Magtajas v. Pryce Properties Corp.

G.R. No. 111097, July 20, 1994

Cruz, J.

Facts:

PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a
building belonging to Pryce Properties Corporation, Inc., renovated and
equipped the same, and prepared to inaugurate its casino there during the Christmas season. Civic
organizations angrily denounced the project. The religious elements echoed the objection and so did the
women's groups and the youth. Demonstrations were led by the mayor and the city legislators. The media
trumpeted the protest, describing the casino as an affront to the welfare of the city. The contention of the
petitioners is that it is violative of the Sangguniang Panlungsod of Cagayan de Oro City Ordinance No.
3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting
the operation of casinos. On the other hand, the respondents invoke P.D. 1869 which created PAGCOR to
help centralize and regulate all games of chance, including casinos on land and sea within the territorial
jurisdiction of the Philippines. The Court of Appeals ruled in favor of the respondents. Hence, the petition
for review.

Issue:

Whether or not the Ordinance No. 3353 and Ordinance No. 3375-93 are valid

Held:

No. Cagayan de Oro City, like other local political subdivisions, is empowered toenact ordinances for the
purposes indicated in the Local Government Code. It is expresslyvested with the police power under what
is known as the General Welfare Clause nowembodied in Section 16 as follows:Sec. 16.

General Welfare

. — Every local government unit shall exercise the powers expressly granted, those necessarily implied
there from, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local governmentunits shall ensure and support,
among other things, the preservation and enrichment of culture, promote health and safety, enhance the
right of the people to a balanced ecology, encourage and support the development of appropriate and self-
reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and
social justice, promote full employment among their residents, maintain peace and order, and preserve the
comfort and convenience of their
inhabitants. There is a requirement that the ordinances should not contravene a statute.Municipal
governments are only agents of the national government. Local councils exercise only delegated
legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot
be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that
the local government units can undo the acts of Congress, from which they have derived their power in
the first place, and negate by mere ordinance the mandate of the statute.
Magtajas Vs Pryce Properties

G.R. No. 111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,

vs.

PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING

CORPORATION,

FACTS: There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de
Oro City. Civic organizations angrily denounced the project.The trouble arose when in 1992, flush with
its tremendous success in several cities, PAGCOR decided to expand its operations to Cagayan de Oro
City.he reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On
December 7, 1992, it enacted Ordinance No. 3353.Nor was this all. On January 4, 1993, it adopted a
sterner Ordinance No. 3375-93Pryce assailed the ordinances before the Court of Appeals, where it was
joined by PAGCOR as intervenor and supplemental petitioner. Their challenge succeeded. On March 31,
1993, the Court of Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their
enforcement

ISSUE: WON Ordinance 3353 and 3375-93 valid

HELD: No

Local Government Code, local government units are authorized to prevent or suppress, among others,
"gambling and other prohibited games of chance." Obviously, this provision excludes games of chance
which are not prohibited but are in fact permitted by law. The rationale of the requirement that the
ordinances should not contravene a statute is obvious. Casino gambling is authorized by P.D. 1869. This
decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Hence, it was
not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353
prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the
operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and
the public policy announced therein and is therefore ultra vires and void.
Parayno vs Jovellanos
G.R. No. 148408

Subject: Public Corporation

Doctrine: Police power

Facts:
Petitioner was the owner of a gasoline filling station in Calasiao, Pangasinan. In 1989, some residents of
Calasiao petitioned the Sangguniang Bayan (SB) of said municipality for the closure or transfer of the
station to another location. The matter was referred to the Municipal Engineer, Chief of Police, Municipal
Health Officer and the Bureau of Fire Protection for investigation. Upon their advise, the Sangguniang
Bayan recommended to the Mayor the closure or transfer of location of petitioner’s gasoline station. In
Resolution No. 50, it declared that the existing gasoline station is a blatant violation and disregard of
existing law.
According to the Resolution, 1) the gasoline filling station is in violation of The Official Zoning Code of
Calasiao, Art. 6, Section 44, the nearest school building which is San Miguel Elementary School and
church, the distances are less than 100 meters. (No neighbors were called as witnesses when actual
measurements were done by HLURB Staff, Baguio City dated 22 June 1989); 2) it remains in thickly
populated area with commercial/residential buildings, houses closed (sic) to each other which still
endangers the lives and safety of the people in case of fire; 3) residents of our barangay always complain
of the irritating smell of gasoline most of the time especially during gas filling which tend to expose
residents to illness, and 4) It hampers the flow of traffic.
Petitioner moved for the reconsideration of the resolution but was denied by the SB. Hence she filed a
case before the RTC claiming that the gasoline filling station was not covered under Sec 44 of the
mentioned law but is under Sec 21. Case was denied by the court and by the CA. Hence this appeal.

