippines, its offices and agents, in any official avail of said provision, time and again invoking it to issue executive orders providing
investigation, proceeding or matter requiring the services of a lawyer" (Section 1661, for the creation of municipalities.
Revised Administrative Code), and, in connection with the creation of the
aforementioned municipalities, which involves a political, not proprietary, function, From September 4, 1964 to October 29, 1964 the President of the Philippines issued
said local officials, if any, are mere agents or representatives of the national executive orders to create thirty-three municipalities pursuant to Section 68 of the
government. Their interest in the case at bar has, accordingly, been, in effect, duly Revised Administrative Code. Public funds thereby stood to be disbursed in
represented.8 implementation of said executive orders.
With respect to the second point, respondent alleges that he has not as yet acted on Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez filed in this
any of the executive order & in question and has not intimated how he would act in Court a petition for prohibition with preliminary injunction against the Auditor
General. It seeks to restrain the respondent or any person acting in his behalf, from The power to create a municipality is legislative in character. American authorities
passing in audit any expenditure of public funds in implementation of the executive have therefore favored the view that it cannot be delegated; that what is delegable is
orders aforementioned. not the power to create municipalities but only the power to determine the existence
of facts under which creation of a municipality will result (37 Am. Jur. 628).
Petitioner contends that the President has no power to create a municipality by
executive order. It is argued that Section 68 of the Revised Administrative Code of The test is said to lie in whether the statute allows any discretion on the delegate as
1917, so far as it purports to grant any such power, is invalid or, at the least, already to whether the municipal corporation should be created. If so, there is an attempted
repealed, in light of the Philippine Constitution and Republic Act 2370 (The Barrio delegation of legislative power and the statute is invalid (Ibid.). Now Section 68 no
Charter). doubt gives the President such discretion, since it says that the President "may by
executive order" exercise the powers therein granted. Furthermore, Section 5 of the
Section 68 is again reproduced hereunder for convenience: same Code states:
SEC. 68. General authority of [Governor-General) President of the Philippines SEC. 5. Exercise of administrative discretion — The exercise of the permissive
to fix boundaries and make new subdivisions. — The [Governor-General] powers of all executive or administrative officers and bodies is based upon
President of the Philippines may by executive order define the boundary, or discretion, and when such officer or body is given authority to do any act but
boundaries, of any province, subprovince, municipality, [township] not required to do such act, the doing of the same shall be dependent on a
municipal district, or other political subdivision, and increase or diminish sound discretion to be exercised for the good of the service and benefit of the
the territory comprised therein, may divide any province into one or more public, whether so expressed in the statute giving the authority or not.
subprovinces, separate any political division other than a province, into such
portions as may be required, merge any of such subdivisions or portions Under the prevailing rule in the United States — and Section 68 is of American origin
with another, name any new subdivision so created, and may change the seat — the provision in question would be an invalid attempt to delegate purely legislative
of government within any subdivision to such place therein as the public powers, contrary to the principle of separation of powers.
welfare may require: Provided, That the authorization of the [Philippine
Legislature] Congress of the Philippines shall first be obtained whenever the It is very pertinent that Section 68 should be considered with the stream of history in
boundary of any province or subprovince is to be defined or any province is mind. A proper knowledge of the past is the only adequate background for the
to be divided into one or more subprovinces. When action by the [Governor- present. Section 68 was adopted half a century ago. Political change, two world wars,
General] President of the Philippines in accordance herewith makes the recognition of our independence and rightful place in the family of nations, have
necessary a change of the territory under the jurisdiction of any since taken place. In 1917 the Philippines had for its Organic Act the Jones Law. And
administrative officer or any judicial officer, the [Governor-General] under the setup ordained therein no strict separation of powers was adhered to.
President of the Philippines, with the recommendation and advice of the Consequently, Section 68 was not constitutionally objectionable at the time of its
head of the Department having executive control of such officer, shall enactment.
redistrict the territory of the several officers to the new districts so formed.
The advent of the Philippine Constitution in 1935 however altered the situation. For
Upon the changing of the limits of political divisions in pursuance of the not only was separation of powers strictly ordained, except only in specific instances
foregoing authority, an equitable distribution of the funds and obligations of therein provided, but the power of the Chief Executive over local governments
the divisions thereby affected shall be made in such manner as may be suffered an explicit reduction.
recommended by the [Insular Auditor] Auditor General and approved by the
[Governor-General] President of the Philippines.
