1) BASCO VS PAGCOR Municipal Corporation

G.R. No. 91649

May 14, 1991

PARAS, J.:p

Principle of Local Autonomy

Facts:
The Philippine Amusements and Gaming Corporation (PAGCOR) was created
by virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise
under P.D. 1067-B 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 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. 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 certain declared policy.
This was subsequently proven to be beneficial not just to the government but
also to the society in general. It is a reliable source of much needed revenue
for the cash-strapped Government.
Basco and four other lawyers assailed the validity of the law creating
PAGCOR on constitutional grounds, among others, particularly citing that the
PAGCORs charter is against the constitutional provision on local autonomy.
Basco et al contend that P.D. 1869 constitutes a waiver of the right of the
City of Manila to impose taxes and legal fees; that 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 is violative of the local autonomy
principle.
Issue:
Whether PAGCORs charter is violative of the principle of local autonomy.
Held:
NO. Section 5, Article 10 of the 1987 Constitution provides that 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. A close reading of the above provision does not violate
local autonomy, particularly on taxing powers, as it was clearly stated that
the taxing power of LGUs are subject to such guidelines and limitation as
Congress may provide. Further, the City of Manila, being a mere Municipal
corporation has no inherent right to impose taxes. 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 which has the power to create
and abolish municipal corporations due to its general legislative powers.
Congress, therefore, has the power of control over Local governments. 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. Further still, 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. Otherwise, its operation might be burdened, impeded
or subjected to control by a mere Local government.
This doctrine emanates from the supremacy of the National Government
over local governments.
2) LOPEZ VS COMELEC
G.R. No. 182701, July 23, 2008
REYES, R.T., J.:

A Filipino-American or any dual citizen cannot run for any elective public
position in the Philippines unless he or she personally swears to a
renunciation of all foreign citizenship at the time of filing the certificate of
candidacy.
Civil Procedure assailing the (1) Resolution and (2) Omnibus Order of the
Commission on Elections (COMELEC), Second
petitioner from running as Barangay Chairman.

Division,

disqualifying

FACTS:
Petitioner Eusebio Eugenio K. Lopez was a candidate for the position
of Chairman of Barangay Bagacay, San Dionisio, Iloilo City in the
synchronized Barangay and Sangguniang Kabataan Elections held on
October 29,2007.On October 25, 2007, respondent Tessie P. Villanueva filed a
petition before the Provincial Election Supervisor of the Province of Iloilo,
praying for the disqualification of petitioner on the ground that he is an
American citizen, hence, ineligible from running for any public office. In his
Answer, petitioner argued that he is a dual citizen, a Filipino and at the same
time an American, by virtue of Republic Act (R.A.) No. 9225,otherwise known
as the Citizenship Retention and Re- acquisition Act of 2003.
He returned to the Philippines and resided in Barangay Bagacay. Thus, he
said, he possessed all the qualifications to run for Barangay Chairman. After
the votes for Barangay Chairman were canvassed, petitioner emerged as the
winner.
On February 6, 2008, however, COMELEC issued the assailed Resolution
granting the petition for disqualification of Lopez. In ruling against petitioner,
the COMELEC found that he was not able to regain his Filipino citizenship in
the manner provided by law. According to the poll body, to be able to qualify
as a candidate in the elections, petitioner should have made a personal and
sworn renunciation of any and all foreign citizenship. This, petitioner failed to
do.