ISSUE: Whether or not the closure/transfer of her gasoline filling station by respondent municipality was
an invalid exercise of the latter’s police powers

HELD:
The respondent is barred from denying their previous claim that the gasoline filling station is not under
Sec 44. The Counsel in fact admitted that : “That the business of the petitioner [was] one of a gasoline
filling station as defined in Article III, Section 21 of the zoning code and not as a service station as
differently defined under Article 42 of the said official zoning code;”
The foregoing were judicial admissions which were conclusive on the municipality, the party making
them. hence, because of the distinct and definite meanings alluded to the two terms by the zoning
ordinance, respondents could not insist that “gasoline service station” under Section 44 necessarily
included “gasoline filling station” under Section 21. Indeed, the activities undertaken in a “gas service
station” did not automatically embrace those in a “gas filling station.”
As for the main issue, the court held that the respondent municipality invalidly used its police powers in
ordering the closure/transfer of petitioner’s gasoline station. While it had, under RA 7160, the power to
take actions and enact measures to promote the health and general welfare of its constituents, it should
have given due deference to the law and the rights of petitioner.
A local government is considered to have properly exercised its police powers only when the following
requisites are met: (1) the interests of the public generally, as distinguished from those of a particular
class, require the interference of the State and (2) the means employed are reasonably necessary for the
attainment of the object sought to be accomplished and not unduly oppressive. The first requirement
refers to the equal protection clause and the second, to the due process clause of the Constitution.
Respondent municipality failed to comply with the due process clause when it passed Resolution No. 50.
While it maintained that the gasoline filling station of petitioner was less than 100 meters from the nearest
public school and church, the records do not show that it even attempted to measure the distance,
notwithstanding that such distance was crucial in determining whether there was an actual violation of
Section 44. The different local offices that respondent municipality tapped to conduct an investigation
never conducted such measurement either.

Moreover, petitioner’s business could not be considered a nuisance which respondent municipality could
summarily abate in the guise of exercising its police powers. The abatement of a nuisance without judicial
proceedings is possible only if it is a nuisance per se. A gas station is not a nuisance per se or one
affecting the immediate safety of persons and property, hence, it cannot be closed down or transferred
summarily to another location.

On the alleged hazardous effects of the gasoline station to the lives and properties of the people of
Calasiao, we again note: “Hence, the Board is inclined to believe that the project being hazardous to life
and property is more perceived than factual. For, after all, even the Fire Station Commander..
recommended “to build such buildings after conform (sic) all the requirements of PP 1185.” It is further
alleged by the complainants that the proposed location is “in the heart of the thickly populated residential
area of Calasiao.” Again, findings of the [HLURB] staff negate the allegations as the same is within a
designated Business/Commercial Zone per the Zoning Ordinance.

WHEREFORE, the petition is hereby GRANTED. The assailed resolution of the Court of the Appeals is
REVERSED and SET ASIDE. Respondent Municipality of Calasiao is hereby directed to cease and desist
from enforcing Resolution No. 50 against petitioner insofar as it seeks to close down or transfer her
gasoline station to another location.
G.R. No. 177807/G.R. No. 177933, October 11, 2011
Emilio Gancayco
vs City Government of Quezon City and MMDA
Ponente: Sereno

Facts:
In 1950s, retired justice Emilio Gancayco bought a parcel of land located in EDSA. Then on March 1956,
Quezon City Council issued Ordinance No. 2904 requiring the construction of arcades for commercial
buildings to be constructed. At the outset, it bears emphasis that at the time Ordinance No. 2904 was
passed by the city council, there was yet no building code passed by the national legislature. Thus, the
regulation of the construction of buildings was left to the discretion of local government units. Under this
particular ordinance, the city council required that the arcade is to be created by constructing the wall of
the ground floor facing the sidewalk a few meters away from the property line. Thus, the building owner
is not allowed to construct his wall up to the edge of the property line, thereby creating a space or shelter
under the first floor. In effect, property owners relinquish the use of the space for use as an arcade for
pedestrians, instead of using it for their own purposes.
The ordinance covered the property of Justice Gancayco. Subsequently, sometime in 1965, Justice
Gancayco sought the exemption of a two-storey building being constructed on his property from the
application of Ordinance No. 2904 that he be exempted from constructing an arcade on his property.
On 2 February 1966, the City Council acted favorably on Justice Gancayco’s request and issued
Resolution No. 7161, S-66, “subject to the condition that upon notice by the City Engineer, the owner
shall, within reasonable time, demolish the enclosure of said arcade at his own expense when public
interest so demands.”
Decades after, in March 2003, MMDA conducted operations to clear obstructions along EDSA, in
consequence, they sent a notice of demolition to Justice Gancayco alleging that a portion of his building
violated the National Building Code.
Gancayco did not comply with the notice and filed a petition for TRO with the RTC Quezon City to
prohibit the MMDA from demolishing his property. The RTC rendered its Decision on 30 September
2003 in favor of Justice Gancayco. It held that the questioned ordinance was unconstitutional, ruling that
it allowed the taking of private property for public use without just compensation. The RTC said that
because 67.5 square meters out of Justice Gancayco’s 375 square meters of property were being taken
without compensation for the public’s benefit, the ordinance was confiscatory and oppressive. It likewise
held that the ordinance violated owners’ right to equal protection of laws.
MMDA appealed with the CA. CA held that the MMDA went beyond its powers when it demolished the
subject property. It further found that Resolution No. 02-28 only refers to sidewalks, streets, avenues,
alleys, bridges, parks and other public places in Metro Manila, thus excluding Justice Gancayco’s private
property. Lastly, the CA stated that the MMDA is not clothed with the authority to declare, prevent or
abate nuisances.

