Alfelor, Rodolfo Albano, Santiago Respicio and Faustino Dy.
The bill was referred to
[G.R. No. 118303. January 31, 1996]
SENATOR HEHERSON T. ALVAREZ, SENATOR JOSE D. LINA, JR., MR.
NICASIO B. BAUTISTA, MR. JESUS P. GONZAGA, MR. SOLOMON
D. MAYLEM, LEONORA C. MEDINA, CASIANO S.
ALIPON, petitioners, vs. HON. TEOFISTO T. GUINGONA, JR., in his
capacity as Executive Secretary, HON. RAFAEL ALUNAN, in his
capacity as Secretary of Local Government, HON. SALVADOR
ENRIQUEZ, in his capacity as Secretary of Budget, THE COMMISSION
ON AUDIT, HON. JOSE MIRANDA, in his capacity as Municipal Mayor
of Santiago and HON. CHARITO MANUBAY, HON. VICTORINO
MIRANDA, JR., HON. ARTEMIO ALVAREZ, HON. DANILO
VERGARA, HON. PETER DE JESUS, HON. NELIA NATIVIDAD,
HON. CELSO CALEON and HON. ABEL MUSNGI, in their capacity as
SANGGUNIANG BAYAN MEMBERS, MR. RODRIGO L. SANTOS, in
his capacity as Municipal Treasurer, and ATTY. ALFREDO S. DIRIGE,
in his capacity as Municipal Administrator, respondents.
DECISION
HERMOSISIMA, JR., J.:
Of main concern to the petitioners is whether Republic Act No. 7720, just recently
passed by Congress and signed by the President into law, is constitutionally infirm.
Indeed, in this Petition for Prohibition with prayer for Temporary Restraining
Order and Preliminary Prohibitory Injunction, petitioners assail the validity of Republic
Act No. 7720, entitled, An Act Converting the Municipality of Santiago, Isabela into an
Independent Component City to be known as the City of Santiago, mainly because the
Act allegedly did not originate exclusively in the House of Representatives as mandated
by Section 24, Article VI of the 1987 Constitution.
Also, petitioners claim that the Municipality of Santiago has not met the minimum
average annual income required under Section 450 of the Local Government Code of
1991 in order to be converted into a component city.
Undisputed is the following chronicle of the metamorphosis of House Bill No.
8817 into Republic Act No. 7720:
On April 18, 1993, HB No. 8817, entitled An Act Converting
the Municipality of Santiago into an Independent Component City to be known as the
City of Santiago, was filed in the House of Representatives with Representative
Antonio Abaya as principal author. Other sponsors included Representatives Ciriaco
the House Committee on Local Government and the House Committee on
Appropriations on May 5, 1993.
On May 19, 1993, June 1, 1993, November 28, 1993, and December 1, 1993,
public hearings on HB No. 8817 were conducted by the House Committee on Local
Government. The committee submitted to the House a favorable report, with
amendments, on December 9, 1993.
On December 13, 1993, HB No. 8817 was passed by the House of Representatives
on Second Reading and was approved on Third Reading on December 17, 1993.
On January 28, 1994, HB No. 8817 was transmitted to the Senate.
Meanwhile, a counterpart of HB No. 8817, Senate Bill No. 1243, entitled, An Act
Converting the Municipality of Santiago into an Independent] Component City to be
Known as the City of Santiago, was filed in the Senate. It was introduced by Senator
Vicente Sotto III, as principal sponsor, on May 19, 1993. This was just after the House
of Representatives had conducted its first public hearing on HB No. 8817.
On February 23, 1994, or a little less than a month after HB No. 8817 was
transmitted to the Senate, the Senate Committee on Local Government conducted public
hearings on SB No. 1243. On March 1, 1994, the said committee submitted Committee
Report No. 378 on HB No. 8817, with the recommendation that it be approved without
amendment, taking into consideration the reality that H.B. No. 8817 was on all fours
with SB No. 1243. Senator Heherson T. Alvarez, one of the herein petitioners, indicated
his approval thereto by signing said report as member of the Committee on Local
Government.
On March 3, 1994, Committee Report No. 378 was passed by the Senate on
Second Reading and was approved on Third Reading on March 14, 1994. On March 22,
1994, the House of Representatives, upon being apprised of the action of the Senate,
approved the amendments proposed by the Senate.
The enrolled bill, submitted to the President on April 12, 1994, was signed by the
Chief Executive on May 5, 1994 as Republic Act No. 7720. When a plebiscite on the
Act was held on July 13, 1994, a great majority of the registered voters
of Santiago voted in favor of the conversion of Santiago into a city.
The question as to the validity of Republic Act No. 7720 hinges on the following
twin issues: (I) Whether or not the Internal Revenue Allotments (IRAs) are to be
included in the computation of the average annual income of a municipality for
purposes of its conversion into an independent component city, and (II) Whether or not,
considering that the Senate passed SB No. 1243, its own version of HB No. 8817,
Republic Act No. 7720 can be said to have originated in the House of Representatives.
I
The annual income of a local
government unit includes the IRAs
-----------------------------------------------------------
Petitioners claim that Santiago could not qualify into a component city because its
average annual income for the last two (2) consecutive years based on 1991 constant
prices falls below the required annual income of Twenty Million Pesos
(P20,000,000.00) for its conversion into a city, petitioners having computed Santiagos
average annual income in the following manner:
Total income (at 1991 constant prices) for 1991 P20,379,057.07
Total income (at 1991 constant prices) for 1992 P21,570,106.87
Total income for 1991 and 1992 P41,949,163.94
Minus:
IRAs for 1991 and 1992 P15,730,043.00
Total income for 1991 and 1992 P26,219,120.94
Average Annual Income P13,109,960.47
By dividing the total income of Santiago for calendar years 1991 and 1992, after
deducting the IRAs, the average annual income arrived at would only be
P13,109,560.47 based on the 1991 constant prices. Thus, petitioners claim
that Santiagos income is far below the aforesaid Twenty Million Pesos average annual
income requirement.
The certification issued by the Bureau of Local Government Finance of the
Department of Finance, which indicates Santiagos average annual income to be
P20,974,581.97, is allegedly not accurate as the Internal Revenue Allotments were not
excluded from the computation. Petitioners asseverate that the IRAs are not actually
income but transfers and! or budgetary aid from the national government and that they
fluctuate, increase or decrease, depending on factors like population, land and equal
sharing.
In this regard, we hold that petitioners asseverations are untenable because Internal
Revenue Allotments form part of the income of Local Government Units.
It is true that for a municipality to be converted into a component city, it must,
among others, have an average annual income of at least Twenty Million Pesos for the
last two (2) consecutive years based on 1991 constant prices. 1 Such income must be
duly certified by the Department of Finance.2
Resolution of the controversy regarding compliance by
the Municipality of Santiagowith the aforecited income requirement hinges on a
correlative and contextual explication of the meaning of internal revenue allotments
(IRAs) vis-a-vis the notion of income of a local government unit and the principles of
local autonomy and decentralization underlying the institutionalization and intensified
empowerment of the local government system.
A Local Government Unit is a political subdivision of the State which is
constituted by law and possessed of substantial control over its own affairs. 3 Remaining
to be an intra sovereign subdivision of one sovereign nation, but not intended, however,
to be an imperium in imperio,4 the local government unit is autonomous in the sense
that it is given more powers, authority, responsibilities and resources. 5 Power which
used to be highly centralized in Manila, is thereby deconcentrated, enabling especially
the peripheral local government units to develop not only at their own pace and
discretion but also with their oWn resources and assets.6
The practical side to development through a decentralized local government
system certainly concerns the matter of financial resources. With its broadened powers
and increased responsibilities, a local government unit must now operate on a much
wider scale. More extensive operations, in turn, entail more expenses. Understandably,
the vesting of duty, responsibility and accountability in every local government unit is
accompanied with a provision for reasonably adequate resources to discharge its powers
and effectively carry out its functions.7 Availment of such resources is effectuated
through the vesting in every local government unit of (1) the right to create and broaden
its own source of revenue; (2) the right to be allocated a just share in national taxes,
such share being in the form of internal revenue allotments (IRAs); and (3) the right to
be given its equitable share in the proceeds of the utilization and development of the
national wealth, if any, within its territorial boundaries. 8.
The funds generated from local taxes, IRAs and national wealth utilization
proceeds accrue to the general fund of the local government and are used to finance its
operations subject to specified modes of spending the same as provided for in the Local
Government Code and its implementing rules and regulations. For instance, not less
than twenty percent (20%) of the IRAs must be set aside for local development
projects.9 As such, for purposes of budget preparation, which budget should reflect the
estimates of the income of the local government unit, among others, the IRAs and the
share in the national wealth utilization proceeds are considered items of income. This is
as it should be, since income is defined in the Local Government Code to be all
revenues and receipts collected or received forming the gross accretions of funds of the
local government unit.10
The IRAs are items of income because they form part of the gross accretion of the
funds of the local government unit. The IRAs regularly and automatically accrue to the
local treasury without need of any further action on the part of the local government
unit.11 They thus constitute income which the local government can invariably rely
upon as the source of much needed funds.
 For purposes of converting the Municipality of Santiago into a city, the
Department of Finance certified, among others, that the municipality had an average
annual income of at least Twenty Million Pesos for the last two (2) consecutive years
based on 1991 constant prices. This, the Department of Finance did after including the
IRAs in its computation of said average annual income.
Furthermore, Section 450 (c) of the Local Government Code provides that the
average annual income shall include the income accruing to the general fund, exclusive
of special funds, transfers, and non-recurring income. To reiterate, IRAs are a regular,
recurring item of income; nil is there a basis, too, to classify the same as a special fund
or transfer, since IRAs have a technical definition and meaning all its own as used in the
Local Government Code that unequivocally makes it distinct from special funds or
transfers referred to when the Code speaks of funding support from the national
government, its instrumentalities and government-owned-or-controlled corporations.12
Thus, Department of Finance Order No. 3593 13 correctly encapsulizes the full
import of the above disquisition when it defined ANNUAL INCOME to be revenues
and receipts realized by provinces, cities and municipalities from regular sources of the
Local General Fund including the internal revenue allotment and other shares provided
for in Sections 284, 290 and 291 of the Code, but exclusive of non-recurring receipts,
such as other national aids, grants, financial assistance, loan proceeds, sales of fixed
assets, and similar others (Italics ours).14 Such order, constituting executive or
contemporaneous construction of a statute by an administrative agency charged with the
task of interpreting and applying the same, is entitled to full respect and should be
accorded great weight by the courts, unless such construction is clearly shown to be in
sharp conflict with the Constitution, the governing statute, or other laws. 15
II
In the enactment of RA No. 7720,
there was compliance with Section 24,
Article VI of the 1987 Constitution
-----------------------------------------------------------
Although a bill of local application like HB No. 8817 should, by constitutional
prescription,16 originate exclusively in the House of Representatives, the claim of
petitioners that Republic Act No. 7720 did not originate exclusively in the House of
Representatives because a bill of the same import, SB No. 1243, was passed in the
Senate, is untenable because it cannot be denied that HB No. 8817 was filed in the
House of Representatives first before SB No. 1243 was filed in the Senate. Petitioners
themselves cannot disavow their own admission that HB No. 8817 was filed on April
18, 1993 while SB No. 1243 was filed on May 19, 1993. The filing of HB No. 8817 was
thus precursive not only of the said Act in question but also of SB No. 1243. Thus, HB
No. 8817, was the bill that initiated the legislative process that culminated in the
enactment of Republic Act No. 7720. No violation of Section 24, Article VI, of the
1987 Constitution is perceptible under the circumstances attending the instant
controversy.
Furthermore, petitioners themselves acknowledge that HB No. 8817 was already
approved on Third Reading and duly transmitted to the Senate when the Senate
Committee on Local Government conducted its public hearing on HB No. 8817. HB
No. 8817 was approved on the Third Reading on December 17, 1993 and transmitted to
the Senate on January 28, 1994; a little less than a month thereafter, or on February 23,
1994, the Senate Committee on Local Government conducted public hearings on SB
No. 1243. Clearly, the Senate held in abeyance any action on SB No. 1243 until it
received HB No. 8817, already approved on the Third Reading, from the House of
Representatives. The filing in the Senate of a substitute bill in anticipation of its receipt
of the bill from the House, does not contravene the constitutional requirement that a bill
of local application should originate in the House of Representatives, for as long as the
Senate does not act thereupon until it receives the House bill.
We have already addressed this issue in the case of Tolentino vs. Secretary of
Finance.17 There, on the matter of the Expanded Value Added Tax (EVAT) Law,
which, as a revenue bill, is nonetheless constitutionally required to originate exclusively
in the House of Representatives, we explained:
x x x To begin with, it is not the law-but the revenue bill-which is required by the
Constitution to originate exclusively in the House of Representatives. It is important to
emphasize this, because a bill originating in the House may undergo such extensive
changes in the Senate that the result may be a rewriting of the whole. x x x as a result of
the Senate action, a distinct bill may be produced. To insist that a revenue statute-and
not only the bill which initiated the legislative process culminating in the enactment of
the law-must substantially be the same as the House bill would be to deny the Senates
power not only to concur with amendments but also to propose amendments. It would
be to violate the coequality of legislative power of the two houses of Congress and in
fact make the House superior to the Senate.
xxx xxx xxx
It is insisted, however, that S. No. 1630 was passed not in substitution of H. No. 11197
but of another Senate bill (S. No. 1129) earlier filed and that what the Senate did was
merely to take [H. No. 11197] into consideration in enacting S. No. 1630. There is
really no difference between the Senate preserving H. No. 11197 up to the enacting
clause and then writing its own version following the enacting clause (which, it would
seem petitioners admit is an amendment by substitution), and, on the other hand,
separately presenting a bill of its own on the same subject matter. In either case the
result are two bills on the same subject.
Indeed, what the Constitution simply means is that the initiative for filing revenue,
tariff, or tax bills, bills authorizing an increase of the public debt, private bills and bills
of local application must come from the House of Representatives on the theory that,
elected as they are from the districts, the members of the House can be expected to be
more sensitive to the local needs and problems. On the other hand, the senators, who are
elected at large, are expected to approach the same problems from the national
perspective. Both views are thereby made to bear on the enactment of such laws.