ISSUE: Whether COMELEC is correct in disqualifying petitioners candidacy

for the Barangay election.
HELD:
Yes. R.A. No. 9225 expressly provides for the conditions before those who reacquired Filipino citizenship may run for a public office in the Philippines.
Section 5 of the said law provides that those who retain or re-acquire
Philippine citizenship under this Act shall enjoy full civil and political rights
and be subject to all attendant liabilities and responsibilities under existing
laws of the Philippines and that if they would seek elective public office in the
Philippines, shall meet the qualification for holding such public office as
required by the Constitution and existing laws and, at the time of the filing of
the certificate of candidacy, make a personal and sworn renunciation of any
and all foreign citizenship before any public officer authorized to administer
an oath.
Petitioner re-acquired his Filipino citizenship under the cited law which
explicitly provides that should one seek elective public office, he should first
"make a personal and sworn renunciation of any and all foreign citizenship
before any public officer authorized to administer an oath." Petitioner failed
to comply with this requirement.
While respondent was able to regain his Filipino Citizenship by virtue of the
Dual Citizenship Law when he took his oath of allegiance before the Vice
Consul of the Philippine Consulate General's Office in Los Angeles, California,
the same is not enough to allow him to run for a public office. The abovequoted provision of law mandates that a candidate with dual citizenship must
make a personal and sworn renunciation of any and all foreign citizenship
before any public officer authorized to administer an oath.
There is no evidence presented that will show that respondent complied with
the provision of R.A. No. 9225. Absent such proof the court cannot allow
respondent to run for Barangay Chairman of Barangay Bagacay. For the
renunciation to be valid, it must be contained in an affidavit duly executed
before an officer of law who is authorized to administer an oath.
The affiant must state in clear and unequivocal terms that he is renouncing
all foreign citizenship for it to be effective. In the instant case, respondent
Lopez's failure to renounce his American citizenship as proven by the
absence of an affidavit that will prove the contrary leads this Commission to
believe that he failed to comply with the positive mandate of law. For failure
of respondent to prove that he abandoned his allegiance to the United
States, the court affirms the Commissions resolution declaring him
disqualified from running for an elective position in the Philippines.
While it is true that petitioner won the elections, took his oath and began to
discharge the functions of Barangay Chairman, his victory cannot cure the
defect of his candidacy. Garnering the most number of votes does not
validate the election of a disqualified candidate because the application of
the constitutional and statutory provisions on disqualification is not a matter
of popularity.
3) Solicitor General v Metro Manila Authority

G.R. No. 102782 December 11, 1991

FACTS:
In the years 1990 to 1991, several complaints were filed in the Supreme
Court against the confiscation by police authorities of driver's licenses and
removal of license plates for alleged traffic violations.
The Metropolitan Manila Authority issued Ordinance No. 11, Series of 1991,
authorizing itself "to detach the license plate/tow and impound attended/
unattended/ abandoned motor vehicles illegally parked or obstructing the
flow of traffic in Metro Manila." However, in the decision in Metropolitan
Traffic Command, West Traffic District vs. Hon. Arsenio M. Gonong, G.R. No.
91023, promulgated on July 13, 1990, the Court held that the confiscation of
the license plates of motor vehicles for traffic violations was not among the
sanctions that could be imposed by the Metro Manila Commission under PD
1605 and was permitted only under the conditions laid down by LOI 43 in the
case of stalled vehicles obstructing the public streets. It was there also
observed that even the confiscation of driver's licenses for traffic violations
was not directly prescribed by the decree nor was it allowed by the decree to
be imposed by the Commission.
The Metropolitan Manila Authority defended the said issued ordinance on
the ground that it was adopted pursuant to the powers conferred upon it by
EO 392, that there was no conflict between the decision and the ordinance
because the latter was meant to supplement and not supplant the latter. It
stressed that the decision itself said that the confiscation of license plates
was invalid in the absence of a valid law or ordinance, which was why
Ordinance No. 11 was enacted.
To clarify the matters for the proper guidance of law-enforcement officers
and motorists, the Court resolved to require the Metropolitan Manila
Authority and the Solicitor General to submit, within ten (10) days from
notice hereof, separate COMMENTS on such sanctions in light of the said
decision.
The Solicitor General expressed the view that the ordinance was null and
void because it represented an invalid exercise of a delegated legislative
power. It violated PD 1605 which does not permit, and so impliedly prohibits,
the removal of license plates and the confiscation of driver's licenses for
traffic violations in Metropolitan Manila.
In its Comment, the Metropolitan Manila Authority defended the said
ordinance on the ground that it was adopted pursuant to the powers
conferred upon it by EO 392.
ISSUE:
Whether Ordinance No. 11 is valid.

Held:
No.
The problem before the Court is not the validity of the delegation of
legislative power. The question the SC must resolve is the validity of the
exercise of such delegated power.
A municipal ordinance, to be valid must conform with the following
requisites, to wit:
1)it must not contravene the Constitution or any statute;
2) must not be unfair or oppressive;
3)must not be partial or discriminatory;
4) must not prohibit but may regulate trade;
5) must not be unreasonable; and
6) must be general and consistent with public policy.