Issues: (1) WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM ASSAILING THE
VALIDITY OF ORDINANCE NO. 2904. (2) WHETHER OR NOT ORDINANCE NO. 2904 IS
CONSTITUTIONAL.(3) WHETHER OR NOT THE WING WALL OF JUSTICE GANCAYCO’S
BUILDING IS A PUBLIC NUISANCE. (4) WHETHER OR NOT THE MMDA LEGALLY
DEMOLISHED THE PROPERTY OF JUSTICE GANCAYCO.

Ruling:

(1) We find that petitioner was not guilty of estoppel. When it made the undertaking to comply with all
issuances of the BIR, which at that time it considered as valid, petitioner did not commit any false
misrepresentation or misleading act.
(2) Justice Gancayco may not question the ordinance on the ground of equal protection when he also
benefited from the exemption. It bears emphasis that Justice Gancayco himself requested for an
exemption from the application of the ordinance in 1965 and was eventually granted one. Moreover, he
was still enjoying the exemption at the time of the demolition as there was yet no valid notice from the
city engineer. Thus, while the ordinance may be attacked with regard to its different treatment of
properties that appears to be similarly situated, Justice Gancayco is not the proper person to do so.
(3) The fact that in 1966 the City Council gave Justice Gancayco an exemption from constructing an
arcade is an indication that the wing walls of the building are not nuisances per se. The wing walls do not
per se immediately and adversely affect the safety of persons and property. The fact that an ordinance
may declare a structure illegal does not necessarily make that structure a nuisance. Clearly, when Justice
Gancayco was given a permit to construct the building, the city council or the city engineer did not
consider the building, or its demolished portion, to be a threat to the safety of persons and property. This
fact alone should have warned the MMDA against summarily demolishing the structure.
Sangguniang Bayan cannot declare a particular thing as a nuisance per se and order its condemnation. It
does not have the power to find, as a fact, that a particular thing is a nuisance when such thing is not a
nuisance per se; nor can it authorize the extrajudicial condemnation and destruction of that as a nuisance
which in its nature, situation or use is not such. Those things must be determined and resolved in the
ordinary courts of law.
MMDA illegally demolished Gancayco's property.
Tano vs Socrates
FACTS:
On Dec 15, 1992, the Sangguniang Panglungsod ng Puerto Princesa enacted an ordinance banning the
shipment of all live fish and lobster outside Puerto Princesa City from January 1, 1993 to January 1, 1998.
Subsequently the Sangguniang Panlalawigan, Provincial Government of Palawan enacted a resolution
prohibiting the catching , gathering, possessing, buying, selling, and shipment of a several species of live
marine coral dwelling aquatic organisms for 5 years, in and coming from Palawan waters.
Petitioners filed a special civil action for certiorari and prohibition, praying that the court declare the said
ordinances and resolutions as unconstitutional on the ground that the said ordinances deprived them of the
due process of law, their livelihood, and unduly restricted them from the practice of their trade, in
violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution.

ISSUE:
Are the challenged ordinances unconstitutional?

HELD:
No. The Supreme Court found the petitioners contentions baseless and held that the challenged
ordinances did not suffer from any infirmity, both under the Constitution and applicable laws. There is
absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. Besides,
Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress
on the duty of the State to protect the nation’s marine wealth. The so-called “preferential right” of
subsistence or marginal fishermen to the use of marine resources is not at all absolute.
In accordance with the Regalian Doctrine, marine resources belong to the state and pursuant to the first
paragraph of Section 2, Article XII of the Constitution, their “exploration, development and
utilization...shall be under the full control and supervision of the State.