Nor does the Constitution prohibit the filing in the Senate of a substitute bill in
anticipation of its receipt of the bill from the House, so long as action by the Senate as a
body is withheld pending receipt of the House bill. x x x18

III

Every law, including RA No. 7720,

has in its favor the presumption
of constitutionality
--------------------------------------------------------------------
It is a well-entrenched jurisprudential rule that on the side of every law lies the
presumption of constitutionality.19 Consequently, for RA No. 7720 to be nullified, it
must be shown that there is a clear and unequivocal breach of the Constitution, not
merely a doubtful and equivocal one; in other words, the grounds for nullity must be
clear and beyond reasonable doubt.20 Those who petition this court to declare a law to
be unconstitutional must clearly and fully establish the basis that will justify such a
declaration; otherwise, their petition must fail. Taking into consideration the
justification of our stand on the immediately preceding ground raised by petitioners to
challenge the constitutionality of RA No. 7720, the Court stands on the holding that
petitioners have failed to overcome the presumption. The dismissal of this petition is,
therefore, inevitable.
WHEREFORE, the instant petition is DISMISSED for lack of merit with costs
against petitioners.
SO ORDERED.
G.R. No. 91649 May 14, 1991 and Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended
Petition; p. 21, Rollo).
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES
MARANAN AND LORENZO SANCHEZ,petitioners, The procedural issue is whether petitioners, as taxpayers and practicing lawyers
vs. (petitioner Basco being also the Chairman of the Committee on Laws of the City
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION Council of Manila), can question and seek the annulment of PD 1869 on the alleged
(PAGCOR), respondent. grounds mentioned above.

H.B. Basco & Associates for petitioners. The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue
Valmonte Law Offices collaborating counsel for petitioners. of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B
Aguirre, Laborte and Capule for respondent PAGCOR. also dated January 1, 1977 "to establish, operate and maintain gambling casinos on land
or water within the territorial jurisdiction of the Philippines." Its operation was
originally conducted in the well known floating casino "Philippine Tourist." The
PARAS, J.: operation was considered a success for it proved to be a potential source of revenue to
fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2,
1978 for PAGCOR to fully attain this objective.
A TV ad proudly announces:

"The new PAGCOR — responding through responsible gaming."
But the petitioners think otherwise, that is why, they filed the instant petition seeking to
annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter — PD
1869, because it is allegedly contrary to morals, public policy and order, and because —
A. It constitutes a waiver of a right prejudicial to a third person with a right
recognized by law. It waived the Manila City government's right to impose
taxes and license fees, which is recognized by law;
B. For the same reason stated in the immediately preceding paragraph, the law
has intruded into the local government's right to impose local taxes and license
fees. This, in contravention of the constitutionally enshrined principle of local
autonomy;
C. It violates the equal protection clause of the constitution in that it legalizes
PAGCOR — conducted gambling, while most other forms of gambling are
outlawed, together with prostitution, drug trafficking and other vices;
D. It violates the avowed trend of the Cory government away from
monopolistic and crony economy, and toward free enterprise and privatization.
(p. 2, Amended Petition; p. 7, Rollo)
In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the
declared national policy of the "new restored democracy" and the people's will as
expressed in the 1987 Constitution. The decree is said to have a "gambling objective"
and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the
Government to regulate and centralize all games of chance authorized by existing
franchise or permitted by law, under the following declared policy —
Sec. 1. Declaration of Policy. — It is hereby declared to be the policy of the
State to centralize and integrate all games of chance not heretofore authorized
by existing franchises or permitted by law in order to attain the following
objectives:
(a) To centralize and integrate the right and authority to operate and conduct
games of chance into one corporate entity to be controlled, administered and
supervised by the Government.
(b) To establish and operate clubs and casinos, for amusement and recreation,
including sports gaming pools, (basketball, football, lotteries, etc.) and such
other forms of amusement and recreation including games of chance, which
may be allowed by law within the territorial jurisdiction of the Philippines and
which will: (1) generate sources of additional revenue to fund infrastructure
and socio-civic projects, such as flood control programs, beautification,
sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional
Programs, Population Control and such other essential public services; (2)
create recreation and integrated facilities which will expand and improve the
country's existing tourist attractions; and (3) minimize, if not totally eradicate,
all the evils, malpractices and corruptions that are normally prevalent on the
conduct and operation of gambling clubs and casinos without direct
government involvement. (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the
Philippines. Under its Charter's repealing clause, all laws, decrees, executive orders,
rules and regulations, inconsistent therewith, are accordingly repealed, amended or
modified.
It is reported that PAGCOR is the third largest source of government revenue, next to
the Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR
earned P3.43 Billion, and directly remitted to the National Government a total of P2.5
Billion in form of franchise tax, government's income share, the President's Social Fund
and Host Cities' share. In addition, PAGCOR sponsored other socio-cultural and
charitable projects on its own or in cooperation with various governmental agencies,
and other private associations and organizations. In its 3 1/2 years of operation under
the present administration, PAGCOR remitted to the government a total of P6.2 Billion.
As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9)
casinos nationwide, directly supporting the livelihood of Four Thousand Four Hundred
Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the
same is "null and void" for being "contrary to morals, public policy and public order,"
monopolistic and tends toward "crony economy", and is violative of the equal
protection clause and local autonomy as well as for running counter to the state policies
enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family) and 13
(Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and Section 2
(Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the
most deliberate consideration by the Court, involving as it does the exercise of what has
been described as "the highest and most delicate function which belongs to the judicial
department of the government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez,
146 SCRA 323).
As We enter upon the task of passing on the validity of an act of a co-equal and
coordinate branch of the government We need not be reminded of the time-honored
principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid.
Every presumption must be indulged in favor of its constitutionality. This is not to say
that We approach Our task with diffidence or timidity. Where it is clear that the
legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily, as
fall it must, on the offending statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr.
Justice Zaldivar underscored the —
. . . thoroughly established principle which must be followed in all cases where
questions of constitutionality as obtain in the instant cases are involved. All
presumptions are indulged in favor of constitutionality; one who attacks a
statute alleging unconstitutionality must prove its invalidity beyond a
reasonable doubt; that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports
the statute, it will be upheld and the challenger must negate all possible basis;
that the courts are not concerned with the wisdom, justice, policy or
expediency of a statute and that a liberal interpretation of the constitution in
favor of the constitutionality of legislation should be adopted. (Danner v. Hass,
194 N.W. 2nd534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660, 663; 59
SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v.
Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v.
Reyes, 125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for
Consumer Protection v. Energy Regulatory Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the legal
personality of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping
with the Court's duty, under the 1987 Constitution, to determine whether or not the
other branches of government have kept themselves within the limits of the Constitution
and the laws and that they have not abused the discretion given to them, the Court has
brushed aside technicalities of procedure and has taken cognizance of this petition.
(Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA
371)
With particular regard to the requirement of proper party as applied in the
cases before us, We hold that the same is satisfied by the petitioners and
intervenors because each of them has sustained or is in danger of sustaining an
immediate injury as a result of the acts or measures complained of. And even
if, strictly speaking they are not covered by the definition, it is still within the
wide discretion of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional questions
raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers were
allowed to question the constitutionality of several executive orders issued by
President Quirino although they were involving only an indirect and general
interest shared in common with the public. The Court dismissed the objection
that they were not proper parties and ruled that "the transcendental importance
to the public of these cases demands that they be settled promptly and
definitely, brushing aside, if we must technicalities of procedure." We have
since then applied the exception in many other cases. (Association of Small
Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA
343).
Having disposed of the procedural issue, We will now discuss the substantive issues
raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the
prohibition of gambling does not mean that the Government cannot regulate it in the
exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has been defined
as the "state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487)
As defined, it consists of (1) an imposition or restraint upon liberty or property, (2) in
order to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace.
(Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuming the greatest benefits. (Edu v.
Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its
origin to the charter. Along with the taxing power and eminent domain, it is inborn in
the very fact of statehood and sovereignty. It is a fundamental attribute of government
that has enabled it to perform the most vital functions of governance. Marshall, to
whom the expression has been credited, refers to it succinctly as the plenary power of
the state "to govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The
police power of the State is a power co-extensive with self-protection and is most aptly
termed the "law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39
Phil. 660, 708) It is "the most essential, insistent, and illimitable of powers." (Smith
Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables the state to meet
the agencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and
centralize thru an appropriate institution all games of chance authorized by existing
franchise or permitted by law" (1st whereas clause, PD 1869). As was subsequently
proved, regulating and centralizing gambling operations in one corporate entity — the
PAGCOR, was beneficial not just to the Government but to society in general. It is a
reliable source of much needed revenue for the cash strapped Government. It provided
funds for social impact projects and subjected gambling to "close scrutiny, regulation,
supervision and control of the Government" (4th Whereas Clause, PD 1869). With the
creation of PAGCOR and the direct intervention of the Government, the evil practices
and corruptions that go with gambling will be minimized if not totally eradicated.
Public welfare, then, lies at the bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila
to impose taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the
principle of local autonomy. They must be referring to Section 13 par. (2) of P.D. 1869
which exempts PAGCOR, as the franchise holder from paying any "tax of any kind or
form, income or otherwise, as well as fees, charges or levies of whatever nature,
whether National or Local."
(2) Income and other taxes. — a) Franchise Holder: No tax of any kind or
form, income or otherwise as well as fees, charges or levies of whatever
nature, whether National or Local, shall be assessed and collected under this
franchise from the Corporation; nor shall any form or tax or charge attach in
any way to the earnings of the Corporation, except a franchise tax of five (5%)
percent of the gross revenues or earnings derived by the Corporation from its
operations under this franchise. Such tax shall be due and payable quarterly to
the National Government and shall be in lieu of all kinds of taxes, levies, fees
or assessments of any kind, nature or description, levied, established or
collected by any municipal, provincial or national government authority
(Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to
impose taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105
Phil. 337; Santos v. Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or
statute must plainly show an intent to confer that power or the municipality cannot
assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to tax" therefore must
always yield to a legislative act which is superior having been passed upon by the state
itself which has the "inherent power to tax" (Bernas, the Revised [1973] Philippine
Constitution, Vol. 1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be
stressed that "municipal corporations are mere creatures of Congress" (Unson v.
Lacson, G.R. No. 7909, January 18, 1957) which has the power to "create and abolish
municipal corporations" due to its "general legislative powers" (Asuncion v. Yriantes,
28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has the power of
control over Local governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And if
Congress can grant the City of Manila the power to tax certain matters, it can also
provide for exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been
revoked. As early as 1975, the power of local governments to regulate gambling thru
the grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was
vested exclusively on the National Government, thus:
 Sec. 1. Any provision of law to the contrary notwithstanding, the authority of
chartered cities and other local governments to issue license, permit or other
form of franchise to operate, maintain and establish horse and dog race tracks,
jai-alai and other forms of gambling is hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish,
horse and dog race tracks, jai-alai and other forms of gambling shall be issued
by the national government upon proper application and verification of the
qualification of the applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits"
for the operation of gambling. Necessarily, the power to demand or collect license fees
which is a consequence of the issuance of "licenses or permits" is no longer vested in
the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National
Government. PAGCOR is a government owned or controlled corporation with an
original charter, PD 1869. All of its shares of stocks are owned by the National
Government. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it also
exercises regulatory powers thus:
Sec. 9. Regulatory Power. — The Corporation shall maintain a Registry of the
affiliated entities, and shall exercise all the powers, authority and the
responsibilities vested in the Securities and Exchange Commission over such
affiliating entities mentioned under the preceding section, including, but not
limited to amendments of Articles of Incorporation and By-Laws, changes in
corporate term, structure, capitalization and other matters concerning the
operation of the affiliated entities, the provisions of the Corporation Code of
the Philippines to the contrary notwithstanding, except only with respect to
original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the
Government. Being an instrumentality of the Government, PAGCOR should be and
actually is exempt from local taxes. Otherwise, its operation might be burdened,
impeded or subjected to control by a mere Local government.
The states have no power by taxation or otherwise, to retard, impede, burden or
in any manner control the operation of constitutional laws enacted by Congress
to carry into execution the powers vested in the federal government. (MC
Culloch v. Marland, 4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local
governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire
absence of power on the part of the States to touch, in that way (taxation) at
least, the instrumentalities of the United States (Johnson v. Maryland, 254 US
51) and it can be agreed that no state or political subdivision can regulate a
federal instrumentality in such a way as to prevent it from consummating its
federal responsibilities, or even to seriously burden it in the accomplishment of
them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination
of what local authorities may perceive to be undesirable activities or enterprise using
the power to tax as "a tool for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc
Culloch v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation
of the very entity which has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be
violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution
(on Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own
source of revenue and to levy taxes, fees, and other charges subject to such
guidelines and limitation as the congress may provide, consistent with the
basic policy on local autonomy. Such taxes, fees and charges shall accrue
exclusively to the local government. (emphasis supplied)
The power of local government to "impose taxes and fees" is always subject to
"limitations" which Congress may provide by law. Since PD 1869 remains an
"operative" law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987
Constitution), its "exemption clause" remains as an exception to the exercise of the
power of local governments to impose taxes and fees. It cannot therefore be violative
but rather is consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as
cited in Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed.,
1988, p. 374). It does not make local governments sovereign within the state or an
"imperium in imperio."
Local Government has been described as a political subdivision of a nation or
state which is constituted by law and has substantial control of local affairs. In
a unitary system of government, such as the government under the Philippine
Constitution, local governments can only be an intra sovereign subdivision of
one sovereign nation, it cannot be an imperium in imperio. Local government
 in such a system can only mean a measure of decentralization of the function
of government. (emphasis supplied)
As to what state powers should be "decentralized" and what may be delegated to local
government units remains a matter of policy, which concerns wisdom. It is therefore a
political question. (Citizens Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with
gambling is a State concern and hence, it is the sole prerogative of the State to retain it
or delegate it to local governments.
As gambling is usually an offense against the State, legislative grant or
express charter power is generally necessary to empower the local corporation
to deal with the subject. . . . In the absence of express grant of power to
enact, ordinance provisions on this subject which are inconsistent with the
state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte
Solomon, 9, Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25
PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol.
3 Ibid, p. 548, emphasis supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the
Constitution, because "it legalized PAGCOR — conducted gambling, while most
gambling are outlawed together with prostitution, drug trafficking and other vices" (p.
82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture
ignores the well-accepted meaning of the clause "equal protection of the laws." The
clause does not preclude classification of individuals who may be accorded different
treatment under the law as long as the classification is not unreasonable or arbitrary
(Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal force
on all persons or things to be conformable to Article III, Section 1 of the Constitution
(DECS v. San Diego, G.R. No. 89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing classes
of individuals or objects upon which different rules shall operate (Laurel v. Misa, 43
O.G. 2847). The Constitution does not require situations which are different in fact or
opinion to be treated in law as though they were the same (Gomez v. Palomar, 25
SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the
equal protection is not clearly explained in the petition. The mere fact that some
gambling activities like cockfighting (P.D 449) horse racing (R.A. 306 as amended by
RA 983), sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are
legalized under certain conditions, while others are prohibited, does not render the
applicable laws, P.D. 1869 for one, unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be
overthrown because there are other instances to which it might have been
applied. (Gomez v. Palomar, 25 SCRA 827)
The equal protection clause of the 14th Amendment does not mean that all
occupations called by the same name must be treated the same way; the state
may do what it can to prevent which is deemed as evil and stop short of those
cases in which harm to the few concerned is not less than the harm to the
public that would insure if the rule laid down were made mathematically exact.
(Dominican Hotel v. Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory
Government away from monopolies and crony economy and toward free enterprise and
privatization" suffice it to state that this is not a ground for this Court to nullify P.D.
1869. If, indeed, PD 1869 runs counter to the government's policies then it is for the
Executive Department to recommend to Congress its repeal or amendment.
The judiciary does not settle policy issues. The Court can only declare what the
law is and not what the law should be.1âwphi1 Under our system of
government, policy issues are within the domain of the political branches of
government and of the people themselves as the repository of all state power.
(Valmonte v. Belmonte, Jr., 170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public interest so
requires. No combinations in restraint of trade or unfair competition shall be
allowed. (Art. XII, National Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily
prohibited by the Constitution. The state must still decide whether public interest
demands that monopolies be regulated or prohibited. Again, this is a matter of policy for
the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12
(Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII
and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to
state also that these are merely statements of principles and, policies. As such, they are
basically not self-executing, meaning a law should be passed by Congress to clearly
define and effectuate such principles.
 In general, therefore, the 1935 provisions were not intended to be self-
executing principles ready for enforcement through the courts. They were
rather directives addressed to the executive and the legislature. If the executive
and the legislature failed to heed the directives of the articles the available
remedy was not judicial or political. The electorate could express their
displeasure with the failure of the executive and the legislature through the
language of the ballot. (Bernas, Vol. II, p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v.
Trinidad, 47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA
30; Abbas v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified, it must
be shown that there is a clear and unequivocal breach of the Constitution, not merely a
doubtful and equivocal one. In other words, the grounds for nullity must be clear and
beyond reasonable doubt. (Peralta v. Comelec, supra) Those who petition this Court to
declare a law, or parts thereof, unconstitutional must clearly establish the basis for such
a declaration. Otherwise, their petition must fail. Based on the grounds raised by
petitioners to challenge the constitutionality of P.D. 1869, the Court finds that
petitioners have failed to overcome the presumption. The dismissal of this petition is
therefore, inevitable. But as to whether P.D. 1869 remains a wise legislation considering
the issues of "morality, monopoly, trend to free enterprise, privatization as well as the
state principles on social justice, role of youth and educational values" being raised, is
up for Congress to determine.
As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 521 —
Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in
any case, in its favor the presumption of validity and constitutionality which
petitioners Valmonte and the KMU have not overturned. Petitioners have not
undertaken to identify the provisions in the Constitution which they claim to
have been violated by that statute. This Court, however, is not compelled to
speculate and to imagine how the assailed legislation may possibly offend
some provision of the Constitution. The Court notes, further, in this respect
that petitioners have in the main put in question the wisdom, justice and
expediency of the establishment of the OPSF, issues which are not properly
addressed to this Court and which this Court may not constitutionally pass
upon. Those issues should be addressed rather to the political departments of
government: the President and the Congress.
Parenthetically, We wish to state that gambling is generally immoral, and this is
precisely so when the gambling resorted to is excessive. This excessiveness necessarily
depends not only on the financial resources of the gambler and his family but also on
his mental, social, and spiritual outlook on life. However, the mere fact that some
persons may have lost their material fortunes, mental control, physical health, or even
their lives does not necessarily mean that the same are directly attributable to
gambling. Gambling may have been the antecedent, but certainly not necessarily the
cause. For the same consequences could have been preceded by an overdose of food,
drink, exercise, work, and even sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Separate Opinions
PADILLA, J., concurring:
I concur in the result of the learned decision penned by my brother Mr. Justice Paras.
This means that I agree with the decision insofar as it holds that the prohibition, control,
and regulation of the entire activity known as gambling properly pertain to "state
policy." It is, therefore, the political departments of government, namely, the legislative
and the executive that should decide on what government should do in the entire area of
gambling, and assume full responsibility to the people for such policy.
The courts, as the decision states, cannot inquire into the wisdom, morality or
expediency of policies adopted by the political departments of government in areas
which fall within their authority, except only when such policies pose a clear and
present danger to the life, liberty or property of the individual. This case does not
involve such a factual situation.
However, I hasten to make of record that I do not subscribe to gambling in any form. It
demeans the human personality, destroys self-confidence and eviscerates one's self-
respect, which in the long run will corrode whatever is left of the Filipino moral
character. Gambling has wrecked and will continue to wreck families and homes; it is
an antithesis to individual reliance and reliability as well as personal industry which are
the touchstones of real economic progress and national development.
Gambling is reprehensible whether maintained by government or privatized. The
revenues realized by the government out of "legalized" gambling will, in the long run,
be more than offset and negated by the irreparable damage to the people's moral values.
Also, the moral standing of the government in its repeated avowals against "illegal
gambling" is fatally flawed and becomes untenable when it itself engages in the very
activity it seeks to eradicate.
One can go through the Court's decision today and mentally replace the activity referred
to therein as gambling, which is legal only because it is authorized by law and run by
the government, with the activity known as prostitution. Would prostitution be any less
reprehensible were it to be authorized by law, franchised, and "regulated" by the
government, in return for the substantial revenues it would yield the government to
carry out its laudable projects, such as infrastructure and social amelioration? The
question, I believe, answers itself. I submit that the sooner the legislative department
outlaws all forms of gambling, as a fundamental state policy, and the sooner the
executive implements such policy, the better it will be for the nation.
VILAS v. CITY OF MANILA(1911)
No. 53
Argued: Decided: April 3, 1911
[220 U.S. 345, 346] Messrs. Frederic R. Coudert, Howard Thayer Kingsbury, Paul
Fuller, and Harry Weston Van Dyke for plaintiffs in error and appellants.
[220 U.S. 345, 349] Messrs. Paul Charlton andIsaac Adams for appellee.
[220 U.S. 345, 351]
Mr. Justice Lurton delivered the opinion of the court:
The plaintiffs in error, who were plaintiffs below, are creditors of the city of Manila as
it existed before the cession of the Philippine Islands to the United States by the treaty
of Paris, December 10, 1898 [30 Stat. at L. 1754]. Upon the theory that the city, under
its present charter from the government of the Philippine Islands, is the same juristic
person and liable upon the obligations of the old city, these actions were brought against
it. The supreme court of the Philippine Islands denied relief, holding that the present
municipality is a totally different corporate entity, and in no way liable for the debts of
the Spanish municipality. [220 U.S. 345, 352] The fundamental question is whether,
notwithstanding the cession of the Philippine Islands to the United States, followed by a
reincorporation of the city, the present municipality is liable for the obligations of the
city incurred prior to the cession to the United States.
We shall confine ourselves to the question whether the plaintiffs in error are entitled to
judgments against the city upon their several claims. Whether there is a remedy
adequate to the collection when reduced to judgment is not presented by the record. But
whether there is or is not a remedy affords no reason why the plaintiffs in error may not
reduce their claims to judgment. Mt. Pleasant v. Beckwith, 100 U.S. 514, 530 , 25 S. L.
ed. 699, 703. The city confessedly may be sued under its existing charter, and that
implies at least a right to judgment if they establish their demands.
The city as now incorporated has succeeded to all of the property rights of the old city
and to the right to enforce all of its causes of action. There is identity of purpose
between the Spanish and American charters and substantial identity of municipal
powers. The area and the inhabitants incorporated are substantially the same. But for the
change of sovereignty which has occurred under the treaty of Paris, the question of the
liability of the city under its new charter for the debts of the old city would seem to be
of easy solution. The principal question would therefore seem to be the legal
consequence of the cession referred to upon the property rights and civil obligations of
the city incurred before the cession. And so the question was made to turn in the court
below upon the consequence of a change in sovereignty and a reincorporation of the
city by the substituted sovereignty.
This disposes of the question of the jurisdiction of this court, grounded upon the
absence from the petition of the plaintiffs of any distinct claim under the treaty of Paris,
since, under 10 of the Philippine organic act [220 U.S. 345, 353] of July 1, 1902 [32
Stat. at L. 695, chap. 1369, U. S. Comp. Stat. Supp. 1909, p. 226], this court is given
jurisdiction to review any final decree or judgment of the supreme court of the
Philippine Islands where any treaty of the United States 'is involved.' That treaty was
necessarily 'involved,' since neither the court below nor this court can determine the
continuity of the municipality nor the liability of the city as it now exists for the
obligation of the old city, without considering the effect of the change of sovereignty
resulting from that treaty. See Reavis v. Fianza, 215 U.S. 16, 22 , 54 S. L. ed. 72, 75, 30
Sup. Ct. rep. 1.
The historical continuity of a municipality embracing the inhabitants of the territory
now occupied by the city of Manila is impressive. Before the conquest of the Philippine
Islands by Spain, Manila existed. The Spaniards found on the spot now occupied a
populous and fortified community of Moros. In 1571 they occupied what was then and
is now known as Manila, and established it as a municipal corporation. In 1574 there
was conferred upon it the title of 'Illustrious and ever loyal city of Manila.' From time to
time there occurred amendments, and, on January 19, 1894, there was a reorganization
of the city government under a royal decree of that date. Under that charter there was
power to incur debts for municipal purposes and power to sue and be sued. The
obligations here in suit were incurred under the charter referred to, and are obviously
obligations strictly within the provision of the municipal power. To pay judgments upon
such debts it was the duty of the ayuntamiento of Manila, which was the corporate name
of the old city, to make provision in its budget.
The contention that the liability of the city upon such obligations was destroyed by a
mere change of sovereignty is obviously one which is without a shadow of moral force,
and, if true, must result from settled principles of rigid law. While the contracts from
which the claims in suit resulted were in progress, war between the United [220 U.S.
345, 354] States and Spain ensued. On August 13, 1898, the city was occupied by the
forces of this government, and its affairs conducted by military authority. On July 31,
1901, the present incorporating act was passed, and the city since that time has been an
autonomous municipality. The charter in force is act 183 of the Philippine Commission,
and now may be found as chapters 68 to 75 of the compiled acts of the Philippine
Commission. The 1st section of the charter of 1901 reads as follows:
'The inhabitants of the city of Manila, residing within the territory described in 2 of this
act, are hereby constituted a municipality, which shall be known as the city of Manila,
and by that name shall have perpetual succession, and shall possess all the rights of
property herein granted or heretofore enjoyed and possessed by the city of Manila as
organized under Spanish sovereignty.'
The boundaries described in 2 include substantially the area and inhabitants which had
theretofore constituted the old city.
By 4 of the same act, the government of the city was invested in a municipal board.
Section 16 grants certain legislative powers to the board, and provides that it shall 'take
possession of all lands, buildings, offices, books, papers, records, moneys, credits,
securities, assets, accounts, or other property or rights belonging to the former city of
Manila, or pertaining to the business or interests thereof, and, subject to the provisions
herein set forth, shall have control of all its property except the building known as the
ayuntamiento, provision for the occupation and control of which is made in 15 of this
act; shall collect taxes and other revenues, and apply the same in accordance with
appropriations, as hereinbefore provided, to the payment of the municipal expenses;
shall supervise and control the discharge of official duties by subordinates; shall
institute judicial proceedings to recover property and [220 U.S. 345, 355] funds of the
city wherever found, or otherwise to protect the interests of the city, and shall defend all
suits against the city,' etc.
Section 69 of the charter expressly preserved 'all city ordinances and orders in force at
the time of the passage of this act, and not inconsistent herewith,' until modified or
repealed by ordinances passed under this act.
Section 72 is the repealing clause, and provides for the repeal of 'all acts, orders, and
regulations' which are inconsistent with the provisions of the act.
The charter contains no reference to the obligations or contracts of the old city.
If we understand the argument against the liability here asserted, it proceeds mainly
upon the theory that inasmuch as the predecessor of the present city, the ayuntamiento
of Manila, was a corporate entity created by the Spanish government, when the
sovereignty of Spain in the islands was terminated by the treaty of cession, if not by the
capitulation of August 13, 1898, the municipality ipso facto disappeared for all
purposes. This conclusion is reached upon the supposed analogy to the doctrine of
principal and agent, the death of the principal ending the agency. So complete is the
supposed death and annihilation of a municipal entity by extinction of sovereignty of
the creating state that it was said in one of the opinions below that all of the public
property of Manila passed to the United States, 'for a consideration, which was paid,'
and that the United States was therefore justified in creating an absolutely new
municipality, and endowing it with all of the assets of the defunct city, free from any
obligation to the creditors of that city. And so the matter was dismissed in the Trigas
Case by the court of first instance, by the suggestion that 'the plaintiff may have a claim
against the Crown of Spain, which has received from the United States payment for that
done by the plaintiff.' [220 U.S. 345, 356] We are unable to agree with the argument. It
loses sight of the dual character of municipal corporations. They exercise powers which
are governmental and powers which are of a private or business character. In the one
character a municipal corporation is a governmental subdivision, and for that purpose
exercises by delegation a part of the sovereignty of the state. In the other character it is a
mere legal entity or juristic person. In the latter character it stands for the community in
the administration of local affairs wholly beyond the sphere of the public purposes for
which its governmental powers are conferred.
The distinction is observed in South Carolina v. United States, 199 U.S. 437, 461 , 50 S.
L. ed. 261, 269, 26 Sup. Ct. Rep. 110, 4 A. & E. Ann. Cas. 737, where Lloyd v. New
York, 5 N. Y. 369, 374, 55 Am. Dec. 347, and Western Sav. Fund Soc. v. Philadelphia,
31 Pa. 175, 72 Am. Dec. 730, are cited and approved. In Lloyd v. New York, supra, it is
said:
'The corporation of the city of New York possesses two kinds of powers: one
governmental and public, and to the extent they are held and exercised, is clothed with
sovereignty; the other private, and to the extent they are held and exercised, is a legal
individual. The former are given and used for public purposes, the latter for private
purposes. While in the exercise of the former, the corporation is a municipal
government; and while in the exercise of the latter, is a corporate legal individual.'
See also Dill. Mun. Corp. 4th ed. 66; Petersburg v. Applegarth, 28 Gratt. 321, 343, 26
Am. Rep. 357, and Oliver v. Worcester, 102 Mass. 489, 3 Am. Rep. 485.
In view of the dual character of municipal corporations there is no public reason for
presuming their total dissolution as a mere consequence of military occupation or
territorial cession. The suspension of such governmental functions as are obviously
incompatible with the new political relations thus brought about may be presumed. [220
U.S. 345, 357] But no such implication may be reasonably indulged beyond that result.
Such a conclusion is in harmony with the settled principles of public law as declared by
this and other courts and expounded by the text-books upon the laws of war and
international law. Taylor, International Pub. Law , 578.
That there is a total abrogation of the former political relations of the inhabitants of the
ceded region is obvious. That all laws theretofore in force which are in confiict with the
political character, constitution, or institutions of the substituted sovereign, lose their
force, is also plain. Alvarez y Sanchez v. United States, 216 U.S. 167 , 54 L. ed. 432, 30
Sup. Ct. Rep. 367. But it is equally settled in the same public law that that great body of
municipal law which regulates private and domestic rights continues in force until
abrogated or changed by the new ruler. In Chicago, R. I. & P. R. Co. v. McGlinn, 114
U.S. 542, 546 , 29 S. L. ed. 270, 271, 5 Sup. Ct. Rep. 1005, it was said:
'It is a general rule of public law, recognized and acted upon by the United States, that
whenever political jurisdiction and legislative power over any territory are transferred
from one nation or sovereign to another, the municipal laws of the country, that is, laws
which are intended for the protection of private rights, continue in force until abrogated
or changed by the new government or sovereign. By the cession, public property passes
from one government to the other, but private property remains as before, and with it
those municipal laws which are designed to secure its peaceful use and enjoyment. As a
matter of course, all laws, ordinances, and regulations in conflict with the political
character, institutions, and constitution of the new government are at once displaced.
Thus, upon a cession of political jurisdiction and legislative power-and the latter is
involved in the former-to the United States, the laws of the country in support of an
established religion, or abridging the freedom of the [220 U.S. 345, 358] press, or
authorizing cruel and unusual punishments, and the like, would at once cease to be of
obligatory force without any declaration to that effect; and the laws of the country on
other subjects would necessarily be superseded by existing laws of the new government
upon the same matters. But with respect to other laws affecting the possession, use, and
transfer of property, and designed to secure good order and peace in the community,
and promote its health and prosperity, which are strictly of a municipal character, the
rule is general, that a change of government leaves them in force until, by direct action
of the new government, they are altered or repealed.'
The above language was quoted with approval in Downes v. Bidwell, 182 U.S. 244, 298
, 45 S. L. ed. 1088, 1110, 21 Sup. Ct. Rep. 770.
That the United States might, by virtue of its situation under a treaty ceding full title,
have utterly extinguished every municipality which it found in existence in the
Philippine Islands, may be conceded. That it did so, in view of the practice of nations to
the contrary, is not to be presumed, and can only be established by cogent evidence.
That during military occupation the affairs of the city were in a large part administered
by officials put in place by military order did not operate to dissolve the corporation, or
relieve it from liability upon obligations incurred before the occupation, nor those
created for municipal purposes by the administrators of its affairs while its old officials
were displaced. New Orleans v. New York Mail S. S. Co. 20 Wall. 387, 394, 22 L. ed.
354, 358. During that occupation and military administration the business of the city
was carried on as usual. Taxes were assessed and taxes collected and expended for local
purposes, and many of the officials carrying on the government were those found in
office when the city was occupied. The continuity of the corporate city was not
inconsistent with military occupation or the constitution or institutions of the occupying
power. This [220 U.S. 345, 359] is made evident by the occurrences at the time of
capitulation. Thus, the articles of capitulation concluded in these words: 'This city, its
inhabitants, . . . and its private property of all descriptions, are placed under the special
safeguard of the faith and honor of the American Army.' This was quoted in President
McKinley's instructions of April 7, 1900, to the Philippine Commission, and touching
this he said: 'I believe that this pledge has been faithfully kept.' And the commission
was directed to labor for the full performance of this obligation. This instruction was in
line with and in fulfilment of the 8th article of the treaty of Paris of December 10, 1898.
Under the 3d article of that treaty the archipelago known as the Philippine Islands was
ceded to the United States, the latter agreeing to pay to Spain the sum of $20,000,000.
Under the first paragraph of the 8th article, Spain relinquished to the United States 'all
the buildings, wharves, barracks, forts, structures, public highways, and other
immovable property which, in conformity with law, belong to the public domain, and as
such belong to the Crown of Spain.' It is under this clause, in connection with the clause
agreeing to pay to Spain $20,000,000 for the cession of the Philippine group, that the
contention that all of the public rights of the city of Manila were acquired by the United
States, which country was therefore justified, as absolute owner, in granting the
property rights so acquired to what is called the 'absolutely new corporation' created
thereafter. But the qualifying words touching property rights relinquished by Spain limit
the relinquishment to 'property which, in conformity with law, belonging to the public
domain, and as such belong to the Crown of Spain.' It did not affect property which did
not, in 'conformity with law, belong to the Crown of Spain.' That it was not intended to
apply to property which, 'in conformity with law,' belonged to the city of Manila as a
municipal cor- [220 U.S. 345, 360] poration, is clear. This is demonstrated by the
second paragraph of the same article, which reads: 'And it is hereby declared that the
relinquishment or cession, as the case may be, to which the preceding paragraph refers,
cannot in any respect impair the property or rights which by law belong to the peaceful
possession of property of all kinds, of provinces, municipalities, public or private
establishments . . . having legal capacity to acquire and possess property in the aforesaid
territories renounced or ceded, or of private individuals.' Thus, the property and
property rights of municipal corporations were protected and safeguarded precisely as
were the property and property rights of individuals.
That the cession did not operate as an extinction or dissolution of corporations is herein
recognized, for the stipulation against impairment of their property rights has this plain
significance.
The conclusion we reach, that the legal entity survived both the military occupation and
the cession which followed, finds support in the cases which hold that the Pueblos of
San Francisco and Los Angeles, which existed as municipal organizations prior to the
cession of California by Mexico, continued to exist with their community and property
rights intact. Cohas v. Raisin, 3 Cal. 443; Hart v. Burnett, 15 Cal. 530; Townsend v.
Greeley, 5 Wall. 326, 18 L. ed. 547; Merryman v. Bourne, 9 Wall. 592, 602, 19 L. ed.
683, 686; Moore v. Steinbach, 127 U.S. 70 , 32 L. ed. 51, 8 Sup. Ct. Rep. 1067; Los
Angeles Farming & Mill. Co. v. Los Angeles, 217 U.S. 217 , 54 L. ed. 736, 30 Sup. Ct.
Rep. 452.
Were corporate identity and corporate liability extinguished as a necessary legal result
of the new charter granted in 1901 by the Philippine Commission? The inhabitants of
the old city are the incorporators of the new. There is substantially identity of area.
There are some changes in the form of government and some changes in corporate
powers and methods of administration. the new corporation is endowed with all of the
property and[220 U.S. 345, 361] property rights of the old. It has the same power to
sue and be sued which the former corporation had. There is not the slightest suggestion
that the new corporation shall not succeed to the contracts and obligations of the old
corporation. Laying out of view any question of the constitutional guaranty against
impairment of the obligation of contracts, there is, in the absence of express legislative
declaration of a contrary purpose, no reason for supposing that the reincorporation of an
old municipality is intended to permit an escape from the obligations of the old, to
whose property and rights it has succeeded. The juristic identity of the corporation has
been in no wise affected, and, in law, the present city is, in every legal sense, the
successor of the old. As such it is entitled to the property and property rights of the
predecessor corporation, and is, in law, subject to all of its liabilities. Broughton v.
Pensacola 93 U.S. 266 , 23 L. ed. 896; Mt. Pleasant v. Beckwith, 100 U.S. 520 , 25 L.
ed. 699; Mobile v. Watson, 116 U.S. 289 , 29 L. ed. 620, 6 Sup. Ct. Rep. 398;
Shapleigh v. San Angelo, 167 U.S. 646, 655 , 42 S. L. ed. 310, 313, 17 Sup. Ct. Rep.
957; O'Connor v. Memphis, 6 Lea, 730; Colchester v. Seaber, 3 Burr. 1866, 1870, in
which case, when a municipality became disabled to act and obtained a new charter, in
an action upon an obligation of the old corporation, there was judgment for the creditor,
Lord Mansfield saying:
'Many corporations, for want of legal magistrates, have lost their activity, and obtained Aguado is, nevertheless, entitled to a judgment. The designation of the city in the
new charters. Maidstone, Radnor, Carmarthen, and many more are in the same case petition as trustee may be regarded as descriptive. The debt having been incurred by the
with Colchester. And yet it has never been disputed but that the new charters revive and city, it must be regarded as a city liability. Taylor v. Davis (Taylor v. Mayo), 110 U.S.
give activity to the old corporation; except, perhaps, in that case in Levinz, where the 330, 336 , 28 S. L. ed. 163, 165, 4 Sup. Ct. Rep. 147.
corporation had a new name; and even there the court made no doubt. Where the
question has arisen upon any remarkable metamorphosis, it has always been determined Our conclusion is that the decree in the Aguado Case must be reversed and the case
'that they remain the same as to debts and rights." remanded, with direction to render judgment and such other relief as may seem in
Morris v. State, 62 Tex. 728, 730. [220 U.S. 345, 362] In Shapleigh v. San Angelo, conformity with law. The judgments in the Trigas and Vilas Cases will be reversed and
supra, this court said in a similar case: the cases remanded, with direction to overrule the respective demurrers, and for such
other action as may be consistent with law, and consistent with this opinion.
'The state's plenary power over its municipal corporations to change their organization,
to modify their method of internal government, or to abolish them altogether, is not
restricted by contracts entered into by the municipality with its creditors or with private
parties. An absolute repeal of a municipal charter is therefor effectual so far as it
abolishes the old corporate organization; but when the same or substantially the same
inhabitants are erected into a new corporation, whether with extended or restricted
territorial limits, such new corporation is treated as in law the successor of the old one,
entitled to its property rights, and subject to its liabilities.'
The cases of Trigas and Vilas went off upon demurrers, and no question of remedy
arises here.

