Drilon vs Lim

GR No. 112497
August 4, 1994
The principal issue in this case is the constitutionality of Section 187 of the Local
Government Code. The Secretary of Justice (on appeal to him of four oil companies and
a taxpayer) declared Ordinance No. 7794 (Manila Revenue Code) null and void for noncompliance with the procedure in the enactment of tax ordinances and for containing
certain provisions contrary to law and public policy.
RTCs Ruling:
1. The RTC revoked the Secretarys resolution and sustained the ordinance. It declared
Sec 187 of the LGC as unconstitutional because it vests on the Secretary the power of
control over LGUs in violation of the policy of local autonomy mandated in the
Constitution.
Petitioners Argument:
1. The annulled Section 187 is constitutional and that the procedural requirements for the
enactment of tax ordinances as specified in the Local Government Code had indeed
not been observed. (Petition originally dismissed by the Court due to failure to submit
certified true copy of the decision, but reinstated it anyway.)
2. Grounds of non-compliance of procedure
a. No written notices as required by Art 276 of Rules of Local Government Code
b. Not published
c. Not translated to tagalog
Supreme Courts Argument:
1. Section 187 authorizes the petitioner to review only the constitutionality or legality of tax
ordinance. What he found only was that it was illegal. That act is not control but
supervision.
2. Control lays down the rules in the doing of act and if not followed order the act undone
or re-done. Supervision sees to it that the rules are followed.
3. Two grounds of declaring Manila Revenue Code null and void (1) inclusion of certain
ultra vires provisions (2) non-compliance with prescribed procedure in its enactment but
were followed.
The requirements are upon approval of local development plans and public investment
programs of LGU not to tax ordinances.
Drilon v Lim 235 SCRA 135, GR No. 112497 (04 August 1994)
Then Secretary of Justice Franklin M. Drilon, pursuant to the authority granted upon him by
Section 187 of the LGC and upon appeal of concerned parties, declared the Manila Revenue
Code null and void for non-compliance with the prescribed procedure in thge enactment of local
tax ordinances and for containing provisions contrary to law and public policy.
Upon appeal to the RTC, the trial judge reversed the order of petitioner and, in addition, declared
Section 187 of the LGC unconstitutional as it gave the Secretary of Justice the power of control

over local governments in violation of the principle of local autonomy mandated by the
Constitution. The RTC ruled that the Executive only had the power of supervision and not
control.
HELD: The SC overruled the trial court insofar as it declared Section 187 unconstitutional. The
power of control encompasses the power to lay down the rules in the accomplishment of an act.
If they are not followed, the one in control may order the act done, re-done, or do it himself. On
the other hand, the power to supervise only entails a determination of WON the rules were
followed and to have the work done or re-done in accordance with the prescribed rules.
Contrary to the holding of the lower court, the SC said that the provision only gave the Secretary
of Justice the power to supervise, not control, in that the Secretary of Justice could only
determine the constitutionality or legality of the local tax ordinance and revoke them on such
grounds. The provision did not em power the Secretary to substitute his own judgment for the
judgment of the LGU; the Secretary was not authorized by Section 187 to determine whether the
law was wise or reasonable or otherwise a generally bad law. He was given no discretion in the
matter.
That notwithstanding, the SC agreed with the trial court in that the procedural requirements for
the passage of the ordinance were fulfilled. The initial decision of the Secretary, it said, was a
result of the insufficient time it gave to the respondents to procure the necessary evidence of such
procedural compliance. The Manila Revenue Code was upheld.
(Note: No mention was made in the final decision regarding the provisions contrary to law and
public policy earlier cited by the Secretary as additional grounds.)