Formerly, Section 21 of the Jones Law provided that the Governor-General "shall have
general supervision and control of all the departments and bureaus of the
From such working I believe that power to create a municipality is included: to government in the Philippine Islands." Now Section 10 (1), Article VII of the
"separate any political division other than a province, into such portions as may be Philippine Constitution provides: "The President shall have control of all the
required, merge any such subdivisions or portions with another, name any new executive departments, bureaus, or offices, exercise general supervision over all local
subdivision so created." The issue, however, is whether the legislature can validly governments as may be provided by law, and take care that the laws be faithfully
delegate to the Executive such power. executed.
In short, the power of control over local governments had now been taken away from prohibition for creating a municipality. For although municipalities consist of barrios,
the Chief Executive. Again, to fully understand the significance of this provision, one there is nothing in the statute that would preclude creation of new municipalities out
must trace its development and growth. of pre-existing barrios.
As early as April 7, 1900 President McKinley of the United States, in his Instructions It is not contrary to the logic of local autonomy to be able to create larger political
to the Second Philippine Commission, laid down the policy that our municipal units and unable to create smaller ones. For as long ago observed in President
governments should be "subject to the least degree of supervision and control" on the McKinley's Instructions to the Second Philippine Commission, greater autonomy is to
part of the national government. Said supervision and control was to be confined be imparted to the smaller of the two political units. The smaller the unit of local
within the "narrowest limits" or so much only as "may be necessary to secure and government, the lesser is the need for the national government's intervention in its
enforce faithful and efficient administration by local officers." And the national political affairs. Furthermore, for practical reasons, local autonomy cannot be given
government "shall have no direct administration except of matters of purely general from the top downwards. The national government, in such a case, could still exercise
concern." (See Hebron v. Reyes, L-9158, July 28, 1958.) power over the supposedly autonomous unit, e.g., municipalities, by exercising it over
the smaller units that comprise them, e.g., the barrios. A realistic program of
All this had one aim, to enable the Filipinos to acquire experience in the art of self- decentralization therefore calls for autonomy from the bottom upwards, so that it is
government, with the end in view of later allowing them to assume complete not surprising for Congress to deny the national government some power over
management and control of the administration of their local affairs. Such aim is the barrios without denying it over municipalities. For this reason, I disagree with the
policy now embodied in Section 10 (1), Article VII of the Constitution (Rodriguez v. majority view that because the President could not create a barrio under Republic Act
Montinola, 50 O.G. 4820). 2370, a fortiori he cannot create a municipality.
It is the evident decree of the Constitution, therefore, that the President shall have no It is my view, therefore, that the Constitution, and not Republic Act 2370, repealed
power of control over local governments. Accordingly, Congress cannot by law grant Section 68 of the Revised Administrative Code's provision giving the President
him such power (Hebron v. Reyes, supra). And any such power formerly granted authority to create local governments. And for this reason I agree with the ruling in
under the Jones Law thereby became unavoidably inconsistent with the Philippine the majority opinion that the executive orders in question are null and void.
Constitution.
In thus ruling, the Court is but sustaining the fulfillment of our historic desire to be
It remains to examine the relation of the power to create and the power to control free and independent under a republican form of government, and exercising a
local governments. Said relationship has already been passed upon by this Court in function derived from the very sovereignty that it upholds. Executive orders declared
Hebron v. Reyes, supra. In said case, it was ruled that the power to control is an incident null and void.
of the power to create or abolish municipalities. Respondent's view, therefore, that
creating municipalities and controlling their local governments are "two worlds Makalintal and Regala, JJ., concur.
apart," is untenable. And since as stated, the power to control local governments can
no longer be conferred on or exercised by the President, it follows a fortiori that the
power to create them, all the more cannot be so conferred or exercised.
Since the Constitution repealed Section 68 as far back as 1935, it is academic to ask
whether Republic Act 2370 likewise has provisions in conflict with Section 68 so as
to repeal it. Suffice it to state, at any rate, that statutory prohibition on the President
from creating a barrio does not, in my opinion, warrant the inference of statutory