In addition, one of the devolved powers of the LCG on devolution is the enforcement of fishery laws in
municipal waters including the conservation of mangroves. This necessarily includes the enactment of
ordinances to effectively carry out such fishery laws within the municipal waters. In light of the principles
of decentralization and devolution enshrined in the LGC and the powers granted therein to LGUs which
unquestionably involve the exercise of police power, the validity of the questioned ordinances cannot be
doubted.
TANO v. SOCRATES
Facts:
The petitioners filed a petition for certiorari and prohibition assailing the constitutionality of:
(1) Ordinance No. 15-92 entitled: " AN ORDINANCE BANNING THE SHIPMENT OF ALL
LIVEFISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO
JANUARY 1,1998 AND PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES
THEREOF"
(2) Office Order No. 23, requiring any person engaged or intending to engage in any business, trade,
occupation, calling or profession or having in his possession any of the articles for which a permit is
required to be had, to obtain first a Mayor’s and authorizing and directing to check or conduct necessary
inspections on cargoes containing live fish and lobster being shipped out from Puerto Prinsesa and,
(3) Resolution No. 33, Ordinance No. 2 entitled: "A RESOLUTION PROHIBITING THECATCHING, G
ATHERING, POSSESSING, BUYING, SELLING AND SHIPMENT OF LIVE MARINECORAL
DWELLING AQUATIC ORGANISMS” The petitioners
contend that the said Ordinances deprived them of due process of law, their livelihood, and unduly
restricted them from the practice of their trade, in violation of Section 2, Article XII and Sections 2 and 7
of Article XIII of the 1987 Constitution and that the Mayor had the absolute authority to determine
whether or not to issue the permit. They also claim that it took away their right to earn their livelihood in
lawful ways; and insofar as the Airline Shippers Association are concerned, they were unduly prevented
from pursuing their vocation and entering "into contracts which are proper, necessary, and essential
to carry out their business endeavors to a successful conclusion Public respondents Governor Socrates
and Members of the Sangguniang Panlalawigan of Palawan defended the validity of Ordinance No. 2,
Series of 1993, as a valid exercise of the Provincial Government’s power under the general welfare
clause; they likewise maintained that there was no violation of the due process and equal protection
clauses of the Constitution.
Issue:
Whether or not the Ordinances in question are unconstitutional
Held: NO
Ratio:
In light then of the principles of decentralization and devolution enshrined in the LGC and the powers
granted therein to local government units under Section 16 (the General Welfare Clause), and under
Sections 149, 447(a) (1) (vi), 458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the
exercise of police power, the validity of the questioned Ordinances cannot be doubted. ***Sec. 16.
General Welfare
. — Every local government unit shall exercise the powers expressly granted, those necessarily implied
there from, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Within their respective
territorial jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and preserve the comfort and
convenience of their inhabitants. (emphasis supplied).It is clear to the Court that both Ordinances have
two principal objectives or purposes: (1) to establish a "closed season" for the species of fish or aquatic
animals covered therein for a period of five years; and (2) to protect the coral in the marine waters of
the City of Puerto Prinsesa and the Province of Palawan from further destruction due to illegal
fishing activities.
It imposes upon the sangguniang bayan, the sangguniang panlungsod, and the sangguniang panlalawigan
the duty to enact ordinances to "[p]rotect the environment and impose appropriate
penaltiesfor acts which endanger the environment such as dynamite fishing and other forms of destructive
fishing . . . and such other activities which result in pollution, acceleration of eutrophication of rivers and
lakes or of ecological imbalance."

The petition is dismissed.

Olivarez vs Sandiganbayan
Fact: Baclaran Credit Cooperative, Inc. (BCCI), through its board member charged petitioner Parañaque
Mayor Olivarez with Violation of the Anti-Graft and Corrupt Practices Act for unreasonably refusing to
issue a mayor’s permit despite request and follow-ups to implement Parañaque Sangguniang Bayan
Resolution which petitioner himself approved. the resolution authorized BCCI to set up a night
manufacturer’s fair during the Christmas fiesta celebration of and at Baclaran for 60 days for which they
will use a portion of the service road of Roxas Boulevard from the corner of Opena to Rivera Streets.
BCCI requesting assistance for the issuance of a mayor’s permit, BCCI counsel Atty. Renato Dilag to
petitioner formally demanding implementation of Resolution. petitioner replied letter to Atty. Dilag
stating among others that the non-implementation of Resolution was due to BCCI’s failure to apply for
appropriate permit and license to operate the Night Manufacturer’s Fair which was one of the conditions
in the authorization.
Issue: Whether the petitioner disregarded right to the Equal Protection of BCCI?
Held: Yes, petitioner failed to show, in apparent disregard of BCCI’s right to equal protection, that BCCI
and the unidentified Baclaran-based vendors’ associations were not similarly situated as to give at least a
semblance of legality to the apparent haste with which said executive order was issued. It would seem that
if there was any interest served by such executive order, it was that of herein petitioner. As the mayor of
the municipality, the officials referred to were definitely under his authority and he was not without
recourse to take appropriate action on the letter-application of BCCI although the same was not strictly in
accordance with normal procedure. There was nothing to prevent him from referring said letter-
application to the licensing department, but which paradoxically he refused to do. Whether petitioner was
impelled by any material interest or ulterior motive may be beyond us for the moment since this is a
matter of evidence, but the environmental facts and circumstances are sufficient to create a belief in the
mind of a reasonable man that this would not be completely improbable, absent countervailing
clarification. Lastly, it may not be amiss to add that petitioner, as a municipal mayor, is expressly
authorized and has the power to issue permits and licenses for the holding of activities for any charitable
or welfare purpose, pursuant to the Local Government Code of. Hence, he cannot really feign total lack of
authority to act on the letter-application of BCCI..