The appeal of Aguado is from a decree upon a final hearing denying him all relief.

That all three of the plaintiffs in error are entitled to proceed to judgment when they
shall establish their several claims is obvious from what we have said. But in the
Aguado Case it is sought to establish his claim as a charge against certain property and
funds held by the city as trustee, known as the Carriedo fund. In 1734 one Don
Francisco Carriedo y Perodo bequeathed to the city a fund for the establishment of
waterworks, to be kept as a separate fund and devoted to the erection and maintenance
of the works. This fund was loyally kept and greatly increased, and was enlarged by a
special tax upon meat, devoted to that purpose. The works were finally completed in
1878, and have been since operated by the city, the income and special tax going to
maintenance. Certain securities belonging to the fund are now held by the city, the
income being applied to the operation of the works. Aguado took a contract to supply
coal for the use of the [220 U.S. 345, 363] Carriedo works, and made a deposit to
guarantee the contract. When the city was occupied by the American Army it was
indebted to him for coal so supplied, as well as for the deposit so made. That the coal
was bought for and used in the operation of the Carriedo works is not denied. But there
is no evidence that the credit was given to the Carriedo fund so held in trust under the
will of Carriedo. The contract was made with the ayuntamiento of Manila, just as all
other contracts for city supplies or works were made. The contract not having been
made with special reference to the liability of the fund held in trust by the city, but
apparently upon the general credit of the city, we are not disposed to reverse the
judgment of the court below, holding that the claim of Aguado did not constitute a
charge upon the Carriedo fund.
G.R. No. L-28089 October 25, 1967
BARA LIDASAN, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
Suntay for petitioner.
Barrios and Fule for respondent.
SANCHEZ, J.:
The question initially presented to the Commission on Elections, 1 is this: Is Republic
Act 4790, which is entitled "An Act Creating the Municipality of Dianaton in the
Province of Lanao del Sur", but which includes barrios located in another province —
Cotabato — to be spared from attack planted upon the constitutional mandate that "No
bill which may be enacted into law shall embrace more than one subject which shall be
expressed in the title of the bill"? Comelec's answer is in the affirmative. Offshoot is the
present original petition for certiorari and prohibition.
On June 18, 1966, the Chief Executive signed into law House Bill 1247, known as
Republic Act 4790, now in dispute. The body of the statute, reproduced in haec verba,
reads:
Sec. 1. Barrios Togaig, Madalum, Bayanga, Langkong, Sarakan, Kat-bo,
Digakapan, Magabo, Tabangao, Tiongko, Colodan, Kabamakawan,
Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung, Losain,
Matimos and Magolatung, in the Municipalities of Butig and Balabagan,
Province of Lanao del Sur, are separated from said municipalities and
constituted into a distinct and independent municipality of the same province
to be known as the Municipality of Dianaton, Province of Lanao del Sur. The
seat of government of the municipality shall be in Togaig.
Sec. 2. The first mayor, vice-mayor and councilors of the new municipality
shall be elected in the nineteen hundred sixty-seven general elections for local
officials.
Sec. 3. This Act shall take effect upon its approval.
It came to light later that barrios Togaig and Madalum just mentioned are within the
municipality of Buldon, Province of Cotabato, and that Bayanga, Langkong, Sarakan,
Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan and Kabamakawan are parts
and parcel of another municipality, the municipality of Parang, also in the Province of
Cotabato and not of Lanao del Sur.
Prompted by the coming elections, Comelec adopted its resolution of August 15, 1967,
the pertinent portions of which are:
For purposes of establishment of precincts, registration of voters and for other
election purposes, the Commission RESOLVED that pursuant to RA 4790, the
new municipality of Dianaton, Lanao del Sur shall comprise the barrios of
Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung, Losain,
Matimos, and Magolatung situated in the municipality of Balabagan, Lanao del
Sur, the barrios of Togaig and Madalum situated in the municipality of Buldon,
Cotabato, the barrios of Bayanga, Langkong, Sarakan, Kat-bo, Digakapan,
Magabo, Tabangao, Tiongko, Colodan and Kabamakawan situated in the
municipality of Parang, also of Cotabato.
Doubtless, as the statute stands, twelve barrios — in two municipalities in the province
of Cotabato — are transferred to the province of Lanao del Sur. This brought about a
change in the boundaries of the two provinces.
Apprised of this development, on September 7, 1967, the Office of the President,
through the Assistant Executive Secretary, recommended to Comelec that the operation
of the statute be suspended until "clarified by correcting legislation."
Comelec, by resolution of September 20, 1967, stood by its own interpretation, declared
that the statute "should be implemented unless declared unconstitutional by the
Supreme Court."
This triggered the present original action for certiorari and prohibition by Bara Lidasan,
a resident and taxpayer of the detached portion of Parang, Cotabato, and a qualified
voter for the 1967 elections. He prays that Republic Act 4790 be declared
unconstitutional; and that Comelec's resolutions of August 15, 1967 and September 20,
1967 implementing the same for electoral purposes, be nullified.
1. Petitioner relies upon the constitutional requirement aforestated, that "[n]o bill which
may be enacted into law shall embrace more than one subject which shall be expressed
in the title of the bill."2
It may be well to state, right at the outset, that the constitutional provision contains dual
limitations upon legislative power. First. Congress is to refrain from conglomeration,
under one statute, of heterogeneous subjects. Second. The title of the bill is to be
couched in a language sufficient to notify the legislators and the public and those
concerned of the import of the single subject thereof.
Of relevance here is the second directive. The subject of the statute must be "expressed
in the title" of the bill. This constitutional requirement "breathes the spirit of
command."3 Compliance is imperative, given the fact that the Constitution does not
exact of Congress the obligation to read during its deliberations the entire text of the
bill. In fact, in the case of House Bill 1247, which became Republic Act 4790, only its
title was read from its introduction to its final approval in the House of
Representatives4 where the bill, being of local application, originated.5
Of course, the Constitution does not require Congress to employ in the title of an
enactment, language of such precision as to mirror, fully index or catalogue all the
contents and the minute details therein. It suffices if the title should serve the purpose of
the constitutional demand that it inform the legislators, the persons interested in the
subject of the bill, and the public, of the nature, scope and consequences of the proposed
law and its operation. And this, to lead them to inquire into the body of the bill, study
and discuss the same, take appropriate action thereon, and, thus, prevent surprise or
fraud upon the legislators.6
In our task of ascertaining whether or not the title of a statute conforms with the
constitutional requirement, the following, we believe, may be taken as guidelines:
The test of the sufficiency of a title is whether or not it is misleading; and,
which technical accuracy is not essential, and the subject need not be stated in
express terms where it is clearly inferable from the details set forth, a title
which is so uncertain that the average person reading it would not be informed
of the purpose of the enactment or put on inquiry as to its contents, or which is
misleading, either in referring to or indicating one subject where another or
different one is really embraced in the act, or in omitting any expression or
indication of the real subject or scope of the act, is bad.
xxx xxx xxx
In determining sufficiency of particular title its substance rather than its form
should be considered, and the purpose of the constitutional requirement, of
giving notice to all persons interested, should be kept in mind by the court.7
With the foregoing principles at hand, we take a hard look at the disputed statute. The
title — "An Act Creating the Municipality of Dianaton, in the Province of Lanao del
Sur"8 — projects the impression that solely the province of Lanao del Sur is affected by
the creation of Dianaton. Not the slightest intimation is there that communities in the
adjacent province of Cotabato are incorporated in this new Lanao del Sur town. The
phrase "in the Province of Lanao del Sur," read without subtlety or contortion, makes
the title misleading, deceptive. For, the known fact is that the legislation has a two-
pronged purpose combined in one statute: (1) it creates the municipality of Dianaton
purportedly from twenty-one barrios in the towns of Butig and Balabagan, both in the
province of Lanao del Sur; and (2) it also dismembers two municipalities in Cotabato, a
province different from Lanao del Sur.
The baneful effect of the defective title here presented is not so difficult to perceive.
Such title did not inform the members of Congress as to the full impact of the law; it did
not apprise the people in the towns of Buldon and Parang in Cotabato and in the
province of Cotabato itself that part of their territory is being taken away from their
towns and province and added to the adjacent Province of Lanao del Sur; it kept the
public in the dark as to what towns and provinces were actually affected by the bill.
These are the pressures which heavily weigh against the constitutionality of Republic
Act 4790.
Respondent's stance is that the change in boundaries of the two provinces resulting in
"the substantial diminution of territorial limits" of Cotabato province is "merely the
incidental legal results of the definition of the boundary" of the municipality of
Dianaton and that, therefore, reference to the fact that portions in Cotabato are taken
away "need not be expressed in the title of the law." This posture — we must say — but
emphasizes the error of constitutional dimensions in writing down the title of the bill.
Transfer of a sizeable portion of territory from one province to another of necessity
involves reduction of area, population and income of the first and the corresponding
increase of those of the other. This is as important as the creation of a municipality. And
yet, the title did not reflect this fact.
Respondent asks us to read Felwa vs. Salas, L-16511, October 29, 1966, as controlling
here. The Felwa case is not in focus. For there, the title of the Act (Republic Act 4695)
reads: "An Act Creating the Provinces of Benguet, Mountain Province, Ifugao, and
Kalinga-Apayao." That title was assailed as unconstitutional upon the averment that the
provisions of the law (Section, 8 thereof) in reference to the elective officials of the
provinces thus created, were not set forth in the title of the bill. We there ruled that this
pretense is devoid of merit "for, surely, an Act creating said provinces must be expected
to provide for the officers who shall run the affairs thereof" — which is "manifestly
germane to the subject" of the legislation, as set forth in its title. The statute now before
us stands altogether on a different footing. The lumping together of barrios in adjacent
but separate provinces under one statute is neither a natural nor logical consequence of
the creation of the new municipality of Dianaton. A change of boundaries of the two
provinces may be made without necessarily creating a new municipality and vice versa.
As we canvass the authorities on this point, our attention is drawn to Hume vs. Village
of Fruitport, 219 NW 648, 649. There, the statute in controversy bears the title "An Act
to Incorporate the Village of Fruitport, in the County of Muskegon." The statute,
however, in its section 1 reads: "The people of the state of Michigan enact, that the
following described territory in the counties of Muskegon and Ottawa Michigan, to wit:
. . . be, and the same is hereby constituted a village corporate, by the name of the
Village of Fruitport." This statute was challenged as void by plaintiff, a resident of
Ottawa county, in an action to restraint the Village from exercising jurisdiction and
control, including taxing his lands. Plaintiff based his claim on Section 20, Article IV of
the Michigan State Constitution, which reads: "No law shall embrace more than one
object, which shall be expressed in its title." The Circuit Court decree voided the statute
and defendant appealed. The Supreme Court of Michigan voted to uphold the decree of
nullity. The following, said in Hume, may well apply to this case:
 It may be that words, "An act to incorporate the village of Fruitport," would
have been a sufficient title, and that the words, "in the county of Muskegon"
were unnecessary; but we do not agree with appellant that the words last
quoted may, for that reason, be disregarded as surplusage.
. . . Under the guise of discarding surplusage, a court cannot reject a part of the
title of an act for the purpose of saving the act. Schmalz vs. Woody, 56 N.J.
Eq. 649, 39 A. 539.
A purpose of the provision of the Constitution is to "challenge the attention of
those affected by the act to its provisions." Savings Bank vs. State of
Michigan, 228 Mich. 316, 200 NW 262.
The title here is restrictive. It restricts the operation of the act of Muskegon
county. The act goes beyond the restriction. As was said in Schmalz vs. Wooly,
supra: "The title is erroneous in the worst degree, for it is misleading." 9
Similar statutes aimed at changing boundaries of political subdivisions, which
legislative purpose is not expressed in the title, were likewise declared
unconstitutional."10
We rule that Republic Act 4790 is null and void.
2. Suggestion was made that Republic Act 4790 may still be salvaged with reference to
the nine barrios in the municipalities of Butig and Balabagan in Lanao del Sur, with the
mere nullification of the portion thereof which took away the twelve barrios in the
municipalities of Buldon and Parang in the other province of Cotabato. The reasoning
advocated is that the limited title of the Act still covers those barrios actually in the
province of Lanao del Sur.
We are not unmindful of the rule, buttressed on reason and of long standing, that where
a portion of a statute is rendered unconstitutional and the remainder valid, the parts will
be separated, and the constitutional portion upheld. Black, however, gives the exception
to this rule, thus:
. . . But when the parts of the statute are so mutually dependent and connected,
as conditions, considerations, inducements, or compensations for each other, as
to warrant a belief that the legislature intended them as a whole, and that if all
could not be carried into effect, the legislature would not pass the residue
independently, then, if some parts are unconstitutional, all the provisions
which are thus dependent, conditional, or connected, must fall with them, 11
In substantially similar language, the same exception is recognized in the jurisprudence
of this Court, thus:
The general rule is that where part of a statute is void, as repugnant to the
Organic Law, while another part is valid, the valid portion if separable from
the invalid, may stand and be enforced. But in order to do this, the valid
portion must be so far independent of the invalid portion that it is fair to
presume that the Legislature would have enacted it by itself if they had
supposed that they could not constitutionally enact the other. . . Enough must
remain to make a complete, intelligible, and valid statute, which carries out the
legislative intent. . . . The language used in the invalid part of the statute can
have no legal force or efficacy for any purpose whatever, and what remains
