Malabang vs Benito

FACTS:

Municipality of Balabagan was once part of the Municipality of Malabang before it was created into a
separate municipality thruan executive order. The Municipality Malabang filed a suit against the
Municipality of Balabagan for having been created under an invalid EO 386 andto restrain the respondent
municipal officials from performing thefunctions of their respective offices.Petitioner relied on the ruling
of the Pelaez case that Sec. 68 of the Administrative Code is unconstitutional (a) because itconstitutes an
undue delegation of legislative power and (b)because it offends against Section 10 (1) of Article VII of
theConstitution, which limits the President's power over local governments to mere supervision.Section
68 of the Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the
subsequentadoption of the Constitution, in 1935, which is utterly incompatible and inconsistent with said
statutory enactment. The Respondents on the other hand argue that the Mun. of Balabagan is at least a
de facto corporation for having beeno rganized under color of a statute before this was
declaredunconstitutional, its officers having been either elected orappointed, and the municipality itself
having discharged itscorporate functions for the past five years preceding theinstitution of this action. It
is contended that as a de factocorporation, its existence cannot be collaterally attacked,although it may
be inquired into directly in an action for quowarranto at the instance of the State and not of an individual
likethe petitioner Balindong.

The method of challenging the existence of a municipalcorporation is reserved to the State in a

proceeding for quowarranto or other direct proceeding. But the rule disallowingcollateral attacks applies
only where the municipal corporation isat least a de facto corporation. For where it is neither acorporation
de jure nor de facto, but a nullity, the rule is that itsexistence may be questioned collaterally or directly in
any actionor proceeding by any one whose rights or interests are affectedthereby, including the citizens
of the territory incorporated unlessthey are estopped by their conduct from doing so.ISSUE:W/O the
municipality of Balabagan is a de facto corporation.RULING:No, because there is no other valid statute to
give color of authority to its creation when EO 386 was subsequently declaredas unconstitutional. The
color of authority requisite to the organization of a de factomunicipal corporation may be:1. A valid law
enacted by the legislature.2. An unconstitutional law, valid on its face, which has either (a)been upheld
for a time by the courts or (b) not yet been declaredvoid; provided that a warrant for its creation can be
found insome other valid law or in the recognition of its potentialexistence by the general laws or
constitution of the state.In the case at bar, there is no other law that could give color of authority to the
validity of the existence of the municpality of Balabagan when EO 386 was later on invalidated. Hence,
such municipality is not a de facto corporation.