Lim v. Pacquing
G.R. No. 115044 - 240 SCRA 649 - January 27, 1995

To be discussed below are two consolidated cases bearing GR No. 115044 and GR No. 117263.
Petitioner and respondent for the first are Mayor Alfredo Lim and Judge Pacquing respectively.
Petitioners for the second case are Teofisto Guingona, Jr. and Dominador R. Cepeda while the
respondents are Judge Vetino Reyes and Associated Development Corporation.

FACTS:
Judge Pacquing issued an order directing Manila mayor Alfredo S. Lim to issue a permit/license
to operate a jai-alai in favor of Associated Development Corporation (ADC). Due to the mayor’s
noncompliance, the judge issued an order directing mayor Lim to explain why he should not be cited in
contempt. Another order was then sent afterwards reiterating the order to grant license/permit to ADC.
Mayor Lim filed petition in GR No. 115044 but the same was dismissed. An order to immediately
release the permit/license was then passed.
Executive Secretary Guingona issued a directive to then chairman of the Games and Amusements
Board (GAB), Francisco R. Sumulong, Jr. to hold the grant of the license. This prompted ADC to file a
case for prohibition, mandamus, and injunction with prayer for temporary restraining order and
preliminary injunction, which were granted by the RTC Judge Reyes.
Thus, Guingona and Sumulong filed a petition assailing the orders of the judge.
The Court analyzed the pertinent laws on the subject:
In 1951, Executive Order No. 392 transferred the authority to regulate jai-alais from local
government to the Games and Amusements Board (GAB).
In 1953, Republic Act No. 954 was passed, entitled " An Act to Prohibit With Horse Races and Basque
Pelota Games (Jai-Alai), …" The law stated that for a person to operate a basque pelota(jai-alai) game, he
must have been granted a legislative franchise.
In 1971, however, the Municipal Board of Manila passed Ordinance No. 7065 entitled "An Ordinance
Authorizing the Mayor to Allow and Permit the Associated Development Corporation to Establish,
Maintain And Operate A Jai-Alai In The City Of Manila…."
In 1975, Presidential Decree No. 771 was issued entitled "Revoking All Powers and Authority of Local
Government(s) To Grant Franchise, License or Permit And Regulate Wagers Or Betting By The Public
On … Jai-Alai Or Basque Pelota …”, and Section 3 thereof, expressly revoked all existing franchises and
permits issued by local governments.
Subsequently, Presidential Decree No. 810, entitled "An Act granting The Philippine Jai-Alai and
Amusement Corporation a Franchise to Operate, Construct and Maintain a Fronton for Basque …" was
promulgated.
However, in 1987, then President Aquino issued Executive Order No. 169 expressly repealing PD 810
and revoking and cancelling the franchise granted to the Philippine Jai-Alai and Amusement Corporation.

ISSUE:
Whether ADC possessed a valid franchise to maintain and operate a jai-alai.
Whether PD No. 771 was in violation of the equal protection clause and non-impairment clause.

HELD:
ADC did not possess a valid franchise.

Congress did not delegate to the City of Manila the power "to franchise" the jai-alai, but retained
for itself such power "to franchise". It is still necessary for a person to seek a franchise from the national
government to operate. The authority to grant franchises for the operation of jai-alai frontons is in
Congress, while the regulatory function is vested in the GAB. Such regulatory functions include the
power to license, permit, or regulate.
Thus, since ADC did not obtain a franchise from Congress, it was not allowed to operate a jai-alai.
PD No. 771 was not in violation of the non-impairment clause.
“[A] franchise is…a mere privilege specially in matters which are within the government's power
to regulate and even prohibit through the exercise of the police power. Thus, a gambling franchise is
always subject to the exercise of police power for the public welfare.”
“[j]ai-alai, when played for bets, is pure and simple gambling.” It cannot be analogous to the
operation of a public utility for it is a mere privilege.
PD No. 771 was not in violation of the equal protection clause.

“There was no violation by PD No. 771 of the equal protection clause since the decree revoked all
franchises issued by local governments without qualification or exception.”
“ADC was not singled out when all jai-alai franchises were revoked.”
Joseph Kim O. Buenafe
Constitutional rights are not absolute. The inherent police power of the state may at all times be invoked
in order to preserve the interests of the common good over the individual.

Laguna Lake Development Authority vs CA

Natural Resources and Environmental Laws; Statutory Construction

GR No. 120865-71; Dec. 7 1995

FACTS:
The Laguna Lake Development Authority (LLDA) was created through Republic Act No. 4850. It was
granted, inter alia, exclusive jurisdiction to issue permits for the use of all surface water for any project or
activity in or affecting the said region including navigation, construction, and operation of fishpens, fish
enclosures, fish corrals and the like.
Then came RA 7160, the Local Government Code of 1991. The municipalities in the Laguna Lake region
interpreted its provisions to mean that the newly passed law gave municipal governments the exclusive
jurisdiction to issue fishing privileges within their municipal waters.