PD 1605 does not allow either the removal of license plates or the
confiscation of driver's licenses for traffic violations committed in
Metropolitan Manila. There is nothing in the decree authorizing the
Metropolitan Manila Commission, now the Metropolitan Manila Authority, to
impose such sanctions.
Local political subdivisions are able to legislate only by virtue of a valid
delegation of legislative power from the national legislature (except only that
the power to create their own sources of revenue and to levy taxes is
conferred by the Constitution itself). They are mere agents vested with what
is called the power of subordinate legislation. As delegates of the Congress,
the local government unit cannot contravene but must obey at all times the
will of their principal. Here, the enactments in question, which are merely
local in origin, cannot prevail against the decree, which has the force and
effect of a statute.
The measures in question do not merely add to the requirement of PD 1605
but, worse, impose sanctions the decree does not allow and in fact actually
prohibits. There is no statutory authority for and indeed there is a statutory
prohibition against the imposition of such penalties in the Metropolitan
Manila area. Hence, regardless of their merits, they cannot be imposed by
the challenged enactments by virtue only of the delegated legislative
powers.

4) New Sun Valley vs Sangguniang Barangay

GR 156686 July 7, 2011
LEONARDO-DE CASTRO, J.:
Facts:
The Sangguniang Barangay of Barangay Sun Valley issued BSV Resolution
No. 98-096 entitled "Directing the New Sun Valley Homeowners
Association to Open Rosemallow and Aster Streets to Vehicular and
Pedestrian Traffic. The New Sun Valley Homeowners Association, Inc.
(NSVHAI), opposed the ordinance and filed a Petition for a "Writ of
Preliminary Injunction/Permanent Injunction with prayer for issuance of
TRO" with the Regional Trial Court of Paraaque City. NSVHAI claimed
therein that the implementation of BSV Resolution No. 98-096 would: (1)
"cause grave injustice and irreparable injury" as "[the] affected
homeowners acquired their properties for strictly residential purposes";
(2) that the subdivision is a place that the homeowners envisioned would
provide them privacy and "a peaceful neighborhood, free from the hassles
of public places"; (3) and that the passage of the Resolution would destroy
the character of the subdivision. The maintenance of peace and order in
the residential area was one of the reasons why entry and exit to the
subdivision was regulated by the Association and why the passing through
of vehicles was controlled and limited; and that criminal elements would
take advantage of the opening to public use of the roads in question.
NSVHAI also averred that contrary to what was stated in the BSV
Resolution, the opening of the gates of the subdivision would not in any
manner ease the traffic congestion in the area, and that there were
alternative routes available.
NSVHAI likewise argued that a Barangay Resolution cannot validly cause the
opening of the subject roads because under the law, an ordinance is required
to effect such an act.
Issue:
Whether the homeowners association has a right to the protection of the
law that would entitle it to injunctive relief against the implementation of
BSV Resolution No. 98-096.
Ruling:
No. The subdivision road lots sought to be opened to decongest traffic in
the area - namely Rosemallow and Aster Streets - have already been
donated by the Sun Valley Subdivision to, and the titles thereto already
issued in the name of, the City Government of Paraaque since the year
1964. Having been already donated or turned over to the City
Government of Paraaque, the road lots in question have since then taken
the nature of public roads which are withdrawn from the commerce of
man, and hence placed beyond the private rights or claims of herein
Appellant. Homeowners association was not in the lawful exercise of its
predicated rights when it built obstructing structures closing the road lots
in question to vehicular traffic.