must express the legislative will independently of the void part, since the court
has no power to legislate, . . . .12
Could we indulge in the assumption that Congress still intended, by the Act, to create
the restricted area of nine barrios in the towns of Butig and Balabagan in Lanao del Sur
into the town of Dianaton, if the twelve barrios in the towns of Buldon and Parang,
Cotabato were to be excluded therefrom? The answer must be in the negative.
Municipal corporations perform twin functions. Firstly. They serve as an
instrumentality of the State in carrying out the functions of government. Secondly. They
act as an agency of the community in the administration of local affairs. It is in the latter
character that they are a separate entity acting for their own purposes and not a
subdivision of the State.13
Consequently, several factors come to the fore in the consideration of whether a group
of barrios is capable of maintaining itself as an independent municipality. Amongst
these are population, territory, and income. It was apparently these same factors which
induced the writing out of House Bill 1247 creating the town of Dianaton. Speaking of
the original twenty-one barrios which comprise the new municipality, the explanatory
note to House Bill 1247, now Republic Act 4790, reads:
The territory is now a progressive community; the aggregate population is
large; and the collective income is sufficient to maintain an independent
municipality.
This bill, if enacted into law, will enable the inhabitants concerned to govern
themselves and enjoy the blessings of municipal autonomy.
When the foregoing bill was presented in Congress, unquestionably, the totality of the
twenty-one barrios — not nine barrios — was in the mind of the proponent thereof.
That this is so, is plainly evident by the fact that the bill itself, thereafter enacted into
law, states that the seat of the government is in Togaig, which is a barrio in the
municipality of Buldon in Cotabato. And then the reduced area poses a number of
questions, thus: Could the observations as to progressive community, large aggregate
population, collective income sufficient to maintain an independent municipality, still
apply to a motley group of only nine barrios out of the twenty-one? Is it fair to assume
that the inhabitants of the said remaining barrios would have agreed that they be formed
into a municipality, what with the consequent duties and liabilities of an independent
municipal corporation? Could they stand on their own feet with the income to be
derived in their community? How about the peace and order, sanitation, and other
corporate obligations? This Court may not supply the answer to any of these disturbing
questions. And yet, to remain deaf to these problems, or to answer them in the negative
and still cling to the rule on separability, we are afraid, is to impute to Congress an
undeclared will. With the known premise that Dianaton was created upon the basic
considerations of progressive community, large aggregate population and sufficient
income, we may not now say that Congress intended to create Dianaton with only nine
— of the original twenty-one — barrios, with a seat of government still left to be
conjectured. For, this unduly stretches judicial interpretation of congressional intent
beyond credibility point. To do so, indeed, is to pass the line which circumscribes the
judiciary and tread on legislative premises. Paying due respect to the traditional
separation of powers, we may not now melt and recast Republic Act 4790 to read a
Dianaton town of nine instead of the originally intended twenty-one barrios. Really, if
these nine barrios are to constitute a town at all, it is the function of Congress, not of
this Court, to spell out that congressional will.
Republic Act 4790 is thus indivisible, and it is accordingly null and void in its totality. 14
3. There remains for consideration the issue raised by respondent, namely, that
petitioner has no substantial legal interest adversely affected by the implementation of
Republic Act 4790. Stated differently, respondent's pose is that petitioner is not the real
party in interest.
Here the validity of a statute is challenged on the ground that it violates the
constitutional requirement that the subject of the bill be expressed in its title. Capacity
to sue, therefore, hinges on whether petitioner's substantial rights or interests are
impaired by lack of notification in the title that the barrio in Parang, Cotabato, where he
is residing has been transferred to a different provincial hegemony.
The right of every citizen, taxpayer and voter of a community affected by legislation
creating a town to ascertain that the law so created is not dismembering his place of
residence "in accordance with the Constitution" is recognized in this jurisdiction.15
Petitioner is a qualified voter. He expects to vote in the 1967 elections. His right to vote
in his own barrio before it was annexed to a new town is affected. He may not want, as
is the case here, to vote in a town different from his actual residence. He may not desire
to be considered a part of hitherto different communities which are fanned into the new
town; he may prefer to remain in the place where he is and as it was constituted, and
continue to enjoy the rights and benefits he acquired therein. He may not even know the
candidates of the new town; he may express a lack of desire to vote for anyone of them;
he may feel that his vote should be cast for the officials in the town before
dismemberment. Since by constitutional direction the purpose of a bill must be shown
in its title for the benefit, amongst others, of the community affected thereby, 16 it stands
to reason to say that when the constitutional right to vote on the part of any citizen of
that community is affected, he may become a suitor to challenge the constitutionality of
the Act as passed by Congress.
For the reasons given, we vote to declare Republic Act 4790 null and void, and to
prohibit respondent Commission from implementing the same for electoral purposes.
No costs allowed. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Castro and
Angeles, JJ., concur.
Separate Opinions
FERNANDO, J., dissenting:
With regret and with due recognition of the merit of the opinion of the Court, I find
myself unable to give my assent. Hence these few words to express my stand.
Republic Act No. 4790 deals with one subject matter, the creation of the municipality of
Dianaton in the province of Lanao del Sur. The title makes evident what is the subject
matter of such an enactment. The mere fact that in the body of such statute barrios
found in two other municipalities of another province were included does not of itself
suffice for a finding of nullity by virtue of the constitutional provision invoked. At the
most, the statute to be free from the insubstantial doubts about its validity must be
construed as not including the barrios, located not in the municipalities of Butig and
Balabagan, Lanao del Sur, but in Parang and Baldon, Cotabato.
The constitutional requirement is that no bill which may be enacted into law shall
embrace more than one subject which shall be expressed in the title of the bill. 1 This
provision is similar to those found in the Constitution of many American States. It is
aimed against the evils, of the so-called omnibus bills, and log-rolling legislation, and
against surreptitious or unconsidered enactments.2 Where the subject of a bill is limited
to a particular matter, the members of the legislature as well as the people should be
informed of the subject of proposed legislative measures. This constitutional provision
thus precludes the insertion of riders in legislation, a rider being a provision not
germane to the subject matter of the bill.
It is not to be narrowly construed though as to cripple or impede proper legislation. The
construction must be reasonable and not technical. It is sufficient if the title be
comprehensive enough reasonably to include the general object which the statute seeks
to effect without expressing each and every end and means necessary for the
accomplishment of that object. Mere details need not be set forth. The legislature is not
required to make the title of the act a complete index of its contents. The constitutional
provision is satisfied if all parts of an act which relates to its subject find expression in
its title.3
The first decision of this Court, after the establishment of the Commonwealth of the
Philippines, in 1938, construing a provision of this nature, Government v. Hongkong &
Shanghai Bank,4 held that the inclusion of Section 11 of Act No. 4007, the
Reorganization Law, providing for the mode in which the total annual expenses of the
Bureau of Banking may be reimbursed through assessment levied upon all banking
institutions subject to inspection by the Bank Commissioner was not violative of such a
requirement in the Jones Law, the previous organic act. Justice Laurel, however,
vigorously dissented, his view being that while the main subject of the act was
reorganization, the provision assailed did not deal with reorganization but with taxation.
While the case of Government vs. Hongkong & Shanghai Bank was decided by a bare
majority of four justices against three, the present trend seems to be that the
constitutional requirement is to be given the liberal test as indicated in the majority
opinion penned by Justice Abad Santos, and not the strict test as desired by the majority
headed by Justice Laurel.
Such a trend has been reflected in subsequent decisions beginning with Sumulong v.
Commission on Elections,5 up to and including Felwa vs. Salas, a 1966 decision,6 the
opinion coming from Justice Concepcion.
It is true of course that in Philconsa v. Gimenez,7 one of the grounds on which the
invalidity of Republic Act No. 3836 was predicated was the violation of the above
constitutional provision. This Retirement Act for senators and representatives was
entitled "AN ACT AMENDING SUB-SECTION (c), SECTION TWELVE OF
COMMONWEALTH ACT NUMBERED ONE HUNDRED EIGHTY-SIX, AS
AMENDED BY REPUBLIC ACT NUMBERED THIRTY HUNDRED NINETY-
SIX." As we noted, the paragraph in Republic Act No. 3836 deemed objectionable
"refers to members of Congress and to elective officers thereof who are not members of
the Government Service Insurance System. To provide retirement benefits, therefore,
for these officials, would relate to a subject matter which is not germane to
Commonwealth Act No. 186. In other words, this portion of the amendment ( re
retirement benefits for Members of Congress and appointive officers, such as the
Secretary and Sergeants-at-arms for each house) is not related in any manner to the
subject of Commonwealth Act No. 186 establishing the Government Service Insurance
System and which provides for both retirement and insurance benefits to its members."
Nonetheless our opinion was careful to note that there was no abandonment of the
principle of liberality. Thus: "we are not unmindful of the fact that there has been a
general disposition in all courts to construe the constitutional provision with reference
to the subject and title of the Act, liberally."
It would follow therefore that the challenged legislation Republic Act No. 4790 is not
susceptible to the indictment that the constitutional requirement as to legislation having
only one subject which should be expressed in his title was not met. The subject was the
creation of the municipality of Dianaton. That was embodied in the title.
It is in the light of the aforementioned judicial decisions of this Court, some of the
opinions coming from jurists illustrious for their mastery of constitutional law and their
acknowledged erudition, that, with all due respect, I find the citation from Corpus Juris
Secundum, unnecessary and far from persuasive. The State decisions cited, I do not
deem controlling, as the freedom of this Court to accept or reject doctrines therein
announced cannot be doubted.
Wherein does the weakness of the statute lie then? To repeat, several barrios of two
municipalities outside Lanao del Sur were included in the municipality of Dianaton of
that province. That itself would not have given rise to a constitutional question
considering the broad, well-high plenary powers possessed by Congress to alter
provincial and municipal boundaries. What justified resort to this Court was the
congressional failure to make explicit that such barrios in two municipalities located in
Cotabato would thereafter form part of the newly created municipality of Dianaton,
Lanao del Sur.
To avoid any doubt as to the validity of such statute, it must be construed as to exclude
from Dianaton all of such barrios mentioned in Republic Act No. 4790 found in
municipalities outside Lanao del Sur. As thus interpreted, the statute can meet the test of
the most rigid scrutiny. Nor is this to do violence to the legislative intent. What was
created was a new municipality from barrios named as found in Lanao del Sur. This
construction assures precisely that.
This mode of interpreting Republic Act No. 4790 finds support in basic principles
underlying precedents, which if not precisely controlling, have a persuasive ring.
In Radiowealth v. Agregado,8 certain provisions of the Administrative Code were
interpreted and given a "construction which would be more in harmony with the tenets
of the fundamental law." In Sanchez v. Lyon Construction,9 this Court had a similar
ruling: "Article 302 of the Code of Commerce must be applied in consonance with [the
relevant] provisions of our Constitution." The above principle gained acceptance at a
much earlier period in our constitutional history. Thus in a 1913 decision, In re
Guariña:10 "In construing a statute enacted by the Philippine Commission we deem it
our duty not to give it a construction which would be repugnant to an Act of Congress,
if the language of the statute is fairly susceptible of another construction not in conflict
with the higher law. In doing so, we think we should not hesitate to disregard
contentions touching the apparent intention of the legislator which would lead to the
conclusion that the Commission intended to enact a law in violation of the Act of
Congress. However specious the argument may be in favor of one of two possible
constructions, it must be disregarded if on examination it is found to rest on the
contention that the legislator designed an attempt to transcend the rightful limits of his
authority, and that his apparent intention was to enact an invalid law."
American Supreme Court decisions are equally explicit. The then Justice, later Chief
Justice, Stone, construed statutes "with an eye to possible constitutional limitations so
as to avoid doubts as to [their] validity." 11 From the pen of the articulate jurist,
Frankfurter:12 "Accordingly, the phrase "lobbying activities" in the resolution must be
given the meaning that may fairly be attributed to it, having special regard for the
principle of constitutional adjudication which makes it decisive in the choice of fair
alternatives that one construction may raise serious constitutional questions avoided by
another." His opinion in the Rumely case continues with the above pronouncement of
Stone and two other former Chief Justices: "In the words of Mr. Chief Justice Taft, '(i)t
is our duty in the interpretation of federal statutes to reach conclusion which will avoid
serious doubt of their constitutionality', Richmond Screw Anchor Co. v. United States,
275 US 331, 346, 48 S. Ct. 194, 198, 72 L. ed. 303. . . . As phrased by Mr. Chief Justice
Hughes, "if a serious doubt of constitutionality is raised, it is a cardinal principle that
this Court will first ascertain whether a construction of the statute is fairly possible by
which the question may be avoided.' Crowell v. Benson, 285, 296, 76 L. ed. 598, and
cases cited." The prevailing doctrine then as set forth by Justice Clark in a 1963
decision,13 is that courts "have consistently sought an interpretation which supports the
constitutionality of legislation." Phrased differently by Justice Douglas, the judiciary
favors "that interpretation of legislation which gives it the greater change of surviving
the test of constitutionality."14