ISSUE:
Who should exercise jurisdiction over the Laguna Lake and its environs insofar as the issuance of permits
for fishing privileges is concerned, the LLDA or the towns and municipalities comprising the region?

HELD:
LLDA has jurisdiction over such matters because the charter of the LLDA prevails over the Local
Government Code of 1991. The said charter constitutes a special law, while the latter is a general law. It
is basic in statutory construction that the enactment of a later legislation which is a general law, cannot be
construed to have repealed a special law. The special law is to be taken as an exception to the general law
in the absence of special circumstances forcing a contrary conclusion.
In addition, the charter of the LLDA embodies a valid exercise of police power for the purpose of
protecting and developing the Laguna Lake region, as opposed to the Local Government Code, which
grants powers to municipalities to issue fishing permits for revenue purposes.

Thus it has to be concluded that the charter of the LLDA should prevail over the Local Government Code
of 1991 on matters affecting Laguna de Bay.
LAGUNA LAKE VS CA
Facts:
The Laguna Lake Development Authority (LLDA) was created through RA No. 4850 in order to execute
the policy towards environmental protection and sustainable development so as to accelerate the
development and balanced growth of the Laguna Lake area and the surrounding provinces and towns.
Upon implementation of RA 7160 (Local Government Code of 1991), the municipalities assumed
exclusive jurisdiction & authority to issue fishing privileges within their municipal waters
since Sec.149 thereof provides: “Municipal corporations shall have the authority to grant fishery
privileges in the municipal waters and impose rental fees or charges therefore…” Big fishpen operators
took advantage of the occasion to establish fishpens & fish cages to the consternation of the LLDA.
The implementation of separate independent policies in fish cages & fish pen operation and the
indiscriminate grant of fishpen permits by the lakeshore municipalities have saturated the lake with
fishpens, thereby aggravating the current environmental problems and ecological stress of Laguna Lake.
The LLDA then served notice to the general public that:
(1) fishpens, cages & other aqua-culture structures unregistered with the LLDA as of March 31, 1993 are
declared illegal;
(2) those declared illegal shall be subject to demolition by the Presidential Task Force for Illegal Fishpen
and Illegal Fishing; and
(3) owners of those declared illegal shall be criminally charged with violation of Sec.39-A of RA 4850 as
amended by PD 813.
A month later, the LLDA sent notices advising the owners of the illegally constructed fishpens, fishcages
and other aqua-culture structures advising them to dismantle their respective structures otherwise
demolition shall be effected.

Issue
Which agency of the Government — the Laguna Lake Development Authority or the towns and
municipalities comprising the region — should exercise jurisdiction over the Laguna Lake and its
environs insofar as the issuance of permits for fishery privileges is concerned?

Held
LLDA has jurisdiction over such matters because the charter of the LLDA prevails over the Local
Government Code of 1991.
The said charter constitutes a special law, while the latter is a general law.
The Local Government Code of 1991, has not repealed the provisions of the charter of the Laguna Lake
Development Authority, Republic Act No. 4850, as amended.
Thus, the Authority has the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges
in Laguna de Bay to the exclusion of municipalities situated therein and the authority to exercise such
powers as are by its charter vested on it.
In addition, the charter of the LLDA embodies a valid exercise of police power for the purpose of
protecting and developing the Laguna Lake region, as opposed to the Local Government Code, which
grants powers to municipalities to issue fishing permits for revenue purposes.
Thus, it has to be concluded that the charter of the LLDA should prevail over the Local Government Code
of 1991 on matters affecting Laguna de Bay.

BINAY VS DOMINGO
Facts:
Petitioner Municipality of Makati, through its Council, approved Resolution No. 60 which extends P500
burial assistance to bereaved families whose gross family income does not exceed P2,000.00 a month.
The funds are to be taken out of the unappropriated available funds in the municipal treasury. The Metro
Manila Commission approved the resolution. Thereafter, the municipal secretary certified a disbursement
of P400,000.00for the implementation of the program. However, the Commission on Audit disapproved
said resolution and the disbursement of funds for the implementation thereof for the following reasons: (1)
the resolution has no connection to alleged public safety, general welfare, safety, etc. of the inhabitants of
Makati; (2) government funds must be disbursed for public purposes only; and, (3) it violates the equal
protection clause since it will only benefit a few individuals.

Issues:

1. Whether Resolution No. 60 is a valid exercise of the police power under the general welfare clause
2. Whether the questioned resolution is for a public purpose
3. Whether the resolution violates the equal protection clause

Held:
1.
The police power is a governmental function, an inherent attribute of sovereignty, which was born with
civilized government. It is founded largely on the maxims, "Sicutere tuo et ahenum non laedas and "Salus
populi est suprema lex. Its fundamental purpose is securing the general welfare, comfort and convenience
of the people.