The Court sees no reason to depart from the findings of the Court of
Appeals. Petitioners recourse in questioning BSV Resolution No. 98-096
should have been with the Mayor of Paraaque City, as clearly stated in
Section 32 of the Local Government Code, which provides that t he city or
municipality, through the city or municipal mayor concerned, shall
exercise general supervision over component barangays to ensure that
said barangays act within the scope of their prescribed powers and
functions. It is the Mayor who can best review the Sangguniang
Barangays actions to see if it acted within the scope of its prescribed
powers and functions. Indeed, this is a local problem to be resolved within
the local government.
Thus, the Court of Appeals correctly found that the trial court committed
no reversible error in dismissing the case for petitioners failure to exhaust
administrative remedies, as the requirement under the Local Government
Code that the closure and opening of roads be made pursuant to an
ordinance, instead of a resolution, is not applicable in this case because
the subject roads belong to the City Government of Paraaque. The local
government units power to close and open roads within its jurisdiction is
clear under the Local Government Code, Section 21 of which provides:
Section 21. Closure and Opening of Roads. (a) A local government unit
may, pursuant to an ordinance, permanently or temporarily close or open
any local road, alley, park, or square falling within its jurisdiction:
Provided, however, That in case of permanent closure, such ordinance
must be approved by at least two-thirds (2/3) of all the members of the
sanggunian, and when necessary, an adequate substitute for the public
facility that is subject to closure is provided.
5) CANDELARIO L. VERZOSA, JR. vs. GUILLERMO N. CARAGUE , et al
G.R. No. 157838
March 8, 2011
VILLARAMA, JR., J.:
Facts:
The Cooperative Development Authority (CDA) purchased from Tetra
Corporation (Tetra) on two separate occasions in December 1992, a total of
forty-six (46) units of computer equipment and peripherals in the total
amount of P2,285,279.00. Tetra was chosen from among three qualified
bidders (Tetra, Microcircuits and Columbia). Even when CDA first offered to
buy computers, of the three qualified bidders, Microcircuits offered the
lowest bid of P1,123,315.00 while Tetra offered the highest bid of
P1,269,630.00. In the technical evaluation of the units to be supplied by the
qualified bidders, CDA engaged the services of the Development Academy of
the Philippines-Technical Evaluation Committee (DAP-TEC). The bidding was
conducted in accordance with the Approved Guidelines and Procedures of
Public Bidding for Information Technology (IT) Resources and Memorandum
Order No. 237 issued by the Office of the President. Petitioner who was then
the Executive Director of the CDA approved the purchase.
On May 18, 1993, the Resident Auditor sought the assistance of the Technical
Services Office (TSO), COA in the determination of the reasonableness of the
prices of the purchased computers. The TSO found that the purchased
computers were overpriced/excessive by a total of P881,819.00. The
Resident Auditor then issued Notice of Disallowance No. 93-0016-101 dated
November 17, 1993, for the amount of P881,819.00.5

In a letter6 dated May 13, 1994, CDA Chairman Edna E. Aberilla appealed for
reconsideration of the disallowance to COA Chairman Celso D. Gangan,
claiming, among others, that the procedures of the public bidding as adopted
by the [CDA] x x x demonstrate a very effective mechanism for avoiding any
possible overpricing.
However, the Resident Auditor maintained her stand on the disallowance and
submitted to Assistant Commissioner Raul C. Flores her replies to the CDAs
justifications.
On October 21, 1998, respondent COA issued the assailed decision affirming
the disallowance. It held that whether or not the product is branded is
irrelevant in the determination of the reasonableness of the price since the
brand was not stated in the Call for Bids nor in the Purchase Order. The bids
of the three qualified bidders were based on similar technical specifications,
features and warranty as contained in their proposals. It was also found that
the performance of the competing computer equipment would not vary or
change even if the attributes or characteristics of said computers cited by
petitioner were to be factored in. The difference in brands, microprocessors,
BIOSes, as well as casings will not affect the efficiency of the computers
performance.
Further, COA declared that CDA should not have awarded the contract to
Tetra but to the other competing bidders, whose bid is more advantageous to
the government. The conduct of public bidding should be made objectively
with the end in view of purchasing quality equipment as needed at the least
cost to the government. The price for the equipment delivered having been
paid, when such equipment could be acquired at a lower cost, the
disallowance of the price difference was justified.
Petitioner Candelario L. Verzosa, Jr. is hereby ordered to REIMBURSE the
amount of P881,819.00 subject of Notice of Disallowance No. 93-0016-101
dated November 17, 1993 and the corresponding CSB No. 94-001-101 dated
January 10, 1994.
Petitioners motion for reconsideration having been denied, he now comes to
the Supreme Court for relief.
Petitioner contends that he should not be made personally liable for the
disallowed expense. He invokes the prevailing doctrine that unless they have
exceeded their authority, corporate officers, as a general rule, are not
personally liable for their official acts, because a corporation, by legal fiction,
has a personality separate and distinct from its officers, stockholders and
members.
Issue:
Whether the petitioners contention is correct.
Held:
No. Findings of quasi-judicial agencies, such as the COA, which have acquired
expertise because their jurisdiction is confined to specific matters are
generally accorded not only respect but at times even finality if such findings
are supported by substantial evidence. It is only upon a clear showing that
the COA acted without or in excess of jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction that the Court will set
aside its decisions or final orders. The Court finds no such arbitrariness or
grave abuse on the part of the COA when it disallowed in audit the amount