It would follow then that both Philippine and American decisions unite in the view that
a legislative measure, in the language of Van Devanter "should not be given a
construction which will imperil its validity where it is reasonably open to construction
free from such peril."15 Republic Act No. 4790 as above construed incurs no such risk
and is free from the peril of nullity.

So I would view the matter, with all due acknowledgment of the practical
considerations clearly brought to light in the opinion of the Court.
[G.R. No. 148622. September 12, 2002]
REPUBLIC OF THE PHILIPPINES, represented by HON. HEHERSON T.
ALVAREZ, in his capacity as Secretary of the DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES (DENR), CLARENCE
L. BAGUILAT, in his capacity as the Regional Executive Director of
DENR-Region XI and ENGR. BIENVENIDO L. LIPAYON, in his
capacity as the Regional Director of the DENR-ENVIRONMENTAL
MANAGEMENT BUREAU (DENR-EMB), Region XI, petitioners, vs.
THE CITY OF DAVAO, represented by BENJAMIN C. DE GUZMAN,
City Mayor, respondent.
DECISION
YNARES-SANTIAGO, J.:
Before us is a petition for review[1] on certiorari assailing the decision[2] dated May
28, 2001 of the Regional Trial Court of Davao City, Branch 33, which granted the writ
of mandamus and injunction in favor of respondent, the City of Davao, and against
petitioner, the Republic, represented by the Department of Environment and Natural
Resources (DENR). The trial court also directed petitioner to issue a Certificate of Non-
Coverage in favor of respondent.
The antecedent facts of the case are as follows:
On August 11, 2000, respondent filed an application for a Certificate of Non-
Coverage (CNC) for its proposed project, the Davao City Artica Sports Dome, with the
Environmental Management Bureau (EMB), Region XI. Attached to the application
were the required documents for its issuance, namely, a) detailed location map of the
project site; b) brief project description; and c) a certification from the City Planning
and Development Office that the project is not located in an environmentally critical
area (ECA). The EMB Region XI denied the application after finding that the proposed
project was within an environmentally critical area and ruled that, pursuant to Section 2,
Presidential Decree No. 1586, otherwise known as the Environmental Impact Statement
System, in relation to Section 4 of Presidential Decree No, 1151, also known as the
Philippine Environment Policy, the City of Davao must undergo the environmental
impact assessment (EIA) process to secure an Environmental Compliance Certificate
(ECC), before it can proceed with the construction of its project.
Believing that it was entitled to a Certificate of Non-Coverage, respondent filed a
petition for mandamus and injunction with the Regional Trial Court of Davao, docketed
as Civil Case No. 28,133-2000. It alleged that its proposed project was neither an
environmentally critical project nor within an environmentally critical area; thus it was
outside the scope of the EIS system. Hence, it was the ministerial duty of the DENR,
through the EMB-Region XI, to issue a CNC in favor of respondent upon submission of
the required documents.
The Regional Trial Court rendered judgment in favor of respondent, the
dispositive portion of which reads as follows:
WHEREFORE, finding the petition to be meritorious, judgment granting the writ of
mandamus and injunction is hereby rendered in favor of the petitioner City of Davao
and against respondents Department of Environment and Natural Resources and the
other respondents by:
1) directing the respondents to issue in favor of the petitioner City of Davao a
Certificate of Non-Coverage, pursuant to Presidential Decree No. 1586 and related
laws, in connection with the construction by the City of Davao of the Artica Sports
Dome;
2) making the preliminary injunction issued on December 12, 2000 permanent.
Costs de oficio.
SO ORDERED.[3]
The trial court ratiocinated that there is nothing in PD 1586, in relation to PD 1151
and Letter of Instruction No. 1179 (prescribing guidelines for compliance with the EIA
system), which requires local government units (LGUs) to comply with the EIS
law. Only agencies and instrumentalities of the national government, including
government owned or controlled corporations, as well as private corporations, firms and
entities are mandated to go through the EIA process for their proposed projects which
have significant effect on the quality of the environment. A local government unit, not
being an agency or instrumentality of the National Government, is deemed excluded
under the principle of expressio unius est exclusio alterius.
The trial court also declared, based on the certifications of the DENR-Community
Environment and Natural Resources Office (CENRO)-West, and the data gathered from
the Philippine Institute of Volcanology and Seismology (PHIVOLCS), that the site for
the Artica Sports Dome was not within an environmentally critical area. Neither was the
project an environmentally critical one. It therefore becomes mandatory for the DENR,
through the EMB Region XI, to approve respondents application for CNC after it has
satisfied all the requirements for its issuance. Accordingly, petitioner can be compelled
by a writ of mandamus to issue the CNC, if it refuses to do so.
Petitioner filed a motion for reconsideration, however, the same was
denied. Hence, the instant petition for review.
With the supervening change of administration, respondent, in lieu of a comment,
filed a manifestation expressing its agreement with petitioner that, indeed, it needs to
secure an ECC for its proposed project. It thus rendered the instant petition moot and
academic.However, for the guidance of the implementors of the EIS law and pursuant
to our symbolic function to educate the bench and bar,[4] we are inclined to address the
issue raised in this petition.
Section 15 of Republic Act 7160,[5] otherwise known as the Local Government
Code, defines a local government unit as a body politic and corporate endowed with
powers to be exercised by it in conformity with law. As such, it performs dual
functions, governmental and proprietary. Governmental functions are those that concern
the health, safety and the advancement of the public good or welfare as affecting the
public generally.[6] Proprietary functions are those that seek to obtain special corporate
benefits or earn pecuniary profit and intended for private advantage and benefit. [7] When
exercising governmental powers and performing governmental duties, an LGU is an
agency of the national government.[8]When engaged in corporate activities, it acts as an
agent of the community in the administration of local affairs. [9]
Found in Section 16 of the Local Government Code is the duty of the LGUs to
promote the peoples right to a balanced ecology.[10] Pursuant to this, an LGU, like the
City of Davao, can not claim exemption from the coverage of PD 1586. As a body
politic endowed with governmental functions, an LGU has the duty to ensure the quality
of the environment, which is the very same objective of PD 1586.
Further, it is a rule of statutory construction that every part of a statute must be
interpreted with reference to the context, i.e., that every part must be considered with
other parts, and kept subservient to the general intent of the enactment. [11] The trial
court, in declaring local government units as exempt from the coverage of the EIS law,
failed to relate Section 2 of PD 1586[12] to the following provisions of the same law:
WHEREAS, the pursuit of a comprehensive and integrated environmental protection
program necessitates the establishment and institutionalization of a system whereby the
exigencies of socio-economic undertakings can be reconciled with the requirements of
environmental quality; x x x.
Section 1. Policy. It is hereby declared the policy of the State to attain and maintain a
rational and orderly balance between socio-economic growth and environmental
protection.
xxxxxxxxx
Section 4. Presidential Proclamation of Environmentally Critical Areas and
Projects. The President of the Philippines may, on his own initiative or upon
recommendation of the National Environmental Protection Council, by proclamation
declare certain projects, undertakings or areas in the country as environmentally critical.
No person, partnership or corporation shall undertake or operate any such declared
environmentally critical project or area without first securing an Environmental
Compliance Certificate issued by the President or his duly authorized representative.
For the proper management of said critical project or area, the President may by his
proclamation reorganize such government offices, agencies, institutions, corporations or
instrumentalities including the realignment of government personnel, and their specific
functions and responsibilities.
Section 4 of PD 1586 clearly states that no person, partnership or corporation shall
undertake or operate any such declared environmentally critical project or area without
first securing an Environmental Compliance Certificate issued by the President or his
duly authorized representative.[13] The Civil Code defines a person as either natural or
juridical. The state and its political subdivisions, i.e., the local government units [14] are
juridical persons.[15] Undoubtedly therefore, local government units are not excluded
from the coverage of PD 1586.
Lastly, very clear in Section 1 of PD 1586 that said law intends to implement the
policy of the state to achieve a balance between socio-economic development and
environmental protection, which are the twin goals of sustainable development. The
above-quoted first paragraph of the Whereas clause stresses that this can only be
possible if we adopt a comprehensive
and integrated environmental protection program where all the sectors of the
community are involved, i.e., the government and the private sectors. The local
government units, as part of the machinery of the government, cannot therefore be
deemed as outside the scope of the EIS system.[16]
The foregoing arguments, however, presuppose that a project, for which an
Environmental Compliance Certificate is necessary, is environmentally critical or
within an environmentally critical area. In the case at bar, respondent has sufficiently
shown that the Artica Sports Dome will not have a significant negative environmental
impact because it is not an environmentally critical project and it is not located in an
environmentally critical area. In support of this contention, respondent submitted the
following:
1. Certification from the City Planning and Development Office that the project is not
located in an environmentally critical area;
2. Certification from the Community Environment and Natural Resources Office
(CENRO-West) that the project area is within the 18-30% slope, is outside the scope of
the NIPAS (R.A. 7586), and not within a declared watershed area; and
3. Certification from PHILVOCS that the project site is thirty-seven (37) kilometers
southeast of the southernmost extension of the Davao River Fault and forty-five (45)
kilometers west of the Eastern Mindanao Fault; and is outside the required minimum
buffer zone of five (5) meters from a fault zone.
The trial court, after a consideration of the evidence, found that the Artica Sports
Dome is not within an environmentally critical area. Neither is it an environmentally
critical project.It is axiomatic that factual findings of the trial court, when fully
supported by the evidence on record, are binding upon this Court and will not be
disturbed on appeal.[17] This Court is not a trier of facts.[18]
 There are exceptional instances when this Court may disregard factual findings of
the trial court, namely: a) when the conclusion is a finding grounded entirely on
speculations, surmises, or conjectures; b) when the inference made is manifestly
mistaken, absurd, or impossible; c) where there is a grave abuse of discretion; d) when
the judgment is based on a misapprehension of facts; e) when the findings of fact are
conflicting; f) when the Court of Appeals, in making its findings, went beyond the
issues of the case and the same are contrary to the admissions of both appellant and
appellee; g) when the findings of the Court of Appeals are contrary to those of the trial
court; h) when the findings of fact are conclusions without citation of specific evidence
on which they are based; i) when the finding of fact of the Court of Appeals is premised
on the supposed absence of evidence but is contradicted by the evidence on record; and
j) when the Court of Appeals manifestly overlooked certain relevant facts not disputed
by the parties and which, if properly considered, would justify a different
conclusion.[19] None of these exceptions, however, obtain in this case.
The Environmental Impact Statement System, which ensures environmental
protection and regulates certain government activities affecting the environment, was
established by Presidential Decree No. 1586. Section 2 thereof states:
There is hereby established an Environmental Impact Statement System founded and
based on the environmental impact statement required under Section 4 of Presidential
Decree No. 1151, of all agencies and instrumentalities of the national government,
including government-owned or controlled corporations, as well as private corporations,
firms and entities, for every proposed project and undertaking which significantly affect
the quality of the environment.
Section 4 of PD 1151, on the other hand, provides:
(e) whenever a proposal involves the use of depletable or nonrenewable resources, a
finding must be made that such use and commitment are warranted.
Before an environmental impact statement is issued by a lead agency, all agencies
having jurisdiction over, or special expertise on, the subject matter involved shall
comment on the draft environmental impact statement made by the lead agency within
thirty (30) days from receipt of the same.
Under Article II, Section 1, of the Rules and Regulations Implementing PD 1586,
the declaration of certain projects or areas as environmentally critical, and which shall
fall within the scope of the Environmental Impact Statement System, shall be by
Presidential Proclamation, in accordance with Section 4 of PD 1586 quoted above.
Pursuant thereto, Proclamation No. 2146 was issued on December 14, 1981,
proclaiming the following areas and types of projects as environmentally critical and
within the scope of the Environmental Impact Statement System established under PD
1586:
A. Environmentally Critical Projects
I. Heavy Industries
a. Non-ferrous metal industries
b. Iron and steel mills
c. Petroleum and petro-chemical industries including oil and gas
d. Smelting plants