Police power is inherent in the state but not in municipal corporations. Before a municipal corporation
may exercise such power, there must be a valid delegation of such power by the legislature which is the
repository of the inherent powers of the State. Municipal governments exercise this power under the
general welfare clause. Pursuant thereto they are clothed with authority to "enact such ordinances and
issue such regulations as may be necessary to carry out and discharge the responsibilities conferred upon
it by law, and such as shall be necessary and proper to provide for the health, safety, comfort and
convenience, maintain peace and order, improve public morals, promote the prosperity and general
welfare of the municipality and the inhabitants thereof, and insure the protection of property therein.

2.
Police power is not capable of an exact definition but has been, purposely, veiled in general terms
to underscore its all comprehensiveness. Its scope, over-expanding to meet the exigencies of the times,
even to anticipate the future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits.

The police power of a municipal corporation is broad, and has been said to be commensurate with, but
not to exceed, the duty to provide for the real needs of the people in their health, safety, comfort, and
convenience as consistently as may be with private rights. It extends to all the great public needs, and, in
a broad sense includes all legislation and almost every function of the municipal government. It covers a
wide scope of subjects, and, while it is especially occupied with whatever affects the peace, security,
health, morals, and general welfare of the community, it is not limited thereto, but is broadened to deal
with conditions which exists so as to bring out of them the greatest welfare of the people by promoting
public convenience or general prosperity, and to everything worthwhile for the preservation of comfort of
the inhabitants of the corporation. Thus, it is deemed inadvisable to attempt to frame any definition which
shall absolutely indicate the limits of police power.

Public purpose is not unconstitutional merely because it incidentally benefits a limited number of persons.
As correctly pointed out by the Office of the Solicitor General, "the drift is towards social welfare
legislation geared towards state policies to provide adequate social services, the promotion of the general
welfare, social justice as well as human dignity and respect for human rights." The care for the poor is
generally recognized as a public duty. The support for the poor has long been an accepted exercise of
police power in the promotion of the common good.

3.
There is no violation of the equal protection clause. Paupers may be reasonably classified. Different
groups may receive varying treatment. Precious to the hearts of our legislators, down to our local
councilors, is the welfare of the paupers. Thus, statutes have been passed giving rights and benefits to the
disabled, emancipating the tenant-farmer from the bondage of the soil, housing the urban poor, etc.
Resolution No. 60,re-enacted under Resolution No. 243, of the Municipality of Makati is a paragon of the
continuing program of our government towards social justice. The Burial Assistance Program is a relief
of pauperism, though not complete. The loss of a member of a family is a painful experience, and it is
more painful for the poor to be financially burdened by such death. Resolution No. 60 vivifies the very
words of the late President Ramon Magsaysay 'those who have less in life, should have more in law."
This decision, however must not be taken as a precedent, or as an official go-signal for municipal
governments to embark on a philanthropic orgy of inordinate dole-outs for motives political or otherwise.
(Binay vs Domingo, G.R. No. 92389, September 11, 1991)

107 Terrado v. Court of Appeals

G.R. No. L-58794 August 24, 1984
TOPIC: Extinguishment of Agency
PONENTE: GUERRERO, J.:

FACTS:
1. Pursuant to Act No. 4041 of the Philippine Legislature the Fisheries situated in the
locality known as Mangabul, Bayambang, Pangasinan, recently declared by the courts as
public land was reserved and the usufruct thereof ceded to the municipality of
Bayambang, Province of Pangasinan, to be used or disposed of in accordance with the
general municipal law relative to the letting of fisheries in municipal waters.
2. Provided however that the timber and other forest products therein shall be placed under
the administration and control of the forest service. Provided further, that the cession
shall not be interpreted as limiting the power of the Secretary of Agriculture and Natural
Resources to prescribe rules and regulations for the protection of game birds, mammals
or fish within the area ceded to the municipality of Bayambang.
3. On May 15, 1974, the Sanggunian Bayan of Bayambang, Pangasinan passed Resolution
No. 35 enacting Ordinance NO. 8, series of 1974, establishing the Bayambang Fishery
and Hunting Park and Municipal Water Shed embracing all the vast area of the Mangabul
Fisheries consisting of about 2,061 hectares with 19 fishponds and not less than 1,500
hectares of watershed area.
4. In the said ordinance, the municipality designated appointed and constituted private
respondent Geruncio Lacuesta as Manager-Administrator for a period of 25 years,
renewable for another 25 years, under the condition that said respondent shall pay the
municipality. a sum equivalent to 10% of the annual gross income that may be derived
from the sale of forest products, wild game and fish, which amount shall not be less than
P200,000.00 annually. He was further required to post a bond in the amount of
P200,000.00 to guaranty payment of the 10% due the municipality.
5. Municipal Ordinance No. 8 was approved by the Provincial Board of Pangasinan and
thereafter was forwarded to the then Secretary of Agriculture and Natural Resources for
 approval pursuant to the provisions of the Fisheries Act, Act No. 4003.
6. Later, the Secretary disapproved the Ordinance because it grants fishery privileges to
respondent Lacuesta without the benefit of competitive public hearing in contravention of
the provisions of Act 4003 as amended.
7. Respondent Lacuesta interposed an appeal from the disapproval by the Secretary of
Agriculture and Natural Resources to the Office of the President but the appeal was
withdrawn by said respondent in his letter dated July 14, 1977.
8. The Municipality then informed respondent Lacuesta of the disapproval of the Ordinance
by the Secretary of Agriculture & Natural Resources and directed him to refrain and
desist from acting as Administrator-Manager under the contract but the latter refused and
insisted in maintaining possession of the fisheries.
9. Despite such refusal, the Sanggunian Bayan of Bayambang, Pangasinan passed
Resolution No. 31, series of 1977, resolving to advertise for public bidding all fisheries at
the Mangabul area for four years and to direct the Municipal Treasurer to prepare the
necessary notices of public bidding, and accordingly, the Municipal Mayor and the
Municipal Treasurer caused to issue a Notice of Public Bidding.
10. Among the winning bidders were the petitioners herein, the spouses Lydia Terrado and
Martin Rosario and Domingo Fernandez who were immediately placed in possession of
the Mangabul fisheries as of July 6, 1977.
11. Private respondent Geruncio Lacuesta immediately filed a petition for prohibition and
mandamus with damages with the CFI of Pangasinan against the Municipal Mayor, the
Municipal Treasurer, the Sanggunian Bayan and the members thereof, praying that the
respondent municipal officials named therein be prohibited from executing any contract
of lease with the winning bidders and from enforcing Resolution No. 31, series of 1977,
and further asked that a temporary restraining order be issued against said respondent
officials from performing the acts enjoined.
12. The situation became serious as the Sanggunian Bayan passed Resolution No. 34, series
of 1977 "requesting the assistance from the Department of Natural Resources, the
Philippine Constabulary, Department of Justice, the Provincial Fiscal, the Provincial
Governor and other agencies, for them to enjoin respondent from disturbing and
interfering with the administration by the Municipality of Mangabul Fisheries and other
areas."
ISSUE(S):
1. W/N the Municipal Order granting Lacuesta administration is valid
HELD:
1. No. It granted the administration without the the benefit of public bidding.
RATIO:
The Ordinance is clearly against the provisions of the law for it granted exclusive fishery
privileges to the private respondent without benefit of public bidding. Under the Fisheries Act,
the Municipality may not delegate to a private individual as Manager-Administrator to "use or
dispose of the fisheries portion in accordance with the general law on municipal waters" nor to
charge foes for fishing and hunting in the park, much less sell forest products, wild games and
fish from the area.

Neither can the Municipality grant the exclusive privilege of fishing for a period more than five
(5) years, whereas in the instant case, the period granted the Manager-Administrator was for
twenty-five (25) years, renewable for another twenty-five years.

Moreover, under the specific provision of Act No. 4041, there is the proviso that the timber and
other forest products therein shall be placed under the administration and control of the forest
service so that insofar as the ordinance relates to the timber and other forest products and the
reforestation of the timberland portions indicated in Plan Ipd-92 including the powers, duties and
responsibilities of the Manager-Administrator affecting the forestry portions are violative of Act
No. 4041.

… The Ordinance is illegal and contrary to law, the contract executed in pursuance thereto is
consequently illegal. Acts executed against the provisions of mandatory or prohibitory laws shall
be void, except when the law itself authorizes their validity.

Since Ordinance No. 8 granted fishery privileges exclusively to the private respondent without
benefit of public bidding and for a period exceeding five (5) years, the said ordinance and the
contract of management executed in accordance therewith were null and void ab initio, such that
the failure of the Secretary of Agriculture & Natural Resources to disapprove the same within 30
days from its submission does not render validity to the illegal legislation of the municipal
council nor to the contract executed under the same.

Essentially, the contract of management and administration between the Municipality and
Lacuesta is one of agency whereby a person binds himself to render some service or to do
something in representation or on behalf of another, with the consent or authority of the latter.
Here in the case at bar, Lacuesta bound himself as Manager-Administrator of the Bayambang
Fishing & Hunting Park and Municipal Watershed to render service or perform duties and
responsibilities in representation or on behalf of the Municipality of Bayambang, with the
consent or authority of the latter pursuant to Ordinance No. 8. Under Article 1919, New Civil
Code, agency is extinguished by the death of the agent. His rights and obligations arising from
the contract are not transmittable to his heirs.

“We hereby pronounce the nullity of Ordinance No. 8, series of 1974 of the Municipal Council
of Bayambang, Pangasinan and the contract of management and supervision executed between
the Municipality of Bayambang and Geruncio Lacuesta as Manager-Administrator of the
Bayambang Fishery & Hunting Park and Municipal Watershed”

Since Ordinance No. 8 and the contract of management and supervision are both null and void,
the Alias Writ of Execution and Possession dated November 6, 1981 and the Order of October 8,
1982 for the issuance of writ of execution and possession to place and restore possession of the
Mangabul Fisheries, of portions thereof or fisheries therein to Geruncio Lacuesta, his agents,
men and/or representatives under the said contract and by virtue of the ordinance are, including
the writ also issued without legal force and effect.