representing the overprice in the payment by CDA for the purchased

computer units and peripherals, its findings are well-supported by the
evidence on record.
With respect to the liability of petitioner, the Court likewise affirm the COAs
ruling that he is personally and solidarily liable for the disallowed amount.
The doctrine of separate personality of a corporation finds no application
because CDA is not a private entity but a government agency created by
virtue of Republic Act No. 6939 in compliance with the provisions of Section
15, Article XII of the 1987 Constitution. Moreover, respondents satisfactorily
established that petitioner acted in bad faith when he prevailed upon the
DAP-TEC to modify the initial result of the technical evaluation of the
computers by imposing an irrelevant grading system that was intended to
favor one of the bidders, after the bids had been opened.
6) JULIAN SEGUNDO MANANTAN, et al., v THE MUNICIPALITY OF LUNA, et al.
G.R. No. L-2337, February 26, 1949
REYES, J.:
the municipal council of Luna, Province of La Union, passed its Resolution No.
32, series of 1945 on December 15, 1945, the purpose of offering at public
auction on January 15, 1946, a lease of the privilege to catch "bagus" fry
within certain section of the municipal waters.
Acting on the authority granted in said resolution the municipal treasurer
issued the necessary notices for the auction.
The auction was held on the date specified, and of the five bids submitted
that of Julian Segundo Manantan and his associates was declared to the best
and highest. In official confirmation of this declaration the municipal council
passed Resolution No. 37, series of 1946, granting to Julian Segundo
Manantan and his associates the fishing privilege in question and authorizing
the municipal mayor to execute the corresponding contract of lease. In due
time the contract was signed by the parties, and conformably to the bid, the
lease was to be four years from 1946 to 1949, the agreed price of P1,000
from the first year payable immediately, and P2,400 for the succeeding three
years, payable in a lump sum at the beginning of 1947 or in installments at
the discretion of the municipal council.
After paying the corresponding amount to the first year of the lease, the
lessees began catching "bangus" fry within the fishery zone in question. But
on July 20, 1946, the municipal council, now composed of a new set
councilors headed by a new mayor, passed, Resolution No. 2, series of 1946,
requesting the Provincial Board of La Union to annul Resolution No. 32, series
of 1945, and the fishing privilege granted thereunder to Julian Segundo
Manantan and his partners.
Julian Segundo Manantan, later joined by his partners, commenced the suit
in the Court of First Instance of La Union to have the last-mentioned
resolution declared void and the municipal council enjoined from carrying out
the auction. The municipal council, however, went ahead with the auction
and awarded the lease for the fishing privileges in question to Timoteo
Santaromana. But the petitioners succeeded in having a writ of preliminary