Environmental Impact Statements. Pursuant to the above enunciated policies and goals, II. Resource Extractive Industries
all agencies and instrumentalities of the national government, including government-
owned or controlled corporations, as well as private corporations, firms and entities a. Major mining and quarrying projects
shall prepare, file and include in every action, project or undertaking which significantly b. Forestry projects
affects the quality of the environment a detailed statement on
1. Logging
(a) the environmental impact of the proposed action, project or undertaking 2. Major wood processing projects
3. Introduction of fauna (exotic-animals) in
(b) any adverse environmental effect which cannot be avoided should the proposal be public/private forests
implemented 4. Forest occupancy
5. Extraction of mangrove products
6. Grazing
(c) alternative to the proposed action
c. Fishery Projects
(d) a determination that the short-term uses of the resources of the environment are
consistent with the maintenance and enhancement of the long-term productivity of the
same; and 1. Dikes for/and fishpond development projects
III. Infrastructure Projects In this connection, Section 5 of PD 1586 expressly states:

a. Major dams Environmentally Non-Critical Projects. All other projects, undertakings and areas not
b. Major power plants (fossil-fueled, nuclear fueled, declared by the President as environmentally critical shall be considered as non-critical
hydroelectric or geothermal) and shall not be required to submit an environmental impact statement. The National
c. Major reclamation projects Environmental Protection Council, thru the Ministry of Human Settlements may
d. Major roads and bridges however require non-critical projects and undertakings to provide additional
environmental safeguards as it may deem necessary.
B. Environmentally Critical Areas
The Artica Sports Dome in Langub does not come close to any of the projects or
1. All areas declared by law as national parks, watershed reserves, areas enumerated above. Neither is it analogous to any of them. It is clear, therefore,
wildlife preservesand sanctuaries; that the said project is not classified as environmentally critical, or within an
2. Areas set aside as aesthetic potential tourist spots; environmentally critical area. Consequently, the DENR has no choice but to issue the
3. Areas which constitute the habitat for any endangered or threatened Certificate of Non-Coverage.It becomes its ministerial duty, the performance of which
species of indigenous Philippine Wildlife (flora and fauna); can be compelled by writ of mandamus, such as that issued by the trial court in the case
4. Areas of unique historic, archaeological, or scientific interests; at bar.
5. Areas which are traditionally occupied by cultural communities or tribes; WHEREFORE, in view of the foregoing, the instant petition is DENIED. The
6. Areas frequently visited and/or hard-hit by natural calamities decision of the Regional Trial Court of Davao City, Branch 33, in Civil Case No.
(geologic hazards, floods, typhoons, volcanic activity, etc.); 28,133-2000, granting the writ of mandamus and directing the Department of
7. Areas with critical slopes; Environment and Natural Resources to issue in favor of the City of Davao a Certificate
8. Areas classified as prime agricultural lands; of Non-Coverage, pursuant to Presidential Decree No. 1586 and related laws, in
9. Recharged areas of aquifers; connection with the construction of the Artica Sports Dome, is AFFIRMED.
10. Water bodies characterized by one or any combination of the following conditions;
SO ORDERED.
a. tapped for domestic purposes
b. within the controlled and/or protected areas declared by
appropriate authorities
c. which support wildlife and fishery activities

11. Mangrove areas characterized by one or any combination of the following

conditions:

a. with primary pristine and dense young growth;

b. adjoining mouth of major river systems;
c. near or adjacent to traditional productive fry or fishing grounds;
d. which act as natural buffers against shore erosion, strong
winds and storm floods;
e. on which people are dependent for their livelihood.

12. Coral reefs, characterized by one or any combinations of the following conditions:

a. with 50% and above live coralline cover;

b. spawning and nursery grounds for fish;
c. which act as natural breakwater of coastlines.