injunction issued on April 11, 1947, against the municipality, the municipal
mayor, the municipal councilors, and Timoteo Santaromana, enjoining them
and their agents from preventing the petitioners form enjoining their
privilege under the lease.
After trial, the Court of First Instance decided in favor of Timoteo
Santaromana and requiring the petitioners to account for the value of the
"bagus" fry caught by them from the date of the issuance of the preliminary
injunction, less reasonable expenses.
From this decision, petitioners have appealed to the Supreme Court,
contending that the lower court erred in holding Resolution No. 37 to be null
and void, and in not declaring Resolution No. 23 null and void as violative of
the constitutional provision prohibiting the passage of any law impairing the
obligation of contracts.
Issue:
Whether contract entered into thereunder between the same municipal
government and Timoteo Santaromana to be void as violative of the
constitutional provision against the impairment of the obligation of contracts.
Held:
Yes.
The learned trial judge rightly held that Resolution No. 32 (the one
authorizing the first auction) was not invalidated by the fact that it was
disapproved by the provincial board, since "they only ground upon which a
provincial board may declare any municipal resolution . . . invalid is when
such resolution . . . is beyond the powers conferred upon the council . . .
making the same" (Gabriel vs. Provincial Board of Pampanga, 50 Phil., 686,
692), and there is no question that Resolution No. 32 is within the powers
granted to municipal councils by the Fishery Law (section 67, Act No. 4003 as
amended by Com. Act. No. 471). It is a rule repeatedly followed by this Court
that "the construction place upon a law at the time by the official in charge
of enforcing it should be respected." (In re Allen, 2 Phil., 630; Government of
the Philippine Islands vs. Municipality of Binalonan, 32 Phil., 634; Molina vs.
Rafferty, 37 Phil., 545; Madrigal and Paterno vs. Rafferty and Concepcion, 38
Phil., 414.)' (Guanio vs. Fernandez, 55 Phil., 814, 819).
It results that the contract of lease entered into under the authority of
Resolution No. 37 between the petitioners and the municipal government of
Luna is a valid and binding contract and as such it is protected by the
Constitution and can not, therefore, be impaired by a subsequent resolution
which sets in it aside and grants the fishing privilege to another party.
Wherefore, the judgment appealed from is revolved and another one shall be
entered declaring the contract entered into between the municipal
government of Luna, Province of La Union and Julian Segundo Manantan and
his associates under the authority of Resolutions No. 32, series f 1945 and
No. 37, series of 1946, to be valid; and Resolution No. 27, series of 1946, and
the contract entered into thereunder between the same municipal
government and Timoteo Santaromana to be void as violative of the
constitutional provision against the impairment of the obligation of contracts.

7) Guilatco v. City of Dagupan

G.R. No. 61516 March 21, 1989
SARMIENTO, J.:
FACTS:
Florentina Guilatco was about to board a tricycle at a sidewalk located at
Perez Blvd. (a nationalroad) when she accidentally fell into an open
manhole. Her right leg was fractured, resulting in her hospitalization and
continuing difficulty in locomotion. Because of her accident, Guilatco was
unable to go to work, thereby losing her income. She also lost weight, and
she is now no longer her former jovial self since she is unable to perform her
religious, social, and other activities. She filed an action for damages against
the City of Dagupan. The City of Dagupan denied liability on the ground that
the manhole was located on a national road, which was not under the control
or supervision of the City of Dagupan. Hence, no liability should attach to the
city.
ISSUE:
Whether the City of Dagupan is liable to Guilatco.
HELD:
Yes, the City of Dagupan is liable. For Article 2189 to apply, it is not
necessary for the defective road or street to belong to the province, city or
municipality. The article only requires that either control or supervision is
exercised over the defective road or street. In this case, this control or
supervision is provided for in the charter of Dagupan and is exercised
through the City Engineer, whose duties include the care and custody of the
public system of waterworks and sewers. The charter of Dagupan provides
that the laying out, construction, and improvement of streets, avenues, and
alleys and sidewalks and the regulation of the use thereof may be legislated
by the Municipal Board. Thus, the charter clearly indicates that the city
indeed has supervision and control over the sidewalk where the open
drainage hole is located.

PADILLA VS COMELEC
214 SCRA 735, ROMERO, J
FACTS
Pursuant to Republic Act No. 7155, creating the Municipality of Tulay-NaLupa in the Province of Camarines Norte to be composed of Barangays TulayNa-Lupa, Lugui, San Antonio, Mabilo I, Napaod, Benit, Bayan-Bayan,
Matanlang, Pag-Asa, Maot, and Calabasa, all in the Municipality of Labo.
COMELEC scheduled a plebiscite throughout the Municipality of Labo and
majority voted against the creation of the Municipality of Tulan na Lupa.
Pettioner prayed that the plebiscite conducted to set aside with the
contention that such plebiscite was a complete failure. etitioner stresses that
the plebiscite should not have included the remaining area of the mother
unit of the Municipality of Labo, Camarines Norte.

ISSUE
Whether or not the plebiscite conducted in the areas comprising the
proposed Municipality of Tulay-Na-Lupa and the remaining areas of the
mother Municipality of Labo is valid.
HELD
YES
It stands to reason that when the law states that the plebiscite shall be
conducted "in the political units directly affected," it means that residents of
the political entity who would be economically dislocated by the separation
of a portion thereof have a right to vote in said plebiscite. Evidently, what is
contemplated by the phase "political units directly affected," is the plurality
of political units which would participate in the plebiscite.

MALABANG VS BENITO
G.R. No. L-28113
CASRTOR, J

March 28, 1969

FACTS
Balabagan was formerly a part of the municipality of Malabang, having been
created on March 15, 1960, by Executive Order 386 of the then President
Carlos P. Garcia, out of barrios and sitios of the municipality of Malabang.
Petitioners brought this action for prohibition to nullify Executive Order 386
and to restrain the respondent municipal officials from performing the
functions of their respective office relying on the ruling of this Court inPelaez
v. Auditor General and Municipality of San Joaquin v. Siva.
In Pelaez, the Supreme Court ruled: (1) that section 23 of Republic Act 2370
[Barrio Charter Act, approved January 1, 1960], by vesting the power to
create barrios in the provincial board, is a "statutory denial of the
presidential authority to create a new barrio [and] implies a negation of
thebigger power to create municipalities," and (2) that section 68 of the
Administrative Code, insofar as it gives the President the power to create
municipalities, is unconstitutional (a) because it constitutes an undue
delegation of legislative power and (b) because it offends against section 10
(1) of article VII of the Constitution, which limits the President's power over
local governments to mere supervision.
Respondent argue that the rule announced in Pelaez can have no application
in this case because unlike the municipalities involved inPelaez, the
municipality of Balabagan is at least a de facto corporation, having been
organized under color of a statute before this was declared unconstitutional,
its officers having been either elected or appointed, and the municipality
itself having discharged its corporate functions for the past five years
preceding the institution of this action.
ISSUE

Whether or not the municipality of Balabagan is a de facto corporation

HELD
NO.
In the cases where a de facto municipal corporation was recognized as such
despite the fact that the statute creating it was later invalidated, the
decisions could fairly be made to rest on the consideration that there was
some other valid law giving corporate vitality to the organization. Hence, in
the case at bar, the mere fact that Balabagan was organized at a time when
the statute had not been invalidated cannot conceivably make it a de
facto corporation, as, independently of the Administrative Code provision in
question, there is no other valid statute to give color of authority to its
creation. Indeed, in Municipality of San Joaquin v. Siva, 11 this Court granted a
similar petition for prohibition and nullified an executive order creating the
municipality of Lawigan in Iloilo on the basis of the Pelaez ruling, despite the
fact that the municipality was created in 1961, before section 68 of the
Administrative Code, under which the President had acted, was invalidated.
'Of course the issue of de facto municipal corporation did not arise in that
case.

VELOSO VS COA
GR NO 1936777, September 6, 2011
PERALTA, J

FACTS
On December 7, 2000, the City Council of Manila enacted Ordinance No.
8040 entitled An Ordinance Authorizing the Conferment of Exemplary Public
Service Award to Elective Local Officials of Manila Who Have Been Elected for
Three (3) Consecutive Terms in the Same Position. Section 2 thereof provides
retirement and gratuity pay remuneration equivalent to the actual
time served in the position for three (3) consecutive terms.
Pursuant to the ordinance, the City made partial payments in favor OF SIX(6)
former councilors with a total of P9,923,257.00.
The Director, Legal and Adjudication Office (LAO)- Local of the COA issued
Notice of Disallowance date May 24, 2006. The COA sustained the Notice of
Disallowance.
ISSUE

Whether the COA has the authority to disallow the disbursement of local
government funds.
HELD
Under the 1987 Constitution, however, the COA is vested with the authority
to determine whether government entities, including LGUs , comply with
laws and regulations in disbursing government funds and to disallow illegal
or irregular disbursement of these funds.
Thus, the LGUs, though granted local fiscal autonomy, are still within the
audit jurisdiction of the COA.